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<h1>Federal Relations<font color="#000080"><br>
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<!-- BEGIN MAIN BODY SECTION --> <h3>NASULG/CAAU/ACE Letter to OMB Regarding FOIA Issues Involved in Circular A-110
Revision Mandated in HR 4328, the FY '99 Omnibus Appropriations Bill</h3>
<p>April 5, 1999 </p>
<p>F. James Charney<br>
Policy Analyst<br>
Office of Management and Budget<br>
Room 6025<br>
New Executive Office Building<br>
Washington, D.C. 20503 </p>
<p><b><i>Re: Proposed Revision of OMB Circular A-110</i></b> </p>
<p>Dear Mr. Charney: </p>
<p>This letter is filed on behalf of the Association of American Universities, the
National Association of State Universities and Land-Grant Colleges, and the American
Council on Education concerning the proposed revision to OMB Circular A-110 that was
published in the Federal Register on February 4, 1999. These organizations and other
representatives of the higher education and research communities have expressed serious
concerns over the potential negative impact of the proposed rule on the scientific
research community. This letter deals specifically with legal concerns related to the
Freedom of Information Act. </p>
<p><b>Interpretation of Language Referencing the Freedom of Information Act</b> </p>
<p>Both the legislation and OMB's proposed implementing rule state that requesters may
have access to grant data &quot;through the procedures established under the Freedom of
Information Act.&quot; The imprecise wording of the legislation, and of OMB's proposed
rule, in their reference to &quot;procedures established under the Freedom of Information
Act&quot; has raised concerns regarding application of the FOIA exemptions. Will all
existing exemptions identified in the law and accompanying court case decisions continue
to stand without exception in agencies' interpretation of the statute? Could those seeking
a looser interpretation of FOIA exemptions establish a legal case based on the fact that
the law refers to &quot;procedures established under FOIA&quot; rather than directly to
the law itself? </p>
<p><b>Privacy Concerns</b> </p>
<p>Does interpretation of FOIA exemption (b)(6), concerning &quot;clearly unwarranted
invasion of personal privacy,&quot;<b><sup>1</sup></b> offer sufficient protection to
honor assurances that have been given and will necessarily continue to be given to private
persons, concerning the confidentiality and anonymity that are needed for certain types of
studies? Can grantees be assured that agencies will strictly interpret this exemption to
remove all personal identifiers from research data?<br>
Commercial Value </p>
<p>Exemption (b)(4), for &quot;trade secrets and commercial or financial . . . [and]
confidential&quot; information,<b><sup>2</sup></b> is also of particular importance to
grant recipients. Much research data that are produced under federal grants, but possessed
only by the recipient, are maintained as highly confidential for competitive reasons. The
mere possibility of releasing this valuable, confidential data to third parties, for other
than a federal purpose, is contrary to present grant terms and present FOIA law.
Presently, recipients own the data in that they may obtain all copyrights and patents that
arise from it. [OMB Circular A-110 ¼ __.36(a) and (b)]. Awarding agencies are granted
only a license in such rights. [Id.] Awarding agencies also have a right to obtain copies
of any data produced. [Id. at ¼ __.36(c)(1)]. They may choose to share the data with
third parties, however, only for a federal purpose. [Id. at ¼ __.36(c)(2)]. Does the
legislation leave these rules in place or does it override the Circular A 110 limit to
data retrieval only for a federal purpose? Or does it effectively broaden the definition
of federal purpose to include any public request? </p>
<p>OMB Circular A-110 allows federal agencies to obtain grant data - a predicate to any
public access under FOIA procedures - for <i>disclosure</i> only if done for a federal
purpose: no federal purpose, no disclosure. And yet disclosure of these data under FOIA
threatens to import the basic principles of FOIA that provide that agency records must be
disclosed, unless specifically exempted, without regard to the motive or even the identity
of the requester or the impact on the agency. Because of these basic principles, courts
have interpreted FOIA exemptions narrowly and resolved any doubt against the government.
(Under FOIA, the agency has the burden of proof in court.) </p>
<p>Third-party requesters under FOIA, at present, have <i>no</i> right of access to data
that the agency chooses to leave in a recipient's possession. [<i>Forsham v. Harris</i>,
445 U.S. 169, 171-72 (1980)]. The recipient thus is the sole owner of such data, unless
and until the agency exercises its right to obtain a copy. Due to the great volume of data
produced, the great majority of data is owned, in practice, only by the recipient. </p>
<p>It presently is unclear to what extent these data generated by non profit institutions
may be exempted from release under FOIA. In <i>Washington Research Project v. HEW</i>, the
U.S. Court of Appeals for the D.C. Circuit held that there was no protection, under FOIA
exemption (b)(4), against release of a scientific research <i>proposal</i> for federal
grant funding. [504 F.2d 238 (C.A. D.C. 1974)]: </p>
<p>&nbsp;</p>
<blockquote>
<p>It . . . defies common sense to pretend that the scientist is engaged in trade or
commerce. This is not to say that the scientist may not have a preference for or an
interest in nondisclosure of his research design . . . . We cannot, consistent with
[FOIA]'s recognized mandate to construe exemptions narrowly, extend them by analogies that
lead so far away from the plain meaning of exemption 4. Consequently, we hold that
research designs submitted in grant applications are not exempt from disclosure under
[FOIA].</p>
</blockquote>
<p>[Id. at 244]. </p>
<p>In other contexts, however, the law appears to recognize the inherently
&quot;trade&quot; and &quot;commercial&quot; nature of research data created by
universities, hospitals, and non profits with federal funding. [Cf. <i>Vest v. Waring</i>,
565 F. Supp. 674, 686-89 (N.D. Ga. 1983)]. (such research efforts are not automatically
immune from suit under the Sherman Act prohibition of actions in restraint of trade or
commerce.) A compilation of information can be a &quot;trade secret.&quot; [<i>Restatement
of Torts</i> ¼ 757 (1939)]. Both patent and copyright laws apply to such research, and
are referenced in ¼ __.36 of OMB Circular A-110. Moreover, even where nonprofit
institutions and researchers are involved, it is manifest that there is substantial
competition both within and among grantee institutions - competition for grant funds,
competition for public recognition, competition for nongrant resources, and, ultimately,
competition in the commercial marketplace for products that might be developed from the
work done by grantees. </p>
<p>The question whether grant recipients will be able to rely on exemption (b)(4) of FOIA
in the face of this new right of third-party access to data under the procedures of FOIA
can only be resolved with certainty in federal courts, and not by OMB. As a result, all
recipients will be required to operate for a period of some years without knowing the
extent of their protection, under FOIA, regarding data they consider to be valuable and
sensitive for commercial, or noncommercial but competitive, reasons. </p>
<p>The uncertain application of FOIA exemption (b)(4) leaves recipients utterly in the
dark about whether data that they treat confidentially and consider commercially valuable
will continue to be protected from release to third parties. This uncertainty is likely to
be a very negative consideration for all potential recipients in deciding whether to seek
federal funding for research projects. This can only impair future research and adversely
affect the public interest. </p>
<p><b>Prospective Application of Legislation</b> </p>
<p>The uncertain application of FOIA exemption (b)(4) makes critical an important aspect
of the new right of access required by the legislation: Is it the intent of OMB that the
circular change will apply only to data produced under awards made after OMB's final rule
is published and takes effect? Such clarification would be important to protect existing
data against improper and mistaken releases by agencies in response to requests made under
FOIA. Legal precedent supports this view. Over a decade ago, the United States Supreme
Court set out the principles governing whether implementing regulations issued by a
federal agency may be retroactive in their effect. </p>
<blockquote>
<p>[A] statutory grant of legislative rule making power [to a federal agency] will not, as
a general matter, be understood to encompass the power to promulgate retroactive rules
unless that power is conveyed by Congress in express terms.</p>
</blockquote>
<p>[<i>Bowen v. Georgetown University Hospital</i>, 488 U.S. 204, 208 (1988)].<b><sup>3</sup></b>
</p>
<p><b>Administrative Burden</b> </p>
<p>The legislation may well, in practice, do violence to the very law that it proposes to
apply. It may bury agencies in an avalanche of new requests, requiring them to obtain <i>and
review</i> mountains of data (<i>e.g.</i>, slogging through volumes of linear clinical
research due to the privacy exemption in ¼ 552(b)(6)) with the same care applied to
other, traditional agency records that the agency can limit by choice. This could grind
agency FOIA offices to a halt and stem the flow of other important information to the
public and press. </p>
<p>Moreover, it is likely to be simply impossible to apply FOIA's time limits to requests
for voluminous grant data. The very law that is being invoked to provide a door to grant
data stands in danger of erosion, if not evisceration, by the burdens that may be imposed
by the legislation. </p>
<p><b>Narrow versus Broader Interpretation of FOIA </p>
<p></b>Likewise, applying FOIA's exemptions under a traditionally narrow interpretation of
their scope - especially relating to claims of personal privacy and commercial
confidentiality - is more likely to harm than advance both the interests of grantees and
the granting agency. FOIA's exemption (b)(6), for example, does not protect against <i>any</i>
invasion of personal privacy, only one that is &quot;clearly unwarranted.&quot; But no
invasion of privacy of individuals participating in clinical trials or studies funded by
federal grants can be consistent with a &quot;federal purpose,&quot; even if such invasion
cannot be shown to be &quot;clearly unwarranted.&quot; Thus agencies must, as a practical
matter, imbue meaning into the &quot;federal purpose&quot; requirement of the Circular by
raising the bar for disclosure where private interests - personal privacy and commercial
confidentiality - are adversely affected. The meaning of &quot;federal purpose&quot; must
include the purpose for which the grant was made and the program objectives of the
granting agency; these goals militate toward a broad, rather than a narrow, interpretation
of the FOIA exemptions when applied to grant data through the revised Circular. </p>
<p>We appreciate your consideration of these comments. </p>
<p>Cordially, </p>
<p>Nils Hasselmo, President<br>
Association of American Universities </p>
<p>&nbsp;</p>
<p>Stanley Ikenberry, President<br>
American Council on Education </p>
<p>&nbsp;</p>
<p>C. Peter Magrath, President<br>
National Association of State Universities and Land-Grant Colleges </p>
<p>NH/SQ/llt </p>
<hr>
<b><sup><p>1 </sup></b>5 U.S.C. ¼ 552(b)6).<br>
<b><sub>2</sub></b> Id. ¼ 552(b)(4).<br>
<b><sub>3 </sub></b>Although <i>Georgetown</i> was criticized in some quarters for
abandoning a test that balanced competing public interests and fairness considerations, it
has been followed since and is now seen even by its critics as &quot;part of a broader
movement toward disfavoring retroactivity in the law.&quot; Kenneth Culp Davis &amp;
Richard J. Pierce, Jr., <i>Administrative Law Treatise</i>a ¼ 6.6 (Supp. 1998).<br>
</p>
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