Is This the Beginning of a Fair Reading Era?

The Supreme Court’s June 24 ruling in Food Marketing Institute v. Argus Media Group effected a significant change in the law governing the Freedom of Information Act’s (“FOIA”) provision that exempts confidential commercial or financial information from disclosure under FOIA. You can find my take on the case here. The cornerstone of the Court’s holding was its interpretation of the term “confidential.” The Court’s holding depended in significant part on its rejection of policy-driven interpretations of statutory language choosing instead to give statutes a “fair reading.”

The holding of Food Marketing Institute extended last fall’s decision in a 5-4 decision that the white collar exemptions under the Fair Labor Standards Act (FLSA) should no longer be construed narrowly. See Encino Motorcars, LLC. v. Navarro, 584 U.S. __, 138 S. Ct. 1134 (2018). This overturned decades of FLSA case law that hewed to the principle that exemptions should not be extended to workers “other than those plainly and unmistakably within its terms and spirit” so as to avoid abusing “the interpretive process and [frustrating] the announced will of the people.” A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493 (1945). The Court stated that “the FLSA gives no ‘textual indication’ that its exemptions should be construed narrowly, [thus] ‘there is no reason to give [them] anything other than a fair (rather than a “narrow”) interpretation.’” Encino Motorcars, 138 S.Ct. at 1142. You can find my colleague’s riff on Encino Motorcars here.

Without diving in the Food Marketing Institute weeds that I covered on Monday, the Court again cast aside decades-old precedent in which lower courts “narrowly” construed the term “confidential” so as to require parties to prove they would suffer substantial competitive harm if their confidential commercial or financial information was released. The justification for the narrow interpretation was to achieve the goal of transparency for which FOIA was enacted. See generally National Parks & Conservation Assn. v. Morton, 498 F. 2d 765 (D.C. Cir. 1974).

The Supreme Court, however, expressed its distaste for such policy-driven interpretations of statutes characterizing the so-called National Parks standard as a “relic from a ‘bygone era of statutory construction.’” Food Marketing Institute, slip op. at 8 (citation omitted). While one could say that transparency is a valid goal, the Court made it clear that the exemptions from disclosure are just as important as the requirement for disclosure. This reasoning came straight out of the Court’s decision in Encino Motorcars. Moreover, the Court stated it will not “approve [the] casual disregard of the rules of statutory interpretation [because] a court’s proper starting point lies in a careful examination of the ordinary meaning and structure of the law itself.” If “that examination yields a clear answer, judges must stop.” Id. (citations omitted).

Having applied the “fair reading” principle twice in one term, the Court is sending a strong message—it will show no hesitation to reject settled interpretations of laws when it perceives “ordinary” meanings being supplanted by interpretations aimed at achieving broad, but otherwise unstated, legislative goals. Of course, whether a meaning is ordinary may depend on the eyes of the beholder.