[Federal Register Volume 77, Number 249 (Friday, December 28, 2012)]
[Pages 76518-76522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-31158]



Summary of Commission Practice Relating to Administrative 
Protective Orders

AGENCY: U.S. International Trade Commission.

[[Page 76519]]

ACTION: Summary of Commission practice relating to administrative 
protective orders.


SUMMARY: Since February 1991, the U.S. International Trade Commission 
(``Commission'') has issued an annual report on the status of its 
practice with respect to violations of its administrative protective 
orders (``APOs'') under title VII of the Tariff Act of 1930, in 
response to a direction contained in the Conference Report to the 
Customs and Trade Act of 1990. Over time, the Commission has added to 
its report discussions of APO breaches in Commission proceedings other 
than under title VII and violations of the Commission's rules including 
the rule on bracketing business proprietary information (``BPI'') (the 
``24-hour rule''), 19 CFR 207.3(c). This notice provides a summary of 
investigations completed during calendar year 2011 of breaches in 
proceedings under title VII and section 337 of the Tariff Act of 1930. 
There were no rules violation investigations completed in 2011. The 
Commission intends that this report inform representatives of parties 
to Commission proceedings as to some specific types of APO breaches 
encountered by the Commission and the corresponding types of actions 
the Commission has taken.

FOR FURTHER INFORMATION CONTACT: Carol McCue Verratti, Esq., Office of 
the General Counsel, U.S. International Trade Commission, telephone 
(202) 205-3088. Hearing impaired individuals are advised that 
information on this matter can be obtained by contacting the 
Commission's TDD terminal at (202) 205-1810. General information 
concerning the Commission can also be obtained by accessing its Web 
site. (http://www.usitc.gov).

SUPPLEMENTARY INFORMATION: Representatives of parties to investigations 
or other proceedings conducted under title VII of the Tariff Act of 
1930, section 337 of the Tariff Act of 1930, the North American Free 
Trade Agreement (NAFTA) Article 1904.13, and safeguard-related 
provisions such as section 202 of the Trade Act of 1974, may enter into 
APOs that permit them, under strict conditions, to obtain access to BPI 
(title VII) and confidential business information (``CBI'') (safeguard-
related provisions and section 337) of other parties. See, e.g., 19 
U.S.C. 1677f; 19 CFR 207.7; 19 U.S.C. 1337(n); 19 CFR 210.5, 210.34; 19 
U.S.C. 2252(i); 19 CFR 206.17; and 19 U.S.C. 1516a(g)(7)(A); 19 CFR 
207.100, et. seq.. The discussion below describes APO breach 
investigations that the Commission has completed during calendar year 
2011, including a description of actions taken in response to these 
    Since 1991, the Commission has published annually a summary of its 
actions in response to violations of Commission APOs and the 24-hour 
rule. See 56 FR 4846 (February 6, 1991); 57 FR 12335 (April 9, 1992); 
58 FR 21991 (April 26, 1993); 59 FR 16834 (April 8, 1994); 60 FR 24880 
(May 10, 1995); 61 FR 21203 (May 9, 1996); 62 FR 13164 (March 19, 
1997); 63 FR 25064 (May 6, 1998); 64 FR 23355 (April 30, 1999); 65 FR 
30434 (May 11, 2000); 66 FR 27685 (May 18, 2001); 67 FR 39425 (June 7, 
2002); 68 FR 28256 (May 23, 2003); 69 FR 29972 (May 26, 2004); 70 FR 
42382 (July 25, 2005); 71 FR 39355 (July 12, 2006); 72 FR 50119 (August 
30, 2007); 73 FR 51843 (September 5, 2008); 74 FR 54071 (October 21, 
2009); 75 FR 54071 (October 27, 2010) and 76 FR 78945 (December 20, 
2011). This report does not provide an exhaustive list of conduct that 
will be deemed to be a breach of the Commission's APOs. APO breach 
inquiries are considered on a case-by-case basis.
    As part of the effort to educate practitioners about the 
Commission's current APO practice, the Commission Secretary issued in 
March 2005 a fourth edition of An Introduction to Administrative 
Protective Order Practice in Import Injury Investigations (Pub. No. 
3755). This document is available upon request from the Office of the 
Secretary, U.S. International Trade Commission, 500 E Street SW., 
Washington, DC 20436, tel. (202) 205-2000 and on the Commission's Web 
site at http://www.usitc.gov.

I. In General

    The current APO form for antidumping and countervailing duty 
investigations, which was revised in March 2005, requires the applicant 
to swear that he or she will:
    (1) Not divulge any of the BPI disclosed under this APO or 
otherwise obtained in this investigation and not otherwise available to 
him or her, to any person other than--
    (i) Personnel of the Commission concerned with the investigation,
    (ii) The person or agency from whom the BPI was obtained,
    (iii) A person whose application for disclosure of BPI under this 
APO has been granted by the Secretary, and
    (iv) Other persons, such as paralegals and clerical staff, who (a) 
are employed or supervised by and under the direction and control of 
the authorized applicant or another authorized applicant in the same 
firm whose application has been granted; (b) have a need thereof in 
connection with the investigation; (c) are not involved in competitive 
decision making for an interested party which is a party to the 
investigation; and (d) have signed the acknowledgment for clerical 
personnel in the form attached hereto (the authorized applicant shall 
also sign such acknowledgment and will be deemed responsible for such 
persons' compliance with this APO);
    (2) Use such BPI solely for the purposes of the above-captioned 
Commission investigation or for judicial or binational panel review of 
such Commission investigation;
    (3) Not consult with any person not described in paragraph (1) 
concerning BPI disclosed under this APO or otherwise obtained in this 
investigation without first having received the written consent of the 
Secretary and the party or the representative of the party from whom 
such BPI was obtained;
    (4) Whenever materials e.g., documents, computer disks, etc. 
containing such BPI are not being used, store such material in a locked 
file cabinet, vault, safe, or other suitable container (N.B.: storage 
of BPI on so-called hard disk computer media is to be avoided, because 
mere erasure of data from such media may not irrecoverably destroy the 
BPI and may result in violation of paragraph C of this APO);
    (5) Serve all materials containing BPI disclosed under this APO as 
directed by the Secretary and pursuant to section 207.7(f) of the 
Commission's rules;
    (6) Transmit each document containing BPI disclosed under this APO:
    (i) With a cover sheet identifying the document as containing BPI,
    (ii) with all BPI enclosed in brackets and each page warning that 
the document contains BPI,
    (iii) if the document is to be filed by a deadline, with each page 
marked ``Bracketing of BPI not final for one business day after date of 
filing,'' and
    (iv) if by mail, within two envelopes, the inner one sealed and 
marked ``Business Proprietary Information--To be opened only by [name 
of recipient]'', and the outer one sealed and not marked as containing 
    (7) Comply with the provision of this APO and section 207.7 of the 
Commission's rules;
    (8) Make true and accurate representations in the authorized 
applicant's application and promptly notify the Secretary of any 
changes that occur after the submission of the application and that 
affect the representations made in the application

[[Page 76520]]

(e.g., change in personnel assigned to the investigation);
    (9) Report promptly and confirm in writing to the Secretary any 
possible breach of this APO; and
    (10) Acknowledge that breach of this APO may subject the authorized 
applicant and other persons to such sanctions or other actions as the 
Commission deems appropriate, including the administrative sanctions 
and actions set out in this APO.
    The APO further provides that breach of an APO may subject an 
applicant to:
    (1) Disbarment from practice in any capacity before the Commission 
along with such person's partners, associates, employer, and employees, 
for up to seven years following publication of a determination that the 
order has been breached;
    (2) Referral to the United States Attorney;
    (3) In the case of an attorney, accountant, or other professional, 
referral to the ethics panel of the appropriate professional 
    (4) Such other administrative sanctions as the Commission 
determines to be appropriate, including public release of, or striking 
from the record any information or briefs submitted by, or on behalf 
of, such person or the party he represents; denial of further access to 
business proprietary information in the current or any future 
investigations before the Commission, and issuance of a public or 
private letter of reprimand; and
    (5) Such other actions, including but not limited to, a warning 
letter, as the Commission determines to be appropriate.
    APOs in investigations other than those under title VII contain 
similar, though not identical, provisions.
    Commission employees are not signatories to the Commission's APOs 
and do not obtain access to BPI through APO procedures. Consequently, 
they are not subject to the requirements of the APO with respect to the 
handling of CBI and BPI. However, Commission employees are subject to 
strict statutory and regulatory constraints concerning BPI and CBI, and 
face potentially severe penalties for noncompliance. See 18 U.S.C. 
1905; title 5, U.S. Code; and Commission personnel policies 
implementing the statutes. Although the Privacy Act (5 U.S.C. 552a) 
limits the Commission's authority to disclose any personnel action 
against agency employees, this should not lead the public to conclude 
that no such actions have been taken.
    An important provision of the Commission's title VII and safeguard 
rules relating to BPI/CBI is the ``24-hour'' rule. This rule provides 
that parties have one business day after the deadline for filing 
documents containing BPI/CBI to file a public version of the document. 
The rule also permits changes to the bracketing of information in the 
proprietary version within this one-day period. No changes--other than 
changes in bracketing--may be made to the proprietary version. The rule 
was intended to reduce the incidence of APO breaches caused by 
inadequate bracketing and improper placement of BPI/CBI. The Commission 
urges parties to make use of the rule. If a party wishes to make 
changes to a document other than bracketing, such as typographical 
changes or other corrections, the party must ask for an extension of 
time to file an amended document pursuant to section 201.14(b)(2) of 
the Commission's rules.

II. Investigations of Alleged APO Breaches

    Upon finding evidence of an APO breach or receiving information 
that there is a reason to believe one has occurred, the Commission 
Secretary notifies relevant offices in the agency that an APO breach 
investigation has commenced and that an APO breach investigation file 
has been opened. Upon receiving notification from the Secretary, the 
Office of the General Counsel (``OGC'') prepares a letter of inquiry to 
be sent to the possible breacher over the Secretary's signature to 
ascertain the possible breacher's views on whether a breach has 
occurred.\1\ If, after reviewing the response and other relevant 
information, the Commission determines that a breach has occurred, the 
Commission often issues a second letter asking the breacher to address 
the questions of mitigating circumstances and possible sanctions or 
other actions. The Commission then determines what action to take in 
response to the breach. In some cases, the Commission determines that, 
although a breach has occurred, sanctions are not warranted, and 
therefore finds it unnecessary to issue a second letter concerning what 
sanctions might be appropriate. Instead, it issues a warning letter to 
the individual. A warning letter is not considered to be a sanction.

    \1\ Procedures for inquiries to determine whether a prohibited 
act such as a breach has occurred and for imposing sanctions for 
violation of the provisions of a protective order issued during 
NAFTA panel or committee proceedings are set out in 19 CFR 
Sec. Sec.  207.100-207.120. Those investigations are initially 
conducted by the Commission's Office of Unfair Import 

    Sanctions for APO violations serve two basic interests: (a) 
Preserving the confidence of submitters of BPI/CBI that the Commission 
is a reliable protector of BPI/CBI; and (b) disciplining breachers and 
deterring future violations. As the Conference Report to the Omnibus 
Trade and Competitiveness Act of 1988 observed, ``[T]he effective 
enforcement of limited disclosure under administrative protective order 
depends in part on the extent to which private parties have confidence 
that there are effective sanctions against violation.'' H.R. Conf. Rep. 
No. 576, 100th Cong., 1st Sess. 623 (1988).
    The Commission has worked to develop consistent jurisprudence, not 
only in determining whether a breach has occurred, but also in 
selecting an appropriate response. In determining the appropriate 
response, the Commission generally considers mitigating factors such as 
the unintentional nature of the breach, the lack of prior breaches 
committed by the breaching party, the corrective measures taken by the 
breaching party, and the promptness with which the breaching party 
reported the violation to the Commission. The Commission also considers 
aggravating circumstances, especially whether persons not under the APO 
actually read the BPI/CBI. The Commission considers whether there have 
been prior breaches by the same person or persons in other 
investigations and multiple breaches by the same person or persons in 
the same investigation.
    The Commission's rules permit an economist or consultant to obtain 
access to BPI/CBI under the APO in a title VII or safeguard 
investigation if the economist or consultant is under the direction and 
control of an attorney under the APO, or if the economist or consultant 
appears regularly before the Commission and represents an interested 
party who is a party to the investigation. 19 CFR 207.7(a)(3)(B) and 
(C); 19 CFR 206.17(a)(3)(B) and (C). Economists and consultants who 
obtain access to BPI/CBI under the APO under the direction and control 
of an attorney nonetheless remain individually responsible for 
complying with the APO. In appropriate circumstances, for example, an 
economist under the direction and control of an attorney may be held 
responsible for a breach of the APO by failing to redact APO 
information from a document that is subsequently filed with the 
Commission and served as a public document. This is so even though the 
attorney exercising direction or control over the economist or 
consultant may also be

[[Page 76521]]

held responsible for the breach of the APO.
    The records of Commission investigations of alleged APO breaches in 
antidumping and countervailing duty cases, section 337 investigations, 
and safeguard investigations are not publicly available and are exempt 
from disclosure under the Freedom of Information Act, 5 U.S.C. 552. See 
19 U.S.C. 1677f(g), 19 U.S.C. 1333(h).
    The two types of breaches most frequently investigated by the 
Commission involve the APO's prohibition on the dissemination of BPI or 
CBI to unauthorized persons and the APO's requirement that the 
materials received under the APO be returned or destroyed and that a 
certificate be filed indicating which action was taken after the 
termination of the investigation or any subsequent appeals of the 
Commission's determination. The dissemination of BPI/CBI usually occurs 
as the result of failure to delete BPI/CBI from public versions of 
documents filed with the Commission or transmission of proprietary 
versions of documents to unauthorized recipients. Other breaches have 
included the failure to bracket properly BPI/CBI in proprietary 
documents filed with the Commission, the failure to report immediately 
known violations of an APO, and the failure to adequately supervise 
non-lawyers in the handling of BPI/CBI.
    Occasionally, the Commission conducts APOB investigations that 
involve members of a law firm or consultants working with a firm who 
were granted access to APO materials by the firm although they were not 
APO signatories. In many of these cases, the firm and the person using 
the BPI mistakenly believed an APO application had been filed for that 
person. The Commission determined in all of these cases that the person 
who was a non-signatory, and therefore did not agree to be bound by the 
APO, could not be found to have breached the APO. Action could be taken 
against these persons, however, under Commission rule 201.15 (19 CFR 
201.15) for good cause shown. In all cases in which action was taken, 
the Commission decided that the non-signatory was a person who appeared 
regularly before the Commission and was aware of the requirements and 
limitations related to APO access and should have verified his or her 
APO status before obtaining access to and using the BPI. The Commission 
notes that section 201.15 may also be available to issue sanctions to 
attorneys or agents in different factual circumstances in which they 
did not technically breach the APO, but when their actions or inactions 
did not demonstrate diligent care of the APO materials even though they 
appeared regularly before the Commission and were aware of the 
importance the Commission placed on the care of APO materials.
    Counsel have been cautioned to be certain that each authorized 
applicant files within 60 days of the completion of an import injury 
investigation or at the conclusion of judicial or binational review of 
the Commission's determination a certificate that to his or her 
knowledge and belief all copies of BPI/CBI have been returned or 
destroyed and no copies of such material have been made available to 
any person to whom disclosure was not specifically authorized. This 
requirement applies to each attorney, consultant, or expert in a firm 
who has been granted access to BPI/CBI. One firm-wide certificate is 
insufficient. This same information is also being added to 
notifications sent to new APO applicants.
    In addition, attorneys who are signatories to the APO representing 
clients in a section 337 investigation should send a notice to the 
Commission if they stop participating in the investigation or the 
subsequent appeal of the Commission's determination. The notice should 
inform the Commission about the disposition of CBI obtained under the 
APO that was in their possession or they could be held responsible for 
any failure of their former firm to return or destroy the CBI in an 
appropriate manner.

III. Specific Investigations

APO Breach Investigations

Case 1
    The Commission found that two attorneys and a legal assistant from 
a law firm breached the APO when they failed to remove business 
proprietary information (BPI) from the public version of final comments 
filed on behalf of their clients, who were respondents in a title VII 
investigation. The Commission issued a private letter of reprimand to 
all three individuals.
    After the law firm filed the public version of its final comments, 
the Commission staff identified five instances of failure to redact BPI 
from brackets in that public document. The Commission Secretary 
notified the firm of that failure to redact and she sent a letter of 
inquiry to the firm. Two attorneys and a legal assistant provided 
responses describing their participation in preparation and filing of 
that public version. The Commission found that they had breached the 
APO, and allowed additional comments from the attorneys and legal 
assistant on mitigating circumstances and their views on the 
appropriate sanction.
    The Commission considered several mitigating circumstances. The 
record indicated that the breach was unintentional and none of the 
three individuals had been found in violation of an APO in the two 
years preceding the breach, the standard period the Commission has 
considered in sanctions determinations. After the breach was discovered 
by Commission staff, the firm took immediate steps to cure the breach, 
including retrieval from counsel who was not a signatory to the APO but 
upon whom the public version of the final comments had been served. The 
firm also immediately followed up with Commission staff to assure that 
the BPI was removed from the Electronic Document Information System 
    The Commission also took into account some aggravating factors. The 
breach was discovered by Commission staff and not the law firm. The BPI 
was available to the public for about a week, including on EDIS, and 
the document was in fact viewed on EDIS by the public. Also, one law 
firm which was not on the APO was served the public document containing 
BPI, thus making it likely that the BPI was read by persons not under 
the APO. In addition, the firm failed to follow its own procedures for 
protecting BPI by not using a third attorney to review the redaction of 
the BPI from the public version of the document.
Case 2
    The Commission found that an attorney breached the APO by failing 
to serve all authorized applicants to the APO with written submissions 
containing business proprietary information, pursuant to the 
requirements of the APO and Commission Rule 207.7(f). The Commission 
issued a warning letter to the attorney.
    Commission Rule 207.7(f) requires that all written submissions 
containing business proprietary information be served on all authorized 
applicants to the APO. The APO requires that all BPI materials be 
served pursuant to Commission rule 207.7. An attorney representing a 
respondent submitted foreign producer questionnaire responses to the 
Commission. In the accompanying cover letter, the attorney indicated 
that he had served the questionnaire responses on all authorized 
applicants except for a law firm representing two of the domestic 
interested parties. The attorney claimed that the firm was engaged in 
competitive decision making for its

[[Page 76522]]

clients and that the information being submitted was a type of 
information for which there was a clear and compelling need to withhold 
from disclosure.
    Commission staff informed the attorney that he was required to 
serve the law firm in question by noon the next day or the 
questionnaires would be rejected. Since the attorney did not do so, the 
questionnaire responses were rejected.
    The Commission considered several mitigating factors. The attorney 
involved had not been sanctioned for an APO breach within the two year 
period generally examined by the Commission for purposes of determining 
sanctions nor had he previously violated the Commission's rules. 
Moreover, no party was prejudiced by the breach as the attorney later 
filed the same questionnaire responses and served them on all 
authorized applicants, including the law firm not previously served.
    The Commission also considered the aggravating circumstances that 
the APO breach was intentional and was caused by the attorney 
substituting his judgment for the Commission's as to which parties to 
Case 3
    Attorneys who were APO signatories in two law firms were found by 
the Commission to have breached the APO in a section 337 investigation 
by retaining confidential business information (CBI) after the appeal 
of the investigation had terminated. Two of the attorneys breached the 
APO by retaining the CBI and by disclosing third party CBI to non-
signatories in response to discovery requests in separate district 
court litigation. Those two attorneys were issued private letters of 
reprimand by the Commission and the attorneys who had retained but not 
disclosed the CBI were issued warning letters. The Commission did not 
find a violation of the APO by attorneys in several other law firms who 
were not signatories to the APO but who received the CBI that had been 
disclosed by the two aforementioned attorneys. They were instead issued 
letters instructing them to return or destroy the CBI.
    With respect to the attorneys who retained and disclosed the CBI, 
the Commission considered the mitigating circumstances that the breach 
was unintentional, that the attorneys acted quickly to cure the breach, 
and that they had not previously breached an APO within the two-year 
period generally considered by the Commission in determining what 
sanctions to impose for a breach. The Commission also took into account 
the aggravating circumstances that the CBI was viewed by unauthorized 
persons, and that the breach was not discovered by the attorneys or 
their firm.
    With respect to the attorneys who retained but did not disclose the 
CBI, the Commission considered the mitigating circumstances that the 
breach was unintentional, that the CBI that they retained was not read 
by any person not subject to the APO, that their firm moved to remedy 
the breach expeditiously after being informed of it by the Commission 
staff, and that this is the only breach in which they had been involved 
in the two-year period generally examined by the Commission for the 
purpose of determining sanctions. The Commission also considered the 
aggravating circumstances that their firm did not discover the breach 
and that it appeared that their firm had a policy to retain CBI 
following any case or investigation.

     Issued: December 21, 2012.

    By order of the Commission.
Lisa R. Barton,
Acting Secretary to the Commission.
[FR Doc. 2012-31158 Filed 12-27-12; 8:45 am]