[Federal Register Volume 60, Number 140 (Friday, July 21, 1995)]
[Rules and Regulations]
[Pages 37746-37751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16948]
[[Page 37745]]
_______________________________________________________________________
Part III
Federal Trade Commission
_______________________________________________________________________
16 CFR Parts 1, 2, 3, and 4
Rules of Practice Amendments; Final Rule
Federal Register / Vol. 60, No. 140 / Friday, July 21, 1995 / Rules
and Regulations
[[Page 37746]]
FEDERAL TRADE COMMISSION
16 CFR Parts 1, 2, 3, and 4
Rules of Practice Amendments
AGENCY: Federal Trade Commission.
ACTION: Final rule.
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SUMMARY: The Federal Trade Commission amends its Rules of Practice to
adapt them to the Federal Trade Commission Act Amendments of 1994. This
action conforms the Commission's Rules of Practice to certain statutory
changes and provides guidance to the public.
EFFECTIVE DATE: July 21, 1995.
FOR FURTHER INFORMATION CONTACT: Joyce Plyler, Attorney, Office of
General Counsel, Federal Trade Commission, Washington, D.C. 20580, 202-
326-2155.
SUPPLEMENTARY INFORMATION: On August 26, 1994, the President signed
into law the ``Federal Trade Commission Act Amendments of 1994,'' Pub.
L. 103-312, 108 Stat. 1691 (1994 Amendments), by which the Congress
reauthorized the Federal Trade Commission and further defined or
altered the Commission's authority. The 1994 Amendments make it
necessary or appropriate to revise certain of the agency's Rules of
Practice. These rule revisions relate solely to agency practice and,
thus, are not subject to the notice and comment requirements of the
Administrative Procedure Act, 5 U.S.C. 553(a)(2), nor to the
requirements of the Regulatory Flexibility Act, 5 U.S.C. 601(2). The
Paperwork Reduction Act, 44 U.S.C. 3501, does not apply because these
revisions do not contain requirements for information collection
subject to approval of the Office of Management and Budget. Although
the rule revisions are effective immediately, the Commission welcomes
comment on them and will consider further revision, as appropriate.
I. Analysis
1. Deletion of Section 1.17
Section 1.17 is being removed in accordance with section 3 of the
1994 Amendments, which deletes section 18(h) of the FTC Act, 15 U.S.C.
57a. That section permitted the Commission to provide, in certain
circumstances, compensation for attorney's fees and other costs
incurred by participants in rulemaking proceedings.
2. Addition to Section 2.7
Section 7 of the 1994 Amendments broadens the Commission's
investigatory authority by authorizing it to issue civil investigative
demands (CIDs) for tangible things, and to use CIDs in antitrust
investigations. The Commission is adding a new subsection (2) to
Sec. 2.7(b) of the rules, to extend CID authority to tangible items.
The new subsection parallels existing rules that apply to demands for
other materials. Cross-references in other subsections are renumbered.
No rule change is necessary to implement the extension of the
Commission's authority to use CIDs in antitrust investigations.
3. Revisions Relating to Stays of Orders
The 1994 Amendments make any cease and desist order that is
adjudicated under section 5 of the FTC Act effective 60 days after
service, except for divestiture provisions,1 unless the order is
stayed by the Commission or a court. The Commission is adding a new
Sec. 3.56 to incorporate this statutory change and to establish
procedural rules for stay applications. Section 3.56 requires that
applications must be submitted within 30 days of service of the order.
This time limit will help ensure that a Commission resolution of the
request for a stay can be made before the order goes into effect and
before a petition for judicial review must be filed. The rule also
specifies that applications shall state the reasons for a stay and
shall be supported by affidavits or other sworn statements, with
attachments from the record where relevant.
\1\ Pursuant to amended section 5(g) of the FTC Act, the
automatic stay still applies to ``an order provision requiring a
person, partnership or corporation to divest itself of stock, other
share capital, or assets, if a petition for review of such order has
been filed * * *.'' Divestiture provisions retain the automatic stay
because of their substantial impact on business operations. See S.
Rep. No. 130, 103d Cong., 1st Sess. 11 (1993); H. Rep. No. 138, 103d
Cong., 1st Sess. 13 (1993). Other provisions of the order are not
automatically stayed. The Commission notes that order paragraphs
containing divestiture provisions may also contain other provisions,
such as hold-separate requirements or asset-preservation provisions,
which do not have the same impact as divestiture requirements and
which, therefore, are not automatically stayed.
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In addition, applications must address the likelihood of the
applicant's success on appeal, whether the applicant will suffer
irreparable harm if a stay is not granted, the degree of injury to
other parties if a stay is granted, and why the stay is in the public
interest. These questions are based on the traditional four-part test
that courts, as well as agencies governed by the Administrative
Procedure Act, have applied in determining requests for stays of
orders. See, e.g., Hilton v. Braunskill, 481 U.S. 770, 776 (1987); In
re Chicago Mercantile Exchange, Board of Trade of the City of Chicago,
and Investment Company Institute, Securities Exchange Act Release No.
26811 (May 12, 1989). The Commission previously has stated that this
four-part test is the appropriate standard for stay applications under
the FTC Act. See Order Denying Respondent's Motion to Stay Enforcement,
Trans Union Corp., D. 9255 (Dec. 5, 1994).
Section 3.56 also requires that service of applications be made in
the same fashion as in adjudicative proceedings, to ensure that
applications are filed with the Secretary of the Commission as well as
the relevant staff. An answer to an application may be filed within 5
business days of receipt of the application, and a reply (limited to
new matters raised in the answer) may be filed within 3 business days
of receipt of the answer. These short time frames take into account
that the Commission will undertake to rule on the application within 30
days, after which, if the Commission has not acted, or the application
is denied, the applicant may request a stay from the court in which an
appeal is pending. Specifically allowing replies, and limiting them to
new matters raised in the answer, will deter submission of repetitious
filings.
The Commission is also adding a provision to Sec. 4.7(e) concerning
ex parte communications, specifying that the requirements of Rule 4.7
are to be observed with respect to stay applications. In Sec. 4.7(f),
the Commission clarifies that the ex parte rules are not applicable to
communications regarding preparations for judicial review.
In addition, the Commission is revising Rule 2.41 pertaining to the
filing of compliance reports, to state that neither the filing of an
application for a stay nor of a petition for review will operate to
delay the required date for filing a compliance report. Compliance
reports will be delayed only to the extent that an order is stayed
automatically by statute, by order of the Commission or a court, or as
otherwise permitted under the rules.
Finally, the Commission is clarifying that applications for stays
and subsequent, related filings (as well as petitions for
reconsideration) will be placed on the public record, pursuant to
Sec. 4.9(b). Requests for confidential treatment of material submitted
with stay applications will be determined as provided in
Sec. 4.9(c)(1).
4. Revisions Affecting Custody of Tangible Things
Section 8 of the 1994 Amendments amended section 20 of the FTC Act
regarding the Commission's custody of tangible things. To accommodate
submissions of tangible items, the
[[Page 37747]]
Commission is making a number of technical revisions to Sec. 3.45, 4.9,
4.10, 4.11, and 4.12.2 The most prevalent change is that, where
appropriate, the word ``material'' is substituted for ``documents,''
``documents and testimony,'' and ``information''.
\2\ Unrelated to the 1994 Amendments, the Commission is deleting
the second sentence of Sec. 3.45(c) because it is unnecessary. The
Commission also is making some minor editorial changes to the
general paragraphs in Sec. 4.9(a), which are not substantive but
merely clarify the Commission's organization of its materials. The
Commission also is correcting some of the categorizations and
parenthetical cross-references in Sec. 4.9(b).
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Some portions of the rules, most notably in Sec. 4.10(a), are based
on the Freedom of Information Act (FOIA), 5 U.S.C. 552, which has been
interpreted not to cover tangible items.3 Thus, references to
``records'' in provisions that are founded on the FOIA are not intended
to be read any broader than the FOIA itself. However, other provisions
of the rules use ``records'' and ``public records'' in a manner
indicating, by their context, that tangible items should be included.
To avoid potential confusion over whether the word ``record'' does or
does not include tangible items, the revisions distinguish between a
``record,'' which includes only compilations of information, such as in
a document or transcript, and ``the public record,'' a term of art that
could include anything available to the public, including tangible
items. Thus, in some cases, the word ``records'' is changed to
``material'' to indicate that tangible items are included, and the
phrase, ``public records'' is changed to ``the public record'' in
places where that term of art is more appropriate.
\3\ Matthews v. United States Postal Serv., No. 92-1208, slip
op. at 4, n. 3 (W.D. Mo. Apr. 14, 1994) (computer hardware not
``record''); Nichols v. United States, 325 F. Supp. 130, 135-36
(D.Kan. 1971) (guns, bullets, and clothing held not ``records''),
aff'd on other grounds, 460 F.2d 671 (10th Cir.), cert. denied, 409
U.S. 966 (1972).
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Some rule provisions arise from section 21 of the FTC Act and
already refer to ``material.'' The definition of ``material'' in
section 21(a) of the FTC Act was amended by the 1994 Amendments to
include tangible items. Thus, those provisions may be read to include
tangible items. In addition, because the definition of ``material'' in
section 21(a) also includes transcripts of oral testimony, the
Commission is deleting the parenthetical references to transcripts of
oral testimony because they are superfluous. These deletions are not
intended to exclude transcripts of oral testimony from the word
``material.'' On the contrary, the Commission intends ``material'' to
include transcripts of oral testimony wherever that term is used.
List of Subjects
16 CFR Part 1
Administrative practice and procedure, Advisory opinions,
Rulemaking, Trade regulation rules.
16 CFR Part 2
Administrative practice and procedure, Investigations.
16 CFR Part 3
Administrative practice and procedure, Investigations.
16 CFR Part 4
Administrative practice and procedure, Freedom of Information Act,
Privacy Act, Sunshine Act.
Accordingly, the Federal Trade Commission amends title 16, Chapter
I, subchapter A of the Code of Federal Regulations, as follows:
PART 1--GENERAL PROCEDURES
1. The authority for part 1 continues to read as follows:
Authority: Sec. 6, 38 Stat. 721 (15 U.S.C. 46), unless otherwise
noted.
Sec. 1.17 [Removed and reserved]
2. Section 1.17 is removed and reserved.
PART 2-- NONADJUDICATIVE PROCEDURES
3. The authority for part 2 continues to read as follows:
Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46.
Sec. 2.7 [Amended]
4. In the last sentence of Sec. 2.7(b)(1), remove the reference
``20(c)(10)'' and add, in its place, ``20(c)(11)''.
Sec. 2.7 [Amended]
5. In the last sentence of Sec. 2.7(b)(2), remove the reference
``20(c)(11)'' and add, in its place, ``20(c)(13)''.
Sec. 2.7 [Amended]
6. In the last sentence of Sec. 2.7(b)(3), remove the reference
``20(c)(12)'' and add, in its place, ``20(c)(14)''.
7. In Sec. 2.7, paragraphs (b)(2) and (b)(3) are redesignated as
paragraphs (b)(3) and (b)(4), respectively, and new paragraph (b)(2) is
added to read as follows:
Sec. 2.7 Compulsory process in investigations.
* * * * *
(b) Civil investigative demands. * * *
(2) Civil investigative demands for tangible things will describe
each class of tangible things to be produced with such definiteness and
certainty as to permit such things to be fairly identified, prescribe a
return date or dates which will provide a reasonable period of time
within which the things so demanded may be assembled and submitted, and
identify the custodian to whom such things shall be submitted.
Submission of tangible things in response to a civil investigative
demand shall be made in accordance with the procedures prescribed by
section 20(c)(12) of the Federal Trade Commission Act.
* * * * *
8. Section 2.41(a) is revised to read as follows:
Sec. 2.41 Reports of compliance.
(a) In every proceeding in which the Commission has issued an order
pursuant to the provisions of section 5 of the Federal Trade Commission
Act or section 11 of the Clayton Act, as amended, and except as
otherwise specifically provided in any such order, each respondent
named in such order shall file with the Commission, within sixty (60)
days after service thereof, or within such other time as may be
provided by the order or the rules in this chapter, a report in
writing, signed by the respondent, setting forth in detail the manner
and form of his compliance with the order, and shall thereafter file
with the Commission such further signed, written reports of compliance
as it may require. Reports of compliance shall be under oath if so
requested. Where the order prohibits the use of a false advertisement
of a food, drug, device, or cosmetic which may be injurious to health
because of results from its use under the conditions prescribed in the
advertisement, or under such conditions as are customary or usual, or
if the use of such advertisement is with intent to defraud or mislead,
or in any other case where the circumstances so warrant, the order may
provide for an interim report stating whether and how respondents
intend to comply to be filed within ten (10) days after service of the
order. Neither the filing of an application for stay pursuant to
Sec. 3.56, nor the filing of a petition for judicial review, shall
operate to postpone the time for filing a compliance report under the
order or this section. If the Commission, or a court, determines to
grant a stay of an order, or portion thereof, pending judicial review,
or if any order provision is automatically stayed by statute, no
compliance report shall be due as to those portions of the order that
are stayed unless ordered by the court. Thereafter, as to orders, or
portions thereof, that are stayed, the time for filing a report of
compliance shall begin
[[Page 37748]]
to run de novo from the final judicial determination, except that if no
petition for certiorari has been filed following affirmance of the
order of the Commission by a court of appeals, the compliance report
shall be due the day following the date on which the time expires for
the filing of such petition. Staff of the Bureaus of Competition and
Consumer Protection will review such reports of compliance and may
advise each respondent whether the staff intends to recommend that the
Commission take any enforcement action. The Commission may, however,
institute proceedings, including certification of facts to the Attorney
General pursuant to the provisions of section 5(l) of the Federal Trade
Commission Act (15 U.S.C. 45(l)) and section 11(1) of the Clayton Act,
as amended (15 U.S.C. 21(1)), to enforce compliance with an order,
without advising a respondent whether the actions set forth in a report
of compliance evidence compliance with the Commission's order or
without prior notice of any kind to a respondent.
* * * * *
PART 3--RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS
9. The authority for part 3 continues to read as follows:
Authority: Sec. 6, 38 Stat. 721 (15 U.S.C. 46), unless otherwise
noted.
10. In Sec. 3.45 paragraphs (a), (b), and (c) are revised to read
as follows:
Sec. 3.45 In camera orders.
(a) Definition. Except as hereinafter provided, material made
subject to an in camera order will be kept confidential and not placed
on the public record of the proceeding in which it was submitted. Only
respondents, their counsel, authorized Commission personnel, and court
personnel concerned with judicial review may have access thereto,
provided that the Administrative Law Judge, the Commission and
reviewing courts may disclose such in camera material to the extent
necessary for the proper disposition of the proceeding.
(b) In camera treatment of material. The Administrative Law Judge
may order material, or portions thereof, offered into evidence, whether
admitted or rejected, to be placed in camera on a finding that their
public disclosure will likely result in a clearly defined, serious
injury to the person, partnership or corporation requesting their in
camera treatment. This finding shall be based on the standard
articulated in H.P. Hood & Sons, Inc., 58 F.T.C. 1184, 1188 (1961); see
also Bristol-Myers Co., 90 F.T.C. 455, 456 (1977), which established a
three-part test that was modified by General Foods Corp., 95 F.T.C.
352, 355 (1980). No material, or portion thereof offered into evidence,
whether admitted or rejected, may be withheld from the public record
unless it falls within the scope of an order issued in accordance with
this section, stating the date on which in camera treatment will
expire, and including:
(1) A description of the material;
(2) A statement of the reasons for granting in camera treatment;
and
(3) A statement of the reasons for the date on which in camera
treatment will expire. Such expiration date may not be omitted except
in unusual circumstances, in which event the order shall state with
specificity the reasons why the need for confidentiality of the
material, or portion thereof at issue is not likely to decrease over
time, and any other reasons why such material is entitled to in camera
treatment for an indeterminate period. Any party desiring, in
connection with the preparation and presentation of the case, to
disclose in camera material to experts, consultants, prospective
witnesses, or witnesses, shall make application to the Administrative
Law Judge setting forth the justification therefor. The Administrative
Law Judge, in granting such application for good cause found, shall
enter an order protecting the rights of the affected parties and
preventing unnecessary disclosure of information. Material subject to
an in camera order shall be segregated from the public record and filed
in a sealed envelope, or other appropriate container, bearing the
title, the docket number of the proceeding, the notation ``In Camera
Record under Sec. 3.45,'' and the date, if any, on which in camera
treatment expires.
(c) Release of in camera material. In camera material constitutes
part of the confidential records of the Commission and is subject to
the provisions of Sec. 4.11 of this chapter.
* * * * *
11. Section 3.56 is added to subpart F to read as follows:
Sec. 3.56 Effective date of orders; application for stay.
(a) Other than consent orders, an order to cease and desist under
section 5 of the FTC Act becomes effective upon the sixtieth day after
service, except as provided in section 5(g)(3) of the FTC Act, and
except for divestiture provisions, as provided in section 5(g)(4) of
the FTC Act.
(b) Any party subject to a cease and desist order under section 5
of the FTC Act, other than a consent order, may apply to the Commission
for a stay of all or part of that order pending judicial review. If,
within 30 days after the application was received by the Commission,
the Commission either has denied or has not acted on the application, a
stay may be sought in a court of appeals where a petition for review of
the order is pending.
(c) An application for stay shall state the reasons a stay is
warranted and the facts relied upon, and shall include supporting
affidavits or other sworn statements, and a copy of the relevant
portions of the record. The application shall address the likelihood of
the applicant's success on appeal, whether the applicant will suffer
irreparable harm if a stay is not granted, the degree of injury to
other parties if a stay is granted, and why the stay is in the public
interest.
(d) An application for stay shall be filed within 30 days of
service of the order on the party. Such application shall be served in
accordance with the provisions of Sec. 4.4(b) of this part that are
applicable to service in adjudicative proceedings. Any party opposing
the application may file an answer within 5 business days after receipt
of the application. The applicant may file a reply brief, limited to
new matters raised by the answer, within 3 business days after receipt
of the answer.
PART 4--MISCELLANEOUS RULES
12. The authority for part 4 continues to read as follows:
Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46.
13. Section 4.7 is amended by adding a new sentence at the end of
paragraph (e) and by revising the first sentence of paragraph (f) to
read as follows:
Sec. 4.7 Ex parte communications.
* * * * *
(e) * * * In addition, the prohibitions of this section shall apply
with respect to communications concerning an application for stay filed
with the Commission pursuant to Sec. 3.56 from the time that the
application is filed until its disposition.
(f) The prohibitions of paragraph (b) of this section do not apply
to a communication occasioned by and concerning a nonadjudicative
function of the Commission, including such functions as the initiation,
conduct, or disposition of a separate investigation, the issuance of a
complaint, or the initiation of a rulemaking or other proceeding,
whether or not it involves a party already in an adjudicative
proceeding; preparations for judicial review of a Commission order; a
[[Page 37749]]
proceeding outside the scope of Sec. 3.2, including a matter in state
or federal court or before another governmental agency; * * *
14. In Sec. 4.9, the heading and paragraphs (a)(1) through (a)(3)
are revised to read as follows:
Sec. 4.9 The public record.
(a) General. (1) Materials on the public record of the Commission
are available for public inspection and copying either routinely or
upon request.
(2) Materials that are exempt from mandatory public disclosure, or
are otherwise not available from the Commission's public record, may be
made available for inspection and copying only upon request under the
procedures set forth in Sec. 4.11 of this part, or as provided in
Secs. 4.10 (d) through (g), 4.13, and 4.15(b)(3) of this part, or by
the Commission.
(3) Location. Materials on the public record are available for
inspection at the principal office of the Commission, and copies of
some of those records are available at the regional offices, on each
business day from 9 a.m. to 5 p.m.
* * * * *
Sec. 4.9 [Amended]
15. Section 4.9(b) is amended by revising the heading and
introductory text, the heading of paragraph (b)(3), the heading and
text of paragraphs (b)(5) and (b)(6), and the heading of paragraph
(b)(8) to read as follows:
* * * * *
(b) Categories. Except to the extent material is confidential, as
provided in paragraph (c) of this section, the public record of the
Commission includes, but is not necessarily limited to:
* * * * *
(3) Rulemaking (16 CFR 1.7 through 1.26). * * *
* * * * *
(5) Adjudicative proceedings, stay applications, requests to
reopen, and litigated orders. (16 CFR 2.51, 3.1 through 3.24, 3.31
through 3.56, 3.71 through 3.72, 4.7)--Except for transcripts of
matters heard in camera pursuant to Sec. 3.45 and material filed in
camera pursuant to Secs. 3.22, 3.24, 3.45, 3.46, 3.51 and 3.52,
(i) The versions of pleadings and transcripts of prehearing
conferences to the extent made available under Sec. 3.21(e), motions,
certifications, orders, and the transcripts of hearings (including
public conferences), testimony, oral arguments, and other material made
a part thereof, and exhibits and material received in evidence or made
a part of the public record in adjudicative proceedings;
(ii) Initial decisions of administrative law judges;
(iii) Orders and opinions in interlocutory matters;
(iv) Final orders and opinions in adjudications, and rulings on
stay applications, including separate statements of Commissioners;
(v) Petitions for reconsideration, and answers thereto, filed
pursuant to Sec. 3.55;
(vi) Applications for stay, answers thereto, and replies, filed
pursuant to Sec. 3.56;
(vii) Petitions, applications, pleadings, briefs, and other records
filed by the Commission with the courts in connection with
adjudicative, injunctive, enforcement, compliance, and condemnation
proceedings, and in connection with judicial review of Commission
actions, and opinions and orders of the courts in disposition thereof;
(viii) Records of ex parte communications in adjudicative
proceedings and stay applications;
(ix) Petitions to reopen proceedings and orders to determine
whether orders should be altered, modified, or set aside in accordance
with Sec. 2.51; and
(x) Decisions reopening proceedings, and orders to show cause under
Sec. 3.72.
(6) Consent Agreements (16 CFR 2.31 through 2.34, 3.25). (i)
Agreements containing orders, after acceptance by the Commission
pursuant to Secs. 2.34 and 3.25(f) of this chapter;
(ii) Comments filed under Secs. 2.34 and 3.25(f) of this chapter
concerning proposed consent agreements; and
(iii) Final decisions and orders issued after the comment period
prescribed in Secs. 2.34 and 3.25(f), including separate statements of
Commissioners.
* * * * *
(8) Access to Documents and Meetings (16 CFR 4.8, 4.11, 4.13,
4.15). * * *
* * * * *
Sec. 4.9 [Amended]
16. Section 4.9(c) is amended by revising the heading, the first
sentence of paragraph (c)(1), and paragraphs (c)(2) and (c)(3) to read
as follows:
* * * * *
(c) Confidentiality and in camera material. (1) Persons submitting
material to the Commission described in this section may designate that
material or portions of it confidential and request that it be withheld
from the public record. * * *
(2) Motions seeking in camera treatment of material submitted in
connection with a proceeding under part 3 of these rules, except stay
applications under Sec. 3.56, shall be filed with the Administrative
Law Judge who is presiding over the proceeding. Requests for
confidential treatment of material submitted in connection with a stay
application shall be made in accordance with Sec. 4.9(c)(1).
(3) To the extent that any material or portions of material
otherwise falling within Sec. 4.9(b) contain information that is not
required to be made public under Sec. 4.10 of this part, the General
Counsel may determine to withhold such materials from the public
record.
17. Section 4.10 is amended by revising the heading, paragraph (a)
introductory text, paragraphs (a)(8) through (a)(11), and paragraphs
(d), (e), (f), and (g), introductory text and concluding text, to read
as follows:
Sec. 4.10 Nonpublic material.
(a) The following records and other material of the Commission are
not required to be made public pursuant to 5 U.S.C. 552.
* * * * *
(8) Material, as that term is defined in section 21(a) of the
Federal Trade Commission Act, which is received by the Commission:
(i) In an investigation, a purpose of which is to determine whether
any person may have violated any provision of the laws administered by
the Commission; and
(ii) Which is provided pursuant to any compulsory process under the
Federal Trade Commission Act, 15 U.S.C. 41, et seq., or which is
provided voluntarily in place of compulsory process in such an
investigation. See section 21(f) of the Federal Trade Commission Act.
(9) Material, as that term is defined in section 21(a) of the
Federal Trade Commission Act, which is received by the Commission
pursuant to compulsory process in an investigation, a purpose of which
is to determine whether any person may have violated any provision of
the laws administered by the Commission. See section 21(b)(3)(C) of the
Federal Trade Commission Act.
(10) Such other material of the Commission as may from time to time
be designated by the Commission as confidential pursuant to statute or
Executive Order. This exempts from disclosure any information that has
been designated nonpublic pursuant to criteria and procedures
prescribed by Executive Order and that has not been subsequently
declassified in accordance with applicable procedures. The exemption
also preserves the full force and effect of statutes that restrict
public access to specific government records or material.
(11) Material in an investigation or proceeding that involves a
possible
[[Page 37750]]
violation of criminal law, when there is reason to believe that the
subject of the investigation or proceeding is not aware of its
pendency, and disclosure of the existence of the investigation could
reasonably be expected to interfere with enforcement proceedings. When
a request is made for records under Sec. 4.11(a), the Commission may
treat the records as not subject to the requirements of the Freedom of
Information Act.
* * * * *
(d) Except as provided in paragraphs (f) and (g) of this section
and in Sec. 4.11 (b), (c), and (d), no material which is marked or
otherwise identified as confidential and which is within the scope of
Sec. 4.10(a)(8) and no material which is within the scope of
Sec. 4.10(a)(9) which is not otherwise public shall be made available
to any individual other than a duly authorized officer or employee of
the Commission or a consultant or contractor retained by the Commission
who has agreed in writing not to disclose the information without the
consent of the person who produced the material. All other Commission
records may be made available to a requester under the procedures set
forth in Sec. 4.11 or may be disclosed by the Commission except where
prohibited by law.
(e) Except as provided in paragraphs (f) and (g) of this section
and in Sec. 4.11 (b), (c), and (d), material not within the scope of
Sec. 4.10(a)(8) or Sec. 4.10(a)(9) which is received by the Commission
and is marked or otherwise identified as confidential may be disclosed
only if it is determined that the material is not within the scope of
Sec. 4.10(a)(2), and only if the submitter is provided at least 10
days' notice of the intent to disclose the material involved.
(f) Nonpublic material obtained by the Commission may be disclosed
to persons other than the submitter in connection with the taking of
oral testimony without the consent of the submitter only if the
material or transcript is not within the scope of Sec. 4.10(a)(2). If
the material is marked confidential, the submitter will be provided 10
days' notice of the intended disclosure or will be afforded an
opportunity to seek an appropriate protective order.
(g) Material obtained by the Commission:
(1) * * *
(2) * * *
(3) * * *
Prior to disclosure of such material in a proceeding, the submitter
will be afforded an opportunity to seek an appropriate protective or in
camera order. All other material obtained by the Commission may be
disclosed in Commission administrative or court proceedings at the
discretion of the Commission except where prohibited by law.
18. Section 4.11 is amended by revising the heading, the first
sentence in paragraph (b), the first, second and third sentences in
paragraph (c), the heading in paragraph (e), and paragraphs (e)(1)
through (e)(5) to read as follows:
Sec. 4.11 Disclosure requests.
* * * * *
(b) Requests from congressional committees and subcommittees.
Requests from congressional committees and subcommittees for nonpublic
material shall be referred to the General Counsel for presentation to
the Commission, subject to the provisions in 5 U.S.C. 552(c) and FTC
Act 21(b) that neither the Freedom of Information Act, 5 U.S.C. 552,
nor the Federal Trade Commission Act, 15 U.S.C. 41, et seq., is
authority to withhold information from Congress. * * *
(c) Requests from Federal and State law enforcement agencies.
Requests from law enforcement agencies of the Federal government shall
be addressed to the liaison officer for the requesting agency, or if
there is none, to the General Counsel. Requests from state agencies
shall be addressed to the General Counsel. With respect to requests
under this paragraph, the General Counsel or the appropriate liaison
officer is delegated the authority to dispose of them or may refer them
to the Commission for determination, except that requests must be
referred to the Commission for determination where the Bureau having
the material sought and the General Counsel do not agree on the
disposition. * * *
* * * * *
(e) Material and information requested by subpoena in cases or
matters to which the agency is not a party. (1) The procedures
specified in this section will apply to all subpoenas directed to
Commission employees, except special government employees, that relate
in any way to the employees' official duties. These procedures will
also apply to subpoenas directed to former Commission employees and
current or former special government employees of the Commission, if
the subpoenas seek nonpublic materials or information acquired during
Commission employment. The provisions of paragraph (e)(3) of this
section will also apply to subpoenas directed to the agency. For
purposes of this section, the term ``subpoena'' includes any compulsory
process in a case or matter to which the agency is not a party; the
term ``nonpublic'' includes any material or information which, under
Sec. 4.10, is not required to be made public; the term ``employees,''
except where otherwise specified, includes ``special government
employees'' and other agency employees; and the term ``special
government employees'' includes consultants and other employees as
defined by section 202 of title 18 of the United States Code.
(2) Any employee or former employee who is served with a subpoena
shall promptly advise the General Counsel of the service of the
subpoena, the nature of the material or information sought, and all
relevant facts and circumstances.
(3) A party causing a subpoena to be issued to the Commission or
any employee or former employee of the Commission shall furnish a
statement to the General Counsel. The statement shall set forth the
party's interest in the case or matter, the relevance of the desired
testimony or material, and a discussion of whether it is reasonably
available from other sources. If testimony is desired, the statement
shall also contain a general summary of the testimony and a discussion
of whether agency records could be produced and used in its place. Any
authorization for testimony will be limited to the scope of the demand
as summarized in such statement.
(4) Absent authorization from the General Counsel, the employee or
former employee shall respectfully decline to produce requested
material or to disclose requested information. The refusal should be
based on this paragraph and on Touhy v. Ragen, 340 U.S. 462 (1951).
(5) The General Counsel will consider and act upon subpoenas under
this section with due regard for statutory restrictions, the
Commission's rules and the public interest, taking into account factors
such as the need to conserve the time of employees for conducting
official business; the need to avoid spending the time and money of the
United States for private purposes; the need to maintain impartiality
between private litigants in cases where a substantial government
interest is not involved; and the established legal standards for
determining whether justification exists for the disclosure of
confidential information and material.
* * * * *
19. Section 4.12 is amended by revising paragraphs (a) and (c) to
read as follows:
[[Page 37751]]
Sec. 4.12 Disposition of material submitted to the Commission.
(a) Material submitted to the Commission. (1) Any person who has
submitted material to the Commission may obtain, on request, the return
of material submitted to the Commission which has not been received
into evidence:
(i) After the close of the proceeding in connection with which the
material was submitted; or
(ii) When no proceeding in which the material may be used has been
commenced within a reasonable time after completion of the examination
and analysis of all such material and other information assembled in
the course of the investigation.
(2) Such request shall be in writing, addressed to the custodian
designated pursuant to Sec. 2.16 or the Secretary of the Commission in
all other circumstances, and shall reasonably describe the material
requested. A request for return of material may be filed at any time,
but material will not be returned nor will commitments to return
material be undertaken prior to the time described in this paragraph.
* * * * *
(c) Disposition of material not returned. Subsequent to the time
prescribed in paragraph (a) of this section, the staff will examine all
submitted material and Commission-made copies of documents located in a
reasonable search of the Commission's files and will determine,
consistent with the Federal Records Act, 44 U.S.C. 3301, which
materials are appropriate for preservation as evidence of the
organization, functions, policies, decisions, procedures, operations,
or other activities of the Commission or because of the information
value of data in them. The Commission will dispose of all material
determined not to be appropriate for preservation in accordance with
applicable regulations of the National Archives and Records
Administration.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 95-16948 Filed 7-20-95; 8:45 am]
BILLING CODE 6750-01-P
