National Parks and Conservation Association



498 F.2d 765 (D.C.Cir. 1974)





Appellant brought this action under the Freedom of Information Act, 5 U.S.C. 5 552 (1970), seeking to

enjoin officials of the Department of the Interior from refusing to permit inspection and copying of certain agency records concerning concessions operated in the national parks. The district court granted summary judgment for the defendant on the ground that the information sought is exempt from disclosure under section 552(b)(4) of the Act which states:


(b) This section does not apply to matters that are


(4) trade secrets and commercial or financial information obtained from a person and privileged or confidentiaL . .


In order to bring a matter (other than a trade secret) within this exemption, it must be shown that the information is (a) commercial or financial, (b) obtained from a person, and (c) privileged or confidential. Since the parties agree that the matter in question is financial information obtained from a person and that it is not privileged, the only issue on appeal is whether the information is "confidential" within the meaning of the exemption.


Unfortunately, the statute contains no definition of the word "confidential." In the past, our decisions

concerning this exemption have been guided by the following passage from the Senate Report, particularly the italicized portion:


This exception is necessary to protect the confidentiality of information which is obtained by the Government through questionnaires or other inquiries, but which would customarily not be released to the public by the person from whom it was obtained.


Whether particular information would customarily be disclosed to the public by the person from whom it was obtained is not the only relevant inquiry.


A court must also be satisfied that nondisclosure is justified by the legislative purpose which underlies theexemption.


The "financial information" exemption recognizes the need of government policymakers to have access to

commercial and financial data. Unless persons having necessary information can be assured that it will

remain confidential, they may decline to cooperate with officials and the ability of the Government to make intelligent, well informed decisions will be impaired.


Apart from encouraging cooperation with the Government by persons having information useful to officials, section 552(b)(4) serves another distinct It protects persons who submit financial or agencies from the competitive disadvantages


To summarize commercial or financial matter is "confidential" for purposes of the exemption if disclosure of the information is likely to have either of the following effects: (1) to impair the Government's ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained.


The financial information sought by appellant consists of audits conducted upon the books of companies operating concessions in national parks, annual financial statements filed by the concessioners with the National Park Service and other financial information. The district court concluded that this information was of the kind

"that would not generally be made available for public perusal." While we discern no error in this finding, we do not think that, by itself, it supports application of the financial information exemption. The district court must also inquire into the possibility that disclosure will harm legitimate

private or governmental interests in secrecy.


[Case remanded to the district court.]