[Federal Register Volume 69, Number 172 (Tuesday, September 7, 2004)]
[Rules and Regulations]
[Pages 54002-54005]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20219]


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DEPARTMENT OF THE TREASURY

31 CFR Part 1

RIN 1505-AA97


Disclosure of Records in Legal Proceedings

AGENCY: Departmental Offices, Treasury.

ACTION: Final rule.

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SUMMARY: This final rule makes several amendments to an interim final 
rule that amended Treasury's regulations that govern access to 
information and records in connection with litigation, including 
litigation in which neither the United States nor the Department of the 
Treasury is a party. The amendments made by this rule are in response 
to comments received on the interim final rule.

DATES: This final rule is effective September 7, 2004.

FOR FURTHER INFORMATION CONTACT: Christian Furey, Attorney-Advisor, 
Office of the Assistant to the General Counsel for Legislation, 
Litigation and Disclosure, at (202) 622-5441 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

    Under 5 U.S.C. 301, heads of Executive or military departments may 
prescribe regulations for the custody, use, and preservation of the 
department's records, papers, and property. Many departments and 
agencies have promulgated such regulations to provide procedures for 
the disclosure of official records and information. Generally, these 
are termed Touhy regulations, after the Supreme Court's decision in 
United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951). In that 
case, the Supreme Court held that an agency employee could not be held 
in contempt for refusing to disclose agency records or information when 
following the instructions of his or her supervisor regarding the 
disclosure. As such, an agency's Touhy regulations are the instructions 
agency employees are to follow when those employees receive requests or 
demands to testify or otherwise disclose agency records or information.
    Treasury's Touhy regulations are codified in Sec. Sec.  1.8 through 
1.12 of title 31 of the Code of Federal Regulations. Generally, these 
regulations provide that employees of the Departmental Offices of the 
Department of the Treasury may not disclose documents or information in 
response to a demand or other order of a court or any other authority 
without first being authorized to do so. The purpose of these 
regulations is to conserve valuable agency resources, to protect 
Treasury employees from becoming enmeshed in litigation, and to protect 
sensitive government documents and decision making processes.
    On March 17, 2003, Treasury published in the Federal Register an 
interim final rule (68 FR 12584) that amended its Touhy regulations. 
The interim final rule revised the regulations to prescribe the factors 
Treasury officials should consider when deciding whether to allow 
disclosure of documents and information in response to a demand or 
other order of a court, and which Treasury officials may make these 
decisions. The interim final rule also made a number of clarifying and 
technical amendments to the regulations and solicited public comment on 
Treasury's revisions to its Touhy regulations.

II. Analysis of the Final Rule

    This final rule adopts the provisions of the interim final rule 
with the following changes.

Section 1.11 Testimony or the Production of Records in a Court or Other 
Proceeding

    This section sets forth the policies and procedures of the 
Department regarding the testimony of employees as witnesses in legal 
proceedings and the production or disclosure of Treasury documents for 
use in legal proceedings.
    Paragraph (b) defines the terms used throughout the regulations. 
Paragraph (b)(5) defines ``employee'' to include ``officers of the 
Department, including contractors and any other individuals who have 
been appointed by, or are subject to the supervision, jurisdiction or 
control of the Secretary.'' We amended paragraph (b)(5) to clarify that 
the term ``employee'' also includes the Secretary of the Treasury. We 
also amended paragraph (b)(1) to clarify that the General Counsel may 
delegate his or her responsibilities as agency counsel with respect to 
the Departmental offices.
    Paragraph (d) sets forth procedures applicable to requests for 
testimony or the production of documents. Paragraph (d)(3) of the 
interim final rule provided that any request for testimony or the 
production of documents in litigation in which neither the Department 
nor the United States is a party be supported by an affidavit setting 
forth the nature of the litigation, describing the nature of the 
testimony and/or documents sought, and explaining why the testimony 
and/or documents are desired. Under paragraph (d)(3)(i) there had to be 
a ``showing that the desired testimony or document is not reasonably 
available from any other source.''
    One commenter suggested that the use of the terms ``testimony'' and 
``document'' in paragraph (d)(3)(i) was misleading because it implied 
that unless a specific document or testimony from a particular person 
is not available from another source then the request should be 
granted. We agree with this comment. While government documents and 
testimony from specific individuals may be unique, the intent of this 
provision was to not grant requests if other documents and testimony 
could be obtained, thus ensuring that requesters have exhausted all 
other avenues to obtain the information sought. Accordingly, we are 
clarifying paragraph (d)(3)(i) to require a requester to show that 
information reasonably suited to the request is not available from any 
other source.
    Paragraph (f)(1) provided that an ``employee'' may not provide 
expert testimony, except on behalf of the United States or a party 
represented by the Department of Justice, without written approval of 
agency counsel. Paragraph (f)(2) provided that agency counsel may 
approve a request for expert testimony from an ``employee'' or ``former 
employee'' upon a showing by the requestor of exceptional need or 
unique circumstances, provided that the testimony will not be adverse 
to the interests of Treasury or the United States. Paragraph (f)(3) 
provided expert or opinion testimony of a ``former employee'' is not 
subject to prohibition in paragraph (f)(1) if the testimony involves 
only general expertise gained while employed at the Department.
    One commenter suggested that the term ``former employee'' be added 
to paragraph (f)(1) to clarify that the entirety of paragraph (f) 
applies to former employees. We agree that such an amendment is 
consistent with paragraph (f), and this final rule amends paragraph 
(f)(1) accordingly.

III. Procedural Requirements

    Because this rule relates to agency management and personnel, and 
because it merely amends Treasury's

[[Page 54003]]

existing regulations to more closely parallel similar regulations 
adopted by other Federal agencies, it is not subject to notice and 
public procedure pursuant to 5 U.S.C. 553(a)(2) and (b)(B). For the 
same reasons, a delayed effective date is not required pursuant to 5 
U.S.C. 553(a)(2) and (d)(3).
    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. chapter 6) do 
not apply.
    It has been determined that this interim final rule is not a 
significant regulatory action for purposes of Executive Order 12866.

List of Subjects in 31 CFR Part 1

    Courts, Freedom of information, Government employees, and Privacy.

0
Therefore, for the reasons discussed in the preamble, the interim rule 
amending 31 CFR part 1 which was published at 68 FR 12584 on March 17, 
2003 is adopted as a final rule with the following changes:

PART 1--[AMENDED]

0
1. The authority citation for part 1 continues to read as follows:

    Authority: 5 U.S.C. 301 and 31 U.S.C. 321. Subpart A also issued 
under 5 U.S.C. 552, as amended. Subpart C also issued under 5 U.S.C. 
552a.

0
2. Sections 1.8 through 1.12 are revised to read as follows:


Sec.  1.8  Scope.

    The regulations in this subpart concern access to information and 
records other than under 5 U.S.C. 552. This subpart is applicable to 
the Departmental Offices and to the bureaus of the Department as 
defined in Sec.  1.1(a) of this part, except to the extent that bureaus 
of the Department have adopted separate guidance governing the subject 
matter of a provision of this subpart.


Sec.  1.9  Records not to be otherwise withdrawn or disclosed.

    Except in accordance with this part, or as otherwise authorized, 
Treasury Department officers and employees are prohibited from making 
records or duplicates available to any person who is not an officer or 
employee of the Department, and are prohibited from withdrawing any 
such records or duplicates from the files, possession or control of the 
Department.


Sec.  1.10  Oral information.

    (a) Officers and employees of the Department may, in response to 
requests, orally provide information contained in records of the 
Department that are determined to be available to the public. If the 
obtaining of such information requires a search of records, a written 
request and the payment of the fee for a record search set forth in 
Sec.  1.6 will be required.
    (b) Information with respect to activities of the Department not a 
matter of record shall not be disclosed if the information involves 
matters exempt from disclosure under 5 U.S.C. 552 or the regulations in 
this part, or if the disclosure of such information would give the 
person requesting the information advantages not accorded to other 
citizens.


Sec.  1.11  Testimony or the production of records in a court or other 
proceeding.

    (a) Applicability. (1) This section sets forth the policies and 
procedures of the Department regarding the testimony of employees and 
former employees as witnesses in legal proceedings and the production 
or disclosure of information contained in Department documents for use 
in legal proceedings pursuant to a request, order, or subpoena 
(collectively referred to in this subpart as a demand).
    (2) This section does not apply to any legal proceeding in which an 
employee is to testify while on leave status regarding facts or events 
that are unrelated to the official business of the Department.
    (3)(i) Nothing in this section affects the rights and procedures 
governing public access to records pursuant to the Freedom of 
Information Act (5 U.S.C. 552) or the Privacy Act (5 U.S.C. 552a).
    (ii) Demands in legal proceedings for the production of records, or 
for the testimony of Department employees regarding information 
protected by the Privacy Act (5 U.S.C. 552a), the Trade Secrets Act (18 
U.S.C. 1905) or other confidentiality statutes, must satisfy the 
requirements for disclosure set forth in those statutes and the 
applicable regulations of this part before the records may be provided 
or testimony given.
    (4) This section is intended only to provide guidance for the 
internal operations of the Department and to inform the public about 
Department procedures concerning the service of process and responses 
to demands or requests, and the procedures specified in this section, 
or the failure of any Treasury employee to follow the procedures 
specified in this section, are not intended to, do not, and may not be 
relied upon to create a right or benefit, substantive or procedural, 
enforceable at law by a party against the United States.
    (b) Definitions. For purposes of this section:
    (1) Agency counsel means:
    (i) With respect to the Departmental Offices, the General Counsel 
or his or her designee; or
    (ii) With respect to a bureau or office of the Department, the 
Chief Counsel or Legal Counsel (or his or her designee) of such bureau 
or office.
    (2) Demand means a request, order, or subpoena for testimony or 
documents related to or for possible use in a legal proceeding.
    (3) Department means the United States Department of the Treasury.
    (4) Document means any record or other property, no matter what 
media and including copies thereof, held by the Department, including 
without limitation, official letters, telegrams, memoranda, reports, 
studies, calendar and diary entries, maps, graphs, pamphlets, notes, 
charts, tabulations, analyses, statistical or informational 
accumulations, any kind of summaries of meetings and conversations, 
film impressions, magnetic tapes and sound or mechanical reproductions.
    (5) Employee means all employees or officers of the Department, 
including contractors and any other individuals who have been appointed 
by, or are subject to the supervision, jurisdiction or control of the 
Secretary, as well as the Secretary of the Treasury. The procedures 
established within this subpart also apply to former employees of the 
Department where specifically noted.
    (6) General Counsel means the General Counsel of the Department or 
other Department employee to whom the General Counsel has delegated 
authority to act under this subpart.
    (7) Legal proceeding means all pretrial, trial and post trial 
stages of all existing or reasonably anticipated judicial or 
administrative actions, hearings, investigations, or similar 
proceedings before courts, commissions, boards, grand juries, or other 
tribunals, foreign or domestic. This phrase includes all phases of 
discovery as well as responses to formal or informal requests by 
attorneys or others involved in legal proceedings.
    (8) Official business means the authorized business of the 
Department.
    (9) Secretary means the Secretary of the Treasury.
    (10) Testimony means a statement in any form, including personal 
appearances before a court or other legal tribunal, interviews, 
depositions, telephonic, televised, or videotaped statements or any 
responses given during discovery or similar proceedings, which response 
would involve more than the production of documents.
    (c) Department policy. No current or former employee shall, in 
response to a

[[Page 54004]]

demand, produce any Department documents, provide testimony regarding 
any information relating to or based upon Department documents, or 
disclose any information or produce materials acquired as part of the 
performance of that employee's official duties or official status, 
without the prior authorization of the General Counsel or the 
appropriate agency counsel.
    (d) Procedures for demand for testimony or production of documents. 
(1) A demand directed to the Department for the testimony of a 
Department employee or for the production of documents shall be served 
in accordance with the Federal Rules of Civil Procedure, Federal Rules 
of Criminal Procedure, or applicable state procedures and shall be 
directed to the General Counsel, Department of the Treasury, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220, or to the Chief or 
Legal Counsel of the concerned Department component. Acceptance of a 
demand shall not constitute an admission or waiver with respect to 
jurisdiction, propriety of service, improper venue, or any other 
defense in law or equity available under the applicable laws or rules.
    (2) A subpoena or other demand for testimony directed to an 
employee or former employee shall be served in accordance with the 
Federal Rules of Civil or Criminal Procedure or applicable State 
procedure and a copy of the subpoena shall be sent to agency counsel.
    (3)(i) In court cases in which the United States or the Department 
is not a party, where the giving of testimony or the production of 
documents by the Department, or a current or former employee is 
desired, an affidavit (or if that is not feasible, a statement) by the 
litigant or the litigant's attorney, setting forth the information with 
respect to which the testimony or production is desired, must be 
submitted in order to obtain a decision concerning whether such 
testimony or production will be authorized. Such information shall 
include: the title of the legal proceeding, the forum, the requesting 
party's interest in the legal proceeding, the reason for the demand, a 
showing that other evidence reasonably suited to the requester's needs 
is not available from any other source and, if testimony is requested, 
the intended use of the testimony, a general summary of the desired 
testimony, and a showing that no document could be provided and used in 
lieu of testimony. The purpose of this requirement is to assist agency 
counsel in making an informed decision regarding whether testimony or 
the production of document should be authorized. Permission to testify 
or produce documents will, in all cases, be limited to the information 
set forth in the affidavit or statement, or to such portions thereof as 
may be deemed proper.
    (ii) Agency counsel may consult or negotiate with an attorney for a 
party, or the party if not represented by an attorney, to refine or 
limit a demand so that compliance is less burdensome or obtain 
information necessary to make the determination required by paragraph 
(e) of this section. Failure of the attorney or party to cooperate in 
good faith to enable agency counsel to make an informed determination 
under this subpart may serve, where appropriate, as a basis for a 
determination not to comply with the demand.
    (iii) A determination under this subpart to comply or not to comply 
with a demand is without prejudice as to any formal assertion or waiver 
of privilege, lack of relevance, technical deficiency or any other 
ground for noncompliance.
    (4)(i) Employees shall immediately refer all inquiries and demands 
made on the Department to agency counsel.
    (ii) An employee who receives a subpoena shall immediately forward 
the subpoena to agency counsel. Agency counsel will determine the 
manner in which to respond to the subpoena.
    (e) Factors to be considered by agency counsel. (1) In deciding 
whether to authorize the release of official information or the 
testimony of personnel concerning official information (hereafter 
referred to as ``the disclosure'') agency counsel shall consider the 
following factors:
    (i) Whether the request or demand is unduly burdensome;
    (ii) Whether the request would involve the Department in 
controversial issues unrelated to the Department's mission;
    (iii) Whether the time and money of the United States would be used 
for private purposes;
    (iv) The extent to which the time of employees for conducting 
official business would be compromised;
    (v) Whether the public might misconstrue variances between personal 
opinions of employees and Department policy;
    (vi) Whether the request demonstrates that the information 
requested is relevant and material to the action pending, genuinely 
necessary to the proceeding, unavailable from other sources, and 
reasonable in its scope;
    (vii) Whether the number of similar requests would have a 
cumulative effect on the expenditure of agency resources;
    (viii) Whether disclosure otherwise would be inappropriate under 
the circumstances; and
    (ix) Any other factor that is appropriate.
    (2) Among those demands and requests in response to which 
compliance will not ordinarily be authorized are those with respect to 
which any of the following factors exists:
    (i) The disclosure would violate a statute, Executive order, or 
regulation;
    (ii) The integrity of the administrative and deliberative processes 
of the Department would be compromised;
    (iii) The disclosure would not be appropriate under the rules of 
procedure governing the case or matter in which the demand arose;
    (iv) The disclosure, including release in camera, is not 
appropriate or necessary under the relevant substantive law concerning 
privilege;
    (v) The disclosure, except when in camera and necessary to assert a 
claim of privilege, would reveal information properly classified or 
other matters exempt from unrestricted disclosure; or
    (vi) The disclosure would interfere with ongoing enforcement 
proceedings, compromise constitutional rights, reveal the identity of 
an intelligence source or confidential informant, or disclose trade 
secrets or similarly confidential commercial or financial information.
    (f) Requests for opinion or expert testimony. (1) Subject to 5 CFR 
2635.805, an employee or former employee shall not provide, with or 
without compensation, opinion or expert testimony concerning official 
information, subjects, or activities, except on behalf of the United 
States or a party represented by the Department of Justice, without 
written approval of agency counsel.
    (2) Upon a showing by the requestor of exceptional need or unique 
circumstances and that the anticipated testimony will not be adverse to 
the interests of the Department or the United States, agency counsel 
may, in writing, grant authorization for an employee, or former 
employee, to appear and testify at no expense to the United States.
    (3) Any expert or opinion testimony by a former employee of the 
Department shall be excepted from Sec.  1.11(f)(1) where the testimony 
involves only general expertise gained while employed at the 
Department.
    (g) Procedures when agency counsel directs an employee not to 
testify or provide documents. (1) If agency counsel determines that an 
employee or former employee should not comply with a subpoena or other 
request for

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testimony or the production of documents, agency counsel will so inform 
the employee and the party who submitted the subpoena or made the 
request.
    (2) If, despite the determination of the agency counsel that 
testimony should not be given and/or documents not be produced, a court 
of competent jurisdiction or other appropriate authority orders the 
employee or former employee to testify and/or produce documents, the 
employee shall notify agency counsel of such order.
    (i) If agency counsel determines that no further legal review of, 
or challenge to, the order will be sought, the employee or former 
employee shall comply with the order.
    (ii) If agency counsel determines to challenge the order, or that 
further legal review is necessary, the employee or former employee 
should not comply with the order. Where necessary, the employee should 
appear at the time and place set forth in the subpoena. If legal 
counsel cannot appear on behalf of the employee, the employee should 
produce a copy of this subpart and respectfully inform the legal 
tribunal that he/she has been advised by counsel not to provide the 
requested testimony and/or produce documents. If the legal tribunal 
rules that the subpoena must be complied with, the employee shall 
respectfully decline to comply, citing this section and United States 
ex rel. Touhy v. Ragen, 340 U.S. 462 (1951).


Sec.  1.12  Regulations not applicable to official request.

    The regulations in this part shall not be applicable to official 
requests of other governmental agencies or officers thereof acting in 
their official capacities, unless it appears that granting a particular 
request would be in violation of law or inimical to the public 
interest. Cases of doubt should be referred for decision to agency 
counsel (as defined in Sec.  1.11(b)(1)).

    Dated: August 23, 2004.
Arnold I. Havens,
General Counsel.
[FR Doc. 04-20219 Filed 9-3-04; 8:45 am]
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