[Federal Register Volume 60, Number 228 (Tuesday, November 28, 1995)]
[Rules and Regulations]
[Pages 58514-58515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28554]
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FEDERAL TRADE COMMISSION
16 CFR Part 3
Duration of Existing Competition and Consumer Protection Orders
AGENCY: Federal Trade Commission (FTC).
ACTION: Final rule.
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SUMMARY: The Commission hereby issues a rule (``Sunset Rule'') that
terminates existing administrative orders when certain conditions have
been met, consistent with the Commission's ``Policy Statement Regarding
Duration of Competition and Consumer Protection Orders'' published in
the Federal Register on August 16, 1995. Prior to the issuance of this
rule, the Commission could only set aside the provisions of such orders
upon petition of the respondent, or pursuant to show-cause proceedings
initiated sua sponte by the Commission. The rule reduces the
administrative expense and burden associated with those procedures by
automatically vacating certain order provisions that no longer serve
the public interest.
EFFECTIVE DATE: January 2, 1996.
FOR FURTHER INFORMATION CONTACT: Justin Dingfelder, Assistant Director
for Enforcement, Division of Enforcement, Bureau of Consumer
Protection, FTC, (202) 326-3017; Roberta Baruch, Deputy Assistant
Director for Compliance, Bureau of Competition, (202) 326-2861.
SUPPLEMENTARY INFORMATION: On September 1, 1994, the Commission
published a policy statement that sunsetted Commission competition
orders under certain conditions.\1\ The Commission requested comment on
the policy and on whether a similar policy should be applied to
consumer protection orders.
\1\ ``Policy Statement With Request for Public Comment Regarding
Duration of Competition Orders and Request for Public Comment
Regarding Duration of Consumer Protection Orders,'' 59 FR 45286.
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On August 16, 1995, the Commission published a further ``Policy
Statement Regarding Duration of Competition and Consumer Protection
Orders'' in the Federal Register. 60 FR 42569. Under this Policy
Statement, which superseded the Commission's 1994 Policy Statement, the
Commission will ordinarily sunset future competition and consumer
protection administrative orders automatically after 20 years, unless
the Commission or the Department of Justice has filed a complaint (with
or without an accompanying consent decree) in federal court to enforce
such order pursuant to Section 5(l) of the Federal Trade Commission Act
(``FTC Act''). This policy does not extend to federal court orders. The
Commission also announced its intention to sunset existing
administrative orders through rulemaking, rather than case-by-case
determinations, and published a Notice of Proposed Rulemaking regarding
the ``Duration of Existing Competition and Consumer Protection Orders''
in the Federal Register. 60 FR 42481 (August 16, 1995).
The Commission received 22 comments regarding the proposed rule, 21
of which support the issuance of the proposed rule. One comment, filed
by the American Association of Retired Persons (``AARP''), opposes the
proposed rule.\2\ In addition, three of the 21 comments supporting the
proposed rule urge the Commission to sunset existing administrative
orders in less than 20 years.\3\ One of the 21 comments supporting the
proposed rule urges the Commission to adopt (1) an expedited process
for reviewing petitions to set aside consumer protection orders that
are ten years old or older; and (2) a presumption that such petitions
should be granted unless substantial contrary evidence is submitted on
the record.\4\
\2\ AARP opposes the sunsetting of core provisions in consumer
protection orders (AARP took the same position when it commented on
the Commission's 1994 Policy Statement). However, if the Commission
decides to sunset consumer protection orders after 20 years, AARP
endorses the proposal to extend the duration of any order where the
government has filed a complaint to enforce the order while it
remains in force. AARP contends that the proposed rule is unclear as
to whether the Commission will be able to impose civil penalties as
well as extend an order's duration by filing a complaint. AARP urges
the Commission to state unambiguously that civil penalties may be
imposed for violations of an order, the duration of which is
extended under the proposed rule.
The Commission notes that the issuance of the rule will not
affect the Commission's authority pursuant to Section 5(l) of the
FTC Act to seek civil penalties for violations of an order that
remains in effect. Complaints filed in federal court by the
Commission or the Department of Justice pursuant to Section 5(l) of
the FTC Act routinely seek civil penalties and will continue to do
so.
\3\ Another comment supporting the proposed rule requested that
the Commission clarify its policy by confirming that the reference
date for computing the 20 year sunset period is the date of the
order's initial issuance and not the date of any subsequent
modification. As the Commission stated in its Policy Statement:
Unless an order modification expressly changes the duration of
an order, such modification will not affect the duration of the
order as determined by this Policy Statement.
60 FR at 42572 n.9.
\4\ One of the three comments described above urges the
Commission to adopt a ten year sunset period for competition orders.
Another urges the Commission to adopt a ten year sunset period for
consumer protection orders. The last one urges the Commission to
consider a sunset period shorter than 20 years. The Policy Statement
explains why the Commission decided to sunset administrative orders
after 20 years, 60 FR at 42573, as does the superseded 1994 Policy
Statement, 59 FR at 45288. Furthermore, the Policy Statement
explains why the Commission decided to sunset existing orders
through rulemaking as opposed to the petitioning process:
The cost of the Commission retaining added discretion as to
whether it should retain older orders, thereby requiring a case-by-
case analysis with respect to each petition, likely exceeds the
benefits of retaining older orders in extraordinary circumstances.
By adopting a policy that does not require the Commission to
exercise discretion with respect to individual orders, the
Commission will conserve scarce resources and ensure equitable
treatment of similarly situated respondents now subject to
administrative orders.
60 FR at 42572.
[[Page 58515]]
None of the comments provide any information or express any views
that the Commission had not already considered in issuing its Policy
Statement and the proposed rule. Accordingly, the Commission has
determined to issue the proposed rule with no changes. The rule
provides that, in general, all provisions of any existing
administrative order will automatically sunset 20 years from the date
that the order was issued.5 The rule establishes an exception,
however, where a federal court complaint alleging a violation of an
existing order was filed (with or without an accompanying consent
decree) within the last 20 years, or where such a complaint is
subsequently filed with respect to an existing order that has not yet
expired. In that event, the order will run for another 20 years from
the date that the most recent complaint was or is filed with the court,
unless the complaint was or is dismissed, or the court has ruled or
rules 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 Commission's order will remain in effect while the
court complaint and any appeal is pending.
\5\ Orders that are 20 years old or older will sunset on January
2, 1996. Certain provisions in existing administrative orders will
expire, or have already expired, according to their own terms, and
the rule will not affect the duration of those provisions. The rule
also will not revive any order provision that the Commission has
previously reopened and set aside. See 16 CFR 2.51 & 3.72. The rule
will not apply to in camera orders or other procedural or
interlocutory rulings by an Administrative Law Judge or the
Commission.
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The filing of a court complaint will not affect the duration of an
order's application to any respondent that is not named as a defendant
in the complaint. The issuance of this rule does not affect the
Commission's ability to consider whether a complaint alleging order
violations has ever been filed against a respondent, and any other
relevant circumstances, in determining whether to grant or deny a
subsequent petition by a respondent to reopen and set aside an order on
the basis of changes in law, fact, or the public interest. See
Commission Rule 2.51, 16 CFR 2.51.
Regulatory Flexibility Act
On the basis of information currently available to the Commission,
it is anticipated that the rule will result in the elimination of a
substantial number of existing orders that no longer serve the public
interest. Many of the comments supporting the issuance of the rule
state that it will reduce costs and stimulate competition. Accordingly,
the Commission has determined at this time that the Regulatory
Flexibility Act does not require an initial or final regulatory
flexibility analysis, because the rule will not have a significant
impact on a substantial number of small entities within the meaning of
the Act. 5 U.S.C. Sec. 605. This notice serves as certification to that
effect for purposes of the Small Business Administration.
Effective Date
The rule will take effect on January 2, 1996. Petitions to stay, in
whole or in part, the termination of an order pursuant to the rule
shall be filed pursuant to Commission Rule 2.51, 16 CFR 2.51. In the
case of orders that have been in effect for at least 20 years, the rule
provides respondents with 30 days to file such a petition before the
order is automatically terminated by the rule. Pending the disposition
of such a petition, the order will be deemed to remain in effect
without interruption.
List of Subjects in 16 CFR Part 3
Administrative practice and procedure, Claims, Equal access to
justice, Lawyers.
Accordingly, the Federal Trade Commission amends Title 16, Chapter
I, Subchapter A, of the Code of Federal Regulations as follows:
PART 3--[AMENDED]
1. The authority for Part 3 continues to read as follows:
Authority: Sec. 6, 38 Stat. 721 (15 U.S.C. 46), unless otherwise
noted.
2. Section 3.72 is amended by adding a new paragraph 3.72(b)(3) to
read as follows:
Sec. 3.72 Reopening.
* * * * *
(b) * * *
(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.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 95-28554 Filed 11-27-95; 8:45 am]
BILLING CODE 6750-01-P
