July 22, 2020Client Alert

Part 2: How much of My Business’s Information Will Become Public as a Result of My Use of the Paycheck Protection Program (PPP)?

Since we initially addressed the issue on April 28, 2020, the protection of confidential information—submitted to the Small Business Administration (SBA)—has taken on heightened importance. On July 6, 2020, the SBA released the following information to the public:

  • Business names
  • Addresses
  • NAICS codes
  • Zip codes
  • Business type
  • Demographic data
  • Non-profit information
  • Jobs supported
  • Loan amount ranges

Further heightening attention on the PPP has been Freedom of Information Act (FOIA) litigation. On May 12, 2020, the Wall Street Journal (WSJ), among others, sued the SBA to release information regarding PPP borrowers. See WP Co. LLC et al v. U.S. Small Bus. Admin., No. 1:20cv1240 (D.D.C. filed May 12, 2020) (WSJ Litigation). Tellingly, the July 6 release of information by the SBA did not make the WSJ litigation moot—primarily because the plaintiffs seek information beyond the bulleted points, above. This is also made clear in a recent filing by the plaintiffs on July 17, 2020. See Joint Status Report, Dkt. No. 13 at 2-4 (The July 6 release does not satisfy Plaintiffs’ FOIA requests…). A briefing schedule for summary judgment has been proposed, commencing August 7, 2020. Id. at 4.

Preemptive Steps: What can be done to mitigate risk?

Because the press, competitors, disgruntled employees—and even non-profit groups—may seek FOIA requests beyond what has been released by the SBA, strategies can be employed (as described in our April client alert) under 5 U.S.C. § 552(b)(4) to mitigate the risk of information falling into the public domain. Ultimately, however, questions related to confidential information will be assessed against the U.S. Supreme Court test in Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356, (2019). This case provides a framework for protecting confidential information submitted to the SBA for PPP loan-related information. The Food Marketing case was addressed at length in our previous alert on April 28, 2020.

Please contact us if you are concerned about the content of information submitted to the SBA or should you wish to discuss these strategies further.

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