AT&T Case Shows Supreme Court Isn’t Big On Privacy Rights For Companies

A year ago, the U.S. Supreme Court granted extraordinary “free speech” rights to corporations, when it ruled (in the Citizens United v. Federal Election Commission) that corporations had a right to spend money during elections with few limitations. That decision overturned election-spending laws going back to the 1980s and suggested that the current court had very expansive ideas about corporate “personhood” that could lead to a series of business-friendly decisions. (And indeed, the U.S. Chamber of Commerce was on the winning side of 13 of the 16 cases it weighed in on in the last term.) But early reports of oral arguments in FCC v. AT&T suggest that while the Supreme Court might be giving some big wins to major business, it draws the line at protecting a company’s “personal privacy.”

The case involves an FCC investigation into accusations that AT&T (NYSE: T) overcharged schools in New London, Conn. AT&T settled the FCC’s case in 2004, agreeing to pay $500,000 but not admitting to any wrongdoing.

A lot of interesting documents were produced along the way, and a group of AT&T competitors sought some of those documents through a Freedom of Information Act request. The FCC deleted some material it deemed was connected to AT&T trade secrets, and the names of individuals. But when AT&T suggested that more documents should be withheld because the release might violate AT&T’s own “personal” privacy, the FCC drew the line. AT&T sued and won its case at the appellate level. (AT&T is the plaintiff in this case.) The Philadelphia appeals court that sided with AT&T said that under the current rules of corporate personhood, the company could use privacy laws to keep the documents secret.

But that case has moved up to the Supreme Court, and media in the courtroom Wednesday painted a picture of even leading advocates of corporate rights showing deep skepticism towards AT&T’s argument. The WSJ quotes Chief Justice John Roberts saying:

“I don’t think there’s much to the argument that because ‘person’ means one thing, ‘personal’ has to be the same relation,” he said. The chief justice observed that he had easily found “other examples where the adjective was very different from the root noun,” including “squirrel” and “squirrelly,” “pastor” and “pastoral,” and “craft” and “crafty.”

And Scalia, quoted in the New York Times, said: “Can you give me any examples in common usage where people would refer to the personal privacy of a corporation?” Justice Scalia asked Mr. Klineberg. “Do you have any examples from The New York Times (NYSE: NYT), from, you know, Boswell, from anywhere, that anybody refers to the interests of a corporation as the ‘personal privacy’ of General Motors?”

AT&T’s lawyer argued that the court shouldn’t allow the law “to be a tool for an organization’s adversaries to obtain access to harmful or embarrassing documents” that aren’t of public import. For example, the documents might reveal disparaging remarks by AT&T employees about the company’s customers or about government regulators.

Corporations are usually on the defendant’s side of privacy lawsuits. But the discussion during oral arguments Wednesday suggests that when they’re on the plaintiff’s side of the aisle in a privacy lawsuit, even though the Supreme Court has granted some controversial “personal” rights to corporations, there will be a sharp limit on what kind of powers corporations have. If AT&T were to win in this case, many businesses might want to use privacy laws to file suits and keep embarrassing information under wraps.