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Will corporations be recognized as having a right to privacy?

 

The U.S. Supreme Court agreed on September 28, 2010, to review whether Exemption 7(C) of the Freedom of Information Act (FOIA), protecting “personal privacy,” protects not only the privacy of individuals, but also the privacy of corporate entities. The case is Federal Communications Commission v. AT&T, Inc. Docket No. 09-1279.

The facts of the case are as follows. AT&T had provided equipment and services to a federal program administered by the Federal Communications Commission (FCC) geared at increasing schools’ access to advanced telecommunications technology. AT&T found out in 2004 that it may have overcharged the Government for some work, and voluntarily reported that fact to the FCC. The FCC Enforcement Bureau (Bureau) then conducted an investigation. As part of this investigation, AT&T produced various documents to the Bureau. In April 2005, a trade association representing some of AT&T’s competitors submitted a FOIA request for documents in this investigation file. AT&T submitted an objection to disclosure, arguing that FOIA’s exemptions prohibited disclosure.

FOIA, U.S.C. § 552, was enacted by Congress in 1966 in order to improve public access to information controlled by federal agencies. Congress wanted FOIA to reflect "a general philosophy of full agency disclosure unless information is exempted under clearly delineated statutory language." S.Rep. No. 89-813, at 3 (1965). Indeed, there are nine enumerated statutory exemptions allowing an agency to withhold documents responsive to a FOIA request. One of these exemptions is codified at § 552(b)(7)(C) (Exemption 7(C)): FOIA does not apply to “records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information could reasonably be expected to constitute an unwarranted invasion of personal privacy.”

FOIA does not define “personal,” but “person” is defined by the Administrative Procedure Act (APA), 5 U.S.C. § 551(2), as “includ[ing] an individual, partnership, corporation, association, or public or private organization other than an agency.” The FOIA was enacted as an amendment to the APA, so it can be argued that this definition applies to FOIA as well.

The Bureau issued a letter-ruling in August 2005, rejecting AT&T’s argument that Exemption 7 (C) prohibited disclosure because corporations lack “personal privacy.” AT&T asked the FCC to review this ruling, and in October 2008 the FCC issued an order compelling disclosure, arguing that Exemption 7 (C) does not apply to corporations. AT&T then filed a petition to review the FCC’s order, arguing that an incorrect interpretation of Exemption 7 (C) prevented a corporation to claim a personal privacy interest.

The Third Circuit reviewed the FCC’s order, and granted AT&T’s petition for review on September 22, 2009, and remanded for further agency proceedings. The Court held that FOIA “unambiguously indicates that a corporation may have a “personal privacy” interest within the meaning of Exemption 7 (C).“ The Third Circuit reasoned that Exemption 7(F) of FOIA prohibits disclosure of information that, if released, “could reasonably be expected to endanger the life or physical safety of any individual”(emphasis in the Third Circuit decision), thus indicating that Congress wanted only human beings to benefit from Exemption 7(F). Since Congress did not use the same language in Exemption 7 (C), it indicates that Congress wanted it to have a broader protective scope. Also, it reasoned that “personal” is the adjectival form of “person” and that “it would be very odd indeed for an adjectival form of a defined term not to refer back to that defined term.”

The FCC and the Government petitioned the Supreme Court for a writ of certiorari, and the Supreme Court granted it on September 28.

The Government argued in the petition that “the law ordinarily protects personal privacy to safeguard human dignity and preserve individual autonomy,” and “such concepts do not comfortably extend to a corporation.” The Third Circuit noted in footnote 5 of the ruling that “corporations, like human beings, face public embarrassment, harassment, and stigma “if they are involved in law enforcement investigations.” The government shunned “this attempted personification of an entity.”

However, in Citizen United v. Federal Election Commission, 558 U.S. 50 (2010), the Supreme Court held corporations cannot be prevented by the government to spend money in order to support or to denounce a political candidate, as corporate spending is a form of political speech. The Supreme Court cited the precedent of First Nat. Bank of Boston v. Bellotti, 435 U. S. 765 (1978), to state that “the First Amendment does not allow political speech restrictions based on a speaker’s corporate identity.” Will corporations now have a right to privacy? 

The government also argued that if the APA defines “person” as including public organizations other than a federal government agency, state, local, foreign governments and governmental components would then be given a right to privacy, and thus federal agencies answering a FOIA request may have to balance the public interest in disclosure against the privacy interests of corporations and governments. This may jeopardize public disclosure of government records. Indeed, Public Citizen, the Electronic Frontier Foundation and other nonprofit organizations have filed a brief of Amici Curiae, stating that the Third Circuit’s decision undermines the core purpose of the FOIA, and would prevent that records concerning government oversight of industry would be available to the public.  Once again, the delicate balance between the right of privacy, if there is such a right for corporations, and freedom of information, will have to be assessed by the Supreme Court.

 

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