00-28202. 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.

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 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 [phone]. Comments may also be filed by telefacsimile to [phone] or by email to [e-mail]. 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 [phone] ext. 2208; facsimile [phone]; email [e-mail].

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.

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]

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 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

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.

§ 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.

§ 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.

§ 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.”

§ 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 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.

§ 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.

§ 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.

Footnotes

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.

2.  Misconduct by Agency employees is dealt with under internal personnel rules.