[UPDATE: A unanimous Supreme Court reversed the Third Circuit, and held that corporations do not have “personal privacy” rights under FOIA.]
In September, the Supreme Court granted cert in the case, which could have a significant impact on FOIA exemptions if the 3rd Circuit’s reasoning is upheld.
“This is the first time in 35 years that an appellate court has looked at that language and seen [this interpretation],” says Max Kennerly, an associate at The Beasley Firm. Kennerly, who has covered the case for his Litigation and Trial Blog, adds that the Supreme Court has repeatedly said the purpose of FOIA is to release information. “It may indeed be good policy to create some sort of privacy exemption so that corporations can share records with federal law enforcement,” he says, “but it’s almost certainly not what the Congress that drafted [FOIA] thought of it.”
Read the whole story.
“Corporate privacy” is a big deal these days, not least since “WikiLeaks’ Julian Assange Wants To Spill Your Corporate Secrets“:
He also wants to clear up a misunderstanding. Despite his revolutionary reputation, he’s not antibusiness. He bristles at the media’s focus on his teenage years as a computer hacker who broke into dozens of systems, from the Department of Defense to Nortel, and was eventually convicted on 25 charges of computer fraud and fined thousands of dollars.
Instead, he prefers to think of himself as an entrepreneur. … “I saw it early on, without realizing it: potentiating people to reveal their information, creating a conduit,” Assange says. “Without having any other robust publisher in the market, people came to us.”
Leaks merely lubricate the free market, he says, settling into the couch and clearly enjoying giving me a lecture on economics. (Later, as a 45-minute interview pushes into two hours, he ignores his handler, who keeps urging him to leave for his next appointment.) He cites the example of the Chinese Sanlu Group, whose milk powder contained toxic melamine in 2008. While poisoning its customers, Sanlu also gained an advantage over competitors and might have forced more of them to taint their products, too, or go bankrupt—if Sanlu hadn’t been exposed in the Chinese press. “In the struggle between open and honest companies and dishonest and closed companies, we’re creating a tremendous reputational tax on the unethical companies,” he says.
Like any true believer, Assange sees his work in simple terms. Markets, he reminds me, can’t exist without information. Business will come to appreciate what he offers. And if that requires a few painful scandals in the process?
Assange doesn’t miss a beat. “Pain for the guilty.”
Assange says he’s preparing a leak relating to a major bank, and speculation has turned to Bank of America, which Assange mentioned a year ago in an interview.
Business clients will often ask their attorneys, “how can I avoid getting sued?” The answer comes swiftly: “don’t do anything that will get you sued.” Even assuming, which I do, that there are frivolous lawsuits and lawsuits brought for wrongful purposes, a simple empirical fact remains: if you don’t do something wrong, you likely won’t be sued, and very likely won’t be held liable.
That rule is just as true for corporations as it is for everyone else. Law-abiding corporations have far more to hear from others’ wrongful or illegal conduct than they have to fear from lawsuits. For every frivolous or improper lawsuit there are 100 meritorious lawsuits, 1,000 wrongful or illegal acts for which no one was held responsible, and 10,000 law-abiding companies that go about their business with minimal connection to the legal system.
And so it goes for leaks to high-profile whistleblower websites like WikiLeaks. Are big banks worried that WikiLeaks is going to disclose to the world extramarital affairs by their executives, unnecessary expenditures on first-class business travel, or the poor state in which they keep the bathrooms at some of their branch offices?
Of course not. Nobody (other than a handful of activist shareholders) really cares about that, not even WikiLeaks.
Are they worried that WikiLeaks is going to expose false claims to the government or violations of securities, tax, or safety laws? I doubt it; there’s already a whole government-approved system set up for those kinds of whistleblower claims. Those whistleblowers will call someone like me, not Assange, since I can use those laws to protect and to reward them in ways WikiLeaks can’t. The False Claims Act and Dodd-Frank Act have relator award and anti-retaliation provisions; no such luck on the Internet.
Big banks and big corporations are worried about WikiLeaks because they have something to hide. Because some routinely cheat millions of their customers. Because some recklessly kill innocent people. Because some get involved with rogue nations.
If you don’t want to have your information dumped on WikiLeaks, don’t do something so egregious that it would attract the attention of WikiLeaks.
While we’re on the subject of corporate privacy, let’s consider exactly what WikiLeaks is going to leak about corporations. Of course, at the moment, we don’t know any of the details about the upcoming bank releases, but we do know from WikiLeaks’ foreign policy and military operations disclosures that WikiLeaks tries to conceal information that might imperil the safety of individuals. Their focus is not on burning up intelligence sources for sport, but on revealing the big picture. (As some have argued, “What changed with WikiLeaks is the scale of the leaks – both in terms of mass and sensitivity. Rather than playing politics as usual, WikiLeaks is capable of interfering within it and setting its own agenda.”)
There are of course analogies to the banking and corporate sectors. Some corporate information is rightly held secret, like trade secrets, competitive business intelligence, and corporate strategy. I find it unlikely that WikiLeaks in any particular interest in this information, not least because, other than competitors, most of the public doesn’t care about any of this information. Would you really care if you knew how to make fluffy muffins in industrial quantities? Does it really help you to know what the next generation iPhone is going to look like? All of these things are rightfully kept secret by businesses and it seems unlikely that WikiLeaks would be able to create a splash by disclosing them.
Which brings us to the core of the issue: if WikiLeaks is not disclosing corporation information that is appropriately secret (e.g., trade secrets), then it is disclosing information that, although kept secret, is really more embarrassing than rightly confidential.
Should corporations have a legal right to be free from embarrassment? That’s the central issue in the FCC v. AT&T case (at least in terms of the Freedom of Information Act), it seems like it will be the central issue in the upcoming WikiLeaks disclosures.
Frankly, I haven’t seen any coherent argument for why corporations should be thought to have personal privacy rights. Corporations are not all created equal and endowed with certain inalienable rights; they are legal fictions recognized by the state as a means of making money. “Embarrassment” in that context it just means that the corporation won’t make as much money; the question then, properly phrased, is: should corporations have the right to make more money than they would if everyone knew the truth about them?
I think that answers itself.