[Federal Register Volume 60, Number 90 (Wednesday, May 10, 1995)]
[Notices]
[Pages 24880-24884]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11492]
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INTERNATIONAL TRADE COMMISSION
International Trade Commission, Investigations Relating to
Potential Breaches of Administrative Protective Orders, Sanctions
Imposed for Actual Violations
AGENCY: U.S. International Trade Commission.
ACTION: Summary of Commission practice relating to administrative
protective orders.
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SUMMARY: This notice provides a summary by the International Trade
Commission (Commission) of its investigations of (1) breaches of
administrative protective orders (APOs) issued in connection with
investigations under Title VII and Section 337 of the Tariff Act of
1930, and (2) certain violations of the Commission's rules.
This notice is intended to inform the public of the Commission's
experience with APO breaches. The Commission also intends that this
notice will educate and alert representatives of parties to Commission
proceedings as to some specific types of APO breaches encountered by
the Commission. This notice is illustrative only and does not limit the
Commission's rules or standard APO. The notice does not provide an
exclusive list of conduct that will be deemed to be a breach of the
Commission's APOs, and does not indicate how the Commission will rule
in future cases.
FOR FURTHER INFORMATION CONTACT: Elizabeth C. Rose, Esq., Office of the
General Counsel, U.S. International Trade Commission, telephone 202-
205-3113.
SUPPLEMENTARY INFORMATION: The discussion below illustrates APO breach
investigations that the Commission has completed including a
description of actions taken in response to breaches. The discussion
covers breach investigations completed during 1994 with respect to
antidumping and countervailing duty cases. Also discussed are the
Commission's investigations completed during 1994 of possible
violations of Commission rule 207.3, commonly known as the ``one day
rule.'' In the interest of providing as much information to
practitioners as possible on APO practice, this notice also discusses
breach investigations completed during 1994 with respect to
investigations under section 337 of the Tariff Act of 1930.
The Commission periodically reports a summary of its actions in
response to violations of Commission APOs in an effort to educate those
obtaining access to business proprietary information (BPI) under an APO
of the common problems encountered in handling BPI and confidential
business information (CBI). This is the fifth notice of its kind, the
previous ones having been published at 56 FR 4846 (Feb. 6, 1991), 57 FR
12335 (Apr. 9, 1992), 58 FR 21991 (Apr. 26, 1993), and 59 FR 16834
(Apr. 8, 1994). The Commission intends to publish summaries at least
annually, and more frequently as appropriate.
As part of the effort to educate practitioners about APO practice,
the Commission's Secretary issued in September 1991 An Introduction to
Administrative Protective Order Practice in Antidumping and
Countervailing Duty Investigations. This document is available upon
request from the Office of the Secretary, U.S. International Trade
Commission, 500 E Street, SW, Washington, DC 20436, telephone 202-205-
2000.
I. Title VII Administrative Protective Orders
A. In General
APOs are issued in Commission investigations under Title VII of the
Tariff Act of 1930 to provide access to BPI to certain party
representatives under conditions designed to protect the
confidentiality of such information. The [[Page 24881]] Commission is
required to disclose under APO to the authorized representatives of
interested parties who are parties to an investigation BPI collected by
the Commission in the course of such investigations. 19 U.S.C. 1677f.
The Commission has implemented procedures governing this disclosure,
which is accomplished under an APO issued by the Secretary to the
Commission. 19 CFR 207.7. An important provision of the Commission's
rules relating to APOs is the ``one day rule'' that provides parties
with an extra day in which to file the public version of certain
submissions containing BPI. 19 CFR 207.3. The one day rule, which also
permits correction of the bracketing of BPI during that extra day, was
intended to reduce the incidence of APO breaches caused by inadequate
bracketing and improper placement of BPI. The Commission urges parties
to make use of the rule.
The Commission Secretary provides BPI only to ``authorized
applicants'' who agree to be bound by the terms and conditions of an
APO. The Commission is currently revising its standard APO forms for
antidumping and countervailing duty investigations to reflect recent
regulatory changes and Commission practice. The Commission has also
created a new APO form for use in section 201 investigations. The
standard APO form for antidumping and countervailing duty
investigations issued by the Commission in 1994 required the applicant
to swear that he or she would:
(1) Not divulge any of the BPI obtained under the APO and not
otherwise available to him, to any person other than
(i) Personnel of the Commission concerned with the investigation,
(ii) The person or agency from whom the BPI was obtained,
(iii) A person whose application for disclosure of BPI under the
APO has been granted by the Secretary, and
(iv) Other persons, such as paralegals and clerical staff, who (a)
are employed or supervised by and under the direction and control of
the authorized applicant or another authorized applicant in the same
firm whose application has been granted; (b) have a need thereof in
connection with the investigation; (c) are not involved in competitive
decision-making for an interested party which is a party to the
investigation; and (d) have submitted to the Secretary a signed
Acknowledgment for Clerical Personnel in the form attached hereto (the
authorized applicant shall also sign such acknowledgment and will be
deemed responsible for such persons' compliance with the APO);
(2) Use such BPI solely for the purposes of the above-captioned
Commission investigation or for judicial or binational panel review of
such Commission investigation;
(3) Not consult with any person not described in paragraph (1)
concerning BPI disclosed under the APO without first having received
the written consent of the Secretary and the party or the attorney of
the party from whom such BPI was obtained;
(4) Whenever materials (e.g., documents, computer disks, etc.)
containing such BPI are not being used, store such material in a locked
file cabinet, vault, safe, or other suitable container (N.B.: storage
of BPI on so-called hard disk computer media is to be avoided, because
mere erasure of data from such media may not irrecoverably destroy the
BPI and may result in violation of paragraph C of the APO);
(5) Serve all materials containing BPI disclosed under the APO as
directed by the Secretary and pursuant to section 207.7(f) of the
Commission's rules;
(6) Transmit each document containing BPI disclosed under the APO:
(i) with a cover sheet identifying the document as containing BPI,
(ii) with all BPI enclosed in brackets and each page warning that
the document contains BPI,
(iii) if the document is to be filed by a deadline, with each page
marked ``Bracketing of BPI not final for one business day after date of
filing,'' and
(iv) if by mail, within two envelopes, the inner one sealed and
marked ``Business Proprietary Information--To be opened only by [name
of recipient]'', and the outer one sealed and not marked as containing
BPI;
(7) Comply with the provisions of the APO and section 207.7 of the
Commission's rules;
(8) Make true and accurate representations in the authorized
applicant's application and promptly notify the Secretary of any
changes that occur after the submission of the application and that
affect the representations made in the application (e.g., change in
personnel assigned to the investigation);
(9) Report promptly and confirm in writing to the Secretary any
possible breach of the APO; and
(10) Acknowledge that breach of the APO may subject the authorized
applicant and other persons to such sanctions as the Commission deems
appropriate, including the administrative sanctions set out in the APO.
The APO further provides that breach of the protective order may
subject an applicant to:
(1) Disbarment from practice in any capacity before the Commission
along with such person's partners, associates, employer, and employees,
for up to seven years following publication of a determination that the
order has been breached;
(2) Referral to the United States Attorney;
(3) In the case of an attorney, accountant, or other professional,
referral to the ethics panel of the appropriate professional
association; and
(4) Such other administrative sanctions as the Commission
determines to be appropriate, including public release of or striking
from the record any information or briefs submitted by, or on behalf
of, the offender or the party represented by the offender, and denial
of further access to business proprietary information in the current or
any future investigations before the Commission. In addition, as noted
in its December 28, 1994 Notice of Final Rulemaking (59 FR 66719,
66720-21), the Commission may take actions other than sanctions, such
as the issuance of letters of warning.
Commission employees are not signatories to the Commission's APOs
and do not obtain access to BPI through the APO procedure.
Consequently, they are not subject to the APOs' requirements with
respect to the handling of BPI. However, Commission employees are
subject to strict statutory and regulatory constraints concerning BPI,
and face potentially severe penalties for noncompliance. See 18 U.S.C.
1905; Title 5, U.S. Code; and Commission personnel policies
implementing the statutes. Although the Privacy Act (5 U.S.C. 552a)
limits the Commission's authority to disclose any personnel action
against agency employees, this should not lead the public to conclude
that no such actions have been taken; during 1994, such action was
taken.
B. Investigations of Alleged APO Breaches
In an antidumping or countervailing duty investigation, the
investigation of an alleged APO breach generally proceeds as follows.
The Secretary, acting under delegated authority, issues to the alleged
breacher a letter of inquiry to ascertain the alleged breacher's views
on whether a breach has occurred. If, based on the response made to
such a letter of inquiry, the Commission determines that a breach has
occurred, [[Page 24882]] the Commission often issues a second letter
asking the breacher to address the questions of mitigating
circumstances and possible sanctions or other actions. The Commission
then determines what action to take in response to the breach. However,
in some cases, the Commission has determined that although a breach has
occurred sanctions are not warranted, and therefore has found it
unnecessary to issue a second letter concerning what sanctions might be
appropriate, and has waived the rule requiring issuance of the second
letter. The Commission's December 28, 1994 Notice of Final Rulemaking
formally codifies this procedure. See 59 FR 66719, 66721. The
Commission retains sole authority to make final determinations
regarding the existence of a breach and the appropriate action to be
taken if a breach has occurred.
The records of Commission investigations of alleged APO breaches in
antidumping and countervailing duty cases are not publicly available
and are exempt from disclosure under the Freedom of Information Act, 5
U.S.C. 552. Section 135(b) of the Customs and Trade Act of 1990, 19
U.S.C. 1677f(g).
The breach most frequently investigated by the Commission involves
the APO's prohibition on the dissemination of BPI to unauthorized
persons. Such dissemination usually occurs as the result of failure to
delete BPI from public versions of documents filed with the Commission
or of transmission of proprietary versions of documents to unauthorized
recipients. Other breaches have involved: the failure to properly
bracket BPI in proprietary documents filed with the Commission; the
failure to immediately report known violations of an APO; and the
failure to adequately supervise non-legal personnel in the handling of
BPI in certain circumstances.
Sanctions for APO violations serve two basic interests: (a)
Preserving the confidence of submitters of BPI in the Commission as a
reliable protector of BPI, and (b) disciplining breachers and deterring
future violations. As the Conference Report to the Omnibus Trade and
Competitiveness Act of 1988 observed, ``the effective enforcement of
limited disclosure under administrative protective order depends in
part on the extent to which private parties have confidence that there
are effective sanctions against violation.'' H.R. Conf. Rep. No. 576,
100th Cong., 1st Sess. 623 (1988).
The Commission has worked to develop consistent jurisprudence, not
only in determining whether a breach has occurred, but also in
selecting an appropriate response. In determining the appropriate
response, the Commission generally considers mitigating factors such as
whether the breach was unintentional, lack of prior breaches committed
by the breaching party, the corrective measures taken by the breaching
party, the promptness with which the breaching party reported the
violation to the Commission, and any relevant circumstances peculiar to
the situation. The Commission also considers aggravating circumstances,
especially whether persons not under the APO actually read the BPI.
The Commission notes that Commission rules permit economists or
consultants to obtain access to BPI under the APO under the direction
and control of an attorney under the APO, or upon their own
responsibility, if the economist or consultant appears regularly before
the Commission and represents an interested party who is a party to the
investigation. See 19 C.F.R. 207.7(a)(3) (B) and (C). The Commission
cautions that economists or consultants who obtain access to BPI under
the APO under the direction and control of an attorney nonetheless
remain individually responsible for complying with the APO. In
appropriate circumstances, for example, an economist under the
direction and control of an attorney may be held responsible for a
breach of the APO by failing to redact APO information from a document
that is subsequently filed with the Commission and served as a public
document. This is so even though the attorney exercising direction or
control over the economist or consultant may also be held responsible
for the breach of the APO.
C. Specific Investigations in Which Breaches Were Found
The following case studies are presented to educate users about the
types of APO breaches found by the Commission and the sanctions imposed
and other actions taken by the Commission. In addition, the case
studies discuss the factors considered by the Commission as mitigating
the sanctions imposed in particular instances. The Commission has not
included some of the specific facts in the descriptions of
investigations where disclosure could reveal the identity of a
particular breacher. Thus, in some cases, apparent inconsistencies in
the facts set forth in this notice result from the Commission's
inability to disclose particular facts more fully.
The following discussion covers the 8 instances in which breaches
of APOs in antidumping and countervailing duty investigations were
found in 1994:
Case 1: An attorney (1) failed to redact BPI in the public version
of a brief, and (2) subsequently served that version on persons not
subject to the APO. The public version of the brief filed with the
Commission was placed in the public file and was signed out and
reviewed by a person not subject to the APO. The failure to redact the
BPI from the brief was not discovered by the attorney but was found by
the Secretary to the Commission. After being notified, counsel
retrieved copies of the document containing the confidential
information and sent replacement pages to the Commission. The
Commission found that the attorney had breached the APO, but that
mitigating circumstances existed because the attorney had committed no
prior breaches and the breaches were unintentional. The attorney was
given a private letter of reprimand.
Case 2: An attorney failed to redact BPI in the public version of a
brief. The Commission was informed of the incident the next day and the
attorney filed corrected pages of the brief with the Commission. The
public version of the brief was immediately removed from the Commission
files. No one other than the Commission staff had seen the public
version. The defective public version of the brief was only sent to the
attorneys subject to the APO and was recovered without being
disseminated to anyone not subject to the protective order. The
Commission found that the attorney had breached the APO, but did not
sanction the attorney because of the following mitigating
circumstances: the breach was not intentional; the attorney had
committed no prior breaches; when notified of the defective brief the
attorney promptly retrieved the defective documents so no BPI was
actually released to any unauthorized persons; and the firm immediately
revised and strengthened its previously established procedures for
safeguarding against the unintentional release of BPI. Two colleagues
were found not to have breached, because they were not directly
involved in the preparation of the public version of the brief. The
breaching attorney received a warning letter.
Case 3: An attorney filed with the Commission and served upon
parties a copy of the public version of a brief in which certain
bracketed BPI was not deleted and other BPI was neither bracketed nor
deleted. The public version of the brief filed with the Commission was
placed in the public file and was signed out and reviewed by persons
not subject to the APO. The failure to redact the BPI from the brief
was brought to the attorney's attention [[Page 24883]] by the Secretary
of the Commission. The Commission found that a breach of the APO had
occurred, but that mitigating circumstances existed because the
breaches were unintentional, the attorney had not previously been
charged by the Commission with an APO violation, and the attorney acted
promptly to mitigate the breach when notified by the Commission that
the breach had occurred. However, aggravating circumstances included
the fact that members of the public actually reviewed the improperly
redacted documents on several occasions, the breach was not discovered
by the attorney or by the attorney's firm, but by the Commission, and
the attorney appeared not to have reviewed the work of a paralegal who
created the public version of the brief. With respect to this last
item, we note that the Commission has no specific requirement that
attorneys review the work of paralegals, but attorneys are held
responsible for APO breaches by their staff who are APO signatories.
The attorney was given a private letter of reprimand.
Case 4: An attorney served the public version of a brief on persons
on the public service list and filed it with the Commission. However,
BPI was contained in an appendix to the brief. The public version of
the brief was not placed in the Commission's public files and the
copies of the brief that were served on attorneys on the public service
list were destroyed before dissemination to the attorneys' clients. The
Commission found that a breach had occurred, but mitigating
circumstances were found in that the attorney had committed no prior
APO violation, the attorney took immediate steps to ``cure'' the breach
by seeking the removal of the brief from the Commission's public file
before it could be reviewed by members of the public (although the
brief had not yet been placed in the public file), and the attorney
notified other counsel participating in the investigations of the
problem before they released the information to their clients. The
breaching attorney was not sanctioned but received a warning letter.
Case 5: An attorney filed the public version of a brief in which
bracketed BPI was not redacted. The brief was filed with the Commission
and served on persons on the public service list, several of whom were
not signatories to the APO. The attorney learned of the error that same
day and immediately retrieved all copies of the defective public
version of the brief from the parties on whom it had been served. The
brief was retrieved before it was viewed by any non-signatories to the
APO. The brief was never placed in the Commission's public file. The
Commission found that the attorney had breached the APO, but decided
not to sanction the attorney because of mitigating circumstances
including that the breach was inadvertent, the attorney had never been
sanctioned by the Commission in the past for APO breaches, immediate
steps were taken to mitigate any harm arising from the breach, and no
non-APO signatories viewed the confidential information. The breaching
attorney received a warning letter. Three colleagues were found not to
have breached the APO because they did not participate in the
preparation of the public version of the brief.
Case 6: A paralegal assigned to remove bracketed BPI from the
public version of a brief failed to do so, and the brief was submitted
to the Commission, and served on a signatory to the APO. The error was
discovered and reported to the Commission before the brief was placed
in the public file. The Commission found that two attorneys responsible
for supervising the paralegal breached the APO, but that there were
mitigating circumstances including the facts the breach was
inadvertent, none of the persons involved had been previously
sanctioned by the Commission for APO breaches, steps were taken to
mitigate any harm arising from the breach, and no BPI was disclosed.
The attorneys were not sanctioned, but received warning letters. Two
colleagues were found not to have breached the APO because they were
not directly involved with the production of the document in question.
Case 7: Two attorneys served the business proprietary version of a
brief on a non-APO signatory due to an error in the certificate of
service. Two non-APO signatories actually viewed the defective brief
before the attorneys could retrieve it. In a related incident, three
attorneys also disclosed information in the public version of a brief
from which BPI could be derived, but retrieved it before service was
complete. That brief also was filed with the Commission's Secretary,
but had not yet been placed in the public file when the attorneys
reported the incident. The Commission found breaches in both incidents,
but determined not to sanction the attorneys. Mitigating circumstances
included the facts that the breaches were unintentional, none of the
attorneys involved had been previously sanctioned by the Commission for
an APO breach, the attorneys promptly reported both breaches to the
Commission and took immediate action to mitigate the breaches, and no
non-APO signatories viewed the brief in the second incident. The
attorneys received warning letters.
Case 8: Two attorneys mistakenly served replacement pages
containing BPI for the confidential version of a brief on an attorney
at another law firm. Neither the law firm to which the APO material was
sent, nor any of its attorneys, was included in the APO service list.
The attorneys waited several days to inform the Commission of the
breach. The Commission found that a breach had occurred, but that
mitigating circumstances included the following: the breach was
unintentional; the attorneys had no prior APO sanctions; prompt and
effective measures were taken to minimize any harm resulting from the
breach; and the firm conducted more training of its personnel and
instituted new procedures to guard against future breaches. Aggravating
circumstances included the fact that non-APO signatories of the law
firm that received the misdirected copies viewed the information. The
breaching attorneys received private letters of reprimand.
D. Investigations Involving the ``One Day Rule''
During 1994, the Commission completed the following investigations
of changes to briefs that were not in compliance with the one day rule.
The Commission found no violations in these investigations. The reasons
for finding no violation include:
(1) Attorneys representing two parties in the same investigation
made and submitted substantive corrections to their briefs along with
bracketing corrections. The attorneys were found not to be in violation
because a representative of the Commission had suggested that the
corrections be made and there was a misunderstanding as to the
appropriate means to make such changes; and
(2) An attorney submitted bracketing changes to a brief in one
letter and correction of a typographical error in the brief in a
separate letter. The Commission determined that because the correction
was filed separately, and not along with the bracketing changes, there
was no violation of the one day rule.
E. Investigations in Which No Breach Was Found
During 1994, the Commission completed 4 additional investigations
in which no breach was found. The reasons for a finding of no breach
included:
(1) The information allegedly mishandled was not BPI;
[[Page 24884]]
(2) Partially redacted BPI was largely illegible; and
(3) The information allegedly mishandled by the alleged breacher
consisted entirely of information pertaining to the alleged breacher's
own client.
II. Section 337 Administrative Protective Orders
APOs are issued in section 337 investigations pursuant to the
statute and the Commission's rules. 19 U.S.C. Sec. 1337(n); 19 CFR
210.37. APO practice in section 337 investigations differs in important
respects from APO practice in title VII investigations. Notably, in the
section 337 context, it is the presiding Administrative Law Judge
rather than the Secretary who issues the APO. The terms of the APO may
differ from case to case. Further, the one day rule does not apply.
In a section 337 investigation that is no longer before the
administrative law judge but is before the Commission, the
investigation of an alleged APO breach generally proceeds in the
following manner. The Secretary issues a letter of inquiry to ascertain
the alleged breacher's views on whether a breach has occurred. If,
based on the response made to such a letter of inquiry, the Commission
determines that a breach has occurred, the Commission issues a second
letter asking the breacher to address the questions of mitigating
circumstances and possible sanctions or other actions. The Commission
then determines what action to take in response to the breach. The
Commission retains sole authority to make final determinations
regarding the existence of a breach and the appropriate action to be
taken if a breach has occurred.
In section 337 investigations that are before the presiding
Administrative Law Judge, it is the judge who presides over the inquiry
into any alleged APO breaches.
Breaches have involved the unauthorized dissemination of CBI; the
use of CBI for purposes other than the section 337 investigation; and
the failure to return or destroy CBI in a timely manner. The following
is a summary of the one case in which a breach of the APO in a section
337 investigation was found in 1994:
Case 9: An attorney failed to destroy CBI in a timely manner after
the termination of the investigation and after the determination was no
longer appealable. The Commission determined that the attorney had
breached the APO after written and oral requests by the supplier for
return of the information were denied. Mitigating circumstances
included the facts that this was the first APO breach by the attorney,
and that while the attorney failed to return or destroy the CBI, no CBI
was disclosed. The attorney received a private letter of reprimand.
Issued: May 2, 1995.
By order of the Commission.
Donna R. Koehnke,
Secretary.
[FR Doc. 95-11492 Filed 5-9-95; 8:45 am]
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