Exemption 4 of FOIA Not Revoked By Later Enacted CWA Section 308

On May 30, a panel of the U.S. Court of Appeals for the DC Circuit decided the case of Environmental Integrity Project, et al. v. EPA. Affirming the District Court, the Court of Appeals held that Exemption 4 of the Freedom of Information Act (FOIA) trumps Clean Water Act Section 308’s authorization to the Environmental Protection Agency (EPA) to disclose to the public certain commercial and financial information EPA had obtained from power plant operators.

Reviewing the text of both FOIA and the CWA, the Court of Appeals notes that Exemption 4 was enacted in 1967, or a few years before the CWA was enacted and concludes that FOIA’s exemptions, being part of the Administrative Procedure Act, cannot be supplanted by later-enacted legislation that does not expressly revoke that exemption.

Exemption 4 of FOIA authorizes agencies to withhold “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” Section 308 of the CWA authorizes EPA to obtain records from power plants and states that those records “shall be available to the public” unless EPA determines that the records “would divulge methods or processes entitled to protection as trade secrets.”

The Court of Appeals noted that “[t]he problem is that Exemption 4 and Section 308 appear to conflict in certain circumstances. Exemption 4 exempts from disclosure both trade secrets and certain commercial and financial information. Section 308 exempts from disclosure only trade secrets, but it seemingly requires disclosure of commercial and financial information.”

The plaintiffs in this case requested records from EPA that it had previously obtained from power plants under Section 308. “All parties agree that the records requested by the environmental groups do not qualify as trade secrets (which are exempt under both Section 308 and Exemption 4) but do qualify as ‘commercial or financial information’ under Exemption 4 of FOIA.” As a result, the records requested by the plaintiffs are exempt from disclosure under Exemption 4 of FOIA but seemingly must be disclosed under Section 308 of the CWA.

When answer the question which statute prevails, the Court of Appeals found the answer quite simply to be:

The Administrative Procedure Act directly answers that question. Section 559 of Title 5 provides that FOIA exemptions apply unless a later statute expressly supersedes or modifies those exemptions. The statute states: ‘Subsequent statute may not be held to supersede or modify’ the APA, of which FOIA is a part, ‘except to the extent that it does so expressly.” (emphasis added by the Court of Appeals).

For this reason, the Court of Appeals found that EPA “permissibly invoked Exemption 4 to deny the environmental groups’ FOIA request.”