US Says CIT Abused Discretion in Disclosing Business Confidential Data in Injury Suit

The U.S. on Sept. 30 told the U.S. Court of Appeals for the Federal Circuit that the Court of International Trade erred in rejecting its efforts to redact parts of the trade court's decision sustaining an International Trade Commission injury determination. The government said CIT "abused its discretion" in publicly disclosing information marked by the commission as business confidential (CVB, Inc. v. United States, Fed. Cir. # 24-1504).

The U.S. argued there were three ways in which Judge Stephen Vaden erred, the first of which centered on the judge's reliance on the common law right of public access to judicial records instead of the "clear statutory language requiring the court to preserve the confidential status of information" treated as business proprietary information (BPI) by the ITC.

The second error was in finding claims of confidentiality to be waived since the parties' questionnaire responses were not individually bracketed, the government said. The final error was in finding that information on import volumes and market shares was publicly available and thus unqualified for BPI treatment, the brief said.

The trade court in January rejected the ITC's efforts to redact information in the court's decision sustaining the injury determination on mattresses, touting the need for transparency in the judicial system (see 2401090046). Exporter CVB appealed the decision to sustain the injury finding, while the U.S. joined as a cross-appellant to contest the BPI ruling and elements of the trade court's injury ruling.

The government noted that there are generally two categories of BPI at issue: questionnaire response information on individual domestic production operations and U.S. buyer names and import volume and market share data calculated using aggregated questionnaire responses.

The U.S. said the statute requires the trade court to preserve the confidential status of the BPI. The law says to shield information designated as BPI by the submitter, save for three instances: where the information can't be associated with a certain person, where the information was submitted under a protective order or where the ITC gets the consent of the submitter. The statute also "extends the robust protection afforded to BPI" to "actions before the CIT," the brief said.

While the statute allows the disclosure of BPI under "terms" and "conditions" as the court may order, Congress intended for those terms and conditions to relate to a protective order, the brief said.

The government defended its BPI treatment of both categories of information. Regarding the individual submissions, the information Vaden made public contains "granular and detailed data spanning several years" on a company's processes and operations. Disclosure of this information raises "legitimate concerns" that the data "could fall into a competitor's hands" or could cause "substantial harm to the competitive position of the firms involved."

Regarding the aggregate information, the U.S. said it should also be kept confidential because competitors could derive key confidential information about individual companies from the data. For data derived from the submissions of two firms, each of the firms could back out their own information from the totals, revealing their sole competitor's data, the brief said.

The U.S. argued that Vaden erred in relying on the common law right of public access to deny its motion. The trade court cited the 5th Circuit's decision in Binh Hoa Le v. Exeter Finance Corp., which unmasked certain information since it was designated for no other reason than the parties "wanted it that way." The government said the present case stands in "stark contrast" to Binh Hoa, since the protective order at issue here "was implemented pursuant to a clear statutory authority."

While transparency is crucial, "Congress clearly intended to foreclose public disclosure of information properly treated as BPI during the Commission’s administrative proceedings, unless such protections are waived by the submitters of that information," the brief said.

The government next said its claim to confidentiality was never waived, despite the lack of individual brackets of information. The statute clearly says waiver only occurs when the submitter consents to disclosure. None of the submitters consented here, and, to the contrary, "U.S. producers, importers, purchasers, and foreign producers submitted their responses in confidence, with the expectation that their information would be kept private," the brief said.

Lastly, Vaden made the information public after citing various news articles containing comparable information. The U.S. said the court "misapprehends" that the information the ITC used was "uniquely calculated" when compared to the market trend and market share information reported by the articles. While the news reports may have contained "somewhat similar information," the reports didn't reflect the "tailored information derived from confidential questionnaire responses that constituted BPI relied upon by the Commission."

The U.S. also defended its injury determination, claiming that it wasn't compelled to complete a segmented market analysis assessing flat-packed mattresses and packaged-in-a-box mattresses separately, as CVB claims. Aside from the statute's mandate to assess the domestic industry as a whole, the government said it also properly found that imports injured the segment of the U.S. market for mattresses packaged in a box. A brief from the injury proceedings' petitioners echoed these claims.