[Federal Register Volume 62, Number 53 (Wednesday, March 19, 1997)]
[Notices]
[Pages 13164-13168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6904]
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INTERNATIONAL TRADE COMMISSION
Summary of Commission Practice Relating to Administrative
Protective Orders
AGENCY: United States International Trade Commission.
ACTION: Summary of Commission practice relating to administrative
protective orders.
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SUMMARY: The Conference Report to the Customs and Trade Act of 1990
provided for the International Trade Commission (``Commission'') to
issue periodic reports, at least annually, on the status of its
practice with respect to violations of its administrative protective
orders (``APOs'') in investigations under Title VII of the Tariff Act
of 1930. This notice provides a summary of investigations of breaches
for the period ending in 1996. The Commission intends that this notice
will educate representatives of parties to Commission proceedings as to
some specific types of APO breaches encountered by the Commission and
the corresponding types of actions the Commission has taken.
FOR FURTHER INFORMATION CONTACT: Gail S. Usher, Esq., Office of the
General Counsel, U.S. International Trade Commission, tel. (202) 205-
3152. Hearing impaired individuals are advised that information on this
matter can be obtained by contacting the Commission's TDD terminal at
(202) 205-1810.
SUPPLEMENTARY INFORMATION: Representatives of parties to
investigations conducted under Title VII of the Tariff Act of 1930
may enter into administrative protective orders that permit them,
under strict conditions, to obtain access to business proprietary
information (``BPI'') of other parties. See 19 U.S.C. 1677f; 19 CFR
207.7. The discussion below describes APO breach investigations
that the Commission has completed including a description of
actions taken in response to breaches. The discussion covers breach
investigations completed during the period ending in 1996,
generally with respect to antidumping and countervailing duty
cases.
In past years, the notice has contained also a summary of the
Commission's investigations involving violations of the ``24-hour''
rule, which provides that during the 24-hour period after a Commission
deadline for a party submission in an antidumping or countervailing
duty proceeding, the only changes to the proprietary version permitted
are changes to the bracketing of BPI. See 19 CFR 207.3(c). In 1996,
however, no investigations of 24-hour rule violations were completed.
In recent years, the Commission has expanded the notice to include
APO breaches in other types of proceedings as well. In 1996, only one
APO investigation was completed in a proceeding conducted under Section
201 of the Trade Act of 1974, and no APO investigations were completed
in proceedings conducted under Section 337 of the Tariff Act of 1930.
Since 1991, the Commission has published annually a summary of its
actions in response to violations of Commission APOs and the ``24
hour'' rule. See 56 FR 4846 (Feb. 6, 1991); 57 FR 12,335 (Apr. 9,
1992); 58 FR 21,991 (Apr. 26, 1993); 59 FR 16,834 (Apr. 8, 1994); 60 FR
24,880 (May 10, 1995); and 61 FR 21,203 (May 9, 1996). This notice does
not provide an exclusive list of conduct that will be deemed to be a
breach of the Commission's APOs, and does not bind the Commission in
its future rulings.
As part of the effort to educate practitioners about the
Commission's current APO practice, the Secretary of the Commission
issued in April 1996 a revised edition of An Introduction to
Administrative Protective Order Practice in Antidumping and
Countervailing Duty Investigations (Pub. No. 2961). This document is
available upon request from the Office of the Secretary, U.S.
International Trade Commission, 500 E Street, SW, Washington, DC 20436,
tel. (202) 205-2000.
I. In General
The current APO form for antidumping and countervailing duty
investigations, which the Commission has used since March 1995,
requires the applicant to swear that he or she will:
(1) Not divulge any of the BPI obtained under this APO and not
otherwise available to him, to any person other than
(i) Personnel of the Commission concerned with the investigation,
(ii) The person or agency from whom the BPI was obtained,
(iii) A person whose application for disclosure of BPI under this
APO has been granted by the Secretary, and
(iv) Other persons, such as paralegals and clerical staff, who (a)
are employed or supervised by and under the direction and control of
the authorized applicant or another authorized applicant in the same
firm whose application has been granted; (b) have a need thereof in
connection with the investigation; (c) are not involved in competitive
decision making for an interested party which is a party to the
investigation; and (d) have submitted to the Secretary a signed
Acknowledgment for Clerical Personnel in the form attached hereto (the
authorized applicant shall also sign such acknowledgment and will be
deemed responsible for such persons' compliance with this APO);
(2) Use such BPI solely for the purposes of the above-captioned
Commission investigation or for judicial or binational panel review of
such Commission investigation;
[[Page 13165]]
(3) Not consult with any person not described in paragraph (1)
concerning BPI disclosed under this APO without first having received
the written consent of the Secretary and the party or the
representative of the party from whom such BPI was obtained;
(4) Whenever materials (e.g., documents, computer disks, etc.)
containing such BPI are not being used, store such material in a locked
file cabinet, vault, safe, or other suitable container (N.B.: storage
of BPI on so-called hard disk computer media is to be avoided, because
mere erasure of data from such media may not irrecoverably destroy the
BPI and may result in violation of paragraph C of this APO);
(5) Serve all materials containing BPI disclosed under this APO as
directed by the Secretary and pursuant to section 207.7(f) of the
Commission's rules;
(6) Transmit each document containing BPI disclosed under this APO:
(i) with a cover sheet identifying the document as containing BPI,
(ii) with all BPI enclosed in brackets and each page warning that
the document contains BPI,
(iii) if the document is to be filed by a deadline, with each page
marked ``Bracketing of BPI not final for one business day after date of
filing,'' and
(iv) if by mail, within two envelopes, the inner one sealed and
marked ``Business Proprietary Information--To be opened only by [name
of recipient]'', and the outer one sealed and not marked as containing
BPI;
(7) Comply with the provisions of this APO and section 207.7 of the
Commission's rules;
(8) Make true and accurate representations in the authorized
applicant's application and promptly notify the Secretary of any
changes that occur after the submission of the application and that
affect the representations made in the application (e.g., change in
personnel assigned to the investigation);
(9) Report promptly and confirm in writing to the Secretary any
possible breach of this APO; and
(10) Acknowledge that breach of this APO may subject the authorized
applicant and other persons to such sanctions or other actions as the
Commission deems appropriate, including the administrative sanctions
and actions set out in this APO.
The APO further provides that breach of a protective order may
subject an applicant to:
(1) Disbarment from practice in any capacity before the Commission
along with such person's partners, associates, employer, and employees,
for up to seven years following publication of a determination that the
order has been breached;
(2) Referral to the United States Attorney;
(3) In the case of an attorney, accountant, or other professional,
referral to the ethics panel of the appropriate professional
association;
(4) Such other administrative sanctions as the Commission
determines to be appropriate, including public release of or striking
from the record any information or briefs submitted by, or on behalf
of, such person or the party he represents; denial of further access to
business proprietary information in the current or any future
investigations before the Commission; and issuance of a public or
private letter of reprimand; and
(5) Such other actions, including but not limited to, a warning
letter, as the Commission determines to be appropriate.
Commission employees are not signatories to the Commission's APOs
and do not obtain access to BPI through APO procedure. Consequently,
they are not subject to the requirements of the APO with respect to the
handling of BPI. However, Commission employees are subject to strict
statutory and regulatory constraints concerning BPI, and face
potentially severe penalties for noncompliance. See 18 U.S.C. 1905;
Title 5, U.S. Code; and Commission personnel policies implementing the
statutes. Although the Privacy Act (5 U.S.C. 552a) limits the
Commission's authority to disclose any personnel action against agency
employees, this should not lead the public to conclude that no such
actions have been taken.
An important provision of the Commission's rules relating to BPI is
the ``24-hour'' rule. This rule provides that parties have one business
day after the deadline for filing documents containing BPI to file a
public version of the document. The rule also permits changes to the
bracketing of information in the proprietary version within this one-
day period. No changes--other than changes in bracketing--may be made
to the proprietary version. The rule was intended to reduce the
incidence of APO breaches caused by inadequate bracketing and improper
placement of BPI. The Commission urges parties to make use of the rule.
If a party wishes to make changes to a document other than bracketing,
such as typographical changes or other corrections, the party must ask
for an extension of time to file an amended document pursuant to Rule
201.14(b)(2).
II. Investigations of Alleged APO Breaches
An investigation of an alleged APO breach in an antidumping or
countervailing duty investigation commences when the Secretary, acting
under delegated authority, issues to the alleged breacher a letter of
inquiry to ascertain the alleged breacher's views on whether a breach
has occurred. If, after reviewing the response and other relevant
information, the Commission determines that a breach has occurred, the
Commission often issues a second letter asking the breacher to address
the questions of mitigating or aggravating circumstances and possible
sanctions or other actions. The Commission then determines what action
to take in response to the breach. However, in some cases, the
Commission has determined that although a breach has occurred,
sanctions are not warranted, and therefore has found it unnecessary to
issue a second letter concerning what sanctions might be appropriate.
Instead, it issues a warning letter to the individual. The Commission
retains sole authority to make final determinations regarding the
existence of a breach and the appropriate action to be taken if a
breach has occurred.
The records of Commission investigations of alleged APO breaches in
antidumping and countervailing duty cases are not publicly available
and are exempt from disclosure under the Freedom of Information Act, 5
U.S.C. 552; Section 135(b) of the Customs and Trade Act of 1990; and 19
U.S.C. 1677f(g).
The breach most frequently investigated by the Commission involves
the APO's prohibition on the dissemination of BPI to unauthorized
persons. Such dissemination usually occurs as the result of failure to
delete BPI from public versions of documents filed with the Commission
or of transmission of proprietary versions of documents to unauthorized
recipients. Other breaches have involved: the failure to properly
bracket BPI in proprietary documents filed with the Commission; the
failure to immediately report known violations of an APO; and the
failure to adequately supervise non-legal personnel in the handling of
BPI in certain circumstances.
Sanctions for APO violations serve two basic interests: (a)
preserving the confidence of submitters of BPI in the Commission as a
reliable protector of BPI; and (b) disciplining breachers and deterring
future violations. As the Conference Report to the Omnibus Trade and
Competitiveness Act of 1988 observed, ``the effective enforcement of
[[Page 13166]]
limited disclosure under administrative protective order depends in
part on the extent to which private parties have confidence that there
are effective sanctions against violation.'' H.R. Conf. Rep. No. 576,
100th Cong., 1st Sess. 623 (1988).
The Commission has worked to develop consistent jurisprudence, not
only in determining whether a breach has occurred, but also in
selecting an appropriate response. In determining the appropriate
response, the Commission generally considers mitigating factors such as
the unintentional nature of the breach, the lack of prior breaches
committed by the breaching party, the corrective measures taken by the
breaching party, and the promptness with which the breaching party
reported the violation to the Commission. The Commission also considers
aggravating circumstances, especially whether persons not under the APO
actually read the BPI.
Commission rules permit economists or consultants to obtain access
to BPI under the APO if the economist or consultant is under the
direction and control of an attorney under the APO, or if the economist
or consultant appears regularly before the Commission and represents an
interested party who is a party to the investigation. 19 CFR
207.7(a)(3) (B) and (C). Economists and consultants who obtain access
to BPI under the APO under the direction and control of an attorney
nonetheless remain individually responsible for complying with the APO.
In appropriate circumstances, for example, an economist under the
direction and control of an attorney may be held responsible for a
breach of the APO by failing to redact APO information from a document
that is subsequently filed with the Commission and served as a public
document. This is so even though the attorney exercising direction or
control over the economist or consultant may also be held responsible
for the breach of the APO.
III. Specific Investigations in Which Breaches Were Found
The Commission presents the following case studies to educate users
about the types of APO breaches found by the Commission. The case
studies provide the factual background, the actions taken by the
Commission, and the factors considered by the Commission in determining
the appropriate actions. The Commission has not included some of the
specific facts in the descriptions of investigations where disclosure
could reveal the identity of a particular breacher. Thus, in some
cases, apparent inconsistencies in the facts set forth in this notice
result from the Commission's inability to disclose particular facts
more fully.
Case 1: Counsel bracketed but failed to redact BPI in the public
version of its pre-hearing brief. The Commission found that two of the
signatories to the brief breached the APO and issued private letters of
reprimand. In deciding on this sanction, the Commission considered that
the breach was discovered by the Commission, not by the offending
parties, and the brief containing BPI was in fact released and copied
by an unauthorized person. On the other hand, the attorneys had
committed no prior breaches of an APO; the breach did not appear to be
intentional; the attorneys moved promptly to mitigate the breach; and
the attorneys cooperated in a timely and complete manner. (The
Commission found that a third signatory did not breach the APO because
he was not involved in the preparation of the brief).
Case 2: In a final investigation, counsel served a document
containing BPI information on four parties' representatives that were
signatories to the APO in the preliminary investigation, but were not
signatories in the final investigation.1 The Commission found that
the party responsible for serving the document breached the APO, but
decided to issue only a warning letter. Factors relevant to the
Commission's decision included that the breach was inadvertent; the
offender did not commit any prior APO breaches; the offender took
immediate actions to mitigate any harm by retrieving the documents from
the unauthorized recipients; and the document was not viewed by anyone
not on the APO.
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\1\ These references correspond to the preliminary and final
phases of an investigation under the Commission's amended rules. See
19 CFR 207.12. 61 FR 37,818, 37819 (July 22, 1996). In this case,
and in other cases discussed in this notice, the investigations were
conducted under the Commission's pre-existing rules, which termed
such proceedings to be preliminary and final investigations.
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Case 3: A junior associate and an attorney with principal
responsibility for an investigation (``principal attorney'') submitted
certifications that all APO information had been returned or destroyed.
Both attorneys subsequently changed firms. Thereafter, an employee at
the principal attorney's new firm located two documents obtained under
the APO in the principal attorney's files. The principal attorney
notified the Commission. The Commission found that both the junior
associate and the principal attorney breached the APO by (1) failing to
return or destroy all documents containing BPI; and (2) certifying that
they had done so when in fact documents had not been returned or
destroyed. The Commission found that the principal attorney breached
the APO also by not safeguarding BPI material such that a non-APO
signatory--the employee who discovered the documents--had access to APO
information. The Commission decided to issue private letters of
reprimand to both the junior associate and the principal attorney.
The Commission rejected the junior associate's assertions that he
did not breach the APO because he was not permitted access to all of
the files at his firm. The Commission stated that if this was the case,
the associate should have asked other signatories whether they had
returned or destroyed all BPI. As for the sanction, the Commission
noted that the filing of an incorrect certification of destruction of
documents is a serious violation of an APO. On the other hand, the
Commission noted that the attorney had not previously breached an APO;
the violation was not intentional; and the breach occurred at a time
when the affairs of the firm were in disarray due to significant
organizational changes at the firm.
As for the principal attorney, the Commission considered that a
false certification of destruction is a serious breach; the attorney
was the one principally responsible for representing clients in this
particular investigation; and there was the additional breach of making
BPI available to a non-APO signatory. On the other hand, the Commission
noted that the attorney had not previously breached an APO; the breach
was not intentional; and the affairs of the firm were in disarray due
to significant organizational changes at the firm.
Case 4: Three attorneys subject to an APO left their firm during
the pendency of the appeal process of an investigation, while a fourth
remained at the firm. Accordingly, when the three departed, the firm
still possessed BPI under the APO. One of the three asserted that he
thought that the fourth attorney would be responsible for the APO
material; another asserted that he left instructions for the documents
to be sent to the client's new law firm or be destroyed; while the
third asserted that the material was not destroyed at the time of his
departure because the litigation was still ongoing. All parties to the
case then entered a stipulation dismissing all pending litigation. A
year later, upon departure from the firm or shortly thereafter, the
fourth attorney
[[Page 13167]]
asserted that he learned that the documents still were in the firm's
locked APO room, instructed his secretary to destroy them, and
conferred with her thereafter to ensure that the instructions had been
followed. Three years later, this attorney was informed by personnel at
this firm that material obtained pursuant to the APO was still in the
firm's locked APO room. He promptly reported this to the Commission.
The Commission found that all four attorneys breached the APO by
failing to return or destroy all documents containing BPI obtained
under APO. The Commission also found that the fourth attorney further
breached the APO by failing to ascertain that any instructions he had
given to destroy documents containing BPI had been executed, a failure
which resulted in BPI being retained by individuals who were neither
APO signatories nor under the control of APO signatories.
The Commission decided to issue private letters of reprimand to
each of the attorneys. The Commission noted that the failure of the
attorneys to communicate adequately with each other concerning who
would have the ultimate responsibility for disposing of the APO
materials was a serious breach of their obligations, and that it
resulted in the failure to return or destroy APO material. The
Commission also noted that none of the parties had previously breached
an APO.
Case 5: Counsel filed the public version of a document that
contained bracketed but unredacted BPI. The Commission found that the
economic consultant who was responsible for the exhibits that contained
the unredacted BPI, as well as three attorneys acting as counsel for
the same party (one as a contract attorney for the retained firm) who
had all worked on the brief and reviewed the brief for BPI, had
breached the APO. In deciding to issue only warning letters to the
economic consultant and to the three attorneys, the Commission noted
the following: the breach was inadvertent; the offenders had not been
found to have previously breached an APO; they took actions to mitigate
any harm by ensuring that all unauthorized parties returned or
destroyed the BPI; and it did not appear that the BPI was in fact
viewed by any unauthorized persons.
The Commission simultaneously investigated another potential breach
by one of the attorneys--that testimony he gave at a hearing involved
BPI. The Commission determined that no breach occurred because the
information had been previously publicly disclosed in the companion
Commerce proceeding by the party whose BPI was at issue.
Case 6: Counsel filed and served a brief whose proprietary version
contained BPI that was not bracketed and whose public version contained
the same unbracketed, unredacted BPI. The Commission found that the
attorney with responsibility for performing the initial review of the
public and proprietary versions of the brief and the partner who signed
the brief and accepted overall responsibility for compliance with the
APO breached the APO. (The Commission found that two other attorneys at
the firm did not breach the APO because they were not involved in the
preparation of the brief. The Commission also found that a legal
assistant responsible for redacting the BPI did not breach the
protective order because he properly redacted all BPI that had been
bracketed). The Commission issued warning letters to both attorneys,
noting that the breach was inadvertent; they had not previously
breached the APO; they took actions to mitigate any harm; and it did
not appear that the BPI was viewed by any unauthorized persons.
Case 7: Counsel failed to redact BPI in two submissions, one filed
a week after the first. The Commission found that the partner
responsible for redacting BPI from both submissions and an associate
responsible for redacting BPI from one of the submissions breached the
APO. (The Commission found that a third signatory to the brief did not
violate the APO because he was not involved in the preparation of the
brief). The Commission issued a private letter of reprimand to the
partner and a warning letter to the associate.
The Commission considered that the Commission, not the offenders,
discovered the breaches, and the breaches were not fully cured because
it was not known whether unauthorized recipients actually viewed the
BPI. In addition, with respect to the partner, the Commission pointed
to the fact that two separate breaches occurred. On the other hand, the
Commission noted that the breaches appeared to be inadvertent; neither
offender had previously breached an APO; upon learning of the breaches,
the offenders moved promptly to mitigate any harm; and they otherwise
cooperated with the Commission. In addition, the associate was involved
with only one of the breaches and did not have ultimate responsibility
for review of the entire submission that the associate did help
prepare.
Case 8: A trade specialist who was subject to the direction and
control of an attorney received a public and proprietary version of a
hearing transcript and gave them to a secretary for copying and
distribution. The secretary sent a copy of the proprietary version to
an individual not authorized to receive APO information.
The Commission found that the attorney who had responsibility for
ensuring the compliance with the APO by the clerical staff breached the
APO by failing to arrange for adequate supervision of the handling of
BPI. It decided to issue a private letter of reprimand to him and
imposed a requirement that in the next investigation in which the
attorney appears before the Commission in which he seeks APO status,
that either (1) he certify that he has provided written instructions to
clerical and support staff at his firm handling BPI materials that no
BPI is to be transmitted without his personal approval; or (2) the firm
designate another attorney to be lead APO counsel. In making its
decision, the Commission noted that the attorney had two prior APO
violations. On the other hand, the Commission noted that his conduct
did not rise to the level of willful misbehavior or gross negligence
characteristic of investigations where the Commission has issued public
letters of reprimand; and no BPI was viewed by any unauthorized
persons.
The Commission also found that the secretary, by sending the
transcript to a non-APO signatory, had breached the APO and issued a
warning letter. The Commission noted that it was departing from its
normal practice of not holding clerical employees responsible for APO
breaches because the secretary sent the transcript to an individual
whom she knew was not permitted to receive APO information. However,
the Commission noted the presence of mitigating factors: she had not
previously breached an APO; the breach was inadvertent; and no BPI was
actually viewed by any unauthorized persons.
The Commission found that the trade specialist breached the APO
because he had supervisory responsibility on the day in question for
overseeing the distribution of the proprietary version of the
transcript. In issuing a warning letter, the Commission noted that he
was the firm's APO coordinator responsible for distribution of APO
materials; and that at the time the breach occurred, he was called away
from the office and made no provision for anyone at the firm to assume
his responsibilities. However, the Commission also noted that he had
not previously breached an APO; the breach was inadvertent; and no BPI
was
[[Page 13168]]
actually viewed by unauthorized persons.
Case 9: Three attorneys prepared and filed the public version of a
brief that contained bracketed but unredacted BPI and served copies of
the brief to parties on the public service list and to other non-
authorized persons. The Commission found that these attorneys breached
the APO and decided to issue a warning letter to each of the attorneys.
(The Commission also found that two other attorneys whose name appeared
on the brief did not breach the APO because they did not assist in the
preparation of the public version of the brief at issue). In making its
decision, the Commission noted that the breach was inadvertent; the
attorneys had not previously breached an APO; they took immediate
action to mitigate the harm; they immediately reported the potential
breach to the Commission; and it did not appear that the BPI was
actually read by any unauthorized persons.
IV. Specific Investigations in Which No Breach Was Found
As noted above, in three investigations where the Commission found
a breach by one or more parties, it also found that one or more parties
investigated did not breach the APO. In addition, the Commission
completed one investigation in 1996 in which it found that no breach by
any party had occurred. In that investigation, the Commission reached
its conclusion on the basis of a finding that the BPI in question,
which was petitioner's BPI, had previously been publicly disclosed by
the petitioners.
V. Investigations of Breaches Other Than in Antidumping or
Countervailing Duty Proceedings
In 1996, the Commission conducted one investigation of an alleged
breach of an APO in a proceeding brought pursuant to Section 201 of the
Trade Act of 1974. In that investigation, an APO signatory sent the
proprietary version of a brief to a party on the public service list
that was not a party to the APO. The Commission found that the
signatory breached the APO. In deciding to issue only a warning letter,
the Commission pointed to the following factors: the breach was
inadvertent; the signatory had not previously breached an APO; the
signatory took actions to mitigate any harm by retrieving the unopened
envelope containing the brief; and thus it did not appear that any
unauthorized persons viewed the BPI.
During 1996, the Commission did not conduct any investigations of
breaches of APOs in proceedings filed under Section 337 of the Tariff
Act of 1930.
By order of the Commission.
Issued: March 13, 1997.
Donna R. Koehnke,
Secretary.
[FR Doc. 97-6904 Filed 3-18-97; 8:45 am]
BILLING CODE 7020-02-P
