[Title 16 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 1999 Edition]
[From the U.S. Government Printing Office]
16
Commercial Practices
[[Page i]]
PARTS 0 TO 999
Revised as of January 1, 1999
CONTAINING
A CODIFICATION OF DOCUMENTS
OF GENERAL APPLICABILITY
AND FUTURE EFFECT
AS OF JANUARY 1, 1999
With Ancillaries
Published by
the Office of the Federal Register
National Archives and Records
Administration
as a Special Edition of
the Federal Register
[[Page ii]]
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1999
For sale by U.S. Government Printing Office
Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328
[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 16:
Chapter I--Federal Trade Commission................. 3
Finding Aids:
Material Approved for Incorporation by Reference........ 609
Table of CFR Titles and Chapters........................ 611
Alphabetical List of Agencies Appearing in the CFR...... 629
List of CFR Sections Affected........................... 639
[[Page iv]]
----------------------------
Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 16 CFR 0.1 refers
to title 16, part 0,
section 1.
----------------------------
[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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To determine whether a Code volume has been amended since its
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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OBSOLETE PROVISIONS
Provisions that become obsolete before the revision date stated on
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appropriate numerical list of sections affected. For the period before
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1963, 1964-1972, or 1973-1985, published in seven separate volumes. For
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INCORPORATION BY REFERENCE
What is incorporation by reference? Incorporation by reference was
established by statute and allows Federal agencies to meet the
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This material, like any other properly issued regulation, has the force
of law.
What is a proper incorporation by reference? The Director of the
Federal Register will approve an incorporation by reference only when
the requirements of 1 CFR part 51 are met. Some of the elements on which
approval is based are:
(a) The incorporation will substantially reduce the volume of
material published in the Federal Register.
(b) The matter incorporated is in fact available to the extent
necessary to afford fairness and uniformity in the administrative
process.
(c) The incorporating document is drafted and submitted for
publication in accordance with 1 CFR part 51.
Properly approved incorporations by reference in this volume are
listed in the Finding Aids at the end of this volume.
What if the material incorporated by reference cannot be found? If
you have any problem locating or obtaining a copy of material listed in
the Finding Aids of this volume as an approved incorporation by
reference, please contact the agency that issued the regulation
containing that incorporation. If, after contacting the agency, you find
the material is not available, please notify the Director of the Federal
Register, National Archives and Records Administration, Washington DC
20408, or call (202) 523-4534.
CFR INDEXES AND TABULAR GUIDES
A subject index to the Code of Federal Regulations is contained in a
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An index to the text of ``Title 3--The President'' is carried within
that volume.
The Federal Register Index is issued monthly in cumulative form.
This index is based on a consolidation of the ``Contents'' entries in
the daily Federal Register.
[[Page vii]]
A List of CFR Sections Affected (LSA) is published monthly, keyed to
the revision dates of the 50 CFR titles.
REPUBLICATION OF MATERIAL
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Raymond A. Mosley,
Director,
Office of the Federal Register.
January 1, 1999.
[[Page ix]]
THIS TITLE
Title 16--Commercial Practices is composed of two volumes. The first
volume contains parts 0-999 and comprises chapter I--Federal Trade
Commission. The second volume containing part 1000 to end comprises
chapter II--Consumer Product Safety Commission. The contents of these
volumes represent all current regulations codified under this title of
the CFR as of January 1, 1999.
For this volume, Kenneth R. Payne was Chief Editor. The Code of
Federal Regulations publication program is under the direction of
Frances D. McDonald, assisted by Alomha S. Morris.
[[Page x]]
[[Page 1]]
TITLE 16--COMMERCIAL PRACTICES
(This book contains parts 0 to 999)
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Part
chapter i--Federal Trade Commission......................... 0
[[Page 3]]
CHAPTER I--FEDERAL TRADE COMMISSION
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SUBCHAPTER A--ORGANIZATION, PROCEDURES AND RULES OF PRACTICE
Part Page
0 Organization................................ 7
1 General procedures.......................... 10
2 Nonadjudicative procedures.................. 31
3 Rules of practice for adjudicative
proceedings............................. 44
4 Miscellaneous rules......................... 81
5 Standards of conduct........................ 109
6 Enforcement of nondiscrimination on the
basis of handicap in programs or
activities conducted by the Federal
Trade Commission........................ 113
14 Administrative interpretations, general
policy statements, and enforcement
policy statements....................... 120
16 Advisory committee management............... 123
SUBCHAPTER B--GUIDES AND TRADE PRACTICE RULES
17 Application of guides in preventing unlawful
practices [Note]........................ 130
18 Guides for the nursery industry............. 130
20 Guides for the rebuilt, reconditioned and
other used automobile parts industry.... 134
23 Guides for the jewelry, precious metals, and
pewter industries....................... 136
24 Guides for select leather and imitation
leather products........................ 147
25-227
[Reserved]
228 Tire advertising and labeling guides........ 150
233 Guides against deceptive pricing............ 160
238 Guides against bait advertising............. 163
239 Guides for the advertising of warranties and
guarantees.............................. 164
240 Guides for advertising allowances and other
merchandising payments and services..... 166
241 Guides for the dog and cat food industry.... 172
245 Guides for the watch industry............... 179
250 Guides for the household furniture industry. 187
[[Page 4]]
251 Guide concerning use of the word ``free''
and similar representations............. 194
254 Guides for private vocational and distance
education schools....................... 196
255 Guides concerning use of endorsements and
testimonials in advertising............. 199
256 Guides for the law book industry............ 204
259 Guide concerning fuel economy advertising
for new automobiles..................... 210
260 Guides for the use of environmental
marketing claims........................ 213
SUBCHAPTER C--REGULATIONS UNDER SPECIFIC ACTS OF CONGRESS
300 Rules and regulations under the Wool
Products Labeling Act of 1939........... 224
301 Rules and regulations under Fur Products
Labeling Act............................ 236
303 Rules and regulations under the Textile
Fiber Products Identification Act....... 251
304 Rules and regulations under the Hobby
Protection Act.......................... 273
305 Rule concerning disclosures regarding energy
consumption and water use of certain
home appliances and other products
required under the Energy Policy and
Conservation Act (``Appliance Labeling
Rule'')................................. 274
306 Automotive fuel ratings, certification and
posting................................. 350
307 Regulations under the Comprehensive
Smokeless Tobacco Health Education Act
of 1986................................. 356
308 Trade regulation rule pursuant to the
Telephone Disclosure and Dispute
Resolution Act of 1992.................. 369
309 Labeling requirements for alternative fuels
and alternative fueled vehicles......... 380
310 Telemarketing sales rule.................... 397
311 Test procedures and labeling standards for
recycled oil............................ 403
SUBCHAPTER D--TRADE REGULATION RULES
408 Unfair or deceptive advertising and labeling
of cigarettes in relation to the health
hazards of smoking [Note]............... 405
410 Deceptive advertising as to sizes of
viewable pictures shown by television
receiving sets.......................... 405
423 Care labeling of textile wearing apparel and
certain piece goods as amended.......... 405
424 Retail food store advertising and marketing
practices............................... 411
[[Page 5]]
425 Use of prenotification negative option plans 412
429 Rule concerning cooling-off period for sales
made at homes or at certain other
locations............................... 414
432 Power output claims for amplifiers utilized
in home entertainment products.......... 417
433 Preservation of consumers' claims and
defenses................................ 419
435 Mail or telephone order merchandise......... 420
436 Disclosure requirements and prohibitions
concerning franchising and business
opportunity ventures.................... 424
444 Credit practices............................ 436
453 Funeral industry practices.................. 438
455 Used motor vehicle trade regulation rule.... 445
456 Ophthalmic practice rules................... 453
460 Labeling and advertising of home insulation. 453
SUBCHAPTER E--RULES, REGULATIONS, STATEMENT OF GENERAL POLICY OR
INTERPRETATION AND EXEMPTIONS UNDER THE FAIR PACKAGING AND LABELING ACT
500 Regulations under section 4 of the Fair
Packaging and Labeling Act.............. 462
501 Exemptions from requirements and
prohibitions under part 500............. 475
502 Regulations under section 5(c) of the Fair
Packaging and Labeling Act.............. 476
503 Statements of general policy or
interpretation.......................... 480
SUBCHAPTER F--STATEMENTS OF GENERAL POLICY OR INTERPRETATIONS UNDER THE
FAIR CREDIT REPORTING ACT
600 Statements of general policy or
interpretations......................... 484
601 Summary of consumer rights, notice of user
responsibilities, and notice of
furnisher responsibilities under the
Fair Credit Reporting Act............... 511
SUBCHAPTER G--RULES, REGULATIONS, STATEMENTS AND INTERPRETATIONS UNDER
THE MAGNUSON-MOSS WARRANTY ACT
700 Interpretations of Magnuson-Moss Warranty
Act..................................... 522
701 Disclosure of written consumer product
warranty terms and conditions........... 527
702 Pre-sale availability of written warranty
terms................................... 529
703 Informal dispute settlement procedures...... 531
SUBCHAPTER H--RULES, REGULATIONS, STATEMENTS AND INTERPRETATIONS UNDER
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976
801 Coverage rules.............................. 538
802 Exemption rules............................. 555
[[Page 6]]
803 Transmittal rules........................... 571
SUBCHAPTER I--FAIR DEBT COLLECTION PRACTICES ACT
901 Procedures for State application for
exemption from the provisions of the Act 602
902-999
[Reserved]
Cross References: Animal and Plant Health Inspection Service, Department
of Agriculture: 9 CFR Chapter I. Commodity Futures Trading Commission:
17 CFR Chapter I. Consumer Product Safety Commission: 16 CFR Chapter
II. Securities and Exchange Commission: 17 CFR Chapter II.
Supplemental Publications: Federal Trade Commission decisions, Volumes
1-90 Index digest of volumes 1, 2, and 3 of decisions of the Federal
Trade Commission with annotation of Federal cases. Mar. 16, 1915-June
30, 1921. Statutes and decisions pertaining to the Federal Trade
Commission. 1914-1929, 1930-1938, 1939-1943, 1944-1948, 1949-1955,
1956-1960, 1961-1965, 1966-1970, 1971-1975, 1976, 1977.
[[Page 7]]
SUBCHAPTER A--ORGANIZATION, PROCEDURES AND RULES OF PRACTICE
PART 0--ORGANIZATION--Table of Contents
Sec.
0.1 The Commission.
0.2 Official address.
0.3 Hours.
0.4 Laws administered.
0.5 Laws authorizing monetary claims.
0.6 [Reserved]
0.7 Delegation of functions.
0.8 The Chairman.
0.9 Organization structure.
0.10 Office of the Executive Director.
0.11 Office of the General Counsel.
0.12 Office of the Secretary.
0.13 [Reserved]
0.14 Office of Administrative Law Judges.
0.15 [Reserved]
0.16 Bureau of Competition.
0.17 Bureau of Consumer Protection.
0.18 Bureau of Economics.
0.19 The Regional Offices.
Authority: Sec. 6(g), 38 Stat. 721 (15 U.S.C. 46); 80 Stat. 383, as
amended (5 U.S.C. 552).
Source: 41 FR 54483, Dec. 14, 1976, unless otherwise noted.
Sec. 0.1 The Commission.
The Federal Trade Commission is an independent administrative agency
which was organized in 1915 pursuant to the Federal Trade Commission Act
of 1914 (38 Stat. 717, as amended; 15 U.S.C. 41-58). It is responsible
for the administration of a variety of statutes which, in general, are
designed to promote competition and to protect the public from unfair
and deceptive acts and practices in the advertising and marketing of
goods and services. It is composed of five members appointed by the
President and confirmed by the Senate for terms of seven years.
Sec. 0.2 Official address.
The principal office of the Commission is at Washington, DC. All
communications to the Commission should be addressed to the Federal
Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580,
unless otherwise specifically directed.
[63 FR 71582, Dec. 29, 1998]
Sec. 0.3 Hours.
Principal and field offices are open on each business day from 8:30
a.m. to 5 p.m.
Sec. 0.4 Laws administered.
The Commission exercises enforcement and administrative authority
under the Federal Trade Commission Act (38 Stat. 717, as amended (15
U.S.C. 41-58)), the Clayton Act (38 Stat 730, as amended (15 U.S.C. 12-
27)), the Export Trade Act (40 Stat. 516, as amended (15 U.S.C. 61-65)),
the Packers and Stockyards Act (42 Stat. 159, as amended (7 U.S.C. 181-
229)), the Wool Products Labeling Act (54 Stat. 1128, as amended (15
U.S.C. 68-68j)), the Trade Mark Act (60 Stat. 427, as amended (15 U.S.C.
1051-72)), The Fur Products Labeling Act (65 Stat. 175, as amended (15
U.S.C. 69-69j)), the Textile Fiber Products Identification Act (72 Stat.
1717, as amended (15 U.S.C. 70-70k)), the Federal Cigarette Labeling and
Advertising Act (79 Stat. 282, as amended (15 U.S.C. 1331-39)), the Fair
Packaging and Labeling Act (80 Stat. 1296, as amended (15 U.S.C. 1451-
61)), the Truth in Lending Act (82 Stat. 146, as amended (15 U.S.C. 1601
et seq.)), the Fair Credit Reporting Act (84 Stat. 1128 (15 U.S.C. 1681
et seq.)), the Fair Credit Billing Act (88 Stat. 1511; (15 U.S.C.
1666)), the Equal Credit Opportunity Act (88 Stat. 1521, as amended (15
U.S.C. 1691)), Hobby Protection Act (87 Stat. 686 (15 U.S.C. 2101)), the
Magnuson-Moss Warranty--Federal Trade Commission Improvement Act (88
Stat. 2183 (15 U.S.C. 2301-12, 45-58)), the Energy Policy and
Conservation Act (89 Stat. 871 (42 U.S.C. 6291)), the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (90 Stat. 1383 (15 U.S.C. 1311)), and
other Federal statutes.
Sec. 0.5 Laws authorizing monetary claims.
The Commission is authorized to entertain monetary claims against it
under three statutes. The Federal Tort
[[Page 8]]
Claims Act (28 U.S.C. 2671-2680) provides that the United States will be
liable for injury or loss of property or personal injury or death caused
by the negligent or wrongful acts or omissions of its employees acting
within the scope of their employment or office. The Military Personnel
and Civilian Employees Claims Act of 1964 (31 U.S.C. 3701, 3721)
authorizes the Commission to compensate employees' claims for damage to
or loss of personal property incident to their service. The Equal Access
to Justice Act (5 U.S.C. 504 and 28 U.S.C. 2412) provides that an
eligible prevailing party other than the United States will be awarded
fees and expenses incurred in connection with any adversary adjudicative
and court proceeding, unless the adjudicative officer finds that the
agency was substantially justified or that special circumstances make an
award unjust. In addition, eligible parties, including certain small
businesses, will be awarded fees and expenses incurred in defending
against an agency demand that is substantially in excess of the final
decision of the adjudicative officer and is unreasonable when compared
with such decision under the facts and circumstances of the case, unless
the adjudicative officer finds that the party has committed a willful
violation of law or otherwise acted in bad faith, or special
circumstances make an award unjust. Questions may be addressed to the
Office of the General Counsel, (202) 326-2462.
[63 FR 36340, July 6, 1998]
Sec. 0.6 [Reserved]
Sec. 0.7 Delegation of functions.
The Commission, under the authority provided by Reorganization Plan
No. 4 of 1961, may delegate, by published order or rule, certain of its
functions to a division of the Commission, an individual Commissioner,
an administrative law judge, or an employee or employee board.
Sec. 0.8 The Chairman.
The Chairman of the Commission is designated by the President, and,
subject to the general policies of the Commission, is the executive and
administrative head of the agency. He presides at meetings of and
hearings before the Commission and participates with other Commissioners
in all Commission decisions. Attached to the Office of the Chairman, and
reporting directly to him, and through him to the Commission, are the
following staff units:
(a) The Office of Public Affairs, which furnishes information
concerning Commission activities to news media and the public; and
(b) the Office of Congressional Relations, which coordinates all
liaison activities with Congress.
[50 FR 53303, Dec. 31, 1985]
Sec. 0.9 Organization structure.
The Federal Trade Commission comprises the following principal
units: Office of the Executive Director, Office of the General Counsel,
Office of the Secretary, Office of Administrative Law Judges, Bureau of
Competition, Bureau of Consumer Protection, Bureau of Economics, The
Regional Offices.
[54 FR 19885, May 9, 1989]
Sec. 0.10 Office of the Executive Director.
(a) The Executive Director, under the direction of the Chairman, is
the chief operating official. He exercises executive and administrative
supervision over all the offices, bureaus, and staff of the Commission
and resolves problems concerning priorities in case handling.
Immediately under his direction are the Deputy Executive Directors for
Management and Planning and Information.
(b) The Deputy Executive Director for Management functions as staff
advisor to the Executive Director in all aspects of administrative
management; provides administrative policy guidance to agency management
and provides general supervision to the programs of procurement and
contracts, personnel, budget and finance, and administrative service
activities; and initiates and develops long-range plans to assure that
the Commission acquires and effectively utilizes the manpower, financial
resources, physical facilities and management tools necessary to
accomplish its mission.
(c) The Deputy Executive Director for Planning and Information
provides general supervision to the programs of
[[Page 9]]
data processing and information systems, information analysis, and the
library; responds to initial requests for Commission records under the
Freedom of Information and Privacy Acts; maintains a current index of
opinions, orders, statements of policy and interpretations, staff
manuals and instructions that affect any member of the public, and other
public records of the Commission; makes available for inspection and
copying all public records of the Commission; coordinates the
Commission's information processing systems; and is responsible for the
publication of all Commission actions which must appear in the Federal
Register and for the publication of Federal Trade Commission Decisions
and Court Decisions--Federal Trade Commission.
[48 FR 4280, Jan. 31, 1983, as amended at 50 FR 53303, Dec. 31, 1985]
Sec. 0.11 Office of the General Counsel.
The General Counsel is the Commission's chief law officer and
adviser, who renders necessary legal services to the Commission,
represents the Commission in the Federal and State Courts, advises the
Commission with respect to questions of law and policy, including advice
with respect to legislative matters, cooperates with and assists State
and local officials in the efforts to eliminate local and national trade
restraints.
[41 FR 54483, Dec. 14, 1976, as amended at 50 FR 53303, Dec. 31, 1985]
Sec. 0.12 Office of the Secretary.
The Secretary is responsible for the minutes of Commission meetings
and is the legal custodian of the Commission's seal, property, papers,
and records, including legal and public records. The Secretary, or in
his absence an Acting Secretary designated by the Commission, signs
Commission orders and official correspondence.
[48 FR 4280, Jan. 31, 1983]
Sec. 0.13 [Reserved]
Sec. 0.14 Office of Administrative Law Judges.
Administrative law judges are officials to whom the Commission, in
accordance with law, delegates the initial performance of its
adjudicative fact-finding functions to be exercised in conformity with
Commission decisions and policy directives and with its rules of
practice. The administrative law judges also serve as presiding officers
assigned to conduct rulemaking proceedings under section 18(a)(1)(B) of
the Federal Trade Commission Act as amended and other rulemaking
proceedings as directed. The Chief Administrative Law Judge also serves
as the Chief Presiding Officer. Administrative law judges are appointed
under the authority and subject to the prior approval of the Office of
Personnel Management.
[54 FR 19885, May 9, 1989]
Sec. 0.15 [Reserved]
Sec. 0.16 Bureau of Competition.
The bureau is responsible for enforcing Federal antitrust and trade
regulation laws under section 5 of the Federal Trade Commission Act, the
Clayton Act, and a number of other special statutes which the Commission
is charged with enforcing. The bureau work aims to preserve the free
market system and assure the unfettered operation of the forces of
supply and demand. Its activities seek to ensure price competition,
quality products and services and efficient operation of the national
economy. The bureau carries out its responsibilities by investigating
alleged law violations, and recommending to the Commission such further
action as may be appropriate. Such action may include injunctive relief
in Federal District Court, complaint and litigation before the agency's
administrative law judges, formal nonadjudicative settlement of
complaints, trade regulation rules, or reports. The bureau also conducts
compliance investigations and initiates proceedings for civil penalties
to assure compliance with final Commission orders dealing with
competition and trade restraint matters.
[41 FR 54483, Dec. 14, 1976. Redesignated at 45 FR 36341, May 29, 1980,
and amended at 50 FR 53303, Dec. 31, 1985]
Sec. 0.17 Bureau of Consumer Protection.
The Bureau investigates unfair or deceptive acts or practices under
section
[[Page 10]]
5 of the Federal Trade Commission Act as well as potential violations of
numerous special statutes which the Commission is charged with
enforcing. It prosecutes before the agency's administrative law judges
alleged violations of law after issuance of a complaint by the
Commission or obtains through negotiation consented-to orders, which
must be accepted and issued by the Commission. The bureau participates
in trade regulation rulemaking proceedings under section 18(a)(1)(B) of
the Federal Trade Commission Act and other rulemaking proceedings under
other statutory authority. It investigates compliance with final orders
and trade regulation rules and seeks civil penalties or consumer redress
for their violation. In addition, the bureau seeks to educate both
consumers and the business community about the laws it enforces.
[46 FR 26287, May 12, 1981]
Sec. 0.18 Bureau of Economics.
The bureau aids and advises the Commission concerning the economic
aspects of all of its functions, and is responsible for the preparation
of various economic reports and surveys. The bureau provides economic
and statistical assistance to the enforcement bureaus in the
investigation and trial of cases.
[41 FR 54483, Dec. 14, 1976. Redesignated at 45 FR 36341, May 29, 1980,
and amended at 50 FR 53303, Dec. 31, 1985]
Sec. 0.19 The Regional Offices.
(a) These offices are investigatory arms of the Commission, and,
with respect to matters of a regional nature, have responsibility for
investigational, trial, compliance, and consumer educational activities
as delegated by the Commission. Each regional office has general
responsibility for its own activities and for the smaller offices,
designated as field stations, located in its area of responsibility.
They are under the general supervision of the Office of the Executive
Director, and clear their activities through the appropriate operating
bureaus.
(b) The addresses of the respective regional offices, and of the
field stations located in the area of each are as follows:
(1) Atlanta Regional Office. Federal Trade Commission, Suite 5M35,
Midrise Building, 60 Forsyth Street, S.W., Atlanta, Georgia 30303.
(2) Boston Regional Office. Federal Trade Commission, 101 Merrimac
Street, Suite 810, Boston, Massachusetts 02114-4719.
(3) Chicago Regional Office. Federal Trade Commission, 55 East
Monroe Street, Suite 1860, Chicago, Illinois 60603-5701.
(4) Cleveland Regional Office. Federal Trade Commission, Eaton
Center, Suite 200, 1111 Superior Avenue, Cleveland, Ohio 44114.
(5) Dallas Regional Office. Federal Trade Commission, 1999 Bryan
Street, Suite 2150, Dallas, Texas 75201.
(6) Denver Regional Office. Federal Trade Commission, 1961 Stout
Street, Suite 1523, Denver, Colorado 80294-0101.
(7) Los Angeles Regional Office. Federal Trade Commission, 10877
Wilshire Boulevard, Suite 700, Los Angeles, California 90024.
(8) New York Regional Office. Federal Trade Commission, 150 William
Street, Suite 1300, New York, New York 10038.
(9) San Francisco Regional Office. Federal Trade Commission, 901
Market Street, Suite 570, San Francisco, California 94103.
(10) Seattle Regional Office. Federal Trade Commission, 915 Second
Avenue, Suite 2896, Seattle, Washington 98174.
(c) Each of the regional offices is supervised by a Regional
Director, who is available for conferences with attorneys, consumers,
and other members of the public on matters relating to the Commission's
activities.
[41 FR 54483, Dec. 14, 1976, as amended at 42 FR 27218, May 27, 1977; 43
FR 754, Jan. 4, 1978; 43 FR 6579, Feb. 15, 1978. Redesignated at 45 FR
36341, May 29, 1980, and amended at 50 FR 53303, Dec. 31, 1985; 63 FR
71582, Dec. 29, 1998]
PART 1--GENERAL PROCEDURES--Table of Contents
Subpart A--Industry Guidance
Advisory Opinions
Sec.
1.1 Policy.
1.2 Procedure.
1.3 Advice.
1.4 Public disclosure.
[[Page 11]]
Industry Guides
1.5 Purpose.
1.6 How promulgated.
Subpart B--Rules and Rulemaking Under Section 18(a)(1)(B) of the FTC Act
1.7 Scope of rules in this subpart.
1.8 Nature, authority and use of trade regulation rules.
1.9 Petitions to commence trade regulation rule proceedings.
1.10 Advance notice of proposed rulemaking.
1.11 Commencement of a rulemaking proceeding.
1.12 Final notice.
1.13 Rulemaking proceeding.
1.14 Promulgation.
1.15 Amendment or repeal of a rule.
1.16 Petition for exemption from trade regulation rule.
1.17 [Reserved]
1.18 Rulemaking record.
1.19 Modification of a rule by the Commission at the time of judicial
review.
1.20 Alternative procedures.
Subpart C--Rules Promulgated Under Authority Other Than Section
18(a)(1)(B) of the FTC Act
1.21 Scope of the rules in this subpart.
1.22 Rulemaking.
1.23 Quantity limit rules.
1.24 Rules applicable to wool, fur, and textile fiber products and
rules promulgated under the Fair Packaging and Labeling Act.
1.25 Initiation of proceedings--petitions.
1.26 Procedure.
Subpart D [Reserved]
Subpart E--Export Trade Associations
1.41 Limited antitrust exemption.
1.42 Notice to Commission.
1.43 Recommendations.
Subpart F--Trademark Cancellation Procedure
1.51 Applications.
Subpart G--Injunctive and Condemnation Proceedings
1.61 Injunctions.
1.62 Ancillary court orders pending review.
1.63 Injunctions: Wool, fur, and textile cases.
1.64 Condemnation proceedings.
Subpart H--Administration of the Fair Credit Reporting Act
1.71 Administration.
1.72 Examination, counseling and staff advice.
1.73 Interpretations.
Subpart I--Procedures for Implementation of the National Environmental
Policy Act of 1969
1.81 Authority and incorporation of CEQ Regulations.
1.82 Declaration of policy.
1.83 Whether to commence the process for an environmental impact
statement.
1.84 Draft environmental impact statements: Availability and comment.
1.85 Final environmental impact statements.
1.86 Supplemental statements.
1.87 NEPA and agency decisionmaking.
1.88 Implementing procedures.
1.89 Effect on prior actions.
Subpart J--Economic Surveys, Investigations, and Reports
1.91 Authority and purpose.
Subpart K--Penalties for Violation of Appliance Labeling Rules
1.92 Scope.
1.93 Notice of proposed penalty.
1.94 Commission proceeding to assess civil penalty.
1.95 Procedures upon election.
1.96 Compromise of penalty.
1.97 Amount of penalty.
Subpart L--Civil Penalty Adjustments Under the Debt Collection
Improvement Act of 1996
1.98 Adjustment of civil monetary penalty amounts.
Subpart M--Submissions Under the Small Business Regulatory Enforcement
Fairness Act
1.99 Submission of rules, guides, interpretations, and policy
statements to Congress and the Comptroller General.
Authority: Sec. 6, 38 Stat. 721 (15 U.S.C. 46), unless otherwise
noted.
Source: 32 FR 8444, June 13, 1967, unless otherwise noted.
[[Page 12]]
Subpart A--Industry Guidance
Advisory Opinions
Sec. 1.1 Policy.
(a) Any person, partnership, or corporation may request advice from
the Commission with respect to a course of action which the requesting
party proposes to pursue. The Commission will consider such requests for
advice and inform the requesting party of the Commission's views, where
practicable, under the following circumstances.
(1) The matter involves a substantial or novel question of fact or
law and there is no clear Commission or court precedent; or
(2) The subject matter of the request and consequent publication of
Commission advice is of significant public interest.
(b) The Commission has authorized its staff to consider all requests
for advice and to render advice, where practicable, in those
circumstances in which a Commission opinion would not be warranted.
Hypothetical questions will not be answered, and a request for advice
will ordinarily be considered inappropriate where:
(1) The same or substantially the same course of action is under
investigation or is or has been the subject of a current proceeding
involving the Commission or another governmental agency, or
(2) An informed opinion cannot be made or could be made only after
extensive investigation, clinical study, testing, or collateral inquiry.
[44 FR 21624, Apr. 11, 1979; 44 FR 23515, Apr. 20, 1979, as amended at
54 FR 14072, Apr. 7, 1989]
Sec. 1.2 Procedure.
(a) Application. The request for advice or interpretation should be
submitted in writing (one original and two copies) to the Secretary of
the Commission and should: (1) State clearly the question(s) that the
applicant wishes resolved; (2) cite the provision of law under which the
question arises; and (3) state all facts which the applicant believes to
be material. In addition, the identity of the companies and other
persons involved should be disclosed. Letters relating to unnamed
companies or persons may not be answered. Submittal of additional facts
may be requested prior to the rendering of any advice.
(b) Compliance matters. If the request is for advice as to whether
the proposed course of action may violate an outstanding order to cease
and desist issued by the Commission, such request will be considered as
provided for in Sec. 2.41 of this chapter.
[44 FR 21624, Apr. 11, 1979, as amended at 44 FR 40638, July 12, 1979]
Sec. 1.3 Advice.
(a) On the basis of the materials submitted, as well as any other
information available, and if practicable, the Commission or its staff
will inform the requesting party of its views.
(b) Any advice given by the Commission is without prejudice to the
right of the Commission to reconsider the questions involved and, where
the public interest requires, to rescind or revoke the action. Notice of
such rescission or revocation will be given to the requesting party so
that he may discontinue the course of action taken pursuant to the
Commission's advice. The Commission will not proceed against the
requesting party with respect to any action taken in good faith reliance
upon the Commission's advice under this section, where all the relevant
facts were fully, completely, and accurately presented to the Commission
and where such action was promptly discontinued upon notification of
rescission or revocation of the Commission's approval.
(c) Advice rendered by the staff is without prejudice to the right
of the Commission later to rescind the advice and, where appropriate, to
commence an enforcement proceeding.
[44 FR 21624, Apr. 11, 1979]
Sec. 1.4 Public disclosure.
Written advice rendered pursuant to this section and requests
therefor, including names and details, will be placed in the
Commission's public record immediately after the requesting party has
received the advice, subject to any limitations on public disclosure
arising from statutory restrictions, the Commission's rules, and the
[[Page 13]]
public interest. A request for confidential treatment of information
submitted in connection with the questions should be made separately.
[44 FR 21624, Apr. 11, 1979]
Industry Guides
Sec. 1.5 Purpose.
Industry guides are administrative interpretations of laws
administered by the Commission for the guidance of the public in
conducting its affairs in conformity with legal requirements. They
provide the basis for voluntary and simultaneous abandonment of unlawful
practices by members of industry. Failure to comply with the guides may
result in corrective action by the Commission under applicable statutory
provisions. Guides may relate to a practice common to many industries or
to specific practices of a particular industry.
Sec. 1.6 How promulgated.
Industry guides \1\ are promulgated by the Commission on its own
initiative or pursuant to petition filed with the Secretary or upon
informal application therefor, by any interested person or group, when
it appears to the Commission that guidance as to the legal requirements
applicable to particular practices would be beneficial in the public
interest and would serve to bring about more widespread and equitable
observance of laws administered by the Commission. In connection with
the promulgation of industry guides, the Commission at any time may
conduct such investigations, make such studies, and hold such
conferences or hearings as it may deem appropriate. All or any part of
any such investigation, study, conference, or hearing may be conducted
under the provisions of subpart A of part 2 of this chapter.
---------------------------------------------------------------------------
\1\ In the past, certain of these have been promulgated and referred
to as trade practice rules.
---------------------------------------------------------------------------
Subpart B--Rules and Rulemaking Under Section 18(a)(1)(B) of the FTC Act
Authority: 15 U.S.C. 46; 15 U.S.C. 57a; 5 U.S.C. 552; sec. 212(a),
Pub. L. 104-121, 110 Stat. 857 (5 U.S.C. 601 note).
Sec. 1.7 Scope of rules in this subpart.
The rules in this subpart apply to and govern proceedings for the
promulgation of rules as provided in section 18(a)(1)(B) of the Federal
Trade Commission Act. Such rules shall be known as trade regulation
rules. All other rulemaking proceedings shall be governed by the rules
in subpart C, except as otherwise required by law or as otherwise
specified in this chapter.
[46 FR 26288, May, 12, 1981, as amended at 50 FR 53303, Dec. 31, 1985]
Sec. 1.8 Nature, authority and use of trade regulation rules.
(a) For the purpose of carrying out the provisions of the Federal
Trade Commission Act, the Commission is empowered to promulgate trade
regulation rules which define with specificity acts or practices which
are unfair or deceptive acts or practices in or affecting commerce. Such
rules may include requirements prescribed for the purpose of preventing
such acts or practices. A violation of a rule shall constitute an unfair
or deceptive act or practice in violation of section 5(a)(1) of that
Act, unless the Commission otherwise expressly provides in its rule.
However, the respondent in an adjudicative proceeding may show that his
conduct does not violate the rule or assert any other defense to which
he is legally entitled.
(b) The Commission at any time may conduct such investigations, make
such studies and hold such conferences as it may deem necessary. All or
any part of any such investigation may be conducted under the provisions
of subpart A of part 2 of this chapter.
[46 FR 26288, May 12, 1981]
[[Page 14]]
Sec. 1.9 Petitions to commence trade regulation rule proceedings.
Trade regulation rule proceedings may be commenced by the Commission
upon its own initiative or pursuant to written petition filed with the
Secretary by any interested person stating reasonable grounds therefor.
If the Commission determines to commence a trade regulation rule
proceeding pursuant to the petition, the petitioner shall be mailed a
copy of the public notices issued under Secs. 1.10, 1.11 and 1.12. Any
person whose petition is not deemed by the Commission sufficient to
warrant commencement of a rulemaking proceeding shall be notified of
that determination and may be given an opportunity to submit additional
data.
[46 FR 26288, May, 12, 1981, as amended at 50 FR 53303, Dec. 31, 1985]
Sec. 1.10 Advance notice of proposed rulemaking.
(a) Prior to the commencement of any trade regulation rule
proceeding, the Commission shall publish in the Federal Register an
advance notice of such proposed proceeding.
(b) The advance notice shall:
(1) Contain a brief description of the area of inquiry under
consideration, the objectives which the Commission seeks to achieve, and
possible regulatory alternatives under consideration by the Commission;
and
(2) invite the response of interested persons with respect to such
proposed rulemaking, including any suggestions or alternative methods
for achieving such objectives.
(c) The advance notice shall be submitted to the Committee on
Commerce, Science, and Transportation of the Senate and to the Committee
on Interstate and Foreign Commerce of the House of Representatives.
(d) The Commission may, in addition to publication of the advance
notice, use such additional mechanisms as it considers useful to obtain
suggestions regarding the content of the area of inquiry before
publication of an initial notice of proposed rulemaking pursuant to
Sec. 1.11.
[46 FR 26288, May, 12, 1981, as amended at 50 FR 53303, Dec. 31, 1985]
Sec. 1.11 Commencement of a rulemaking proceeding.
(a) Initial notice. A trade regulation rule proceeding shall
commence with an initial notice of proposed rulemaking. Such notice
shall be published in the Federal Register not sooner than 30 days after
it has been submitted to the Committee on Commerce, Science, and
Transportation of the Senate and to the Committee on Interstate and
Foreign Commerce of the House of Representatives. The initial notice
shall include:
(1) The text of the proposed rule including any alternatives which
the Commission proposes to promulgate;
(2) Reference to the legal authority under which the rule is
proposed;
(3) A statement describing with particularity the reason for the
proposed rule;
(4) An invitation to all interested persons to propose issues which
meet the criteria of Sec. 1.13(d)(1)(i) for consideration in accordance
with Sec. 1.13 (d)(5) and (d)(6);
(5) An invitation to all interested persons to comment on the
proposed rule; and
(6) A statement of the manner in which the public may obtain copies
of the preliminary regulatory analysis.
(b) Preliminary regulatory analysis. Except as otherwise provided by
statute, the Commission shall, when commencing a rulemaking proceeding,
issue a preliminary regulatory analysis which shall contain:
(1) A concise statement of the need for, and the objectives of, the
proposed rule;
(2) A description of any reasonable alternatives to the proposed
rule which may accomplish the stated objective of the rule in a manner
consistent with applicable law;
(3) For the proposed rule, and for each of the alternatives
described in the analysis, a preliminary analysis of the projected
benefits and any adverse economic effects and any other effects, and of
the effectiveness of the proposed rule and each alternative in meeting
the stated objectives of the proposed rule; and
(4) The information required by the Regulatory Flexibility Act, 5
U.S.C.
[[Page 15]]
601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520, if
applicable.
[46 FR 26288, May, 12, 1981, as amended at 50 FR 53303, Dec. 31, 1985;
63 FR 36340, July 6, 1998]
Sec. 1.12 Final notice.
A final notice of proposed rulemaking shall be published in the
Federal Register and, to the extent practicable, otherwise made
available to interested persons. The final notice shall include:
(a) Designated issues, unless there are none, which are to be
considered in accordance with Sec. 1.13 (d)(5) and (d)(6);
(b) The time and place of an informal hearing;
(c) Instructions to interested persons seeking to make oral
presentations;
(d) A requirement that interested persons who desire to avail
themselves of the procedures of Sec. 1.13 (d)(5) and (d)(6) with respect
to any issue designated in paragraph (a) of this section must identify
their interests with respect to those issues in such manner as may be
established by the presiding officer; and
(e) an incorporation by reference of the contents of the initial
notice.
[40 FR 33966, Aug. 13, 1975, as amended at 50 FR 53303, Dec. 31, 1985]
Sec. 1.13 Rulemaking proceeding.
(a) Written comments. After commencement of a trade regulation rule
proceeding, the Commission shall accept written submissions of data,
views, and arguments on all issues of fact, law, and policy. The initial
notice shall specify the deadline for filing written comments under this
subsection.
(b) Comments proposing issues subject to the procedures of Sec. 1.13
(d)(5) and (d)(6). Interested persons may propose issues for
consideration in accordance with Sec. 1.13 (d)(5) and (d)(6) until
thirty (30) days after the close of the written comment period or such
other period as the Commission may establish in the initial notice.
(c) Presiding officer--(1) Assignment. Upon commencement of a
proposed trade regulation rule proceeding, a presiding officer shall be
appointed by the Chief Presiding Officer or, when the Commission or one
or more of its members serves as presiding officer, by the Commission.
(2) Powers of the presiding officer. The presiding officer shall be
responsible for the orderly conduct of the rulemaking proceeding and the
maintenance of the rulemaking and public records until the close of the
postrecord comment period. He shall have all powers necessary to that
end including the following:
(i) To publish a final notice in accordance with Sec. 1.12 or issue
any other public notice that may be necessary for the orderly conduct of
the rulemaking proceeding;
(ii) To designate or modify, issues for consideration in accordance
with Sec. 1.13 (d)(5) and (d)(6);
(iii) To set the time and place of the informal hearing and to
change any time periods prescribed in this subpart;
(iv) To prescribe rules or issue rulings to avoid unnecessary costs
or delay. Such rules or rulings may include, but are not limited to, the
imposition of reasonable time limits on each person's oral presentation;
and requirements that any examination; including cross-examination,
which a person may be entitled to conduct or have conducted be conducted
by the presiding officer on behalf of that person in such a manner as
the presiding officer determines to be appropriate and to be required
for a full and true disclosure with respect to any issue designated for
consideration in accordance with Sec. 1.13 (d)(5) and (d)(6);
(v) To make rules and rulings limiting the representation of
interested persons for the purpose of examination, including cross-
examination, and governing the manner in which such examination is
limited, including the selection of a representative from among a group
of persons with the same or similar interests;
(vi) To require that oral presentations at the informal hearing or
responses to written questions be under oath;
(vii) To require that oral presentations at the informal hearing be
submitted in writing in advance of presentation;
(viii) To certify questions to the Commission for its determination;
and
[[Page 16]]
(ix) To rule upon all motions or petitions of interested persons,
which motions or petitions must be filed with the presiding officer
until the close of the postrecord comment period.
(3) Review of rulings by the presiding officer--(i) Review after
certification by the presiding officer. Except as otherwise provided in
paragraph (c)(3)(ii) of this section, applications for review of a
ruling will not be entertained by the Commission prior to its review of
the record pursuant to Sec. 1.14, unless the presiding officer certifies
in writing to the Commission 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 review of the ruling may
materially advance the ultimate termination of the proceeding or
subsequent review will be an inadequate remedy. Within five (5) days
after a ruling by the presiding officer, any interested person may
petition the presiding officer for certification of that ruling to the
Commission. Certification of a ruling shall not stay the rulemaking
proceeding unless the presiding officer or the Commission shall so
order. Submissions to the Commission not to exceed fifteen (15) pages
may be made within ten (10) days of the presiding officer's
certification. All such filings shall be a part of the rulemaking
record. The Commission may thereupon, in its discretion, permit the
appeal. Commission review, if permitted, will be based on the
application for review and any additional submissions, without oral
argument or further briefs, unless otherwise ordered by the Commission.
(ii) Review without certification by the presiding officer. Within
ten (10) days after publication of the final notice, any interested
person may petition the Commission for addition, modification or
deletion of a designated issue, accompanied by a filing not to exceed
fifteen (15) pages. Additional submissions on the issue by other
interested persons, not to exceed fifteen (15) pages, may be made within
twenty (20) days of the publication of the final notice. The Commission
may thereupon, in its discretion, permit the appeal. Commission review,
if permitted, will be based on the petition and any additional
submissions, without oral argument or further briefs, unless otherwise
ordered by the Commission. A petition hereunder shall not stay the
rulemaking proceeding unless the presiding officer or the Commission
shall so order. All petitions filed under this paragraph shall be a part
of the rulemaking record. Notice of the filing of any such petition may
be obtained from the Office of the Secretary of the Commission. In the
event any designated issue is added or substantially modified by the
Commission, interested persons shall be given a further opportunity to
identify their interests with respect to those issues.
(4) Substitution of presiding officer. In the event of the
substitution of a new presiding officer for the one originally
appointed, any motion predicated upon such substitution shall be made
within five (5) days thereafter.
(5) Organization. In the performance of their rulemaking functions,
presiding officers shall be responsible to the chief presiding officer
who shall not be responsible to any other officer or employee of the
Commission.
(6) Ex parte communications. Except as required for the disposition
of ex parte matters as authorized by law, no presiding officer shall
consult any person or party with respect to any fact in issue unless
such officer gives notice and opportunity for all parties to
participate.
(d) Informal hearings. An informal hearing with the opportunity for
oral presentations on all issues shall be conducted by the presiding
officer. In addition, if an issue is designated pursuant to these rules
for consideration in accordance with Sec. 1.13(d) (5) and (6), the
informal hearing on such issues shall be conducted in accordance with
those paragraphs. For all other issues the presiding officer may in his
discretion employ, in whole or in part, the procedures of those
paragraphs.
(1) Nature of issues for consideration in accordance with Sec. 1.13
(d)(5) and (d)(6)--(i) Issues that must be considered in accordance with
Sec. 1.13(d)(5) and (d)(6). The only issues that must be designated for
consideration in accordance with paragraphs (d)(5) and (d)(6) of this
section are disputed issues of fact that are determined by the
Commission or the presiding officer to be material and necessary to
resolve.
[[Page 17]]
(ii) Issues that may be considered in accordance with
Sec. 1.13(d)(5) and (d)((6). The Commission and the presiding officer
retain the power to designate any other issues for consideration in
accordance with paragraphs (d)(5) and (d)(6) of this section.
(2) Addition or modification of issues for consideration in
accordance with Sec. 1.13(d)(5) and (d)(6). The presiding officer may at
any time on his own motion or pursuant to a written petition by
interested persons, add or modify any issues designated pursuant to
Sec. 1.12(a). No such petition shall be considered unless good cause is
shown why any such proposed issue was not proposed pursuant to
Sec. 1.13(b).
(3) Identification of interests. Not later than twenty (20) days
after publication of the final notice each interested person who desires
to avail himself of the procedures of paragraphs (d)(5) and (d)(6) of
this section shall notify the presiding officer in writing of his
particular interest with respect to each issue designated for
consideration in accordance with those subsections. In the event that
new issues are designated, each interested person shall promptly notify
the presiding officer of his particular interest with respect to each
such issue.
(4) Examination and cross-examination by the presiding officer. The
presiding officer may conduct any examination, including cross-
examination, to which a person may be entitled. For that purpose he may
require submission of written requests for presentation of questions to
any person making oral presentations and shall determine whether to ask
such questions or any other questions. All requests for presentation of
questions shall be placed in the rulemaking record.
(5) Examination, cross-examination, and the presentation of rebuttal
submissions by interested persons--(i) In general. The presiding officer
shall conduct or allow to be conducted examination, including cross-
examination of oral presentations and the presentation of rebuttal
submissions relevant to the issues designated for consideration in
accordance with paragraphs (d)(5) and (d)(6) of this section.
Examination, including, cross-examination, and the presentation of
rebuttal submissions, shall be allowed to the extent to which it is
appropriate and is required for a full and true disclosure with respect
to those issues. Requests for an opportunity to examine, including
cross-examine, or to present rebuttal submissions, shall be accompanied
by a specific justification therefor. In determining whether or not to
grant such requests, the presence of the following circumstances
indicate that such requests should be granted:
(A) An issue for examination including cross-examination, or the
presentation of rebuttal submissions, is an issue of specific in
contrast to legislative fact.
(B) A full and true disclosure with respect to the issue can only be
achieved through examination including cross-examination rather than
through rebuttal submissions or the presentation of additional oral
submissions.
(C) Circumstantial guarantees of the trustworthiness of a
presentation do not exist.
(D) The particular presentation is required for the resolution of a
designated issue.
(ii) Selection of representatives for cross-examination. After
consideration of the information supplied in response to the final
notice, the presiding officer shall identify groups of persons with the
same or similar interests in the proceeding. Any such group may be
required to select a single representative for the purpose of
examination, including cross-examination. If a group is unable to select
a representative then the presiding officer may select a representative
of each such group.
(iii) Inability to select representative for examination, including
cross-examination. No person shall be denied the opportunity to conduct
or have conducted, examination, including cross-examination, under
paragraph (d)(5)(i) of this section if he is a member of a group as
described in paragraph (d)(5)(ii) of this section and is unable to agree
upon group representation with other group members after a good faith
effort to do so and seeks to present substantial and relevant issues
which will not be adequately presented by the group representative. In
that event he shall be allowed to conduct or have conducted
[[Page 18]]
any examination, including cross-examination, to which he is entitled on
issues designated for consideration in accordance with paragraphs (d)(5)
and (d)(6) of this section and which affect his particular interest.
(6) Requests to compel the attendance of persons or the production
of documents or to obtain responses to written questions. During the
course of the rulemaking proceeding, the presiding officer shall
entertain requests from the Commission's staff or any interested person
to compel the attendance of persons or the production of documents or to
obtain responses to written questions. Requests to compel the attendance
of persons or the production of documents or to obtain responses to
written questions shall contain a statement showing the general
relevancy of the material, information or presentation, and the
reasonableness of the scope of the request, together with a showing that
such material, information or presentation is not available by voluntary
methods and cannot be obtained through examination, including cross-
examination, of oral presentations or the presentation of rebuttal
submissions, and is appropriate and required for a full and true
disclosure with respect to the issues designated for consideration in
accordance with paragraphs (d)(5) and (d)(6) of this section. If the
presiding officer determines that a request should be granted, he shall
transmit his determination to the Commission which shall determine
whether to issue a civil investigative demand under Sec. 2.7(b).
Information received in response to such a demand may be disclosed in
the rulemaking proceeding subject to an in camera order under
Sec. 1.18(b).
(e) Written transcript. A verbatim transcript shall be made of the
informal hearing which transcript shall be placed in the rulemaking
record.
(f) Staff recommendations. The staff shall make recommendations to
the Commission in a report on the rulemaking record. Such report shall
contain its analysis of the record and its recommendations as to the
form of the final rule.
(g) Recommended decision. After publication of the staff report, the
presiding officer shall make a recommended decision based upon his or
her findings and conclusions as to all relevant and material evidence,
and taking into account the staff report. The recommended decision shall
be made by the presiding officer who presided over the rulemaking
proceeding except that such recommended decision may be made by another
officer if the officer who presided over the proceeding is no longer
available to the Commission.
(h) Postrecord comment. The staff report and the presiding officer's
recommended decision shall be the subject of public comment for a period
to be prescribed by the presiding officer at the time the recommended
decision is placed in the rulemaking record. The comment period shall be
no less than sixty (60) days. The comments shall be confined to
information already in the record and may include requests for review by
the Commission of determinations made by the presiding officer.
(i) Commission review of the rulemaking record. The Commission shall
review the rulemaking record to determine what form of rule, if any, it
should promulgate. During this review process, the Commission may allow
persons who have previously participated in the proceeding to make oral
presentations to the Commission, unless it determines with respect to
that proceeding that such presentations would not significantly assist
it in its deliberations. Presentations shall be confined to information
already in the rulemaking record. Requests to participate in an oral
presentation must be received by the Commission no later than the close
of the comment period under Sec. 1.13(h). The identity of the
participants and the format of such presentations will be announced in
advance by the Office of Public Information in the Commisison's Weekly
Calendar and Notice of ``Sunshine'' Meetings and in accordance with the
applicable provisions of 5 U.S.C. 552(b) and Sec. 4.15 of the
Commission's Rules of Practice. Such presentations will be transcribed
verbatim or summarized at the discretion of the Commission and a copy of
the transcript or summary and copies of any
[[Page 19]]
written communications and summaries of any oral communications relating
to such presentations shall be placed on the rulemaking record.
[40 FR 33966, Aug. 13, 1975, as amended at 43 FR 39084, Sept. 1, 1978;
45 36341, May 29, 1980; 45 FR 78628, Nov. 26, 1980; 46 FR 14888, Mar. 3,
1981; 46 FR 26288, May 12, 1981; 50 FR 53303, Dec. 31, 1985; 54 FR
19886, May 9, 1989]
Sec. 1.14 Promulgation.
(a) The Commission, after review of the rulemaking record, may
issue, modify, or decline to issue any rule. Where it believes that it
should have further information or additional views of interested
persons, it may withhold final action pending the receipt of such
additional information or views. If it determines not to issue a rule,
it may adopt and publish an explanation for not doing so.
(1) Statement of Basis and Purpose. If the Commission determines to
promulgate a rule, it shall adopt a Statement of Basis and Purpose to
accompany the rule which shall include:
(i) A statement as to the prevalence of the acts or practices
treated by the rule;
(ii) A statement as to the manner and context in which such acts or
practices are unfair or deceptive;
(iii) A statement as to the economic effect of the rule, taking into
account the effect on small businesses and consumers;
(iv) a statement as to the effect of the rule on state and local
laws; and
(v) A statement of the manner in which the public may obtain copies
of the final regulatory analysis.
(2) Final regulatory analysis. Except as otherwise provided by
statute, if the Commission determines to promulgate a final rule, it
shall issue a final regulatory analysis relating to the final rule. Each
final regulatory analysis shall contain:
(i) A concise statement of the need for, and the objectives of, the
final rule;
(ii) A description of any alternatives to the final rule which were
considered by the Commission;
(iii) An analysis of the projected benefits and any adverse economic
effects and any other effects of the final rule;
(iv) An explanation of the reasons for the determination of the
Commission that the final rule will attain its objectives in a manner
consistent with applicable law and the reasons the particular
alternative was chosen;
(v) A summary of any significant issues raised by the comments
submitted during the public comment period in response to the
preliminary regulatory analysis, and a summary of the assessment by the
Commission of such issues; and
(vi) The information required by the Regulatory Flexibility Act, 5
U.S.C. 601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520, if
applicable.
(3) Small entity compliance guide. For each rule for which the
Commission must prepare a final regulatory flexibility analysis, the
Commission will publish one or more guides to assist small entities in
complying with the rule. Such guides will be designated as ``small
entity compliance guides.''
(b) In the event the Commission determines, upon its review of the
rulemaking record, to propose a revised rule for further proceedings in
accordance with this subpart, such proceedings, including the
opportunity of interested persons to avail themselves of the procedures
of Sec. 1.13 (d)(5) and (d)(6), shall be limited to those portions of
the revised rule, the subjects and issues of which were not
substantially the subject of comment in response to a previous notice of
proposed rulemaking.
(c) The final rule and Statement of Basis and Purpose shall be
published in the Federal Register. A rule issued under this subpart
shall be deemed promulgated at 3 p.m. Eastern Standard Time on the
fourth day after the date on which the final rule and Statement of Basis
and Purpose are published in the Federal Register. In the event such day
is a Saturday, Sunday or national holiday, then the rule is deemed
promulgated at 3 p.m. Eastern Standard Time on the following business
day.
[40 FR 33966, Aug. 13, 1975, as amended at 46 FR 26289, May 12, 1981; 50
FR 53304, Dec. 31, 1985; 63 FR 36340, July 6, 1998]
[[Page 20]]
Sec. 1.15 Amendment or repeal of a rule.
(a) Substantive amendment or repeal of a rule. The procedures for
substantive amendment to or repeal of a rule are the same as for the
issuance thereof.
(b) Nonsubstantive amendment of a rule. The Commission may make a
nonsubstantive amendment to a rule by announcing the amendment in the
Federal Register.
[46 FR 26289, May 12, 1981]
Sec. 1.16 Petition for exemption from trade regulation rule.
Any person to whom a rule would otherwise apply may petition the
Commission for an exemption from such rule. The procedures for
determining such a petition shall be those of subpart C of these rules.
[40 FR 33966, Aug. 13, 1975]
Sec. 1.17 [Reserved]
Sec. 1.18 Rulemaking record.
(a) Definition. For purposes of these rules the term rulemaking
record includes the rule, its Statement of Basis and Purpose, the
verbatim transcripts of the informal hearing, written submissions, the
recommended decision of the presiding officer, and the staff
recommendations as well as any public comment thereon, verbatim
transcripts or summaries of oral presentations to the Commission any
communications placed on the rulemaking record pursuant to Sec. 1.18c
and any other information which the Commission considers relevant to the
rule.
(b) Public availability. The rulemaking record shall be publicly
available except when the presiding officer, for good cause shown,
determines that it is in the public interest to allow any submission to
be received in camera subject to the provisions of Sec. 4.11 of this
chapter.
(c) Communications to Commissioners and Commissioners' personal
staffs--(1) Communications by outside parties. Except as otherwise
provided in this subpart or by the Commission, after the Commission
votes to issue an initial notice of proposed rulemaking, comment on the
proposed rule should be directed to the presiding officer pursuant to
Sec. 1.13. Communications with respect to the merits of that proceeding
from any outside party to any Commissioner or Commissioner advisor shall
be subject to the following treatment:
(i) Written communications. Written communications, including
written communications from members of Congress, received within the
period for acceptance of initial written comments shall be forwarded
promptly to the presiding officer for placement on the rulemaking
record. Written communications received after the time period for
acceptance of initial written comments but prior to any other deadline
for the acceptance of written submissions will be forwarded promptly to
the presiding officer, who will determine whether such communications
comply with the applicable requirements for written submissions at that
stage of the proceeding. Communications that comply with such
requirements will be promptly placed on the rulemaking record.
Noncomplying communications and all communications received after the
time periods for acceptance of written submissions will be placed
promptly on the public record.
(ii) Oral communications. Oral communications are permitted only
when advance notice of such oral communications is published by the
Commission's Office of Public Information in its Weekly Calendar and
Notice of ``Sunshine'' Meetings and when such oral communications are
transcribed verbatim or summarized at the discretion of the Commissioner
or Commissioner advisor to whom such oral communications are made and
are promptly placed on the rulemaking record together with any written
communications and summaries of any oral communications relating to such
oral communications. Transcripts or summaries of oral communications
which occur after the time period for acceptance of initial written
comments but prior to any other deadline for the acceptance of written
submissions will be forwarded promptly to the presiding officer together
with any written communications and summaries of any oral communications
relating to such oral communications. The presiding officer will
determine whether such oral communications comply with the applicable
[[Page 21]]
requirements for written submissions at that stage of the proceeding.
Transcripts or summaries of oral communications that comply with such
requirements will be promptly placed on the rulemaking record together
with any written communications and summaries of any oral communications
relating to such oral communications. Transcripts or summaries of
noncomplying oral communications will be promptly placed on the public
record together with any written communications and summaries of any
oral communications relating to such oral communications. No oral
communications are permitted subsequent to the close of the postrecord
comment period, except as provided in Sec. 1.13(i). If an oral
communication does otherwise occur, the Commissioner or Commissioner
advisor will promptly place on the public record either a transcript of
the communication or a memorandum setting forth the contents of the
communication and the circumstances thereof; such transcript or
memorandum will not be part of the rulemaking record.
(iii) Congressional communications. The provisions of paragraph
(c)(1)(ii) of this section do not apply to communications from members
of Congress. Memoranda prepared by the Commissioner or Commissioner
advisor setting forth the contents of any oral congressional
communications will be placed on the public record. If the communication
occurs within the initial comment period and is transcribed verbatim or
summarized, the transcript or summary will be promptly placed on the
rulemaking record. A transcript or summary of any oral communication
which occurs after the time period for acceptance of initial written
comments but prior to any other deadline for the acceptance of written
submissions will be forwarded promptly to the presiding officer, who
will determine whether such oral communication complies with the
applicable requirements for written submissions at that stage of the
proceeding. Transcripts or summaries of oral communications that comply
with such requirements will be promptly placed on the rulemaking record.
Transcripts or summaries of noncomplying oral communications will be
placed promptly on the public record.
(2) Communications by certain officers, employees, and agents of the
Commission. Any officer, employee, or agent of the Commission with
investigative or other responsibility relating to any rulemaking
proceeding within any operating bureau of the Commission is prohibited
from communicating or causing to be communicated to any Commissioner or
to the personal staff of any Commissioner any fact which is relevant to
the merits of such proceeding and which is not on the rulemaking record
of such proceeding, unless such communication is made available to the
public and is included in the rulemaking record. The provisions of this
subsection shall not apply to any communication to the extent such
communication is required for the disposition of ex parte matters as
authorized by law.
(Sec. 6(g), 38 Stat. 721 (15 U.S.C. 46), 80 Stat. 383, as amended (5
U.S.C. 552))
[42 FR 43974, Sept. 1, 1977, as amended at 42 FR 60563, Nov. 28, 1977;
44 FR 16368, Mar. 19, 1979; 44 FR 21005, Apr. 9, 1979; 45 FR 78628, Nov.
26, 1980; 50 FR 53304, Dec. 31, 1985]
Sec. 1.19 Modification of a rule by the Commission at the time of judicial review.
In the event that a reviewing court determines under section
18(e)(2) of the Federal Trade Commission Act, to allow further
submissions and presentations on the rule, the Commission may modify or
set aside its rule or make a new rule by reason of the additional
submissions and presentations. Such modified or new rule shall then be
filed with the court together with an appropriate Statement of Basis and
Purpose and the return of such submissions and presentations.
[40 FR 33966, Aug. 13, 1975, as amended at 50 FR 53304, Dec. 31, 1985]
Sec. 1.20 Alternative procedures.
If the Commission determines at the commencement of a rulemaking
proceeding to employ procedures other
[[Page 22]]
than those established in the remainder of this subpart, it may do so by
announcing those procedures in the Federal Register notice commencing
the rulemaking proceeding.
[43 FR 35683, Aug. 11, 1978]
Subpart C--Rules Promulgated Under Authority Other Than Section
18(a)(1)(B) of the FTC Act
Authority: 15 U.S.C. 46; 5 U.S.C. 552; Sec. 212(a), Pub. L. 104-121,
110 Stat. 857 (5 U.S.C. 601 note).
Sec. 1.21 Scope of the rules in this subpart.
This subpart sets forth procedures for the promulgation of rules
under authority other than section 18(a)(1)(B) of the FTC Act except as
otherwise required by law or otherwise specified in the rules of this
chapter. This subpart does not apply to the promulgation of industry
guides, general statements of policy, rules of agency organization,
procedure, or practice, or rules governed by subpart B of this part.
[50 FR 53304, Dec. 31, 1985]
Sec. 1.22 Rulemaking.
(a) Nature and authority. For the purpose of carrying out the
provisions of the statutes administered by it, the Commission is
empowered to promulgate rules and regulations applicable to unlawful
trade practices. Such rules and regulations express the experience and
judgment of the Commission, based on facts of which it has knowledge
derived from studies, reports, investigations, hearings, and other
proceedings, or within official notice, concerning the substantive
requirements of the statutes which it administers.
(b) Scope. Rules may cover all applications of a particular
statutory provision and may be nationwide in effect, or they may be
limited to particular areas or industries or to particular product or
geographic markets, as may be appropriate.
(c) Use of rules in adjudicative proceedings. When a rule is
relevant to any issue involved in an ajudicative proceeding thereafter
instituted, the Commission may rely upon the rule to resolve such issue,
provided that the respondent shall have been given a fair hearing on the
applicability of the rule to the particular case.
[40 FR 15232, Apr. 4, 1975]
Sec. 1.23 Quantity limit rules.
Quantity limit rules are authorized by section 2(a) of the Clayton
Act, as amended by the Robinson-Patman Act. These rules have the force
and effect of law.
[32 FR 8444, June 13, 1967. Redesignated at 40 FR 15232, Apr. 4, 1975]
Sec. 1.24 Rules applicable to wool, fur, and textile fiber products and rules promulgated under the Fair Packaging and Labeling Act.
Rules having the force and effect of law are authorized under
section 6 of the Wool Products Labeling Act of 1939, section 8 of the
Fur Products Labeling Act, section 7 of the Textile Fiber Products
Identification Act, and sections 4, 5, and 6 of the Fair Packaging and
Labeling Act.
[40 FR 15233, Apr. 4, 1975]
Sec. 1.25 Initiation of proceedings--petitions.
Proceedings for the issuance of rules or regulations, including
proceedings for exemption of products or classes of products from
statutory requirements, may be commenced by the Commission upon its own
initiative or pursuant to petition filed with the Secretary by any
interested person or group stating reasonable grounds therefor. Anyone
whose petition is not deemed by the Commission sufficient to warrant the
holding of a rulemaking proceeding will be promptly notified of that
determination and given an opportunity to submit additional data.
Procedures for the amendment or repeal of a rule or regulation are the
same as for the issuance thereof.
[32 FR 8444, June 13, 1967. Redesignated at 40 FR 15232, Apr. 4, 1975]
Sec. 1.26 Procedure.
(a) Investigations and conferences. In connection with any
rulemaking proceeding, the Commission at any time may conduct such
investigations, make such studies, and hold such conferences
[[Page 23]]
as it may deem necessary. All or any part of any such investigation may
be conducted under the provisions of subpart A of part 2 of this
chapter.
(b) Notice. General notice of proposed rulemaking will be published
in the Federal Register and, to the extent practicable, otherwise made
available to interested persons except when the Commission for good
cause finds that notice and public procedure relating to the rule are
impractical, unnecessary or contrary to the public interest and
incorporates such finding and a brief statement of the reasons therefor
in the rule. If the rulemaking proceeding was instituted pursuant to
petition, a copy of the notice will be served on the petitioner. Such
notice will include:
(1) A statement of the time, place, and nature of the public
proceedings;
(2) Reference to the authority under which the rule is proposed;
(3) Either the terms or substance of the proposed rule or
description of the subjects and issues involved;
(4) An opportunity for interested persons to participate in the
proceeding through the submission of written data, views, or arguments;
and(5) A statement setting forth such procedures for treatment of
communications from persons not employed by the Commission to
Commissioners or Commissioner Advisors with respect to the merits of the
proceeding as will incorporate the requirements of Sec. 1.18(c),
including the transcription of oral communications required by
Sec. 1.18(c)(2), adapted in such form as may be appropriate to the
circumstances of the particular proceeding.
(c) Oral hearings. Oral hearing on a proposed rule may be held
within the discretion of the Commission, unless otherwise expressly
required by law. Any such hearing will be conducted by the Commission, a
member thereof, or a member of the Commission's staff. At the hearing
interested persons may appear and express their views as to the proposed
rule and may suggest such amendments, revisions, and additions thereto
as they may consider desirable and appropriate. The presiding officer
may impose reasonable limitations upon the length of time allotted to
any person. If by reason of the limitations imposed the person cannot
complete the presentation of his suggestions, he may within twenty-four
(24) hours file a written statement covering those relevant matters
which he did not orally present.
(d) Promulgation of rules or orders. The Commission, after
consideration of all relevant matters of fact, law, policy, and
discretion, including all relevant matters presented by interested
persons in the proceeding, will adopt and publish in the Federal
Register an appropriate rule or order, together with a concise general
statement of its basis and purpose and any necessary findings, or will
give other appropriate public notice of disposition of the proceeding.
The Federal Register publication will contain the information required
by the Paperwork Reduction Act, 44 U.S.C. 3501-3520, and the Regulatory
Flexibility Act, 5 U.S.C. 601-612, if applicable. For each rule for
which the Commission must prepare a final regulatory flexibility
analysis, the Commission will publish one or more guides to assist small
entities in complying with the rule. Such guides will be designated as
``small entity compliance guides.''
(e) Effective date of rules. Except as provided in paragraphs (f)
and (g) of this section, the effective date of any rule, or of the
amendment, suspension, or repeal of any rule will be as specified in a
notice published in the Federal Register, which date will be not less
than thirty (30) days after the date of such publication unless an
earlier effective date is specified by the Commission upon good cause
found and published with the rule.
(f) Effective date of rules and orders under Fair Packaging and
Labeling Act. The effective date of any rule or order under the Fair
Packaging and Labeling Act will be as specified by order published in
the Federal Register, but shall not be prior to the day following the
last day on which objections may be filed under paragraph (g) of this
section.
(g) Objections and request for hearing under Fair Packaging and
Labeling Act. On or before the thirtieth (30th) day after the date of
publication of an order in the Federal Register pursuant to paragraph
(f) of this section, any person who will be adversely affected
[[Page 24]]
by the order if placed in effect may file objections thereto with the
Secretary of the Commission, specifying with particularity the
provisions of the order deemed objectionable, stating the grounds
therefor, and requesting a public hearing upon such objections.
Objections will be deemed sufficient to warrant the holding of a public
hearing only:
(1) If they establish that the objector will be adversely affected
by the order;
(2) If they specify with particularity the provisions of the order
to which objection is taken; and
(3) If they are supported by reasonable grounds which, if valid and
factually supported, may be adequate to justify the relief sought.
Anyone who files objections which are not deemed by the Commission
sufficient to warrant the holding of a public hearing will be promptly
notified of that determination. As soon as practicable after the time
for filing objections has expired, the Commission will publish a notice
in the Federal Register specifying those parts of the order which have
been stayed by the filing of objections or, if no objections sufficient
to warrant the holding of a hearing have been filed, stating that fact.
[32 FR 8444, June 13, 1967. Redesignated at 40 FR 15232, Apr. 4, 1975,
and amended at 44 FR 16368, Mar. 19, 1979; 50 FR 53304, Dec. 31, 1985;
63 FR 36340, July 6, 1998]
Subpart D [Reserved]
Subpart E--Export Trade Associations
Sec. 1.41 Limited antitrust exemption.
The Export Trade Act authorizes the organization and operation of
export trade associations, and extends to them certain limited
exemptions from the Sherman Act and the Clayton Act. It also extends the
jurisdiction of the Commission under the Federal Trade Commission Act to
unfair methods of competition used in export trade against competitors
engaged in export trade, even though the acts constituting such unfair
methods are done without the territorial jurisdiction of the United
States.
Sec. 1.42 Notice to Commission.
To obtain the exemptions afforded by the Act, an export trade
association is required to file with the Commission, within thirty (30)
days after its creation, a verified written statement setting forth the
location of its offices and places of business, names, and addresses of
its officers, stockholders, or members, and copies of its documents of
incorporation or association. On the first day of January of each year
thereafter, each association must file a like statement and, when
required by the Commission to do so, must furnish to the Commission
detailed information as to its organization, business, conduct,
practices, management, and relation to other associations, corporations,
partnerships, and individuals.
Sec. 1.43 Recommendations.
Whenever the Commission has reason to believe that an association
has violated the prohibitions of section 2 of the Act, it may conduct an
investigation. If, after investigation, it concludes that the law has
been violated, it may make to such association recommendations for the
readjustment of its business. If the association fails to comply with
the recommendations, the Commission will refer its findings and
recommendations to the Attorney General for appropriate action.
Subpart F--Trademark Cancellation Procedure
Sec. 1.51 Applications.
Applications for the institution of proceedings for the cancellation
of registration of trade, service, or certification marks under the
Trade-Mark Act of 1946 may be filed with the Secretary of the
Commission. Such applications shall be in writing, signed by or in
behalf of the applicant, and should identify the registration concerned
and contain a short and simple statement of the facts constituting the
alleged basis for cancellation, the name and address of the applicant,
together with all relevant and available information. If, after
consideration of the application, or upon its own initiative, the
Commission concludes that cancellation of the mark may be warranted, it
[[Page 25]]
will institute a proceeding before the Commissioner of Patents for
cancellation of the registration.
Subpart G--Injunctive and Condemnation Proceedings
Sec. 1.61 Injunctions.
In those cases where the Commission has reason to believe that it
would be to the interest of the public, the Commission will apply to the
courts for injunctive relief, pursuant to the authority granted in
section 13 of the Federal Trade Commission Act.
[40 FR 15233, Apr. 4, 1975]
Sec. 1.62 Ancillary court orders pending review.
Where petition for review of an order to cease and desist has been
filed in a U.S. court of appeals, the Commission may apply to the court
for issuance of such writs as are ancillary to its jurisdiction or are
necessary in its judgment to prevent injury to the public or to
competitors pendente lite.
Sec. 1.63 Injunctions: Wool, fur, and textile cases.
In those cases arising under the Wool Products Labeling Act of 1939,
Fur Products Labeling Act, and Textile Fiber Products Identification
Act, where it appears to the Commission that it would be to the public
interest for it to do so, the Commission will apply to the courts for
injunctive relief, pursuant to the authority granted in such Acts.
[32 FR 8444, June 13, 1967, as amended at 41 FR 4814, Feb. 2, 1976]
Sec. 1.64 Condemnation proceedings.
In those cases arising under the Wool Products Labeling Act of 1939
and Fur Products Labeling Act, and where it appears to the Commission
that the public interest requires such action, the Commission will apply
to the courts for condemnation, pursuant to the authority granted in
such Acts.
[32 FR 8444, June 13, 1967, as amended at 41 FR 4814, Feb. 2, 1976]
Subpart H--Administration of the Fair Credit Reporting Act
Authority: 84 Stat. 1128, 15 U.S.C. 1681 et seq.
Sec. 1.71 Administration.
The general administration of the Fair Credit Reporting Act (Title
VI of the Consumer Credit Protection Act of 1968; enacted October 26,
1970; Pub. L. 91-508, 82 Stat. 146, 15 U.S.C. 1601 et seq.) is carried
out by the Bureau of Consumer Protection, Division of Credit Practices.
Any interested person may obtain copies of the Act and these procedures
and rules of practice upon request to the Secretary of the Commission,
Washington, DC 20580.
[36 FR 9293, May 22, 1971, as amended at 36 FR 18788, Sept. 22, 1971; 38
FR 32438, Nov. 26, 1973; 46 FR 26290, May 12, 1981]
Sec. 1.72 Examination, counseling and staff advice.
The Commission maintains a staff to carry out on-the-scene
examination of records and procedures utilized to comply with the Fair
Credit Reporting Act and to carry out industry counseling. Requests for
staff interpretation of the Fair Credit Reporting Act should be directed
to the Division of Credit Practices, Bureau of Consumer Protection. Such
interpretations represent informal staff opinion which is advisory in
nature and is not binding upon the Commission as to any action it may
take in the matter. Administrative action to effect correction of minor
infractions on a voluntary basis is taken in those cases where such
procedure is believed adequate to effect immediate compliance and
protect the public interest.
[36 FR 9293, May 22, 1971, as amended at 36 FR 18788, Sept. 22, 1971; 38
FR 32438, Nov. 26, 1973; 46 FR 26290, May 12, 1981]
Sec. 1.73 Interpretations.
(a) Nature and purpose. (1) The Commission issues and causes to be
published in the Federal Register interpretations of the provisions of
the Fair Credit Reporting Act on its own initiative or pursuant to the
application of any person when it appears to the Commission that
guidance as to the legal
[[Page 26]]
requirements of the Act would be in the public interest and would serve
to bring about more widespread and equitable observance of the Act.
(2) The interpretations are not substantive rules and do not have
the force or effect of statutory provisions. They are guidelines
intended as clarification of the Fair Credit Reporting Act, and, like
industry guides, are advisory in nature. They represent the Commission's
view as to what a particular provision of the Fair Credit Reporting Act
means for the guidance of the public in conducting its affairs in
conformity with that Act, and they provide the basis for voluntary and
simultaneous abandonment of unlawful practices by members of industry.
Failure to comply with such interpretations may result in corrective
action by the Commission under applicable statutory provisions.
(b) Procedure. (1) Requests for Commission interpretations should be
submitted in writing to the Secretary of the Federal Trade Commission
stating the nature of the interpretation requested and the reasons and
justification therefor. If the request is granted, as soon as
practicable thereafter, the Commission will publish a notice in the
Federal Register setting forth the text of the proposed interpretation.
Comments, views, or objections, together with the grounds therefor,
concerning the proposed interpretation may be submitted to the Secretary
of the Commission within thirty (30) days of public notice thereof. The
proposed interpretation will automatically become final after the
expiration of sixty (60) days from the date of public notice thereof,
unless upon consideration of written comments submitted as hereinabove
provided, the Commission determine to rescind, revoke, modify, or
withdraw the proposed interpretation, in which event notification of
such determination will be published in the Federal Register.
(2) The issuance of such interpretations is within the discretion of
the Commission and the Commission at any time may conduct such
investigations and hold such conferences or hearings as it may deem
appropriate. Any interpretation issued pursuant to this chapter is
without prejudice to the right of the Commission to reconsider the
interpretation, and where the public interest requires, to rescind,
revoke, modify, or withdraw the interpretation, in which event
notification of such action will be published in the Federal Register.
(c) Applicability of interpretations. Interpretations issued
pursuant to this subpart may cover all applications of a particular
statutory provision, or they may be limited in application to a
particular industry, as appropriate.
[36 FR 9293, May 22, 1971]
Subpart I--Procedures for Implementation of the National Environmental
Policy Act of 1969
Authority: 15 U.S.C. 46(g), 42 U.S.C. 4321 et seq.
Source: 47 FR 3096, Jan. 22, 1982, unless otherwise noted.
Sec. 1.81 Authority and incorporation of CEQ Regulations.
This subpart is issued pursuant to 102(2) of the National
Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et
seq.). Pursuant to Executive Order 11514 (March 5, 1970, as amended by
Executive Order 11991, May 24, 1977) and the Environmental Quality
Improvement Act of 1980, as amended (42 U.S.C. 4371 et seq.) the Council
on Environmental Quality (CEQ) has issued comprehensive regulations for
implementing the procedural provisions of NEPA (40 CFR parts 1500
through 1508) (``CEQ Regulations''). Although it is the Commission's
position that these regulations are not binding on it, the Commission's
policy is to comply fully with the CEQ Regulations unless it determines
in a particular instance or for a category of actions that compliance
would not be consistent with the requirements of law. With this caveat,
the Commission incorporates into this subpart the CEQ Regulations. The
following are supplementary definitions and procedures to be applied in
conjunction with the CEQ Regulations.
[47 FR 3096, Jan. 22, 1982, as amended at 50 FR 53304, Dec. 31, 1985]
[[Page 27]]
Sec. 1.82 Declaration of policy.
(a) Except for actions which are not subject to the requirements of
section 102(2)(C) of NEPA, no Commission proposal for a major action
significantly affecting the quality of the human environment will be
instituted unless an environmental impact statement has been prepared
for consideration in the decisionmaking. All relevant environmental
documents, comments, and responses as provided in this subpart shall
accompany such proposal through all review processes. ``Major actions,
significantly affecting the quality of the human environment'' referred
to in this subpart ``do not include bringing judicial or administrative
civil or criminal enforcement actions'' CEQ Regulation (40 CFR
1508.18(a)). In the event that the Commission in an administrative
enforcement proceeding actively contemplates the adoption of standards
or a form of relief which it determines may have a significant effect on
the environment, the Commission will, when consistent with the
requirements of law, provide for the preparation of an environmental
assessment or an environmental impact statement or such other action as
will permit the Commission to assess alternatives with a view toward
avoiding or minimizing any adverse effect upon the environment.
(b) No Commission proposal for legislation significantly affecting
the quality of the human environment and concerning a subject matter in
which the Commission has primary responsibility will be submitted to
Congress without an accompanying environmental impact statement.
(c) When the Commission finds that emergency action is necessary and
an environmental impact statement cannot be prepared in conformance with
the CEQ Regulations, the Commission will consult with CEQ about
alternative arrangements in accordance with CEQ Regulation (40 CFR
1506.11).
Sec. 1.83 Whether to commence the process for an environmental impact statement.
(a) The Bureau responsible for submitting a proposed rule, guide, or
proposal for legislation to the Commission for agency action shall,
after consultation with the Office of the General Counsel, initially
determine whether or not the proposal is one which requires an
environmental impact statement. Except for matters where the
environmental effects, if any, would appear to be either (1) clearly
significant and therefore the decision is made to prepare an
environmental impact statement, or (2) so uncertain that environmental
analysis would be based on speculation, the Bureau should normally
prepare an ``environmental assessment'' CEQ Regulation (40 CFR 1508.9)
for purposes of providing sufficient evidence and analysis for
determining whether to prepare an environmental impact statement or a
finding of no significant impact. The Bureau should involve
environmental agencies to the extent practicable in preparing an
assessment. An environmental assessment shall be made available to the
public when the proposed action is made public along with any ensuing
environmental impact statement or finding of no significant impact.
(b) If the Bureau determines that the proposal is one which requires
an environmental impact statement, it shall commence the ``scoping
process'' CEQ Regulation (40 CFR 1501.7) except that the impact
statement which is part of a proposal for legislation need not go
through a scoping process but shall conform to CEQ Regulation (40 CFR
1506.8). As soon as practicable after its decision to prepare an
environmental impact statement and before the scoping process, the
Bureau shall publish a notice of intent as provided in CEQ Regulations
(40 CFR 1501.7 and 1508.22).
(c) If, on the basis of an environmental assessment, the
determination is made not to prepare a statement, a finding of ``no
significant impact'' shall be made in accordance with CEQ Regulation (40
CFR 1508.3) and shall be made available to the public as specified in
CEQ Regulation (40 CFR 1506.6).
Sec. 1.84 Draft environmental impact statements: Availability and comment.
Except for proposals for legislation, environmental impact
statements shall be prepared in two stages: Draft statement and final
statement.
[[Page 28]]
(a) Proposed rules or guides. (1) An environmental impact statement,
if deemed necessary, shall be in draft form at the time a proposed rule
or guide is published in the Federal Register and shall accompany the
proposal throughout the decisionmaking process.
(2) The major decision points with respect to rules and guides are:
(i) Preliminary formulation of a staff proposal;
(ii) The time the proposal is initially published in the Federal
Register as a Commission proposal;
(iii) Presiding officer's report (in trade regulation rule
proceedings);
(iv) Submission to the Commission of the staff report or
recommendation for final action on the proposed guide or rule;
(v) Final decision by the Commission. The decision on whether or not
to prepare an environmental impact statement should occur at point
(a)(2)(i) of this section. The publication of any draft impact statement
should occur at point (a)(2)(ii) of this section. The publication of the
final environmental impact statement should occur at point (a)(2)(iv) of
this section.
(b) Legislative proposals. In legislative matters, a legislative
environmental impact statement shall be prepared in accordance with CEQ
Regulation (40 CFR 1506.8).
(c) In rule or guide proceedings the draft environmental impact
statement shall be prepared in accordance with CEQ Regulation (40 CFR
1502.9) and shall be placed in the public record to which it pertains;
in legislative matters, the legislative impact statement shall be placed
in a public record to be established, containing the legislative report
to which it pertains; these will be available to the public through the
Office of the Secretary and will be published in full with the
appropriate proposed rule, guide, or legislative report; such statements
shall also be filed with the Environmental Protection Agency's (EPA)
Office of Environmental Review (CEQ Regulation (40 CFR 1506.9)) for
listing in the weekly Federal Register Notice of draft environmental
impact statements, and shall be circulated, in accordance with CEQ
Regulations (40 CFR 1502.19, 1506.6) to appropriate federal, state and
local agencies.
(d) Forty-five (45) days will be allowed for comment on the draft
environmental impact statement, calculated from the date of publication
in the EPA's weekly Federal Register list of draft environmental impact
statements. The Commission may in its discretion grant such longer
period as the complexity of the issues may warrant.
Sec. 1.85 Final environmental impact statements.
(a) After the close of the comment period, the Bureau responsible
for the matter will consider the comments received on the draft
environmental impact statement and will put the draft statement into
final form in accordance with the requirements of CEQ Regulation (40 CFR
1502.9(b)), attaching the comments received (or summaries if response
was exceptionally voluminous).
(b) Upon Bureau approval of the final environmental impact statement
the final statement will be
(1) Filed with the EPA;
(2) Forwarded to all parties which commented on the draft
environmental impact statement and to other interested parties, if
practicable;
(3) Placed in the public record of the proposed rule or guide
proceeding or legislative matter to which it pertains;
(4) Distributed in any other way which the Bureau in consultation
with CEQ deems appropriate.
(c) In rule and guide proceedings, at least thirty (30) days will be
allowed for comment on the final environmental impact statement,
calculated from the date of publication in the EPA's weekly Federal
Register list of final environmental impact statements. In no event will
a final rule or guide be promulgated prior to ninety (90) days after
notice of the draft environmental impact statement, except where
emergency action makes such time period impossible.
Sec. 1.86 Supplemental statements.
Except for proposals for legislation, as provided in CEQ Regulation
(40 CFR 1502.9(c)), the Commission shall publish
[[Page 29]]
supplements to either draft or final environmental statements if:
(a) The Commission makes substantial changes in the proposed action
that are relevant to environmental concerns; or
(b) There are significant new circumstances or information relevant
to environmental concerns and bearing on the proposed action and its
impacts. In the course of a trade regulation rule proceeding, the
supplement will be placed in the rulemaking record.
Sec. 1.87 NEPA and agency decisionmaking.
In its final decision on the proposed action or, if appropriate, in
its recommendation to Congress, the Commission shall consider all the
alternatives in the environmental impact statement and other relevant
environmental documents and shall prepare a concise statement which, in
accordance with CEQ Regulation Sec. 1505.2, shall:
(a) Identify all alternatives considered by the Commission in
reaching its decision or recommendation, specifying the alternatives
which were considered to be environmentally preferable;
(b) State whether all practicable means to avoid or minimize
environmental harm from the alternative selected have been adopted, and
if not, why they were not.
Sec. 1.88 Implementing procedures.
(a) The General Counsel is designated the official responsible for
coordinating the Commission's efforts to improve environmental quality.
He will provide assistance to the staff in determining when an
environmental impact statement is needed and in its preparation.
(b) The Commission will determine finally whether an action complies
with NEPA.
(c) The Directors of the Bureaus of Consumer Protection and
Competition will supplement these procedures for their Bureaus to assure
that every proposed rule and guide is reviewed to assess the need for an
environmental impact statement and that, where need exists, an
environmental impact statement is developed to assure timely
consideration of environmental factors.
(d) The General Counsel will establish procedures to assure that
every legislative proposal on a matter for which the Commission has
primary responsibility is reviewed to assess the need for an
environmental impact statement and that, where need exists, and
environmental impact statement is developed to assure timely
consideration of environmental factors.
(e) Parties seeking information or status reports on environmental
impact statements and other elements of the NEPA process, should contact
the Assistant General Counsel for Litigation and Environmental Policy.
Sec. 1.89 Effect on prior actions.
It is the policy of the Commission to apply these procedures to the
fullest extent possible to proceedings which are already in progress.
Subpart J--Economic Surveys, Investigations and Reports
Sec. 1.91 Authority and purpose.
General and special economic surveys, investigations, and reports
are made by the Bureau of Economics under the authority of the various
laws which the Federal Trade Commission administers. The Commission may
in any such survey or investigation invoke any or all of the compulsory
processes authorized by law.
[32 FR 8444, June 13, 1967. Redesignated at 40 FR 15233, Apr. 4, 1975]
Subpart K--Penalties for Violation of Appliance Labeling Rules
Source: 45 FR 67318, Oct. 10, 1980, unless otherwise noted.
Sec. 1.92 Scope.
The rules in this subpart apply to and govern proceedings for the
assessment of civil penalties for the violation of section 332 of the
Energy Policy and Conservation Act, 42 U.S.C. 6302, and the Commission's
Rules on Labeling and Advertising of Consumer Appliances, 16 CFR part
305, promulgated under sections 324 and 326 of the Energy Policy and
Conservation Act, 42 U.S.C. 6294 and 6296.
[[Page 30]]
Sec. 1.93 Notice of proposed penalty.
(a) Notice. Before issuing an order assessing a civil penalty under
this subpart against any person, the Commission shall provide to such
person notice of the proposed penalty. This notice shall:
(1) Inform such person of the opportunity to elect in writing within
30 days of receipt of the notice of proposed penalty to have procedures
of Sec. 1.95 (in lieu of those of Sec. 1.94) apply with respect to such
assessment; and
(2) Include a copy of a proposed complaint conforming to the
provision of Sec. 3.11(b) (1) and (2) of the Commission's Rules of
Practice, or a statement of the material facts constituting the alleged
violation and the legal basis for the proposed penalty; and
(3) Include the amount of the proposed penalty; and
(4) Include a statement of the procedural rules that the Commission
will follow if respondent elects to proceed under Sec. 1.94 unless the
Commission chooses to follow subparts B, C, D, E, and F of part 3 of
this chapter.
(b) Election. Within 30 days of receipt of the notice of proposed
penalty, the respondent shall, if it wishes to elect to have the
procedures of Sec. 1.95 apply, notify the Commission of the election in
writing. The notification, to be filed in accordance with Sec. 4.2 of
this chapter, may include any factual or legal reasons for which the
proposed assessment order should not issue, should be reduced in amount,
or should otherwise be modified.
Sec. 1.94 Commission proceeding to assess civil penalty.
If the respondent fails to elect to have the procedures of Sec. 1.95
apply, the Commission shall determine whether to issue a complaint and
thereby commence an adjudicative proceeding in conformance with section
333(d)(2)(A) of the Energy Policy and Conservation Act, 42 U.S.C.
6303(d)(2)(A). If the Commission votes to issue a complaint, the
proceeding shall be conducted in accordance with subparts B, C, D, E and
F of part 3 of this chapter, unless otherwise ordered in the notice of
proposed penalty. In assessing a penalty, the Commission shall take into
account the factors listed in Sec. 1.97.
Sec. 1.95 Procedures upon election.
(a) After receipt of the notification of election to apply the
procedures of this section pursuant to Sec. 1.93, the Commission shall
promptly assess such penalty as it deems appropriate, in accordance with
Sec. 1.97.
(b) If the civil penalty has not been paid within 60 calendar days
after the assessment order has been issued under paragraph (a) of this
section, the General Counsel, unless otherwise directed, shall institute
an action in the appropriate district court of the United States for an
order enforcing the assessment of the civil penalty.
(c) Any election to have this section apply may not be revoked
except with the consent of the Commission.
Sec. 1.96 Compromise of penalty.
The Commission may compromise any penalty or proposed penalty at any
time, with leave of court when necessary, taking into account the nature
and degree of violation and the impact of a penalty upon a particular
respondent.
Sec. 1.97 Amount of penalty.
All penalties assessed under this subchapter shall be in the amount
per violation as described in section 333(a) of the Energy Policy and
Conservation Act, 42 U.S.C. 6303(a), adjusted for inflation pursuant to
Sec. 1.98, unless the Commission otherwise directs. In considering the
amount of penalty, the Commission shall take into account:
(a) Respondent's size and ability to pay;
(b) Respondent's good faith;
(c) Any history of previous violations;
(d) The deterrent effect of the penalty action;
(e) The length of time involved before the Commission was made aware
of the violation;
(f) The gravity of the violation, including the amount of harm to
consumers and the public caused by the violation; and
(g) Such other matters as justice may require.
[32 FR 8444, June 13, 1967, as amended at 61 FR 54548, Oct. 21, 1996]
[[Page 31]]
Subpart L--Civil Penalty Adjustments Under the Debt Collection
Improvement Act of 1996
Authority: Pub. L. 101-410 (28 U.S.C. 2461 note), as amended by sec.
31001(s), Pub. L. 104-134 (Apr. 26, 1996), 110 Stat. 3009 et seq.
Source: 61 FR 54549, Oct. 21, 1996, unless otherwise noted.
Sec. 1.98 Adjustment of civil monetary penalty amounts.
Effective November 20, 1996, dollar amounts specified in civil
monetary penalty provisions within the Commission's jurisdiction are
adjusted for inflation in accordance with paragraphs (a) through (l) of
this section. The adjustments set forth in this section apply to
violations occurring after November 20, 1996. The adjustments are as
follows:
(a) Clayton Act section 7A(g)(1), 15 U.S.C. 18a(g)(1), adjusted from
$10,000 to $11,000 per violation;
(b) Clayton Act section 11(l), 15 U.S.C. 21(l), adjusted from $5,000
to $5,500 per violation;
(c) FTC Act section 5(l), 15 U.S.C. 45(l), adjusted from $10,000 to
$11,000 per violation;
(d) FTC Act section 5(m)(1)(A), 15 U.S.C. 45(m)(1)(A), adjusted from
$10,000 to $11,000 per violation;
(e) FTC Act section 5(m)(1)(B), 15 U.S.C. 45(m)(1)(B), adjusted from
$10,000 to $11,000 per violation;
(f) FTC Act section 10, 15 U.S.C. 50, adjusted from $100 to $110 per
violation;
(g) Webb-Pomerene (Export Trade) Act section 5, 15 U.S.C. 65,
adjusted from $100 to $110 per violation;
(h) Wool Products Labeling Act section 6(b), 15 U.S.C. 68d(b),
adjusted from $100 to $110 per violation;
(i) Fur Products Labeling Act section 3(e), 15 U.S.C. 69a(e),
adjusted from $100 to $110 per violation;
(j) Fur Products Labeling Act section 8(d)(2), 15 U.S.C. 69f(d)(2),
adjusted from $100 to $110 per violation;
(k) Energy Policy and Conservation Act section 333(a), 42 U.S.C.
6303(a), adjusted from $100 to $110 per violation; and
(l) Civil monetary penalties authorized by reference to the Federal
Trade Commission Act under any other provision of law within the
jurisdiction of the Commission, adjusted in accordance with paragraphs
(c), (d), (e) and (f) of this section, as applicable.
Subpart M--Submissions Under the Small Business Regulatory Enforcement
Fairness Act
Authority: 5 U.S.C. 801-804.
Sec. 1.99 Submission of rules, guides, interpretations, and policy statements to Congress and the Comptroller General.
Whenever the Commission issues or substantively amends a rule or
industry guide or formally adopts an interpretation or policy statement
that constitutes a ``rule'' within the meaning of 5 U.S.C. 804(3), a
copy of the final rule, guide, interpretation or statement, together
with a concise description, the proposed effective date, and a statement
of whether the rule, guide, interpretation or statement is a ``major
rule'' within the meaning of 5 U.S.C. 804(2), will be transmitted to
each House of Congress and to the Comptroller General. The material
transmitted to the Comptroller General will also include any additional
relevant information required by 5 U.S.C. 801(a)(1)(B). This provision
generally applies to rules issued or substantively amended pursuant to
Sec. 1.14(c), Sec. 1.15(a), Sec. 1.19, or Sec. 1.26(d); industry guides
issued pursuant to Sec. 1.6; interpretations and policy statements
formally adopted by the Commission; and any rule of agency organization,
practice or procedure that substantially affects the rights or
obligations of non-agency parties.
[63 FR 36340, July 8, 1998]
PART 2--NONADJUDICATIVE PROCEDURES--Table of Contents
Subpart A--Inquiries; Investigations; Compulsory Processes
Sec.
2.1 How initiated.
2.2 Request for Commission action.
2.3 Policy as to private controversies.
2.4 Investigational policy.
2.5 By whom conducted.
2.6 Notification of purpose.
2.7 Compulsory process in investigations.
2.8 Investigational hearings.
[[Page 32]]
2.8A Withholding requested material.
2.9 Rights of witnesses in investigations.
2.10 Depositions.
2.11 Orders requiring access.
2.12 Reports.
2.13 Noncompliance with compulsory processes.
2.14 Disposition.
2.15 Orders requiring witnesses to testify or provide other information
and granting immunity.
2.16 Custodians.
Subpart B [Reserved]
Subpart C--Consent Order Procedure
2.31 Opportunity to submit a proposed consent order.
2.32 Agreement.
2.33 Compliance procedure.
2.34 Disposition.
Subpart D--Reports of Compliance
2.41 Reports of compliance.
Subpart E--Requests to Reopen
2.51 Requests to reopen.
Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46.
Subpart A--Inquiries; Investigations; Compulsory Processes
Sec. 2.1 How initiated.
Commission investigations and inquiries may be originated upon the
request of the President, Congress, governmental agencies, or the
Attorney General; upon referrals by the courts; upon complaint by
members of the public; or by the Commission upon its own initiative. The
Commission has delegated to the Director, Deputy Directors, and
Assistant Directors of the Bureau of Competition, the Director, Deputy
Directors, and Associate Directors of the Bureau of Consumer Protection
and, the Regional Directors and Assistant Regional Directors of the
Commission's regional offices, without power of redelegation, limited
authority to initiate investigations.
[48 FR 41374, Sept. 15, 1983, as amended at 50 FR 53304, Dec. 31, 1985]
Sec. 2.2 Request for Commission action.
(a) Any individual, partnership, corporation, association, or
organization may request the Commission to institute an investigation in
respect to any matter over which the Commission has jurisdiction.
(b) Such request should be in the form of a signed statement setting
forth the alleged violation of law with such supporting information as
is available, and the name and address of the person or persons
complained of. No forms or formal procedures are required.
(c) The person making the request is not regarded as a party to any
proceeding which might result from the investigation.
(d) It is the general Commission policy not to publish or divulge
the name of an applicant or complaining party except as required by law
or by the Commission's rules. Where a complaint is by a consumer or
consumer representative concerning a specific consumer product or
service, the Commission, in the course of a referral of the complaint or
of an investigation, may disclose the identity of the complainant or
complainants. In referring any such consumer complaint, the Commission
specifically retains its right to take such action as it deems
appropriate in the public interest and under any of the statutes which
it administers.
[32 FR 8446, June 13, 1967, as amended at 35 FR 10146, June 20, 1970]
Sec. 2.3 Policy as to private controversies.
The Commission acts only in the public interest and does not
initiate an investigation or take other action when the alleged
violation of law is merely a matter of private controversy and does not
tend adversely to affect the public.
[32 FR 8446, June 13, 1967]
Sec. 2.4 Investigational policy.
The Commission encourages voluntary cooperation in its
investigations. Where the public interest requires, however, the
Commission may, in any matter under investigation adopt a resolution
authorizing the use of any or all of the compulsory processes provided
for by law.
[45 FR 36341, May 29, 1980]
[[Page 33]]
Sec. 2.5 By whom conducted.
Inquiries and investigations are conducted under the various
statutes administered by the Commission by Commission representatives
designated and duly authorized for the purpose. Such representatives are
``examiners'' or ``Commission investigators'' within the meaning of the
Federal Trade Commission Act and are authorized to exercise and perform
the duties of their office in accordance with the laws of the United
States and the regulations of the Commission. Included among such duties
is the administration of oaths and affirmations in any matter under
investigation by the Commission.
[45 FR 36341, May 29, 1980]
Sec. 2.6 Notification of purpose.
Any person under investigation compelled or requested to furnish
information or documentary evidence shall be advised of the purpose and
scope of the investigation and of the nature of the conduct constituting
the alleged violation which is under investigation and the provisions of
law applicable to such violation.
[46 FR 26290, May 12, 1981; 46 FR 27634, May 21, 1981]
Sec. 2.7 Compulsory process in investigations.
(a) In general. The Commission or any member thereof may, pursuant
to a Commission resolution, issue a subpoena or a civil investigative
demand directing the person named therein to appear before a designated
representative at a designated time and place to testify or to produce
documentary evidence, or both, or, in the case of a civil investigative
demand, to provide a written report or answers to questions relating to
any matter under investigation by the Commission. Material for which a
civil investigative demand has been issued shall be made available for
inspection and copying at the principal place of business of the person
or at such other place or in such other manner as the person and the
custodian designated pursuant to Sec. 2.16 agree.
(b) Civil investigative demands. Civil investigative demands shall
be the only form of compulsory process issued in investigations with
respect to unfair or deceptive acts or practices within the meaning of
FTC Act section 5(a)(1).
(1) Civil investigative demands for the production of documentary
material shall describe each class of material to be produced with such
definiteness and certainty as to permit such material to be fairly
identified, prescribe a return date or dates which will provide a
reasonable period of time within which the material so demanded may be
assembled and made available for inspection and copying or reproduction,
and identify the custodian to whom such material shall be made
available. Production of documentary material in response to a civil
investigative demand shall be made in accordance with the procedures
prescribed by section 20(c)(11) of the Federal Trade Commission Act.
(2) Civil investigative demands for tangible things will describe
each class of tangible things to be produced with such definiteness and
certainty as to permit such things to be fairly identified, prescribe a
return date or dates which will provide a reasonable period of time
within which the things so demanded may be assembled and submitted, and
identify the custodian to whom such things shall be submitted.
Submission of tangible things in response to a civil investigative
demand shall be made in accordance with the procedures prescribed by
section 20(c)(12) of the Federal Trade Commission Act.
(3) Civil investigative demands for written reports or answers to
questions shall propound with definiteness and certainty the reports to
be produced or the questions to be answered, prescribe a date or dates
at which time written reports or answers to questions shall be
submitted, and identify the custodian to whom such reports or answers
shall be submitted. Response to a civil investigative demand for a
written report or answers to questions shall be made in accordance with
the procedures prescribed by section 20(c)(13) of the Federal Trade
Commission Act.
(4) Civil investigative demands for the giving of oral testimony
shall prescribe a date, time, and place at which oral testimony shall be
commenced, and identify a Commission investigator who shall conduct the
investigation
[[Page 34]]
and the custodian to whom the transcript of such investigation shall be
submitted. Oral testimony in response to a civil investigative demand
shall be taken in accordance with the procedures prescribed by section
20(c)(14) of the Federal Trade Commission Act.
(c) The Bureau Director, Deputy Directors and Assistant Directors of
the Bureaus of Competition and Economics, the Director, Deputy Directors
and Associate Directors of the Bureau of Consumer Protection, Regional
Directors, and Assistant Regional Directors, are authorized to negotiate
and approve the terms of satisfactory compliance with subpoenas and
civil investigative demands and, for good cause shown, may extend the
time prescribed for compliance. Specifically, the subpoena power
conferred by Section 329 of the Energy Policy and Conservation Act (42
U.S.C. 6299) is included within this delegation.
(d) Petitions to limit or quash--(1) General. Any petition to limit
or quash any investigational subpoena or civil investigative demand
shall be filed with the Secretary of the Commission within twenty (20)
days after service of the subpoena or civil investigative demand, or, if
the return date is less than twenty (20) days after service, prior to
the return date. Such petition shall set forth all assertions of
privilege or other factual and legal objections to the subpoena or civil
investigative demand, including all appropriate arguments, affidavits
and other supporting documentation.
(2) Statement. Each petition shall be accompanied by a signed
statement representing that counsel for the petitioner has conferred
with counsel for the Commission in an effort in good faith to resolve by
agreement the issues raised by the petition 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 participating in each such
conference.
(3) Extensions of time. Bureau Directors, Deputy Directors, and
Assistant Directors in the Bureaus of Competition and Economics, the
Bureau Director, Deputy Directors and Associate Directors in the Bureau
of Consumer Protection, Regional Directors and Assistant Regional
Directors are delegated, without power of redelegation, the authority to
rule upon requests for extensions of time within which to file such
petitions.
(4) Disposition. A Commissioner, to be designated by the Chairman,
is delegated, without power of redelegation, the authority to rule upon
petitions to limit or quash an investigational subpoena or civil
investigative demand, but the designated Commissioner may, in his or her
sole discretion, refer a petition to the full Commission for
determination.
(e) Stay of compliance period. The timely filing of a petition to
limit or quash any investigational subpoena or civil investigative
demand shall stay the time permitted for compliance with the portion
challenged. If the petition is denied in whole or in part, the ruling
will specify a new return date.
(f) Review. Any petitioner, within three days after service of a
ruling by the designated Commissioner denying all or a portion of the
relief requested in its petition, may file with the Secretary of the
Commission a request that the full Commission review the ruling. The
timely filing of such a request shall not stay the return date specified
in the ruling, unless otherwise specified by the Commission.
(g) Public disclosure. All petitions to limit or quash
investigational subpoenas or civil investigative demands and the
responses thereto are part of the public records of the Commission,
except for information exempt from disclosure under Sec. 4.10(a) of this
chapter.
[45 FR 36342, May 29, 1980, as amended at 46 FR 26290, May 12, 1981; 48
FR 41375, Sept. 15, 1983; 49 FR 6089, Feb. 17, 1984; 50 FR 42672, Oct.
22, 1985; 60 FR 37747, July 21, 1995]
Sec. 2.8 Investigational hearings.
(a) Investigational hearings, as distinguished from hearings in
adjudicative proceedings, may be conducted in the course of any
investigation undertaken by the Commission, including rulemaking
proceedings under subpart B of part 1 of this chapter, inquiries
[[Page 35]]
initiated for the purpose of determining whether or not a respondent is
complying with an order of the Commission or the manner in which decrees
in suits brought by the United States under the antitrust laws are being
carried out, the development of facts in cases referred by the courts to
the Commission as a master in chancery, and investigations made under
section 5 of the Export Trade Act.
(b) Investigational hearings shall be conducted by any Commission
member, examiner, attorney, investigator, or other person duly
designated under the FTC Act, for the purpose of hearing the testimony
of witnesses and receiving documents and other data relating to any
subject under investigation. Such hearings shall be stenographically
reported and a transcript thereof shall be made a part of the record of
the investigation.
(c) Unless otherwise ordered by the Commission, investigational
hearings shall not be public. In investigational hearings conducted
pursuant to a civil investigative demand for the giving of oral
testimony, the Commission investigators shall exclude from the hearing
room all other persons except the person being examined, his counsel,
the officer before whom the testimony is to be taken, and the
stenographer recording such testimony. A copy of the transcript shall
promptly be forwarded by the Commission investigator to the custodian
designated in Sec. 2.16.
[32 FR 8446, June 13, 1967, as amended at 45 FR 36342, May 29, 1980; 61
FR 50645, Sept. 26, 1996]
Sec. 2.8A Withholding requested material.
(a) Any person withholding material responsive to an investigational
subpoena or civil investigative demand issued pursuant to Sec. 2.7, an
access order issued pursuant to Sec. 2.11, an order to file a report
issued pursuant to Sec. 2.12, or any other request for production of
material issued under this part, shall assert a claim of privilege or
any similar claim not later than the date set for the production of
material. Such person shall, if so directed in the subpoena, civil
investigative demand or other request for production, submit, together
with such claim, a schedule of the items withheld which states
individually as to each such item the type, specific subject matter, and
date of the item; the names, addresses, positions, and organizations of
all authors and recipients of the item; and the specific grounds for
claiming that the item is privileged.
(b) A person withholding material solely for reasons described in
Sec. 2.8A(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))
[44 FR 54042, Sept. 18, 1979, as amended at 45 FR 36342, May 29, 1980]
Sec. 2.9 Rights of witnesses in investigations.
(a) Any person compelled to submit data to the Commission or to
testify in an investigational hearing shall be entitled to retain a copy
or, on payment of lawfully prescribed costs, procure a copy of any
document submitted by him and of his own testimony as stenographically
reported, except that in a nonpublic hearing the witness may for good
cause be limited to inspection of the official transcript of his
testimony. Where the investigational hearing has been conducted pursuant
to a civil investigative demand issued under section 20 of the Federal
Trade Commission Act, upon completion of transcription of the testimony
of the witness, the witness shall be offered an opportunity to read the
transcript of his testimony. Any changes in form or substance which the
witness desires to make shall be entered and identified upon the
transcript by the Commission investigator with a statement of the
reasons given by the witness for making such changes. The transcript
shall then be signed by the witness unless the witnesss cannot be found,
is ill, waives in writing his right to signature or refuses to sign. If
the transcript is not signed by the witness within thirty days of his
being afforded a reasonable opportunity to review it, the Commission
investigator shall take the actions prescribed by section
20(c)(12)(E)(ii) of the Federal Trade Commission Act.
(b) Any witness compelled to appear in person in an investigational
hearing may be accompanied, represented, and advised by counsel as
follows:
[[Page 36]]
(1) Counsel for a witness may advise the witness, in confidence and
upon the initiative of either counsel or the witness, with respect to
any question asked of the witness. If the witness refuses to answer a
question, then counsel may briefly state on the record if he has advised
the witness not to answer the question and the legal grounds for such
refusal.
(2) Where it is claimed that the testimony or other evidence sought
from a witness is outside the scope of the investigation, or that the
witness is privileged to refuse to answer a question or to produce other
evidence, the witness or counsel for the witness may object on the
record to the question or requirement and may state briefly and
precisely the ground therefor. The witness and his counsel shall not
otherwise object to or refuse to answer any question, and they shall not
otherwise interrupt the oral examination.
(3) Any objections made under the rules in this part will be treated
as continuing objections and preserved throughout the further course of
the hearing without the necessity for repeating them as to any similar
line of inquiry. Cumulative objections are unnecessary. Repetition of
the grounds for any objection will not be allowed.
(4) Counsel for a witness may not, for any purpose or to any extent
not allowed by paragraphs (b) (1) and (2) of this section, interrupt the
examination of the witness by making any objections or statements on the
record. Petitions challenging the Commission's authority to conduct the
investigation or the sufficiency or legality of the subpoena or civil
investigative demand must have been addressed to the Commission in
advance of the hearing. Copies of such petitions may be filed as part of
the record of the investigation with the person conducting the
investigational hearing, but no arguments in support thereof will be
allowed at the hearing.
(5) Following completion of the examination of a witness, counsel
for the witness may on the record request the person conducting the
investigational hearing to permit the witness of clarify any of his or
her answers. The grant or denial of such request shall be within the
sole discretion of the person conducting the hearing.
(6) The person conducting the hearing shall take all necessary
action to regulate the course of the hearing to avoid delay and to
prevent or restrain disorderly, dilatory, obstructionist, or
contumacious conduct, or contemptuous language. Such person shall, for
reasons stated on the record, immediately report to the Commission any
instances where an attorney has allegedly refused to comply with his or
her directions, or has allegedly engaged in disorderly, dilatory,
obstructionist, or contumacious conduct, or contemptuous language in the
course of the hearing. The Commission, acting pursuant to Sec. 4.1(e) of
this chapter, will thereupon take such further action, if any, as the
circumstances warrant, including suspension or disbarment of the
attorney from further practice before the Commission or exclusion from
further participation in the particular investigation.
(18 U.S.C. 6002, 6004)
[32 FR 8446, June 13, 1967, as amended at 45 FR 36343, May 29, 1980; 45
FR 39244, June 10, 1980; 46 FR 26290, May 12, 1981; 50 FR 53304, Dec.
31, 1985; 61 FR 50645, Sept. 26, 1996]
Sec. 2.10 Depositions.
In investigations other than those conducted under section 20 of the
Federal Trade Commission Act, the Commission may order testimony to be
taken by deposition at any stage of such investigation. Such depositions
may be taken before any person having power to administer oaths who may
be designated by the Commission. The testimony shall be reduced to
writing by the person taking the deposition, or under his direction, and
shall then be subscribed to by the deponent. Any person may be compelled
to appear and be deposed and to produce documentary evidence in the same
manner as witnesses may be compelled to appear and testify and produce
documentary evidence as provided in Secs. 2.7 through 2.9.
[45 FR 36343, May 29, 1980, as amended at 50 FR 53304, Dec. 31, 1985]
[[Page 37]]
Sec. 2.11 Orders requiring access.
(a) In investigations other than those conducted under section 20 of
the Federal Trade Commission Act, the Commission may issue an order
requiring any person, partnership or corporation being investigated to
grant access to files for the purpose of examination and the right to
copy any documentary evidence. The Directors, Deputy Directors and
Assistant Directors of the Bureaus of Competition and Economics, the
Director, Deputy Directors and Associate Directors of the Bureau of
Consumer Protection, the Regional Directors, and Assistant Regional
Directors of the Commission's regional offices, pursuant to delegation
of authority by the Commission, without power of redelegation, are
authorized, for good cause shown, to extend the time prescribed for
compliance with orders requiring access issued during the investigation
of any matter.
(b) Any petition to limit or quash an order requiring access shall
be filed with the Secretary of the Commission within twenty (20) days
after service of the order, or, if the date for compliance is less than
twenty (20) days after service of the order, then before the return
date. Such petition shall set forth all assertions of privilege or other
factual and legal objections to the order requiring access, including
all appropriate arguments, affidavits and other supporting
documentation. All petitions to limit or quash orders requiring access
shall be ruled upon by the Commission itself, but the above-designated
Directors, Deputy Directors, Assistant Directors, Associate Directors,
Regional Directors and Assistant Regional Directors are delegated,
without power of redelegation, the authority to rule upon motions for
extensions of time within which to file petitions to limit or quash
orders requiring access.
(c) The timely filing of any petition to limit or quash such an
order shall stay the requirement of compliance if the Commission has not
ruled upon the motion by the date of compliance. If it rules on or
subsequent to the date required for compliance and its ruling denies the
petition in whole or in part, the Commission shall specify a new date of
compliance.
(d) All petitions to limit or quash orders requiring access, and the
Commission's responses thereto, are part of the public records of the
Commission, except for information exempt from disclosure under
Sec. 4.10(a) of this chapter.
[46 FR 26290, May 12, 1981, as amended at 48 FR 41375, Sept. 15, 1983]
Sec. 2.12 Reports.
(a) In investigations other than those covered by section 20 of the
Federal Trade Commission Act the Commission may issue an order requiring
a person, partnership, or corporation to file a report or answers in
writing to specific questions relating to any matter under
investigation, study or survey, or under any of the Commission's
reporting programs.
(b) The Directors, Deputy Directors and Assistant Directors of the
Bureaus of Competition and Economics, the Director, Deputy Directors and
Associate Directors of the Bureau of Consumer Protection, and the
Regional Directors and Assistant Regional Directors of the Commission's
regional offices, pursuant to delegation of authority by the Commission,
without power of redelegation, are authorized, for good cause shown, to
extend the time prescribed for compliance with orders requiring reports
or answers to questions issued during the investigation, study or survey
of any matter or in connection with any of the Commission's reporting
programs.
(c) Any petition to limit or quash an order requiring a report or
answer to specific questions shall be filed with the Secretary of the
Commission within twenty (20) days after service of the order, or, if
the date for compliance is less than twenty (20) days after service of
the order, then before the return date. Such petition shall set forth
all assertions of privilege or other factual and legal objections to the
order requiring a report or answer to specific questions, including all
appropriate arguments, affidavits and other supporting documentation.
All petitions to limit or quash orders requiring reports or answers to
questions shall be ruled upon by the Commission itself, but the above-
designated Directors, Deputy Directors, Assistant Directors, Associate
[[Page 38]]
Directors, Regional Directors and Assistant Regional Directors are
delegated, without power of redelegation, the authority to rule upon
motions for extensions of time within which to file petitions to limit
or quash orders requiring reports or answers to questions.
(d) Except as otherwise provided by the Commission, the timely
filing of any petition to limit or quash such an order shall stay the
requirement of return on the portion challenged if the Commission has
not ruled upon the petition by the return date. If it rules on or
subsequent to the return date and its ruling denies the petition in
whole or in part, the Commission shall specify a new return date.
(e) All petitions to limit or quash orders requiring a report or
answers to specific questions, and the Commission's responses thereto,
are part of the public records of the Commission, except for information
exempt from disclosure under Sec. 4.10(a) of this chapter.
[41 FR 54485, Dec. 14, 1976, as amended at 45 FR 36343, May 29, 1980; 46
FR 26290, May 12, 1981; 48 FR 41375, Sept. 15, 1983; 50 FR 53304, Dec.
31, 1985]
Sec. 2.13 Noncompliance with compulsory processes.
(a) In cases of failure to comply with Commission compulsory
processes, appropriate action may be initiated by the Commission or the
Attorney General, including actions for enforcement, forfeiture, or
penalties or criminal actions.
(b) The General Counsel, pursuant to delegation of authority by the
Commission, without power of redelegation, is authorized:
(1) To institute, on behalf of the Commission, an enforcement
proceeding in connection with the failure or refusal of a person,
partnership, or corporation to comply with, or to obey, a subpoena, or
civil investigative demand if the return date or any extension thereof
has passed;
(2) To approve and have prepared and issued, in the name of the
Commission when deemed appropriate by the General Counsel, a notice of
default in connection with the failure of a person, partnership, or
corporation to timely file a report pursuant to section 6(b) of the
Federal Trade Commission Act, if the return date or any extension
thereof has passed;
(3) To institute, on behalf of the Commission, an enforcement
proceeding and to request, on behalf of the Commission, the institution,
when deemed appropriate by the General Counsel, of a civil action in
connection with the failure of a person, partnership, or corporation to
timely file a report pursuant to an order under section 6(b) of the
Federal Trade Commission Act, if the return date or any extension
thereof has passed; and
(4) To seek civil contempt in cases where a court order enforcing
compulsory process has been violated.
[41 FR 54485, Dec. 14, 1976, as amended at 45 FR 39244, June 10, 1980;
50 FR 53304, Dec. 31, 1985]
Sec. 2.14 Disposition.
(a) When the facts disclosed by an investigation indicate that
corrective action is warranted, and the matter is not subject to a
consent settlement pursuant to subpart C of this part, further
proceedings may be instituted pursuant to the provisions of part 3 of
this chapter.
(b) When the facts disclosed by an investigation indicate that
corrective action is not necessary or warranted in the public interest,
the investigational file will be closed. The matter may be further
investigated at any time if circumstances so warrant.
(c) The Commission has delegated to the Director, Deputy Directors,
and Assistant Directors of the Bureau of Competition, the Director,
Deputy Directors and Associate Directors of the Bureau of Consumer
Protection, and Regional Directors, without power of redelegation,
limited authority to close investigations.
[32 FR 8446, June 13, 1967, as amended at 42 FR 42195, Aug. 22, 1977; 48
FR 41375, Sept. 15, 1983; 50 FR 53304, Dec. 31, 1985]
Sec. 2.15 Orders requiring witnesses to testify or provide other information and granting immunity.
(a) The Bureau Director, Deputy Directors, and Assistant Directors
in the
[[Page 39]]
Bureaus of Competition and Economics, the Bureau Director, Deputy
Directors and Associate Directors of the Bureau of Consumer Protection,
Regional Directors and Assistant Regional Directors are hereby
authorized to request, through the Commission's liaison officer,
approval from the Attorney General for the issuance of an order
requiring a witness to testify or provide other information granting
immunity under title 18, section 6002, of the United States Code.
(b) The Commission retains the right to review the exercise of any
of the functions delegated under paragraph (a) of this section. Appeals
to the Commission from an order requiring a witness to testify or
provide other information will be entertained by the Commission only
upon a showing that a substantial question is involved, the
determination of which is essential to serve the interests of justice.
Such appeals shall be made on the record and shall be in the form of a
brief not to exceed fifteen (15) pages in length and shall be filed
within five (5) days after notice of the complained of action. The
appeal shall not operate to suspend the hearing unless otherwise
determined by the person conducting the hearing or ordered by the
Commission.
(18 U.S.C. 6002, 6004)
[37 FR 5016, Mar. 9, 1972, as amended at 48 FR 41375, Sept. 15, 1983; 61
FR 50645, Sept. 26, 1996]
Sec. 2.16 Custodians.
(a) Designation. The Commission shall designate a custodian and one
or more deputy custodians for material to be delivered pursuant to
compulsory process in a investigation, a purpose of which is to
determine whether any person may have violated any provision of the laws
administered by the Commission. The custodian shall have the powers and
duties prescribed by section 21 of the FTC Act. Deputy custodians may
perform all of the duties assigned to custodians. The appropriate Bureau
Directors, Deputy Directors, Associate Directors in the Bureau of
Consumer Protection, Assistant Directors in the Bureau of Competition,
Regional Directors or Assistant Regional Directors shall take the action
required by section 21(b)(7) of the FTC Act if it is necessary to
replace a custodian or deputy custodian.
(b) Copying of custodial documents. The custodian designated
pursuant to section 21 of the Federal Trade Commission Act (subject to
the general supervision of the Executive Director) may, from among the
material submitted, select the material the copying of which is
necessary or appropriate for the official use of the Commission, and
shall determine, the number of copies of any such material that are to
be reproduced. Copies of material in the physical possession of the
custodian may be reproduced by or under the authority of an employee of
the Commission designated by the custodian.
(c) Material produced pursuant to the Federal Trade Commission Act,
while in the custody of the custodian, shall be for the official use of
the Commission in accordance with the Act; but such material shall upon
reasonable notice to the custodian be made available for examination by
the person who produced such material, or his duly authorized
representative, during regular office hours established for the
Commission.
[45 FR 36343, May 29, 1980, as amended at 46 FR 26291, May 12, 1981; 48
FR 41376, Sept. 15, 1983; 50 FR 53305, Dec. 31, 1985]
Subpart B [Reserved]
Subpart C--Consent Order Procedure
Sec. 2.31 Opportunity to submit a proposed consent order.
(a) Where time, the nature of the proceeding, and the public
interest permit, any individual, partnership, or corporation being
investigated shall be afforded the opportunity to submit through the
operating Bureau or Regional Office having responsibility in the matter
a proposal for disposition of the matter in the form of a consent order
agreement executed by the party being investigated and complying with
the requirements of Sec. 2.32, for consideration by the Commission in
connection with a proposed complaint submitted by the Commission's
staff.
(b) After a complaint has been issued, the consent order procedure
described
[[Page 40]]
in this part will not be available except as provided in Sec. 3.25(b).
[40 FR 15235, Apr. 4, 1975]
Sec. 2.32 Agreement.
Every agreement shall contain, in addition to an appropriate order,
either an admission of the proposed findings of fact and conclusions of
law submitted simultaneously by the Commission's staff or an admission
of all jurisdictional facts and an express waiver of the requirement
that the Commission's decision contain a statement of findings of fact
and conclusions of law. In addition, every agreement shall contain
waivers of further procedural steps and of all rights to seek judicial
review or otherwise to challenge or contest the validity of the order.
The agreement shall also contain provisions that the complaint may be
used in construing the terms of the order, and that no agreement,
understanding, representation, or interpretation not contained in the
order or the aforementioned agreement may be used to vary or to
contradict the terms of the order; that the order shall have the same
force and effect and may be altered, modified, or set aside in the same
manner provided by statute for other orders; that the order shall become
final upon service; that the agreement shall not become a part of the
public record unless and until it is accepted by the Commission; and, if
the agreement is accepted, that the Commission will place the order
contained therein on the public record for a period of sixty (60) days
for the receipt and consideration of comments or views from any
interested person; and that the Commission thereafter may either
withdraw its acceptance of the agreement and so notify the other party,
in which event it will take such other action as it may consider
appropriate, or issue and serve its complaint (in such form as the
circumstances may require) and decision, in disposition of the
proceeding. In addition, in appropriate circumstances the agreement may
contain a statement that the signing thereof is for settlement purposes
only and does not constitute an admission by any party that the law has
been violated as alleged in the complaint.
[42 FR 3300, Jan. 18, 1977, as amended at 50 FR 53305, Dec. 31, 1985]
Sec. 2.33 Compliance procedure.
The Commission may in its discretion require that a proposed
agreement containing an order to cease and desist be accompanied by an
initial report signed by the respondent setting forth in precise detail
the manner in which the respondent will comply with the order when and
if entered. Such report will not become part of the public record unless
and until the accompanying agreement and order are accepted by the
Commission. At the time any such report is submitted a respondent may
request confidentiality for any portion thereof with a precise showing
of justification therefor as set out in Sec. 4.9(c) and the General
Counsel or the General Counsel's designee will dispose of such requests
in accordance with that section.
[63 FR 32977, June 17, 1998]
Sec. 2.34 Disposition.
Upon receiving an executed agreement conforming with the
requirements of Sec. 2.32, the Commission may:
Accept it; reject it and issue its complaint; or take such other
action as it may deem appropriate. If an agreement is accepted, the
Commission will place the order contained therein and any initial report
of compliance submitted pursuant to Sec. 2.33 on the public record, and
at the same time, will make available an explanation of the provisions
of the order and the relief to be obtained thereby, and any other
information which it deems helpful in assisting interested persons to
understand the terms of the order. The Commission will publish the
explanation in the Federal Register. For a period of sixty (60) days
after placement of the order on the public record and issuance of the
statement, the Commission will receive and consider any comments or
views concerning the order that may be filed by any interested person.
Thereafter, the Commission may either withdraw its acceptance of the
agreement and so notify the other party, in which event it will take
such other action as
[[Page 41]]
it may consider appropriate, or issue and serve its complaint (in such
form as the circumstances may require) and decision, in disposition of
the proceeding.
[43 FR 51758, Nov. 7, 1978, as amended at 61 FR 50431, Sept. 26, 1996]
Subpart D--Reports of Compliance
Sec. 2.41 Reports of compliance.
(a) In every proceeding in which the Commission has issued an order
pursuant to the provisions of section 5 of the Federal Trade Commission
Act or section 11 of the Clayton Act, as amended, and except as
otherwise specifically provided in any such order, each respondent named
in such order shall file with the Commission, within sixty (60) days
after service thereof, or within such other time as may be provided by
the order or the rules in this chapter, a report in writing, signed by
the respondent, setting forth in detail the manner and form of his
compliance with the order, and shall thereafter file with the Commission
such further signed, written reports of compliance as it may require.
Reports of compliance shall be under oath if so requested. Where the
order prohibits the use of a false advertisement of a food, drug,
device, or cosmetic which may be injurious to health because of results
from its use under the conditions prescribed in the advertisement, or
under such conditions as are customary or usual, or if the use of such
advertisement is with intent to defraud or mislead, or in any other case
where the circumstances so warrant, the order may provide for an interim
report stating whether and how respondents intend to comply to be filed
within ten (10) days after service of the order. Neither the filing of
an application for stay pursuant to Sec. 3.56, nor the filing of a
petition for judicial review, shall operate to postpone the time for
filing a compliance report under the order or this section. If the
Commission, or a court, determines to grant a stay of an order, or
portion thereof, pending judicial review, or if any order provision is
automatically stayed by statute, no compliance report shall be due as to
those portions of the order that are stayed unless ordered by the court.
Thereafter, as to orders, or portions thereof, that are stayed, the time
for filing a report of compliance shall begin to run de novo from the
final judicial determination, except that if no petition for certiorari
has been filed following affirmance of the order of the Commission by a
court of appeals, the compliance report shall be due the day following
the date on which the time expires for the filing of such petition.
Staff of the Bureaus of Competition and Consumer Protection will review
such reports of compliance and may advise each respondent whether the
staff intends to recommend that the Commission take any enforcement
action. The Commission may, however, institute proceedings, including
certification of facts to the Attorney General pursuant to the
provisions of section 5(l) of the Federal Trade Commission Act (15
U.S.C. 45(l)) and section 11(1) of the Clayton Act, as amended (15
U.S.C. 21(1)), to enforce compliance with an order, without advising a
respondent whether the actions set forth in a report of compliance
evidence compliance with the Commission's order or without prior notice
of any kind to a respondent.
(b) The Commission has delegated to the Director, the Deputy
Directors, and the Assistant Director for Compliance of the Bureau of
Competition, and to the Director, the Deputy Directors, and the
Associate Director for Enforcement of the Bureau of Consumer Protection
the authority to monitor compliance reports and to open and close
compliance investigations. With respect to any compliance matter which
has received previous Commission consideration as to compliance or in
which the Commission or any Commissioner has expressed an interest, any
matter proposed to be closed by reason of expense of investigation or
testing, or any matter involving substantial questions as to the public
interest, Commission policy or statutory construction, the Bureaus shall
submit an analysis to the Commission regarding their intended actions.
[[Page 42]]
(c) The Commission has delegated to the Director, Deputy Directors,
and Assistant Directors of the Bureau of Competition and to the
Director, Deputy Directors, and Associate Directors of the Bureau of
Consumer Protection, and to the Regional Directors, the authority, for
good cause shown, to extend the time within which reports of compliance
with orders to cease and desist may be filed. It is to be noted,
however, that an extension of time within which a report of compliance
may be filed, or the filing of a report which does not evidence full
compliance with the order, does not in any circumstances suspend or
relieve a respondent from his obligation under the law with respect to
compliance with such order. An order of the Commission to cease and
desist becomes final on the date and under the conditions provided in
the Federal Trade Commission Act and the Clayton Act. Any person,
partnership or corporation against which an order to cease and desist
has been issued who is not in full compliance with such order on and
after the date provided in these statutes for the order to become final
is in violation of such order and is subject to an immediate action for
civil penalties. The authority under this paragraph may not be
redelegated, except that the Associate Director for Enforcement in the
Bureau of Consumer Protection and the Assistant Director for Compliance
in the Bureau of Competition may each name a designee under this
paragraph.
(d) Any respondent subject to a Commission order may request advice
from the Commission as to whether a proposed course of action, if
pursued by it, will constitute compliance with such order. The request
for advice should be submitted in writing to the Secretary of the
Commission and should include full and complete information regarding
the proposed course of action. On the basis of the facts submitted, as
well as other information available to the Commission, the Commission
will inform the respondent whether or not the proposed course of action,
if pursued, would constitute compliance with its order. A request
ordinarily will be considered inappropriate for such advice:
(1) Where the course of action is already being followed by the
requesting party;
(2) Where the same or substantially the same course of action is
under investigation or is or has been the subject of a current
proceeding, order, or decree initiated or obtained by the Commission or
another governmental agency; or
(3) Where the proposed course of action or its effects may be such
that an informed decision thereon cannot be made or could be made only
after extensive investigation, clinical study, testing or collateral
inquiry.
Furthermore, the filing of a request for advice under this paragraph
does not in any circumstances suspend or relieve a respondent from his
obligation under the law with respect to his compliance with the order.
He must in any event be in full compliance on and after the date the
order becomes final as prescribed by statute referred to in paragraph
(b) of this section. Advice to respondents under this paragraph will be
published by the Commission in the same manner and subject to the same
restrictions and considerations as advisory opinions under Sec. 1.4 of
this chapter.
(e) The Commission may at any time reconsider any advice given under
this section and, where the public interest requires, rescind or revoke
its prior advice. In such event the respondent will be given notice of
the Commission's intent to revoke or rescind and will be given an
opportunity to submit its views to the Commission. The Commission will
not proceed against a respondent for violation of an order with respect
to any action which was taken in good faith reliance upon the
Commission's advice under this section, where all relevant facts were
fully, completely, and accurately presented to the Commission and where
such action was promptly discontinued upon notification of rescission or
revocation of the Commission's advice.
(f)(1) All applications for approval of proposed divestitures,
acquisitions, or similar transactions subject to Commission review under
outstanding orders shall fully describe the terms of the transaction and
shall set forth why
[[Page 43]]
the transaction merits Commission approval. Such applications will be
placed on the public record, together with any additional applicant
submissions that the Commission directs be placed on the public record.
The Director of the Bureau of Competition is delegated the authority to
direct such placement.
(2) The Commission will receive public comment on a prior approval
application for 30 days. During the comment period, any person may file
formal written objections or comments with the Secretary of the
Commission, and such objections or comments shall be placed on the
public record. In appropriate cases, the Commission may shorten,
eliminate, extend, or reopen a comment period.
(3) If a Commissioner or a member of a Commissioner's personal staff
receives a written communication from a person not employed by the
agency concerning a proposed transaction that is subject to this
section, such communication will be placed on the public record
expeditiously after its receipt. If a Commissioner or a member of a
Commissioner's personal staff receives an oral communication concerning
such a transaction from a person not employed by the Commission, the
recipient shall expeditiously prepare and have placed on the public
record a memorandum setting forth the full contents of such
communication and the circumstances thereof.
(4) Responses to applications under this section, together with a
statement of supporting reasons, will be published when made, together
with responses to any public comments filed under this section.
(5) Persons submitting information that is subject to public record
disclosure under this section may request confidential treatment for
that information or portions thereof in accordance with Sec. 4.9(c) and
the General Counsel or the General Counsel's designee will dispose of
such requests in accordance with that section. Nothing in this section
requires that confidentiality requests be resolved prior to, or
contemporaneously with, the disposition of the application.
[32 FR 8449, June 13, 1967, as amended at 63 FR 32977, June 17, 1998]
Editorial Note: For Federal Register citations affecting Sec. 2.41,
see the List of CFR Sections Affected in the Finding Aids section of
this volume.
Subpart E--Requests to Reopen
Sec. 2.51 Requests to reopen.
(a) Scope. Any person, partnership, or corporation subject to a
Commission decision containing a rule or order which has become
effective, or an order to cease and desist which has become final, may
file with the Secretary a request that the Commission reopen the
proceeding to consider whether the rule or order, including any
affirmative relief provision contained therein, should be altered,
modified, or set aside in whole or in part.
(b) Contents. A request under this section shall contain a
satisfactory showing that changed conditions of law or fact require the
rule or order to be altered, modified or set aside, in whole or in part
or that the public interest so requires. This requirement shall not be
deemed satisfied if a request is merely conclusory or otherwise fails to
set forth by affidavit(s) specific facts demonstrating in detail the
nature of the changed conditions and the reasons why these changed
conditions or the public interest require the requested modifications of
the rule of order. Each affidavit shall set forth facts that would be
admissible in evidence and shall show that the affiant is competent to
testify to the matters stated therein. All information and material that
the requester wishes the Commission to consider shall be contained in
the request at the time of filing.
(c) Opportunity for public comment. A request under this section
shall be placed on the public record except for material exempt from
public disclosure under rule 4.10(a). Unless the Commission determines
that earlier disposition is necessary, the request shall remain on the
public record for thirty (30) days after a press release on the request
is issued. Bureau Directors are authorized to publish a notice in the
Federal Register announcing the receipt of a request to reopen at their
discretion. The public is invited to comment on the request while it is
on the public record.
[[Page 44]]
(d) Determination. After the period for public comments on a request
under this section has expired and no later than one hundred and twenty
(120) days after the date of the filing of the request, the Commission
shall determine whether the request complies with paragraph (b) of this
section and whether the proceeding shall be reopened and the rule or
order should be altered, modified, or set aside as requested. In doing
so, the Commission may, in its discretion, issue an order reopening the
proceeding and modifying the rule or order as requested, issue an order
to show cause pursuant to Sec. 3.72, or take such other action as is
appropriate: Provided, however, That any action under Sec. 3.72 or
otherwise shall be concluded within the specified 120-day period.
(Sec. 6(g), 38 Stat. 721 (15 U.S.C. 46(g)); 80 Stat. 383, as amended, 81
Stat. 54 (5 U.S.C. 552))
[45 FR 36344, May 29, 1980, as amended at 46 FR 26291, May 12, 1981; 47
FR 33251, Aug. 2, 1982; 50 FR 53305, Dec. 31, 1985; 53 FR 40868, Oct.
19, 1988]
PART 3--RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS--Table of Contents
Subpart A--Scope of Rules; Nature of Adjudicative Proceedings
Sec.
3.1 Scope of the rules in this part.
3.2 Nature of adjudicative proceedings.
Subpart B--Pleadings
3.11 Commencement of proceedings.
3.11A Fast-track proceedings.
3.12 Answer.
3.13 Adjudicative hearing on issues arising in rulemaking proceedings
under the Fair Packaging and Labeling Act.
3.14 Intervention.
3.15 Amendments and supplemental pleadings.
Subpart C--Prehearing Procedures; Motions; Interlocutory Appeals;
Summary Decisions
3.21 Prehearing procedures.
3.22 Motions.
3.23 Interlocutory appeals.
3.24 Summary decisions.
3.25 Consent agreement settlements.
3.26 Motions following denial of preliminary injunctive relief.
Subpart D--Discovery; Compulsory Process
3.31 General provisions.
3.32 Admissions.
3.33 Depositions.
3.34 Subpoenas.
3.35 Interrogatories to parties.
3.36 Applications for subpoenas for records, or appearances by
officials or employees, of governmental agencies other than
the Commission.
3.37 Production of documents and things; access for inspection and
other purposes.
3.38 Motion for order compelling disclosure or discovery; sanctions.
3.38A Withholding requested material.
3.39 Orders requiring witnesses to testify or provide other information
and granting immunity.
3.40 Admissibility of evidence in advertising substantiation cases.
Subpart E--Hearings
3.41 General rules.
3.42 Presiding officials.
3.43 Evidence.
3.44 Record.
3.45 In camera orders.
3.46 Proposed findings, conclusions, and order.
Subpart F--Decision
3.51 Initial decision.
3.52 Appeal from initial decision.
3.53 Review of initial decision in absence of appeal.
3.54 Decision on appeal or review.
3.55 Reconsideration.
3.56 Effective date of orders; application for stay.
Subpart G [Reserved]
Subpart H--Reopening of Proceedings
3.71 Authority.
3.72 Reopening.
Subpart I--Recovery of Awards Under the Equal Access to Justice Act in
Commission Proceedings
3.81 General provisions.
3.82 Information required from applicants.
3.83 Procedures for considering applicants.
Authority: Sec. 6, 38 Stat. 721 (15 U.S.C. 46), unless otherwise
noted.
Source: 32 FR 8449, June 13, 1967, unless otherwise noted.
[[Page 45]]
Subpart A--Scope of Rules; Nature of Adjudicative Proceedings
Sec. 3.1 Scope of the rules in this part.
The rules in this part govern procedure in adjudicative proceedings.
It is the policy of the Commission that, to the extent practicable and
consistent with requirements of law, such proceedings shall be conducted
expeditiously. In the conduct of such proceedings the Administrative Law
Judge and counsel for all parties shall make every effort at each state
of a proceeding to avoid delay.
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 and
proceedings for the assessment of civil penalties pursuant to Sec. 1.94
of this chapter. It does not include other proceedings such as
negotiations for 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; proceedings
for fixing quantity limits under section 2(a) of the Clayton Act;
investigations under section 5 of the Export Trade Act; rulemaking
proceedings under the Fair Packaging and Labeling Act 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; or the promulgation of substantive rules and regulations,
determinations of classes of products exempted from statutory
requirements, the establishment of name guides, or inspections and
industry counseling, under sections 4(d) and 6(a) of the Wool Products
Labeling Act of 1939, sections 7, 8(b), and 8(c) of the Fur Products
Labeling Act, and sections 7(c), 7(d), and 12(b) of the Textile Fiber
Products Identification Act.
[45 FR 67319, Oct. 10, 1980]
Subpart B--Pleadings
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 time and place for hearing, the time to be at
least thirty (30) days after service of the complaint.
(c) Motion for more definite statement. Where the respondent makes a
reasonable showing that it cannot frame a responsive answer based on the
allegations contained in the complaint, the respondent may move for a
more definite statement of the charges against it before filing an
answer. Such a motion shall be filed within ten (10) days after service
of the complaint and shall point out the defects complained of and the
details desired.
[32 FR 8449, June 13, 1967, as amended at 43 FR 11978, Mar. 23, 1978; 50
FR 53305, Dec. 31, 1985]
Sec. 3.11A Fast-track proceedings.
(a) Scope and applicability. This section governs the availability
of fast-track procedures in administrative cases where the Commission
files a collateral federal district court complaint
[[Page 46]]
that seeks preliminary injunctive relief against some or all of the
conduct alleged in the Commission's administrative complaint. The
Commission will afford the respondent the opportunity to elect such
fast-track procedures, subject to the conditions set forth in paragraph
(b)(1) of this section, in cases that the Commission designates as
appropriate. In cases so designated, the Commission will provide written
notice to each respondent at the time that it is served with the
Commission's federal district court complaint for preliminary injunctive
relief. Except as modified by this section, the rules contained in
subparts A through I of part 3 of this chapter will govern fast-track
procedures in adjudicative proceedings. Discovery will be governed by
subpart D of this part, and the Administrative Law Judge may exercise
his plenary authority under Sec. 3.42(c)(6) to establish limitations on
the number of depositions, witnesses, or any document production.
(b)(1) Conditions. In cases designated as appropriate by the
Commission pursuant to paragraph (a) of this section, a respondent may
elect fast-track procedures:
(i) if a federal court enters a preliminary injunction against some
or all of the conduct alleged in the Commission's administrative
complaint; or,
(ii) where no such injunction is entered, if the Commission
determines that the Federal court proceeding has resulted in an
evidentiary record that is likely materially to facilitate resolution of
the administrative proceeding in accordance with the expedited schedule
set forth in this section. The Commission will provide each respondent
with written notice of any such determination.
(2) Election. A respondent that determines to elect fast-track
procedures shall file a notice of such election with the Secretary by
the latest of: three days after entry of a preliminary injunction as
described in paragraph (b)(1)(i) of this section; three days after the
respondent is served with notice of the Commission's determination under
paragraph (b)(1)(ii) of this section; or three days after the respondent
is served with the Commission's administrative complaint in the
adjudicative proceeding. In proceedings involving multiple respondents,
the fast-track procedures set forth in this section will not apply
unless the procedures are elected by all respondents.
(c) Deadlines in fast-track proceedings. (1) For purposes of this
paragraph, ``triggering event'' means the latest of: entry of a
preliminary injunction as described in paragraph (b)(1)(i) of this
section; service on the last respondent of notice of the Commission's
determination under paragraph (b)(1)(ii) of this section; service on the
last respondent of the Commission's administrative complaint in the
adjudicative proceeding; or filing with the Secretary by the last
respondent of a notice electing fast-track procedures.
(2) Proceedings before the Administrative Law Judge. In fast-track
proceedings covered by this section:
(i) The scheduling conference required by Sec. 3.21(b) shall be held
not later than three days after the triggering event.
(ii) Respondent's answer shall be filed within 14 days after the
triggering event.
(iii) The Administrative Law Judge shall file an initial decision
within 56 days following the conclusion of the evidentiary hearing. The
initial decision shall be filed no later than 195 days after the
triggering event.
(iv) Any party wishing to appeal an initial decision to the
Commission shall file a notice of appeal with the Secretary within three
days after service of the initial decision. The notice shall comply with
Sec. 3.52(a) in all other respects.
(v) The appeal shall be in the form of a brief, filed within 21 days
after service of the initial decision, and shall comply with
Sec. 3.52(b) in all other respects. All issues raised on appeal shall be
presented in the party's appeal brief.
(vi) Within 14 days after service of the appeal brief, the appellee
may file an answering brief, which shall comply with Sec. 3.52(c).
Cross-appeals, as permitted in Sec. 3.52(c), may not be raised in an
appellee's answering brief.
(vii) Within five days after service of the appellee's answering
brief, the appellant may file a reply brief, in accordance with
Sec. 3.52(d) in all other respects.
[[Page 47]]
(3) Proceedings before the Commission. In fast-track proceedings
covered by this section, the Commission will issue a final order and
opinion within 13 months after the triggering event. If the adjudicative
proceeding is stayed pursuant to a motion filed under Sec. 3.26, the 13-
month deadline will be tolled for as long as the proceeding is stayed.
The Commission may extend the date for issuance of the Commission's
final order and opinion in the following circumstances: if necessary to
permit the Commission to provide submitters of in camera material or
information with advance notice of the Commission's intention to
disclose all or portions of such material or information in the
Commission's final order or opinion; or if the Commission determines
that adherence to the 13-month deadline would result in a miscarriage of
justice due to circumstances unforeseen at the time of respondent's
election of fast-track procedures.
[63 FR 7527, Feb. 13, 1998]
Sec. 3.12 Answer.
(a) Time for filing. A respondent shall file an answer within twenty
(20) days after being served with the complaint: Provided, however, That
the filing of a motion for a more definite statement of the charges
shall alter this period of time as follows, unless a different time is
fixed by the Administrative Law Judge:
(1) If the motion is denied, the answer shall be filed within ten
(10) days after service of the order of denial or thirty (30) days after
service of the complaint, whichever is later;
(2) If the motion is granted, in whole or in part, the more definite
statement of the charges shall be filed within ten (10) days after
service of the order granting the motion and the answer shall be filed
within ten (10) days after service of the more definite statement of the
charges.
(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, his answer shall consist of a statement that he 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
Administrative Law Judge shall file an initial decision containing
appropriate findings and conclusions and an appropriate order disposing
of the proceeding. In such an answer, the respondent may, however,
reserve the right to submit proposed findings and conclusions under
Sec. 3.46 and the right to appeal the initial decision to the Commission
under Sec. 3.52.
(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 Administrative Law Judge, without further notice to the
respondent, to find the facts to be as alleged in the complaint and to
enter an initial decision containing such findings, appropriate
conclusions, and order.
[32 FR 8449, June 13, 1967, as amended at 50 FR 53305, Dec. 31, 1985; 61
FR 50646, Sept. 26, 1996]
Sec. 3.13 Adjudicative hearing on issues arising in rulemaking proceedings under the Fair Packaging and Labeling Act.
(a) Notice of hearing. When the Commission, acting under
Sec. 1.26(g) of this chapter, determines that objections which have been
filed are sufficient to warrant the holding of an adjudicative hearing
in rulemaking proceedings under the Fair Packaging and Labeling Act, or
when the Commission otherwise determines that the holding of such a
hearing would be in the public interest, a hearing will be held before
[[Page 48]]
an Administrative Law Judge for the purpose of receiving evidence
relevant and material to the issues raised by such objections or other
issues specified by the Commission. In such case the Commission will
publish a notice in the Federal Register containing a statement of:
(1) The provisions of the rule or order to which objections have
been filed;
(2) The issues raised by the objections or the issues on which the
Commission wishes to receive evidence;
(3) The time and place for hearing, the time to be at least thirty
(30) days after publication of the notice; and
(4) The time within which, and the conditions under which, any
person who petitioned for issuance, amendment, or repeal of the rule or
order, or any person who filed objections sufficient to warrant the
holding of the hearing, or any other interested person, may file notice
of intention to participate in the proceeding.
(b) Parties. Any person who petitions for issuance, amendment, or
repeal of a rule or order, and any person who files objections
sufficient to warrant the holding of a hearing, and who files timely
notice of intention to participate, shall be regarded as a party and
shall be individually served with any pleadings filed in the proceeding.
Upon written application to the Administrative Law Judge and a showing
of good cause, any interested person may be designated by the
Administrative Law Judge as a party.
[32 FR 8449, June 13, 1967, as amended at 40 FR 33969, Aug. 13, 1975]
Sec. 3.14 Intervention.
(a) Any individual, partnership, unincorporated association, or
corporation desiring to intervene in an adjudicative proceeding shall
make written application in the form of a motion setting forth the basis
therefor. Such application shall have attached to it a certificate
showing service thereof upon each party to the proceeding in accordance
with the provisions of Sec. 4.4(b) of this chapter. A similar
certificate shall be attached to the answer filed by any party, other
than counsel in support of the complaint, showing service of such answer
upon the applicant. The Administrative Law Judge or the Commission may
by order permit the intervention to such extent and upon such terms as
are provided by law or as otherwise may be deemed proper.
(b) In an adjudicative proceeding where the complaint states that
divestiture relief is contemplated, the labor organization[s]
representing employees of the respondent[s] may intervene as a matter of
right. Applications for such intervention are to be made in accordance
with the procedures set forth in paragraph (a) of this section and must
be filed within 60 days of the issuance of the complaint. Intervention
as a matter of right shall be limited to the issue of the effect, if
any, of proposed remedies on employment, with full rights of
participation in the proceeding concerning this issue. This paragraph
does not affect a labor organization's ability to petition for leave to
intervene pursuant to Sec. 3.14(a).
[32 FR 8449, June 13, 1967, as amended at 46 FR 20979, Apr. 8, 1981]
Sec. 3.15 Amendments and supplemental pleadings.
(a) Amendments--(1) By leave. If and whenever determination of a
controversy on the merits will be facilitated thereby, the
Administrative Law Judge may, upon such conditions as are necessary to
avoid prejudicing the public interest and the rights of the parties,
allow appropriate amendments to pleadings or notice of hearing:
Provided, however, That a motion for amendment of a complaint or notice
may be allowed by the Administrative Law Judge only if the amendment is
reasonably within the scope of the original complaint or notice. Motions
for other amendments of complaints or notices shall be certified to the
Commission.
(2) Conformance to evidence. When issues not raised by the pleadings
or notice of hearing but reasonably within the scope of the original
complaint or notice of hearing are tried by express or implied consent
of the parties, they shall be treated in all respects as if they had
been raised in the pleadings or notice of hearing; and such amendments
of the pleadings or notice as may be necessary to make them conform to
the evidence and to raise such issues shall be allowed at any time.
[[Page 49]]
(b) Supplemental pleadings. The Administrative Law Judge may, upon
reasonable notice and such terms as are just, permit service of a
supplemental pleading or notice setting forth transactions, occurrences,
or events which have happened since the date of the pleading or notice
sought to be supplemented and which are relevant to any of the issues
involved.
Subpart C--Prehearing Procedures; Motions; Interlocutory Appeals;
Summary Decisions
Sec. 3.21 Prehearing procedures.
(a) Meeting of the parties before scheduling conference. An early as
practicable before the prehearing scheduling conference described in
paragraph (b) of this section, 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, and to
agree, if possible, on a proposed discovery schedule, a preliminary
estimate of the time required for the hearing, and a proposed hearing
date, and on any other matters to be determined at the scheduling
conference.
(b) Scheduling conference. Not later than seven (7) 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 their factual and
legal theories, a schedule of proceedings, possible limitations on
discovery, and other possible agreements or steps that may aid in the
orderly and expeditious disposition of the proceeding.
(c) Prehearing scheduling order. (1) Not later than two (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, including a plan of discovery,
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 and
of the evidentiary hearing.
(2) The Administrative Law Judge may grant a motion to extend any
deadline or time specified in this scheduling order only upon a showing
of good cause. 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, 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, 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 orderly and
expeditious disposition of a proceeding. 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)
[[Page 50]]
shall be closed to the public. The Administrative Law Judge shall have
discretion to determine whether a prehearing conference shall be
stenographically reported.
[50 FR 41487, Oct. 11, 1985, as amended at 61 FR 50646, Sept. 26, 1996]
Sec. 3.22 Motions.
(a) Presentation and disposition. During the time a proceeding is
before an Administrative Law Judge, all motions therein, except those
filed under Sec. 3.26, Sec. 3.42(g), or Sec. 4.17, 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
any motion upon which he or she has no authority to rule, accompanied by
any recommendation that he or she may deem appropriate. Such
recommendation may contain a proposed disposition of the motion or other
relevant comments. The Commission may order the ALJ to submit a
recommendation or an amplification thereof. Rulings or recommendations
containing information granted in camera status pursuant to Sec. 3.45
shall be filed in accordance with Sec. 3.45(f). 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) Content. All written motions shall state the particular order,
ruling, or action desired and the grounds therefor. If a party includes
in a motion information that has been granted in camera status pursuant
to Sec. 3.45(b), the party shall file two versions of the motion in
accordance with the procedures set forth in Sec. 3.45(e). The time
period specified by Sec. 3.22(c) within which an opposing party may file
an answer will begin to run upon service on that opposing party of the
in camera version of a motion.
(c) Answers. Within ten (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 granted in camera status pursuant to
Sec. 3.45(b), the opposing party shall file two 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 as permitted by the
Administrative Law Judge or the Commission.
(d) 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.
(e) Rulings on motions for dismissal. When a motion to dismiss a
complaint or for other relief is granted with the result that the
proceeding before the Administrative Law Judge is terminated, the
Administrative Law Judge shall file an initial decision in accordance
with the provisions of Sec. 3.51. If such a motion is granted as to all
charges of the complaint in regard to some, but not all, of the
respondents, or is granted as to any part of the charges in regard to
any or all of the respondents, the Administrative Law Judge shall enter
his ruling on the record, in accordance with the procedures set forth in
paragraph (a) of this section, and take it into account in his initial
decision. 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 may defer
ruling thereon until immediately after all evidence has been received
and the hearing record is closed.
(f) 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
[[Page 51]]
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 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.
[32 FR 8449, June 13, 1967, as amended at 50 FR 42672, Oct. 22, 1985; 52
FR 22293, June 11, 1987; 60 FR 39641, Aug. 3, 1995; 61 FR 50647, Sept.
26, 1996]
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, not to exceed fifteen (15) pages exclusive of
those attachments required below, within five (5) days after notice of
the Administrative Law Judge's ruling. Answer thereto may be filed
within five (5) days after service of the application for review. The
application for review should specify the person or party taking the
appeal; should attach the ruling or part thereof from which appeal is
being taken and any other portions of the record on which the moving
party relies; and should specify under which provisions hereof review is
being sought. The Commission upon its own motion may enter an order
staying the return date of an order issued 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
briefs if deemed appropriate by the Commission.
(b) Appeals upon a determination by the Administrative Law Judge.
Except as provided in paragraph (a) of this section, applications for
review of a ruling by the Administrative Law Judge may be allowed only
upon request made to the Administrative Law Judge and a determination by
the Administrative Law Judge in writing, with justification in support
thereof, 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. Applications for review in writing may be filed, not
to exceed fifteen (15) pages exclusive of those attachments required
below, within five (5) days after notice of the Administrative Law
Judge's determination. Additionally, the moving party is required to
attach the ruling or part thereof from which appeal is being taken and
any other portions of the record on which the moving party is relying.
Answer thereto may be filed within five (5) days after service of the
application for review. The Commission may thereupon, in its discretion,
permit an appeal. Commission review, if permitted, will be confined to
the application for review and answer thereto, without oral argument or
further briefs, unless otherwise ordered by the Commission.
(c) Proceedings not stayed. Application for review and appeal
hereunder shall
[[Page 52]]
not stay proceedings before the Administrative Law Judge unless the
Judge or the Commission shall so order.
[37 FR 5608, Mar. 17, 1972, as amended at 42 FR 31591, June 22, 1977; 42
FR 33025, June 29, 1977; 43 FR 56902 Dec. 5, 1978; 50 FR 53305, Dec. 31,
1985]
Sec. 3.24 Summary decisions.
(a) Procedure. (1) Any party to an adjudicatory proceeding 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 not
genuine issue. Counsel in support of the complaint may so move at any
time after twenty (20) days following issuance of the complaint and any
party 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 twenty (20) days before the date fixed for the
adjudicatory hearing.
(2) Any other party may, within ten (10) 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 Administrative Law Judge may, in his
discretion, set the matter for oral argument and call for the submission
of briefs or memoranda. If a party includes in any such brief or
memorandum information that has been granted in camera status pursuant
to Sec. 3.45(b), the party shall file two versions of the document in
accordance with the procedures set forth in Sec. 3.45(e). The decision
sought by the moving party shall be rendered within thirty (30) days if
the pleadings and any depositions, answers to interrogatories,
admissions on file, and affidavits show that there is no genuine issue
as to any material fact and that the moving party is entitled to such
decision as a matter of law. Any such decision shall constitute the
initial decision of the Administrative Law Judge and shall accord with
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 the nature and extent of 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 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 pleading; his response, by affidavits or as otherwise provided in
this rule, must set forth specific facts showing that there is a genuine
issue of 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 he cannot, for reasons stated, present by affidavit facts
essential to justify his opposition, the Administrative Law Judge may
refuse the application 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 the whole case or for all the relief asked and a trial is
necessary, the Administrative Law Judge shall make 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 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
Administrative Law Judge
[[Page 53]]
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 Administrative Law Judge concludes that action by him to suspend or
remove an attorney from the case is warranted, he shall take action as
specified in Sec. 3.42(d). If the Administrative Law Judge 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 examiner shall certify the matter, with his findings
and recommendations, to the Commission for its consideration of
disciplinary action in the manner provided by the Commission's rules.
[35 FR 5007, Mar. 24, 1970, as amended at 50 FR 53305, Dec. 31, 1985; 52
FR 22293, June 11, 1987; 61 FR 50647, Sept. 26, 1996]
Sec. 3.25 Consent agreement settlements.
(a) The Administrative Law Judge may, in his discretion and without
suspension of prehearing procedures, hold conferences for the purpose of
supervising negotiations for the settlement of the case, in whole or in
part, by way of consent agreement.
(b) A proposal to settle a matter in adjudication by consent
agreement shall be submitted by way of a motion to withdraw the matter
from adjudication for the purpose of considering the proposed consent
agreement. Such motion shall be filed with the Secretary of the
Commission, as provided in Sec. 4.2. Any such motion shall be
accompanied by a proposed consent agreement containing a proposed order
executed by one or more respondents and conforming to the requirements
of Sec. 2.32; the proposed consent agreement itself, however, shall not
be placed on the public record unless and until it is accepted by the
Commission as provided herein. If the proposed consent agreement affects
only some of the respondents or resolves only some of the charges in
adjudication, the motion required by this subsection shall so state and
shall specify the portions of the matter that the proposal would
resolve.
(c) If the proposed consent agreement accompanying the motion has
also been executed by complaint counsel, including the appropriate
Bureau Director, the Secretary shall issue an order withdrawing from
adjudication those portions of the matter that the proposal would
resolve and all proceedings before the Administrative Law Judge shall be
stayed with respect to such portions, pending a determination by the
Commission pursuant to paragraph (f) of this section.
(d) If the proposed consent agreement accompanying the motion has
not been executed by complaint counsel, the Administrative Law Judge may
certify the motion and agreement to the Commission together with his
recommendation if he determines, in writing, that there is a likelihood
of settlement. The filing of a motion under this subsection and
certification thereof to the Commission shall not stay proceedings
before the Administrative Law Judge unless the Administrative Law Judge
or the Commission shall so order. Upon certification of a motion
pursuant to this subsection, the Commission may, if it is satisfied that
there is a likelihood of settlement, issue an order withdrawing from
adjudication those portions of the matter that the proposal would
resolve, for the purpose of considering the proposed consent agreement.
(e) The Commission will treat those portions of a matter withdrawn
from adjudication pursuant to paragraph (c) or (d) of this section as
being in a nonadjudicative status. Portions not so withdrawn shall
remain in an adjudicative status.
(f) After the matter has been withdrawn from adjudication, in whole
or in part, the Commission may:
(1) Accept the proposed consent agreement,
(2) Reject it and return to adjudication for further proceedings any
portion of the matter previously withdrawn from adjudication, or
(3) Take such other action as it may deem appropriate.
If a proposed consent agreement is accepted, the Commission will place
it on
[[Page 54]]
the public record, together with any initial report of compliance
submitted pursuant to Sec. 2.33, and at the same time, will make
available an explanation of the provisions of the order and the relief
to be obtained thereby, and any other information which it deems helpful
in assisting interested persons to understand the terms of the order.
The Commission will publish the explanation in the Federal Register. For
a period of sixty (60) days after placement of the order on the public
record and issuance of the statement, the Commission will receive and
consider any comments concerning the order that may be filed by any
interested person. Thereafter, the Commission may either withdraw its
acceptance of the agreement and so notify the parties, in which event it
will return the affected portions of the matter to adjudication for
further proceedings or take such other action as it may consider
appropriate, or issue and serve its decision.
(g) This rule will not preclude the settlement of the case by
regular adjudicatory process through the filing of an admission answer
or submission of the case to the Administrative Law Judge on a
stipulation of facts and an agreed order.
[40 FR 15236, Apr. 4, 1975, as amended at 42 FR 39659, Aug. 5, 1977; 43
FR 51758, Nov. 7, 1978; 50 FR 53305, Dec. 31, 1985; 54 FR 18885, May 3,
1989; 61 FR 50431, Sept. 26, 1996; 61 FR 50647, Sept. 26, 1996]
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 fourteen (14) days after:
(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 preliminary injunctive relief.
(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 adjudicative proceeding be withdrawn from adjudication in order to
consider whether or not the public interest warrants further litigation.
Such a motion shall be filed by all of the respondents in the
adjudicative proceeding. The Secretary shall issue an order withdrawing
the matter from adjudication two days after such a motion is filed,
except that, if complaint counsel have objected that the conditions of
paragraph (b) of this section have not been met, the Commission shall
determine whether to withdraw the matter from adjudication.
(d) Consideration on the record. (1) In lieu of a motion to withdraw
a matter from adjudication under paragraph (c) of this section, 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. Motions filed under
this paragraph shall incorporate or be accompanied by a supporting brief
or memorandum.
(2) Stay. A motion under this paragraph will stay all proceedings
before the Administrative Law Judge until such time as the Commission
directs otherwise.
(3) Answer. Within fourteen (14) days after service of a motion
filed under this paragraph, complaint counsel may file an answer.
(4) Form. Motions (including any supporting briefs and memoranda)
and answers under this paragraph shall not exceed 30 pages if printed,
or 45 pages if typewritten, and shall comply with the requirements of
Sec. 3.52(e).
(5) In camera materials. If any filing includes materials that are
subject to confidentiality protections pursuant to
[[Page 55]]
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 two
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).
[60 FR 39641, Aug. 3, 1995]
Subpart D--Discovery; Compulsory Process
Sec. 3.31 General 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. 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) Initial disclosures. Complaint counsel and respondent's counsel
shall, within five (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);
(2) A copy of, or a description by category and location of, all
documents, data compilations, 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 privileged as
defined in Sec. 3.31(c)(2), pertain to hearing preparation as defined in
Sec. 3.31(c)(3), pertain to experts as defined in Sec. 3.31(c)(4), 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
rules, the scope of discovery is as follows:
(1) In general; limitations. 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, or other tangible things 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. 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
determines that:
(i) The discover 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.
(2) Privilege. The Administrative Law Judge may enter a protective
order denying or limiting discovery to preserve the privilege of a
witness, person, or governmental agency as governed by the Constitution,
any applicable act of
[[Page 56]]
Congress, or the principles of the common law as they may be interpreted
by the Commission in the light of reason and experience.
(3) Hearing preparations: Materials. Subject to the provisions of
paragraph (c)(4) of this section, 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.
(4) Hearing preparation: Experts. (i) Discovery of facts known and
opinions held by experts, otherwise discoverable under the provisions of
paragraph (c)(1) of this section and acquired or developed in
anticipation of litigation or for hearing, may be obtained only as
follows:
(A) A party may through interrogatories require any other party to
identify each person whom the other party expects to call as an expert
witness at hearing, to state the subject matter on which the expert is
expected to testify, and to state the substance of the facts and
opinions to which the expert is expected to testify and a summary of the
grounds for each opinion.
(B) 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.
(ii) A party may 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
expected to be called as a witness at hearing, only upon a showing of
exceptional circumstances under which it is impracticable for the party
seeking discovery to obtain facts or opinions on the same subject by
other means.
(iii) The Administrative Law Judge may require as a condition of
discovery that the party seeking discovery pay the expert a reasonable
fee, but not more than the maximum specified in 5 U.S.C. 3109 unless the
parties have stipulated a higher amount, for time spent in responding to
discovery under paragraphs (c)(4)(i)(B) and (c)(4)(ii) of this section.
(d) Protective orders; order to preserve evidence. (1) The
Administrative Law Judge may deny discovery or make any 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.
(2) [Reserved]
(e) Supplementation of disclosures and responses. A party who has
made an 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 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 seasonably to amend 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
[[Page 57]]
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 made ex 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.
[43 FR 56864, Dec. 4, 1978, as amended at 50 FR 53305, Dec. 31, 1985; 61
FR 50647, Sept. 26, 1996]
Sec. 3.32 Admissions.
(a) At any time after thirty (30) days after issuance of compliant,
or after publication of notice of an adjudicative hearing in a
rulemaking proceeding under Sec. 3.13, any party may serve on any other
party a written request for admission of the truth of any matters
relevant to the pending proceeding set forth in the request that relate
to statements or opinions of fact or of the application of law to fact,
including the genuineness of any documents described in the request.
Copies of documents shall be served with the request unless they have
been or are otherwise furnished or are known to be, and in the request
are stated as being, in the possession of the other party. Each matter
of which an admission is requested shall be separately set forth. A copy
of the request shall be filed with the Secretary.
(b) The matter is admitted unless, within ten (10) days after
service of the request, or within such shorter or longer time as the
Administrative Law Judge may allow, the party to whom the request is
directed serves upon the party requesting the admission, with a copy
filed with the Secretary, a sworn written answer or objection addressed
to the matter. If objection is made, the reasons therefor shall be
stated. The answer shall specifically deny the matter or set forth in
detail the reasons why the answering party cannot truthfully admit or
deny the matter. A denial shall fairly meet the substance of the
requested admission, and when good faith requires that a party qualify
its answer or deny only a part of the matter of which an admission is
requested, the party shall specify so much of it as is true and qualify
or deny the remainder. An answering party may not give lack of
information or knowledge as a reason for failure to admit or deny unless
the party states that it has made reasonable inquiry and that the
information known to or readily obtainable by the party is insufficient
to enable it to admit or deny. A party who considers that a matter of
which an admission has been requested presents a genuine issue for trial
may not, on that ground alone, object to the request; the party may deny
the matter or set fourth reasons why the party cannot admit or deny it.
(c) Any matter admitted under this rule is conclusively established
unless the Administrative Law Judge on motion permits withdrawal or
amendment of the admission. The Administrative Law Judge may permit
withdrawal or amendment when the presentation of the merits of the
proceeding will be subserved thereby and the party who obtained the
admission fails to satisfy the Administrative Law Judge that withdrawal
or amendment will prejudice him in maintaining his action or defense on
the merits. Any admission made by a party under this rule is for the
purpose of the pending proceeding only and is not an admission by him
for any other purpose nor may it be used against him in any other
proceeding.
[43 FR 56865, Dec. 4, 1978, as amended at 50 FR 53305, Dec. 31, 1985]
Sec. 3.33 Depositions.
(a) In general. Any party may take a deposition of a 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
[[Page 58]]
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.
(b) [Reserved]
(c) 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 names 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 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.
(d) Taking of deposition. Each deponent shall be duly sworn, and any
party shall have the right to question him. 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 Rule
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. 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, 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
[[Page 59]]
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 Rule
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 remarks, stating with specificity the alleged errors in the
transcript.
(g)(1) Use of depositions in hearings. At the hearing on the
complaint or upon a motion, any part or all of a deposition, so far as
admissible under the rules of evidence applied as though the witness
were then present and testifying, may be used against any party who was
present or represented at the taking of the deposition or who had
reasonable notice thereof, in accordance with any of the following
provisions:
(i) Any deposition may be used for the purpose of contradicting or
impeaching the testimony of deponent as a witness.
(ii) The deposition of a party or of anyone who at the time of
taking the deposition was an officer, director, or managing agent, or a
person designated to testify on behalf of a public or private
corporation, partnership or association which is a party, or of an
official or employee (other than a special employee) of the Commission,
may be used by an adverse party for any purpose.
(iii) A deposition may be used by any party for any purpose if the
Administrative Law Judge finds:
(A) That the deponent is dead; or
(B) That the deponent is out of the United States or is located at
such a distance that his attendance would be impractical, unless it
appears that the absence of the deponent was procured by the party
offering the deposition; or
(C) That the deponent is unable to attend or testify because of age,
sickness, infirmity, or imprisonment; or
(D) That the party offering the deposition has been unable to
procure the attendance of the deponent by subpoena; or
(E) That such exceptional circumstances exist as to make it
desirable, in the interest of justice and with due regard to the
importance of presenting the testimony of witnesses orally in open
hearing, to allow the deposition to be used.
(iv) If only part of a deposition is offered in evidence by a party,
any other party may introduce any other part which ought in fairness to
be considered with the part introduced.
(2) 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.
(3) 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.
[[Page 60]]
(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.
[43 FR 56865, Dec. 4, 1978, as amended at 61 FR 50648, Sept. 26, 1996]
Sec. 3.34 Subpoenas.
(a) Subpoenas ad testificandum--(1) Prehearing. The Secretary of the
Commission shall issue a subpoena, signed but otherwise in blank,
requiring a person to appear and give testimony at the taking of a
deposition to a party requesting such subpoena, who shall complete it
before service.
(2) Hearing. Application for issuance of a subpoena commanding a
person to attend and give testimony at an adjudicative hearing shall be
made in writing to the Administrative Law Judge. Such subpoena may be
issued upon a showing of the reasonable relevancy of the expected
testimony.
(b) Subpoenas duces tecum; subpoenas to permit inspection of
premises. The Secretary of the Commission, upon request of a party,
shall issue a subpoena, signed but otherwise in blank, commanding a
person to produce and permit inspection and copying of designated books,
documents, or tangible things, or commanding a person to permit
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 writings, drawings, graphs,
charts, handwritten notes, film, photographs, audio and video recordings
and any such representations stored on a computer, a computer disk, CD-
ROM, magnetic or electronic tape, or any other means of electronic
storage, and other data compilations from which information can be
obtained in machine-readable form (translated, if necessary, into
reasonably usable form by the person subject to the subpoena). 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 to other government
agencies. Any motion by the subject of a subpoena to limit or quash the
subpoena shall be filed within the earlier of ten (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 Rule 3.22(f). 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, which may be authorized only in accordance
with Sec. 3.36.
[43 FR 56866, Dec. 4, 1978, as amended at 50 FR 42672, Oct. 22, 1985; 61
FR 50648, Sept. 26, 1996]
Sec. 3.35 Interrogatories to parties.
(a) Availability; Procedures for Use. (1) Any party may serve upon
any other party written interrogatories, not exceeding twenty-five (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,
[[Page 61]]
the General Counsel, the office of Administrative Law Judges, or the
Secretary in his 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 thirty (30) days after the service of the interrogatories. The
Administrative Law Judge may allow a shorter or longer time.
(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 the Administrative Law Judge may order that 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.
[43 FR 56867, Dec. 4, 1978, as amended at 61 FR 50649, Sept. 26, 1996]
Sec. 3.36 Applications for subpoenas for records, or appearances by officials or employees, of governmental agencies other than the Commission.
(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 subpoena requiring access to documents or other tangible things,
for the purposes described in Sec. 3.37(a), in the possession, custody,
or control 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 an official or employee of another
governmental agency, 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 satisfy the same requirements for a
subpoena under Sec. 3.34 or a request for production or access under
Sec. 3.37, together with a specific 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(b)(1), or, if for an adjudicative
hearing, the material is reasonably relevant; and
(3) the information or material sought cannot reasonably be obtained
by other means.
[61 FR 50649, Sept. 26, 1996]
Sec. 3.37 Production of documents and 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, as defined in Sec. 3.34(b), or to inspect and copy, test, or
sample any tangible
[[Page 62]]
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
inspected, or the property to be entered. Each such request shall also
specify a reasonable time, place, and manner of making the inspection
and performing the related acts. 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.
(b) Response; objections. 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 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.
[61 FR 50649, Sept. 26, 1996]
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 initial disclosures required by
Sec. 3.31(b), a request for admission under Sec. 3.32, a deposition
under Sec. 3.33, or an interrogatory under Sec. 3.35.
(1) Initial disclosures; requests for admission; depositions;
interrogatories. Unless the objecting party sustains its burden of
showing that the objection is justified, the Administrative Law Judge
shall order that an answer be served or disclosure otherwise be made. If
the Administrative Law Judge determines that an answer or other response
by the objecting party does not comply with the requirements of these
rules, he may order either that the matter is admitted or that an
amended answer or response be served. The Administrative Law Judge may,
in lieu of these orders, determine that final disposition may be made at
a prehearing conference or at a designated time prior to trial.
(2) Requests for production or access. If a party fails to respond
to or comply as requested with a request for production or access made
under Sec. 3.37(a), the discovering party may move for an order to
compel production or access in accordance with the request.
(b) If a party or an officer or agent of a party fails to comply
with a subpoena or with an order including, but not limited to, an order
for the taking of a deposition, the production of documents, or the
answering of interrogatories, or requests for admissions, or an order of
the Administrative Law Judge or the Commission issued as, or in
accordance with, a ruling upon a motion concerning such an order or
subpoena or upon an appeal from such a ruling, the Administrative Law
Judge or the Commission, or both, for the purpose of permitting
resolution of relevant issues and disposition of the proceeding without
unnecessary delay despite such failure, may take such action in regard
thereto as is just, including but not limited to the following:
(1) Infer that the admission, testimony, documents or other evidence
would have been adverse to the party;
(2) 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;
(3) Rule that the party may not introduce into evidence or otherwise
rely, in support of any claim or defense, upon testimony by such party,
[[Page 63]]
officer, or agent, or the documents or other evidence;
(4) 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;
(5) 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.
(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 shall certify to the Commission a
request that court enforcement of the subpoena or order be sought.
[43 FR 56867, Dec. 4, 1978, as amended at 50 FR 53305, Dec. 31, 1985; 61
FR 50649, Sept. 26, 1996]
Sec. 3.38A Withholding requested material.
(a) Any person withholding material responsive to a subpoena issued
pursuant to Sec. 3.34, 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 of the items withheld which states individually as to
each such item the type, title, specific subject matter, and date of the
item; the names, addresses, positions, and organizations of all authors
and recipients of the item; and the specific grounds for claiming that
the item is privileged.
(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))
[44 FR 54043, Sept. 18, 1979, as amended at 61 FR 50650, Sept. 26, 1996]
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 having responsibility 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 privilege
against self-incrimination; and to request, through the Commission's
liaison officer, approval by the Attorney General for the issuance of
such an order. Upon receipt of approval by the Attorney General (or his
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 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 made ex parte. When
such requests are made, the Administrative Law Judge is authorized to
determine:
[[Page 64]]
(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 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 designee) has granted such approval, to
issue such order when the witness or deponent has invoked his privilege
against self-incrimination and it cannot be determined that such
privilege was improperly invoked.
(18 U.S.C. 6002, 6004)
[37 FR 5017, Mar. 9, 1972, as amended at 50 FR 53306, Dec. 31, 1985]
Sec. 3.40 Admissibility of evidence in advertising substantiation cases.
(a) If a person, partnership, or corporation is required through
compulsory process under section 6, 9 or 20 of the Act issued after
October 26, 1977 to submit to the Commission substantiation in support
of an express or an implied representation contained in an
advertisement, such person, partnership or corporation shall not
thereafter be allowed, in any adjudicative proceeding in which it is
alleged that the person, partnership, or corporation lacked a reasonable
basis for the representation, and for any purpose relating to the
defense of such allegation, to introduce into the record, whether
directly or indirectly through references contained in documents or oral
testimony, any material of any type whatsoever that was required to be
but was not timely submitted in response to said compulsory process.
Provided, however, that a person, partnership, or corporation is not,
within the meaning of this section, required through compulsory process
to submit substantiation with respect to those portions of said
compulsory process to which such person, partnership, or corporation has
raised good faith legal objections in a timely motion pursuant to the
Commission's Rules of Practice and Procedure, until the Commission
denies such motion; or if the person, partnership, or corporation
thereafter continues to refuse to comply, until such process has been
judicially enforced.
(b) The Administrative Law Judge shall, upon motion, at any stage
exclude all material that was required to be but was not timely
submitted in response to compulsory process described in paragraph (a)
of this section, or any reference to such material, unless the person,
partnership, or corporation demonstrates in a hearing, and the
Administrative Law Judge finds, that by the exercise of due diligence
the material could not have been timely submitted in response to the
compulsory process, and that the Commission was notified of the
existence of the material immediately upon its discovery. Said findings
of the Administrative Law Judge shall be in writing and shall specify
with particularity the evidence relied upon. The rules normally
governing the admissibility of evidence in Commission proceedings shall
in any event apply to any material coming within the above exception.
[42 FR 56500, Oct. 10, 1977; 42 FR 61450, Dec. 5, 1977, as amended at 45
FR 45578, July 7, 1980]
Subpart E--Hearings
Sec. 3.41 General 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. 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
where the Administrative Law Judge determines
[[Page 65]]
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 Administrative Law
Judge may order a joint hearing of any or all the matters in issue in
the actions; the Administrative Law Judge may order all the actions
consolidated; and 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 Administrative Law Judge may order a separate hearing of
any claim, or of any separate issue, or of any number of claims or
issues.
(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, 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.
(e) Participation in adjudicative packaging and labeling hearings.
At adjudicative hearings under the Fair Packaging and Labeling Act, any
party or any interested person designated as a party pursuant to
Sec. 3.13, or his representative, may be sworn as a witness and heard.
(f) 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.
(18 U.S.C. 6002, 6004)
[32 FR 8449, June 13, 1967, as amended at 37 FR 5017, Mar. 9, 1972; 37
FR 5609, Mar. 17, 1972; 39 FR 34398, Sept. 25, 1974; 44 FR 62887, Nov.
1, 1979]
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.
(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 subpenas 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;
and
(11) 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, U.S.C.
(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
[[Page 66]]
who shall refuse to comply with his 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 five (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 disqualified to preside in a
particular proceeding, he 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,
such motion to be supported by affidavits setting forth the alleged
grounds for disqualification. If the Administrative Law Judge does not
disqualify himself within ten (10) days, he shall certify the motion to
the Commission, together with any statement he 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.
[32 FR 8449, June 13, 1967, as amended at 37 FR 5609, Mar. 17, 1972; 41
FR 8340, Feb. 26, 1976; 43 FR 56868, Dec. 4, 1978; 46 FR 45750, Sept.
15, 1981; 50 FR 53306, Dec. 31, 1985]
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; exclusion of relevant evidence; mode and order of
interrogation and presentation. Relevant, material, and reliable
evidence shall be admitted. 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. The Administrative Law
Judge shall exercise reasonable control over the mode and order of
interrogating witnesses and presenting evidence so as to
[[Page 67]]
(1) make the interrogation and presentation effective for the
ascertainment of the truth,
(2) avoid needless consumption of time, and
(3) protect witnesses from harassment or undue embarrassment.
(c) 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.
(d) Official notice. When any decision of an Administrative Law
Judge or of the Commission rests, in whole or in part, upon the taking
of official notice of a material fact not appearing in evidence of
record, opportunity to disprove such noticed fact shall be granted any
party making timely motion therefor.
(e) 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.
(f) Exceptions. Formal exception to an adverse ruling is not
required.
(g) Excluded evidence. When an objection to a question propounded to
a witness is sustained, the questioner may make a specific offer of what
he expects to prove by the answer of the witness, or the Administrative
Law Judge may, in his 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.
[32 FR 8449, June 13, 1967; 32 FR 8711, June 17, 1967, as amended at 48
FR 44766, Sept. 30, 1983; 61 FR 50650, Sept. 26, 1996]
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. 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. Immediately upon completion of
the evidentiary hearing, the Administrative Law Judge shall issue an
order closing the hearing record. The Administrative Law Judge shall
retain the description to permit or order correction of the record as
provided in Sec. 3.44(b).
[32 FR 8449, June 13, 1967, as amended at 61 FR 50650, Sept. 26, 1996]
Sec. 3.45 In camera orders.
(a) Definition. Except as hereinafter provided, material made
subject to an in camera order will be kept confidential and not placed
on the public record of the proceeding in which it was submitted. Only
respondents, their counsel, authorized Commission personnel, and court
personnel concerned with judicial review may have access thereto,
provided that the Administrative Law Judge, the Commission and reviewing
courts may disclose such in camera material to the extent necessary for
the proper disposition of the proceeding.
[[Page 68]]
(b) In camera treatment of material. The Administrative Law Judge
may order material, or portions thereof, offered into evidence, whether
admitted or rejected, to be placed in camera on a finding that their
public disclosure will likely result in a clearly defined, serious
injury to the person, partnership or corporation requesting their in
camera treatment. This finding shall be based on the standard
articulated in H.P. Hood & Sons, Inc., 58 F.T.C. 1184, 1188 (1961); see
also Bristol-Myers Co., 90 F.T.C. 455, 456 (1977), which established a
three-part test that was modified by General Foods Corp., 95 F.T.C. 352,
355 (1980). No material, or portion thereof offered into evidence,
whether admitted or rejected, may be withheld from the public record
unless it falls within the scope of an order issued in accordance with
this section, stating the date on which in camera treatment will expire,
and including:
(1) A description of the material;
(2) A statement of the reasons for granting in camera treatment; and
(3) A statement of the reasons for the date on which in camera
treatment will expire. Such expiration date may not be omitted except in
unusual circumstances, in which event the order shall state with
specificity the reasons why the need for confidentiality of the
material, or portion thereof at issue is not likely to decrease over
time, and any other reasons why such material is entitled to in camera
treatment for an indeterminate period. Any party desiring, in connection
with the preparation and presentation of the case, to disclose in camera
material to experts, consultants, prospective witnesses, or witnesses,
shall make application to the Administrative Law Judge setting forth the
justification therefor. The Administrative Law Judge, in granting such
application for good cause found, shall enter an order protecting the
rights of the affected parties and preventing unnecessary disclosure of
information. Material subject to an in camera order shall be segregated
from the public record and filed in a sealed envelope, or other
appropriate container, bearing the title, the docket number of the
proceeding, the notation ``In Camera Record under Sec. 3.45,'' and the
date, if any, on which in camera treatment expires.
(c) Release of in camera material. In camera material constitutes
part of the confidential records of the Commission and is subject to the
provisions of Sec. 4.11 of this chapter.
(d) Briefs and other submissions referring to in camera information.
Parties shall not disclose information that has been granted in camera
status pursuant to Sec. 3.45(b) 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 information or general statements based on the content of such
information.
(e) When in camera information is included in briefs and other
submissions. If a party includes specific information that has been
granted in camera status pursuant to Sec. 3.45(b) in any document filed
in a proceeding under this part, the party shall file two versions of
the document. A complete version shall be marked ``In Camera'' on the
first page and shall be filed with the Secretary and served upon the
parties in accordance with the rules in this part. 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 information that
appears in the complete version, shall be filed with the Secretary
within five days after the filing of the complete version, unless the
Administrative Law Judge or the Commission directs otherwise, and shall
be served upon the parties. The expurgated version shall indicate any
omissions with brackets or elipses.
(f) When in camera 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 camera status pursuant to Sec. 3.45(b), the
Administrative Law Judge shall file two versions of the ruling or
recommendation. A complete version shall be marked ``In Camera'' on the
first page and shall
[[Page 69]]
be serve upon the parties. The complete version will be placed in the in
camera record of the proceeding. An expurgated version, to be filed
within five (5) days after the filing of the complete version, shall
omit the in camera 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.
[32 FR 8449, June 13, 1967, as amended at 52 FR 22293, June 11, 1987; 60
FR 37748, July 21, 1995; 61 FR 50650, Sept. 26, 1996]
Sec. 3.46 Proposed findings, conclusions, and order.
(a) General. Upon the closing of the hearing record, or within a
reasonable time thereafter fixed by the Administrative Law Judge, any
party may file with the Secretary of the Commission 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 two versions of the proposals in
accordance with the procedures set forth in Sec. 3.45(e).
(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.
(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 identifying any portion of the witness' testimony
that was received in camera.
(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.
[48 FR 56945, Dec. 27, 1983, as amended at 52 FR 22294, June 11, 1987;
61 FR 50650, Sept. 26, 1996]
Subpart F--Decision
Sec. 3.51 Initial decision.
(a) When filed and when effective. The Administrative Law Judge
shall file an initial decision within ninety (90) days after closing the
hearing record pursuant to Sec. 3.44(c), or within thirty (30) days
after a default or the granting of a motion for summary decision or
waiver by the parties of the filing of proposed findings of fact,
conclusions of law and order, or within such further time as the
Commission may by order allow upon written request from the
Administrative Law Judge. In no event shall the initial decision be
filed any later than one (1) year after the issuance of the
administrative compliant, except that the Administrative Law Judge may,
upon a finding of extraordinary circumstances, extend the
[[Page 70]]
one-year deadline for a period of up to sixty (60) days. Such extension,
upon its expiration, may be continued for additional consecutive periods
of up to sixty (60) days, provided that each additional period is based
upon a finding by the Administrative Law Judge that extraordinary
circumstances are still present. The pendency of any collateral federal
court proceeding that relates to the administrative adjudication shall
toll the one-year deadline for filing the initial decision. The ALJ may
stay the administrative proceeding until resolution of the collateral
federal court proceeding. Once issued, the initial decision shall become
the decision of the Commission thirty (30) days after service thereof
upon the parties or thirty (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. (1) The initial decision shall include a statement of
findings (with specific page references to principal supporting items of
evidence in the record) and conclusions, 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) 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.
(3) An initial decision shall be based upon a consideration of the
whole record relevant to the issues decided pursuant to paragraph (c)(1)
of this section, and it shall be supported by reliable, probative and
substantial evidence.
(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 shall have become unavailable to the Commission.
(e) Reopening of proceeding by Administrative Law Judge; termination
of jurisdiction. (1) At any time prior to the filing of his initial
decision, an Administrative Law Judge may reopen the proceeding for the
reception of further evidence.
(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 initial
decision with respect to those issues decided pursuant to paragraph
(c)(1) of this section.
[32 FR 8449, June 13, 1967, as amended at 35 FR 10656, July 1, 1970; 44
FR 62887, Nov. 1, 1979; 48 FR 52576, Nov. 21, 1983; 48 FR 54810, Dec. 7,
1983; 52 FR 22294, June 11, 1987; 61 FR 50650, Sept. 26, 1996]
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 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. The appeal shall be in the form of a brief, filed
within 30 days after service of the initial decision, and
[[Page 71]]
shall contain, in the order indicated, the following:
(1) 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;
(2) A concise statement of the case;
(3) A specification of the questions intended to be urged;
(4) 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
(5) A proposed form of order for the Commission's consideration
instead of the order contained in the initial decision.
The brief shall not, without leave of the Commission, exceed 60 pages,
if printed, or 90 pages, if typewritten, including any appendices but
exclusive of pages containing the table of contents, tables of
authorities and any addendum containing statutes, rules and regulations.
(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 60 pages, if printed, or 90 pages, if typewritten. If the
appellee cross-appeals, its brief in answer and on cross-appeal shall
not, without leave of the Commission, exceed 105 pages, if printed, or
160 pages, if typewritten. The page limitations of this paragraph
include any appendices but are exclusive of pages containing the table
of contents, tables of authorities, and any addendum containing
statutes, rules and regulations.
(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 60 pages, if printed, or 90
pages, if typewritten. However, if the appellee has cross-appealed, any
appellant 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 75 pages, if printed, or 115
pages, if typewritten. If the appellee has cross-appealed, any party who
is the subject of the cross-appeal, other than an appellant may, within
30 days after service of the appellee's brief, file a reply brief which
shall be limited to rebuttal of matters raised by the appellee's cross-
appeal with respect to the party and shall not, without leave of the
Commission, exceed 60 pages if printed, or 90 pages, if typewritten. 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 30 pages, if printed,
or 45 pages, if typewritten. The page limitations of this paragraph
include any appendices but are exclusive of pages containing the table
of contents, tables of authorities, and any addendum containing
statutes, rules, and regulations. No further briefs may be filed except
by leave of the Commission.
(e) Form of briefs. Briefs may be produced by standard typographic
printing or by any duplicating or copying process which produces a clear
black image on white paper. All printed matter must appear in the least
11 point type on opaque, unglazed paper. Briefs produced by the standard
typographic
[[Page 72]]
process shall be bound in volumes having pages 6\1/8\ by 9\1/4\ inches
and type matter 4\1/6\ by 7\1/6\ inches. Those produced by any other
process shall be bound in volumes having pages not exceeding 8\1/2\ by
11 inches and type matter not exceeding 6\1/2\ by 9\1/2\ inches, with
double spacing between each line of text. Footnotes and quoted material
within the text may be single-spaced. Both printed and typewritten
briefs shall contain no more than 10 characters (including spaces) per
inch.
(f) 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), the party shall file two 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 version of a brief.
(g) 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, and that it
is not interposed for delay. 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.
(h) 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 rule.
(i) 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 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. The purpose of oral argument is
to emphasize and clarify the written argument appearing in the briefs
and to answer questions. Reading at length from the briefs or other
texts is not favored.
(j) 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.
(k) 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 officer of any of them. The
brief may be conditionally filed with the motion for leave. A motion for
leave shall
[[Page 73]]
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.
[32 FR 8449, June 13, 1967, as amended at 33 FR 7033, May 10, 1968; 41
FR 54486, Dec. 14, 1976; 42 FR 13540, Mar. 11, 1977; 42 FR 39977, Aug.
8, 1977; 50 FR 28096, July 10, 1985; 52 FR 22294, June 11, 1987]
Sec. 3.53 Review of initial decision in absence of appeal.
An order by the Commission placing a case on its own docket for
review will set forth the scope of such review and the issues which will
be considered and will make provision for the filing of briefs if deemed
appropriate by the Commission.
Sec. 3.54 Decision on appeal or review.
(a) Upon appeal from or review of an initial decision, the
Commission will consider such parts of the record as are cited or as may
be necessary to resolve the issues presented and, in addition, will, to
the extent necessary or desirable, exercise all the powers which it
could have exercised if it had made the initial decision.
(b) In rendering its decision, the Commission will adopt, modify, or
set aside the findings, conclusions, and rule or order contained in the
initial decision, and will include in the decision a statement of the
reasons or basis for its action and any concurring and dissenting
opinions.
(c) In those cases where the Commission believes that it should have
further information or additional views of the parties as to the form
and content of the rule or order to be issued, the Commission, in its
discretion, may withhold final action pending the receipt of such
additional information or views.
(d) The order of the Commission disposing of adjudicative hearings
under the Fair Packaging and Labeling Act will be published in the
Federal Register and, if it contains a rule or regulation, will specify
the effective date thereof, which will not be prior to the ninetieth
(90th) day after its publication unless the Commission finds that
emergency conditions exist necessitating an earlier effective date, in
which event the Commission will specify in the order its findings as to
such conditions.
Sec. 3.55 Reconsideration.
Within fourteen (14) days after completion of service of a
Commission decision, any party may file with the Commission a petition
for reconsideration of such decision, setting forth the relief desired
and the grounds in support thereof. Any petition filed under this
subsection must be confined to new questions raised by the decision or
final order and upon which the petitioner had no opportunity to argue
before the Commission. Any party desiring to oppose such a petition
shall file an answer thereto within ten (10) days after service upon him
of the petition. The filing of a petition for reconsideration shall not
operate to stay the effective date of the decision or order or to toll
the running of any statutory time period affecting such decision or
order unless specifically so ordered by the Commission.
[32 FR 8449, June 13, 1967, as amended at 61 FR 50650, Sept. 26, 1996]
Sec. 3.56 Effective date of orders; application for stay.
(a) Other than consent orders, an order to cease and desist under
section 5 of the FTC Act becomes effective upon the sixtieth day after
service, except as provided in section 5(g)(3) of the FTC Act, and
except for divestiture provisions, as provided in section 5(g)(4) of the
FTC Act.
(b) Any party subject to a cease and desist order under section 5 of
the FTC Act, other than a consent order, may apply to the Commission for
a stay of all or part of that order pending judicial review. If, within
30 days after the
[[Page 74]]
application was received by the Commission, the Commission either has
denied or has not acted on the application, a stay may be sought in a
court of appeals where a petition for review of the order is pending.
(c) An application for stay shall state the reasons a stay is
warranted and the facts relied upon, and shall include supporting
affidavits or other sworn statements, and a copy of the relevant
portions of the record. The application shall address the likelihood of
the applicant's success on appeal, whether the applicant will suffer
irreparable harm if a stay is not granted, the degree of injury to other
parties if a stay is granted, and why the stay is in the public
interest.
(d) An application for stay shall be filed within 30 days of service
of the order on the party. Such application shall be served in
accordance with the provisions of Sec. 4.4(b) of this part that are
applicable to service in adjudicative proceedings. Any party opposing
the application may file an answer within 5 business days after receipt
of the application. The applicant may file a reply brief, limited to new
matters raised by the answer, within 3 business days after receipt of
the answer.
[60 FR 37748, July 21, 1995]
Subpart G [Reserved]
Subpart H--Reopening of Proceedings
Sec. 3.71 Authority.
Except while pending in a U.S. court of appeals on a petition for
review (after the transcript of the record has been filed) or in the
U.S. Supreme Court, a proceeding may be reopened by the Commission at
any time in accordance with Sec. 3.72. Any person subject to a
Commission decision containing a rule or order which has become
effective, or an order to cease and desist which has become final may
file a request to reopen the proceeding in accordance with Sec. 2.51.
[44 FR 40637, July 12, 1979]
Sec. 3.72 Reopening.
(a) Before statutory review. At any time prior to the expiration of
the time allowed for filing a petition for review or prior to the filing
of the transcript of the record of a proceeding in a U.S. court of
appeals pursuant to a petition for review, the Commission may upon its
own initiative and without prior notice to the parties reopen the
proceeding and enter a new decision modifying or setting aside the whole
or any part of the findings as to the facts, conclusions, rule, order,
or opinion issued by the Commission in such proceeding.
(b) After decision has become final. (1) Whenever the Commission is
of the opinion that changed conditions of fact or law or the public
interest may require that a Commission decision containing a rule or
order which has become effective, or an order to cease and desist which
has become final by reason of court affirmance or expiration of the
statutory period for court review without a petition for review having
been filed, or a Commission decision containing an order dismissing a
proceeding, should be altered, modified, or set aside in whole or in
part, the Commission will, except as provided in Sec. 2.51, serve upon
each person subject to such decision (in the case of proceedings
instituted under Sec. 3.13, such service may be by publication in the
Federal Register) an order to show cause, stating the changes it
proposes to make in the decision and the reasons they are deemed
necessary. Within thirty (30) days after service of such order to show
cause, any person served may file an answer thereto. Any person not
responding to the order within the time allowed may be deemed to have
consented to the proposed changes.
(2) Whenever an order to show cause is not opposed, or if opposed
but the pleadings do not raise issues of fact to be resolved, the
Commission, in its discretion, may decide the matter on the order to
show cause and answer thereto, if any, or it may serve upon the parties
(in the case of proceedings instituted under Sec. 3.13, such service may
be by publication in Federal Register) a notice of hearing, setting
forth the date when the cause will be heard. In such a case, the hearing
will be limited to the filing of briefs and may include oral argument
when deemed necessary by the Commission. When the pleadings raise
substantial factual issues,
[[Page 75]]
the Commission will direct such hearings as it deems appropriate,
including hearings for the receipt of evidence by it or by an
Administrative Law Judge. Unless otherwise ordered and insofar as
practicable, hearings before an Administrative Law Judge to receive
evidence shall be conducted in accordance with subparts B, C, D, and E
of part 3 of this chapter. Upon conclusion of hearings before an
Administrative Law Judge, the record and the Administrative Law Judge's
recommendations shall be certified to the Commission for final
disposition of the matter.
(3) Termination of existing orders--(i) Generally. Notwithstanding
the foregoing provisions of this rule, and except as provided in
paragraphs (b)(3) (ii) and (iii) of this section, an order issued by the
Commission before August 16, 1995, will be deemed, without further
notice or proceedings, to terminate 20 years from the date on which the
order was first issued, or on January 2, 1996, whichever is later.
(ii) Exception. This paragraph applies to the termination of an
order issued before August 16, 1995, where a complaint alleging a
violation of the order was or is filed (with or without an accompanying
consent decree) in federal court by the United States or the Federal
Trade Commission while the order remains in force, either on or after
August 16, 1995, or within the 20 years preceding that date. If more
than one complaint was or is filed while the order remains in force, the
relevant complaint for purposes of this paragraph will be the latest
filed complaint. An order subject to this paragraph will terminate 20
years from the date on which a court complaint described in this
paragraph was or is filed, except as provided in the following sentence.
If the complaint was or is dismissed, or a federal court rules or has
ruled that the respondent did not violate any provision of the order,
and the dismissal or ruling was or is not appealed, or was or is upheld
on appeal, the order will terminate according to paragraph (b)(3)(i) of
this section as though the complaint was never filed; provided, however,
that the order will not terminate between the date that such complaint
is filed and the later of the deadline for appealing such dismissal or
ruling and the date such dismissal or ruling is upheld on appeal. The
filing of a complaint described in this paragraph will not affect the
duration of any order provision that has expired, or will expire, by its
own terms. The filing of a complaint described in this paragraph also
will not affect the duration of an order's application to any respondent
that is not named in the complaint.
(iii) Stay of Termination. Any party to an order may seek to stay,
in whole or part, the termination of the order as to that party pursuant
to paragraph (b)(3) (i) or (ii) of this section. Petitions for such
stays shall be filed in accordance with the procedures set forth in
Sec. 2.51 of these rules. Such petitions shall be filed on or before the
date on which the order would be terminated pursuant to paragraph (b)(3)
(i) or (ii) of this section. Pending the disposition of such a petition,
the order will be deemed to remain in effect without interruption.
(iv) Orders not terminated. Nothing in Sec. 3.72(b)(3) is intended
to apply to in camera orders or other procedural or interlocutory
rulings by an Administrative Law Judge or the Commission.
[32 FR 8449, June 13, 1967, as amended at 44 FR 40637, July 12, 1979; 45
FR 21623, Apr. 2, 1980; 60 FR 58515, Nov. 28, 1995]
Subpart I--Recovery of Awards Under the Equal Access to Justice Act in
Commission Proceedings
Authority: 5 U.S.C. 504 and 5 U.S.C. 553(b).
Source: 63 FR 36341, July 6, 1998, unless otherwise noted.
Sec. 3.81 General provisions.
(a) Purpose of these rules. The Equal Access to Justice Act, 5
U.S.C. 504 (called ``the Act'' in this subpart), provides for the award
of attorney fees and other expenses to eligible individuals and entities
who are parties to adversary adjudicative proceedings under part 3 of
this title. The rules in this subpart describe the parties eligible for
awards, how to apply for awards, and the procedures and standards that
the Commission will use to make them.
[[Page 76]]
(1) When an eligible party will receive an award. An eligible party
will receive an award when:
(i) It prevails in the adjudicative proceeding, unless the
Commission's position in the proceeding was substantially justified or
special circumstances make an award unjust. Whether or not the position
of the agency was substantially justified will be determined on the
basis of the administrative record as a whole that is made in the
adversary proceeding for which fees and other expenses are sought; or
(ii) The agency's demand is substantially in excess of the decision
of the adjudicative officer, and is unreasonable when compared with that
decision, under all the facts and circumstances of the case. Demand
means the express final demand made by the agency prior to initiation of
the adversary adjudication, but does not include a recitation by the
agency of the statutory penalty in the administrative complaint or
elsewhere when accompanied by an express demand for a lesser amount.
(b) When the Act applies. (1) Section 504(a)(1) of the Act applies
to any adversarial adjudicative proceeding pending before the Commission
at any time after October 1, 1981. This includes proceedings begun
before October 1, 1981, if final Commission action has not been taken
before that date.
(2) Section 504(a)(4) applies to any adversarial adjudicative
proceeding pending before the Commission at any time on or after March
29, 1996.
(c) Proceedings covered. (1) The Act applies to all adjudicative
proceedings under part 3 of the rules of practice as defined in
Sec. 3.2, except hearings relating to the promulgation, amendment, or
repeal of rules under the Fair Packaging and Labeling Act.
(2) [Reserved]
(d) Eligibility of applicants. (1) To be eligible for an award of
attorney fees and other expenses under the Act, the applicant must be a
party to the adjudicative proceeding in which it seeks an award. The
term party is defined in 5 U.S.C. 551(3). The applicant must show that
it meets all conditions of eligibility set out in this subpart.
(2) The types of eligible applicants are as follows:
(i) An individual with a net worth of not more than $2 million;
(ii) the sole owner of an unincorporated business who has a net
worth of not more than $7 million, including both personal and business
interests, and not more than 500 employees;
(iii) A charitable or other tax-exempt organization described in
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3))
with not more than 500 employees;
(iv) A cooperative association as defined in section 15(a) of the
Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500
employees;
(v) Any other partnership, corporation, association, unit of local
government, or organization with a net worth of not more than $7 million
and not more than 500 employees; and
(vi) For purposes of receiving an award for fees and expenses for
defending against an excessive Commission demand, any small entity, as
that term is defined under 5 U.S.C. 601.
(3) Eligibility of a party shall be determined as of the date the
proceeding was initiated.
(4) An applicant who owns an unincorporated business will be
considered as an ``individual'' rather than a ``sole owner of an
unincorporated business'' if the issues on which the applicant prevails
are related primarily to personal interests rather than to business
interests.
(5) The employees of an applicant include all persons who regularly
perform services for remuneration for the applicant, under the
applicant's direction and control. Part-time employees shall be included
on a proportional basis.
(6) The net worth and number of employees of the applicant and all
of its affiliates shall be aggregated to determine eligibility. Any
individual, corporation or other entity that directly or indirectly
controls or owns a majority of the voting shares or other interest of
the applicant, or any corporation or other entity of which the applicant
directly or indirectly owns or controls a majority of the voting shares
or other interest, will be considered an affiliate for purposes of this
part, unless the Administrative Law Judge determines that such treatment
would be
[[Page 77]]
unjust and contrary to the purposes of the Act in light of the actual
relationship between the affiliated entities. In addition, the
Administrative Law Judge may determine that financial relationships of
the applicant other than those described in this paragraph constitute
special circumstances that would make an award unjust.
(7) An applicant that participates in a proceeding primarily on
behalf of one or more other persons or entities that would be ineligible
is not itself eligible for an award.
(e) Standards for awards--(1) For a prevailing party:
(i) A prevailing applicant will receive an award for fees and
expenses incurred after initiation of the adversary adjudication in
connection with the entire adversary adjudication, or on a substantive
portion of the adversary adjudication that is sufficiently significant
and discrete to merit treatment as a separate unit unless the position
of the agency was substantially justified. The burden of proof that an
award should not be made to an eligible prevailing applicant is on
complaint counsel, which may avoid an award by showing that its position
had a reasonable basis in law and fact.
(ii) An award to prevailing party will be reduced or denied if the
applicant has unduly or unreasonably protracted the proceeding or if
special circumstances make an award unjust.
(2) For a party defending against an excessive demand:
(i) An eligible applicant will receive an award for fees and
expenses incurred after initiation of the adversary adjudication related
to defending against the excessive portion of a Commission demand that
is substantially in excess of the decision of the adjudicative officer
and is unreasonable when compared with that decision under all the facts
and circumstances of the case.
(ii) An award will be denied if the applicant has committed a
willful violation of law or otherwise acted in bad faith or if special
circumstances make an award unjust.
(f) Allowable fees and expenses. (1) Awards will be based on rates
customarily charged by persons engaged in the business of acting as
attorneys, agents and expert witnesses, even if the services were made
available without charge or at a reduced rate to the applicant.
(2) No award for the fee of an attorney or agent under these rules
may exceed the hourly rate specified in 5 U.S.C. 504(b)(1)(A). No award
to compensate an expert witness may exceed the highest rate at which the
Commission paid expert witnesses for similar services at the time the
fees were incurred. The appropriate rate may be obtained from the Office
of the Executive Director. However, an award may also include the
reasonable expenses of the attorney, agent, or witness as a separate
item, if the attorney, agent or witness ordinarily charges clients
separately for such expenses.
(3) In determining the reasonableness of the fee sought for an
attorney, agent or expert witness, the Administrative Law Judge shall
consider the following:
(i) If the attorney, agent or witness is in private practice, his or
her customary fee for similar services, or, if an employee of the
applicant, the fully allocated cost of the services;
(ii) The prevailing rate for similar services in the community in
which the attorney, agent or witness ordinarily performs services;
(iii) The time actually spent in the representation of the
applicant;
(iv) The time reasonably spent in light of the difficulty or
complexity of the issues in the proceeding; and
(v) Such other factors as may bear on the value of the services
provided.
(4) The reasonable cost of any study, analysis, engineering report,
test, project or similar matter prepared on behalf of a party may be
awarded, to the extent that the charge for the service does not exceed
the prevailing rate for similar services, and the study or other matter
was necessary for preparation of the applicant's case.
(5) Any award of fees or expenses under the Act is limited to fees
and expenses incurred after initiation of the adversary adjudication
and, with respect to excessive demands, the fees and expenses incurred
in defending against the excessive portion of the demand.
[[Page 78]]
(g) Rulemaking on maximum rates for attorney fees. If warranted by
an increase in the cost of living or by special circumstances (such as
limited availability of attorneys qualified to handle certain types of
proceedings), the Commission may, upon its own initiative or on petition
of any interested person or group, adopt regulations providing that
attorney fees may be awarded at a rate higher than the rate specified in
5 U.S.C. 504(b)(1)(A) per hour in some or all the types of proceedings
covered by this part. Rulemaking under this provision will be in
accordance with Rules of Practice part 1, subpart C of this chapter.
Sec. 3.82 Information required from applicants.
(a) Contents of application. An application for an award of fees and
expenses under the Act shall contain the following:
(1) Identify of the applicant and the proceeding for which the award
is sought;
(2) A showing that the applicant has prevailed; or, if the applicant
has not prevailed, a showing that the Commission's demand was the final
demand before initiation of the adversary adjudication and that it was
substantially in excess of the decision of the adjudicative officer and
was unreasonable when compared with that decision;
(3) Identification of the Commission position(s) that applicant
alleges was (were) not substantially justified; or, identification of
the Commission's demand that is alleged to be excessive and unreasonable
and an explanation as to why the demand was excessive and unreasonable;
(4) A brief description of the type and purpose of the organization
or business (unless the applicant is an individual);
(5) A statement of how the applicant meets the criteria of
Sec. 3.81(d);
(6) The amount of fees and expenses incurred after the initiation of
the adjudicative proceeding or, in the case of a claim for defending
against an excessive demand, the amount of fees and expenses incurred
after the initiation of the adjudicative proceeding attributable to the
excessive portion of the demand;
(7) Any other matters the applicant wishes the Commission to
consider in determining whether and in what amount an award should be
made; and
(8) A written verification under oath or under penalty or perjury
that the information provided is true and correct accompanied by the
signature of the applicant or an authorized officer or attorney.
(b) Net worth exhibit. (1) Each applicant except a qualified tax-
exempt organization or cooperative association must provide with its
application a detailed exhibit showing the net worth of the application
and any affiliates (as defined in Sec. 3.81(d)(6)) when the proceeding
was initiated. The exhibit may be in any form convenient to the
applicant that provides full disclosure of the applicant's and its
affiliates' assets and liabilities and is sufficient to determine
whether the applicant qualifies under the standards in this part. The
Administrative Law Judge may require an applicant to file additional
information to determine its eligibility for an award.
(2) Ordinarily, the net worth exhibit will be included in the public
record of the proceeding. However, if an applicant objects to public
disclosure of information in any portion of the exhibit and believes
there are legal grounds for withholding it from disclosure, the
applicant may submit that portion of the exhibit directly to the
Administrative Law Judge in a sealed envelope labeled ``Confidential
Financial Information,'' accompanied by a motion to withhold the
information from public disclosure. The motion shall describe the
information sought to be withheld and explain, in detail, why it falls
within one or more of the specific exemptions from mandatory disclosure
under the Freedom of Information Act, 5 U.S.C. 552(b) (1) through (9),
why public disclosure of the information would adversely affect the
applicant, and why disclosure is not required in the public interest.
The material in question shall be served on complaint counsel but need
not be served on any other party to the proceeding. If the
Administrative Law Judge finds that the information should not be
withheld from disclosure, it shall be placed in the public record
[[Page 79]]
of the proceeding. Otherwise, any request to inspect or copy the exhibit
shall be disposed of in accordance with Sec. 4.11.
(c) Documentation of fees and expenses. The application shall be
accompanied by full documentation of the fees and expenses incurred
after initiation of the adversary adjudication, including the cost of
any study, analysis, engineering report, test, project or similar
matter, for which an award is sought. With respect to a claim for fees
and expenses involving an excessive demand, the application shall be
accompanied by full documentation of the fees and expenses incurred
after initiation of the adversary adjudication, including the cost of
any study, analysis, engineering report, test, project or similar
matter, for which an award is sought attributable to the portion of the
demand alleged to be excessive and unreasonable. A separate itemized
statement shall be submitted for each professional firm or individual
whose services are covered by the application, showing the hours spent
in connection with the proceeding by each individual, a description of
the specific services performed, the rate at which each fee has been
computed, any expenses for which reimbursement is sought, the total
amount claimed, and the total amount paid or payable by the applicant or
by any other person or entity for the services provided. The
Administrative Law Judge may require the applicant to provide vouchers,
receipts, or other substantiation for any expenses claimed.
(d) When an application may be filed--(1) For a prevailing party:
(i) An application may be filed not later than 30 days after the
Commission has issued an order or otherwise taken action that results in
final disposition of the proceeding.
(ii) If review or reconsideration is sought or taken of a decision
as to which an applicant believes it has prevailed, proceedings for the
award of fees shall be stayed pending final disposition of the
underlying controversy.
(2) For a party defending against an excessive demand:
(i) An application may be filed not later than 30 days after the
Commission has issued an order or otherwise taken action that results in
final disposition of the proceeding.
(ii) If review or reconsideration is sought or taken of a decision
as to which an applicant believes the agency's demand was excessive and
unreasonable, proceedings for the award of fees and expenses shall be
stayed pending final disposition of the underlying controversy.
(3) For purposes of this subpart, final disposition means the later
of--
(i) The date that the initial decision of the Administrative Law
Judge becomes the decision of the Commission pursuant to Sec. 3.51(a);
(ii) The date that the Commission issues an order disposing of any
petitions for reconsideration of the Commission's final order in the
proceeding; or
(iii) The date that the Commission issues a final order or any other
final resolution of a proceeding, such as a consent agreement,
settlement or voluntary dismissal, which is not subject to a petition
for reconsideration.
Sec. 3.83 Procedures for considering applicants.
(a) Filing and service of documents. Any application for an award or
other pleading or document related to an application shall be filed and
served on all parties as specified in Secs. 4.2 and 4.4(b) of this
chapter, except as provided in Sec. 3.82(b)(2) for confidential
financial information. The date the Office of the Secretary of the
Commission receives the application is deemed the date of filing.
(b) Answer to application. (1) Within 30 days after service of an
application, complaint counsel may file an answer to the application.
Unless complaint counsel requests an extension of time for filing or
files a statement of intent to negotiate under paragraph (b)(2) of this
section, failure to file an answer within the 30-day period may be
treated as a consent to the award requested.
(2) If complaint counsel and the applicant believe that the issues
in the fee application can be settled, they may jointly file a statement
of their intent to negotiate a settlement. The filing of this statement
shall extend the time for filing an answer for an additional 30 days,
and further extensions
[[Page 80]]
may be granted by the Administrative Law Judge upon request by complaint
counsel and the applicant.
(3) The answer shall explain in detail any objections to the award
requested and identify the facts relied on in support of complaint
counsel's position. If the answer is based on any alleged facts not
already in the record of the proceeding, complaint counsel shall include
with the answer either supporting affidavits or a request for further
proceedings under paragraph (f) of this section.
(c) Reply. Within 15 days after service of an answer, the applicant
may file a reply. If the reply is based on any alleged facts not already
in the record of the proceeding, the applicant shall include with the
reply either supporting affidavits or a request for further proceedings
under paragraph (f) of this section.
(d) Comments by other parties. Any party to a proceeding other than
the applicant and complaint counsel may file comments on an application
within 30 days after it is served or on an answer within 15 days after
it is served. A commenting party may not participate further in
proceedings on the application unless the Administrative Law Judge
determines that the public interest requires such participation in order
to permit full exploration of matters in the comments.
(e) Settlement. The applicant and complaint counsel may agree on a
proposed settlement of the award before final action on the application.
A proposed award settlement entered into in connection with a consent
agreement covering the underlying proceeding will be considered in
accordance with Sec. 3.25. The Commission may request findings of fact
or recommendations on the award settlement from the Administrative Law
Judge. A proposed award settlement entered into after the underlying
proceeding has been concluded will be considered and may be approved or
disapproved by the Administrative Law Judge subject to Commission review
under paragraph (h) of this section. If an applicant and complaint
counsel agree on a proposed settlement of an award before an application
has been filed, the application shall be filed with the proposed
settlement.
(f) Further proceedings. (1) Ordinarily, the determination of an
award will be made on the basis of the written record. However, on
request of either the applicant or complaint counsel, or on his or her
own initiative, the Administrative Law Judge may order further
proceedings, such as an informal conference, oral argument, additional
written submissions or an evidentiary hearing. Such further proceedings
shall be held only when necessary for full and fair resolution of the
issues arising from the application, and shall be conducted as promptly
as possible.
(2) A request that the Administrative Law Judge order further
proceedings under this section shall specifically identify the
information sought or the disputed issues and shall explain why the
additional proceedings are necessary to resolve the issues.
(g) Decision. The Administrative Law Judge shall issue an initial
decision on the application within 30 days after closing proceedings on
the application.
(1) For a decision involving a prevailing party: The decision shall
include written findings and conclusions on the applicant's eligibility
and status as a prevailing party, and an explanation of the reasons for
any difference between the amount requested and the amount awarded. The
decision shall also include, if at issue, findings on whether the
agency's position was substantially justified, whether the applicant
unduly protracted the proceedings, or whether special circumstances make
an award unjust.
(2) For a decision involving an excessive agency demand: The
decision shall include written findings and conclusions on the
applicant's eligibility and an explanation of the reasons why the
agency's demand was or was not determined to be substantially in excess
of the decision of the adjudicative officer and was or was not
unreasonable when compared with that decision. That decision shall be
based upon all the facts and circumstances of the case. The decision
shall also include, if at issue, findings on whether the applicant has
committed a willful violation of law or otherwise acted in bad faith, or
whether special circumstances make an award unjust.
[[Page 81]]
(h) Agency review. Either the applicant or complaint counsel may
seek review of the initial decision on the fee application by filing a
notice of appeal under Sec. 3.52(a), or the Commission may decide to
review the decision on its own initiative, in accordance with Sec. 3.53.
If neither the applicant nor complaint counsel seeks review and the
Commission does not take review on its own initiative, the initial
decision on the application shall become a final decision of the
Commission 30 days after it is issued. Whether to review a decision is a
matter within the discretion of the Commission. If review is taken, the
Commission will issue a final decision on the application or remand the
application to the Administrative Law Judge for further proceedings.
(i) Judicial review. Judicial review of final Commission decisions
on awards may be sought as provided in 5 U.S.C. 503(c)(2).
(j) Payment of award. An applicant seeking payment of an award shall
submit to the Secretary of the Commission a copy of the Commission's
final decision granting the award, accompanied by a statement that the
applicant will not seek review of the decision in the United States
courts. The agency will pay the amount awarded to the applicant within
60 days, unless judicial review of the award or of the underlying
decision of the adjudicative proceeding has been sought by the applicant
or any party to the proceeding.
PART 4--MISCELLANEOUS RULES--Table of Contents
Sec.
4.1 Appearances.
4.2 Requirements as to form, and filing of documents other than
correspondence.
4.3 Time.
4.4 Service.
4.5 Fees.
4.6 Cooperation with other agencies.
4.7 Ex parte communications.
4.8 Costs for obtaining Commission records.
4.9 The public record.
4.10 Nonpublic material.
4.11 Disclosure requests.
4.12 Disposition of documents submitted to the Commission.
4.13 Privacy Act rules.
4.14 Conduct of business.
4.15 Commission meetings.
4.16 Privilege against self-incrimination.
4.17 Disqualification of Commissioners.
Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46.
Sec. 4.1 Appearances.
(a) Qualifications--(1) Attorneys. (i) U.S.-admitted. Members of the
bar of a Federal court or of the highest court of any State or Territory
of the United States are eligible to practice before the Commission.
(ii) European Community (EC)-qualified. Persons who are qualified to
practice law in a Member State of the European Community and authorized
to practice before The Commission of the European Communities in
accordance with Regulation No. 99/63/EEC are eligible to practice before
the Commission.
(iii) Any attorney desiring to appear before the Commission or an
Administrative Law Judge may be required to show to the satisfaction of
the Commission or the Administrative Law Judge his or her acceptability
to act in that capacity.
(2) Others. (i) Any individual or member of a partnership involved
in any proceeding or investigation may appear on behalf or himself or of
such partnership upon adequate identification. A corporation or
association may be represented by a bona fide officer thereof upon a
showing of adequate authorization.
(ii) At the request of counsel representing any party in an
adjudicative proceeding, the Administrative Law Judge may permit an
expert witness to conduct all or a portion of the cross-examination of
such witness.
(b) Restrictions as to former members and employees--(1) General
Prohibition. Except as provided in this section, or otherwise
specifically authorized by the Commission, no former member or employee
(``former employee'' or ``employee'') of the Commission may communicate
to or appear before the Commission, as attorney or counsel, or otherwise
assist or advise behind-the-scenes, regarding a formal or informal
proceeding or investigation \1\ (except
[[Page 82]]
that a former employee who is disqualified solely under paragraph
(b)(1)(iv) of this section, is not prohibited from assisting or advising
behind-the-scenes) if:
---------------------------------------------------------------------------
\1\ It is important to note that a new ``proceeding or
investigation'' may be considered the same matter as a seemingly
separate ``proceeding or investigation'' that was pending during the
former employee's tenure. This is because a ``proceeding or
investigation'' may continue in another form or in part. In determining
whether two matters are actually the same, the Commission will consider:
the extent to which the matters involve the same or related facts,
issues, confidential information and parties; the time elapsed; and the
continuing existence of an important Federal interest. See 5 CFR
2637.201(c)(4). For example, where a former employee intends to
participate in an investigation of compliance with a Commission order,
submission of a request to reopen an order, or a proceeding with respect
to reopening an order, the matter will be considered the same as the
adjudicative proceeding or investigation that resulted in the order. A
former employee who is uncertain whether the matter in which he seeks
clearance to participate is wholly separate from any matter that was
pending during his tenure should seek advice from the General Counsel or
the General Counsel's designee before participating.
---------------------------------------------------------------------------
(i) The former employee participated personally and substantially on
behalf of the Commission in the same proceeding or investigation in
which the employee now intends to participate;
(ii) The participation would begin within two years after the
termination of the former employee's service and, within a period of one
year prior to the employee's termination, the proceeding or
investigation was pending under the employee's official responsibility;
(iii) Nonpublic documents or information pertaining to the
proceeding or investigation in question, and of the kind delineated in
Sec. 4.10(a), came to, or would be likely to have come to, the former
employee's attention in the course of the employee's duties, and the
employee left the Commission within the previous three years (unless
Commission staff determines that the nature of the documents or
information is such that no present advantage could thereby be derived);
or
(iv) The former employee's participation would begin within one year
after the employee's termination and, at the time of termination, the
employee was a member of the Commission or a ``senior employee'' as
defined in 18 U.S.C. 207(c).
Note: Former Commissioners and certain former ``senior'' employees
who were appointed to those positions on or after January 20, 1993 may
be subject to a five year ban on participation in Commission matters
pursuant to Executive Order 12834 (58 FR 5911-5916, January 22, 1993), 3
CFR 1993 Comp., p. 580).
(2) Clearance Request Required. Any former employee, before
participating in a Commission proceeding or investigation (see footnote
1), whether through an appearance before a Commission official or
behind-the-scenes assistance, shall file with the Secretary a request
for clearance to participate, containing the information listed in
Sec. 4.1(b)(4) if:
(i) The proceeding or investigation was pending in the Commission
while the former employee served;
(ii) A proceeding or investigation from which such proceeding or
investigation directly resulted was pending during the former employee's
service; or
(iii) Nonpublic documents or information pertaining to the
proceeding or investigation in question, and of the kind delineated in
Sec. 4.10(a), came to or would likely have come to the former employee's
attention in the course of the employee's duties, and the employee left
the Commission within the previous three years.
Note: This requirement applies even to a proceeding or investigation
that had not yet been initiated formally when the former employee
terminated employment, if the employee had learned nonpublic information
relating to the subsequently initiated proceeding or investigation.
(3) Exceptions. (i) Paragraphs (b) (1) and (2) of this section do
not apply to:
(A) Making a pro se filing of any kind;
(B) Submitting a request or appeal under the Freedom of Information
Act, the Privacy Act, or the Government in the Sunshine Act;
(C) Testifying under oath (except that a former employee who is
subject to the restrictions contained in paragraph (b)(1)(i) of this
section with respect to a particular matter may not, except pursuant to
court order, serve as an expert witness for any person other than the
United States in that same matter);
[[Page 83]]
(D) Submitting a statement required to be made under penalty of
perjury; or
(E) Appearing on behalf of the United States.
(ii) With the exception of subparagraph (b)(1)(iv), paragraphs (b)
(1) and (2) of this section do not apply to participating in a
Commission rulemaking proceeding, including submitting comments on a
matter on which the Commission has invited public comment.
(iii) Paragraph (b)(1)(iv) of this section does not apply to
submitting a statement based on the former employee's own special
knowledge in the particular area that is the subject of the statement,
provided that no compensation is thereby received, other than that
regularly provided by law or by Sec. 4.5 for witnesses.
(iv) Paragraph (b)(2) of this section does not apply to filing a
premerger notification form or participating in subsequent events
concerning compliance or noncompliance with Section 7A of the Clayton
Act, 15 U.S.C. 18a, or any regulation issued under that section.
(4) Request Contents. Clearance requests filed pursuant to
Sec. 4.1(b)(2) shall contain:
(i) The name and matter number (if known) of the proceeding or
investigation in question;
(ii) A description of the contemplated participation;
(iii) The name of the Commission office(s) or division(s) in which
the former employee was employed and the position(s) the employee
occupied;
(iv) A statement whether, while employed by the Commission, the
former employee participated in any proceeding or investigation
concerning the same company, individual, or industry currently involved
in the matter in question;
(v) A certification that while employed by the Commission, the
employee never participated personally and substantially in the same
matter or proceeding;
(vi) If the employee's Commission employment terminated within the
past two years, a certification that the matter was not pending under
the employee's official responsibility during any part of the one year
before the employee's termination;
(vii) If the employee's Commission employment terminated within the
past three years, either a declaration that nonpublic documents or
information pertaining to the proceeding or investigation in question,
and of the kind delineated in Sec. 4.10(a), never came to the employee's
attention, or a description of why the employee believes that such
nonpublic documents or information could not confer a present advantage
to the employee or to the employee's client in the proceeding or
investigation in question; and
(viii) A certification that the employee has read, and understands,
both the criminal conflict of interest law on post-employment activities
(18 U.S.C. 207) and this Rule in their entirety.
(5) Definitions. The following definitions apply for purposes of
this section:
(i) Behind-the-scenes participation includes any form of
professional consultation, assistance, or advice to anyone about the
proceeding or investigation in question, whether formal or informal,
oral or written, direct or indirect.
(ii) Communicate to or appear before means making any oral or
written communication to, or any formal or informal appearance before,
the Commission or any of its members or employees on behalf of any
person (except the United States) with the intent to influence.
(iii) Directly resulted from means that the proceeding or
investigation in question emanated from an earlier phase of the same
proceeding or investigation or from a directly linked, antecedent
investigation. The existence of some attenuated connection between a
proceeding or investigation that was pending during the requester's
tenure and the proceeding or investigation in question does not
constitute a direct result.
(iv) Pending under the employee's official responsibility means that
the former employee had the direct administrative or operating authority
to approve, disapprove, or otherwise direct official actions in the
proceeding or investigation, irrespective of whether the employee's
authority was intermediate or final, and whether it was exercisable
alone or only in conjunction with others.
[[Page 84]]
(v) Personal and substantial participation. A former employee
participated in the proceeding or investigation personally if the
employee either participated directly or directed a subordinate in doing
so. The employee participated substantially if the involvement was
significant to the matter or reasonably appeared to be significant. A
series of peripheral involvements may be considered insubstantial, while
a single act of approving or participating in a critical step may be
considered substantial.
(vi) Present advantage. Whether exposure to nonpublic information
about the proceeding or investigation could confer a present advantage
to a former employee will be analyzed and determined on a case-by-case
basis. Relevant factors include, inter alia, the nature and age of the
information, its relation and current importance to the proceeding or
investigation in question, and the amount of time that has passed since
the employee left the Commission.
(vii) Proceeding or investigation shall be interpreted broadly and
includes an adjudicative or other proceeding; the consideration of an
application; a request for a ruling or other determination; a contract;
a claim; a controversy; an investigation; or an interpretive ruling.
Proceeding or investigation does not include a rulemaking proceeding.
(6) Advice as to Whether Clearance Request is Required. A former
employee may ask the General Counsel, either orally or in writing,
whether the employee is required to file a request for clearance to
participate in a Commission matter pursuant to paragraph (b)(2) of this
section. The General Counsel, or the General Counsel's designee, will
make any such determination within three business days.
(7) Deadline for Determining Clearance Requests. By the close of the
tenth business day after the date on which the clearance request is
filed, the General Counsel, or the General Counsel's designee, will
notify the requester either that:
(i) the request for clearance has been granted;
(ii) the General Counsel or the General Counsel's designee has
decided to recommend that the Commission prohibit the requester's
participation; or
(iii) the General Counsel or the General Counsel's designee is, for
good cause, extending the period for reaching a determination on the
request by up to an additional ten business days.
(8) Participation of Partners or Associates of Former Employees. (i)
If a former employee is prohibited from participating in a proceeding or
investigation by virtue of having worked on the matter personally and
substantially while a Commission employee, no partner or legal or
business associate of that individual may participate except after
filing with the Secretary of the Commission an affidavit attesting that:
(A) The former employee will not participate in the proceeding or
investigation in any way, directly or indirectly (and describing how the
former employee will be screened from participating);
(B) The former employee will not share in any fees resulting from
the participation;
(C) Everyone who intends to participate is aware of the requirement
that the former employee be screened;
(D) The client(s) have been informed; and
(E) The matter was not brought to the participant(s) through the
active solicitation of the former employee.
(ii) If the Commission finds that the screening measures being taken
are unsatisfactory or that the matter was brought to the participant(s)
through the active solicitation of the former employee, the Commission
will notify the participant(s) to cease the representation immediately.
(9) Effect on Other Standards. The restrictions and procedures in
this section are intended to apply in lieu of restrictions and
procedures that may be adopted by any state or jurisdiction, insofar as
such restrictions and procedures apply to appearances or participation
in Commission proceedings or investigations. Nothing in this section
supersedes other standards of conduct applicable under paragraph (e) of
this section. Requests for advice about this section, or about any
matter related to other applicable rules and standards of ethical
conduct, shall be directed to the Office of the General Counsel.
[[Page 85]]
(c) Public Disclosure. Any request for clearance filed by a former
member or employee pursuant to this section, as well as any written
response, are part of the public records of the Commission, except for
information exempt from disclosure under Sec. 4.10(a) of this chapter.
Information identifying the subject of a nonpublic Commission
investigation will be redacted from any request for clearance or other
document before it is placed on the public record.
(d) Notice of appearance. Any attorney desiring to appear before the
Commission or an Administrative Law Judge on behalf of a person or party
shall file with the Secretary of the Commission a written notice of
appearance, stating the basis for eligibility under this section and
including the attorney's jurisdiction of admission/qualification,
attorney identification number, if applicable, and a statement by the
appearing attorney attesting to his/her good standing within the legal
profession. No other application shall be required for admission to
practice, and no register of attorneys will be maintained.
(e) Standards of conduct; disbarment. (1) All attorneys practicing
before the Commission shall conform to the standards of ethical conduct
required by the bars of which the attorneys are members.
(2) If for good cause shown, the Commission shall be of the opinion
that any attorney is not conforming to such standards, or that he has
been otherwise guilty of conduct warranting disciplinary action, the
Commission may issue an order requiring such attorney to show cause why
he should not be suspended or disbarred from practice before the
Commission. The alleged offender shall be granted due opportunity to be
heard in his own defense and may be represented by counsel. Thereafter,
if warranted by the facts, the Commission may issue against the attorney
an order of reprimand, suspension, or disbarment.
[32 FR 8456, June 13, 1967, as amended at 40 FR 15235, Apr. 4, 1975; 41
FR 16453, Apr. 19, 1976; 46 FR 26295, May 12, 1981; 48 FR 44767, Sept.
30, 1983; 50 FR 50781, Dec. 12, 1985; 50 FR 53306, Dec. 31, 1985; 56 FR
44139, Sept. 27, 1991; 58 FR 40737, July 30, 1993; 63 FR 15758, Apr. 1,
1998]
Sec. 4.2 Requirements as to form, and filing of documents other than correspondence.
(a) Filing. (1) Except as otherwise provided, all documents
submitted to the Commission, including those addressed to the
Administrative Law Judge, shall be filed with the Secretary of the
Commission; Provided, however, That in any instance informal
applications or requests may be submitted directly to the official in
charge of any office of the Commission or to the appropriate Director,
Deputy Director, Associate Director in the Bureau of Consumer
Protection, or Assistant Director in the Bureau of Competition or to the
Administrative Law Judge. Copies of all documents filed with the
Secretary of the Commission by parties in adjudicative proceedings
shall, at or before the time of filing, be served by the party filing
the documents or person acting for that party on all other parties
pursuant to Sec. 4.4.
(2) Documents submitted to the Commission in response to a Civil
Investigative Demand under section 20 of the FTC Act shall be filed with
the custodian or deputy custodian named in the demand.
(b) Title. Documents shall clearly show the file or docket number
and title of the action in connection with which they are filed.
(c) Copies. An original and twenty (20) copies of all documents
before the Commission and motions for an Administrative Law Judge's
certification of an interlocutory appeal pursuant to Sec. 3.23(b) shall
be filed; an original and ten (10) copies of all other documents before
the Administrative Law Judge shall be filed; and an original and one (1)
copy of compliance reports shall be filed. Only one (1) copy of
admissions and answers thereto must be filed with the Secretary, the
originals to be served on the opposing party as specified by Sec. 3.32.
With respect to motions under Sec. 3.22, the moving party shall provide
a copy of its motion to the Administrative Law Judge at the time the
motion is filed with the Secretary.
(d) Form. (1) Documents filed with the Secretary of the Commission,
other than briefs in support of appeals from
[[Page 86]]
initial decisions, shall be printed, typewritten, or otherwise processed
in permanent form and on good unglazed paper. A motion or other paper
filed in an adjudicative proceeding shall contain a caption setting
forth the title of the case, the docket number, and a brief descriptive
title indicating the purpose of the paper.
(2) Briefs filed on an appeal from an initial decision shall be in
the form prescribed by Sec. 3.52(e).
(3) If printed, documents shall be on good unglazed paper seven (7)
inches by ten (10) inches. The type shall not be less than ten (10)
point adequately leaded. Citations and quotations shall not be less than
ten (10) point single leaded, and footnotes shall not be less than eight
(8) point single leaded. The printed line shall not exceed four and
three-quarter (4\3/4\) inches in length.
(4) If typewritten, documents shall be on paper not less than eight
(8) inches nor more than eight and one-half (8\1/2\) inches by not less
than ten and one-half (10\1/2\) inches nor more than eleven (11) inches.
(5) All documents must be bound on the left side. Except for printed
documents, the left margin of each page must be at least one and one-
half (1\1/2\) inches and the right margin at least one (1) inch.
(e) Signature. (1) The original of each document 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. In addition, motions filed
pursuant to Sec. 3.22 shall include the name, address, and telephone
number of counsel.
(2) Signing a document constitutes a representation by the signer
that he has read it, that to the best of his knowledge, information, and
belief, the statements made in it are true, and that it is not
interposed for delay. If a document 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 document had
not been filed.
[32 FR 8456, June 13, 1967, as amended at 40 FR 59725, Dec. 30, 1975; 42
FR 30150, June 13, 1977; 45 FR 36344, May 29, 1980; 47 FR 7826, Feb. 23,
1982; 48 FR 41376, Sept. 15, 1983; 50 FR 28097, July 10, 1985; 61 FR
50650, Sept. 26, 1996]
Sec. 4.3 Time.
(a) Computation. Computation of any period of time prescribed or
allowed by the rules in this chapter, by order of the Commission or an
Administrative Law Judge, or by any applicable statute, shall begin with
the first business day following that on which the act, event, or
development initiating such period of time shall have occurred. When the
last day of the period so computed is a Saturday, Sunday, or national
holiday, or other day on which the office of the Commission is closed,
the period shall run until the end of the next following business day.
When such period of time, with the intervening Saturdays, Sundays, and
national holidays counted, is seven (7) days or less, each of the
Saturdays, Sundays, and such holidays shall be excluded from the
computation. When such period of time, with the intervening Saturdays,
Sundays, and national holidays counted, exceeds seven (7) days, each of
the Saturdays, Sundays, and such holidays shall be included in the
computation.
(b) Extensions. For good cause shown, the Administrative Law Judge
may, in any proceeding before him, extend any time limit prescribed or
allowed by the rules in this chapter or by order of the Commission or
the Administrative Law Judge, except those governing the filing of
interlocutory appeals and initial decisions and those expressly
requiring Commission action. 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 may
properly rule shall be made to him. Notwithstanding the above, where a
[[Page 87]]
motion to extend is made after the expiration of the specified period,
the Administrative Law Judge or the Commission may consider the motion
where the untimely filing was the result of excusable neglect.
(c) Additional time after service by mail. Whenever a party in an
adjudicative proceeding under part 3 of the rules is required or
permitted to do an act within a prescribed period after service of a
paper upon it and the paper is served by first-class mail pursuant to
Sec. 4.4(a)(3) or Sec. 4.4(b), 3 days shall be added to the prescribed
period.
[32 FR 8456, June 13, 1967, as amended at 42 FR 30150, June 13, 1977; 50
FR 28097, July 10, 1985; 50 FR 53306, Dec. 31, 1985]
Sec. 4.4 Service.
(a) By the Commission. (1) Service of complaints, initial decisions,
final orders and other processes of the Commission under 15 U.S.C. 45
may be effected as follows:
(i) By registered or certified mail. A copy of the document shall be
addressed to the person, partnership, corporation or unincorporated
association to be served at his, her or its residence or principal
office or place of business, registered or certified, and mailed;
service under this provision is complete upon delivery of the document
by the Post Office; or
(ii) By delivery to an individual. A copy therof may be delivered to
the person to be served, or to a member of the partnership to be served,
or to the president, secretary, or other executive officer or a director
of the corporation or unincorporated association to be served; service
under this provision is complete upon delivery as specified herein; or
(iii) By delivery to an address. A copy thereof may be left at the
principal office or place of business of the person, partnership,
corporation, or unincorporated association, or it may be left at the
residence of the person or of a member of the partnership or of an
executive officer or director of the corporation, or unincorporated
association to be served; service under this provision is complete upon
delivery as specified herein.
(2) All other orders and notices, including subpoenas, orders
requiring access, orders to file annual and special reports, and notices
of default, may be served by any method reasonably certain to inform the
affected person, partnership, corporation or unincorporated association,
including any method specified in paragraph (a)(1), except that civil
investigative demands may only be served in the manner provided by
section 20(c)(7) of the FTC Act (in the case of service on a
partnership, corporation, association, or other legal entity) or section
20(c)(8) of the FTC Act (in the case of a natural person). Service under
this provision is complete upon delivery by the Post Office or upon
personal delivery.
(3) All documents served in adjudicative proceedings under part 3 of
the Commission's Rules of Practice other than complaints and initial,
interlocutory, and final decisions and orders may be served by personal
delivery or by first-class mail and shall be deemed served on the day of
personal delivery or the day of mailing.
(4) When a party has appeared in a proceeding by an attorney,
service on that individual of any document pertaining to the proceeding
other than a complaint shall be deemed service upon the party. However,
service of those documents specified in paragraph (a)(1) of this section
shall first be attempted in accordance with the provision of paragraphs
(a)(1) (i), (ii), and (iii) of this section.
(b) By other parties. Service of documents by parties other than the
Commission shall be by delivering copies thereof as follows: Upon the
Commission, by personal delivery or delivery by first-class mail to the
Office of the Secretary of the Commission and, in adjudicative
proceedings under part 3 of the Commission's Rules of Practice, to the
Assistant Director in the Bureau of Competition, the Associate Director
in the Bureau of Consumer Protection, or the Director of the Regional
Office of complaint counsel. Upon a party other than the Commission or
Commission counsel, service shall be by personal delivery or delivery by
first-class mail. If the party is an individual or partnership, delivery
shall be to such individual or a member of the partnership; if a
corporation or unincorporated
[[Page 88]]
association, to an officer or agent authorized to accept service of
process therefor. Personal service includes handling the document to be
served to the individual, partner, officer, or agent; leaving it at his
or her office with a person in charge thereof; or, if there is no one in
charge or if the office is closed or if the party has no office, leaving
it at his or her dwelling house or usual place of abode with some person
of suitable age and discretion then residing therein. Documents served
in adjudicative proceedings under part 3 of the Commission's Rules of
Practice shall be deemed served on the day of personal service or the
day of mailing. All other documents shall be deemed served on the day of
personal service or on the day of delivery by the Post Office.
(c) Proof of service. In an adjudicative proceeding under part 3 of
the Commission's Rules of Practice, papers presented for filing by a
party respondent or intervenor shall contain an acknowledgment of
service by the person served or proof of service in the form of a
statement of the date and manner of service and of the names of the
person served, certified by the person who made service. Proof of
service may appear on or be affixed to the papers filed.
[50 FR 28097, July 10, 1985]
Sec. 4.5 Fees.
(a) Deponents and witnesses. Any person compelled to appear in
person in response to subpoena shall be paid the same fees and mileage
as are paid witnesses in the courts of the United States.
(b) Presiding officers. Officers before whom depositions are taken
shall be entitled to the same fees as are paid for like services in the
courts of the United States.
(c) Responsibility. The fees and mileage referred to in this section
shall be paid by the party at whose instance deponents or witnesses
appear.
[32 FR 8456, June 13, 1967]
Sec. 4.6 Cooperation with other agencies.
It is the policy of the Commission to cooperate with other
governmental agencies to avoid unnecessary overlapping or duplication of
regulatory functions.
[32 FR 8456, June 13, 1967]
Sec. 4.7 Ex parte communications.
(a) Definitions. For purposes of this section, ex parte
communication means an oral or written communication not on the public
record with respect to which reasonable prior notice to all parties is
not given, but it shall not include requests for status reports on any
matter or proceeding.
(b) Prohibited ex parte communications. While a proceeding is in
adjudicative status within the Commission, except to the extent required
for the disposition of ex parte matters as authorized by law:
(1) No person not employed by the Commission, and no employee or
agent of the Commission who performs investigative or prosecuting
functions in adjudicative proceedings, shall make or knowingly cause to
be made to any member of the Commission, or to the Administrative Law
Judge, or to any other employee who is or who reasonably may be expected
to be involved in the decisional process in the proceeding, an ex parte
communciation relevant to the merits of that or a factually related
proceeding; and
(2) No member of the Commission, the Administrative Law Judge, or
any other employee who is or who reasonably may be expected to be
involved in the decisional process in the proceeding, shall make or
knowingly cause to be made to any person not employed by the Commission,
or to any employee or agent of the Commission who performs investigative
or prosecuting functions in adjudicative proceedings, an ex parte
communication relevant to the merits of that or a factually related
proceeding.
(c) Procedures. A Commissioner, the Administrative Law Judge or any
other employee who is or who may reasonably be expected to be involved
in the decisional process who receives or who make or knowingly causes
to be made, a communication prohibited by paragraph (b) of this section
shall promptly provide to the Secretary of the Commission:
(1) All such written communications;
[[Page 89]]
(2) Memoranda stating the substance of and circumstances of all such
oral communications; and
(3) All written responses, and memoranda stating the substance of
all oral responses, to the materials described in paragraphs (c) (1) and
(2) of this section. The Secretary shall make relevant portions of any
such materials part of the public record of the Commission, pursuant to
Sec. 4.9, and place them in the docket binder of the proceeding to which
it pertains, but they will not be considered by the Commission as part
of the record for purposes of decision unless introduced into evidence
in the proceeding. The Secretary shall also send copies of the materials
to or otherwise notify all parties to the proceeding.
(d) Sanctions. (1) Upon receipt of an ex parte communication
knowingly made or knowingly caused to be made by a party and prohibited
by paragraph (b) of this section, the Commission, Administrative Law
Judge, or other employee presiding over the proceeding may, to the
extent consistent with the interests of justice and the policy of the
underlying statutes administered by the Commission, require the party to
show cause why his claim or interest in the proceeding should not be
dismissed, denied, disregarded, or otherwise adversely affected on
account of such violation. The Commission may take such action as it
considers appropriate, including but not limited to, action under
Sec. 4.1(e)(2) and 5 U.S.C. 556(d).
(2) A person, not a party to the proceeding who knowingly makes or
causes to be made an ex parte communication prohibited by paragraph (b)
of this section shall be subject to all sanctions provided herein if he
subsequently becomes a party to the proceeding.
(e) The prohibitions of this section shall apply in an adjudicative
proceeding from the time the Commission votes to issue a complaint
pursuant to Sec. 3.11, to conduct adjudicative hearings pursuant to
Sec. 3.13, or to issue an order to show cause pursuant to Sec. 3.72(b),
or from the time an order by a U.S. court of appeals remanding a
Commission decision and order for further proceedings becomes effective,
until the time the Commission votes to enter its decision in the
proceeding and the time permitted by Sec. 3.55 to seek reconsideration
of that decision has elapsed. For purposes of this section, an order of
remand by a U.S. court of appeals shall be deemed to become effective
when the Commission determines not to file a petition for a writ of
certiorari, or when the time for filing such a petition has expired
without a petition having been filed, or when such a petition has been
denied. If a petition for reconsideration of a Commission decision is
filed pursuant to Sec. 3.55, the provisions of this section shall apply
until the time the Commission votes to enter an order disposing of the
petition. In addition, the prohibitions of this section shall apply with
respect to communications concerning an application for stay filed with
the Commission pursuant to Sec. 3.56 from the time that the application
is filed until its disposition.
(f) The prohibitions of paragraph (b) of this section do not apply
to a communication occasioned by and concerning a nonadjudicative
function of the Commission, including such functions as the initiation,
conduct, or disposition of a separate investigation, the issuance of a
complaint, or the initiation of a rulemaking or other proceeding,
whether or not it involves a party already in an adjudicative
proceeding; preparations for judicial review of a Commission order; a
proceeding outside the scope of Sec. 3.2, including a matter in state or
federal court or before another governmental agency; a nonadjudicative
function of the Commission, including but not limited to an obligation
under Sec. 4.11 or a communication with Congress; or the disposition of
a consent settlement under Sec. 3.25 concerning some or all of the
charges involved in a complaint and executed by some or all respondents.
The Commission, at its discretion and under such restrictions as it may
deem appropriate, may disclose to the public or to respondent(s) in a
pending adjudicative proceeding a communication made exempt by this
paragraph from the prohibitions of paragraph (b) of this section,
however, when the Commission determines that the interests of justice
would be served by the disclosure. The prohibitions of paragraph (b) of
this
[[Page 90]]
section also do not apply to a communication between any member of the
Commission, the Administrative Law Judge, or any other employee who is
or who reasonably may be expected to be involved in the decisional
process, and any employee who has been directed by the Commission or
requested by an individual Commissioner or Administrative Law Judge to
assist in the decision of the adjudicative proceeding. Such employee
shall not, however, have performed an investigative or prosecuting
function in that or a factually related proceeding.
[42 FR 43974, Sept. 1, 1977, as amended at 44 FR 40637, July 12, 1979;
46 FR 32435, June 23, 1981; 50 FR 53306, Dec. 31, 1985; 51 FR 36802,
Oct. 16, 1986; 57 FR 10805, Mar. 31, 1992; 60 FR 37748, July 21, 1995;
60 FR 67325, Dec. 29, 1995]
Sec. 4.8 Costs for obtaining Commission records.
(a) Definitions. For the purpose of this section:
(1) The term search includes all time spent looking, manually or by
automated means, for material that is responsive to a request, including
page-by-page or line-by-line identification of material within
documents.
(2) The term duplication refers to the process of making a copy of a
document in order to respond to a request for Commission records.
(3) The term review refers to the examination of documents located
in response to a request to determine whether any portion of such
documents may be withheld, and the reduction or other processing of
documents for disclosure. Review does not include time spent resolving
general legal or policy issues regarding the release of the document.
(4) The term direct costs means expenditures that the Commission
actually incurs in processing requests. Not included in direct costs are
overhead expenses such as costs of document review facilities or the
costs of heating or lighting such a facility or other facilities in
which records are stored. The direct costs of specific services are set
forth in Sec. 4.8(b)(6).
(b) Fees. User fees pursuant to 31 U.S.C. 483(a) and 5 U.S.C. 552(a)
shall be charged according to this paragraph.
(1) Commercial use requesters. Commercial use requesters will be
charged for the direct costs to search for, review, and duplicate
documents. A commercial use requester is a requester who seeks
information for a use or purpose that furthers the commercial, trade, or
profit interests of the requester or the person on whose behalf the
request is made.
(2) Educational requesters, non-commercial scientific institution
requesters, and representative of the news media. Requesters in these
categories will be charged for the direct costs to duplicate documents,
excluding charges for the first 100 pages. An educational institution is
a preschool, a public or private elementary or secondary school, an
institution of graduate higher education, an institution of
undergraduate higher education, an institution of professional
education, and an institution of vocational education, which operates a
program or programs of scholarly research. A non-commercial scientific
institution is an institution that is not operated on a commercial basis
as that term is referenced in paragraph (b)(1) of this section, and that
is operated solely to conduct scientific research the results of which
are not intended to promote any particular product or industry. A
representative of the news media is any person actively gathering news
for an entity that is organized and operated to publish or broadcast
news to the public. News means information that is about current events
or that would be of current interest to the public.
(3) Other requesters. Other requesters will be charged for the
direct costs to search for and duplicate documents, except that the
first 100 pages of duplication and the first two hours of search time
shall be furnished without charge.
(4) Waiver of small charges. Notwithstanding the provisions of
paragraphs (b) (1), (2), and (3), charges will be waived if the total
chargeable fees for a request do not exceed $5.00.
(5) Materials available without charge. These provisions do not
apply to recent Commission decisions and other materials that may be
made available to all requesters without charge while supplies last.
(6) Schedule of direct costs. The following uniform schedule of fees
applies to
[[Page 91]]
records held by all constituent units of the Commission.
Duplication
Paper Copy (up to 8\1/2\" x 14")
(Reproduced by Commission staff)--$0.14 per page
(Reproduced by Requester)--$0.05 per page
Computer Paper--$0.14 per page
Microfilm Services
Film Copy--Paper to 16mm film--$0.02 per frame
Fiche Copy--Paper to 105mm fiche--$0.02 per frame + $0.23 per fiche
Film Copy--Duplication of existing 100 ft. roll of 16mm film--$3.35 per
roll
Fiche Copy--Duplication of existing 105mm fiche--$0.04 per roll
Paper Copy--Converting existing 16mm film to paper
(Conversion by Commission Staff)--$0.23 per page
(Conversion by Requester)--$0.14 per page
Paper Copy--Converting existing 105mm fiche to paper
(Conversion by Commission Staff)--$0.23 per page
(Conversion by Requester)--$0.14 per page
Film Cassettes--$3.60 per cassette
Other Charges
Computer Tape--$18.50 per tape
Certification--$10.35 each
Express Mail--$5.00 for the first pound and $.89 for each additional
pound (per request)
Search and Review Fees
Agency staff is divided into three categories: clerical, attorney/
economist, and other professional. Fees for search and review are
assessed on a quarter-hourly basis, and are determined by identifying
the category into which the staff member(s) conducting the search or
review belong(s), determining the average quarter-hourly wages of all
staff members within that category, and adding 16 percent to reflect the
cost of additional benefits accorded to government employees. The exact
fees are calculated and announced periodically and are available from
the Public Reference Section, Federal Trade Commission, Sixth Street and
Pennsylvania Avenue, NW., Washington, DC 20580; (202) 326-2222.
(c) Information to determine fees. Each request for records shall
set forth whether the request is made for other than commercial purposes
and whether the requester is an educational institution, a noncommercial
scientific institution, or a representative of the news media. The
Assistant General Counsel for Legal Counsel (Management & Access) or his
or her designee initially, or the General Counsel on appeal, will use
this information, any additional information provided by the requester,
and any other relevant information to determine the appropriate fee
category in which to place the requester.
(d) Agreement to pay fees. (1) Each request that does not contain an
application for a fee waiver shall specifically indicate the requester's
willingness either:
(i) To pay, in accordance with Sec. 4.8(b) of these rules, whatever
fees may be charged for processing the request; or
(ii) A willingness to pay such fees up to a specified amount.
(2) Each request that contains an application for a fee waiver must
specifically indicate:
(i) The requester's willingness to pay, in accordance with
Sec. 4.8(b) of the rules, whatever fees may be charged for processing
the request;
(ii) The requester's willingness to pay fees up to a specified
amount; or
(iii) That the requester is not willing to pay fees if the waiver is
not granted.
(3) If the agreement required by this section is absent, and if the
estimated fees exceed $25.00, the requester will be advised of the
estimated fees and the request will not be processed until the requester
agrees to pay such fees.
(e) Public interest fee waivers--(1) Procedures. A requester may
apply for a waiver of fees. The requester shall explain why a waiver is
appropriate under the standards set forth in this paragraph. The
application shall also include a statement, as provided by paragraph (d)
of this section, of whether the requester agrees to pay costs if the
waiver is denied. The Assistant General Counsel for Legal Counsel
(Management & Access) or his or her designee initially, or the General
Counsel on appeal, will rule on applications for fee waivers.
(2) Standards. (i) The first requirement for a fee waiver is that
disclosure will likely contribute significantly to public understanding
of the operations or activities of the government. This requirement
shall be met if:
(A) The subject matter of the requested information concerns the
operations or activities of the Federal government;
[[Page 92]]
(B) The disclosure is likely to contribute to an understanding of
these operations or activities;
(C) The understanding to which disclosure is likely to contribute is
the understanding of the public at large, as opposed to the
understanding of the individual requester or a narrow segment of
interested persons; and
(D) The likely contribution to public understanding will be
significant.
(ii) The second requirement for a fee waiver is that the request not
be primarily in the commercial interest of the requester. Satisfaction
of this requirement shall be determined by considering:
(A) Whether the requester has a commercial interest that would be
furthered by the requested disclosure; and
(B) If so, whether the public interest in disclosure is outweighed
by the identified commercial interest of the requester so as to render
the disclosure primarily in the requester's commercial interest.
(f) Unsuccessful searches. Charges may be assessed for search time
even if the agency fails to locate any responsive records or if it
locates only records that are determined to be exempt from disclosure.
(g) Aggregating requests. If the Assistant General Counsel for Legal
Counsel (Management & Access) or his or her designee initially, or the
General Counsel on appeal, reasonably believes that a requester, or a
group of requesters acting in concert, is attempting to evade an
assessment of fees by dividing a single request into a series of smaller
requests, the requests may be aggregated and fees charged accordingly.
(h) Advance payment. If the Assistant General Counsel for Legal
Counsel (Management & Access) or his or her designee initially, or the
General Counsel on appeal, estimates or determines that allowable
charges that a requester may be required to pay are likely to exceed
$250.00, or if the requester has previously failed to pay a fee within
30 days of the date of billing, the requester may be required to pay
some or all of the total estimated charge in advance. Further, the
requester may be required to pay all unpaid bills, including accrued
interest, prior to processing the request.
(i) Means of payment. Payment shall be made by check or money order
payable to the Treasury of the United States.
(j) Interest charges. The Commission will begin assessing interest
charges on an unpaid bill starting on the 31st day following the day on
which the bill was sent. Interest will accrue from the date of the
billing, and will be calculated at the rate prescribed in 31 U.S.C.
3717.
(k) Effect of the Debt Collection Act of 1982 (Pub. L. 97-365) The
Commission may pursue repayment, where appropriate, by employing the
provisions of the Debt Collection Act, Public Law 97-365), including
disclosure to consumer reporting agencies and use of collection
agencies.
[57 FR 10806, Mar. 31, 1992, as amended at 63 FR 45646, Aug. 26, 1998]
Sec. 4.9 The public record.
(a) General. (1) Materials on the public record of the Commission
are available for public inspection and copying either routinely or upon
request.
(2) Materials that are exempt from mandatory public disclosure, or
are otherwise not available from the Commission's public record, may be
made available for inspection and copying only upon request under the
procedures set forth in Sec. 4.11 of this part, or as provided in
Secs. 4.10 (d) through (g), 4.13, and 4.15(b)(3) of this part, or by the
Commission.
(3) Location. All of the public records of the Commission are
available for inspection at the principal office of the Commission on
each business day from 9 a.m. to 5 p.m., and copies of some of those
records are available at the regional offices on each business day from
8:30 a.m. to 5 p.m. Copies of records that the Commission is required to
make available to the public electronically, pursuant to 5 U.S.C.
552(a)(2), may be obtained in that format from the Commission's Web site
on the Internet, WWW.FTC.GOV.
(4) Copying of public records--(i) Procedures. Reasonable facilities
for copying public records are provided at each office of the
Commission. Subject to appropriate limitations and the availability of
facilities, any person may copy
[[Page 93]]
public records available for inspection at each of those offices.
Further, the agency will provide copies to any person upon request.
Written requests for copies of public records shall be addressed to the
Supervisor, Consumer Response Center, and shall specify as clearly and
accurately as reasonably possible the records desired. For records that
cannot be specified with complete clarity and particularity, requesters
shall provide descriptions sufficient to enable qualified Commission
personnel to locate the records sought. In any instance, the Commission,
the Supervisor of the Consumer Response Center, the General Counsel, the
Assistant General Counsel for Legal Counsel (Management & Access), or
the official in charge of each office may prohibit the use of Commission
facilities to produce more than one copy of any public record, and may
refuse to permit the use of such facilities for copying records that
have been published or are publicly available at places other than the
offices of the Commission.
(ii) Costs; agreement to pay costs. Requesters will be charged
search and duplication costs prescribed by Rule 4.8 for requests under
this section. All requests shall include a statement of the information
needed to determine fees, as provided by Sec. 4.8(c), and an agreement
to pay fees (or a statement that the requester will not pay fees if a
fee waiver is denied), as provided by Sec. 4.8(d). Requests may also
include an application for a fee waiver, as provided by Sec. 4.8(e).
Advance payment may be required, as provided by Sec. 4.8(h).
(iii) Records for sale at another government agency. If requested
materials are available for sale at a another government agency, the
requester will not be provided with copies of the materials but will be
advised to obtain them from the selling agency.
(b) Categories. Except to the extent material is confidential, as
provided in paragraph (c) of this section, the public record of the
Commission includes, but is not necessarily limited to:
(1) Commission Organization and Procedures (16 CFR part 0 and
Secs. 4.14 through 4.15, 4.17). (i) A current index of opinions, orders,
statements of policy and interpretations, administrative staff manuals,
general instructions and other public records of the Commission;
(ii) A current record of the final votes of each member of the
Commission in all matters of public record, including matters of public
record decided by notational voting;
(iii) Descriptions of the Commission's organization, including
descriptions of where, from whom, and how the public may secure
information, submit documents or requests, and obtain copies of orders,
decisions and other materials;
(iv) Statements of the Commission's general procedures and policies
and interpretations, its nonadjudicative procedures, its rules of
practice for adjudicative proceedings, and its miscellaneous rules,
including descriptions of the nature and requirements of all formal and
informal procedures available, and
(v) Reprints of the principal laws under which the Commission
exercises enforcement or administrative responsibilities.
(2) Industry Guidance (16 CFR 1.1-1.6). (i) Any advice, advisory
opinion or response given and required to be made public under Secs. 1.4
and 2.41 (d) or (f) of this chapter (whether by the Commission or the
staff), together with a statement of supporting reasons;
(ii) Industry guides, digests of advisory opinions and compliance
advice believed to be of interest to the public generally and other
administrative interpretations;
(iii) Transcripts of hearings in all industry guide proceedings, as
well as written statements filed with or forwarded to the Commission in
connection with these proceedings; and
(iv) Petitions filed with the Secretary of the Commission for the
promulgation or issuance, amendment, or repeal of industry guides.
(3) Rulemaking (16 CFR 1.7 through 1.26). (i) Petitions filed with
the Secretary of the Commission for the promulgation or issuance,
amendment, or repeal of rules or regulations within the scope of
Secs. 1.7 and 1.21 of this chapter, and petitions for exemptions;
(ii) Notices and advance notices of proposed rulemaking and rules
and orders issued in rulemaking proceedings; and
[[Page 94]]
(iii) Transcripts of hearings of all rulemaking proceedings, as well
as written statements filed with or forwarded to the Commission in
connection with these proceedings.
(4) Investigations (16 CFR 2.7). (i) Petitions to limit or quash
compulsory process and the rulings thereon, requests for review by the
full Commission of those rulings, and Commission rulings on such
requests; and
(ii) Closing letters in initial phase and full phase investigations.
(5) Adjudicative proceedings, stay applications, requests to reopen,
and litigated orders. (16 CFR 2.51, 3.1 through 3.24, 3.31 through 3.56,
3.71 through 3.72, 4.7)--Except for transcripts of matters heard in
camera pursuant to Sec. 3.45 and material filed in camera pursuant to
Secs. 3.22, 3.24, 3.45, 3.46, 3.51 and 3.52,
(i) The versions of pleadings and transcripts of prehearing
conferences to the extent made available under Sec. 3.21(e), motions,
certifications, orders, and the transcripts of hearings (including
public conferences), testimony, oral arguments, and other material made
a part thereof, and exhibits and material received in evidence or made a
part of the public record in adjudicative proceedings;
(ii) Initial decisions of administrative law judges;
(iii) Orders and opinions in interlocutory matters;
(iv) Final orders and opinions in adjudications, and rulings on stay
applications, including separate statements of Commissioners;
(v) Petitions for reconsideration, and answers thereto, filed
pursuant to Sec. 3.55;
(vi) Applications for stay, answers thereto, and replies, filed
pursuant to Sec. 3.56;
(vii) Petitions, applications, pleadings, briefs, and other records
filed by the Commission with the courts in connection with adjudicative,
injunctive, enforcement, compliance, and condemnation proceedings, and
in connection with judicial review of Commission actions, and opinions
and orders of the courts in disposition thereof;
(viii) Records of ex parte communications in adjudicative
proceedings and stay applications;
(ix) Petitions to reopen proceedings and orders to determine whether
orders should be altered, modified, or set aside in accordance with
Sec. 2.51; and
(x) Decisions reopening proceedings, and orders to show cause under
Sec. 3.72.
(6) Consent Agreements (16 CFR 2.31 through 2.34, 3.25). (i)
Agreements containing orders, after acceptance by the Commission
pursuant to Secs. 2.34 and 3.25(f) of this chapter;
(ii) Comments filed under Secs. 2.34 and 3.25(f) of this chapter
concerning proposed consent agreements; and
(iii) Final decisions and orders issued after the comment period
prescribed in Secs. 2.34 and 3.25(f), including separate statements of
Commissioners.
(7) Compliance/Enforcement (16 CFR 2.33, 2.41). (i) Reports of
compliance filed pursuant to the rules in this chapter or pursuant to a
provision in a Commission order and supplemental materials filed in
connection with these reports, except for reports of compliance, and
supplemental materials filed in connection with Commission orders
requiring divestitures or establishment of business enterprises of
facilities, which are confidential until the last divestiture or
establishment of a business enterprise or facility, as required by a
particular order, has been finally approved by the Commission, and staff
letters to respondents advising them that their compliance reports do
not warrant any further action. At the time each such report is
submitted the filing party may request confidential treatment in
accordance with paragraph (c) of this section and the General Counsel or
the General Counsel's designee will pass upon such request in accordance
with that paragraph;
(ii) Materials required to be made public under 16 CFR 2.41(f) in
connection with applications for approval of proposed divestitures,
acquisitions or similar transactions subject to Commission review under
outstanding orders.
(8) Access to Documents and Meetings (16 CFR 4.8, 4.11, 4.13, 4.15).
(i) Letters requesting access to Commission records pursuant to
Sec. 4.11(a) of this chapter and the Freedom of Information Act, 5
U.S.C. 552, and letters granting or denying such requests (not
[[Page 95]]
including access requests and answers thereto from the Congress or other
government agencies);
(ii) Announcements of Commission meetings as required under the
Sunshine Act, 5 U.S.C. 552b, including records of the votes to close
such meetings;
(iii) Summaries or other explanatory materials relating to matters
to be considered at open meetings made available pursuant to
Sec. 4.15(b)(3)
(iv) Commission minutes of open meetings, and, to the extent they
are not exempt from mandatory public disclosure under the Sunshine Act
or the Freedom of Information Act, portions of minutes or transcripts of
closed meetings; and
(v) A guide for requesting records or information from the
Commission, including an index of all major information systems, a
description of major information and record locator systems maintained
by the Commission, and a handbook for obtaining various types and
categories of public information.
(9) Standards of Conduct (16 CFR 5.5 through 5.6, 5.10 through 5.26,
5.31, 5.57 through 5.68). (i) Memoranda to staff elaborating or
clarifying standards described in administative staff manuals and part 5
of this subchapter.
(10) Miscellaneous (Press Releases, Clearance Requests, Reports
Filed by or with the Commission, Continuing Guaranties, Registered
Identification Numbers). (i) Releases by the Commission's Office of
Public Affairs supplying information concerning the activities of the
Commission;
(ii) Applications under Sec. 4.1(b)(2) of this chapter for clearance
or authorization to appear or participate in a proceeding or
investigation and of the Commission's responses thereto;
(iii) Continuing guaranties filed under the Wool, Fur, and Textile
Acts;
(iv) Published reports by the staff or by the Commission on economic
surveys and investigations of general interest;
(v) Filings by the Commission or by the staff in connection with
proceedings before other federal agencies or state or local government
bodies;
(vi) Registration statements and annual reports filed with the
Commission by export trade associations, and bulletins, pamphlets, and
reports with respect to such associations released by the Commission;
(vii) The identities of holders of registered identification numbers
issued by the Commission pursuant to Sec. 1.32 of this chapter;
(viii) The Commission's annual report submitted after the end of
each fiscal year, summarizing its work during the year (available for
inspection at each of the offices of the Commission with copies
obtainable from the Superintendent of Documents, U.S. Government
Printing Office, Washington, DC 20402) and any other annual reports made
to Congress on activities of the Commission as required by law;
(ix) Records, as determined by the General Counsel or his or her
designee, that have been released in response to a request made under
the Freedom of Information Act, 5 U.S.C. 552, and which, because of the
nature of the subject matter, have become or are likely to become the
subject of subsequent requests for substantially the same records,
except where some or all of those records would be exempt from
disclosure under 5 U.S.C. 552 if requested by another party;
(x) A general index of the records referred to under paragraph
(b)(10)(ix) of this section;
(xi) Grants of early termination of waiting periods published in
accordance with the Hart-Scott-Rodino premerger notification provisions
of the Clayton Act, 15 U.S.C. 18a(b)(2);
(xii) Reports on appliance energy consumption or efficiency filed
with the Commission pursuant to Sec. 305.8 of this chapter;
(xiii) Other documents that the Commission has determined to place
on the public record; and
(xiv) Every amendment, revision, substitute, or repeal of any of the
foregoing items listed in Sec. 4.9(b)(1) through (10) of this section.
(c) Confidentiality and in camera material. (1) Persons submitting
material to the Commission described in this section may designate that
material or portions of it confidential and request that it be withheld
from the public record. All requests for confidential treatment shall be
supported by a
[[Page 96]]
showing of justification in light of applicable statutes, rules, orders
of the Commission or its administrative law judges, orders of the
courts, or other relevant authority. The General Counsel or the General
Counsel's designee will act upon such request with due regard for legal
constraints and the public interest. No such material or portions of
material (including documents generated by the Commission or its staff
containing or reflecting such material or portions of material) will be
placed on the public record until the General Counsel or the General
Counsel's designee has ruled on the request for confidential treatment
and provided any prior notice to the submitter required by law.
(2) Motions seeking in camera treatment of material submitted in
connection with a proceeding under part 3 of these rules, except stay
applications under Sec. 3.56, shall be filed with the Administrative Law
Judge who is presiding over the proceeding. Requests for confidential
treatment of material submitted in connection with a stay application
shall be made in accordance with Sec. 4.9(c)(1).
(3) To the extent that any material or portions of material
otherwise falling within paragraph (b) of this section contain
information that is not required to be made public under Sec. 4.10 of
this part, the General Counsel or the General Counsel's designee may
determine, with due regard for legal constraints and the public
interest, to withhold such materials from the public record.
[50 FR 50779, Dec. 12, 1985, as amended at 57 FR 10805, Mar. 31, 1992;
59 FR 34970, July 8, 1994; 60 FR 37749, July 21, 1995; 63 FR 18820, Apr.
16, 1998; 63 FR 32977, June 17, 1998; 63 FR 45647, Aug. 26, 1998]
Sec. 4.10 Nonpublic material.
(a) The following records and other material of the Commission are
not required to be made public pursuant to 5 U.S.C. 552.
(1) Records, except to the extent required to be disclosed under
other laws or regulations, related solely to the internal personnel
rules and practices of the Commission. This exemption applies to
internal rules or instructions to Commission personnel which must be
kept confidential in order to assure effective performance of the
functions and activities for which the Commission is responsible and
which do not affect members of the public.
(2) Trade secrets and commercial or financial information obtained
from a person and privileged or confidential. As provided in section
6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), this
exemption applies to competitively sensitive information, such as costs
or various types of sales statistics and inventories. It includes trade
secrets in the nature of formulas, patterns, devices, and processes of
manufacture, as well as names of customers in which there is a
proprietary or highly competitive interest.
(3) Interagency or intra-agency memoranda or letters which would not
routinely be available by law to a private party in litigation with the
Commission. This exemption preserves the existing freedom of Commission
officials and employees to engage in full and frank communication with
each other and with officials and employees of other governmental
agencies. This exemption includes records of the deliberations of the
Commission except for the record of the final votes of each member of
the Commission in every agency proceeding. It includes intraagency and
interagency reports, memorandums, letters, correspondence, work papers,
and minutes of meetings, as well as staff papers prepared for use within
the Commission or between the Commission and other governmental
agencies. It also includes information scheduled for public release, but
as to which premature release would be contrary to the public interest;
(4) Personnel and medical files and similar files the disclosure of
which would constitute a clearly unwarranted invasion of personal
privacy except to the extent such files or materials must be disclosed
under other laws or regulations. This exemption applies to personnel and
medical records and similar records containing private or personal
information concerning any individual which, if disclosed to any person
other than the individual concerned or his designated legal
representative without his permission in writing, would
[[Page 97]]
constitute a clearly unwarranted invasion of personal privacy. Examples
of files exempt from disclosure include, but are not limited to:
(i) The personnel records of the Commission;
(ii) Files containing reports, records or other material pertaining
to individual cases in which disciplinary or other administrative action
has been or may be taken, including records of proceedings pertaining to
the conduct or performance of duties by Commission personnel;
(5) Records or information compiled for law enforcement purposes,
but only to the extent that production of such law enforcement records
or information:
(i) Could reasonably be expected to interfere with enforcement
proceedings;
(ii) Would deprive a person of a right to a fair trial or an
impartial adjudication;
(iii) Could reasonably be expected to constitute an unwarranted
invasion of personal privacy;
(iv) Could reasonably be expected to disclose the identity of a
confidential source, including a State, local, or foreign agency or
authority or any private institution that furnished information on a
confidential basis, and, in the case of a record or information compiled
by a criminal law enforcement authority in the course of a criminal
investigation, or by an agency conducting a lawful national security
intelligence investigation, information furnished by a confidential
source;
(v) Would disclose techniques and procedures for law enforcement
investigations or prosecutions, or would disclose guidelines for law
enforcement investigations or prosecutions if such disclosure could
reasonably be expected to risk circumvention of the law; or
(vi) Could reasonably be expected to endanger the life or physical
safety of any individual.
(6) Information contained in or related to examination, operating,
or condition reports prepared by, on behalf of, or for the use of an
agency responsible for the regulation or supervision of financial
institutions;
(7) Geological and geophysical information and data, including maps,
concerning wells; and
(8) Material, as that term is defined in section 21(a) of the
Federal Trade Commission Act, which is received by the Commission:
(i) In an investigation, a purpose of which is to determine whether
any person may have violated any provision of the laws administered by
the Commission; and
(ii) Which is provided pursuant to any compulsory process under the
Federal Trade Commission Act, 15 U.S.C. 41, et seq., or which is
provided voluntarily in place of compulsory process in such an
investigation. See section 21(f) of the Federal Trade Commission Act.
(9) Material, as that term is defined in section 21(a) of the
Federal Trade Commission Act, which is received by the Commission
pursuant to compulsory process in an investigation, a purpose of which
is to determine whether any person may have violated any provision of
the laws administered by the Commission. See section 21(b)(3)(C) of the
Federal Trade Commission Act.
(10) Such other material of the Commission as may from time to time
be designated by the Commission as confidential pursuant to statute or
Executive Order. This exempts from disclosure any information that has
been designated nonpublic pursuant to criteria and procedures prescribed
by Executive Order and that has not been subsequently declassified in
accordance with applicable procedures. The exemption also preserves the
full force and effect of statutes that restrict public access to
specific government records or material.
(11) Material in an investigation or proceeding that involves a
possible violation of criminal law, when there is reason to believe that
the subject of the investigation or proceeding is not aware of its
pendency, and disclosure of the existence of the investigation could
reasonably be expected to interfere with enforcement proceedings. When a
request is made for records under Sec. 4.11(a), the Commission may treat
the records as not subject to the requirements of the Freedom of
Information Act.
[[Page 98]]
(b) With respect to information contained in transcripts of
Commission meetings, the exemptions contained in paragraph (a) of this
section, except for paragraphs (a)(3) and (a)(7) of this section, shall
apply; in addition, such information will not be made available if it is
likely to have any of the effects described in 5 U.S.C. 552b (c)(5),
(c)(9), or (c)(10).
(c) Under section 10 of the Federal Trade Commission Act, any
officer or employee of the Commission who shall make public any
information obtained by the Commission, without its authority, unless
directed by a court, shall be deemed guilty of a misdemeanor, and upon
conviction thereof, may be punished by a fine not exceeding five
thousand dollars ($5,000), or by imprisonment not exceeding 1 year, or
by fine and imprisonment, in the discretion of the court.
(d) Except as provided in paragraphs (f) or (g) of this section, in
Sec. 4.11 (b), (c), or (d), or as contemplated by agreements under the
International Antitrust Enforcement Assistance Act (15 U.S.C. 6201 et
seq.), no material that is marked or otherwise identified as
confidential and that is within the scope of Sec. 4.10(a)(8), and no
material within the scope of Sec. 4.10(a)(9) that is not otherwise
public, will be made available, without the consent of the person who
produced the material, to any individual other than a duly authorized
officer or employee of the Commission or a consultant or contractor
retained by the Commission who has agreed in writing not to disclose the
information. All other Commission records may be made available to a
requester under the procedures set forth in Sec. 4.11 or may be
disclosed by the Commission except where prohibited by law.
(e) Except as provided in paragraphs (f) or (g) of this section, in
Sec. 4.11 (b), (c), or (d), or as contemplated by agreements under the
International Antitrust Enforcement Assistance Act (15 U.S.C. 6201 et
seq.), material not within the scope of Sec. 4.10(a)(8) or
Sec. 4.10(a)(9) that is received by the Commission and is marked or
otherwise identified as confidential may be disclosed only if it is
determined that the material is not within the scope of Sec. 4.10(a)(2),
and the submitter is provided at least ten days' notice of the intent to
disclose the material.
(f) Nonpublic material obtained by the Commission may be disclosed
to persons other than the submitter in connection with the taking of
oral testimony without the consent of the submitter only if the material
or transcript is not within the scope of Sec. 4.10(a)(2). If the
material is marked confidential, the submitter will be provided 10 days'
notice of the intended disclosure or will be afforded an opportunity to
seek an appropriate protective order.
(g) Material obtained by the Commission:
(1) Through compulsory process or voluntarily in lieu thereof, and
protected by sections 21 (b) and (f) of the Federal Trade Commission
Act, 15 U.S.C. 57b-2 (b), (f), and 4.10(d) of this part; or
(2) That is designated by the submitter as confidential, and
protected by section 21(c) of the Federal Trade Commission Act, 15
U.S.C. 57b-2(c), and Sec. 4.10(e) of this part; or
(3) That is confidential commercial or financial information
protected by section 6(f) of the Federal Trade Commission Act, 15 U.S.C.
46(f), and Sec. 4.10(a)(2) of this part, may be disclosed in Commission
administrative or court proceedings subject to Commission or court
protective or in camera orders as appropriate. See Secs. 1.18(b) and
3.45.
Prior to disclosure of such material in a proceeding, the submitter will
be afforded an opportunity to seek an appropriate protective or in
camera order. All other material obtained by the Commission may be
disclosed in Commission administrative or court proceedings at the
discretion of the Commission except where prohibited by law.
(15 U.S.C. 41 et seq.)
[38 FR 1731, Jan. 18, 1973, as amended at 40 FR 7629, Feb. 21, 1975; 40
FR 23278, May 29, 1975; 42 FR 13540, Mar. 11, 1977; 46 FR 26291, May 12,
1981; 49 FR 30166, July 27, 1984; 54 FR 7399, Feb. 21, 1989; 57 FR
10807, Mar. 31, 1992; 60 FR 37749, July 21, 1995; 63 FR 38473, July 17,
1998]
Sec. 4.11 Disclosure requests.
(a) Freedom of Information Act requests--(1) Initial requests--(i)
Form and
[[Page 99]]
contents; time of receipt. (A) A request under the provisions of the
Freedom of Information Act, 5 U.S.C. 552, as amended, for access to
Commission records shall be in writing and addressed as follows:
Freedom of Information Act Request, Assistant General Counsel for Legal
Counsel, (Management & Access), Office of the General Counsel, Federal
Trade Commission, 6th Street and Pennsylvania Avenue, NW., Washington,
DC 20580.
(B) Failure to mark the envelope and the request in accordance with
paragraph (a)(1)(i)(A) of this section will result in the request being
treated as received on the date the request is actually received by the
processing unit in the Office of the Deputy Executive Director for
Planning and Information.
(C) Costs; agreement to pay costs. Requesters will be charged search
and duplication costs prescribed by Rule 4.8 for requests under this
section. All requests shall include a statement of the information
needed to determine fees, as provided by Sec. 4.8(c), and an agreement
to pay fees (or a statement that the requester will not pay fees if a
fee waiver is denied), as provided by Sec. 4.8(d). Requests may also
include an application for a fee waiver, as provided by Sec. 4.8(e). An
advance payment may be required in appropriate cases as provided by
Sec. 4.8(h).
(D) Failure to agree to pay fees. If a request does not include an
agreement to pay fees, and if the requester is notified of the estimated
costs pursuant to Rule 4.8(d)(3), the request will be deemed not to have
been received until the requester agrees to pay such fees. If a
requester declines to pay fees and is not granted a fee waiver, the
request will be denied.
(E) Records for sale at another government agency. If requested
materials are available for sale at another government agency, the
requester will not be provided with copies of the materials but will be
advised to obtain them from the selling agency.
(ii) Identifiability. (A) A request for access to Commission records
must reasonably describe the records requested to enable Commission
personnel to identify and locate them with a reasonable amount of
effort. A request should be as specific as possible, and include, where
known, information regarding dates, titles, file designations, location,
and any other information which may assist the Commission in identifying
and locating the records requested.
(B) A denial of a request may state that the description required by
paragraph (a)(1)(ii)(A) of this section is insufficient to allow
identification and location of the records.
(iii) Time limit for initial determination. (A) The Assistant
General Counsel for Legal Counsel (Management & Access) or his or her
designee will, within 20 working days of the receipt of a request,
either grant or deny, in whole or in part, such request.
(B) Except in exceptional circumstances as provided in paragraph
(a)(1)(iii)(C) of this section, the Assistant General Counsel for Legal
Counsel (Management & Access) or his or her designee may extend the time
limit by not more than 10 working days if such extension is:
(1) Necessary for locating records or transferring them from
physically separate facilities; or
(2) Necessary to search for, collect, and appropriately examine a
voluminous amount of separate and distinct records which are sought in a
single or series of closely related requests; or
(3) Necessary for consultation with another agency having a
substantial interest in the determination, or for consultation among two
or more components of the Commission having substantial subject matter
interest therein.
(C) If the Assistant General Counsel for Legal Counsel (Management &
Access) or his or her designee extends the time limit for initial
determination pursuant to paragraph (a)(1)(iii)(B) of this section, the
requester will be notified in accordance with 5 U.S.C. 552(a)(6)(B). In
exceptional circumstances, when the request cannot be processed within
the extended time limit, the requester will be so notified and provided
an opportunity to limit the scope of the request so that it may be
processed within such time limit, or to arrange an alternative time
frame for processing the request or a modified request. ``Exceptional''
circumstances will not include delays resulting from a
[[Page 100]]
predictable workload of requests under this section. Unwillingness to
make reasonable modifications in the scope of the request or to agree to
an alternative time frame may be considered as factors in determining
whether exceptional circumstances exist and whether the agency has
exercised due diligence in responding to the request.
(D) If a request is not granted within the time limits set forth in
paragraphs (a)(1)(iii) (A) and (B) of this section, the request shall be
deemed to be denied and the requesting party may appeal such denial to
the General Counsel in accordance with paragraph (a)(2) of this section.
(iv) Initial determination. (A) The Assistant General Counsel for
Legal Counsel (Management & Access) or his or her designee will make
reasonable efforts to search, using either manual or electronic means,
for the requested records in electronic form or format, except when such
efforts would significantly interfere with the operation of the
Commission's automated information systems. Access will be granted to
requested records, or any portions thereof, that must be made available
under the Freedom of Information Act. Access will be denied to records
that are exempt under the Freedom of Information Act, 5 U.S.C. 552(b),
unless the Assistant General Counsel for Legal Counsel (Management &
Access) or his or her designee determines that such records fall within
a category the Commission or the General Counsel has previously
authorized to be made available to the public as a matter of policy.
Denials will set forth the reasons therefor and advise the requester
that this determination may be appealed to the General Counsel if the
requester believes either that the records are not exempt, or that the
General Counsel should exercise discretion to release such records
notwithstanding their exempt status. The Assistant General Counsel for
Legal Counsel (Management & Access) or his or her designee will also
provide a reasonable, good-faith estimate of the volume of any materials
to which access is denied, unless providing such an estimate would harm
an interest protected by an exemption in 5 U.S.C. 552(b) that was cited
as a basis for withholding materials.
(B) The Assistant General Counsel for Legal Counsel (Management &
Access) or his or her designee is deemed to be the sole official
responsible for all denials of initial requests, except denials of
access to materials contained in active investigatory files, in which
case the Director or Deputy Director of the Bureau or the Director of
the Regional Office responsible for the investigation will be the
responsible official.
(C) Records to which access has been granted will be made available
to the requester in any form or format specified by the requester, if
the records are readily reproducible in that form or format, or can be
converted to that form or format with a reasonable amount of effort, and
they will remain available for inspection and copying for a period not
to exceed 30 days from date of notification to the requester unless the
requester asks for and receives the consent of the Assistant General
Counsel for Legal Counsel (Management & Access) or his or her designee
to a longer period. Records assembled pursuant to a request will remain
available only during this period and thereafter will be refiled.
Appropriate fees may be imposed for any new or renewed request for the
same records.
(D) If a requested record cannot be located from the information
supplied, or is known to have been destroyed or otherwise disposed of,
the requester shall be so notified.
(2) Appeals to the General Counsel from initial denials--(i) Form
and contents; time of receipt. (A) If an initial request for records is
denied in its entirety, the requester may, within 30 days of the date of
the determination appeal such denial to the General Counsel. If an
initial request is denied in part, the time for appeal shall not expire
until 30 days after the date of the letter notifying the requester that
all records to which access has been granted have been made available.
The appeal shall be in writing and should include a copy of the initial
request and a copy of the response to that initial request, if any. The
appeal shall be addressed as follows:
[[Page 101]]
Freedom of Information Act Appeal, Office of the General Counsel,
Federal Trade Commission, 6th Street and Pennsylvania Avenue, NW.,
Washington, DC 20580.
(B) Failure to mark the envelope and the appeal, in accordance with
paragraph (a)(2)(i)(A) of this section, will result in the appeal being
treated as received on the date the appeal is actually received by the
Office of the General Counsel.
(C) Each appeal to the General Counsel which requests him to
exercise his discretion to release exempt records shall set forth the
interest of the requester in the subject matter and the purpose for
which the records will be used if the request is granted.
(ii) Time limit for appeal. (A) The General Counsel shall, within
twenty (20) working days of the receipt of an appeal, either grant or
deny the appeal, in whole or in part.
(B) The General Counsel may, by written notice to the requester in
accordance with 5 U.S.C. 552(a)(6)(B), extend the time limit for
deciding an appeal by not more than 10 working days pursuant to
paragraph (a)(1)(iii)(B) of this section, provided that the amount of
any extension utilized during the initial consideration of the request
under that paragraph will be subtracted from the amount of additional
time otherwise available. Where exceptional circumstances do not permit
the processing of the appeal within the extended time limit, the notice
and procedures set forth in paragraph (a)(1)(iii)(C) of this section
shall apply.
(iii) Determination of appeal. (A) The General Counsel has the
authority to grant or deny all appeals and to release as an exercise of
discretion records exempt from mandatory disclosure under 5 U.S.C.
552(b). In unusual or difficult cases, the General Counsel may, in his
or her sole discretion, refer an appeal to the Commission for
determination. A denial of an appeal in whole or in part will set forth
the basis for the denial; will include a reasonable, good-faith estimate
of the volume of any materials to which access is denied, unless
providing such an estimate would harm an interest protected by an
exemption in 5 U.S.C. 552(b) that was cited as a basis for withholding
materials; and will advise the requester that judicial review of the
decision is available by civil suit in the district in which the
requester resides, or has his principal place of business, or in which
the agency records are situated, or in the District of Columbia.
(B) The General Counsel shall be deemed solely responsible for all
denials of appeals, except where an appeal is denied by the Commission.
In such instances, the Commission shall be deemed solely responsible for
the denial.
(b) Requests from congressional committees and subcommittees.
Requests from congressional committees and subcommittees for nonpublic
material shall be referred to the General Counsel for presentation to
the Commission, subject to the provisions in 5 U.S.C. 552(c) and FTC Act
21(b) that neither the Freedom of Information Act, 5 U.S.C. 552, nor the
Federal Trade Commission Act, 15 U.S.C. 41, et seq., is authority to
withhold information from Congress. Upon receipt of a request from a
congressional committee or subcommittee, notice will be given to the
submitter of any material marked confidential, or any material within
the scope of Sec. 4.10(a)(9), that is responsive to the request that the
request has been received. No other notice need be provided prior to
granting the request. The Commission will inform the committee or
subcommittee that the submitter considers such information confidential.
(c) Requests from Federal and State law enforcement agencies.
Requests from law enforcement agencies of the Federal government for
nonpublic records shall be addressed to the liaison officer for the
requesting agency, or if there is none, to the General Counsel. Requests
from State agencies for nonpublic records shall be addressed to the
General Counsel. With respect to requests under this paragraph, the
General Counsel, the General Counsel's designee, or the appropriate
liaison officer is delegated the authority to dispose of them.
Alternatively, the General Counsel may refer such requests to the
Commission for determination, except that requests must be referred to
the Commission for determination where the Bureau having the material
sought and the General Counsel do not agree on
[[Page 102]]
the disposition. Prior to granting access under this section to any
material submitted to the Commission, the General Counsel, the General
Counsel's designee, or the liaison officer will obtain from the
requester a certification that such information will be maintained in
confidence and will be used only for official law enforcement purposes.
The certificate will also describe the nature of the law enforcement
activity and the anticipated relevance of the information to that
activity. A copy of the certificate will be forwarded to the submitter
of the information at the time the request is granted unless the agency
requests that the submitter not be notified.
(d) Requests from Federal and State agencies for purposes other than
law enforcement. Requests from Federal and State agencies for access to
nonpublic records for purposes not related to law enforcement should be
addressed to the General Counsel. The General Counsel or the General
Counsel's designee is delegated the authority to dispose of requests
under this paragraph. Disclosure of nonpublic information will be made
consistent with sections 6(f) and 21 of the FTC Act. Requests under this
section shall be subject to the fee and fee waiver provisions of
Sec. 4.8.
(e) Material and information requested by subpoena in cases or
matters to which the agency is not a party. (1) The procedures specified
in this section will apply to all subpoenas directed to Commission
employees, except special government employees, that relate in any way
to the employees' official duties. These procedures will also apply to
subpoenas directed to former Commission employees and current or former
special government employees of the Commission, if the subpoenas seek
nonpublic materials or information acquired during Commission
employment. The provisions of paragraph (e)(3) of this section will also
apply to subpoenas directed to the agency. For purposes of this section,
the term subpoena includes any compulsory process in a case or matter to
which the agency is not a party; the term nonpublic includes any
material or information which, under Sec. 4.10, is not required to be
made public; the term employees, except where otherwise specified,
includes ``special government employees'' and other agency employees;
and the term special government employees includes consultants and other
employees as defined by section 202 of title 18 of the United States
Code.
(2) Any employee or former employee who is served with a subpoena
shall promptly advise the General Counsel of the service of the
subpoena, the nature of the material or information sought, and all
relevant facts and circumstances.
(3) A party causing a subpoena to be issued to the Commission or any
employee or former employee of the Commission shall furnish a statement
to the General Counsel. The statement shall set forth the party's
interest in the case or matter, the relevance of the desired testimony
or material, and a discussion of whether it is reasonably available from
other sources. If testimony is desired, the statement shall also contain
a general summary of the testimony and a discussion of whether agency
records could be produced and used in its place. Any authorization for
testimony will be limited to the scope of the demand as summarized in
such statement.
(4) Absent authorization from the General Counsel, the employee or
former employee shall respectfully decline to produce requested material
or to disclose requested information. The refusal should be based on
this paragraph and on Touhy v. Ragen, 340 U.S. 462 (1951).
(5) The General Counsel will consider and act upon subpoenas under
this section with due regard for statutory restrictions, the
Commission's rules and the public interest, taking into account factors
such as the need to conserve the time of employees for conducting
official business; the need to avoid spending the time and money of the
United States for private purposes; the need to maintain impartiality
between private litigants in cases where a substantial government
interest is not involved; and the established legal standards for
determining whether justification exists for the disclosure of
confidential information and material.
(f) Requests by current or former employees to use nonpublic
memoranda as writing samples shall be addressed to
[[Page 103]]
the General Counsel. The General Counsel or the General Counsel's
designee is delegated the authority to dispose of such requests
consistent with applicable nondisclosure provisions, including sections
6(f) and 21 of the FTC Act.
(g) Employees are encouraged to engage in teaching, lecturing, and
writing that is not prohibited by law, Executive order, or regulation.
However, an employee shall not use information obtained as a result of
his Government employment, except to the extent that such information
has been made available to the general public or will be made available
on request, or when the General Counsel or the General Counsel's
designee gives written authorization for the use of nonpublic
information on the basis that the use is in the public interest.
(15 U.S.C. 41 et seq.)
[40 FR 7629, Feb. 21, 1975, as amended at 42 FR 13820, Mar. 14, 1977; 43
FR 5802, Feb. 10, 1978; 46 FR 26292, May 12, 1981; 48 FR 4280, Jan. 31,
1983; 49 FR 20279, May 14, 1984; 49 FR 21048, May 18, 1984; 50 FR 53306,
Dec. 31, 1985; 55 FR 29839, July 23, 1990; 57 FR 10807, Mar. 31, 1992;
58 FR 15764, Mar. 24, 1993; 60 FR 37750, July 21, 1995; 63 FR 32978,
June 17, 1998; 63 FR 45647, Aug. 26, 1998]
Sec. 4.12 Disposition of documents submitted to the Commission.
(a) Material submitted to the Commission. (1) Any person who has
submitted material to the Commission may obtain, on request, the return
of material submitted to the Commission which has not been received into
evidence:
(i) After the close of the proceeding in connection with which the
material was submitted; or
(ii) When no proceeding in which the material may be used has been
commenced within a reasonable time after completion of the examination
and analysis of all such material and other information assembled in the
course of the investigation.
(2) Such request shall be in writing, addressed to the custodian
designated pursuant to Sec. 2.16 or the Secretary of the Commission in
all other circumstances, and shall reasonably describe the material
requested. A request for return of material may be filed at any time,
but material will not be returned nor will commitments to return
material be undertaken prior to the time described in this paragraph.
(b) Commission-made copies of documents submitted to the Commission.
The Commission will not return to the submitter copies of documents made
by the Commission unless, upon a showing of extraordinary circumstances,
the Commission determines that return would be required in the public
interest.
(c) Disposition of material not returned. Subsequent to the time
prescribed in paragraph (a) of this section, the staff will examine all
submitted material and Commission-made copies of documents located in a
reasonable search of the Commission's files and will determine,
consistent with the Federal Records Act, 44 U.S.C. 3301, which materials
are appropriate for preservation as evidence of the organization,
functions, policies, decisions, procedures, operations, or other
activities of the Commission or because of the information value of data
in them. The Commission will dispose of all material determined not to
be appropriate for preservation in accordance with applicable
regulations of the National Archives and Records Administration.
[46 FR 26292, May 12, 1981, as amended at 60 FR 37751, July 21, 1995]
Sec. 4.13 Privacy Act rules.
(a) Purpose and scope. (1) This section is promulgated to implement
the Privacy Act of 1974 (Pub. L. 93-579, 5 U.S.C. 552a) by establishing
procedures whereby an individual can, as to all systems of records
maintained by the Commission except those set forth in Sec. 4.13(m) as
exempt from disclosure, (i) Request notification of whether the
Commission maintains a record pertaining to him in any system of
records, (ii) request access to such a record or to an accounting of its
disclosure, (iii) request that the record be amended or corrected, and
(iv) appeal an initial adverse determination of any such request. This
section also establishes those systems of records that are specifically
exempt from disclosure and from other requirements.
(2) The procedures of this section apply only to requests by an
individual
[[Page 104]]
as defined in Sec. 4.13(b). Except as otherwise provided, they govern
only records containing personal information in systems of records for
which notice has been published by the Commission in the Federal
Register pursuant to section 552a(e)(4) of the Privacy Act of 1974 and
which are neither exempt from the provisions of this section nor
contained in government-wide systems of personnel records for which
notice has been published in the Federal Register by the Office of
Personnel Management. Requests for notification, access, and amendment
of personnel records which are contained in a system of records for
which notice has been given by the Office of Personnel Management are
governed by the Office of Personnel Management's notices, 5 CFR part
297. Access to records which are not subject to the requirements of the
Privacy Act are governed by Secs. 4.8 through 4.11.
(b) Definitions. The following definitions apply to this section
only:
(1) Individual means a natural person who is a citizen of the United
States or an alien lawfully admitted for permanent residence.
(2) Record means any item, collection, or grouping of personal
information about an individual that is maintained by the Commission,
including, but not limited to, his education, financial transactions,
medical history, and criminal or employment history and that contains
his name, or the identifying number, symbol, or other identifying
particular assigned to the individual, such as a finger or voice print
or a photograph, but does not include information concerning
proprietorships, businesses, or corporations.
(3) System of records means a group of any records under the control
of the Commission from which information is retrieved by the name of the
individual or by some identifying number, symbol, or other identifying
particular assigned to the individual, for which notice has been
published by the Commission in the Federal Register pursuant to 5 U.S.C.
552a(e)(4).
(c) Procedures for requests pertaining to individual records in a
record system. An individual may request access to his or her records or
any information pertaining to that individual in a system of records,
and notification of whether and to whom the Commission has disclosed a
record for which an accounting of disclosures is required to be kept and
made available to the individual, using the procedures of this section.
Requests for the disclosure of records under this section or to
determine whether a system of records contains records pertaining to an
individual or to obtain an accounting of disclosures, shall be in
writing and if mailed, addressed as follows:
Privacy Act Request, Assistant General Counsel for Legal Counsel
(Management & Access), Office of the General Counsel, Federal Trade
Commission, 6th Street and Pennsylvania Avenue N.W., Washington, DC
20580.
If requests are presented in person at the Office of the General
Counsel, the individual shall be required to execute a written request.
All requests shall name the system of records that is the subject of the
request, and shall include any additional information specified in the
pertinent system notice as necessary to locate the records requested. If
the requester wants another person to accompany him or her to review the
records, the request shall so state. Nothing in this section will allow
an individual access to any information compiled in reasonable
anticipation of a civil action or proceeding.
(d) Times, places, and requirements for identification of
individuals making requests. Verification of identity of persons making
written requests to the Assistant General Counsel for Legal Counsel
(Management & Access) ordinarily will not be required. The signature on
such requests will be deemed a certification by the signatory that he or
she is the individual to whom the record pertains or is the parent or
guardian of a minor or the legal guardian of the individual to whom the
record pertains. The Assistant General Counsel for Legal Counsel
(Management & Access) or his or her designee may require additional
verification of a requester's identity when such information is
reasonably necessary to assure that records are not improperly
disclosed; provided, however, that no verification of identity will be
required
[[Page 105]]
if the records sought are publicly available under the Freedom of
Information Act.
(e) Disclosure of requested information to individuals. Within 10
working days of receipt of a request under Sec. 4.13(c), the Assistant
General Counsel for Legal Counsel (Management & Access) or his or her
designee will acknowledge receipt of the request. Within 30 working days
of the receipt of a request under Sec. 4.13(c), the Assistant General
Counsel for Legal Counsel (Management & Access) or his or her designee
will inform the requester whether a system of records containing
retrievable information pertaining to the requester exists, and if so,
either that the request has been granted or that the requested records
or information is exempt from disclosure pursuant to Sec. 4.13(m). When,
for good cause shown, the Assistant General Counsel for Legal Counsel
(Management & Access) or his or her designee is unable to respond within
30 working days of the receipt of the request, that official will notify
the requester and inform him or her approximately when a response will
be made.
(f) Special procedures: Medical records. When the Assistant General
Counsel for Legal Counsel (Management & Access) or his or her designee
determines that disclosure of a medical or psychological record directly
to a requesting individual could have an adverse effect on the
individual, he or she will require the individual to designate a medical
doctor to whom the record will be transmitted.
(g) Request for correction or amendment of record. An individual to
whom access to his records or any information pertaining to him in a
system of records has been granted may request that any portion thereof
be amended or corrected because he believes it is not accurate,
relevant, timely, or complete. An initial request for correction or
amendment of a record shall be in writing whether presented in person or
by mail, and if by mail, addressed as in Sec. 4.13(c). In making a
request under this subsection, the requesting party shall state the
nature of the information in the record the individual believes to be
inaccurate, irrelevant, untimely, or incomplete, the correction or
amendment desired, and the reasons therefore.
(h) Agency review of request for correction or amendment of record.
Whether presented in person or by mail, requests under Sec. 4.13(g) will
be acknowledged by the Assistant General Counsel for Legal Counsel
(Management & Access) or his or her designee within 10 working days of
the receipt of the request if action on the request cannot be completed
and the individual notified of the results within that time. Thereafter,
the Assistant General Counsel for Legal Counsel (Management & Access) or
his or her designee will promptly either make the requested amendment or
correction or inform the requester of his refusal to make the amendment
or correction, the reasons for the refusal, and the requester's right to
appeal that refusal in accordance with Sec. 4.13(i).
(i) Appeal of initial adverse agency determination. (1) If an
initial request filed under Sec. 4.13(c) or Sec. 4.13(g) is denied, the
requester may appeal that denial to the General Counsel. The appeal
shall be in writing and addressed as follows:
Privacy Act Appeal, Office of the General Counsel, Federal Trade
Commission, 6th Street & Pennsylvania Avenue, NW., Washington, DC 20580.
Within 30 working days of the receipt of the appeal, the General Counsel
will notify the requester of the disposition of that appeal, except that
the General Counsel may extend the 30-day period for good cause, in
which case, the General Counsel will advise the requester of the
approximate date on which review will be completed. In unusual or
difficult cases, the General Counsel may, in his or her sole discretion,
refer an appeal to the Commission for determination.
(2)(i) If the General Counsel refuses to amend or correct the record
in accordance with a request under Sec. 4.13(g), the General Counsel
will notify the requester of that decision and inform the requester of
the right to file with the Assistant General Counsel for Legal Counsel
(Management & Access) a concise statement setting forth the reasons for
the requester's disagreement
[[Page 106]]
with the General Counsel's determination and the fact that the
requester's statement will be treated as set forth in paragraph
(i)(2)(ii) of this section. The General Counsel will also inform the
requester that judicial review of the decision is available by a civil
suit in the district in which the requester resides, or has his
principal place of business, or in which the agency records are
situated, or in the District of Columbia.
(ii) If the individual files a statement disagreeing with the
General Counsel's determination not to amend or correct a record, such
disagreement will be clearly noted in the record involved and the
individual's statement will be made available to anyone to whom the
record has been disclosed after September 27, 1975, or is subsequently
disclosed together with, if the General Counsel deems it appropriate, a
brief statement of his or her reasons for declining to amend the record.
(j) Disclosure of record to person other than the individual to whom
it pertains. Except as provided by 5 U.S.C. 552a(b), the written request
or prior written consent of the individual to whom a record pertains, or
of his parent if a minor, or legal guardian if incompetent, shall be
required before such record is disclosed. If the individual elects to
inspect a record in person and desires to be accompanied by another
person, the Assistant General Counsel for Legal Counsel (Management &
Access) or his or her designee may require the individual to furnish a
signed statement authorizing disclosure of his or her record in the
presence of the accompanying named person.
(k) Fees. No fees will be charged for searching for a record,
reviewing it, or for copies of records made by the Commission for its
own purposes incident to granting access to a requester. Copies of
records to which access has been granted under this section may be
obtained by the requester from the Assistant General Counsel for Legal
Counsel (Management & Access) or his or her designee on payment of the
reproduction fees provided in Sec. 4.8(b)(6).
(l) Penalties. Section 552a(i)(3) of the Privacy Act, 5 U.S.C.
552a(i)(3), makes it a misdemeanor, subject to a maximum fine of $5,000,
to knowingly and willfully request or obtain any record concerning an
individual under false pretenses. Sections 552a(i) (1) and (2) of the
Privacy Act, 5 U.S.C. 552a(i) (1) and (2), provide penalties for
violations by agency employees of the Privacy Act or regulations
established thereunder. Title 18 U.S.C. 1001, Crimes and Criminal
Procedures, makes it a criminal offense, subject to a maximum fine of
$10,000 or imprisonment for not more than 5 years or both, to knowingly
and willfully make or cause to be made any false or fraudulent
statements or representations in any matter within the jurisdiction of
any agency of the United States.
(m) Specific exemptions. (1) Pursuant to 5 U.S.C. 552a(j)(2),
investigatory materials maintained by an agency component in connection
with any activity relating to criminal law enforcement in the following
systems of records are exempt from all subsections of 5 U.S.C. 552a,
except (b), (c) (1) and (2), (e)(4) (A) through (F), (e) (6), (7), (9),
(10), and (11), and (i), and from the provisions of this section, except
as otherwise provided in 5 U.S.C. 552a(j)(2):
Office of Inspector General Investigative Files--FTC
(2) Pursuant to 5 U.S.C. 552a(k)(2), investigatory materials
compiled for law enforcement purposes in the following systems of
records are exempt from subsections (c)(3), (d), (e)(1), (e)(4) (G),
(H), and (I), and (f) of 5 U.S.C. 552a, and from the provisions of this
section, except as otherwise provided in 552a(k)(2):
Investigational, Legal, and Public Records--FTC
Disciplinary Action Investigatory Files--FTC
Clearance to Participate Applications and the Commission's Responses
Thereto, and Related Documents--FTC
Management Information System--FTC
Office of the Secretary Control and Reporting System--FTC
Office of Inspector General Investigative Files--FTC
Stenographic Reporting Service Requests--FTC
Freedom of Information Act Requests and Appeals--FTC
Privacy Act Requests and Appeals--FTC
Information Retrieval and Indexing System--FTC
[[Page 107]]
(3) Pursuant to 5 U.S.C. 552a(k)(5), investigatory materials
compiled to determine suitability, eligibility, or qualifications for
Federal civilian employment, military service, Federal contracts, or
access to classified information, but only where disclosure would reveal
the identity of a confidential source of information, in the following
systems of records are exempt from subsections (c)(3), (d), (e)(1),
(e)(4) (G), (H), and (I), and (f) of 5 U.S.C. 552a, and from the
provisions of this section, except as otherwise provided in 5 U.S.C.
552a(k)(5):
Personnel Security File--FTC
[40 FR 40780, Sept. 3, 1975, as amended at 46 FR 26292, May 12, 1981; 48
FR 4280, Jan. 31, 1983; 55 FR 37700, Sept. 13, 1990; 55 FR 38801, Sept.
21, 1990; 57 FR 10808, Mar. 31, 1992; 58 FR 7047, Feb. 4, 1993; 63 FR
45648, Aug. 26, 1998]
Sec. 4.14 Conduct of business.
(a) Matters before the Commission for consideration may be resolved
either at a meeting under Sec. 4.15 or by written circulation. Any
Commissioner may direct that a matter presented for consideration be
placed on the agenda of a Commission meeting.
(b) Quorum. A majority of the members of the Commission, constitutes
a quorum for the transaction of business.
(c) Any Commission action, either at a meeting or by written
circulation, may be taken only with the affirmative concurrence of a
majority of the participating Commissioners, except where a greater
majority is required by statute or rule or where the action is taken
pursuant to a valid delegation of authority. No Commissioner may
delegate the authority to determine his or her vote in any matter
requiring Commission action, but authority to report a Commissioner's
vote on a particular matter resolved either by written circulation, or
at a meeting held in the Commissioner's absence, may be vested in a
member of the Commissioner's staff.
[42 FR 13540, Mar. 11, 1977, as amended at 50 FR 53306, Dec. 31, 1985]
Sec. 4.15 Commission meetings.
(a) In general. (1) Meetings of the Commission, as defined in 5
U.S.C. 552b(a)(2), are held at the principal office of the Commission,
unless otherwise directed.
(2) Initial announcements of meetings. For each meeting, the
Commission shall announce:
(i) The time, place and subject matter of the meeting,
(ii) Whether the meeting will be open or closed to the public, and
(iii) The name and phone number of the official who will respond to
requests for information about the meeting.
Such announcement shall be made at least one week before the meeting
except that where the agency determines pursuant to 5 U.S.C. 552b(e)(1)
to call the meeting on less than one week's notice, or where the agency
determines to close the meeting pursuant to paragraph (c)(2) of this
section, the announcement shall be made at the earliest practicable
time.
(3) Announcements of changes in meetings. Following the announcement
of a meeting, any change in the time, place or subject matter will be
announced at the earliest practicable time, and, except with respect to
meetings closed under paragraph (c)(2) of this section, any change in
the subject matter or decision to open or close a meeting shall be made
only as provided in 5 U.S.C. 552b(e)(2).
(4) Deletions from announcements. The requirements of paragraphs
(a)(2) and (a)(3) of this section do not require the disclosure of any
information pertaining to a portion of a closed meeting where such
disclosure is likely to concern a matter within the scope of 5 U.S.C.
552b(c).
(5) Dissemination of notices. Notices required under paragraphs
(a)(2) and (a)(3) of this section will be posted at the principal office
of the Commission, recorded on a telephone message device, and, except
as to notices of meetings closed under paragraph (c)(2) of this section,
submitted to the Federal Register for publication. In addition, notices
issued under paragraph (a)(2) of this section one week in advance of the
meeting will be sent to all persons and organizations who have requested
inclusion on a meeting notice mailing list, and will be issued as a
press release to interested media.
[[Page 108]]
(b) Open meetings. (1) Commission meetings shall be open to public
observation unless the Commission determines that portions may be closed
pursuant to 5 U.S.C. 552b(c).
(2) Any person whose interest may be directly affected if a portion
of a meeting is open, may request that the Commission close that portion
for any of the reasons described in 5 U.S.C. 552b(c). The Commission
shall vote on such requests if at least one member desires to do so.
Such requests shall be in writing, filed at the earliest practicable
time, and describe how the matters to be discussed will have any of the
effects enumerated in 5 U.S.C. 552b(c). Requests shall be addressed as
follows:
Closed Meeting Request, Office of the General Counsel, Federal Trade
Commission, 6th Street and Pennsylvania Avenue NW., Washington, DC
20580.
(3) The Commissioner to whom a matter has been assigned for
presentation to the Commission shall have the authority to make
available to the public, prior to consideration of that matter at an
open meeting, material sufficient to inform the public of the issues
likely to be discussed in connection with that matter.
(c) Closed meetings. (1) Whenever the Commission votes to close a
meeting or series of meetings under these rules, it shall make publicly
available within one day notices both of such vote and the General
Counsel's determination regarding certification under 5 U.S.C.
552b(f)(1). Such determination by the General Counsel shall be made
prior to the Commission vote to close a meeting or series of meetings.
Further, except with respect to meetings closed under paragraph (c)(2)
of this section, the Commission shall make publicly available within one
day a full written explanation of its action in closing any meeting, and
a list specifying the names and affiliations of all persons expected to
attend, except Commission employees and consultants and any stenographer
or court reporter attending for the sole purpose of preparing a verbatim
transcript. All Commission employees and consultants may attend
nonadjudicative portions of any closed meeting and members of
Commissioners' personal staffs, the General Counsel and his staff, and
the Secretary and his staff may attend the adjudicative portions of any
closed meeting except to the extent the notice of a particular closed
meeting otherwise specifically provides. Stenographers or court
reporters may attend any closed meeting at which their services are
required by the Commission.
(2) If a Commission meeting, or portions thereof, may be closed
pursuant to 5 U.S.C. 552b(c)(10), the Commission may, by vote recorded
at the beginning of the meeting, or portion thereof, close the portion
or portions of the meeting so exempt.
(3) Closed meeting transcripts or minutes required by 5 U.S.C.
552b(f)(1) will be released to the public insofar as they contain
information that either is not exempt from disclosure under 5 U.S.C.
552b(c), or, although exempt, should be disclosed in the public
interest. The Commission will determine whether to release, in whole or
in part, the minutes of its executive sessions to consider oral
arguments. With regard to all other closed meetings, the General Counsel
or the General Counsel's designee shall determine, in accordance with
Sec. 4.9(c), which portions of the transcripts or minutes may be
released.
(d) The presiding officer shall be responsible for preserving order
and decorum at meetings and shall have all powers necessary to that end.
[42 FR 13541, Mar. 11, 1977; 42 FR 15409, Mar. 22, 1977, as amended at
42 FR 62912, Dec. 14, 1977: 43 FR 1937, Jan. 13, 1978; 43 FR 35684, Aug.
11, 1978; 63 FR 32978, June 17, 1998]
Sec. 4.16 Privilege against self-incrimination.
Section 2.11 of Pub. L. 91-462 specifically repeals paragraph 7 of
section 9 of the Federal Trade Commission Act. Title 18, section 6002,
of the United States Code provides that whenever a witness refuses, on
the basis of his privilege against self-incrimination, to testify or
provide other information in a proceeding before or ancillary to:
(a) A court or grand jury of the United States,
(b) An agency of the United States, or
(c) Either House of Congress, a joint committee of the two Houses,
or a
[[Page 109]]
committee or a subcommittee of either House, and the person presiding
over the proceeding communicates to the witness an order issued under
section 6004, the witness may not refuse to comply with the order on the
basis of his privilege against self-incrimination; but no testimony or
other information compelled under the order (or any information directly
or indirectly derived from such testimony or other information) may be
used against the witness in any criminal case, except a prosecution for
perjury, giving a false statement, or otherwise failing to comply with
the order. Title 18, section 6004, of the United States Code provides
that: (1) In the case of any individual who has been or who may be
called to testify or provide other information at any proceeding before
an agency of the United States, the agency may, with the approval of the
Attorney General, issue, in accordance with subsection (b) of section
6004, an order requiring the individual to give testimony or provide
other information which he refused to give or provide on the basis of
his privilege against self-incrimination, such order to become effective
as provided in title 18, section 6002, of the United States Code; (2) an
agency of the United States may issue an order under subsection (a) of
section 6004 only if in its judgment (i) the testimony or other
information from such individual may be necessary to the public
interest; and (ii) such individual has refused or is likely to refuse to
testify or provide other information on the basis of his privilege
against self-incrimination.
(18 U.S.C. 6002, 6004)
[37 FR 5017, Mar. 9, 1972. Redesignated at 45 FR 36345, May 29, 1980]
Sec. 4.17 Disqualification of Commissioners.
(a) Applicability. This section applies to all motions seeking the
disqualification of a Commissioner from any adjudicative or rulemaking
proceeding.
(b) Procedures. (1) Whenever any participant in a proceeding shall
deem a Commissioner for any reason to be disqualified from participation
in that proceeding, such participant may file with the Secretary a
motion to the Commission to disqualify the Commissioner, such motion to
be supported by affidavits and other information setting forth with
particularity the alleged grounds for disqualification.
(2) 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.
(3)(i) Such motion shall be addressed in the first instance by the
Commissioner whose disqualification is sought.
(ii) In the event such Commissioner declines to recuse himself or
herself from further participation in the proceeding, the Commission
shall determine the motion without the participation of such
Commissioner.
(c) Standards. Such motion shall be determined in accordance with
legal standards applicable to the proceeding in which such motion is
filed.
(15 U.S.C. 46(g))
[46 FR 45750, Sept. 15, 1981]
PART 5--STANDARDS OF CONDUCT--Table of Contents
Subpart A--Employee Conduct Standards and Financial Conflicts of
Interest
Sec.
5.1 Cross-reference to executive branch-wide regulations.
5.2 Exemption of insubstantial financial conflicts.
Subpart B--Financial Disclosure Requirements
5.10 Cross-reference to executive branch-wide regulations.
Subparts C-D [Reserved]
Subpart E--Disciplinary Actions Concerning Postemployment Conflict of
Interest
5.51 Scope and applicability.
5.52 Nonpublic proceedings.
5.53 Initiation of investigation.
5.54 Referral to the Office of Government Ethics and to the Department
of Justice.
5.55 Conduct of investigation.
5.56 Disposition.
5.57 Order to show cause.
5.58 Answer and request for a hearing.
5.59 Presiding official.
5.60 Scheduling of hearing.
5.61 Prehearing procedures; motions; interlocutory appeals; summary
decision; discovery; compulsory process.
5.62 Hearing rights of respondent.
[[Page 110]]
5.63 Evidence; transcript; in camera orders; proposed findings of fact
and conclusions of law.
5.64 Initial decision.
5.65 Review of initial decision.
5.66 Commission decision and reconsideration.
5.67 Sanctions.
5.68 Judicial review.
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of
1978); 15 U.S.C. 46(g); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p.
215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306;
5 CFR part 2635, unless otherwise noted.
Source: 32 FR 13272, Sept. 20, 1967, unless otherwise noted.
Redesignated at 41 FR 54483, Dec. 14, 1976.
Subpart A--Employee Conduct Standards and Financial Conflicts of
Interest
Source: 58 FR 15764, Mar. 24, 1993, unless otherwise noted.
Sec. 5.1 Cross-reference to executive branch-wide regulations.
Commissioners and employees, including special government employees,
of the Federal Trade Commission (FTC) are subject to and should refer to
the ``Standards of Ethical Conduct for Employees of the Executive
Branch'' at 5 CFR part 2635 (``executive branch-wide Standards of
Conduct'') and to the FTC regulations at 5 CFR 5701.101 that supplements
the executive branch-wide Standards of Conduct.
Sec. 5.2 Exemption of insubstantial financial conflicts.
(a) An employee or special Government employee will not be subject
to remedial or disciplinary action or to criminal prosecution under 18
U.S.C. 208(a), if he makes a full disclosure in writing to the official
responsible for his appointment of the nature and circumstances of the
particular matter involved and of his conflicting financial interest
relating thereto, and receives in advance a written determination made
by such official that the interest is not so substantial as to be deemed
likely to affect the integrity of the services which the Government may
expect from the employee or special Government employee.
(b) For the purposes of paragraph (a) of this section, the
``official responsible for appointment'' shall be the Executive Director
in all cases where the employee is classified at grade GS-15 or below,
or at a comparable pay level, except that each Commissioner shall be the
``official responsible for appointment'' of advisors in the
Commissioner's immediate office.
(c) In all other cases, the Chairman shall be the ``official
responsible for appointment.''
(d) Pursuant to 5 CFR part 2640, certain financial interests are
exempted from the provisions of 18 U.S.C. 208(a) as being too remote too
inconsequential to affect the integrity of an employee's services.
[58 FR 15764, Mar. 24, 1993, as amended at 63 FR 35130, June 29, 1998]
Subpart B--Financial Disclosure Requirements
Sec. 5.10 Cross-reference to executive branch-wide regulations.
Commissioners and employees, including special government employees,
of the Federal Trade Commission are subject to and should refer to the
executive branch-wide financial disclosure regulations at 5 CFR part
2634, and to the procedures for filing and review of financial
disclosure reports found in Chapter 3 of the FTC Administrative Manual.
[58 FR 15765, Mar. 24, 1993]
Subparts C-D [Reserved]
Subpart E--Disciplinary Actions Concerning Postemployment Conflict of
Interest
Authority: 15 U.S.C. 41 et seq.
Source: 46 FR 26050, May 11, 1981, unless otherwise noted.
Sec. 5.51 Scope and applicability.
These regulations establish procedures for investigating and
determining alleged violations of 18 U.S.C. 207 (postemployment
restrictions applicable to federal employees) or regulations issued by
the Office of Government Ethics, set forth in 5 CFR parts
[[Page 111]]
2637 and 2641, reflecting the views of the Office of Government Ethics
and the Department of Justice as to the requirements of 18 U.S.C. 207.
[58 FR 15765, Mar. 24, 1993]
Sec. 5.52 Nonpublic proceedings.
Any investigation or proceedings held under this part shall be
nonpublic unless the respondent specifically requests otherwise, except
to the extent required by the Freedom of Information Act (5 U.S.C. 552)
or by the Sunshine Act (5 U.S.C. 552b). However, the presiding
official's initial decision and any final decision of the Commission
shall be placed on the public record, except that information may be
designated in camera in accordance with Sec. 3.45 of the Commission's
Rules of Practice.
Sec. 5.53 Initiation of investigation.
(a) Investigations under this part may be initiated upon the
submission by any person of a written statement to the Secretary setting
forth sufficient information to indicate a possible violation of 18
U.S.C. 207 or by the Commission on its own initiative when a possible
violation is indicated by information within the Commission's
possession.
(b) At the direction of the Commission, the General Counsel shall
investigate any alleged violation of 18 U.S.C. 207.
Sec. 5.54 Referral to the Office of Government Ethics and to the Department of Justice.
(a) The General Counsel shall make a preliminary determination of
whether the matter appears frivolous and, if not, shall expeditiously
transmit any available information to the Director of the Office of
Government Ethics and to the Criminal Division, Department of Justice.
(b) Unless the Department of Justice communicates to the Commission
that it does not intend to initiate criminal prosecution, the General
Counsel shall coordinate any investigation or proceeding under this part
with the Department of Justice in order to avoid prejudicing criminal
proceedings.
Sec. 5.55 Conduct of investigation.
(a) The General Counsel may (1) exercise the authority granted in
Sec. 2.5 of the Commission's Rules of Practice to administer oaths and
affirmations; and (2) conduct investigational hearings pursuant to part
2 of these rules. He may also recommend that the Commission issue
compulsory process in connection with an investigation under this
section.
(b) Witnesses in investigations shall have the rights set forth in
Sec. 2.9 of the Commission's Rules of Practice.
Sec. 5.56 Disposition.
(a) Upon the conclusion of an investigation under this part, the
General Counsel shall forward to the Commission a summary of the facts
disclosed by the investigation along with a recommendation as to whether
the Commission should issue an order to show cause pursuant to
Sec. 5.57.
(b) When the former government employee involved is an attorney, the
General Counsel shall also recommend whether the matter should be
referred to the disciplinary committee of the bar(s) of which the
attorney is a member.
Sec. 5.57 Order to show cause.
(a) Upon a Commission determination that there exists reasonable
cause to believe a former government employee has violated 18 U.S.C.
207, the Commission may issue an order requiring the former employee to
show cause why sanctions should not be imposed.
(b) The show cause order shall contain:
(1) The statutory provisions alleged to have been violated and a
clear and concise description of the acts of the former employee that
are alleged to constitute the violation;
(2) Notice of the respondent's right to submit an answer and request
a hearing, and the time and manner in which the request is to be made;
and
(3) A statement of the sanctions that may be imposed pursuant to
Sec. 5.67 of this part.
(c) Subsequent to the issuance of an order to show cause, any
communications to or from the Commission or any member of the Commission
shall be governed by the ex parte provisions of
[[Page 112]]
Sec. 4.7 of the Commission's Rules of Practice. 16 CFR 4.7.
Sec. 5.58 Answer and request for a hearing.
(a) An answer and request for a hearing must be filed with the
Secretary of the Commission within thirty (30) days after service of the
order to show cause.
(b) In the absence of good cause shown, failure to file an answer
and request for a hearing within the specified time limit:
(1) Will be deemed a waiver of the respondent's right to contest the
allegations of the show cause order or request a hearing and
(2) Shall authorize the Commission to find the facts to be as
alleged in the show cause order and enter a final decision providing for
the imposition of such sanctions specified in Sec. 5.67 as the
Commission deems appropriate.
(c) An answer shall contain (1) a concise statement of the facts or
law constituting each ground of defense and (2) specific admission,
denial, or explanation of each fact alleged in the show cause order or,
if the respondent is without knowledge thereof, a statement to that
effect. Any allegations of a complaint not answered in this manner will
be deemed admitted.
(d) Hearings shall be deemed waived as to any facts in the show
cause order that are specifically admitted or deemed to be admitted as a
result of respondent's failure to deny them. Those portions of
respondent's answer, together with the show cause order, will provide a
record basis for initial decision by the Administrative Law Judge or for
final decision by the Commission.
(e) If all material factual allegations of the show cause order are
specifically admitted or have been deemed admitted in accordance with
paragraph (c) of this section, the Commission will decide the matter on
the basis of the allegations set forth in the show cause order and
respondent's answer.
Sec. 5.59 Presiding official.
(a) Upon the receipt of an answer and request for a hearing, the
Secretary shall refer the matter to the Chief Administrative Law Judge,
who shall appoint an Administrative Law Judge to preside over the
hearing and shall notify the respondent and the General Counsel as to
the person selected.
(b) The powers and duties of the presiding official shall be as set
forth in Sec. 3.42(b) through (h) of the Commission's Rules of Practice.
Sec. 5.60 Scheduling of hearing.
The presiding official shall fix the date, time and place of the
hearing. The hearing shall not be scheduled earlier than fifteen days
after receipt of the respondent's answer and request for a hearing. In
fixing the time, date and place of the hearing, the presiding official
shall give due regard to the respondent's need for adequate time to
prepare a defense and an expeditious resolution of allegations that may
be damaging to his or her reputation.
Sec. 5.61 Prehearing procedures; motions; interlocutory appeals; summary decision; discovery; compulsory process.
Because of the nature of the issues involved in proceedings under
this part, the Commission anticipates that extensive motions, prehearing
proceedings and discovery will not be required in most cases. For this
reason, detailed procedures will not be established under this part.
However, to the extent deemed warranted by the presiding official,
prehearing conferences, motions, interlocutory appeals, summary
decisions, discovery and compulsory process shall be permitted and shall
be governed, where appropriate, by the provisions set forth in subparts
C and D, part 3, of the Commission's Rules of Practice.
Sec. 5.62 Hearing rights of respondent.
In any hearing under this subpart, the respondent shall have the
right:
(a) To be represented by counsel;
(b) To present and cross-examine witnesses and submit evidence;
(c) To present objections, motions, and arguments, oral or written;
and
(d) To obtain a transcript of the proceedings on request.
[[Page 113]]
Sec. 5.63 Evidence; transcript; in camera orders; proposed findings of fact and conclusions of law.
Sections 3.43, 3.44, 3.45, and 3.46 of the Commission's Rules of
Practice shall govern, respectively, the receipt and objections to
admissibility of evidence, the transcript of the hearing, in camera
orders and the submission and consideration of proposed findings of fact
and conclusions of law except that (a) a copy of the hearing transcript
shall be provided the respondent; and (b) the Commission has the burden
of establishing, by a preponderance of the evidence on the record as a
whole, the allegations stated in the order to show cause.
Sec. 5.64 Initial decision.
Section 3.51 of the Commission's Rules of Practice shall govern the
initial decision in proceedings under this subpart, except that the
determination of the Administrative Law Judge must be supported by a
preponderance of the evidence.
Sec. 5.65 Review of initial decision.
Appeals from the initial decision of the Administrative Law Judge or
review by the Commission in the absence of an appeal shall be governed
by Secs. 3.52 and 3.53 of the Commission's Rules of Practice except that
oral arguments shall be nonpublic subject to the exceptions stated in
Sec. 3.52 of this part.
Sec. 5.66 Commission decision and reconsideration.
The Commission's decision and any reconsideration or reopening of
the proceeding shall be governed by Secs. 2.51, 3.54, 3.55, 3.71 and
3.72 of the Commission's Rules of Practice, except that (a) if the
initial decision is modified or reversed, the Commission shall specify
such findings of fact and conclusions of law as are different from those
of the presiding official; and (b) references therein to ``court of
appeals'' shall be deemed for purposes of proceedings under this part to
refer to ``district court.''
Sec. 5.67 Sanctions.
In the case of any respondent who fails to request a hearing after
receiving adequate notice of the allegations pursuant to Sec. 5.57 or
who is found in the Commission's final decision to have violated 18
U.S.C. 207 (a), (b), or (c), the Commission may order such disciplinary
action as it deems warranted, including:
(a) Reprimand;
(b) Suspension from participating in a particular matter or matters
before the Commission; or
(c) Prohibiting the respondent from making, with the intent to
influence, any formal or informal appearance before, or any oral or
written communication to, the Commission or its staff on any matter or
business on behalf of any other person (except the United States) for a
period not to exceed five (5) years.
Sec. 5.68 Judicial review.
A respondent against whom the Commission has issued an order
imposing disciplinary action under this part may seek judicial review of
the Commission's determination in an appropriate United States District
Court by filing a petition for such review within sixty (60) days of
receipt of notice of the Commission's final decision.
PART 6--ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS OR ACTIVITIES CONDUCTED BY THE FEDERAL TRADE COMMISSION--Table of Contents
Sec.
6.101 Purpose.
6.102 Application.
6.103 Definitions.
6.104-6.109 [Reserved]
6.110 Self-evaluation.
6.111 Notice.
6.112-6.129 [Reserved]
6.130 General prohibitions against discrimination.
6.131-6.139 [Reserved]
6.140 Employment.
6.141-6.148 [Reserved]
6.149 Program accessibility: Discrimination prohibited.
6.150 Program accessibility: Existing facilities.
6.151 Program accessibility: New construction and alterations.
6.152-6.159 [Reserved]
6.160 Communications.
6.161-6.169 [Reserved]
6.170 Compliance procedures.
[[Page 114]]
6.171-6.999 [Reserved]
Authority: 29 U.S.C. 794.
Source: 52 FR 45628, Dec. 1, 1987, unless otherwise noted.
Sec. 6.101 Purpose.
This part effectuates section 119 of the Rehabilitation,
Comprehensive Services, and Developmental Disabilities Amendments of
1978, which amended section 504 of the Rehabilitation Act of 1973 to
prohibit discrimination on the basis of handicap in programs or
activities conducted by Executive agencies or the United States Postal
Service.
Sec. 6.102 Application.
This part applies to all programs or activities conducted by the
Commission except for programs or activities conducted outside the
United States that do not involve individuals with handicaps in the
United States.
Sec. 6.103 Definitions.
For purposes of this part, the term--
Auxiliary aids means services or devices that enable persons with
impaired sensory, manual, or speaking skills to have an equal
opportunity to participate in, and to enjoy the benefits of, programs or
activities conducted by the Commission. For example, auxiliary aids
useful for persons with impaired vision include readers, Brailled
materials, audio recordings, and other similar services and devices.
Auxiliary aids useful for persons with impaired hearing include
telephone handset amplifiers, telephones compatible with hearing aids,
telecommunication devices for deaf persons (TDD's), interpreters,
notetakers, written materials, and other similar services and devices.
Commission means the Federal Trade Commission.
Complete complaint means a written statement that contains the
complainant's name and address and describes the Commission's alleged
discriminatory action in sufficient detail to inform the Commission of
the nature and date of the alleged violation of section 504. It shall be
signed by the complainant or by someone authorized to do so on his or
her behalf. Complaints filed on behalf of classes or third parties shall
describe or identify (by name, if possible) the alleged victims of
discrimination.
Facility means all or any portion of buildings, structures,
equipment, roads, walks, parking lots, rolling stock or other
conveyances, or other real or personal property.
Individual with handicaps means any person who has a physical or
mental impairment that substantially limits one or more major life
activities, has a record of such an impairment, or is regarded as having
such an impairment. As used in this definition, the phrase:
(1) Physical or mental impairment includes--
(i) Any physiological disorder or condition, cosmetic disfigurement,
or anatomical loss affecting one or more of the following body systems:
Neurological; musculoskeletal; special sense organs; respiratory,
including speech organs; cardiovascular; reproductive; digestive;
genitourinary; hemic and lymphatic; skin; and endocrine; or
(ii) Any mental or psychological disorder, such as mental
retardation, organic brain syndrome, emotional or mental illness, and
specific learning disabilities. The term physical or mental impairment
includes, but is not limited to, such diseases and conditions as
orthopedic, visual, speech, and hearing impairments, cerebral palsy,
epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease,
diabetes, mental retardation, emotional illness, and drug addiction and
alcoholism.
(2) Major life activities includes functions such as caring for
one's self, performing manual tasks, walking, seeing, hearing, speaking,
breathing, learning, and working.
(3) Has a record of such an impairment means has a history of, or
has been misclassified as having, a mental or physical impairment that
substantially limits one or more major life activities.
(4) Is regarded as having an impairment means--
(i) Has a physical or mental impairment that does not substantially
limit major life activities but is treated by the Commission as
constituting such a limitation;
[[Page 115]]
(ii) Has a physical or mental impairment that substantially limits
major life activities only as a result of the attitudes of others toward
such impairment; or
(iii) Has none of the impairments defined in paragraph (1) of this
definition but is treated by the Commission as having such an
impairment.
Qualified individual with handicaps means--
(1) With respect to any Commission program or activity under which a
person is required to perform services or to achieve a level of
accomplishment, an individual with handicaps who meets the essential
eligibility requirements and who can achieve the purpose of the program
or activity without modifications in the program or activity that the
Commission can demonstrate would result in a fundamental alteration in
its nature; and
(2) With respect to any other program or activity, an individual
with handicaps who meets the essential eligibility requirements for
participation in, or receipt of benefits from, that program or activity.
(3) Qualified handicapped person as that term is defined for
purposes of employment in 29 CFR 1613.702 (f), which is made applicable
to this part by Sec. 6.140.
Section 504 means section 504 of the Rehabilitation Act of 1973
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the
Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617);
the Rehabilitation, Comprehensive Services, and Developmental
Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955) and the
Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810).
As used in this part, section 504 applies only to programs or activities
conducted by Executive agencies and not to federally assisted programs.
Secs. 6.104-6.109 [Reserved]
Sec. 6.110 Self-evaluation.
(a) The Commission shall, by February 1, 1989, evaluate its current
policies and practices, and the effects thereof, that do not or may not
meet the requirements of this part, and, to the extent modification of
any such policies and practices is required, the Commission shall
proceed to make the necessary modifications.
(b) The Commission shall provide an opportunity to interested
persons, including individuals with handicaps or organizations
representing individuals with handicaps, to participate in the self-
evaluation process by submitting comments (both oral and written).
(c) The Commission shall, for at least three years following
completion of the self-evaluation required under paragraph (a) of this
section, maintain on file and make available for public inspection:
(1) A description of areas examined and any problems identified, and
(2) A description of any modifications made.
Sec. 6.111 Notice.
The Commission shall make available to employees, applicants,
participants, beneficiaries, and other interested persons such
information regarding the provisions of this part and its applicability
to the programs or activities conducted by the Commission, and make such
information available to them in such manner as the Chairman or his or
her designee finds necessary to apprise such persons of the protections
against discrimination assured to them by section 504 and this
regulation.
Secs. 6.112-6.129 [Reserved]
Sec. 6.130 General prohibitions against discrimination.
(a) No qualified individual with handicaps shall, on the basis of
handicap, be excluded from participation in, be denied the benefits of,
or otherwise be subjected to discrimination under any program or
activity conducted by the Commission.
(b)(1) The Commission, in providing any aid, benefit, or service,
may not, directly or through contractual, licensing, or other
arrangements, on the basis of handicap--
(i) Deny a qualified individual with handicaps the opportunity to
participate in or benefit from the aid, benefit, or service;
[[Page 116]]
(ii) Afford a qualified individual with handicaps an opportunity to
participate in or benefit from the aid, benefit, or service that is not
equal to that afforded others;
(iii) Provide a qualified individual with handicaps with an aid,
benefit, or service that is not as effective in affording equal
opportunity to obtain the same result, to gain the same benefit, or to
reach the same level of achievement as that provided to others;
(iv) Provide different or separate aid, benefits, or services to
individuals with handicaps or to any class of individuals with handicaps
than is provided to others unless such action is necessary to provide
qualified individuals with handicaps with aid, benefits, or services
that are as effective as those provided to others;
(v) Deny a qualified individual with handicaps the opportunity to
participate as a member of planning or advisory boards; or
(vi) Otherwise limit a qualified individual with handicaps in the
enjoyment of any right, privilege, advantage, or opportunity enjoyed by
others receiving the aid, benefit, or service.
(2) The Commission may not deny a qualified individual with
handicaps the opportunity to participate in programs or activities that
are not separate or different, despite the existence of permissibly
separate or different programs or activities.
(3) The Commission may not, directly or through contractual or other
arrangements, utilize criteria or methods of administration the purpose
or effect of which would--
(i) Subject qualified individuals with handicaps to discrimination
on the basis of handicap; or
(ii) Defeat or substantially impair accomplishment of the objectives
of a program or activity with respect to individuals with handicaps.
(4) The Commission may not, in determining the site or location of a
facility, make selections the purpose or effect of which would--
(i) Exclude individuals with handicaps from, deny them the benefits
of, or otherwise subject them to discrimination under any program or
activity conducted by the Commission; or
(ii) Defeat or substantially impair the accomplishment of the
objectives of a program or activity with respect to individuals with
handicaps.
(5) The Commission, in the selection of procurement contractors, may
not use criteria that subject qualified individuals with handicaps to
discrimination on the basis of handicap.
(c) The exclusion of nonhandicapped persons from the benefits of a
program limited by Federal statute or Executive order to individuals
with handicaps or the exclusion of a specific class of individuals with
handicaps from a program limited by Federal statute or Executive order
to a different class of individuals with handicaps is not prohibited by
this part.
(d) The Commission shall administer programs and activities in the
most integrated setting appropriate to the needs of qualified
individuals with handicaps.
Secs. 6.131-6.139 [Reserved]
Sec. 6.140 Employment.
No qualified individual with handicaps shall, on the basis of
handicap, be subjected to discrimination in employment under any program
or activity conducted by the Commission. The definitions, requirements
and procedures of section 501 of the Rehabilitation Act of 1973 (29
U.S.C. 791), as established by the Equal Employment Opportunity
Commission in 29 CFR part 1613, shall apply to employment in federally
conducted programs or activities.
Secs. 6.141-6.148 [Reserved]
Sec. 6.149 Program accessibility: Discrimination prohibited.
Except as otherwise provided in Sec. 6.150, no qualified individuals
with handicaps shall, because the Commission's facilities are
inaccessible to or unusable by individuals with handicaps, be denied the
benefits of, be excluded from participation in, or otherwise be
subjected to discrimination under any program or activity conducted by
the Commission.
[[Page 117]]
Sec. 6.150 Program accessibility: Existing facilities.
(a) General. The Commission shall operate each program or activity
so that the program or activity, when viewed in its entirety, is readily
accessible to and usable by individuals with handicaps. This paragraph
does not--
(1) Necessarily require the Commission to make each of its existing
facilities accessible to and usable by individuals with handicaps, or
(2) Require the Commission to take any action that it can
demonstrate would result in a fundamental alteration in the nature of a
program or activity or in undue financial and administrative burdens. In
those circumstances where Commission personnel believe that the proposed
action would fundamentally alter the program or activity or would result
in undue financial and administrative burdens, the Commission has the
burden of proving that compliance with Sec. 6.150(a) would result in
such alteration or burdens. The decision that compliance would result in
such alteration or burdens must be made by the Chairman or his or her
designee after considering all Commission resources available for use in
the funding and operation of the conducted program or activity, and must
be accompanied by a written statement of the reasons for reaching that
conclusion. If an action would result in such an alteration or such
burdens, the Commission shall take any other action that would not
result in such an alteration or such burdens, but would, nevertheless,
ensure that individuals with handicaps receive the benefits and services
of the program or activity.
(b) Methods. The Commission may comply with the requirements of this
section through such means as redesign of equipment, reassignment of
services to accessible buildings, assignment of aides to beneficiaries,
home visits, delivery of services at alternate accessible sites,
alteration of existing facilities and construction of new facilities,
use of accessible rolling stock, or any methods that result in making
its programs or activities readily accessible to and usable by
individuals with handicaps. The Commission is not required to make
structural changes in existing facilities where other methods are
effective in achieving compliance with this section. The Commission, in
making alterations to existing buildings, shall meet accessibility
requirements to the extent compelled by the Architectural Barriers Act
of 1968, as amended (42 U.S.C. 4151-4157) and any regulations
implementing it. In choosing among available methods for meeting the
requirements of this section, the Commission shall give priority to
those methods that offer programs and activities to qualified
individuals with handicaps in the most integrated setting appropriate.
(c) Time period for compliance. The Commission shall comply with the
obligations established under this section by April 1, 1988, except that
where structural changes in facilities are undertaken, such changes
shall be made by February 1, 1991, but in any event as expeditiously as
possible.
(d) Transition plan. In the event that structural changes to
facilities will be undertaken to achieve program accessibility, the
Commission shall develop, by August 1, 1988, a transition plan setting
forth the steps necessary to complete such changes. The Commission shall
provide an opportunity to interested persons, including individuals with
handicaps or organizations representing individuals with handicaps, to
participate in the development of the transition plan by submitting
comments (both oral and written). A copy of the transition plan shall be
made available for public inspection. The plan shall, at a minimum--
(1) Identify physical obstacles in the Commission's facilities that
limit the accessibility of its programs or activities to individuals
with handicaps;
(2) Describe in detail the methods that will be used to make the
facilities accessible;
(3) Specify the schedule for taking the steps necessary to achieve
compliance with this section and, if the time period of the transition
plan is longer than one year, identify steps that will be taken during
each year of the transition period;
(4) Indicate the official responsible for implementation of the
plan; and
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(5) Identify the persons or groups with whose assistance the plan
was prepared.
Sec. 6.151 Program accessibility: New construction and alterations.
Each building or part of a building that is constructed or altered
by, on behalf of, or for the use of the Commission shall be designed,
constructed, or altered so as to be readily accessible to and usable by
individuals with handicaps. The definitions, requirements, and standards
of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established
in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this
section.
Secs. 6.152-6.159 [Reserved]
Sec. 6.160 Communications.
(a) The Commission shall take appropriate steps to ensure effective
communication with applicants, participants, personnel of other Federal
entities, and members of the public.
(1) The Commission shall furnish appropriate auxiliary aids where
necessary to afford an individual with handicaps an equal opportunity to
participate in, and enjoy the benefits of, a program or activity
conducted by the Commission.
(i) In determining what type of auxiliary aid is necessary, the
Commission shall give primary consideration to the requests of the
individual with handicaps.
(ii) The Commission need not provide individually prescribed
devices, readers for personal use or study, or other devices of a
personal nature.
(2) Where the Commission communicates with applicants and
beneficiaries by telephone, telecommunication devices for deaf persons
(TDD's), or equally effective telecommunication systems shall be used.
(b) The Commission shall ensure that interested persons, including
persons with impaired vision or hearing, can obtain information as to
the existence and location of accessible services, activities, and
facilities.
(c) The Commission shall provide signs at a primary entrance to each
of its inaccessible facilities, directing users to a location at which
they can obtain information about accessible facilities. The
international symbol for accessibility shall be used at each primary
entrance of an accessible facility.
(d) This section does not require the Commission to take any action
that it can demonstrate would result in a fundamental alteration in the
nature of a program or activity, or in undue financial and
administrative burdens. In those circumstances where Commission
personnel believe that the proposed action would fundamentally alter the
program or activity or would result in undue financial and
administrative burdens, the Commission has the burden of proving that
compliance with Sec. 6.160 would result in such alteration or burdens.
The decision that compliance would result in such alteration or burdens
must be made by the Chairman or his or her designee after considering
all Commission resources available for use in the funding and operation
of the conducted program or activity, and must be accompanied by a
written statement of the reasons for reaching that conclusion. If an
action required to comply with this section would result in such an
alteration or such burdens, the Commission shall take any other action
that would not result in such an alteration or burdens but would
nevertheless ensure that, to the maximum extent possible, individuals
with handicaps receive the benefits and services of the program or
activity.
Secs. 6.161-6.169 [Reserved]
Sec. 6.170 Compliance procedures.
(a) Except as provided in paragraph (b) of this section, this
section applies to all allegations of discrimination on the basis of
handicap in programs or activities conducted by the Commission.
(b) The Commission shall process complaints alleging violations of
section 504 with respect to employment according to the procedures
established by the Equal Employment Opportunity Commission in 29 CFR
part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29
U.S.C. 791).
(c) Responsibility for implementation and operation of this section
is
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vested in the Director of Equal Employment Opportunity.
(d)(1) A complete complaint under this section may be filed by any
person who believes that he or she or any specific class of persons of
which he or she is a member has been subjected to discrimination
prohibited by this part. The complaint may also be filed by an
authorized representative of any such person.
(2) The complaint must be filed within 180 days of the alleged act
of discrimination unless the Director of Equal Employment Opportunity
extends the time period for good cause.
(3) The complaint must be addressed to the Director of Equal
Employment Opportunity, Federal Trade Commission, 6th and Pennsylvania
Ave. NW., Washington, DC 20580.
(e) If the Director of Equal Employment Opportunity receives a
complaint over which the Commission does not have jurisdiction, he or
she shall promptly notify the complainant and shall make reasonable
efforts to refer the complaint to the appropriate Government entity.
(f) The Director of Equal Employment Opportunity shall notify the
Architectural and Transportation Barriers Compliance Board upon receipt
of any complaint alleging that a building or facility that is subject to
the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157)
is not readily accessible to and usable by individuals with handicaps.
(g)(1) The Director of Equal Employment Opportunity shall accept and
investigate a complete complaint that is filed in accordance with
paragraph (d) of this section and over which the Commission has
jurisdiction.
(2) If the Director of Equal Employment Opportunity receives a
complaint that is not complete (see Sec. 6.103), he or she shall, within
30 days thereafter, notify the complainant that additional information
is needed. If the complainant fails to complete the complaint within 30
days of the date of the Director's notice, the Director of Equal
Employment Opportunity may dismiss the complaint without prejudice.
(h) Within 180 days of the receipt of a complete complaint over
which the Commission has jurisdiction, the Director of Equal Employment
Opportunity shall notify the complainant of the results of the
investigation in a letter containing--
(1) Findings of fact and conclusions of law;
(2) A description of a remedy for each violation found; and
(3) A notice of the right to appeal to the Commission's General
Counsel.
(i)(1) An appeal under this section must be filed within 90 days of
the complainant's receipt of the letter under paragraph (h) of this
section unless the General Counsel extends the time period for good
cause.
(2) The appeal must be addressed to the General Counsel, Federal
Trade Commission, 6th and Pennsylvania Ave. NW., Washington, DC 20580.
(3) The appeal shall specify the questions raised by the appeal and
the arguments on the points of fact and law relied upon in support of
the position taken on each question; and it shall include copies of the
complaint filed under paragraph (d) of this section and the letter by
the Director of Equal Employment Opportunity under paragraph (h) of this
section as well as any other material relied upon in support of the
appeal.
(j) The General Counsel shall notify the complainant of the results
of the appeal within 60 days of the receipt of the appeal. If the
General Counsel determines that additional information is needed from
the complainant, the General Counsel shall have 60 days from the date of
receipt of the additional information to make a final determination on
the appeal. The General Counsel may submit the appeal to the Commission
for final determination provided that any final determination of the
appeal is made by the Commission within the 60-day period specified by
this paragraph.
(k) The time limits specified by paragraphs (h) and (j) of this
section may be extended by the Chairman for good cause.
(l) The Commission may delegate its authority for conducting
complaint investigations to other Federal agencies, except that the
authority for making the final determination may not be delegated.
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Secs. 6.171-6.999 [Reserved]
PART 14--ADMINISTRATIVE INTERPRETATIONS, GENERAL POLICY STATEMENTS, AND ENFORCEMENT POLICY STATEMENTS--Table of Contents
Sec.
14.9 Requirements concerning clear and conspicuous disclosures in
foreign language advertising and sales materials.
14.12 Use of secret coding in marketing research.
14.15 In regard to comparative advertising.
14.16 Interpretation of Truth-in-Lending Orders consistent with
amendments to the Truth-in-Lending Act and Regulation Z.
Authority: 15 U.S.C. 41-58.