[Federal Register Volume 63, Number 30 (Friday, February 13, 1998)]
[Rules and Regulations]
[Pages 7526-7528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3506]
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Part III
Federal Trade Commission
_______________________________________________________________________
16 CFR Part 3
Rules of Practice; Final Rule
Federal Register / Vol. 63, No. 30 / Friday, February 13, 1998 /
Rules and Regulations
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FEDERAL TRADE COMMISSION
16 CFR Part 3
Rules of Practice
AGENCY: Federal Trade Commission (FTC).
ACTION: Final rule, with request for public comment.
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SUMMARY: This document amends Commission Rule 3.11A (16 CFR 3.11A),
which establishes ``fast-track'' procedures applicable in certain FTC
adjudicatory proceedings. Under the amended rule, a respondent will
have the option of electing these procedures in certain cases where the
procedures have not previously been available. Amendments have also
been made to improve and clarify notice procedures and other technical
provisions of the Rule.
EFFECTIVE DATE: February 13, 1998. Public comments will be received
until March 16, 1998.
ADDRESSES: Send comments to the Office of the Secretary, Federal Trade
Commission, Room 159-H, Sixth Street and Pennsylvania Avenue, NW.,
Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Cynthia Hogue Levy, (202) 326-2158, or
Alex Tang, (202) 326-2447, Attorneys, Office of General Counsel, FTC,
Sixth Street and Pennsylvania Avenue, NW., Washington, DC 20580.
SUPPLEMENTARY INFORMATION: On September 26, 1996, the Commission
published and sought public comment on interim amendments to the rules
governing the Commission's adjudicatory proceedings, 61 FR 50640. The
interim amendments included a new Rule 3.11A, which makes expedited
(``fast-track'') procedures available to respondents in certain
Commission adjudicatory proceedings challenging conduct that has been
preliminarily enjoined by a federal court. The public comment period on
the interim rule amendments ended November 25, 1996. The amendments
became fully applicable to all proceedings commenced on or after
January 1, 1997. The one public comment received by the Commission did
not discuss Rule 3.11A.1
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\1\ The Commission will address that comment when it completes
its full review of the rules' impact.
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The Commission has determined that the Rule should make the fast-
track option expressly available in certain circumstances even where no
preliminary injunction of the challenged conduct has been issued. As
the Commission observed in its statement accompanying the Rule, the
Administrative Law Judge presiding over an adjudicatory proceeding may,
in his or her discretion, treat discovery from the preliminary
injunction hearing and transcripts of testimony in the preliminary
injunction proceeding as if the material had been discovered and
presented in the administrative proceeding. 61 FR at 50641. The
Commission concludes that, where no preliminary injunction has been
issued, implementation of an expedited schedule in the administrative
proceeding nonetheless may be appropriate where the evidentiary record
from the federal court injunctive proceeding is likely materially to
facilitate prompt resolution of the adjudicatory proceeding.
Accordingly, the Commission is amending the Rule to expand the
availability of the fast-track procedures to cases in which the
Commission determines that such circumstances exist. The Commission
believes that this expansion of the Rule is in the public interest
because it would foster expeditious resolution of allegations of
possible law violations and reduce uncertainty for the affected
respondent.
To accomplish expansion of the Rule, paragraph (b) has been
bifurcated to address separately the conditions under which the fast-
track option will be available and the mechanics of electing the
procedure. Amended paragraph (b)(1) provides that a respondent may
elect fast-track procedures either (i) if a federal court enters
preliminary injunctive relief against some or all of the conduct
alleged in the Commission's administrative complaint, or (ii) where no
such injunction is issued, if the Commission determines that the
evidentiary record resulting from the court proceeding is likely
materially to facilitate the resolution of the administrative
adjudication in accordance with the expedited schedule set forth in the
Rule. In making the latter determination, the Commission will consider,
inter alia, whether significant discovery has occurred in the federal
court proceeding.
A conforming change has been made in paragraph (a) of the Rule by
deleting language that preserved the Commission's discretion to take
``appropriate action'' in cases where ``the preliminary injunction'' is
vacated. A preliminary injunction will not necessarily have been issued
in every case where fast-track procedures may now apply. Further, even
in cases where such an injunction is vacated after fast-track
proceedings have been initiated, the Commission concludes that such
proceedings should ordinarily continue to be conducted on an expedited
basis. The Commission, however, retains its discretion under the Rule
to extend the 13-month deadline specified for issuance of a final order
and opinion where, inter alia, adherence to the deadline would result
in a miscarriage of justice due to circumstances unforeseen at the time
that the respondent elected fast-track procedures. Sec. 3.11A(c)(3).
Amended paragraph (b)(2), dealing with timing of the respondent's
fast-track election, has also been conformed to include a reference to
the evidentiary record determination made by the Commission under
paragraph (b)(1)(ii) of the Rule. Further, language in former paragraph
(b) providing that the fast-track election could be made ``after
service of the administrative complaint challenging the merger or
acquisition'' has been modified in paragraph (b)(2) to refer simply to
service of the ``administrative complaint.'' This amendment makes fast-
track procedures available in any appropriate administrative case,
including cases under the Commission's authority respecting unfair or
deceptive acts and cases involving anticompetitive practices other than
mergers, provided that the Commission has filed a collateral action
seeking preliminary injunctive relief against conduct alleged in the
administrative complaint. Thus, Rule 3.11A is not restricted to cases
involving mergers or acquisitions. As the Commission has previously
indicated, however, 61 FR at 50641 n.2, fast-track procedures are
likely as a practical matter to be available most often to respondents
in cases involving mergers.
The Commission also notes that respondents may make a fast-track
election under paragraph (b)(2) of the Rule before the necessary
conditions specified in paragraph (b)(1) for fast-track treatment have
been fulfilled. In such cases, the election will become effective only
if a federal court thereafter issues a preliminary injunction, as
required by paragraph (b)(1)(i), or the Commission determines that the
evidentiary record from the federal court injunctive proceeding is
likely materially to facilitate the expedited resolution of the
administrative adjudication, as required by paragraph (b)(1)(ii).
The Rule provisions specifying the procedural deadlines for
administrative cases in which fast-track scheduling applies are now
consolidated in paragraph (c). Amended paragraph (c)(1) sets out the
``triggering events,'' formerly found in paragraph (a), that
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specify the dates upon which the fast-track deadlines are based. The
triggering events have been expanded to include evidentiary record
determinations made by the Commission under paragraph (b)(1)(ii).
Amended paragraph (c)(2), which is the list of deadlines applicable to
fast-track proceedings before the Administrative Law Judge, formerly
comprised paragraph (c). Amended paragraph (c)(3) contains the 13-month
deadline for issuance of a final order and opinion by the Commission
that previously appeared in paragraph (a). Paragraph (c)(3) also
contains new language explaining the effect on the 13-month deadline if
an automatic stay of the adjudicatory proceeding is triggered by a
motion to dismiss under Rule 3.26. As amended, the Rule explicitly
provides that the 13-month deadline will be tolled for as long as the
Rule 3.26 stay remains in effect.
Several clarifying changes have been made in the Rule. Amended
paragraph (a) provides that, when the Commission designates a case as
appropriate for election of fast-track procedures by a respondent
(subject to the conditions set forth in paragraph (b)(1)), written
notice of the Commission's designation will be provided. The notice
will be given to the respondent (or to the potential respondent, if the
administrative complaint has not yet been issued) at the time that it
is served with the Commission's complaint for injunctive relief. These
requirements are designed to forestall questions concerning whether and
when the agency provided the notice specified in the Rule. The
Commission continues to believe that certain cases may appear too
complex at the outset to be designated as appropriate for the fast-
track schedule. 61 FR at 50641. In such instances, the Commission will
not notify the respondent of an option to elect fast-track procedures.
This aspect of the Rule remains unchanged.
The revised Rule also clarifies that a respondent may elect fast-
track procedures in cases where a preliminary injunction has been
issued in a collateral federal court proceeding even if the injunction
addresses only part of the conduct alleged in the Commission's
administrative complaint. The Commission also intends that, under the
revised Rule, a respondent will have an opportunity to elect fast-track
procedures if injunctive relief is initially denied by the district
court but later ordered as the result of judicial review. The amended
Rule's reference to the court's entry of preliminary injunctive relief
is intended to be consistent with the usage of the term ``entry'' in
the Federal Rules of Civil Procedure. See Fed. R. Civ. P. 58, 79.
Finally, paragraph (d) of the Rule, dealing with discovery procedures
in fast-track cases, has been deleted, and the text incorporated into
paragraph (a). Various typographical and stylistic changes have been
made throughout the Rule.
Because these amendments relate solely to agency practice, they are
not subject to the notice-and-comment requirements of the
Administrative Procedure Act, 5 U.S.C. 553(b)(A), or to the
requirements of the Regulatory Flexibility Act, 5 U.S.C. 601(2). The
amendments do not impose information collection requirements under the
Paperwork Reduction Act. 44 U.S.C. 3501-3520.
List of Subjects in 16 CFR Part 3
Administrative practice and procedure, Claims, Equal access to
justice, Lawyers
For the reasons set forth in the preamble, the Federal Trade
Commission amends Title 16, Chapter I, Subchapter A of the Code of
Federal Regulations, as follows:
PART 3--RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS
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 3.11A is revised to read as follows:
Sec. 3.11A Fast-track proceedings.
(a) Scope and applicability. This section governs the availability
of fast-track procedures in administrative cases where the Commission
files a collateral federal district court complaint that seeks
preliminary injunctive relief against some or all of the conduct
alleged in the Commission's administrative complaint. The Commission
will afford the respondent the opportunity to elect such fast-track
procedures, subject to the conditions set forth in paragraph (b)(1) of
this section, in cases that the Commission designates as appropriate.
In cases so designated, the Commission will provide written notice to
each respondent at the time that it is served with the Commission's
federal district court complaint for preliminary injunctive relief.
Except as modified by this section, the rules contained in subparts A
through I of part 3 of this chapter will govern fast-track procedures
in adjudicative proceedings. Discovery will be governed by subpart D of
this part, and the Administrative Law Judge may exercise his plenary
authority under Sec. 3.42(c)(6) to establish limitations on the number
of depositions, witnesses, or any document production.
(b)(1) Conditions. In cases designated as appropriate by the
Commission pursuant to paragraph (a) of this section, a respondent may
elect fast-track procedures:
(i) if a federal court enters a preliminary injunction against some
or all of the conduct alleged in the Commission's administrative
complaint; or,
(ii) where no such injunction is entered, if the Commission
determines that the Federal court proceeding has resulted in an
evidentiary record that is likely materially to facilitate resolution
of the administrative proceeding in accordance with the expedited
schedule set forth in this section. The Commission will provide each
respondent with written notice of any such determination.
(2) Election. A respondent that determines to elect fast-track
procedures shall file a notice of such election with the Secretary by
the latest of: three days after entry of a preliminary injunction as
described in paragraph (b)(1)(i) of this section; three days after the
respondent is served with notice of the Commission's determination
under paragraph (b)(1)(ii) of this section; or three days after the
respondent is served with the Commission's administrative complaint in
the adjudicative proceeding. In proceedings involving multiple
respondents, the fast-track procedures set forth in this section will
not apply unless the procedures are elected by all respondents.
(c) Deadlines in fast-track proceedings.
(1) For purposes of this paragraph, ``triggering event'' means the
latest of: entry of a preliminary injunction as described in paragraph
(b)(1)(i) of this section; service on the last respondent of notice of
the Commission's determination under paragraph (b)(1)(ii) of this
section; service on the last respondent of the Commission's
administrative complaint in the adjudicative proceeding; or filing with
the Secretary by the last respondent of a notice electing fast-track
procedures.
(2) Proceedings before the Administrative Law Judge. In fast-track
proceedings covered by this section:
(i) The scheduling conference required by Sec. 3.21(b) shall be
held not later than three days after the triggering event.
(ii) Respondent's answer shall be filed within 14 days after the
triggering event.
(iii) The Administrative Law Judge shall file an initial decision
within 56 days following the conclusion of the evidentiary hearing. The
initial decision
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shall be filed no later than 195 days after the triggering event.
(iv) Any party wishing to appeal an initial decision to the
Commission shall file a notice of appeal with the Secretary within
three days after service of the initial decision. The notice shall
comply with Sec. 3.52(a) in all other respects.
(v) The appeal shall be in the form of a brief, filed within 21
days after service of the initial decision, and shall comply with
Sec. 3.52(b) in all other respects. All issues raised on appeal shall
be presented in the party's appeal brief.
(vi) Within 14 days after service of the appeal brief, the appellee
may file an answering brief, which shall comply with Sec. 3.52(c).
Cross-appeals, as permitted in Sec. 3.52(c), may not be raised in an
appellee's answering brief.
(vii) Within five days after service of the appellee's answering
brief, the appellant may file a reply brief, in accordance with
Sec. 3.52(d) in all other respects.
(3) Proceedings before the Commission. In fast-track proceedings
covered by this section, the Commission will issue a final order and
opinion within 13 months after the triggering event. If the
adjudicative proceeding is stayed pursuant to a motion filed under
Sec. 3.26, the 13-month deadline will be tolled for as long as the
proceeding is stayed. The Commission may extend the date for issuance
of the Commission's final order and opinion in the following
circumstances: if necessary to permit the Commission to provide
submitters of in camera material or information with advance notice of
the Commission's intention to disclose all or portions of such material
or information in the Commission's final order or opinion; or if the
Commission determines that adherence to the 13-month deadline would
result in a miscarriage of justice due to circumstances unforeseen at
the time of respondent's election of fast-track procedures.
By direction of the Commission, Commissioner Azcuenaga not
participating.
Donald S. Clark,
Secretary.
[FR Doc. 98-3506 Filed 2-12-98; 8:45 am]
BILLING CODE 6750-01-P
