Top court to decide corporate privacy rights

WASHINGTON (Reuters) - The U.S. Supreme Court said on Tuesday that it would decide whether corporations like AT&T Inc can claim personal privacy to prevent the disclosure of government records about them under the freedom of information law.

The justices agreed to hear an Obama administration appeal arguing that the law's personal privacy protections apply only to individuals, not to corporations like the telecommunications giant.

A U.S. appeals court in Philadelphia handed AT&T a victory by ruling that corporations may invoke personal privacy as a legal basis for claiming that government records about them should be exempt from disclosure.

The administration said it marked the first time in the 35-year-history of the law that it has been extended to corporations.

Six public interest groups supported the administration's appeal.

Unless the Supreme Court overturns the ruling, government records could be withheld about coal mine safety violations, offshore oil rig problems, dirty conditions at a food manufacturing plant and questionable investment bank financial dealings, the groups said.

AT&T said it has the right to make use of the Freedom of Information Act's personal privacy exception.

The company argued that the Federal Communications Commission should keep secret all the information it gathered from AT&T during an investigation into its participation in the federal E-Rate program, which helps schools and libraries get Internet access.

AT&T informed the FCC in 2004 that an internal investigation had revealed "certain irregularities" in the company's billings to a Connecticut school under the program.

The FCC launched an investigation that led to a December 2004 settlement in which AT&T agreed to pay $500,000 and to adopt a two-year compliance program.

CompTel, a trade association representing some of AT&T competitors, then made a request under the freedom of information law for all records in the FCC's file on the matter.

The FCC decided to release some of the records, but AT&T said that releasing any information violated its right to personal privacy.

The appeals court sent the matter back to the FCC to determine if the disclosure of the records would constitute an unwarranted invasion of personal privacy.

The administration said the appeals court's ruling "threatens to impose barriers to the public disclosure of government records concerning corporation malfeasance in government programs that the public has a right to review."

The Supreme Court is expected to hear arguments in the case early next year, with a ruling likely by June.

(Reporting by James Vicini, Editing by Gerald E. McCormick, Dave Zimmerman)