29 July 2016

FOIA Improvement Act of 2016: The Presumption of Openness” and Other Significant Changes

On June 30, 2016, President Obama signed the FOIA Improvement Act of 2016 (the Act). The Act adds provisions to the Freedom of Information Act (FOIA) that may assist requesters, as well as lead to increased disclosure. However, business records currently protected by existing interpretations of FOIA exemptions should continue to be protected despite these changes. The flagship change enacts the Obama Administration’s “presumption of openness” by codifying an already-existing executive branch policy that restricts an agency’s discretionary power to withhold documents to situations where disclosure would result in foreseeable harm. Other changes include a 25-year sunset provision for protection of privileged pre-decisional inter- or intra-agency memoranda under exemption 5; procedural changes intended to streamline requests and reduce delay; and increased emphasis on FOIA’s alternative dispute resolution services to assist requesters.

Below are five highlights from the Act.

  1. How Will the Presumption of Openness Affect FOIA Requests? The Act’s foreseeable harm standard applies only to those FOIA exemptions for which agencies have the discretion to disclose exempt information. The Act adds a provision stating that an agency may withhold information only if it “reasonably foresees that disclosure would harm an interest protected by” one of the FOIA exemptions or if “disclosure is prohibited by law.” 5 U.S.C. § 552(a)(8)(A)(i). Agencies also must “consider whether partial disclosure of information is possible” and “take reasonable steps necessary to segregate and release nonexempt information.” Id. § 552(a)(8)(A)(ii). For exemptions that allow agencies little or no discretion, these changes are unlikely to have any effect—if nondisclosure was mandatory before, it should continue to be mandatory. However, the presumption of openness may encourage more partial disclosures and more careful consideration of whether business records meet the standards of the non-discretionary exemptions.
  2. Will the Presumption of Openness Make It Easier for Requesters to Obtain Exempt Business Sensitive Information? Probably not. Because the exemptions most often relied on to protect business sensitive information—exemptions 3, 4, 6 and 8—are typically treated as non-discretionary, the presumption of openness is unlikely to have a significant effect on disclosure of business sensitive information.
    • Exemption 3: Exemption 3 provides that information “specifically exempted from disclosure” by any other statute is protected under FOIA, so long as the other statute either “requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue” or “establishes particular criteria for withholding or refers to particular types of matters to be withheld.” 5 U.S.C. § 552(b)(3)(A).1 Statutes that have been held to qualify under exemption 3 include, among others, the U.S. Food and Drug Administration’s trade secret statute, 21 U.S.C. § 331(j), the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801, which protects nonpublic personal information of customers of financial institutions, and a provision of the Bank Secrecy Act that concerns reports pertaining to monetary instruments transactions, 31 U.S.C. § 5319. Exemption 3 is usually considered non-discretionary for purposes of FOIA because discretion, when permitted, is typically exercised under the terms of the underlying statute rather than FOIA.
    • Exemption 4: Exemption 4 protects “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4). Exemption 4 is treated as non-discretionary in practice because the Trade Secrets Act, 18 U.S.C. § 1905—a statute that criminalizes disclosure of trade secrets, confidential statistical data and confidential financial information—prohibits unauthorized disclosure of all information that falls within exemption 4. Chrysler v. Brown, 441 U.S. 281, 318–19 & n.49 (1979); Venetian Casino Resort, L.L.C. v. EEOC, 530 F.3d 925, 932 (D.C. Cir. 2008).
    • Exemption 6: Exemption 6 protects “personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.” 5 U.S.C. § 552(b)(6). Information falling within the bounds of exemption 6 is generally considered unsuitable for discretionary disclosure because “a balancing of public interest considerations is built into the determination of whether the information is exempt in the first place” and because the information may also be protected by the Privacy Act of 1974, 5 U.S.C. § 552a, which provides a limited basis for disclosure.
    • Exemption 8: Exemption 8 protects banking information “contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.” 5 U.S.C. § 552(b)(8). Although records protected by exemption 8 may be the subject of discretionary release, such disclosure is not common because courts construe the exemption broadly to ensure the security of financial institutions and to safeguard the relationship between the banks and their supervising agencies.
  3. Which Discretionary Exemptions Are Most Likely to be Affected by the Presumption of Openness? The exemptions with the broadest discretionary disclosure are exemption 2, which protects documents that are “related solely to the internal personnel rules and practices of an agency,” and exemption 5, which protects “inter-agency or intra-agency memorandums or letters that would not be available by law to a party other than an agency in litigation with the agency.” 5 U.S.C. § 552(b)(2), (5). Exemption 2 was historically interpreted to exempt a broad range of agency documents from disclosure. That changed dramatically when the Supreme Court swept away many lower court decisions in Milner v. Department of the Navy, 562 U.S. 562 (2011), and instead held that “personnel rules and practices” should be narrowly read to apply only to employee relations and human resources matters. Exemption 5, which has been interpreted broadly to “exempt those documents, and only those documents, normally privileged in the civil discovery context,” NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149 (1975), is also the only exemption whose text is directly amended by the Act, which adds a sunset provision revoking the deliberative process privilege for “records created 25 years or more before the date on which the records were requested.” 5 U.S.C. § 552(b)(5).
  4. Will the Act’s Procedural Amendments Speed Up the FOIA Request Process? Although the Act does not alter the number of days agencies have to respond to requests, it does make a number of procedural changes that are likely to increase efficiency and reduce backlog. First, the Act requires the Office of Management and Budget to “ensure the operation of a consolidated online request portal” for submitting FOIA requests, 5 U.S.C. § 552(m)(1), which will mean that requesters no longer have to research each agency’s individual procedures when making a request. Second, the Act expands the range of information agencies are required to proactively disclose by requiring agencies to make all records that have been requested and disclosed three or more times electronically available. Id. § 552(a)(2)(D). This builds upon changes put in place by the Electronic Freedom of Information Act Amendments of 1996, which had required agencies to maintain online reading rooms through which members of the public can access certain categories of records without having first to submit a FOIA request, including any disclosed records that “the agency determines have become or are likely to become the subject of subsequent requests for substantially the same records.” Pub. L. 104-231, 110 Stat. 3048 (codified at 5 U.S.C. § 552(a)(2)(D)). Third, the Act clarifies an existing requirement that agencies may not charge requesters for search or duplication fees if the agency failed to comply with statutory time limits, except under unusual or exceptional circumstances. 5 U.S.C. § 552(a)(4)(A)(viii). This may incentivize agencies to process requests more promptly.
  5. What Effect Will the Act Have on FOIA Alternative Dispute Resolution Services? Dispute resolution services have been offered as part of FOIA since the OPEN Government Act of 2007, which created the Office of Government Information Services (OGIS) and required agencies to make their FOIA Public Liaisons (FPLs) available to assist in the resolution of disputes. OGIS was tasked with providing impartial mediation services to requesters and agencies. Although OGIS has no enforcement power and cannot compel an agency to disclose information, it can assist a requester to exhaust administrative remedies, including the FOIA appeal process. FPLs serve a similar function within the agency and act as a point of contact for FOIA requesters. The Act requires agencies to include dispute resolution procedures in their FOIA regulations and to notify requesters of their right to seek dispute resolution services from the OGIS and FPLs. 5 U.S.C. § 552(a)(6)(A)(i)(III)(bb), (a)(6)(B)(ii); FOIA Improvement Act of 2016, Pub. L. 114-185, § 3, 130 Stat. 538, 544. It is hoped that this will lead to more records being released.
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