[Title 16 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2023 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 16
Commercial Practices
________________________
Parts 0 to 999
Revised as of January 1, 2023
Containing a codification of documents of general
applicability and future effect
As of January 1, 2023
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 16:
Chapter I--Federal Trade Commission 3
Finding Aids:
Table of CFR Titles and Chapters........................ 761
Alphabetical List of Agencies Appearing in the CFR...... 781
List of CFR Sections Affected........................... 791
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 16 CFR 0.1 refers to
title 16, part 0, section
1.
----------------------------
[[Page v]]
EXPLANATION
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Each volume of the Code is revised at least once each calendar year
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Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
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[[Page vi]]
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[[Page vii]]
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Oliver A. Potts,
Director,
Office of the Federal Register
January 1, 2023
[[Page ix]]
THIS TITLE
Title 16--Commercial Practices is composed of two volumes. The first
volume contains parts 0-999 and comprises chapter I--Federal Trade
Commission. The second volume containing part 1000 to end comprises
chapter II--Consumer Product Safety Commission. The contents of these
volumes represent all current regulations codified under this title of
the CFR as of January 1, 2023.
For this volume, Robert J. Sheehan, III was Chief Editor. The Code
of Federal Regulations publication program is under the direction of
John Hyrum Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 16--COMMERCIAL PRACTICES
(This book contains parts 0 to 999)
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Part
chapter i--Federal Trade Commission......................... 0
[[Page 3]]
CHAPTER I--FEDERAL TRADE COMMISSION
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SUBCHAPTER A--ORGANIZATION, PROCEDURES AND RULES OF PRACTICE
Part Page
0 Organization................................ 7
1 General procedures.......................... 11
2 Nonadjudicative procedures.................. 48
3 Rules of practice for adjudicative
proceedings............................. 64
4 Miscellaneous rules......................... 107
5 Standards of conduct........................ 144
6 Enforcement of nondiscrimination on the
basis of handicap in programs or
activities conducted by the Federal
Trade Commission........................ 148
14 Administrative interpretations, general
policy statements, and enforcement
policy statements....................... 156
16 Advisory committee management............... 159
SUBCHAPTER B--GUIDES AND TRADE PRACTICE RULES
17 Application of guides in preventing unlawful
practices............................... 166
20 Guides for the rebuilt, reconditioned and
other used automobile parts industry.... 166
23 Guides for the jewelry, precious metals, and
pewter industries....................... 167
24 Guides for select leather and imitation
leather products........................ 181
25-227
[Reserved]
233 Guides against deceptive pricing............ 183
238 Guides against bait advertising............. 187
239 Guides for the advertising of warranties and
guarantees.............................. 188
240 Guides for advertising allowances and other
merchandising payments and services..... 190
251 Guide concerning use of the word ``free''
and similar representations............. 196
254 Guides for private vocational and distance
education schools....................... 198
255 Guides concerning use of endorsements and
testimonials in advertising............. 202
[[Page 4]]
259 Guide concerning fuel economy advertising
for new automobiles..................... 210
260 Guides for the use of environmental
marketing claims........................ 216
SUBCHAPTER C--REGULATIONS UNDER SPECIFIC ACTS OF CONGRESS
300 Rules and regulations under the Wool
Products Labeling Act of 1939........... 230
301 Rules and regulations under Fur Products
Labeling Act............................ 243
303 Rules and regulations under the Textile
Fiber Products Identification Act....... 257
304 Rules and regulations under the Hobby
Protection Act.......................... 279
305 Energy and water use labeling for consumer
products under the Energy Policy and
Conservation Act (``Energy Labeling
Rule'')................................. 281
306 Automotive fuel ratings, certification and
posting................................. 386
307
[Reserved]
308 Trade regulation rule pursuant to the
Telephone Disclosure and Dispute
Resolution Act of 1992.................. 398
309 Labeling requirements for alternative fuels
and alternative fueled vehicles......... 410
310 Telemarketing sales rule.................... 419
311 Test procedures and labeling standards for
recycled oil............................ 433
312 Children's online privacy protection rule... 434
313 Privacy of consumer financial information... 443
314 Standards for safeguarding customer
information............................. 469
315 Contact lens rule........................... 477
316 Can-spam rule............................... 482
317 Prohibition of energy market manipulation
rule.................................... 485
318 Health breach notification rule............. 486
320 Disclosure requirements for depository
institutions lacking Federal deposit
insurance............................... 489
321 Mortgage acts and practices--Advertising.... 489
322 Mortgage assistance relief services......... 490
323 Made In USA labeling........................ 490
SUBCHAPTER D--TRADE REGULATION RULES
408 Unfair or deceptive advertising and labeling
of cigarettes in relation to the health
hazards of smoking...................... 492
423 Care labeling of textile wearing apparel and
certain piece goods as amended.......... 492
424 Retail food store advertising and marketing
practices............................... 498
[[Page 5]]
425 Use of prenotification negative option plans 498
429 Rule concerning cooling-off period for sales
made at homes or at certain other
locations............................... 500
432 Power output claims for amplifiers utilized
in home entertainment products.......... 503
433 Preservation of consumers' claims and
defenses................................ 505
435 Mail, internet, or telephone order
merchandise............................. 507
436 Disclosure requirements and prohibitions
concerning franchising.................. 511
437 Business opportunity rule................... 540
444 Credit practices............................ 548
453 Funeral industry practices.................. 551
455 Used motor vehicle trade regulation rule.... 557
456 Ophthalmic practice rules (eyeglass rule)... 567
460 Labeling and advertising of home insulation. 568
SUBCHAPTER E--RULES, REGULATIONS, STATEMENT OF GENERAL POLICY OR
INTERPRETATION AND EXEMPTIONS UNDER THE FAIR PACKAGING AND LABELING ACT
500 Regulations under section 4 of the Fair
Packaging and Labeling Act.............. 578
501 Exemptions from requirements and
prohibitions under part 500............. 591
502 Regulations under section 5(c) of the Fair
Packaging and Labeling Act.............. 592
503 Statements of general policy or
interpretation.......................... 593
SUBCHAPTER F--FAIR CREDIT REPORTING ACT
600
[Reserved]
602 Fair and Accurate Credit Transactions Act of
2003.................................... 598
603 Definitions................................. 598
604 Fair Credit Reporting Act rules............. 599
609 Free electronic credit monitoring for active
duty military........................... 599
610 Free annual file disclosures................ 601
611 Prohibition against circumventing treatment
as a nationwide consumer reporting
agency.................................. 601
613 Duration of active duty alerts.............. 602
614 Appropriate proof of identity............... 602
640 Duties of creditors regarding risk-based
pricing................................. 602
641 Duties of users of consumer reports
regarding address discrepancies......... 616
642 Prescreen opt-out notice.................... 617
660 Duties of furnishers of information to
consumer reporting agencies............. 618
680 Affiliate marketing......................... 623
681 Identity theft rules........................ 637
[[Page 6]]
682 Disposal of consumer report information and
records................................. 642
698 Model forms and disclosures................. 643
SUBCHAPTER G--RULES, REGULATIONS, STATEMENTS AND INTERPRETATIONS UNDER
THE MAGNUSON-MOSS WARRANTY ACT
700 Interpretations of Magnuson-Moss Warranty
Act..................................... 662
701 Disclosure of written consumer product
warranty terms and conditions........... 668
702 Pre-sale availability of written warranty
terms................................... 670
703 Informal dispute settlement procedures...... 673
SUBCHAPTER H--RULES, REGULATIONS, STATEMENTS AND INTERPRETATIONS UNDER
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976
801 Coverage rules.............................. 679
802 Exemption rules............................. 703
803 Transmittal rules........................... 721
SUBCHAPTER I--FAIR DEBT COLLECTION PRACTICES ACT
901 Procedures for State application for
exemption from the provisions of the Act 757
902-999
[Reserved]
Cross References: Animal and Plant Health Inspection Service, Department
of Agriculture: 9 CFR Chapter I. Commodity Futures Trading Commission:
17 CFR Chapter I. Consumer Product Safety Commission: 16 CFR Chapter
II. Securities and Exchange Commission: 17 CFR Chapter II.
Supplementary Publications: Federal Trade Commission decisions, Volumes
1-90 Index digest of volumes 1, 2, and 3 of decisions of the Federal
Trade Commission with annotation of Federal cases. Mar. 16, 1915-June
30, 1921. Statutes and decisions pertaining to the Federal Trade
Commission. 1914-1929, 1930-1938, 1939-1943, 1944-1948, 1949-1955,
1956-1960, 1961-1965, 1966-1970, 1971-1975, 1976, 1977.
[[Page 7]]
SUBCHAPTER A_ORGANIZATION, PROCEDURES AND RULES OF PRACTICE
PART 0_ORGANIZATION--Table of Contents
Sec.
0.1 The Commission.
0.2 Official address.
0.3 Hours.
0.4 Laws administered.
0.5 Laws authorizing monetary claims.
0.6 [Reserved]
0.7 Delegation of functions.
0.8 The Chair.
0.9 Organization structure.
0.10 Office of the Executive Director.
0.11 Office of the General Counsel.
0.12 Office of the Secretary.
0.13 Office of the Inspector General.
0.14 Office of Administrative Law Judges.
0.15 [Reserved]
0.16 Bureau of Competition.
0.17 Bureau of Consumer Protection.
0.18 Bureau of Economics.
0.19 The Regional Offices.
0.20 Office of International Affairs.
Authority: 5 U.S.C. 552(a)(1); 15 U.S.C. 46(g).
Source: 41 FR 54483, Dec. 14, 1976, unless otherwise noted.
Sec. 0.1 The Commission.
The Federal Trade Commission is an independent administrative agency
that was organized in 1915 pursuant to the Federal Trade Commission Act
of 1914 (38 Stat. 717, as amended; 15 U.S.C. 41-58). It is responsible
for the administration of a variety of statutes that, in general, are
designed to promote competition and to protect the public from unfair
and deceptive acts and practices in the advertising and marketing of
goods and services. It is composed of five members appointed by the
President and confirmed by the Senate for terms of seven years.
[41 FR 54483, Dec. 14, 1976, as amended at 86 FR 38545, July 22, 2021]
Sec. 0.2 Official address.
The principal office of the Commission is in Washington, DC. All
communications to the Commission should be addressed to the Federal
Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580,
unless otherwise specifically directed. The Commission's Web site
address is www.ftc.gov.
[63 FR 71582, Dec. 29, 1998, as amended at 65 FR 78408, Dec. 15, 2000;
86 FR 38545, July 22, 2021]
Sec. 0.3 Hours.
Principal and regional offices are open from 8:30 a.m. to 5 p.m.,
except on Saturdays, Sundays, and legal holidays.
[86 FR 38545, July 22, 2021]
Sec. 0.4 Laws administered.
The Commission exercises enforcement and administrative authority
under the Federal Trade Commission Act (15 U.S.C. 41-58), Clayton Act
(15 U.S.C. 12-27), and more than 70 other Federal statutes, which are
listed at https://www.ftc.gov/enforcement/statutes.
[86 FR 38545, July 22, 2021]
Sec. 0.5 Laws authorizing monetary claims.
(a) The Commission is authorized to entertain monetary claims
against it under three statutes.
(1) The Federal Tort Claims Act (28 U.S.C. 2671-2680) provides that
the United States will be liable for injury or loss of property or
personal injury or death caused by the negligent or wrongful acts or
omissions of its employees acting within the scope of their employment
or office.
(2) The Military Personnel and Civilian Employees Claims Act of 1964
(31 U.S.C. 3701, 3721) authorizes the Commission to compensate
employees' claims for damage to or loss of personal property incident to
their service.
(3) The Equal Access to Justice Act (5 U.S.C. 504 and 28 U.S.C.
2412) provides that an eligible prevailing party other than the United
States will be awarded fees and expenses incurred in connection with any
adversary adjudicative and court proceeding, unless the adjudicative
officer finds that the agency
[[Page 8]]
was substantially justified or that special circumstances make an award
unjust.
(b) In addition, eligible parties, including certain small
businesses, will be awarded fees and expenses incurred in defending
against an agency demand that is substantially in excess of the final
decision of the adjudicative officer and is unreasonable when compared
with such decision under the facts and circumstances of the case, unless
the adjudicative officer finds that the party has committed a willful
violation of law or otherwise acted in bad faith, or special
circumstances make an award unjust. Questions may be addressed to the
Office of the General Counsel.
[86 FR 38545, July 22, 2021]
Sec. 0.6 [Reserved]
Sec. 0.7 Delegation of functions.
(a) The Commission, under the authority provided by Reorganization
Plan No. 4 of 1961 (15 U.S.C. 41 note), may delegate, by published order
or rule, certain of its functions to a division of the Commission, an
individual Commissioner, an administrative law judge, or an employee or
employee board, and retains a discretionary right to review such
delegated action upon its own initiative or upon petition of a party to
or an intervenor in such action.
(b) The Commission delegates its functions, subject to certain
limitations, when no quorum is available for the transaction of
business. The delegate or delegates are authorized to act in instances
in which no party or intervenor would be adversely affected by the
delegated action and entitled to seek review by the Commission, as
provided by section 1(b) of Reorganization Plan No. 4 of 1961, or in
instances in which all such adversely affected parties or intervenors
have waived such a right. In actions in which at least one Commissioner
is participating, this delegation is to the participating Commissioner
or to the body of Commissioners who are participating. In actions in
which no Commissioner is available or no Commissioner is participating,
the General Counsel in consultation, where appropriate, with the
Directors of the Bureaus of Consumer Protection, Competition, and
Economics will exercise this delegated authority without power of
redelegation. This delegation does not alter or affect other delegations
to Commission staff. This delegation is only authorized for those
instances in which the Commission lacks a quorum as set forth in
Commission Rule 4.14(b), 16 CFR 4.14(b) (Commission quorum).
[83 FR 7110, Feb. 20, 2018, as amended at 86 FR 38546, July 22, 2021]
Sec. 0.8 The Chair.
The Chair of the Commission is designated by the President, and,
subject to the general policies of the Commission, is the executive and
administrative head of the agency. The Chair presides at meetings of and
hearings before the Commission and participates with other Commissioners
in all Commission decisions. In rulemaking proceedings under section
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C.
57a(a)(1)(B)), the Chair serves as or may designate another Commissioner
to serve as the Chief Presiding Officer or may appoint another person to
serve as Chief Presiding Officer who is not responsible to any other
official or employee of the Commission. Attached to the Office of the
Chair, and reporting directly to the Chair, and through the Chair to the
Commission, are the following staff units:
(a) The Office of the Chief Privacy Officer, which ensures that the
agency's practices and policies comply with applicable federal
information privacy and security requirements and standards;
(b) The Office of Congressional Relations, which coordinates all
liaison activities with Congress;
(c) The Office of Equal Employment Opportunity and Workplace
Inclusion, which advises and assists the Chair and the organizational
units in EEO policy and diversity management issues;
(d) The Office of Policy Planning, which assists the Commission to
develop and implement long-range competition and consumer protection
policy initiatives; and
[[Page 9]]
(e) The Office of Public Affairs, which furnishes information
concerning Commission activities to news media and the public.
[86 FR 38546, July 22, 2021]
Sec. 0.9 Organization structure.
The Federal Trade Commission includes the following principal units:
Office of the Executive Director; Office of the General Counsel; Office
of the Secretary; Office of the Inspector General; Office of
Administrative Law Judges; Bureau of Competition; Bureau of Consumer
Protection; Bureau of Economics; and Office of International Affairs.
[86 FR 38546, July 22, 2021]
Sec. 0.10 Office of the Executive Director.
The Executive Director, under the direction of the Chairman, is the
chief operating official who develops and implements management and
administrative policies, programs, and directives for the Commission.
The Executive Director works closely with the Bureaus on strategic
planning and assessing the management and resource implications of any
proposed action. In addition, the Executive Director manages the
Commission's facilities and administrative services, financial
management, information technology, and human resources.
[65 FR 78408, Dec. 15, 2000, as amended at 86 FR 38546, July 22, 2021]
Sec. 0.11 Office of the General Counsel.
The General Counsel is the Commission's chief law officer and
adviser, who renders necessary legal services to the Commission;
represents the Commission in the Federal and State courts, and before
administrative agencies in coordination with the Bureaus, in appellate
litigation, investigative compulsory process enforcement, and defensive
litigation; advises the Commission and other agency officials and staff
with respect to questions of law and policy, including advice with
respect to legislative matters and ethics; represents the agency in
employment and labor disputes; and responds to requests and appeals
filed under the Freedom of Information and Privacy Acts and to intra-
and intergovernmental information access requests.
[86 FR 38546, July 22, 2021]
Sec. 0.12 Office of the Secretary.
The Secretary is the legal custodian of the Commission's seal,
property, papers, and records, including legal and public records, and
is responsible for the minutes of Commission meetings. The Secretary, or
in the Secretary's absence an Acting Secretary, signs Commission orders
and official correspondence. In addition, the Secretary is responsible
for the publication of all Commission actions that appear in the Federal
Register and for the publication of Federal Trade Commission decisions.
[86 FR 38546, July 22, 2021]
Sec. 0.13 Office of the Inspector General.
The Office of Inspector General (OIG) was established within the
Federal Trade Commission in 1989 as required by the Inspector General
Act Amendments of 1988 (5 U.S.C. app. 3). The OIG promotes the economy,
efficiency, and effectiveness of FTC programs and operations. To this
end, the OIG independently conducts audits and investigations to find
and prevent fraud, waste, and abuse within the agency.
[65 FR 78408, Dec. 15, 2000, as amended at 86 FR 38546, July 22, 2021]
Sec. 0.14 Office of Administrative Law Judges.
Administrative law judges are officials to whom the Commission, in
accordance with law, delegates the initial performance of statutory
fact-finding functions and initial rulings on conclusions of law, to be
exercised in conformity with Commission decisions and policy directives
and with its Rules of Practice.
[86 FR 38546, July 22, 2021]
Sec. 0.15 [Reserved]
Sec. 0.16 Bureau of Competition.
The Bureau is responsible for enforcing Federal antitrust and trade
regulation laws under section 5 of the Federal Trade Commission Act (15
U.S.C. 45), the Clayton Act (15 U.S.C. 12-27), and a
[[Page 10]]
number of other special statutes that the Commission is charged with
enforcing. The Bureau carries out its responsibilities by investigating
alleged law violations, recommending to the Commission such further
steps as may be appropriate, and prosecuting enforcement actions
authorized by the Commission. Such further steps may include seeking
injunctive and other relief as permitted by statute in Federal district
court; litigating before the agency's administrative law judges;
negotiating settlement of complaints; and initiating rules or reports.
The Bureau also conducts compliance investigations and, in compliance
with Section 16(a)(1) of the FTC Act (15 U.S.C. 56(a)(1)), initiates
proceedings for civil penalties to assure compliance with final
Commission orders dealing with competition and trade restraint matters.
The Bureau's activities also include business and consumer education and
staff advice on competition laws and compliance, and liaison functions
with respect to foreign antitrust and competition law enforcement
agencies and organizations, including requests for international
enforcement assistance.
[86 FR 38546, July 22, 2021]
Sec. 0.17 Bureau of Consumer Protection.
The Bureau is responsible for enforcing the prohibition against
unfair or deceptive acts or practices in section 5 of the Federal Trade
Commission Act (15 U.S.C. 45), as well as numerous special statutes that
the Commission is charged with enforcing. The Bureau carries out its
responsibilities by investigating alleged law violations, recommending
to the Commission such further steps as may be appropriate, and
prosecuting enforcement actions authorized by the Commission. Such
further steps may include seeking injunctive and other relief as
permitted by statute in Federal district court; litigating before the
agency's administrative law judges; negotiating settlement of
complaints; initiating rules or reports; and initiating civil penalty
proceedings for rule violations. The Bureau also conducts compliance
investigations and, in compliance with Section 16(a)(1) of the FTC Act
(15 U.S.C. 56(a)(1)), initiates proceedings for civil penalties to
assure compliance with final Commission orders dealing with unfair or
deceptive practices. The Bureau participates in trade regulation
rulemaking proceedings under section 18(a)(1)(B) of the Federal Trade
Commission Act (15 U.S.C. 57a(a)(1)(B)) and other rulemaking proceedings
under statutory authority. In addition, the Bureau seeks to educate both
consumers and the business community about the laws it enforces, and to
assist and cooperate with other state, local, and international agencies
and organizations in consumer protection enforcement and regulatory
matters.
[86 FR 38546, July 22, 2021]
Sec. 0.18 Bureau of Economics.
The Bureau aids and advises the Commission concerning the economic
aspects of all of its functions, and is responsible for the preparation
of various economic reports and surveys. The Bureau provides economic
and statistical assistance to the enforcement Bureaus in the
investigation and trial of cases.
[41 FR 54483, Dec. 14, 1976. Redesignated at 45 FR 36341, May 29, 1980,
and amended at 50 FR 53303, Dec. 31, 1985; 86 FR 38547, July 22, 2021]
Sec. 0.19 The Regional Offices.
(a) These offices are investigatory and enforcement arms of the
Commission, and have responsibility for investigational, trial,
compliance, and consumer educational activities as delegated by the
Commission. They are under the general supervision of the Bureaus of
Competition and Consumer Protection and clear their activities through
the appropriate operating Bureau.
(b) The names and geographic areas of responsibility of the
respective regional offices are as follows:
(1) Northeast Region (located in New York City, New York), covering
Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York,
Rhode Island, Vermont, Puerto Rico, and the U.S. Virgin Islands.
(2) Southeast Region (located in Atlanta, Georgia), covering
Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina,
and Tennessee.
[[Page 11]]
(3) East Central Region (located in Cleveland, Ohio), covering
Delaware, District of Columbia, Maryland, Michigan, Ohio, Pennsylvania,
Virginia, and West Virginia.
(4) Midwest Region (located in Chicago, Illinois), covering
Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri,
Nebraska, North Dakota, South Dakota, and Wisconsin.
(5) Southwest Region (located in Dallas, Texas), covering Arkansas,
Louisiana, New Mexico, Oklahoma, and Texas.
(6) Northwest Region (located in Seattle, Washington), covering
Alaska, Idaho, Montana, Oregon, Washington, and Wyoming.
(7) Western Region Los Angeles (located in Los Angeles, California),
covering Arizona, Hawaii, Southern California, Southern Nevada, Guam,
the Northern Mariana Islands, and American Samoa.
(8) Western Region San Francisco (located in San Francisco,
California), covering Colorado, Northern California, Northern Nevada,
and Utah.
(c) Each of the regional offices is supervised by a Regional
Director and an Assistant Regional Director, who are available for
conferences with attorneys, consumers, and other members of the public
on matters relating to the Commission's activities.
[86 FR 38547, July 22, 2021]
Sec. 0.20 Office of International Affairs.
The Office of International Affairs (OIA) is responsible for the
agency's international antitrust and international consumer protection
missions in coordination and consultation with the appropriate Bureaus,
including the design and implementation of the Commission's
international program. OIA provides support to the Bureaus of
Competition and Consumer Protection with regard to the international
aspects of investigation and prosecution of unlawful conduct; builds
cooperative relationships between the Commission and foreign
authorities; cooperates with foreign authorities on investigations and
enforcement; works closely with the Bureaus to recommend agency policies
to the Commission; works, through bilateral relationships, multilateral
organizations, and trade fora to promote Commission priorities and
policies; participates in the United States government interagency
process to promote agency views on international issues within the FTC's
mandate; and coordinates staff exchanges and internships at the FTC for
staff of non-U.S. competition, consumer protection, and privacy
agencies. OIA also assists young agencies around the world to build
capacity to promote sound competition and consumer protection law
enforcement.
[86 FR 38547, July 22, 2021]
PART 1_GENERAL PROCEDURES--Table of Contents
Subpart A_Industry Guidance
Advisory Opinions
Sec.
1.1 Policy.
1.2 Procedure.
1.3 Advice.
1.4 Public disclosure.
Industry Guides
1.5 Purpose.
1.6 How promulgated.
Subpart B_Rules and Rulemaking Under Section 18(a)(1)(B) of the FTC Act
1.7 Scope of rules in this subpart.
1.8 Nature, authority and use of trade regulation rules.
1.9 Petitions to commence trade regulation rule proceedings.
1.10 Advance notice of proposed rulemaking.
1.11 Commencement of a rulemaking proceeding.
1.12 Notice of informal Hearing and designations.
1.13 Conduct of informal hearing by the presiding officer.
1.14 Promulgation.
1.15 Amendment or repeal of a rule.
1.16 Petition for exemption from trade regulation rule.
1.17 [Reserved]
1.18 Rulemaking record.
1.19 Modification of a rule by the Commission at the time of judicial
review.
1.20 Alternative procedures.
Subpart C_Rules Promulgated Under Authority Other Than Section
18(a)(1)(B) of the FTC Act
1.21 Scope of the rules in this subpart.
1.22 Rulemaking.
1.23 Quantity limit rules.
[[Page 12]]
1.24 Rules applicable to wool, fur, and textile fiber products and rules
promulgated under the Fair Packaging and Labeling Act.
1.25 Initiation of rulemaking proceedings--petitions.
1.26 Procedure.
Subpart D_Petitions for Rulemaking or Exemption
1.31 Procedures for addressing petitions.
Subpart E_Export Trade Associations
1.41 Limited antitrust exemption.
1.42 Notice to Commission.
1.43 Recommendations.
Subpart F_Trademark Cancellation Procedure
1.51 Applications.
Subpart G_Injunctive and Condemnation Proceedings
1.61 Injunctions.
1.62 Ancillary court orders pending review.
1.63 Injunctions: Wool, fur, and textile cases.
1.64 Condemnation proceedings.
Subpart H_Administration of the Fair Credit Reporting Act
1.71 Administration.
1.72 Examination, counseling and staff advice.
1.73 Interpretations.
Subpart I_Procedures for Implementation of the National Environmental
Policy Act of 1969
1.81 Authority and incorporation of CEQ Regulations.
1.82 Declaration of policy.
1.83 Whether to commence the process for an environmental impact
statement.
1.84 Draft environmental impact statements: Availability and comment.
1.85 Final environmental impact statements.
1.86 Supplemental statements.
1.87 NEPA and agency decisionmaking.
1.88 Implementing procedures.
1.89 Effect on prior actions.
Subpart J_Economic Surveys, Investigations, and Reports
1.91 Authority and purpose.
Subpart K_Penalties for Violation of Appliance Labeling Rules
1.92 Scope.
1.93 Notice of proposed penalty.
1.94 Commission proceeding to assess civil penalty.
1.95 Procedures upon election.
1.96 Compromise of penalty.
1.97 Amount of penalty.
Subpart L_Civil Penalty Adjustments Under the Federal Civil Penalties
Inflation Adjustment Act of 1990, as Amended
1.98 Adjustment of civil monetary penalty amounts.
Subpart M_Submissions Under the Small Business Regulatory Enforcement
Fairness Act
1.99 Submission of rules, guides, interpretations, and policy statements
to Congress and the Comptroller General.
Subpart N_Administrative Wage Garnishment
1.100 Administrative wage garnishment.
Subpart O_OMB Control Numbers for Commission Information Collection
Requirements
1.101 OMB control numbers assigned pursuant to the Paperwork Reduction
Act.
1.102-1.109 [Reserved]
Subpart P_Administrative Debt Collection, Including Administrative
Offset
1.110 Application of Government-wide administrative claims collections
standards and adoption of administrative offset regulations.
1.111-1.119 [Reserved]
Subpart Q_Tax Refund Offset
1.120 Purpose.
1.121 Notification of intent to collect.
1.122 Commission action as a result of consideration of evidence
submitted in response to the notice of intent.
1.123 Change in notification to Bureau of the Fiscal Service.
1.124 Interest, penalties, and costs.
1.125--1.129 [Reserved
Subpart R_Policy With Regard to Indemnification of FTC Employees
1.130 Policy on employee indemnification.
Subpart S_Procedures for Submissions Under the Horseracing Integrity and
Safety Act
1.140 Definitions.
1.141 Required submissions.
[[Page 13]]
1.142 Submission of proposed rule or modification.
1.143 Submissions to the Secretary.
1.144 Approval or disapproval of proposed rules and proposed rule
modifications.
Subpart T_Procedures for Review of Final Civil Sanctions Imposed under
the Horseracing Integrity and Safety Act
1.145 Submission of notice of civil sanctions.
1.146 Review of civil sanction by an Administrative Law Judge.
1.147 Review by the Commission of the decision of the Administrative Law
Judge.
1.148 Stay of proceedings.
1.149 Adoption of miscellaneous rules.
Authority: 15 U.S.C. 46; 15 U.S.C. 57a; 5 U.S.C. 552; 5 U.S.C. 601
note.
Source: 32 FR 8444, June 13, 1967, unless otherwise noted.
Subpart A_Industry Guidance
Authority: 15 U.S.C. 46, unless otherwise noted.
Advisory Opinions
Sec. 1.1 Policy.
(a) Any person, partnership, or corporation may request advice from
the Commission with respect to a course of action which the requesting
party proposes to pursue. The Commission will consider such requests for
advice and inform the requesting party of the Commission's views, where
practicable, under the following circumstances.
(1) The matter involves a substantial or novel question of fact or
law and there is no clear Commission or court precedent; or
(2) The subject matter of the request and consequent publication of
Commission advice is of significant public interest.
(b) The Commission has authorized its staff to consider all requests
for advice and to render advice, where practicable, in those
circumstances in which a Commission opinion would not be warranted.
Hypothetical questions will not be answered, and a request for advice
will ordinarily be considered inappropriate where:
(1) The same or substantially the same course of action is under
investigation or is or has been the subject of a current proceeding
involving the Commission or another governmental agency, or
(2) An informed opinion cannot be made or could be made only after
extensive investigation, clinical study, testing, or collateral inquiry.
[44 FR 21624, Apr. 11, 1979; 44 FR 23515, Apr. 20, 1979, as amended at
54 FR 14072, Apr. 7, 1989]
Sec. 1.2 Procedure.
(a) Application. The request for advice or interpretation should be
submitted in writing (one original and two copies) to the Secretary of
the Commission and should: (1) State clearly the question(s) that the
applicant wishes resolved; (2) cite the provision of law under which the
question arises; and (3) state all facts which the applicant believes to
be material. In addition, the identity of the companies and other
persons involved should be disclosed. Letters relating to unnamed
companies or persons may not be answered. Submittal of additional facts
may be requested prior to the rendering of any advice.
(b) Compliance matters. If the request is for advice as to whether
the proposed course of action may violate an outstanding order to cease
and desist issued by the Commission, such request will be considered as
provided for in Sec. 2.41 of this chapter.
[44 FR 21624, Apr. 11, 1979, as amended at 44 FR 40638, July 12, 1979]
Sec. 1.3 Advice.
(a) On the basis of the materials submitted, as well as any other
information available, and if practicable, the Commission or its staff
will inform the requesting party of its views.
(b) Any advice given by the Commission is without prejudice to the
right of the Commission to reconsider the questions involved and, where
the public interest requires, to rescind or revoke the action. Notice of
such rescission or revocation will be given to the requesting party so
that he may discontinue the course of action taken pursuant to the
Commission's advice. The Commission will not proceed against the
requesting party with respect to any action taken in good faith reliance
upon the Commission's advice under this
[[Page 14]]
section, where all the relevant facts were fully, completely, and
accurately presented to the Commission and where such action was
promptly discontinued upon notification of rescission or revocation of
the Commission's approval.
(c) Advice rendered by the staff is without prejudice to the right
of the Commission later to rescind the advice and, where appropriate, to
commence an enforcement proceeding.
[44 FR 21624, Apr. 11, 1979]
Sec. 1.4 Public disclosure.
Written advice rendered pursuant to this section and requests
therefor, including names and details, will be placed in the
Commission's public record immediately after the requesting party has
received the advice, subject to any limitations on public disclosure
arising from statutory restrictions, the Commission's rules, and the
public interest. A request for confidential treatment of information
submitted in connection with the questions should be made separately.
[44 FR 21624, Apr. 11, 1979]
Industry Guides
Sec. 1.5 Purpose.
Industry guides are administrative interpretations of laws
administered by the Commission for the guidance of the public in
conducting its affairs in conformity with legal requirements. They
provide the basis for voluntary and simultaneous abandonment of unlawful
practices by members of industry. Failure to comply with the guides may
result in corrective action by the Commission under applicable statutory
provisions. Guides may relate to a practice common to many industries or
to specific practices of a particular industry.
Sec. 1.6 How promulgated.
Industry guides \1\ are promulgated by the Commission on its own
initiative or pursuant to petition filed with the Secretary pursuant to
Sec. 1.31, by any interested person or group, when it appears to the
Commission that guidance as to the legal requirements applicable to
particular practices would be beneficial in the public interest and
would serve to bring about more widespread and equitable observance of
laws administered by the Commission. In connection with the promulgation
of industry guides, the Commission at any time may conduct such
investigations, make such studies, and hold such conferences or hearings
as it may deem appropriate. All or any part of any such investigation,
study, conference, or hearing may be conducted under the provisions of
subpart A of part 2 of this chapter.
---------------------------------------------------------------------------
\1\ In the past, certain of these have been promulgated and referred
to as trade practice rules.
[86 FR 59852, Oct. 29, 2021]
Subpart B_Rules and Rulemaking Under Section 18(a)(1)(B) of the FTC Act
Authority: 5 U.S.C. 552; 5 U.S.C. 601 note; 15 U.S.C. 46; 15 U.S.C.
57a.
Sec. 1.7 Scope of rules in this subpart.
The rules in this subpart apply to and govern proceedings for the
promulgation of rules as provided in section 18(a)(1)(B) of the Federal
Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). Such rules will be known
as trade regulation rules. All other rulemaking proceedings will be
governed by the rules in subpart C of this part, except as otherwise
required by law or as otherwise specified in this chapter.
[86 FR 38547, July 22, 2021]
Sec. 1.8 Nature, authority, and use of trade regulation rules.
(a) For the purpose of carrying out the provisions of the Federal
Trade Commission Act, the Commission is empowered to promulgate trade
regulation rules, which define with specificity acts or practices that
are unfair or deceptive acts or practices in or affecting commerce.
Trade regulation rules may include requirements prescribed for the
purpose of preventing such acts or practices. A violation of a rule
constitutes an unfair or deceptive act or practice in violation of
section 5(a)(1) of that Act (15 U.S.C. 45(a)(1)),
[[Page 15]]
unless the Commission otherwise expressly provides in its rule. The
respondents in an adjudicative proceeding may show that the alleged
conduct does not violate the rule or assert any other defense to which
they are legally entitled.
(b) The Commission at any time may conduct such investigations, make
such studies, and hold such conferences as it may deem necessary. All or
any part of any such investigation may be conducted under the provisions
of part 2, subpart A of this chapter.
[86 FR 38547, July 22, 2021]
Sec. 1.9 Petitions to commence trade regulation rule proceedings.
Trade regulation rule proceedings may be commenced by the Commission
upon its own initiative or pursuant to written petition filed with the
Secretary by any interested person stating reasonable grounds therefor.
Such petitions will be handled in the same manner and pursuant to the
same procedures as prescribed in Sec. 1.31 of this chapter.
[86 FR 59852, Oct. 29, 2021]
Sec. 1.10 Advance notice of proposed rulemaking.
(a) Prior to the commencement of any trade regulation rule
proceeding, the Commission must publish in the Federal Register an
advance notice of such proposed proceeding.
(b) The advance notice must:
(1) Contain a brief description of the area of inquiry under
consideration, the objectives which the Commission seeks to achieve, and
possible regulatory alternatives under consideration by the Commission;
and
(2) Invite the response of interested persons with respect to such
proposed rulemaking, including any suggestions or alternative methods
for achieving such objectives.
(c) The advance notice must be submitted to the Committee on
Commerce, Science, and Transportation of the Senate and to the Committee
on Energy and Commerce of the House of Representatives.
(d) The Commission may, in addition to publication of the advance
notice, use such additional mechanisms as it considers useful to obtain
suggestions regarding the content of the area of inquiry before
publication of a notice of proposed rulemaking pursuant to Sec. 1.11.
[86 FR 38547, July 22, 2021]
Sec. 1.11 Commencement of a rulemaking proceeding.
(a) Notice of proposed rulemaking. A trade regulation rule
proceeding will commence with a notice of proposed rulemaking (NPRM). An
NPRM will be published in the Federal Register not sooner than 30 days
after it has been submitted to the Committee on Commerce, Science, and
Transportation of the Senate and to the Committee on Energy and Commerce
of the House of Representatives.
(b) Contents of NPRM. The NPRM will include:
(1) A statement containing, with particularity, the text of the
proposed rule, including any alternatives, which the Commission proposes
to promulgate;
(2) Reference to the legal authority under which the rule is
proposed;
(3) A statement describing the reason for the proposed rule;
(4) An invitation to comment on the proposed rule, as provided in
paragraph (d) of this section;
(5) A list of disputed issues of material fact designated by the
Commission as necessary to be resolved, if any;
(6) An explanation of the opportunity for an informal hearing and
instructions for submissions relating to such a hearing, as provided in
paragraph (e) of this section; and
(7) A statement of the manner in which the public may obtain copies
of the preliminary regulatory analysis, if that analysis is not in the
notice.
(c) Preliminary regulatory analysis. Except as otherwise provided by
statute, the Commission must, when commencing a rulemaking proceeding,
issue a preliminary regulatory analysis, which must contain:
(1) A concise statement of the need for, and the objectives of, the
proposed rule;
(2) A description of any reasonable alternatives to the proposed
rule which may accomplish the stated objective of the rule in a manner
consistent with applicable law;
[[Page 16]]
(3) For the proposed rule, and for each of the alternatives
described in the analysis, a preliminary analysis of the projected
benefits and any adverse economic effects and any other effects, and of
the effectiveness of the proposed rule and each alternative in meeting
the stated objectives of the proposed rule; and
(4) The information required by the Regulatory Flexibility Act, 5
U.S.C. 601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520, if
applicable.
(d) Written comments. The Commission will accept written submissions
of data, views, and arguments on all issues of fact, law, and policy.
The Commission may in its discretion provide for a separate rebuttal
period following the comment period. The subject matter of any rebuttal
comments must be confined to subjects and issues identified by the
Commission in its notice or by other interested persons in comments and
must not introduce new issues into the record. The NPRM will establish
deadlines for filing written comments and for filing rebuttal comments
on the proposed rule.
(e) Opportunity for hearing. The Commission will provide an
opportunity for an informal hearing if an interested person requests to
present their position orally or if the Commission in its discretion
elects to hold an informal hearing. Any such request regarding an
informal hearing must be submitted to the Commission no later than the
close of the written comment period, including a rebuttal period, if
any, and must include:
(1) A request to make an oral submission, if desired;
(2) A statement identifying the interested person's interests in the
proceeding; and
(3) Any proposals to add disputed issues of material fact beyond
those identified in the notice.
[86 FR 38548, July 22, 2021]
Sec. 1.12 Notice of informal hearing and designations.
(a) Initial notice of informal hearing. If an informal hearing has
been requested under Sec. 1.11(e), a notice of informal hearing will be
published in the Federal Register. The initial notice of informal
hearing will include:
(1) The designation of a presiding officer, pursuant to Sec.
1.13(a)(1);
(2) The time and place of the informal hearing;
(3) A final list of disputed issues of material fact necessary to be
resolved during the hearing, if any;
(4) A list of the interested persons who will make oral
presentations;
(5) A list of the groups of interested persons determined by the
Commission to have the same or similar interests in the proceeding;
(6) An invitation to interested persons to submit requests to
conduct or have conducted cross-examination or to present rebuttal
submissions, pursuant to Sec. 1.13(b)(2), if desired; and
(7) Any other procedural rules necessary to promote the efficient
and timely determination of the disputed issues to be resolved during
the hearing.
(b) Requests to conduct cross-examination or present rebuttal
submissions. Cross-examination and rebuttal submissions at an informal
hearing are available only to address disputed issues of material fact
necessary to be resolved. Requests for an opportunity to cross-examine
or to present rebuttal submissions must be accompanied by a specific
justification therefor. In determining whether to grant such requests,
the presence of the following circumstances indicate that such requests
should be granted:
(1) An issue for cross-examination or the presentation of rebuttal
submissions, is an issue of specific fact in contrast to legislative
fact;
(2) A full and true disclosure with respect to the issue can be
achieved only through cross-examination rather than through rebuttal
submissions or the presentation of additional oral submissions; and
(3) The particular cross-examination or rebuttal submission is
required for the resolution of a disputed issue.
(c) Final notice of informal hearing. Based on requests submitted in
response to the initial notice of public hearing, the Commission will
publish a final notice of informal hearing in the Federal Register. The
final notice of public hearing will include:
[[Page 17]]
(1) A list of the interested persons who will conduct cross-
examination regarding disputed issues of material fact;
(2) A list of any groups of interested persons with the same or
similar interests in the proceeding who will be required to choose a
single representative to conduct cross-examination on behalf of the
group, as provided in paragraph (d) of this section; and
(3) A list of the interested persons who will be permitted to make
rebuttal submissions regarding disputed issues of material fact.
(d) Designation of group representatives for cross-examination.
After consideration of any submissions under Sec. 1.11(e), the
Commission will, if appropriate, identify groups of interested persons
with the same or similar interests in the proceeding. The Commission may
require any group of interested persons with the same or similar
interests in the proceeding to select a single representative to conduct
cross-examination on behalf of the group.
[86 FR 38548, July 22, 2021]
Sec. 1.13 Conduct of informal hearing by the presiding officer.
(a) Presiding officer--(1) Designation. In a trade regulation rule
proceeding in which the Commission determines an informal hearing will
be conducted, the initial notice of informal hearing must designate a
presiding officer, who will be appointed by the Chief Presiding Officer
specified in Sec. 0.8 of this chapter.
(2) Powers of the presiding officer. The presiding officer is
responsible for the orderly conduct of the informal hearing. The
presiding officer has all powers necessary or useful to that end,
including the following:
(i) To issue any public notice that may be necessary for the orderly
conduct of the informal hearing;
(ii) To modify the location, format, or time limits prescribed for
the informal hearing, except that the presiding officer may not increase
the time allotted for an informal hearing beyond a total of five hearing
days over the course of a thirty-day period, unless the Commission, upon
a showing of good cause, extends the number of days for the hearing;
(iii) To prescribe procedures or issue rulings to avoid unnecessary
costs or delay, including, but not limited to, the imposition of
reasonable time limits on the number and duration of oral presentations
from individuals or groups with the same or similar interests in the
proceeding and requirements that any cross-examination, which a person
may be entitled to conduct or have conducted, be conducted by the
presiding officer on behalf of that person in such a manner as the
presiding officer determines to be appropriate and to be required for a
full and true disclosure with respect to any issue designated for
consideration in accordance with Sec. 1.13(b)(1);
(iv) To issue rulings selecting or modifying the designated
representatives of groups of interested persons, as provided in
paragraph (a)(3) of this section;
(v) To require that oral presentations at the informal hearing be
under oath;
(vi) To require that oral presentations at the informal hearing be
submitted in writing in advance of presentation; and
(viii) To rule on all requests of interested persons made during the
course of the informal hearing.
(3) Selection or modification of group representatives. If a group
of interested persons designated by the Commission under Sec. 1.12(d)
to select a group representative is unable to agree upon a
representative, the presiding officer may select a representative for
the group. The presiding officer may entertain requests by a member of a
group of interested persons to conduct or have conducted cross-
examination under paragraph (b)(2) of this section if, after good-faith
effort, the person is unable to agree upon a single representative with
other group members and is able to demonstrate that the group
representative will not adequately represent the person's interests. If
the presiding officer finds that there are substantial and relevant
issues or data that will not be adequately presented by the group
representative, then the presiding officer may allow that person to
conduct or have conducted any appropriate cross-examination on issues
affecting the person's particular interests.
[[Page 18]]
(4) Organization. In the performance of their rulemaking functions,
presiding officers are responsible to the chief presiding officer who
must not be responsible to any other officer or employee of the
Commission.
(5) Ex parte communications. Except as required for the disposition
of ex parte matters as authorized by law, no presiding officer may
consult any person or party with respect to any fact in issue unless
such officer gives notice and opportunity for all parties to
participate.
(b) Additional procedures when there are disputed issues of material
fact. If requested under Sec. 1.11(d), an informal hearing with the
opportunity for oral presentations will be conducted by the presiding
officer. In addition, if the Commission determines that there are
disputed issues of material fact that are material and necessary to
resolve, the informal hearing on such issues will be conducted in
accordance with Sec. 1.13(b)(2).
(1) Nature of issues for consideration in accordance with Sec.
1.13(b)(2)--(i) Issues that must be considered in accordance with Sec.
1.13(b)(2). The only issues that must be designated for consideration in
accordance with paragraphs (b)(2) of this section are disputed issues of
fact that are determined by the Commission to be material and necessary
to resolve.
(ii) Addition or modification of issues for consideration in
accordance with Sec. 1.13(b)(2). The presiding officer may at any time
on the presiding officer's own motion or pursuant to a written petition
by interested persons, add or modify any issues designated pursuant to
Sec. 1.12(a). No such petition shall be considered unless good cause is
shown why any such proposed issue was not proposed pursuant to Sec.
1.11(e). In the event that new issues are designated, the presiding
officer may determine whether interested persons may conduct cross-
examination or present rebuttal submissions with respect to each new
issue, as provided in Sec. 1.12(b), and may select or modify group
representatives for cross examination with respect to each new issue, as
provided in paragraph (a)(3) of this section.
(2) Cross-examination and the presentation of rebuttal submissions
by interested persons. The presiding officer will conduct or allow to be
conducted cross-examination of oral presentations and the presentation
of rebuttal submissions relevant to the disputed issues of material fact
designated for consideration during the informal hearing. For that
purpose, the presiding officer may require submission of written
requests for presentation of questions to any person making oral
presentations and will determine whether to ask such questions or any
other questions. All requests for presentation of questions will be
placed in the rulemaking record. The presiding officer will also allow
the presentation of rebuttal submissions as appropriate and required for
a full and true disclosure with respect to the disputed issues of
material fact designated for consideration during the informal hearing.
(c) Written transcript. A verbatim transcript will be made of the
informal hearing and placed in the rulemaking record.
(d) Recommended decision. The presiding officer will make a
recommended decision based on their findings and conclusions as to all
relevant and material evidence. The recommended decision will be made by
the presiding officer who presided over the informal hearing except that
such recommended decision may be made by another officer if the officer
who presided over the hearing is no longer available to the Commission.
The recommended decision must be rendered within sixty days of the
completion of the hearing. If a petition for review of a ruling by the
presiding officer has been filed under paragraph (e) of this section,
the recommended decision must be rendered within sixty days following
the resolution of that petition or any rehearing required by the
Commission. The presiding officer's recommended decision will be limited
to explaining the presiding officer's proposed resolution of disputed
issues of material fact.
(e) Post-hearing review by the Commission of rulings by the
presiding officer. (1) Within ten days of the completion of the informal
hearing, any interested person may petition the Commission for review of
a ruling by the presiding
[[Page 19]]
officer denying or limiting the petitioner's ability to conduct cross-
examination or make rebuttal submissions upon a showing that the ruling
precluded disclosure of a disputed material fact that was necessary for
fair determination by the Commission of the rulemaking proceeding as a
whole. Such petitions must not exceed eight thousand words. This word
count limitation includes headings, footnotes, and quotations, but does
not include the cover, table of contents, table of citations or
authorities, glossaries, statements with respect to oral argument, any
addendums containing statutes, rules or regulations, any certificates of
counsel, or proposed form of order. A petition hereunder will not stay
the rulemaking proceeding unless the Commission so orders. All petitions
filed under this paragraph will be a part of the rulemaking record.
(2) The Commission may, in its discretion, hear the appeal.
Commission review, if granted, will be based on the petition and
anything on the rulemaking record, without oral argument or further
briefs, unless otherwise ordered by the Commission. If the Commission
grants review, it will render a decision within thirty days of the
announcement of its decision to review unless, upon a showing of good
cause, the Commission extends the number of days for review.
[86 FR 38549, July 22, 2021]
Sec. 1.14 Promulgation.
(a) The Commission, after review of the rulemaking record, may
issue, modify, or decline to issue any rule. If the Commission wants
further information or additional views of interested persons, it may
withhold final action pending the receipt of such additional information
or views. If it determines not to issue a rule, it may adopt and publish
an explanation for not doing so.
(1) Statement of basis and purpose. If the Commission determines to
promulgate a rule, it will adopt a statement of basis and purpose to
accompany the rule, which must include:
(i) A statement regarding the prevalence of the acts or practices
treated by the rule;
(ii) A statement as to the manner and context in which such acts or
practices are unfair or deceptive; and
(iii) A statement as to the economic effect of the rule, taking into
account the effect on small businesses and consumers.
(2) Final regulatory analysis. Except as otherwise provided by
statute, if the Commission determines to promulgate a final rule, it
will issue a final regulatory analysis relating to the final rule. Each
final regulatory analysis must contain:
(i) A concise statement of the need for, and the objectives of, the
final rule;
(ii) A description of any alternatives to the final rule that were
considered by the Commission;
(iii) An analysis of the projected benefits and any adverse economic
effects and any other effects of the final rule;
(iv) An explanation of the reasons for the determination of the
Commission that the final rule will attain its objectives in a manner
consistent with applicable law and the reasons the particular
alternative was chosen;
(v) A summary of any significant issues raised by the comments
submitted during the public comment period in response to the
preliminary regulatory analysis, and a summary of the assessment by the
Commission of such issues; and
(vi) The information required by the Regulatory Flexibility Act, 5
U.S.C. 601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520, if
applicable.
(3) Small entity compliance guide. For each rule for which the
Commission must prepare a final regulatory flexibility analysis, the
Commission will publish one or more guides to assist small entities in
complying with the rule. Such guides will be designated as ``small
entity compliance guides.''
(b) If the Commission determines, upon its review of the rulemaking
record, to propose a revised rule for further proceedings in accordance
with this subpart, such proceedings, including the opportunity of
interested persons to avail themselves of the procedures of Sec.
1.13(b)(2), will be limited to those portions of the revised rule, the
subjects and issues of which were not substantially the subject of
comment
[[Page 20]]
in response to a previous notice of proposed rulemaking.
(c) The final rule will be published in the Federal Register and
will include the Statement of Basis and Purpose for the rule or provide
an explanation of the manner in which the public may obtain copies of
that document.
[86 FR 38550, July 22, 2021]
Sec. 1.15 Amendment or repeal of a rule.
(a) Substantive amendment or repeal of a rule. The procedures for
substantive amendment to or repeal of a rule are the same as for the
issuance thereof.
(b) Nonsubstantive amendment of a rule. The Commission may make a
nonsubstantive amendment to a rule by announcing the amendment in the
Federal Register.
[46 FR 26289, May 12, 1981]
Sec. 1.16 Petition for exemption from trade regulation rule.
Any person to whom a rule would otherwise apply may petition the
Commission for an exemption from such rule. Petitions for exemptions
will be handled in the same manner and pursuant to the same procedures
as prescribed in Sec. 1.31 of this chapter.
[86 FR 59852, Oct. 29, 2021]
Sec. 1.17 [Reserved]
Sec. 1.18 Rulemaking record.
(a) Definition. For purposes of these rules the term rulemaking
record includes the final rule, its statement of basis and purpose, the
verbatim transcripts of the informal hearing, if any, written
submissions, the recommended decision of the presiding officer, any
communications placed on the rulemaking record pursuant to Sec.
1.18(c), and any other information the Commission considers relevant to
the rule.
(b) Public availability. The rulemaking record will be publicly
available except when the Commission, for good cause shown, determines
that it is in the public interest to allow any submission to be received
in camera subject to the provisions of Sec. 4.9 of this chapter.
(c) Communications to Commissioners and Commissioners' personal
staffs--(1) Communications by outside parties. Except as otherwise
provided in this subpart or by the Commission, after the Commission
votes to issue a notice of proposed rulemaking, comment on the proposed
rule should be directed as provided in the notice. Communications with
respect to the merits of that proceeding from any outside party to any
Commissioner or Commissioner's advisor will be subject to the following
treatment:
(i) Written communications. Written communications, including
written communications from members of Congress, received within the
period for acceptance of initial or rebuttal written comments or other
written submissions will be placed on the rulemaking record. Written
communications received outside of the time periods designated for
acceptance of written comments or other written submissions will be
placed on public record unless the Commission votes to place them on the
rulemaking record.
(ii) Oral communications. Oral communications to a Commissioner or
Commissioner's advisor are permitted only when advance notice of such
oral communications is published by the Commission's Office of Public
Affairs in its Weekly Calendar and Notice of ``Sunshine'' Meetings. A
Commissioner's advisor will ensure such oral communications are
transcribed verbatim or summarized at the discretion of the Commissioner
or Commissioner's advisor to whom such oral communications are made and
promptly placed on the rulemaking record. Memoranda summarizing such
oral communications must list all persons attending or otherwise
participating in the meeting at which the oral communication was made,
and summarize all data presented and arguments made during the meeting.
(iii) Congressional communications. The provisions of paragraph
(c)(1)(ii) of this section do not apply to communications from Members
of Congress. Memoranda prepared by the Commissioner or Commissioner's
advisor setting forth the contents of any oral congressional
communications will be placed on the public record. If the communication
occurs within the comment period and is transcribed verbatim or
summarized, the transcript or summary will be promptly placed on the
rulemaking record. A transcript or
[[Page 21]]
summary of any oral communication which occurs after the time period for
acceptance of written comments will be placed promptly on the public
record.
(2) Communications by certain officers, employees, and agents of the
Commission. After the Commission votes to issue a notice of proposed
rulemaking, any officer, employee, or agent of the Commission with
investigative or other responsibility relating to any rulemaking
proceeding within any operating bureau of the Commission is prohibited
from communicating or causing to be communicated to any Commissioner or
to the personal staff of any Commissioner any fact which is relevant to
the merits of such proceeding and which is not on the rulemaking record
of such proceeding, unless such communication is made available to the
public and is included in the rulemaking record. The provisions of this
subsection do not apply to any communication to the extent such
communication is required for the disposition of ex parte matters as
authorized by law.
[86 FR 38550, July 22, 2021]
Sec. 1.19 Modification of a rule by the Commission at the time of
judicial review.
If a reviewing court orders, under section 18(e)(2) of the Federal
Trade Commission Act (15 U.S.C. 57a(e)(2)), further submissions and
presentations on the rule, the Commission may modify or set aside its
rule or make a new rule by reason of the additional submissions and
presentations. Such modified or new rule will then be filed with the
court together with an appropriate statement of basis and purpose and
the return of such submissions and presentations.
[86 FR 38551, July 22, 2021]
Sec. 1.20 Alternative procedures.
If the Commission determines at the commencement of a rulemaking
proceeding to employ procedures other than those established in this
subpart, it may do so by announcing those procedures in the Federal
Register notice commencing the rulemaking proceeding.
[86 FR 38551, July 22, 2021]
Subpart C_Rules Promulgated Under Authority Other Than Section
18(a)(1)(B) of the FTC Act
Authority: 15 U.S.C. 46; 5 U.S.C. 601 note.
Sec. 1.21 Scope of the rules in this subpart.
This subpart sets forth procedures for the promulgation of rules
under authority other than section 18(a)(1)(B) of the FTC Act except as
otherwise required by law or otherwise specified in the rules of this
chapter. This subpart does not apply to the promulgation of industry
guides, general statements of policy, rules of agency organization,
procedure, or practice, or rules governed by subpart B of this part.
[50 FR 53304, Dec. 31, 1985]
Sec. 1.22 Rulemaking.
(a) Nature and authority. For the purpose of carrying out the
provisions of the statutes administered by it, the Commission is
empowered to promulgate rules and regulations applicable to unlawful
trade practices. Such rules and regulations express the experience and
judgment of the Commission, based on facts of which it has knowledge
derived from studies, reports, investigations, hearings, and other
proceedings, or within official notice, concerning the substantive
requirements of the statutes which it administers.
(b) Scope. Rules may cover all applications of a particular
statutory provision and may be nationwide in effect, or they may be
limited to particular areas or industries or to particular product or
geographic markets, as may be appropriate.
(c) Use of rules in adjudicative proceedings. When a rule is
relevant to any issue involved in an ajudicative proceeding thereafter
instituted, the Commission may rely upon the rule to resolve such issue,
provided that the respondent shall have been given a fair
[[Page 22]]
hearing on the applicability of the rule to the particular case.
[40 FR 15232, Apr. 4, 1975]
Sec. 1.23 Quantity limit rules.
Quantity limit rules are authorized by section 2(a) of the Clayton
Act, as amended by the Robinson-Patman Act. These rules have the force
and effect of law.
[32 FR 8444, June 13, 1967. Redesignated at 40 FR 15232, Apr. 4, 1975]
Sec. 1.24 Rules applicable to wool, fur, and textile fiber products
and rules promulgated under the Fair Packaging and Labeling Act.
Rules having the force and effect of law are authorized under
section 6 of the Wool Products Labeling Act of 1939, section 8 of the
Fur Products Labeling Act, section 7 of the Textile Fiber Products
Identification Act, and sections 4, 5, and 6 of the Fair Packaging and
Labeling Act.
[40 FR 15233, Apr. 4, 1975]
Sec. 1.25 Initiation of rulemaking proceedings--petitions.
Proceedings for the issuance, amendment, or repeal of rules issued
pursuant to authorities other than Section 18(a)(1)(B) of the FTC Act
(15 U.S.C. 57a(1)(B)), including proceedings for exemption of products
or classes of products from statutory requirements, may be commenced by
the Commission upon its own initiative or pursuant to petition. Such
petitions will be handled in the same manner and pursuant to the same
procedures as prescribed in Sec. 1.31 of this chapter.
[86 FR 59852, Oct. 29, 2021]
Sec. 1.26 Procedure.
(a) Investigations and conferences. In connection with any
rulemaking proceeding, the Commission at any time may conduct such
investigations, make such studies, and hold such conferences as it may
deem necessary. All or any part of any such investigation may be
conducted under the provisions of subpart A of part 2 of this chapter.
(b) Notice. General notice of proposed rulemaking will be published
in the Federal Register and, to the extent practicable, otherwise made
available to interested persons except when the Commission for good
cause finds that notice and public procedure relating to the rule are
impractical, unnecessary or contrary to the public interest and
incorporates such finding and a brief statement of the reasons therefor
in the rule. If the rulemaking proceeding was instituted pursuant to
petition, a copy of the notice will be served on the petitioner. Such
notice will include:
(1) A statement of the time, place, and nature of the public
proceedings;
(2) Reference to the authority under which the rule is proposed;
(3) Either the terms or substance of the proposed rule or
description of the subjects and issues involved;
(4) An opportunity for interested persons to participate in the
proceeding through the submission of written data, views, or arguments;
and
(5) A statement setting forth such procedures for treatment of
communications from persons not employed by the Commission to
Commissioners or Commissioner Advisors with respect to the merits of the
proceeding as will incorporate the requirements of Sec. 1.18(c),
including the transcription of oral communications required by Sec.
1.18(c)(2), adapted in such form as may be appropriate to the
circumstances of the particular proceeding.
(c) Oral hearings. Oral hearing on a proposed rule may be held
within the discretion of the Commission, unless otherwise expressly
required by law. Any such hearing will be conducted by the Commission, a
member thereof, or a member of the Commission's staff. At the hearing
interested persons may appear and express their views as to the proposed
rule and may suggest such amendments, revisions, and additions thereto
as they may consider desirable and appropriate. The presiding officer
may impose reasonable limitations upon the length of time allotted to
any person. If by reason of the limitations imposed the person cannot
complete the presentation of his suggestions, he may within twenty-four
(24) hours file a written statement covering those relevant matters
which he did not orally present.
(d) Promulgation of rules or orders. The Commission, after
consideration of all relevant matters of fact, law, policy,
[[Page 23]]
and discretion, including all relevant matters presented by interested
persons in the proceeding, will adopt and publish in the Federal
Register an appropriate rule or order, together with a concise general
statement of its basis and purpose and any necessary findings, or will
give other appropriate public notice of disposition of the proceeding.
The Federal Register publication will contain the information required
by the Paperwork Reduction Act, 44 U.S.C. 3501-3520, and the Regulatory
Flexibility Act, 5 U.S.C. 601-612, if applicable. For each rule for
which the Commission must prepare a final regulatory flexibility
analysis, the Commission will publish one or more guides to assist small
entities in complying with the rule. Such guides will be designated as
``small entity compliance guides.''
(e) Effective date of rules. Except as provided in paragraphs (f)
and (g) of this section, the effective date of any rule, or of the
amendment, suspension, or repeal of any rule will be as specified in a
notice published in the Federal Register, which date will be not less
than thirty (30) days after the date of such publication unless an
earlier effective date is specified by the Commission upon good cause
found and published with the rule.
(f) Effective date of rules and orders under Fair Packaging and
Labeling Act. The effective date of any rule or order under the Fair
Packaging and Labeling Act will be as specified by order published in
the Federal Register, but shall not be prior to the day following the
last day on which objections may be filed under paragraph (g) of this
section.
(g) Objections and request for hearing under Fair Packaging and
Labeling Act. On or before the thirtieth (30th) day after the date of
publication of an order in the Federal Register pursuant to paragraph
(f) of this section, any person who will be adversely affected by the
order if placed in effect may file objections thereto with the Secretary
of the Commission, specifying with particularity the provisions of the
order deemed objectionable, stating the grounds therefor, and requesting
a public hearing upon such objections. Objections will be deemed
sufficient to warrant the holding of a public hearing only:
(1) If they establish that the objector will be adversely affected
by the order;
(2) If they specify with particularity the provisions of the order
to which objection is taken; and
(3) If they are supported by reasonable grounds which, if valid and
factually supported, may be adequate to justify the relief sought.
Anyone who files objections which are not deemed by the Commission
sufficient to warrant the holding of a public hearing will be promptly
notified of that determination. As soon as practicable after the time
for filing objections has expired, the Commission will publish a notice
in the Federal Register specifying those parts of the order which have
been stayed by the filing of objections or, if no objections sufficient
to warrant the holding of a hearing have been filed, stating that fact.
[32 FR 8444, June 13, 1967. Redesignated at 40 FR 15232, Apr. 4, 1975,
as amended at 44 FR 16368, Mar. 19, 1979; 50 FR 53304, Dec. 31, 1985; 63
FR 36340, July 6, 1998]
Subpart D_Petitions for Rulemaking or Exemption
Authority: 15 U.S.C. 46; 15 U.S.C. 57a; 5 U.S.C. 601 note.
Source: 86 FR 59852, Oct. 29, 2021, unless otherwise noted.
Sec. 1.31 Procedures for addressing petitions.
(a) Petitions for rulemaking. An interested person may petition for
the issuance, amendment, or repeal of a rule, administered by the
Commission pursuant to Section 18(a)(1)(B) of the FTC Act (15 U.S.C.
57a(1)(B)) or other statutory authorities. A request to issue, amend, or
repeal an interpretive rule, including an industry guide, may also be
submitted by petition. For purposes of this section, a ``petition''
means a written request to issue, amend, or repeal a rule or
interpretive rule administered by the Commission or a petition seeking
an exemption from the coverage of a rule.
(b) Requirements. Petitions must include the following information:
[[Page 24]]
(1) The petitioner's full name, address, telephone number, and email
address (if available), along with an explanation of how the
petitioner's interests would be affected by the requested action;
(2) A full statement of the action requested by the petitioner,
including the text and substance of the proposed rule or amendment, or a
statement identifying the rule proposed to be repealed, and citation to
any existing Commission rules that would be affected by the requested
action;
(3) A full statement of the factual and legal basis on which the
petitioner relies for the action requested in the petition, including
all relevant facts, views, argument, and data upon which the petitioner
relies, as well as information known to the petitioner that is
unfavorable to the petitioner's position. The statement should identify
the problem the requested action is intended to address and explain why
the requested action is necessary to address the problem.
(c) Supporting data. If an original research report is used to
support a petition, the information should be presented in a form that
would be acceptable for publication in a peer reviewed scientific or
technical journal. If quantitative data are used to support a petition,
the presentation of the data should include a complete statistical
analysis using conventional statistical methods. Sources of information
appropriate to use in support of a petition include, but are not limited
to:
(1) Professional journal articles,
(2) Research reports,
(3) Official government statistics,
(4) Official government reports,
(5) Industry data, and
(6) Scientific textbooks.
(d) Filing. A petition should be submitted via email to
[email protected] or sent via postal mail or commercial delivery
to Federal Trade Commission, Office of the Secretary, Suite CC-5610, 600
Pennsylvania Avenue NW, Washington, DC 20580. If the petition meets the
requirements for Commission consideration described in this section, the
Secretary will assign a docket number to the petition. Once a petition
has been docketed, the FTC will notify the petitioner in writing and
provide the petitioner with the number assigned to the petition and an
agency contact for inquiries relating to the petition. The petition
number should be referenced by the petitioner in all contacts with the
agency regarding the petition.
(e) Confidential treatment. If a petition contains material for
which the petitioner seeks confidential treatment, the petitioner must
file a request for confidential treatment that complies with Sec.
4.9(c) of this chapter and two versions of the petition and all
supporting materials, consisting of a confidential and a public version.
Every page of each such document shall be clearly and accurately labeled
``Public'' or ``Confidential.'' In the confidential version, the
petitioner must use brackets or similar conspicuous markings to indicate
the material for which it is claiming confidential treatment. In the
public version, the petitioner must redact all material for which it
seeks confidential treatment in the petition and supporting materials or
all portions thereof for which confidential treatment is requested. The
written request for confidential treatment that accompanies the petition
must include a description of the material for which confidential
treatment is requested and the factual and legal basis for the request.
Requests for confidential treatment will only be granted if the General
Counsel grants the request in accordance with the law and the public
interest, pursuant to Sec. 4.9(c) of this chapter.
(f) Notice and public comment. After a petition has been docketed as
described in paragraph (d) of this section, the Office of the Secretary
will provide public notice of the petition on behalf of the Commission
in the Federal Register and publish the document online for public
comment for 30 days through the Federal eRulemaking portal at https://
www.regulations.gov. Any person may file a statement in support of or in
opposition to a petition prior to Commission action on the petition by
following the instructions provided in the Federal Register notice
inviting comment on the petition. All comments on a petition will become
part of the public record.
[[Page 25]]
(g) Resolution of petitions. The Commission may grant or deny a
petition in whole or in part. If the Commission determines to commence a
rulemaking proceeding in response to a petition, the Commission will
publish a rulemaking notice in the Federal Register and will serve a
copy of the notice initiating the rulemaking proceeding on the
petitioner. If the petition is deemed by the Commission as insufficient
to warrant commencement of a rulemaking proceeding, the Commission will
make public its determination and notify the petitioner, who may be
given the opportunity to submit additional data. Petitions that are
moot, premature, repetitive, frivolous, or which plainly do not warrant
consideration by the Commission may be denied or dismissed without
prejudice to the petitioner.
[86 FR 59852, Oct. 29, 2021]
Subpart E_Export Trade Associations
Sec. 1.41 Limited antitrust exemption.
The Export Trade Act authorizes the organization and operation of
export trade associations, and extends to them certain limited
exemptions from the Sherman Act and the Clayton Act. It also extends the
jurisdiction of the Commission under the Federal Trade Commission Act to
unfair methods of competition used in export trade against competitors
engaged in export trade, even though the acts constituting such unfair
methods are done without the territorial jurisdiction of the United
States.
Sec. 1.42 Notice to Commission.
To obtain the exemptions afforded by the Act, an export trade
association is required to file with the Commission, within thirty (30)
days after its creation, a verified written statement setting forth the
location of its offices and places of business, names, and addresses of
its officers, stockholders, or members, and copies of its documents of
incorporation or association. On the first day of January of each year
thereafter, each association must file a like statement and, when
required by the Commission to do so, must furnish to the Commission
detailed information as to its organization, business, conduct,
practices, management, and relation to other associations, corporations,
partnerships, and individuals.
Sec. 1.43 Recommendations.
Whenever the Commission has reason to believe that an association
has violated the prohibitions of section 2 of the Act, it may conduct an
investigation. If, after investigation, it concludes that the law has
been violated, it may make to such association recommendations for the
readjustment of its business. If the association fails to comply with
the recommendations, the Commission will refer its findings and
recommendations to the Attorney General for appropriate action.
Subpart F_Trademark Cancellation Procedure
Sec. 1.51 Applications.
Applications for the institution of proceedings for the cancellation
of registration of trade, service, or certification marks under the
Trade-Mark Act of 1946 may be filed with the Secretary of the
Commission. Such applications shall be in writing, signed by or in
behalf of the applicant, and should identify the registration concerned
and contain a short and simple statement of the facts constituting the
alleged basis for cancellation, the name and address of the applicant,
together with all relevant and available information. If, after
consideration of the application, or upon its own initiative, the
Commission concludes that cancellation of the mark may be warranted, it
will institute a proceeding before the Commissioner of Patents for
cancellation of the registration.
Subpart G_Injunctive and Condemnation Proceedings
Sec. 1.61 Injunctions.
In those cases where the Commission has reason to believe that it
would be
[[Page 26]]
to the interest of the public, the Commission will apply to the courts
for injunctive relief, pursuant to the authority granted in section 13
of the Federal Trade Commission Act.
[40 FR 15233, Apr. 4, 1975]
Sec. 1.62 Ancillary court orders pending review.
Where petition for review of an order to cease and desist has been
filed in a U.S. court of appeals, the Commission may apply to the court
for issuance of such writs as are ancillary to its jurisdiction or are
necessary in its judgment to prevent injury to the public or to
competitors pendente lite.
Sec. 1.63 Injunctions: Wool, fur, and textile cases.
In those cases arising under the Wool Products Labeling Act of 1939,
Fur Products Labeling Act, and Textile Fiber Products Identification
Act, where it appears to the Commission that it would be to the public
interest for it to do so, the Commission will apply to the courts for
injunctive relief, pursuant to the authority granted in such Acts.
[32 FR 8444, June 13, 1967, as amended at 41 FR 4814, Feb. 2, 1976]
Sec. 1.64 Condemnation proceedings.
In those cases arising under the Wool Products Labeling Act of 1939
and Fur Products Labeling Act, and where it appears to the Commission
that the public interest requires such action, the Commission will apply
to the courts for condemnation, pursuant to the authority granted in
such Acts.
[32 FR 8444, June 13, 1967, as amended at 41 FR 4814, Feb. 2, 1976]
Subpart H_Administration of the Fair Credit Reporting Act
Authority: 84 Stat. 1128, 15 U.S.C. 1681 et seq.
Sec. 1.71 Administration.
The general administration of the Fair Credit Reporting Act (Title
VI of the Consumer Credit Protection Act of 1968; enacted October 26,
1970; Pub. L. 91-508, 82 Stat. 146, 15 U.S.C. 1601 et seq.) is carried
out by the Bureau of Consumer Protection, Division of Credit Practices.
Any interested person may obtain copies of the Act and these procedures
and rules of practice upon request to the Secretary of the Commission,
Washington, DC 20580.
[36 FR 9293, May 22, 1971, as amended at 36 FR 18788, Sept. 22, 1971; 38
FR 32438, Nov. 26, 1973; 46 FR 26290, May 12, 1981]
Sec. 1.72 Examination, counseling and staff advice.
The Commission maintains a staff to carry out on-the-scene
examination of records and procedures utilized to comply with the Fair
Credit Reporting Act and to carry out industry counseling. Requests for
staff interpretation of the Fair Credit Reporting Act should be directed
to the Division of Credit Practices, Bureau of Consumer Protection. Such
interpretations represent informal staff opinion which is advisory in
nature and is not binding upon the Commission as to any action it may
take in the matter. Administrative action to effect correction of minor
infractions on a voluntary basis is taken in those cases where such
procedure is believed adequate to effect immediate compliance and
protect the public interest.
[36 FR 9293, May 22, 1971, as amended at 36 FR 18788, Sept. 22, 1971; 38
FR 32438, Nov. 26, 1973; 46 FR 26290, May 12, 1981]
Sec. 1.73 Interpretations.
(a) Nature and purpose. (1) The Commission issues and causes to be
published in the Federal Register interpretations of the provisions of
the Fair Credit Reporting Act on its own initiative or pursuant to the
application of any person when it appears to the Commission that
guidance as to the legal requirements of the Act would be in the public
interest and would serve to bring about more widespread and equitable
observance of the Act.
(2) The interpretations are not substantive rules and do not have
the force or effect of statutory provisions. They are guidelines
intended as clarification of the Fair Credit Reporting Act, and, like
industry guides, are advisory in nature. They represent the
[[Page 27]]
Commission's view as to what a particular provision of the Fair Credit
Reporting Act means for the guidance of the public in conducting its
affairs in conformity with that Act, and they provide the basis for
voluntary and simultaneous abandonment of unlawful practices by members
of industry. Failure to comply with such interpretations may result in
corrective action by the Commission under applicable statutory
provisions.
(b) Procedure. (1) Requests for Commission interpretations should be
submitted in writing to the Secretary of the Federal Trade Commission
stating the nature of the interpretation requested and the reasons and
justification therefor. If the request is granted, as soon as
practicable thereafter, the Commission will publish a notice in the
Federal Register setting forth the text of the proposed interpretation.
Comments, views, or objections, together with the grounds therefor,
concerning the proposed interpretation may be submitted to the Secretary
of the Commission within thirty (30) days of public notice thereof. The
proposed interpretation will automatically become final after the
expiration of sixty (60) days from the date of public notice thereof,
unless upon consideration of written comments submitted as hereinabove
provided, the Commission determine to rescind, revoke, modify, or
withdraw the proposed interpretation, in which event notification of
such determination will be published in the Federal Register.
(2) The issuance of such interpretations is within the discretion of
the Commission and the Commission at any time may conduct such
investigations and hold such conferences or hearings as it may deem
appropriate. Any interpretation issued pursuant to this chapter is
without prejudice to the right of the Commission to reconsider the
interpretation, and where the public interest requires, to rescind,
revoke, modify, or withdraw the interpretation, in which event
notification of such action will be published in the Federal Register.
(c) Applicability of interpretations. Interpretations issued
pursuant to this subpart may cover all applications of a particular
statutory provision, or they may be limited in application to a
particular industry, as appropriate.
[36 FR 9293, May 22, 1971]
Subpart I_Procedures for Implementation of the National Environmental
Policy Act of 1969
Authority: 15 U.S.C. 46(g), 42 U.S.C. 4321 et seq.
Source: 47 FR 3096, Jan. 22, 1982, unless otherwise noted.
Sec. 1.81 Authority and incorporation of CEQ Regulations.
This subpart is issued pursuant to 102(2) of the National
Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et
seq.). Pursuant to Executive Order 11514 (March 5, 1970, as amended by
Executive Order 11991, May 24, 1977) and the Environmental Quality
Improvement Act of 1980, as amended (42 U.S.C. 4371 et seq.) the Council
on Environmental Quality (CEQ) has issued comprehensive regulations for
implementing the procedural provisions of NEPA (40 CFR parts 1500
through 1508) (``CEQ Regulations''). Although it is the Commission's
position that these regulations are not binding on it, the Commission's
policy is to comply fully with the CEQ Regulations unless it determines
in a particular instance or for a category of actions that compliance
would not be consistent with the requirements of law. With this caveat,
the Commission incorporates into this subpart the CEQ Regulations. The
following are supplementary definitions and procedures to be applied in
conjunction with the CEQ Regulations.
[47 FR 3096, Jan. 22, 1982, as amended at 50 FR 53304, Dec. 31, 1985]
Sec. 1.82 Declaration of policy.
(a) Except for actions which are not subject to the requirements of
section 102(2)(C) of NEPA, no Commission proposal for a major action
significantly affecting the quality of the human environment will be
instituted unless an environmental impact statement has been prepared
for consideration in the
[[Page 28]]
decisionmaking. All relevant environmental documents, comments, and
responses as provided in this subpart shall accompany such proposal
through all review processes. ``Major actions, significantly affecting
the quality of the human environment'' referred to in this subpart ``do
not include bringing judicial or administrative civil or criminal
enforcement actions'' CEQ Regulation (40 CFR 1508.18(a)). In the event
that the Commission in an administrative enforcement proceeding actively
contemplates the adoption of standards or a form of relief which it
determines may have a significant effect on the environment, the
Commission will, when consistent with the requirements of law, provide
for the preparation of an environmental assessment or an environmental
impact statement or such other action as will permit the Commission to
assess alternatives with a view toward avoiding or minimizing any
adverse effect upon the environment.
(b) No Commission proposal for legislation significantly affecting
the quality of the human environment and concerning a subject matter in
which the Commission has primary responsibility will be submitted to
Congress without an accompanying environmental impact statement.
(c) When the Commission finds that emergency action is necessary and
an environmental impact statement cannot be prepared in conformance with
the CEQ Regulations, the Commission will consult with CEQ about
alternative arrangements in accordance with CEQ Regulation (40 CFR
1506.11).
Sec. 1.83 Whether to commence the process for an environmental impact
statement.
(a) The Bureau responsible for submitting a proposed rule, guide, or
proposal for legislation to the Commission for agency action shall,
after consultation with the Office of the General Counsel, initially
determine whether or not the proposal is one which requires an
environmental impact statement. Except for matters where the
environmental effects, if any, would appear to be either (1) clearly
significant and therefore the decision is made to prepare an
environmental impact statement, or (2) so uncertain that environmental
analysis would be based on speculation, the Bureau should normally
prepare an ``environmental assessment'' CEQ Regulation (40 CFR 1508.9)
for purposes of providing sufficient evidence and analysis for
determining whether to prepare an environmental impact statement or a
finding of no significant impact. The Bureau should involve
environmental agencies to the extent practicable in preparing an
assessment. An environmental assessment shall be made available to the
public when the proposed action is made public along with any ensuing
environmental impact statement or finding of no significant impact.
(b) If the Bureau determines that the proposal is one which requires
an environmental impact statement, it shall commence the ``scoping
process'' CEQ Regulation (40 CFR 1501.7) except that the impact
statement which is part of a proposal for legislation need not go
through a scoping process but shall conform to CEQ Regulation (40 CFR
1506.8). As soon as practicable after its decision to prepare an
environmental impact statement and before the scoping process, the
Bureau shall publish a notice of intent as provided in CEQ Regulations
(40 CFR 1501.7 and 1508.22).
(c) If, on the basis of an environmental assessment, the
determination is made not to prepare a statement, a finding of ``no
significant impact'' shall be made in accordance with CEQ Regulation (40
CFR 1508.3) and shall be made available to the public as specified in
CEQ Regulation (40 CFR 1506.6).
Sec. 1.84 Draft environmental impact statements: Availability and
comment.
Except for proposals for legislation, environmental impact
statements shall be prepared in two stages: Draft statement and final
statement.
(a) Proposed rules or guides. (1) An environmental impact statement,
if deemed necessary, shall be in draft form at the time a proposed rule
or guide is published in the Federal Register and shall accompany the
proposal throughout the decisionmaking process.
[[Page 29]]
(2) The major decision points with respect to rules and guides are:
(i) Preliminary formulation of a staff proposal;
(ii) The time the proposal is initially published in the Federal
Register as a Commission proposal;
(iii) Presiding officer's report (in trade regulation rule
proceedings);
(iv) Submission to the Commission of the staff report or
recommendation for final action on the proposed guide or rule;
(v) Final decision by the Commission. The decision on whether or not
to prepare an environmental impact statement should occur at point
(a)(2)(i) of this section. The publication of any draft impact statement
should occur at point (a)(2)(ii) of this section. The publication of the
final environmental impact statement should occur at point (a)(2)(iv) of
this section.
(b) Legislative proposals. In legislative matters, a legislative
environmental impact statement shall be prepared in accordance with CEQ
Regulation (40 CFR 1506.8).
(c) In rule or guide proceedings the draft environmental impact
statement shall be prepared in accordance with CEQ Regulation (40 CFR
1502.9) and shall be placed in the public record to which it pertains;
in legislative matters, the legislative impact statement shall be placed
in a public record to be established, containing the legislative report
to which it pertains; these will be available to the public through the
Office of the Secretary and will be published in full with the
appropriate proposed rule, guide, or legislative report; such statements
shall also be filed with the Environmental Protection Agency's (EPA)
Office of Environmental Review (CEQ Regulation (40 CFR 1506.9)) for
listing in the weekly Federal Register Notice of draft environmental
impact statements, and shall be circulated, in accordance with CEQ
Regulations (40 CFR 1502.19, 1506.6) to appropriate federal, state and
local agencies.
(d) Forty-five (45) days will be allowed for comment on the draft
environmental impact statement, calculated from the date of publication
in the EPA's weekly Federal Register list of draft environmental impact
statements. The Commission may in its discretion grant such longer
period as the complexity of the issues may warrant.
Sec. 1.85 Final environmental impact statements.
(a) After the close of the comment period, the Bureau responsible
for the matter will consider the comments received on the draft
environmental impact statement and will put the draft statement into
final form in accordance with the requirements of CEQ Regulation (40 CFR
1502.9(b)), attaching the comments received (or summaries if response
was exceptionally voluminous).
(b) Upon Bureau approval of the final environmental impact statement
the final statement will be
(1) Filed with the EPA;
(2) Forwarded to all parties which commented on the draft
environmental impact statement and to other interested parties, if
practicable;
(3) Placed in the public record of the proposed rule or guide
proceeding or legislative matter to which it pertains;
(4) Distributed in any other way which the Bureau in consultation
with CEQ deems appropriate.
(c) In rule and guide proceedings, at least thirty (30) days will be
allowed for comment on the final environmental impact statement,
calculated from the date of publication in the EPA's weekly Federal
Register list of final environmental impact statements. In no event will
a final rule or guide be promulgated prior to ninety (90) days after
notice of the draft environmental impact statement, except where
emergency action makes such time period impossible.
Sec. 1.86 Supplemental statements.
Except for proposals for legislation, as provided in CEQ Regulation
(40 CFR 1502.9(c)), the Commission shall publish supplements to either
draft or final environmental statements if:
(a) The Commission makes substantial changes in the proposed action
that are relevant to environmental concerns; or
(b) There are significant new circumstances or information relevant
to environmental concerns and bearing on the proposed action and its
impacts. In
[[Page 30]]
the course of a trade regulation rule proceeding, the supplement will be
placed in the rulemaking record.
Sec. 1.87 NEPA and agency decisionmaking.
In its final decision on the proposed action or, if appropriate, in
its recommendation to Congress, the Commission shall consider all the
alternatives in the environmental impact statement and other relevant
environmental documents and shall prepare a concise statement which, in
accordance with CEQ Regulation Sec. 1505.2, shall:
(a) Identify all alternatives considered by the Commission in
reaching its decision or recommendation, specifying the alternatives
which were considered to be environmentally preferable;
(b) State whether all practicable means to avoid or minimize
environmental harm from the alternative selected have been adopted, and
if not, why they were not.
Sec. 1.88 Implementing procedures.
(a) The General Counsel is designated the official responsible for
coordinating the Commission's efforts to improve environmental quality.
He will provide assistance to the staff in determining when an
environmental impact statement is needed and in its preparation.
(b) The Commission will determine finally whether an action complies
with NEPA.
(c) The Directors of the Bureaus of Consumer Protection and
Competition will supplement these procedures for their Bureaus to assure
that every proposed rule and guide is reviewed to assess the need for an
environmental impact statement and that, where need exists, an
environmental impact statement is developed to assure timely
consideration of environmental factors.
(d) The General Counsel will establish procedures to assure that
every legislative proposal on a matter for which the Commission has
primary responsibility is reviewed to assess the need for an
environmental impact statement and that, where need exists, and
environmental impact statement is developed to assure timely
consideration of environmental factors.
(e) Parties seeking information or status reports on environmental
impact statements and other elements of the NEPA process, should contact
the Assistant General Counsel for Litigation and Environmental Policy.
Sec. 1.89 Effect on prior actions.
It is the policy of the Commission to apply these procedures to the
fullest extent possible to proceedings which are already in progress.
Subpart J_Economic Surveys, Investigations and Reports
Sec. 1.91 Authority and purpose.
General and special economic surveys, investigations, and reports
are made by the Bureau of Economics under the authority of the various
laws which the Federal Trade Commission administers. The Commission may
in any such survey or investigation invoke any or all of the compulsory
processes authorized by law.
[32 FR 8444, June 13, 1967. Redesignated at 40 FR 15233, Apr. 4, 1975]
Subpart K_Penalties for Violation of Appliance Labeling Rules
Source: 45 FR 67318, Oct. 10, 1980, unless otherwise noted.
Sec. 1.92 Scope.
The rules in this subpart apply to and govern proceedings for the
assessment of civil penalties for the violation of section 332 of the
Energy Policy and Conservation Act, 42 U.S.C. 6302, and the Commission's
Rules on Labeling and Advertising of Consumer Appliances, 16 CFR part
305, promulgated under sections 324 and 326 of the Energy Policy and
Conservation Act, 42 U.S.C. 6294 and 6296.
Sec. 1.93 Notice of proposed penalty.
(a) Notice. Before issuing an order assessing a civil penalty under
this subpart against any person, the Commission shall provide to such
person notice of the proposed penalty. This notice shall:
[[Page 31]]
(1) Inform such person of the opportunity to elect in writing within
30 days of receipt of the notice of proposed penalty to have procedures
of Sec. 1.95 (in lieu of those of Sec. 1.94) apply with respect to
such assessment; and
(2) Include a copy of a proposed complaint conforming to the
provision of Sec. 3.11(b) (1) and (2) of the Commission's Rules of
Practice, or a statement of the material facts constituting the alleged
violation and the legal basis for the proposed penalty; and
(3) Include the amount of the proposed penalty; and
(4) Include a statement of the procedural rules that the Commission
will follow if respondent elects to proceed under Sec. 1.94 unless the
Commission chooses to follow subparts B, C, D, E, and F of part 3 of
this chapter.
(b) Election. Within 30 days of receipt of the notice of proposed
penalty, the respondent shall, if it wishes to elect to have the
procedures of Sec. 1.95 apply, notify the Commission of the election in
writing. The notification, to be filed in accordance with Sec. 4.2 of
this chapter, may include any factual or legal reasons for which the
proposed assessment order should not issue, should be reduced in amount,
or should otherwise be modified.
Sec. 1.94 Commission proceeding to assess civil penalty.
If the respondent fails to elect to have the procedures of Sec.
1.95 apply, the Commission shall determine whether to issue a complaint
and thereby commence an adjudicative proceeding in conformance with
section 333(d)(2)(A) of the Energy Policy and Conservation Act, 42
U.S.C. 6303(d)(2)(A). If the Commission votes to issue a complaint, the
proceeding shall be conducted in accordance with subparts B, C, D, E and
F of part 3 of this chapter, unless otherwise ordered in the notice of
proposed penalty. In assessing a penalty, the Commission shall take into
account the factors listed in Sec. 1.97.
Sec. 1.95 Procedures upon election.
(a) After receipt of the notification of election to apply the
procedures of this section pursuant to Sec. 1.93, the Commission shall
promptly assess such penalty as it deems appropriate, in accordance with
Sec. 1.97.
(b) If the civil penalty has not been paid within 60 calendar days
after the assessment order has been issued under paragraph (a) of this
section, the General Counsel, unless otherwise directed, shall institute
an action in the appropriate district court of the United States for an
order enforcing the assessment of the civil penalty.
(c) Any election to have this section apply may not be revoked
except with the consent of the Commission.
Sec. 1.96 Compromise of penalty.
The Commission may compromise any penalty or proposed penalty at any
time, with leave of court when necessary, taking into account the nature
and degree of violation and the impact of a penalty upon a particular
respondent.
Sec. 1.97 Amount of penalty.
All penalties assessed under this subchapter shall be in the amount
per violation as described in section 333(a) of the Energy Policy and
Conservation Act, 42 U.S.C. 6303(a), adjusted for inflation pursuant to
Sec. 1.98, unless the Commission otherwise directs. In considering the
amount of penalty, the Commission shall take into account:
(a) Respondent's size and ability to pay;
(b) Respondent's good faith;
(c) Any history of previous violations;
(d) The deterrent effect of the penalty action;
(e) The length of time involved before the Commission was made aware
of the violation;
(f) The gravity of the violation, including the amount of harm to
consumers and the public caused by the violation; and
(g) Such other matters as justice may require.
[32 FR 8444, June 13, 1967, as amended at 61 FR 54548, Oct. 21, 1996]
[[Page 32]]
Subpart L_Civil Penalty Adjustments Under the Federal Civil Penalties
Inflation Adjustment Act of 1990, as Amended
Authority: 28 U.S.C. 2461 note.
Sec. 1.98 Adjustment of civil monetary penalty amounts.
This section makes inflation adjustments in the dollar amounts of
civil monetary penalties provided by law within the Commission's
jurisdiction. The following maximum civil penalty amounts apply only to
penalties assessed after January 10, 2022, including those penalties
whose associated violation predated January 10, 2022.
(a) Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1)--
$46,517;
(b) Section 11(l) of the Clayton Act, 15 U.S.C. 21(l)--$24,714;
(c) Section 5(l) of the FTC Act, 15 U.S.C. 45(l)--$46,517;
(d) Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A)--
$46,517;
(e) Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B)--
$46,517;
(f) Section 10 of the FTC Act, 15 U.S.C. 50--$612;
(g) Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C.
65--$612;
(h) Section 6(b) of the Wool Products Labeling Act, 15 U.SC.
68d(b)--$612;
(i) Section 3(e) of the Fur Products Labeling Act, 15 U.S.C.
69a(e)--$612;
(j) Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C.
69f(d)(2)--$612;
(k) Section 333(a) of the Energy Policy and Conservation Act, 42
U.S.C. 6303(a)--$503;
(l) Sections 525(a) and (b) of the Energy Policy and Conservation
Act, 42 U.S.C. 6395(a) and (b), respectively--$24,714 and $46,517,
respectively;
(m) Section 621(a)(2) of the Fair Credit Reporting Act, 15 U.S.C.
1681s(a)(2)--$4,367;
(n) Section 1115(a) of the Medicare Prescription Drug Improvement
and Modernization Act of 2003, Public Law 108-173, as amended by Public
Law 115-263, 21 U.S.C. 355 note--$16,445;
(o) Section 814(a) of the Energy Independence and Security Act of
2007, 42 U.S.C. 17304--$1,323,791; and
(p) Civil monetary penalties authorized by reference to the Federal
Trade Commission Act under any other provision of law within the
jurisdiction of the Commission--refer to the amounts set forth in
paragraphs (c), (d), (e) and (f) of this section, as applicable.
[87 FR 1071, Jan. 10, 2022]
Subpart M_Submissions Under the Small Business Regulatory Enforcement
Fairness Act
Authority: 5 U.S.C. 801-804.
Sec. 1.99 Submission of rules, guides, interpretations, and policy
statements to Congress and the Comptroller General.
Whenever the Commission issues or substantively amends a rule or
industry guide or formally adopts an interpretation or policy statement
that constitutes a ``rule'' within the meaning of 5 U.S.C. 804(3), a
copy of the final rule, guide, interpretation or statement, together
with a concise description, the proposed effective date, and a statement
of whether the rule, guide, interpretation or statement is a ``major
rule'' within the meaning of 5 U.S.C. 804(2), will be transmitted to
each House of Congress and to the Comptroller General. The material
transmitted to the Comptroller General will also include any additional
relevant information required by 5 U.S.C. 801(a)(1)(B). This provision
generally applies to rules issued or substantively amended pursuant to
Sec. 1.14(c), Sec. 1.15(a), Sec. 1.19, or Sec. 1.26(d); industry
guides issued pursuant to Sec. 1.6; interpretations and policy
statements formally adopted by the Commission; and any rule of agency
organization, practice or procedure that substantially affects the
rights or obligations of non-agency parties.
[63 FR 36340, July 8, 1998]
Subpart N_Administrative Wage Garnishment
Sec. 1.100 Administrative wage garnishment.
(a) General. The Commission may use administrative wage garnishment
for debts, including those referred to Bureau of the Fiscal Service,
Department of Treasury, for cross-servicing. Regulations in 31 CFR
285.11 govern the collection of delinquent nontax debts
[[Page 33]]
owed to federal agencies through administrative garnishment of non-
Federal wages. Whenever the Bureau of the Fiscal Service collects such a
debt for the Commission using administrative wage garnishment, the
statutory administrative requirements in 31 CFR 285.11 will govern.
(b) Hearing official. Any hearing required to establish the
Commission's right to collect a debt through administrative wage
garnishment shall be conducted by a qualified individual selected at the
discretion of the Chairman of the Commission, as specified in 31 CFR
285.11.
[75 FR 68418, Nov. 8, 2010, as amended at 81 FR 2742, Jan. 19, 2016]
Subpart O_OMB Control Numbers for Commission Information Collection
Requirements
Authority: 44 U.S.C. 3501-3521.
Sec. 1.101 OMB control numbers assigned pursuant to the Paperwork
Reduction Act.
(a) Purpose. This part collects and displays control numbers
assigned by the Office of Management and Budget (OMB) pursuant to the
Paperwork Reduction Act of 1995 to information collection requirements
in rules issued or enforced by the Commission. A response to an
information collection is not required unless the collection of
information displays a valid OMB control number. This part fulfills the
mandate (44 U.S.C. 3507(a)(3), 44 U.S.C. 3512) that agencies display the
current control number assigned by the OMB Director to agency
information collection requirements and inform affected persons that
they need not respond to a collection of information unless it displays
a valid control number.
(b) Display.
------------------------------------------------------------------------
16 CFR part where the
information collection
Current OMB control number (all requirement is located (or
numbers begin with 3084-) alternate part(s) if issued by
another agency, co-enforced by
the Federal Trade Commission)
------------------------------------------------------------------------
0005................................... 801-803.
0025................................... 453.
0068................................... 306.
0069................................... 305.
0085................................... 12 CFR part 205; 12 CFR part
1005.
0086................................... 12 CFR part 213; 12 CFR part
1013.
0087................................... 12 CFR part 202; 12 CFR part
1002.
0088................................... 12 CFR part 226; 12 CFR part
1026.
0094................................... 309.
0097................................... 310.
0099................................... 301.
0100................................... 300.
0101................................... 303.
0102................................... 308.
0103................................... 423.
0104................................... 425.
0105................................... 432.
0106................................... 435.
0107................................... 436.
0108................................... 455.
0109................................... 460.
0110................................... 500-503.
0111................................... 701.
0112................................... 702.
0113................................... 703.
0117................................... 312.
0121................................... 313.
0127................................... 315.
0128................................... 12 CFR 1022.136; 12 CFR
1022.137.
0131................................... 680; 12 CFR 1022.20.
0132................................... 642; 12 CFR 1022.54.
0137................................... 641; 681.
0142................................... 437.
0144................................... 660; 12 CFR 1022.42; 12 CFR
1022.43.
0145................................... 640; 12 CFR 1022.70.
0150................................... 318.
0156................................... 12 CFR part 1014.
0157................................... 12 CFR part 1015.
------------------------------------------------------------------------
[[Page 34]]
[78 FR 65558, Nov. 1, 2013]
Sec. Sec. 1.102-1.109 [Reserved]
Subpart P_Administrative Debt Collection, Including Administrative
Offset
Authority: 31 U.S.C. 3701 et seq.
Source: 81 FR 2742, Jan. 19, 2016, unless otherwise noted.
Sec. 1.110 Application of Government-wide administrative claims collections
standards and adoption of administrative offset regulations.
(a) The Commission shall apply the Federal Claims Collection
Standards (FCCS), 31 CFR parts 900-904, in the administrative
collection, offset, compromise, suspension, termination, and referral of
collection activity for civil claims for money, funds, or property, as
defined by 31 U.S.C. 3701(b), unless specific Federal agency statutes or
regulations apply to such activities or, as provided for by Title 11 of
the United States Code, when the claims involve bankruptcy. The
Commission shall also follow Department of Treasury regulations set
forth at 31 CFR part 285, as applicable, for administrative debt
collection, including centralized offset of federal payments to collect
non-tax debts that may be owed to the Commission, 31 CFR 285.5. Nothing
in this subpart shall be construed to supersede or require the
Commission to provide additional notice or other procedures that may
have already been provided or afforded to a debtor in the course of
administrative or judicial litigation or otherwise.
(b) For purposes of 31 U.S.C. 3716(b)(1), the Commission adopts
without change the regulations on collection by administrative offset
set forth at 31 CFR 901.3 and other relevant sections of the FCCS
applicable to such offset.
Sec. Sec. 1.111-1.119 [Reserved]
Subpart Q_Tax Refund Offset
Authority: 31 U.S.C. 3716 and 3720A, 31 CFR 285.2(c).
Source: 81 FR 2742, Jan. 19, 2016, unless otherwise noted.
Sec. 1.120 Purpose.
This subpart establishes procedures for the Commission's referral of
past-due legally enforceable debts to the Department of the Treasury's
Bureau of the Fiscal Service (Fiscal Service) for offset against the tax
refund payments of the debtor, consistent with applicable Fiscal Service
regulations and definitions set forth in 31 CFR 285.2 and 285.5.
Sec. 1.121 Notification of intent to collect.
(a) Notification before tax refund offset. Reduction of a tax refund
payment will be made only after the Commission makes a determination
that an amount is owed and past-due and gives or makes a reasonable
attempt to give the debtor 60 days written notice of the intent to
collect by tax refund offset.
(b) Contents of notice. The Commission's notice of intent to collect
by tax refund offset will state:
(1) The amount of the debt;
(2) That unless the debt is repaid within 60 days from the date of
the notice, the Commission intends to collect the debt by requesting a
reduction of any amounts payable to the debtor as a Federal tax refund
payment by an amount equal to the amount of the debt and all accumulated
interest and other charges;
(3) That the debtor, within 60 days from the date of the notice, has
an opportunity to make a written agreement to repay the amount of the
debt, unless such opportunity has previously been provided;
(4) A mailing address for forwarding any written correspondence and
a contact name and a telephone number for any questions; and
(5) That the debtor may present evidence to the Commission that all
or part of the debt is not past due or legally enforceable by:
(i) Sending a written request for a review of the evidence to the
address provided in the notice;
(ii) Stating in the request the amount disputed and the reasons why
the debtor believes that the debt is not past due or is not legally
enforceable; and
(iii) Including in the request any documents that the debtor wishes
to be
[[Page 35]]
considered or stating that the additional information will be submitted
within the remainder of the 60-day period.
(c) A debtor may dispute the existence or amount of the debt or the
terms of repayment, except with respect to debts established by a
judicial or administrative order. In those cases, the debtor may not
dispute matters or issues already settled, litigated, or otherwise
established by such order, including the amount of the debt or the
debtor's liability for that debt, except to the extent that the debtor
alleges that the amount of the debt does not reflect payments already
made to repay the debt in whole or part.
Sec. 1.122 Commission action as a result of consideration of evidence
submitted in response to the notice of intent.
(a) Consideration of evidence. If, in response to the notice
provided to the debtor under Sec. 1.121, the Commission is notified
that the debtor will submit additional evidence, or the Commission
receives additional evidence from the debtor within the prescribed time,
tax refund offset will be stayed until the Commission can:
(1) Consider the evidence presented by the debtor;
(2) Determine whether all or a portion of the debt is still past due
and legally enforceable; and
(3) Notify the debtor of its determination, as set forth in
paragraph (b) of this section.
(b) Commission action on the debt. (1) If, after considering any
additional evidence from the debtor, the Commission determines that the
debt remains past-due and legally enforceable, the Commission will
notify the debtor of its intent to refer the debt to the Fiscal Service
for offset against the debtor's Federal tax refund payment, including
whether the amount of the debt remains the same or is modified; or
(2) If, after considering any additional evidence from the debtor,
the Commission determines that no part of the debt remains past-due and
legally enforceable, the Commission will so notify the debtor and will
not refer the debt to the Fiscal Service for offset against the debtor's
Federal tax refund payment.
Sec. 1.123 Change in notification to Bureau of the Fiscal Service.
After the Commission sends the Fiscal Service notification of a
debtor's liability for a debt, the Commission will promptly notify the
Fiscal Service if the Commission:
(a) Determines that there is a material error or other material
change in the information contained in the notification, including in
the amount of the debt, subject to any additional due process
requirements, where applicable, under this subpart or the Federal Claims
Collection Standards, if the amount of debt has increased;
(b) Receives a payment or credits a payment to the account of the
debtor named in the notification that reduces the amount of the debt
referred to Fiscal Service for offset; or
(c) Otherwise concludes that such notification is appropriate or
necessary.
Sec. 1.124 Interest, penalties, and costs.
To the extent permitted or required by 31 U.S.C. 3717 or other law,
regulation, or order, all interest, penalties, and costs applicable to
the debt or incurred in connection with its referral for collection by
tax refund offset will be assessed on the debt and thus increase the
amount of the offset.
Sec. Sec. 1.125-1.129 [Reserved]
Subpart R_Policy With Regard to Indemnification of FTC Employees
Authority: 15 U.S.C. 46.
Source: 82 FR 30966, July 5, 2017, unless otherwise noted.
Sec. 1.130 Policy on employee indemnification.
(a) The Commission may indemnify, in whole or in part, its employees
(which for the purpose of this regulation includes former employees) for
any verdict, judgment, or other monetary award which is rendered against
any such employee, provided that the conduct giving rise to the verdict,
judgment, or award was taken within the scope of his or her employment
with the Federal Trade Commission
[[Page 36]]
and that such indemnification is in the interest of the Federal Trade
Commission, as determined as a matter of discretion by the Commission,
or its designee.
(b) The Commission may settle or compromise a personal damage claim
against its employee by the payment of available funds, at any time,
provided the alleged conduct giving rise to the personal damage claim
was taken within the scope of employment and that such settlement or
compromise is in the interest of the Federal Trade Commission, as
determined as a matter of discretion by the Commission, or its designee.
(c) Absent exceptional circumstances, as determined by the
Commission or its designee, the Commission will not entertain a request
either to agree to indemnify or to settle a personal damage claim before
entry of an adverse verdict, judgment, or monetary award.
(d) When an employee of the Federal Trade Commission becomes aware
that an action may be or has been filed against the employee in his or
her individual capacity as a result of conduct taken within the scope of
his or her employment, the employee shall immediately notify his or her
supervisor that such an action is pending or threatened. The supervisor
shall promptly thereafter notify the Office of the General Counsel.
Employees may be authorized to receive legal representation by the
Department of Justice in accordance with 28 CFR 50.15.
(e)(1) The employee may, thereafter, request either:
(i) Indemnification to satisfy a verdict, judgment or award entered
against the employee; or
(ii) Payment to satisfy the requirements of a settlement proposal.
(2) The employee shall submit a written request, with documentation
including copies of the verdict, judgment, award, or settlement
proposal, as appropriate, to the head of his or her division or office,
who thereupon shall submit to the General Counsel, in a timely manner, a
recommended disposition of the request. The General Counsel may also
seek the views of the Department of Justice. The failure of an employee
to provide notification under paragraph (d) of this section or make a
request under this paragraph (e) shall not impair the agency's ability
to provide indemnification or payment under this section if it
determines it is appropriate to do so.
(f) Any amount paid under this section either to indemnify a Federal
Trade Commission employee or to settle a personal damage claim shall be
contingent upon the availability of appropriated funds of the Federal
Trade Commission.
Subpart S_Procedures for Submissions Under the Horseracing Integrity and
Safety Act
Authority: 15 U.S.C. 3053.
Source: 86 FR 54823, Oct. 5, 2021, unless otherwise noted.
Sec. 1.140 Definitions.
When used in relation to the Horseracing Integrity and Safety Act,
15 U.S.C. 3051 through 3060, and this subpart--
Act means the Horseracing Integrity and Safety Act, 15 U.S.C. 3051
through 3060.
Breeder means a person who is in the business of breeding covered
horses.
Commission means the Federal Trade Commission.
Covered horse means any Thoroughbred horse, or any other horse made
subject to the Act by election of the applicable State racing commission
or the breed governing organization for such horse under 15 U.S.C.
3054(l), during the period--
(1) Beginning on the date of the horse's first timed and reported
workout at a racetrack that participates in covered horseraces or at a
training facility; and
(2) Ending on the date on which the Authority receives written
notice that the horse has been retired.
Covered horserace means any horserace involving covered horses that
has a substantial relation to interstate commerce, including any
Thoroughbred horserace that is the subject of interstate off-track or
advance deposit wagers.
Covered persons means all trainers, owners, breeders, jockeys,
racetracks,
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veterinarians, persons (legal and natural) licensed by a State racing
commission and the agents, assigns, and employees of such persons and
other horse support personnel who are engaged in the care, training, or
racing of covered horses.
HISA Guidance means Horseracing Integrity and Safety Authority
(Authority) guidance issued under 15 U.S.C. 3054(g)(1), which does not
have the force of law.
Horseracing anti-doping and medication control program means the
anti-doping and medication program established under 15 U.S.C. 3055(a).
Horseracing Integrity and Safety Authority or Authority means the
private, independent, self-regulatory, nonprofit corporation recognized
for purposes of developing and implementing a horseracing anti-doping
and medication control program and a racetrack safety program for
covered horses, covered persons, and covered horseraces.
Interstate off-track wager has the meaning given such term in
Section 3 of the Interstate Horseracing Act of 1978, 15 U.S.C. 3002.
Jockey means a rider or driver of a covered horse in covered
horseraces.
Owner means a person who holds an ownership interest in one or more
covered horses.
Proposed rule means any rule proposed by the Authority pursuant to
the Act.
Proposed rule modification or modification means:
(1) Any proposed modification to a rule or proposed rule change; or
(2) Any interpretation or statement of policy or practice relating
to an existing rule of the Authority that is not HISA Guidance and would
have the force of law if approved as a final rule.
Racetrack means an organization licensed by a State racing
commission to conduct covered horseraces.
Racetrack safety program means the program established under 15
U.S.C. 3056(a).
State racing commission means an entity designated by State law or
regulation that has jurisdiction over the conduct of horseracing within
the applicable State.
Trainer means an individual engaged in the training of covered
horses.
Training facility means a location that is not a racetrack licensed
by a State racing commission that operates primarily to house covered
horses and conduct official timed workouts.
Veterinarian means a licensed veterinarian who provides veterinary
services to covered horses.
Workout means a timed running of a horse over a predetermined
distance not associated with a race or its first qualifying race, if
such race is made subject to the Act by election under 15 U.S.C. 3054(l)
of the horse's breed governing organization or the applicable State
racing commission.
Sec. 1.141 Required submissions.
The Authority must submit to the Commission any proposed rule, or
proposed rule modification, of the Authority relating to--
(a) The bylaws of the Authority;
(b) A list of permitted and prohibited medications, substances, and
methods, including allowable limits of permitted medications,
substances, and methods;
(c) Laboratory standards for accreditation and protocols;
(d) Standards for racing surface quality maintenance;
(e) Racetrack safety standards and protocols;
(f) A program for injury and fatality data analysis;
(g) A program of research and education on safety, performance, and
anti-doping and medication control;
(h) A description of safety, performance, and anti-doping and
medication control rule violations applicable to covered horses and
covered persons;
(i) A schedule of civil sanctions for violations;
(j) A process or procedures for disciplinary hearings;
(k) A formula or methodology for determining assessments described
in 15 U.S.C. 3052(f); and
(l) Any other proposed rule or modification the Act requires the
Authority to submit to the Commission for approval.
Sec. 1.142 Submission of proposed rule or modification.
(a) Contents of submission. In order for a submission to qualify as
a proposed rule or proposed rule modification
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under 15 U.S.C. 3053(a), the Authority must submit to the Commission a
complete draft of the Federal Register document for the proposed rule or
proposed rule modification, which includes the text of the rule and a
statement of the purpose of, and statutory basis for, the proposed rule
or modification (``statement of basis and purpose''). The statement of
basis and purpose must contain:
(1) The reasons for adopting the proposed rule or modification.
(2) Any problems the proposed rule or modification is intended to
address and how the proposed rule or modification will resolve those
problems.
(3) A description of any reasonable alternatives to the proposed
rule or modification that may accomplish the stated objective and an
explanation of the reasons the Authority chose the proposed rule or
modification over its alternatives.
(4) How the proposed rule or modification will affect covered
persons, covered horses, and covered horseraces.
(5) Why the proposed rule or modification is consistent with the
requirements of the Act and any rules and regulations applicable to the
Authority, including the following:
(i) Anti-doping and medication control program. When proposing a
rule or modification to the horseracing anti-doping and medication
control program, the Authority must explain how it considered the
factors in 15 U.S.C. 3055, including:
(A) Under 15 U.S.C. 3055(a)(2), the unique characteristics of a
breed of horse made subject to the Act by election of a State racing
commission or breed governing organization for such horse pursuant to 15
U.S.C. 3054(l);
(B) The factors listed in 15 U.S.C. 3055(b); and
(C) The baseline anti-doping and medication control rules identified
in 15 U.S.C. 3055(g)(2)(A). For a proposed rule, the Authority must
state whether its proposed rule adopts the baseline standards identified
in 15 U.S.C. 3055(g)(2)(A). If there is a conflict in any baseline
standards identified in 15 U.S.C. 3055(g)(2)(A), the Authority must
identify the conflict and state whether the standard it adopted is the
most stringent standard. For a proposed rule modification, the Authority
must explain whether the modification renders an anti-doping and
medication control rule less stringent than the baseline anti-doping and
medication control rules described in 15 U.S.C. 3055(g)(2)(A), and state
whether the anti-doping and medication control enforcement agency has
approved of the change.
(ii) Racetrack safety program. When proposing a rule or modification
to any rule regarding the racetrack safety program required under 15
U.S.C. 3056(a)(1), the Authority must explain how the proposed rule or
modification meets the requirements in 15 U.S.C. 3056(b). The Authority
must explain how it considered and whether it adopted the safety
standards in 15 U.S.C. 3056(a)(2). If any horseracing safety standards
in 15 U.S.C. 3056(a)(2) were considered but not adopted or were
modified, the Authority must explain why it decided not to adopt or why
it decided to modify such standard.
(iii) Other rules. To the extent the Act requires the Authority to
consider any factors or standards not specifically referenced in this
section, the Authority must explain whether and how it considered those
factors when proposing a rule or modification. For instance, when
proposing a civil sanctions rule or modification pursuant to 15 U.S.C.
3057(d)(1), the Authority must explain how the rule or modification
meets the requirements of 15 U.S.C. 3057(d)(2).
(6) If written comments were solicited, the Authority's draft
Federal Register document must include a summary of the substance of all
comments received and the Authority's written response to all
significant issues raised in such comments.
(7) The date that the Authority proposes for the Federal Register to
publish its proposed rule or modification.
(b) Supporting documentation. The Authority's submission to the
Commission required under paragraph (a) of this section must also
include copies of the pertinent factual information underlying the
Authority's development of the proposed rule or modification, including
a copy of existing standards
[[Page 39]]
used as a reference for the development of the proposed rule or
modification and scientific data, studies, or analysis underlying the
development of the proposed rule or modification. Supporting
documentation must be attached as exhibits, and each exhibit must
clearly identify the proposed rule or modification it supports.
(c) Redline document for proposed rule modification. For proposed
rule modifications, the Authority must also provide, in a document
separate from the Federal Register document, a redline version of the
existing rule that will enable the Commission to immediately identify
any proposed changes.
(d) Timing of submission. To qualify as a proposed rule or proposed
modification under 15 U.S.C. 3053(a), the Authority's submission must
provide the information in paragraphs (a), (b), and (c) of this section
at least 90 days in advance of the proposed date for the Federal
Register to publish a proposed rule or modification for public comment
pursuant to 15 U.S.C. 3053(b)(1). The Secretary may waive the 90-day
requirement in this section if the Authority demonstrates such waiver is
necessary to meet statutory deadlines.
(e) Conclusory statements and failure to provide requisite analysis.
Information required to be submitted under this section must be
sufficiently detailed and contain sufficient analysis to support a
Commission finding that a proposed rule or modification satisfies the
statutory requirements. For instance, a mere assertion or conclusory
statement that a proposed rule or modification is consistent with the
requirements of the Act is insufficient. Failure to describe and justify
the proposed rule or modification in the manner described in this
section or failure to submit the information required by this section
may result in the Commission's having insufficient information to make
an affirmative finding that the proposed rule or modification is
consistent with the Act and the applicable rules approved by the
Commission.
(f) Public comments. The Authority is encouraged to solicit public
comments on its proposed rule or modification in advance of making a
submission to the Commission pursuant to this section. If the Authority
solicits public comments, it must attach a copy of the comments as an
exhibit to its submission. By soliciting public comments and addressing
significant issues raised therein, the Authority facilitates the
Commission's review and approval of the Authority's proposed rule or
modification.
Sec. 1.143 Submissions to the Secretary.
(a) Electronic submission. All rule submissions under Sec. 1.142
and 15 U.S.C. 3053(a), rate increases that must be reported to the
Commission under 15 U.S.C. 3052(f)(1)(C)(iv), or HISA Guidance that must
be submitted to the Commission under 15 U.S.C. 3054(g)(2) must be
emailed to the Secretary of the Commission at [email protected].
The subject line of the email must state: ``HISA Rule Submission,''
``HISA Rate Increase Submission,'' or ``HISA Guidance Submission,'' as
applicable.
(b) Format for submission of proposed rules or modifications--(1)
Electronic format. Except for supporting documentation submitted
pursuant to Sec. 1.142(b) and copies of comments submitted pursuant to
Sec. 1.142(f), all documents submitted to the Secretary must be in a
word processing format.
(2) Table of contents. Submissions with more than one attachment
must contain a table of contents in the body of the email with a brief
description of each item.
(3) Contact information. The Authority must provide the name,
telephone number, and email address of a person on the staff of the
Authority responsible for responding to questions and comments on the
submission in the body of the email.
(4) Draft Federal Register documents. Draft Federal Register
documents must follow the relevant format and editorial requirements for
regulatory documents under 1 CFR parts 18, 21, and 22 (see Office of
Federal Register's Document Drafting Handbook). The Document Drafting
Handbook specifies that draft Federal Register documents (see 1 CFR
15.10) must:
(i) Contain proper preamble captions and content;
(ii) State the purpose of, and basis for, the proposed rule or
modification;
[[Page 40]]
(iii) Set forth regulatory text, headings, and authority citations;
(iv) Use correct numbering, structure, and amendatory language; and
(v) Conform to the style and formatting established by the Office of
the Federal Register and Government Publishing Office. (See,
specifically, section 2.17 (proposed rules) of the Office of the Federal
Register's Document Drafting Handbook.)
(c) Confidential information. If a document filed with the Secretary
contains confidential information, the Secretary must be so informed,
and a request for confidential treatment must be submitted in accordance
with 16 CFR 4.9.
(d) Date of filing. If the conditions of this section are otherwise
satisfied, all filings submitted electronically on or before 5:30 p.m.
Eastern Time, on a business day, will be deemed filed on that business
day, and all filings submitted after 5:30 p.m. Eastern Time, will be
deemed filed on the next business day.
(e) Authority to reject documents for filing. The Secretary of the
Commission may reject a document for filing that fails to comply with
the Commission's rules for filing in this section or Sec. 1.142.
(f) Federal Register publication. If the conditions in this section
and Sec. 1.142 have been satisfied, the Commission will publish the
proposed rules or modifications in the Federal Register and request
public comment on those proposed rules or modifications.
Sec. 1.144 Approval or disapproval of proposed rules and proposed rule
modifications.
(a) Commission decision. The Commission will approve or disapprove a
proposed rule or modification by issuing an order within 60 days of the
date the proposed rule or modification was published in the Federal
Register for public comment.
(b) Standard of review. The Commission will approve a proposed rule
or modification if the Commission finds that the proposed rule or
modification is consistent with the Act and the applicable rules
approved by the Commission. If the Commission disapproves a rule or
modification, it will make recommendations to the Authority to modify
the proposed rule or modification within 30 days of such disapproval.
(c) Effect. A proposed rule or modification will not take effect
unless it has been approved by the Commission.
Subpart T_Procedures for Review of Final Civil Sanctions Imposed under
the Horseracing Integrity and Safety Act
Authority: 15 U.S.C. 3058.
Source: 87 FR 60079, Oct. 4, 2022, unless otherwise noted.
Sec. 1.145 Submission of notice of civil sanctions.
(a) Requirement to file. If the Horseracing Integrity and Safety
Authority (Authority) imposes a final civil sanction under 15 U.S.C.
3057(d) for a covered person's violation of a rule of the Authority, the
Authority must submit notice of the sanction to the Federal Trade
Commission (Commission) no later than two days after the sanction has
been issued for the sanction to be enforceable.
(b) Format and procedure for submission of notice. The notice
submitted to the Commission must:
(1) Be emailed to the Secretary of the Commission (Secretary) at
[email protected];
(2) Contain the subject line ``HISA Civil Sanction Notice'';
(3) Clearly indicate that it relates to a civil sanction imposed on
a covered person resulting from a violation of an Authority rule;
(4) Include contact information for an employee at the Authority
responsible for communications regarding review of the civil sanction;
(5) Be sent in portable document format (or .PDF) or such other
format as the Secretary may permit;
(6) Contain only public information; and
(7) Be served the same day upon the person aggrieved by the sanction
in accordance with 16 CFR 4.4(b) as made applicable to review
proceedings under this part.
[[Page 41]]
Sec. 1.146 Review of civil sanction by an Administrative Law Judge.
(a) Application for review. An application for review of a final
civil sanction imposed by the Authority may be filed by the Commission
or by the person aggrieved by the civil sanction. Any such application
must: be filed within 30 days of the submission of the notice of civil
sanctions under Sec. 1.145; state the civil sanction imposed; include a
copy of the final Authority decision imposing the sanction; and be
served on the Authority (and, if filed by the Commission, served on the
aggrieved person) in accordance with 16 CFR 4.4(b) as made applicable to
review proceedings in this part.
(1) Application by aggrieved person. An application filed by an
aggrieved person also must state in no more than 1,000 words the reasons
for challenging the sanction and whether the person requests an
evidentiary hearing conducted by the Administrative Law Judge; if a
hearing is requested, the applicant must state whether the hearing is
sought to supplement or to contest facts in the record found by the
Authority. Each issue must be plainly and concisely stated. Further, the
applicant must provide support for each issue raised, citing to the
Authority's record when assignments of error are based on the record,
and citing to the principal legal authorities the applicant relies upon,
whether statutes, regulations, cases, or other authorities. Except for
good cause shown, no assignment of error by the aggrieved party may rely
on any question of fact or law not presented to the Authority. Within 10
days of being served with the application, the Authority may file a
response limited to no more than 1,000 words stating the reasons the
sanction should be upheld and whether an evidentiary hearing conducted
by the Administrative Law Judge is either unnecessary, or necessary to
supplement or to contest facts in the record found by the Authority.
(2) Application by the Commission. When the Commission on its own
initiative files an application, the application must identify matters
that the Commission finds material to the Administrative Law Judge's
review of the civil sanction imposed by the Authority, whether or not
raised by the aggrieved person or the Authority. Notice to the parties
of the opportunity for further factual development of the record through
an evidentiary hearing conducted by the Administrative Law Judge under
paragraph (c) of this section shall be given when the Commission
believes that supplementation of the record would significantly aid the
decisional process.
(b) Nature of review by the Administrative Law Judge. Under 15
U.S.C. 3058(b)(2)(A), the Administrative Law Judge must determine when
reviewing matters under this subpart:
(1) Whether the person has engaged in such acts or practices, or has
omitted such acts or practices, as the Authority has found the person to
have engaged in or omitted. In making this determination, the
Administrative Law Judge may rely on the factual record developed before
the Authority and may supplement that record by evidence presented in an
administrative hearing under paragraph (c) of this section;
(2) Whether such acts, practices, or omissions are in violation of
the Horseracing Integrity and Safety Act, 15 U.S.C. 3051 through 3060,
or the rules of the Authority as approved by the Commission. The
Administrative Law Judge will make this determination de novo; and
(3) Whether the final civil sanction of the Authority was arbitrary,
capricious, an abuse of discretion, prejudicial, the result of a
conflict of interest, or otherwise not in accordance with law. The
Administrative Law Judge will make this determination de novo.
(c) Administrative hearings--(1) Duties and powers of the
Administrative Law Judge and rights of the parties. (i) The
Administrative Law Judge has the duty and is granted the necessary
powers to conduct fair and impartial hearings, to take all necessary
action to avoid delay in the disposition of proceedings, and to maintain
order. To effectuate those goals, the hearing conducted by the
Administrative Law Judge under 15 U.S.C. 3058(b)(2)(B) shall include
(but is not limited to):
(A) Administering oaths and affirmations;
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(B) Issuing orders requiring answers to questions;
(C) Compelling admissions, upon request of a party or on its own
initiative;
(D) Ruling upon offers of proof and receiving evidence;
(E) Regulating the course of the hearing;
(F) Holding conferences for settlement, simplification of the
issues, or other proper purposes;
(G) Ruling on procedural and other motions; and
(H) Issuing a decision.
(ii) All parties are entitled to the right of due notice, cross-
examination, presentation of evidence, objection, motion, argument, and
all other rights essential to a fair hearing consistent with 5 U.S.C.
556.
(2) The factual record. In reviewing the final civil sanction and
decision of the Authority, the Administrative Law Judge may rely in full
or in part on the factual record developed before the Authority through
the disciplinary process under 15 U.S.C. 3057(c) and disciplinary
hearings under Authority Rule Series 8300. The record may be
supplemented by an evidentiary hearing conducted by the Administrative
Law Judge to ensure each party receives a fair and impartial hearing.
Within 20 days of the filing of an application for review, based on the
application submitted by the aggrieved party or by the Commission and on
any response by the Authority, the Administrative Law Judge will assess
whether:
(i) The parties do not request to supplement or contest the facts
found by the Authority;
(ii) The parties do not seek to contest any facts found by the
Authority, but at least one party requests to supplement the factual
record;
(iii) At least one party seeks to contest any facts found by the
Authority;
(iv) The Commission, if it filed the application for review, seeks
supplementation of the record; or
(v) In the Administrative Law Judge's view, the factual record is
insufficient to adjudicate the merits of the review proceeding.
(3) Hearings for which neither a party nor the Commission requests
to supplement or contest the facts found by the Authority and whose
record the Administrative Law Judge deems sufficient. When neither a
party nor the Commission requests to supplement or alter the factual
record before the Authority, and the Administrative Law Judge has not
determined the factual record is insufficient, the factual record will
be deemed closed, and no evidentiary hearing will be held. In such
cases, the administrative hearing conducted by the Administrative Law
Judge will be limited to briefing by the parties, unless the
Administrative Law Judge elects to hear oral argument. Within 30 days of
the application for review, each party will concurrently file with the
Secretary for consideration by the Administrative Law Judge proposed
findings of fact, conclusions of law, and a proposed order, together
with a supporting legal brief providing the party's reasoning. Such
filings, limited to 7,500 words, must be served on the other party and
contain references to the record and authorities on which they rely.
Reply findings of fact, conclusions of law, and briefs, limited to 2,500
words, may be filed by each party within 10 days of service of the
initial filings.
(4) Hearings for which no party contests facts found by the
Authority but at least one party or the Commission seeks to supplement
the record or for which the Administrative Law Judge determines that
supplementation is necessary. When a party or the Commission seeks to
supplement the record, or when the Administrative Law Judge determines
the factual record is insufficient, the factual record developed before
the Authority will be considered the initial record before the
Administrative Law Judge. The record will be supplemented by evidence
presented in a hearing before the Administrative Law Judge.
(i) The Administrative Law Judge will conduct an evidentiary hearing
lasting no more than 8 hours for each party or the Commission seeking
supplementation. The hearing may be extended by request of a party, the
Commission, or on the Administrative Law Judge's own initiative, for
good cause. When a party seeks to supplement the record, the hearing
will be limited to:
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(A) An opening statement by the party requesting supplementation of
no more than 15 minutes;
(B) Direct examination by the party requesting supplementation, with
opportunity for cross-examination by the other party; and
(C) The admission of documentary evidence. When the Administrative
Law Judge or the Commission seek supplementation of the record, the
Administrative Law Judge or the Commission may issue an order allowing
the consideration of additional evidence, describing the additional
evidence sought, and prescribing the procedures for holding the hearing
before the Administrative Law Judge.
(ii) Within 30 days of the hearing's conclusion, each party will
concurrently file with the Secretary for consideration by the
Administrative Law Judge proposed findings of fact, conclusions of law,
and a proposed order, and a supporting legal brief explaining the
party's reasoning. Such filings, limited to 7,500 words, must be served
upon the other party and contain references to the record and
authorities on which they rely. Reply briefs, limited to 2,500 words,
may be filed by each party within 10 days of service of the initial
filings.
(iii) The Administrative Law Judge must hear closing statements from
the parties within 10 days of the date on which reply briefs are due if
either party, in its reply brief, requests the opportunity to make a
closing statement.
(5) Hearings in which a party seeks to supplant facts found by the
Authority. (i) In an application for review, an aggrieved person may
request an extended hearing before the Administrative Law Judge to
supplant facts found by the Authority. The extended hearing may last up
to 40 hours. To receive an extended hearing, the aggrieved person must
make a proffer of weighty, probative, and substantial evidence and
compelling argument in support of its contention that the disciplinary
process before the Authority failed to comply with the requirements of
15 U.S.C. 3057(c) or of the Authority's Rule Series 8300, or that
prejudicial errors, procedural irregularities, or conflicts of interest
were present in, or committed during, the Authority's proceeding and
resulted in a failure to provide the ``adequate due process'' required
under section 3057(c)(3). Extended hearings are disfavored and granted
only in these circumstances. For applications for review in which
applicants request an extended hearing, the total application is limited
to 2,500 words (instead of the ordinary 1,000 words).
(ii) The Authority may file a response to the request for an
extended hearing within 10 days of being served with the application for
review, limited to 2,500 words (instead of the ordinary 1,000 words).
The Authority may, in its response, elect to concede that the contention
of procedural inadequacy has substantial evidence in support of it.
Presented with such a concession, the Administrative Law Judge must
order the final civil sanction set aside without prejudice and remand
the matter to the Authority.
(iii) The Administrative Law Judge will issue a decision resolving
the request for an extended hearing within 10 days of the date on which
the Authority's response is due. If the request for an extended hearing
is granted in part or in full, the extended hearing will be limited to
the same elements listed in paragraph (c)(4) of this section, adjusted
as deemed necessary by the Administrative Law Judge.
(iv) The final factual record will consist of:
(A) Those facts found by the Authority that, in the determination of
the Administrative Law Judge, were found in a process that was
consistent with 15 U.S.C. 3057(c), the Authority's Rule Series 8300, and
adequate due process; as well as
(B) Any new facts adduced at the hearing and found by the
Administrative Law Judge.
(6) Evidence--(i) Burden of proof. The burden of proof is on the
Authority to show, by a preponderance of the evidence, that the covered
person has violated a rule issued by the Authority, but the proponent of
any factual proposition is required to sustain the burden of proof with
respect thereto.
(ii) Admissibility. Only relevant, material, and reliable evidence
will be admitted. Evidence, even if relevant, may
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be excluded if its probative value is substantially outweighed by the
danger of unfair prejudice or confusion of the issues, or if the
evidence would be misleading, cause undue delay, waste time, or present
duplicative evidence. Evidence that constitutes hearsay may be admitted
if it is relevant, material, and bears satisfactory indicia of
reliability.
(iii) Presentation of evidence. A party is entitled to present its
case or defense by sworn oral testimony and documentary evidence, to
submit rebuttal evidence, and to conduct such cross-examination as, in
the discretion of the Administrative Law Judge, may be required for a
full and true disclosure of the facts. The Administrative Law Judge must
exercise reasonable control over the mode and order of interrogating
witnesses and presenting evidence so as to make the presentation
effective for the ascertainment of the truth while avoiding needless
consumption of time and to protect witnesses from harassment or undue
embarrassment.
(iv) Adverse witnesses. Adverse parties, or officers, agents, or
employees thereof, and any witnesses who appears to be hostile,
unwilling, or evasive, may be interrogated by leading questions and may
also be contradicted and impeached by the party calling them.
(v) Objections. Objections to evidence must be timely and must
briefly state the grounds relied upon. The transcript must not include
argument or debate thereon except as ordered by the Administrative Law
Judge. Rulings on all objections must appear in the record.
(7) In camera treatment of material. (i) A party or third party may
obtain in camera treatment for material, or portions thereof, offered
into evidence only by motion to the Administrative Law Judge. The
Administrative Law Judge has the authority to order such material,
whether admitted or rejected, be placed in camera only after finding
that its public disclosure will likely result in a clearly defined,
serious injury to the party requesting in camera treatment or after
finding that the material constitutes sensitive personal information.
``Sensitive personal information'' includes, but is not limited to, an
individual's Social Security number, taxpayer identification number,
financial account number, credit card or debit card number, driver's
license number, state-issued identification number, passport number,
date of birth (other than year), and any sensitive health information
identifiable by individual, such as an individual's medical records.
(ii) Material made subject to an in camera order will be kept
confidential and not placed on the public record. Parties must not
disclose information that has been granted in camera status or is
subject to confidentiality protections pursuant to a protective order in
the public version of proposed findings, briefs, or other documents.
Parties who seek to use material obtained from a third party subject to
confidentiality restrictions must show that the third party has been
given at least 10 days' notice of the proposed use of such material.
(d) Decision by the Administrative Law Judge--(1) When filed. The
Administrative Law Judge must file a decision within 30 days of closing
statements or, if no closing statements are ordered, within 30 days of
the date on which reply findings of fact, conclusions of law, and briefs
are due. The Administrative Law Judge may extend this time period for up
to 30 days for good cause. The decision must be filed within 60 days of
the conclusion of the administrative hearing.
(2) Content. The decision by the Administrative Law Judge must be
based on a consideration of the whole record relevant to the issues
decided and must be supported by reliable and probative evidence. The
decision must include a statement of findings of fact (with specific
page references to principal supporting items of evidence in the record)
and conclusions of law, explaining the reasons for the decision, and an
appropriate order. Rulings containing information granted in camera
status must be issued such that only counsel for the parties receive an
unredacted confidential version of the ruling and that only a version of
the ruling redacting confidential information is placed on the public
record.
(3) Disposition. In the decision, the Administrative Law Judge may:
(i) Affirm, reverse, modify, set aside, or remand for further
proceedings, in
[[Page 45]]
whole or in part, the final civil sanction of the Authority; and
(ii) Make any finding or conclusion that, in the judgment of the
Administrative Law Judge, is proper and based on the record.
(4) Final decision; waiver upon Commission review. A decision by the
Administrative Law Judge will constitute the final decision of the
Commission subject to judicial review under 5 U.S.C. 704 without further
proceedings unless a notice or an application for review to the
Commission is timely filed under Sec. 1.147. Any objection to any
ruling by the Administrative Law Judge or to any finding, conclusion, or
a provision of the order in the decision of the Administrative Law Judge
that is not made a part of an appeal to the Commission will be deemed to
have been waived.
Sec. 1.147 Review by the Commission of the decision of the Administrative
Law Judge.
(a) Notice of review by the Commission. The Commission may on its
own motion review any decision of an Administrative Law Judge issued
under Sec. 1.146 by providing written notice to the Authority and any
other party within 45 days of the issuance of the decision. The order
will set forth the scope of such review and the issues to be considered
and will set a briefing schedule. If no party has filed an application
for the Commission to review the decision of the Administrative Law
Judge and the Commission does not initiate a review on its own motion,
the decision of the Administrative Law Judge becomes the final decision
of the Commission for purposes of 5 U.S.C. 704 without the need for
further agency proceedings 46 days after its issuance.
(b) Application for review and response--(1) Timing. The Authority
or a person aggrieved by the decision of the Administrative Law Judge
under Sec. 1.146 may petition the Commission for review of such
decision by filing an application for review with the Secretary of the
Commission within 30 days of the issuance of the decision.
(2) Contents of application and response. (i) The application must
specify the party or parties against whom the appeal is taken and
specify the decision and order or parts thereof appealed from. The
application, limited to 1,000 words, must provide the reasons it should
be granted by addressing the matters the Commission considers in
determining whether to grant the application under paragraph (b)(4)(i)
of this section. Unless the application is denied, the applicant must
perfect its application by filing its opening brief consistent with the
requirements in paragraph (c)(3)(i) of this section.
(ii) Any other party to the matter may respond to the application no
later than 10 days after it is filed by providing the reasons, limited
to 1,000 words, it should not be granted by addressing the matters the
Commission considers in determining whether to grant the application
under paragraph (b)(4)(i) of this section.
(3) Effect of denial of application for review. If an application
for review is denied, the decision of the Administrative Law Judge
becomes the final decision of the Commission for purposes of 5 U.S.C.
704 without the need for further agency proceedings.
(4) Discretion of the Commission--(i) In general. A decision whether
to grant an application for review is subject to the sole discretion of
the Commission. The Commission will issue an order resolving an
application for its review as expeditiously as possible. The Commission
may decide to grant review of only one issue or any subset of all the
issues raised in the application for review.
(ii) Matters to be considered. In determining whether to grant an
application for review, in full or in part, the Commission considers
whether the application makes a reasonable showing that:
(A) A prejudicial error was committed in the conduct of the
proceeding before the Administrative Law Judge; or
(B) The decision involved:
(1) An erroneous application of the anti-doping and medication
control or racetrack safety rules approved by the Commission; or
(2) An exercise of discretion or a decision of law or policy that
warrants review by the Commission.
(c) Nature of review on the merits--(1) Standard of review. The
Commission reviews de novo the factual findings and
[[Page 46]]
conclusions of law made by the Administrative Law Judge.
(2) Consideration of additional evidence. In those cases in which
the Commission believes it requires additional information or evidence
before issuing a final decision, the Commission, in its discretion, may
withhold issuing its decision until it obtains additional information or
evidence.
(i) Order by Commission. The Commission may issue on its own motion
an order allowing the consideration of additional evidence and
prescribing the procedures for doing so.
(ii) Motion by a party. A party may file a motion to have the
Commission consider additional evidence at any time before the issuance
of a decision by the Commission. The motion must show, with
particularity, that:
(A) Such additional evidence is material; and
(B) There were reasonable grounds for failure to submit the evidence
previously.
(iii) Commission determination. Upon motion by a party, the
Commission may:
(A) Accept or hear additional evidence itself; or
(B) Remand the proceeding to the Administrative Law Judge for the
consideration of additional evidence.
(3) Briefing schedule--(i) Opening brief. If the Commission grants
an application for review, the applicant must perfect its application by
filing its opening brief, limited to 7,500 words (without leave of the
Commission), within 30 days of the Commission's order granting the
application for review. The opening brief must contain, in the following
order:
(A) A subject index of the matter in the brief, with page
references, and a table of cases with page references;
(B) A concise statement of the case, which includes a statement of
facts relevant to the issues submitted for review, and a summary of the
argument, which must contain a succinct, clear, and accurate statement
of the arguments made in the body of the brief;
(C) A list of the questions presented on appeal that the Commission
has agreed to hear;
(D) The argument, clearly presenting the points of fact and law
relied upon in support of the position taken on each question, with
specific page references to the record and the legal or other material
relied upon; and
(E) A proposed order for the Commission's consideration.
(ii) Answering brief. The opposing party may respond to the opening
brief by filing an answering brief, limited to 7,500 words (without
leave of the Commission), within 30 days of service of the opening
brief. The answering brief must contain a subject index, with page
references, and a table of cases with page references, as well as
arguments in response to the applicant's appeal brief.
(iii) Reply brief. The applicant may file a reply to an answering
brief within 14 days of service of the answering brief. The reply brief,
limited to 2,500 words, must be limited to rebuttal of matters in the
answering brief and must not introduce new material. The Commission will
not consider new arguments or matters raised in reply briefs that could
have been raised earlier in the principal briefs. No further briefs may
be filed except by leave of the Commission.
(iv) Word count limitation. The word count limitations in this
section include headings, footnotes, and quotations, but do not include
the cover, table of contents, table of citations or authorities,
glossaries, statements with respect to oral argument, any addendums
containing statutes, rules or regulations, any certificates of counsel,
and any proposed form of order. Extensions of word count limitations are
disfavored and will only be granted when a party can make a strong
showing that undue prejudice would result from complying with the
existing limit.
(4) Oral argument. Oral arguments will be held in all cases on
review to the Commission unless the Commission orders otherwise or upon
request of any party made at the time of filing of its brief. Unless the
Commission orders otherwise, argument will be held within 30 days of the
deadline for filing reply briefs and will be limited to 20 minutes per
side.
(5) Decision--(i) Timing. The Commission will issue its final
decision within
[[Page 47]]
30 days of oral argument or, if no argument is held, within 30 days of
the deadline for the filing of reply briefs. The Commission may extend
this time period by up to 30 days for good cause.
(ii) Content; resolution. The Commission will include in its
decision a statement of the reasons or bases for its action and any
concurring and dissenting opinions. Based on its decision, the
Commission may:
(A) Affirm, reverse, modify, set aside, or remand for further
proceedings before the Administrative Law Judge, in whole or in part,
the decision of the Administrative Law Judge; and
(B) Make any finding or conclusion that, in the judgment of the
Commission, is proper and based on the record.
Sec. 1.148 Stay of proceedings.
(a) In general. Review by an Administrative Law Judge or by the
Commission under this subpart will not operate as a stay of a final
civil sanction of the Authority unless the Administrative Law Judge or
the Commission orders such a stay.
(b) Application for a stay--(1) Before the Administrative Law Judge.
A person subject to a final civil sanction imposed by the Authority may
apply to the Administrative Law Judge for a stay of all or part of that
sanction pending review by the Administrative Law Judge. Any application
for a stay is limited to 1,000 words, must be filed concurrently with
the application for review of the sanction, and must be served on the
Authority in accordance with the provisions of 16 CFR 4.4(b) that are
applicable to service in review proceedings under this part. The
Authority may file an opposition, limited to 1,000 words, within 7 days
of being served with the application for a stay. The Administrative Law
Judge must resolve the stay application within 10 days of the date on
which the Authority's opposition is due.
(2) Before the Commission--(i) Expedited application for a stay. The
party aggrieved by the sanction and denied a stay by the Administrative
Law Judge under paragraph (b)(1) of this section may file an expedited
application for a stay with the Commission within 3 days of the
Administrative Law Judge's denial. An expedited application for a stay
is limited to 1,000 words and must be served on the Authority in
accordance with the provisions of 16 CFR 4.4(b) that are applicable to
service in review proceedings under this part. The Authority may file an
opposition, limited to 1,000 words, within 3 days of service of the
expedited application. The application and opposition should address the
factors in paragraph (d) of this section the Commission considers in
resolving a stay application. The Commission will issue its decision on
the stay application as soon as practicable.
(ii) Application for a stay after the Commission decides to review
the Administrative Law Judge's decision. If the Commission grants the
application for review of the decision of the Administrative Law Judge,
or orders review of the decision on its own motion, the person subject
to the sanction may apply to the Commission for a stay of the sanction
pending the Commission's decision. In this circumstance, the aggrieved
person may seek a stay of the sanction before the Commission a second
time under this paragraph (b)(2)(ii) even if the person was previously
denied an expedited application for a stay under paragraph (b)(2)(i) of
this section. The application for a stay, limited to 1,000 words, must
be filed within 7 days of the Commission's order granting the
application for review or ordering review under Sec. 1.147(a), and must
be served on the Authority in accordance with the provisions of 16 CFR
4.4(b) that are applicable to service in review proceedings under this
part. The Authority may file an opposition, limited to 1,000 words,
within 7 days of being served with the stay application.
(c) Content of stay application and opposition. An application for a
stay of the sanction, and any opposition to the application, must
provide the reasons a stay is or is not warranted by addressing the
factors described in paragraph (d) of this section, and the facts relied
upon, and may include supporting affidavits or other sworn statements,
and a copy of the relevant portions of the record.
[[Page 48]]
(d) Factors considered in deciding a stay application. The parties,
the Administrative Law Judge, and the Commission must address the
following factors, in advocating for or against, or in resolving, a stay
application:
(1) The likelihood of the applicant's success on review;
(2) Whether the applicant will suffer irreparable harm if a stay is
not granted;
(3) The degree of injury to other parties or third parties if a stay
is granted; and
(4) Whether the stay is in the public interest.
Sec. 1.149 Adoption of miscellaneous rules.
Part 4 of this subchapter is adopted into this subpart and governs
proceedings under this subpart, and, within Sec. Sec. 4.2 and 4.4,
references to ``part 3'' shall include this subpart.
PART 2_NONADJUDICATIVE PROCEDURES--Table of Contents
Subpart A_Inquiries; Investigations; Compulsory Processes
Sec.
2.1 How initiated.
2.2 Complaint or request for Commission action.
2.3 Policy as to private controversies.
2.4 Investigational policy.
2.5 By whom conducted.
2.6 Notification of purpose.
2.7 Compulsory process in investigations.
2.8 [Reserved]
2.9 Rights of witnesses in investigations.
2.10 Petitions to limit or quash Commission compulsory process.
2.11 Withholding requested material.
2.12 [Reserved]
2.13 Noncompliance with compulsory processes.
2.14 Disposition.
2.15 Orders requiring witnesses to testify or provide other information
and granting immunity.
2.16 Custodians.
2.17 Statutory delays of notifications and prohibitions of disclosure.
Subpart B_Petitions Filed Under Section 7A of the Clayton Act, as
Amended, for Review of Requests for Additional Information or
Documentary Material
2.20 Petitions for review of requests for additional information or
documentary material.
Subpart C_Consent Order Procedure
2.31 Opportunity to submit a proposed consent order.
2.32 Agreement.
2.33 Compliance procedure.
2.34 Disposition.
Subpart D_Reports of Compliance
2.41 General compliance obligations and specific obligations regarding
acquisitions and divestitures.
Subpart E_Requests To Reopen
2.51 Requests to reopen.
Authority: 15 U.S.C. 46.
Subpart A_Inquiries; Investigations; Compulsory Processes
Sec. 2.1 How initiated.
Commission investigations and inquiries may be originated upon the
request of the President, Congress, governmental agencies, or the
Attorney General; upon referrals by the courts; upon complaint by
members of the public; or by the Commission upon its own initiative. The
Commission has delegated to the Director, Deputy Directors, and
Assistant Directors of the Bureau of Competition, the Director, Deputy
Directors, and Associate Directors of the Bureau of Consumer Protection
and, the Regional Directors and Assistant Regional Directors of the
Commission's regional offices, without power of redelegation, limited
authority to initiate investigations. The Director of the Bureau of
Competition has also been delegated, without power of redelegation,
authority to open investigations in response to requests pursuant to an
agreement under the International Antitrust Enforcement Assistance Act,
15 U.S.C. 6201 et seq., if the requests do not ask the Commission to use
process. Before responding to such
[[Page 49]]
a request, the Bureau Director shall transmit the proposed response to
the Secretary and the Secretary shall notify the Commission of the
proposed response. If no Commissioner objects within three days
following the Commission's receipt of such notification, the Secretary
shall inform the Bureau Director that he or she may proceed.
[48 FR 41374, Sept. 15, 1983, as amended at 50 FR 53304, Dec. 31, 1985;
65 FR 67259, Nov. 9, 2000]
Sec. 2.2 Complaint or request for Commission action.
(a) A complaint or request for Commission action may be submitted
via the Commission's web-based complaint site (https://
www.ftccomplaintassistant.gov/); by a telephone call to 1-877-FTC-HELP
(1-877-382-4357); or by a signed statement setting forth the alleged
violation of law with such supporting information as is available, and
the name and address of the person or persons complained of, filed with
the Office of the Secretary in conformity with Sec. 4.2(d) of this
chapter. No forms or formal procedures are required.
(b) The person making the complaint or request is not regarded as a
party to any proceeding that might result from the investigation.
(c) Where the complainant's identity is not otherwise made public,
the Commission's policy is not to publish or divulge the name of a
complainant except as authorized by law or by the Commission's rules.
Complaints or requests submitted to the Commission may, however, be
lodged in a database and made available to federal, state, local, and
foreign law enforcement agencies that commit to maintain the privacy and
security of the information provided. Further, where a complaint is by a
consumer or consumer representative concerning a specific consumer
product or service, the Commission in the course of a referral of the
complaint or request, or in furtherance of an investigation, may
disclose the identity of the complainant. In referring any such consumer
complaint, the Commission specifically retains its right to take such
action as it deems appropriate in the public interest and under any of
the statutes it administers.
[77 FR 59305, Sept. 27, 2012]
Sec. 2.3 Policy as to private controversies.
The Commission acts only in the public interest and does not
initiate an investigation or take other action when the alleged
violation of law is merely a matter of private controversy and does not
tend adversely to affect the public.
[32 FR 8446, June 13, 1967]
Sec. 2.4 Investigational policy.
Consistent with obtaining the information it needs for
investigations, including documentary material, the Commission
encourages the just and speedy resolution of investigations. The
Commission will therefore employ compulsory process when in the public
interest. The Commission encourages cooperation in its investigations.
In all matters, whether involving compulsory process or voluntary
requests for documents and information, the Commission expects all
parties to engage in meaningful discussions with staff to prevent
confusion or misunderstandings regarding the nature and scope of the
information and material being sought, in light of the inherent value of
genuinely cooperative discovery.
[77 FR 59305, Sept. 27, 2012]
Sec. 2.5 By whom conducted.
Inquiries and investigations are conducted under the various
statutes administered by the Commission by Commission representatives
designated and duly authorized for the purpose. Such representatives are
``examiners'' or ``Commission investigators'' within the meaning of the
Federal Trade Commission Act and are authorized to exercise and perform
the duties of their office in accordance with the laws of the United
States and the regulations of the Commission. Included among such duties
is the administration of oaths and affirmations in any matter under
investigation by the Commission.
[45 FR 36341, May 29, 1980]
[[Page 50]]
Sec. 2.6 Notification of purpose.
Any person, partnership, or corporation under investigation
compelled or requested to furnish information or documentary material
shall be advised of the purpose and scope of the investigation, the
nature of the acts or practices under investigation, and the applicable
provisions of law. A copy of a Commission resolution, as prescribed
under Sec. 2.7(a), shall be sufficient to give persons, partnerships,
or corporations notice of the purpose of the investigation. While
investigations are generally nonpublic, Commission staff may disclose
the existence of an investigation to potential witnesses or other third
parties to the extent necessary to advance the investigation.
[77 FR 59305, Sept. 27, 2012]
Sec. 2.7 Compulsory process in investigations.
(a) In general. When the public interest warrants, the Commission
may issue a resolution authorizing the use of compulsory process. The
Commission or any Commissioner may, pursuant to a Commission resolution,
issue a subpoena, or a civil investigative demand, directing the
recipient named therein to appear before a designated representative at
a specified time and place to testify or to produce documentary
material, or both, and in the case of a civil investigative demand, to
provide a written report or answers to questions, relating to any matter
under investigation by the Commission. For the purposes of this subpart,
the term:
(1) Electronically stored information (``ESI'') means any writings,
drawings, graphs, charts, photographs, sound recordings, images and
other data or data compilations stored in any electronic medium from
which information can be obtained either directly or, if necessary,
after translation by the responding party into a reasonably usable form.
(2) ``Documentary material'' includes all documents, materials, and
information, including ESI, within the meaning of the Federal Rules of
Civil Procedure.
(3) ``Compulsory process'' means any subpoena, CID, access order, or
order for a report issued by the Commission.
(4) ``Protected status'' refers to information or material that may
be withheld from production or disclosure on the grounds of any
privilege, work product protection, or statutory exemption.
(b) Civil Investigative Demands. Civil Investigative Demands
(``CIDs'') shall be the only form of compulsory process issued in
investigations with respect to unfair or deceptive acts or practices
under section 5(a)(1) of the Federal Trade Commission Act (hereinafter
referred to as ``unfair or deceptive acts or practices'').
(1) CIDs for the production of documentary material, including ESI,
shall describe each class of material to be produced with sufficient
definiteness and certainty as to permit such material to be fairly
identified, prescribe a return date providing a reasonable period of
time within which the material so demanded may be assembled and made
available for inspection and copying or reproduction, and identify the
Commission's custodian to whom such material shall be made available.
Documentary material, including ESI, for which a CID has been issued
shall be made available as prescribed in the CID. Such productions shall
be made in accordance with the procedures prescribed by section
20(c)(11) of the Federal Trade Commission Act.
(2) CIDs for tangible things, including electronic media, shall
describe each class of tangible thing to be produced with sufficient
definiteness and certainty as to permit each such thing to be fairly
identified, prescribe a return date providing a reasonable period of
time within which the things so demanded may be assembled and submitted,
and identify the Commission's custodian to whom such things shall be
submitted. Submission of tangible things in response to a CID shall be
made in accordance with the procedures prescribed by section 20(c)(12)
of the Federal Trade Commission Act.
(3) CIDs for written reports or answers to questions shall propound
with sufficient definiteness and certainty the reports to be produced or
the questions to be answered, prescribe a return
[[Page 51]]
date, and identify the Commission's custodian to whom such reports or
answers to questions shall be submitted. The submission of written
reports or answers to questions in response to a CID shall be made in
accordance with the procedures prescribed by section 20(c)(13) of the
Federal Trade Commission Act.
(4) CIDs for the giving of oral testimony shall prescribe a date,
time, and place at which oral testimony shall commence, and identify the
hearing official and the Commission custodian. Oral testimony in
response to a CID shall be taken in accordance with the procedures set
forth in section 20(c)(14) of the Federal Trade Commission Act.
(c) Subpoenas. Except in investigations with respect to unfair or
deceptive acts or practices, the Commission may require by subpoena the
attendance and testimony of witnesses and the production of documentary
material relating to any matter under investigation. Subpoenas for the
production of documentary material, including ESI, shall describe each
class of material to be produced with sufficient definiteness and
certainty as to permit such material to be fairly identified, prescribe
a return date providing a reasonable period of time for production, and
identify the Commission's custodian to whom such material shall be made
available. A subpoena may require the attendance of the witness or the
production of documentary material at any place in the United States.
(d) Special reports. Except in investigations regarding unfair or
deceptive acts or practices, the Commission may issue an order requiring
a person, partnership, or corporation to file a written report or
answers to specific questions relating to any matter under
investigation, study or survey, or under any of the Commission's
reporting programs.
(e) Commission orders requiring access. Except in investigations
regarding unfair or deceptive acts or practices, the Commission may
issue an order requiring any person, partnership, or corporation under
investigation to grant access to their files, including electronic
media, for the purpose of examination and to make copies.
(f) Investigational hearings. (1) Investigational hearings may be
conducted in the course of any investigation undertaken by the
Commission, including rulemaking proceedings under subpart B of part 1
of this chapter, inquiries initiated for the purpose of determining
whether a respondent is complying with an order of the Commission or to
monitor performance under, and compliance with, a decree entered in
suits brought by the United States under the antitrust laws, the
development of facts in cases referred by the courts to the Commission
as a master in chancery, and investigations made under section 5 of the
Webb-Pomerene (Export Trade) Act.
(2) Investigational hearings shall be conducted by one or more
Commission employees designated for the purpose of hearing the testimony
of witnesses (the ``hearing official'') and receiving documents and
information relating to any subject under investigation. Such hearings
shall be under oath or affirmation, stenographically recorded, and the
transcript made a part of the record of the investigation. The
Commission may, in addition, employ other means to record the hearing.
(3) Unless otherwise ordered by the Commission, investigational
hearings shall not be public. For investigational hearings conducted
pursuant to a CID for the giving of oral testimony, the hearing official
shall exclude from the hearing room all persons other than the person
being examined, counsel for the person being examined, Commission staff,
and any stenographer or other person recording such testimony. A copy of
the transcript shall promptly be forwarded by the hearing official to
the Commission custodian designated under Sec. 2.16 of this part. At
the discretion of the hearing official, and with the consent of the
person being examined (or, in the case of an entity, its counsel),
persons other than Commission staff, court reporters, and the hearing
official may be present in the hearing room.
(g) Depositions. Except in investigations with respect to unfair or
deceptive acts or practices, the Commission may order by subpoena a
deposition pursuant to section 9 of the Federal Trade Commission Act, of
any person, partnership, or corporation, at any
[[Page 52]]
stage of an investigation. The deposition shall take place upon notice
to the subjects of the investigation, and the examination and cross-
examination may proceed as they would at trial. Depositions shall be
conducted by a hearing official, for the purpose of hearing the
testimony of witnesses and receiving documents and information relating
to any subject under investigation. Depositions shall be under oath or
affirmation, stenographically recorded, and the transcript made a part
of the record of the investigation. The Commission may, in addition,
employ other means to record the deposition.
(h) Testimony from an entity. Where Commission compulsory process
requires oral testimony from an entity, the compulsory process shall
describe with reasonable particularity the matters for examination and
the entity must designate one or more officers, directors, or managing
agents, or designate other persons who consent, to testify on its
behalf. Unless a single individual is designated by the entity, the
entity must designate in advance and in writing the matters on which
each designee will testify. The persons designated must testify about
information known or reasonably available to the entity and their
testimony shall be binding upon the entity.
(i) Inspection, copying, testing, and sampling of documentary
material, including electronic media. The Commission, through compulsory
process, may require the production of documentary material, or
electronic media or other tangible things, for inspection, copying,
testing, or sampling.
(j) Manner and form of production of ESI. When Commission compulsory
process requires the production of ESI, it shall be produced in
accordance with the instructions provided by Commission staff regarding
the manner and form of production. All instructions shall be followed by
the recipient of the process absent written permission to the contrary
from a Commission official identified in paragraph (l) of this section.
Absent any instructions as to the form for producing ESI, ESI must be
produced in the form or forms in which it is ordinarily maintained or in
a reasonably usable form.
(k) Mandatory pre-petition meet and confer process. Unless excused
in writing or granted an extension of no more than 30 days by a
Commission official identified in paragraph (l) of this section, a
recipient of Commission compulsory process shall meet and confer with
Commission staff within 14 days after receipt of process or before the
deadline for filing a petition to quash, whichever is first, to discuss
compliance and to address and attempt to resolve all issues, including
issues relating to protected status and the form and manner in which
claims of protected status will be asserted. The initial meet and confer
session and all subsequent meet and confer sessions may be in person or
by telephone. The recipient must make available personnel with the
knowledge necessary for resolution of the issues relevant to compliance
with compulsory process. Such personnel could include individuals
knowledgeable about the recipient's information or records management
systems, individuals knowledgeable about other relevant materials such
as organizational charts, and persons knowledgeable about samples of
material required to be produced. If any issues relate to ESI, the
recipient shall have a person familiar with its ESI systems and methods
of retrieval participate in the meeting. The Commission will not
consider petitions to quash or limit absent a pre-filing meet and confer
session with Commission staff and, absent extraordinary circumstances,
will consider only issues raised during the meet and confer process.
(l) Delegations. The Directors of the Bureaus of Competition,
Consumer Protection, and Economics and the Office of Policy Planning,
their Deputy Directors, the Assistant Directors of the Bureaus of
Competition and Economics, the Associate Directors of the Bureau of
Consumer Protection, the Regional Directors, and the Assistant Regional
Directors are all authorized to modify and, in writing, approve the
terms of compliance with all compulsory process, including subpoenas,
CIDs, reporting programs, orders requiring reports, answers to
questions,
[[Page 53]]
and orders requiring access. If a recipient of compulsory process has
demonstrated satisfactory progress toward compliance, a Commission
official identified in this paragraph may, at his or her discretion,
extend the time for compliance with Commission compulsory process. The
subpoena power conferred by section 329 of the Energy Policy and
Conservation Act (42 U.S.C. 6299) and section 5 of the Webb-Pomerene
(Export Trade) Act (15 U.S.C. 65) are specifically included within this
delegation of authority.
[77 FR 59305, Sept. 27, 2012, as amended at 80 FR 15160, Mar. 23, 2015]
Sec. 2.8 [Reserved]
Sec. 2.9 Rights of witnesses in investigations.
(a) Any person compelled to submit data to the Commission or to
testify in a deposition or investigational hearing shall be entitled to
retain a copy or, on payment of lawfully prescribed costs, procure a
copy of any document submitted, and of any testimony as stenographically
recorded, except that in a nonpublic hearing the witness may for good
cause be limited to inspection of the official transcript of the
testimony. Upon completion of transcription of the testimony, the
witness shall be offered an opportunity to read the transcript. Any
changes by the witness shall be entered and identified upon the
transcript by the hearing official, together with a statement of the
reasons given by the witness for requesting such changes. After the
changes are entered, the transcript shall be signed by the witness
unless the witness cannot be found, is ill and unavailable, waives in
writing his or her right to sign, or refuses to sign. If the transcript
is not signed by the witness within 30 days of having been afforded a
reasonable opportunity to review it, the hearing official shall sign the
transcript and state on the hearing record the fact of the waiver,
illness, absence of the witness, or the refusal to sign, together with
any reasons given for the failure to sign, as prescribed by section
20(c)(14)(E)(ii) of the Federal Trade Commission Act.
(b) Any witness compelled to appear in person in a deposition or
investigational hearing may be accompanied, represented, and advised by
counsel, as follows:
(1) In depositions or investigational hearings conducted pursuant to
section 9 of the Federal Trade Commission Act, counsel may not consult
with the witness while a question directed to a witness is pending,
except with respect to issues involving protected status.
(2) Any objection during a deposition or investigational hearing
shall be stated concisely on the hearing record in a nonargumentative
and nonsuggestive manner. Neither the witness nor counsel shall
otherwise object or refuse to answer any question. Following an
objection, the examination shall proceed and the testimony shall be
taken, except for testimony requiring the witness to divulge information
protected by the claim of protected status. Counsel may instruct a
witness not to answer only when necessary to preserve a claim of
protected status.
(3) The hearing official may elect to recess the deposition or
investigational hearing and reconvene the deposition or hearing at a
later date to continue a course of inquiry interrupted by any objection
made under paragraph (b)(1) or (2) of this section. The hearing official
shall provide written notice of the date of the reconvened deposition or
hearing to the witness, which may be in the form of an email or
facsimile. Failure to reappear or to file a petition to limit or quash
in accordance with Sec. 2.10 of this part shall constitute
noncompliance with Commission compulsory process for the purposes of a
Commission enforcement action under Sec. 2.13 of this part.
(4) In depositions or investigational hearings, immediately
following the examination of a witness by the hearing official, the
witness or his or her counsel may on the hearing record request that the
hearing official permit the witness to clarify any answers. The grant or
denial of such request shall be within the discretion of the hearing
official and would ordinarily be granted except for good cause stated
and explained on the hearing record, and with an opportunity for counsel
to undertake to correct the expressed concerns of the hearing official
or otherwise to reply.
[[Page 54]]
(5) The hearing official shall conduct the deposition or
investigational hearing in a manner that avoids unnecessary delay, and
prevents and restrains disorderly or obstructionist conduct. The hearing
official shall, where appropriate, report pursuant to Sec. 4.1(e) of
this chapter any instance where an attorney, in the course of the
deposition or hearing, has allegedly refused to comply with his or her
directions, or has allegedly engaged in conduct addressed in Sec.
4.1(e). The Commission may take any action as circumstances may warrant
under Sec. 4.1(e) of this chapter.
[77 FR 59307, Sept. 27, 2012]
Sec. 2.10 Petitions to limit or quash Commission compulsory process.
(a) In general. (1) Petitions. Any petition to limit or quash any
compulsory process shall be filed with the Secretary within 20 days
after service of the Commission compulsory process or, if the return
date is less than 20 days after service, prior to the return date. Such
petition shall set forth all assertions of protected status or other
factual and legal objections to the Commission compulsory process,
including all appropriate arguments, affidavits, and other supporting
documentation. Such petition shall not exceed 5,000 words, including all
headings, footnotes, and quotations, but excluding the cover, table of
contents, table of authorities, glossaries, copies of the compulsory
process order or excerpts thereof, appendices containing only sections
of statutes or regulations, the statement required by paragraph (a)(2)
of this section, and affidavits and other supporting documentation.
Petitions to limit or quash that fail to comply with these provisions
shall be rejected by the Secretary pursuant to Sec. 4.2(g) of this
chapter.
(2) Statement. Each petition filed pursuant to paragraph (a)(1) of
this section shall be accompanied by a signed separate statement
representing that counsel for the petitioner has conferred with
Commission staff pursuant to Sec. 2.7(k) of this part in an effort in
good faith to resolve by agreement the issues raised by the petition and
has been unable to reach such an agreement. If some of the issues in
controversy have been resolved by agreement, the statement shall, in a
nonargumentative manner, specify the issues so resolved and the issues
remaining unresolved. The statement shall recite the date, time, and
place of each conference between counsel, and the names of all parties
participating in each such conference. Failure to include the required
statement may result in a denial of the petition.
(3) Reconvened investigational hearings or depositions. If the
hearing official elects pursuant to Sec. 2.9(b)(3) of this part to
recess the investigational hearing or deposition and reconvene it at a
later date, the witness compelled to reappear may challenge the
reconvening by filing with the Secretary a petition to limit or quash
the reconvening of the hearing or deposition. Such petition shall be
filed within 5 days after receiving written notice of the reconvened
hearing; shall set forth all assertions of protected status or other
factual and legal objections to the reconvening of the hearing or
deposition, including all appropriate arguments, affidavits, and other
supporting documentation; and shall be subject to the word count limit
in paragraph (a)(1) of this section. Except for good cause shown, the
Commission will not consider issues presented and ruled upon in any
earlier petition filed by or on behalf of the witness.
(4) Staff reply. Commission staff may, without serving the
petitioner, provide the Commission a statement that shall set forth any
factual and legal response to the petition to limit or quash.
(5) Extensions of time. The Directors of the Bureaus of Competition,
Consumer Protection, and Economics and the Office of Policy Planning,
their Deputy Directors, the Assistant Directors of the Bureaus of
Competition and Economics, the Associate Directors of the Bureau of
Consumer Protection, the Regional Directors, and the Assistant Regional
Directors are delegated, without power of redelegation, the authority to
rule upon requests for extensions of time within which to file petitions
to limit or quash Commission compulsory process.
(b) Stay of compliance period. The timely filing of a petition to
limit or quash any Commission compulsory process shall stay the
remaining
[[Page 55]]
amount of time permitted for compliance as to the portion or portions of
the challenged specifications or provisions. If the petition is denied
in whole or in part, the ruling by the Commission shall specify new
terms for compliance, including a new return date, for the Commission's
compulsory process.
(c) Disposition and review. The Commission will issue an order
ruling on a petition to limit or quash within 40 days after the petition
is filed with the Secretary. The order may be served on the petitioner
via email, facsimile, or any other method reasonably calculated to
provide notice to the petitioner of the order.
(d) Public disclosure. All petitions to limit or quash Commission
compulsory process and all Commission orders in response to those
petitions shall become part of the public records of the Commission,
except for information granted confidential treatment under Sec. 4.9(c)
of this chapter.
[77 FR 59308, Sept. 27, 2012, as amended at 80 FR 15160, Mar. 23, 2015]
Sec. 2.11 Withholding requested material.
(a)(1) Any person withholding information or material responsive to
an investigational subpoena, CID, access order, or order to file a
report issued pursuant to Sec. 2.7 of this part, or any other request
for production of material issued under this part, shall assert a claim
of protected status, as that term is defined in Sec. 2.7(a)(4), not
later than the date set for the production of the material. The claim of
protected status shall include a detailed log of the items withheld,
which shall be attested by the lead attorney or attorney responsible for
supervising the review of the material and who made the determination to
assert the claim. A document, including all attachments, may be withheld
or redacted only to the extent necessary to preserve any claim of
protected status. The information provided in the log shall be of
sufficient detail to enable the Commission staff to assess the validity
of the claim for each document, including attachments, without
disclosing the protected information. The failure to provide information
sufficient to support a claim of protected status may result in a denial
of the claim. Absent an instruction as to the form and content of the
log, the log shall be submitted in a searchable electronic format, and
shall, for each document, including attachments, provide:
(i) Document control number(s);
(ii) The full title (if the withheld material is a document) and the
full file name (if the withheld material is in electronic form);
(iii) A description of the material withheld (for example, a letter,
memorandum, or email), including any attachments;
(iv) The date the material was created;
(v) The date the material was sent to each recipient (if different
from the date the material was created);
(vi) The email addresses, if any, or other electronic contact
information to the extent used in the document, from which and to which
each document was sent;
(vii) The names, titles, business addresses, email addresses or
other electronic contact information, and relevant affiliations of all
authors;
(viii) The names, titles, business addresses, email addresses or
other electronic contact information, and relevant affiliations of all
recipients of the material;
(ix) The names, titles, business addresses, email addresses or other
electronic contact information, and relevant affiliations of all persons
copied on the material;
(x) The factual basis supporting the claim that the material is
protected (for example, that it was prepared by an attorney rendering
legal advice to a client in a confidential communication, or prepared by
an attorney in anticipation of litigation regarding a specifically
identified claim); and
(xi) Any other pertinent information necessary to support the
assertion of protected status by operation of law.
(2) Each attorney who is an author, recipient, or person copied on
the material shall be identified in the log by an asterisk. The titles,
business addresses, email addresses, and relevant affiliations of all
authors, recipients, and persons copied on the material may be provided
in a legend appended to the log. However, the information
[[Page 56]]
required by paragraph (a)(1)(vi) of this section shall be provided in
the log.
(b) A person withholding responsive material solely for the reasons
described in paragraph (a) of this section shall meet and confer with
Commission staff pursuant to Sec. 2.7(k) of this part to discuss and
attempt to resolve any issues associated with the manner and form in
which privilege or protection claims will be asserted. The participants
in the meet and confer session may agree to modify the logging
requirements set forth in paragraph (a) of this section. The failure to
comply with paragraph (a) shall constitute noncompliance subject to
judicial enforcement under Sec. 2.13(a) of this part.
(c) Unless otherwise provided in the instructions accompanying the
compulsory process, and except for information or material subject to a
valid claim of protected status, all responsive information and material
shall be produced without redaction.
(d)(1)(i) The disclosure of material protected by the attorney-
client privilege or as work product shall not operate as a waiver if:
(A) The disclosure is inadvertent;
(B) The holder of the privilege or protection took reasonable steps
to prevent disclosure; and
(C) The holder promptly took reasonable steps to rectify the error,
including notifying Commission staff of the claim and the basis for it.
(ii) After being so notified, Commission staff must:
(A) Promptly return or destroy the specified material and any
copies, not use or disclose the material until any dispute as to the
validity of the claim is resolved; and take reasonable measures to
retrieve the material from all persons to whom it was disclosed before
being notified; or
(B) Sequester such material until such time as an Administrative Law
Judge or court may rule on the merits of the claim of privilege or
protection in a proceeding or action resulting from the investigation.
(iii) The producing party must preserve the material until the claim
of privilege or protection is resolved, the investigation is closed, or
any enforcement proceeding is concluded.
(2) When a disclosure is made that waives attorney-client privilege
or work product, the waiver extends to an undisclosed communication or
information only if:
(i) The waiver is intentional;
(ii) The disclosed and undisclosed information or material concern
the same subject matter; and
(iii) They ought in fairness to be considered together.
[77 FR 59308, Sept. 27, 2012]
Sec. 2.12 [Reserved]
Sec. 2.13 Noncompliance with compulsory processes.
(a) In cases of failure to comply with Commission compulsory
processes, appropriate action may be initiated by the Commission or the
Attorney General, including actions for enforcement, forfeiture, civil
penalties, or criminal sanctions. The Commission may also take any
action as the circumstances may warrant under Sec. 4.1(e) of this
chapter.
(b) The General Counsel, pursuant to delegation of authority by the
Commission, without power of redelegation, is authorized, when he or she
deems appropriate:
(1) To initiate, on behalf of the Commission, an enforcement
proceeding in connection with the failure or refusal of a recipient to
comply with, or to obey, a subpoena, a CID, or an access order, if the
return date or any extension thereof has passed, or if the recipient
breaches any modification regarding compliance;
(2) To approve and have prepared and issued, in the name of the
Commission, a notice of default in connection with the failure of a
recipient of an order to file a report pursuant to section 6(b) of the
Federal Trade Commission Act to timely file that report, if the return
date or any extension thereof has passed; to initiate, on behalf of the
Commission, an enforcement proceeding; or to request to the Attorney
General, on behalf of the Commission, to initiate a civil action in
connection with the failure of such recipient to timely file a report,
when the return date or any extension thereof has passed;
[[Page 57]]
(3) To initiate, on behalf of the Commission, an enforcement
proceeding under section 7A(g)(2) of the Clayton Act (15 U.S.C.
18a(g)(2)) in connection with the failure to substantially comply with
any request for the submission of additional information or documentary
material under section 7A(e)(1) of the Clayton Act (15 U.S.C.
18a(e)(1)), provided that the General Counsel shall provide notice to
the Commission at least 2 days before initiating such action; and
(4) To seek an order of civil contempt in cases where a court order
enforcing compulsory process has been violated.
[77 FR 59309, Sept. 27, 2012]
Sec. 2.14 Disposition.
(a) When an investigation indicates that corrective action is
warranted, and the matter is not subject to a consent settlement
pursuant to subpart C of this part, the Commission may initiate further
proceedings.
(b) When corrective action is not necessary or warranted in the
public interest, the investigation shall be closed. The matter may
nevertheless be further investigated at any time if circumstances so
warrant.
(c) In matters in which a recipient of a preservation demand, an
access letter, or Commission compulsory process has not been notified
that an investigation has been closed or otherwise concluded, after a
period of twelve months following the last written communication from
the Commission staff to the recipient or the recipient's counsel, the
recipient is relieved of any obligation to continue preserving
information, documentary material, or evidence, for purposes of
responding to the Commission's process or the staff's access letter. The
``written communication'' may be in the form of a letter, an email, or a
facsimile.
(d) The Commission has delegated to the Directors of the Bureaus of
Competition and Consumer Protection, their Deputy Directors, the
Assistant Directors of the Bureau of Competition, the Associate
Directors of the Bureau of Consumer Protection, and the Regional
Directors, without power of redelegation, limited authority to close
investigations.
[77 FR 59309, Sept. 27, 2012]
Sec. 2.15 Orders requiring witnesses to testify or provide other
information and granting immunity.
(a) The Bureau Director, Deputy Directors, and Assistant Directors
in the Bureaus of Competition and Economics, the Bureau Director, Deputy
Directors and Associate Directors of the Bureau of Consumer Protection,
Regional Directors and Assistant Regional Directors are hereby
authorized to request, through the Commission's liaison officer,
approval from the Attorney General for the issuance of an order
requiring a witness to testify or provide other information granting
immunity under title 18, section 6002, of the United States Code.
(b) The Commission retains the right to review the exercise of any
of the functions delegated under paragraph (a) of this section. Appeals
to the Commission from an order requiring a witness to testify or
provide other information will be entertained by the Commission only
upon a showing that a substantial question is involved, the
determination of which is essential to serve the interests of justice.
Such appeals shall be made on the record and shall be in the form of a
brief not to exceed fifteen (15) pages in length and shall be filed
within five (5) days after notice of the complained of action. The
appeal shall not operate to suspend the hearing unless otherwise
determined by the person conducting the hearing or ordered by the
Commission.
(18 U.S.C. 6002, 6004)
[37 FR 5016, Mar. 9, 1972, as amended at 48 FR 41375, Sept. 15, 1983; 61
FR 50645, Sept. 26, 1996]
Sec. 2.16 Custodians.
(a) Designation. The Commission shall designate a custodian and one
or more deputy custodians for material to be delivered pursuant to
compulsory process in an investigation, a purpose of which is to
determine whether any person may have violated any provision of the laws
administered by the Commission. The custodian shall have the powers and
duties prescribed by section 21
[[Page 58]]
of the FTC Act. Deputy custodians may perform all of the duties assigned
to custodians. The appropriate Bureau Directors, Deputy Directors,
Associate Directors in the Bureau of Consumer Protection, Assistant
Directors in the Bureau of Competition, Regional Directors or Assistant
Regional Directors shall take the action required by section 21(b)(7) of
the FTC Act if it is necessary to replace a custodian or deputy
custodian.
(b) Copying of custodial documents. The custodian designated
pursuant to section 21 of the Federal Trade Commission Act (subject to
the general supervision of the Executive Director) may, from among the
material submitted, select the material the copying of which is
necessary or appropriate for the official use of the Commission, and
shall determine, the number of copies of any such material that are to
be reproduced. Copies of material in the physical possession of the
custodian may be reproduced by or under the authority of an employee of
the Commission designated by the custodian.
(c) Material produced pursuant to the Federal Trade Commission Act,
while in the custody of the custodian, shall be for the official use of
the Commission in accordance with the Act; but such material shall upon
reasonable notice to the custodian be made available for examination by
the person who produced such material, or his duly authorized
representative, during regular office hours established for the
Commission.
[45 FR 36343, May 29, 1980, as amended at 46 FR 26291, May 12, 1981; 48
FR 41376, Sept. 15, 1983; 50 FR 53305, Dec. 31, 1985]
Sec. 2.17 Statutory delays of notifications and prohibitions of
disclosure.
Upon authorization by the Commissioner who issues compulsory process
pursuant to Sec. 2.7(a) or, alternatively, upon authorization by the
General Counsel, Commission attorneys may seek to delay notifications or
prohibit disclosures pursuant to the Right to Financial Privacy Act (12
U.S.C. 3409), the Electronic Communications Privacy Act (18 U.S.C.
2705), or section 7 of the U.S. SAFE WEB Act (15 U.S.C. 57b-2a).
[76 FR 54691, Sept. 2, 2011]
Subpart B_Petitions Filed Under Section 7A of the Clayton Act, as
Amended, for Review of Requests for Additional Information or
Documentary Material
Authority: 15 U.S.C. 18a(d), (e).
Sec. 2.20 Petitions for review of requests for additional information
or documentary material.
(a) For purposes of this section, ``second request'' refers to a
request for additional information or documentary material issued under
16 CFR 803.20.
(b) Second request procedures--(1) Notice. Every request for
additional information or documentary material issued under 16 CFR
803.20 shall inform the recipient(s) of the request that the recipient
has a right to discuss modifications or clarifications of the request
with an authorized representative of the Commission. The request shall
identify the name and telephone number of at least one such
representative.
(2) Second request conference. An authorized representative of the
Commission shall invite the recipient to discuss the request for
additional information or documentary material soon after the request is
issued. At the conference, the authorized representative shall discuss
the competitive issues raised by the proposed transaction, to the extent
then known, and confer with the recipient about the most effective way
to obtain information and documents relating to the competitive issues
raised. The conference will ordinarily take place within 5 business days
of issuance of the request, unless the recipient declines the invitation
or requests a later date.
(3) Modification of requests. The authorized representative shall
modify the request for additional information or documentary material,
or recommend such modification to the responsible Assistant Director of
the Bureau of Competition, if he or she determines that a less
burdensome request would be consistent with the needs of the
investigation. A request for additional information or documentary
material may be modified only in writing
[[Page 59]]
signed by the authorized representative.
(4) Review of request decisions. (i) If the recipient of a request
for additional information or documentary material believes that
compliance with portions of the request should not be required and the
recipient has exhausted reasonable efforts to obtain clarifications or
modifications of the request from an authorized representative, the
recipient may petition the General Counsel to consider and rule on
unresolved issues. Such petition shall be submitted by letter to the
General Counsel with a copy to the authorized representative who
participated in the second request conference held under paragraph
(b)(3) of this section. The petition shall not, without leave of the
General Counsel, exceed 500 words, excluding any cover, table of
contents, table of authorities, glossaries, proposed form of relief and
any appendices containing only sections of statutes or regulations, and
shall address petitioner's efforts to obtain modification from the
authorized representative.
(ii) Within 2 business days after receiving such a petition, the
General Counsel shall set a date for a conference with the petitioner
and the authorized representative.
(iii) Such conference shall take place within 7 business days after
the General Counsel receives the petition, unless the request recipient
agrees to a later date or declines to attend a conference.
(iv) Not later than 3 business days before the date of the
conference, the petitioner and the authorized representative may each
submit memoranda regarding the issues presented in the petition. Such
memoranda shall not, without leave of the General Counsel, exceed 1250
words, excluding any cover, table of contents, table of authorities,
glossaries, proposed form of relief and appendices containing only
sections of statutes or regulations. Such memoranda shall be delivered
to counsel for the other participants on the same day they are delivered
to the General Counsel.
(v) The petitioner's memorandum shall include a concise statement of
reasons why the request should be modified, together with proposed
modifications, or a concise explanation why the recipient believes it
has substantially complied with the request for additional information
or documentary material.
(vi) The authorized representative's memorandum shall include a
concise statement of reasons why the petitioner's proposed modifications
are inappropriate or a concise statement of the reasons why the
representative believes that the petitioner has not substantially
complied with the request for additional information and documentary
material.
(vii) The General Counsel shall advise the petitioner and the
authorized representative of his or her decision within 3 business days
following the conference.
[66 FR 8721, Feb. 1, 2001]
Subpart C_Consent Order Procedure
Sec. 2.31 Opportunity to submit a proposed consent order.
(a) Where time, the nature of the proceeding, and the public
interest permit, any individual, partnership, or corporation being
investigated shall be afforded the opportunity to submit through the
operating Bureau or Regional Office having responsibility in the matter
a proposal for disposition of the matter in the form of a consent order
agreement executed by the party being investigated and complying with
the requirements of Sec. 2.32, for consideration by the Commission in
connection with a proposed complaint submitted by the Commission's
staff.
(b) After a complaint has been issued, the consent order procedure
described in this part will not be available except as provided in Sec.
3.25(b).
[40 FR 15235, Apr. 4, 1975]
Sec. 2.32 Agreement.
Every agreement in settlement of a Commission complaint shall
contain, in addition to an appropriate proposed order, either an
admission of the proposed findings of fact and conclusions of law
submitted simultaneously by the Commission's staff or an admission of
all jurisdictional facts and an express waiver of the requirement that
[[Page 60]]
the Commission's decision contain a statement of findings of fact and
conclusions of law. Every agreement also shall waive further procedural
steps and all rights to seek judicial review or otherwise to challenge
or contest the validity of the order. In addition, where appropriate,
every agreement in settlement of a Commission complaint challenging the
lawfulness of a proposed merger or acquisition shall also contain a
hold-separate or asset-maintenance order. The agreement may state that
the signing thereof is for settlement purposes only and does not
constitute an admission by any party that the law has been violated as
alleged in the complaint. Every agreement shall provide that:
(a) The complaint may be used in construing the terms of the order;
(b) No agreement, understanding, representation, or interpretation
not contained in the order or the aforementioned agreement may be used
to vary or to contradict the terms of the order;
(c) The order will have the same force and effect and may be
altered, modified or set aside in the same manner provided by statute
for Commission orders issued on a litigated or stipulated record;
(d) Except as provided by order of the Commission, any order issued
pursuant to the agreement will become final upon service;
(e) The agreement will not become a part of the public record unless
and until it is accepted by the Commission; and
(f) If the Commission accepts the agreement, further proceedings
will be governed by Sec. 2.34.
[64 FR 46268, Aug. 25, 1999]
Sec. 2.33 Compliance procedure.
The Commission may in its discretion require that a proposed
agreement containing an order to cease and desist be accompanied by an
initial report signed by the respondent setting forth in precise detail
the manner in which the respondent will comply with the order when and
if entered. Such report will not become part of the public record unless
and until the accompanying agreement and order are accepted by the
Commission. At the time any such report is submitted a respondent may
request confidentiality for any portion thereof with a precise showing
of justification therefor as set out in Sec. 4.9(c) and the General
Counsel or the General Counsel's designee will dispose of such requests
in accordance with that section.
[63 FR 32977, June 17, 1998]
Sec. 2.34 Disposition.
(a) Acceptance of proposed consent agreement. The Commission may
accept or refuse to accept a proposed consent agreement. Except as
otherwise provided in paragraph (c) of this section, acceptance does not
constitute final approval, but it serves as the basis for further
actions leading to final disposition of the matter.
(b) Effectiveness of hold-separate or asset-maintenance order.
Following acceptance of a consent agreement, the Commission will, if it
deems a hold-separate or asset-maintenance order appropriate, issue a
complaint and such an order as agreed to by the parties. Such order will
be final upon service. The issuance of a complaint under this paragraph
will neither commence an adjudicatory proceeding subject to part 3 of
this chapter nor subject the consent agreement proceeding to the
prohibitions specified in Sec. 4.7 of this chapter.
(c) Public comment. Promptly after its acceptance of the consent
agreement, the Commission will place the order contained in the consent
agreement, the complaint, and the consent agreement on the public record
for a period of 30 days, or such other period as the Commission may
specify, for the receipt of comments or views from any interested
person. At the same time, the Commission will place on the public record
an explanation of the provisions of the order and the relief to be
obtained thereby and any other information that it believes may help
interested persons understand the order. The Commission also will
publish the explanation in the Federal Register. The Commission retains
the discretion to issue a complaint and a Final Decision and Order,
incorporating the order contained in a consent agreement, in appropriate
cases before seeking public comment. Unless directed otherwise by
[[Page 61]]
the Commission, such Decision and Order will be final upon service.
(d) Comment on initial compliance report. If respondents have filed
an initial report of compliance pursuant to Sec. 2.33, the Commission
will place that report on the public record, except for portions, if
any, granted confidential treatment pursuant to Sec. 4.9(c) of this
chapter, with the complaint, the order, and the consent agreement.
(e) Action following comment period. (1) Following the comment
period, on the basis of comments received or otherwise, the Commission
may either withdraw its acceptance of the agreement and so notify
respondents, in which event it will take such other action as it may
consider appropriate, or issue and serve its complaint in such form as
the circumstances may require and its decision in disposition of the
proceeding.
(2) The Commission, following the comment period, may determine, on
the basis of the comments or otherwise, that a Final Decision and Order
that was issued in advance of the comment period should be modified.
Absent agreement by respondents to the modifications, the Commission may
initiate a proceeding to reopen and modify the decision and order in
accordance with Sec. 3.72(b) of this chapter or commence a new
administrative proceeding by issuing a complaint in accordance with
Sec. 3.11 of this chapter.
[64 FR 46269, Aug. 25, 1999]
Subpart D_Reports of Compliance
Sec. 2.41 General compliance obligations and specific obligations
regarding acquisitions and divestitures.
(a) In every proceeding in which the Commission has issued an order
pursuant to the provisions of section 5 of the Federal Trade Commission
Act or section 11 of the Clayton Act, as amended, and except as
otherwise specifically provided in any such order, each respondent named
in such order shall file with the Commission, within sixty (60) days
after service thereof, or within such other time as may be provided by
the order or the rules in this chapter, a report in writing, signed by
the respondent, setting forth in detail the manner and form of his
compliance with the order, and shall thereafter file with the Commission
such further signed, written reports of compliance as it may require. An
original and one copy of each such report shall be filed with the
Secretary of the Commission, and one copy of each such report shall be
filed with the Associate Director for Enforcement in the Bureau of
Consumer Protection (for consumer protection orders) or with the
Assistant Director for Compliance in the Bureau of Competition (for
competition orders). Reports of compliance shall be under oath if so
requested. Where the order prohibits the use of a false advertisement of
a food, drug, device, or cosmetic which may be injurious to health
because of results from its use under the conditions prescribed in the
advertisement, or under such conditions as are customary or usual, or if
the use of such advertisement is with intent to defraud or mislead, or
in any other case where the circumstances so warrant, the order may
provide for an interim report stating whether and how respondents intend
to comply to be filed within ten (10) days after service of the order.
Neither the filing of an application for stay pursuant to Sec. 3.56,
nor the filing of a petition for judicial review, shall operate to
postpone the time for filing a compliance report under the order or this
section. If the Commission, or a court, determines to grant a stay of an
order, or portion thereof, pending judicial review, or if any order
provision is automatically stayed by statute, no compliance report shall
be due as to those portions of the order that are stayed unless ordered
by the court. Thereafter, as to orders, or portions thereof, that are
stayed, the time for filing a report of compliance shall begin to run de
novo from the final judicial determination, except that if no petition
for certiorari has been filed following affirmance of the order of the
Commission by a court of appeals, the compliance report shall be due the
day following the date on which the time expires for the filing of such
petition. Staff of the Bureaus of Competition and Consumer Protection
will review such reports of compliance and may advise each respondent
whether the staff intends to recommend that
[[Page 62]]
the Commission take any enforcement action. The Commission may, however,
institute proceedings, including certification of facts to the Attorney
General pursuant to the provisions of section 5(l) of the Federal Trade
Commission Act (15 U.S.C. 45(l)) and section 11(1) of the Clayton Act,
as amended (15 U.S.C. 21(1)), to enforce compliance with an order,
without advising a respondent whether the actions set forth in a report
of compliance evidence compliance with the Commission's order or without
prior notice of any kind to a respondent.
(b) The Commission has delegated to the Director, the Deputy
Directors, and the Assistant Director for Compliance of the Bureau of
Competition, and to the Director, the Deputy Directors, and the
Associate Director for Enforcement of the Bureau of Consumer Protection
the authority to monitor compliance reports and to open and close
compliance investigations. With respect to any compliance matter which
has received previous Commission consideration as to compliance or in
which the Commission or any Commissioner has expressed an interest, any
matter proposed to be closed by reason of expense of investigation or
testing, or any matter involving substantial questions as to the public
interest, Commission policy or statutory construction, the Bureaus shall
submit an analysis to the Commission regarding their intended actions.
(c) The Commission has delegated to the Director, Deputy Directors,
and Assistant Directors of the Bureau of Competition and to the
Director, Deputy Directors, and Associate Directors of the Bureau of
Consumer Protection, and to the Regional Directors, the authority, for
good cause shown, to extend the time within which reports of compliance
with orders to cease and desist may be filed. It is to be noted,
however, that an extension of time within which a report of compliance
may be filed, or the filing of a report which does not evidence full
compliance with the order, does not in any circumstances suspend or
relieve a respondent from his obligation under the law with respect to
compliance with such order. An order of the Commission to cease and
desist becomes final on the date and under the conditions provided in
the Federal Trade Commission Act and the Clayton Act. Any person,
partnership or corporation against which an order to cease and desist
has been issued who is not in full compliance with such order on and
after the date provided in these statutes for the order to become final
is in violation of such order and is subject to an immediate action for
civil penalties. The authority under this paragraph may not be
redelegated, except that the Associate Director for Enforcement in the
Bureau of Consumer Protection and the Assistant Director for Compliance
in the Bureau of Competition may each name a designee under this
paragraph.
(d) Any respondent subject to a Commission order may request advice
from the Commission as to whether a proposed course of action, if
pursued by it, will constitute compliance with such order. The request
for advice should be submitted in writing to the Secretary of the
Commission and should include full and complete information regarding
the proposed course of action. On the basis of the facts submitted, as
well as other information available to the Commission, the Commission
will inform the respondent whether or not the proposed course of action,
if pursued, would constitute compliance with its order. A request
ordinarily will be considered inappropriate for such advice:
(1) Where the course of action is already being followed by the
requesting party;
(2) Where the same or substantially the same course of action is
under investigation or is or has been the subject of a current
proceeding, order, or decree initiated or obtained by the Commission or
another governmental agency; or
(3) Where the proposed course of action or its effects may be such
that an informed decision thereon cannot be made or could be made only
after extensive investigation, clinical study, testing or collateral
inquiry.
Furthermore, the filing of a request for advice under this paragraph
does not in any circumstances suspend or relieve a respondent from his
obligation under the law with respect to his compliance with the order.
He must in any event be in full compliance on and after the
[[Page 63]]
date the order becomes final as prescribed by statute referred to in
paragraph (b) of this section. Advice to respondents under this
paragraph will be published by the Commission in the same manner and
subject to the same restrictions and considerations as advisory opinions
under Sec. 1.4 of this chapter.
(e) The Commission may at any time reconsider any advice given under
this section and, where the public interest requires, rescind or revoke
its prior advice. In such event the respondent will be given notice of
the Commission's intent to revoke or rescind and will be given an
opportunity to submit its views to the Commission. The Commission will
not proceed against a respondent for violation of an order with respect
to any action which was taken in good faith reliance upon the
Commission's advice under this section, where all relevant facts were
fully, completely, and accurately presented to the Commission and where
such action was promptly discontinued upon notification of rescission or
revocation of the Commission's advice.
(f)(1) All applications for approval of proposed divestitures,
acquisitions, or similar transactions subject to Commission review under
outstanding orders (including modifications to previously approved
transactions) shall fully describe the terms of the transaction or
modification and shall set forth why the transaction or modification
merits Commission approval. Such applications will be placed on the
public record, together with any additional applicant submissions that
the Commission directs be placed on the public record. The Director of
the Bureau of Competition is delegated authority to direct such
placement.
(2) The Commission will receive public comment on a prior approval
application submitted pursuant to paragraphs (f)(1) or (5) of this
section for thirty (30) days. During the comment period, any person may
file formal written objections or comments with the Secretary of the
Commission, and such objections or comments shall be placed on the
public record. In appropriate cases, the Commission may shorten,
eliminate, extend, or reopen a comment period.
(3) Responses to applications under this section, together with a
statement of supporting reasons, will be published when made, together
with responses to any public comments filed under this section.
(4) Persons submitting information that is subject to public record
disclosure under this section may request confidential treatment for
that information or portions thereof in accordance with Sec. 4.9(c) and
the General Counsel or the General Counsel's designee will dispose of
such requests in accordance with that section. Nothing in this section
requires that confidentiality requests be resolved prior to, or
contemporaneously with, the disposition of the application.
(5)(i) Any application to modify either:
(A) An agreement that has been approved by the Commission pursuant
to paragraph (f) of this section, or
(B) An agreement incorporated by reference into a final order of the
Commission issued in connection with a merger, acquisition, or similar
transaction shall be subject to review and approval in the manner
described in paragraphs (f)(1) through (4) of this section, except as
provided in paragraph (f)(5)(ii) of this section.
(ii) If the application establishes that the proposed modification
is purely ministerial, or unlikely under any plausible facts to affect
achieving the remedial purposes of the order at issue, the Commission
has delegated to the Director, Deputy Directors, and Assistant Director
for Compliance of the Bureau of Competition, without power of
redelegation, for good cause shown, the authority.
(A) To waive the approval requirement of paragraph (f)(5)(i) of this
section; and
(B) To shorten, eliminate, extend or reopen the comment period
pursuant to paragraph (f)(2) of this section.
(iii) Any agreement containing a modification approved, or for which
the approval requirement is waived, pursuant to this paragraph (f)(5),
shall be subject to any outstanding Commission order to the same extent
as was the original agreement.
[32 FR 8449, June 13, 1967]
[[Page 64]]
Editorial Note: For Federal Register citations affecting Sec. 2.41,
see the List of CFR Sections Affected, which appears in the Finding Aids
section of the printed volume and at www.govinfo.gov.
Subpart E_Requests To Reopen
Sec. 2.51 Requests to reopen.
(a) Scope. Any person, partnership, or corporation subject to a
Commission decision containing a rule or order which has become
effective, or an order to cease and desist which has become final, may
file with the Secretary a request that the Commission reopen the
proceeding to consider whether the rule or order, including any
affirmative relief provision contained therein, should be altered,
modified, or set aside in whole or in part.
(b) Contents. A request under this section shall contain a
satisfactory showing that changed conditions of law or fact require the
rule or order to be altered, modified or set aside, in whole or in part,
or that the public interest so requires.
(1) This requirement shall not be deemed satisfied if a request is
merely conclusory or otherwise fails to set forth by affidavit(s)
specific facts demonstrating in detail:
(i) The nature of the changed conditions and the reasons why they
require the requested modifications of the rule or order; or
(ii) The reasons why the public interest would be served by the
modification.
(2) Each affidavit shall set forth facts that would be admissible in
evidence and shall show that the affiant is competent to testify to the
matters stated therein. All information and material that the requester
wishes the Commission to consider shall be contained in the request at
the time of filing.
(c) Opportunity for public comment. A request under this section
shall be placed on the public record except for material exempt from
public disclosure under rule 4.10(a). Unless the Commission determines
that earlier disposition is necessary, the request shall remain on the
public record for thirty (30) days after a press release on the request
is issued. Bureau Directors are authorized to publish a notice in the
Federal Register announcing the receipt of a request to reopen at their
discretion. The public is invited to comment on the request while it is
on the public record.
(d) Determination. After the period for public comments on a request
under this section has expired and no later than one hundred and twenty
(120) days after the date of the filing of the request, the Commission
shall determine whether the request complies with paragraph (b) of this
section and whether the proceeding shall be reopened and the rule or
order should be altered, modified, or set aside as requested. In doing
so, the Commission may, in its discretion, issue an order reopening the
proceeding and modifying the rule or order as requested, issue an order
to show cause pursuant to Sec. 3.72, or take such other action as is
appropriate: Provided, however, That any action under Sec. 3.72 or
otherwise shall be concluded within the specified 120-day period.
(Sec. 6(g), 38 Stat. 721 (15 U.S.C. 46(g)); 80 Stat. 383, as amended, 81
Stat. 54 (5 U.S.C. 552))
[45 FR 36344, May 29, 1980, as amended at 46 FR 26291, May 12, 1981; 47
FR 33251, Aug. 2, 1982; 50 FR 53305, Dec. 31, 1985; 53 FR 40868, Oct.
19, 1988; 65 FR 50637, Aug. 21, 2000]
PART 3_RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS--Table of Contents
Subpart A_Scope of Rules; Nature of Adjudicative Proceedings
Sec.
3.1 Scope of the rules in this part; expedition of proceedings.
3.2 Nature of adjudicative proceedings.
Subpart B_Pleadings
3.11 Commencement of proceedings.
3.12 Answer.
3.13 Adjudicative hearing on issues arising in rulemaking proceedings
under the Fair Packaging and Labeling Act.
3.14 Intervention.
3.15 Amendments and supplemental pleadings.
Subpart C_Prehearing Procedures; Motions; Interlocutory Appeals; Summary
Decisions
3.21 Prehearing procedures.
3.22 Motions.
[[Page 65]]
3.23 Interlocutory appeals.
3.24 Summary decisions.
3.25 Consent agreement settlements.
3.26 Motions following denial of preliminary injunctive relief.
Subpart D_Discovery; Compulsory Process
3.31 General discovery provisions.
3.31A Expert discovery.
3.32 Admissions.
3.33 Depositions.
3.34 Subpoenas.
3.35 Interrogatories to parties.
3.36 Applications for subpoenas for records of or appearances by certain
officials or employees of the Commission or officials or
employees of governmental agencies other than the Commission,
and subpoenas to be served in a foreign country.
3.37 Production of documents, electronically stored information, and any
tangible things; access for inspection and other purposes.
3.38 Motion for order compelling disclosure or discovery; sanctions.
3.38A Withholding requested material.
3.39 Orders requiring witnesses to testify or provide other information
and granting immunity.
3.40 Admissibility of evidence in advertising substantiation cases.
Subpart E_Hearings
3.41 General hearing rules.
3.42 Presiding officials.
3.43 Evidence.
3.44 Record.
3.45 In camera orders.
3.46 Proposed findings, conclusions, and order.
Subpart F_Decision
3.51 Initial decision.
3.52 Appeal from initial decision.
3.53 Review of initial decision in absence of appeal.
3.54 Decision on appeal or review.
3.55 Reconsideration.
3.56 Effective date of orders; application for stay.
Subpart G [Reserved]
Subpart H_Reopening of Proceedings
3.71 Authority.
3.72 Reopening.
Subpart I_Recovery of Awards Under the Equal Access to Justice Act in
Commission Proceedings
3.81 General provisions.
3.82 Information required from applicants.
3.83 Procedures for considering applicants.
Authority: 15 U.S.C. 46.
Source: 32 FR 8449, June 13, 1967, unless otherwise noted.
Subpart A_Scope of Rules; Nature of Adjudicative Proceedings
Sec. 3.1 Scope of the rules in this part; expedition of proceedings.
The rules in this part govern procedure in formal adjudicative
proceedings. To the extent practicable and consistent with requirements
of law, the Commission's policy is to conduct such proceedings
expeditiously. In the conduct of such proceedings the Administrative Law
Judge and counsel for all parties shall make every effort at each stage
of a proceeding to avoid delay. In the event of a scheduling conflict
between a proceeding in which the Commission also has sought or is
seeking relief under Section 13(b) of the FTC Act, 15 U.S.C. 53(b), and
another proceeding, the proceeding in which the Commission also has
sought or is seeking relief under Section 13(b) shall take precedence.
The Commission, at any time, or the Administrative Law Judge at any time
prior to the filing of his or her initial decision, may, with the
consent of the parties, shorten any time limit prescribed by these Rules
of Practice.
[74 FR 20208, May 1, 2009]
Sec. 3.2 Nature of adjudicative proceedings.
Adjudicative proceedings are those formal proceedings conducted
under one or more of the statutes administered by the Commission which
are required by statute to be determined on the record after opportunity
for an agency hearing. The term includes hearings upon objections to
orders relating to the promulgation, amendment, or repeal of rules under
sections 4, 5 and 6 of the Fair Packaging and Labeling Act, but does not
include rulemaking proceedings up to the time when the Commission
determines under Sec. 1.26(g) of this chapter that objections
sufficient to warrant the holding of a public hearing have been filed.
The term also includes proceedings for
[[Page 66]]
the assessment of civil penalties pursuant to Sec. 1.94 of this
chapter. The term does not include other proceedings such as
negotiations for and Commission consideration of the entry of consent
orders; investigational hearings as distinguished from proceedings after
the issuance of a complaint; requests for extensions of time to comply
with final orders or other proceedings involving compliance with final
orders; proceedings for the promulgation of industry guides or trade
regulation rules; or the promulgation of substantive rules and
regulations.
[74 FR 1820, Jan. 13, 2009]
Subpart B_Pleadings
Sec. 3.11 Commencement of proceedings.
(a) Complaint. Except as provided in Sec. 3.13, an adjudicative
proceeding is commenced when an affirmative vote is taken by the
Commission to issue a complaint.
(b) Form of complaint. The Commission's complaint shall contain the
following:
(1) Recital of the legal authority and jurisdiction for institution
of the proceeding, with specific designation of the statutory provisions
alleged to have been violated;
(2) A clear and concise factual statement sufficient to inform each
respondent with reasonable definiteness of the type of acts or practices
alleged to be in violation of the law;
(3) Where practical, a form of order which the Commission has reason
to believe should issue if the facts are found to be as alleged in the
complaint; and
(4) Notice of the specific date, time and place for the evidentiary
hearing. Unless a different date is determined by the Commission, the
date of the evidentiary hearing shall be 5 months from the date of the
administrative complaint in a proceeding in which the Commission, in an
ancillary proceeding, has sought or is seeking relief pursuant to
Section 13(b) of the FTC Act, 15 U.S.C. 53(b), and 8 months from the
date of issuance of the administrative complaint in all other
proceedings.
[74 FR 1820, Jan. 13, 2009]
Sec. 3.12 Answer.
(a) Time for filing. A respondent shall file an answer within 14
days after being served with the complaint.
(b) Content of answer. An answer shall conform to the following:
(1) If allegations of complaint are contested. An answer in which
the allegations of a complaint are contested shall contain:
(i) A concise statement of the facts constituting each ground of
defense;
(ii) Specific admission, denial, or explanation of each fact alleged
in the complaint or, if the respondent is without knowledge thereof, a
statement to that effect. Allegations of a complaint not thus answered
shall be deemed to have been admitted.
(2) If allegations of complaint are admitted. If the respondent
elects not to contest the allegations of fact set forth in the
complaint, the answer shall consist of a statement that the respondent
admits all of the material allegations to be true. Such an answer shall
constitute a waiver of hearings as to the facts alleged in the
complaint, and together with the complaint will provide a record basis
on which the Commission shall issue a final decision containing
appropriate findings and conclusions and a final order disposing of the
proceeding. In such an answer, the respondent may, however, reserve the
right to submit proposed findings of fact and conclusions of law under
Sec. 3.46.
(c) Default. Failure of the respondent to file an answer within the
time provided shall be deemed to constitute a waiver of the respondent's
right to appear and contest the allegations of the complaint and to
authorize the Commission, without further notice to the respondent, to
find the facts to be as alleged in the complaint and to enter a final
decision containing appropriate findings and conclusions and a final
order disposing of the proceeding.
[74 FR 1820, Jan. 13, 2009]
Sec. 3.13 Adjudicative hearing on issues arising in rulemaking
proceedings under the Fair Packaging and Labeling Act.
(a) Notice of hearing. When the Commission, acting under Sec.
1.26(g) of this chapter, determines that objections which have been
filed are sufficient to
[[Page 67]]
warrant the holding of an adjudicative hearing in rulemaking proceedings
under the Fair Packaging and Labeling Act, or when the Commission
otherwise determines that the holding of such a hearing would be in the
public interest, a hearing will be held before an Administrative Law
Judge for the purpose of receiving evidence relevant and material to the
issues raised by such objections or other issues specified by the
Commission. In such case the Commission will publish a notice in the
Federal Register containing a statement of:
(1) The provisions of the rule or order to which objections have
been filed;
(2) The issues raised by the objections or the issues on which the
Commission wishes to receive evidence;
(3) The time and place for hearing, the time to be at least thirty
(30) days after publication of the notice; and
(4) The time within which, and the conditions under which, any
person who petitioned for issuance, amendment, or repeal of the rule or
order, or any person who filed objections sufficient to warrant the
holding of the hearing, or any other interested person, may file notice
of intention to participate in the proceeding.
(b) Parties. Any person who petitions for issuance, amendment, or
repeal of a rule or order, and any person who files objections
sufficient to warrant the holding of a hearing, and who files timely
notice of intention to participate, shall be regarded as a party and
shall be individually served with any pleadings filed in the proceeding.
Upon written application to the Administrative Law Judge and a showing
of good cause, any interested person may be designated by the
Administrative Law Judge as a party.
[32 FR 8449, June 13, 1967, as amended at 40 FR 33969, Aug. 13, 1975]
Sec. 3.14 Intervention.
(a) Any individual, partnership, unincorporated association, or
corporation desiring to intervene in an adjudicative proceeding shall
make written application in the form of a motion setting forth the basis
therefor. Such application shall be served upon each party to the
proceeding in accordance with the provisions of Sec. 4.4(b) of this
chapter. The answer filed by any party shall be served upon the
applicant in accordance with the provisions of Sec. 4.4(b). The
Administrative Law Judge or the Commission may by order permit the
intervention to such extent and upon such terms as are provided by law
or as otherwise may be deemed proper.
(b) In an adjudicative proceeding where the complaint states that
divestiture relief is contemplated, the labor organization[s]
representing employees of the respondent[s] may intervene as a matter of
right. Applications for such intervention are to be made in accordance
with the procedures set forth in paragraph (a) of this section and must
be filed within 60 days of the issuance of the complaint. Intervention
as a matter of right shall be limited to the issue of the effect, if
any, of proposed remedies on employment, with full rights of
participation in the proceeding concerning this issue. This paragraph
does not affect a labor organization's ability to petition for leave to
intervene pursuant to Sec. 3.14(a).
[32 FR 8449, June 13, 1967, as amended at 46 FR 20979, Apr. 8, 1981; 80
FR 25941, May 12, 2015]
Sec. 3.15 Amendments and supplemental pleadings.
(a) Amendments--(1) By leave. If and whenever determination of a
controversy on the merits will be facilitated thereby, the
Administrative Law Judge may, upon such conditions as are necessary to
avoid prejudicing the public interest and the rights of the parties,
allow appropriate amendments to pleadings or notice of hearing:
Provided, however, That a motion for amendment of a complaint or notice
may be allowed by the Administrative Law Judge only if the amendment is
reasonably within the scope of the original complaint or notice. Motions
for other amendments of complaints or notices shall be certified to the
Commission.
(2) Conformance to evidence. When issues not raised by the pleadings
or notice of hearing but reasonably within the scope of the original
complaint or notice of hearing are tried by express or implied consent
of the parties, they shall be treated in all respects as if they had
been raised in the pleadings
[[Page 68]]
or notice of hearing; and such amendments of the pleadings or notice as
may be necessary to make them conform to the evidence and to raise such
issues shall be allowed at any time.
(b) Supplemental pleadings. The Administrative Law Judge may, upon
reasonable notice and such terms as are just, permit service of a
supplemental pleading or notice setting forth transactions, occurrences,
or events which have happened since the date of the pleading or notice
sought to be supplemented and which are relevant to any of the issues
involved.
Subpart C_Prehearing Procedures; Motions; Interlocutory Appeals; Summary
Decisions
Sec. 3.21 Prehearing procedures.
(a) Meeting of the parties before scheduling conference. As early as
practicable before the prehearing scheduling conference described in
paragraph (b) of this section, but in any event no later than 5 days
after the answer is filed by the last answering respondent, counsel for
the parties shall meet to discuss the nature and basis of their claims
and defenses and the possibilities for a prompt settlement or resolution
of the case. The parties shall also agree, if possible, on--
(1) A proposed discovery plan specifically addressing a schedule for
depositions of fact witnesses, the production of documents and
electronically stored information, and the timing of expert discovery
pursuant to Sec. 3.31A. The parties' agreement regarding electronically
stored information should include the scope of and a specified time
period for the exchange of such information that is subject to
Sec. Sec. 3.31(b)(2), 3.31(c), and 3.37(a), and the format for the
disclosure of such information, consistent with Sec. Sec. 3.31(c)(3)
and 3.37(c);
(2) A preliminary estimate of the time required for the evidentiary
hearing; and
(3) Any other matters to be determined at the scheduling conference.
(b) Scheduling conference. Not later than 10 days after the answer
is filed by the last answering respondent, the Administrative Law Judge
shall hold a scheduling conference. At the scheduling conference,
counsel for the parties shall be prepared to address:
(1) Their factual and legal theories;
(2) The current status of any pending motions;
(3) A schedule of proceedings that is consistent with the date of
the evidentiary hearing set by the Commission;
(4) Steps taken to preserve evidence relevant to the issues raised
by the claims and defenses;
(5) The scope of anticipated discovery, any limitations on
discovery, and a proposed discovery plan, including the disclosure of
electronically stored information;
(6) Issues that can be narrowed by agreement or by motion,
suggestions to expedite the presentation of evidence at trial, and any
request to bifurcate issues, claims or defenses; and
(7) Other possible agreements or steps that may aid in the just and
expeditious disposition of the proceeding and to avoid unnecessary cost.
(c) Prehearing scheduling order. (1) Not later than 2 days after the
scheduling conference, the Administrative Law Judge shall enter an order
that sets forth the results of the conference and establishes a schedule
of proceedings that will permit the evidentiary hearing to commence on
the date set by the Commission, including a plan of discovery that
addresses the deposition of fact witnesses, timing of expert discovery,
and the production of documents and electronically stored information,
dates for the submission and hearing of motions, the specific method by
which exhibits shall be numbered or otherwise identified and marked for
the record, and the time and place of a final prehearing conference. The
Commission may, upon a showing of good cause, order a later date for the
evidentiary hearing than the one specified in the complaint.
(2) The Administrative Law Judge may, upon a showing of good cause,
grant a motion to extend any deadline or time specified in this
scheduling order other than the date of the evidentiary hearing. Such
motion shall set forth the total period of extensions, if any,
previously obtained by the moving party. In determining whether to grant
the motion, the Administrative
[[Page 69]]
Law Judge shall consider any extensions already granted, the length of
the proceedings to date, the complexity of the issues, and the need to
conclude the evidentiary hearing and render an initial decision in a
timely manner. The Administrative Law Judge shall not rule on ex parte
motions to extend the deadlines specified in the scheduling order, or
modify such deadlines solely upon stipulation or agreement of counsel.
(d) Meeting prior to final prehearing conference. Counsel for the
parties shall meet before the final prehearing conference described in
paragraph (e) of this section to discuss the matters set forth therein
in preparation for the conference.
(e) Final prehearing conference. As close to the commencement of the
evidentiary hearing as practicable, the Administrative Law Judge shall
hold a final prehearing conference, which counsel shall attend in
person, to submit any proposed stipulations as to law, fact, or
admissibility of evidence, exchange exhibit and witness lists, and
designate testimony to be presented by deposition. At this conference,
the Administrative Law Judge shall also resolve any outstanding
evidentiary matters or pending motions (except motions for summary
decision) and establish a final schedule for the evidentiary hearing.
(f) Additional prehearing conferences and orders. The Administrative
Law Judge shall hold additional prehearing and status conferences or
enter additional orders as may be needed to ensure the just and
expeditious disposition of the proceeding and to avoid unnecessary cost.
Such conferences shall be held in person to the extent practicable.
(g) Public access and reporting. Prehearing conferences shall be
public unless the Administrative Law Judge determines in his or her
discretion that the conference (or any part thereof) shall be closed to
the public. The Administrative Law Judge shall have discretion to
determine whether a prehearing conference shall be stenographically
reported.
[74 FR 1820, Jan. 13, 2009]
Sec. 3.22 Motions.
(a) Presentation and disposition. Motions filed under Sec. 4.17 of
this chapter shall be directly referred to and ruled on by the
Commission. Motions to dismiss filed before the evidentiary hearing
(other than motions to dismiss under Sec. 3.26(d)), motions to strike,
and motions for summary decision shall be directly referred to the
Commission and shall be ruled on by the Commission unless the Commission
in its discretion refers the motion to the Administrative Law Judge.
Except as otherwise provided by an applicable rule, motions not referred
to the Administrative Law Judge shall be ruled on by the Commission
within 45 days of the filing of the last-filed answer or reply to the
motion, if any, unless the Commission determines there is good cause to
extend the deadline. If the Commission refers the motion to the
Administrative Law Judge, it may set a deadline for the ruling by the
Administrative Law Judge, and a party may seek review of the ruling of
the Administrative Law Judge in accordance with Sec. 3.23. During the
time a proceeding is before an Administrative Law Judge, all other
motions shall be addressed to and decided by the Administrative Law
Judge, if within his or her authority. The Administrative Law Judge
shall certify to the Commission a motion to disqualify filed under Sec.
3.42(g) if the Administrative Law Judge does not disqualify himself or
herself within 10 days. The Administrative Law Judge shall certify to
the Commission forthwith any other motion upon which he or she has no
authority to rule. Rulings containing information granted in camera
status pursuant to Sec. 3.45 shall be filed in accordance with Sec.
3.45(f). When a motion to dismiss is made at the close of the evidence
offered in support of the complaint based upon an alleged failure to
establish a prima facie case, the Administrative Law Judge shall defer
ruling thereon until immediately after all evidence has been received
and the hearing record is closed. All written motions shall be filed
with the Secretary of the Commission, and all motions addressed to the
Commission shall be in writing. The moving party shall also provide a
copy of its motion to the Administrative Law Judge at
[[Page 70]]
the time the motion is filed with the Secretary.
(b) Proceedings not stayed. A motion under consideration by the
Commission shall not stay proceedings before the Administrative Law
Judge unless the Commission so orders or unless otherwise provided by an
applicable rule.
(c) Content. All written motions shall state the particular order,
ruling, or action desired and the grounds therefor. Memoranda in support
of, or in opposition to, any dispositive motion shall not exceed 10,000
words. Memoranda in support of, or in opposition to, any other motion
shall not exceed 2,500 words. Any reply in support of a dispositive
motion shall not exceed 5,000 words and any reply in support of any
other motion authorized by the Administrative Law Judge or the
Commission shall not exceed 1,250 words. These word count limitations
include headings, footnotes, and quotations, but do not include the
cover, table of contents, table of citations or authorities, glossaries,
statements with respect to oral argument, any addendums containing
statutes, rules or regulations, any certificates of counsel, proposed
form of order, and any attachment required by Sec. 3.45(e). Documents
that fail to comply with these provisions shall not be filed with the
Secretary. Motions must also include the name, address, telephone
number, fax number, and e-mail address (if any) of counsel and attach a
draft order containing the proposed relief. If a party includes in a
motion information that has been granted in camera status pursuant to
Sec. 3.45(b) or is subject to confidentiality protections pursuant to a
protective order, the party shall file 2 versions of the motion in
accordance with the procedures set forth in Sec. 3.45(e). The party
shall mark its confidential filings with brackets or similar conspicuous
markings to indicate the material for which it is claiming confidential
treatment. The time period specified by Sec. 3.22(d) within which an
opposing party may file an answer will begin to run upon service on that
opposing party of the confidential version of the motion.
(d) Responses. Within 10 days after service of any written motion,
or within such longer or shorter time as may be designated by the
Administrative Law Judge or the Commission, the opposing party shall
answer or shall be deemed to have consented to the granting of the
relief asked for in the motion. If an opposing party includes in an
answer information that has been granted in camera status pursuant to
Sec. 3.45(b) or is subject to confidentiality protections pursuant to a
protective order, the opposing party shall file 2 versions of the answer
in accordance with the procedures set forth in Sec. 3.45(e). The moving
party shall have no right to reply, except for dispositive motions or as
otherwise permitted by the Administrative Law Judge or the Commission.
Reply and surreply briefs to motions other than dispositive motions
shall be permitted only in circumstances where the parties wish to draw
the Administrative Law Judge's or the Commission's attention to recent
important developments or controlling authority that could not have been
raised earlier in the party's principal brief. The reply may be
conditionally filed with the motion seeking leave to reply. Any reply
with respect to a dispositive motion, or any permitted reply to any
other motion, shall be filed within 5 days after service of the last
answer to that motion.
(e) Rulings on motions. Unless otherwise provided by a relevant
rule, the Administrative Law Judge shall rule on motions within 14 days
after the filing of all motion papers authorized by this section. The
Commission, for good cause, may extend the time allowed for a ruling.
(f) Motions for extensions. The Administrative Law Judge or the
Commission may waive the requirements of this section as to motions for
extensions of time; however, the Administrative Law Judge shall have no
authority to rule on ex parte motions for extensions of time.
(g) Statement. Each motion to quash filed pursuant to Sec. 3.34(c),
each motion to compel or determine sufficiency pursuant to Sec.
3.38(a), each motion for sanctions pursuant to Sec. 3.38(b), and each
motion for enforcement pursuant to Sec. 3.38(c) shall be accompanied by
a signed statement representing that
[[Page 71]]
counsel for the moving party has conferred with opposing counsel in an
effort in good faith to resolve by agreement the issues raised by the
motion and has been unable to reach such an agreement. If some of the
matters in controversy have been resolved by agreement, the statement
shall specify the matters so resolved and the matters remaining
unresolved. The statement shall recite the date, time, and place of each
such conference between counsel, and the names of all parties
participating in each such conference. Unless otherwise ordered by the
Administrative Law Judge, the statement required by this rule must be
filed only with the first motion concerning compliance with the
discovery demand at issue.
[74 FR 1821, Jan. 13, 2009, as amended at 80 FR 15160, Mar. 23, 2015]
Sec. 3.23 Interlocutory appeals.
(a) Appeals without a determination by the Administrative Law Judge.
(1) The Commission may, in its discretion, entertain interlocutory
appeals where a ruling of the Administrative Law Judge:
(i) Requires the disclosure of records of the Commission or another
governmental agency or the appearance of an official or employee of the
Commission or another governmental agency pursuant to Sec. 3.36, if
such appeal is based solely on a claim of privilege: Provided, that the
Administrative Law Judge shall stay until further order of the
Commission the effectiveness of any ruling, whether or not appeal is
sought, that requires the disclosure of nonpublic Commission minutes,
Commissioner circulations, or similar documents prepared by the
Commission, an individual Commissioner, or the Office of the General
Counsel;
(ii) Suspends an attorney from participation in a particular
proceeding pursuant to Sec. 3.42(d); or
(iii) Grants or denies an application for intervention pursuant to
the provisions of Sec. 3.14.
(2) Appeal from such rulings may be sought by filing with the
Commission an application for review within 3 days after notice of the
Administrative Law Judge's ruling. An answer may be filed within 3 days
after the application for review is filed. The Commission upon its own
motion may enter an order staying compliance with a discovery demand
authorized by the Administrative Law Judge pursuant to Sec. 3.36 or
placing the matter on the Commission's docket for review. Any order
placing the matter on the Commission's docket for review will set forth
the scope of the review and the issues which will be considered and will
make provision for the filing of memoranda of law if deemed appropriate
by the Commission.
(b) Other interlocutory appeals. A party may request the
Administrative Law Judge to determine that a ruling involves a
controlling question of law or policy as to which there is substantial
ground for difference of opinion and that an immediate appeal from the
ruling may materially advance the ultimate termination of the litigation
or subsequent review will be an inadequate remedy. An answer may be
filed within 3 days after the request for determination is filed. The
Administrative Law Judge shall issue a ruling on the request for
determination within 3 days of the deadline for filing an answer. The
party may file an application for review with the Commission within 1
day after notice that the Administrative Law Judge has issued the
requested determination or 1 day after the deadline has passed for the
Administrative Law Judge to issue a ruling on the request for
determination and the Administrative Law Judge has not issued his or her
ruling. An answer may be filed within 3 days after the application for
review is filed.
(c) The application for review shall attach the ruling from which
appeal is being taken and any other portions of the record on which the
moving party relies. Neither the application for review nor the answer
shall exceed 2,500 words. This word count limitation includes headings,
footnotes, and quotations, but does not include the cover, table of
contents, table of citations or authorities, glossaries, statements with
respect to oral argument, any addendums containing statutes, rules or
regulations, any certificates of counsel, proposed form of order, and
any attachment required by Sec. 3.45(e).
[[Page 72]]
The Commission may order additional briefing on the application.
(d) Ruling on application for review. Within 3 days after the
deadline for filing an answer, the Commission will determine whether to
grant the application for review. The denial of an application shall not
constitute a ruling on the merits of the ruling that is the subject of
the application.
(e) Proceedings not stayed. An application for review and appeal
hereunder shall not stay proceedings before the Administrative Law Judge
unless the Judge or the Commission shall so order.
[74 FR 1822, Jan. 13, 2009, as amended at 80 FR 15160, Mar. 23, 2015]
Sec. 3.24 Summary decisions.
(a) Procedure. (1) Any party may move, with or without supporting
affidavits, for a summary decision in the party's favor upon all or any
part of the issues being adjudicated. The motion shall be accompanied by
a separate and concise statement of the material facts as to which the
moving party contends there is no genuine issue for trial. Counsel in
support of the complaint may so move at any time after 20 days following
issuance of the complaint and any respondent may so move at any time
after issuance of the complaint. Any such motion by any party, however,
shall be filed in accordance with the scheduling order issued pursuant
to Sec. 3.21, but in any case at least 30 days before the date fixed
for the hearing.
(2) Any other party may, within 14 days after service of the motion,
file opposing affidavits. The opposing party shall include a separate
and concise statement of those material facts as to which the opposing
party contends there exists a genuine issue for trial, as provided in
Sec. 3.24(a)(3). The parties may file memoranda of law in support of,
or in opposition to, the motion consistent with Sec. 3.22(c). If a
party includes in any such brief or memorandum information that has been
granted in camera status pursuant to Sec. 3.45(b) or is subject to
confidentiality protections pursuant to a protective order, the party
shall file 2 versions of the document in accordance with the procedures
set forth in Sec. 3.45(e). If the Commission (or, when appropriate, the
Administrative Law Judge) determines that there is no genuine issue as
to any material fact regarding liability or relief, it shall issue a
final decision and order. In the event that the motion has been referred
to the Administrative Law Judge, such determination by the
Administrative Law Judge shall constitute his or her initial decision
and shall conform to the procedures set forth in Sec. 3.51(c). A
summary decision, interlocutory in character and in compliance with the
procedures set forth in Sec. 3.51(c), may be rendered on the issue of
liability alone although there is a genuine issue as to relief.
(3) Affidavits shall set forth such facts as would be admissible in
evidence and shall show affirmatively that the affiant is competent to
testify to the matters stated therein. The Commission (or, when
appropriate, the Administrative Law Judge) may permit affidavits to be
supplemented or opposed by depositions, answers to interrogatories, or
further affidavits. When a motion for summary decision is made and
supported as provided in this rule, a party opposing the motion may not
rest upon the mere allegations or denials of his or her pleading; the
response, by affidavits or as otherwise provided in this rule, must set
forth specific facts showing that there is a genuine issue of material
fact for trial. If no such response is filed, summary decision, if
appropriate, shall be rendered.
(4) Should it appear from the affidavits of a party opposing the
motion that it cannot, for reasons stated, present by affidavit facts
essential to justify its opposition, the Commission (or, when
appropriate, the Administrative Law Judge) may deny the motion for
summary decision or may order a continuance to permit affidavits to be
obtained or depositions to be taken or discovery to be had or make such
other order as is appropriate and a determination to that effect shall
be made a matter of record.
(5) If on motion under this rule a summary decision is not rendered
upon the whole case or for all the relief asked and a trial is
necessary, the Commission (or, when appropriate, the Administrative Law
Judge) shall issue
[[Page 73]]
an order specifying the facts that appear without substantial
controversy and directing further proceedings in the action. The facts
so specified shall be deemed established.
(b) Affidavits filed in bad faith. (1) Should it appear to the
satisfaction of the Commission (or, when appropriate, the Administrative
Law Judge) at any time that any of the affidavits presented pursuant to
this rule are presented in bad faith, or solely for the purpose of
delay, or are patently frivolous, the Commission (or, when appropriate,
the Administrative Law Judge) shall enter a determination to that effect
upon the record.
(2) If upon consideration of all relevant facts attending the
submission of any affidavit covered by paragraph (b)(1) of this section,
the Commission (or, when appropriate, the Administrative Law Judge)
concludes that action to suspend or remove an attorney from the case is
warranted, it shall take action as specified in Sec. 3.42(d). If the
Administrative Law Judge to whom the Commission has referred a motion
for summary decision concludes, upon consideration of all the relevant
facts attending the submission of any affidavit covered by paragraph
(b)(1) of this section, that the matter should be certified to the
Commission for consideration of disciplinary action against an attorney,
including reprimand, suspension or disbarment, the Administrative Law
Judge shall certify the matter, with his or her findings and
recommendations, to the Commission for its consideration of disciplinary
action in the manner provided by the Commission's rules. If the
Commission has addressed the motion directly, it may consider such
disciplinary action without a certification by the Administrative Law
Judge.
[74 FR 1822, Jan. 13, 2009]
Sec. 3.25 Consent agreement settlements.
(a) The Administrative Law Judge may, in his or her discretion and
without suspension of prehearing procedures, hold conferences for the
purpose of supervising negotiations for the settlement of the case, in
whole or in part, by way of consent agreement.
(b) A proposal to settle a matter in adjudication by consent shall
be submitted by way of a motion to withdraw the matter from adjudication
for the purpose of considering a proposed settlement. Such motion shall
be filed with the Secretary of the Commission, as provided in Sec. 4.2.
Any such motion shall be accompanied by a consent proposal; the proposal
itself, however, shall not be placed on the public record unless and
until it is accepted by the Commission as provided herein. If the
consent proposal affects only some of the respondents or resolves only
some of the charges in adjudication, the motion required by this
paragraph shall so state and shall specify the portions of the matter
that the proposal would resolve.
(c) If a consent agreement accompanying the motion has been executed
by one or more respondents and by complaint counsel, has been approved
by the appropriate Bureau Director, and conforms to Sec. 2.32, and the
matter is pending before an Administrative Law Judge, the Secretary
shall issue an order withdrawing from adjudication those portions of the
matter that the proposal would resolve and all proceedings before the
Administrative Law Judge shall be stayed with respect to such portions,
pending a determination by the Commission pursuant to paragraph (f) of
this section. If a consent proposal is not in the form of a consent
agreement executed by a respondent, does not otherwise conform to Sec.
2.32, or has not been executed by complaint counsel, and the matter is
pending before the Administrative Law Judge, he or she shall certify the
motion and proposal to the Commission upon a written determination that
there is a reasonable possibility of settlement. The certification may
be accompanied by a recommendation to the Commission as to the
disposition of the motion. The Administrative Law Judge shall make a
determination as to whether to certify the motion within 5 days after
the filing of the motion. The filing of a motion under paragraph (b) of
this section and certification thereof to the Commission shall not stay
proceedings before the Administrative Law Judge unless the Commission
shall so order. Upon certification of such motion, the Commission in its
[[Page 74]]
discretion may issue an order withdrawing from adjudication those
portions of the matter that the proposal would resolve for the purpose
of considering the consent proposal.
(d) If the matter is no longer pending before the Administrative Law
Judge, the Commission in its discretion may, upon motion filed under
paragraph (b) of this section, issue an order withdrawing from
adjudication those portions of the matter that the proposal would
resolve for the purpose of considering the consent proposal. Such order
may issue whether or not the consent proposal is in the form of a
consent agreement executed by a respondent, otherwise conforms to Sec.
2.32, or has been executed by complaint counsel.
(e) The Commission will treat those portions of a matter withdrawn
from adjudication pursuant to paragraphs (c) or (d) of this section as
being in a nonadjudicative status. Portions not so withdrawn shall
remain in an adjudicative status.
(f) After some or all of the allegations in a matter have been
withdrawn from adjudication, the Commission may accept a proposed
consent agreement, reject it and return the matter or affected portions
thereof to adjudication for further proceedings, or take such other
action as it may deem appropriate. If an agreement is accepted, it will
be disposed of as provided in Sec. 2.34 of this chapter, except that
if, following the public comment period provided for in Sec. 2.34, the
Commission decides, based on comments received or otherwise, to withdraw
its acceptance of the agreement, it will so notify the parties and will
return to adjudication any portions of the matter previously withdrawn
from adjudication for further proceedings or take such other action it
considers appropriate.
(g) This rule will not preclude the settlement of the case by
regular adjudicatory process through the filing of an admission answer
or submission of the case to the Administrative Law Judge on a
stipulation of facts and an agreed order.
[74 FR 20208, May 1, 2009]
Sec. 3.26 Motions following denial of preliminary injunctive relief.
(a) This section sets forth two procedures by which respondents may
obtain consideration of whether continuation of an adjudicative
proceeding is in the public interest after a court has denied
preliminary injunctive relief in a separate proceeding brought under
section 13(b) of the Federal Trade Commission Act, 15 U.S.C. 53(b), in
aid of the adjudicative proceeding.
(b) A motion under this section shall be addressed to the Commission
and must be filed within 14 days after, but no earlier than:
(1) A district court has denied the Commission's request for a
preliminary injunction, if the Commission has not filed a motion for
relief pending appeal with the court of appeals within 7 days following
the district court's denial of a preliminary injunction; or
(2) A court of appeals has denied a Commission motion for relief
pending appeal.
(c) Withdrawal from adjudication. Following denial of court relief
as specified in paragraph (b) of this section, respondents may move that
the adjudicative proceeding be withdrawn from adjudication in order to
consider whether the public interest warrants further litigation.
Although all respondents must consent to the filing of such a motion, a
motion under this paragraph (c) may be filed jointly or separately by
each of the respondents in the adjudicative proceeding. At the time
respondents file a motion under this paragraph (c), respondents must
also electronically transmit a copy to complaint counsel. The Secretary
shall issue an order withdrawing the matter from adjudication 2 days
after such a motion is filed, except that, if complaint counsel file an
objection asserting that the conditions of paragraph (b) of this section
have not been met, the Commission shall decide the motion within 10 days
after the objection is filed.
(d) Consideration on the record of a motion to dismiss. (1) In lieu
of a motion to withdraw the adjudicative proceeding from adjudication
under paragraph (c) of this section, any respondent may file a motion
under this paragraph to dismiss the administrative complaint on
[[Page 75]]
the basis that the public interest does not warrant further litigation
after a court has denied preliminary injunctive relief to the
Commission.
(2) Stay. The filing of a motion under this paragraph (d) shall stay
the proceeding until 7 days following the disposition of the motion by
the Commission, and all deadlines established by these rules shall be
tolled for the amount of time the proceeding is so stayed.
(3) Answer. Complaint counsel may file a response within 7 days
after such motion is filed.
(4) Ruling by Commission. Within 30 days after the deadline for
filing a response, the Commission shall rule on any motion under this
paragraph (d).
(e) Form. Memoranda in support of or in opposition to motions
authorized by this section shall not exceed 10,000 words. This word
count limitation includes headings, footnotes, and quotations, but does
not include the cover, table of contents, table of citations or
authorities, glossaries, statements with respect to oral argument, any
addendums containing statutes, rules or regulations, any certificates of
counsel, proposed form of order, and any attachment required by Sec.
3.45(e).
(f) In camera materials. If any filing includes materials that are
subject to confidentiality protections pursuant to an order entered in
either the proceeding under section 13(b) or the adjudicative
proceeding, such materials shall be treated as in camera materials for
purposes of this paragraph and the party shall file 2 versions of the
document in accordance with the procedures set forth in Sec. 3.45(e).
The time within which complaint counsel may file an objection or
response under this section will begin to run upon service of the in
camera version of the motion (including any supporting briefs and
memoranda).
[80 FR 15161, Mar. 23, 2015]
Subpart D_Discovery; Compulsory Process
Sec. 3.31 General discovery provisions.
(a) Discovery methods. Parties may obtain discovery by one or more
of the following methods: Depositions upon oral examination or written
questions; written interrogatories; production of documents or things
for inspection and other purposes; and requests for admission. Except as
provided in the rules, or unless the Administrative Law Judge orders
otherwise, the frequency or sequence of these methods is not limited.
The parties shall, to the greatest extent practicable, conduct discovery
simultaneously; the fact that a party is conducting discovery shall not
operate to delay any other party's discovery. Unless all parties
expressly agree otherwise, no discovery shall take place before the
issuance of a prehearing scheduling order under Sec. 3.21(c), except
for the mandatory initial disclosures required by paragraph (b) of this
section.
(b) Mandatory initial disclosures. Complaint counsel and
respondent's counsel shall, within 5 days of receipt of a respondent's
answer to the complaint and without awaiting a discovery request,
provide to each other:
(1) The name, and, if known, the address and telephone number of
each individual likely to have discoverable information relevant to the
allegations of the Commission's complaint, to the proposed relief, or to
the defenses of the respondent, as set forth in Sec. 3.31(c)(1); and
(2) A copy of, or a description by category and location of, all
documents and electronically stored information including declarations,
transcripts of investigational hearings and depositions, and tangible
things in the possession, custody, or control of the Commission or
respondent(s) that are relevant to the allegations of the Commission's
complaint, to the proposed relief, or to the defenses of the respondent,
as set forth in Sec. 3.31(c)(1); unless such information or materials
are subject to the limitations in Sec. 3.31(c)(2), privileged as
defined in Sec. 3.31(c)(4), pertain to hearing preparation as defined
in Sec. 3.31(c)(5), pertain to experts as defined in Sec. 3.31A, or
are obtainable from some other source that is more convenient, less
burdensome, or less expensive. A party shall make its disclosures based
on the information then reasonably available to it and is not excused
from making its disclosures because it
[[Page 76]]
has not fully completed its investigation.
(c) Scope of discovery. Unless otherwise limited by order of the
Administrative Law Judge or the Commission in accordance with these
rules, the scope of discovery under all the rules in this part is as
follows:
(1) In general. Parties may obtain discovery to the extent that it
may be reasonably expected to yield information relevant to the
allegations of the complaint, to the proposed relief, or to the defenses
of any respondent. Such information may include the existence,
description, nature, custody, condition, and location of any books,
documents, other tangible things, electronically stored information, and
the identity and location of persons having any knowledge of any
discoverable matter. Information may not be withheld from discovery on
grounds that the information will be inadmissible at the hearing if the
information sought appears reasonably calculated to lead to the
discovery of admissible evidence.
(2) Limitations. Complaint counsel need only search for materials
that were collected or reviewed in the course of the investigation of
the matter or prosecution of the case and that are in the possession,
custody or control of the Bureaus or Offices of the Commission that
investigated the matter, including the Bureau of Economics. The
Administrative Law Judge may authorize for good cause additional
discovery of materials in the possession, custody, or control of those
Bureaus or Offices, or authorize other discovery pursuant to Sec. 3.36.
Neither complaint counsel, respondent, nor a third party receiving a
discovery request under these rules is required to search for materials
generated and transmitted between an entity's counsel (including
counsel's legal staff or in-house counsel) and not shared with anyone
else, or between complaint counsel and non-testifying Commission
employees, unless the Administrative Law Judge determines there is good
cause to provide such materials. The frequency or extent of use of the
discovery methods otherwise permitted under these rules shall be limited
by the Administrative Law Judge if he or she determines that:
(i) The discovery sought from a party or third party is unreasonably
cumulative or duplicative, or is obtainable from some other source that
is more convenient, less burdensome, or less expensive;
(ii) The party seeking discovery has had ample opportunity by
discovery in the action to obtain the information sought; or
(iii) The burden and expense of the proposed discovery on a party or
third party outweigh its likely benefit.
(3) Electronically stored information. A party or third party need
not provide discovery of electronically stored information from sources
that the party or third party identifies as not reasonably accessible
because of undue burden or cost. On a motion to compel discovery, the
party or third party from whom discovery is sought must show that the
information is not reasonably accessible because of undue burden or
cost. If that showing is made, the Administrative Law Judge may
nonetheless order discovery if the requesting party shows good cause,
considering the limitations of paragraph (c)(2). The Administrative Law
Judge may specify conditions for the discovery.
(4) Privilege. Discovery shall be denied or limited in order to
preserve the privilege of a witness, person, or governmental agency as
governed by the Constitution, any applicable act of Congress, or the
principles of the common law as they may be interpreted by the
Commission in the light of reason and experience.
(5) Hearing preparations: Materials. Subject to the provisions of
Sec. 3.31A, a party may obtain discovery of documents and tangible
things otherwise discoverable under paragraph (c)(1) of this section and
prepared in anticipation of litigation or for hearing by or for another
party or by or for that other party's representative (including the
party's attorney, consultant, or agent) only upon a showing that the
party seeking discovery has substantial need of the materials in the
preparation of its case and that the party is unable without undue
hardship to obtain the substantial equivalent of the materials by other
means. In ordering discovery of such materials when the required showing
has been made, the
[[Page 77]]
Administrative Law Judge shall protect against disclosure of the mental
impressions, conclusions, opinions, or legal theories of an attorney or
other representative of a party.
(d) Protective orders; orders to preserve evidence. In order to
protect the parties and third parties against improper use and
disclosure of confidential information, the Administrative Law Judge
shall issue a protective order as set forth in the appendix to this
section. The Administrative Law Judge may also deny discovery or make
any other order which justice requires to protect a party or other
person from annoyance, embarrassment, oppression, or undue burden or
expense, or to prevent undue delay in the proceeding. Such an order may
also be issued to preserve evidence upon a showing that there is
substantial reason to believe that such evidence would not otherwise be
available for presentation at the hearing.
(e) Supplementation of disclosures and responses. A party who has
made a mandatory initial disclosure under Sec. 3.31(b) or responded to
a request for discovery with a disclosure or response is under a duty to
supplement or correct the disclosure or response to include information
thereafter acquired if ordered by the Administrative Law Judge or in the
following circumstances:
(1) A party is under a duty to supplement at appropriate intervals
its mandatory initial disclosures under Sec. 3.31(b) if the party
learns that in some material respect the information disclosed is
incomplete or incorrect and if the additional or corrective information
has not otherwise been made known to the other parties during the
discovery process or in writing.
(2) A party is under a duty to amend in a timely manner a prior
response to an interrogatory, request for production, or request for
admission if the party learns that the response is in some material
respect incomplete or incorrect.
(f) Stipulations. When approved by the Administrative Law Judge, the
parties may by written stipulation (1) provide that depositions may be
taken before any person, at any time or place, upon any notice, and in
any manner and when so taken may be used like other depositions, and (2)
modify the procedures provided by these rules for other methods of
discovery.
(g) Disclosure of privileged or protected information or
communications; scope of waiver; obligations of receiving party. (1)(i)
The disclosure of privileged or protected information or communications
during a part 3 proceeding or during a Commission precomplaint
investigation shall not operate as a waiver if:
(A) The disclosure is inadvertent;
(B) The holder of the privilege or protection took reasonable steps
to prevent disclosure; and
(C) The holder promptly took reasonable steps to rectify the error,
including notifying any party that received the information or
communication of the claim and the basis for it.
(ii) After being notified, the receiving party must promptly return,
sequester, or destroy the specified information and any copies it has;
must not use or disclose the information until the claim is resolved;
must take reasonable steps to retrieve the information if the party
disclosed it before being notified; and may promptly present the
information to the Administrative Law Judge under seal for a
determination of the claim. The producing party must preserve the
information until the claim is resolved.
(2) The disclosure of privileged or protected information or
communications during a part 3 proceeding or during a Commission
precomplaint investigation shall waive the privilege or protection as to
undisclosed information or communications only if:
(i) The waiver is intentional;
(ii) The disclosed and undisclosed information or communications
concern the same subject matter; and
(iii) They ought in fairness to be considered together.
(h) Restriction on filings. Unless otherwise ordered by the
Administrative Law Judge in his or her discretion, mandatory initial and
supplemental disclosures, interrogatories, depositions, requests for
documents, requests for admissions, and answers and responses thereto
shall be served upon other parties but shall not be filed with
[[Page 78]]
the Office of the Secretary, the Administrative Law Judge, or otherwise
provided to the Commission, except to support or oppose a motion or to
offer as evidence.
Appendix A to Sec. 3.31: Standard Protective Order.
For the purpose of protecting the interests of the parties and third
parties in the above-captioned matter against improper use and
disclosure of confidential information submitted or produced in
connection with this matter:
IT IS HEREBY ORDERED THAT this Protective Order Governing
Confidential Material (``Protective Order'') shall govern the handling
of all Discovery Material, as hereafter defined.
1. As used in this Order, ``confidential material'' shall refer to
any document or portion thereof that contains privileged information,
competitively sensitive information, or sensitive personal information.
``Sensitive personal information'' shall refer to, but shall not be
limited to, an individual's Social Security number, taxpayer
identification number, financial account number, credit card or debit
card number, driver's license number, state-issued identification
number, passport number, date of birth (other than year), and any
sensitive health information identifiable by individual, such as an
individual's medical records. ``Document'' shall refer to any
discoverable writing, recording, transcript of oral testimony, or
electronically stored information in the possession of a party or a
third party. ``Commission'' shall refer to the Federal Trade Commission
(``FTC''), or any of its employees, agents, attorneys, and all other
persons acting on its behalf, excluding persons retained as consultants
or experts for purposes of this proceeding.
2. Any document or portion thereof submitted by a respondent or a
third party during a Federal Trade Commission investigation or during
the course of this proceeding that is entitled to confidentiality under
the Federal Trade Commission Act, or any other federal statute or
regulation, or under any federal court or Commission precedent
interpreting such statute or regulation, as well as any information that
discloses the substance of the contents of any confidential materials
derived from a document subject to this Order, shall be treated as
confidential material for purposes of this Order. The identity of a
third party submitting such confidential material shall also be treated
as confidential material for the purposes of this Order where the
submitter has requested such confidential treatment.
3. The parties and any third parties, in complying with informal
discovery requests, disclosure requirements, or discovery demands in
this proceeding may designate any responsive document or portion thereof
as confidential material, including documents obtained by them from
third parties pursuant to discovery or as otherwise obtained.
4. The parties, in conducting discovery from third parties, shall
provide to each third party a copy of this Order so as to inform each
such third party of his, her, or its rights herein.
5. A designation of confidentiality shall constitute a
representation in good faith and after careful determination that the
material is not reasonably believed to be already in the public domain
and that counsel believes the material so designated constitutes
confidential material as defined in Paragraph 1 of this Order.
6. Material may be designated as confidential by placing on or
affixing to the document containing such material (in such manner as
will not interfere with the legibility thereof), or if an entire folder
or box of documents is confidential by placing or affixing to that
folder or box, the designation ``CONFIDENTIAL--FTC Docket No. XXXX'' or
any other appropriate notice that identifies this proceeding, together
with an indication of the portion or portions of the document considered
to be confidential material. Confidential information contained in
electronic documents may also be designated as confidential by placing
the designation ``CONFIDENTIAL--FTC Docket No. XXXX'' or any other
appropriate notice that identifies this proceeding, on the face of the
CD or DVD or other medium on which the document is produced. Masked or
otherwise redacted copies of documents may be produced where the
portions masked or redacted contain privileged matter, provided that the
copy produced shall indicate at the appropriate point that portions have
been masked or redacted and the reasons therefor.
7. Confidential material shall be disclosed only to: (a) the
Administrative Law Judge presiding over this proceeding, personnel
assisting the Administrative Law Judge, the Commission and its
employees, and personnel retained by the Commission as experts or
consultants for this proceeding; (b) judges and other court personnel of
any court having jurisdiction over any appellate proceedings involving
this matter; (c) outside counsel of record for any respondent, their
associated attorneys and other employees of their law firm(s), provided
they are not employees of a respondent; (d) anyone retained to assist
outside counsel in the preparation or hearing of this proceeding
including consultants, provided they are not affiliated in any way with
a respondent and have signed an agreement to abide by the terms of the
protective order; and (e) any witness or deponent who may have authored
or received the information in question.
[[Page 79]]
8. Disclosure of confidential material to any person described in
Paragraph 7 of this Order shall be only for the purposes of the
preparation and hearing of this proceeding, or any appeal therefrom, and
for no other purpose whatsoever, provided, however, that the Commission
may, subject to taking appropriate steps to preserve the confidentiality
of such material, use or disclose confidential material as provided by
its Rules of Practice; sections 6(f) and 21 of the Federal Trade
Commission Act; or any other legal obligation imposed upon the
Commission.
9. In the event that any confidential material is contained in any
pleading, motion, exhibit or other paper filed or to be filed with the
Secretary of the Commission, the Secretary shall be so informed by the
Party filing such papers, and such papers shall be filed in camera. To
the extent that such material was originally submitted by a third party,
the party including the materials in its papers shall immediately notify
the submitter of such inclusion. Confidential material contained in the
papers shall continue to have in camera treatment until further order of
the Administrative Law Judge, provided, however, that such papers may be
furnished to persons or entities who may receive confidential material
pursuant to Paragraphs 7 or 8. Upon or after filing any paper containing
confidential material, the filing party shall file on the public record
a duplicate copy of the paper that does not reveal confidential
material. Further, if the protection for any such material expires, a
party may file on the public record a duplicate copy which also contains
the formerly protected material.
10. If counsel plans to introduce into evidence at the hearing any
document or transcript containing confidential material produced by
another party or by a third party, they shall provide advance notice to
the other party or third party for purposes of allowing that party to
seek an order that the document or transcript be granted in camera
treatment. If that party wishes in camera treatment for the document or
transcript, the party shall file an appropriate motion with the
Administrative Law Judge within 5 days after it receives such notice.
Except where such an order is granted, all documents and transcripts
shall be part of the public record. Where in camera treatment is
granted, a duplicate copy of such document or transcript with the
confidential material deleted therefrom may be placed on the public
record.
11. If any party receives a discovery request in any investigation
or in any other proceeding or matter that may require the disclosure of
confidential material submitted by another party or third party, the
recipient of the discovery request shall promptly notify the submitter
of receipt of such request. Unless a shorter time is mandated by an
order of a court, such notification shall be in writing and be received
by the submitter at least 10 business days before production, and shall
include a copy of this Protective Order and a cover letter that will
apprise the submitter of its rights hereunder. Nothing herein shall be
construed as requiring the recipient of the discovery request or anyone
else covered by this Order to challenge or appeal any order requiring
production of confidential material, to subject itself to any penalties
for non-compliance with any such order, or to seek any relief from the
Administrative Law Judge or the Commission. The recipient shall not
oppose the submitter's efforts to challenge the disclosure of
confidential material. In addition, nothing herein shall limit the
applicability of Rule 4.11(e) of the Commission's Rules of Practice, 16
CFR 4.11(e), to discovery requests in another proceeding that are
directed to the Commission.
12. At the time that any consultant or other person retained to
assist counsel in the preparation of this action concludes participation
in the action, such person shall return to counsel all copies of
documents or portions thereof designated confidential that are in the
possession of such person, together with all notes, memoranda or other
papers containing confidential information. At the conclusion of this
proceeding, including the exhaustion of judicial review, the parties
shall return documents obtained in this action to their submitters,
provided, however, that the Commission's obligation to return documents
shall be governed by the provisions of Rule 4.12 of the Rules of
Practice, 16 CFR 4.12.
13. The provisions of this Protective Order, insofar as they
restrict the communication and use of confidential discovery material,
shall, without written permission of the submitter or further order of
the Commission, continue to be binding after the conclusion of this
proceeding.
[74 FR 1824, Jan. 13, 2009, as amended at 74 FR 20309, May 1, 2009; 76
FR 52251, 52252, Aug. 22, 2011]
Sec. 3.31A Expert discovery.
(a) The parties shall serve each other with a list of experts they
intend to call as witnesses at the hearing not later than 1 day after
the close of fact discovery, meaning the close of discovery except for
depositions and other discovery permitted under Sec. 3.24(a)(4), and
discovery for purposes of authenticity and admissibility of exhibits.
Complaint counsel shall serve the other parties with a report prepared
by each of its expert witnesses not later than 14 days after the close
of fact discovery. Each respondent shall serve
[[Page 80]]
each other party with a report prepared by each of its expert witnesses
not later than 14 days after the deadline for service of complaint
counsel's expert reports. Complaint counsel shall serve respondents with
a list of any rebuttal expert witnesses and a rebuttal report prepared
by each such witness not later than 10 days after the deadline for
service of respondent's expert reports. Aside from any information
required by paragraph (c), a rebuttal report shall be limited to
rebuttal of matters set forth in a respondent's expert reports. If
material outside the scope of fair rebuttal is presented, a respondent
may file a motion not later than 5 days after the deadline for service
of complaint counsel's rebuttal reports, seeking appropriate relief with
the Administrative Law Judge, including striking all or part of the
report, leave to submit a surrebuttal report by respondent's experts, or
leave to call a surrebuttal witness and to submit a surrebuttal report
by that witness.
(b) No party may call an expert witness at the hearing unless he or
she has been listed and has provided reports as required by this
section. Each side will be limited to calling at the evidentiary hearing
5 expert witnesses, including any rebuttal or surrebuttal expert
witnesses. A party may file a motion seeking leave to call additional
expert witnesses due to extraordinary circumstances.
(c) Each report shall be signed by the expert and contain a complete
statement of all opinions to be expressed and the basis and reasons
therefor; the data, materials, or other information considered by the
witness in forming the opinions; any exhibits to be used as a summary of
or support for the opinions; the qualifications of the witness,
including a list of all publications authored by the witness within the
preceding 10 years; the compensation to be paid for the study and
testimony; and a listing of any other cases in which the witness has
testified as an expert at trial or by deposition within the preceding 4
years. A rebuttal or surrebuttal report need not include any information
already included in the initial report of the witness.
(d) A party may depose any person who has been identified as an
expert whose opinions may be presented at trial. Unless otherwise
ordered by the Administrative Law Judge, a deposition of any expert
witness shall be conducted after the disclosure of a report prepared by
the witness in accordance with paragraph (a) of this section.
Depositions of expert witnesses shall be completed not later than 65
days after the close of fact discovery. Upon motion, the Administrative
Law Judge may order further discovery by other means, subject to such
restrictions as to scope as the Administrative Law Judge may deem
appropriate.
(e) A party may not discover facts known or opinions held by an
expert who has been retained or specifically employed by another party
in anticipation of litigation or preparation for hearing and who is not
listed as a witness for the evidentiary hearing. A party may not
discover drafts of any report required by this section, regardless of
the form in which the draft is recorded, or any communications between
another party's attorney and any of that other party's testifying
experts, regardless of the form of the communications, except to the
extent that the communications:
(1) Relate to compensation for the expert's study or testimony;
(2) Identify facts or data that the other party's attorney provided
and that the expert considered in forming the opinions to be expressed;
or
(3) Identify assumptions that the other party's attorney provided
and that the expert relied on in forming the opinions to be expressed.
(f) The Administrative Law Judge may, upon a finding of good cause,
alter the pre-hearing schedule set forth in this section; provided,
however, that no such alteration shall affect the date of the
evidentiary hearing noticed in the complaint.
[74 FR 1826, Jan. 13, 2009, as amended at 76 FR 52252, Aug. 22, 2011]
Sec. 3.32 Admissions.
(a) At any time after 30 days after issuance of a complaint, or
after publication of notice of an adjudicative hearing in a rulemaking
proceeding under Sec. 3.13, any party may serve on any other party a
written request for admission of the truth of any matters
[[Page 81]]
relevant to the pending proceeding set forth in the request that relate
to statements or opinions of fact or of the application of law to fact,
including the genuineness of any documents described in the request.
Copies of documents shall be served with the request unless they have
been or are otherwise furnished or are known to be, and in the request
are stated as being, in the possession of the other party. Each matter
of which an admission is requested shall be separately set forth.
(b) The matter is admitted unless, within 10 days after service of
the request, or within such shorter or longer time as the Administrative
Law Judge may allow, the party to whom the request is directed serves
upon the party requesting the admission a sworn written answer or
objection addressed to the matter. If objection is made, the reasons
therefor shall be stated. The answer shall specifically deny the matter
or set forth in detail the reasons why the answering party cannot
truthfully admit or deny the matter. A denial shall fairly meet the
substance of the requested admission, and when good faith requires that
a party qualify its answer or deny only a part of the matter of which an
admission is requested, the party shall specify so much of it as is true
and qualify or deny the remainder. An answering party may not give lack
of information or knowledge as a reason for failure to admit or deny
unless the party states that it has made reasonable inquiry and that the
information known to or readily obtainable by the party is insufficient
to enable it to admit or deny. A party who considers that a matter of
which an admission has been requested presents a genuine issue for trial
may not, on that ground alone, object to the request; the party may deny
the matter or set forth reasons why the party cannot admit or deny it.
(c) Any matter admitted under this rule is conclusively established
unless the Administrative Law Judge on motion permits withdrawal or
amendment of the admission. The Administrative Law Judge may permit
withdrawal or amendment when the presentation of the merits of the
proceeding will be subserved thereby and the party who obtained the
admission fails to satisfy the Administrative Law Judge that withdrawal
or amendment will prejudice him in maintaining his action or defense on
the merits. Any admission made by a party under this rule is for the
purpose of the pending proceeding only and is not an admission by him
for any other purpose nor may it be used against him in any other
proceeding.
[43 FR 56865, Dec. 4, 1978, as amended at 50 FR 53305, Dec. 31, 1985; 80
FR 15161, Mar. 23, 2015]
Sec. 3.33 Depositions.
(a) In general. Any party may take a deposition of any named person
or of a person or persons described with reasonable particularity,
provided that such deposition is reasonably expected to yield
information within the scope of discovery under Sec. 3.31(c)(1) and
subject to the requirements in Sec. 3.36. Such party may, by motion,
obtain from the Administrative Law Judge an order to preserve relevant
evidence upon a showing that there is substantial reason to believe that
such evidence would not otherwise be available for presentation at the
hearing. Depositions may be taken before any person having power to
administer oaths, either under the law of the United States or of the
state or other place in which the deposition is taken, who may be
designated by the party seeking the deposition, provided that such
person shall have no interest in the outcome of the proceeding. The
party seeking the deposition shall serve upon each person whose
deposition is sought and upon each party to the proceeding reasonable
notice in writing of the time and place at which it will be taken, and
the name and address of each person or persons to be examined, if known,
and if the name is not known, a description sufficient to identify them.
The parties may stipulate in writing or the Administrative Law Judge may
upon motion order that a deposition be taken by telephone or other
remote electronic means. A deposition taken by such means is deemed
taken at the place where the deponent is to answer questions.
(b) The Administrative Law Judge may rule on motion by a party that
a deposition shall not be taken upon a
[[Page 82]]
determination that such deposition would not be reasonably expected to
meet the scope of discovery set forth under Sec. 3.31(c), or that the
value of the deposition would be outweighed by the considerations set
forth under Sec. 3.43(b). The fact that a witness testifies at an
investigative hearing does not preclude the deposition of that witness.
(c)(1) Notice to corporation or other organization. A party may name
as the deponent a public or private corporation, partnership,
association, governmental agency other than the Federal Trade
Commission, or any bureau or regional office of the Federal Trade
Commission, and describe with reasonable particularity the matters on
which examination is requested. The organization so named shall
designate one or more officers, directors, or managing agents, or other
persons who consent to testify on its behalf, and may set forth, for
each person designated, the matters on which he or she will testify. A
subpoena shall advise a non-party organization of its duty to make such
a designation. The persons so designated shall testify as to matters
known or reasonably available to the organization. This subsection does
not preclude taking a deposition by any other procedure authorized in
these rules.
(2) Restriction on filings. Except as provided in Sec. 3.31(h),
notices of depositions shall not be filed with the Office of the
Secretary or with the Administrative Law Judge, or otherwise provided to
the Commission.
(d) Taking of deposition. Each deponent shall be duly sworn, and any
party shall have the right to question him or her. Objections to
questions or to evidence presented shall be in short form, stating the
grounds of objections relied upon. The questions propounded and the
answers thereto, together with all objections made, shall be recorded
and certified by the officer. Thereafter, upon payment of the charges
therefor, the officer shall furnish a copy of the deposition to the
deponent and to any party.
(e) Depositions upon written questions. A party desiring to take a
deposition upon written questions shall serve them upon every other
party with a notice stating:
(1) The name and address of the person who is to answer them, and
(2) The name or descriptive title and address of the officer before
whom the deposition is to be taken.
A deposition upon written questions may be taken of a public or
private corporation, partnership, association, governmental agency other
than the Federal Trade Commission, or any bureau or regional office of
the Federal Trade Commission in accordance with the provisions of Sec.
3.33(c). Within 30 days after the notice and written questions are
served, any other party may serve cross questions upon all other
parties. Within 10 days after being served with cross questions, the
party taking the deposition may serve redirect questions upon all other
parties. Within 10 days after being served with redirect questions, any
other party may serve recross questions upon all other parties. The
content of any question shall not be disclosed to the deponent prior to
the taking of the deposition. A copy of the notice and copies of all
questions served shall be delivered by the party taking the deposition
to the officer designated in the notice, who shall proceed promptly to
take the testimony of the deponent in response to the questions and to
prepare, certify, and file or mail the deposition, attaching thereto the
copy of the notice and the questions received by him or her. When the
deposition is filed the party taking it shall promptly give notice
thereof to all other parties.
(f) Correction of deposition. A deposition may be corrected, as to
form or substance, in the manner provided by Sec. 3.44(b). Any such
deposition shall, in addition to the other required procedures, be read
to or by the deponent and signed by him or her, unless the parties by
stipulation waive the signing or the deponent is unavailable or cannot
be found or refuses to sign. If the deposition is not signed by the
deponent within 30 days of its submission or attempted submission, the
officer shall sign it and certify that the signing has been waived or
that the deponent is unavailable or that the deponent has refused to
sign, as the case may be, together with the reason for the refusal to
sign, if any has been given. The deposition may then be used
[[Page 83]]
as though signed unless, on a motion to suppress under Sec.
3.33(g)(2)(iv), the Administrative Law Judge determines that the reasons
given for the refusal to sign require rejection of the deposition in
whole or in part. In addition to and not in lieu of the procedure for
formal correction of the deposition, the deponent may enter in the
record at the time of signing a list of objections to the transcription
of his or her remarks, stating with specificity the alleged errors in
the transcript.
(g) Objections; errors and irregularities--(1) Objections to
admissibility. Subject to the provisions of paragraph (g)(2) of this
section, objection may be made at the hearing to receiving in evidence
any deposition or part thereof for any reason which would require the
exclusion of the evidence if the witness were then present and
testifying.
(2) Effect of errors and irregularities in depositions--(i) As to
notice. All errors and irregularities in the notice for taking a
deposition are waived unless written objection is promptly served upon
the party giving the notice.
(ii) As to disqualification of officer. Objection to taking a
deposition because of disqualification of the officer before whom it is
to be taken is waived unless made before the taking of the deposition
begins or as soon thereafter as the disqualification becomes known or
could be discovered with reasonable diligence.
(iii) As to taking of deposition. (A) Objections to the competency
of a witness or to the competency, relevancy, or materiality of
testimony are not waived by failure to make them before or during the
taking of the deposition, unless the ground of the objection is one
which might have been obviated or removed if presented at that time.
(B) Errors and irregularities occurring at the oral examination in
the manner of taking the deposition, in the form of the questions or
answers, in the oath or affirmation, or in the conduct of parties, and
errors of any kind which might be obviated, removed, or cured if
promptly presented, are waived unless seasonable objection thereto is
made at the taking of the deposition.
(C) Objections to the form of written questions are waived unless
served in writing upon all parties within the time allowed for serving
the succeeding cross or other questions and within 5 days after service
of the last questions authorized.
(iv) As to completion and return of deposition. Errors and
irregularities in the manner in which the testimony is transcribed or
the deposition is prepared, signed, certified, endorsed, or otherwise
dealt with by the officer are waived unless a motion to suppress the
deposition or some part thereof is made with reasonable promptness after
such defect is or with due diligence might have been ascertained.
[74 FR 1827, Jan. 13, 2009, as amended at 80 FR 15162, Mar. 23, 2015]
Sec. 3.34 Subpoenas.
(a) Subpoenas ad testificandum. Counsel for a party may sign and
issue a subpoena, on a form provided by the Secretary, requiring a
person to appear and give testimony at the taking of a deposition to a
party requesting such subpoena or to attend and give testimony at an
adjudicative hearing.
(b) Subpoenas duces tecum; subpoenas to permit inspection of
premises. Counsel for a party may sign and issue a subpoena, on a form
provided by the Secretary, commanding a person to produce and permit
inspection and copying of designated books, documents, or tangible
things, or commanding a person to permit inspection of premises, at a
time and place therein specified. The subpoena shall specify with
reasonable particularity the material to be produced. The person
commanded by the subpoena need not appear in person at the place of
production or inspection unless commanded to appear for a deposition or
hearing pursuant to paragraph (a) of this section. As used herein, the
term ``documents'' includes written materials, electronically stored
information, and tangible things. A subpoena duces tecum may be used by
any party for purposes of discovery, for obtaining documents for use in
evidence, or for both purposes, and shall specify with reasonable
particularity the materials to be produced.
(c) Motions to quash; limitation on subpoenas. Any motion by the
subject of a subpoena to limit or quash the subpoena shall be filed
within the earlier
[[Page 84]]
of 10 days after service thereof or the time for compliance therewith.
Such motions shall set forth all assertions of privilege or other
factual and legal objections to the subpoena, including all appropriate
arguments, affidavits and other supporting documentation, and shall
include the statement required by Sec. 3.22(g). Nothing in paragraphs
(a) and (b) of this section authorizes the issuance of subpoenas except
in accordance with Sec. Sec. 3.31(c)(2) and 3.36.
[74 FR 1828, Jan. 13, 2009]
Sec. 3.35 Interrogatories to parties.
(a) Availability; procedures for use. (1) Any party may serve upon
any other party written interrogatories, not exceeding 25 in number,
including all discrete subparts, to be answered by the party served or,
if the party served is a public or private corporation, partnership,
association or governmental agency, by any officer or agent, who shall
furnish such information as is available to the party. For this purpose,
information shall not be deemed to be available insofar as it is in the
possession of the Commissioners, the General Counsel, the office of
Administrative Law Judges, or the Secretary in his or her capacity as
custodian or recorder of any such information, or their respective
staffs.
(2) Each interrogatory shall be answered separately and fully in
writing under oath, unless it is objected to on grounds not raised and
ruled on in connection with the authorization, in which event the
reasons for objection shall be stated in lieu of an answer. The answers
are to be signed by the person making them, and the objections signed by
the attorney making them. The party upon whom the interrogatories have
been served shall serve a copy of the answers, and objections, if any,
within 30 days after the service of the interrogatories. The
Administrative Law Judge may allow a shorter or longer time.
(3) Except as provided in Sec. 3.31(h), interrogatories shall not
be filed with the Office of the Secretary, the Administrative Law Judge,
or otherwise provided to the Commission.
(b) Scope; use at hearing. (1) Interrogatories may relate to any
matters that can be inquired into under Sec. 3.31(c)(1), and the
answers may be used to the extent permitted by the rules of evidence.
(2) An interrogatory otherwise proper is not necessarily
objectionable merely because an answer to the interrogatory involves an
opinion or contention that relates to fact or the application of law to
fact, but such an interrogatory need not be answered until after
designated discovery has been completed, but in no case later than 3
days before the final prehearing conference.
(c) Option to produce records. Where the answer to an interrogatory
may be derived or ascertained from the records of the party upon whom
the interrogatory has been served or from an examination, audit, or
inspection of such records, or from a compilation, abstract, or summary
based thereon, and the burden of deriving or ascertaining the answer is
substantially the same for the party serving the interrogatory as for
the party served, it is a sufficient answer to such interrogatory to
specify the records from which the answer may be derived or ascertained
and to afford to the party serving the interrogatory reasonable
opportunity to examine, audit or inspect such records and to make
copies, compilations, abstracts or summaries. The specification shall
include sufficient detail to permit the interrogating party to identify
readily the individual documents from which the answer may be
ascertained.
[74 FR 1828, Jan. 13, 2009, as amended at 80 FR 15162, Mar. 23, 2015]
Sec. 3.36 Applications for subpoenas for records of or appearances
by certain officials or employees of the Commission or officials or
employees of governmental agencies other than the Commission, and
subpoenas to be served in a foreign country.
(a) Form. An application for issuance of a subpoena for the
production of documents, as defined in Sec. 3.34(b), or for the
issuance of a request requiring the production of or access to
documents, other tangible things, or electronically stored information
for the purposes described in Sec. 3.37(a), in the possession, custody,
or control of the Commissioners, the General Counsel, any Bureau or
Office not involved in the matter, the office of Administrative Law
Judges, or the Secretary in his or her
[[Page 85]]
capacity as custodian or recorder of any such information, or their
respective staffs, or of a governmental agency other than the Commission
or the officials or employees of such other agency, or for the issuance
of a subpoena requiring the appearance of a Commissioner, the General
Counsel, an official of any Bureau or Office not involved in the matter,
an Administrative Law Judge, or the Secretary in his or her capacity as
custodian or recorder of any such information, or their respective
staffs, or of an official or employee of another governmental agency, or
for the issuance of a subpoena to be served in a foreign country, shall
be made in the form of a written motion filed in accordance with the
provisions of Sec. 3.22(a). No application for records pursuant to
Sec. 4.11 of this chapter or the Freedom of Information Act may be
filed with the Administrative Law Judge.
(b) Content. The motion shall make a showing that:
(1) The material sought is reasonable in scope;
(2) If for purposes of discovery, the material falls within the
limits of discovery under Sec. 3.31(c)(1), or, if for an adjudicative
hearing, the material is reasonably relevant;
(3) If for purposes of discovery, the information or material sought
cannot reasonably be obtained by other means or, if for purposes of
compelling a witness to appear at the evidentiary hearing, the movant
has a compelling need for the testimony;
(4) With respect to subpoenas to be served in a foreign country,
that the party seeking discovery or testimony has a good faith belief
that the discovery requested would be permitted by treaty, law, custom,
or practice in the country from which the discovery or testimony is
sought and that any additional procedural requirements have been or will
be met before the subpoena is served; and
(5) If the subpoena requires access to documents or other tangible
things, it meets the requirements of Sec. 3.37.
(c) Execution. If an Administrative Law Judge issues an order
authorizing a subpoena pursuant to this section, the moving party may
forward to the Secretary a request for the authorized subpoena, with a
copy of the authorizing order attached. Each such subpoena shall be
signed by the Secretary; shall have attached to it a copy of the
authorizing order; and shall be served by the moving party only in
conjunction with a copy of the authorizing order.
[74 FR 1828, Jan. 13, 2009]
Sec. 3.37 Production of documents, electronically stored information,
and any tangible things; access for inspection and other purposes.
(a) Availability; procedures for use. Any party may serve on another
party a request: to produce and permit the party making the request, or
someone acting on the party's behalf, to inspect and copy any designated
documents or electronically stored information, as defined in Sec.
3.34(b), or to inspect and copy, test, or sample any tangible things
which are within the scope of Sec. 3.31(c)(1) and in the possession,
custody, or control of the party upon whom the request is served; or to
permit entry upon designated land or other property in the possession or
control of the party upon whom the order would be served for the purpose
of inspection and measuring, surveying, photographing, testing, or
sampling the property or any designated object or operation thereon,
within the scope of Sec. 3.31(c)(1). Each such request shall specify
with reasonable particularity the documents or things to be produced or
inspected, or the property to be entered. Each such request shall also
specify a reasonable time, place, and manner of making the production or
inspection and performing the related acts. Each request may specify the
form in which electronically stored information is to be produced, but
the requested form of electronically stored information must not be
overly burdensome or unnecessarily costly to the producing party. A
party shall make documents available as they are kept in the usual
course of business or shall organize and label them to correspond with
the categories in the request. A person not a party to the action may be
compelled to produce documents and things or to submit to an inspection
as provided in Sec. 3.34. Except as provided in Sec. 3.31(h), requests
under this
[[Page 86]]
section shall not be filed with the Office of the Secretary, the
Administrative Law Judge, or otherwise provided to the Commission.
(b) Response; objections. No more than 30 days after receiving the
request, the response of the party upon whom the request is served shall
state, with respect to each item or category, that inspection and
related activities will be permitted as requested, unless the request is
objected to, in which event the reasons for the objection shall be
stated. If objection is made to part of an item or category, the part
shall be specified and inspection permitted of the remaining parts. The
response may state an objection to a requested form for producing
electronically stored information. If the responding party objects to a
requested form - or if no form was specified in the request - the party
must state the form it intends to use. The party submitting the request
may move for an order under Sec. 3.38(a) with respect to any objection
to or other failure to respond to the request or any part thereof, or
any failure to permit inspection as requested.
(c) Production of documents or electronically stored information.
Unless otherwise stipulated or ordered by the Administrative Law Judge,
these procedures apply to producing documents or electronically stored
information:
(i) A party must produce documents as they are kept in the usual
course of business or must organize and label them to correspond to the
categories in the request;
(ii) If a request does not specify a form for producing
electronically stored information, a party must produce it in a form in
which it is ordinarily maintained or in a reasonably usable form; and
(iii) A party need not produce the same electronically stored
information in more than one form.
[74 FR 1829, Jan. 13, 2009]
Sec. 3.38 Motion for order compelling disclosure or discovery;sanctions.
(a) Motion for order to compel. A party may apply by motion to the
Administrative Law Judge for an order compelling disclosure or
discovery, including a determination of the sufficiency of the answers
or objections with respect to the mandatory initial disclosures required
by Sec. 3.31(b), a request for admission under Sec. 3.32, a deposition
under Sec. 3.33, an interrogatory under Sec. 3.35, or a production of
documents or things or access for inspection or other purposes under
Sec. 3.37. Any memorandum in support of such motion shall be no longer
than 2,500 words. Any response to the motion by the opposing party must
be filed within 5 days of receipt of service of the motion and shall be
no longer than 2,500 words. These word count limitations include
headings, footnotes, and quotations, but do not include the cover, table
of contents, table of citations or authorities, glossaries, statements
with respect to oral argument, any addendums containing statutes, rules
or regulations, any certificates of counsel, proposed form of order, and
any attachment required by Sec. 3.45(e). The Administrative Law Judge
shall rule on a motion to compel within 3 business days of the date in
which the response is due. Unless the Administrative Law Judge
determines that the objection is justified, the Administrative Law Judge
shall order that an initial disclosure or an answer to any requests for
admissions, documents, depositions, or interrogatories be served or
disclosure otherwise be made.
(b) If a party or an officer or agent of a party fails to comply
with any discovery obligation imposed by these rules, upon motion by the
aggrieved party, the Administrative Law Judge or the Commission, or
both, may take such action in regard thereto as is just, including but
not limited to the following:
(1) Order that any answer be amended to comply with the request,
subpoena, or order;
(2) Order that the matter be admitted or that the admission,
testimony, documents, or other evidence would have been adverse to the
party;
(3) Rule that for the purposes of the proceeding the matter or
matters concerning which the order or subpoena was issued be taken as
established adversely to the party;
(4) Rule that the party may not introduce into evidence or otherwise
rely, in support of any claim or defense, upon testimony by such party,
officer, agent, expert, or fact witness,
[[Page 87]]
or the documents or other evidence, or upon any other improperly
withheld or undisclosed materials, information, witnesses, or other
discovery;
(5) Rule that the party may not be heard to object to introduction
and use of secondary evidence to show what the withheld admission,
testimony, documents, or other evidence would have shown;
(6) Rule that a pleading, or part of a pleading, or a motion or
other submission by the party, concerning which the order or subpoena
was issued, be stricken, or that a decision of the proceeding be
rendered against the party, or both.
(c) Any such action may be taken by written or oral order issued in
the course of the proceeding or by inclusion in an initial decision of
the Administrative Law Judge or an order or opinion of the Commission.
It shall be the duty of parties to seek and Administrative Law Judges to
grant such of the foregoing means of relief or other appropriate relief
as may be sufficient to compensate for withheld testimony, documents, or
other evidence. If in the Administrative Law Judge's opinion such relief
would not be sufficient, or in instances where a nonparty fails to
comply with a subpoena or order, he or she shall certify to the
Commission a request that court enforcement of the subpoena or order be
sought.
[74 FR 1829, Jan. 13, 2009]
Sec. 3.38A Withholding requested material.
(a) Any person withholding material responsive to a subpoena issued
pursuant to Sec. 3.34 or Sec. 3.36, written interrogatories requested
pursuant to Sec. 3.35, a request for production or access pursuant to
Sec. 3.37, or any other request for the production of materials under
this part, shall assert a claim of privilege or any similar claim not
later than the date set for production of the material. Such person
shall, if so directed in the subpoena or other request for production,
submit, together with such claim, a schedule which describes the nature
of the documents, communications, or tangible things not produced or
disclosed - and does so in a manner that, without revealing information
itself privileged or protected, will enable other parties to assess the
claim. The schedule need not describe any material outside the scope of
the duty to search set forth in Sec. 3.31(c)(2) except to the extent
that the Administrative Law Judge has authorized additional discovery as
provided in that paragraph.
(b) A person withholding material for reasons described in Sec.
3.38A(a) shall comply with the requirements of that subsection in lieu
of filing a motion to limit or quash compulsory process.
(Sec. 5 of theFTC Act (15 U.S.C. 45))
[74 FR 1830, Jan. 13, 2009]
Sec. 3.39 Orders requiring witnesses to testify or provide other
information and granting immunity.
(a) Where Commission complaint counsel desire the issuance of an
order requiring a witness or deponent to testify or provide other
information and granting immunity under 18 U.S.C. 6002, Directors and
Assistant Directors of Bureaus and Regional Directors and Assistant
Regional Directors of Commission Regional Offices who supervise
complaint counsel responsible for presenting evidence in support of the
complaint are authorized to determine:
(1) That the testimony or other information sought from a witness or
deponent, or prospective witness or deponent, may be necessary to the
public interest, and
(2) That such individual has refused or is likely to refuse to
testify or provide such information on the basis of his or her privilege
against self-incrimination; and to request, through the Commission's
liaison officer, approval by the Attorney General for the issuance of
such order. Upon receipt of approval by the Attorney General (or his or
her designee), the Administrative Law Judge is authorized to issue an
order requiring the witness or deponent to testify or provide other
information and granting immunity when the witness or deponent has
invoked his or her privilege against self-incrimination and it cannot be
determined that such privilege was improperly invoked.
(b) Requests by counsel other than Commission complaint counsel for
an order requiring a witness to testify or provide other information and
granting
[[Page 88]]
immunity under 18 U.S.C. 6002 may be made to the Administrative Law
Judge and may be made ex parte. When such requests are made, the
Administrative Law Judge is authorized to determine:
(1) That the testimony or other information sought from a witness or
deponent, or prospective witness or deponent, may be necessary to the
public interest, and
(2) That such individual has refused or is likely to refuse to
testify or provide such information on the basis of his or her privilege
against self-incrimination; and, upon making such determinations, to
request, through the Commission's liaison officer, approval by the
Attorney General for the issuance of an order requiring a witness to
testify or provide other information and granting immunity; and, after
the Attorney General (or his or her designee) has granted such approval,
to issue such order when the witness or deponent has invoked his or her
privilege against self-incrimination and it cannot be determined that
such privilege was improperly invoked.
(18 U.S.C. 6002, 6004)
[74 FR 1830, Jan. 13, 2009]
Sec. 3.40 Admissibility of evidence in advertising substantiation cases.
(a) If a person, partnership, or corporation is required through
compulsory process under section 6, 9 or 20 of the Act issued after
October 26, 1977 to submit to the Commission substantiation in support
of an express or an implied representation contained in an
advertisement, such person, partnership or corporation shall not
thereafter be allowed, in any adjudicative proceeding in which it is
alleged that the person, partnership, or corporation lacked a reasonable
basis for the representation, and for any purpose relating to the
defense of such allegation, to introduce into the record, whether
directly or indirectly through references contained in documents or oral
testimony, any material of any type whatsoever that was required to be
but was not timely submitted in response to said compulsory process.
Provided, however, that a person, partnership, or corporation is not,
within the meaning of this section, required through compulsory process
to submit substantiation with respect to those portions of said
compulsory process to which such person, partnership, or corporation has
raised good faith legal objections in a timely motion pursuant to the
Commission's Rules of Practice and Procedure, until the Commission
denies such motion; or if the person, partnership, or corporation
thereafter continues to refuse to comply, until such process has been
judicially enforced.
(b) The Administrative Law Judge shall, upon motion, at any stage
exclude all material that was required to be but was not timely
submitted in response to compulsory process described in paragraph (a)
of this section, or any reference to such material, unless the person,
partnership, or corporation demonstrates in a hearing, and the
Administrative Law Judge finds, that by the exercise of due diligence
the material could not have been timely submitted in response to the
compulsory process, and that the Commission was notified of the
existence of the material immediately upon its discovery. Said findings
of the Administrative Law Judge shall be in writing and shall specify
with particularity the evidence relied upon. The rules normally
governing the admissibility of evidence in Commission proceedings shall
in any event apply to any material coming within the above exception.
[42 FR 56500, Oct. 10, 1977; 42 FR 61450, Dec. 5, 1977, as amended at 45
FR 45578, July 7, 1980]
Subpart E_Hearings
Sec. 3.41 General hearing rules.
(a) Public hearings. All hearings in adjudicative proceedings shall
be public unless an in camera order is entered by the Administrative Law
Judge pursuant to Sec. 3.45(b) of this chapter or unless otherwise
ordered by the Commission.
(b) Expedition. Hearings shall proceed with all reasonable
expedition, and, insofar as practicable, shall be held at one place and
shall continue, except for brief intervals of the sort normally involved
in judicial proceedings, without suspension until concluded. The hearing
will take place on the date specified in the notice accompanying the
complaint, pursuant to Sec. 3.11(b)(4), and should be limited to no
more than 210
[[Page 89]]
hours. The Commission, upon a showing of good cause, may order a later
date for the evidentiary hearing to commence or extend the number of
hours for the hearing. Consistent with the requirements of expedition:
(1) The Administrative Law Judge may order hearings at more than one
place and may grant a reasonable recess at the end of a case-in-chief
for the purpose of discovery deferred during the prehearing procedure if
the Administrative Law Judge determines that such recess will materially
expedite the ultimate disposition of the proceeding.
(2) When actions involving a common question of law or fact are
pending before the Administrative Law Judge, the Commission or the
Administrative Law Judge may order a joint hearing of any or all the
matters in issue in the actions; the Commission or the Administrative
Law Judge may order all the actions consolidated; and the Commission or
the Administrative Law Judge may make such orders concerning proceedings
therein as may tend to avoid unnecessary costs or delay.
(3) When separate hearings will be conducive to expedition and
economy, the Commission or the Administrative Law Judge may order a
separate hearing of any claim, or of any separate issue, or of any
number of claims or issues.
(4) Each side shall be allotted no more than half of the trial time
within which to present its opening statements, in limine motions, all
arguments excluding the closing argument, direct or cross examinations,
or other evidence.
(5) Each side shall be permitted to make an opening statement that
is no more than 2 hours in duration.
(6) Each side shall be permitted to make a closing argument no later
than 5 days after the last filed proposed findings. The closing argument
shall last no longer than 2 hours.
(c) Rights of parties. Every party, except intervenors, whose rights
are determined under Sec. 3.14, shall have the right of due notice,
cross-examination, presentation of evidence, objection, motion,
argument, and all other rights essential to a fair hearing.
(d) Adverse witnesses. An adverse party, or an officer, agent, or
employee thereof, and any witness who appears to be hostile, unwilling,
or evasive, may be interrogated by leading questions and may also be
contradicted and impeached by the party calling him or her.
(e) Requests for an order requiring a witness to testify or provide
other information and granting immunity under 18 U.S.C. 6002 shall be
disposed of in accordance with Sec. 3.39.
(f) Collateral federal court actions. (1) The pendency of a
collateral federal court action that relates to the administrative
adjudication shall not stay the proceeding:
(i) Unless a court of competent jurisdiction, or the Commission for
good cause, so directs; or
(ii) Except as provided in Sec. 3.26.
(2) A stay shall toll any deadlines set by the rules.
[74 FR 1830, Jan. 13, 2009, as amended at 80 FR 15162, Mar. 23, 2015]
Sec. 3.42 Presiding officials.
(a) Who presides. Hearings in adjudicative proceedings shall be
presided over by a duly qualified Administrative Law Judge or by the
Commission or one or more members of the Commission sitting as
Administrative Law Judges; and the term Administrative Law Judge as used
in this part means and applies to the Commission or any of its members
when so sitting.
(b) How assigned. The presiding Administrative Law Judge shall be
designated by the Chief Administrative Law Judge or, when the Commission
or one or more of its members preside, by the Commission, who shall
notify the parties of the Administrative Law Judge designated.
(c) Powers and duties. Administrative Law Judges shall have the duty
to conduct fair and impartial hearings, to take all necessary action to
avoid delay in the disposition of proceedings, and to maintain order.
They shall have all powers necessary to that end, including the
following:
(1) To administer oaths and affirmations;
(2) To issue subpoenas and orders requiring answers to questions;
[[Page 90]]
(3) To take depositions or to cause depositions to be taken;
(4) To compel admissions, upon request of a party or on their own
initiative;
(5) To rule upon offers of proof and receive evidence;
(6) To regulate the course of the hearings and the conduct of the
parties and their counsel therein;
(7) To hold conferences for settlement, simplification of the
issues, or any other proper purpose;
(8) To consider and rule upon, as justice may require, all
procedural and other motions appropriate in an adjudicative proceeding,
including motions to open defaults;
(9) To make and file initial decisions;
(10) To certify questions to the Commission for its determination;
(11) To reject written submissions that fail to comply with rule
requirements, or deny in camera status without prejudice until a party
complies with all relevant rules; and
(12) To take any action authorized by the rules in this part or in
conformance with the provisions of the Administrative Procedure Act as
restated and incorporated in title 5, U.S.C.
(d) Suspension of attorneys by Administrative Law Judge. The
Administrative Law Judge shall have the authority, for good cause stated
on the record, to suspend or bar from participation in a particular
proceeding any attorney who shall refuse to comply with his directions,
or who shall be guilty of disorderly, dilatory, obstructionist, or
contumacious conduct, or contemptuous language in the course of such
proceeding. Any attorney so suspended or barred may appeal to the
Commission in accordance with the provisions of Sec. 3.23(a). The
appeal shall not operate to suspend the hearing unless otherwise ordered
by the Administrative Law Judge or the Commission; in the event the
hearing is not suspended, the attorney may continue to participate
therein pending disposition of the appeal.
(e) Substitution of Administrative Law Judge. In the event of the
substitution of a new Administrative Law Judge for the one originally
designated, any motion predicated upon such substitution shall be made
within five (5) days thereafter.
(f) Interference. In the performance of their adjudicative
functions, Administrative Law Judges shall not be responsible to or
subject to the supervision or direction of any officer, employee, or
agent engaged in the performance of investigative or prosecuting
functions for the Commission, and all direction by the Commission to
Administrative Law Judges concerning any adjudicative proceedings shall
appear in and be made a part of the record.
(g) Disqualification of Administrative Law Judges. (1) When an
Administrative Law Judge deems himself disqualified to preside in a
particular proceeding, he shall withdraw therefrom by notice on the
record and shall notify the Director of Administrative Law Judges of
such withdrawal.
(2) Whenever any party shall deem the Administrative Law Judge for
any reason to be disqualified to preside, or to continue to preside, in
a particular proceeding, such party may file with the Secretary a motion
addressed to the Administrative Law Judge to disqualify and remove him,
such motion to be supported by affidavits setting forth the alleged
grounds for disqualification. If the Administrative Law Judge does not
disqualify himself within ten (10) days, he shall certify the motion to
the Commission, together with any statement he may wish to have
considered by the Commission. The Commission shall promptly determine
the validity of the grounds alleged, either directly or on the report of
another Administrative Law Judge appointed to conduct a hearing for that
purpose.
(3) Such motion shall be filed at the earliest practicable time
after the participant learns, or could reasonably have learned, of the
alleged grounds for disqualification.
(h) Failure to comply with Administrative Law Judge's directions.
Any party who refuses or fails to comply with a lawfully issued order or
direction of an Administrative Law Judge may be considered to be in
contempt of the Commission. The circumstances of any
[[Page 91]]
such neglect, refusal, or failure, together with a recommendation for
appropriate action, shall be promptly certified by the Administrative
Law Judge to the Commission. The Commission may make such orders in
regard thereto as the circumstances may warrant.
[32 FR 8449, June 13, 1967, as amended at 37 FR 5609, Mar. 17, 1972; 41
FR 8340, Feb. 26, 1976; 43 FR 56868, Dec. 4, 1978; 46 FR 45750, Sept.
15, 1981; 50 FR 53306, Dec. 31, 1985; 66 FR 17629, Apr. 3, 2001; 80 FR
15162, Mar. 23, 2015]
Sec. 3.43 Evidence.
(a) Burden of proof. Counsel representing the Commission, or any
person who has filed objections sufficient to warrant the holding of an
adjudicative hearing pursuant to Sec. 3.13, shall have the burden of
proof, but the proponent of any factual proposition shall be required to
sustain the burden of proof with respect thereto.
(b) Admissibility. Relevant, material, and reliable evidence shall
be admitted. Irrelevant, immaterial, and unreliable evidence shall be
excluded. Evidence, even if relevant, may be excluded if its probative
value is substantially outweighed by the danger of unfair prejudice,
confusion of the issues, or if the evidence would be misleading, or
based on considerations of undue delay, waste of time, or needless
presentation of cumulative evidence. Evidence that constitutes hearsay
may be admitted if it is relevant, material, and bears satisfactory
indicia of reliability so that its use is fair. Hearsay is a statement,
other than one made by the declarant while testifying at the hearing,
offered in evidence to prove the truth of the matter asserted. If
otherwise meeting the standards for admissibility described in this
paragraph, depositions, investigational hearings, prior testimony in
Commission or other proceedings, expert reports, and any other form of
hearsay, shall be admissible and shall not be excluded solely on the
ground that they are or contain hearsay. However, absent the consent of
the parties, before admitting prior testimony (including expert reports)
from other proceedings where either the Commission or respondent did not
participate, except for other proceedings where the Commission and at
least one respondent did participate, the Administrative Law Judge must
make a finding upon the motion of a party seeking the admission of such
evidence that the prior testimony would not be duplicative, would not
present unnecessary hardship to a party or delay to the proceedings, and
would aid in the determination of the matter. Statements or testimony by
a party-opponent, if relevant, shall be admitted.
(c) Admissibility of third party documents. Extrinsic evidence of
authenticity as a condition precedent to admissibility of documents
received from third parties is not required with respect to the original
or a duplicate of a domestic record of regularly conducted activity by
that third party that otherwise meets the standards of admissibility
described in paragraph (b) if accompanied by a written declaration of
its custodian or other qualified person, in a manner complying with any
Act of Congress or rule prescribed by the Supreme Court pursuant to
statutory authority, certifying that the record:
(1) Was made at or near the time of the occurrence of the matters
set forth by, or from information transmitted by, a person with
knowledge of those matters;
(2) Was kept in the course of the regularly conducted activity; and
(3) Was made by the regularly conducted activity as a regular
practice.
(d) Presentation of evidence. (1) A party is entitled to present its
case or defense by sworn oral testimony and documentary evidence, to
submit rebuttal evidence, and to conduct such cross-examination as, in
the discretion of the Commission or the Administrative Law Judge, may be
required for a full and true disclosure of the facts.
(2) The Administrative Law Judge shall exercise reasonable control
over the mode and order of interrogating witnesses and presenting
evidence so as to--
(i) Make the interrogation and presentation effective for the
ascertainment of the truth;
(ii) Avoid needless consumption of time; and
(iii) Protect witnesses from harassment or undue embarrassment.
[[Page 92]]
(3) As respondents are in the best position to determine the nature
of documents generated by such respondents and which come from their own
files, the burden of proof is on the respondent to introduce evidence to
rebut a presumption that such documents are authentic and kept in the
regular course of business.
(e) Information obtained in investigations. Any documents, papers,
books, physical exhibits, or other materials or information obtained by
the Commission under any of its powers may be disclosed by counsel
representing the Commission when necessary in connection with
adjudicative proceedings and may be offered in evidence by counsel
representing the Commission in any such proceeding
(f) Official notice. ``Official notice'' may be taken of any
material fact that is not subject to reasonable dispute in that it is
either generally known within the Commission's expertise or capable of
accurate and ready determination by resort to sources whose accuracy
cannot reasonably be questioned. If official notice is requested or is
taken of a material fact not appearing in the evidence in the record,
the parties, upon timely request, shall be afforded an opportunity to
disprove such noticed fact.
(g) Objections. Objections to evidence shall timely and briefly
state the grounds relied upon, but the transcript shall not include
argument or debate thereon except as ordered by the Administrative Law
Judge. Rulings on all objections shall appear in the record.
(h) Exceptions. Formal exception to an adverse ruling is not
required.
(i) Excluded evidence. When an objection to a question propounded to
a witness is sustained, the questioner may make a specific offer of what
he or she expects to prove by the answer of the witness, or the
Administrative Law Judge may, in his or her discretion, receive and
report the evidence in full. Rejected exhibits, adequately marked for
identification, shall be retained in the record so as to be available
for consideration by any reviewing authority.
[74 FR 1831, Jan. 13, 2009, as amended at 76 FR 52252, Aug. 22, 2011]
Sec. 3.44 Record.
(a) Reporting and transcription. Hearings shall be stenographically
reported and transcribed by the official reporter of the Commission
under the supervision of the Administrative Law Judge, and the original
transcript shall be a part of the record and the sole official
transcript. Upon a motion by any party, for good cause shown the
Administrative Law Judge may order that the live oral testimony of all
witnesses be video recorded digitally, at the expense of the moving
party, and in such cases the video recording and the written transcript
of the testimony shall be made part of the record. If a video recording
is so ordered, the moving party shall not pay or retain any person or
entity to perform such recording other than the reporter designated by
the Commission to transcribe the proceeding, except by order of the
Administrative Law Judge upon a finding of good cause. In any order
allowing for video recording by a person or entity other than the
Commission's designated reporter, the Administrative Law Judge shall
prescribe standards and procedures for the video recording to ensure
that it is a complete and accurate record of the witnesses' testimony.
Copies of the written transcript and video recording are available from
the reporter at rates not to exceed the maximum rates fixed by contract
between the Commission and the reporter. Copies of a video recording
made by a person or entity other than the reporter shall be available at
the same rates, or no more than the actual cost of duplication,
whichever is higher.
(b) Corrections. Corrections of the official transcript may be made
only when they involve errors affecting substance and then only in the
manner herein provided. Corrections ordered by the Administrative Law
Judge or agreed to in a written stipulation signed by all counsel and
parties not represented by counsel, and approved by the Administrative
Law Judge, shall be included in the record, and such stipulations,
except to the extent they are capricious or without substance, shall be
approved by the Administrative Law Judge. Corrections
[[Page 93]]
shall not be ordered by the Administrative Law Judge except upon notice
and opportunity for the hearing of objections. Such corrections shall be
made by the official reporter by furnishing substitute type pages, under
the usual certificate of the reporter, for insertion in the official
record. The original uncorrected pages shall be retained in the files of
the Commission.
(c) Closing of the hearing record. Upon completion of the
evidentiary hearing, the Administrative Law Judge shall issue an order
closing the hearing record after giving the parties 3 business days to
determine if the record is complete or needs to be supplemented. The
Administrative Law Judge shall retain the discretion to permit or order
correction of the record as provided in Sec. 3.44(b).
[74 FR 1832, Jan. 13, 2009, as amended at 76 FR 52252, Aug. 22, 2011]
Sec. 3.45 In camera orders.
(a) Definition. Except as hereinafter provided, material made
subject to an in camera order will be kept confidential and not placed
on the public record of the proceeding in which it was submitted. Only
respondents, their counsel, authorized Commission personnel, and court
personnel concerned with judicial review may have access thereto,
provided that the Administrative Law Judge, the Commission and reviewing
courts may disclose such in camera material to the extent necessary for
the proper disposition of the proceeding.
(b) In camera treatment of material. A party or third party may
obtain in camera treatment for material, or portions thereof, offered
into evidence only by motion to the Administrative Law Judge. Parties
who seek to use material obtained from a third party subject to
confidentiality restrictions must demonstrate that the third party has
been given at least 10 days notice of the proposed use of such material.
Each such motion must include an attachment containing a copy of each
page of the document in question on which in camera or otherwise
confidential excerpts appear. The Administrative Law Judge shall order
that such material, whether admitted or rejected, be placed in camera
only after finding that its public disclosure will likely result in a
clearly defined, serious injury to the person, partnership, or
corporation requesting in camera treatment or after finding that the
material constitutes sensitive personal information. ``Sensitive
personal information'' shall include, but shall not be limited to, an
individual's Social Security number, taxpayer identification number,
financial account number, credit card or debit card number, driver's
license number, state-issued identification number, passport number,
date of birth (other than year), and any sensitive health information
identifiable by individual, such as an individual's medical records. For
material other than sensitive personal information, a finding that
public disclosure will likely result in a clearly defined, serious
injury shall be based on the standard articulated in H.P. Hood & Sons,
Inc., 58 F.T.C. 1184, 1188 (1961); see also Bristol-Myers Co., 90 F.T.C.
455, 456 (1977), which established a three-part test that was modified
by General Foods Corp., 95 F.T.C. 352, 355 (1980). The party submitting
material for which in camera treatment is sought must provide, for each
piece of such evidence and affixed to such evidence, the name and
address of any person who should be notified in the event that the
Commission intends to disclose in camera information in a final
decision. No material, or portion thereof, offered into evidence,
whether admitted or rejected, may be withheld from the public record
unless it falls within the scope of an order issued in accordance with
this section, stating the date on which in camera treatment will expire,
and including:
(1) A description of the material;
(2) A statement of the reasons for granting in camera treatment; and
(3) A statement of the reasons for the date on which in camera
treatment will expire, except in the case of sensitive personal
information, which shall be accorded permanent in camera treatment
unless disclosure or an expiration date is required or provided by law.
For in camera material other than sensitive personal information, an
expiration date may not be omitted except in unusual circumstances, in
which event the order shall state with specificity
[[Page 94]]
the reasons why the need for confidentiality of the material, or portion
thereof at issue is not likely to decrease over time, and any other
reasons why such material is entitled to in camera treatment for an
indeterminate period. If an in camera order is silent as to duration,
without explanation, then it will expire 3 years after its date of
issuance. Material subject to an in camera order shall be segregated
from the public record and filed in a sealed envelope, or other
appropriate container, bearing the title, the docket number of the
proceeding, the notation ``In Camera Record under Sec. 3.45,'' and the
date on which in camera treatment expires. If the Administrative Law
Judge has determined that in camera treatment should be granted for an
indeterminate period, the notation should state that fact. Parties are
not required to provide documents subject to in camera treatment,
including documents obtained from third parties, to any individual or
entity other than the Administrative Law Judge, counsel for other
parties, and, during an appeal, the Commission or a federal court.
(c) Release of in camera material. In camera material constitutes
part of the confidential records of the Commission and is subject to the
provisions of Sec. 4.11 of this chapter.
(d) Briefs and other submissions referring to in camera or
confidential information. Parties shall not disclose information that
has been granted in camera status pursuant to Sec. 3.45(b) or is
subject to confidentiality protections pursuant to a protective order in
the public version of proposed findings, briefs, or other documents.
This provision does not preclude references in such proposed findings,
briefs, or other documents to in camera or other confidential
information or general statements based on the content of such
information.
(e) When in camera or confidential information is included in briefs
and other submissions. If a party includes specific information that has
been granted in camera status pursuant to paragraph (b) of this section
or is subject to confidentiality protections pursuant to a protective
order in any document filed in a proceeding under this part, the party
shall file 2 versions of the document. A complete version shall be
marked ``In Camera'' or ``Subject to Protective Order,'' as appropriate,
on every page and shall be filed with the Secretary and served by the
party on the other parties in accordance with the Commission's rules.
Submitters of in camera or other confidential material should mark any
such material in the complete versions of their submissions in a
conspicuous matter, such as with highlighting or bracketing. References
to in camera or confidential material must be supported by record
citations to relevant evidentiary materials and associated
Administrative Law Judge in camera or other confidentiality rulings to
confirm that in camera or other confidential treatment is warranted for
such material. In addition, the document must include an attachment
containing a copy of each page of the document in question on which in
camera or otherwise confidential excerpts appear, and providing the name
and address of any person who should be notified of the Commission's
intent to disclose in a final decision any of the in camera or otherwise
confidential information in the document. Any time period within which
these rules allow a party to respond to a document shall run from the
date the party is served with the complete version of the document. An
expurgated version of the document, marked ``Public Record'' on every
page and omitting the in camera and confidential information and
attachment that appear in the complete version, shall be filed with the
Secretary within 5 days after the filing of the complete version, unless
the Administrative Law Judge or the Commission directs otherwise, and
shall be served by the party on the other parties in accordance with the
rules in this part. The expurgated version shall indicate any omissions
with brackets or ellipses, and its pagination and depiction of text on
each page shall be identical to that of the in camera version.
(f) When in camera or confidential information is included in
rulings or recommendations of the Administrative Law Judge. If the
Administrative Law Judge includes in any ruling or recommendation
information that has been granted in camera status pursuant to paragraph
[[Page 95]]
(b) of this section or is subject to confidentiality protections
pursuant to a protective order, the Administrative Law Judge shall file
2 versions of the ruling or recommendation. A complete version shall be
marked ``In Camera'' or ``Subject to Protective Order,'' as appropriate,
on every page and shall be served upon the parties. The complete version
will be placed in the in camera record of the proceeding. An expurgated
version, to be filed within 5 days after the filing of the complete
version, shall omit the in camera and confidential information that
appears in the complete version, shall be marked ``Public Record'' on
every page, shall be served upon the parties, and shall be included in
the public record of the proceeding.
(g) Provisional in camera rulings. The Administrative Law Judge may
make a provisional grant of in camera status to materials if the showing
required in Sec. 3.45(b) cannot be made at the time the material is
offered into evidence but the Administrative Law Judge determines that
the interests of justice would be served by such a ruling. Within 20
days of such a provisional grant of in camera status, the party offering
the evidence or an interested third party must present a motion to the
Administrative Law Judge for a final ruling on whether in camera
treatment of the material is appropriate pursuant to Sec. 3.45(b). If
no such motion is filed, the Administrative Law Judge may either exclude
the evidence, deny in camera status, or take such other action as is
appropriate.
[74 FR 1832, Jan. 13, 2009, as amended at 76 FR 52253, Aug. 22, 2011; 80
FR 15162, Mar. 3, 2015]
Sec. 3.46 Proposed findings, conclusions, and order.
(a) General. Within 21 days of the closing of the hearing record,
each party may file with the Secretary for consideration of the
Administrative Law Judge proposed findings of fact, conclusions of law,
and rule or order, together with reasons therefor and briefs in support
thereof. Such proposals shall be in writing, shall be served upon all
parties, and shall contain adequate references to the record and
authorities relied on. If a party includes in the proposals information
that has been granted in camera status pursuant to Sec. 3.45(b), the
party shall file 2 versions of the proposals in accordance with the
procedures set forth in Sec. 3.45(e). Reply findings of fact,
conclusions of law, and briefs may be filed by each party within 10 days
of service of the initial proposed findings.
(b) Exhibit index. The first statement of proposed findings of fact
and conclusions of law filed by a party shall include an index listing
for each exhibit offered by the party and received in evidence:
(1) The exhibit number, followed by
(2) The exhibit's title or a brief description if the exhibit is
untitled;
(3) The transcript page at which the Administrative Law Judge ruled
on the exhibit's admissibility or a citation to any written order in
which such ruling was made;
(4) The transcript pages at which the exhibit is discussed;
(5) An identification of any other exhibit which summarizes the
contents of the listed exhibit, or of any other exhibit of which the
listed exhibit is a summary;
(6) A cross-reference, by exhibit number, to any other portions of
that document admitted as a separate exhibit on motion by any other
party; and
(7) A statement whether the exhibit has been accorded in camera
treatment, and a citation to the in camera ruling.
(c) Witness index. The first statement of proposed findings of fact
and conclusions of law filed by a party shall also include an index to
the witnesses called by that party, to include for each witness:
(1) The name of the witness;
(2) A brief identification of the witness;
(3) The transcript pages at which any testimony of the witness
appears; and
(4) A statement whether the witness testimony has been accorded in
camera treatment, and a citation to the in camera ruling.
(d) Stipulated indices. As an alternative to the filing of separate
indices, the parties are encouraged to stipulate to joint exhibit and
witness indices at the time the first statement of proposed findings of
fact and conclusions of law is due to be filed.
[[Page 96]]
(e) Rulings. The record shall show the Administrative Law Judge's
ruling on each proposed finding and conclusion, except when the order
disposing of the proceeding otherwise informs the parties of the action
taken.
[74 FR 1833, Jan. 13, 2009, as amended at 80 FR 15162, Mar. 23, 2015]
Subpart F_Decision
Sec. 3.51 Initial decision.
(a) When filed and when effective. The Administrative Law Judge
shall file an initial decision within 70 days after the filing of the
last filed initial or reply proposed findings of fact, conclusions of
law and order pursuant to Sec. 3.46, within 85 days of the closing the
hearing record pursuant to Sec. 3.44(c) where the parties have waived
the filing of proposed findings, or within 14 days after the granting of
a motion for summary decision following a referral of such motion from
the Commission. The Administrative Law Judge may extend any of these
time periods by up to 30 days for good cause. The Commission may further
extend any of these time periods for good cause. Except in cases subject
to Sec. 3.52(a), once issued, the initial decision shall become the
decision of the Commission 30 days after service thereof upon the
parties or 30 days after the filing of a timely notice of appeal,
whichever shall be later, unless a party filing such a notice shall have
perfected an appeal by the timely filing of an appeal brief or the
Commission shall have issued an order placing the case on its own docket
for review or staying the effective date of the decision.
(b) Exhaustion of administrative remedies. An initial decision shall
not be considered final agency action subject to judicial review under 5
U.S.C. 704. Any objection to a ruling by the Administrative Law Judge,
or to a finding, conclusion or a provision of the order in the initial
decision, which is not made a part of an appeal to the Commission shall
be deemed to have been waived.
(c) Content, format for filing. (1) An initial decision shall be
based on a consideration of the whole record relevant to the issues
decided, and shall be supported by reliable and probative evidence. The
initial decision shall include a statement of findings of fact (with
specific page references to principal supporting items of evidence in
the record) and conclusions of law, as well as the reasons or basis
therefor, upon all the material issues of fact, law, or discretion
presented on the record (or those designated under paragraph (c)(2) of
this section) and an appropriate rule or order. Rulings containing
information granted in camera status pursuant to Sec. 3.45 shall be
filed in accordance with Sec. 3.45(f).
(2) The initial decision shall be prepared in a common word
processing format, such as WordPerfect or Microsoft Word, and shall be
filed by the Administrative Law Judge with the Office of the Secretary
in both electronic and paper versions.
(3) When more than one claim for relief is presented in an action,
or when multiple parties are involved, the Administrative Law Judge may
direct the entry of an initial decision as to one or more but fewer than
all of the claims or parties only upon an express determination that
there is no just reason for delay and upon an express direction for the
entry of initial decision.
(d) By whom made. The initial decision shall be made and filed by
the Administrative Law Judge who presided over the hearings, except when
he or she shall have become unavailable to the Commission.
(e) Reopening of proceeding by Administrative Law Judge; termination
of jurisdiction. (1) At any time from the close of the hearing record
pursuant to Sec. 3.44(c) until the filing of his or her initial
decision, an Administrative Law Judge may reopen the proceeding for the
reception of further evidence for good cause shown.
(2) Except for the correction of clerical errors or pursuant to an
order of remand from the Commission, the jurisdiction of the
Administrative Law Judge is terminated upon the filing of his or her
initial decision with respect to those issues decided pursuant to
paragraph (c)(1) of this section.
[74 FR 1834, Jan. 13, 2009]
Sec. 3.52 Appeal from initial decision.
(a) Automatic review of cases in which the Commission sought
preliminary relief
[[Page 97]]
in federal court; timing. For proceedings with respect to which the
Commission has sought preliminary relief in federal court under 15
U.S.C. 53(b), the Commission will review the initial decision without
the filing of a notice of appeal.
(1) In such cases, any party may file objections to the initial
decision or order of the Administrative Law Judge by filing its opening
appeal brief, subject to the requirements in paragraph (c), within 20
days of the issuance of the initial decision. Any party may respond to
any objections filed by another party by filing an answering brief,
subject to the requirements of paragraph (d), within 20 days of service
of the opening brief. Any party may file a reply to an answering brief,
subject to the requirements of paragraph (e), within 5 days of service
of the answering brief. Unless the Commission orders that there shall be
no oral argument, it will hold oral argument within 10 days after the
deadline for the filing of any reply briefs. The Commission will issue
its final decision pursuant to Sec. 3.54 within 45 days after oral
argument. If no oral argument is scheduled, the Commission will issue
its final decision pursuant to Sec. 3.54 within 45 days after the
deadline for the filing of any reply briefs.
(2) If no objections to the initial decision are filed, the
Commission may in its discretion hold oral argument within 10 days after
the deadline for the filing of objection, and will issue its final
decision pursuant to Sec. 3.54 within 45 days after oral argument. If
no oral argument is scheduled, the Commission will issue its final
decision pursuant to Sec. 3.54 within 45 days after the deadline for
the filing of objections.
(b) Review in all other cases; timing. (1) In all cases other than
those subject to paragraph (a), any party may file objections to the
initial decision or order of the Administrative Law Judge by filing a
notice of appeal with the Secretary within 10 days after service of the
initial decision. The notice shall specify the party or parties against
whom the appeal is taken and shall designate the initial decision and
order or part thereof appealed from. If a timely notice of appeal is
filed by a party, any other party may thereafter file a notice of appeal
within 5 days after service of the first notice, or within 10 days after
service of the initial decision, whichever period expires last.
(2) In such cases, any party filing a notice of appeal must perfect
its appeal by filing its opening appeal brief, subject to the
requirements in paragraph (c), within 30 days of the issuance of the
initial decision. Any party may respond to the opening appeal brief by
filing an answering brief, subject to the requirements of paragraph (d),
within 30 days of service of the opening brief. Any party may file a
reply to an answering brief, subject to the requirements of paragraph
(e), within 7 days of service of the answering brief. Unless the
Commission orders that there shall be no oral argument, it will hold
oral argument within 15 days after the deadline for the filing of any
reply briefs. The Commission will issue its final decision pursuant to
Sec. 3.54 within 100 days after oral argument. If no oral argument is
scheduled, the Commission will issue its final decision pursuant to
Sec. 3.54 within 100 days after the deadline for the filing of any
reply briefs.
(c) Appeal brief. (1) The opening appeal brief shall contain, in the
order indicated, the following:
(i) A subject index of the matter in the brief, with page
references, and a table of cases (alphabetically arranged), textbooks,
statutes, and other material cited, with page references thereto;
(ii) A concise statement of the case, which includes a statement of
facts relevant to the issues submitted for review, and a summary of the
argument, which must contain a succinct, clear, and accurate statement
of the arguments made in the body of the brief, and which must not
merely repeat the argument headings;
(iii) A specification of the questions intended to be urged;
(iv) The argument presenting clearly the points of fact and law
relied upon in support of the position taken on each question, with
specific page references to the record and the legal or other material
relied upon; and
(v) A proposed form of order for the Commission's consideration
instead of the order contained in the initial decision.
[[Page 98]]
(2) The brief shall not, without leave of the Commission, exceed
14,000 words.
(d) Answering brief. The answering brief shall contain a subject
index, with page references, and a table of cases (alphabetically
arranged), textbooks, statutes, and other material cited, with page
references thereto, as well as arguments in response to the appellant's
appeal brief. The answering brief shall not, without leave of the
Commission, exceed 14,000 words.
(e) Reply brief. The reply brief shall be limited to rebuttal of
matters in the answering brief and shall not, without leave of the
Commission, exceed 7,000 words. The Commission will not consider new
arguments or matters raised in reply briefs that could have been raised
earlier in the principal briefs. No further briefs may be filed except
by leave of the Commission.
(f) In camera information. If a party includes in any brief to be
filed under this section information that has been granted in camera
status pursuant to Sec. 3.45(b) or is subject to confidentiality
provisions pursuant to a protective order, the party shall file 2
versions of the brief in accordance with the procedures set forth in
Sec. 3.45(e). The time period specified by this section within which a
party may file an answering or reply brief will begin to run upon
service on the party of the in camera or confidential version of a
brief.
(g) Signature. (1) The original of each brief filed shall have a
hand-signed signature by an attorney of record for the party, or in the
case of parties not represented by counsel, by the party itself, or by a
partner if a partnership, or by an officer of the party if it is a
corporation or an unincorporated association.
(2) Signing a brief constitutes a representation by the signer that
he or she has read it; that to the best of his or her knowledge,
information, and belief, the statements made in it are true; that it is
not interposed for delay; that it complies with the applicable word
count limitation; and that to the best of his or her knowledge,
information, and belief, it complies with all the other rules in this
part. If a brief is not signed or is signed with intent to defeat the
purpose of this section, it may be stricken as sham and false and the
proceeding may go forward as though the brief has not been filed.
(h) Oral argument. All oral arguments shall be public unless
otherwise ordered by the Commission. Oral arguments will be held in all
cases on appeal or review to the Commission, unless the Commission
otherwise orders upon its own initiative or upon request of any party
made at the time of filing his or her brief. Oral arguments before the
Commission shall be reported stenographically, unless otherwise ordered,
and a member of the Commission absent from an oral argument may
participate in the consideration and decision of the appeal in any case
in which the oral argument is stenographically reported.
(i) Corrections in transcript of oral argument. The Commission will
entertain only joint motions of the parties requesting corrections in
the transcript of oral argument, except that the Commission will receive
a unilateral motion which recites that the parties have made a good
faith effort to stipulate to the desired corrections but have been
unable to do so. If the parties agree in part and disagree in part, they
should file a joint motion incorporating the extent of their agreement,
and, if desired, separate motions requesting those corrections to which
they have been unable to agree. The Secretary, pursuant to delegation of
authority by the Commission, is authorized to prepare and issue in the
name of the Commission a brief ``Order Correcting Transcript'' whenever
a joint motion to correct transcript is received.
(j) Briefs of amicus curiae. A brief of an amicus curiae may be
filed by leave of the Commission granted on motion with notice to the
parties or at the request of the Commission, except that such leave
shall not be required when the brief is presented by an agency or
officer of the United States; or by a State, territory, commonwealth, or
the District of Columbia, or by an agency or officer of any of them. The
brief may be conditionally filed with the motion for leave. A motion for
leave shall identify the interest of the applicant and state how a
Commission decision
[[Page 99]]
in the matter would affect the applicant or persons it represents. The
motion shall also state the reasons why a brief of an amicus curiae is
desirable. Except as otherwise permitted by the Commission, an amicus
curiae shall file its brief within the time allowed the parties whose
position as to affirmance or reversal the amicus brief will support. The
Commission shall grant leave for a later filing only for cause shown, in
which event it shall specify within what period such brief must be
filed. A motion for an amicus curiae to participate in oral argument
will be granted only for extraordinary reasons. An amicus brief may be
no more than one-half the maximum length authorized by these rules for a
party's principal brief.
(k) Word count limitation. The word count limitations in this
section include headings, footnotes and quotations, but do not include
the cover, table of contents, table of citations or authorities,
glossaries, statements with respect to oral argument, any addendums
containing statutes, rules or regulations, any certificates of counsel,
proposed form of order, and any attachment required by Sec. 3.45(e).
Extensions of word count limitations are disfavored, and will only be
granted where a party can make a strong showing that undue prejudice
would result from complying with the existing limit.
[74 FR 1834, Jan. 13, 2009, as amended at 76 FR 52253, Aug. 22, 2011; 80
FR 15162, Mar. 23, 2015]
Sec. 3.53 Review of initial decision in absence of appeal.
An order by the Commission placing a case on its own docket for
review will set forth the scope of such review and the issues which will
be considered and will make provision for the filing of briefs if deemed
appropriate by the Commission.
Sec. 3.54 Decision on appeal or review.
(a) Upon appeal from or review of an initial decision, the
Commission will consider such parts of the record as are cited or as may
be necessary to resolve the issues presented and, in addition, will, to
the extent necessary or desirable, exercise all the powers which it
could have exercised if it had made the initial decision.
(b) In rendering its decision, the Commission will adopt, modify, or
set aside the findings, conclusions, and rule or order contained in the
initial decision, and will include in the decision a statement of the
reasons or basis for its action and any concurring and dissenting
opinions.
(c) In those cases where the Commission believes that it should have
further information or additional views of the parties as to the form
and content of the rule or order to be issued, the Commission, in its
discretion, may withhold final action pending the receipt of such
additional information or views.
(d) The order of the Commission disposing of adjudicative hearings
under the Fair Packaging and Labeling Act will be published in the
Federal Register and, if it contains a rule or regulation, will specify
the effective date thereof, which will not be prior to the ninetieth
(90th) day after its publication unless the Commission finds that
emergency conditions exist necessitating an earlier effective date, in
which event the Commission will specify in the order its findings as to
such conditions.
Sec. 3.55 Reconsideration.
Within fourteen (14) days after completion of service of a
Commission decision, any party may file with the Commission a petition
for reconsideration of such decision, setting forth the relief desired
and the grounds in support thereof. Any petition filed under this
subsection must be confined to new questions raised by the decision or
final order and upon which the petitioner had no opportunity to argue
before the Commission. Any party desiring to oppose such a petition
shall file an answer thereto within ten (10) days after service upon him
of the petition. The filing of a petition for reconsideration shall not
operate to stay the effective date of the decision or order or to toll
the running of any statutory time period affecting such decision or
order unless specifically so ordered by the Commission.
[32 FR 8449, June 13, 1967, as amended at 61 FR 50650, Sept. 26, 1996]
[[Page 100]]
Sec. 3.56 Effective date of orders; application for stay.
(a) Other than consent orders, an order to cease and desist under
section 5 of the FTC Act becomes effective upon the sixtieth day after
service, except as provided in section 5(g)(3) of the FTC Act, and
except for divestiture provisions, as provided in section 5(g)(4) of the
FTC Act.
(b) Any party subject to a cease and desist order under section 5 of
the FTC Act, other than a consent order, may apply to the Commission for
a stay of all or part of that order pending judicial review. If, within
30 days after the application was received by the Commission, the
Commission either has denied or has not acted on the application, a stay
may be sought in a court of appeals where a petition for review of the
order is pending.
(c) An application for stay shall state the reasons a stay is
warranted and the facts relied upon, and shall include supporting
affidavits or other sworn statements, and a copy of the relevant
portions of the record. The application shall address the likelihood of
the applicant's success on appeal, whether the applicant will suffer
irreparable harm if a stay is not granted, the degree of injury to other
parties if a stay is granted, and why the stay is in the public
interest.
(d) An application for stay shall be filed within 30 days of service
of the order on the party. Such application shall be served in
accordance with the provisions of Sec. 4.4(b) of this part that are
applicable to service in adjudicative proceedings. Any party opposing
the application may file an answer within 5 business days after receipt
of the application. The applicant may file a reply brief, limited to new
matters raised by the answer, within 3 business days after receipt of
the answer.
[60 FR 37748, July 21, 1995]
Subpart G [Reserved]
Subpart H_Reopening of Proceedings
Sec. 3.71 Authority.
Except while pending in a U.S. court of appeals on a petition for
review (after the transcript of the record has been filed) or in the
U.S. Supreme Court, a proceeding may be reopened by the Commission at
any time in accordance with Sec. 3.72. Any person subject to a
Commission decision containing a rule or order which has become
effective, or an order to cease and desist which has become final may
file a request to reopen the proceeding in accordance with Sec. 2.51.
[44 FR 40637, July 12, 1979]
Sec. 3.72 Reopening.
(a) Before statutory review. At any time prior to the expiration of
the time allowed for filing a petition for review or prior to the filing
of the transcript of the record of a proceeding in a U.S. court of
appeals pursuant to a petition for review, the Commission may upon its
own initiative and without prior notice to the parties reopen the
proceeding and enter a new decision modifying or setting aside the whole
or any part of the findings as to the facts, conclusions, rule, order,
or opinion issued by the Commission in such proceeding.
(b) After decision has become final. (1) Whenever the Commission is
of the opinion that changed conditions of fact or law or the public
interest may require that a Commission decision containing a rule or
order which has become effective, or an order to cease and desist which
has become final by reason of court affirmance or expiration of the
statutory period for court review without a petition for review having
been filed, or a Commission decision containing an order dismissing a
proceeding, should be altered, modified, or set aside in whole or in
part, the Commission will, except as provided in Sec. 2.51, serve upon
each person subject to such decision (in the case of proceedings
instituted under Sec. 3.13, such service may be by publication in the
Federal Register) an order to show cause, stating the changes it
proposes to make in the decision and the reasons they are deemed
necessary. Within thirty (30) days after service of such order to show
cause, any person served may file an answer thereto. Any person not
responding to the order within the time allowed may be deemed to have
consented to the proposed changes.
[[Page 101]]
(2) Whenever an order to show cause is not opposed, or if opposed
but the pleadings do not raise issues of fact to be resolved, the
Commission, in its discretion, may decide the matter on the order to
show cause and answer thereto, if any, or it may serve upon the parties
(in the case of proceedings instituted under Sec. 3.13, such service
may be by publication in Federal Register) a notice of hearing, setting
forth the date when the cause will be heard. In such a case, the hearing
will be limited to the filing of briefs and may include oral argument
when deemed necessary by the Commission. When the pleadings raise
substantial factual issues, the Commission will direct such hearings as
it deems appropriate, including hearings for the receipt of evidence by
it or by an Administrative Law Judge. Unless otherwise ordered and
insofar as practicable, hearings before an Administrative Law Judge to
receive evidence shall be conducted in accordance with subparts B, C, D,
and E of part 3 of this chapter. Upon conclusion of hearings before an
Administrative Law Judge, the record and the Administrative Law Judge's
recommendations shall be certified to the Commission for final
disposition of the matter.
(3) Termination of existing orders--(i) Generally. Notwithstanding
the foregoing provisions of this rule, and except as provided in
paragraphs (b)(3) (ii) and (iii) of this section, an order issued by the
Commission before August 16, 1995, will be deemed, without further
notice or proceedings, to terminate 20 years from the date on which the
order was first issued, or on January 2, 1996, whichever is later.
(ii) Exception. This paragraph applies to the termination of an
order issued before August 16, 1995, where a complaint alleging a
violation of the order was or is filed (with or without an accompanying
consent decree) in federal court by the United States or the Federal
Trade Commission while the order remains in force, either on or after
August 16, 1995, or within the 20 years preceding that date. If more
than one complaint was or is filed while the order remains in force, the
relevant complaint for purposes of this paragraph will be the latest
filed complaint. An order subject to this paragraph will terminate 20
years from the date on which a court complaint described in this
paragraph was or is filed, except as provided in the following sentence.
If the complaint was or is dismissed, or a federal court rules or has
ruled that the respondent did not violate any provision of the order,
and the dismissal or ruling was or is not appealed, or was or is upheld
on appeal, the order will terminate according to paragraph (b)(3)(i) of
this section as though the complaint was never filed; provided, however,
that the order will not terminate between the date that such complaint
is filed and the later of the deadline for appealing such dismissal or
ruling and the date such dismissal or ruling is upheld on appeal. The
filing of a complaint described in this paragraph will not affect the
duration of any order provision that has expired, or will expire, by its
own terms. The filing of a complaint described in this paragraph also
will not affect the duration of an order's application to any respondent
that is not named in the complaint.
(iii) Stay of Termination. Any party to an order may seek to stay,
in whole or part, the termination of the order as to that party pursuant
to paragraph (b)(3) (i) or (ii) of this section. Petitions for such
stays shall be filed in accordance with the procedures set forth in
Sec. 2.51 of these rules. Such petitions shall be filed on or before
the date on which the order would be terminated pursuant to paragraph
(b)(3) (i) or (ii) of this section. Pending the disposition of such a
petition, the order will be deemed to remain in effect without
interruption.
(iv) Orders not terminated. Nothing in Sec. 3.72(b)(3) is intended
to apply to in camera orders or other procedural or interlocutory
rulings by an Administrative Law Judge or the Commission.
[32 FR 8449, June 13, 1967, as amended at 44 FR 40637, July 12, 1979; 45
FR 21623, Apr. 2, 1980; 60 FR 58515, Nov. 28, 1995]
Subpart I_Recovery of Awards Under the Equal Access to Justice Act in
Commission Proceedings
Authority: 5 U.S.C. 504 and 5 U.S.C. 553(b).
[[Page 102]]
Source: 63 FR 36341, July 6, 1998, unless otherwise noted.
Sec. 3.81 General provisions.
(a) Purpose of these rules. The Equal Access to Justice Act, 5
U.S.C. 504 (called ``the Act'' in this subpart), provides for the award
of attorney fees and other expenses to eligible individuals and entities
who are parties to adversary adjudicative proceedings under part 3 of
this title. The rules in this subpart describe the parties eligible for
awards, how to apply for awards, and the procedures and standards that
the Commission will use to make them.
(1) When an eligible party will receive an award. An eligible party
will receive an award when:
(i) It prevails in the adjudicative proceeding, unless the
Commission's position in the proceeding was substantially justified or
special circumstances make an award unjust. Whether or not the position
of the agency was substantially justified will be determined on the
basis of the administrative record as a whole that is made in the
adversary proceeding for which fees and other expenses are sought; or
(ii) The agency's demand is substantially in excess of the decision
of the adjudicative officer, and is unreasonable when compared with that
decision, under all the facts and circumstances of the case. Demand
means the express final demand made by the agency prior to initiation of
the adversary adjudication, but does not include a recitation by the
agency of the statutory penalty in the administrative complaint or
elsewhere when accompanied by an express demand for a lesser amount.
(b) When the Act applies. (1) Section 504(a)(1) of the Act applies
to any adversarial adjudicative proceeding pending before the Commission
at any time after October 1, 1981. This includes proceedings begun
before October 1, 1981, if final Commission action has not been taken
before that date.
(2) Section 504(a)(4) applies to any adversarial adjudicative
proceeding pending before the Commission at any time on or after March
29, 1996.
(c) Proceedings covered. (1) The Act applies to all adjudicative
proceedings under part 3 of the rules of practice as defined in Sec.
3.2, except hearings relating to the promulgation, amendment, or repeal
of rules under the Fair Packaging and Labeling Act.
(2) [Reserved]
(d) Eligibility of applicants. (1) To be eligible for an award of
attorney fees and other expenses under the Act, the applicant must be a
party to the adjudicative proceeding in which it seeks an award. The
term party is defined in 5 U.S.C. 551(3). The applicant must show that
it meets all conditions of eligibility set out in this subpart.
(2) The types of eligible applicants are as follows:
(i) An individual with a net worth of not more than $2 million;
(ii) The sole owner of an unincorporated business who has a net
worth of not more than $7 million, including both personal and business
interests, and not more than 500 employees;
(iii) A charitable or other tax-exempt organization described in
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3))
with not more than 500 employees;
(iv) A cooperative association as defined in section 15(a) of the
Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500
employees;
(v) Any other partnership, corporation, association, unit of local
government, or organization with a net worth of not more than $7 million
and not more than 500 employees; and
(vi) For purposes of receiving an award for fees and expenses for
defending against an excessive Commission demand, any small entity, as
that term is defined under 5 U.S.C. 601.
(3) Eligibility of a party shall be determined as of the date the
proceeding was initiated.
(4) An applicant who owns an unincorporated business will be
considered as an ``individual'' rather than a ``sole owner of an
unincorporated business'' if the issues on which the applicant prevails
are related primarily to personal interests rather than to business
interests.
(5) The employees of an applicant include all persons who regularly
perform services for remuneration for the applicant, under the
applicant's direction and control. Part-time employees
[[Page 103]]
shall be included on a proportional basis.
(6) The net worth and number of employees of the applicant and all
of its affiliates shall be aggregated to determine eligibility. Any
individual, corporation or other entity that directly or indirectly
controls or owns a majority of the voting shares or other interest of
the applicant, or any corporation or other entity of which the applicant
directly or indirectly owns or controls a majority of the voting shares
or other interest, will be considered an affiliate for purposes of this
part, unless the Administrative Law Judge determines that such treatment
would be unjust and contrary to the purposes of the Act in light of the
actual relationship between the affiliated entities. In addition, the
Administrative Law Judge may determine that financial relationships of
the applicant other than those described in this paragraph constitute
special circumstances that would make an award unjust.
(7) An applicant that participates in a proceeding primarily on
behalf of one or more other persons or entities that would be ineligible
is not itself eligible for an award.
(e) Standards for awards. (1) For a prevailing party:
(i) A prevailing applicant will receive an award for fees and
expenses incurred after initiation of the adversary adjudication in
connection with the entire adversary adjudication, or on a substantive
portion of the adversary adjudication that is sufficiently significant
and discrete to merit treatment as a separate unit unless the position
of the agency was substantially justified. The burden of proof that an
award should not be made to an eligible prevailing applicant is on
complaint counsel, which may avoid an award by showing that its position
had a reasonable basis in law and fact.
(ii) An award to prevailing party will be reduced or denied if the
applicant has unduly or unreasonably protracted the proceeding or if
special circumstances make an award unjust.
(2) For a party defending against an excessive demand:
(i) An eligible applicant will receive an award for fees and
expenses incurred after initiation of the adversary adjudication related
to defending against the excessive portion of a Commission demand that
is substantially in excess of the decision of the adjudicative officer
and is unreasonable when compared with that decision under all the facts
and circumstances of the case.
(ii) An award will be denied if the applicant has committed a
willful violation of law or otherwise acted in bad faith or if special
circumstances make an award unjust.
(f) Allowable fees and expenses. (1) Awards will be based on rates
customarily charged by persons engaged in the business of acting as
attorneys, agents and expert witnesses, even if the services were made
available without charge or at a reduced rate to the applicant.
(2) No award for the fee of an attorney or agent under these rules
may exceed the hourly rate specified in 5 U.S.C. 504(b)(1)(A). No award
to compensate an expert witness may exceed the highest rate at which the
Commission paid expert witnesses for similar services at the time the
fees were incurred. The appropriate rate may be obtained from the Office
of the Executive Director. However, an award may also include the
reasonable expenses of the attorney, agent, or witness as a separate
item, if the attorney, agent or witness ordinarily charges clients
separately for such expenses.
(3) In determining the reasonableness of the fee sought for an
attorney, agent or expert witness, the Administrative Law Judge shall
consider the following:
(i) If the attorney, agent or witness is in private practice, his or
her customary fee for similar services, or, if an employee of the
applicant, the fully allocated cost of the services;
(ii) The prevailing rate for similar services in the community in
which the attorney, agent or witness ordinarily performs services;
(iii) The time actually spent in the representation of the
applicant;
(iv) The time reasonably spent in light of the difficulty or
complexity of the issues in the proceeding; and
(v) Such other factors as may bear on the value of the services
provided.
(4) The reasonable cost of any study, analysis, engineering report,
test, project or similar matter prepared on
[[Page 104]]
behalf of a party may be awarded, to the extent that the charge for the
service does not exceed the prevailing rate for similar services, and
the study or other matter was necessary for preparation of the
applicant's case.
(5) Any award of fees or expenses under the Act is limited to fees
and expenses incurred after initiation of the adversary adjudication
and, with respect to excessive demands, the fees and expenses incurred
in defending against the excessive portion of the demand.
(g) Rulemaking on maximum rates for attorney fees. If warranted by
an increase in the cost of living or by special circumstances (such as
limited availability of attorneys qualified to handle certain types of
proceedings), the Commission may, upon its own initiative or on petition
of any interested person or group, adopt regulations providing that
attorney fees may be awarded at a rate higher than the rate specified in
5 U.S.C. 504(b)(1)(A) per hour in some or all the types of proceedings
covered by this part. Rulemaking under this provision will be in
accordance with Rules of Practice part 1, subpart C of this chapter.
Sec. 3.82 Information required from applicants.
(a) Contents of application. An application for an award of fees and
expenses under the Act shall contain the following:
(1) Identity of the applicant and the proceeding for which the award
is sought;
(2) A showing that the applicant has prevailed; or, if the applicant
has not prevailed, a showing that the Commission's demand was the final
demand before initiation of the adversary adjudication and that it was
substantially in excess of the decision of the adjudicative officer and
was unreasonable when compared with that decision;
(3) Identification of the Commission position(s) that applicant
alleges was (were) not substantially justified; or, identification of
the Commission's demand that is alleged to be excessive and unreasonable
and an explanation as to why the demand was excessive and unreasonable;
(4) A brief description of the type and purpose of the organization
or business (unless the applicant is an individual);
(5) A statement of how the applicant meets the criteria of Sec.
3.81(d);
(6) The amount of fees and expenses incurred after the initiation of
the adjudicative proceeding or, in the case of a claim for defending
against an excessive demand, the amount of fees and expenses incurred
after the initiation of the adjudicative proceeding attributable to the
excessive portion of the demand;
(7) Any other matters the applicant wishes the Commission to
consider in determining whether and in what amount an award should be
made; and
(8) A written verification under oath or under penalty or perjury
that the information provided is true and correct accompanied by the
signature of the applicant or an authorized officer or attorney.
(b) Net worth exhibit. (1) Each applicant except a qualified tax-
exempt organization or cooperative association must provide with its
application a detailed exhibit showing the net worth of the application
and any affiliates (as defined in Sec. 3.81(d)(6)) when the proceeding
was initiated. The exhibit may be in any form convenient to the
applicant that provides full disclosure of the applicant's and its
affiliates' assets and liabilities and is sufficient to determine
whether the applicant qualifies under the standards in this part. The
Administrative Law Judge may require an applicant to file additional
information to determine its eligibility for an award.
(2) Ordinarily, the net worth exhibit will be included in the public
record of the proceeding. However, if an applicant objects to public
disclosure of information in any portion of the exhibit and believes
there are legal grounds for withholding it from disclosure, the
applicant may submit that portion of the exhibit directly to the
Administrative Law Judge in a sealed envelope labeled ``Confidential
Financial Information,'' accompanied by a motion to withhold the
information from public disclosure. The motion shall describe the
information sought to be withheld and explain, in detail, why it falls
within one or more of the specific exemptions from
[[Page 105]]
mandatory disclosure under the Freedom of Information Act, 5 U.S.C.
552(b) (1) through (9), why public disclosure of the information would
adversely affect the applicant, and why disclosure is not required in
the public interest. The material in question shall be served on
complaint counsel but need not be served on any other party to the
proceeding. If the Administrative Law Judge finds that the information
should not be withheld from disclosure, it shall be placed in the public
record of the proceeding. Otherwise, any request to inspect or copy the
exhibit shall be disposed of in accordance with Sec. 4.11.
(c) Documentation of fees and expenses. The application shall be
accompanied by full documentation of the fees and expenses incurred
after initiation of the adversary adjudication, including the cost of
any study, analysis, engineering report, test, project or similar
matter, for which an award is sought. With respect to a claim for fees
and expenses involving an excessive demand, the application shall be
accompanied by full documentation of the fees and expenses incurred
after initiation of the adversary adjudication, including the cost of
any study, analysis, engineering report, test, project or similar
matter, for which an award is sought attributable to the portion of the
demand alleged to be excessive and unreasonable. A separate itemized
statement shall be submitted for each professional firm or individual
whose services are covered by the application, showing the hours spent
in connection with the proceeding by each individual, a description of
the specific services performed, the rate at which each fee has been
computed, any expenses for which reimbursement is sought, the total
amount claimed, and the total amount paid or payable by the applicant or
by any other person or entity for the services provided. The
Administrative Law Judge may require the applicant to provide vouchers,
receipts, or other substantiation for any expenses claimed.
(d) When an application may be filed--(1) For a prevailing party:
(i) An application may be filed not later than 30 days after the
Commission has issued an order or otherwise taken action that results in
final disposition of the proceeding.
(ii) If review or reconsideration is sought or taken of a decision
as to which an applicant believes it has prevailed, proceedings for the
award of fees shall be stayed pending final disposition of the
underlying controversy.
(2) For a party defending against an excessive demand:
(i) An application may be filed not later than 30 days after the
Commission has issued an order or otherwise taken action that results in
final disposition of the proceeding.
(ii) If review or reconsideration is sought or taken of a decision
as to which an applicant believes the agency's demand was excessive and
unreasonable, proceedings for the award of fees and expenses shall be
stayed pending final disposition of the underlying controversy.
(3) For purposes of this subpart, final disposition means the later
of--
(i) The date that the initial decision of the Administrative Law
Judge becomes the decision of the Commission pursuant to Sec. 3.51(a);
(ii) The date that the Commission issues an order disposing of any
petitions for reconsideration of the Commission's final order in the
proceeding; or
(iii) The date that the Commission issues a final order or any other
final resolution of a proceeding, such as a consent agreement,
settlement or voluntary dismissal, which is not subject to a petition
for reconsideration.
Sec. 3.83 Procedures for considering applicants.
(a) Filing and service of documents. Any application for an award or
other pleading or document related to an application shall be filed and
served on all parties as specified in Sec. Sec. 4.2 and 4.4(b) of this
chapter, except as provided in Sec. 3.82(b)(2) for confidential
financial information.
(b) Answer to application. (1) Within 30 days after service of an
application, complaint counsel may file an answer to the application.
Unless complaint counsel requests an extension of time for filing or
files a statement of intent to negotiate under paragraph (b)(2) of this
section, failure to file an answer
[[Page 106]]
within the 30-day period may be treated as a consent to the award
requested.
(2) If complaint counsel and the applicant believe that the issues
in the fee application can be settled, they may jointly file a statement
of their intent to negotiate a settlement. The filing of this statement
shall extend the time for filing an answer for an additional 30 days,
and further extensions may be granted by the Administrative Law Judge
upon request by complaint counsel and the applicant.
(3) The answer shall explain in detail any objections to the award
requested and identify the facts relied on in support of complaint
counsel's position. If the answer is based on any alleged facts not
already in the record of the proceeding, complaint counsel shall include
with the answer either supporting affidavits or a request for further
proceedings under paragraph (f) of this section.
(c) Reply. Within 15 days after service of an answer, the applicant
may file a reply. If the reply is based on any alleged facts not already
in the record of the proceeding, the applicant shall include with the
reply either supporting affidavits or a request for further proceedings
under paragraph (f) of this section.
(d) Comments by other parties. Any party to a proceeding other than
the applicant and complaint counsel may file comments on an application
within 30 days after it is served or on an answer within 15 days after
it is served. A commenting party may not participate further in
proceedings on the application unless the Administrative Law Judge
determines that the public interest requires such participation in order
to permit full exploration of matters in the comments.
(e) Settlement. The applicant and complaint counsel may agree on a
proposed settlement of the award before final action on the application.
A proposed award settlement entered into in connection with a consent
agreement covering the underlying proceeding will be considered in
accordance with Sec. 3.25. The Commission may request findings of fact
or recommendations on the award settlement from the Administrative Law
Judge. A proposed award settlement entered into after the underlying
proceeding has been concluded will be considered and may be approved or
disapproved by the Administrative Law Judge subject to Commission review
under paragraph (h) of this section. If an applicant and complaint
counsel agree on a proposed settlement of an award before an application
has been filed, the application shall be filed with the proposed
settlement.
(f) Further proceedings. (1) Ordinarily, the determination of an
award will be made on the basis of the written record. However, on
request of either the applicant or complaint counsel, or on his or her
own initiative, the Administrative Law Judge may order further
proceedings, such as an informal conference, oral argument, additional
written submissions or an evidentiary hearing. Such further proceedings
shall be held only when necessary for full and fair resolution of the
issues arising from the application, and shall be conducted as promptly
as possible.
(2) A request that the Administrative Law Judge order further
proceedings under this section shall specifically identify the
information sought or the disputed issues and shall explain why the
additional proceedings are necessary to resolve the issues.
(g) Decision. The Administrative Law Judge shall issue an initial
decision on the application within 30 days after closing proceedings on
the application.
(1) For a decision involving a prevailing party: The decision shall
include written findings and conclusions on the applicant's eligibility
and status as a prevailing party, and an explanation of the reasons for
any difference between the amount requested and the amount awarded. The
decision shall also include, if at issue, findings on whether the
agency's position was substantially justified, whether the applicant
unduly protracted the proceedings, or whether special circumstances make
an award unjust.
(2) For a decision involving an excessive agency demand: The
decision shall include written findings and conclusions on the
applicant's eligibility and an explanation of the reasons why the
agency's demand was or was not determined to be substantially in excess
of the decision of the adjudicative officer and was or was not
unreasonable when
[[Page 107]]
compared with that decision. That decision shall be based upon all the
facts and circumstances of the case. The decision shall also include, if
at issue, findings on whether the applicant has committed a willful
violation of law or otherwise acted in bad faith, or whether special
circumstances make an award unjust.
(h) Agency review. Either the applicant or complaint counsel may
seek review of the initial decision on the fee application by filing a
notice of appeal under Sec. 3.52(a), or the Commission may decide to
review the decision on its own initiative, in accordance with Sec.
3.53. If neither the applicant nor complaint counsel seeks review and
the Commission does not take review on its own initiative, the initial
decision on the application shall become a final decision of the
Commission 30 days after it is issued. Whether to review a decision is a
matter within the discretion of the Commission. If review is taken, the
Commission will issue a final decision on the application or remand the
application to the Administrative Law Judge for further proceedings.
(i) Judicial review. Judicial review of final Commission decisions
on awards may be sought as provided in 5 U.S.C. 504(c)(2).
(j) Payment of award. An applicant seeking payment of an award shall
submit to the Secretary of the Commission a copy of the Commission's
final decision granting the award, accompanied by a statement that the
applicant will not seek review of the decision in the United States
courts. The agency will pay the amount awarded to the applicant within
60 days, unless judicial review of the award or of the underlying
decision of the adjudicative proceeding has been sought by the applicant
or any party to the proceeding.
[63 FR 36341, July 6, 1998, as amended at 76 FR 52253, Aug. 22, 2011; 80
FR 25941, May 6, 2015]
PART 4_MISCELLANEOUS RULES--Table of Contents
Sec.
4.1 Appearances.
4.2 Requirements as to form, and filing of documents other than
correspondence.
4.3 Time.
4.4 Service.
4.5 Fees.
4.6 Cooperation with other agencies.
4.7 Ex parte communications.
4.8 Costs for obtaining Commission records.
4.9 The public record.
4.10 Nonpublic material.
4.11 Disclosure requests.
4.12 Disposition of documents submitted to the Commission.
4.13 Privacy Act rules.
4.14 Conduct of business.
4.15 Commission meetings.
4.16 Privilege against self-incrimination.
4.17 Disqualification of Commissioners.
Authority: 15 U.S.C. 46.
Sec. 4.1 Appearances.
(a) Qualifications--(1) Attorneys--(i) U.S.-admitted. Members of the
bar of a Federal court or of the highest court of any State or Territory
of the United States are eligible to practice before the Commission.
(ii) European Community (EC)-qualified. Persons who are qualified to
practice law in a Member State of the European Community and authorized
to practice before The Commission of the European Communities in
accordance with Regulation No. 99/63/EEC are eligible to practice before
the Commission.
(iii) Any attorney desiring to appear before the Commission or an
Administrative Law Judge may be required to show to the satisfaction of
the Commission or the Administrative Law Judge his or her acceptability
to act in that capacity.
(2) Others. (i) Any individual or member of a partnership involved
in any proceeding or investigation may appear on behalf or himself or of
such partnership upon adequate identification. A corporation or
association may be represented by a bona fide officer thereof upon a
showing of adequate authorization.
(ii) At the request of counsel representing any party in an
adjudicative proceeding, the Administrative Law Judge may permit an
expert in the same discipline as an expert witness to conduct all or a
portion of the cross-examination of such witness.
(b) Restrictions as to former members and employees--(1) General
prohibition. Except as provided in this section, or otherwise
specifically authorized by the Commission, no former member or
[[Page 108]]
employee (``former employee'' or ``employee'') of the Commission may
communicate to or appear before the Commission, as attorney or counsel,
or otherwise assist or advise behind-the-scenes, regarding a formal or
informal proceeding or investigation \1\ (except that a former employee
who is disqualified solely under paragraph (b)(1)(ii) or paragraph
(b)(1)(iv) of this section, is not prohibited from assisting or advising
behind-the-scenes) if:
---------------------------------------------------------------------------
\1\ It is important to note that a new ``proceeding or
investigation'' may be considered the same matter as a seemingly
separate ``proceeding or investigation'' that was pending during the
former employee's tenure. This is because a ``proceeding or
investigation'' may continue in another form or in part. In determining
whether two matters are actually the same, the Commission will consider:
the extent to which the matters involve the same or related facts,
issues, confidential information and parties; the time elapsed; and the
continuing existence of an important Federal interest. See 5 CFR
2637.201(c)(4). For example, where a former employee intends to
participate in an investigation of compliance with a Commission order,
submission of a request to reopen an order, or a proceeding with respect
to reopening an order, the matter will be considered the same as the
adjudicative proceeding or investigation that resulted in the order. A
former employee who is uncertain whether the matter in which he seeks
clearance to participate is wholly separate from any matter that was
pending during his tenure should seek advice from the General Counsel or
the General Counsel's designee before participating.
---------------------------------------------------------------------------
(i) The former employee participated personally and substantially on
behalf of the Commission in the same proceeding or investigation in
which the employee now intends to participate;
(ii) The participation would begin within two years after the
termination of the former employee's service and, within a period of one
year prior to the employee's termination, the proceeding or
investigation was pending under the employee's official responsibility;
(iii) Nonpublic documents or information pertaining to the
proceeding or investigation in question, and of the kind delineated in
Sec. 4.10(a), came to, or would be likely to have come to, the former
employee's attention in the course of the employee's duties, (unless
Commission staff determines that the nature of the documents or
information is such that no present advantage could thereby be derived);
or
(iv) The former employee's participation would begin within one year
after the employee's termination and, at the time of termination, the
employee was a member of the Commission or a ``senior employee'' as
defined in 18 U.S.C. 207(c).
(2) Clearance request required. Any former employee, before
participating in a Commission proceeding or investigation (see footnote
1), whether through an appearance before a Commission official or
behind-the-scenes assistance, shall file with the Secretary a request
for clearance to participate, containing the information listed in Sec.
4.1(b)(4) if:
(i) The proceeding or investigation was pending in the Commission
while the former employee served;
(ii) A proceeding or investigation from which such proceeding or
investigation directly resulted was pending during the former employee's
service; or
(iii) Nonpublic documents or information pertaining to the
proceeding or investigation in question, and of the kind delineated in
Sec. 4.10(a), came to or would likely have come to the former
employee's attention in the course of the employee's duties, and the
employee left the Commission within the previous three years.
Note: This requirement applies even to a proceeding or investigation
that had not yet been initiated formally when the former employee
terminated employment, if the employee had learned nonpublic information
relating to the subsequently initiated proceeding or investigation.
(3) Exceptions. (i) Paragraphs (b) (1) and (2) of this section do
not apply to:
(A) Making a pro se filing of any kind;
(B) Submitting a request or appeal under the Freedom of Information
Act, the Privacy Act, or the Government in the Sunshine Act;
(C) Testifying under oath (except that a former employee who is
subject to the restrictions contained in paragraph (b)(1)(i) of this
section with respect to a particular matter may not, except pursuant to
court order, serve
[[Page 109]]
as an expert witness for any person other than the United States in that
same matter);
(D) Submitting a statement required to be made under penalty of
perjury; or
(E) Appearing on behalf of the United States.
(ii) With the exception of subparagraph (b)(1)(iv), paragraphs (b)
(1) and (2) of this section do not apply to participating in a
Commission rulemaking proceeding, including submitting comments on a
matter on which the Commission has invited public comment.
(iii) Paragraph (b)(1)(iv) of this section does not apply to
submitting a statement based on the former employee's own special
knowledge in the particular area that is the subject of the statement,
provided that no compensation is thereby received, other than that
regularly provided by law or by Sec. 4.5 for witnesses.
(iv) Paragraph (b)(2) of this section does not apply to filing a
premerger notification form or participating in subsequent events
concerning compliance or noncompliance with Section 7A of the Clayton
Act, 15 U.S.C. 18a, or any regulation issued under that section.
(4) Request contents. Clearance requests filed pursuant to Sec.
4.1(b)(2) shall contain:
(i) The name and matter number (if known) of the proceeding or
investigation in question;
(ii) A description of the contemplated participation;
(iii) The name of the Commission office(s) or division(s) in which
the former employee was employed and the position(s) the employee
occupied;
(iv) A statement whether, while employed by the Commission, the
former employee participated in any proceeding or investigation
concerning the same company, individual, or industry currently involved
in the matter in question;
(v) A certification that while employed by the Commission, the
employee never participated personally and substantially in the same
matter or proceeding;
(vi) If the employee's Commission employment terminated within the
past two years, a certification that the matter was not pending under
the employee's official responsibility during any part of the one year
before the employee's termination;
(vii) If the employee's Commission employment terminated within the
past three years, either a declaration that nonpublic documents or
information pertaining to the proceeding or investigation in question,
and of the kind delineated in Sec. 4.10(a), never came to the
employee's attention, or a description of why the employee believes that
such nonpublic documents or information could not confer a present
advantage to the employee or to the employee's client in the proceeding
or investigation in question; and
(viii) A certification that the employee has read, and understands,
both the criminal conflict of interest law on post-employment activities
(18 U.S.C. 207) and this Rule in their entirety.
(5) Definitions. The following definitions apply for purposes of
this section:
(i) Behind-the-scenes participation includes any form of
professional consultation, assistance, or advice to anyone about the
proceeding or investigation in question, whether formal or informal,
oral or written, direct or indirect.
(ii) Communicate to or appear before means making any oral or
written communication to, or any formal or informal appearance before,
the Commission or any of its members or employees on behalf of any
person (except the United States) with the intent to influence.
(iii) Directly resulted from means that the proceeding or
investigation in question emanated from an earlier phase of the same
proceeding or investigation or from a directly linked, antecedent
investigation. The existence of some attenuated connection between a
proceeding or investigation that was pending during the requester's
tenure and the proceeding or investigation in question does not
constitute a direct result.
(iv) Pending under the employee's official responsibility means that
the former employee had the direct administrative or operating authority
to approve, disapprove, or otherwise direct official actions in the
proceeding or investigation, irrespective of whether the employee's
authority was intermediate or final, and whether it was exercisable
[[Page 110]]
alone or only in conjunction with others.
(v) Personal and substantial participation. A former employee
participated in the proceeding or investigation personally if the
employee either participated directly or directed a subordinate in doing
so. The employee participated substantially if the involvement was
significant to the matter or reasonably appeared to be significant. A
series of peripheral involvements may be considered insubstantial, while
a single act of approving or participating in a critical step may be
considered substantial.
(vi) Present advantage. Whether exposure to nonpublic information
about the proceeding or investigation could confer a present advantage
to a former employee will be analyzed and determined on a case-by-case
basis. Relevant factors include, inter alia, the nature and age of the
information, its relation and current importance to the proceeding or
investigation in question, and the amount of time that has passed since
the employee left the Commission.
(vii) Proceeding or investigation shall be interpreted broadly and
includes an adjudicative or other proceeding; the consideration of an
application; a request for a ruling or other determination; a contract;
a claim; a controversy; an investigation; or an interpretive ruling.
(6) Advice as to whether clearance request is required. A former
employee may ask the General Counsel, either orally or in writing,
whether the employee is required to file a request for clearance to
participate in a Commission matter pursuant to paragraph (b)(2) of this
section. The General Counsel, or the General Counsel's designee, will
make any such determination within three business days.
(7) Deadline for determining clearance requests. By the close of the
tenth business day after the date on which the clearance request is
filed, the General Counsel, or the General Counsel's designee, will
notify the requester either that:
(i) The request for clearance has been granted;
(ii) The General Counsel or the General Counsel's designee has
decided to recommend that the Commission prohibit the requester's
participation; or
(iii) The General Counsel or the General Counsel's designee is, for
good cause, extending the period for reaching a determination on the
request by up to an additional ten business days.
(8) Participation of partners or associates of former employees. (i)
If a former employee is prohibited from participating in a proceeding or
investigation by virtue of having worked on the matter personally and
substantially while a Commission employee, no partner or legal or
business associate of that individual may participate except after
filing with the Secretary of the Commission an affidavit attesting that:
(A) The former employee will not participate in the proceeding or
investigation in any way, directly or indirectly (and describing how the
former employee will be screened from participating);
(B) The former employee will not share in any fees resulting from
the participation;
(C) Everyone who intends to participate is aware of the requirement
that the former employee be screened;
(D) The client(s) have been informed; and
(E) The matter was not brought to the participant(s) through the
active solicitation of the former employee.
(ii) If the Commission finds that the screening measures being taken
are unsatisfactory or that the matter was brought to the participant(s)
through the active solicitation of the former employee, the Commission
will notify the participant(s) to cease the representation immediately.
(9) Effect on other standards. The restrictions and procedures in
this section are intended to apply in lieu of restrictions and
procedures that may be adopted by any state or jurisdiction, insofar as
such restrictions and procedures apply to appearances or participation
in Commission proceedings or investigations. Nothing in this section
supersedes other standards of conduct applicable under paragraph (e) of
this section. Requests for advice about this section, or about any
matter related to other applicable rules and standards of ethical
conduct, shall be directed to the Office of the General Counsel.
[[Page 111]]
(c) Public disclosure. Any request for clearance filed by a former
member or employee pursuant to this section, as well as any written
response, are part of the public records of the Commission, except for
information exempt from disclosure under Sec. 4.10(a) of this chapter.
Information identifying the subject of a nonpublic Commission
investigation will be redacted from any request for clearance or other
document before it is placed on the public record.
(d) Notice of appearance. Any attorney desiring to appear before the
Commission or an Administrative Law Judge on behalf of a person or party
shall file with the Secretary of the Commission a written notice of
appearance, stating the basis for eligibility under this section and
including the attorney's jurisdiction of admission/qualification,
attorney identification number, if applicable, and a statement by the
appearing attorney attesting to his/her good standing within the legal
profession. No other application shall be required for admission to
practice, and no register of attorneys will be maintained.
(e) Reprimand, suspension, or disbarment of attorneys. (1)(i) The
following provisions govern the evaluation of allegations of misconduct
by attorneys practicing before the Commission who are not employed by
the Commission.\1\ The Commission may publicly reprimand, suspend, or
disbar from practice before the Commission any such person who has
practiced, is practicing, or holds himself or herself out as entitled to
practice before the Commission if it finds that such person:
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\1\ The standards of conduct and disciplinary procedures under this
Sec. 4.1(e) apply only to outside attorneys practicing before the
Commission and not to Commission staff. Allegations of misconduct by
Commission employees will be handled pursuant to procedures for employee
discipline or pursuant to investigations by the Office of Inspector
General.
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(A) Does not possess the qualifications required by Sec. 4.1(a);
(B) Has failed to act in a manner consistent with the rules of
professional conduct of the attorney's state(s) of licensure;
(C) Has engaged in obstructionist, contemptuous, or unprofessional
conduct during the course of any Commission proceeding or investigation;
or
(D) Has knowingly or recklessly given false or misleading
information, or has knowingly or recklessly participated in the giving
of false information to the Commission or any officer or employee of the
Commission.\2\
---------------------------------------------------------------------------
\2\ For purposes of this rule, knowingly giving false or misleading
information includes knowingly omitting material facts necessary to make
any oral or written statements not misleading in light of the
circumstances under which they were made.
---------------------------------------------------------------------------
(ii) An attorney may be responsible for another attorney's violation
of this paragraph (e) if the attorney orders, or with knowledge of the
specific conduct, ratifies the conduct involved. In addition, an
attorney who has direct supervisory authority over another attorney may
be responsible for that attorney's violation of this paragraph (e) if
the supervisory attorney knew of the conduct at a time when its
consequences could have been avoided or mitigated but failed to take
reasonable remedial action.
(2) Allegations of attorney misconduct in violation of paragraph
(e)(1) of this section may be proffered by any person possessing
information concerning the alleged misconduct. Any such allegations may
be submitted orally or in writing to a Bureau Officer who will evaluate
the sufficiency of the allegations in the first instance to determine
whether further action by the Commission is warranted. The Director of
the Bureau or office responsible for the matter about which the
allegations are made, or the Director's designee, shall serve as the
Bureau Officer.
(3) After review and evaluation of the allegations, any supporting
materials, and any additional information that the Bureau Officer may
acquire, the Bureau Officer, if he or she determines that further action
is warranted, shall in writing notify the subject of the complaint of
the underlying allegations and potential sanctions available to the
Commission under this section, and provide him or her an opportunity to
respond to the allegations and provide additional relevant information
and material. The Bureau Officer may request that the Commission issue a
[[Page 112]]
resolution authorizing the use of compulsory process, and may thereafter
initiate the service of compulsory process, to assist in obtaining
information for the purpose of making a recommendation to the Commission
whether further action may be warranted.
(4) If the Bureau Officer, after review and evaluation of the
allegations, supporting material, response by the subject of the
allegations, if any, and all additional available information and
material, determines that no further action is warranted, he or she may
close the matter if the Commission has not issued a resolution
authorizing the use of compulsory process. In the event the Bureau
Officer determines that further Commission action may be warranted, or
if the Commission has issued a resolution authorizing the use of
compulsory process, he or she shall make a recommendation to the
Commission. The recommendation shall include all relevant information
and material as to whether further Commission action, or any other
disposition of the matter, may be warranted.
(5) If the Commission has reason to believe, after review of the
Bureau Officer's recommendation, that an attorney has engaged in
professional misconduct of the type described in paragraph (e)(1) of
this section, the Commission may institute administrative disciplinary
proceedings proposing public reprimand, suspension, or disbarment of the
attorney from practice before the Commission. Except as provided in
paragraph (e)(7) of this section, administrative disciplinary
proceedings shall be handled in accordance with the following
procedures:
(i) The Commission shall serve the respondent attorney with an order
to show cause why the Commission should not impose sanctions against the
attorney. The order to show cause shall specify the alleged misconduct
at issue and the possible sanctions. The order to show cause shall be
accompanied by all declarations, deposition transcripts, or other
evidence the staff wishes the Commission to consider in support of the
allegations of misconduct.
(ii) Within 14 days of service of the order to show cause, the
respondent may file a response to the allegations of misconduct. If the
response disputes any of the allegations of misconduct, it shall do so
with specificity and include all materials the respondent wishes the
Commission to consider relating to the allegations. If no response is
filed, the allegations shall be deemed admitted.
(iii) If, upon considering the written submissions of the
respondent, the Commission determines that there remains a genuine
dispute as to any material fact, the Commission may order further
proceedings to be presided over by an Administrative Law Judge or by one
or more Commissioners sitting as Administrative Law Judges (hereinafter
referred to collectively as the Administrative Law Judge), or by the
Commission. The Commission order shall specify the nature and scope of
any proceeding, including whether live testimony will be heard and
whether any pre-hearing discovery will be allowed and if so to what
extent. The attorney respondent shall be granted due opportunity to be
heard in his or her own defense and may be represented by counsel. If
the written submissions of the respondent raise no genuine dispute of
material fact, the Commission may issue immediately any or all of the
sanctions enumerated in the order to show cause provided for in
paragraph (e)(5)(i) of this section.
(iv) Commission counsel shall be appointed by the Bureau Officer to
prosecute the allegations of misconduct in any administrative
disciplinary proceedings instituted pursuant to this rule.
(v) If the Commission assigns the matter to an Administrative Law
Judge, the Commission will establish a deadline for an initial decision.
The deadline shall not be modified by the Administrative Law Judge
except that it may be amended by leave of the Commission.
(vi) Based on the entirety of the record of administrative
proceedings, the Administrative Law Judge or the Commission if it
reviews the matter in the first instance, shall issue a decision either
dismissing the allegations or, if it is determined that the allegations
are supported by a preponderance of the evidence, specify an appropriate
sanction. An Administrative Law Judge's decision may be appealed to
[[Page 113]]
the Commission by either party within 30 days. If the Administrative Law
Judge's decision is appealed, the Commission will thereafter issue a
scheduling order governing the appeal.
(vii) Investigations and administrative proceedings prior to the
hearing on the order to show cause will be nonpublic unless otherwise
ordered by the Commission. Any administrative hearing on the order to
show cause, and any oral argument on appeal, shall be open to the public
unless otherwise ordered for good cause by the Commission or the
Administrative Law Judge.
(6) Regardless of any action or determination the Commission may or
may not make, the Commission may direct the General Counsel to refer the
allegations of misconduct to the appropriate state, territory, or
District of Columbia bar or any other appropriate authority for further
action.
(7) Upon receipt of notification from any authority having power to
suspend or disbar an attorney from the practice of law within any state,
territory, or the District of Columbia, demonstrating that an attorney
practicing before the Commission is subject to an order of final
suspension (not merely temporary suspension pending further action) or
disbarment by such authority, the Commission may, without resort to any
of the procedures described in this section, enter an order temporarily
suspending the attorney from practice before it and directing the
attorney to show cause within 30 days from the date of said order why
the Commission should not impose further discipline against the
attorney. If no response is filed, the attorney will be deemed to have
acceded to such further discipline as the Commission deems appropriate.
If a response is received, the Commission may take action or initiate
proceedings consistent with paragraph (e)(5) of this section before
making a determination whether, and to what extent, to impose further
discipline against the attorney.
(8) The disciplinary process described in this section is in
addition to, and does not supersede, the authority of the Commission or
an Administrative Law Judge to discipline attorneys participating in
part 3 proceedings pursuant to Sec. Sec. 3.24(b)(2) or 3.42(d).
[32 FR 8456, June 13, 1967, as amended at 40 FR 15235, Apr. 4, 1975; 41
FR 16453, Apr. 19, 1976; 46 FR 26295, May 12, 1981; 48 FR 44767, Sept.
30, 1983; 50 FR 50781, Dec. 12, 1985; 50 FR 53306, Dec. 31, 1985; 56 FR
44139, Sept. 27, 1991; 58 FR 40737, July 30, 1993; 63 FR 15758, Apr. 1,
1998; 64 FR 14830, Mar. 29, 1999; 66 FR 13645, Mar. 7, 2001; 66 FR
64143, Dec. 12, 2001; 77 FR 59309, Sept. 27, 2012]
Sec. 4.2 Requirements as to form, and filing of documents other than
correspondence.
(a) Filing. (1) All paper and electronic documents filed with the
Commission or with an Administrative Law Judge pursuant to part 0, part
1, part 2, or part 3 of this chapter shall be filed with the Secretary
of the Commission, except that:
(i) Documents produced in response to compulsory process issued
pursuant to part 2 or part 3 of this chapter shall instead be produced
to the custodian, deputy custodian, or other person prescribed therein,
and in the manner prescribed therein; and
(ii) Comments filed in response to a Commission request for public
comment shall instead be filed in the manner prescribed in the Federal
Register document or other Commission document containing the request
for such comment.
(iii) Petitions for rulemaking and petitions for exemptions from
rules shall instead be filed in the manner prescribed in Sec. 1.31 of
this chapter.
(2) All paper and electronic documents filed with the Commission
pursuant to parts 4-999 of this chapter shall be filed with the
Secretary of the Commission, except as otherwise provided in such part.
(b) Title and public or nonpublic status. All paper and electronic
documents filed with the Commission or with an Administrative Law Judge
pursuant to any part of this chapter shall clearly show the file or
docket number and title of the action in connection with which they are
filed. Every page of each such document shall be clearly and accurately
labeled ``Public'', ``In Camera'' or ``Confidential''.
[[Page 114]]
(c) Paper and electronic copies of filings before the Commission or
an Administrative Law Judge in adjudicative proceedings under part 3 of
this chapter. (1) Each document filed in an adjudicative proceeding
under part 3, except documents covered by Sec. 4.2(a)(1)(i), shall be
filed with the Secretary of the Commission, shall be in 12-point font
with 1-inch margins, and shall comply with the requirements of
Sec. Sec. 4.2(b) and (f) and 4.3(d). Documents may be filed with the
Office of the Secretary either electronically or in hard copy.
(i) Documents may be filed electronically by using the Office of the
Secretary's electronic filing system and complying with the Secretary's
directions for using that system. Documents filed electronically shall
be in Adobe portable document format or such other format as the
Secretary may direct.
(ii) Documents filed in hard copy shall include a paper original,
one paper copy, and an electronic copy in Adobe portable document format
or such other format as the Secretary shall direct.
(2) If the document is labeled ``In Camera'' or ``Confidential'', it
must include as an attachment either a motion requesting in camera or
other confidential treatment, in the form prescribed by Sec. 3.45 of
this chapter, or a copy of a Commission, Administrative Law Judge, or
federal court order granting such treatment. The document must also
include as a separate attachment a set of only those pages of the
document on which the in camera or otherwise confidential material
appears and comply with all other requirements of Sec. 3.45 and any
other applicable rules governing in camera treatment. A document labeled
``In Camera'' or ``Confidential'' may be filed electronically using the
electronic filing system.
(3) Sensitive personal information, as defined in Sec. 3.45(b) of
this chapter, shall not be included in, and must be redacted or omitted
from, filings where the filing party determines that such information is
not relevant or otherwise necessary for the conduct of the proceeding.
(4) A copy of each document filed in accordance with this section in
an adjudicative proceeding under part 3 of this chapter shall be served
by the party filing the document or person acting for that party on all
other parties pursuant to Sec. 4.4, at or before the time the original
is filed.
(d) Other documents filed with the Commission. (1) Each document
filed with the Commission, and not covered by Sec. 4.2(a)(1)(i) or (ii)
or Sec. 4.2(c), shall be filed with the Secretary of the Commission,
and shall be clearly and accurately labeled as required by Sec. 4.2(b).
(2) Each such document shall be signed and shall comply with the
requirements of Sec. 4.2(f). Documents filed under this paragraph (d)
shall include a paper original, one paper copy, and an electronic copy
in Adobe portable document format, unless the Secretary shall otherwise
direct.
(3) Each such document labeled ``Public'' may be placed on the
public record of the Commission at the time it is filed.
(4) If such a document is labeled ``Confidential'', and it is filed
pursuant to Sec. 2.10(a), Sec. 2.41(f), or Sec. 2.51 of this chapter,
it will be rejected for filing pursuant to Sec. 4.2(g), and will not
stay compliance with any applicable obligation imposed by the Commission
or the Commission staff, unless the filer simultaneously files:
(i) An explicit request for confidential treatment that includes the
factual and legal basis for the request, identifies the specific
portions of the document to be withheld from the public record, provides
the name and address of the person(s) who should be notified in the
event the Commission determines to disclose some or all of the material
labeled ``Confidential'', and otherwise conforms to the requirements of
Sec. 4.9(c); and
(ii) A redacted public version of the document that is clearly
labeled ``Public''.
(e) Form. Paper documents filed with the Secretary of the Commission
shall be printed, typewritten, or otherwise processed in permanent form
and on good unglazed paper. A motion or other document filed in an
adjudicative proceeding under part 3 of this chapter shall contain a
caption setting forth the title of the case, the docket number, and a
brief descriptive title indicating the purpose of the document.
[[Page 115]]
(f) Signature. (1) The original of each document filed shall be
signed by an attorney of record for the filing party, or in the case of
parties not represented by counsel, by the party itself, or by a partner
if a partnership, or by an officer of the party if it is a corporation
or an unincorporated association. For documents filed electronically
using the Office of the Secretary's electronic filing system, documents
must be signed using a scanned signature image, an ``s/'' followed by
the name of the filer using the electronic filing system, or another
signature method as the Secretary may direct.
(2) Signing a document constitutes a representation by the signer
that he or she has read it; that to the best of his or her knowledge,
information, and belief, the statements made in it are true; that it is
not interposed for delay; and that to the best of his or her knowledge,
information, and belief, it complies with the rules in this part. If a
document is not signed or is signed with intent to defeat the purpose of
this section, it may be stricken as sham and false and the proceeding
may go forward as though the document had not been filed.
(g) Authority to reject documents for filing. The Secretary of the
Commission may reject a document for filing that fails to comply with
the Commission's rules. In cases of extreme hardship, the Secretary may
excuse compliance with a rule regarding the filing of documents if the
Secretary determines that the non-compliance would not interfere with
the functions of the Commission.
[74 FR 1835, Jan. 13, 2009, as amended at 74 FR 20209, May 1, 2009; 76
FR 52253, Aug. 22, 2011; 77 FR 59311, Sept. 27, 2012; 80 FR 25941, May
6, 2015; 86 FR 59853, Oct. 29, 2021]
Sec. 4.3 Time.
(a) Computation. Computation of any period of time prescribed or
allowed by the rules in this chapter, by order of the Commission or an
Administrative Law Judge, or by any applicable statute, shall begin with
the first business day following that on which the act, event, or
development initiating such period of time shall have occurred. When the
last day of the period so computed is a Saturday, Sunday, or national
holiday, or other day on which the office of the Commission is closed,
the period shall run until the end of the next following business day.
When such period of time, with the intervening Saturdays, Sundays, and
national holidays counted, is seven (7) days or less, each of the
Saturdays, Sundays, and such holidays shall be excluded from the
computation. When such period of time, with the intervening Saturdays,
Sundays, and national holidays counted, exceeds seven (7) days, each of
the Saturdays, Sundays, and such holidays shall be included in the
computation.
(b) Extensions. For good cause shown, the Administrative Law Judge
may, in any proceeding before him or her: (1) Extend any time limit
prescribed or allowed by order of the Administrative Law Judge or the
Commission (if the Commission order expressly authorizes the
Administrative Law Judge to extend time periods); or (2) extend any time
limit prescribed by the rules in this chapter, except those governing
motions directed to the Commission, interlocutory appeals and initial
decisions and deadlines that the rules expressly authorize only the
Commission to extend. Except as otherwise provided by law, the
Commission, for good cause shown, may extend any time limit prescribed
by the rules in this chapter or by order of the Commission or an
Administrative Law Judge, provided, however, that in a proceeding
pending before an Administrative Law Judge, any motion on which he or
she may properly rule shall be made to the Administrative Law Judge.
Notwithstanding the above, where a motion to extend is made after the
expiration of the specified period, the motion may be considered where
the untimely filing was the result of excusable neglect.
(c) Additional time after certain kinds of service. Whenever a party
in an adjudicative proceeding under part 3 of this chapter is required
or permitted to do an act within a prescribed period after service of a
document upon it and the document is served by first-class mail pursuant
to Sec. 4.4(a)(2) or (b), 3 days shall be added to the prescribed
period. Whenever a party in an adjudicative proceeding under part 3 is
required or
[[Page 116]]
permitted to do an act within a prescribed period after service of a
document upon it and the document is served by electronic delivery
pursuant to Sec. 4.4(e), 1 day shall be added to the prescribed period.
(d) Date of filing. Documents permitted to be filed using the
electronic filing system must be received by 11:59 p.m. Eastern Time to
be deemed timely filed that day. All other documents must be received in
the Office of the Secretary by 5:00 p.m. Eastern Time to be deemed filed
that day, and any such document received after 5:00 p.m. Eastern Time
will be deemed filed the following business day.
[32 FR 8456, June 13, 1967, as amended at 42 FR 30150, June 13, 1977; 50
FR 28097, July 10, 1985; 50 FR 53306, Dec. 31, 1985; 66 FR 17633, Apr.
3, 2001; 74 FR 1836, Jan. 13, 2009; 80 FR 25942, May 6, 2015]
Sec. 4.4 Service.
(a) By the Commission. (1) Service of complaints, initial decisions,
final orders and other processes of the Commission under 15 U.S.C. 45
may be effected as follows:
(i) By registered or certified mail. A copy of the document shall be
addressed to the person, partnership, corporation or unincorporated
association to be served at his, her or its residence or principal
office or place of business, registered or certified, and mailed;
service under this provision is complete upon delivery of the document
by the Post Office; or
(ii) By delivery to an individual. A copy thereof may be delivered
to the person to be served, or to a member of the partnership to be
served, or to the president, secretary, or other executive officer or a
director of the corporation or unincorporated association to be served;
service under this provision is complete upon delivery as specified
herein; or
(iii) By delivery to an address. A copy thereof may be left at the
principal office or place of business of the person, partnership,
corporation, or unincorporated association, or it may be left at the
residence of the person or of a member of the partnership or of an
executive officer or director of the corporation, or unincorporated
association to be served; service under this provision is complete upon
delivery as specified herein.
(2) All documents served by the Commission or Administrative Law
Judge in adjudicative proceedings under part 3 of this chapter, other
than documents governed by paragraph (a)(1) of this section, may be
served by personal delivery (including delivery by courier), by
electronic delivery in accordance with Sec. 4.4(e), or by first-class
mail. Unless otherwise specified in Sec. 4.4(e), documents shall be
deemed served on the day of personal or electronic delivery or the day
of mailing.
(3) All other orders and notices, including subpoenas, orders
requiring access, orders to file annual and special reports, and notices
of default, may be served by any method reasonably certain to inform the
affected person, partnership, corporation or unincorporated association,
including any method specified in paragraph (a)(1) of this section,
except that civil investigative demands may only be served in the manner
provided by section 20(c)(8) of the FTC Act (in the case of service on a
partnership, corporation, association, or other legal entity) or section
20(c)(9) of the FTC Act (in the case of a natural person). Service under
this provision is complete upon delivery by the Post Office or upon
personal delivery (including delivery by courier).
(b) By parties or third parties in adjudicative proceedings under
part 3 of this chapter. (1) Service of documents by complaint counsel,
respondents, or third parties in adjudicative proceedings under part 3
shall be by delivering copies using the following methods.
(i) Upon complaint counsel. A copy may be served by personal
delivery (including delivery by courier), by electronic delivery in
accordance with Sec. 4.4(e), or by first-class mail to the lead
complaint counsel, with a copy to the Administrative Law Judge.
(ii) Upon a party other than complaint counsel or upon a third
party. A copy may be served by personal delivery (including delivery by
courier), by electronic delivery in accordance with Sec. 4.4(e), or by
first-class mail, with a copy to the Administrative Law Judge.
[[Page 117]]
If the party is an individual or partnership, delivery shall be to such
individual or a member of the partnership; if a corporation or
unincorporated association, to an officer or agent authorized to accept
service of process therefor. Personal delivery includes handing the
document to be served to the individual, partner, officer, or agent;
leaving it at his or her office with a person in charge thereof; or, if
there is no one in charge or if the office is closed or if the party has
no office, leaving it at his or her dwelling house or usual place of
abode with some person of suitable age and discretion then residing
therein.
(2) Unless otherwise specified in Sec. 4.4(e), documents served in
adjudicative proceedings under part 3 shall be deemed served on the day
of personal delivery (including delivery by courier), the day of
electronic delivery, or the day of mailing.
(c) Service upon counsel. When counsel has appeared in a proceeding
on behalf of a party, service upon such counsel of any document, other
than a complaint, shall be deemed service upon the party. However,
service of those documents specified in paragraph (a)(1) of this section
shall be in accordance with paragraphs (a)(1)(i), (ii), and (iii) of
this section.
(d) Proof of service. In an adjudicative proceeding under part 3,
documents presented for filing shall contain proof of service in the
form of a statement of the date and manner of service and of the names
of the persons served, certified by the person who made service. Proof
of service must appear on or be affixed to the documents filed.
(e) Service by electronic delivery in an adjudicative proceeding
under part 3 of this chapter--(1) Service through the electronic filing
system. A party may elect, for documents labeled ``Public'' pursuant to
Sec. 4.2(b), to be served via the electronic filing system provided by
the Office of the Secretary. The electronic filing system cannot be used
to serve third parties. For parties that have elected to be served via
the electronic filing system:
(i) Service of documents labeled ``Public'' pursuant to Sec. 4.2(b)
may be effected through the electronic filing system;
(ii) Each such party thereby agrees that, for any document served
through the electronic filing system, transmission of the notice of
electronic filing provided by the electronic filing system shall satisfy
the service obligations of the serving party; and
(iii) A document served via the electronic filing system shall be
deemed served on the date the notice of electronic filing is
transmitted, unless the serving party learns that the notice of
electronic filing did not reach the person to be served.
(2) Service by other methods of electronic delivery. (i) In the
following circumstances, service by other methods of electronic delivery
(including service by email) may be effected as the Administrative Law
Judge and the Secretary may direct:
(A) The document to be served is labeled ``In Camera'' or
``Confidential'' pursuant to Sec. 4.2(b);
(B) The party to be served has not elected to be served via the
electronic filing system;
(C) The document is to be served upon a third party; or
(D) Service under paragraph (e)(1) of this section is unavailable
for technical reasons.
(ii) If documents labeled ``In Camera'' or ``Confidential'' are
being served under this paragraph (e)(2), the documents must be
encrypted prior to transit or must be transferred through a secure file
transfer protocol. Service of a document under this paragraph (e)(2)
shall be complete upon transmission by the serving party, unless the
serving party learns that the document did not reach the person to be
served.
(f) Service of process upon the Commission. Documents served upon
the Commission may be served by personal delivery (including delivery by
courier) or by first-class mail to the Office of the Secretary of the
Commission.
[80 FR 25942, May 6, 2015, as amended at 80 FR 60797, Oct. 8, 2015]
Sec. 4.5 Fees.
(a) Deponents and witnesses. Any person compelled to appear in
person in response to subpoena shall be paid the same fees and mileage
as are paid witnesses in the courts of the United States.
[[Page 118]]
(b) Presiding officers. Officers before whom depositions are taken
shall be entitled to the same fees as are paid for like services in the
courts of the United States.
(c) Responsibility. The fees and mileage referred to in this section
shall be paid by the party at whose instance deponents or witnesses
appear.
[32 FR 8456, June 13, 1967]
Sec. 4.6 Cooperation with other agencies.
It is the policy of the Commission to cooperate with other
governmental agencies to avoid unnecessary overlapping or duplication of
regulatory functions.
[32 FR 8456, June 13, 1967]
Sec. 4.7 Ex parte communications.
(a) Definitions. For purposes of this section, ex parte
communication means an oral or written communication not on the public
record with respect to which reasonable prior notice to all parties is
not given, but it shall not include requests for status reports on any
matter or proceeding.
(b) Prohibited ex parte communications. While a proceeding is in
adjudicative status within the Commission, except to the extent required
for the disposition of ex parte matters as authorized by law:
(1) No person not employed by the Commission, and no employee or
agent of the Commission who performs investigative or prosecuting
functions in adjudicative proceedings, shall make or knowingly cause to
be made to any member of the Commission, or to the Administrative Law
Judge, or to any other employee who is or who reasonably may be expected
to be involved in the decisional process in the proceeding, an ex parte
communciation relevant to the merits of that or a factually related
proceeding; and
(2) No member of the Commission, the Administrative Law Judge, or
any other employee who is or who reasonably may be expected to be
involved in the decisional process in the proceeding, shall make or
knowingly cause to be made to any person not employed by the Commission,
or to any employee or agent of the Commission who performs investigative
or prosecuting functions in adjudicative proceedings, an ex parte
communication relevant to the merits of that or a factually related
proceeding.
(c) Procedures. A Commissioner, the Administrative Law Judge or any
other employee who is or who may reasonably be expected to be involved
in the decisional process who receives or who make or knowingly causes
to be made, a communication prohibited by paragraph (b) of this section
shall promptly provide to the Secretary of the Commission:
(1) All such written communications;
(2) Memoranda stating the substance of and circumstances of all such
oral communications; and
(3) All written responses, and memoranda stating the substance of
all oral responses, to the materials described in paragraphs (c) (1) and
(2) of this section. The Secretary shall make relevant portions of any
such materials part of the public record of the Commission, pursuant to
Sec. 4.9, and place them in the docket binder of the proceeding to
which it pertains, but they will not be considered by the Commission as
part of the record for purposes of decision unless introduced into
evidence in the proceeding. The Secretary shall also send copies of the
materials to or otherwise notify all parties to the proceeding.
(d) Sanctions. (1) Upon receipt of an ex parte communication
knowingly made or knowingly caused to be made by a party and prohibited
by paragraph (b) of this section, the Commission, Administrative Law
Judge, or other employee presiding over the proceeding may, to the
extent consistent with the interests of justice and the policy of the
underlying statutes administered by the Commission, require the party to
show cause why his claim or interest in the proceeding should not be
dismissed, denied, disregarded, or otherwise adversely affected on
account of such violation. The Commission may take such action as it
considers appropriate, including but not limited to, action under Sec.
4.1(e)(2) and 5 U.S.C. 556(d).
(2) A person, not a party to the proceeding who knowingly makes or
causes to be made an ex parte communication prohibited by paragraph (b)
of
[[Page 119]]
this section shall be subject to all sanctions provided herein if he
subsequently becomes a party to the proceeding.
(e) The prohibitions of this section shall apply in an adjudicative
proceeding from the time the Commission votes to issue a complaint
pursuant to Sec. 3.11, to conduct adjudicative hearings pursuant to
Sec. 3.13, or to issue an order to show cause pursuant to Sec.
3.72(b), or from the time an order by a U.S. court of appeals remanding
a Commission decision and order for further proceedings becomes
effective, until the time the Commission votes to enter its decision in
the proceeding and the time permitted by Sec. 3.55 to seek
reconsideration of that decision has elapsed. For purposes of this
section, an order of remand by a U.S. court of appeals shall be deemed
to become effective when the Commission determines not to file a
petition for a writ of certiorari, or when the time for filing such a
petition has expired without a petition having been filed, or when such
a petition has been denied. If a petition for reconsideration of a
Commission decision is filed pursuant to Sec. 3.55, the provisions of
this section shall apply until the time the Commission votes to enter an
order disposing of the petition. In addition, the prohibitions of this
section shall apply with respect to communications concerning an
application for stay filed with the Commission pursuant to Sec. 3.56
from the time that the application is filed until its disposition.
(f) The prohibitions of paragraph (b) of this section do not apply
to a communication occasioned by and concerning a nonadjudicative
function of the Commission, including such functions as the initiation,
conduct, or disposition of a separate investigation, the issuance of a
complaint, or the initiation of a rulemaking or other proceeding,
whether or not it involves a party already in an adjudicative
proceeding; preparations for judicial review of a Commission order; a
proceeding outside the scope of Sec. 3.2, including a matter in state
or federal court or before another governmental agency; a
nonadjudicative function of the Commission, including but not limited to
an obligation under Sec. 4.11 or a communication with Congress; or the
disposition of a consent settlement under Sec. 3.25 concerning some or
all of the charges involved in a complaint and executed by some or all
respondents. The Commission, at its discretion and under such
restrictions as it may deem appropriate, may disclose to the public or
to respondent(s) in a pending adjudicative proceeding a communication
made exempt by this paragraph from the prohibitions of paragraph (b) of
this section, however, when the Commission determines that the interests
of justice would be served by the disclosure. The prohibitions of
paragraph (b) of this section also do not apply to a communication
between any member of the Commission, the Administrative Law Judge, or
any other employee who is or who reasonably may be expected to be
involved in the decisional process, and any employee who has been
directed by the Commission or requested by an individual Commissioner or
Administrative Law Judge to assist in the decision of the adjudicative
proceeding. Such employee shall not, however, have performed an
investigative or prosecuting function in that or a factually related
proceeding.
[42 FR 43974, Sept. 1, 1977, as amended at 44 FR 40637, July 12, 1979;
46 FR 32435, June 23, 1981; 50 FR 53306, Dec. 31, 1985; 51 FR 36802,
Oct. 16, 1986; 57 FR 10805, Mar. 31, 1992; 60 FR 37748, July 21, 1995;
60 FR 67325, Dec. 29, 1995]
Sec. 4.8 Costs for obtaining Commission records.
(a) Definitions. For the purpose of this section:
(1) The term search includes all time spent looking, manually or by
automated means, for material that is responsive to a request, including
page-by-page or line-by-line identification of material within
documents.
(2) The term duplication refers to the process of making a copy of a
document for the purpose of releasing that document in response to a
request for Commission records. Such copies can take the form of paper
copy, microform, audio-visual materials, or machine readable
documentation such as magnetic tape or computer disc. For copies
prepared by computer and then saved to a computer disc, the Commission
charges the direct costs, including
[[Page 120]]
operator time, of production of the disc or other output format. Where
paper documents must be scanned in order to comply with a requester's
preference to receive the records in an electronic format, the requester
shall pay the direct costs associated with scanning those materials. As
set out in Sec. 4.8(b), certain requesters do not pay for direct costs
associated with duplicating the first 100 pages.
(3) The term review refers to the examination of documents located
in response to a request to determine whether any portion of such
documents may be withheld, and the redaction or other processing of
documents for disclosure. Review costs are recoverable from commercial
use requesters even if a record ultimately is not disclosed. Review time
includes time spent considering formal objections to disclosure made by
a business submitter but does not include time spent resolving general
legal or policy issues regarding the release of the document.
(4) The term direct costs means expenditures that the Commission
actually incurs in processing requests. Direct costs include the salary
of the employee performing work (the basic rate of pay for the employee
plus 16 percent of that rate to cover benefits) and the cost of
operating duplicating machinery. Not included in direct costs are
overhead expenses such as costs of document review facilities or the
costs of heating or lighting such a facility or other facilities in
which records are stored. The direct costs of specific services are set
forth in Sec. 4.8(b)(6).
(b) Fees. User fees pursuant to 31 U.S.C. 9701 and 5 U.S.C. 552(a)
shall be charged according to this paragraph, unless the requester
establishes the applicability of a public interest fee waiver pursuant
to Sec. 4.8(e). The chart summarizes the types of charges that apply to
requester categories set out in paragraphs (b)(1)-(b)(3).
----------------------------------------------------------------------------------------------------------------
Fee charged for all Fee charged for all
Requester categories search time review time Duplication charges
----------------------------------------------------------------------------------------------------------------
Commercial........................... Fee.................... Fee.................... Fee charged for all
duplication.
Educational, Non-commercial No charge.............. No charge.............. No charge for first 100
Scientific Institution, or News pages.
Media.
All other requesters (including Fee after two hours.... No charge.............. No charge for first 100
members of the general public). pages.
----------------------------------------------------------------------------------------------------------------
(1) Commercial use requesters. Commercial use requesters will be
charged for the direct costs to search for, review, and duplicate
documents. A commercial use requester is a requester who seeks
information for a use or purpose that furthers the commercial, trade, or
profit interests of the requester or the person on whose behalf the
request is made.
(2) Educational requesters, non-commercial scientific institution
requesters, and representative of the news media. Requesters in these
categories will be charged for the direct costs to duplicate documents,
excluding charges for the first 100 pages.
(i) An educational institution is a preschool, a public or private
elementary or secondary school, an institution of graduate higher
education, an institution of undergraduate higher education, an
institution of professional education, and an institution of vocational
education, which operates a program or programs of scholarly research.
To be in this category, a requester must show that the request is
authorized by and is made under the auspices of a qualifying institution
and that the records are sought to further the scholarly research of the
institution and are not sought for a commercial or an individual use or
goal.
(ii) A non-commercial scientific institution is an institution that
is not operated on a commercial basis as that term is referenced in
paragraph (b)(1) of this section, and that is operated solely to conduct
scientific research the results of which are not intended to promote any
particular product or industry.
(iii) A representative of the news media is any person or entity
that gathers information of potential interest to a segment of the
public, uses its editorial skills to turn the raw materials into a
distinct work, and distributes that
[[Page 121]]
work to an audience. The term ``news'' means information that is about
current events or that would be of current interest to the public.
Examples of news media entities include television or radio stations
broadcasting to the public at large and publishers of periodicals (but
only in those instances where they can qualify as disseminators of news)
who make their products available for purchase by or subscription by the
general public or free distribution to the general public. These
examples are not intended to be all-inclusive. As traditional methods of
news delivery evolve (e.g., electronic dissemination of newspapers
through telecommunications services), such alternative media shall be
considered to be news-media entities. A freelance journalist shall be
regarded as working for a news-media entity if the journalist can
demonstrate a solid basis for expecting publication through that entity,
whether or not the journalist is actually employed by the entity. A
publication contract would provide a solid basis for such an
expectation, but the past publication record of a requester may also be
considered in making such a determination. To qualify for news media
status, a request must not be for a nonjournalistic commercial use. A
request for records supporting the news dissemination function of the
requester is not considered a commercial use.
(3) Other requesters. Other requesters not described in paragraphs
(b)(1) or (2) will be charged for the direct costs to search for and
duplicate documents, except that the first 100 pages of duplication and
the first two hours of search time shall be furnished without charge.
(4) Waiver of small charges. Notwithstanding the provisions of
paragraphs (b)(1), (2), and (3) of this section, charges will be waived
if the total chargeable fees for a request are under $25.00.
(5) Materials available without charge. These provisions do not
apply to public records, including but not limited to Commission
decisions, orders, and other public materials that may be made available
to all requesters without charge.
(6)(i) Schedule of direct costs. The following uniform schedule of
fees applies to records held by all constituent units of the Commission:
------------------------------------------------------------------------
------------------------------------------------------------------------
Duplication
------------------------------------------------------------------------
Paper to paper copy (up to 8.5[sec] x $0.14 per page.
14[sec]).
Converting paper into electronic format Quarter hour rate of operator
(scanning). (Clerical, Other Professional,
Attorney/Economist).
Other reproduction (e.g., converting Actual direct cost, including
from one electronic format to computer operator time.
disk or printout, microfilm,
microfiche, or microform).
------------------------------------------------------------------------
Electronic Services
------------------------------------------------------------------------
Compact disc (CD)...................... $3.00 per disc.
DVD.................................... $3.00 per disc.
Videotape cassette..................... $2.00 per cassette.
------------------------------------------------------------------------
Microfilm Services
------------------------------------------------------------------------
Conversion of existing fiche/film to $0.14 per page.
paper.
------------------------------------------------------------------------
Other Fees
------------------------------------------------------------------------
Certification.......................... $25.00 each.
Express Mail........................... U.S. Postal Service Market
Rates.
Records maintained at Iron Mountain or Contract Rates.
Washington National Records Center
facilities (records retrieval,
refiling, et cetera).
Other Services as they arise........... Market Rates.
------------------------------------------------------------------------
[[Page 122]]
(ii) Search, review and duplication fees. Agency staff is divided
into three categories: Clerical, attorney/economist, and other
professional. Fees for search and review purposes, as well the costs of
operating duplication machinery such as converting paper to electronic
format (scanning), are assessed on a quarter-hourly basis, and are
determined by identifying the category into which the staff member(s)
conducting the search or review or duplication procedure belong(s),
determining the average quarter-hourly wages of all staff members within
that category, and adding 16 percent to reflect the cost of additional
benefits accorded to government employees. The exact fees are calculated
and announced periodically and are available from the Consumer Response
Center, Federal Trade Commission, 600 Pennsylvania Avenue NW.,
Washington, DC 20580; (202) 326-2222.
(7) Untimely responses. (i) Except as provided in paragraphs
(b)(7)(ii)-(iv) of this section, search fees for responding to a Freedom
of Information Act request will not be assessed for responses that fail
to comply with the time limits, as provided at 5 U.S.C.
552(a)(4)(A)(viii), Sec. 4.11(a)(1)(ii) and Sec. 4.11(a)(3)(ii), if
there are no unusual or exceptional circumstances, as those terms are
defined by 5 U.S.C. 552(a)(6) and Sec. 4.11(a)(1)(ii). Except as
provided below, duplication fees will not be assessed for an untimely
response, where there are no unusual or exceptional circumstances, made
to a requester qualifying for one of the fee categories set forth in
paragraph (b)(2) of this section.
(ii) If the Commission has determined that unusual circumstances
apply and has provided a timely written notice to the requester in
accordance with 5 U.S.C. 552(a)(6)(B), the delay in a response is
excused for an additional 10 days. If the Commission fails to comply
with the extended time limit, it will not charge search fees (or, for a
requester qualifying for one of the fee categories set forth in
paragraph (b)(2) of this section, will not charge duplication fees).
(iii) If the Commission has determined that unusual circumstances
apply and more than 5,000 pages are necessary to respond to the request,
the agency may charge search fees (or, for requesters qualifying for one
of the fee categories set forth in paragraph (b)(2) of this section, may
charge duplication fees) if timely written notice has been provided to
the requester and the agency has discussed with the requester via
written mail, electronic mail, or telephone (or made not less than 3
good-faith attempts to do so) how the requester could effectively limit
the scope of the request.
(iv) If a court determines that exceptional circumstances exist, the
Commission's failure to comply with a time limit shall be excused for
the length of time provided by the court order.
(c) Information to determine fees. Each request for records shall
set forth whether the request is made for either commercial or non-
commercial purposes or whether the requester is an educational
institution, a noncommercial scientific institution, or a representative
of the news media. The deciding official (as designated by the General
Counsel) will use this information, any additional information provided
by the requester, and any other relevant information to determine the
appropriate fee category in which to place the requester. See Sec.
4.11(a)(3)(i)(A)(3) for procedures on appealing fee category and fee
waiver determinations.
(d) Agreement to pay fees. (1) Each request that does not contain an
application for a fee waiver as set forth in Sec. 4.8(e) shall
specifically indicate that the requester will either:
(i) Pay, in accordance with Sec. 4.8(b), whatever fees may be
charged for processing the request; or
(ii) Pay such fees up to a specified amount, whereby the processing
of the request would cease once the specified amount has been reached.
(2) Each request that contains an application for a fee waiver shall
specifically indicate whether the requester, in the case that the fee
waiver is not granted, will:
(i) Pay, in accordance with Sec. 4.8(b), whatever fees may be
charged for processing the request;
(ii) Pay fees up to a specified amount, whereby the processing of
the request would cease once the specified amount has been reached; or
[[Page 123]]
(iii) Not pay fees, whereby the processing of the request will cease
at the point fees are to be incurred in accordance with Sec. 4.8(b).
(3) If the agreement required by this section is absent, and if the
estimated fees exceed $25.00, the requester will be advised of the
estimated fees and the request will not be processed until the requester
agrees to pay such fees. If the requester does not respond to the
notification that the estimated fees exceed $25.00 within 20 calendar
days from the date of the notification, the request will be closed.
(e) Public interest fee waivers--(1) Procedures. A requester may
apply for a waiver of fees. The requester shall explain in sufficient
detail why a waiver is appropriate under the standards set forth in this
paragraph. The application shall also include a statement, as provided
by paragraph (d) of this section, of whether the requester agrees to pay
costs if the waiver is denied. The deciding official (as designated by
the General Counsel) will rule on applications for fee waivers. To
appeal the deciding official's determination of the fee waiver, a
requester must follow the procedures set forth in Sec. 4.11(a)(3).
(2) Standards. (i) The first requirement for a fee waiver is that
disclosure will likely contribute significantly to public understanding
of the operations or activities of the government. This requirement
shall be met if the requester establishes that:
(A) The subject matter of the requested information concerns the
operations or activities of the Federal government;
(B) The disclosure is likely to contribute to an understanding of
these operations or activities;
(C) The understanding to which disclosure is likely to contribute is
public understanding, as opposed to the understanding of the individual
requester or a narrow segment of interested persons (e.g., by providing
specific information about the requester's expertise in the subject area
of the request and about the ability and intention to disseminate the
information to the public); and
(D) The likely contribution to public understanding will be
significant.
(ii) The second requirement for a fee waiver is that the request not
be primarily in the commercial interest of the requester. This
requirement shall be met if the requester shows either:
(A) That the requester does not have a commercial interest that
would be furthered by the requested disclosure; or
(B) If the requester does have a commercial interest that would be
furthered by the requested disclosure, that the public interest in
disclosure outweighs the identified commercial interest of the requester
so that the disclosure is not primarily in the requester's commercial
interest.
(f) Searches that do not yield responsive records. Charges may be
assessed for search time even if the agency fails to locate any
responsive records or if it locates only records that are determined to
be exempt from disclosure.
(g) Aggregating requests. If the deciding official (as designated by
the General Counsel) initially, or the General Counsel on appeal,
reasonably believes that a requester, or a group of requesters acting in
concert, is attempting to evade an assessment of fees by dividing a
single request into a series of smaller requests, the requests may be
aggregated and fees charged accordingly.
(h) Advance payment. If the deciding official (as designated by the
General Counsel) initially, or the General Counsel on appeal, estimates
or determines that allowable charges that a requester may be required to
pay are likely to exceed $250.00, or if the requester has previously
failed to pay a fee within 30 days of the date of billing, the requester
may be required to pay some or all of the total estimated charge in
advance. Further, the requester may be required to pay all unpaid bills,
including accrued interest, prior to processing the request.
(i) Means of payment. Payment shall be made either electronically
through the Department of Treasury's pay.gov Web site or by check or
money order payable to the Treasury of the United States.
(j) Interest charges. The Commission will begin assessing interest
charges on an unpaid bill starting on the 31st day following the day on
which the bill was sent. Interest will accrue from the date
[[Page 124]]
of the billing, and will be calculated at the rate prescribed in 31
U.S.C. 3717.
(k) Effect of the Debt Collection Act of 1982 (Pub. L. 97-365), as
amended by the Debt Collection Improvement Act of 1996 (Pub. L. 104-
134). The Commission will pursue repayment, where appropriate, by
employing the provisions of the Debt Collection Act of 1982, as amended
by the Debt Collection Improvement Act of 1996, the Federal Claims
Collection Standards (FCSS), 31 CFR 900-904, and any other applicable
authorities in collecting unpaid fees assessed under this section,
including disclosure to consumer reporting agencies and use of
collection agencies. The FTC also reserves the legal right to employ
other lawful debt collection methods such as alternative dispute
resolution and arbitration when appropriate.
[57 FR 10806, Mar. 31, 1992, as amended at 63 FR 45646, Aug. 26, 1998;
64 FR 3012, Jan. 20, 1999; 66 FR 64144, Dec. 12, 2001; 78 FR 15683, Mar.
21, 2014; 82 FR 21686, May 10, 2017]
Sec. 4.9 The public record.
(a) General. (1) Materials on the public record of the Commission
are available for public inspection and copying either from the
Commission's Web site or upon request.
(2) Materials that are exempt from mandatory public disclosure, or
are otherwise not available from the Commission's public record, may be
made available only upon request under the procedures set forth in Sec.
4.11, or as provided in Sec. Sec. 4.10(d) through (g), 4.13, and
4.15(b)(3), or by the Commission.
(3) Electronic access to public records. The majority of recent
Commission public records are available for review electronically on the
Commission's Web site on the Internet, www.ftc.gov. Copies of records
that the Commission is required to make available to the public
electronically, pursuant to 5 U.S.C. 552(a)(2), may be obtained in that
format from http://www.ftc.gov/foia/readingroom.shtm.
(4) Requesting public records--(i) Procedures. Certain older public
records may not be available at the FTC Web site. Any person may request
copies of such records by contacting the FTC Reading Room by telephone
at (202) 326-2222, extension 2. These requests shall specify as clearly
and accurately as reasonably possible the records desired. For records
that cannot be specified with complete clarity and particularity,
requesters shall provide descriptions sufficient to enable qualified
Commission personnel to locate the records sought. The Commission, the
Supervisor of the Consumer Response Center, the General Counsel, or the
deciding official (as designated by the General Counsel) may decide to
provide only one copy of any public record and may refuse to provide
copies to the requester if the records have been published or are
publicly available at places other than the Commission's offices.
(ii) Costs; agreement to pay costs. Requesters will be charged
search and duplication costs prescribed by Rule 4.8 for requests under
this section. All requests shall include a statement of the information
needed to determine fees, as provided by Sec. 4.8(c), and an agreement
to pay fees (or a statement that the requester will not pay fees if a
fee waiver is denied), as provided by Sec. 4.8(d). Requests may also
include an application for a fee waiver, as provided by Sec. 4.8(e).
Advance payment may be required, as provided by Sec. 4.8(h).
(iii) Records for sale at another government agency. If requested
materials are available for sale at another government agency, the
requester will not be provided with copies of the materials but will be
advised to obtain them from the selling agency. The U.S. Government
Printing Office (``GPO''), the official bookstore for most U.S.
Government publications, can be contacted at (202) 512-1800 or toll-free
at (866) 512-1800, and at [email protected]. The GPO's online store
can be accessed at http://bookstore.gpo.gov and mail orders should be
directed to U.S. Government Printing Office, P.O. Box 979050, St. Louis,
MO 63197-9000.
(b) Categories. Except to the extent material is confidential, as
provided in paragraph (c) of this section, the public record of the
Commission includes, but is not necessarily limited to:
(1) Commission Organization and Procedures (16 CFR part 0 and
Sec. Sec. 4.14 through 4.15, 4.17). (i) A current index of opinions,
orders, statements of policy and interpretations, administrative staff
manuals, general instructions and
[[Page 125]]
other public records of the Commission;
(ii) A current record of the final votes of each member of the
Commission in all matters of public record, including matters of public
record decided by notational voting;
(iii) Descriptions of the Commission's organization, including
descriptions of where, from whom, and how the public may secure
information, submit documents or requests, and obtain copies of orders,
decisions and other materials;
(iv) Statements of the Commission's general procedures and policies
and interpretations, its nonadjudicative procedures, its rules of
practice for adjudicative proceedings, and its miscellaneous rules,
including descriptions of the nature and requirements of all formal and
informal procedures available, and
(v) Reprints of the principal laws under which the Commission
exercises enforcement or administrative responsibilities.
(2) Industry Guidance (16 CFR 1.1-1.6). (i) Any advice, advisory
opinion or response given and required to be made public under
Sec. Sec. 1.4 and 2.41 (d) or (f) of this chapter (whether by the
Commission or the staff), together with a statement of supporting
reasons;
(ii) Industry guides, digests of advisory opinions and compliance
advice believed to be of interest to the public generally and other
administrative interpretations;
(iii) Transcripts of hearings in all industry guide proceedings, as
well as written statements filed with or forwarded to the Commission in
connection with these proceedings; and
(iv) Petitions filed with the Secretary of the Commission for the
promulgation or issuance, amendment, or repeal of industry guides.
(3) Rulemaking (16 CFR 1.7 through 1.26). (i) Petitions filed with
the Secretary of the Commission for the promulgation or issuance,
amendment, or repeal of rules or regulations within the scope of
Sec. Sec. 1.7 and 1.21 of this chapter, and petitions for exemptions;
(ii) Notices and advance notices of proposed rulemaking and rules
and orders issued in rulemaking proceedings; and
(iii) Transcripts of hearings of all rulemaking proceedings, all
other materials that are distributed to the public during these
proceedings, and written statements filed with or forwarded to the
Commission in connection with these proceedings.
(4) Investigations. (i) Petitions to limit or quash compulsory
process and the rulings thereon; and
(ii) Closing letters in initial phase and full phase investigations.
(5) Adjudicative proceedings, stay applications, requests to reopen,
and litigated orders. (16 CFR 2.51, 3.1 through 3.24, 3.31 through 3.56,
3.71 through 3.72, 4.7)--Except for transcripts of matters heard in
camera pursuant to Sec. 3.45 and material filed in camera pursuant to
Sec. Sec. 3.22, 3.24, 3.45, 3.46, 3.51 and 3.52,
(i) The versions of pleadings and transcripts of prehearing
conferences to the extent made available under Sec. 3.21(e), motions,
certifications, orders, and the transcripts of hearings (including
public conferences), testimony, oral arguments, and other material made
a part thereof, and exhibits and material received in evidence or made a
part of the public record in adjudicative proceedings;
(ii) Initial decisions of administrative law judges;
(iii) Orders and opinions in interlocutory matters;
(iv) Final orders and opinions in adjudications, and rulings on stay
applications, including separate statements of Commissioners;
(v) Petitions for reconsideration, and answers thereto, filed
pursuant to Sec. 3.55;
(vi) Applications for stay, answers thereto, and replies, filed
pursuant to Sec. 3.56;
(vii) Petitions, applications, pleadings, briefs, and other records
filed by the Commission with the courts in connection with adjudicative,
injunctive, enforcement, compliance, and condemnation proceedings, and
in connection with judicial review of Commission actions, and opinions
and orders of the courts in disposition thereof;
(viii) Records of ex parte communications in adjudicative
proceedings and stay applications;
(ix) Petitions to reopen proceedings and orders to determine whether
orders
[[Page 126]]
should be altered, modified, or set aside in accordance with Sec. 2.51;
and
(x) Decisions reopening proceedings, and orders to show cause under
Sec. 3.72.
(6) Consent agreements (16 CFR 2.31 through 2.34, 3.25). (i)
Agreements containing orders, after acceptance by the Commission
pursuant to Sec. Sec. 2.34 and 3.25(f) of this chapter;
(ii) Comments and other materials filed or placed on the public
record under Sec. Sec. 2.34 and 3.25(f) concerning proposed consent
agreements and related orders; and
(iii) Decisions and orders issued and served under Sec. Sec. 2.34
and 3.25(f), including separate statements of Commissioners.
(7) Compliance/enforcement (16 CFR 2.33, 2.41). (i) Reports of
compliance filed pursuant to the rules in this chapter or pursuant to a
provision in a Commission order and supplemental materials filed in
connection with these reports, except for reports of compliance, and
supplemental materials filed in connection with Commission orders
requiring divestitures or establishment of business enterprises of
facilities, which are confidential until the last divestiture or
establishment of a business enterprise or facility, as required by a
particular order, has been finally approved by the Commission, and staff
letters to respondents advising them that their compliance reports do
not warrant any further action. At the time each such report is
submitted the filing party may request confidential treatment in
accordance with paragraph (c) of this section and the General Counsel or
the General Counsel's designee will pass upon such request in accordance
with that paragraph;
(ii) Materials required to be made public under 16 CFR 2.41(f) in
connection with applications for approval of proposed divestitures,
acquisitions or similar transactions subject to Commission review under
outstanding orders.
(8) Access to documents and meetings (16 CFR 4.8, 4.11, 4.13, 4.15).
(i) Letters requesting access to Commission records pursuant to Sec.
4.11(a) of this chapter and the Freedom of Information Act, 5 U.S.C.
552, and letters granting or denying such requests (not including access
requests and answers thereto from the Congress or other government
agencies);
(ii) Announcements of Commission meetings as required under the
Sunshine Act, 5 U.S.C. 552b, including records of the votes to close
such meetings;
(iii) Summaries or other explanatory materials relating to matters
to be considered at open meetings made available pursuant to Sec.
4.15(b)(3)
(iv) Commission minutes of open meetings, and, to the extent they
are not exempt from mandatory public disclosure under the Sunshine Act
or the Freedom of Information Act, portions of minutes or transcripts of
closed meetings; and
(v) A guide for requesting records or information from the
Commission, including an index of all major information systems, a
description of major information and record locator systems maintained
by the Commission, and a handbook for obtaining various types and
categories of public information.
(9) Standards of conduct (16 CFR 5.5 through 5.6, 5.10 through 5.26,
5.31, 5.57 through 5.68). (i) Memoranda to staff elaborating or
clarifying standards described in administrative staff manuals and part
5 of this subchapter.
(10) Miscellaneous (press releases, clearance requests, reports
filed by or with the Commission, continuing guaranties, registered
identification numbers). (i) Releases by the Commission's Office of
Public Affairs supplying information concerning the activities of the
Commission;
(ii) Applications under Sec. 4.1(b)(2) of this chapter for
clearance or authorization to appear or participate in a proceeding or
investigation and of the Commission's responses thereto;
(iii) Continuing guaranties filed under the Wool, Fur, and Textile
Acts;
(iv) Published reports by the staff or by the Commission on economic
surveys and investigations of general interest;
(v) Filings by the Commission or by the staff in connection with
proceedings before other federal agencies or state or local government
bodies;
(vi) Registration statements and annual reports filed with the
Commission
[[Page 127]]
by export trade associations, and bulletins, pamphlets, and reports with
respect to such associations released by the Commission;
(vii) The identities of holders of registered identification numbers
issued by the Commission pursuant to Sec. 1.32 of this chapter;
(viii) The Commission's annual report submitted after the end of
each fiscal year, summarizing its work during the year (with copies
obtainable from the Superintendent of Documents, U.S. Government
Publishing Office, Washington, DC 20402) and any other annual reports
made to Congress on activities of the Commission as required by law;
(ix) Records, as determined by the General Counsel or his or her
designee, that have been released in response to a request made under
the Freedom of Information Act, 5 U.S.C. 552, and which, because of the
nature of the subject matter, have become or are likely to become the
subject of subsequent requests for substantially the same records, or
that have been requested three or more times, except where some or all
of those records would be exempt from disclosure under 5 U.S.C. 552 if
requested by another party;
(x) A general index of the records referred to under paragraph
(b)(10)(ix) of this section;
(xi) Grants of early termination of waiting periods published in
accordance with the Hart-Scott-Rodino premerger notification provisions
of the Clayton Act, 15 U.S.C. 18a(b)(2);
(xii) Reports on appliance energy consumption or efficiency filed
with the Commission pursuant to Sec. 305.8 of this chapter;
(xiii) Annual filings by professional boxing sanctioning
organizations as required by the Muhammed Ali Boxing Reform Act, 15
U.S.C. 6301 note, 6307a-6307h;
(xiv) All transcripts or other materials that are distributed by
staff at public workshops;
(xv) Other documents that the Commission has determined to place on
the public record; and
(xvi) Every amendment, revision, substitute, or repeal of any of the
foregoing items listed in paragraphs (b)(1) through (10) of this
section.
(c) Confidentiality and in camera material. (1) Persons submitting
material to the Commission described in this section may designate that
material or portions of it confidential and request that it be withheld
from the public record. All requests for confidential treatment shall be
supported by a showing of justification in light of applicable statutes,
rules, orders of the Commission or its administrative law judges, orders
of the courts, or other relevant authority. The General Counsel or the
General Counsel's designee will act upon such request with due regard
for legal constraints and the public interest. No such material or
portions of material (including documents generated by the Commission or
its staff containing or reflecting such material or portions of
material) will be placed on the public record until the General Counsel
or the General Counsel's designee has ruled on the request for
confidential treatment and provided any prior notice to the submitter
required by law.
(2) Motions seeking in camera treatment of material submitted in
connection with a proceeding under part 3 of these rules, except stay
applications under Sec. 3.56, shall be filed with the Administrative
Law Judge who is presiding over the proceeding. Requests for
confidential treatment of material submitted in connection with a stay
application shall be made in accordance with Sec. 4.9(c)(1).
(3) To the extent that any material or portions of material
otherwise falling within paragraph (b) of this section contain
information that is not required to be made public under Sec. 4.10 of
this part, the General Counsel or the General Counsel's designee may
determine, with due regard for legal constraints and the public
interest, to withhold such materials from the public record.
[50 FR 50779, Dec. 12, 1985, as amended at 57 FR 10805, Mar. 31, 1992;
59 FR 34970, July 8, 1994; 60 FR 37749, July 21, 1995; 63 FR 18820, Apr.
16, 1998; 63 FR 32977, June 17, 1998; 63 FR 45647, Aug. 26, 1998; 64 FR
46269, Aug. 25, 1999; 66 FR 17633, Apr. 3, 2001; 66 FR 64144, Dec. 12,
2001; 77 FR 59311, Sept. 27, 2012; 78 FR 13474, Feb. 28, 2013; 80 FR
15162, Mar. 23, 2015; 80 FR 16961, Mar. 31, 2015; 81 FR 93805, Dec. 22,
2016]
[[Page 128]]
Editorial Note: At 80 FR 15162, Mar. 23, 2015, in Sec. 4.9,
paragraph (a)(10)(viii) was revised, however no paragraph (a)(10)(viii)
exists, so the amendment could not be incorporated.
Sec. 4.10 Nonpublic material.
(a) The following records and other material of the Commission are
not required to be made public pursuant to 5 U.S.C. 552.
(1) Records, except to the extent required to be disclosed under
other laws or regulations, related solely to the internal personnel
rules and practices of the Commission. This exemption applies to
internal rules or instructions to Commission personnel which must be
kept confidential in order to assure effective performance of the
functions and activities for which the Commission is responsible and
which do not affect members of the public.
(2) Trade secrets and commercial or financial information obtained
from a person and privileged or confidential. As provided in section
6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), this
exemption applies to competitively sensitive information, such as costs
or various types of sales statistics and inventories. It includes trade
secrets in the nature of formulas, patterns, devices, and processes of
manufacture, as well as names of customers in which there is a
proprietary or highly competitive interest.
(3) Interagency or intra-agency memoranda or letters that would not
routinely be available by law to a private party in litigation with the
Commission, provided that the deliberative process privilege shall not
apply to records created 25 years or more before the date on which the
records are requested. This exemption preserves the existing freedom of
Commission officials and employees to engage in full and frank
communication with each other and with officials and employees of other
governmental agencies. This exemption includes records of the
deliberations of the Commission except for the record of the final votes
of each member of the Commission in every agency proceeding. It includes
intraagency and interagency reports, memorandums, letters,
correspondence, work papers, and minutes of meetings, as well as staff
papers prepared for use within the Commission or between the Commission
and other governmental agencies. It also includes information scheduled
for public release, but as to which premature release would be contrary
to the public interest;
(4) Personnel and medical files and similar files the disclosure of
which would constitute a clearly unwarranted invasion of personal
privacy except to the extent such files or materials must be disclosed
under other laws or regulations. This exemption applies to personnel and
medical records and similar records containing private or personal
information concerning any individual which, if disclosed to any person
other than the individual concerned or his designated legal
representative without his permission in writing, would constitute a
clearly unwarranted invasion of personal privacy. Examples of files
exempt from disclosure include, but are not limited to:
(i) The personnel records of the Commission;
(ii) Files containing reports, records or other material pertaining
to individual cases in which disciplinary or other administrative action
has been or may be taken, including records of proceedings pertaining to
the conduct or performance of duties by Commission personnel;
(5) Records or information compiled for law enforcement purposes,
but only to the extent that production of such law enforcement records
or information:
(i) Could reasonably be expected to interfere with enforcement
proceedings;
(ii) Would deprive a person of a right to a fair trial or an
impartial adjudication;
(iii) Could reasonably be expected to constitute an unwarranted
invasion of personal privacy;
(iv) Could reasonably be expected to disclose the identity of a
confidential source, including a State, local, or foreign agency or
authority or any private institution that furnished information on a
confidential basis, and, in the case of a record or information compiled
by a criminal law enforcement authority in the course of a criminal
investigation, or by an agency
[[Page 129]]
conducting a lawful national security intelligence investigation,
information furnished by a confidential source;
(v) Would disclose techniques and procedures for law enforcement
investigations or prosecutions, or would disclose guidelines for law
enforcement investigations or prosecutions if such disclosure could
reasonably be expected to risk circumvention of the law; or
(vi) Could reasonably be expected to endanger the life or physical
safety of any individual.
(6) Information contained in or related to examination, operating,
or condition reports prepared by, on behalf of, or for the use of an
agency responsible for the regulation or supervision of financial
institutions;
(7) Geological and geophysical information and data, including maps,
concerning wells; and
(8) Material, as that term is defined in section 21(a) of the
Federal Trade Commission Act, which is received by the Commission:
(i) In an investigation, a purpose of which is to determine whether
any person may have violated any provision of the laws administered by
the Commission; and
(ii) Which is provided pursuant to any compulsory process under the
Federal Trade Commission Act, 15 U.S.C. 41, et seq., or which is
provided voluntarily in place of compulsory process in such an
investigation. See section 21(f) of the Federal Trade Commission Act.
(9) Material, as that term is defined in section 21(a) of the
Federal Trade Commission Act, which is received by the Commission
pursuant to compulsory process in an investigation, a purpose of which
is to determine whether any person may have violated any provision of
the laws administered by the Commission. See section 21(b)(3)(C) of the
Federal Trade Commission Act.
(10) Such other material of the Commission as may from time to time
be designated by the Commission as confidential pursuant to statute or
Executive Order. This exempts from disclosure any information that has
been designated nonpublic pursuant to criteria and procedures prescribed
by Executive Order and that has not been subsequently declassified in
accordance with applicable procedures. The exemption also preserves the
full force and effect of statutes that restrict public access to
specific government records or material.
(11) Material in an investigation or proceeding that involves a
possible violation of criminal law, when there is reason to believe that
the subject of the investigation or proceeding is not aware of its
pendency, and disclosure of the existence of the investigation could
reasonably be expected to interfere with enforcement proceedings. When a
request is made for records under Sec. 4.11(a), the Commission may
treat the records as not subject to the requirements of the Freedom of
Information Act.
(b) With respect to information contained in transcripts of
Commission meetings, the exemptions contained in paragraph (a) of this
section, except for paragraphs (a)(3) and (a)(7) of this section, shall
apply; in addition, such information will not be made available if it is
likely to have any of the effects described in 5 U.S.C. 552b (c)(5),
(c)(9), or (c)(10).
(c) Under section 10 of the Federal Trade Commission Act, any
officer or employee of the Commission who shall make public any
information obtained by the Commission, without its authority, unless
directed by a court, shall be deemed guilty of a misdemeanor, and upon
conviction thereof, may be punished by a fine not exceeding five
thousand dollars ($5,000), or by imprisonment not exceeding 1 year, or
by fine and imprisonment, in the discretion of the court.
(d) Except as provided in paragraphs (f) or (g) of this section or
in Sec. 4.11(b), (c), (d), (i), or (j), no material that is marked or
otherwise identified as confidential and that is within the scope of
Sec. 4.10(a)(8), and no material within the scope of Sec. 4.10(a)(9)
that is not otherwise public, will be made available without the consent
of the person who produced the material, to any individual other than a
duly authorized officer or employee of the Commission or a consultant or
contractor retained by the Commission who has agreed in writing not to
disclose the information. All other Commission records may be made
available to a requester
[[Page 130]]
under the procedures set forth in Sec. 4.11 or may be disclosed by the
Commission except where prohibited by law.
(e) Except as provided in paragraphs (f) or (g) of this section or
in Sec. 4.11(b), (c), (d), (i), or (j), material not within the scope
of Sec. 4.10(a)(8) or Sec. 4.10(a)(9) that is received by the
Commission and is marked or otherwise identified as confidential may be
disclosed only if it is determined that the material is not within the
scope of Sec. 4.10(a)(2), and the submitter is provided at least ten
days notice of the intent to disclose the material.
(f) Nonpublic material obtained by the Commission may be disclosed
to persons other than the submitter in connection with the taking of
oral testimony without the consent of the submitter only if the material
or transcript is not within the scope of Sec. 4.10(a)(2). If the
material is marked confidential, the submitter will be provided 10 days'
notice of the intended disclosure or will be afforded an opportunity to
seek an appropriate protective order.
(g) Material obtained by the Commission:
(1) Through compulsory process and protected by section 21(b) of the
Federal Trade Commission Act, 15 U.S.C. 57b-2(b) or voluntarily in lieu
thereof and designated by the submitter as confidential and protected by
section 21(f) of the Federal Trade Commission Act, 15 U.S.C. 57b-2(f),
and Sec. 4.10(d) of this part; or
(2) That is designated by the submitter as confidential, and
protected by section 21(c) of the Federal Trade Commission Act, 15
U.S.C. 57b-2(c), and Sec. 4.10(e) of this part; or
(3) That is confidential commercial or financial information
protected by section 6(f) of the Federal Trade Commission Act, 15 U.S.C.
46(f), and Sec. 4.10(a)(2) of this part, may be disclosed in Commission
administrative or court proceedings subject to Commission or court
protective or in camera orders as appropriate. See Sec. Sec. 1.18(b)
and 3.45.
Prior to disclosure of such material in a proceeding, the submitter will
be afforded an opportunity to seek an appropriate protective or in
camera order. All other material obtained by the Commission may be
disclosed in Commission administrative or court proceedings at the
discretion of the Commission except where prohibited by law.
(15 U.S.C. 41 et seq.)
[38 FR 1731, Jan. 18, 1973, as amended at 40 FR 7629, Feb. 21, 1975; 40
FR 23278, May 29, 1975; 42 FR 13540, Mar. 11, 1977; 46 FR 26291, May 12,
1981; 49 FR 30166, July 27, 1984; 54 FR 7399, Feb. 21, 1989; 57 FR
10807, Mar. 31, 1992; 60 FR 37749, July 21, 1995; 63 FR 38473, July 17,
1998; 65 FR 67259, Nov. 9, 2000; 66 FR 17633, Apr. 3, 2001; 72 FR 28853,
May 23, 2007; 81 FR 93805, Dec. 22, 2016]
Sec. 4.11 Disclosure requests.
(a) Freedom of Information Act--(1) Initial requests--(i) Form and
contents; time of receipt. (A) A request under the provisions of the
Freedom of Information Act, 5 U.S.C. 552, as amended, for access to
Commission records shall be in writing and transmitted by one of the
following means: by the form located on the FTC's FOIA Web site, found
at www.ftc.gov; by email message to the FOIA email account at
[email protected]; by facsimile transmission to (202) 326-2477; or by mail to
the following address: Freedom of Information Act Request, Office of the
General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue NW.,
Washington, DC 20580.
(B) Failure to mark the envelope and the request in accordance with
paragraph (a)(1)(i)(A) of this section, or the filing of a request for
expedited treatment under paragraph (a)(1)(i)(G) of this section, will
result in the request (or requests, if expedited treatment has been
requested) as received on the date that the processing unit in the
Office of General Counsel actually receives the request(s).
(C) Acknowledgment of requests. Once a FOIA request is properly
received by the processing unit in the Office of the General Counsel, a
letter acknowledging the receipt of the request shall be mailed to the
requester if processing the request will likely take more than 5
business days.
(D) Identifiability. (1) A properly filed FOIA request shall
reasonably describe the records sought with enough detail to enable the
Commission to locate them with a reasonable amount of effort. Whenever
possible, the request should include specific information
[[Page 131]]
about each record sought such as date, title, name, author, recipient,
subject matter of the record, provide information regarding fees
pursuant to Sec. 4.8(c), and provide sufficient contact information for
a response to be sent. Although a mailing address is generally required,
an email address can suffice in some instances. The FOIA Office will
consider requests to send responses by email.
(2) A denial of a request may state that the description required by
paragraph (a)(2)(ii)(A) of this section is insufficient to allow
identification and location of the records.
(E) Costs; agreement to pay costs. Requesters will be charged
search, review, duplication and other chargeable direct costs as
prescribed by Sec. 4.8 for requests under this section. All requests
shall include a statement of the information needed to determine fees,
as provided by Sec. 4.8(c), and an agreement to pay fees (or a
statement that the requester will not pay fees if a fee waiver is
denied), as provided by Sec. 4.8(d). Requests may also include an
application for a fee waiver, as provided by Sec. 4.8(e). An advance
payment may be required in appropriate cases as provided by Sec.
4.8(h).
(F) Failure to agree to pay fees. If a request does not include an
agreement to pay fees, and if the requester is notified of the estimated
costs pursuant to Sec. 4.8(d)(3), the request will be deemed not to
have been received until the requester agrees to pay such fees. If a
requester declines to pay fees within 20 calendar days and is not
granted a fee waiver, the request will be denied.
(G) Expedited treatment. Requests may include an application for
expedited treatment. Where such an application is not included with an
initial request for access to records under paragraph (a)(1) of this
section, the application may be included in any appeal of that request
filed under paragraph (a)(3) of this section. Such application, which
shall be certified by the requester to be true and correct to the best
of such person's knowledge and belief, shall describe the compelling
need for expedited treatment, including an explanation as to why a
failure to obtain the requested records on an expedited basis could
reasonably be expected to pose an imminent threat to the life or
physical safety of an individual, or, with respect to a request made by
a person primarily engaged in disseminating information, an explanation
of the urgency to inform the public concerning actual or alleged Federal
Government activity. The deciding official (as designated by the General
Counsel) will, within 10 calendar days of receipt of a request for
expedited treatment, notify the requester, in writing, of the decision
to either grant or deny the request for expedited treatment, and, if the
request is denied, advise the requester that this determination may be
appealed to the General Counsel.
(H) Records for sale at another government agency. If requested
materials are available for sale at another government agency, the
requester will not be provided with copies of the materials but will be
advised to obtain them from the selling agency. The U.S. Government
Printing Office (``GPO''), the official bookstore for most U.S.
Government publications, can be contacted at (202) 512-1800 (for those
in the Washington, DC area), toll-free at (866) 512-1800 and at
[email protected]. The GPO's online store can be accessed at http://
bookstore.gpo.gov and mail orders should be directed to U.S. Government
Printing Office, P.O. Box 979050, St. Louis, MO 63197-9000.
(ii) Time limit for initial determination. (A) The deciding official
(as designated by the General Counsel) will, within 20 working days of
the receipt of a request, or if applicable, the date that a request is
properly filed, either grant or deny, in whole or in part, such request,
unless the request has been granted expedited treatment in accordance
with this section, in which case the request will be processed as soon
as practicable. The date that a request is properly filed is the date on
which the requester agrees to pay fees necessary for a response,
reasonably describes the records sought, and provides sufficient contact
information for a response to be sent. Any tolling of the 20-working day
period will be done in compliance with the FOIA statute, as amended.
(B) Except in exceptional circumstances as provided in paragraph
(a)(1)(ii)(C) of this section, the deciding official (as designated by
the General
[[Page 132]]
Counsel) may extend the time limit by not more than 10 working days if
such extension is:
(1) Necessary to search for and collect the records from field
facilities or other establishments that are separate from the office
processing the request; or
(2) Necessary to search for, collect, and appropriately examine a
voluminous amount of separate and distinct records which are sought in a
single or series of closely related requests; or
(3) Necessary for consultation with another agency having a
substantial interest in the determination, or for consultation among two
or more components of the Commission having substantial subject matter
interest therein.
(C) If the deciding official (as designated by the General Counsel)
extends the time limit for initial determination pursuant to paragraph
(a)(1)(ii)(B) of this section, the requester will be notified in
accordance with 5 U.S.C. 552(a)(6)(B). In exceptional circumstances,
when the request cannot be processed within the extended time limit, the
requester will be so notified and provided an opportunity to limit the
scope of the request so that it may be processed within such time limit,
or to arrange an alternative time frame for processing the request or a
modified request. In exceptional circumstances, when the request cannot
be processed within the extended time limit, the Commission will also
make available the agency's FOIA Public Liaison to assist in the
resolution of any disputes and notify the requester of the right to seek
dispute resolution services from the Office of Government Information
Services. ``Exceptional'' circumstances will not include delays
resulting from a predictable workload of requests under this section.
Unwillingness to make reasonable modifications in the scope of the
request or to agree to an alternative time frame may be considered as
factors in determining whether exceptional circumstances exist and
whether the agency has exercised due diligence in responding to the
request.
(D) If the deciding official (as designated by the General Counsel)
reasonably believes that requests made by a requester, or a group of
requesters acting in concert, actually constitute a single request that
would otherwise involve unusual circumstances, as specified in paragraph
(a)(1)(ii)(B) of this section, and the requests involve clearly related
matters, those multiple requests may be aggregated.
(E) If a request is not granted within the time limits set forth in
paragraphs (a)(1)(ii)(A) and (B) of this section, the request shall be
deemed to be denied and the requesting party may appeal such denial to
the General Counsel in accordance with paragraph (a)(3) of this section.
(iii) Initial determination. (A) The deciding official (as
designated by the General Counsel) will make reasonable efforts to
search, using either manual or electronic means, for documents that
exist as of the date of the receipt of a request for the requested
records in electronic form or format, except when such efforts would
significantly interfere with the operation of the Commission's automated
information systems. The deciding official will only withhold
information if the agency reasonably foresees that disclosure would harm
an interest protected by a FOIA exemption or disclosure is prohibited by
law. The deciding official shall consider whether partial disclosure of
information is possible whenever there is a determination that a full
disclosure of a requested record is not possible and take reasonable
steps necessary to segregate and release nonexempt information.
Determination letters to a requester shall include the reasons therefor
and the right of such person to seek assistance from the FTC's FOIA
Public Liaison. Denials will advise the requester that this
determination may be appealed to the General Counsel not more than 90
days after the date of the determination if the requester believes
either that the records are not exempt, or that the General Counsel
should exercise discretion to release such records notwithstanding their
exempt status. The deciding official (as designated by the General
Counsel) will also provide a reasonable, good-faith estimate of the
volume of any materials to which access is denied, unless providing such
an estimate would harm an interest protected by an exemption
[[Page 133]]
in 5 U.S.C. 552(b) that was cited as a basis for withholding materials.
In the case of an adverse determination, FOIA response letters will
notify requesters that they may seek dispute resolution services from
the FTC's FOIA Public Liaison or from the Office of Government
Information Services.
(B) The deciding official (as designated by the General Counsel) is
deemed to be the sole official responsible for all denials of initial
requests, except denials of access to materials contained in active
investigatory files, in which case the Director or Deputy Director of
the Bureau or the Director of the Regional Office responsible for the
investigation will be the responsible official.
(C) Records to which access has been granted will be made available
to the requester in any form or format specified by the requester, if
the records are readily reproducible in that form or format, or can be
converted to that form or format with a reasonable amount of effort.
Certain records which are not easily copied or duplicated, such as
tangible exhibits, will be made be available for inspection for a period
not to exceed 30 days from date of notification to the requester unless
the requester asks for and receives the consent of the deciding official
(as designated by the General Counsel) to a longer period. Records
assembled pursuant to a request will remain available only during this
period and thereafter will be refiled. Appropriate fees may be imposed
for any new or renewed request for the same records.
(D) If a requested record cannot be located from the information
supplied, or is known to have been destroyed or otherwise disposed of,
the requester shall be so notified. The requester will also be notified
if a record that is part of an official agency file is lost or missing.
If the person so requests, he will also be notified if the record should
subsequently be located.
(2) FOIA Requester Service Center. If a requester has questions or
comments about the FOIA process, the requester should call the FOIA
Requester Service Center at (202) 326-2430 to either speak directly to a
FOIA Case Officer or leave a voice message. A requester should also ask
the FOIA Case Officer to speak with the FOIA Public Liaison if there are
concerns about the quality of the service received, or seek mediation
resolution assistance during the FOIA response process.
(3) Appeals to the General Counsel from initial denials--(i) Form
and contents; time of receipt--(A)(1) If an initial request for
expedited treatment is denied, the requester, at any time before the
initial determination of the underlying request for records by the
deciding official (as designated by the General Counsel) (or, if the
request for expedited treatment was filed with any appeal filed under
paragraph (a)(3)(i)(A)(2) of this section, at any time before the
General Counsel's determination on such an appeal), may appeal the
denial of expedited treatment to the General Counsel.
(2) If an initial request for records is denied in its entirety, the
requester may, within 90 days after the adverse determination, appeal
such denial to the General Counsel. If an initial request is denied in
part, the time for appeal will not expire until 90 days after the date
of the final letter notifying the requester that all records to which
access has been granted have been made available. In unusual
circumstances, the General Counsel or his or her designee may extend the
time to appeal.
(3) If an initial request for a fee waiver or reduction is denied,
the requester may, within 30 days of the date of the letter notifying
the requester of that decision, appeal such denial to the General
Counsel. In unusual circumstances, the time to appeal may be extended by
the General Counsel or his or her designee.
(4) The appeal shall be in writing and shall clearly refer to the
adverse decision, or portions of the decision, being appealed; the
appeal should include a copy of the initial request and a copy of the
response to that initial request, if any. The appeal may be: mailed to
Freedom of Information Act Appeal, Office of the General Counsel,
Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC
20580; submitted by facsimile to (202) 326-3198; or emailed to
[email protected].
(B) If the appeal is mailed, failure to mark the envelope and the
appeal in
[[Page 134]]
accordance with paragraph (a)(3)(i)(A)(4) of this section will result in
the appeal (and any request for expedited treatment filed with that
appeal) being treated as received on the actual date of receipt by the
Office of General Counsel.
(C) Each appeal to the General Counsel that requests him or her to
exercise his discretion to release exempt records shall set forth the
interest of the requester in the subject matter and the purpose for
which the records will be used if the request is granted.
(ii) Time limit for appeal. (A)(1) Regarding appeals from initial
denials of a request for expedited treatment, the General Counsel will
either grant or deny the appeal expeditiously;
(2) Regarding appeals from initial denials of a request for records,
the General Counsel will, within 20 working days of the Office of
General Counsel's receipt of such an appeal, either grant or deny it, in
whole or in part, unless expedited treatment has been granted in
accordance with this section, in which case the appeal will be processed
expeditiously.
(B) The General Counsel may, by written notice to the requester in
accordance with 5 U.S.C. 552(a)(6)(B), extend the time limit for
deciding an appeal by not more than 10 working days pursuant to
paragraph (a)(1)(ii)(B) of this section, provided that the amount of any
extension utilized during the initial consideration of the request under
that paragraph will be subtracted from the amount of additional time
otherwise available. Where exceptional circumstances do not permit the
processing of the appeal within the extended time limit, the notice and
procedures set forth in paragraph (a)(1)(ii)(C) of this section shall
apply.
(iii) Determination of appeal. (A) The General Counsel has the
authority to grant or deny all appeals and to release as an exercise of
discretion records exempt from mandatory disclosure under 5 U.S.C.
552(b). In unusual or difficult cases, the General Counsel may, in his
or her sole discretion, refer an appeal to the Commission for
determination. A denial of an appeal in whole or in part will set forth
the basis for the denial; will include a reasonable, good-faith estimate
of the volume of any materials to which access is denied, unless
providing such an estimate would harm an interest protected by an
exemption in 5 U.S.C. 552(b) that was cited as a basis for withholding
materials; and will advise the requester that judicial review of the
decision is available by civil suit in the district in which the
requester resides, or has his principal place of business, or in which
the agency records are situated, or in the District of Columbia.
(B) The General Counsel may designate a Deputy General Counsel to
make any determination assigned to the General Counsel by paragraph (a)
of this section. The General Counsel or the official designated by the
General Counsel to make the determination shall be deemed solely
responsible for the denial of all appeals, except where an appeal is
denied by the Commission. In such instances, the Commission shall be
deemed solely responsible for the denial.
(b) Requests from congressional committees and subcommittees.
Requests from congressional committees and subcommittees for nonpublic
material shall be referred to the General Counsel for presentation to
the Commission, subject to the provisions in 5 U.S.C. 552(c) and FTC Act
21(b) that neither the Freedom of Information Act, 5 U.S.C. 552, nor the
Federal Trade Commission Act, 15 U.S.C. 41, et seq., is authority to
withhold information from Congress. Upon receipt of a request from a
congressional committee or subcommittee, notice will be given to the
submitter of any material marked confidential, or any material within
the scope of Sec. 4.10(a)(9), that is responsive to the request that
the request has been received. No other notice need be provided prior to
granting the request. The Commission will inform the committee or
subcommittee that the submitter considers such information confidential.
(c) Requests from Federal and State law enforcement agencies.
Requests from law enforcement agencies of the Federal and State
governments for nonpublic records shall be addressed to a liaison
officer, where the Commission has appointed such an officer, or if there
is none, to the General Counsel. With respect to requests under this
paragraph,
[[Page 135]]
the General Counsel, the General Counsel's designee, or the appropriate
liaison officer is delegated the authority to dispose of them.
Alternatively, the General Counsel may refer such requests to the
Commission for determination, except that requests must be referred to
the Commission for determination where the Bureau having the material
sought and the General Counsel do not agree on the disposition. Prior to
granting access under this section to any material submitted to the
Commission, the General Counsel, the General Counsel's designee, or the
liaison officer will obtain from the requester a certification that such
information will be maintained in confidence and will be used only for
official law enforcement purposes. The certificate will also describe
the nature of the law enforcement activity and the anticipated relevance
of the information to that activity. A copy of the certificate will be
forwarded to the submitter of the information at the time the request is
granted unless the agency requests that the submitter not be notified.
Requests for material pursuant to compulsory process, or for voluntary
testimony, in cases or matters in which the Commission is not a party
will be treated in accordance with paragraph (e) of this section.
(d) Requests from Federal and State agencies for purposes other than
law enforcement. Requests from Federal and State agencies for access to
nonpublic records for purposes not related to law enforcement should be
addressed to the General Counsel. The General Counsel or the General
Counsel's designee is delegated the authority to dispose of requests
under this paragraph. Disclosure of nonpublic information will be made
consistent with sections 6(f) and 21 of the FTC Act. Requests under this
section shall be subject to the fee and fee waiver provisions of Sec.
4.8. Requests for material pursuant to compulsory process, or for
voluntary testimony, in cases or matters in which the Commission is not
a party will be treated in accordance with paragraph (e) of this
section.
(e) Requests for testimony, pursuant to compulsory process or
otherwise, and requests for material pursuant to compulsory process, in
cases or matters to which the Commission is not a party. (1) The
procedures specified in this section will apply to compulsory process
and requests for voluntary testimony directed to Commission employees,
except special government employees, that relate in any way to the
employees' official duties. These procedures will also apply to
compulsory process and requests for voluntary testimony directed to
former Commission employees or to current or former special government
employees of the Commission that seek nonpublic materials or information
acquired during Commission employment. The provisions of paragraph
(e)(3) of this section will also apply when requests described above are
directed to the Commission. For purposes of this section, the term
testimony includes any written or oral statement by a witness, such as
depositions, affidavits, declarations, and statements at a hearing or
trial; the term nonpublic includes any material or information which,
under Sec. 4.10, is not required to be made public; the term employees,
except where otherwise specified, includes special government employees
and other Commission employees; and the term special government
employees includes consultants and other employees as defined by section
202 of title 18 of the United States Code.
(2) Any employee or former employee who is served with compulsory
process shall promptly advise the General Counsel of its service, the
nature of the material or information sought, and all relevant facts and
circumstances. This notification requirement also applies to any
employee or former employee whose testimony is sought on a voluntary
basis under the conditions set forth in paragraph (e)(1) of this
section.
(3) A party who causes compulsory process to be issued to, or who
requests testimony by, the Commission or any employee or former employee
of the Commission shall furnish a statement to the General Counsel,
unless, with respect to a request by a Federal or State agency, the
General Counsel determines, as a matter of discretion, to waive this
requirement. The statement shall set forth the party's interest in the
case or matter, the relevance of the desired testimony or material, and
a
[[Page 136]]
discussion of whether it is reasonably available from other sources. If
testimony is desired, the statement shall also contain a general summary
of the testimony and a discussion of whether Commission records could be
produced and used in its place. Any authorization for testimony will be
limited to the scope of the demand as summarized in such statement.
(4) Absent authorization from the General Counsel, the employee or
former employee shall respectfully decline to produce requested material
or to disclose requested information. The refusal should be based on
this paragraph and on United States ex rel. Touhy v. Ragen, 340 U.S. 462
(1951).
(5) The General Counsel will consider and act upon compulsory
process and requests for voluntary testimony under this section with due
regard for statutory restrictions, the Commission's rules and the public
interest, taking into account such factors as the need to conserve the
time of employees for conducting official business; the need to avoid
spending the time and money of the United States for private purposes;
the need to maintain impartiality between private litigants in cases
where a substantial government interest is not involved; and the
established legal standards for determining whether justification exists
for the disclosure of confidential information and material.
(6) Invitations to testify before Congressional committees or
subcommittees or to testify before other government bodies on the
possible effects of legislative and regulatory proposals are not subject
to paragraphs (e)(1) through (5) of this section.
(f) Requests by current or former employees to use nonpublic
memoranda as writing samples shall be addressed to the General Counsel.
The General Counsel or the General Counsel's designee is delegated the
authority to dispose of such requests consistent with applicable
nondisclosure provisions, including sections 6(f) and 21 of the FTC Act.
(g) Employees are encouraged to engage in teaching, lecturing, and
writing that is not prohibited by law, Executive order, or regulation.
However, an employee shall not use information obtained as a result of
his Government employment, except to the extent that such information
has been made available to the general public or will be made available
on request, or when the General Counsel or the General Counsel's
designee gives written authorization for the use of nonpublic
information on the basis that the use is in the public interest.
(h) The General Counsel (or General Counsel's designee) may
authorize a Commission member, other Commission official, or Commission
staff to disclose an item or category of information from Commission
records not currently available to the public for routine inspection and
copying under Rule 4.9(b) where the General Counsel (or General
Counsel's designee) determines that such disclosure would facilitate the
conduct of official agency business and would not otherwise be
prohibited by applicable law, order, or regulation. Requests for such
determinations shall be set forth in writing and, in the case of staff
requests, shall be forwarded to the General Counsel (or General
Counsel's designee) through the relevant Bureau. In unusual or difficult
cases, the General Counsel may refer the request to the Commission for
determination.
(i) The Director of the Bureau of Competition is authorized, without
power of redelegation, to respond to access requests for records and
other materials pursuant to an agreement under the International
Antitrust Enforcement Assistance Act, 15 U.S.C. 6201 et seq. Before
responding to such a request, the Bureau Director shall transmit the
proposed response to the Secretary and the Secretary shall notify the
Commission of the proposed response. If no Commissioner objects within
three days following the Commission's receipt of such notification, the
Secretary shall inform the Bureau Director that he or she may proceed.
(j)(1) The procedures specified in this section apply to disclosures
of certain records to foreign law enforcement agencies in specified
circumstances in accordance with the U.S. SAFE WEB Act of 2006. Nothing
in this section authorizes the disclosure of material obtained in
connection with the administration of the Federal antitrust laws or
[[Page 137]]
foreign antitrust laws, as defined in paragraph (j)(5)(i) of this
section.
(2) Requests from foreign law enforcement agencies, as defined in
paragraph (j)(5)(ii) of this section, for nonpublic records shall be
addressed to the Director of the Office of International Affairs or the
Director's designee, who shall forward them to the General Counsel with
recommendations for disposition after obtaining any required
certification described in paragraph (j)(3) of this section and approval
of the Bureau of Consumer Protection. With respect to requests under
this paragraph, the General Counsel or the General Counsel's designee is
delegated the authority to dispose of them. Alternatively, the General
Counsel may refer such requests to the Commission for determination,
except that requests must be referred to the Commission for
determination where the Bureau of Consumer Protection or the Office of
International Affairs disagrees with the General Counsel's proposed
disposition.
(3) Access under this section to any material subject to the
disclosure restrictions in sections 6(f) or 21(b) of the FTC Act or
Sec. 4.10(d) may not be granted unless--
(i) An appropriate official of the foreign law enforcement agency
has certified, either by prior agreement or memorandum of understanding
or by other written certification, that such material will be maintained
in confidence and will be used only for official law enforcement
purposes; and
(ii)(A) The foreign law enforcement agency has set forth a bona fide
legal basis for its authority to maintain the material in confidence;
(B) The materials are to be used for purposes of investigating, or
engaging in enforcement proceedings related to, possible violations of:
(1) Foreign laws prohibiting fraudulent or deceptive commercial
practices, or other practices substantially similar to practices
prohibited by any law administered by the Commission;
(2) A law administered by the Commission, if disclosure of the
material would further a Commission investigation or enforcement
proceeding; or
(3) With the approval of the Attorney General, other foreign
criminal laws, if such foreign criminal laws are offenses defined in or
covered by a criminal mutual legal assistance treaty in force between
the government of the United States and the foreign law enforcement
agency's government;
(C) The appropriate Federal banking agency, (as defined in section
3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)) or, in the
case of a Federal credit union, the National Credit Union Administration
has given its prior approval if the materials to be provided under
paragraph (j)(3)(ii)(B) of this section are requested by the foreign law
enforcement agency for the purpose of investigating, or engaging in
enforcement proceedings based on, possible violations of law by a bank,
a savings and loan institution described in section 18(f)(3) of the
Federal Trade Commission Act (15 U.S.C. 57a(f)(3)), or a Federal credit
union described in section 18(f)(4) of the Federal Trade Commission Act
(15 U.S.C. 57a(f)(4)); and
(D) The foreign law enforcement agency is not from a foreign state
that the Secretary of State has determined, in accordance with section
6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)),
has repeatedly provided support for acts of international terrorism,
unless and until such determination is rescinded pursuant to section
6(j)(4) of that Act (50 U.S.C. App. 2405(j)(4)).
(4) A copy of the certificate described in paragraph (j)(3) of this
section will be forwarded to the submitter of the information at the
time the request is granted unless the foreign law enforcement agency
requests that the submitter not be notified.
(5) For purposes of this section:
(i) ``Federal antitrust laws'' and ``foreign antitrust laws'' are to
be interpreted as defined in paragraphs (5) and (7), respectively, of
section 12 of the International Antitrust Enforcement Assistance Act of
1994 (15 U.S.C. 6211); and
(ii) ``Foreign law enforcement agency'' is defined as:
(A) Any agency or judicial authority of a foreign government,
including a foreign state, a political subdivision of a foreign state,
or a multinational organization constituted by and comprised of foreign
states, that is vested
[[Page 138]]
with law enforcement or investigative authority in civil, criminal, or
administrative matters and
(B) Any multinational organization, to the extent that it is acting
on behalf of an entity described in paragraph (j)(5)(i)(A) of this
section.
(15 U.S.C. 41 et seq.)
[40 FR 7629, Feb. 21, 1975]
Editorial Note: For Federal Register citations affecting Sec. 4.11,
see the List of CFR Sections Affected, which appears in the Finding Aids
section of the printed volume and at www.govinfo.gov.
Sec. 4.12 Disposition of documents submitted to the Commission.
(a) Material submitted to the Commission. (1) Any person who has
submitted material to the Commission may obtain, on request, the return
of material submitted to the Commission which has not been received into
evidence:
(i) After the close of the proceeding in connection with which the
material was submitted; or
(ii) When no proceeding in which the material may be used has been
commenced within a reasonable time after completion of the examination
and analysis of all such material and other information assembled in the
course of the investigation.
(2) Such request shall be in writing, addressed to the custodian
designated pursuant to Sec. 2.16 or the Secretary of the Commission in
all other circumstances, and shall reasonably describe the material
requested. A request for return of material may be filed at any time,
but material will not be returned nor will commitments to return
material be undertaken prior to the time described in this paragraph.
(b) Commission-made copies of documents submitted to the Commission.
The Commission will not return to the submitter copies of documents made
by the Commission unless, upon a showing of extraordinary circumstances,
the Commission determines that return would be required in the public
interest.
(c) Disposition of material not returned. Subsequent to the time
prescribed in paragraph (a) of this section, the staff will examine all
submitted material and Commission-made copies of documents located in a
reasonable search of the Commission's files and will determine,
consistent with the Federal Records Act, 44 U.S.C. 3301, which materials
are appropriate for preservation as evidence of the organization,
functions, policies, decisions, procedures, operations, or other
activities of the Commission or because of the information value of data
in them. The Commission will dispose of all material determined not to
be appropriate for preservation in accordance with applicable
regulations of the National Archives and Records Administration.
[46 FR 26292, May 12, 1981, as amended at 60 FR 37751, July 21, 1995; 78
FR 13474, Feb. 28, 2013]
Sec. 4.13 Privacy Act rules.
(a) Purpose and scope. (1) This section is promulgated to implement
the Privacy Act of 1974 (Pub. L. 93-579, 5 U.S.C. 552a) by establishing
procedures whereby an individual can, as to all systems of records
maintained by the Commission except those set forth in Sec. 4.13(m) as
exempt from disclosure, (i) Request notification of whether the
Commission maintains a record pertaining to him in any system of
records, (ii) request access to such a record or to an accounting of its
disclosure, (iii) request that the record be amended or corrected, and
(iv) appeal an initial adverse determination of any such request. This
section also establishes those systems of records that are specifically
exempt from disclosure and from other requirements.
(2) The procedures of this section apply only to requests by an
individual as defined in Sec. 4.13(b). Except as otherwise provided,
they govern only records containing personal information in systems of
records for which notice has been published by the Commission in the
Federal Register pursuant to section 552a(e)(4) of the Privacy Act of
1974 and which are neither exempt from the provisions of this section
nor contained in government-wide systems of personnel records for which
notice has been published in the Federal Register by the Office of
Personnel Management. Requests for notification, access, and amendment
of personnel records which are contained in a system of records for
which notice has been given by the Office of Personnel
[[Page 139]]
Management are governed by the Office of Personnel Management's notices,
5 CFR part 297. Access to records which are not subject to the
requirements of the Privacy Act are governed by Sec. Sec. 4.8 through
4.11.
(b) Definitions. The following definitions apply to this section
only:
(1) Individual means a natural person who is a citizen of the United
States or an alien lawfully admitted for permanent residence.
(2) Record means any item, collection, or grouping of personal
information about an individual that is maintained by the Commission,
including, but not limited to, his education, financial transactions,
medical history, and criminal or employment history and that contains
his name, or the identifying number, symbol, or other identifying
particular assigned to the individual, such as a finger or voice print
or a photograph, but does not include information concerning
proprietorships, businesses, or corporations.
(3) System of records means a group of any records under the control
of the Commission from which information is retrieved by the name of the
individual or by some identifying number, symbol, or other identifying
particular assigned to the individual, for which notice has been
published by the Commission in the Federal Register pursuant to 5 U.S.C.
552a(e)(4).
(c) Procedures for requests pertaining to individual records in a
record system. An individual may request access to his or her records or
any information pertaining to that individual in a system of records,
and notification of whether and to whom the Commission has disclosed a
record for which an accounting of disclosures is required to be kept and
made available to the individual, using the procedures of this section.
Requests for the disclosure of records under this section or to
determine whether a system of records contains records pertaining to an
individual or to obtain an accounting of disclosures, shall be in
writing and if mailed, addressed as follows:
Privacy Act Request, Office of the General Counsel, Federal Trade
Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580.
If requests are presented in person at the Office of the General
Counsel, the individual shall be required to execute a written request.
All requests shall name the system of records that is the subject of the
request, and shall include any additional information specified in the
pertinent system notice as necessary to locate the records requested. If
the requester wants another person to accompany him or her to review the
records, the request shall so state. Nothing in this section will allow
an individual access to any information compiled in reasonable
anticipation of a civil action or proceeding.
(d) Times, places, and requirements for identification of
individuals making requests. Verification of identity of persons making
written requests to the deciding official (as designated by the General
Counsel) ordinarily will not be required. The signature on such requests
will be deemed a certification by the signatory that he or she is the
individual to whom the record pertains or is the parent or guardian of a
minor or the legal guardian of the individual to whom the record
pertains. The deciding official (as designated by the General Counsel)
may require additional verification of a requester's identity when such
information is reasonably necessary to assure that records are not
improperly disclosed; provided, however, that no verification of
identity will be required if the records sought are publicly available
under the Freedom of Information Act.
(e) Disclosure of requested information to individuals. Within 10
working days of receipt of a request under Sec. 4.13(c), the deciding
official (as designated by the General Counsel) will acknowledge receipt
of the request. Within 30 working days of the receipt of a request under
Sec. 4.13(c), the deciding official (as designated by the General
Counsel) will inform the requester whether a system of records
containing retrievable information pertaining to the requester exists,
and if so, either that the request has been granted or that the
requested records or information is exempt from disclosure pursuant to
Sec. 4.13(m). When, for good cause shown, the deciding official (as
designated by the General Counsel) is unable to respond within 30
[[Page 140]]
working days of the receipt of the request, that official will notify
the requester and inform him or her approximately when a response will
be made.
(f) Special procedures: Medical records. When the deciding official
(as designated by the General Counsel) determines that disclosure of a
medical or psychological record directly to a requesting individual
could have an adverse effect on the individual, he or she will require
the individual to designate a medical doctor to whom the record will be
transmitted.
(g) Request for correction or amendment of record. An individual to
whom access to his records or any information pertaining to him in a
system of records has been granted may request that any portion thereof
be amended or corrected because he believes it is not accurate,
relevant, timely, or complete. An initial request for correction or
amendment of a record shall be in writing whether presented in person or
by mail, and if by mail, addressed as in Sec. 4.13(c). In making a
request under this subsection, the requesting party shall state the
nature of the information in the record the individual believes to be
inaccurate, irrelevant, untimely, or incomplete, the correction or
amendment desired, and the reasons therefore.
(h) Agency review of request for correction or amendment of record.
Whether presented in person or by mail, requests under Sec. 4.13(g)
will be acknowledged by the deciding official (as designated by the
General Counsel) within 10 working days of the receipt of the request if
action on the request cannot be completed and the individual notified of
the results within that time. Thereafter, the deciding official (as
designated by the General Counsel) will promptly either make the
requested amendment or correction or inform the requester of his refusal
to make the amendment or correction, the reasons for the refusal, and
the requester's right to appeal that refusal in accordance with Sec.
4.13(i).
(i) Appeal of initial adverse agency determination. (1) If an
initial request filed under Sec. 4.13(c) or Sec. 4.13(g) is denied,
the requester may appeal that denial to the General Counsel. The appeal
shall be in writing and addressed as follows:
Privacy Act Appeal, Office of the General Counsel, Federal Trade
Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580.
Within 30 working days of the receipt of the appeal, the General Counsel
will notify the requester of the disposition of that appeal, except that
the General Counsel may extend the 30-day period for good cause, in
which case, the General Counsel will advise the requester of the
approximate date on which review will be completed. In unusual or
difficult cases, the General Counsel may, in his or her sole discretion,
refer an appeal to the Commission for determination.
(2)(i) If the General Counsel refuses to amend or correct the record
in accordance with a request under Sec. 4.13(g), the General Counsel
will notify the requester of that decision and inform the requester of
the right to file with the deciding official (as designated by the
General Counsel) a concise statement setting forth the reasons for the
requester's disagreement with the General Counsel's determination and
the fact that the requester's statement will be treated as set forth in
paragraph (i)(2)(ii) of this section. The General Counsel will also
inform the requester that judicial review of the decision is available
by a civil suit in the district in which the requester resides, or has
his principal place of business, or in which the agency records are
situated, or in the District of Columbia.
(ii) If the individual files a statement disagreeing with the
General Counsel's determination not to amend or correct a record, such
disagreement will be clearly noted in the record involved and the
individual's statement will be made available to anyone to whom the
record has been disclosed after September 27, 1975, or is subsequently
disclosed together with, if the General Counsel deems it appropriate, a
brief statement of his or her reasons for declining to amend the record.
(j) Disclosure of record to person other than the individual to whom
it pertains. Except as provided by 5 U.S.C. 552a(b), the written request
or prior written consent of the individual to whom a
[[Page 141]]
record pertains, or of his parent if a minor, or legal guardian if
incompetent, shall be required before such record is disclosed. If the
individual elects to inspect a record in person and desires to be
accompanied by another person, the deciding official (as designated by
the General Counsel) may require the individual to furnish a signed
statement authorizing disclosure of his or her record in the presence of
the accompanying named person.
(k) Fees. No fees will be charged for searching for a record,
reviewing it, or for copies of records made by the Commission for its
own purposes incident to granting access to a requester. Copies of
records to which access has been granted under this section may be
obtained by the requester from the deciding official (as designated by
the General Counsel) on payment of the reproduction fees provided in
Sec. 4.8(b)(6).
(l) Penalties. Section 552a(i)(3) of the Privacy Act, 5 U.S.C.
552a(i)(3), makes it a misdemeanor, subject to a maximum fine of $5,000,
to knowingly and willfully request or obtain any record concerning an
individual under false pretenses. Sections 552a(i) (1) and (2) of the
Privacy Act, 5 U.S.C. 552a(i) (1) and (2), provide penalties for
violations by agency employees of the Privacy Act or regulations
established thereunder. Title 18 U.S.C. 1001, Crimes and Criminal
Procedures, makes it a criminal offense, subject to a maximum fine of
$10,000 or imprisonment for not more than 5 years or both, to knowingly
and willfully make or cause to be made any false or fraudulent
statements or representations in any matter within the jurisdiction of
any agency of the United States.
(m) Specific exemptions. (1) Pursuant to 5 U.S.C. 552a(j)(2),
investigatory materials maintained by an agency component in connection
with any activity relating to criminal law enforcement in the following
systems of records are exempt from all subsections of 5 U.S.C. 552a,
except (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (7), (9),
(10), and (11), and (i), and from the provisions of this section, except
as otherwise provided in 5 U.S.C. 552a(j)(2):
(i) I-7--Office of Inspector General Investigative Files--FTC.
(ii) [Reserved]
(2) Pursuant to 5 U.S.C. 552a(k)(2), investigatory materials
compiled for law enforcement purposes in the following systems of
records are exempt from subsections (c)(3), (d), (e)(1), (e)(4)(G), (H),
and (I), and (f) of 5 U.S.C. 552a, and from the provisions of this
section, except as otherwise provided in 5 U.S.C. 552a(k)(2):
(i) I-1--Nonpublic Investigational and Other Nonpublic Legal Program
Records--FTC.
(ii) I-2--Disciplinary Action Investigatory Files--FTC.
(iii) I-4--Clearance Application and Response Files--FTC.
(iv) I-5--Matter Management System--FTC.
(v) I-7--Office of Inspector General Investigative Files--FTC.
(vi) I-8--Stenographic Reporting Services Request System--FTC.
(vii) II-3--Worker's Compensation--FTC.
(viii) II-6--Discrimination Complaint System--FTC.
(ix) IV-1--Consumer Information System--FTC.
(x) V-1--Freedom of Information Act Requests and Appeals--FTC.
(xi) V-2--Privacy Act Requests and Appeals--FTC.
(xii) VII-6--Document Management and Retrieval System--FTC.
(3) Pursuant to 5 U.S.C. 552a(k)(5), investigatory materials
compiled to determine suitability, eligibility, or qualifications for
Federal civilian employment, military service, Federal contracts, or
access to classified information, but only where disclosure would reveal
the identity of a confidential source of information, in the following
systems of records are exempt from subsections (c)(3), (d), (e)(1),
(e)(4)(G), (H), and (I), and (f) of 5 U.S.C. 552a, and from the
provisions of this section, except as otherwise provided in 5 U.S.C.
552a(k)(5):
(i) II-4--Employment Application-Related Records--FTC.
[[Page 142]]
(ii) II-11--Personnel Security, Identity Management and Access
Control Records System--FTC.
[40 FR 40780, Sept. 3, 1975, as amended at 46 FR 26292, May 12, 1981; 48
FR 4280, Jan. 31, 1983; 55 FR 37700, Sept. 13, 1990; 55 FR 38801, Sept.
21, 1990; 57 FR 10808, Mar. 31, 1992; 58 FR 7047, Feb. 4, 1993; 63 FR
45648, Aug. 26, 1998; 64 FR 3014, Jan. 20, 1999; 64 FR 69397, Dec. 13,
1999; 66 FR 64144, Dec. 12, 2001; 67 FR 123, Jan. 2, 2002; 80 FR 15163,
Mar. 23, 2015]
Sec. 4.14 Conduct of business.
(a) Matters before the Commission for consideration may be resolved
either at a meeting under Sec. 4.15 or by written circulation. Any
Commissioner may direct that a matter presented for consideration be
placed on the agenda of a Commission meeting.
(b) A majority of the members of the Commission in office and not
recused from participating in a matter (by virtue of 18 U.S.C. 208 or
otherwise) constitutes a quorum for the transaction of business in that
matter.
(c) Any Commission action, either at a meeting or by written
circulation, may be taken only with the affirmative concurrence of a
majority of the participating Commissioners, except where a greater
majority is required by statute or rule or where the action is taken
pursuant to a valid delegation of authority. No Commissioner may
delegate the authority to determine his or her vote in any matter
requiring Commission action, but authority to report a Commissioner's
vote on a particular matter resolved either by written circulation, or
at a meeting held in the Commissioner's absence, may be vested in a
member of the Commissioner's staff.
[42 FR 13540, Mar. 11, 1977, as amended at 50 FR 53306, Dec. 31, 1985;
70 FR 53297, Sept. 8, 2005]
Sec. 4.15 Commission meetings.
(a) In general. (1) Meetings of the Commission, as defined in 5
U.S.C. 552b(a)(2), are held at the principal office of the Commission,
unless otherwise directed.
(2) Initial announcements of meetings. For each meeting, the
Commission shall announce:
(i) The time, place and subject matter of the meeting,
(ii) Whether the meeting will be open or closed to the public, and
(iii) The name and phone number of the official who will respond to
requests for information about the meeting.
Such announcement shall be made at least one week before the meeting
except that where the agency determines pursuant to 5 U.S.C. 552b(e)(1)
to call the meeting on less than one week's notice, or where the agency
determines to close the meeting pursuant to paragraph (c)(2) of this
section, the announcement shall be made at the earliest practicable
time.
(3) Announcements of changes in meetings. Following the announcement
of a meeting, any change in the time, place or subject matter will be
announced at the earliest practicable time, and, except with respect to
meetings closed under paragraph (c)(2) of this section, any change in
the subject matter or decision to open or close a meeting shall be made
only as provided in 5 U.S.C. 552b(e)(2).
(4) Deletions from announcements. The requirements of paragraphs
(a)(2) and (a)(3) of this section do not require the disclosure of any
information pertaining to a portion of a closed meeting where such
disclosure is likely to concern a matter within the scope of 5 U.S.C.
552b(c).
(5) Dissemination of notices. Notices required under paragraphs
(a)(2) and (a)(3) of this section will be posted at the principal office
of the Commission, recorded on a telephone message device, and, except
as to notices of meetings closed under paragraph (c)(2) of this section,
submitted to the Federal Register for publication. In addition, notices
issued under paragraph (a)(2) of this section one week in advance of the
meeting will be sent to all persons and organizations who have requested
inclusion on a meeting notice mailing list, and will be issued as a
press release to interested media.
(b) Open meetings. (1) Commission meetings shall be open to public
observation unless the Commission determines that portions may be closed
pursuant to 5 U.S.C. 552b(c).
[[Page 143]]
(2) Any person whose interest may be directly affected if a portion
of a meeting is open, may request that the Commission close that portion
for any of the reasons described in 5 U.S.C. 552b(c). The Commission
shall vote on such requests if at least one member desires to do so.
Such requests shall be in writing, filed at the earliest practicable
time, and describe how the matters to be discussed will have any of the
effects enumerated in 5 U.S.C. 552b(c). Requests shall be addressed as
follows:
Closed Meeting Request, Office of the General Counsel, Federal Trade
Commission, 6th Street and Pennsylvania Avenue NW., Washington, DC
20580.
(3) The Commissioner to whom a matter has been assigned for
presentation to the Commission shall have the authority to make
available to the public, prior to consideration of that matter at an
open meeting, material sufficient to inform the public of the issues
likely to be discussed in connection with that matter.
(c) Closed meetings. (1) Whenever the Commission votes to close a
meeting or series of meetings under these rules, it shall make publicly
available within one day notices both of such vote and the General
Counsel's determination regarding certification under 5 U.S.C.
552b(f)(1). Such determination by the General Counsel shall be made
prior to the Commission vote to close a meeting or series of meetings.
Further, except with respect to meetings closed under paragraph (c)(2)
of this section, the Commission shall make publicly available within one
day a full written explanation of its action in closing any meeting, and
a list specifying the names and affiliations of all persons expected to
attend, except Commission employees and consultants and any stenographer
or court reporter attending for the sole purpose of preparing a verbatim
transcript. All Commission employees and consultants may attend
nonadjudicative portions of any closed meeting and members of
Commissioners' personal staffs, the General Counsel and his staff, and
the Secretary and his staff may attend the adjudicative portions of any
closed meeting except to the extent the notice of a particular closed
meeting otherwise specifically provides. Stenographers or court
reporters may attend any closed meeting at which their services are
required by the Commission.
(2) If a Commission meeting, or portions thereof, may be closed
pursuant to 5 U.S.C. 552b(c)(10), the Commission may, by vote recorded
at the beginning of the meeting, or portion thereof, close the portion
or portions of the meeting so exempt.
(3) Closed meeting transcripts or minutes required by 5 U.S.C.
552b(f)(1) will be released to the public insofar as they contain
information that either is not exempt from disclosure under 5 U.S.C.
552b(c), or, although exempt, should be disclosed in the public
interest. The Commission will determine whether to release, in whole or
in part, the minutes of its executive sessions to consider oral
arguments. With regard to all other closed meetings, the General Counsel
or the General Counsel's designee shall determine, in accordance with
Sec. 4.9(c), which portions of the transcripts or minutes may be
released.
(d) The presiding officer shall be responsible for preserving order
and decorum at meetings and shall have all powers necessary to that end.
[42 FR 13541, Mar. 11, 1977; 42 FR 15409, Mar. 22, 1977, as amended at
42 FR 62912, Dec. 14, 1977: 43 FR 1937, Jan. 13, 1978; 43 FR 35684, Aug.
11, 1978; 63 FR 32978, June 17, 1998]
Sec. 4.16 Privilege against self-incrimination.
Section 2.11 of Pub. L. 91-462 specifically repeals paragraph 7 of
section 9 of the Federal Trade Commission Act. Title 18, section 6002,
of the United States Code provides that whenever a witness refuses, on
the basis of his privilege against self-incrimination, to testify or
provide other information in a proceeding before or ancillary to:
(a) A court or grand jury of the United States,
(b) An agency of the United States, or
(c) Either House of Congress, a joint committee of the two Houses,
or a committee or a subcommittee of either House, and the person
presiding over the proceeding communicates to the witness an order
issued under section 6004, the witness may not refuse to
[[Page 144]]
comply with the order on the basis of his privilege against self-
incrimination; but no testimony or other information compelled under the
order (or any information directly or indirectly derived from such
testimony or other information) may be used against the witness in any
criminal case, except a prosecution for perjury, giving a false
statement, or otherwise failing to comply with the order. Title 18,
section 6004, of the United States Code provides that:
(1) In the case of any individual who has been or who may be called
to testify or provide other information at any proceeding before an
agency of the United States, the agency may, with the approval of the
Attorney General, issue, in accordance with subsection (b) of section
6004, an order requiring the individual to give testimony or provide
other information which he refused to give or provide on the basis of
his privilege against self-incrimination, such order to become effective
as provided in title 18, section 6002, of the United States Code;
(2) An agency of the United States may issue an order under
subsection (a) of section 6004 only if in its judgment
(i) The testimony or other information from such individual may be
necessary to the public interest; and
(ii) Such individual has refused or is likely to refuse to testify
or provide other information on the basis of his privilege against self-
incrimination.
(18 U.S.C. 6002, 6004)
[37 FR 5017, Mar. 9, 1972. Redesignated at 45 FR 36345, May 29, 1980]
Sec. 4.17 Disqualification of Commissioners.
(a) Applicability. This section applies to all motions seeking the
disqualification of a Commissioner from any adjudicative or rulemaking
proceeding.
(b) Procedures. (1) Whenever any participant in a proceeding shall
deem a Commissioner for any reason to be disqualified from participation
in that proceeding, such participant may file with the Secretary a
motion to the Commission to disqualify the Commissioner, such motion to
be supported by affidavits and other information setting forth with
particularity the alleged grounds for disqualification.
(2) Such motion shall be filed at the earliest practicable time
after the participant learns, or could reasonably have learned, of the
alleged grounds for disqualification.
(3)(i) Such motion shall be addressed in the first instance by the
Commissioner whose disqualification is sought.
(ii) In the event such Commissioner declines to recuse himself or
herself from further participation in the proceeding, the Commission
shall determine the motion without the participation of such
Commissioner.
(c) Standards. Such motion shall be determined in accordance with
legal standards applicable to the proceeding in which such motion is
filed.
(15 U.S.C. 46(g))
[46 FR 45750, Sept. 15, 1981]
PART 5_STANDARDS OF CONDUCT--Table of Contents
Subpart A_Employee Conduct Standards and Financial Conflicts of Interest
Sec.
5.1 Cross-reference to executive branch-wide regulations.
5.2 Exemption of insubstantial financial conflicts.
Subpart B_Financial Disclosure Requirements
5.10 Cross-reference to executive branch-wide regulations.
Subparts C-D [Reserved]
Subpart E_Disciplinary Actions Concerning Postemployment Conflict of
Interest
5.51 Scope and applicability.
5.52 Nonpublic proceedings.
5.53 Initiation of investigation.
5.54 Referral to the Office of Government Ethics and to the Department
of Justice.
5.55 Conduct of investigation.
5.56 Disposition.
5.57 Order to show cause.
5.58 Answer and request for a hearing.
5.59 Presiding official.
5.60 Scheduling of hearing.
5.61 Prehearing procedures; motions; interlocutory appeals; summary
decision; discovery; compulsory process.
5.62 Hearing rights of respondent.
5.63 Evidence; transcript; in camera orders; proposed findings of fact
and conclusions of law.
5.64 Initial decision.
[[Page 145]]
5.65 Review of initial decision.
5.66 Commission decision and reconsideration.
5.67 Sanctions.
5.68 Judicial review.
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of
1978); 15 U.S.C. 46(g); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p.
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306;
5 CFR part 2635.
Source: 32 FR 13272, Sept. 20, 1967, unless otherwise noted.
Redesignated at 41 FR 54483, Dec. 14, 1976.
Subpart A_Employee Conduct Standards and Financial Conflicts of Interest
Sec. 5.1 Cross-reference to executive branch-wide regulations.
Commissioners and employees, including special government employees,
of the Federal Trade Commission (FTC) are subject to and should refer to
the ``Standards of Ethical Conduct for Employees of the Executive
Branch'' at 5 CFR part 2635 (``executive branch-wide Standards of
Conduct'') and to the FTC regulations at 5 CFR 5701 that supplement the
executive branch-wide Standards of Conduct.
[58 FR 15764, Mar. 24, 1993, as amended at 64 FR 42594, Aug. 5, 1999]
Sec. 5.2 Exemption of insubstantial financial conflicts.
(a) An employee or special Government employee will not be subject
to remedial or disciplinary action or to criminal prosecution under 18
U.S.C. 208(a), if he makes a full disclosure in writing to the official
responsible for his appointment of the nature and circumstances of the
particular matter involved and of his conflicting financial interest
relating thereto, and receives in advance a written determination made
by such official that the interest is not so substantial as to be deemed
likely to affect the integrity of the services which the Government may
expect from the employee or special Government employee.
(b) For the purposes of paragraph (a) of this section, the
``official responsible for appointment'' shall be the Executive Director
in all cases where the employee is classified at grade GS-15 or below,
or at a comparable pay level, except that each Commissioner shall be the
``official responsible for appointment'' of advisors in the
Commissioner's immediate office.
(c) In all other cases, the Chairman shall be the ``official
responsible for appointment.''
(d) Pursuant to 5 CFR part 2640, certain financial interests are
exempted from the provisions of 18 U.S.C. 208(a) as being too remote too
inconsequential to affect the integrity of an employee's services.
[58 FR 15764, Mar. 24, 1993, as amended at 63 FR 35130, June 29, 1998]
Subpart B_Financial Disclosure Requirements
Sec. 5.10 Cross-reference to executive branch-wide regulations.
Commissioners and employees, including special government employees,
of the Federal Trade Commission are subject to and should refer to the
executive branch-wide financial disclosure regulations at 5 CFR part
2634, and to the procedures for filing and review of financial
disclosure reports found in Chapter 3 of the FTC Administrative Manual.
[58 FR 15765, Mar. 24, 1993]
Subparts C-D [Reserved]
Subpart E_Disciplinary Actions Concerning Postemployment Conflict of
Interest
Authority: 15 U.S.C. 41 et seq.
Source: 46 FR 26050, May 11, 1981, unless otherwise noted.
Sec. 5.51 Scope and applicability.
These regulations establish procedures for investigating and
determining alleged violations of 18 U.S.C. 207 (postemployment
restrictions applicable to federal employees) or regulations issued by
the Office of Government Ethics, set forth in 5 CFR parts 2637 and 2641,
reflecting the views of the Office of Government Ethics and
[[Page 146]]
the Department of Justice as to the requirements of 18 U.S.C. 207.
[58 FR 15765, Mar. 24, 1993]
Sec. 5.52 Nonpublic proceedings.
Any investigation or proceedings held under this part shall be
nonpublic unless the respondent specifically requests otherwise, except
to the extent required by the Freedom of Information Act (5 U.S.C. 552)
or by the Sunshine Act (5 U.S.C. 552b). However, the presiding
official's initial decision and any final decision of the Commission
shall be placed on the public record, except that information may be
designated in camera in accordance with Sec. 3.45 of the Commission's
Rules of Practice.
Sec. 5.53 Initiation of investigation.
(a) Investigations under this part may be initiated upon the
submission by any person of a written statement to the Secretary setting
forth sufficient information to indicate a possible violation of 18
U.S.C. 207 or by the Commission on its own initiative when a possible
violation is indicated by information within the Commission's
possession.
(b) At the direction of the Commission, the General Counsel shall
investigate any alleged violation of 18 U.S.C. 207.
Sec. 5.54 Referral to the Office of Government Ethics and to the
Department of Justice.
(a) The General Counsel shall make a preliminary determination of
whether the matter appears frivolous and, if not, shall expeditiously
transmit any available information to the Director of the Office of
Government Ethics and to the Criminal Division, Department of Justice.
(b) Unless the Department of Justice communicates to the Commission
that it does not intend to initiate criminal prosecution, the General
Counsel shall coordinate any investigation or proceeding under this part
with the Department of Justice in order to avoid prejudicing criminal
proceedings.
Sec. 5.55 Conduct of investigation.
(a) The General Counsel may (1) exercise the authority granted in
Sec. 2.5 of the Commission's Rules of Practice to administer oaths and
affirmations; and (2) conduct investigational hearings pursuant to part
2 of these rules. He may also recommend that the Commission issue
compulsory process in connection with an investigation under this
section.
(b) Witnesses in investigations shall have the rights set forth in
Sec. 2.9 of the Commission's Rules of Practice.
Sec. 5.56 Disposition.
(a) Upon the conclusion of an investigation under this part, the
General Counsel shall forward to the Commission a summary of the facts
disclosed by the investigation along with a recommendation as to whether
the Commission should issue an order to show cause pursuant to Sec.
5.57.
(b) When the former government employee involved is an attorney, the
General Counsel shall also recommend whether the matter should be
referred to the disciplinary committee of the bar(s) of which the
attorney is a member.
Sec. 5.57 Order to show cause.
(a) Upon a Commission determination that there exists reasonable
cause to believe a former government employee has violated 18 U.S.C.
207, the Commission may issue an order requiring the former employee to
show cause why sanctions should not be imposed.
(b) The show cause order shall contain:
(1) The statutory provisions alleged to have been violated and a
clear and concise description of the acts of the former employee that
are alleged to constitute the violation;
(2) Notice of the respondent's right to submit an answer and request
a hearing, and the time and manner in which the request is to be made;
and
(3) A statement of the sanctions that may be imposed pursuant to
Sec. 5.67 of this part.
(c) Subsequent to the issuance of an order to show cause, any
communications to or from the Commission or any member of the Commission
shall be governed by the ex parte provisions of Sec. 4.7 of the
Commission's Rules of Practice. 16 CFR 4.7.
[[Page 147]]
Sec. 5.58 Answer and request for a hearing.
(a) An answer and request for a hearing must be filed with the
Secretary of the Commission within thirty (30) days after service of the
order to show cause.
(b) In the absence of good cause shown, failure to file an answer
and request for a hearing within the specified time limit:
(1) Will be deemed a waiver of the respondent's right to contest the
allegations of the show cause order or request a hearing and
(2) Shall authorize the Commission to find the facts to be as
alleged in the show cause order and enter a final decision providing for
the imposition of such sanctions specified in Sec. 5.67 as the
Commission deems appropriate.
(c) An answer shall contain (1) a concise statement of the facts or
law constituting each ground of defense and (2) specific admission,
denial, or explanation of each fact alleged in the show cause order or,
if the respondent is without knowledge thereof, a statement to that
effect. Any allegations of a complaint not answered in this manner will
be deemed admitted.
(d) Hearings shall be deemed waived as to any facts in the show
cause order that are specifically admitted or deemed to be admitted as a
result of respondent's failure to deny them. Those portions of
respondent's answer, together with the show cause order, will provide a
record basis for initial decision by the Administrative Law Judge or for
final decision by the Commission.
(e) If all material factual allegations of the show cause order are
specifically admitted or have been deemed admitted in accordance with
paragraph (c) of this section, the Commission will decide the matter on
the basis of the allegations set forth in the show cause order and
respondent's answer.
Sec. 5.59 Presiding official.
(a) Upon the receipt of an answer and request for a hearing, the
Secretary shall refer the matter to the Chief Administrative Law Judge,
who shall appoint an Administrative Law Judge to preside over the
hearing and shall notify the respondent and the General Counsel as to
the person selected.
(b) The powers and duties of the presiding official shall be as set
forth in Sec. 3.42(b) through (h) of the Commission's Rules of
Practice.
Sec. 5.60 Scheduling of hearing.
The presiding official shall fix the date, time and place of the
hearing. The hearing shall not be scheduled earlier than fifteen days
after receipt of the respondent's answer and request for a hearing. In
fixing the time, date and place of the hearing, the presiding official
shall give due regard to the respondent's need for adequate time to
prepare a defense and an expeditious resolution of allegations that may
be damaging to his or her reputation.
Sec. 5.61 Prehearing procedures; motions; interlocutory appeals;
summary decision; discovery; compulsory process.
Because of the nature of the issues involved in proceedings under
this part, the Commission anticipates that extensive motions, prehearing
proceedings and discovery will not be required in most cases. For this
reason, detailed procedures will not be established under this part.
However, to the extent deemed warranted by the presiding official,
prehearing conferences, motions, interlocutory appeals, summary
decisions, discovery and compulsory process shall be permitted and shall
be governed, where appropriate, by the provisions set forth in subparts
C and D, part 3, of the Commission's Rules of Practice.
Sec. 5.62 Hearing rights of respondent.
In any hearing under this subpart, the respondent shall have the
right:
(a) To be represented by counsel;
(b) To present and cross-examine witnesses and submit evidence;
(c) To present objections, motions, and arguments, oral or written;
and
(d) To obtain a transcript of the proceedings on request.
Sec. 5.63 Evidence; transcript; in camera orders; proposed findings of
fact and conclusions of law.
Sections 3.43, 3.44, 3.45, and 3.46 of the Commission's Rules of
Practice shall
[[Page 148]]
govern, respectively, the receipt and objections to admissibility of
evidence, the transcript of the hearing, in camera orders and the
submission and consideration of proposed findings of fact and
conclusions of law except that (a) a copy of the hearing transcript
shall be provided the respondent; and (b) the Commission has the burden
of establishing, by a preponderance of the evidence on the record as a
whole, the allegations stated in the order to show cause.
Sec. 5.64 Initial decision.
Section 3.51 of the Commission's Rules of Practice shall govern the
initial decision in proceedings under this subpart, except that the
determination of the Administrative Law Judge must be supported by a
preponderance of the evidence.