Recent FOIA Decisions Address “Trade Secret” and “Private Information” Exemptions

The Public Access Counselor (PAC) of the Illinois Attorney General’s office recently issued two binding opinions addressing the Freedom of Information Act (FOIA). Specifically, the opinions found two public entities violated FOIA by improperly applying for the “trade secrets” exemption and the “private information” exemption.

In PAC Op. 18-004, a reporter submitted an FOIA request to the city of Elgin seeking information regarding a construction budget submitted by a private developer. The city denied the reporter’s request, claiming that the records were exempt from disclosure as a “trade secret.” FOIA’s “trade secret” exemption, found at 5 ILCS 140/7(1)(g), protects commercial or financial information where the information is furnished under a claim that it is proprietary, privileged, or confidential, and disclosure of the information would cause competitive harm to the person or business.

The city argued that the developer submitted the information under an implied promise that it would be kept confidential. Further, the city asserted that disclosure of the budget would lead to competitive harm by allowing other developers to model and structure their developments based on confidential information. The PAC disagreed, however, and found that, even if the developer had furnished the budget under a claim of confidentiality or privilege, there was no evidence that disclosure of the information would actually cause the developer competitive harm.

This decision may impact public school districts, who often receive financial information from private entities contracting to do various projects. In light of this decision, school districts should be cognizant that proposals, development budgets, and other submissions by private entities may not be exempt from disclosure as a “trade secret” under FOIA. Without a clear statement that the submitted information is intended to be private and evidence demonstrating possible competitive harm if disclosed, school districts may be required to disclose financial information submitted to them by private entities. Further, even with a clear statement, it must additionally be established that disclosure would cause competitive harm.

Also in the world of FOIA, in February the PAC held that the city of Joliet violated the Act when it improperly redacted a water bill to exclude the customer’s name. In that case, PAC Op. 18-002, a school district requested the water bill associated with a specific address to determine who lived at the location. The city, however, argued that the name of the customer was private information and exempt from disclosure under section 7(1)(b). The PAC determined that the customer’s name was not private information, but rather “basic information,” and was, therefore, subject to disclosure under FOIA. This decision may serve as a useful tool to school districts for purposes of residency and homeless dispute hearings.

As always, we will continue to provide updates as the PAC releases decisions that impact school districts’ FOIA obligations. For now, school districts are encouraged to reach out to their legal counsel if they have any questions regarding their obligations under FOIA or these decisions.