Matt Wade / Flickr
A ruling in FMI vs. Argus Leader could mean that the public will learn more about which grocery companies generate the most income from SNAP.

Culture Ideas Issues Justice News Plate Provocations Shelf Systems

Washington, D.C.—The Supreme Court on Monday heard arguments in a case that will decide whether or not the United States Department of Agriculture (USDA) will have to disclose retailers’ sales data from the federally-funded Supplemental Nutrition Assistance Program (SNAP, formerly food stamps). It will likely announce its decision later this summer.

If the court rules that the agency does have to release retailers’ SNAP sales information, the public will learn more about which grocery companies generate the most income from the program. The last—and most recent—public disclosure of that information happened by accident in 2013, when a Walmart executive let slip at a dinner party that the company made $13 billion from the program.

It’s impossible to predict what disclosure of the data will mean for public opinion on large grocery companies, but retailers like Walmart and Amazon have recently received criticism for their employees’ reliance on SNAP benefits. An additional data point about corporate dollar gains from the program could keep those companies in the spotlight. SNAP sales transparency would also provide crucial data for researchers who study the public health impacts of retailers’ advertisements around SNAP distribution dates.

The Argus Leader, a South Dakota-based newspaper, first sought the disclosure of this data through the Freedom of Information Act (FOIA) in 2010. Since 1966, FOIA has required the government to release previously undisclosed documents to the public unless they fall under one of nine exemptions. USDA denied the Leader’s request based on Exemption 4, which protects “trade secrets and commercial or financial information.”

It’s unclear how retailers might use each others’ SNAP sales to gain a competitive edge.
The case has been winding its way through the courts since 2011 (see the Leader’s timeline here). After USDA declined to continue appealing the case following a 2017 decision in favor of releasing the data, the Food Marketing Institute (FMI), a group representing the interests of food retailers large and small, intervened on the agency’s behalf. Last May, the Eighth Circuit Court of Appeals ruled that USDA must release the data based on a precedent established in 1974 by the D.C. Circuit in a case called National Parks and Conservation Association v. Morton. In that case, the court established a test for Exemption 4: In order to withhold information from the public, disclosure would either have to impair the government’s ability to collect information in the future or cause substantial competitive harm to the business whose information is disclosed. Other courts have largely adhered to the National Parks decision, though their interpretations of “substantial competitive harm” have varied.

The Eighth Circuit’s decision, which was announced in May of 2018, determined that the release of SNAP sales data was not likely to cause substantial competitive harm, meaning FMI’s argument failed the test established in National Parks. I outlined some of the arguments for and against the “substantial competitive harm” question in August.

According to agricultural economist Ricky Volpe, who testified on behalf of the Leader on Monday, it’s unclear how retailers might use each others’ SNAP sales to gain a competitive edge. Would high SNAP sales mean the competition is more motivated to build stores nearby (the logic being that they’re moving near a large group of customers who have a guaranteed food budget every month)? Or would the competition instead choose to locate in wealthier areas (the logic being that high SNAP sales mean low neighborhood incomes and less spending power)? Volpe also argued that large-scale retailers are using such sophisticated data to make decisions about pricing and location that competitors’ SNAP sales likely wouldn’t add much additional insight. FMI has argued that retailers operate on thin profit margins and any disclosure would threaten “the jobs they provide and the communities they nurture.”

Justice Ruth Bader Ginsburg pointed out that FOIA was implemented to compel the disclosure of information even when government officials would rather not.
At stake in this case is the precedent established in National Parks and, by extension, the definition of “confidential.” FMI has argued that the court should overturn National Parks and use the dictionary definition of the term “confidential.” The Merriam-Webster Dictionary, which The New Food Economy uses, includes as one of its definitions for “confidential”: “marked by intimacy or willingness to confide.” That would mean FMI’s argument leans pretty heavily on the part of that definition that includes willingness to disclose. The Leader has argued in favor of maintaining the National Parks test, which has been interpreted to mandate the disclosure of SNAP sales data.

“From my perspective, I thought we were fairly well able to argue our side of the case: that this very clearly, as we demonstrated in the lower courts, this is basic public information, and trying to decide between what the definition of “confidential” is and all of that can get into the weeds,” says Cory Myers, news director for The Argus Leader. “But at its base, this is a very basic request, the kind of request that journalists make from their governments all the time, and I feel like our lawyer was able to portray that, and in fact some of the justices’ questions specifically addressed that. Justice Bader Ginsburg asked about the broadness of its impact and what this means for FOIA.”

The justices also spent a lot of time questioning whether or not FMI should be able to intervene in this case at all. Justice Sonia Sotomayor asked why the group had the right to argue the case when the government had declined to appeal in 2017. The Leader has also challenged FMI’s standing in the case.

Melissa Wasser, coalition director for News Media for Open Government, which advocates on issues surrounding press freedom, says she was somewhat surprised by the amount of time the justices spent on the question of FMI’s standing as an intervenor. If the court rules that FMI did not have the right to bring this case in the first place, the broader questions surrounding Exemption 4 would be saved for a later date. “They took a round of gay marriage cases in 2013, and they heard the arguments, and people thought this was it,” she says. “The court was like, ‘nope, they don’t have standing.’” In that case, too, the court declined to make a determination on several cases before it ultimately ruled in favor of same-sex marriage.

The justices also spent a lot of time questioning whether or not FMI should be able to intervene in this case at all.
Justice Ruth Bader Ginsburg pointed out that FOIA was implemented to compel the disclosure of information even when government officials would rather not disclose it, as in cases where government agencies or officials might feel beholden to corporate interests. Justice Sotomayor added that FOIA already has an exemption that allows Congress to choose to withhold certain information, and a broad ruling on Exemption 4 would mean the executive branch could, too. (Congress recently considered acting to keep retailers’ SNAP sales secret in early drafts of the farm bill and the agriculture appropriations bill.)

Justices Samuel Alito and Neil Gorsuch appeared to challenge the precedent set by National Parks. Contrasting the D.C. Circuit’s “substantial competitive harm” test with a dictionary interpretation of the word “confidential,” Justice Alito presented a hypothetical to the Leader’s lawyers: If a statute set a deadline of 30 days, and then a court interpreted that deadline to mean 50 days, and everyone accepted the 50-day deadline, does that mean the Supreme Court should also accept a 50-day deadline? Justice Gorsuch followed up by asking where, in the 30-vs-50-day example, the justices’ tools of interpretation should take their cue: In the literal text or in three decades’ interpretation of the text by lower courts and by Congress? (The Leader argued that Congress had validated the National Parks decision by declining to reverse this interpretation of Exemption 4, despite having had many opportunities to do so.)

The Court could take its decision in many different directions. It could decide that FMI did not have the right to intervene in the case and therefore decline to rule on Exemption 4. It could decide to overturn National Parks in favor of a dictionary-based, business-friendlier definition of “confidential.” It could even invent its own definition of “confidential,” or offer clarification of the “substantial competitive harm” test.

We’ll find out later this summer.

H. Claire Brown

Claire Brown is a staff writer for The New Food Economy focusing on food policy and the environment. Her reporting has won awards from the Newswomen’s Club of New York and the New York Press Club. She is based in Brooklyn. She can be reached via email at [email protected] or on Twitter at @hclaire_brown.

Sign up for our Newsletter

Get a weekly dish of features, commentary and insight from the food movement’s front lines.