[Federal Register Volume 77, Number 249 (Friday, December 28, 2012)]
[Notices]
[Pages 76518-76522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-31158]
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INTERNATIONAL TRADE COMMISSION
Summary of Commission Practice Relating to Administrative
Protective Orders
AGENCY: U.S. International Trade Commission.
[[Page 76519]]
ACTION: Summary of Commission practice relating to administrative
protective orders.
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SUMMARY: Since February 1991, the U.S. International Trade Commission
(``Commission'') has issued an annual report on the status of its
practice with respect to violations of its administrative protective
orders (``APOs'') under title VII of the Tariff Act of 1930, in
response to a direction contained in the Conference Report to the
Customs and Trade Act of 1990. Over time, the Commission has added to
its report discussions of APO breaches in Commission proceedings other
than under title VII and violations of the Commission's rules including
the rule on bracketing business proprietary information (``BPI'') (the
``24-hour rule''), 19 CFR 207.3(c). This notice provides a summary of
investigations completed during calendar year 2011 of breaches in
proceedings under title VII and section 337 of the Tariff Act of 1930.
There were no rules violation investigations completed in 2011. The
Commission intends that this report inform representatives of parties
to Commission proceedings as to some specific types of APO breaches
encountered by the Commission and the corresponding types of actions
the Commission has taken.
FOR FURTHER INFORMATION CONTACT: Carol McCue Verratti, Esq., Office of
the General Counsel, U.S. International Trade Commission, telephone
(202) 205-3088. Hearing impaired individuals are advised that
information on this matter can be obtained by contacting the
Commission's TDD terminal at (202) 205-1810. General information
concerning the Commission can also be obtained by accessing its Web
site. (http://www.usitc.gov).
SUPPLEMENTARY INFORMATION: Representatives of parties to investigations
or other proceedings conducted under title VII of the Tariff Act of
1930, section 337 of the Tariff Act of 1930, the North American Free
Trade Agreement (NAFTA) Article 1904.13, and safeguard-related
provisions such as section 202 of the Trade Act of 1974, may enter into
APOs that permit them, under strict conditions, to obtain access to BPI
(title VII) and confidential business information (``CBI'') (safeguard-
related provisions and section 337) of other parties. See, e.g., 19
U.S.C. 1677f; 19 CFR 207.7; 19 U.S.C. 1337(n); 19 CFR 210.5, 210.34; 19
U.S.C. 2252(i); 19 CFR 206.17; and 19 U.S.C. 1516a(g)(7)(A); 19 CFR
207.100, et. seq.. The discussion below describes APO breach
investigations that the Commission has completed during calendar year
2011, including a description of actions taken in response to these
breaches.
Since 1991, the Commission has published annually a summary of its
actions in response to violations of Commission APOs and the 24-hour
rule. See 56 FR 4846 (February 6, 1991); 57 FR 12335 (April 9, 1992);
58 FR 21991 (April 26, 1993); 59 FR 16834 (April 8, 1994); 60 FR 24880
(May 10, 1995); 61 FR 21203 (May 9, 1996); 62 FR 13164 (March 19,
1997); 63 FR 25064 (May 6, 1998); 64 FR 23355 (April 30, 1999); 65 FR
30434 (May 11, 2000); 66 FR 27685 (May 18, 2001); 67 FR 39425 (June 7,
2002); 68 FR 28256 (May 23, 2003); 69 FR 29972 (May 26, 2004); 70 FR
42382 (July 25, 2005); 71 FR 39355 (July 12, 2006); 72 FR 50119 (August
30, 2007); 73 FR 51843 (September 5, 2008); 74 FR 54071 (October 21,
2009); 75 FR 54071 (October 27, 2010) and 76 FR 78945 (December 20,
2011). This report does not provide an exhaustive list of conduct that
will be deemed to be a breach of the Commission's APOs. APO breach
inquiries are considered on a case-by-case basis.
As part of the effort to educate practitioners about the
Commission's current APO practice, the Commission Secretary issued in
March 2005 a fourth edition of An Introduction to Administrative
Protective Order Practice in Import Injury Investigations (Pub. No.
3755). This document is available upon request from the Office of the
Secretary, U.S. International Trade Commission, 500 E Street SW.,
Washington, DC 20436, tel. (202) 205-2000 and on the Commission's Web
site at http://www.usitc.gov.
I. In General
The current APO form for antidumping and countervailing duty
investigations, which was revised in March 2005, requires the applicant
to swear that he or she will:
(1) Not divulge any of the BPI disclosed under this APO or
otherwise obtained in this investigation and not otherwise available to
him or her, to any person other than--
(i) Personnel of the Commission concerned with the investigation,
(ii) The person or agency from whom the BPI was obtained,
(iii) A person whose application for disclosure of BPI under this
APO has been granted by the Secretary, and
(iv) Other persons, such as paralegals and clerical staff, who (a)
are employed or supervised by and under the direction and control of
the authorized applicant or another authorized applicant in the same
firm whose application has been granted; (b) have a need thereof in
connection with the investigation; (c) are not involved in competitive
decision making for an interested party which is a party to the
investigation; and (d) have signed the acknowledgment for clerical
personnel in the form attached hereto (the authorized applicant shall
also sign such acknowledgment and will be deemed responsible for such
persons' compliance with this APO);
(2) Use such BPI solely for the purposes of the above-captioned
Commission investigation or for judicial or binational panel review of
such Commission investigation;
(3) Not consult with any person not described in paragraph (1)
concerning BPI disclosed under this APO or otherwise obtained in this
investigation without first having received the written consent of the
Secretary and the party or the representative of the party from whom
such BPI was obtained;
(4) Whenever materials e.g., documents, computer disks, etc.
containing such BPI are not being used, store such material in a locked
file cabinet, vault, safe, or other suitable container (N.B.: storage
of BPI on so-called hard disk computer media is to be avoided, because
mere erasure of data from such media may not irrecoverably destroy the
BPI and may result in violation of paragraph C of this APO);
(5) Serve all materials containing BPI disclosed under this APO as
directed by the Secretary and pursuant to section 207.7(f) of the
Commission's rules;
(6) Transmit each document containing BPI disclosed under this APO:
(i) With a cover sheet identifying the document as containing BPI,
(ii) with all BPI enclosed in brackets and each page warning that
the document contains BPI,
(iii) if the document is to be filed by a deadline, with each page
marked ``Bracketing of BPI not final for one business day after date of
filing,'' and
(iv) if by mail, within two envelopes, the inner one sealed and
marked ``Business Proprietary Information--To be opened only by [name
of recipient]'', and the outer one sealed and not marked as containing
BPI;
(7) Comply with the provision of this APO and section 207.7 of the
Commission's rules;
(8) Make true and accurate representations in the authorized
applicant's application and promptly notify the Secretary of any
changes that occur after the submission of the application and that
affect the representations made in the application
[[Page 76520]]
(e.g., change in personnel assigned to the investigation);
(9) Report promptly and confirm in writing to the Secretary any
possible breach of this APO; and
(10) Acknowledge that breach of this APO may subject the authorized
applicant and other persons to such sanctions or other actions as the
Commission deems appropriate, including the administrative sanctions
and actions set out in this APO.
The APO further provides that breach of an APO may subject an
applicant to:
(1) Disbarment from practice in any capacity before the Commission
along with such person's partners, associates, employer, and employees,
for up to seven years following publication of a determination that the
order has been breached;
(2) Referral to the United States Attorney;
(3) In the case of an attorney, accountant, or other professional,
referral to the ethics panel of the appropriate professional
association;
(4) Such other administrative sanctions as the Commission
determines to be appropriate, including public release of, or striking
from the record any information or briefs submitted by, or on behalf
of, such person or the party he represents; denial of further access to
business proprietary information in the current or any future
investigations before the Commission, and issuance of a public or
private letter of reprimand; and
(5) Such other actions, including but not limited to, a warning
letter, as the Commission determines to be appropriate.
APOs in investigations other than those under title VII contain
similar, though not identical, provisions.
Commission employees are not signatories to the Commission's APOs
and do not obtain access to BPI through APO procedures. Consequently,
they are not subject to the requirements of the APO with respect to the
handling of CBI and BPI. However, Commission employees are subject to
strict statutory and regulatory constraints concerning BPI and CBI, and
face potentially severe penalties for noncompliance. See 18 U.S.C.
1905; title 5, U.S. Code; and Commission personnel policies
implementing the statutes. Although the Privacy Act (5 U.S.C. 552a)
limits the Commission's authority to disclose any personnel action
against agency employees, this should not lead the public to conclude
that no such actions have been taken.
An important provision of the Commission's title VII and safeguard
rules relating to BPI/CBI is the ``24-hour'' rule. This rule provides
that parties have one business day after the deadline for filing
documents containing BPI/CBI to file a public version of the document.
The rule also permits changes to the bracketing of information in the
proprietary version within this one-day period. No changes--other than
changes in bracketing--may be made to the proprietary version. The rule
was intended to reduce the incidence of APO breaches caused by
inadequate bracketing and improper placement of BPI/CBI. The Commission
urges parties to make use of the rule. If a party wishes to make
changes to a document other than bracketing, such as typographical
changes or other corrections, the party must ask for an extension of
time to file an amended document pursuant to section 201.14(b)(2) of
the Commission's rules.
II. Investigations of Alleged APO Breaches
Upon finding evidence of an APO breach or receiving information
that there is a reason to believe one has occurred, the Commission
Secretary notifies relevant offices in the agency that an APO breach
investigation has commenced and that an APO breach investigation file
has been opened. Upon receiving notification from the Secretary, the
Office of the General Counsel (``OGC'') prepares a letter of inquiry to
be sent to the possible breacher over the Secretary's signature to
ascertain the possible breacher's views on whether a breach has
occurred.\1\ If, after reviewing the response and other relevant
information, the Commission determines that a breach has occurred, the
Commission often issues a second letter asking the breacher to address
the questions of mitigating circumstances and possible sanctions or
other actions. The Commission then determines what action to take in
response to the breach. In some cases, the Commission determines that,
although a breach has occurred, sanctions are not warranted, and
therefore finds it unnecessary to issue a second letter concerning what
sanctions might be appropriate. Instead, it issues a warning letter to
the individual. A warning letter is not considered to be a sanction.
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\1\ Procedures for inquiries to determine whether a prohibited
act such as a breach has occurred and for imposing sanctions for
violation of the provisions of a protective order issued during
NAFTA panel or committee proceedings are set out in 19 CFR
Sec. Sec. 207.100-207.120. Those investigations are initially
conducted by the Commission's Office of Unfair Import
Investigations.
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Sanctions for APO violations serve two basic interests: (a)
Preserving the confidence of submitters of BPI/CBI that the Commission
is a reliable protector of BPI/CBI; and (b) disciplining breachers and
deterring future violations. As the Conference Report to the Omnibus
Trade and Competitiveness Act of 1988 observed, ``[T]he effective
enforcement of limited disclosure under administrative protective order
depends in part on the extent to which private parties have confidence
that there are effective sanctions against violation.'' H.R. Conf. Rep.
No. 576, 100th Cong., 1st Sess. 623 (1988).
The Commission has worked to develop consistent jurisprudence, not
only in determining whether a breach has occurred, but also in
selecting an appropriate response. In determining the appropriate
response, the Commission generally considers mitigating factors such as
the unintentional nature of the breach, the lack of prior breaches
committed by the breaching party, the corrective measures taken by the
breaching party, and the promptness with which the breaching party
reported the violation to the Commission. The Commission also considers
aggravating circumstances, especially whether persons not under the APO
actually read the BPI/CBI. The Commission considers whether there have
been prior breaches by the same person or persons in other
investigations and multiple breaches by the same person or persons in
the same investigation.
The Commission's rules permit an economist or consultant to obtain
access to BPI/CBI under the APO in a title VII or safeguard
investigation if the economist or consultant is under the direction and
control of an attorney under the APO, or if the economist or consultant
appears regularly before the Commission and represents an interested
party who is a party to the investigation. 19 CFR 207.7(a)(3)(B) and
(C); 19 CFR 206.17(a)(3)(B) and (C). Economists and consultants who
obtain access to BPI/CBI under the APO under the direction and control
of an attorney nonetheless remain individually responsible for
complying with the APO. In appropriate circumstances, for example, an
economist under the direction and control of an attorney may be held
responsible for a breach of the APO by failing to redact APO
information from a document that is subsequently filed with the
Commission and served as a public document. This is so even though the
attorney exercising direction or control over the economist or
consultant may also be
[[Page 76521]]
held responsible for the breach of the APO.
The records of Commission investigations of alleged APO breaches in
antidumping and countervailing duty cases, section 337 investigations,
and safeguard investigations are not publicly available and are exempt
from disclosure under the Freedom of Information Act, 5 U.S.C. 552. See
19 U.S.C. 1677f(g), 19 U.S.C. 1333(h).
The two types of breaches most frequently investigated by the
Commission involve the APO's prohibition on the dissemination of BPI or
CBI to unauthorized persons and the APO's requirement that the
materials received under the APO be returned or destroyed and that a
certificate be filed indicating which action was taken after the
termination of the investigation or any subsequent appeals of the
Commission's determination. The dissemination of BPI/CBI usually occurs
as the result of failure to delete BPI/CBI from public versions of
documents filed with the Commission or transmission of proprietary
versions of documents to unauthorized recipients. Other breaches have
included the failure to bracket properly BPI/CBI in proprietary
documents filed with the Commission, the failure to report immediately
known violations of an APO, and the failure to adequately supervise
non-lawyers in the handling of BPI/CBI.
Occasionally, the Commission conducts APOB investigations that
involve members of a law firm or consultants working with a firm who
were granted access to APO materials by the firm although they were not
APO signatories. In many of these cases, the firm and the person using
the BPI mistakenly believed an APO application had been filed for that
person. The Commission determined in all of these cases that the person
who was a non-signatory, and therefore did not agree to be bound by the
APO, could not be found to have breached the APO. Action could be taken
against these persons, however, under Commission rule 201.15 (19 CFR
201.15) for good cause shown. In all cases in which action was taken,
the Commission decided that the non-signatory was a person who appeared
regularly before the Commission and was aware of the requirements and
limitations related to APO access and should have verified his or her
APO status before obtaining access to and using the BPI. The Commission
notes that section 201.15 may also be available to issue sanctions to
attorneys or agents in different factual circumstances in which they
did not technically breach the APO, but when their actions or inactions
did not demonstrate diligent care of the APO materials even though they
appeared regularly before the Commission and were aware of the
importance the Commission placed on the care of APO materials.
Counsel have been cautioned to be certain that each authorized
applicant files within 60 days of the completion of an import injury
investigation or at the conclusion of judicial or binational review of
the Commission's determination a certificate that to his or her
knowledge and belief all copies of BPI/CBI have been returned or
destroyed and no copies of such material have been made available to
any person to whom disclosure was not specifically authorized. This
requirement applies to each attorney, consultant, or expert in a firm
who has been granted access to BPI/CBI. One firm-wide certificate is
insufficient. This same information is also being added to
notifications sent to new APO applicants.
In addition, attorneys who are signatories to the APO representing
clients in a section 337 investigation should send a notice to the
Commission if they stop participating in the investigation or the
subsequent appeal of the Commission's determination. The notice should
inform the Commission about the disposition of CBI obtained under the
APO that was in their possession or they could be held responsible for
any failure of their former firm to return or destroy the CBI in an
appropriate manner.
III. Specific Investigations
APO Breach Investigations
Case 1
The Commission found that two attorneys and a legal assistant from
a law firm breached the APO when they failed to remove business
proprietary information (BPI) from the public version of final comments
filed on behalf of their clients, who were respondents in a title VII
investigation. The Commission issued a private letter of reprimand to
all three individuals.
After the law firm filed the public version of its final comments,
the Commission staff identified five instances of failure to redact BPI
from brackets in that public document. The Commission Secretary
notified the firm of that failure to redact and she sent a letter of
inquiry to the firm. Two attorneys and a legal assistant provided
responses describing their participation in preparation and filing of
that public version. The Commission found that they had breached the
APO, and allowed additional comments from the attorneys and legal
assistant on mitigating circumstances and their views on the
appropriate sanction.
The Commission considered several mitigating circumstances. The
record indicated that the breach was unintentional and none of the
three individuals had been found in violation of an APO in the two
years preceding the breach, the standard period the Commission has
considered in sanctions determinations. After the breach was discovered
by Commission staff, the firm took immediate steps to cure the breach,
including retrieval from counsel who was not a signatory to the APO but
upon whom the public version of the final comments had been served. The
firm also immediately followed up with Commission staff to assure that
the BPI was removed from the Electronic Document Information System
(EDIS).
The Commission also took into account some aggravating factors. The
breach was discovered by Commission staff and not the law firm. The BPI
was available to the public for about a week, including on EDIS, and
the document was in fact viewed on EDIS by the public. Also, one law
firm which was not on the APO was served the public document containing
BPI, thus making it likely that the BPI was read by persons not under
the APO. In addition, the firm failed to follow its own procedures for
protecting BPI by not using a third attorney to review the redaction of
the BPI from the public version of the document.
Case 2
The Commission found that an attorney breached the APO by failing
to serve all authorized applicants to the APO with written submissions
containing business proprietary information, pursuant to the
requirements of the APO and Commission Rule 207.7(f). The Commission
issued a warning letter to the attorney.
Commission Rule 207.7(f) requires that all written submissions
containing business proprietary information be served on all authorized
applicants to the APO. The APO requires that all BPI materials be
served pursuant to Commission rule 207.7. An attorney representing a
respondent submitted foreign producer questionnaire responses to the
Commission. In the accompanying cover letter, the attorney indicated
that he had served the questionnaire responses on all authorized
applicants except for a law firm representing two of the domestic
interested parties. The attorney claimed that the firm was engaged in
competitive decision making for its
[[Page 76522]]
clients and that the information being submitted was a type of
information for which there was a clear and compelling need to withhold
from disclosure.
Commission staff informed the attorney that he was required to
serve the law firm in question by noon the next day or the
questionnaires would be rejected. Since the attorney did not do so, the
questionnaire responses were rejected.
The Commission considered several mitigating factors. The attorney
involved had not been sanctioned for an APO breach within the two year
period generally examined by the Commission for purposes of determining
sanctions nor had he previously violated the Commission's rules.
Moreover, no party was prejudiced by the breach as the attorney later
filed the same questionnaire responses and served them on all
authorized applicants, including the law firm not previously served.
The Commission also considered the aggravating circumstances that
the APO breach was intentional and was caused by the attorney
substituting his judgment for the Commission's as to which parties to
serve.
Case 3
Attorneys who were APO signatories in two law firms were found by
the Commission to have breached the APO in a section 337 investigation
by retaining confidential business information (CBI) after the appeal
of the investigation had terminated. Two of the attorneys breached the
APO by retaining the CBI and by disclosing third party CBI to non-
signatories in response to discovery requests in separate district
court litigation. Those two attorneys were issued private letters of
reprimand by the Commission and the attorneys who had retained but not
disclosed the CBI were issued warning letters. The Commission did not
find a violation of the APO by attorneys in several other law firms who
were not signatories to the APO but who received the CBI that had been
disclosed by the two aforementioned attorneys. They were instead issued
letters instructing them to return or destroy the CBI.
With respect to the attorneys who retained and disclosed the CBI,
the Commission considered the mitigating circumstances that the breach
was unintentional, that the attorneys acted quickly to cure the breach,
and that they had not previously breached an APO within the two-year
period generally considered by the Commission in determining what
sanctions to impose for a breach. The Commission also took into account
the aggravating circumstances that the CBI was viewed by unauthorized
persons, and that the breach was not discovered by the attorneys or
their firm.
With respect to the attorneys who retained but did not disclose the
CBI, the Commission considered the mitigating circumstances that the
breach was unintentional, that the CBI that they retained was not read
by any person not subject to the APO, that their firm moved to remedy
the breach expeditiously after being informed of it by the Commission
staff, and that this is the only breach in which they had been involved
in the two-year period generally examined by the Commission for the
purpose of determining sanctions. The Commission also considered the
aggravating circumstances that their firm did not discover the breach
and that it appeared that their firm had a policy to retain CBI
following any case or investigation.
Issued: December 21, 2012.
By order of the Commission.
Lisa R. Barton,
Acting Secretary to the Commission.
[FR Doc. 2012-31158 Filed 12-27-12; 8:45 am]
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