The U.S. Supreme Court heard oral arguments on Jan. 19 in a case that could have far-reaching ramifications for public access to corporate-related information. AT&T, fighting to prevent disclosure of Federal Communications Commission (FCC) files investigating the company, has argued that releasing the documents under the Freedom of Information Act (FOIA) would damage the company's privacy. This argument comes despite the fact that the expectation of privacy has long been recognized only as an individual right, not a corporate one.

A decision in the company's favor in Federal Communications Commission v. AT&T, Inc. would erect a major new obstacle to public access to information about federal interaction with corporations, including regulatory compliance and criminal investigations. Transparency advocates and privacy experts have asked the Court to overturn a lower court decision in favor of AT&T.

The Case

In August 2004, SBC Communications admitted improperly charging for services under an FCC program to subsidize phone and Internet access for schools and libraries. (In 2005, SBC merged with AT&T.) SBC returned the money and paid an additional $500,000 to the government under the terms of a consent decree adopted in December 2004, in exchange for the FCC closing its investigation into the matter.

In April 2005, Comptel, a trade association whose members include AT&T competitors such as Sprint and Verizon, submitted a FOIA request for the FCC's investigation file. SBC opposed the request on the grounds that the records were exempt from release under FOIA's "personal privacy" provision. In August 2005, the FCC decided to release the records because "generally, businesses do not possess 'personal privacy' interests." SBC appealed the agency’s decision.

In September 2008, the FCC decided against SBC’s appeal, noting FCC and judicial precedents that FOIA's personal privacy exemption would not apply to SBC in its corporate capacity. "We do not believe that protecting a corporation from 'embarrassment' falls within the purposes of Exemption 7(C)," the decision stated. AT&T filed suit to prevent the disclosure.

In September 2009, the Third Circuit Court of Appeals sided with AT&T, ruling that corporations could use FOIA's personal privacy exemption because "'personal' is the adjectival form of 'person,' and FOIA defines 'person' to include a corporation … Corporations, like human beings, face public embarrassment, harassment, and stigma." In April 2010, the government asked the Supreme Court to hear the case, and the Court accepted in September 2010.

In November and December 2010, the government and AT&T filed their briefs in the case, along with Comptel and several amici curiae. "The court of appeals' decision is itself a singular outlier in an otherwise uniform body of more than 35 years of decisional law and commentary," the government argued in its brief. "A corporation itself can no more be embarrassed, harassed, or stigmatized than a stone."

Potential Effects

Siding with AT&T would "erode the public's right to know," according to Sandra F. Chance, executive director of the University of Florida's Brechner Center for Freedom of Information. "This is unacceptable, especially when the documents in dispute concern taxpayer funds paid to AT&T."

"Broad new swaths of previously public records will be hidden from view" if the court rules for AT&T, writes Rebecca Jeschke of the Electronic Frontier Foundation, which generally supports individuals' privacy claims. "It's not hard to imagine how documents on the BP oil spill, or coal mine explosions, or the misdeeds of Bernie Madoff's investment firm might be significantly harder to find if AT&T's misguided arguments prevail."

A.C. Ranasinghe writes for the Sunlight Foundation that "federal agencies already have difficulty complying with FOIA requests in a timely fashion whenever business entities object to disclosure. Extending the privacy exemption to corporations may make businesses more able to resist or significantly delay public disclosure."

"Corporations across the country would gain a new weapon to deny public records and to hinder reporters' abilities to investigate not only corporate activities but also to monitor the federal regulators who police those corporations," said Hagit Limor, president of the Society of Professional Journalists.

Oral Argument

Reports from the oral argument seemed unfavorable to AT&T's case. "It might be an understatement to say the Supreme Court on Wednesday seemed skeptical that corporations have 'personal privacy' rights," wrote The Washington Post. "The justices did not seem ready to affirm the lower court ruling for AT&T," wrote USA Today. The New York Times described "widespread skepticism."

Grammar and word origins played a considerable role in the arguments. Assistant Solicitor General Anthony A. Yang, arguing for the government, stated that "'person' is used in certain legal contexts to refer to artificial persons and corporations and the like, 'personal' is not." Chief Justice John Roberts noted several instances "where the adjective was very different from the root noun," including "craft" and "crafty," "squirrel" and "squirrelly," "pastor" and "pastoral."

The case also featured a sort of role reversal. As the Wall Street Journal noted, "Usually in Freedom of Information Act cases, the government is on the opposite side, fighting to withhold documents from the public." However, Yang explicitly declined to endorse the Court's frequently held view that all exemptions to FOIA are to be interpreted narrowly. In December, Yang argued in a separate case for a broad interpretation of a different FOIA exemption.

Other Corporate Secrecy Issues

The week of Jan. 17 marked the one-year anniversary of the Supreme Court's decision in Citizens United v. Federal Election Commission, which permitted new forms of corporate spending to influence elections, for which few disclosure requirements currently exist. Though the Court upheld the long-standing but controversial notion that corporations are "persons" entitled to certain rights under the Constitution, the majority opinion also noted that disclosure regimes were permitted, seemingly pushing back against the idea that corporations are entitled to "personal privacy" rights.

The DISCLOSE Act, which attempted to institute stronger transparency for corporate spending in elections, passed the House but was unable to overcome a Republican filibuster in the Senate, keeping in place the cloak of secrecy and the potential for corruption that surrounds corporate campaign spending.

In addition, a proposal in 2010 to post federal contracts online faced opposition from corporations. Corporations have also used claims of "confidential business information" to prevent disclosure of dangerous chemicals.

Image in teaser by flickr user laura padgett, used under a Creative Commons license