Lawyers for AT&T have won a court battle with the Federal Communications Commission that turned on a question largely of semantics -- whether corporations are entitled to assert claims of "personal" privacy.
In an appeal before the 3rd U.S. Circuit Court of Appeals, the FCC argued that when Congress crafted the exemptions clauses of the Freedom of Information Act, it intended the phrase "personal privacy" to extend only to human beings.
But AT&T begged to differ, arguing that the FOIA specifically defines the term "person" to include corporations, and therefore that "Congress's choice of the adjectival form of that word -- 'personal' -- should be understood to refer to that definition."
By contrast, AT&T argued, "where Congress intends to refer to natural persons and to exclude corporations -- both in the FOIA itself and in the closely related Privacy Act of 1974 -- it uses the term 'individual.'"
Now the 3rd Circuit has ruled that AT&T's lawyer, Colin S. Stretch of Kellogg Huber Hansen Todd Evans & Figel in Washington, D.C., had the better argument, and that the FCC was therefore wrong to block AT&T from invoking the personal privacy protections in FOIA Exemption 7(C).
"It would be very odd indeed for an adjectival form of a defined term not to refer back to that defined term," U.S. Circuit Judge Michael A. Chagares wrote in a 16-page opinion in AT&T Inc. v. Federal Communications Commission, which was joined by 3rd Circuit Judge Julio M. Fuentes and visiting 9th Circuit Judge A. Wallace Tashima.
But Chagares said the 3rd Circuit had refused to go as far as AT&T wanted by declaring that all of the company's documents were entitled to protection from public disclosure under the FOIA's privacy clause.
Instead, Chagares said, the case must be remanded to the FCC so that the agency may have the first chance to apply the statute's balancing test.
"Holding, on the very limited record before us, that Exemption 7(C) protects every reasonably segregable jot and tittle of each document that AT&T submitted would be truly extraordinary, and, in our view, not an appropriate course of action for a reviewing court to undertake in the first instance," Chagares wrote.
The ruling stems from an appeal taken by AT&T to challenge an FCC decision that granted an FOIA request by CompTel, a trade association, for access to an FCC investigation of AT&T.
According to court papers, AT&T informed the FCC in August 2004 that an AT&T internal investigation had revealed "certain irregularities" in the company's billings to a Connecticut school under the "E-Rate" program, an FCC-operated mechanism designed to assist schools and libraries in gaining access to telecommunications and related services.
The FCC launched an investigation that ultimately led to a December 2004 settlement in which AT&T agreed to pay $500,000 and to a consent decree that mandated a corporate compliance program.
Several months later, CompTel filed an FOIA request demanding access to the entire investigative file.
The FCC's decision on that FOIA request sparked two court battles -- one by CompTel in federal district court in Washington seeking access to the documents it was denied, and a 3rd Circuit appeal by AT&T to block the FCC from releasing any of the documents.
The 3rd Circuit appeal focused mostly on the purely legal question of whether a corporation has the right to invoke the personal privacy protections of the FOIA's Exemption 7(C).
Chagares found there was a dearth of case law on the precise question raised in the appeal, and that the FCC was asking the appellate panel to read too much into what little law there was.
"Neither the Supreme Court nor this court has ever squarely rejected a proffered personal privacy interest of a corporation," Chagares wrote.
"The most that can be said of the Supreme Court's cases and of our cases is that they suggest that Exemptions 7(C) and 6 frequently and primarily protect -- and that Congress may have intended them to protect -- the privacy of individuals."
Chagares said he rejected as "unconvincing" the "text-based" arguments by the FCC and CompTel.
"They cite Supreme Court case law for the proposition that, whenever possible, statutory words should be interpreted 'in their ordinary, everyday senses.' The ordinary meaning of 'person' is human being, so, the argument concludes, 'personal' must incorporate this ordinary meaning," Chagares wrote.
"This argument is unpersuasive. It fails to take into account that 'person' -- the root from which the statutory word at issue is derived -- is a defined term," Chagares wrote.
FCC attorney Michael A. Krasnow argued that the FOIA's other uses of the phrase "personal privacy" showed that the phrase does not encompass corporations, such as Exemption 6, which shields from mandatory disclosure "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy."
Krasnow said that courts have held Exemption 6 to apply only to individuals and not to corporations, and therefore that the "personal privacy" in Exemption 7(C) applies only to individuals, as well.
"This argument is flawed," Chagares wrote, explaining that even if the courts were to hold that Exemption 6 is limited to individuals, "this does not mean that each and every component phrase in that exemption, taken on its own, limits Exemption 6 to individuals."
