Supreme Court Refuses to Weigh In on Planned Parenthood’s Invocation of FOIA’s Trade Secret Exemption

IP LAWSUITS

Between the 2016 Presidential Primary Debates and the recent tragedy in Colorado Springs, it seems Planned Parenthood has been central to many current political discussions. The organization also recently made news in legal circles for something the Supreme Court chose not to do. In New Hampshire Right to Life v. Department of Health and Human Services, Case No. 14-1273, 577 U.S. ____ (2015), the U.S. Supreme Court denied anti-abortion group New Hampshire Right to Life’s (“RTL”) petition for writ of certiorari. In doing so, the Supreme Court declined to weigh in on the First Circuit’s decision approving the Department of Health and Human Services’ (the “Department”) refusal to disclose documents to RTL that Planned Parenthood submitted to the Department as part of an application for a sole-source /non-competitive grant. The Supreme Court’s denial foreclosed a chance to interpret Exemption 4 to FOIA requests, i.e. the trade secret exemption, something it had never done before.  

The trade secret exemption, which is codified at 5 USC § 552(b)(5), provides an exemption from the general rule of disclosure for “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”

Planned Parenthood was required to submit an application and additional “institutional files” on “a variety of policies and procedures” in order to receive a grant directly from the Department. One of these additional files was Planned Parenthood’s Manual of Medical Standards and Guidelines. Planned Parenthood also submitted pricing information and schedules.

On December 22, 2011, Right to Life initiated a FOIA suit in the District of New Hampshire seeking documents related to the decision to award the grant. In response, the Department released approximately 2,500 pages of documents, which was not a full disclosure of all documents it received from Planned Parenthood. The Department determined that certain parts of the Planned Parenthood Manual were exempt as trade secrets under 5 USC § 552(b)(4) and notified Planned Parenthood of its decision and RTL’s FOIA request. Planned Parenthood responded to the Department’s notification by stating that the entire manual was exempt because it constitutes confidential commercial information. The Department disagreed, and Planned Parenthood instituted a related action, also in the District of New Hampshire, to enjoin production of the Manual.

The district court advised that the Department should rethink its position. The Department heeded the recommendation and withheld and redacted additional portions of the Manual. Right to Life and the Department then filed cross motions for summary judgment in the original action to determine whether the Department properly withheld the documents under the FOIA trade secret exemption. The district court found that the Department properly withheld the “vast majority” of the requested documents. Right to Life then appealed the decision the United States Court of Appeals for the First Circuit.

In deciding whether the Manual constituted a trade secret, the First Circuit defined commercial information to be confidential if disclosure is likely “(1) to impair the Government’s ability to obtain necessary information in the future; or (2) cause substantial harm to the competitive position of the person from whom the information was obtained.” As an initial matter, the Court found that a non-profit, e.g. Planned Parenthood, is capable of possessing commercial information. The Court then had to make the determination of whether or not the information was confidential, as defined in the FOIA context. The First Circuit states: “Parties opposing disclosure need not demonstrate actual competitive harm; instead, they need only show actual competition and likelihood of substantial competitive injury.”

The First Circuit found that Planned Parenthood faced competition from hospitals and health clinics. The First Circuit then looked at whether the withheld documents would cause substantial competitive harm to Planned Parenthood if disclosed. The First Circuit determined one of these potential competitors could take advantage of the institutional knowledge contained in the manual to compete with Planned Parenthood for “patients, grants, and other funding.” The Court found the same with pricing information. The Department’s decision to withhold the disputed documents was therefore proper.

Right to Life appealed to the Supreme Court. On November 16, 2015, the Supreme Court denied the petition for writ of certiorari, declining to weigh in on the First Circuit’s decision. Justice Thomas, joined by Justice Scalia, dissented.

The procedural history of the related cases provides at least two takeaways.First, unless Planned Parenthood was notified by the Department of the request for disclosure of the Manual, Planned Parenthood might not have been able to intervene. That situation very likely would have resulted in the disclosure of at least what Planned Parenthood considered to be its confidential trade secrets. And, second, the definitions of trade secret and confidential commercial information remain unsettled in the FOIA context. In his dissent, Justice Thomas notes that the Supreme Court has never had occasion to interpret Exemption 4. He also takes issue that the First Circuit’s definition of confidential was not the ordinary meaning of the word, but based on conjecture of whether disclosure would harm Planned Parenthood’s competitive position. The dissent comments that there is uncertainty and some disagreement between the Circuits about the proper definition of confidential. The Supreme Court’s denial of certiorari leaves the question unanswered.

Justice Thomas’ closing paragraph underscores the uncertainty for public agencies as well as individuals and entities submitting sensitive information and documents to those public agencies: “The First Circuit’s decision warrants review. It perpetuates an unsupported interpretation of an important federal statute and further muddies an already amorphous test. For these reasons, I respectfully dissent from the denial of certiorari.”

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