[Federal Register Volume 65, Number 215 (Monday, November 6, 2000)]
[Proposed Rules]
[Pages 66515-66518]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28202]


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CONSUMER PRODUCT SAFETY COMMISSION

16 CFR Part 1026


Standards of Conduct for Outside Attorneys Practicing Before the 
Consumer Product Safety Commission; Notice of Proposed Rulemaking

AGENCY: Consumer Product Safety Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Consumer Product Safety Commission is proposing to amend 
its regulations to add a new part addressing the behavior of attorneys 
on matters before the Commission. The behavior of attorneys who 
represent clients in

[[Page 66516]]

Commission adjudicative proceedings is governed by 16 CFR part 1025. 
The new part would cover attorney behavior in any matter before the 
Commission other than an adjudication. It would also establish the 
procedure for addressing allegations against attorneys.

DATES: Written comments in response to this notice of proposed 
rulemaking must be received by the Commission January 5, 2001.

ADDRESSES: Comments should be mailed, preferably in five (5) copies, to 
the Office of the Secretary, Consumer Product Safety Commission, 
Washington, DC 20207-0001, or delivered to the Office of the Secretary, 
Consumer Product Safety Commission, Room 502, 4330 East West Highway, 
Bethesda, Maryland; Telephone (301) 504-0800. Comments may also be 
filed by telefacsimile to (301) 504-0127 or by email to [email protected]. Comments should be captioned ``NPR for Outside 
Attorneys.''

FOR FURTHER INFORMATION CONTACT: Melissa V. Hampshire, Attorney, Office 
of the General Counsel, Consumer Product Safety Commission, Washington, 
DC 20207; telephone (301) 504-0980 ext. 2208; facsimile (301) 504-0403; 
email [email protected].

SUPPLEMENTARY INFORMATION:

Purpose and Scope

    The Commission does not have rules governing the behavior of 
attorneys outside the context of a formal adjudication. As a result, 
the Commission is unable to take agency action against attorneys who 
are alleged to have acted in a manner prohibited by the State or 
District of Columbia bar disciplinary rules applicable to the attorney, 
unless an administrative complaint has been filed in the matter.
    The Commission conducts the majority of its business outside of 
adjudicatory proceedings. For example, compliance staff often negotiate 
with attorneys during an investigation or inquiry about a product, on a 
voluntary corrective action plan for that product, and, if necessary, 
on a civil penalty with respect to that product. Other Commission staff 
deal with attorneys on these and other matters, including regulatory 
proceedings pursuant to the statutes the Commission administers. If an 
attorney acts in a prohibited manner in these or similar contexts, the 
Commission cannot now sanction such conduct. The proposed new part is 
intended to address this gap in the regulations.
    The Commission is proposing a rule \1\ to govern attorney conduct 
in any matter where Commissioners or Commission staff are acting in 
their official capacities, outside the context of adjudications.
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    \1\ The Commission voted 2-1 to propose this rule. Commissioner 
Gall voted against proposing the rule. Her dissenting statement is 
available from the Office of the Secretary, Consumer Product Safety 
Commission, Washington, DC 20207-0001. Commissioner Moore voted in 
favor of publishing the rule but filed a separate statement. His 
statement is also available from the Office of the Secretary, 
Consumer Product Safety Commission, Washington, DC 20207-0001.
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Definitions

    The proposed rule defines ``prohibited conduct'' as action by an 
attorney in a manner prohibited by the state or District of Columbia 
disciplinary rules applicable to the attorney or otherwise in bad 
faith. Attorneys are subject to sanction if the prohibited conduct 
occurs when no administrative case is filed, or prior to the filing of 
an administrative complaint, or afterwards when an administrative 
action is settled but the staff may be negotiating a recall or civil 
penalty. Similarly, the proposed rule is intended to cover regulatory 
matters or any other activities between attorneys on the one hand and a 
Commissioner or Commission staff acting in their official capacities on 
the other hand.\2\
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    \2\ Misconduct by Agency employees is dealt with under internal 
personnel rules.
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    Actual contact with a Commissioner or the Commission staff is not 
required for an attorney to be sanctioned for prohibited conduct. For 
example, under the proposed rule, an attorney who knowingly destroys 
documents that are relevant to a staff investigation on a particular 
product would be subject to sanction by the Commission.

Procedures

    The new rule includes procedures for addressing allegations of 
prohibited conduct by attorneys. Under the proposal, all allegations 
would be dealt with during a (potentially) three-stage procedure.

First Stage

    During the first stage, the staff refers an allegation to the 
General Counsel who would have discretion to determine how it should be 
dealt with. The General Counsel could review the allegation and then 
(i) decide to close the matter, (ii) conduct an informal investigation 
and decide to close the matter or (iii) conduct an informal 
investigation and issue a show cause order to the attorney.
    The General Counsel may decide, based on a review of the 
allegation, that an informal investigation is unnecessary. For this 
reason, the General Counsel has discretion to close the matter without 
any further action. In addition, if the matter is closed without 
investigation, the General Counsel has discretion to notify or not 
notify the attorney of the allegation. For example, if the allegation 
is frivolous and the attorney is unaware of it, the General Counsel may 
decide to close it without even informing the attorney that the 
allegation was made. The General Counsel's decision to close the matter 
in this instance is final and nonreviewable.
    The proposed regulation also permits the General Counsel to conduct 
an informal investigation during the first stage (without compiling a 
record) to determine if a more formal proceeding against the attorney 
is warranted. An informal investigation may include contact between the 
General Counsel and the CPSC staff, the attorney, counsel for the 
attorney, or anyone else who has information concerning the allegation. 
If the General Counsel closes the matter after an such an 
investigation, he or she must notify the attorney. The General 
Counsel's decision to close the matter is final and nonreviewable.
    If the General Counsel determines, after conducting an informal 
investigation, that a further proceeding is necessary, a show cause 
order will be issued to the attorney. Although the General Counsel may 
close the matter without conducting an informal investigation, as noted 
above, the proposed regulation requires the General Counsel, as a 
matter of fairness, to conduct such an investigation before issuing a 
show cause order.

Second Stage

    If the General Counsel does issue a show cause order to the 
attorney, the second stage of the proceeding begins. The attorney 
receives notice of the right to make written submissions and/or oral 
presentations about the allegation and notice of the right to counsel. 
The responsibility for investigating the allegation is with the General 
Counsel. No discovery will be permitted. An oral presentation shall be 
held if requested by the attorney. All oral presentations will be 
transcribed.
    The General Counsel will determine the number and identity of 
witnesses, the length of testimony, and the admissibility and number of 
exhibits.
    At the conclusion of the second stage, the General Counsel will 
make a determination, based on all the information, whether to forward 
a recommendation for sanction to the

[[Page 66517]]

Commission. If the General Counsel determines not to forward a sanction 
recommendation to the Commission, the matter is closed and 
nonreviewable and the General Counsel will inform the attorney and the 
Executive Director in writing.

Third Stage

    If the General Counsel recommends a sanction, he or she will 
forward the record to the Commission. Under the proposed regulation, 
the record consists of all information submitted by the parties during 
the second stage including at the oral presentation, as well as 
transcripts of the oral presentation, any exhibits and the sanction 
recommendation. The Commission reviews the record and either imposes a 
sanction or closes the matter. The Commission may impose one of the 
listed sanctions or any other sanction deemed appropriate. For example, 
the Commission may decide that an attorney's conduct does not warrant 
public censure, but some other lesser sanction.

Regulatory Flexibility Certification

    Under the Regulatory Flexibility Act (``RFA''), when an agency 
issues a proposed rule it generally must prepare an initial regulatory 
flexibility analysis describing the impact the proposed rule is 
expected to have on small entities. 5 U.S.C. 603. The RFA does not 
require a regulatory flexibility analysis if the head of the agency 
certifies that the rule will not have a significant effect on a 
substantial number of small business entities. 5 U.S.C. 605(b). Because 
the proposed regulation governs only attorney conduct, the Commission 
certifies that it will not have a significant effect on a substantial 
number of small entities.

Environmental Considerations

    Pursuant to the National Environmental Policy Act, and in 
accordance with the Council on Environmental Quality regulations and 
CPSC procedures for environmental review, the Commission has assessed 
the possible environmental effects associated with the proposed rule 
for outside attorneys. Because this proposed rule would have no adverse 
effect on the environment, neither an environmental assessment nor an 
environmental impact statement is required.

List of Subjects in 16 CFR Part 1026

    Administrative practice and procedure, Attorneys.

    Accordingly, 16 CFR Part 1026 is added to read as follows:

PART 1026--RULES AND REGULATIONS

Sec.
1026.1   Purpose and scope.
1026.2   Definitions.
1026.3   Prohibited conduct.
1026.4   Procedure.
1026.5   Sanctions.
1026.6   Information disclosure.

    Authority: 15 U.S.C. 2051-2084, 1261-1278, 1191-1204, 1471-1476, 
1211-1214.


Sec. 1026.1  Purpose and Scope.

    The behavior of attorneys who represent clients in Commission 
adjudicative proceedings is governed by 16 CFR part 1025; see 16 CFR 
1025.66. This part 1026 governs the behavior of attorneys in any matter 
before the Commission other than an adjudicative proceeding.


Sec. 1026.2  Definitions.

    For purposes of this part only:
    (a) CPSC staff means any Commissioner or employee of the Consumer 
Product Safety Commission. Because the Commissioners may have direct 
and individual contacts with attorneys, they are included in the 
definition of CPSC staff in this part. This definition does not alter 
or affect any other law or regulation.
    (b) Attorney means any attorney at law who is admitted to practice 
before the highest court of any State or the District of Columbia.
    (c) Matter before the Commission means any activity where the CPSC 
staff is acting in its official capacity.


Sec. 1026.3.  Prohibited conduct.

    On a matter before the Commission, no attorney may act in a manner 
prohibited by the state or District of Columbia bar disciplinary rules 
applicable to the attorney or otherwise in bad faith. Such action 
constitutes ``prohibited conduct.''


Sec. 1026.4  Procedure.

    The following three-stage procedure will be used to determine 
whether an attorney has engaged in prohibited conduct:
    (a)(1) The first stage begins when CPSC staff refers an allegation 
of prohibited conduct to the General Counsel, with notice to the 
Commission's Executive Director. The General Counsel may summarily 
close the matter of alleged prohibited conduct without conducting an 
informal investigation. If so, the General Counsel will inform the 
Executive Director, but has the discretion to inform or not inform the 
attorney.
    (2) If the General Counsel does not summarily close the matter, the 
General Counsel will conduct an informal investigation, after informing 
the attorney of the allegation and of his or her right to counsel.
    (i) The informal investigation may include contact between the 
General Counsel and the CPSC staff, the attorney, counsel for the 
attorney, or anyone else who has information concerning the allegation.
    (ii) Information gathered during this informal investigation stage 
will not be made part of the record of the proceeding, unless it is 
reintroduced during the second stage.
    (3) Following the informal investigation, the General Counsel will 
review all available information and decide whether to issue an order 
requiring the attorney to show cause why he or she should not be 
sanctioned or close the matter. If the General Counsel closes the 
matter, the General Counsel will inform the attorney and the Executive 
Director in writing of that decision.
    (b)(1) The second stage begins when the General Counsel issues a 
show cause order to the attorney. The order will provide a copy of the 
allegation and inform the attorney of his or her right to respond in 
writing and/or orally to the allegation. The General Counsel will send 
copies of the show cause order to the Executive Director and to the 
CPSC staff who referred the allegation. The General Counsel will 
establish a tentative date for oral presentations, in consultation with 
the attorney and CPSC staff, and a subsequent deadline for written 
submissions.
    (2) During the second stage:
    (i) No discovery is permitted.
    (ii) The attorney may be represented by counsel.
    (iii) An oral presentation shall be held, if requested by the 
attorney. Any oral presentations will be transcribed.
    (iv) The General Counsel has the authority to make a determination 
with respect to any issue related to the oral presentation not 
addressed by this part including the number and identity of witnesses, 
the length of testimony and the 11 admissibility and number of exhibits 
at any presentation.
    (v) Witnesses at the oral presentation may include the attorney, 
the CPSC staff, or any other person with information about the 
allegation. If a witness refuses to appear voluntarily, the General 
Counsel may ask the Commission to issue a subpoena under 15 U.S.C. 
2076(b)(3). The attorney may ask the General Counsel to ask the 
Commission to issue subpoenas to witnesses.
    (3) The General Counsel will review the information in the written

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submissions and oral presentations (if any), and then decide whether to 
forward a recommendation for sanction to the Commission. If the General 
Counsel decides not to forward a written sanction recommendation, the 
matter is closed, and the General Counsel will inform the attorney and 
the Executive Director in writing.
    (4) The General Counsel's decision to close the matter during the 
first or second stage is final and nonreviewable.
    (c)(1) The third stage begins when the General Counsel forwards the 
record to the Commission. The record will consist of the complaint, all 
information submitted in writing during the second stage or at the oral 
presentation, exhibits, the transcript of any oral presentation, and 
the General Counsel's written sanction recommendation. The Commission 
will review the record and decide to impose a sanction or close the 
matter. The Secretary of the Commission will inform the attorney and 
the Executive Director in writing of the decision.
    (2) At the beginning of the third stage, the General Counsel will 
designate a lawyer employed by the Commission and not involved in the 
matter to advise the Commission.
    (3) The Executive Director and the General Counsel may designate 
someone employed by the Commission to act for them at any stage under 
this procedure.


Sec. 1026.5  Sanctions.

    (a) The following are possible sanctions against an attorney for 
prohibited conduct:
    (1) Censure. Issue a public censure to the attorney that describes 
the misconduct.
    (2) Suspension. Suspend the attorney, for a designated period of 
time, from participation in any matter before the Commission.
    (3) Permanent Exclusion. Permanently bar the attorney from 
participation in any matter before the Commission.
    (4) Other. Any sanction deemed appropriate by the Commission.
    (b) If any sanction is imposed, the General Counsel will notify all 
state and District of Columbia bars before which the attorney is 
admitted to practice.


Sec. 1026.6  Information disclosure.

    Information disclosure under this section is governed by the 
provisions of the Freedom of Information Act and 16 CFR Part 1015.

    Dated: October 30, 2000.
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 00-28202 Filed 11-3-00; 8:45 am]
BILLING CODE 6355-01-P