Opinion ID: 409411
Heading Depth: 3
Heading Rank: 2

Heading: The Test for Confidentiality

Text: 62 Under the standard test in this circuit, commercial or financial information is confidential under Exemption 4 if disclosure is likely (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. National Parks & Conservation Association v. Morton, 498 F.2d 765, 770 (D.C.Cir.1974) (National Parks I ) (footnote omitted). 51 The test is an objective one and the government's promise of confidentiality is not dispositive. Id. at 766. 63 In this case, the government concedes that disclosure will not cause competitive harm, 52 and the conflict of interest information is sufficiently important to be necessary. Thus the only issue is whether disclosure is likely to impair the government's ability to obtain similar information in the future. 64 As an initial matter, it might be thought that since consultants must complete Form 474, the government's ability to obtain information cannot be impaired. National Parks I supports this view. We stated: 65 Since the concessioners are required to provide this financial information to the government, there is presumably no danger that public disclosure will impair the ability of the government to obtain this information in the future. 66 Id. at 770 (emphasis in original). In contrast, in Women in Science, we noted that: 67 (T)hose who expect public dissemination of their remarks may well temper candor with a concern for appearances and for their own interests. 68 566 F.2d at 346 (quoting United States v. Nixon, 418 U.S. 683, 705, 94 S.Ct. 3090, 3106, 41 L.Ed.2d 1039 (1974)). 53 69 In our view, whether disclosure is mandatory is certainly a factor in deciding whether the government's access to information is likely to be impaired. If the government can enforce the disclosure obligation, and if the resultant disclosure is likely to be accurate, that may be sufficient to prevent any impairment. In this case, the government can readily enforce the disclosure duty. But, if only because Form 474 leaves room for interpretation of which financial interests relate directly or indirectly to your consultancy duties, we cannot dismiss the possibility that part-time consultants may construe Form 474's disclosure requirement narrowly and thus may not disclose all possible conflicts of interest. Thus, despite the compulsory nature of the disclosure, we believe the possibility of impairment merits further analysis. 54 70 Turning finally to the likelihood of impairment, the government relies primarily on our statement in Women in Science, 566 F.2d at 346, that disclosure of the information on Form 474 very likely would impair the Government's ability to acquire this information in the future. We, on the other hand, do not believe that this conclusion, drawn in the context of another case and based on the record in that case, is dispositive or even very helpful. In Women in Science, the district court, in the course of a one-page order, made an unexplained factual determination that disclosure would impair the government's ability to acquire this information in the future, 55 and we affirmed that finding on appeal. But what was true then need not be true today. In particular, a decision today on impairment must take into account Congress' view, in passing the Ethics in Government Act of 1978, that the benefits of public disclosure of the finances of highly placed government officials outweigh the costs in invasion of privacy, deterring people from accepting government jobs, and possible inaccurate disclosure. 56 71 Even more important, in Women in Science, neither we nor the district court stated the extent to which the government's ability to obtain information would be impaired. A minor impairment cannot overcome the disclosure mandate of FOIA. Rather, the question must be whether the impairment is significant enough to justify withholding the information. Cf. Pacific Architects & Engineers Inc. v. Renegotiation Board, 505 F.2d 383, 385 (D.C.Cir.1974), where we remanded an Exemption 4 claim for a detailed factual inquiry into, among other things, the extent to which disclosure ... will impair the government's ability to obtain necessary information of this type in the future. 72 This inquiry necessarily involves a rough balancing of the extent of impairment and the importance of the information against the public interest in disclosure. We do not decide today the details of the balancing process. 73 Apart from relying on the finding of impairment in Women in Science, the government produced no evidence except a conclusory affidavit by the HHS director of personnel policy. Thus, the government has not yet established its Exemption 4 claim. On the other hand, we cannot say that it will be unable to do so. The district court, of course, made no finding on the extent or even the fact of impairment. We therefore remand to give the government an opportunity to provide the detailed factual justification for withholding under Exemption 4 required by Pacific Architects & Engineers.