Exemption 10

Supreme Court again rules in favor of openness

Posted: March 21, 2011 | Tags: Bloomberg News, Elena Kaga, Federal Reserve, FOIA, Freedom of Information, John Roberts, Supreme Court

For the third time in a month the Supreme Court has ruled in favor of letting the public have access to important government documents.

In the latest case Monday, the justices refused to hear a banking group’s appeal to keep secret the identities of banks that got trillions of dollars in loans from the Federal Reserve Bank during the financial crisis.

Bloomberg News and Fox News, in separate cases, had sued the Fed for details about the loans in 2008. A court ruled in 2009 that the documents should be released.

The Fed and the Clearing House Association appealed, but the 2nd U.S. Circuit Court of Appeals in New York City ruled last year that the information, including the bank names, could be released under the Freedom of Information Act. In the financial reform bill last year Congress already had ordered the Fed to begin releasing more information about its activities.

The Clearing House Association, which is comprised of many of the nation’s biggest banks, argued that releasing the names of banks that got emergency money during the crisis could cause a run on those banks. 

In the lower courts the Fed also argued against release, but did not appeal the lower court’s decision to the Supreme Court. The administration, in fact, asked the court not to hear the case.

Here is Bloomberg’s summary of the case.

The Fed ruling comes on the heels of a decision earlier this month, in which the high court told the Navy, and by extension other federal agencies, that it couldn’t use Exemption 2 to keep such things as maps out of the public domain. That exemption was designed, originally, to protect records "related solely to the internal personnel rules and practices of an agency.”

But a court ruled in 1981 that it could be used to protect finding that the exemption also covered any “predominantly internal” materials whose disclosure would “significantly risk circumvention of agency regulation or statutes.” This became known as the “high 2” exemption, with the original language “low 2.”

The Navy invoked “high 2” in denying a request by a Washington man for information about the blast radius of explosives stored on an island in the Puget Sound. The Navy turned over some documents but withheld others. Lower courts agreed with the government’s position.

In writing the opinion of the court, Justice Elena Kagan threw out the “high 2” interpretation, saying that “under this court’s construction of the statutory language, low 2 is all of 2." Otherwise, she wrote, the government’s interpretation would produce a sweeping exemption, posing the risk that FOIA would become less a disclosure than ‘a withholding statute.’ ”

She focused narrowly on the meaning of “personnel” in the law and wrote: “The data and maps, which calculate and visually portray the magnitude of hypothetical detonations, in no way relate to ‘personnel rules and practices,’ as that term is most naturally understood.”

In a similar vein, Chief Justice John Roberts, in a case involving AT&T and the Federal Communications Commission, ruled on March 1 that Congress didn’t intend the words “personal privacy” to grant corporations a broad right of privacy in FOIA cases.

It is not ideal, of course, to have to rely on the courts to reach the conclusion that the language of FOIA generally means what it says. It would be much better if FOIA officials, led by the Justice Department, would stop coming up with new and ever-more-troublesome ways to avoid disclosure.

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