Two recent appeals court decisions highlight a company’s role in Freedom of Information Act (FOIA) litigation challenging the government’s decision to withhold the company’s information from public release. These types of FOIA lawsuits arise when the government refuses to release a company’s confidential information after a FOIA request and the requester challenges the action in federal court. In federal court, the government bears the burden of proving that the withheld information falls within a FOIA exemption, but the company that submitted the information to the government plays a crucial role in providing the needed evidence to overcome that burden. In this blog, we review the recent decisions and offer important takeaways for any company, including government contractors, that provides confidential information to the government.
1. Kalbers v. U.S. Dep’t of Justice – Proper Timing for Intervening in the Litigation
In the first case, the Ninth Circuit addressed the proper timing for intervening in a FOIA lawsuit over the government’s withholding of records related to the Volkswagen emissions scandal. Proposed Intervenor, Volkswagen, appealed after the district court denied Volkswagen’s motion to intervene. The district court found that Volkswagen’s intervention was untimely because years passed since Volkswagen first learned about the FOIA lawsuit. The Ninth Circuit disagreed with that analysis. Although the Court agreed that a party cannot unduly delay a motion to intervene, the Ninth Circuit held that the proper measure of delay was based on when Volkswagen should have known the agency may not adequately protect Volkswagen’s interests—not when Volkswagen first learned of the litigation.
By this standard, the Ninth Circuit determined that Volkswagen did not delay. Volkswagen moved to intervene only a few weeks after learning their interests may depart from the agency’s interests. During the early phases of the litigation, it appeared that Volkswagen’s interests aligned with the agency’s interests. Initially, the Department of Justice relied on Exemption 7(A), a law enforcement exemption, to withhold all records related to Volkswagen’s emissions scandal. But while preparing its Vaughn index, DOJ decided to rely on Exemption 4 as well, asserting that the records contained Volkswagen’s confidential information. At that point, well into the litigation, “[Volkswagen]’s knowledge about the confidentiality and commercial nature of its records was now important” and Volkswagen realized that DOJ could no longer fully protect its interests.
2. Friends of Animals v. Bernhardt – Being Sufficiently Involved in the Litigation
In the second case, the Tenth Circuit explored the consequences of a company not being sufficiently involved in FOIA litigation about the company’s confidential information. In response to a request for several declarations for importation of fish and wildlife, the Fish and Wildlife Service (FWS) withheld the names of importers as confidential commercial information under Exemption 4. When the requester challenged FWS’ actions in court, the district court granted summary judgment to FWS on the basis that the information sought qualified as confidential, in part based on a declaration submitted by FWS’s FOIA Officer explaining that the redacted information was actually and customarily treated as private by the submitter. On appeal, the requester argued that the declaration was impermissible hearsay, because only the submitter—not the agency—had firsthand knowledge as to the confidential treatment of the information. The Tenth Circuit agreed. As a result, the matter was remanded to the district court.
3. Important Steps Contractors Should Take
With these recent decisions in mind, contractors should take these steps if their information is the subject of FOIA litigation:
- Engage the U.S. Attorney’s Office handling the case for the agency as soon as possible.
- Provide the U.S. Attorney’s Office with a declaration from a company official supporting the facts necessary to show that the company treats the information as confidential to avoid hearsay exclusions.
- Evaluate the U.S. Attorney’s Office’s strategy and determine whether all potentially applicable exemptions are being asserted.
- Consider intervening in the lawsuit as soon as the company learns of the case, but no later than the point when the company believes its interests are no longer being completely protected.
Any company providing confidential information to the government should monitor potential FOIA disclosures. PilieroMazza’s attorneys are here to help protect your company’s confidential information from release under FOIA, whether responding to FOIA Submitter Notification Letters or advising on and intervening in FOIA litigation. Should you have questions, please contact Kevin Barnett, the author of this blog, or another member of the Firm’s Government Contracts Group.
Special thanks to Law Clerk, Lucinda Hendrix, for her assistance with this post.
 Kalbers v. U.S. Dep’t of Justice, No. 20-56316, 2021 WL 6123196 (9th Cir. Dec. 28, 2021).
 See Friends of Animals v. Bernhardt, 15 F.4th 1254 (10th Cir. 2021).