Opinion ID: 416834
Heading Depth: 3
Heading Rank: 2

Heading: Confidential Commercial Information

Text: 25 That the requested documents do not contain trade secrets does not mean that they are ineligible for protection under FOIA Exemption 4. Information other than trade secrets falls within the second prong of the exemption if it is shown to be (1) commercial or financial, (2) obtained from a person, and (3) privileged or confidential. National Parks I, 498 F.2d at 766. Since there is no question that the documents at issue were submitted by a person and no allegation that the information they contain is financial or privileged, we need ask only whether that information is commercial and, if so, whether it is confidential. 26 Concerning the first question, the appellants argue strenuously that the commercial information provision of Exemption 4 should be confined to records that actually reveal basic commercial operations, such as sales statistics, profits and losses, and inventories, or relate to the income-producing aspects of a business. We agree that not every bit of information submitted to the government by a commercial entity qualifies for protection under Exemption 4, 28 but we have consistently held that the terms commercial and financial in the exemption should be given their ordinary meanings. See Washington Post Co. v. United States Department of Health & Human Services, 690 F.2d 252, 266 (D.C.Cir.1982); Board of Trade v. Commodity Futures Trading Commission, 627 F.2d 392, 403 (D.C.Cir.1980). In rejecting the argument that a noncommercial scientist's research design was an item of commercial information, moreover, we have recognized the possibility that an individual ... engaged in profit-oriented research ... could conceivably be shown to have a commercial or trade interest in his research design. Washington Research Project, 504 F.2d at 244 n. 6. Because documentation of the health and safety experience of their products will be instrumental in gaining marketing approval for their products, it seems clear that the manufacturers of IOLs have a commercial interest in the requested information. 27 The relevant question thus becomes whether the commercial information submitted to the FDA by the IOL manufacturers is confidential within the meaning of Exemption 4. Commercial information is confidential for purposes of the exemption if its disclosure would either (1) ... impair the Government's ability to obtain necessary information in the future; or (2) ... cause substantial harm to the competitive position of the person from whom the information was obtained. National Parks I, 498 F.2d at 770 (footnote omitted). Under the second prong of this test--the only one at issue here 29 --the court need not conduct a sophisticated economic analysis of the likely effects of disclosure. National Parks II, 547 F.2d at 681. Conclusory and generalized allegations of substantial competitive harm, of course, are unacceptable and cannot support an agency's decision to withhold requested documents. See id. at 680; Pacific Architects & Engineers, Inc. v. Renegotiation Board, 505 F.2d 383, 384-85 (D.C.Cir.1974). But the parties opposing disclosure need not show actual competitive harm; evidence revealing [a]ctual competition and the likelihood of substantial competitive injury is sufficient to bring commercial information within the realm of confidentiality. Gulf & Western Industries v. United States, 615 F.2d at 530. 30 28 In this case, the corporate appellees submitted a lengthy expert report and numerous depositions documenting the competitive injury that disclosure would cause. Although the appellants now suggest that the evidence offered by the appellees was contradictory and assert that no competitive harm would result, they did not satisfy the requirements of Federal Rule of Civil Procedure 56 and thus could not avoid summary judgment on this issue. See FED.R.CIV.P. 56(e). Those portions of the appellees' voluminous submissions discussing injuries unrelated to the use of disclosed documents by competitors are, in our view, irrelevant. See note 30 supra. But we have reviewed the appellees' evidence and found that, on the whole, the information submitted was sufficient to support the District Court's conclusions regarding competitive harm. 29 At several points, however, the District Court's application of an erroneous legal standard and the cursory nature of its discussion of competitive harm have given us pause. In particular, the definition of trade secrets that we have adopted and our doubts concerning the District Court's findings of competitive harm require the court to reconsider its analysis of documents V-3(1), V-3(2), VI-2, I-GG-1, II-B-1, II-B-2(1), and IV-D-6(2). If on remand the District Court is persuaded that the release of these documents would cause substantial competitive harm to the submitting manufacturers, it should authorize the FDA to withhold them under the second prong of Exemption 4.