[Federal Register Volume 73, Number 195 (Tuesday, October 7, 2008)]
[Proposed Rules]
[Pages 58832-58858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-23745]
[[Page 58831]]
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Part IV
Federal Trade Commission
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16 CFR Parts 3 and 4
Rules of Practice; Proposed Rule
Federal Register / Vol. 73, No. 195 / Tuesday, October 7, 2008 /
Proposed Rules
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FEDERAL TRADE COMMISSION
16 CFR Parts 3 and 4
Rules of Practice
AGENCY: Federal Trade Commission (``Commission'' or ``FTC'').
ACTION: Proposed rule amendments; request for public comment.
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SUMMARY: The FTC is proposing to amend Parts 3 and 4 of its Rules of
Practice, in order to further expedite its adjudicative proceedings,
improve the quality of adjudicative decision making, and clarify the
respective roles of the Administrative Law Judge (``ALJ'') and the
Commission in Part 3 proceedings.
DATES: Written comments must be received on or before November 6, 2008.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form. Comments should refer to ``Parts 3 and
4 Rules of Practice Rulemaking--P072104'' to facilitate the
organization of comments. Please note that comments will be placed on
the public record of this proceeding--including on the publicly
accessible FTC website, at (http://www.ftc.gov/os/publiccomments.shtm)
-- and therefore should not include any sensitive or confidential
information. In particular, comments should not include any sensitive
personal information, such as an individual's Social Security number;
date of birth; driver's license number or other state identification
number, or foreign country equivalent; passport number; financial
account number; or credit or debit card number. Comments also should
not include any sensitive health information, such as medical records
and other individually identifiable health information. In addition,
comments should not include any ``[t]rade secret or any commercial or
financial information which is obtained from any person and which is
privileged or confidential. . . . ,'' as provided in Section 6(f) of
the FTC Act, 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2), 16 CFR
4.10(a)(2). Comments containing material for which confidential
treatment is requested must be filed in paper form, must be clearly
labeled ``Confidential,'' and must comply with Commission Rule
4.9(c).\1\
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\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See Commission Rule 4.9(c),
16 CFR 4.9(c).
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Because paper mail in the Washington area, and specifically to the
FTC, is subject to delay due to heightened security screening, please
consider submitting your comments in electronic form. Comments filed in
electronic form should be submitted by using the following weblink:
(https://secure.commentworks.com/ftc-part3rules) (and following the
instructions on the web-based form). To ensure that the Commission
considers an electronic comment, you must file it on the web-based form
at the weblink: (https://secure.commentworks.com/ftc-part3rules). If
this document appears at (http://www.regulations.gov/search/index.jsp),
you may also file an electronic comment through that website. The
Commission will consider all comments that regulations.gov forwards to
it. You may also visit the FTC website at www.ftc.gov to read this
document and the news release describing it.
A comment filed in paper form should include the ``Parts 3 and 4
Rules of Practice Rulemaking--P072104'' reference both in the text and
on the envelope, and should be mailed or delivered by courier to the
following address: Federal Trade Commission, Office of the Secretary,
Room H-135 (Annex R), 600 Pennsylvania Avenue, NW, Washington, DC
20580.
The Federal Trade Commission Act (``FTC Act'') and other laws the
Commission administers permit the collection of public comments to
consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments that it receives,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC website, to the extent practicable,
at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC website. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm)
FOR FURTHER INFORMATION CONTACT: Michael D. Bergman, Attorney, (202)
326-3184, or Lisa M. Harrison, Attorney, (202) 326-3204, Office of the
General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue, NW,
Washington DC 20580.
SUPPLEMENTARY INFORMATION: This discussion contains the following
sections:
I. Introduction
II. Section-By-Section Analysis of the Proposed Rule Revisions
III. Invitation to Comment
IV. Proposed Rule Revisions
I. Introduction
A. Need for Reform of the Commission's Adjudicatory Process
The Commission has periodically reviewed its rules and procedures
governing the process of administrative adjudication at the Commission
(``Part 3 Rules'') to determine if its administrative adjudication
process can be improved, and has made changes it considered
appropriate. In particular, the Commission's Part 3 adjudicatory
process has long been criticized as being too protracted. See, e.g.,
FTC v. Freeman Hosp., 911 F.Supp. 1213, 1228 n.8 (W.D. Mo. 1995) (``The
average time from the issuance of a complaint by the FTC to an initial
decision by an administrative law judge averaged nearly three years in
1988. Moreover, additional time will be required if that initial
decision is appealed.''), aff'd, 69 F.3d 260 (8th Cir. 1995); see also
National Dynamics Corp. v. FTC, 492 F.2d 1333, 1335 (2d Cir. 1974)
(remarking upon the ``leisurely course typical of FTC proceedings'');
J. Robert Robertson, FTC Part III Litigation: Lessons from Chicago
Bridge and Evanston Northwestern Healthcare, 20 Antitrust 12 (Spring
2006); Report of the American Bar Association Section of Antitrust Law
Special Committee to Study the Role of the Federal Trade Commission, 58
Antitrust L.J. 43, 116 n.167 (1989) (``It is disappointing that the
Commission . . . continues to have problems of delay.'').
Protracted Part 3 proceedings have at least three undesirable
consequences. First, in merger cases, such protracted proceedings may
result in parties abandoning transactions before their antitrust merits
can be adjudicated. Second, protracted Part 3 proceedings may result in
substantially increased litigation costs for the Commission and
respondents whose transactions or practices are challenged. For
example, protracted discovery schedules and pretrial proceedings can
result in nonessential discovery and motion practice that can be very
costly to both the Commission and respondents. Third, protracted Part 3
proceedings do not necessarily result in decisions that are more just
or fair. To the contrary, there is some truth to the adage that
frequently ``justice delayed, is justice denied.''
[[Page 58833]]
To address these concerns, the Commission has periodically engaged
in reform efforts to minimize delay and improve the quality of the
administrative decisionmaking process in a fair manner fully consistent
with the Administrative Procedure Act (``APA'')\2\ without prejudicing
the due process rights of the parties in these proceedings. For
example, in 1994 the Commission adopted a guideline to expedite the
preparation and issuance of final orders and opinions from an initial
decision. See (http://www.ftc.gov/os/adjpro/adjproprepprocedures.pdf).
In 1996, the Commission adopted the ``fast track'' procedure in Rule
3.11A and other changes. 61 FR 50640 (Sept. 26, 1996). In 2001, the
Commission issued another package of approximately twenty rule changes,
66 FR 17622 (Apr. 3, 2001),\3\ and has implemented other rule changes
throughout the past decade.
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\2\ 5 U.S.C. 551 et seq.
\3\ As discussed below in the section-by-section summary of the
proposed rule revisions, the Commission is proposing certain rule
revisions to rules it implemented previously that had lengthened the
process. For example, it is proposing to revise Rule 3.12(a) (as
amended in the 2001 revisions), which permits the tolling of the
period to answer the complaint until resolution of certain motions,
because parties have other procedural means available to them that
would not unduly delay the proceedings. Similarly, the Commission is
proposing a modest reduction in the period of time to schedule an
initial pretrial conference under Rule 3.21(b) that had been
enlarged in the 2001 revisions.
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More recently, Commission staff engaged in a broad and systematic
internal review to further improve its Part 3 practices and procedures
in light of the Commission's recent adjudicatory experiences. The goal
of this effort was for significant improvement in the Part 3 process
through comprehensive review rather than piecemeal modifications of a
limited number of rules, to ensure that the rules are consistent with
one another and that they are workable in practice. Discussions
involved input from various Bureaus within the Commission, the Office
of the General Counsel, the Office of the Administrative Law Judges, an
evaluation of the rules and procedures of the federal courts and other
agencies' adjudicative procedures, as well as the legal standards
imposed by the APA.
The Commission believes that any adjudicative process should
balance three factors: the public interest in a high quality
decisionmaking process; the interests of justice in an expeditious
resolution of litigated matters; and the very real interest of the
parties in litigating matters economically without unnecessary expense.
For example, in principle, high quality expeditious adjudications may
impose costs on the parties or the agency that they may not need to
bear if the demands of a given case permit a more leisurely
adjudicative process. Alternatively, attempts to increase efficiency or
decrease costs to those involved could lead to trade offs in the
quality of the ultimate result. The Commission believes that these
comprehensive proposed rule revisions would strike an appropriate
balance between the need for fair process and quality decisionmaking,
the desire for efficient and speedy resolution of matters, and the
potential costs imposed on the Commission and the parties.
B. Respective Roles of the Commission and the Administrative Law Judge
The Commission was established by Congress and President Woodrow
Wilson in 1914 to be an expert, specialized agency providing guidance
to consumers and the business community on sophisticated questions
involving unfair methods of competition, later expanded to issues
involving unfair or deceptive acts or practices.\4\ To accomplish this
goal, it was provided the authority not only to prosecute cases and
serve as a ``think tank'' making policy, but also to adjudicate its own
cases and render decisions.\5\ Congress determined that the Commission
could use its expertise and administrative adjudicative powers as a
``uniquely effective vehicle for the development of antitrust law in
complex settings in which the agency's expertise [could] make a
measurable difference.''\6\ Certainty, consistency and accuracy in
Commission decisions could serve as a tool not only to improve the
resolution of individual cases, but to provide broad guidance to
industry and the public and help set the policy agenda.\7\
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\4\ Final Report of the Attorney General's Committee on
Administrative Procedure 16 (1941) [hereinafter Attorney General's
Final Report]; see also Marc Winerman, The Origins of the FTC:
Concentration, Cooperation, Control, and Competition, 71 Antitrust
L.J. 1 (2003) (discussing the formation and history of the FTC); D.
Bruce Hoffman & M. Sean Royall, Administrative Litigation at the
FTC: Past, Present, and Future, 71 Antitrust L.J. 319 (2003)
(discussing the evolution of administrative adjudication at the
FTC).
\5\ Hoffman & Royall, supra note 4, at 319.
\6\ Id. at 319-20.
\7\ Id.
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In the influential 1941 report by the Attorney General that became
the basis for the subsequently enacted APA, the Attorney General
identified numerous advantages to administrative adjudications: for
example, the potential for uniformity of decisions, efficiency, and the
inability of courts to handle the volume of suits heard by
administrative agencies.\8\ One of the most critical advantages, and a
cornerstone characteristic of administrative agencies, is expertise.
The Congress and the Executive have long recognized that the ability of
agencies to devote continuous time, supervision, and expertise to
complex problems calling for specialized knowledge is a critical
advantage and an important reason for the creation of administrative
agencies.\9\ With its expertise and unique institutional tools, the
Commission was created to be--and continues to function as--a forum for
expert adjudication.
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\8\ Attorney General's Final Report, supra note 4, at 11-18.
\9\ Id. at 15.
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The Attorney General's Final Report also described the role of
hearing examiners (the predecessor to ALJs) in all agencies that use
them. The report observed that the hearing examiner ``plays an
essential part of the process of hearing and deciding'' given the
difficulty for busy agency heads to fulfill these roles.\10\
Specifically, the Report discussed the importance of having a presiding
officer, such as an ALJ, hear the evidence and make an initial decision
or recommendation because agency heads may lack the time to ``read the
voluminous records and winnow out the essence of them.''\11\ The
Attorney General's Manual on the APA further explained that a general
statutory purpose of the APA was to ``enhance[] the status and role of
hearing officers'' and, because the APA vests in the ALJs the
enumerated powers to the extent that such powers have been given to the
agency itself, ``an agency is without power to withhold such powers
from its hearing officers.''\12\ ALJs have wide ranging authority under
the APA.\13\
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\10\ Id. at 47.
\11\ Id. at 45-46.
\12\ Attorney General's Manual on the Administrative Procedure
Act 74 (1947) [hereinafter Attorney General's Manual].
\13\ See 5 U.S.C. 556(c).
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At the same time, the APA specifies that such authority is
``subject to the published rules of the agency,'' which ``is intended
to make clear the authority of the agency to lay down policies and
procedural rules which will govern the exercise of such powers by
[ALJs].''\14\ Thus, the Supreme Court ``has for more than four decades
emphasized that the formulation of procedures was basically to be left
within the discretion of the agencies to which Congress had confided
the responsibility for substantive judgments.'' Vermont
[[Page 58834]]
Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc.,
435 U.S. 519, 524 (1978). In accordance with the APA, the Commission's
rules contemplate an important role for its ALJs not only in ensuring a
fair and orderly process but also in assuring the public that the
Commission's proceedings are fair. Under Rule 0.14, the Commission
delegates to the ALJs ``the initial performance of statutory fact-
finding functions and initial rulings on conclusions of law, to be
exercised in conformity with Commission decisions and policy directives
and with its Rules of Practice.''\15\ Further, Rule 3.42(c) provides
that presiding officials ``shall have the duty to conduct fair and
impartial hearings, to take all necessary action to avoid delay in the
disposition of proceedings, and to maintain order,'' and that they
shall have ``all powers necessary to that end.''\16\ The Commission
believes that the following proposed rule revisions would ensure the
proper balance between the Commission's expertise and the important
function to be served by its ALJs.
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\14\ Attorney General's Manual, supra note 12, at 74-75.
\15\ 16 CFR 0.14.
\16\ 16 CFR 3.42(c).
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These proposed rule provisions can be considered an important first
step, but not the end of the process. To expedite such reforms, the
Commission intends to establish an internal Standing Rules Committee to
address potential rule changes that may be needed in the future, with
this standing committee's recommendations to be reviewed annually by
the Commission. We recognize that, if adopted, the amended rules' use
in actual litigation, the comments invited by this document, as well as
future events, may reveal the need for further amendments, and that a
standing committee could ensure that the Commission's rules remain
current. The Commission also announces today its intention to make best
efforts to expedite its preparation and disposition of final orders and
opinions in its review of initial decisions in adjudicatory
proceedings. The Commission understands that public concern about Part
3 delay is not limited to the proceedings before the ALJ, but extends
to the delay occasionally incurred by Commission resolution of appeals
of initial decisions. The Commission intends to expedite all phases of
the Part 3 process.
C. Overview of Proposed Rule Revisions
The Commission staff's effort has culminated in comprehensive and
systematic proposed rule changes. We believe that administrative rules
that bring the Commission's expertise into play earlier and more often
during the Part 3 process will likely further the Congressional purpose
that the Commission be a proper forum for expert adjudication and
ensure the high quality of the Commission's decisionmaking. For ease of
reference, the proposed revisions discussed in the following section
can be organized into certain categories, generally designed to improve
the quality of decisionmaking or to expedite the Part 3 process by
imposing stricter deadlines throughout the prehearing or hearing
process, or by giving the Commission the authority to intercede earlier
in the proceedings.
Tighter time limits. Several of the proposed rule revisions allow
the ALJ or the Commission to impose tighter time periods during the
adjudicatory process. For example, Rule 3.1 would provide that the ALJ
or the Commission may shorten any time periods set in the rules
provided that no party will be unfairly prejudiced. Rule 3.11 would
require that the date of the evidentiary hearing be set in the notice
accompanying the complaint, which would be 5 months from the date of
the complaint in merger cases and 8 months from the date of the
complaint in non-merger cases, unless the Commission orders otherwise.
Rule 3.12 would require the respondent to file its answer within 14
days of service of the complaint, instead of 20. Rule 3.21 would impose
strict deadlines on prehearing procedures, including requiring that the
parties' initial meet and confer session and the initial scheduling
conference take place shortly after the answer is filed. Rule 3.51
would be amended to eliminate the authority of the ALJ to extend the
one-year deadline for filing initial decisions, and would provide that
any extensions be approved by the Commission only where it finds there
are ``extraordinary circumstances.''
Earlier Commission involvement. Other proposed rule revisions are
intended to ensure that the Commission is appropriately involved
earlier in the adjudicatory process. For example, Rules 3.22 and 3.24
would provide authority to the Commission to decide in the first
instance all dispositive prehearing motions, including motions for
summary decision, unless it refers the motion to the ALJ, while at the
same time ensuring that the underlying proceedings are not stayed
pending resolution of the dispositive motion absent a Commission order.
The proposed revisions are intended to avoid the substantial delay that
can result from an erroneous ruling by the ALJ on legal and policy
issues that are within the Commission's expertise. Rule 3.42 would
expressly provide authority for the Commission or an individual
Commissioner to preside over discovery and other prehearing proceedings
before transferring the matter to the ALJ.
Discovery and motion practice reforms. Other proposed rule changes
are intended to expedite and improve the quality of the proceedings by
making the discovery process and motion practice more efficient. For
example, Rule 3.22 would impose word count limits on both dispositive
and nondispositive motions. Rule 3.31 would limit the scope of the
search for discoverable materials for complaint counsel, respondents,
and third parties to minimize the burden and costs of searching for
materials that are likely either duplicative or privileged, unless
there has been a sufficient showing of need. Rule 3.31 would also
expressly limit waivers resulting from the inadvertent disclosure of
privileged materials. Rule 3.31 would further require the ALJ to issue
a standard protective order that is intended to limit delay from
negotiations and disputes arising from case-specific orders and to
ensure that privileged information, competitively sensitive
information, and personally sensitive information are treated
consistently in all Part 3 cases. A new Rule 3.31A would govern expert
discovery and would impose strict deadlines, to begin essentially at
the end of fact discovery, to identify expert witnesses and to submit
expert reports and rebuttal expert reports, and would limit each side
to 5 expert witnesses unless there are ``extraordinary circumstances.''
Rule 3.36 would impose a heightened requirement for subpoenas issued to
component offices of the Commission that are not involved in the
litigation. Rule 3.37 would specify procedures governing the exchange
of relevant ``electronically stored information,'' and Rule 3.38 would
be amended to impose strict deadlines and word count limits to resolve
motions to compel discovery.
Hearings. Other proposed rule revisions are intended to expedite
and streamline the evidentiary hearing. For example, Rule 3.41 would
limit the length of hearings to 210 hours--the equivalent of 30 seven-
hour trial days--unless there is a showing of ``good cause,'' would
limit each side to one half of the trial time, and would limit the
length of opening and closing arguments. Rule 3.43 would be revised to
expressly permit at the hearing the use of hearsay evidence--including
prior testimony--if sufficiently reliable, as well as the admission of
relevant statements or testimony by a party-opponent and the self-
authentication
[[Page 58835]]
and admission of third party documents. Rule 3.44 would require that
witness testimony be video recorded digitally and made part of the
official record so that the Commission, if appropriate, can make an
independent assessment of witness demeanor. Rule 3.46 would impose
strict deadlines for the simultaneous filing of proposed findings,
conclusions, and supporting briefs.
Initial decision and Commission review. As noted above, Rule 3.51
would maintain the one-year deadline for the issuance of the initial
decision (except where the Commission otherwise orders), but would
require that the initial decision be issued within 70 days of the last
filed proposed findings. Rule 3.52 would be revised to shorten the
lengths of principal briefs on appeal to the Commission to 14,000 words
and reply briefs to 7,000 words, lengths consistent with the approach
taken in the Federal Rules of Appellate Procedure, unless otherwise
permitted by the Commission. In this regard, the Commission notes that
it has the benefit of all the briefs, legal memoranda, and proposed
findings of fact that the parties have submitted to the ALJ.
Finally, the Commission intends to make certain technical revisions
throughout the rules including, for example, eliminating the convention
of specifying numbers in both written and numerical form, and
substituting gender-neutral language.
The proposed rule revisions relate solely to agency practice and,
thus, are not subject to the notice and comment requirements of the
APA, 5 U.S.C. 553(a)(2). Although the proposed rule revisions are
exempt from these requirements, the Commission invites comment on them
before deciding whether to adopt them. The proposed revisions are also
not subject to the requirements of the Regulatory Flexibility Act, 5
U.S.C. 601(2) and the requirements of the Paperwork Reduction Act, 44
U.S.C. 3518(c)(1)(B)(ii); 5 CFR 1320.4 (exempting information collected
during the conduct of administrative proceedings or investigations).
II. Section-By-Section Analysis of the Proposed Rule Revisions
The following is a section-by-section analysis of the proposed
revisions to Part 3 of the Commission's Rules, and the proposed
revision to Rule 4.3, which would allow for extensions in certain
circumstances of the time limits in the Part 3 Rules.
Subpart A--Scope of Rules; Nature of Adjudicative Proceedings
Section 3.1: Scope of the rules in this part.
The Rule would be amended to state that the Part 3 Rules generally
apply only to ``formal'' adjudicative proceedings. This change, if
adopted, would clarify that the Part 3 Rules generally apply only to
the types of adjudication governed by the adjudication provisions in
the APA.\17\ These provisions only govern cases of ``adjudication
required by statute to be determined on the record after opportunity
for an agency hearing.''\18\ Rule 3.2, as amended, would specify
further the types of adjudicative proceedings that are subject to the
Part 3 Rules.
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\17\ 5 U.S.C. 554, 556-57.
\18\ 5 U.S.C. 554.
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The Rule would be amended further to allow the ALJ or the
Commission to shorten time periods set by the Rule, provided that the
shortened time periods would not unfairly prejudice any party. This
authority could be used in proceedings where expedited procedures would
serve the public interest (e.g., unconsummated mergers) or where the
issues do not require elaborate discovery or evidentiary hearings
(e.g., cases where the parties agree that a copious evidentiary record
already exists that merely needs to be supplemented).
Section 3.2: Nature of adjudicative proceedings.
The technical revisions to this Rule would clarify that Commission
consideration of consent orders--in addition to negotiations of consent
orders--are not adjudicative proceedings. The proposed changes also
omit from the list of excluded items proceedings under specific
statutes that have rarely occurred in recent decades.
Subpart B--Pleadings
Section 3.11: Commencement of proceedings.
The proposed Rule amendment specifies that the actual date for the
evidentiary hearing would be 5 months from the date the complaint is
issued in merger cases and 8 months from the date of the complaint in
all other cases. The proposed change would also give the Commission
discretion to determine a different date for the evidentiary hearing
when it issues the complaint. As amended, Rule 3.21(c), discussed
below, would provide that the hearing date can be extended by the
Commission for good cause after the complaint is issued.
In most cases where the issues are not exceptionally complex and
the premerger process has been complete, the Commission believes a 5-
month complaint-to-evidentiary-hearing process should be feasible.
Considering the ``safety valve'' built into the proposed Rule and the
ability of respondents' counsel to engage in pre-complaint meetings
with the Commissioners where they might advocate for longer post-
complaint discovery periods, the proposed Rule would appear to be
flexible enough to accommodate the exceptional case. Similarly, the
Commission believes a 8-month complaint-to-evidentiary-hearing process
is feasible for all other cases. Here too, the amended language, if
adopted, would be broad enough to allow the Commission either to set a
later hearing date at the time it issues the complaint or, under
amended Rule 3.21(c), to entertain a request for more time upon a
showing of good cause post-complaint.
Proposed Rule 3.11 would also delete paragraph (c), which has
allowed the respondent to file a motion for more definite statement. If
a respondent elects to file such a motion, or any other motion, it
tolls the deadline for respondent to file an answer to the complaint
that would result in substantial delay in the proceedings. The proposed
Rule revision would still provide the respondent an opportunity to
raise similar objections and to file a motion to dismiss, but under the
proposed amendment to Rule 3.22(b) discussed below, the Commission's
consideration of the motion would not stay proceedings before the ALJ
unless the Commission so orders.
These proposed amendments to Rule 3.11 are intended to expedite
cases by requiring the Commission to set a fixed deadline for the start
of the evidentiary hearing and the ALJ and the parties to adhere to the
deadline.
Section 3.12: Answer.
The proposed Rule amendment would shorten the current deadline in
paragraph (a) for filing an answer from 20 to 14 days, a time period
that should be sufficient for parties who, during the course of the
precomplaint investigation, have become familiar with the issues. The
proposed Rule revision would also eliminate the provision in paragraph
(a) that allows the filing of any motion to toll the deadline for
respondent to file an answer to the complaint, which had been added by
the Commission in its
[[Page 58836]]
2001 Rule amendments.\19\ The Commission believes the Rule, if amended
as proposed in this document, would result in an earlier prehearing
conference, earlier discovery, and a more expeditious closure to the
proceeding.
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\19\ 66 FR 17622 (Apr. 3, 2001).
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The proposed changes to paragraphs (b) and (c) would remove the
ALJ's authority to render an initial decision when the allegations of
the complaint are admitted or there is a default. Instead, the
Commission would render its final decision on the basis of the facts
alleged in the complaint. One rationale for the provision of ``hearing
officers'' (the predecessor to ALJs) in the APA was to alleviate the
burden on agency heads of hearing evidence and reviewing a voluminous
record.\20\ When those burdens do not exist, it will likely be more
efficient for the Commission to issue a final opinion and order without
the intermediate step of an ALJ's initial decision.
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\20\ See Attorney General's Final Report, supra note 4, 45-46.
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Subpart C--Prehearing Procedures; Motions; Interlocutory Appeals;
Summary Decisions
Section 3.21: Prehearing procedures.
As amended, Rule 3.21(a) would require that the parties' initial
meet-and-confer session take place within 5 days of the answer and
would require the parties to discuss electronically stored information
(ESI) at that time, including the scope of and the time period for the
exchange of ESI and the format for exchanging such information. This
change is intended to help expedite the case and facilitate resolution
of production issues in ways that minimize costs. Rule 3.21(a) would
also be modified by deleting a phrase that suggested that the parties
should discuss a proposed hearing date because, under proposed Rule
3.11, such a date will already have been set by the Commission when it
issued the complaint, and under proposed Rule 3.21(c), that date could
be modified by the Commission upon a showing of good cause. Rule
3.21(a), as amended, would also specify broad subjects to be discussed
at the parties' meet and confer session(s) before the scheduling
conference.
Revised paragraph (b) would advance the deadline for the scheduling
conference from 14 days after the answer is filed to 10 days after the
answer is filed. Although the Commission extended the deadline to 14
days in 2001,\21\ it believes the 10-day deadline is reasonable for
most cases. In extraordinary circumstances, the scheduling conference
can be postponed. Revised paragraph (b) would include additional items
to be discussed at the scheduling conference, such as stages of the
proceeding that may be expedited. The proposed revisions contemplate
that the parties would inform the ALJ of the results of their
meeting(s) pursuant to paragraph (a) regarding their proposed discovery
plan, including the disclosure of ESI, and that the ALJ would
incorporate in the scheduling order a discovery plan that he or she
deems appropriate.
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\21\ 66 FR 17622 (Apr. 3, 2001).
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Revised paragraph (c)(1) would specify that the ALJ's scheduling
order will establish a schedule of proceedings that will permit the
evidentiary hearing to commence on the date set by the Commission. The
Rule would also state that the Commission may, upon a showing of good
cause, order a later date for the evidentiary hearing than the one
specified in the complaint. The proposed deadline for the prehearing
scheduling conference and order and the more detailed requirements for
both are intended to help keep the prehearing proceedings on track and
enable the parties to contribute to a high quality record on which the
ALJ can base his or her decisions.
Revised paragraph (c)(2) would be revised to authorize the ALJ to
extend, upon a showing of good cause, any deadline in the scheduling
order other than the date of the evidentiary hearing.
Revised paragraph (f) would state that the ALJ shall hold
additional prehearing and status conferences or enter additional orders
as may be needed to ``ensure the just and expeditious disposition of
the proceeding and to avoid unnecessary cost.''
Section 3.22: Motions.
Revised Rule 3.22(a) would give the Commission the opportunity to
rule on motions to strike, motions for summary decision, and prehearing
motions to dismiss, but the Commission may refer such motions back to
the ALJ. This proposal allows the Commission to decide legal questions
and articulate applicable law when the parties raise purely legal
issues. In addition, an early ruling on a dispositive motion may
expedite resolution of a matter and save litigants resources where the
legal issue is the primary dispute. The Commission followed a similar
approach in South Carolina State Board of Dentistry when it retained
jurisdiction to hear motions to dismiss. See In re South Carolina State
Bd. of Dentistry, 136 F.T.C. 229 (2004). This proposal codifies that
approach, giving the Commission more flexibility to determine the law
and resolve matters expeditiously.The revised Rule would also provide
that rulings on motions to dismiss based on alleged failure to
establish a prima facie case shall be deferred until after the hearing
record is closed. The current provision for a recommended ruling by the
ALJ when certifying to the Commission a motion outside his or her
authority to decide would be eliminated.
The Commission anticipates that new paragraphs (b) and (e) would
expedite cases by providing that proceedings before the ALJ will not be
stayed while the Commission considers a motion, unless the Commission
orders otherwise, and would require the ALJ to decide motions within 14
days of briefing of the motion.
Re-designated paragraph (c) would impose word count limits on
motion papers. Dispositive motions would be limited to 10,000 words
(approximately 40 double-spaced pages), and non-dispositive motions
would be limited to 2,500 words (approximately 10 double-spaced pages).
Re-designated paragraph (d) would be modified to provide an
automatic right of reply in support of dispositive motions. Further,
paragraph (d) would state that: ``Reply and surreply briefs to motions
other than dispositive motions shall be permitted only in circumstances
where the parties wish to draw the ALJ's or the Commission's attention
to recent important developments or controlling authority that could
not have been raised earlier in the party's principal brief.'' There
would also be a 5-day filing deadline for any authorized reply to a
motion.
Current paragraph (e) would be eliminated, and current paragraph
(f) would be redesignated as paragraph (g).
Section 3.23: Interlocutory appeals.
The revised Rule would continue to permit the parties to seek
discretionary review of certain interlocutory rulings by the ALJ.
Paragraph (a) would leave unchanged the types of rulings that the
parties can ask the Commission to review without a determination by the
ALJ that interlocutory review is appropriate. Paragraph (b) would
continue to permit interlocutory appeals of other rulings only on a
determination that the ruling ``involves a controlling question of law
or policy as to which there is substantial ground for difference of
opinion and that an immediate appeal from the ruling may materially
advance the ultimate termination of the litigation or subsequent review
will be an inadequate remedy.''
[[Page 58837]]
In order to reduce delay, the revised Rule would require the ALJ to
make his or her determination whether the application for review
involves such a controlling question within three days after the filing
by a party of a request for such a determination. It would eliminate
the requirement that the ALJ provide a written justification for his or
her determination. The revised Rule would allow the party to file its
application for review with the Commission if the ALJ does not make a
timely ruling on its request for a determination on the appropriateness
of review.
Because the pendency of an application for review may leave a cloud
over the proceeding before the ALJ, the revised Rule would also provide
a default if the Commission fails to act quickly on the application.
The revised Rule would provide that, unless the Commission decides to
entertain the appeal within three days after the filing of the
application and answer, the request for discretionary review will be
deemed to be denied. This would not constitute an affirmance of the
ALJ's ruling on the merits. Also, to avoid unnecessary delay, the
revised Rule would set shorter deadlines for the filing of applications
and answers and, to reduce burdens, impose tighter limits than the
current Rule on the length of these filings. The Commission, however,
would retain authority to direct additional briefing.
Section 3.24: Summary decisions.
The revised Rule would accommodate the proposed amendment to Rule
3.22 providing that dispositive motions will be decided initially by
the Commission unless referred by the Commission to the ALJ. At the
same time, it would also require that motions be filed not later than
30 days before the evidentiary hearing, rather than 20 days as in the
current Rule. It would extend the deadline for filing affidavits in
opposition to a summary decision motion from 10 to 14 days. Because the
moving party may have had months to prepare its motion and supporting
papers, the revised Rule would allow slightly more time than the
current Rule for the opposing party to compile, authenticate, and
perform the other research necessary to respond. Finally, the proposed
Rule would eliminate the 30-day deadline for ruling on the motion but
allow the Commission to set a deadline for decision when referring a
summary decision motion, or any other dispositive motion, to the ALJ.
In any event, under revised Rule 3.22(b), the filing of a motion under
this Rule would not stay the proceeding before the ALJ.
Rule 3.26: Motions following denial of preliminary injunctive relief.
The Commission adopted the current version of Rule 3.26 in
connection with a 1995 policy statement, which explained the process
the Commission follows in deciding whether to pursue administrative
litigation of a merger case following the denial of a preliminary
injunction.\22\ The statement noted that the ``Commission was created
in part because Congress believed that a special administrative agency
would serve the public interest by helping to resolve complex antitrust
questions'' and that it was expected that ``an administrative agency
was especially suited to resolving difficult antitrust questions, and
that the FTC should be the principal fact finder in the process.''\23\
---------------------------------------------------------------------------
\22\ 60 FR 39741 (Aug. 3, 1995).
\23\ Id.
---------------------------------------------------------------------------
According to the statement, ``[i]n any given case, the evidence,
arguments, and/or opinion from the preliminary injunction hearing may,
or may not, suggest that further proceedings would be in the public
interest. The Commission's guiding principle is that the determination
whether to proceed in administrative litigation following the denial of
a preliminary injunction and the exhaustion or expiration of all
avenues of appeal must be made on a case-by-case basis.''\24\ The
Commission adopted Rule 3.26 to provide a formal mechanism for making
this determination.
---------------------------------------------------------------------------
\24\ Id.
---------------------------------------------------------------------------
The Commission proposes to revise provisions in the Rule that grant
an automatic withdrawal from adjudication of the Part 3 case upon the
filing of a motion to withdraw from adjudication or an automatic stay
upon the filing of a motion to dismiss. An automatic withdrawal from
adjudication or stay might well be appropriate if the denial of
preliminary injunctive relief typically warranted terminating the Part
3 case. But the Part 3 proceeding is the suitable forum for deciding
the merits, see FTC v. Whole Foods Market, Inc., 533 F.3d 869, 875-76
(D.C. Cir. 2008) (``[A] district court must not require the FTC to
prove the merits, because, in a [5 U.S.C.] Sec. 53(b) preliminary
injunction proceeding, a court `is not authorized to determine whether
the antitrust laws . . . are about to be violated.' That responsibility
lies with the FTC.'') (quoting FTC v. Food Town Stores, Inc., 539 F.2d
1339, 1342 (4th Cir. 1976)). Thus, the Commission believes the norm
should be that the Part 3 case can proceed even if a court denies
preliminary relief. If that is the norm, routine withdrawals from
adjudication or stays of proceedings before the ALJ could unnecessarily
delay the typical Part 3 case in which ancillary relief has been
denied. The proposed Rule would allow the Part 3 case to proceed unless
the Commission determines, on the facts of the particular case, that a
withdrawal or stay is appropriate.
The revised Rule would also make explicit that a motion to dismiss
or withdraw may be filed only after the Commission has an opportunity
to seek reconsideration and appellate review of a denial of injunctive
relief.\25\ The revision would also prescribe the same word count
limits for memoranda supporting or opposing these motions as for
motions to dismiss filed under Rule 3.22(a) and eliminate the special
limitation for printed filings.
---------------------------------------------------------------------------
\25\ See In re Equitable Resources, Inc., No. 9322, 2007 F.T.C.
LEXIS 49 (May 30, 2007); 60 FR 39640, 39641 (Aug. 3, 1995).
---------------------------------------------------------------------------
Subpart D--Discovery; Compulsory Process
Section 3.31: General discovery provisions.
Paragraph (b) of Rule 3.31 would be amended to specify that the
documents to be disclosed as part of the parties' mandatory initial
disclosures include declarations or affidavits, as well as transcripts
of investigational hearings and depositions, and that initial
disclosures also include ESI. The reference to ESI would update the
term ``data compilations'' and would parallel the 2006 amendment to
Fed. R. Civ. Proc. 26(a)(1)(B). The proposed limitations on disclosure
of ESI in paragraph (c)(3) follow Fed. R. Civ. P. 26(b)(2)(B). In
particular, the proposed provision in paragraph (c)(3) that a party
need not provide discovery of ESI from sources that the party
identifies as not reasonably accessible because of undue burden or cost
is anticipated to reduce delays and costs to the parties.
As discussed below, the Commission proposes to treat expert
discovery in a new Rule 3.31A, and therefore the provisions in
paragraphs (b) and (c) of Rule 3.31 governing expert discovery would be
eliminated.
The proposed changes to paragraph (c)(2) would limit the scope of
discovery for complaint counsel, respondents, and third parties who
receive a discovery request. Complaint counsel would only need to
search for materials that were collected or reviewed in the course of
the investigation of the matter or prosecution of the case and that are
in the possession, custody or control of the Bureaus or Offices of the
Commission that investigated the matter, including
[[Page 58838]]
the Bureau of Economics. The ALJ could authorize for good cause
additional discovery of materials in the possession, custody, or
control of those Bureaus or Offices, or authorize other discovery
pursuant to Sec. 3.36. Neither complaint counsel, respondent, nor a
third party receiving a discovery request under these rules would be
required to search for materials generated and transmitted between an
entity's counsel (including counsel's legal staff or in-house counsel)
and not shared with anyone else, or between complaint counsel and non-
testifying Commission employees, unless the ALJ determines there is
good cause to provide such materials. These materials are frequently
duplicative of materials held by the parties and moreover, are almost
always protected by the deliberative process or attorney-client
privileges, or as work product.
Paragraph (d) would be revised to direct the ALJ to issue a
standard protective order (provided as an appendix to this Rule)
governing the use of confidential materials obtained in discovery. The
Commission believes a standard order would eliminate the delay
resulting from negotiations and disputes over case-specific orders and
improve quality and reduce agency costs by ensuring that discovery
materials are handled uniformly and in a manner that is fully
consistent with the FTC's statutory obligations with respect to
materials it receives from private parties.
Paragraph (h), as revised, would address the resources used to
avoid the risk of privilege and work product waiver, which add to the
costs and delay of discovery. The risk of waiver, and the time and
effort needed to avoid it, are aggravated when the party is producing
ESI. The revised Rule would limit the risk of waivers resulting from
inadvertent disclosures as long as parties take reasonable measures to
protect privileged materials. The Rule would not address obligations
imposed by state bar rules on attorneys who receive materials that
appear to be subject to a privilege claim.
The FTC Act requires the Commission to protect ``privileged or
confidential'' information.\26\ By providing that the Commission would
not treat genuinely inadvertent disclosures as waivers of privilege
claims, this proposed Rule, together with the relevant provisions of
the FTC Act, is intended to assure respondents and third parties alike
that if otherwise privileged materials end up in the hands of the FTC,
they will not readily find their way into the public record. In this
regard, the protective order would expressly include privileged
information in the order's definition of ``confidential materials''
subject to the protective order.
---------------------------------------------------------------------------
\26\ FTC Act, 6(f), 21(d)(1)(B), 15 U.S.C. 46(f), 57b-
2(d)(1)(B).
---------------------------------------------------------------------------
Paragraph 3.31(i), as revised, would prohibit the filing of
discovery materials with the Office of the Secretary, the ALJ, or
otherwise providing such materials to the Commission, except when used
to support or oppose a motion or to offer as evidence. This proposed
change is similar to Fed. R. Civ. P. 5(d), which generally prohibits
the filing of discovery material unless ordered by the court or used in
the proceeding.
The revised Rule would also make technical revisions to the current
Rule.
Section 3.31A: Expert discovery.
New Rule 3.31A would mandate a schedule for the disclosure of
potential expert witnesses, the production of expert reports, and the
start and completion of expert depositions. This Rule would incorporate
and revise certain provisions now contained in current Rule 3.31(b) and
(c). The scheduling provisions are intended to provide for expert
discovery in a more orderly and expeditious manner than what has
occurred in past proceedings.
The Rule would not permit expert discovery to begin until fact
discovery is essentially completed. The Commission believes that
discovery of experts, including the production of expert reports, will
be less than thorough if facts potentially relevant to their opinions
have yet to be discovered. The Rule would also limit the number of
expert witnesses to 5 per side, but would allow a party to seek leave
to call additional expert witnesses in extraordinary circumstances. It
has been the Commission's experience that 5 expert witnesses per side
is sufficient for each party to present its case.
The Rule would require that each expert who will testify at the
evidentiary hearing produce a written report, thereby eliminating the
ALJ's authority to dispense with them. Preparation of a written expert
report is a common requirement in federal courts and, given the
Commission's goal of expedited proceedings, should be required here
during the discovery period to allow the parties more effective and
targeted discovery.
The Rule would provide that complaint counsel submit their initial
expert reports first, followed by respondents' expert reports.
Respondents' reports, of course, can rebut material in complaint
counsel's initial expert reports. The revised Rule would also
explicitly authorize complaint counsel to call rebuttal experts and, if
complaint counsel exercises this option, would require the experts to
prepare rebuttal expert reports. Thus, the Rule would allow complaint
counsel's experts an opportunity to respond to respondents' expert
reports.
The Rule would also exclude from expert discovery anyone who has
been retained or specially employed by another party in anticipation of
litigation or preparation for hearing unless he or she is expected to
be called as a witness at the hearing, so as to prevent the discovery
of the unpublished work product of non-testifying experts, particularly
where such materials are proprietary and highly confidential. The
discovery of such marginally relevant materials can be a major
distraction from the central case and can have an adverse effect on the
willingness of non-testifying experts to consult in the future.
Section 3.33: Depositions.
Paragraph (b) would be added to allow the ALJ, upon a party's
motion, to prevent the taking of a deposition if the deposition would
not meet the scope of discovery standard under Rule 3.31(c) or if the
value of the deposition would be outweighed by considerations of unfair
prejudice, confusion of the issues, evidence that would be misleading,
or by considerations of undue delay, waste of time, or needless
presentation of cumulative evidence (as set forth under Rule 3.43(b)).
Paragraph (b) would also clarify that the fact that a witness testifies
in an investigative hearing does not preclude the deposition of that
witness.
Paragraph (c) would be revised to stop the practice of filing
notices of deposition with the Office of the Secretary, the ALJ or
otherwise providing such notices to the Commission, except as provided
in proposed Rule 3.31(i). Such notices serve no purpose for the ALJ or
the agency, and receipt of these notices causes unnecessary processing
costs for the Commission.
Revised Rule 3.43, as discussed below, would provide for the
admission of hearsay evidence in the evidentiary hearing if the
evidence is ``relevant, material, and bears satisfactory indicia of
reliability so that its use is fair.'' If meeting this standard,
depositions, investigational hearings, and other prior testimony may be
admitted. Consistent with this proposed revision, current Rule
3.33(g)(1) would be eliminated because it contains hearsay-based
limitations for the use of depositions. Paragraphs (g)(2) and (3) would
be renumbered accordingly.
[[Page 58839]]
Section 3.34: Subpoenas.
Paragraphs (a) and (b), as amended, would authorize counsel for a
party to sign and issue a subpoena on a form provided by the Secretary.
These revisions are intended to expedite the commencement of hearings
by speeding the issuance of discovery and hearing subpoenas. The
definition of ``documents'' would also be revised to be parallel to
Fed. R. Civ. P. 45(c)(1).
Revisions to paragraph (c) would reflect revised Rule 3.36,
discussed below, which would require a special showing of need for
subpoenas directed to the offices of the Commissioners, the General
Counsel, Bureaus and Offices not involved in the matter, the ALJs, or
the Secretary.
Section 3.35: Interrogatories to parties.
New paragraph (a)(3) would provide that interrogatories should not
be filed with the Office of the Secretary, the ALJ or otherwise
provided to the Commission except as provided in proposed Rule 3.31(i).
Paragraph (b)(2), as revised, would eliminate the requirement that
a party seek an order from the ALJ when not answering a contention
interrogatory before the end of discovery. If a party poses a
contention interrogatory that is capable of being answered at an
earlier time, there is no reason it could not move to compel a more
expeditious response.
Section 3.36: Applications for subpoenas for records of or appearances
by certain officials or employees of the Commission or officials or
employees of governmental agencies other than the Commission, and
subpoenas to be served in a foreign country.
Paragraph (a) currently requires a special showing of need for
subpoenas to other agencies and foreign subpoenas. The revised Rule
would require a special showing of need for subpoenas directed to the
offices of the Commissioners, the General Counsel, Bureaus and Offices
not involved in the matter, the ALJs, and the Secretary. None of these
offices is likely to possess relevant, discoverable information that is
not available from other sources. Given the lack of useful additional
information likely to be available from these offices, the burden (and
delay) of searches for responsive records and the creation of privilege
logs should not be imposed without strong justification. These
revisions would reduce the cost and time devoted to searches for
information that is likely to be privileged or that is unlikely to lead
to the discovery of admissible evidence.
The revisions to paragraph (b)(3) would require a showing of
``compelling need'' as the corresponding standard for witness
testimony. Because the Commission is proposing to revise Rule 3.34 to
eliminate specific showings for hearing subpoenas, the reference to
that Rule would be eliminated from the first sentence of paragraph (b).
The reference to Rule 3.37 would be moved to a new paragraph (b)(5).
Section 3.37: Production of documents, electronically stored
information, and any tangible thing; access for inspection and other
purposes.
The existing Rule substantially follows Fed. R. Civ. P. 34. The
revised Rule would include the current federal rule's provisions on
electronic discovery. The revised Rule would also provide that requests
under this section not be filed with the Office of the Secretary, the
ALJ or otherwise provided to the Commission, except as provided in
proposed Rule 3.31(i).
Section 3.38: Motion for order compelling disclosure or discovery;
sanctions.
The revised Rule would impose short deadlines for responses to and
rulings on motions to compel. It would impose a 2,500 word limit, which
translates into approximately 10 double-spaced pages, for motions and
answers. This limit should be sufficient to enable parties to address
several discovery issues in one filing.
The revised Rule would consolidate the sanctions for failure to
comply with discovery and disclosure requirements and add as a sanction
the inability to call a witness who was not disclosed under Rule
3.31(b) or an expert not disclosed under proposed Rule 3.31A.
Section 3.38A: Withholding requested material.
The revised Rule would modify the existing requirement that a
privilege/work-product log must always contain specific information for
each item being withheld. The Commission intends to substitute the more
flexible requirement in Fed. R. Civ. P. 26(b)(5)(A) that the schedule
of withheld items ``describe the nature of the documents,
communications, or tangible things not produced or disclosed -- and do
so in a manner that, without revealing information itself privileged or
protected, will enable other parties to assess the claim.'' This
proposed requirement would permit parties to describe withheld items by
categories, but only if the description ``will enable other parties to
assess the claim.'' Unless such descriptions are sufficient, item-by-
item descriptions would be required.
The revised Rule would also clarify that the log need not describe
any material outside the scope of the duty to search set forth in
revised Rule 3.31(c)(2) except to the extent that the ALJ has
authorized additional discovery as provided in that Rule. These
exclusions, if adopted, will reduce the burden and time devoted to
preparing a detailed log without eliminating information about
materials most likely to be relevant to the litigation.
Section 3.39: Orders requiring witnesses to testify or provide other
information and granting immunity.
The Commission is proposing technical revisions to the existing
Rule.
All in all, the proposed revisions to the discovery Rules are
designed to encourage the parties to cooperate in the discovery
process, ``automate'' the discovery process to the greatest extent
possible, and provide effective sanctions against those who violate a
discovery obligation. The Commission's expectation is that the revised
Rules would work to improve the quality of the discovery process and
would ultimately reduce the costs and delays that are incurred when
parties engage in unnecessary gamesmanship. For example, the Commission
believes that the sanction of prohibiting a party from calling a fact
or expert witness who should have been disclosed earlier would reduce
the need for last-minute discovery that could delay the hearing and
thereby eliminate the extra costs associated with such discovery and
improve the quality of the discovery process.
Subpart E--Hearings
Section 3.41: General hearing rules.
In order to expedite proceedings, revised Rule 3.41(b) would
require that the evidentiary hearing commence on the date set in the
notice accompanying the complaint. It also would limit the length of
the hearing to 210 hours, the equivalent of 30 seven-hour trial days,
unless extended by the Commission for good cause, and establish
reasonable time allocations for both sides.
Section 3.42: Presiding officials.
Revised Rule 3.42(a) would make explicit provision for the
Commission retaining jurisdiction over a matter during some or all of
the prehearing proceedings and designating one or more Commissioners to
preside. The Commission has followed this course in several recent
cases. The APA, 5 U.S.C. 556(b), allows the agency itself or one or
[[Page 58840]]
more of its members to preside, and the Commission can see no reason
why the Commission or an individual Commissioner may not preside over
the beginning phases of the proceeding even where the Commission or the
individual Commissioner does not preside over the hearing or issue the
initial decision. In appropriate cases, early Commission involvement
has the potential for improving the quality of the final product,
expediting the proceeding, and ultimately reducing the costs of the
litigation.
Section 3.43: Evidence.
The Commission proposes to amend this Rule to define hearsay
evidence and to provide expressly in paragraph (b) for the use and
admission of hearsay evidence in Commission proceedings if the evidence
``is relevant, material, and bears satisfactory indicia or reliability
so that its use is fair.'' The existing Rule states that ``[r]elevant,
material, and reliable evidence shall be admitted. Irrelevant,
immaterial, and unreliable evidence shall be excluded.'' This
modification does not represent a change in the current rule; rather it
emphasizes that the stricter hearsay rules in the Federal Rules of
Evidence do not determine admissibility of evidence in administrative
litigation. The ALJ, in the first place, and ultimately the Commission
must independently assess the reliability of the evidence itself.
Administrative agencies like the FTC ``have never been restricted
by the rigid rules of evidence,''\27\and should evaluate the
admissibility of hearsay evidence based on whether ``it bear[s]
satisfactory indicia of reliability . . . [is] probative and its use
fundamentally fair.''\28\ The ALJ, and on appeal the Commission, are
capable of assessing the reliability and weight to be given hearsay
evidence by, for example, determining the independence or possible bias
of an out-of-court declarant, the context in which the hearsay material
was created, whether the statement was sworn to, and whether it is
corroborated or contradicted by other forms of direct evidence.
---------------------------------------------------------------------------
\27\ FTC v. Cement Inst., 333 U.S. 683, 705-06 (1948).
\28\ Calhoun v. Bailar, 626 F.2d 145, 148 (9th Cir. 1980); see
also Richardson v. Perales, 402 U.S. 389, 407-08 (1971); J.A.M.
Builders, Inc. v. Herman, 233 F.3d 1350, 1354 (11th Cir. 2000)
(hearsay admissible in administrative proceedings if ``reliable and
credible''); 5 U.S.C. 556(d) (APA provides that ``[a]ny oral or
documentary evidence may be received, but the agency as a matter of
policy shall provide for the exclusion of irrelevant, immaterial or
unduly repetitious evidence. A sanction may not be imposed or rule
or order issued except on consideration of the whole record or those
parts thereof cited by a party and supported by and in accordance
with the reliable, probative, and substantial evidence.'').
---------------------------------------------------------------------------
In that regard, proposed paragraph (b) would provide that
depositions, investigational hearings, and prior testimony in
Commission and other proceedings shall be admissible even if they are
or contain hearsay, provided that the testimony is otherwise
sufficiently reliable and probative. The revised Rule would also make
clear that relevant statements or testimony by a party-opponent are
admitted since such statements are not hearsay.
The Commission believes that the revision regarding hearsay
evidence will improve the quality of Commission decisions by enabling
the ALJ and the Commission to decide cases with a more complete record,
which would not exclude relevant, material, and reliable evidence,
including prior testimony, merely because it is hearsay.
Proposed new paragraph (c), which is analogous to Fed. R. Evid.
902(11), is intended to facilitate the admissibility of third party
documents by self-authentication through a written declaration of the
third party document custodian.
Proposed new paragraph (d)(1) would adopt the standard for the
presentation of evidence at an oral hearing under 5 U.S.C. 556(d),
including the right to present both sworn oral and documentary
evidence, to offer rebuttal evidence, and to conduct reasonable cross-
examination. Of particular note, this paragraph would permit sufficient
``cross-examination as, in the discretion of the Commission or the ALJ,
may be required for a full and true disclosure of the facts,'' a
standard that does not impose an absolute or unlimited right of cross-
examination.\29\
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\29\ See, e.g., Citizens Awareness Network, Inc. v. United
States, 391 F.3d 338, 351 (1st Cir. 2004); Central Freight Lines,
Inc. v. United States, 669 F.2d 1063 (5th Cir. 1982).
---------------------------------------------------------------------------
Finally, re-designated paragraph (f) would define what constitutes
``official notice.'' The current Rule does not define official notice
or what constitutes such notice. Further, the revised Rule would
provide that a party may controvert an officially noticed fact either
by opposing the other party's request to do so or after it has been
noticed by the ALJ or the Commission.
Other paragraphs in the current Rule would be re-designated.
Section 3.44: Record.
Paragraph (a) would be amended to require that witness testimony be
preserved as a digital video recording that would be made part of the
official record. Video recordings are permitted and frequently taken in
depositions,\30\ but federal courts do not typically record
proceedings. Section 5(b) of the FTC Act does not preclude video
recording testimony, merely requiring that the ``testimony in any such
proceeding shall be reduced to writing and filed in the office of the
Commission.'' The purpose of the proposed Rule revision is to provide a
record for the Commissioners who are not present at the hearing, but
are ultimately responsible for deciding the outcome of the case, to be
able to make an independent assessment of the demeanor of the witnesses
when that is appropriate. Courts have recognized the ``added value of
demeanor evidence'' from video recording.\31\ The Commission believes
that the video recording requirement would improve the quality of
Commission decisions whenever witness demeanor is a significant issue.
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\30\ See, e.g., Fed. R. Civ. P. 30(b)(3)(A).
\31\ See FTC v. Tarriff, No. 08-MC-217, 2008 WL 2230062, at *5
(D.D.C. June 2, 2008).
---------------------------------------------------------------------------
Paragraph (c), as revised, would delete the word ``immediately'' at
the beginning of the first sentence to allow the Commission or ALJ to
provide the parties with three business days to review the record to
determine if it is complete or needs to be supplemented.
Section 3.45: In camera orders.
Paragraph (b), as revised, would add a paragraph making clear that
parties have no obligation to file or provide in camera versions of
filings with sensitive materials with anyone other than opposing
counsel and the ALJ during the proceedings, as well as with the
Commission or federal courts during any appeals.
Section 3.46: Proposed finding, conclusions, and order.
Revised paragraph (a), if adopted, would expressly provide for the
simultaneous filing of proposed findings of fact, conclusions of law,
and supporting briefs within 21 days of the close of the hearing
record, and the filing of optional proposed reply findings within 10
days of the filing of the initial proposed findings. The current Rule
does not impose any deadlines or specify the order of these filings.
This change, if adopted, is expected to expedite the post-hearing
phase.
Subpart F--Decision
Section 3.51: Initial decision.
Paragraph (a) would be amended to establish the deadline for
issuing the
[[Page 58841]]
initial decision by the filing of proposed findings and conclusions
(and supporting exhibits) rather than by the closing of the hearing
record. The current Rule requires that the initial decision be filed
within 90 days after the close of the record. The revised Rule would
require that the initial decision be filed within 70 days of the last
filed proposed findings and conclusions (or 85 days of the closing of
the hearing record if the parties waive filing proposed findings and
conclusions).
The revised Rule would maintain the over-all requirement that the
initial decision be issued within one year after the issuance of the
complaint. The revised Rule, however, would no longer authorize the ALJ
to grant consecutive 60-day extensions upon a finding of
``extraordinary circumstances.'' Instead, only the Commission could
grant extensions if it finds there are ``extraordinary circumstances
and if appropriate in the public interest.'' The Commission believes
that eliminating the authority of ALJs to grant extensions of the one-
year deadline would permit the Commission to prevent protracted delays,
while still providing ample time for the ALJ to review the evidence and
issue the initial decision.
New paragraph (c)(2) would require that the initial decision be
filed in a word processing format that is accessible to the Commission
on review.
Section 3.52: Appeal from initial decision.
Paragraphs (b) and (c) would be amended to reduce the word limit
for the principal appellate briefs from 18,750 words to 14,000 words
(approximately 55 double-spaced pages) to minimize unnecessarily
lengthy briefs. The Commission anticipates that the shortened limits
would lead to more focused arguments. The proposed length is the same
as that permitted in Fed. R. App. P. 32(a)(7). Paragraph (c) would also
be revised to reduce the word limit for cross-appeal briefs to 16,500
words, the same as in Fed. R. App. P. 28.1(e)(2).
While lengthier appellate briefs could be justified by the
Commission's obligation to review the record de novo, this is offset by
the fact that the Commission has ready access to the briefs and
proposed findings submitted by the parties to the ALJ. Further, parties
will not be prejudiced because they may request permission to extend
the word count limits, which may be appropriate where the case involves
a particularly large record or complex legal issues. However, as noted
in paragraph (k), the Commission will not lightly permit such
extensions.
Paragraph (d) would be amended to reduce the length of reply briefs
to half of the principals' briefs, or 7,000 words, consistent with Fed.
R. App. P. 32(a)(7). This paragraph would also make explicit that
parties cannot raise new arguments or matters in reply briefs that
could have been raised earlier, based on concerns that reply briefs
have often gone beyond ``a rebuttal of matters'' in the appellee's
brief.
Paragraph (h) would be revised by striking the last two sentences
as unnecessary.
Paragraph (j) would be amended to impose a word count limit on
amicus briefs to ``no more than one-half the maximum length authorized
by these rules for a party's principal brief,'' consistent with the
approach taken by Fed. R. App. P. 29(d).
Finally, revised paragraph (k) would specify the contents of the
brief that will count toward the word count limit, similar to that
imposed by Fed. R. App. P. 32(a)(7)(B)(iii).
Rule 4.3: Time.
Revised Rule 4.3(b), if adopted, would specify that the ALJ may
extend a time period set by a Commission order only if the order
expressly authorizes the ALJ to do so. It would also add time limits
regarding motions directed to the Commission to the list of extensions
that only the Commission may grant. The revised Rule would also clarify
that the ALJ may not enlarge any deadline that a rule specifically
authorizes only the Commission to extend.
III. Invitation to Comment
The Commission invites interested members of the public to submit
written comments addressing the issues raised above. Such comments must
be filed by November 6, 2008, and must be filed in accordance with the
instructions in the ADDRESSES section of this document.
IV. Proposed Rule Revisions
List of Subjects in 16 CFR Part 3
Administrative practice and procedure.
List of Subjects in 16 CFR Part 4
Administrative practice and procedure.
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For the reasons set forth in the preamble, the Federal Trade Commission
proposes to amend Title 16, Chapter 1, Subchapter A of the Code of
Federal Regulations, parts 3 and 4, as follows:
PART 3--RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS
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1. The authority citation for part 3 continues to read as follows:
Authority: 15 U.S.C. 46, unless otherwise noted.
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2. Revise Sec. 3.1 to read as follows:
Sec. 3.1 Scope of the rules in this part.
The rules in this part govern procedure in formal adjudicative
proceedings. To the extent practicable and consistent with requirements
of law, the Commission's policy is to conduct such proceedings
expeditiously. In the conduct of such proceedings the Administrative
Law Judge and counsel for all parties shall make every effort at each
stage of a proceeding to avoid delay. Except as otherwise provided by
law, the Commission, at any time, or the Administrative Law Judge at
any time prior to the filing of his or her initial decision, may
shorten any time limit prescribed by these Rules of Practice, provided
that the shortened time limit would not unfairly prejudice the rights
of any party.
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3. Revise Sec. 3.2 to read as follows:
Sec. 3.2 Nature of adjudicative proceedings.
Adjudicative proceedings are those formal proceedings conducted
under one or more of the statutes administered by the Commission which
are required by statute to be determined on the record after
opportunity for an agency hearing. The term includes hearings upon
objections to orders relating to the promulgation, amendment, or repeal
of rules under sections 4, 5 and 6 of the Fair Packaging and Labeling
Act, but does not include rulemaking proceedings up to the time when
the Commission determines under Sec. 1.26(g) of this chapter that
objections sufficient to warrant the holding of a public hearing have
been filed. The term also includes proceedings for the assessment of
civil penalties pursuant to Sec. 1.94 of this chapter. The term does
not include other proceedings such as negotiations for and Commission
consideration of the entry of consent orders; investigational hearings
as distinguished from proceedings after the issuance of a complaint;
requests for extensions of time to comply with final orders or other
proceedings involving compliance with final orders; proceedings for the
promulgation of industry guides or trade regulation rules; or the
promulgation of substantive rules and regulations.
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4. Revise Sec. 3.11 to read as follows:
[[Page 58842]]
Sec. 3.11 Commencement of proceedings.
(a) Complaint. Except as provided in Sec. 3.13, an adjudicative
proceeding is commenced when an affirmative vote is taken by the
Commission to issue a complaint.
(b) Form of complaint. The Commission's complaint shall contain the
following:
(1) Recital of the legal authority and jurisdiction for institution
of the proceeding, with specific designation of the statutory
provisions alleged to have been violated;
(2) A clear and concise factual statement sufficient to inform each
respondent with reasonable definiteness of the type of acts or
practices alleged to be in violation of the law;
(3) Where practical, a form of order which the Commission has
reason to believe should issue if the facts are found to be as alleged
in the complaint; and
(4) Notice of the specific date, time and place for the evidentiary
hearing.
Unless a different date is determined by the Commission, the date
of the evidentiary hearing shall be 5 months from the date of a
complaint issued pursuant to sections 7 and 11(b) of the Clayton Act,
15 U.S.C. 18 and 21(b), and 8 months from the date of issuance of a
complaint in all other proceedings.
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5. Revise Sec. 3.12 to read as follows:
Sec. 3.12 Answer.
(a) Time for filing. A respondent shall file an answer within 14
days after being served with the complaint.
(b) Content of answer. An answer shall conform to the following:
(1) If allegations of complaint are contested. An answer in which
the allegations of a complaint are contested shall contain:
(i) A concise statement of the facts constituting each ground of
defense;
(ii) Specific admission, denial, or explanation of each fact
alleged in the complaint or, if the respondent is without knowledge
thereof, a statement to that effect. Allegations of a complaint not
thus answered shall be deemed to have been admitted.
(2) If allegations of complaint are admitted. If the respondent
elects not to contest the allegations of fact set forth in the
complaint, the answer shall consist of a statement that he or she
admits all of the material allegations to be true. Such an answer shall
constitute a waiver of hearings as to the facts alleged in the
complaint, and together with the complaint will provide a record basis
on which the Commission shall issue a final decision containing
appropriate findings and conclusions and a final order disposing of the
proceeding. In such an answer, the respondent may, however, reserve the
right to submit proposed findings of fact and conclusions of law under
Sec. 3.46.
(c) Default. Failure of the respondent to file an answer within the
time provided shall be deemed to constitute a waiver of the
respondent's right to appear and contest the allegations of the
complaint and to authorize the Commission, without further notice to
the respondent, to find the facts to be as alleged in the complaint and
to enter a final decision containing appropriate findings and
conclusions and a final order disposing of the proceeding.
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6. Revise Sec. 3.21 to read as follows:
Sec. 3.21 Prehearing procedures.
(a) Meeting of the parties before scheduling conference. As early
as practicable before the prehearing scheduling conference described in
paragraph (b) of this section, but in any event no later than 5 days
after the answer is filed by the last answering respondent, counsel for
the parties shall meet to discuss the nature and basis of their claims
and defenses and the possibilities for a prompt settlement or
resolution of the case. The parties shall also agree, if possible, on
(1) a proposed discovery plan specifically addressing a schedule for
depositions of fact witnesses, the production of documents and
electronically stored information, and the timing of expert discovery
pursuant to Sec. 3.31A. The parties' agreement regarding
electronically stored information should include the scope of and a
specified time period for the exchange of such information that is
subject to Sec. Sec. 3.31(b)(2), 3.31(c), and 3.37(a), and the format
for the disclosure of such information, consistent with Sec.
3.31(c)(3) and Sec. 3.37(c); (2) a preliminary estimate of the time
required for the evidentiary hearing; and (3) any other matters to be
determined at the scheduling conference.
(b) Scheduling conference. Not later than 10 days after the answer
is filed by the last answering respondent, the Administrative Law Judge
shall hold a scheduling conference. At the scheduling conference,
counsel for the parties shall be prepared to address: (1) their factual
and legal theories; (2) the current status of any pending motions; (3)
a schedule of proceedings that is consistent with the date of the
evidentiary hearing set by the Commission; (4) steps taken to preserve
evidence relevant to the issues raised by the claims and defenses; (5)
the scope of anticipated discovery, any limitations on discovery, and a
proposed discovery plan, including the disclosure of electronically
stored information; (6) issues that can be narrowed by agreement or by
motion, suggestions to expedite the presentation of evidence at trial,
and any request to bifurcate issues, claims or defenses; and (7) other
possible agreements or steps that may aid in the just and expeditious
disposition of the proceeding and to avoid unnecessary cost.
(c) Prehearing scheduling order. (1) Not later than 2 days after
the scheduling conference, the Administrative Law Judge shall enter an
order that sets forth the results of the conference and establishes a
schedule of proceedings that will permit the evidentiary hearing to
commence on the date set by the Commission, including a plan of
discovery that addresses the deposition of fact witnesses, timing of
expert discovery, and the production of documents and electronically
stored information, dates for the submission and hearing of motions,
the specific method by which exhibits shall be numbered or otherwise
identified and marked for the record, and the time and place of a final
prehearing conference. The Commission may, upon a showing of good
cause, order a later date for the evidentiary hearing than the one
specified in the complaint.
(2) The Administrative Law Judge may, upon a showing of good cause,
grant a motion to extend any deadline or time specified in this
scheduling order other than the date of the evidentiary hearing. Such
motion shall set forth the total period of extensions, if any,
previously obtained by the moving party. In determining whether to
grant the motion, the Administrative Law Judge shall consider any
extensions already granted, the length of the proceedings to date, the
complexity of the issues, and the need to conclude the evidentiary
hearing and render an initial decision in a timely manner. The
Administrative Law Judge shall not rule on ex parte motions to extend
the deadlines specified in the scheduling order, or modify such
deadlines solely upon stipulation or agreement of counsel.
(d) Meeting prior to final prehearing conference. Counsel for the
parties shall meet before the final prehearing conference described in
paragraph (e) of this section to discuss the matters set forth therein
in preparation for the conference.
(e) Final prehearing conference. As close to the commencement of
the evidentiary hearing as practicable, the Administrative Law Judge
shall hold a final prehearing conference, which counsel shall attend in
person, to submit any proposed stipulations as to law, fact, or
admissibility of evidence,
[[Page 58843]]
exchange exhibit and witness lists, and designate testimony to be
presented by deposition. At this conference, the Administrative Law
Judge shall also resolve any outstanding evidentiary matters or pending
motions (except motions for summary decision) and establish a final
schedule for the evidentiary hearing.
(f) Additional prehearing conferences and orders. The
Administrative Law Judge shall hold additional prehearing and status
conferences or enter additional orders as may be needed to ensure the
just and expeditious disposition of the proceeding and to avoid
unnecessary cost. Such conferences shall be held in person to the
extent practicable.
(g) Public access and reporting. Prehearing conferences shall be
public unless the Administrative Law Judge determines in his or her
discretion that the conference (or any part thereof) shall be closed to
the public. The Administrative Law Judge shall have discretion to
determine whether a prehearing conference shall be stenographically
reported.
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7. Revise Sec. 3.22 to read as follows:
Sec. 3.22 Motions.
(a) Presentation and disposition. Motions filed under Sec. 3.26 or
Sec. 4.17 shall be directly referred to and ruled on by the
Commission. Motions to dismiss filed before the evidentiary hearing,
motions to strike, and motions for summary decision shall be directly
referred to the Commission and shall be ruled on by the Commission,
unless the Commission in its discretion refers the motion to the
Administrative Law Judge. If the Commission refers the motion to the
Administrative Law Judge, it may set a deadline for the ruling by the
Administrative Law Judge, and a party may seek review of the ruling of
the Administrative Law Judge in accordance with Sec. 3.23. During the
time a proceeding is before an Administrative Law Judge, all other
motions shall be addressed to and ruled upon, if within his or her
authority, by the Administrative Law Judge. The Administrative Law
Judge shall certify to the Commission a motion to disqualify filed
under Sec. 3.42(g) if the Administrative Law Judge does not disqualify
himself or herself within 10 days. The Administrative Law Judge shall
certify to the Commission forthwith any other motion upon which he or
she has no authority to rule. Rulings containing information granted in
camera status pursuant to Sec. 3.45 shall be filed in accordance with
Sec. 3.45(f). When a motion to dismiss is made at the close of the
evidence offered in support of the complaint based upon an alleged
failure to establish a prima facie case, the Administrative Law Judge
shall defer ruling thereon until immediately after all evidence has
been received and the hearing record is closed. All written motions
shall be filed with the Secretary of the Commission, and all motions
addressed to the Commission shall be in writing. The moving party shall
also provide a copy of its motion to the Administrative Law Judge at
the time the motion is filed with the Secretary.
(b) Pendency of proceedings. A motion under consideration by the
Commission shall not stay proceedings before the Administrative Law
Judge unless the Commission so orders.
(c) Content. All written motions shall state the particular order,
ruling, or action desired and the grounds therefor. Memoranda in
support of, or in opposition to, any dispositive motion shall not
exceed 10,000 words. Memoranda in support of, or in opposition to, any
other motion shall not exceed 2,500 words. Any reply in support of a
dispositive motion shall not exceed 5,000 words and any reply in
support of any other motion authorized by the Administrative Law Judge
or the Commission shall not exceed 1,250 words. These word count
limitations include headings, footnotes and quotations, but do not
include the cover, table of contents, table of citations or
authorities, glossaries, statements with respect to oral argument, any
addendums containing statutes, rules or regulations, any certificates
of counsel, proposed form of order, and any attachment required by
Sec. 3.45(e). Documents that fail to comply with these provisions
shall not be filed with the Secretary. Motions must also include the
name, address, telephone number, fax number, and e-mail address (if
any) of counsel and attach a draft order containing the proposed
relief. If a party includes in a motion information that has been
granted in camera status pursuant to Sec. 3.45(b) or is subject to
confidentiality protections pursuant to a protective order, the party
shall file 2 versions of the motion in accordance with the procedures
set forth in Sec. 3.45(e). The party shall mark its confidential
filings with brackets or similar conspicuous markings to indicate the
material for which it is claiming confidential treatment. The time
period specified by Sec. 3.22(d) within which an opposing party may
file an answer will begin to run upon service on that opposing party of
the confidential version of the motion.
(d) Responses. Within 10 days after service of any written motion,
or within such longer or shorter time as may be designated by the
Administrative Law Judge or the Commission, the opposing party shall
answer or shall be deemed to have consented to the granting of the
relief asked for in the motion. If an opposing party includes in an
answer information that has been grantedin camera status pursuant to
Sec. 3.45(b) or is subject to confidentiality protections pursuant to
a protective order, the opposing party shall file 2 versions of the
answer in accordance with the procedures set forth in Sec. 3.45(e).
The moving party shall have no right to reply, except for dispositive
motions or as otherwise permitted by the Administrative Law Judge or
the Commission. Reply and surreply briefs to motions other than
dispositive motions shall be permitted only in circumstances where the
parties wish to draw the Administrative Law Judge's or the Commission's
attention to recent important developments or controlling authority
that could not have been raised earlier in the party's principal brief.
The reply may be conditionally filed with the motion seeking leave to
reply. Any reply to a dispositive motion, or any permitted reply to any
other motion, shall be filed within 5 days after service of the last
answer to that motion.
(e) Rulings on motions. Unless otherwise provided by a relevant
rule, the Administrative Law Judge shall rule on motions within 14 days
after the filing of all motion papers authorized by this section. The
Commission, for good cause, may extend the time allowed for a ruling.
(f) Motions for extensions. The Administrative Law Judge or the
Commission may waive the requirements of this section as to motions for
extensions of time; however, the Administrative Law Judge shall have no
authority to rule on ex parte motions for extensions of time.
(g) Statement. Each motion to quash filed pursuant to Sec.
3.34(c), each motion to compel or determine sufficiency pursuant to
Sec. 3.38(a), each motion for sanctions pursuant to Sec. 3.38(b), and
each motion for enforcement pursuant to Sec. 3.38(c) shall be
accompanied by a signed statement representing that counsel for the
moving party has conferred with opposing counsel in an effort in good
faith to resolve by agreement the issues raised by the motion and has
been unable to reach such an agreement. If some of the matters in
controversy have been resolved by agreement, the statement shall
specify the matters so resolved and the matters remaining unresolved.
The statement shall recite the date, time, and place of each such
conference between counsel, and the names of all parties
[[Page 58844]]
participating in each such conference. Unless otherwise ordered by the
Administrative Law Judge, the statement required by this rule must be
filed only with the first motion concerning compliance with the
discovery demand at issue.
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8. Revise Sec. 3.23 to read as follows:
Sec. 3.23 Interlocutory appeals.
(a) Appeals without a determination by the Administrative Law
Judge. The Commission may, in its discretion, entertain interlocutory
appeals where a ruling of the Administrative Law Judge:
(1) Requires the disclosure of records of the Commission or another
governmental agency or the appearance of an official or employee of the
Commission or another governmental agency pursuant to Sec. 3.36, if
such appeal is based solely on a claim of privilege: Provided, that the
Administrative Law Judge shall stay until further order of the
Commission the effectiveness of any ruling, whether or not appeal is
sought, that requires the disclosure of nonpublic Commission minutes,
Commissioner circulations, or similar documents prepared by the
Commission, individual Commissioner, or the Office of the General
Counsel;
(2) Suspends an attorney from participation in a particular
proceeding pursuant to Sec. 3.42(d); or
(3) Grants or denies an application for intervention pursuant to
the provisions of Sec. 3.14. Appeal from such rulings may be sought by
filing with the Commission an application for review within 3 days
after notice of the Administrative Law Judge's ruling. An answer may be
filed within 3 days after the application for review is filed. The
Commission upon its own motion may enter an order staying compliance
with a discovery demand authorized by the Administrative Law Judge
pursuant to Sec. 3.36 or placing the matter on the Commission's docket
for review. Any order placing the matter on the Commission's docket for
review will set forth the scope of the review and the issues which will
be considered and will make provision for the filing of memoranda of
law if deemed appropriate by the Commission.
(b) Other interlocutory appeals. A party may request the
Administrative Law Judge to determine that a ruling involves a
controlling question of law or policy as to which there is substantial
ground for difference of opinion and that an immediate appeal from the
ruling may materially advance the ultimate termination of the
litigation or subsequent review will be an inadequate remedy. An answer
may be filed within 3 days after the application for review is filed.
The Administrative Law Judge shall issue a ruling on the request for
determination within 3 days. The party may file an application for
review with the Commission within 1 day after notice that the
Administrative Law Judge has issued the requested determination or 1
day after the deadline has passed for the Administrative Law Judge to
issue a ruling on the request for determination and the Administrative
Law Judge has not issued his or her ruling.
(c) The application for review shall attach the ruling from which
appeal is being taken and any other portions of the record on which the
moving party relies. Neither the application for review nor the answer
shall exceed 2,500 words. This word count limitation includes headings,
footnotes and quotations, but does not include the cover, table of
contents, table of citations or authorities, glossaries, statements
with respect to oral argument, any addendums containing statutes, rules
or regulations, any certificates of counsel, proposed form of order,
and any attachment required by Sec. 3.45(e). The Commission may order
additional briefing on the application.
(d) Unless the Commission, within 3 days after the filing of an
application for review, decides to entertain the appeal, the
application shall be deemed to be denied.
(e) Proceedings not stayed. Application for review and appeal
hereunder shall not stay proceedings before the Administrative Law
Judge unless the Judge or the Commission shall so order.
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9. Revise Sec. 3.24 to read as follows:
Sec. 3.24 Summary decisions.
(a) Procedure. (1) Any party may move, with or without supporting
affidavits, for a summary decision in the party's favor upon all or any
part of the issues being adjudicated. The motion shall be accompanied
by a separate and concise statement of the material facts as to which
the moving party contends there is no genuine issue for trial. Counsel
in support of the complaint may so move at any time after 20 days
following issuance of the complaint and any respondent may so move at
any time after issuance of the complaint. Any such motion by any party,
however, shall be filed in accordance with the scheduling order issued
pursuant to Sec. 3.21, but in any case at least 30 days before the
date fixed for the hearing.
(2) Any other party may, within 14 days after service of the
motion, file opposing affidavits. The opposing party shall include a
separate and concise statement of those material facts as to which the
opposing party contends there exists a genuine issue for trial, as
provided in Sec. 3.24(a)(3). The parties may file memoranda of law in
support of, or in opposition to, the motion consistent with Sec.
3.22(c). If a party includes in any such brief or memorandum
information that has been granted in camera status pursuant to Sec.
3.45(b) or is subject to confidentiality protections pursuant to a
protective order, the party shall file 2 versions of the document in
accordance with the procedures set forth in Sec. 3.45(e). If the
Commission (or, when appropriate, the Administrative Law Judge)
determines that there is no genuine issue as to any material fact
regarding liability or relief, it shall issue a final decision and
order. In the event that the motion has been referred to the
Administrative Law Judge, such determination by the Administrative Law
Judge shall constitute his or her initial decision and shall conform to
the procedures set forth in Sec. 3.51(c). A summary decision,
interlocutory in character and in compliance with the procedures set
forth in Sec. 3.51(c), may be rendered on the issue of liability alone
although there is a genuine issue as to relief.
(3) Affidavits shall set forth such facts as would be admissible in
evidence and shall show affirmatively that the affiant is competent to
testify to the matters stated therein. The Commission (or, when
appropriate, the Administrative Law Judge) may permit affidavits to be
supplemented or opposed by depositions, answers to interrogatories, or
further affidavits. When a motion for summary decision is made and
supported as provided in this rule, a party opposing the motion may not
rest upon the mere allegations or denials of his or her pleading; the
response, by affidavits or as otherwise provided in this rule, must set
forth specific facts showing that there is a genuine issue of material
fact for trial. If no such response is filed, summary decision, if
appropriate, shall be rendered.
(4) Should it appear from the affidavits of a party opposing the
motion that it cannot, for reasons stated, present by affidavit facts
essential to justify its opposition, the Commission (or, when
appropriate, the Administrative Law Judge) may deny the motion for
summary decision or may order a continuance to permit affidavits to be
obtained or depositions to be taken or discovery to be had or make such
other order as is appropriate and a determination to that effect shall
be made a matter of record.
(5) If on motion under this rule a summary decision is not rendered
upon
[[Page 58845]]
the whole case or for all the relief asked and a trial is necessary,
the Commission (or, when appropriate, the Administrative Law Judge)
shall issue an order specifying the facts that appear without
substantial controversy and directing further proceedings in the
action. The facts so specified shall be deemed established.
(b) Affidavits filed in bad faith. (1) Should it appear to the
satisfaction of the Commission (or, when appropriate, the
Administrative Law Judge) at any time that any of the affidavits
presented pursuant to this rule are presented in bad faith, or solely
for the purpose of delay, or are patently frivolous, the Commission
(or, when appropriate, the Administrative Law Judge) shall enter a
determination to that effect upon the record.
(2) If upon consideration of all relevant facts attending the
submission of any affidavit covered by paragraph (b)(1) of this
section, the Commission (or, when appropriate, the Administrative Law
Judge) concludes that action to suspend or remove an attorney from the
case is warranted, it shall take action as specified in Sec. 3.42(d).
If the Administrative Law Judge to whom the Commission has referred a
motion for summary decision concludes, upon consideration of all the
relevant facts attending the submission of any affidavit covered by
paragraph (b)(1) of this section, that the matter should be certified
to the Commission for consideration of disciplinary action against an
attorney, including reprimand, suspension or disbarment, the
Administrative Law Judge shall certify the matter, with his or her
findings and recommendations, to the Commission for its consideration
of disciplinary action in the manner provided by the Commission's
rules.If the Commission has addressed the motion directly, it may
consider such disciplinary action without a certification by the
Administrative Law Judge.
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10. Revise Sec. 3.26 to read as follows:
Sec. 3.26 Motions following denial of preliminary injunctive relief.
(a) This section sets forth two procedures by which respondents may
obtain consideration of whether continuation of an adjudicative
proceeding is in the public interest after a court has denied
preliminary injunctive relief in a separate proceeding brought under
section 13(b) of the Federal Trade Commission Act, 15 U.S.C. 53(b), in
aid of the adjudication.
(b) A motion under this section shall be addressed to the
Commission and filed with the Secretary of the Commission. Such a
motion must be filed within 14 days after and may not be filed sooner
than:
(1) A district court has denied preliminary injunctive relief, all
opportunity has passed for the Commission to seek reconsideration of
the denial or to appeal it, and the Commission has neither sought
reconsideration of the denial nor appealed it; or
(2) A court of appeals has denied injunctive relief pending appeal.
(c) Withdrawal from adjudication. If a court has denied preliminary
injunctive relief to the Commission in a section 13(b) proceeding
brought in aid of an adjudicative proceeding, respondents may move that
the proceeding be withdrawn from adjudication in order to consider
whether or not the public interest warrants further litigation. Such a
motion shall be filed jointly or separately by each of the respondents
in the adjudicative proceeding. Complaint counsel may file a response
within 14 days after such motion is filed. The matter will not be
withdrawn from adjudication unless the Commission so orders.
(d) Consideration on the record. Instead of a motion to withdraw
the matter from adjudication, any respondent or respondents may file a
motion under this paragraph to dismiss the administrative complaint on
the basis that the public interest does not warrant further litigation
after a court has denied preliminary injunctive relief to the
Commission. Complaint counsel may file a response within 14 days after
such motion is filed. The filing of a motion to dismiss shall not stay
the proceeding unless the Commission so orders.
(e) Form. Memoranda in support of or in opposition to such motions
shall not exceed 10,000 words. This word count limitation includes
headings, footnotes and quotations, but does not include the cover,
table of contents, table of citations or authorities, glossaries,
statements with respect to oral argument, any addendums containing
statutes, rules or regulations, any certificates of counsel, proposed
form of order, and any attachment required by Sec. 3.45(e).
(f) In camera materials. If any filing includes materials that are
subject to confidentiality protections pursuant to an order entered in
either the proceeding under section 13(b) or in the proceeding under
this part, such materials shall be treated as in camera materials for
purposes of this paragraph and the party shall file 2 versions of the
document in accordance with the procedures set forth in Sec. 3.45(e).
The time within which complaint counsel may file an answer under this
paragraph will begin to run upon service of the in camera version of
the motion (including any supporting briefs and memoranda).
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11. Revise Sec. 3.31, to read as follows:
Sec. 3.31 General discovery provisions.
(a) Discovery methods. Parties may obtain discovery by one or more
of the following methods: Depositions upon oral examination or written
questions; written interrogatories; production of documents or things
for inspection and other purposes; and requests for admission. Except
as provided in the rules, or unless the Administrative Law Judge orders
otherwise, the frequency or sequence of these methods is not limited.
The parties shall, to the greatest extent practicable, conduct
discovery simultaneously; the fact that a party is conducting discovery
shall not operate to delay any other party's discovery.
(b) Mandatory initial disclosures. Complaint counsel and
respondent's counsel shall, within 5 days of receipt of a respondent's
answer to the complaint and without awaiting a discovery request,
provide to each other:
(1) The name, and, if known, the address and telephone number of
each individual likely to have discoverable information relevant to the
allegations of the Commission's complaint, to the proposed relief, or
to the defenses of the respondent, as set forth in Sec. 3.31(c)(1);
and
(2) A copy of, or a description by category and location of, all
documents and electronically stored information including declarations,
transcripts of investigational hearings and depositions, and tangible
things in the possession, custody, or control of the Commission or
respondent(s) that are relevant to the allegations of the Commission's
complaint, to the proposed relief, or to the defenses of the
respondent, as set forth in Sec. 3.31(c)(1); unless such information
or materials are subject to the limitations in Sec. 3.31(c)(2),
privileged as defined in Sec. 3.31(c)(4), pertain to hearing
preparation as defined in Sec. 3.31(c)(5), pertain to experts as
defined in Sec. 3.31A, or are obtainable from some other source that
is more convenient, less burdensome, or less expensive. A party shall
make its disclosures based on the information then reasonably available
to it and is not excused from making its disclosures because it has not
fully completed its investigation.
(c) Scope of discovery. Unless otherwise limited by order of the
Administrative Law Judge or the Commission in accordance with these
[[Page 58846]]
rules, the scope of discovery is as follows:
(1) In general. Parties may obtain discovery to the extent that it
may be reasonably expected to yield information relevant to the
allegations of the complaint, to the proposed relief, or to the
defenses of any respondent. Such information may include the existence,
description, nature, custody, condition and location of any books,
documents, other tangible things, electronically stored information,
and the identity and location of persons having any knowledge of any
discoverable matter. Information may not be withheld from discovery on
grounds that the information will be inadmissible at the hearing if the
information sought appears reasonably calculated to lead to the
discovery of admissible evidence.
(2) Limitations. Complaint counsel need only search for materials
that were collected or reviewed in the course of the investigation of
the matter or prosecution of the case and that are in the possession,
custody or control of the Bureaus or Offices of the Commission that
investigated the matter, including the Bureau of Economics. The
Administrative Law Judge may authorize for good cause additional
discovery of materials in the possession, custody, or control of those
Bureaus or Offices, or authorize other discovery pursuant to Sec.
3.36. Neither complaint counsel, respondent, nor a third party
receiving a discovery request under these rules is required to search
for materials generated and transmitted between an entity's counsel
(including counsel's legal staff or in-house counsel) and not shared
with anyone else, or between complaint counsel and non-testifying
Commission employees, unless the Administrative Law Judge determines
there is good cause to provide such materials. The frequency or extent
of use of the discovery methods otherwise permitted under these rules
shall be limited by the Administrative Law Judge if he or she
determines that:
(i) The discovery sought is unreasonably cumulative or duplicative,
or is obtainable from some other source that is more convenient, less
burdensome, or less expensive;
(ii) The party seeking discovery has had ample opportunity by
discovery in the action to obtain the information sought; or
(iii) The burden and expense of the proposed discovery outweigh its
likely benefit.
(3) Electronically stored information. A party need not provide
discovery of electronically stored information from sources that the
party identifies as not reasonably accessible because of undue burden
or cost. On a motion to compel discovery, the party from whom discovery
is sought must show that the information is not reasonably accessible
because of undue burden or cost. If that showing is made, the
Administrative Law Judge may nonetheless order discovery if the
requesting party shows good cause, considering the limitations of
paragraph (c)(2). The Administrative Law Judge may specify conditions
for the discovery.
(4) Privilege. Discovery shall be denied or limited in order to
preserve the privilege of a witness, person, or governmental agency as
governed by the Constitution, any applicable act of Congress, or the
principles of the common law as they may be interpreted by the
Commission in the light of reason and experience.
(5) Hearing preparations: Materials. Subject to the provisions of
Sec. 3.31A, a party may obtain discovery of documents and tangible
things otherwise discoverable under paragraph (c)(1) of this section
and prepared in anticipation of litigation or for hearing by or for
another party or by or for that other party's representative (including
the party's attorney, consultant, or agent) only upon a showing that
the party seeking discovery has substantial need of the materials in
the preparation of its case and that the party is unable without undue
hardship to obtain the substantial equivalent of the materials by other
means. In ordering discovery of such materials when the required
showing has been made, the Administrative Law Judge shall protect
against disclosure of the mental impressions, conclusions, opinions, or
legal theories of an attorney or other representative of a party.
(d) Protective orders; order to preserve evidence. In order to
protect the parties and third parties against improper use and
disclosure of confidential information, the Administrative Law Judge
shall issue a protective order as set forth in the appendix to this
section. The Administrative Law Judge may also deny discovery or make
any other order which justice requires to protect a party or other
person from annoyance, embarrassment, oppression, or undue burden or
expense, or to prevent undue delay in the proceeding. Such an order may
also be issued to preserve evidence upon a showing that there is
substantial reason to believe that such evidence would not otherwise be
available for presentation at the hearing.
(e) Supplementation of disclosures and responses. A party who has
made a mandatory initial disclosure under Sec. 3.31(b) or responded to
a request for discovery with a disclosure or response is under a duty
to supplement or correct the disclosure or response to include
information thereafter acquired if ordered by the Administrative Law
Judge or in the following circumstances:
(1) A party is under a duty to supplement at appropriate intervals
its mandatory initial disclosures under Sec. 3.31(b) if the party
learns that in some material respect the information disclosed is
incomplete or incorrect and if the additional or corrective information
has not otherwise been made known to the other parties during the
discovery process or in writing.
(2) A party is under a duty to amend in a timely manner a prior
response to an interrogatory, request for production, or request for
admission if the party learns that the response is in some material
respect incomplete or incorrect.
(f) Stipulations. When approved by the Administrative Law Judge,
the parties may by written stipulation (1) provide that depositions may
be taken before any person, at any time or place, upon any notice, and
in any manner and when so taken may be used like other depositions, and
(2) modify the procedures provided by these rules for other methods of
discovery.
(g) Ex parte rulings on applications for compulsory process.
Applications for the issuance of subpoenas to compel testimony at an
adjudicative hearing pursuant to Sec. 3.34 may be madeex parte, and,
if so made, such applications and rulings thereon shall remain ex parte
unless otherwise ordered by the Administrative Law Judge or the
Commission.
(h) Inadvertent production. The inadvertent production of
information produced by a party or third party in discovery that is
subject to a claim of privilege or immunity for hearing preparation
material shall not waive such claims as to that or other information
regarding the same subject matter if the Administrative Law Judge
determines that the holder of the claim made efforts reasonably
designed to protect the privilege or the hearing preparation material,
provided, however, this provision shall not apply if the party, or an
entity related to that party, who inadvertently produced the privileged
information relies upon such information to support a claim or defense.
(i) Restriction on filings. Unless otherwise ordered by the
Administrative Law Judge in his or her discretion, mandatory initial
and supplemental disclosures, interrogatories, depositions, requests
for documents, requests for admissions, and answers and responses
[[Page 58847]]
thereto shall be served upon other parties but shall not be filed with
the Office of the Secretary, the Administrative Law Judge, or otherwise
provided to the Commission, except to support or oppose a motion or to
offer as evidence.
Appendix A to Sec. 3.31: Standard Protective Order
For the purpose of protecting the interests of the parties and
third parties in the above-captioned matter against improper use and
disclosure of confidential information submitted or produced in
connection with this matter:
It is hereby ordered that this Protective Order Governing
Confidential Material (``Protective Order'') shall govern the handling
of all Discovery Material, as hereafter defined.
1. As used in this Order, ``confidential material'' shall refer to
any document or portion thereof that contains privileged, competitively
sensitive information, or sensitive personal information. ``Sensitive
personal information'' shall refer to, but shall not be limited to, an
individual's Social Security number, taxpayer identification number,
financial account number, credit card or debit card number, driver's
license number, state-issued identification number, passport number,
date of birth (other than year), and any sensitive health information
identified by individual, such as an individual's medical records.
``Document'' shall refer to any discoverable writing, recording,
transcript of oral testimony, or electronically stored information in
the possession of a party or a third party. ``Commission'' shall refer
to the Federal Trade Commission (``FTC''), or any of its employees,
agents, attorneys, and all other persons acting on its behalf,
excluding persons retained as consultants or experts for purposes of
this proceeding.
2. Any document or portion thereof submitted by a respondent or a
third party during a Federal Trade Commission investigation or during
the course of this proceeding that is entitled to confidentiality under
the Federal Trade Commission Act, or any regulation, interpretation, or
precedent concerning documents in the possession of the Commission, as
well as any information taken from any portion of such document, shall
be treated as confidential material for purposes of this Order. The
identity of a third party submitting such confidential material shall
also be treated as confidential material for the purposes of this Order
where the submitter has requested such confidential treatment.
3. The parties and any third parties, in complying with informal
discovery requests, disclosure requirements, or discovery demands in
this proceeding may designate any responsive document or portion
thereof as confidential material, including documents obtained by them
from third parties pursuant to discovery or as otherwise obtained.
4. The parties, in conducting discovery from third parties, shall
provide to each third party a copy of this Order so as to inform each
such third party of his, her, or its rights herein.
5. A designation of confidentiality shall constitute a
representation in good faith and after careful determination that the
material is not reasonably believed to be already in the public domain
and that counsel believes the material so designated constitutes
confidential material as defined in Paragraph of this Order.
6. Material may be designated as confidential by placing on or
affixing to the document containing such material (in such manner as
will not interfere with the legibility thereof), or if an entire folder
or box of documents is confidential by placing or affixing to that
folder or box, the designation ``CONFIDENTIAL--FTC Docket No. XXXX'' or
any other appropriate notice that identifies this proceeding, together
with an indication of the portion or portions of the document
considered to be confidential material. Confidential information
contained in electronic documents may also be designated as
confidential by placing the designation ``CONFIDENTIAL--FTC Docket No.
XXXX'' or any other appropriate notice that identifies this proceeding,
on the face of the CD or DVD or other medium on which the document is
produced. Masked or otherwise redacted copies of documents may be
produced where the portions deleted contain privileged matter, provided
that the copy produced shall indicate at the appropriate point that
portions have been deleted and the reasons therefor.
7. Confidential material shall be disclosed only to: (a) the
Administrative Law Judge presiding over this proceeding, personnel
assisting the Administrative Law Judge, the Commission and its
employees, and personnel retained by the Commission as experts or
consultants for this proceeding; (b) judges and other court personnel
of any court having jurisdiction over any appellate proceedings
involving this matter; (c) outside counsel of record for any
respondent, their associated attorneys and other employees of their law
firm(s), provided they are not employees of a respondent; (d) anyone
retained to assist outside counsel in the preparation or hearing of
this proceeding including consultants, provided they are not affiliated
in any way with a respondent and have signed an agreement to abide by
the terms of the protective order; and (e) any witness or deponent who
may have authored or received the information in question.
8. Disclosure of confidential material to any person described in
Paragraph 7 of this Order shall be only for the purposes of the
preparation and hearing of this proceeding, or any appeal therefrom,
and for no other purpose whatsoever, provided, however, that the
Commission may, subject to taking appropriate steps to preserve the
confidentiality of such material, use or disclose confidential material
as provided by its Rules of Practice; sections 6(f) and 21 of the
Federal Trade Commission Act; or any other legal obligation imposed
upon the Commission.
9. In the event that any confidential material is contained in any
pleading, motion, exhibit or other paper filed or to be filed with the
Secretary of the Commission, the Secretary shall be so informed by the
Party filing such papers, and such papers shall be filed in camera. To
the extent that such material was originally submitted by a third
party, the party including the materials in its papers shall
immediately notify the submitter of such inclusion. Confidential
material contained in the papers shall continue to have in camera
treatment until further order of the Administrative Law Judge,
provided, however, that such papers may be furnished to persons or
entities who may receive confidential material pursuant to Paragraphs 7
or 8. Upon or after filing any paper containing confidential material,
the filing party shall file on the public record a duplicate copy of
the paper that does not reveal confidential material. Further, if the
protection for any such material expires, a party may file on the
public record a duplicate copy which also contains the formerly
protected material.
10. If counsel plans to introduce into evidence at the hearing any
document or transcript containing confidential material produced by
another party or by a third party, they shall provide advance notice to
the other party or third party for purposes of allowing that party to
seek an order that the document or transcript be granted in camera
treatment. If that party wishes in camera treatment for the document or
transcript, the party shall file an appropriate motion with the
[[Page 58848]]
Administrative Law Judge within 5 days after it receives such notice.
Except where such an order is granted, all documents and transcripts
shall be part of the public record. Where in camera treatment is
granted, a duplicate copy of such document or transcript with the
confidential material deleted therefrom may be placed on the public
record.
11. If any party receives a discovery request in another proceeding
that may require the disclosure of confidential material submitted by
another party or third party, the recipient of the discovery request
shall promptly notify the submitter of receipt of such request. Unless
a shorter time is mandated by an order of a court, such notification
shall be in writing and be received by the submitter at least 10
business days before production, and shall include a copy of this
Protective Order and a cover letter that will apprise the submitter of
its rights hereunder. Nothing herein shall be construed as requiring
the recipient of the discovery request or anyone else covered by this
Order to challenge or appeal any order requiring production of
confidential material, to subject itself to any penalties for non-
compliance with any such order, or to seek any relief from the
Administrative Law Judge or the Commission. The recipient shall not
oppose the submitter's efforts to challenge the disclosure of
confidential material. In addition, nothing herein shall limit the
applicability of Rule 4.11(e) of the Commission's Rules of Practice, 16
CFR 4.11(e), to discovery requests in another proceeding that are
directed to the Commission.
12. At the time that any consultant or other person retained to
assist counsel in the preparation of this action concludes
participation in the action, such person shall return to counsel all
copies of documents or portions thereof designated confidential that
are in the possession of such person, together with all notes,
memoranda or other papers containing confidential information. At the
conclusion of this proceeding, including the exhaustion of judicial
review, the parties shall return documents obtained in this action to
their submitters, provided, however, that the Commission's obligation
to return documents shall be governed by the provisions of Rule 4.12 of
the Rules of Practice, 16 CFR 4.12.
13. The provisions of this Protective Order, insofar as they
restrict the communication and use of confidential discovery material,
shall, without written permission of the submitter or further order of
the Commission, continue to be binding after the conclusion of this
proceeding.
0
12. Add Sec. 3.31A to read as follows:
Sec. 3.31A Expert discovery.
(a) The parties shall serve each other with a list of experts they
intend to call as witnesses at the hearing not later than 1 day after
the close of fact discovery, meaning the close of discovery except for
depositions and other discovery permitted under Sec. 3.24(a)(4), and
discovery for purposes of authenticity and admissibility of exhibits.
Complaint counsel shall serve the other parties with a report prepared
by each of its expert witnesses not later than 14 days after the close
of fact discovery. Each respondent shall serve each other party with a
report prepared by each of its expert witnesses not later than 28 days
after the close of fact discovery. Complaint counsel shall serve
respondents with a list of any rebuttal expert witnesses and a rebuttal
report prepared by each such witness not later than 38 days after the
close of fact discovery. Each side will be limited to calling at the
evidentiary hearing 5 expert witnesses, including any rebuttal expert
witnesses. A party may file a motion seeking leave to call additional
expert witnesses due to extraordinary circumstances. Each report shall
be signed by the expert and contain a complete statement of all
opinions to be expressed and the basis and reasons therefor; the data,
materials, or other information considered by the witness in forming
the opinions; any exhibits to be used as a summary of or support for
the opinions; the qualifications of the witness, including a list of
all publications authored by the witness within the preceding 10 years;
the compensation to be paid for the study and testimony; and a listing
of any other cases in which the witness has testified as an expert at
trial or by deposition within the preceding 4 years. A rebuttal report
need not include any information already included in the initial report
of the witness. Aside from any required information, a rebuttal report
shall be limited to rebuttal of matters set forth in respondents'
expert reports. If material outside the scope of fair rebuttal is
presented, respondents may seek appropriate relief, including striking
of all or part of the report or leave to submit a surrebuttal report.
No party may call an expert witness at the hearing unless he or she has
been listed and has provided reports as required by this section.
(b) A party may depose any person who has been identified as an
expert whose opinions may be presented at trial. Unless otherwise
ordered by the Administrative Law Judge, a deposition of any expert
witness shall be conducted after the disclosure of a report prepared by
the witness in accordance with paragraph (a). Depositions of expert
witnesses shall be completed not later than 65 days after the close of
fact discovery. Upon motion, the Administrative Law Judge may order
further discovery by other means, subject to such restrictions as to
scope as the Administrative Law Judge may deem appropriate. A party,
however, may not discover facts known or opinions held by an expert who
has been retained or specially employed by another party in
anticipation of litigation or preparation for hearing and who is not
listed as a witness at hearing.
0
13. Revise Sec. 3.33 to read as follows:
Sec. 3.33 Depositions.
(a) In general. Any party may take a deposition of any named person
or of a person or persons described with reasonable particularity,
provided that such deposition is reasonably expected to yield
information within the scope of discovery under Sec. 3.31(c)(1). Such
party may, by motion, obtain from the Administrative Law Judge an order
to preserve relevant evidence upon a showing that there is substantial
reason to believe that such evidence would not otherwise be available
for presentation at the hearing. Depositions may be taken before any
person having power to administer oaths, either under the law of the
United States or of the state or other place in which the deposition is
taken, who may be designated by the party seeking the deposition,
provided that such person shall have no interest in the outcome of the
proceeding. The party seeking the deposition shall serve upon each
person whose deposition is sought and upon each party to the proceeding
reasonable notice in writing of the time and place at which it will be
taken, and the name and address of each person or persons to be
examined, if known, and if the name is not known, a description
sufficient to identify them. The parties may stipulate in writing or
the Administrative Law Judge may upon motion order that a deposition be
taken by telephone or other remote electronic means. A deposition taken
by such means is deemed taken at the place where the deponent is to
answer questions.
(b) The Administrative Law Judge may rule on motion by a party that
a deposition shall not be taken upon a determination that such
deposition would not be reasonably expected to meet the scope of
discovery set forth under Sec. 3.31(c), or that the value of the
deposition would be outweighed by the considerations set forth under
Sec. 3.43(b). The fact that a witness testifies at an
[[Page 58849]]
investigative hearing does not preclude the deposition of that witness.
(c) Notice.
(1) Notice to corporation or other organization. A party may name
as the deponent a public or private corporation, partnership,
association, governmental agency other than the Federal Trade
Commission, or any bureau or regional office to the Federal Trade
Commission, and describe with reasonable particularity the matters on
which examination is requested. The organization so named shall
designate one or more officers, directors, or managing agents, or other
persons who consent to testify on its behalf, and may set forth, for
each person designated, the matters on which he or she will testify. A
subpoena shall advise a non-party organization of its duty to make such
a designation. The persons so designated shall testify as to matters
known or reasonably available to the organization. This subsection does
not preclude taking a deposition by any other procedure authorized in
these rules.
(2) Notice to Commission. Except as provided in Sec. 3.31(i),
notices of depositions shall not be filed with the Office of the
Secretary, the Administrative Law Judge, or otherwise provided to the
Commission.
(d) Taking of deposition. Each deponent shall be duly sworn, and
any party shall have the right to question him or her. Objections to
questions or to evidence presented shall be in short form, stating the
grounds of objections relied upon. The questions propounded and the
answers thereto, together with all objections made, shall be recorded
and certified by the officer. Thereafter, upon payment of the charges
therefor, the officer shall furnish a copy of the deposition to the
deponent and to any party.
(e) Depositions upon written questions. A party desiring to take a
deposition upon written questions shall serve them upon every other
party with a notice stating:
(1) The name and address of the person who is to answer them, and
(2) The name or descriptive title and address of the officer before
whom the deposition is to be taken.
A deposition upon written questions may be taken of a public or
private corporation, partnership, association, governmental agency
other than the Federal Trade Commission, or any bureau or regional
office of the Federal Trade Commission in accordance with the
provisions of Sec. 3.33(c). Within 30 days after the notice and
written questions are served, any other party may serve cross questions
upon all other parties. Within 10 days after being served with cross
questions, the party taking the deposition may serve redirect questions
upon all other parties. Within 10 days after being served with redirect
questions, any other party may serve recross questions upon all other
parties. The content of any question shall not be disclosed to the
deponent prior to the taking of the deposition. A copy of the notice
and copies of all questions served shall be delivered by the party
taking the deposition to the officer designated in the notice, who
shall proceed promptly to take the testimony of the deponent in
response to the questions and to prepare, certify, and file or mail the
deposition, attaching thereto the copy of the notice and the questions
received by him or her. When the deposition is filed the party taking
it shall promptly give notice thereof to all other parties.
(f) Correction of deposition. A deposition may be corrected, as to
form or substance, in the manner provided by Sec. 3.44(b). Any such
deposition shall, in addition to the other required procedures, be read
to or by the deponent and signed by him or her, unless the parties by
stipulation waive the signing or the deponent is unavailable or cannot
be found or refuses to sign. If the deposition is not signed by the
deponent within 30 days of its submission or attempted submission, the
officer shall sign it and certify that the signing has been waived or
that the deponent is unavailable or that the deponent has refused to
sign, as the case may be, together with the reason for the refusal to
sign, if any has been given. The deposition may then be used as though
signed unless, on a motion to suppress under Sec. 3.33(g)(3)(iv), the
Administrative Law Judge determines that the reasons given for the
refusal to sign require rejection of the deposition in whole or in
part. In addition to and not in lieu of the procedure for formal
correction of the deposition, the deponent may enter in the record at
the time of signing a list of objections to the transcription of his or
her remarks, stating with specificity the alleged errors in the
transcript.
(g) Objections; errors and irregularities.
(1) Objections to admissibility. Subject to the provisions of
paragraph (g)(3) of this section, objection may be made at the hearing
to receiving in evidence any deposition or part thereof for any reason
which would require the exclusion of the evidence if the witness were
then present and testifying.
(2) Effect of errors and irregularities in depositions--(i)As to
notice. All errors and irregularities in the notice for taking a
deposition are waived unless written objection is promptly served upon
the party giving the notice.
(ii) As to disqualification of officer. Objection to taking a
deposition because of disqualification of the officer before whom it is
to be taken is waived unless made before the taking of the deposition
begins or as soon thereafter as the disqualification becomes known or
could be discovered with reasonable diligence.
(iii) As to taking of deposition. (A) Objections to the competency
of a witness or to the competency, relevancy, or materiality of
testimony are not waived by failure to make them before or during the
taking of the deposition, unless the ground of the objection is one
which might have been obviated or removed if presented at that time.
(B) Errors and irregularities occurring at the oral examination in
the manner of taking the deposition, in the form of the questions or
answers, in the oath or affirmation, or in the conduct of parties, and
errors of any kind which might be obviated, removed, or cured if
promptly presented, are waived unless seasonable objection thereto is
made at the taking of the deposition.
(C) Objections to the form of written questions are waived unless
served in writing upon all parties within the time allowed for serving
the succeeding cross or other questions and within 5 days after service
of the last questions authorized.
(iv) As to completion and return of deposition. Errors and
irregularities in the manner in which the testimony is transcribed or
the deposition is prepared, signed, certified, endorsed, or otherwise
dealt with by the officer are waived unless a motion to suppress the
deposition or some part thereof is made with reasonable promptness
after such defect is or with due diligence might have been ascertained.
0
14. Revise Sec. 3.34 to read as follows:
Sec. 3.34 Subpoenas.
(a) Subpoenas ad testificandum. Counsel for a party may sign and
issue a subpoena, on a form provided by the Secretary, requiring a
person to appear and give testimony at the taking of a deposition to a
party requesting such subpoena or to attend and give testimony at an
adjudicative hearing.
(b) Subpoenas duces tecum; subpoenas to permit inspection of
premises. Counsel for a party may sign and issue a subpoena, on a form
provided by the Secretary, commanding a person to produce and permit
inspection and copying of designated books, documents, or tangible
things, or commanding a person to permit
[[Page 58850]]
inspection of premises, at a time and place therein specified. The
subpoena shall specify with reasonable particularity the material to be
produced. The person commanded by the subpoena need not appear in
person at the place of production or inspection unless commanded to
appear for a deposition or hearing pursuant to paragraph (a) of this
section. As used herein, the term ``documents'' includes written
materials, electronically stored information, and tangible things. A
subpoena duces tecum may be used by any party for purposes of
discovery, for obtaining documents for use in evidence, or for both
purposes, and shall specify with reasonable particularity the materials
to be produced.
(c) Motions to quash; limitation on subpoenas subject to Sec.
3.36. Any motion by the subject of a subpoena to limit or quash the
subpoena shall be filed within the earlier of 10 days after service
thereof or the time for compliance therewith. Such motions shall set
forth all assertions of privilege or other factual and legal objections
to the subpoena, including all appropriate arguments, affidavits and
other supporting documentation, and shall include the statement
required by Sec. 3.22(g). Nothing in paragraphs (a) and (b) of this
section authorizes the issuance of subpoenas requiring the appearance
of, or the production of documents in the possession, custody, or
control of, an official or employee of a governmental agency other than
the Commission, the Commissioners, the General Counsel, the Bureaus and
Offices not involved in the matter, the office of Administrative Law
Judges, or the Secretary in his or her capacity as custodian or
recorder of any such information, or their respective staffs, or
subpoenas to be served in a foreign country, which may be authorized
only in accordance with Sec. 3.36.
0
15. Revise Sec. 3.35 to read as follows:
Sec. 3.35 Interrogatories to parties.
(a) Availability; procedures for use. (1) Any party may serve upon
any other party written interrogatories, not exceeding 25 in number,
including all discrete subparts, to be answered by the party served or,
if the party served is a public or private corporation, partnership,
association or governmental agency, by any officer or agent, who shall
furnish such information as is available to the party. For this
purpose, information shall not be deemed to be available insofar as it
is in the possession of the Commissioners, the General Counsel, the
office of Administrative Law Judges, or the Secretary in his or her
capacity as custodian or recorder of any such information, or their
respective staffs.
(2) Each interrogatory shall be answered separately and fully in
writing under oath, unless it is objected to on grounds not raised and
ruled on in connection with the authorization, in which event the
reasons for objection shall be stated in lieu of an answer. The answers
are to be signed by the person making them, and the objections signed
by the attorney making them. The party upon whom the interrogatories
have been served shall serve a copy of the answers, and objections, if
any, within 30 days after the service of the interrogatories. The
Administrative Law Judge may allow a shorter or longer time.
(3) Except as provided in Sec. 3.31(i), interrogatories shall not
be filed with the Office of the Secretary, the Administrative Law
Judge, or otherwise provided to the Commission.
(b) Scope; use at hearing. (1) Interrogatories may relate to any
matters that can be inquired into under Sec. 3.31(c)(1), and the
answers may be used to the extent permitted by the rules of evidence.
(2) An interrogatory otherwise proper is not necessarily
objectionable merely because an answer to the interrogatory involves an
opinion or contention that relates to fact or the application of law to
fact, but such an interrogatory need not be answered until after
designated discovery has been completed or until a pre-trial
conference or other later time.
(c) Option to produce records. Where the answer to an interrogatory
may be derived or ascertained from the records of the party upon whom
the interrogatory has been served or from an examination, audit or
inspection of such records, or from a compilation, abstract or summary
based thereon, and the burden of deriving or ascertaining the answer is
substantially the same for the party serving the interrogatory as for
the party served, it is a sufficient answer to such interrogatory to
specify the records from which the answer may be derived or ascertained
and to afford to the party serving the interrogatory reasonable
opportunity to examine, audit or inspect such records and to make
copies, compilations, abstracts or summaries. The specification shall
include sufficient detail to permit the interrogating party to identify
readily the individual documents from which the answer may be
ascertained.
0
16. Revise Sec. 3.36, to read as follows:
Sec. 3.36 Applications for subpoenas for records of or appearances by
certain officials or employees of the Commission or officials or
employees of governmental agencies other than the Commission, and
subpoenas to be served in a foreign country.
(a) Form. An application for issuance of a subpoena for the
production of documents, as defined in Sec. 3.34(b), or for the
issuance of a request requiring the production of or access to
documents, other tangible things, or electronically stored information
for the purposes described in Sec. 3.37(a), in the possession,
custody, or control of the Commissioners, the General Counsel, any
Bureau or Office not involved in the matter, the office of
Administrative Law Judges, or the Secretary in his or her capacity as
custodian or recorder of any such information, or their respective
staffs, or of a governmental agency other than the Commission or the
officials or employees of such other agency, or for the issuance of a
subpoena requiring the appearance of a Commissioner, the General
Counsel, an official of any Bureau or Office not involved in the
matter, an Administrative Law Judge, or the Secretary in his or her
capacity as custodian or recorder of any such information, or their
respective staffs, or of an official or employee of another
governmental agency, or for the issuance of a subpoena to be served in
a foreign country, shall be made in the form of a written motion filed
in accordance with the provisions of Sec. 3.22(a). No application for
records pursuant to Sec. 4.11 of this chapter or the Freedom of
Information Act may be filed with the Administrative Law Judge.
(b) Content. The motion shall make a showing that:
(1) The material sought is reasonable in scope;
(2) If for purposes of discovery, the material falls within the
limits of discovery under Sec. 3.31(c)(1), or, if for an adjudicative
hearing, the material is reasonably relevant;
(3) If for purposes of discovery, the information or material
sought cannot reasonably be obtained by other means or, if for purposes
of compelling a witness to appear at the evidentiary hearing, the
movant has a compelling need for the testimony;
(4) With respect to subpoenas to be served in a foreign country,
that the party seeking discovery or testimony has a good faith belief
that the discovery requested would be permitted by treaty, law, custom
or practice in the country from which the discovery or testimony is
sought and that any additional procedural requirements have been or
[[Page 58851]]
will be met before the subpoena is served; and
(5) If the subpoena requires access to documents or other tangible
things, it meets the requirements of Sec. 3.37.
(c) Execution. If an Administrative Law Judge issues an Order
authorizing a subpoena pursuant to this section, the moving party may
forward to the Secretary a request for the authorized subpoena, with a
copy of the authorizing Order attached. Each such subpoena shall be
signed by the Secretary; shall have attached to it a copy of the
authorizing Order; and shall be served by the moving party only in
conjunction with a copy of the authorizing Order.
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17. Revise Sec. 3.37, to read as follows:
Sec. 3.37 Production of documents, electronically stored information,
and any tangible things; access for inspection and other purposes.
(a) Availability; procedures for use. Any party may serve on
another party a request: to produce and permit the party making the
request, or someone acting on the party's behalf, to inspect and copy
any designated documents or electronically stored information, as
defined in Sec. 3.34(b), or to inspect and copy, test, or sample any
tangible things which are within the scope of Sec. 3.31(c)(1) and in
the possession, custody or control of the party upon whom the request
is served; or to permit entry upon designated land or other property in
the possession or control of the party upon whom the order would be
served for the purpose of inspection and measuring, surveying,
photographing, testing, or sampling the property or any designated
object or operation thereon, within the scope of Sec. 3.31(c)(1). Each
such request shall specify with reasonable particularity the documents
or things to be produced or inspected, or the property to be entered.
Each such request shall also specify a reasonable time, place, and
manner of making the production or inspection and performing the
related acts. Each request may specify the form in which electronically
stored information is to be produced, but the requested form of
electronically stored information must not be overly burdensome or
unnecessarily costly to the producing party. A party shall make
documents available as they are kept in the usual course of business or
shall organize and label them to correspond with the categories in the
request. A person not a party to the action may be compelled to produce
documents and things or to submit to an inspection as provided in Sec.
3.34. Except as provided in Sec. 3.31(i), requests under this section
shall not be filed with the Office of the Secretary, the Administrative
Law Judge, or otherwise provided to the Commission.
(b) Response; objections. No more than 30 days after receiving the
request, the response of the party upon whom the request is served
shall state, with respect to each item or category, that inspection and
related activities will be permitted as requested, unless the request
is objected to, in which event the reasons for the objection shall be
stated. If objection is made to part of an item or category, the part
shall be specified and inspection permitted of the remaining parts. The
response may state an objection to a requested form for producing
electronically stored information. If the responding party objects to a
requested form -- or if no form was specified in the request -- the
party must state the form it intends to use. The party submitting the
request may move for an order under Sec. 3.38(a) with respect to any
objection to or other failure to respond to the request or any part
thereof, or any failure to permit inspection as requested.
(c) Production of documents or electronically stored information.
Unless otherwise stipulated or ordered by the Administrative Law Judge,
these procedures apply to producing documents or electronically stored
information:
(i) A party must produce documents as they are kept in the usual
course of business or must organize and label them to correspond to the
categories in the request;
(ii) If a request does not specify a form for producing
electronically stored information, a party must produce it in a form in
which it is ordinarily maintained or in a reasonably usable form; and
(iii) A party need not produce the same electronically stored
information in more than one form.
0
18. Revise Sec. 3.38 to read as follows:
Sec. 3.38 Motion for order compelling disclosure or discovery;
sanctions.
(a) Motion for order to compel. A party may apply by motion to the
Administrative Law Judge for an order compelling disclosure or
discovery, including a determination of the sufficiency of the answers
or objections with respect to the mandatory initial disclosures
required by Sec. 3.31(b), a request for admission under Sec. 3.32, a
deposition under Sec. 3.33, an interrogatory under Sec. 3.35, or a
production of documents or things or access for inspection or other
purposes under Sec. 3.37. Any memorandum in support of such motion
shall be no longer than 2,500 words. Any response to the motion by the
opposing party must be filed within 5 days of receipt of service of the
motion and shall be no longer than 2,500 words. These word count
limitations include headings, footnotes and quotations, but do not
include the cover, table of contents, table of citations or
authorities, glossaries, statements with respect to oral argument, any
addendums containing statutes, rules or regulations, any certificates
of counsel, proposed form of order, and any attachment required by
Sec. 3.45(e). The Administrative Law Judge shall rule on a motion to
compel within 3 business days of the date in which the response is due.
Unless the Administrative Law Judge determines that the objection is
justified, the Administrative Law Judge shall order that an initial
disclosure or an answer to any requests for admissions, documents,
depositions, or interrogatories be served or disclosure otherwise be
made.
(b) If a party or an officer or agent of a party fails to comply
with any discovery obligation imposed by these rules, upon motion by
the aggrieved party, the Administrative Law Judge or the Commission, or
both, may take such action in regard thereto as is just, including but
not limited to the following:
(1) Order that any answer be amended to comply with the request,
subpoena, or order;
(2) Order that the matter be admitted or that the admission,
testimony, documents or other evidence would have been adverse to the
party;
(3) Rule that for the purposes of the proceeding the matter or
matters concerning which the order or subpoena was issued be taken as
established adversely to the party;
(4) Rule that the party may not introduce into evidence or
otherwise rely, in support of any claim or defense, upon testimony by
such party, officer, agent, expert or fact witness,
or the documents or other evidence, or upon any other improperly
withheld or undisclosed materials, information, witnesses or other
discovery;
(5) Rule that the party may not be heard to object to introduction
and use of secondary evidence to show what the withheld admission,
testimony, documents, or other evidence would have shown;
(6) Rule that a pleading, or part of a pleading, or a motion or
other submission by the party, concerning which the order or subpoena
was issued, be stricken, or that a decision of the proceeding be
rendered against the party, or both.
[[Page 58852]]
(c) Any such action may be taken by written or oral order issued in
the course of the proceeding or by inclusion in an initial decision of
the Administrative Law Judge or an order or opinion of the Commission.
It shall be the duty of parties to seek and Administrative Law Judges
to grant such of the foregoing means of relief or other appropriate
relief as may be sufficient to compensate for withheld testimony,
documents, or other evidence. If in the Administrative Law Judge's
opinion such relief would not be sufficient, or in instances where a
nonparty fails to comply with a subpoena or order, he or she shall
certify to the Commission a request that court enforcement of the
subpoena or order be sought.
0
19. Revise Sec. 3.38A to read as follows:
Sec. 3.38A Withholding requested material.
(a) Any person withholding material responsive to a subpoena issued
pursuant to Sec. 3.34 or Sec. 3.36, written interrogatories requested
pursuant to Sec. 3.35, a request for production or access pursuant to
Sec. 3.37, or any other request for the production of materials under
this part, shall assert a claim of privilege or any similar claim not
later than the date set for production of the material. Such person
shall, if so directed in the subpoena or other request for production,
submit, together with such claim, a schedule which describes the nature
of the documents, communications, or tangible things not produced or
disclosed -- and does so in a manner that, without revealing
information itself privileged or protected, will enable other parties
to assess the claim. The schedule need not describe any material
outside the scope of the duty to search set forth in Sec. 3.31(c)(2)
except to the extent that the Administrative Law Judge has authorized
additional discovery as provided in that paragraph.
(b) A person withholding material for reasons described in Sec.
3.38A(a) shall comply with the requirements of that subsection in lieu
of filing a motion to limit or quash compulsory process.
(Sec. 5, 38 Stat. 719 as amended (15 U.S.C. 45))
0
20. Revise Sec. 3.39 to read as follows:
Sec. 3.39 Orders requiring witnesses to testify or provide other
information and granting immunity.
(a) Where Commission complaint counsel desire the issuance of an
order requiring a witness or deponent to testify or provide other
information and granting immunity under title 18, section 6002, United
States Code, Directors and Assistant Directors of Bureaus and Regional
Directors and Assistant Regional Directors of Commission Regional
Offices who supervise complaint counsel responsible for presenting
evidence in support of the complaint are authorized to determine:
(1) That the testimony or other information sought from a witness
or deponent, or prospective witness or deponent, may be necessary to
the public interest, and
(2) That such individual has refused or is likely to refuse to
testify or provide such information on the basis of his or her
privilege against self-incrimination; and to request, through the
Commission's liaison officer, approval by the Attorney General for the
issuance of such order. Upon receipt of approval by the Attorney
General (or his or her designee), the Administrative Law Judge is
authorized to issue an order requiring the witness or deponent to
testify or provide other information and granting immunity when the
witness or deponent has invoked his or her privilege against self-
incrimination and it cannot be determined that such privilege was
improperly invoked.
(b) Requests by counsel other than Commission complaint counsel for
an order requiring a witness to testify or provide other information
and granting immunity under title 18, section 6002, United States Code,
may be made to the Administrative Law Judge and may be madeex parte.
When such requests are made, the Administrative Law Judge is authorized
to determine:
(1) That the testimony or other information sought from a witness
or deponent, or prospective witness or deponent, may be necessary to
the public interest, and
(2) That such individual has refused or is likely to refuse to
testify or provide such information on the basis of his or her
privilege against self-incrimination; and, upon making such
determinations, to request, through the Commission's liaison officer,
approval by the Attorney General for the issuance of an order requiring
a witness to testify or provide other information and granting
immunity; and, after the Attorney General (or his or her designee) has
granted such approval, to issue such order when the witness or deponent
has invoked his or her privilege against self-incrimination and it
cannot be determined that such privilege was improperly invoked.
(18 U.S.C. 6002, 6004)
0
21. Revise Sec. 3.41, including the heading, to read as follows:
Sec. 3.41 General hearing rules.
(a) Public hearings. All hearings in adjudicative proceedings shall
be public unless an in camera order is entered by the Administrative
Law Judge pursuant to Sec. 3.45(b) of this chapter or unless otherwise
ordered by the Commission.
(b) Expedition. Hearings shall proceed with all reasonable
expedition, and, insofar as practicable, shall be held at one place and
shall continue, except for brief intervals of the sort normally
involved in judicial proceedings, without suspension until concluded.
The hearing will take place on the date specified in the notice
accompanying the complaint, pursuant to Sec. 3.11(b)(4), and should be
limited to no more than 210 hours. The Commission, upon a showing of
good cause, may order a later date for the evidentiary hearing to
commence or extend the number of hours for the hearing. Consistent with
the requirements of expedition:
(1) The Administrative Law Judge may order hearings at more than
one place and may grant a reasonable recess at the end of a case-in-
chief for the purpose of discovery deferred during the pre-hearing
procedure if the Administrative Law Judge determines that such recess
will materially expedite the ultimate disposition of the proceeding.
(2) When actions involving a common question of law or fact are
pending before the Administrative Law Judge, the Commission or the
Administrative Law Judge may order a joint hearing of any or all the
matters in issue in the actions; the Commission or the Administrative
Law Judge may order all the actions consolidated; and the Commission or
the Administrative Law Judge may make such orders concerning
proceedings therein as may tend to avoid unnecessary costs or delay.
(3) When separate hearings will be conducive to expedition and
economy, the Commission or the Administrative Law Judge may order a
separate hearing of any claim, or of any separate issue, or of any
number of claims or issues.
(4) Each side shall be allotted no more than half of the trial time
within which to present its opening statements, in limine motions, all
arguments excluding the closing argument, direct or cross examinations,
or other evidence.
(5) Each side shall be permitted to make an opening statement that
is no more than 2 hours in duration.
(6) Each side shall be permitted to make a closing argument no
later than 5 days after the last filed proposed findings. The closing
argument shall last no longer than 2 hours.
(c) Rights of parties. Every party, except intervenors, whose
rights are determined under Sec. 3.14, shall have the right of due
notice, cross-examination, presentation of evidence, objection,
[[Page 58853]]
motion, argument, and all other rights essential to a fair hearing.
(d) Adverse witnesses. An adverse party, or an officer, agent, or
employee thereof, and any witness who appears to be hostile, unwilling,
or evasive, may be interrogated by leading questions and may also be
contradicted and impeached by the party calling him or her.
(e) Requests for an order requiring a witness to testify or provide
other information and granting immunity under title 18, section 6002,
of the United States Code, shall be disposed of in accordance with
Sec. 3.39.
(f) Collateral federal court actions.The pendency of a collateral
federal court proceeding that relates to the administrative
adjudication shall not stay the proceeding unless the Commission (or a
court of competent jurisdiction) so orders for good cause. A stay shall
toll any deadlines set by the rules.
(18 U.S.C. 6002, 6004)
0
22. Revise Sec. 3.42 to read as follows:
Sec. 3.42 Presiding officials.
(a) Who presides. Hearings in adjudicative proceedings shall be
presided over by a duly qualified Administrative Law Judge or by the
Commission or one or more members of the Commission sitting as
Administrative Law Judges; and the term Administrative Law Judge as
used in this part means and applies to the Commission or any of its
members when so sitting. The Commission or one or more members of the
Commission may preside over discovery and other prehearing proceedings
and then transfer the matter to an Administrative Law Judge to preside
over any remaining prehearing proceedings and the evidentiary hearing
and to issue an initial decision.
(b) How assigned. The presiding Administrative Law Judge shall be
designated by the Chief Administrative Law Judge or, when the
Commission or one or more of its members preside, by the Commission,
who shall notify the parties of the Administrative Law Judge
designated.
(c) Powers and duties. Administrative Law Judges shall have the
duty to conduct fair and impartial hearings, to take all necessary
action to avoid delay in the disposition of proceedings, and to
maintain order. They shall have all powers necessary to that end,
including the following:
(1) To administer oaths and affirmations;
(2) To issue subpoenas and orders requiring answers to questions;
(3) To take depositions or to cause depositions to be taken;
(4) To compel admissions, upon request of a party or on their own
initiative;
(5) To rule upon offers of proof and receive evidence;
(6) To regulate the course of the hearings and the conduct of the
parties and their counsel therein;
(7) To hold conferences for settlement, simplification of the
issues, or any other proper purpose;
(8) To consider and rule upon, as justice may require, all
procedural and other motions appropriate in an adjudicative proceeding,
including motions to open defaults;
(9) To make and file initial decisions;
(10) To certify questions to the Commission for its determination;
(11) To reject written submissions that fail to comply with rule
requirements, or deny in camera status without prejudice until a party
complies with all relevant rules; and
(12) To take any action authorized by the rules in this part or in
conformance with the provisions of the Administrative Procedure Act as
restated and incorporated in title 5, United States Code.
(d) Suspension of attorneys by Administrative Law Judge. The
Administrative Law Judge shall have the authority, for good cause
stated on the record, to suspend or bar from participation in a
particular proceeding any attorney who shall refuse to comply with his
or her directions, or who shall be guilty of disorderly, dilatory,
obstructionist, or contumacious conduct, or contemptuous language in
the course of such proceeding. Any attorney so suspended or barred may
appeal to the Commission in accordance with the provisions of Sec.
3.23(a). The appeal shall not operate to suspend the hearing unless
otherwise ordered by the Administrative Law Judge or the Commission; in
the event the hearing is not suspended, the attorney may continue to
participate therein pending disposition of the appeal.
(e) Substitution of Administrative Law Judge. In the event of the
substitution of a new Administrative Law Judge for the one originally
designated, any motion predicated upon such substitution shall be made
within 5 days thereafter.
(f) Interference. In the performance of their adjudicative
functions, Administrative Law Judges shall not be responsible to or
subject to the supervision or direction of any officer, employee, or
agent engaged in the performance of investigative or prosecuting
functions for the Commission, and all direction by the Commission to
Administrative Law Judges concerning any adjudicative proceedings shall
appear in and be made a part of the record.
(g) Disqualification of Administrative Law Judges. (1) When an
Administrative Law Judge deems himself or herself disqualified to
preside in a particular proceeding, he or she shall withdraw therefrom
by notice on the record and shall notify the Director of Administrative
Law Judges of such withdrawal.
(2) Whenever any party shall deem the Administrative Law Judge for
any reason to be disqualified to preside, or to continue to preside, in
a particular proceeding, such party may file with the Secretary a
motion addressed to the Administrative Law Judge to disqualify and
remove him or her, such motion to be supported by affidavits setting
forth the alleged grounds for disqualification. If the Administrative
Law Judge does not disqualify himself or herself within 10 days, he or
she shall certify the motion to the Commission, together with any
statement he or she may wish to have considered by the Commission. The
Commission shall promptly determine the validity of the grounds
alleged, either directly or on the report of another Administrative Law
Judge appointed to conduct a hearing for that purpose.
(3) Such motion shall be filed at the earliest practicable time
after the participant learns, or could reasonably have learned, of the
alleged grounds for disqualification.
(h)Failure to comply with Administrative Law Judge's directions.
Any party who refuses or fails to comply with a lawfully issued order
or direction of an Administrative Law Judge may be considered to be in
contempt of the Commission. The circumstances of any such neglect,
refusal, or failure, together with a recommendation for appropriate
action, shall be promptly certified by the Administrative Law Judge to
the Commission. The Commission may make such orders in regard thereto
as the circumstances may warrant.
0
23. Revise Sec. 3.43 to read as follows:
Sec. 3.43 Evidence.
(a) Burden of proof. Counsel representing the Commission, or any
person who has filed objections sufficient to warrant the holding of an
adjudicative hearing pursuant to Sec. 3.13, shall have the burden of
proof, but the proponent of any factual proposition shall be required
to sustain the burden of proof with respect thereto.
(b) Admissibility. Relevant, material, and reliable evidence shall
be admitted.
[[Page 58854]]
Irrelevant, immaterial, and unreliable evidence shall be excluded.
Evidence, even if relevant, may be excluded if its probative value is
substantially outweighed by the danger of unfair prejudice, confusion
of the issues, or if the evidence would be misleading, or by
considerations of undue delay, waste of time, or needless presentation
of cumulative evidence. Evidence that constitutes hearsay may be
admitted if it is relevant, material, and bears satisfactory indicia of
reliability so that its use is fair. Hearsay is a statement, other than
one made by the declarant while testifying at the hearing, offered in
evidence to prove the truth of the matter asserted. If otherwise
meeting the standards for admissibility described in this paragraph,
depositions, investigational hearings, prior testimony in Commission or
other proceedings, and any other form of hearsay, shall be admissible
and shall not be excluded solely on the ground that they are or contain
hearsay. Statements or testimony by a party-opponent, if relevant,
shall be admitted.
(c)Admissibility of third party documents. Extrinsic evidence of
authenticity as a condition precedent to admissibility of documents
received from third parties is not required with respect to the
original or a duplicate of a domestic record of regularly conducted
activity by that third party that otherwise meets the standards of
admissibility described in paragraph (b) if accompanied by a written
declaration of its custodian or other qualified person, in a manner
complying with any Act of Congress or rule prescribed by the Supreme
Court pursuant to statutory authority, certifying that the record: (1)
was made at or near the time of the occurrence of the matters set forth
by, or from information transmitted by, a person with knowledge of
those matters; (2) was kept in the course of the regularly conducted
activity; and (3) was made by the regularly conducted activity as a
regular practice.
(d) Presentation of evidence.
(1) A party is entitled to present its case or defense by sworn
oral testimony and documentary evidence, to submit rebuttal evidence,
and to conduct such cross-examination as, in the discretion of the
Commission or the Administrative Law Judge, may be required for a full
and true disclosure of the facts.
(2) The Administrative Law Judge shall exercise reasonable control
over the mode and order of interrogating witnesses and presenting
evidence so as to--
(i) Make the interrogation and presentation effective for the
ascertainment of the truth;
(ii) Avoid needless consumption of time; and
(iii) Protect witnesses from harassment or undue embarrassment.
(3) As respondents are in the best position to determine the nature
of documents generated by such respondents and which come from their
own files, the burden of proof is on the respondent to introduce
evidence to rebut a presumption that such documents are authentic and
kept in the regular course of business.
(e) Information obtained in investigations. Any documents, papers,
books, physical exhibits, or other materials or information obtained by
the Commission under any of its powers may be disclosed by counsel
representing the Commission when necessary in connection with
adjudicative proceedings and may be offered in evidence by counsel
representing the Commission in any such proceeding.
(f) Official notice. ``Official notice'' may be taken of any
material fact that is not subject to reasonable dispute in that it is
either (1) generally known within the Commission's expertise, or (2)
capable of accurate and ready determination by resort to sources whose
accuracy cannot reasonably be questioned. If official notice is
requested or is taken of a material fact not appearing in the evidence
in the record, the parties, upon timely request, shall be afforded an
opportunity to disprove such noticed fact.
(g) Objections. Objections to evidence shall timely and briefly
state the grounds relied upon, but the transcript shall not include
argument or debate thereon except as ordered by the Administrative Law
Judge. Rulings on all objections shall appear in the record.
(h) Exceptions. Formal exception to an adverse ruling is not
required.
(i) Excluded evidence. When an objection to a question propounded
to a witness is sustained, the questioner may make a specific offer of
what he or she expects to prove by the answer of the witness, or the
Administrative Law Judge may, in his or her discretion, receive and
report the evidence in full. Rejected exhibits, adequately marked for
identification, shall be retained in the record so as to be available
for consideration by any reviewing authority.
0
24. Revise Sec. 3.44 to read as follows:
Sec. 3.44 Record.
(a) Reporting and transcription. Hearings shall be stenographically
reported and transcribed by the official reporter of the Commission
under the supervision of the Administrative Law Judge, and the original
transcript shall be a part of the record and the sole official
transcript. The live oral testimony of each witness shall be video
recorded digitally, and the video recording and the written transcript
of the testimony shall be made part of the record. Copies of
transcripts are available from the reporter at rates not to exceed the
maximum rates fixed by contract between the Commission and the
reporter.
(b) Corrections. Corrections of the official transcript may be made
only when they involve errors affecting substance and then only in the
manner herein provided. Corrections ordered by the Administrative Law
Judge or agreed to in a written stipulation signed by all counsel and
parties not represented by counsel, and approved by the Administrative
Law Judge, shall be included in the record, and such stipulations,
except to the extent they are capricious or without substance, shall be
approved by the Administrative Law Judge. Corrections shall not be
ordered by the Administrative Law Judge except upon notice and
opportunity for the hearing of objections. Such corrections shall be
made by the official reporter by furnishing substitute type pages,
under the usual certificate of the reporter, for insertion in the
official record. The original uncorrected pages shall be retained in
the files of the Commission.
(c) Closing of the hearing record. Upon completion of the
evidentiary hearing, the Administrative Law Judge shall issue an order
closing the hearing record after giving the parties 3 business days to
determine if the record is complete or needs to be supplemented. The
Administrative Law Judge shall retain the discretion to permit or order
correction of the record as provided in Sec. 3.44(b).
0
25. Revise Sec. 3.45 to read as follows:
Sec. 3.45 In camera orders.
(a) Definition. Except as hereinafter provided, material made
subject to an in cameraorder 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.
[[Page 58855]]
(b) In camera treatment of material. A party or third party may
obtain in cameratreatment for material, or portions thereof, offered
into evidence only by motion to the Administrative Law Judge. Parties
who seek to use material obtained from a third party subject to
confidentiality restrictions must demonstrate that the third party has
been given at least 10 days notice of the proposed use of such
material. Each such motion must include an attachment containing a copy
of each page of the document in question on which in camera or
otherwise confidential excerpts appear. The Administrative Law Judge
may order that such material, whether admitted or rejected, be placed
in cameraonly after finding that its public disclosure will likely
result in a clearly defined, serious injury to the person, partnership
or corporation requesting 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). The party submitting
material for which in camera treatment is sought must provide, for each
piece of such evidence and affixed to such evidence, the name and
address of any person who should be notified in the event that the
Commission intends to disclose in camera information in a final
decision. 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 whichin 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. If an in camera order is silent
as to duration, without explanation, then it will expire 3 years after
its date of issuance. 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 on which in camera treatment expires. If the Administrative
Law Judge has determined thatin camera treatment should be granted for
an indeterminate period, the notation should state that fact.
Parties are not required to provide documents subject to in camera
treatment, including documents obtained from third parties, to any
individual or entity other than the Administrative Law Judge, counsel
for other parties, and, during an appeal, the Commission or a federal
court.
(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.
(d) Briefs and other submissions referring to in camera or
confidential information. Parties shall not disclose information that
has been granted in camera status pursuant to Sec. 3.45(b) or is
subject to confidentiality protections pursuant to a protective order
in the public version of proposed findings, briefs, or other documents.
This provision does not preclude references in such proposed findings,
briefs, or other documents to in camera or other confidential
information or general statements based on the content of such
information.
(e) When in camera or confidential information is included in
briefs and other submissions. If a party includes specific information
that has been granted in camerastatus pursuant to Sec. 3.45(b) or is
subject to confidentiality protections pursuant to a protective order
in any document filed in a proceeding under this part, the party shall
file 2 versions of the document. A complete version shall be marked
``In Camera'' or ``Subject to Protective Order,'' as appropriate, on
the first page and shall be filed with the Secretary and served by the
party on the other parties in accordance with the rules in this part.
Submitters of in camera or other confidential material should mark any
such material in the complete versions of their submissions in a
conspicuous matter, such as with highlighting or bracketing. References
to in camera or confidential material must be supported by record
citations to relevant evidentiary materials and associated
Administrative Law Judge in camera or other confidentiality rulings to
confirm that in camera or other confidential treatment is warranted for
such material. In addition, the document must include an attachment
containing a copy of each page of the document in question on which in
camera or otherwise confidential excerpts appear, and providing the
name and address of any person who should be notified of the
Commission's intent to disclose in a final decision any of the in
camera or otherwise confidential information in the document. Any time
period within which these rules allow a party to respond to a document
shall run from the date the party is served with the complete version
of the document. An expurgated version of the document, marked ``Public
Record'' on the first page and omitting the in camera and confidential
information and attachment that appear in the complete version, shall
be filed with the Secretary within 5 days after the filing of the
complete version, unless the Administrative Law Judge or the Commission
directs otherwise, and shall be served by the party on the other
parties in accordance with the rules in this part. The expurgated
version shall indicate any omissions with brackets or ellipses, and its
pagination and depiction of text on each page shall be identical to
that of the in camera version.
(f) When in camera or confidential information is included in
rulings or recommendations of the Administrative Law Judge. If the
Administrative Law Judge includes in any ruling or recommendation
information that has been granted in camerastatus pursuant to Sec.
3.45(b) or is subject to confidentiality protections pursuant to a
protective order, the Administrative Law Judge shall file 2 versions of
the ruling or recommendation. A complete version shall be marked ``In
Camera'' or ``Subject to Protective Order,'' as appropriate, on the
first page and shall be served upon the parties. The complete version
will be placed in the in camera record of the proceeding. An expurgated
version, to be filed within 5 days after the filing of the complete
version, shall omit thein camera and confidential information that
appears in the complete version, shall be marked ``Public Record'' on
the first page, shall be served upon the parties, and shall be included
in the public record of the proceeding.
(g) Provisional in camera rulings. The Administrative Law Judge may
make a provisional grant ofin camera status to materials if the showing
required in Sec. 3.45(b) cannot be made at the time the material is
offered into evidence but the Administrative Law Judge determines that
the interests of justice would be served by such a ruling. Within 20
days of such a provisional grant of in camera status, the party
offering the evidence or an interested third party must present a
motion to the Administrative Law Judge for a final ruling on whether in
camera
[[Page 58856]]
treatment of the material is appropriate pursuant to Sec. 3.45(b). If
no such motion is filed, the Administrative Law Judge may either
exclude the evidence, deny in camera status, or take such other action
as is appropriate.
0
26. Revise Sec. 3.46 to read as follows:
Sec. 3.46 Proposed findings, conclusions, and order.
(a) General. Within 21 days of the closing of the hearing record,
each party may file with the Secretary for consideration of the
Administrative Law Judge proposed findings of fact, conclusions of law,
and rule or order, together with reasons therefor and briefs in support
thereof. Such proposals shall be in writing, shall be served upon all
parties, and shall contain adequate references to the record and
authorities relied on. If a party includes in the proposals information
that has been granted in camera status pursuant to Sec. 3.45(b), the
party shall file 2 versions of the proposals in accordance with the
procedures set forth in Sec. 3.45(e). Reply findings of fact,
conclusions of law, and briefs may be filed by each party within 10
days of service of the initial proposed findings.
(b) Exhibit Index. The first statement of proposed findings of fact
and conclusions of law filed by a party shall include an index listing
for each exhibit offered by the party and received in evidence:
(1) The exhibit number, followed by
(2) The exhibit's title or a brief description if the exhibit is
untitled;
(3) The transcript page at which the Administrative Law Judge ruled
on the exhibit's admissibility or a citation to any written order in
which such ruling was made;
(4) The transcript pages at which the exhibit is discussed;
(5) An identification of any other exhibit which summarizes the
contents of the listed exhibit, or of any other exhibit of which the
listed exhibit is a summary;
(6) A cross-reference, by exhibit number, to any other portions of
that document admitted as a separate exhibit on motion by any other
party; and
(7) A statement whether the exhibit has been accorded in camera
treatment, and a citation to the in camera ruling.
(c) Witness index. The first statement of proposed findings of fact
and conclusions of law filed by a party shall also include an index to
the witnesses called by that party, to include for each witness:
(1) The name of the witness;
(2) A brief identification of the witness;
(3) The transcript pages at which any testimony of the witness
appears; and
(4) A statement whether the exhibit has been accordedin camera
treatment, and a citation to the in camera ruling.
(d) Stipulated indices. As an alternative to the filing of separate
indices, the parties are encouraged to stipulate to joint exhibit and
witness indices at the time the first statement of proposed findings of
fact and conclusions of law is due to be filed.
(e) Rulings. The record shall show the Administrative Law Judge's
ruling on each proposed finding and conclusion, except when the order
disposing of the proceeding otherwise informs the parties of the action
taken.
0
27. Revise Sec. 3.51 to read as follows:
Sec. 3.51 Initial decision.
(a) When filed and when effective. The Administrative Law Judge
shall file an initial decision within 70 days after the filing of the
last filed initial or reply proposed findings of fact, conclusions of
law and order pursuant to Sec. 3.46, or within 85 days of the closing
the hearing record pursuant to Sec. 3.44(c) where the parties have
waived the filing of proposed findings. The Administrative Law Judge,
for good cause, may extend these time periods by 30 days. The
Administrative Law Judge shall file an initial decision within 14 days
after a default or the granting of a motion for summary decision. The
Commission may extend any of these time limits. In no event shall the
Administrative Law Judge file an initial decision later than 1 year
after the issuance of the administrative complaint. Extensions of the
1-year deadline may be granted by the Commission upon a finding of
extraordinary circumstances and if appropriate in the public interest.
Once issued, the initial decision shall become the decision of the
Commission 30 days after service thereof upon the parties or 30 days
after the filing of a timely notice of appeal, whichever shall be
later, unless a party filing such a notice shall have perfected an
appeal by the timely filing of an appeal brief or the Commission shall
have issued an order placing the case on its own docket for review or
staying the effective date of the decision.
(b) Exhaustion of administrative remedies. An initial decision
shall not be considered final agency action subject to judicial review
under 5 U.S.C. 704. Any objection to a ruling by the Administrative Law
Judge, or to a finding, conclusion or a provision of the order in the
initial decision, which is not made a part of an appeal to the
Commission shall be deemed to have been waived.
(c) Content, format for filing. (1) An initial decision shall be
based on a consideration of the whole record relevant to the issues
decided, and shall be supported by reliable and probative evidence. The
initial decision shall include a statement of findings of fact (with
specific page references to principal supporting items of evidence in
the record) and conclusions of law, as well as the reasons or basis
therefor, upon all the material issues of fact, law, or discretion
presented on the record (or those designated under paragraph (c)(2) of
this section) and an appropriate rule or order. Rulings containing
information granted in camera status pursuant to Sec. 3.45 shall be
filed in accordance with Sec. 3.45(f).
(2) The initial decision shall be prepared in a common word
processing format, such as WordPerfect or Word, and shall be filed by
the Administrative Law Judge with the Office of the Secretary in both
electronic and paper versions.
(3) When more than one claim for relief is presented in an action,
or when multiple parties are involved, the Administrative Law Judge may
direct the entry of an initial decision as to one or more but fewer
than all of the claims or parties only upon an express determination
that there is no just reason for delay and upon an express direction
for the entry of initial decision.
(d) By whom made. The initial decision shall be made and filed by
the Administrative Law Judge who presided over the hearings, except
when he or she shall have become unavailable to the Commission.
(e) Reopening of proceeding by Administrative Law Judge;
termination of jurisdiction. (1) At any time from the close of the
hearing record pursuant to Sec. 3.44(c) until the filing of his or her
initial decision, an Administrative Law Judge may reopen the proceeding
for the reception of further evidence for good cause shown.
(2) Except for the correction of clerical errors or pursuant to an
order of remand from the Commission, the jurisdiction of the
Administrative Law Judge is terminated upon the filing of his or her
initial decision with respect to those issues decided pursuant to
paragraph (c)(1) of this section.
0
28. Revise Sec. 3.52 to read as follows:
Sec. 3.52 Appeal from initial decision.
(a) Who may file; notice of intention. Any party to a proceeding
may appeal an initial decision to the Commission by filing a notice of
appeal with the
[[Page 58857]]
Secretary within 10 days after service of the initial decision. The
notice shall specify the party or parties against whom the appeal is
taken and shall designate the initial decision and order or part
thereof appealed from. If a timely notice of appeal is filed by a
party, any other party may thereafter file a notice of appeal within 5
days after service of the first notice, or within 10 days after service
of the initial decision, whichever period expires last.
(b) Appeal brief. (1) The appeal shall be in the form of a brief,
filed within 30 days after service of the initial decision, and shall
contain, in the order indicated, the following:
(i) A subject index of the matter in the brief, with page
references, and a table of cases (alphabetically arranged), textbooks,
statutes, and other material cited, with page references thereto;
(ii) A concise statement of the case, which includes a statement of
facts relevant to the issues submitted for review, and a summary of the
argument, which must contain a succinct, clear, and accurate statement
of the arguments made in the body of the brief, and which must not
merely repeat the argument headings;
(iii) A specification of the questions intended to be urged;
(iv) The argument presenting clearly the points of fact and law
relied upon in support of the position taken on each question, with
specific page references to the record and the legal or other material
relied upon; and
(v) A proposed form of order for the Commission's consideration
instead of the order contained in the initial decision.
(2) The brief shall not, without leave of the Commission, exceed
14,000 words.
(c) Answering brief. Within 30 days after service of the appeal
brief, the appellee may file an answering brief, which shall contain a
subject index, with page references, and a table of cases
(alphabetically arranged), textbooks, statutes, and other material
cited, with page references thereto, as well as arguments in response
to the appellant's appeal brief. However, if the appellee is also
cross-appealing, its answering brief shall also contain its arguments
as to any issues the party is raising on cross-appeal, including the
points of fact and law relied upon in support of its position on each
question, with specific page references to the record and legal or
other material on which the party relies in support of its cross-
appeal, and a proposed form of order for the Commission's consideration
instead of the order contained in the initial decision. If the appellee
does not cross-appeal, its answering brief shall not, without leave of
the Commission, exceed 14,000 words. If the appellee cross-appeals, its
brief in answer and on cross-appeal shall not, without leave of the
Commission, exceed 16,500 words.
(d) Reply brief. Within 7 days after service of the appellee's
answering brief, the appellant may file a reply brief, which shall be
limited to rebuttal of matters in the answering brief and shall not,
without leave of the Commission, exceed 7,000 words. If the appellee
has cross-appealed, any party who is the subject of the cross-appeal
may, within 30 days after service of such appellee's brief, file a
reply brief, which shall be limited to rebuttal of matters in the
appellee's brief and shall not, without leave of the Commission, exceed
7,000 words. The appellee who has cross-appealed may, within 7 days
after service of a reply to its cross-appeal, file an additional brief,
which shall be limited to rebuttal of matters in the reply to its
cross-appeal and shall not, without leave of the Commission, exceed
7,000 words. The Commission will not consider new arguments or matters
raised in reply briefs that could have been raised earlier in the
principal briefs.
(e) In camera information. If a party includes in any brief to be
filed under this section information that has been granted in camera
status pursuant to Sec. 3.45(b) or is subject to confidentiality
provisions pursuant to a protective order, the party shall file 2
versions of the brief in accordance with the procedures set forth in
Sec. 3.45(e). The time period specified by this section within which a
party may file an answering or reply brief will begin to run upon
service on the party of the in camera or confidential version of a
brief.
(f) Signature. (1) The original of each brief filed shall have a
hand-signed signature by an attorney of record for the party, or in the
case of parties not represented by counsel, by the party itself, or by
a partner if a partnership, or by an officer of the party if it is a
corporation or an unincorporated association.
(2) Signing a brief constitutes a representation by the signer that
he or she has read it; that to the best of his or her knowledge,
information, and belief, the statements made in it are true; that it is
not interposed for delay; that it complies all the applicable word
count limitation; and that to the best of his or her knowledge,
information, and belief, it complies with all the other rules in this
part. If a brief is not signed or is signed with intent to defeat the
purpose of this section, it may be stricken as sham and false and the
proceeding may go forward as though the brief has not been filed.
(g) Designation of appellant and appellee in cases involving cross-
appeals. In a case involving an appeal by complaint counsel and one or
more respondents, any respondent who has filed a timely notice of
appeal and as to whom the Administrative Law Judge has issued an order
to cease and desist shall be deemed an appellant for purposes of
paragraphs (b), (c), and (d) of this section. In a case in which the
Administrative Law Judge has dismissed the complaint as to all
respondents, complaint counsel shall be deemed the appellant for
purposes of paragraphs (b), (c), and (d) of this section.
(h) Oral argument. All oral arguments shall be public unless
otherwise ordered by the Commission. Oral arguments will be held in all
cases on appeal to the Commission unless the Commission otherwise
orders upon its own initiative or upon request of any party made at the
time of filing his or her brief. Oral arguments before the Commission
shall be reported stenographically, unless otherwise ordered, and a
member of the Commission absent from an oral argument may participate
in the consideration and decision of the appeal in any case in which
the oral argument is stenographically reported.
(i) Corrections in transcript of oral argument. The Commission will
entertain only joint motions of the parties requesting corrections in
the transcript of oral argument, except that the Commission will
receive a unilateral motion which recites that the parties have made a
good faith effort to stipulate to the desired corrections but have been
unable to do so. If the parties agree in part and disagree in part,
they should file a joint motion incorporating the extent of their
agreement, and, if desired, separate motions requesting those
corrections to which they have been unable to agree. The Secretary,
pursuant to delegation of authority by the Commission, is authorized to
prepare and issue in the name of the Commission a brief ``Order
Correcting Transcript'' whenever a joint motion to correct transcript
is received.
(j) Briefs of amicus curiae. A brief of an amicus curiae may be
filed by leave of the Commission granted on motion with notice to the
parties or at the request of the Commission, except that such leave
shall not be required when the brief is presented by an agency or
officer of the United States; or by a State, territory, commonwealth,
or the District of Columbia, or by an agency or
[[Page 58858]]
officer of any of them. The brief may be conditionally filed with the
motion for leave. A motion for leave shall identify the interest of the
applicant and state how a Commission decision in the matter would
affect the applicant or persons it represents. The motion shall also
state the reasons why a brief of an amicus curiae is desirable. Except
as otherwise permitted by the Commission, an amicus curiae shall file
its brief within the time allowed the parties whose position as to
affirmance or reversal the amicus brief will support. The Commission
shall grant leave for a later filing only for cause shown, in which
event it shall specify within what period such brief must be filed. A
motion for an amicus curiae to participate in oral argument will be
granted only for extraordinary reasons. An amicus brief may be no more
than one-half the maximum length authorized by these rules for a
party's principal brief.
(k) Word count limitation. The word count limitations in this
section include headings, footnotes and quotations, but do not include
the cover, table of contents, table of citations or authorities,
glossaries, statements with respect to oral argument, any addendums
containing statutes, rules or regulations, any certificates of counsel,
proposed form of order, and any attachment required by Sec. 3.45(e).
Extensions of word count limitations are disfavored, and will only be
granted where a party can make a strong showing that undue prejudice
would result from complying with the existing limit.
PART 4--MISCELLANEOUS RULES
0
1. The authority citation for part 4 continues to read as follows:
Authority: 15 U.S.C. 46, unless otherwise noted.
0
2. Amend Sec. 4.3 by revising paragraph (b) as follows:
Sec. 4.3 Time.
* * * * *
(b) Extensions. For good cause shown, the Administrative Law Judge
may, in any proceeding before him or her: (1) extend any time limit
prescribed or allowed by order of the Administrative Law Judge or the
Commission (if the Commission order expressly authorizes the
Administrative Law Judge to extend time periods); or (2) extend any
time limit prescribed by the rules in this chapter, except those
governing motions directed to the Commission, interlocutory appeals and
initial decisions and deadlines that the rules expressly authorize only
the Commission to extend. Except as otherwise provided by law, the
Commission, for good cause shown, may extend any time limit prescribed
by the rules in this chapter or by order of the Commission or an
Administrative Law Judge, provided, however, that in a proceeding
pending before an Administrative Law Judge, any motion on which he or
she may properly rule shall be made to the Administrative Law Judge.
Notwithstanding the above, where a motion to extend is made after the
expiration of the specified period, the motion may be considered where
the untimely filing was the result of excusable neglect.
* * * * *
By direction of the Commission, Commissioner Rosch not
participating.
Donald S. Clark
Secretary
[FR Doc. E8-23745 Filed 10-6-08: 8:45 am]
BILLING CODE 6750-01-S