Rules of Practice Amendments

SUMMARY: The Federal Trade Commission amends its Rules of Practice to

adapt them to the Federal Trade Commission Act Amendments of 1994. This

action conforms the Commission's Rules of Practice to certain statutory

changes and provides guidance to the public.

EFFECTIVE DATE: July 21, 1995.

FOR FURTHER INFORMATION CONTACT: Joyce Plyler, Attorney, Office of

General Counsel, Federal Trade Commission, Washington, D.C. 20580, 202-

326-2155.

SUPPLEMENTARY INFORMATION: On August 26, 1994, the President signed

into law the ``Federal Trade Commission Act Amendments of 1994,'' Pub.

L. 103-312, 108 Stat. 1691 (1994 Amendments), by which the Congress

reauthorized the Federal Trade Commission and further defined or

altered the Commission's authority. The 1994 Amendments make it

necessary or appropriate to revise certain of the agency's Rules of

Practice. These rule revisions relate solely to agency practice and,

thus, are not subject to the notice and comment requirements of the

Administrative Procedure Act, 5 U.S.C. 553(a)(2), nor to the

requirements of the Regulatory Flexibility Act, 5 U.S.C. 601(2). The

Paperwork Reduction Act, 44 U.S.C. 3501, does not apply because these

revisions do not contain requirements for information collection

subject to approval of the Office of Management and Budget. Although

the rule revisions are effective immediately, the Commission welcomes

comment on them and will consider further revision, as appropriate.

I. Analysis

1. Deletion of Section 1.17

Section 1.17 is being removed in accordance with section 3 of the

1994 Amendments, which deletes section 18(h) of the FTC Act, 15 U.S.C.

57a. That section permitted the Commission to provide, in certain

circumstances, compensation for attorney's fees and other costs

incurred by participants in rulemaking proceedings.

2. Addition to Section 2.7

Section 7 of the 1994 Amendments broadens the Commission's

investigatory authority by authorizing it to issue civil investigative

demands (CIDs) for tangible things, and to use CIDs in antitrust

investigations. The Commission is adding a new subsection (2) to

Sec. 2.7(b) of the rules, to extend CID authority to tangible items.

The new subsection parallels existing rules that apply to demands for

other materials. Cross-references in other subsections are renumbered.

No rule change is necessary to implement the extension of the

Commission's authority to use CIDs in antitrust investigations.

3. Revisions Relating to Stays of Orders

The 1994 Amendments make any cease and desist order that is

adjudicated under section 5 of the FTC Act effective 60 days after

service, except for divestiture provisions,1 unless the order is

stayed by the Commission or a court. The Commission is adding a new

Sec. 3.56 to incorporate this statutory change and to establish

procedural rules for stay applications. Section 3.56 requires that

applications must be submitted within 30 days of service of the order.

This time limit will help ensure that a Commission resolution of the

request for a stay can be made before the order goes into effect and

before a petition for judicial review must be filed. The rule also

specifies that applications shall state the reasons for a stay and

shall be supported by affidavits or other sworn statements, with

attachments from the record where relevant.

\1\ Pursuant to amended section 5(g) of the FTC Act, the

automatic stay still applies to ``an order provision requiring a

person, partnership or corporation to divest itself of stock, other

share capital, or assets, if a petition for review of such order has

been filed * * *.'' Divestiture provisions retain the automatic stay

because of their substantial impact on business operations. See S.

Rep. No. 130, 103d Cong., 1st Sess. 11 (1993); H. Rep. No. 138, 103d

Cong., 1st Sess. 13 (1993). Other provisions of the order are not

automatically stayed. The Commission notes that order paragraphs

containing divestiture provisions may also contain other provisions,

such as hold-separate requirements or asset-preservation provisions,

which do not have the same impact as divestiture requirements and

which, therefore, are not automatically stayed.

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In addition, applications must address the likelihood of the

applicant's success on appeal, whether the applicant will suffer

irreparable harm if a stay is not granted, the degree of injury to

other parties if a stay is granted, and why the stay is in the public

interest. These questions are based on the traditional four-part test

that courts, as well as agencies governed by the Administrative

Procedure Act, have applied in determining requests for stays of

orders. See, e.g., Hilton v. Braunskill, 481 U.S. 770, 776 (1987); In

re Chicago Mercantile Exchange, Board of Trade of the City of Chicago,

and Investment Company Institute, Securities Exchange Act Release No.

26811 (May 12, 1989). The Commission previously has stated that this

four-part test is the appropriate standard for stay applications under

the FTC Act. See Order Denying Respondent's Motion to Stay Enforcement,

Trans Union Corp., D. 9255 (Dec. 5, 1994).

Section 3.56 also requires that service of applications be made in

the same fashion as in adjudicative proceedings, to ensure that

applications are filed with the Secretary of the Commission as well as

the relevant staff. An answer to an application may be filed within 5

business days of receipt of the application, and a reply (limited to

new matters raised in the answer) may be filed within 3 business days

of receipt of the answer. These short time frames take into account

that the Commission will undertake to rule on the application within 30

days, after which, if the Commission has not acted, or the application

is denied, the applicant may request a stay from the court in which an

appeal is pending. Specifically allowing replies, and limiting them to

new matters raised in the answer, will deter submission of repetitious

filings.

The Commission is also adding a provision to Sec. 4.7(e) concerning

ex parte communications, specifying that the requirements of Rule 4.7

are to be observed with respect to stay applications. In Sec. 4.7(f),

the Commission clarifies that the ex parte rules are not applicable to

communications regarding preparations for judicial review.

In addition, the Commission is revising Rule 2.41 pertaining to the

filing of compliance reports, to state that neither the filing of an

application for a stay nor of a petition for review will operate to

delay the required date for filing a compliance report. Compliance

reports will be delayed only to the extent that an order is stayed

automatically by statute, by order of the Commission or a court, or as

otherwise permitted under the rules.

Finally, the Commission is clarifying that applications for stays

and subsequent, related filings (as well as petitions for

reconsideration) will be placed on the public record, pursuant to

Sec. 4.9(b). Requests for confidential treatment of material submitted

with stay applications will be determined as provided in

Sec. 4.9(c)(1).

4. Revisions Affecting Custody of Tangible Things

Section 8 of the 1994 Amendments amended section 20 of the FTC Act

regarding the Commission's custody of tangible things. To accommodate

submissions of tangible items, the

[[Page 37747]]

Commission is making a number of technical revisions to Sec. 3.45, 4.9,

4.10, 4.11, and 4.12.2 The most prevalent change is that, where

appropriate, the word ``material'' is substituted for ``documents,''

``documents and testimony,'' and ``information''.

\2\ Unrelated to the 1994 Amendments, the Commission is deleting

the second sentence of Sec. 3.45(c) because it is unnecessary. The

Commission also is making some minor editorial changes to the

general paragraphs in Sec. 4.9(a), which are not substantive but

merely clarify the Commission's organization of its materials. The

Commission also is correcting some of the categorizations and

parenthetical cross-references in Sec. 4.9(b).

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Some portions of the rules, most notably in Sec. 4.10(a), are based

on the Freedom of Information Act (FOIA), 5 U.S.C. 552, which has been

interpreted not to cover tangible items.3 Thus, references to

``records'' in provisions that are founded on the FOIA are not intended

to be read any broader than the FOIA itself. However, other provisions

of the rules use ``records'' and ``public records'' in a manner

indicating, by their context, that tangible items should be included.

To avoid potential confusion over whether the word ``record'' does or

does not include tangible items, the revisions distinguish between a

``record,'' which includes only compilations of information, such as in

a document or transcript, and ``the public record,'' a term of art that

could include anything available to the public, including tangible

items. Thus, in some cases, the word ``records'' is changed to

``material'' to indicate that tangible items are included, and the

phrase, ``public records'' is changed to ``the public record'' in

places where that term of art is more appropriate.

\3\ Matthews v. United States Postal Serv., No. 92-1208, slip

op. at 4, n. 3 (W.D. Mo. Apr. 14, 1994) (computer hardware not

``record''); Nichols v. United States, 325 F. Supp. 130, 135-36

(D.Kan. 1971) (guns, bullets, and clothing held not ``records''),

aff'd on other grounds, 460 F.2d 671 (10th Cir.), cert. denied, 409

U.S. 966 (1972).

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Some rule provisions arise from section 21 of the FTC Act and

already refer to ``material.'' The definition of ``material'' in

section 21(a) of the FTC Act was amended by the 1994 Amendments to

include tangible items. Thus, those provisions may be read to include

tangible items. In addition, because the definition of ``material'' in

section 21(a) also includes transcripts of oral testimony, the

Commission is deleting the parenthetical references to transcripts of

oral testimony because they are superfluous. These deletions are not

intended to exclude transcripts of oral testimony from the word

``material.'' On the contrary, the Commission intends ``material'' to

include transcripts of oral testimony wherever that term is used.

List of Subjects

16 CFR Part 1

Administrative practice and procedure, Advisory opinions,

Rulemaking, Trade regulation rules.

16 CFR Part 2

Administrative practice and procedure, Investigations.

16 CFR Part 3

Administrative practice and procedure, Investigations.

16 CFR Part 4

Administrative practice and procedure, Freedom of Information Act,

Privacy Act, Sunshine Act.

Accordingly, the Federal Trade Commission amends title 16, Chapter

I, subchapter A of the Code of Federal Regulations, as follows:

PART 1--GENERAL PROCEDURES

1. The authority for part 1 continues to read as follows:

Authority: Sec. 6, 38 Stat. 721 (15 U.S.C. 46), unless otherwise

noted.

Sec. 1.17 [Removed and reserved]

2. Section 1.17 is removed and reserved.

PART 2-- NONADJUDICATIVE PROCEDURES

3. The authority for part 2 continues to read as follows:

Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46.

Sec. 2.7 [Amended]

4. In the last sentence of Sec. 2.7(b)(1), remove the reference

``20(c)(10)'' and add, in its place, ``20(c)(11)''.

Sec. 2.7 [Amended]

5. In the last sentence of Sec. 2.7(b)(2), remove the reference

``20(c)(11)'' and add, in its place, ``20(c)(13)''.

Sec. 2.7 [Amended]

6. In the last sentence of Sec. 2.7(b)(3), remove the reference

``20(c)(12)'' and add, in its place, ``20(c)(14)''.

7. In Sec. 2.7, paragraphs (b)(2) and (b)(3) are redesignated as

paragraphs (b)(3) and (b)(4), respectively, and new paragraph (b)(2) is

added to read as follows:

Sec. 2.7 Compulsory process in investigations.

* * * * *

(b) Civil investigative demands. * * *

(2) Civil investigative demands for tangible things will describe

each class of tangible things to be produced with such definiteness and

certainty as to permit such things to be fairly identified, prescribe a

return date or dates which will provide a reasonable period of time

within which the things so demanded may be assembled and submitted, and

identify the custodian to whom such things shall be submitted.

Submission of tangible things in response to a civil investigative

demand shall be made in accordance with the procedures prescribed by

section 20(c)(12) of the Federal Trade Commission Act.

* * * * *

8. Section 2.41(a) is revised to read as follows:

Sec. 2.41 Reports of compliance.

(a) In every proceeding in which the Commission has issued an order

pursuant to the provisions of section 5 of the Federal Trade Commission

Act or section 11 of the Clayton Act, as amended, and except as

otherwise specifically provided in any such order, each respondent

named in such order shall file with the Commission, within sixty (60)

days after service thereof, or within such other time as may be

provided by the order or the rules in this chapter, a report in

writing, signed by the respondent, setting forth in detail the manner

and form of his compliance with the order, and shall thereafter file

with the Commission such further signed, written reports of compliance

as it may require. Reports of compliance shall be under oath if so

requested. Where the order prohibits the use of a false advertisement

of a food, drug, device, or cosmetic which may be injurious to health

because of results from its use under the conditions prescribed in the

advertisement, or under such conditions as are customary or usual, or

if the use of such advertisement is with intent to defraud or mislead,

or in any other case where the circumstances so warrant, the order may

provide for an interim report stating whether and how respondents

intend to comply to be filed within ten (10) days after service of the

order. Neither the filing of an application for stay pursuant to

Sec. 3.56, nor the filing of a petition for judicial review, shall

operate to postpone the time for filing a compliance report under the

order or this section. If the Commission, or a court, determines to

grant a stay of an order, or portion thereof, pending judicial review,

or if any order provision is automatically stayed by statute, no

compliance report shall be due as to those portions of the order that

are stayed unless ordered by the court. Thereafter, as to orders, or

portions thereof, that are stayed, the time for filing a report of

compliance shall begin

[[Page 37748]]

to run de novo from the final judicial determination, except that if no

petition for certiorari has been filed following affirmance of the

order of the Commission by a court of appeals, the compliance report

shall be due the day following the date on which the time expires for

the filing of such petition. Staff of the Bureaus of Competition and

Consumer Protection will review such reports of compliance and may

advise each respondent whether the staff intends to recommend that the

Commission take any enforcement action. The Commission may, however,

institute proceedings, including certification of facts to the Attorney

General pursuant to the provisions of section 5(l) of the Federal Trade

Commission Act (15 U.S.C. 45(l)) and section 11(1) of the Clayton Act,

as amended (15 U.S.C. 21(1)), to enforce compliance with an order,

without advising a respondent whether the actions set forth in a report

of compliance evidence compliance with the Commission's order or

without prior notice of any kind to a respondent.

* * * * *

PART 3--RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS

9. The authority for part 3 continues to read as follows:

Authority: Sec. 6, 38 Stat. 721 (15 U.S.C. 46), unless otherwise

noted.

10. In Sec. 3.45 paragraphs (a), (b), and (c) are revised to read

as follows:

Sec. 3.45 In camera orders.

(a) Definition. Except as hereinafter provided, material made

subject to an in camera order will be kept confidential and not placed

on the public record of the proceeding in which it was submitted. Only

respondents, their counsel, authorized Commission personnel, and court

personnel concerned with judicial review may have access thereto,

provided that the Administrative Law Judge, the Commission and

reviewing courts may disclose such in camera material to the extent

necessary for the proper disposition of the proceeding.

(b) In camera treatment of material. The Administrative Law Judge

may order material, or portions thereof, offered into evidence, whether

admitted or rejected, to be placed in camera on a finding that their

public disclosure will likely result in a clearly defined, serious

injury to the person, partnership or corporation requesting their in

camera treatment. This finding shall be based on the standard

articulated in H.P. Hood & Sons, Inc., 58 F.T.C. 1184, 1188 (1961); see

also Bristol-Myers Co., 90 F.T.C. 455, 456 (1977), which established a

three-part test that was modified by General Foods Corp., 95 F.T.C.

352, 355 (1980). No material, or portion thereof offered into evidence,

whether admitted or rejected, may be withheld from the public record

unless it falls within the scope of an order issued in accordance with

this section, stating the date on which in camera treatment will

expire, and including:

(1) A description of the material;

(2) A statement of the reasons for granting in camera treatment;

and

(3) A statement of the reasons for the date on which in camera

treatment will expire. Such expiration date may not be omitted except

in unusual circumstances, in which event the order shall state with

specificity the reasons why the need for confidentiality of the

material, or portion thereof at issue is not likely to decrease over

time, and any other reasons why such material is entitled to in camera

treatment for an indeterminate period. Any party desiring, in

connection with the preparation and presentation of the case, to

disclose in camera material to experts, consultants, prospective

witnesses, or witnesses, shall make application to the Administrative

Law Judge setting forth the justification therefor. The Administrative

Law Judge, in granting such application for good cause found, shall

enter an order protecting the rights of the affected parties and

preventing unnecessary disclosure of information. Material subject to

an in camera order shall be segregated from the public record and filed

in a sealed envelope, or other appropriate container, bearing the

title, the docket number of the proceeding, the notation ``In Camera

Record under Sec. 3.45,'' and the date, if any, on which in camera

treatment expires.

(c) Release of in camera material. In camera material constitutes

part of the confidential records of the Commission and is subject to

the provisions of Sec. 4.11 of this chapter.

* * * * *

11. Section 3.56 is added to subpart F to read as follows:

Sec. 3.56 Effective date of orders; application for stay.

(a) Other than consent orders, an order to cease and desist under

section 5 of the FTC Act becomes effective upon the sixtieth day after

service, except as provided in section 5(g)(3) of the FTC Act, and

except for divestiture provisions, as provided in section 5(g)(4) of

the FTC Act.

(b) Any party subject to a cease and desist order under section 5

of the FTC Act, other than a consent order, may apply to the Commission

for a stay of all or part of that order pending judicial review. If,

within 30 days after the application was received by the Commission,

the Commission either has denied or has not acted on the application, a

stay may be sought in a court of appeals where a petition for review of

the order is pending.

(c) An application for stay shall state the reasons a stay is

warranted and the facts relied upon, and shall include supporting

affidavits or other sworn statements, and a copy of the relevant

portions of the record. The application shall address the likelihood of

the applicant's success on appeal, whether the applicant will suffer

irreparable harm if a stay is not granted, the degree of injury to

other parties if a stay is granted, and why the stay is in the public

interest.

(d) An application for stay shall be filed within 30 days of

service of the order on the party. Such application shall be served in

accordance with the provisions of Sec. 4.4(b) of this part that are

applicable to service in adjudicative proceedings. Any party opposing

the application may file an answer within 5 business days after receipt

of the application. The applicant may file a reply brief, limited to

new matters raised by the answer, within 3 business days after receipt

of the answer.

PART 4--MISCELLANEOUS RULES

12. The authority for part 4 continues to read as follows:

Authority: Sec. 6, 38 Stat. 721; 15 U.S.C. 46.

13. Section 4.7 is amended by adding a new sentence at the end of

paragraph (e) and by revising the first sentence of paragraph (f) to

read as follows:

Sec. 4.7 Ex parte communications.

* * * * *

(e) * * * In addition, the prohibitions of this section shall apply

with respect to communications concerning an application for stay filed

with the Commission pursuant to Sec. 3.56 from the time that the

application is filed until its disposition.

(f) The prohibitions of paragraph (b) of this section do not apply

to a communication occasioned by and concerning a nonadjudicative

function of the Commission, including such functions as the initiation,

conduct, or disposition of a separate investigation, the issuance of a

complaint, or the initiation of a rulemaking or other proceeding,

whether or not it involves a party already in an adjudicative

proceeding; preparations for judicial review of a Commission order; a

[[Page 37749]]

proceeding outside the scope of Sec. 3.2, including a matter in state

or federal court or before another governmental agency; * * *

14. In Sec. 4.9, the heading and paragraphs (a)(1) through (a)(3)

are revised to read as follows:

Sec. 4.9 The public record.

(a) General. (1) Materials on the public record of the Commission

are available for public inspection and copying either routinely or

upon request.

(2) Materials that are exempt from mandatory public disclosure, or

are otherwise not available from the Commission's public record, may be

made available for inspection and copying only upon request under the

procedures set forth in Sec. 4.11 of this part, or as provided in

Secs. 4.10 (d) through (g), 4.13, and 4.15(b)(3) of this part, or by

the Commission.

(3) Location. Materials on the public record are available for

inspection at the principal office of the Commission, and copies of

some of those records are available at the regional offices, on each

business day from 9 a.m. to 5 p.m.

* * * * *

Sec. 4.9 [Amended]

15. Section 4.9(b) is amended by revising the heading and

introductory text, the heading of paragraph (b)(3), the heading and

text of paragraphs (b)(5) and (b)(6), and the heading of paragraph

(b)(8) to read as follows:

* * * * *

(b) Categories. Except to the extent material is confidential, as

provided in paragraph (c) of this section, the public record of the

Commission includes, but is not necessarily limited to:

* * * * *

(3) Rulemaking (16 CFR 1.7 through 1.26). * * *

* * * * *

(5) Adjudicative proceedings, stay applications, requests to

reopen, and litigated orders. (16 CFR 2.51, 3.1 through 3.24, 3.31

through 3.56, 3.71 through 3.72, 4.7)--Except for transcripts of

matters heard in camera pursuant to Sec. 3.45 and material filed in

camera pursuant to Secs. 3.22, 3.24, 3.45, 3.46, 3.51 and 3.52,

(i) The versions of pleadings and transcripts of prehearing

conferences to the extent made available under Sec. 3.21(e), motions,

certifications, orders, and the transcripts of hearings (including

public conferences), testimony, oral arguments, and other material made

a part thereof, and exhibits and material received in evidence or made

a part of the public record in adjudicative proceedings;

(ii) Initial decisions of administrative law judges;

(iii) Orders and opinions in interlocutory matters;

(iv) Final orders and opinions in adjudications, and rulings on

stay applications, including separate statements of Commissioners;

(v) Petitions for reconsideration, and answers thereto, filed

pursuant to Sec. 3.55;

(vi) Applications for stay, answers thereto, and replies, filed

pursuant to Sec. 3.56;

(vii) Petitions, applications, pleadings, briefs, and other records

filed by the Commission with the courts in connection with

adjudicative, injunctive, enforcement, compliance, and condemnation

proceedings, and in connection with judicial review of Commission

actions, and opinions and orders of the courts in disposition thereof;

(viii) Records of ex parte communications in adjudicative

proceedings and stay applications;

(ix) Petitions to reopen proceedings and orders to determine

whether orders should be altered, modified, or set aside in accordance

with Sec. 2.51; and

(x) Decisions reopening proceedings, and orders to show cause under

Sec. 3.72.

(6) Consent Agreements (16 CFR 2.31 through 2.34, 3.25). (i)

Agreements containing orders, after acceptance by the Commission

pursuant to Secs. 2.34 and 3.25(f) of this chapter;

(ii) Comments filed under Secs. 2.34 and 3.25(f) of this chapter

concerning proposed consent agreements; and

(iii) Final decisions and orders issued after the comment period

prescribed in Secs. 2.34 and 3.25(f), including separate statements of

Commissioners.

* * * * *

(8) Access to Documents and Meetings (16 CFR 4.8, 4.11, 4.13,

4.15). * * *

* * * * *

Sec. 4.9 [Amended]

16. Section 4.9(c) is amended by revising the heading, the first

sentence of paragraph (c)(1), and paragraphs (c)(2) and (c)(3) to read

as follows:

* * * * *

(c) Confidentiality and in camera material. (1) Persons submitting

material to the Commission described in this section may designate that

material or portions of it confidential and request that it be withheld

from the public record. * * *

(2) Motions seeking in camera treatment of material submitted in

connection with a proceeding under part 3 of these rules, except stay

applications under Sec. 3.56, shall be filed with the Administrative

Law Judge who is presiding over the proceeding. Requests for

confidential treatment of material submitted in connection with a stay

application shall be made in accordance with Sec. 4.9(c)(1).

(3) To the extent that any material or portions of material

otherwise falling within Sec. 4.9(b) contain information that is not

required to be made public under Sec. 4.10 of this part, the General

Counsel may determine to withhold such materials from the public

record.

17. Section 4.10 is amended by revising the heading, paragraph (a)

introductory text, paragraphs (a)(8) through (a)(11), and paragraphs

(d), (e), (f), and (g), introductory text and concluding text, to read

as follows:

Sec. 4.10 Nonpublic material.

(a) The following records and other material of the Commission are

not required to be made public pursuant to 5 U.S.C. 552.

* * * * *

(8) Material, as that term is defined in section 21(a) of the

Federal Trade Commission Act, which is received by the Commission:

(i) In an investigation, a purpose of which is to determine whether

any person may have violated any provision of the laws administered by

the Commission; and

(ii) Which is provided pursuant to any compulsory process under the

Federal Trade Commission Act, 15 U.S.C. 41, et seq., or which is

provided voluntarily in place of compulsory process in such an

investigation. See section 21(f) of the Federal Trade Commission Act.

(9) Material, as that term is defined in section 21(a) of the

Federal Trade Commission Act, which is received by the Commission

pursuant to compulsory process in an investigation, a purpose of which

is to determine whether any person may have violated any provision of

the laws administered by the Commission. See section 21(b)(3)(C) of the

Federal Trade Commission Act.

(10) Such other material of the Commission as may from time to time

be designated by the Commission as confidential pursuant to statute or

Executive Order. This exempts from disclosure any information that has

been designated nonpublic pursuant to criteria and procedures

prescribed by Executive Order and that has not been subsequently

declassified in accordance with applicable procedures. The exemption

also preserves the full force and effect of statutes that restrict

public access to specific government records or material.

(11) Material in an investigation or proceeding that involves a

possible

[[Page 37750]]

violation of criminal law, when there is reason to believe that the

subject of the investigation or proceeding is not aware of its

pendency, and disclosure of the existence of the investigation could

reasonably be expected to interfere with enforcement proceedings. When

a request is made for records under Sec. 4.11(a), the Commission may

treat the records as not subject to the requirements of the Freedom of

Information Act.

* * * * *

(d) Except as provided in paragraphs (f) and (g) of this section

and in Sec. 4.11 (b), (c), and (d), no material which is marked or

otherwise identified as confidential and which is within the scope of

Sec. 4.10(a)(8) and no material which is within the scope of

Sec. 4.10(a)(9) which is not otherwise public shall be made available

to any individual other than a duly authorized officer or employee of

the Commission or a consultant or contractor retained by the Commission

who has agreed in writing not to disclose the information without the

consent of the person who produced the material. All other Commission

records may be made available to a requester under the procedures set

forth in Sec. 4.11 or may be disclosed by the Commission except where

prohibited by law.

(e) Except as provided in paragraphs (f) and (g) of this section

and in Sec. 4.11 (b), (c), and (d), material not within the scope of

Sec. 4.10(a)(8) or Sec. 4.10(a)(9) which is received by the Commission

and is marked or otherwise identified as confidential may be disclosed

only if it is determined that the material is not within the scope of

Sec. 4.10(a)(2), and only if the submitter is provided at least 10

days' notice of the intent to disclose the material involved.

(f) Nonpublic material obtained by the Commission may be disclosed

to persons other than the submitter in connection with the taking of

oral testimony without the consent of the submitter only if the

material or transcript is not within the scope of Sec. 4.10(a)(2). If

the material is marked confidential, the submitter will be provided 10

days' notice of the intended disclosure or will be afforded an

opportunity to seek an appropriate protective order.

(g) Material obtained by the Commission:

(1) * * *

(2) * * *

(3) * * *

Prior to disclosure of such material in a proceeding, the submitter

will be afforded an opportunity to seek an appropriate protective or in

camera order. All other material obtained by the Commission may be

disclosed in Commission administrative or court proceedings at the

discretion of the Commission except where prohibited by law.

18. Section 4.11 is amended by revising the heading, the first

sentence in paragraph (b), the first, second and third sentences in

paragraph (c), the heading in paragraph (e), and paragraphs (e)(1)

through (e)(5) to read as follows:

Sec. 4.11 Disclosure requests.

* * * * *

(b) Requests from congressional committees and subcommittees.

Requests from congressional committees and subcommittees for nonpublic

material shall be referred to the General Counsel for presentation to

the Commission, subject to the provisions in 5 U.S.C. 552(c) and FTC

Act 21(b) that neither the Freedom of Information Act, 5 U.S.C. 552,

nor the Federal Trade Commission Act, 15 U.S.C. 41, et seq., is

authority to withhold information from Congress. * * *

(c) Requests from Federal and State law enforcement agencies.

Requests from law enforcement agencies of the Federal government shall

be addressed to the liaison officer for the requesting agency, or if

there is none, to the General Counsel. Requests from state agencies

shall be addressed to the General Counsel. With respect to requests

under this paragraph, the General Counsel or the appropriate liaison

officer is delegated the authority to dispose of them or may refer them

to the Commission for determination, except that requests must be

referred to the Commission for determination where the Bureau having

the material sought and the General Counsel do not agree on the

disposition. * * *

* * * * *

(e) Material and information requested by subpoena in cases or

matters to which the agency is not a party. (1) The procedures

specified in this section will apply to all subpoenas directed to

Commission employees, except special government employees, that relate

in any way to the employees' official duties. These procedures will

also apply to subpoenas directed to former Commission employees and

current or former special government employees of the Commission, if

the subpoenas seek nonpublic materials or information acquired during

Commission employment. The provisions of paragraph (e)(3) of this

section will also apply to subpoenas directed to the agency. For

purposes of this section, the term ``subpoena'' includes any compulsory

process in a case or matter to which the agency is not a party; the

term ``nonpublic'' includes any material or information which, under

Sec. 4.10, is not required to be made public; the term ``employees,''

except where otherwise specified, includes ``special government

employees'' and other agency employees; and the term ``special

government employees'' includes consultants and other employees as

defined by section 202 of title 18 of the United States Code.

(2) Any employee or former employee who is served with a subpoena

shall promptly advise the General Counsel of the service of the

subpoena, the nature of the material or information sought, and all

relevant facts and circumstances.

(3) A party causing a subpoena to be issued to the Commission or

any employee or former employee of the Commission shall furnish a

statement to the General Counsel. The statement shall set forth the

party's interest in the case or matter, the relevance of the desired

testimony or material, and a discussion of whether it is reasonably

available from other sources. If testimony is desired, the statement

shall also contain a general summary of the testimony and a discussion

of whether agency records could be produced and used in its place. Any

authorization for testimony will be limited to the scope of the demand

as summarized in such statement.

(4) Absent authorization from the General Counsel, the employee or

former employee shall respectfully decline to produce requested

material or to disclose requested information. The refusal should be

based on this paragraph and on Touhy v. Ragen, 340 U.S. 462 (1951).

(5) The General Counsel will consider and act upon subpoenas under

this section with due regard for statutory restrictions, the

Commission's rules and the public interest, taking into account factors

such as the need to conserve the time of employees for conducting

official business; the need to avoid spending the time and money of the

United States for private purposes; the need to maintain impartiality

between private litigants in cases where a substantial government

interest is not involved; and the established legal standards for

determining whether justification exists for the disclosure of

confidential information and material.

* * * * *

19. Section 4.12 is amended by revising paragraphs (a) and (c) to

read as follows:

[[Page 37751]]

Sec. 4.12 Disposition of material submitted to the Commission.

(a) Material submitted to the Commission. (1) Any person who has

submitted material to the Commission may obtain, on request, the return

of material submitted to the Commission which has not been received

into evidence:

(i) After the close of the proceeding in connection with which the

material was submitted; or

(ii) When no proceeding in which the material may be used has been

commenced within a reasonable time after completion of the examination

and analysis of all such material and other information assembled in

the course of the investigation.

(2) Such request shall be in writing, addressed to the custodian

designated pursuant to Sec. 2.16 or the Secretary of the Commission in

all other circumstances, and shall reasonably describe the material

requested. A request for return of material may be filed at any time,

but material will not be returned nor will commitments to return

material be undertaken prior to the time described in this paragraph.

* * * * *

(c) Disposition of material not returned. Subsequent to the time

prescribed in paragraph (a) of this section, the staff will examine all

submitted material and Commission-made copies of documents located in a

reasonable search of the Commission's files and will determine,

consistent with the Federal Records Act, 44 U.S.C. 3301, which

materials are appropriate for preservation as evidence of the

organization, functions, policies, decisions, procedures, operations,

or other activities of the Commission or because of the information

value of data in them. The Commission will dispose of all material

determined not to be appropriate for preservation in accordance with

applicable regulations of the National Archives and Records

Administration.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 95-16948 Filed 7-20-95; 8:45 am]

BILLING CODE 6750-01-P