Food Marketing Institute v. Argus Leader

The Supreme Court scrapped the decades-old 'substantial competitive harm' test and held that commercial data is confidential under FOIA Exemption 4 when it is kept private and shared with the government in confidence.

Every business that files data with a federal agency—sales figures, pricing, supply terms, formulas—faces the same quiet worry: could a competitor or a reporter pry it loose through a Freedom of Information Act request? For forty-five years, the answer turned on a judge-made test that asked whether disclosure would cause the submitter “substantial competitive harm.” In Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019), decided June 24, 2019, the Supreme Court swept that test away. Writing for a six-Justice majority, Justice Neil Gorsuch held that commercial or financial information is “confidential” under FOIA Exemption 4 when it is customarily and actually kept private and is provided to the government under an assurance of privacy—no proof of competitive injury required. The ruling reorganized how agencies and the businesses that deal with them think about protecting sensitive commercial information.

At a glance

Case: Food Marketing Institute v. Argus Leader Media, No. 18-481, 139 S. Ct. 2356 (U.S. June 24, 2019).
Court: Supreme Court of the United States; opinion by Justice Gorsuch for a six-Justice majority. Justice Breyer concurred in part and dissented in part, joined by Justices Ginsburg and Sotomayor.
Posture: Reversing the Eighth Circuit, which had affirmed an order compelling disclosure of store-level food-stamp data under the “substantial competitive harm” standard.
Holding: Under FOIA Exemption 4, commercial or financial information is “confidential” when it is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy. The “substantial competitive harm” test has no basis in the statute.
Significance: Overturned the 1974 National Parks gloss that had governed Exemption 4 for decades and substantially broadened the government’s ability to withhold business data.

How the dispute reached the Court

The fight began with a public-records request. Argus Leader Media, a South Dakota newspaper, asked the U.S. Department of Agriculture for store-level data showing how much money each retailer redeemed annually through the Supplemental Nutrition Assistance Program (SNAP, the food-stamp program). The USDA refused, invoking Exemption 4 of FOIA, which shields “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4).

Argus Leader sued. Applying the long-standing test from National Parks & Conservation Ass’n v. Morton (D.C. Cir. 1974), the district court ordered the data released, finding the USDA had not proven that disclosure would cause grocers substantial competitive harm. The Eighth Circuit affirmed. The USDA declined to appeal, but the Food Marketing Institute—a trade association representing grocery retailers—intervened and carried the case to the Supreme Court. The question presented was whether the National Parks “substantial competitive harm” requirement was a legitimate reading of the statute at all.

Reading “confidential” by its ordinary meaning

Justice Gorsuch’s opinion is a textualist set piece. Because FOIA does not define “confidential,” the Court looked to the word’s ordinary meaning when the statute was enacted in 1966. Consulting period dictionaries, the Court identified two conditions that “confidential” can carry. First, and most importantly, information is confidential when it is “customarily kept private, or at least closely held, by the person imparting it.” Second, information might be confidential only if the recipient provides “some assurance that it will remain secret.”

The Court held that the first condition is necessary. The store-level SNAP data easily met it: the grocers’ evidence showed they customarily and actually kept their sales figures private and did not disclose them publicly. As for the second condition, the Court declined to decide whether a government assurance of confidentiality is always required, because the USDA had in fact given retailers such assurances—so the data qualified either way. The majority left that question for another day.

Critically, nowhere in the statutory text did the Court find any requirement of competitive harm. “Substantial competitive harm,” Justice Gorsuch wrote, was an atextual gloss that National Parks had derived from legislative history rather than the words Congress enacted. Reading a harm requirement into “confidential” would, in the Court’s view, rewrite the statute. The test was therefore rejected.

Why the dissent worried about over-withholding

Justice Breyer, joined by Justices Ginsburg and Sotomayor, agreed that National Parks swept too broadly but parted ways on the remedy. The partial dissent argued that “confidential” should still carry some requirement of harm—that disclosure must cause “genuine harm” to the submitter’s economic or business interests—lest Exemption 4 become a near-automatic shield for any data a company prefers to keep quiet. FOIA’s purpose, the dissenters stressed, is disclosure, and its exemptions are to be construed narrowly. By untethering confidentiality from any showing of injury, they warned, the majority risked converting a disclosure statute into a broad secrecy regime for commercial information shared with the government.

The majority answered that policy concerns about over-withholding are for Congress, not the courts, to address by rewriting the words. The disagreement frames the practical stakes: how easily can businesses now keep their government filings out of the public record?

Open questions

Is a government assurance of privacy required? The Court expressly reserved whether the second condition is mandatory, leaving lower courts to sort out cases where the agency made no promise of confidentiality.
How “private” is private enough? The “customarily and actually kept private” standard invites disputes over what counts as closely held when information is shared with auditors, lenders, or business partners.
Does any harm requirement survive? Some agencies and courts continue to consider harm informally; the precise role, if any, of competitive injury after Argus Leader remains contested.

Implications

For businesses filing with agencies: Sensitive commercial data is easier to protect. If you customarily keep figures private and the agency treats them as confidential, Exemption 4 likely applies without proof of competitive harm.
For records requesters and journalists: A powerful tool for prying loose business data has narrowed. Expect more Exemption 4 withholdings and fewer successful challenges premised on the absence of competitive injury.
For agencies: Document the confidentiality understanding at intake. Assurances of privacy, and evidence that submitters keep the data private, now do much of the legal work.
For trade-secret strategy: The case underscores that “keep it closely held” is not just a common-law trade-secret instinct—it is the operative condition for FOIA protection too. Consistent confidentiality practices pay off across doctrines.

Frequently asked questions

Did the Court eliminate the “substantial competitive harm” test entirely? Yes. The Court held that the test, invented by the D.C. Circuit in 1974, has no basis in the statutory text of Exemption 4 and is no longer good law. A submitter no longer has to prove competitive injury to keep commercial information confidential.

What does a company now have to show to qualify under Exemption 4? At minimum, that the information is both commercial or financial and customarily and actually kept private. The Court reserved whether the government must also give an assurance of confidentiality, because that condition was satisfied on the facts.

Is this a trade-secret ruling? Not directly. It interprets a FOIA disclosure exemption, but it matters enormously to anyone who submits sensitive commercial data to a federal agency, because it widens what the government can withhold and reduces the risk that confidential business information becomes public through a records request.