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Title 16: Commercial Practices

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PART 0—ORGANIZATION

Section Contents

§ 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 Office of the Inspector General.

§ 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.

§ 0.20 Office of International Affairs.

Authority: 5 U.S.C. 552(a)(1); 15 U.S.C. 46(g).

Source: 41 FR 54483, Dec. 14, 1976, unless otherwise noted.

§ 0.1 The Commission.

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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.

§ 0.2 Official address.

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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. The

Commission's Web site address is www.ftc.gov.

[63 FR 71582, Dec. 29, 1998, as amended at 65 FR 78408, Dec. 15, 2000]

§ 0.3 Hours.

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Principal and field offices are open on each business day from 8:30 a.m. to 5 p.m.

§ 0.4 Laws administered.

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The Commission exercises enforcement and administrative authority under the Federal Trade Commission Act (15 U.S.C. 41–58),

Clayton Act (15 U.S.C. 12–27), Robinson-Patman Act (15 U.S.C. 13–13b, 21a), Webb-Pomerene (Export Trade) Act (15 U.S.C.

61–66), Packers and Stockyards Act (7 U.S.C. 181–229), Wool Products Labeling Act of 1939 (15 U.S.C. 68–68j), Lanham

Trade-Mark Act (15 U.S.C. 1064), Fur Products Labeling Act (15 U.S.C. 69–69j), Textile Fiber Products Identification Act (15

U.S.C. 70–70k), Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331–1340), Fair Packaging and Labeling Act (15

U.S.C. 1451–1461), Truth in Lending Act (15 U.S.C. 1601–1667f), Fair Credit Reporting Act (15 U.S.C. 1681–1681u), Fair Credit

Billing Act (15 U.S.C. 1666–1666j), Equal Credit Opportunity Act (15 U.S.C. 1691–1691f), Fair Debt Collection Practices Act (15

U.S.C. 1692–1692o), Electronic Fund Transfer Act (15 U.S.C. 1693–1693r), Hobby Protection Act (15 U.S.C. 2101–2106),

Magnuson-Moss Warranty—Federal Trade Commission Improvement Act (15 U.S.C. 2301–2312, 45–58), Energy Policy and

Conservation Act (42 U.S.C. 6201–6422, 15 U.S.C. 2008), Hart-Scott-Rodino Antitrust Improvements Act of 1976 (15 U.S.C. 18a),

Petroleum Marketing Practices Act (15 U.S.C. 2801–2841), Comprehensive Smokeless Tobacco Health Education Act of 1986 (15

U.S.C. 4401–4408), Telephone Disclosure and Dispute Resolution Act of 1992 (15 U.S.C. 5701–5724), Telemarketing and

Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6101–6108), International Antitrust Enforcement Assistance Act of 1994 (15

U.S.C. 46, 57b–1, 1311–1312, 6201 & note, 6202–6212), Credit Repair Organizations Act (15 U.S.C. 1679–1679j), Children's

Online Privacy Protection Act (15 U.S.C. 6501–6506), Identity Theft Assumption and Deterrence Act of 1998 (18 U.S.C. 1028 note),

Gramm-Leach-Bliley Act (15 U.S.C. 6801–6809), and other Federal statutes.

[65 FR 78408, Dec. 15, 2000]

§ 0.5 Laws authorizing monetary claims.

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The Commission is authorized to entertain monetary claims against it under three statutes. The Federal Tort 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]

§ 0.6 [Reserved]

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§ 0.7 Delegation of functions.

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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, and retains a discretionary right to review such delegated action upon its own initiative or upon petition of a party

to or an intervenor in such action.

[65 FR 78408, Dec. 15, 2000]

§ 0.8 The Chairman.

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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]

§ 0.9 Organization structure.

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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 the Inspector General; Office of the Administrative Law Judges; Office of International

Affairs; Bureau of Competition; Bureau of Consumer Protection; Bureau of Economics; and the Regional Offices.

[72 FR 9434, Mar. 2, 2007]

§ 0.10 Office of the Executive Director.

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The Executive Director, under the direction of the Chairman, is the chief operating official who develops and implements

management and administrative policies, programs and directives for the Commission. The Executive Director works closely with

the Bureaus on strategic planning and assessing the management and resource implications of any proposed action. In addition,

the Executive Director manages the Commission's facilities and administrative services, financial management, information

technology, and human resources.

[65 FR 78408, Dec. 15, 2000]

§ 0.11 Office of the General Counsel.

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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 and other agency officials and staff with

respect to questions of law and policy, including advice with respect to legislative matters and ethics, and responds to requests and

appeals filed under the Freedom of Information and Privacy Acts and to intra- and intergovernmental access requests.

[65 FR 78408, Dec. 15, 2000]

§ 0.12 Office of the Secretary.

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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 the Secretary's absence an Acting Secretary

designated by the Commission, signs Commission orders and official correspondence. In addition, the Secretary is responsible for

the publication of all Commission actions that appear in theFederal Registerand for the publication of Federal Trade Commission

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Decisions.

[65 FR 78408, Dec. 15, 2000]

§ 0.13 Office of the Inspector General.

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The Office of Inspector General (OIG) was established within the Federal Trade Commission in 1989 as required by the Inspector

General Act Amendments of 1988 (5 U.S.C. app. 3). The OIG promotes the economy, efficiency and effectiveness of FTC

programs and operations. To this end, the OIG independently conducts audits and investigations to find and prevent fraud, waste,

and abuse within the agency.

[65 FR 78408, Dec. 15, 2000]

§ 0.14 Office of Administrative Law Judges.

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Administrative law judges are officials to whom the Commission, in accordance with law, delegates the initial performance of

statutory fact-finding functions and initial rulings on conclusions of law, to be exercised in conformity with Commission decisions

and policy directives and with its Rules of Practice. 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, as amended at 65 FR 78409, Dec. 15, 2000]

§ 0.15 [Reserved]

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§ 0.16 Bureau of Competition.

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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 that the Commission is charged with enforcing. The

Bureau's 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 and other equitable 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. The Bureau's activities also include business and

consumer education and staff advice on competition laws and compliance, and liaison functions with respect to foreign antitrust and

competition law enforcement agencies and organizations, including requests for international enforcement assistance.

[65 FR 78409, Dec. 15, 2000]

§ 0.17 Bureau of Consumer Protection.

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The Bureau investigates unfair or deceptive acts or practices under section 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. In consultation with the General Counsel, the Bureau

may also seek injunctive or other equitable relief under section 13(b) of the Federal Trade Commission Act. 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 statutory authority. It investigates compliance with final orders and trade regulation rules and seeks

civil penalties or consumer redress for their violation, as well as injunctive and other equitable relief under section 13(b) of the Act.

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In addition, the Bureau seeks to educate both consumers and the business community about the laws it enforces, and to assist and

cooperate with other state, local, foreign, and international agencies and organizations in consumer protection enforcement and

regulatory matters. The Bureau also maintains the agency's public reference facilities, where the public may inspect and copy 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.

[65 FR 78409, Dec. 15, 2000]

§ 0.18 Bureau of Economics.

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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]

§ 0.19 The Regional Offices.

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(a) These offices are investigatory arms of the Commission, and have responsibility for investigational, trial, compliance, and

consumer educational activities as delegated by the Commission. They are under the general supervision of the Office of the

Executive Director, and clear their activities through the appropriate operating Bureaus.

(b) The names, geographic areas of responsibility, and addresses of the respective regional offices are as follows:

(1) Northeast Region (located in New York City, New York), covering Connecticut, Maine, Massachusetts, New Hampshire, New

Jersey, New York, Rhode Island, Vermont, and Puerto Rico. Federal Trade Commission, One Bowling Green, Suite 318, New

York, New York 10004.

(2) Southeast Region (located in Atlanta, Georgia), covering Alabama, Florida, Georgia, Mississippi, North Carolina, South

Carolina, and Tennessee. Federal Trade Commission, Suite 5M35, Midrise Building, 60 Forsyth Street, SW., Atlanta, Georgia

30303.

(3) East Central Region (located in Cleveland, Ohio), covering Delaware, District of Columbia, Maryland, Michigan, Ohio,

Pennsylvania, Virginia, and West Virginia. Federal Trade Commission, Eaton Center, Suite 200, 1111 Superior Avenue, Cleveland,

Ohio 44114.

(4) Midwest Region (located in Chicago, Illinois), covering Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri,

Nebraska, North Dakota, South Dakota, and Wisconsin. Federal Trade Commission, 55 East Monroe Street, Suite 1860, Chicago,

Illinois 60603–5701.

(5) Southwest Region (located in Dallas, Texas), covering Arkansas, Louisiana, New Mexico, Oklahoma, and Texas. Federal Trade

Commission, 1999 Bryan Street, Suite 2150, Dallas, Texas 75201.

(6) Northwest Region (located in Seattle, Washington), covering Alaska, Idaho, Montana, Oregon, Washington, and Wyoming.

Federal Trade Commission, 915 Second Avenue, Suite 2896, Seattle, Washington 98174.

(7) Western Region (located in San Francisco and Los Angeles, California), covering Arizona, California, Colorado, Hawaii,

Nevada, and Utah.

(i) San Francisco Office: Federal Trade Commission, 901 Market Street, Suite 570, San Francisco, California 94103.

(ii) Los Angeles Office: Federal Trade Commission, 10877 Wilshire Boulevard, Suite 700, Los Angeles, California 90024.

(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; 64 FR

71284, Dec. 21, 1999; 65 FR 78409, Dec. 15, 2000]

§ 0.20 Office of International Affairs.

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The Office of International Affairs (OIA) comprises international antitrust, international consumer protection, and international

technical assistance. OIA is responsible for designing and implementing the Commission's international program, which provides

support and advice to the Bureaus of Competition and Consumer Protection with regard to the international aspects of investigation

and prosecution of unlawful conduct. OIA builds cooperative relationships between the Commission and foreign authorities; works

closely with Bureau personnel to recommend agency priorities and policies and works, through bilateral relationships and

multilateral organizations, to promote those policies internationally; and implements Commission policy and participation in the

competition and consumer protection aspects of trade fora and negotiations, such as the U.S. inter-agency delegations negotiating

bilateral and multilateral free trade agreements. OIA works with authorized funding sources to develop and implement competition

and consumer protection technical assistance programs.

[72 FR 9434, Mar. 2, 2007]

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Section 508 / Accessibility

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e-CFR Data is current as of January 6, 2009

Title 16: Commercial Practices

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PART 1—GENERAL PROCEDURES

Section Contents

Subpart A—Industry Guidance

Advisory Opinions

§ 1.1 Policy.

§ 1.2 Procedure.

§ 1.3 Advice.

§ 1.4 Public disclosure.

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.

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§ 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 Federal Civil Penalties Inflation Adjustment Act of 1990, as

Amended by 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

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§ 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.

Subpart A—Industry Guidance

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Advisory Opinions

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§ 1.1 Policy.

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(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]

§ 1.2 Procedure.

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(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 §2.41 of this chapter.

[44 FR 21624, Apr. 11, 1979, as amended at 44 FR 40638, July 12, 1979]

§ 1.3 Advice.

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(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.

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(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]

§ 1.4 Public disclosure.

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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 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

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§ 1.5 Purpose.

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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.

§ 1.6 How promulgated.

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Industry guides1 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

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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).

§ 1.7 Scope of rules in this subpart.

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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]

§ 1.8 Nature, authority and use of trade regulation rules.

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(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]

§ 1.9 Petitions to commence trade regulation rule proceedings.

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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

§§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]

§ 1.10 Advance notice of proposed rulemaking.

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(a) Prior to the commencement of any trade regulation rule proceeding, the Commission shall publish in theFederal Registeran

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 §1.11.

[46 FR 26288, May, 12, 1981, as amended at 50 FR 53303, Dec. 31, 1985]

§ 1.11 Commencement of a rulemaking proceeding.

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(a) Initial notice. A trade regulation rule proceeding shall commence with an initial notice of proposed rulemaking. Such notice shall

be published in theFederal Registernot sooner than 30 days after it has been submitted to the Committee on Commerce, Science,

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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 §1.13(d)(1)(i) for consideration in accordance

with §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. 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]

§ 1.12 Final notice.

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A final notice of proposed rulemaking shall be published in theFederal Registerand, 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 §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 §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]

§ 1.13 Rulemaking proceeding.

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(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 §1.13 (d)(5) and (d)(6). Interested persons may propose issues for

consideration in accordance with §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.

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(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 §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 §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 §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 crossexamination, 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

(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 §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.

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(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 §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 §1.13 (d)( 5 ) and ( d )( 6 )—(i) Issues that must be considered in

accordance with §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.

(ii) Issues that may be considered in accordance with §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 §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

§1.12(a). No such petition shall be considered unless good cause is shown why any such proposed issue was not proposed

pursuant to §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 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

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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

§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 §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 §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 §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 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]

§ 1.14 Promulgation.

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(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;

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(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 §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 theFederal 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 theFederal 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]

§ 1.15 Amendment or repeal of a rule.

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(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 theFederal Register.

[46 FR 26289, May 12, 1981]

§ 1.16 Petition for exemption from trade regulation rule.

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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]

§ 1.17 [Reserved]

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§ 1.18 Rulemaking record.

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(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 §1.18c and any other information which the

Commission considers relevant to the rule.

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(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 §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 §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 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 §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]

§ 1.19 Modification of a rule by the Commission at the time of judicial review.

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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]

§ 1.20 Alternative procedures.

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If the Commission determines at the commencement of a rulemaking proceeding to employ procedures other than those

established in the remainder of this subpart, it may do so by announcing those procedures in theFederal Registernotice

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

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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).

§ 1.21 Scope of the rules in this subpart.

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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]

§ 1.22 Rulemaking.

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(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]

§ 1.23 Quantity limit rules.

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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]

§ 1.24 Rules applicable to wool, fur, and textile fiber products and rules promulgated under the Fair Packaging and Labeling Act.

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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]

§ 1.25 Initiation of proceedings—petitions.

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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]

§ 1.26 Procedure.

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(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 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 theFederal Registerand, 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 §1.18(c), including the transcription of oral communications required by §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 theFederal Registeran

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. TheFederal Registerpublication 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.”

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(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 theFederal 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 theFederal 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 theFederal Registerpursuant to paragraph (f) of this section, any person who will be adversely affected

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 theFederal Registerspecifying 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]

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Subpart E—Export Trade Associations

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§ 1.41 Limited antitrust exemption.

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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.

§ 1.42 Notice to Commission.

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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.

§ 1.43 Recommendations.

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Whenever the Commission has reason to believe that an association has violated the prohibitions of section 2 of the Act, it may

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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

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§ 1.51 Applications.

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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 will institute a proceeding before the Commissioner of Patents for cancellation of the registration.

Subpart G—Injunctive and Condemnation Proceedings

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§ 1.61 Injunctions.

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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]

§ 1.62 Ancillary court orders pending review.

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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.

§ 1.63 Injunctions: Wool, fur, and textile cases.

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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]

§ 1.64 Condemnation proceedings.

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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

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Authority: 84 Stat. 1128, 15 U.S.C. 1681 et seq.

§ 1.71 Administration.

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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]

§ 1.72 Examination, counseling and staff advice.

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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]

§ 1.73 Interpretations.

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(a) Nature and purpose. (1) The Commission issues and causes to be published in theFederal Registerinterpretations 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 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 theFederal Registersetting 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 theFederal 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 theFederal

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.

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[36 FR 9293, May 22, 1971]

Subpart I—Procedures for Implementation of the National Environmental Policy Act of 1969

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Authority: 15 U.S.C. 46(g), 42 U.S.C. 4321 et seq.

Source: 47 FR 3096, Jan. 22, 1982, unless otherwise noted.

§ 1.81 Authority and incorporation of CEQ Regulations.

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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]

§ 1.82 Declaration of policy.

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(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).

§ 1.83 Whether to commence the process for an environmental impact statement.

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(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.

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(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).

§ 1.84 Draft environmental impact statements: Availability and comment.

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Except for proposals for legislation, environmental impact statements shall be prepared in two stages: Draft statement and final

statement.

(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 theFederal Registerand 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 theFederal Registeras 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 weeklyFederal RegisterNotice 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 weeklyFederal Registerlist of draft environmental impact statements. The Commission may in its discretion

grant such longer period as the complexity of the issues may warrant.

§ 1.85 Final environmental impact statements.

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(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;

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(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 weeklyFederal Registerlist 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.

§ 1.86 Supplemental statements.

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Except for proposals for legislation, as provided in CEQ Regulation (40 CFR 1502.9(c)), the Commission shall publish 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.

§ 1.87 NEPA and agency decisionmaking.

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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 §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.

§ 1.88 Implementing procedures.

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(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.

§ 1.89 Effect on prior actions.

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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

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§ 1.91 Authority and purpose.

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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

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Source: 45 FR 67318, Oct. 10, 1980, unless otherwise noted.

§ 1.92 Scope.

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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.

§ 1.93 Notice of proposed penalty.

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(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 §1.95 (in lieu of those of §1.94) apply with respect to such assessment; and

(2) Include a copy of a proposed complaint conforming to the provision of §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 §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 §1.95 apply, notify the Commission of the election in writing. The notification, to be filed in accordance with §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.

§ 1.94 Commission proceeding to assess civil penalty.

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If the respondent fails to elect to have the procedures of §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 §1.97.

§ 1.95 Procedures upon election.

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(a) After receipt of the notification of election to apply the procedures of this section pursuant to §1.93, the Commission shall

promptly assess such penalty as it deems appropriate, in accordance with §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.

§ 1.96 Compromise of penalty.

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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.

§ 1.97 Amount of penalty.

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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 §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]

Subpart L—Civil Penalty Adjustments Under the Federal Civil Penalties Inflation Adjustment Act of 1990, as Amended by the Debt Collection

Improvement Act of 1996

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Authority: 28 U.S.C. 2461 note.

Source: 61 FR 54549, Oct. 21, 1996, unless otherwise noted.

§ 1.98 Adjustment of civil monetary penalty amounts.

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This section makes inflation adjustments in the dollar amounts of civil monetary penalties provided by law within the Commission's

jurisdiction. The following civil penalty amounts apply to violations occurring after November 20, 2000:

(a) Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1)—$11,000;

(b) Section 11(l) of the Clayton Act, 15 U.S.C. 21( l )—$6,500;

(c) Section 5( 1 ) of the FTC Act, 15 U.S.C. 45( 1 )—$11,000;

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(d) Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A)—$11,000;

(e) Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B)—$11,000;

(f) Section 10 of the FTC Act, 15 U.S.C. 50—$110;

(g) Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C. 65—$110;

(h) Section 6(b) of the Wool Products Labeling Act, 15 U.S.C. 68d(b)—$110;

(i) Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 69a(e)—$110;

(j) Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C. 69f(d)(2)—$110;

(k) Section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a)—$110;

(l) Sections 525(a) and (b) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(a) and (b), respectively—$6,500 and

$11,000, respectively; and

(m) Civil monetary penalties authorized by reference to the Federal Trade Commission Act under any other provision of law within

the jurisdiction of the Commission—refer to the amounts set forth in paragraphs (c), (d), (e) and (f) of this section, as applicable.

[65 FR 69666, Nov. 20, 2000, as amended at 69 FR 76612, Dec. 22, 2004]

Subpart M—Submissions Under the Small Business Regulatory Enforcement Fairness Act

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Authority: 5 U.S.C. 801–804.

§ 1.99 Submission of rules, guides, interpretations, and policy statements to Congress and the Comptroller General.

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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 §1.14(c),

§1.15(a), §1.19, or §1.26(d); industry guides issued pursuant to §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]

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Title 16: Commercial Practices

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PART 2—NONADJUDICATIVE PROCEDURES

Section Contents

Subpart A—Inquiries; Investigations; Compulsory Processes

§ 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.

§ 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—Petitions Filed Under Section 7A of the Clayton Act, as Amended, for Review of Requests for

Additional Information or Documentary Material

§ 2.20 Petitions for review of requests for additional information or documentary material.

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

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§ 2.51 Requests to reopen.

Authority: 15 U.S.C. 46, unless otherwise noted.

Subpart A—Inquiries; Investigations; Compulsory Processes

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§ 2.1 How initiated.

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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. The Director of the Bureau of Competition has also been delegated, without power of redelegation, authority to open

investigations in response to requests pursuant to an agreement under the International Antitrust Enforcement Assistance Act, 15

U.S.C. 6201 et seq., if the requests do not ask the Commission to use process. Before responding to such a request, the Bureau

Director shall transmit the proposed response to the Secretary and the Secretary shall notify the Commission of the proposed

response. If no Commissioner objects within three days following the Commission's receipt of such notification, the Secretary shall

inform the Bureau Director that he or she may proceed.

[48 FR 41374, Sept. 15, 1983, as amended at 50 FR 53304, Dec. 31, 1985; 65 FR 67259, Nov. 9, 2000]

§ 2.2 Request for Commission action.

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(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]

§ 2.3 Policy as to private controversies.

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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]

§ 2.4 Investigational policy.

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The Commission encourages voluntary cooperation in its investigations. Where the public interest requires, however, the

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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]

§ 2.5 By whom conducted.

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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]

§ 2.6 Notification of purpose.

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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]

§ 2.7 Compulsory process in investigations.

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(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 §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 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.

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(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 §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]

§ 2.8 Investigational hearings.

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(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

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 §2.16.

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[32 FR 8446, June 13, 1967, as amended at 45 FR 36342, May 29, 1980; 61 FR 50645, Sept. 26, 1996]

§ 2.8A Withholding requested material.

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(a) Any person withholding material responsive to an investigational subpoena or civil investigative demand issued pursuant to

§2.7, an access order issued pursuant to §2.11, an order to file a report issued pursuant to §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 §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]

§ 2.9 Rights of witnesses in investigations.

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(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:

(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

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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 §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]

§ 2.10 Depositions.

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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 §§2.7 through 2.9.

[45 FR 36343, May 29, 1980, as amended at 50 FR 53304, Dec. 31, 1985]

§ 2.11 Orders requiring access.

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(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 §4.10(a) of this chapter.

[46 FR 26290, May 12, 1981, as amended at 48 FR 41375, Sept. 15, 1983]

§ 2.12 Reports.

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(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

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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 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 §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]

§ 2.13 Noncompliance with compulsory processes.

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(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]

§ 2.14 Disposition.

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(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.

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[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]

§ 2.15 Orders requiring witnesses to testify or provide other information and granting immunity.

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(a) The Bureau Director, Deputy Directors, and Assistant Directors in the 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]

§ 2.16 Custodians.

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(a) Designation. The Commission shall designate a custodian and one or more deputy custodians for material to be delivered

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. 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—Petitions Filed Under Section 7A of the Clayton Act, as Amended, for Review of Requests for Additional Information or Documentary

Material

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Authority: 15 U.S.C. 18a(d), (e).

§ 2.20 Petitions for review of requests for additional information or documentary material.

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(a) For purposes of this section, “second request” refers to a request for additional information or documentary material issued

under 16 CFR 803.20.

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(b) Second request procedures —(1) Notice. Every request for additional information or documentary material issued under 16

CFR 803.20 shall inform the recipient(s) of the request that the recipient has a right to discuss modifications or clarifications of the

request with an authorized representative of the Commission. The request shall identify the name and telephone number of at least

one such representative.

(2) Second request conference. An authorized representative of the Commission shall invite the recipient to discuss the request for

additional information or documentary material soon after the request is issued. At the conference, the authorized representative

shall discuss the competitive issues raised by the proposed transaction, to the extent then known, and confer with the recipient

about the most effective way to obtain information and documents relating to the competitive issues raised. The conference will

ordinarily take place within 5 business days of issuance of the request, unless the recipient declines the invitation or requests a

later date.

(3) Modification of requests. The authorized representative shall modify the request for additional information or documentary

material, or recommend such modification to the responsible Assistant Director of the Bureau of Competition, if he or she

determines that a less burdensome request would be consistent with the needs of the investigation. A request for additional

information or documentary material may be modified only in writing signed by the authorized representative.

(4) Review of request decisions. (i) If the recipient of a request for additional information or documentary material believes that

compliance with portions of the request should not be required and the recipient has exhausted reasonable efforts to obtain

clarifications or modifications of the request from an authorized representative, the recipient may petition the General Counsel to

consider and rule on unresolved issues. Such petition shall be submitted by letter to the General Counsel with a copy to the

authorized representative who participated in the second request conference held under paragraph (b)(3) of this section. The

petition shall not, without leave of the General Counsel, exceed 500 words, excluding any cover, table of contents, table of

authorities, glossaries, proposed form of relief and any appendices containing only sections of statutes or regulations, and shall

address petitioner's efforts to obtain modification from the authorized representative.

(ii) Within 2 business days after receiving such a petition, the General Counsel shall set a date for a conference with the petitioner

and the authorized representative.

(iii) Such conference shall take place within 7 business days after the General Counsel receives the petition, unless the request

recipient agrees to a later date or declines to attend a conference.

(iv) Not later than 3 business days before the date of the conference, the petitioner and the authorized representative may each

submit memoranda regarding the issues presented in the petition. Such memoranda shall not, without leave of the General

Counsel, exceed 1250 words, excluding any cover, table of contents, table of authorities, glossaries, proposed form of relief and

appendices containing only sections of statutes or regulations. Such memoranda shall be delivered to counsel for the other

participants on the same day they are delivered to the General Counsel.

(v) The petitioner's memorandum shall include a concise statement of reasons why the request should be modified, together with

proposed modifications, or a concise explanation why the recipient believes it has substantially complied with the request for

additional information or documentary material.

(vi) The authorized representative's memorandum shall include a concise statement of reasons why the petitioner's proposed

modifications are inappropriate or a concise statement of the reasons why the representative believes that the petitioner has not

substantially complied with the request for additional information and documentary material.

(vii) The General Counsel shall advise the petitioner and the authorized representative of his or her decision within 3 business days

following the conference.

[66 FR 8721, Feb. 1, 2001]

Subpart C—Consent Order Procedure

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§ 2.31 Opportunity to submit a proposed consent order.

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(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 §2.32, for consideration by the Commission in connection with a proposed complaint

submitted by the Commission's staff.

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(b) After a complaint has been issued, the consent order procedure described in this part will not be available except as provided in

§3.25(b).

[40 FR 15235, Apr. 4, 1975]

§ 2.32 Agreement.

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Every agreement in settlement of a Commission complaint shall contain, in addition to an appropriate proposed 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. Every agreement also shall waive further procedural steps and all rights to seek judicial

review or otherwise to challenge or contest the validity of the order. In addition, where appropriate, every agreement in settlement

of a Commission complaint challenging the lawfulness of a proposed merger or acquisition shall also contain a hold-separate or

asset-maintenance order. The agreement may state 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. Every agreement shall provide that:

(a) The complaint may be used in construing the terms of the order;

(b) 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;

(c) The order will have the same force and effect and may be altered, modified or set aside in the same manner provided by statute

for Commission orders issued on a litigated or stipulated record;

(d) Except as provided by order of the Commission, any order issued pursuant to the agreement will become final upon service;

(e) The agreement will not become a part of the public record unless and until it is accepted by the Commission; and

(f) If the Commission accepts the agreement, further proceedings will be governed by §2.34.

[64 FR 46268, Aug. 25, 1999]

§ 2.33 Compliance procedure.

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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 §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]

§ 2.34 Disposition.

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(a) Acceptance of proposed consent agreement. The Commission may accept or refuse to accept a proposed consent agreement.

Except as otherwise provided in paragraph (c) of this section, acceptance does not constitute final approval, but it serves as the

basis for further actions leading to final disposition of the matter.

(b) Effectiveness of hold-separate or asset-maintenance order. Following acceptance of a consent agreement, the Commission

will, if it deems a hold-separate or asset-maintenance order appropriate, issue a complaint and such an order as agreed to by the

parties. Such order will be final upon service. The issuance of a complaint under this paragraph will neither commence an

adjudicatory proceeding subject to part 3 of this chapter nor subject the consent agreement proceeding to the prohibitions specified

in §4.7 of this chapter.

(c) Public comment. Promptly after its acceptance of the consent agreement, the Commission will place the order contained in the

consent agreement, the complaint, and the consent agreement on the public record for a period of 30 days, or such other period as

the Commission may specify, for the receipt of comments or views from any interested person. At the same time, the Commission

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will place on the public record an explanation of the provisions of the order and the relief to be obtained thereby and any other

information that it believes may help interested persons understand the order. The Commission also will publish the explanation in

theFederal Register.The Commission retains the discretion to issue a complaint and a Final Decision and Order, incorporating the

order contained in a consent agreement, in appropriate cases before seeking public comment. Unless directed otherwise by the

Commission, such Decision and Order will be final upon service.

(d) Comment on initial compliance report. If respondents have filed an initial report of compliance pursuant to §2.33, the

Commission will place that report on the public record, except for portions, if any, granted confidential treatment pursuant to §4.9(c)

of this chapter, with the complaint, the order, and the consent agreement.

(e) Action following comment period. (1) Following the comment period, on the basis of comments received or otherwise, the

Commission may either withdraw its acceptance of the agreement and so notify respondents, 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 its

decision in disposition of the proceeding.

(2) The Commission, following the comment period, may determine, on the basis of the comments or otherwise, that a Final

Decision and Order that was issued in advance of the comment period should be modified. Absent agreement by respondents to

the modifications, the Commission may initiate a proceeding to reopen and modify the decision and order in accordance with

§3.72(b) of this chapter or commence a new administrative proceeding by issuing a complaint in accordance with §3.11 of this

chapter.

[64 FR 46269, Aug. 25, 1999]

Subpart D—Reports of Compliance

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§ 2.41 Reports of compliance.

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(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. An original and one copy of each such report shall be filed with the Secretary of the

Commission, and one copy of each such report shall be filed with the Associate Director for Enforcement in the Bureau of

Consumer Protection (for consumer protection orders) or with the Assistant Director for Compliance in the Bureau of Competition

(for competition orders). 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 §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

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submit an analysis to the Commission regarding their intended actions.

(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 §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 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) 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.

(4) 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 §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]

Editorial Note: ForFederal Registercitations affecting §2.41, see the List of CFR Sections Affected, which appears in the Finding

Aids section of the printed volume and on GPO Access.

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Subpart E—Requests To Reopen

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§ 2.51 Requests to reopen.

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(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.

(1) 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:

(i) The nature of the changed conditions and the reasons why they require the requested modifications of the rule or order; or

(ii) The reasons why the public interest would be served by the modification.

(2) 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 theFederal Registerannouncing 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.

(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 §3.72, or take such other action as is appropriate:

Provided, however, That any action under §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; 65 FR 50637, Aug. 21, 2000]

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Title 16: Commercial Practices

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PART 3—RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS

Section Contents

Subpart A—Scope of Rules; Nature of Adjudicative Proceedings

§ 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, and subpoenas to be served in a foreign country.

§ 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.

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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: 15 U.S.C. 46, unless otherwise noted.

Source: 32 FR 8449, June 13, 1967, unless otherwise noted.

Subpart A—Scope of Rules; Nature of Adjudicative Proceedings

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§ 3.1 Scope of the rules in this part.

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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.

§ 3.2 Nature of adjudicative proceedings.

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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 §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

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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 §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

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§ 3.11 Commencement of proceedings.

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(a) Complaint. Except as provided in §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]

§ 3.11A Fast-track proceedings.

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(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 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

§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.

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(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 §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 §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 §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 §3.52(c).

Cross-appeals, as permitted in §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 §3.52(d)

in all other respects.

(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

§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]

§ 3.12 Answer.

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(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 permitted under these Rules 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 a motion for more definite statement of the charges 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;

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(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 §3.46 and the right to appeal the initial decision to the Commission under §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; 66 FR 17628, Apr. 3,

2001; 66 FR 20527, Apr. 23, 2001]

§ 3.13 Adjudicative hearing on issues arising in rulemaking proceedings under the Fair Packaging and Labeling Act.

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(a) Notice of hearing. When the Commission, acting under §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 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

theFederal Registercontaining 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]

§ 3.14 Intervention.

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(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 §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 §3.14(a).

[32 FR 8449, June 13, 1967, as amended at 46 FR 20979, Apr. 8, 1981]

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§ 3.15 Amendments and supplemental pleadings.

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(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.

(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

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§ 3.21 Prehearing procedures.

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(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 fourteen (14) 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

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her discretion that the conference (or any part thereof) shall be closed to the public. The Administrative Law Judge shall have

discretion to determine whether a prehearing conference shall be stenographically reported.

[50 FR 41487, Oct. 11, 1985, as amended at 61 FR 50646, Sept. 26, 1996; 66 FR 17628, Apr. 3, 2001]

§ 3.22 Motions.

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(a) Presentation and disposition. During the time a proceeding is before an Administrative Law Judge, all motions therein, except

those filed under §3.26, §3.42(g), or §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 §3.45 shall be filed

in accordance with §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. They must also

include the name, address, telephone number, fax number, and e-mail address (if any) of counsel and attach a draft order

containing the proposed relief. If a party includes in a motion information that has been granted in camera status pursuant to

§3.45(b) or is subject to confidentiality protections pursuant to a protective order, the party shall file two versions of the motion in

accordance with the procedures set forth in §3.45(e). The party shall mark its confidential filings with brackets or similar

conspicuous markings to indicate the material for which it is claiming confidential treatment. The time period specified by §3.22(c)

within which an opposing party may file an answer will begin to run upon service on that opposing party of the confidential version

of the motion.

(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 §3.45(b) or is subject to confidentiality protections pursuant to a protective order, the opposing party

shall file two versions of the answer in accordance with the procedures set forth in §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 §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 §3.34(c), each motion to compel or determine sufficiency pursuant to

§3.38(a), each motion for sanctions pursuant to §3.38(b), and each motion for enforcement pursuant to §3.38(c) shall be

accompanied by a signed statement representing that counsel for the moving party has conferred with opposing counsel in an

effort in good faith to resolve by agreement the issues raised by the motion and has been unable to reach such an agreement. If

some of the matters in controversy have been resolved by agreement, the statement shall specify the matters so resolved and the

matters remaining unresolved. The statement shall recite the date, time, and place of each such conference between counsel, and

the names of all parties 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; 66 FR 17628, Apr. 3, 2001]

§ 3.23 Interlocutory appeals.

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(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 §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 §3.42(d); or

(3) Grants or denies an application for intervention pursuant to the provisions of §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 §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 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]

§ 3.24 Summary decisions.

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(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 §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 §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 §3.45(b) or is subject to confidentiality protections pursuant to a protective order, the party shall file two

versions of the document in accordance with the procedures set forth in §3.45(e). The decision sought by the moving party shall be

rendered within thirty (30) days after the opposition or any final brief ordered by the Administrative Law Judge is filed, 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 §3.51(c). A summary decision,

interlocutory in character and in compliance with the procedures set forth in §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.

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(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 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 §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; 66 FR 17628, Apr. 3, 2001]

§ 3.25 Consent agreement settlements.

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(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 §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 §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 and approved by

the appropriate Bureau Director, and the matter is still pending before an Administrative Law Judge, 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. If the matter is pending before the Commission, the Commission in its discretion may, on motion, issue

an order withdrawing from adjudication those portions of the matter that a proposed consent agreement would resolve for the

purpose of considering the proposed consent agreement.

(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.

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(f) After some or all of allegations in a matter have been withdrawn from adjudication, the Commission may accept the proposed

consent agreement, reject it and return the matter or affected portions thereof to adjudication for further proceedings or take such

other action as it may deem appropriate. If the agreement is accepted, it will be disposed of as provided in §2.34 of this chapter,

except that if, following the public comment period provided for in §2.34, the Commission decides, based on comments received or

otherwise, to withdraw its acceptance of such an agreement, it will so notify the parties and will return to adjudication any portions

of the matter previously withdrawn from adjudication for further proceedings or take such other action it considers appropriate.

(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; 50 FR 53305, Dec. 31, 1985; 54 FR 18885, May 3, 1989;

61 FR 50647, Sept. 26, 1996; 64 FR 46269, Aug. 25, 1999; 70 FR 67350, Nov. 7, 2005]

§ 3.26 Motions following denial of preliminary injunctive relief.

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(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 §3.52(e).

(5) In camera materials. If any filing includes materials that are subject to confidentiality protections pursuant to an order entered in

either the proceeding under section 13(b) or in the proceeding under this part, such materials shall be treated as In camera

materials for purposes of this paragraph and the party shall file two versions of the document in accordance with the procedures

set forth in §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

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§ 3.31 General provisions.

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(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

§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 §3.31(c)(1); unless such information or materials are privileged

as defined in §3.31(c)(2), pertain to hearing preparation as defined in §3.31(c)(3), pertain to experts as defined in §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.

(3) In addition to the disclosures required by paragraphs (b)(1) and (2), of this section, the parties shall disclose to each other the

identity of any person who may be used at trial to present evidence as an expert. Except as otherwise stipulated or directed by the

Administrative Law Judge, this disclosure shall, with respect to a witness who is retained or specially employed to provide expert

testimony in the case or whose duties as an employee of the party regularly involve giving expert testimony, be accompanied by a

written report prepared and signed by the witness. The report shall contain a complete statement of all opinions to be expressed

and the basis and reasons therefor; the data or other information considered by the witness in forming the opinions; any exhibits to

be used as a summary of or support for the opinions; the qualifications of the witness, including a list of all publications authored by

the witness within the preceding ten years; the compensation to be paid for the study and testimony; and a listing of any other

cases in which the witness has testified as an expert at trial or by deposition within the preceding four years. These disclosures

shall be made at the times and in the sequence directed by the Administrative Law Judge. In the absence of other directions from

the Administrative Law Judge or stipulation by the parties, the disclosures shall be made at least 90 days before the trial date or the

date the case is to be ready for trial or, if the evidence is intended solely to contradict or rebut proposed expert testimony on the

same subject matter identified by another party under this paragraph, within 30 days after the disclosure made by the other party.

(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 discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more

convenient, less burdensome, or less expensive;

(ii) The party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or

(iii) The burden and expense of the proposed discovery outweigh its likely benefit.

(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 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.

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(4) Hearing Preparation: Experts. (i) A party may depose any person who has been identified as an expert whose opinions may be

presented at trial. If a report from the expert is required under §3.31(b)(3), the deposition shall not be conducted until after the

report is provided.

(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.

(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 §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 §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 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 §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; 66 FR 17628, Apr. 3,

2001; 66 FR 20527, Apr. 23, 2001]

§ 3.32 Admissions.

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(a) At any time after thirty (30) days after issuance of complaint, or after publication of notice of an adjudicative hearing in a

rulemaking proceeding under §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

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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]

§ 3.33 Depositions.

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(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

§3.31(c)(1). Such party may, by motion, obtain from the Administrative Law Judge an order to preserve relevant evidence upon a

showing that there is substantial reason to believe that such evidence would not otherwise be available for presentation at the

hearing. Depositions may be taken before any person having power to administer oaths, either under the law of the United States

or of the state or other place in which the deposition is taken, who may be designated by the party seeking the deposition, provided

that such person shall have no interest in the outcome of the proceeding. The party seeking the deposition shall serve upon each

person whose deposition is sought and upon each party to the proceeding reasonable notice in writing of the time and place at

which it will be taken, and the name and address of each person or persons to be examined, if known, and if the name is not

known, a description sufficient to identify them. The parties may stipulate in writing or the Administrative Law Judge may upon

motion order that a deposition be taken by telephone or other remote electronic means. A deposition taken by such means is

deemed taken at the place where the deponent is to answer questions.

(b) [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 §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

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by stipulation waive the signing or the deponent is unavailable or cannot be found or refuses to sign. If the deposition is not signed

by the deponent within 30 days of its submission or attempted submission, the officer shall sign it and certify that the signing has

been waived or that the deponent is unavailable or that the deponent has refused to sign, as the case may be, together with the

reason for the refusal to sign, if any has been given. The deposition may then be used as though signed unless, on a motion to

suppress under 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.

(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; 66 FR 17629, Apr. 3, 2001]

§ 3.34 Subpoenas.

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(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 subject to §3.36. 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, or subpoenas to

be served in a foreign country, which may be authorized only in accordance with §3.36.

[43 FR 56866, Dec. 4, 1978, as amended at 50 FR 42672, Oct. 22, 1985; 61 FR 50648, Sept. 26, 1996; 66 FR 17629, Apr. 3,

2001]

§ 3.35 Interrogatories to parties.

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(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, 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 §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

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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]

§ 3.36 Applications for subpoenas for records, or appearances by officials or employees, of governmental agencies other than the Commission,

and subpoenas to be served in a foreign country.

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(a) Form. An application for issuance of a subpoena for the production of documents, as defined in §3.34(b), or for the issuance of

a subpoena requiring access to documents or other tangible things, for the purposes described in §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, or for the

issuance of a subpoena to be served in a foreign country, shall be made in the form of a written motion filed in accordance with the

provisions of §3.22(a). No application for records pursuant to §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 §3.34 or a request for production or access

under §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 §3.31(c)(1), or, if for an adjudicative hearing,

the material is reasonably relevant;

(3) The information or material sought cannot reasonably be obtained by other means; and

(4) With respect to subpoenas to be served in a foreign country, that the party seeking discovery has a good faith belief that the

discovery requested would be permitted by treaty, law, custom or practice in the country from which the discovery is sought and

that any additional procedural requirements have been or will be met before the subpoena is served.

(c) Execution. If an ALJ issues an Order authorizing a subpoena pursuant to this section, the moving party may forward to the

Secretary a request for the authorized subpoena, with a copy of the authorizing Order attached. Each such subpoena shall be

signed by the Secretary; shall have attached to it a copy of the authorizing Order; and shall be served by the moving party only in

conjunction with a copy of the authorizing Order.

[66 FR 17629, Apr. 3, 2001; 66 FR 20527, Apr. 23, 2001]

§ 3.37 Production of documents and things; access for inspection and other purposes.

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(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 §3.34(b), or to

inspect and copy, test, or sample any tangible things which are within the scope of §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 §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 §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 §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]

§ 3.38 Motion for order compelling disclosure or discovery; sanctions.

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(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

§3.31(b), a request for admission under §3.32, a deposition under §3.33, or an interrogatory under §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 §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, 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]

§ 3.38A Withholding requested material.

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(a) Any person withholding material responsive to a subpoena issued pursuant to §3.34, written interrogatories requested pursuant

to §3.35, a request for production or access pursuant to §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 §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]

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§ 3.39 Orders requiring witnesses to testify or provide other information and granting immunity.

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(a) Where Commission complaint counsel desire the issuance of an order requiring a witness or deponent to testify or provide other

information and granting immunity under title 18, section 6002, United States Code, Directors and Assistant Directors of Bureaus

and Regional Directors and Assistant Regional Directors of Commission Regional Offices who supervise complaint counsel

responsible for presenting evidence in support of the complaint are authorized to determine:

(1) That the testimony or other information sought from a witness or deponent, or prospective witness or deponent, may be

necessary to the public interest, and

(2) That such individual has refused or is likely to refuse to testify or provide such information on the basis of his privilege against

self-incrimination; and to request, through the Commission's liaison officer, approval by the Attorney General for the issuance of

such order. Upon receipt of approval by the Attorney General (or his 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:

(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; 66 FR 64143, Dec. 12, 2001]

§ 3.40 Admissibility of evidence in advertising substantiation cases.

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(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

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§ 3.41 General rules.

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(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 §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 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 §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 §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 §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]

§ 3.42 Presiding officials.

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(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;

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(4) To compel admissions, upon request of a party or on their own initiative;

(5) To rule upon offers of proof and receive evidence;

(6) To regulate the course of the hearings and the conduct of the parties and their counsel therein;

(7) To hold conferences for settlement, simplification of the issues, or any other proper purpose;

(8) To consider and rule upon, as justice may require, all procedural and other motions appropriate in an adjudicative proceeding,

including motions to open defaults;

(9) To make and file initial decisions;

(10) To certify questions to the Commission for its determination;

(11) To reject written submissions that fail to comply with rule requirements, or deny in camera status without prejudice until a party

complies with all relevant rules; and

(12) To take any action authorized by the rules in this part or in conformance with the provisions of the Administrative Procedure

Act as restated and incorporated in title 5, 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 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 §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; 66 FR 17629, Apr. 3, 2001]

§ 3.43 Evidence.

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(a) Burden of proof. Counsel representing the Commission, or any person who has filed objections sufficient to warrant the holding

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of an adjudicative hearing pursuant to §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. (1) 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—

(i) Make the interrogation and presentation effective for the ascertainment of the truth.

(ii) Avoid needless consumption of time; and

(iii) Protect witnesses from harassment or undue embarrassment.

(2) As respondents are in the best position to determine the nature of documents generated by such respondents and which come

from their own files, the burden of proof is on the respondent to introduce evidence to rebut a presumption that such documents are

authentic and kept in the regular course of business. See Lenox, Inc., 73 F.T.C. 578, 603–04 (1968).

(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; 66 FR 17629, Apr. 3, 2001; 66 FR 20527, Apr. 23, 2001]

§ 3.44 Record.

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(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 discretion to permit or order correction of the

record as provided in §3.44(b).

[32 FR 8449, June 13, 1967, as amended at 61 FR 50650, Sept. 26, 1996; 66 FR 17630, Apr. 3, 2001]

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§ 3.45 In camera orders.

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(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. A party or third party may obtain in camera treatment for material, or portions thereof, offered

into evidence only by motion to the Administrative Law Judge. Parties who seek to use material obtained from a third party subject

to confidentiality restrictions must demonstrate that the third party has been given at least ten (10) days notice of the proposed use

of such material. Each such motion must include an attachment containing a copy of each page of the document in question on

which in camera or otherwise confidential excerpts appear. The Administrative Law Judge may order that such material, whether

admitted or rejected, be placed in camera only after finding that its public disclosure will likely result in a clearly defined, serious

injury to the person, partnership or corporation requesting in camera treatment. This finding shall be based on the standard

articulated in H.P. Hood & Sons, Inc., 58 F.T.C. 1184, 1188 (1961); see also Bristol-Myers Co., 90 F.T.C. 455, 456 (1977), which

established a three-part test that was modified by General Foods Corp., 95 F.T.C. 352, 355 (1980). The party submitting material

for which in camera treatment is sought must provide, for each piece of such evidence and affixed to such evidence, the name and

address of any person who should be notified in the event that the Commission intends to disclose in camera information in a final

decision. No material, or portion thereof, offered into evidence, whether admitted or rejected, may be withheld from the public

record unless it falls within the scope of an order issued in accordance with this section, stating the date on 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. If an in camera order is silent as to duration, without explanation, then it will expire

three years after its date of issuance. Material subject to an in camera order shall be segregated from the public record and filed in

a sealed envelope, or other appropriate container, bearing the title, the docket number of the proceeding, the notation “ In Camera

Record under §3.45,” and the date on which in camera treatment expires. If the Administrative Law Judge has determined that in

camera treatment should be granted for an indeterminate period, the notation should state that fact.

(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 §4.11 of this chapter.

(d) Briefs and other submissions referring to in camera or confidential information. Parties shall not disclose information that has

been granted in camera status pursuant to §3.45(b) or is subject to confidentiality protections pursuant to a protective order in the

public version of proposed findings, briefs, or other documents. This provision does not preclude references in such proposed

findings, briefs, or other documents to in camera or other confidential information or general statements based on the content of

such information.

(e) When in camera or confidential information is included in briefs and other submissions. If a party includes specific information

that has been granted in camera status pursuant to §3.45(b) or is subject to confidentiality protections pursuant to a protective

order in any document filed in a proceeding under this part, the party shall file two versions of the document. A complete version

shall be marked “ In Camera ” or “Subject to Protective Order,” as appropriate, on the first page and shall be filed with the

Secretary and served by the party on the other parties in accordance with the rules in this part. Submitters of in camera or other

confidential material should mark any such material in the complete versions of their submissions in a conspicuous matter, such as

with highlighting or bracketing. References to in camera or confidential material must be supported by record citations to relevant

evidentiary materials and associated ALJ in camera or other confidentiality rulings to confirm that in camera or other confidential

treatment is warranted for such material. In addition, the document must include an attachment containing a copy of each page of

the document in question on which in camera or otherwise confidential excerpts appear, and providing the name and address of

any person who should be notified of the Commission's intent to disclose in a final decision any of the in camera or otherwise

confidential information in the document. Any time period within which these rules allow a party to respond to a document shall run

from the date the party is served with the complete version of the document. An expurgated version of the document, marked

“Public Record” on the first page and omitting the in camera and confidential information and attachment that appear in the

complete version, shall be filed with the Secretary within five (5) days after the filing of the complete version, unless the

Administrative Law Judge or the Commission directs otherwise, and shall be served by the party on the other parties in accordance

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with the rules in this part. The expurgated version shall indicate any omissions with brackets or ellipses, and its pagination and

depiction of text on each page shall be identical to that of the in camera version.

(f) When in camera or confidential information is included in rulings or recommendations of the Administrative Law Judge. If the

Administrative Law Judge includes in any ruling or recommendation information that has been granted in camera status pursuant to

§3.45(b) or is subject to confidentiality protections pursuant to a protective order, the Administrative Law Judge shall file two

versions of the ruling or recommendation. A complete version shall be marked “ In Camera ” or “Subject to Protective Order,” as

appropriate, on the first page and shall be served upon the parties. The complete version will be placed in the in camera record of

the proceeding. An expurgated version, to be filed within five (5) days after the filing of the complete version, shall omit the in

camera and confidential information that appears in the complete version, shall be marked “Public Record” on the first page, shall

be served upon the parties, and shall be included in the public record of the proceeding.

(g) Provisional in camera rulings. The Administrative Law Judge may make a provisional grant of in camera status to materials if

the showing required in §3.45(b) cannot be made at the time the material is offered into evidence but the Administrative Law Judge

determines that the interests of justice would be served by such a ruling. Within twenty (20) days of such a provisional grant of in

camera status, the party offering the evidence or an interested third party must present a motion to the Administrative Law Judge

for a final ruling on whether in camera treatment of the material is appropriate pursuant to §3.45(b). If no such motion is filed, the

Administrative Law Judge may either exclude the evidence, deny in camera status, or take such other action as is appropriate.

[66 FR 17630, Apr. 3, 2001; 66 FR 20527, Apr. 23, 2001]

§ 3.46 Proposed findings, conclusions, and order.

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(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 §3.45(b), the party shall file two versions

of the proposals in accordance with the procedures set forth in §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, and a citation to the in camera ruling.

(c) Witness Index. The first statement of proposed findings of fact and conclusions of law filed by a party shall also include an index

to the witnesses called by that party, to include for each witness:

(1) The name of the witness;

(2) A brief identification of the witness;

(3) The transcript pages at which any testimony of the witness appears; and

(4) A statement whether the exhibit has been accorded in camera treatment, and a citation to the in camera ruling.

(d) Stipulated indices. As an alternative to the filing of separate indices, the parties are encouraged to stipulate to joint exhibit and

witness indices at the time the first statement of proposed findings of fact and conclusions of law is due to be filed.

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(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; 66 FR 17631, Apr. 3,

2001]

Subpart F—Decision

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§ 3.51 Initial decision.

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(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 §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 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) An initial decision shall be based on a consideration of the whole record relevant to the issues decided, and shall

be supported by reliable and probative evidence. The initial decision shall include a statement of findings (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 §3.45 shall be filed

in accordance with §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.

(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; 66 FR 17631, Apr. 3, 2001]

§ 3.52 Appeal from initial decision.

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(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 ten (10) days after service of the initial decision. The notice shall specify the party or parties

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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 five (5) days after service of the first notice,

or within ten (10) days after service of the initial decision, whichever period expires last.

(b) Appeal brief. (1) The appeal shall be in the form of a brief, filed within thirty (30) days after service of the initial decision, and

shall contain, in the order indicated, the following:

(i) A subject index of the matter in the brief, with page references, and a table of cases (alphabetically arranged), textbooks,

statutes, and other material cited, with page references thereto;

(ii) A concise statement of the case, which includes a statement of facts relevant to the issues submitted for review, and a summary

of the argument, which must contain a succinct, clear, and accurate statement of the arguments made in the body of the brief, and

which must not merely repeat the argument headings;

(iii) A specification of the questions intended to be urged;

(iv) The argument presenting clearly the points of fact and law relied upon in support of the position taken on each question, with

specific page references to the record and the legal or other material relied upon; and

(v) A proposed form of order for the Commission's consideration instead of the order contained in the initial decision.

(2) The brief shall not, without leave of the Commission, exceed 18,750 words, including all footnotes and other substantive matter

but excluding the cover, table of contents, table of authorities, glossaries, proposed form of order, appendices containing only

sections of statutes or regulations, and any attachment required by §3.45(e).

(c) Answering brief. Within thirty (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 crossappeal, 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 18,750 words. If the appellee cross-appeals, its brief in answer

and on cross-appeal shall not, without leave of the Commission, exceed 26,250 words. The word count limitations of this paragraph

include all footnotes and other substantive matter but exclude the cover, table of contents, table of authorities, glossaries, proposed

form of order, appendices containing only sections of statutes or regulations, and any attachment required by §3.45(e).

(d) Reply brief. Within seven (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 18,750 words. If the

appellee has cross-appealed, any party who is the subject of the cross-appeal may, within thirty (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 18,750 words. The appellee who has cross-appealed may, within seven (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 11,250 words. The word count limitations of this paragraph include all footnotes and other

substantive matter but exclude the cover, table of contents, table of authorities, glossaries, proposed form of order, appendices

containing only sections of statutes or regulations, and any attachment required by §3.45(e). No further briefs may be filed except

by leave of the Commission.

(e) In camera information. If a party includes in any brief to be filed under this section information that has been granted in camera

status pursuant to §3.45(b) or is subject to confidentiality provisions pursuant to a protective order, the party shall file two versions

of the brief in accordance with the procedures set forth in §3.45(e). The time period specified by this section within which a party

may file an answering or reply brief will begin to run upon service on the party of the in camera or confidential version of a brief.

(f) Signature. (1) The original of each brief filed shall have a hand-signed signature by an attorney of record for the party, or in the

case of parties not represented by counsel, by the party itself, or by a partner if a partnership, or by an officer of the party if it is a

corporation or an unincorporated association.

(2) Signing a brief constitutes a representation by the signer that he or she has read it; that to the best of his or her knowledge,

information, and belief, the statements made in it are true; that it is not interposed for delay; that it complies all the applicable word

count limitation; and that to the best of his or her knowledge, information, and belief, it complies with all the other rules in this part. If

a brief is not signed or is signed with intent to defeat the purpose of this section, it may be stricken as sham and false and the

proceeding may go forward as though the brief has not been filed.

(g) Designation of appellant and appellee in cases involving cross-appeals. In a case involving an appeal by complaint counsel

and one or more respondents, any respondent who has filed a timely notice of appeal and as to whom the Administrative Law

Judge has issued an order to cease and desist shall be deemed an appellant for purposes of paragraphs (b), (c), and (d) of this

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section. In a case in which the Administrative Law Judge has dismissed the complaint as to all respondents, complaint counsel shall

be deemed the appellant for purposes of paragraphs (b), (c), and (d) of this section.

(h) Oral argument. All oral arguments shall be public unless otherwise ordered by the Commission. Oral arguments will be held in

all cases on appeal to the Commission, unless the Commission otherwise orders upon its own initiative or upon request of any

party made at the time of filing his 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.

(i) Corrections in transcript of oral argument. The Commission will entertain only joint motions of the parties requesting corrections

in the transcript of oral argument, except that the Commission will receive a unilateral motion which recites that the parties have

made a good faith effort to stipulate to the desired corrections but have been unable to do so. If the parties agree in part and

disagree in part, they should file a joint motion incorporating the extent of their agreement, and, if desired, separate motions

requesting those corrections to which they have been unable to agree. The Secretary, pursuant to delegation of authority by the

Commission, is authorized to prepare and issue in the name of the Commission a brief “Order Correcting Transcript” whenever a

joint motion to correct transcript is received.

(j) Briefs of amicus curiae. A brief of an amicus curiae may be filed by leave of the Commission granted on motion with notice to the

parties or at the request of the Commission, except that such leave shall not be required when the brief is presented by an agency

or officer of the United States; or by a State, territory, commonwealth, or the District of Columbia, or by an agency or officer of any

of them. The brief may be conditionally filed with the motion for leave. A motion for leave shall identify the interest of the applicant

and state how a Commission decision in the matter would affect the applicant or persons it represents. The motion shall also state

the reasons why a brief of an amicus curiae is desirable. Except as otherwise permitted by the Commission, an amicus curiae shall

file its brief within the time allowed the parties whose position as to affirmance or reversal the amicus brief will support. The

Commission shall grant leave for a later filing only for cause shown, in which event it shall specify within what period such brief

must be filed. A motion for an amicus curiae to participate in oral argument will be granted only for extraordinary reasons.

(k) Extension of word count limitation. Extensions of word count limitation are disfavored, and will only be granted where a party

can make a strong showing that undue prejudice would result from complying with the existing limit.

[66 FR 17631, Apr. 3, 2001; 66 FR 20527, Apr. 23, 2001]

§ 3.53 Review of initial decision in absence of appeal.

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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.

§ 3.54 Decision on appeal or review.

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(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

theFederal Registerand, 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.

§ 3.55 Reconsideration.

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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]

§ 3.56 Effective date of orders; application for stay.

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(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 §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]

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Subpart H—Reopening of Proceedings

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§ 3.71 Authority.

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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 §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 §2.51.

[44 FR 40637, July 12, 1979]

§ 3.72 Reopening.

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(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

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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 §2.51, serve upon each person subject to such

decision (in the case of proceedings instituted under §3.13, such service may be by publication in theFederal 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 §3.13, such service may be by publication inFederal 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, 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 §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 §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

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Authority: 5 U.S.C. 504 and 5 U.S.C. 553(b).

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Source: 63 FR 36341, July 6, 1998, unless otherwise noted.

§ 3.81 General provisions.

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(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.

(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 §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.

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(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 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.

(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.

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Rulemaking under this provision will be in accordance with Rules of Practice part 1, subpart C of this chapter.

§ 3.82 Information required from applicants.

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(a) Contents of application. An application for an award of fees and expenses under the Act shall contain the following:

(1) Identity 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 §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 §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 of the proceeding. Otherwise, any request

to inspect or copy the exhibit shall be disposed of in accordance with §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.

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(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 §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.

§ 3.83 Procedures for considering applicants.

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(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 §§4.2 and 4.4(b) of this chapter, except as provided in §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 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 §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.

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(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.

(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 §3.52(a), or the Commission may decide to review the decision on its own initiative, in accordance with

§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.

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Title 16: Commercial Practices

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PART 4—MISCELLANEOUS RULES

Section Contents

§ 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: 15 U.S.C. 46, unless otherwise noted.

§ 4.1 Appearances.

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(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 in the same discipline as an expert witness to conduct all or a portion of the cross-examination of such witness.

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(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 investigation1

 (except that a former employee who is disqualified solely under

paragraph (b)(1)(ii) or 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

§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,

(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).

(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 §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

§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);

(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

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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 §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 §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 §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.

(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.

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(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.

(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 §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; 64 FR 14830, Mar. 29, 1999; 66 FR 13645, Mar. 7, 2001; 66 FR 64143, Dec. 12,

2001]

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§ 4.2 Requirements as to form, and filing of documents other than correspondence.

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(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 informal applications or

requests may be submitted directly to the official in charge of any Bureau, Division, or Office of the Commission, or to the

Administrative Law Judge.

(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) Paper and electronic copies of and service of filings before the Commission, and of filings before an ALJ in adjudicative

proceedings. (1) Except as otherwise provided, each document filed before the Commission, whether in an adjudicative or a

nonadjudicative proceeding, shall be filed with Secretary of the Commission, and shall include a paper original, twelve (12) paper

copies, and an electronic copy (in ASCII format, WordPerfect, or Microsoft Word). Except as otherwise provided, each document

filed by a party in an adjudicative proceeding before an ALJ shall be filed with the Secretary of the Commission, and shall include a

paper original, one (1) paper copy and an electronic copy (in ASCII format, WordPerfect, or Microsoft Word).

(2) The first page of the paper original of each such document shall be clearly labeled either public, or in camera or confidential. If

the document is labeled in camera or confidential, it must include as an attachment either a motion requesting in camera or

otherwise confidential treatment, in the form prescribed by §3.45(b), or a copy of a Commission, ALJ, or federal court order granting

such treatment. The document must also include as a separate attachment a set of only those pages of the document on which the

in camera or otherwise confidential material appears.

(3) The electronic copy of each such public document shall be filed by e-mail, as the Secretary shall direct, in a manner that is

consistent with technical standards, if any, that the Judicial Conference of the United States establishes, except that the electronic

copy of each such document containing in camera or otherwise confidential material shall be placed on a diskette so labeled, which

shall be physically attached to the paper original, and not transmitted by e-mail. The electronic copy of all documents shall include

a certification by the filing party that the copy is a true and correct copy of the paper original, and that a paper copy with an original

signature is being filed with the Secretary of the Commission on the same day by other means.

(4) A paper copy of each such document in an adjudicative proceeding shall be served by the party filing the document or person

acting for that party on all other parties pursuant to §4.4, at or before the time the paper original is filed.

(d) Paper and electronic copies of all other documents filed with the Commission. Except as otherwise provided, each document

to which paragraph (c) of this section does not apply, such as public comments in Commission proceedings, may be filed with the

Commission in either paper or electronic form. If such a document contains nonpublic information, it must be filed in paper form with

the Secretary of the Commission, and the first page of the document must be clearly labeled confidential. If the document does not

contain any nonpublic information, it may instead be filed in electronic form (in ASCII format, WordPerfect, or Microsoft Word) by

e-mail, as the Commission or the Secretary may direct.

(e) Form. (1) Documents filed with the Secretary of the Commission, other than briefs in support of appeals from 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 §3.52(e).

(f) 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.

(2) Signing a document constitutes a representation by the signer that he or she has read it; that to the best of his or her

knowledge, information, and belief, the statements made in it are true; that it is not interposed for delay; and that to the best of his

or her knowledge, information, and belief, it complies with the rules in this part. 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.

(g) Authority to reject documents for filing. The Secretary of the Commission may reject a document for filing that fails to comply

with the Commission's rules. In cases of extreme hardship, the Secretary may excuse compliance with a rule regarding the filing of

documents if the Secretary determines that the non-compliance would not interfere with the functions of the Commission.

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[66 FR 17632, Apr. 3, 2001; 66 FR 20527, Apr. 23, 2001]

§ 4.3 Time.

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(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

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 §4.4(a)(3) or §4.4(b), 3 days shall be added to the prescribed period.

(d) Date of filing. Documents must be received in the office of the Secretary of the Commission by 5:00 p.m. Eastern time to be

deemed filed that day. Any documents received by the agency after 5:00 p.m. will be deemed filed the following business day.

[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; 66 FR 17633, Apr. 3, 2001]

§ 4.4 Service.

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(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 thereof 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 the Commission's Rules of Practice, 16 CFR Part 3, other than

complaints and initial, interlocutory, and final decisions and orders, may be served by personal delivery (including delivery by

courier), or by first-class mail, and shall be deemed served on the day of personal delivery or the day of mailing.

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(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 (including delivery by courier) or delivery by first-class mail to the Office of the

Secretary of the Commission and, in adjudicative proceedings under the Commission's Rules of Practice, 16 CFR Part 3, to the

lead complaint counsel, 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, with a copy to the Administrative Law Judge. Upon a party

other than the Commission or Commission counsel, service shall be by personal delivery (including delivery by courier) or delivery

by first-class mail with a copy to the Administrative Law Judge. 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 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 the Commission's Rules of Practice, 16 CFR Part 3, papers presented for

filing shall contain proof of service in the form of a statement of the date and manner of service and of the names of the persons

served, certified by the person who made service. Proof of service must appear on or be affixed to the papers filed.

[50 FR 28097, July 10, 1985, as amended at 66 FR 17633, Apr. 3, 2001; 66 FR 20527, Apr. 23, 2001]

§ 4.5 Fees.

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(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]

§ 4.6 Cooperation with other agencies.

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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]

§ 4.7 Ex parte communications.

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(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

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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;

(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 §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 §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 §3.11, to conduct adjudicative hearings pursuant to §3.13, or to issue an order to show cause pursuant to

§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 §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 §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 §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

§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 §4.11 or a communication with Congress; or the disposition of a

consent settlement under §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 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]

§ 4.8 Costs for obtaining Commission records.

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(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 §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) of this section, charges will be

waived if the total chargeable fees for a request do not exceed $14.00.

(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 records held by all constituent units of the

Commission:

Paper Fees:

Paper copy (up to 8.5&inch;×14&inch;)

Reproduced by Commission $0.14 per page.

Reproduced by Requester 0.05 per page.

Microfiche Fees:

Film Copy—Paper to 16mm film 0.04 per frame.

Fiche Copy—Paper to 105mm fiche 0.08 per frame.

Film Copy—Duplication of existing 100 ft. roll of 16mm

film

9.50 per roll.

Fiche Copy—Duplication of existing 105mm fiche 0.26 per fiche.

Paper Copy—Converting existing 16mm film to paper

(Conversion by Commission Staff)

0.26 per page.

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Paper Copy—Converting existing 105mm fiche to paper

(Conversion by Commission Staff)

0.23 per page.

Film Cassettes 2.00 per cassette.

Electronic Services:

Converting paper into electronic format (scanning) 2.50 per page.

Computer programming 8.00 per qtr. hour.

Other Fees:

Computer Tape 18.50 each.

Certification 10.35 each.

Express Mail 3.50 for first pound and

3.67 for each additional

pound (up to $15.00).

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 Consumer Response Center, Federal Trade Commission, 600 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 deciding official (as designated by the General Counsel) 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 §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 §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 deciding official (as

designated by the General Counsel) 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;

(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

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(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 deciding official (as designated by the General Counsel) 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 deciding official (as designated by the General Counsel) 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; 64 FR 3012, Jan. 20, 1999; 66 FR 64144, Dec. 12,

2001]

§ 4.9 The public record.

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(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 §4.11 of this part, or as

provided in §§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 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 deciding official (as designated by the

General Counsel), 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 §4.8(c), and

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an agreement to pay fees (or a statement that the requester will not pay fees if a fee waiver is denied), as provided by §4.8(d).

Requests may also include an application for a fee waiver, as provided by §4.8(e). Advance payment may be required, as provided

by §4.8(h).

(iii) 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.

(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 §§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

§§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 §§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

(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 §3.45 and material filed in

camera pursuant to §§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 §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 §3.55;

(vi) Applications for stay, answers thereto, and replies, filed pursuant to §3.56;

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(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 §2.51; and

(x) Decisions reopening proceedings, and orders to show cause under §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 §§2.34 and 3.25(f) of this chapter;

(ii) Comments and other materials filed or placed on the public record under §§2.34 and 3.25(f) concerning proposed consent

agreements and related orders; and

(iii) Decisions and orders issued and served under §§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 §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 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

§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 §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;

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(vii) The identities of holders of registered identification numbers issued by the Commission pursuant to §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 §305.8 of this chapter;

(xiii) Annual filings by professional boxing sanctioning organizations as required by the Muhammed Ali Boxing Reform Act, 15

U.S.C. 6301 note, 6307a–6307h;

(xiv) Other documents that the Commission has determined to place on the public record; and

(xv) Every amendment, revision, substitute, or repeal of any of the foregoing items listed in §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 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 §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 §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 §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; 64 FR 46269, Aug. 25, 1999; 66 FR

17633, Apr. 3, 2001; 66 FR 64144, Dec. 12, 2001]

§ 4.10 Nonpublic material.

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(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

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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 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 §4.11(a), the

Commission may treat the records as not subject to the requirements of the Freedom of Information Act.

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(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 or in §4.11(b), (c), (d), (i), or (j), no material that is marked or

otherwise identified as confidential and that is within the scope of §4.10(a)(8), and no material within the scope of §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 §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 or in §4.11(b), (c), (d), (i), or (j), material not within the scope of

§4.10(a)(8) or §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 §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 §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 and protected by section 21(b) of the Federal Trade Commission Act, 15 U.S.C. 57b–2(b) or

voluntarily in lieu thereof and designated by the submitter as confidential and protected by section 21(f) of the Federal Trade

Commission Act, 15 U.S.C. 57b–2(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 §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 §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 §§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; 65 FR 67259, Nov. 9, 2000; 66 FR 17633, Apr. 3, 2001; 72 FR 28853, May, 23, 2007]

§ 4.11 Disclosure requests.

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(a) Freedom of Information Act requests —(1) Initial requests —(i) Form and 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, Office of the General Counsel, Federal Trade Commission, 600

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, or the filing of a request

for expedited treatment under paragraph (a)(1)(i)(E) of this section, will result in the request (or requests, if expedited treatment has

been requested) being treated as received on the date that the processing unit in the Office of General Counsel actually receives

the request(s).

(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 §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 §4.8(d).

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Requests may also include an application for a fee waiver, as provided by §4.8(e). An advance payment may be required in

appropriate cases as provided by §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) Expedited treatment. Requests may include an application for expedited treatment. Where such an application is not included

with an initial request for access to records under paragraph (a)(1) of this section, the application may be included in any appeal of

that request filed under paragraph (a)(2) of this section. Such application, which shall be certified by the requester to be true and

correct to the best of such person's knowledge and belief, shall describe the compelling need for expedited treatment, including an

explanation as to why a failure to obtain the requested records on an expedited basis could reasonably be expected to pose an

imminent threat to the life or physical safety of an individual, or, with respect to a request made by a person primarily engaged in

disseminating information, an explanation of the urgency to inform the public concerning actual or alleged Federal Government

activity. The deciding official (as designated by the General Counsel) will, within 10 calendar days of receipt of a request for

expedited treatment, notify the requester, in writing, of the decision to either grant or deny the request for expedited treatment, and,

if the request is denied, advise the requester that this determination may be appealed to the General Counsel.

(F) 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 deciding official (as designated by the General Counsel) will, within 20 working

days of the receipt of a request, either grant or deny, in whole or in part, such request, unless the request has been granted

expedited treatment in accordance with this section, in which case the request will be processed as soon as practicable.

(B) Except in exceptional circumstances as provided in paragraph (a)(1)(iii)(C) of this section, the deciding official (as designated

by the General Counsel) 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 deciding official (as designated by the General Counsel) 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

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 the deciding official (as designated by the General Counsel) reasonably believes that requests made by a requester, or a

group of requesters acting in concert, actually constitute a single request that would otherwise involve unusual circumstances, as

specified in paragraph (a)(1)(iii)(B) of this section, and the requests involve clearly related matters, those multiple requests may be

aggregated.

(E) 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 deciding official (as designated by the General Counsel) 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

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records that are exempt under the Freedom of Information Act, 5 U.S.C. 552(b), unless the deciding official (as designated by the

General Counsel) 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

deciding official (as designated by the General Counsel) 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 deciding official (as designated by the General Counsel) 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 deciding official (as designated by the

General Counsel) 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)( 1 ) If an initial request for

expedited treatment is denied, the requester, at any time before the initial determination of the underlying request for records by the

deciding official (as designated by the General Counsel) (or, if the request for expedited treatment was filed with any appeal filed

under paragraph (a)(2)(i)(A)( 2 ) of this section, at any time before the General Counsel's determination on such an appeal), may

appeal the denial of expedited treatment to the General Counsel.

( 2 ) 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 will 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.

( 3 ) 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: Freedom of Information Act Appeal, Office of the General Counsel, Federal Trade

Commission, 600 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

(and any request for expedited treatment filed with that appeal) being treated as received on the actual date of receipt by the Office

of 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)( 1 ) Regarding appeals from initial denials of a request for expedited treatment, the General Counsel

will either grant or deny the appeal expeditiously;

( 2 ) Regarding appeals from initial denials of a request for records, the General Counsel will, within 20 working days of the receipt

of such an appeal, either grant or deny it, in whole or in part, unless expedited treatment has been granted in accordance with this

section, in which case the appeal will be processed as soon as practicable.

(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.

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(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

§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 and

State governments for nonpublic records shall be addressed to a liaison officer, where the Commission has appointed such an

officer, or if there is none, 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 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. Requests for material pursuant to compulsory process, or for voluntary testimony, in cases or matters in which the

Commission is not a party will be treated in accordance with paragraph (e) of this section.

(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 §4.8. Requests for material pursuant to compulsory process, or

for voluntary testimony, in cases or matters in which the Commission is not a party will be treated in accordance with paragraph (e)

of this section.

(e) Requests for testimony, pursuant to compulsory process or otherwise, and requests for material pursuant to compulsory

process, in cases or matters to which the Commission is not a party. (1) The procedures specified in this section will apply to

compulsory process and requests for voluntary testimony directed to Commission employees, except special government

employees, that relate in any way to the employees' official duties. These procedures will also apply to compulsory process and

requests for voluntary testimony directed to former Commission employees or to current or former special government employees of

the Commission that seek nonpublic materials or information acquired during Commission employment. The provisions of

paragraph (e)(3) of this section will also apply when requests described above are directed to the Commission. For purposes of this

section, the term testimony includes any written or oral statement by a witness, such as depositions, affidavits, declarations, and

statements at a hearing or trial; the term nonpublic includes any material or information which, under §4.10, is not required to be

made public; the term employees, except where otherwise specified, includes special government employees and other

Commission 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 compulsory process shall promptly advise the General Counsel of its

service, the nature of the material or information sought, and all relevant facts and circumstances. This notification requirement also

applies to any employee or former employee whose testimony is sought on a voluntary basis under the conditions set forth in

paragraph (e)(1) of this section.

(3) A party who causes compulsory process to be issued to, or who requests testimony by, the Commission or any employee or

former employee of the Commission shall furnish a statement to the General Counsel, unless, with respect to a request by a

Federal or State agency, the General Counsel determines, as a matter of discretion, to waive this requirement. 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 Commission 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 United States ex

rel. Touhy v. Ragen, 340 U.S. 462 (1951).

(5) The General Counsel will consider and act upon compulsory process and requests for voluntary testimony under this section

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with due regard for statutory restrictions, the Commission's rules and the public interest, taking into account such factors 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.

(6) Invitations to testify before Congressional committees or subcommittees or to testify before other government bodies on the

possible effects of legislative and regulatory proposals are not subject to paragraphs (e)(1) through (5) of this section.

(f) Requests by current or former employees to use nonpublic memoranda as writing samples shall be addressed to 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.

(h) The General Counsel (or General Counsel's designee) may authorize a Commission member, other Commission official, or

Commission staff to disclose an item or category of information from Commission records not currently available to the public for

routine inspection and copying under Rule 4.9(b) where the General Counsel (or General Counsel's designee) determines that

such disclosure would facilitate the conduct of official agency business and would not otherwise be prohibited by applicable law,

order, or regulation. Requests for such determinations shall be set forth in writing and, in the case of staff requests, shall be

forwarded to the General Counsel (or General Counsel's designee) through the relevant Bureau. In unusual or difficult cases, the

General Counsel may refer the request to the Commission for determination.

(i) The Director of the Bureau of Competition is authorized, without power of redelegation, to respond to access requests for

records and other materials pursuant to an agreement under the International Antitrust Enforcement Assistance Act, 15 U.S.C. 6201

et seq. Before responding to such a request, the Bureau Director shall transmit the proposed response to the Secretary and the

Secretary shall notify the Commission of the proposed response. If no Commissioner objects within three days following the

Commission's receipt of such notification, the Secretary shall inform the Bureau Director that he or she may proceed.

(j)(1) The procedures specified in this section apply to disclosures of certain records to foreign law enforcement agencies in

specified circumstances in accordance with the U.S. SAFE WEB Act of 2006. Nothing in this section authorizes the disclosure of

material obtained in connection with the administration of the Federal antitrust laws or foreign antitrust laws, as defined in

paragraph (j)(5)(i) of this section.

(2) Requests from foreign law enforcement agencies, as defined in paragraph (j)(5)(ii) of this section, for nonpublic records shall be

addressed to the Director of the Office of International Affairs or the Director's designee, who shall forward them to the General

Counsel with recommendations for disposition after obtaining any required certification described in paragraph (j)(3) of this section

and approval of the Bureau of Consumer Protection. With respect to requests under this paragraph, the General Counsel or the

General Counsel's designee 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 of Consumer Protection or the Office of International Affairs disagrees with the General Counsel's proposed disposition.

(3) Access under this section to any material subject to the disclosure restrictions in sections 6(f) or 21(b) of the FTC Act or

§4.10(d) may not be granted unless—

(i) An appropriate official of the foreign law enforcement agency has certified, either by prior agreement or memorandum of

understanding or by other written certification, that such material will be maintained in confidence and will be used only for official

law enforcement purposes; and

(ii)(A) The foreign law enforcement agency has set forth a bona fide legal basis for its authority to maintain the material in

confidence;

(B) The materials are to be used for purposes of investigating, or engaging in enforcement proceedings related to, possible

violations of:

( 1 ) Foreign laws prohibiting fraudulent or deceptive commercial practices, or other practices substantially similar to practices

prohibited by any law administered by the Commission;

( 2 ) A law administered by the Commission, if disclosure of the material would further a Commission investigation or enforcement

proceeding; or

( 3 ) With the approval of the Attorney General, other foreign criminal laws, if such foreign criminal laws are offenses defined in or

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covered by a criminal mutual legal assistance treaty in force between the government of the United States and the foreign law

enforcement agency's government;

(C) The appropriate Federal banking agency, (as defined in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q))

or, in the case of a Federal credit union, the National Credit Union Administration has given its prior approval if the materials to be

provided under paragraph (j)(3)(ii)(B) of this section are requested by the foreign law enforcement agency for the purpose of

investigating, or engaging in enforcement proceedings based on, possible violations of law by a bank, a savings and loan institution

described in section 18(f)(3) of the Federal Trade Commission Act (15 U.S.C. 57a(f)(3)), or a Federal credit union described in

section 18(f)(4) of the Federal Trade Commission Act (15 U.S.C. 57a(f)(4)); and

(D) The foreign law enforcement agency is not from a foreign state that the Secretary of State has determined, in accordance with

section 6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)), has repeatedly provided support for acts of

international terrorism, unless and until such determination is rescinded pursuant to section 6(j)(4) of that Act (50 U.S.C. App.

2405(j)(4)).

(4) A copy of the certificate described in paragraph (j)(3) of this section will be forwarded to the submitter of the information at the

time the request is granted unless the foreign law enforcement agency requests that the submitter not be notified.

(5) For purposes of this section:

(i) “Federal antitrust laws” and “foreign antitrust laws” are to be interpreted as defined in paragraphs (5) and (7), respectively, of

section 12 of the International Antitrust Enforcement Assistance Act of 1994 (15 U.S.C. 6211); and

(ii) “Foreign law enforcement agency” is defined as:

(A) Any agency or judicial authority of a foreign government, including a foreign state, a political subdivision of a foreign state, or a

multinational organization constituted by and comprised of foreign states, that is vested with law enforcement or investigative

authority in civil, criminal, or administrative matters and

(B) Any multinational organization, to the extent that it is acting on behalf of an entity described in paragraph (j)(5)(i)(A) of this

section.

(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; 64 FR 3013, Jan. 20, 1999; 64 FR 32180, June 16, 1999; 64 FR 35256, June 30, 1999; 65 FR

67259, Nov. 9, 2000; 66 FR 64144, Dec. 12, 2001; 72 FR 28853, May, 23, 2007]

§ 4.12 Disposition of documents submitted to the Commission.

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(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 §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

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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]

§ 4.13 Privacy Act rules.

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(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 §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 as defined in §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 theFederal Registerpursuant 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

theFederal Registerby 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 §§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 theFederal Registerpursuant 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, Office of the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue, NW.,

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 deciding official (as designated by the General Counsel) 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 deciding official (as

designated by the General Counsel) 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 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 §4.13(c), the deciding

official (as designated by the General Counsel) will acknowledge receipt of the request. Within 30 working days of the receipt of a

request under §4.13(c), the deciding official (as designated by the General Counsel) 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

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that the requested records or information is exempt from disclosure pursuant to §4.13(m). When, for good cause shown, the

deciding official (as designated by the General Counsel) 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 deciding official (as designated by the General Counsel) 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 §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

§4.13(g) will be acknowledged by the deciding official (as designated by the General Counsel) 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

deciding official (as designated by the General Counsel) 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 §4.13(i).

(i) Appeal of initial adverse agency determination. (1) If an initial request filed under §4.13(c) or §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, 600 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 §4.13(g), the General

Counsel will notify the requester of that decision and inform the requester of the right to file with the deciding official (as designated

by the General Counsel) a concise statement setting forth the reasons for the requester's disagreement 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 deciding official (as designated by the General Counsel) 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 deciding official (as designated by the General Counsel) on payment of the reproduction

fees provided in §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

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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 5 U.S.C. 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

Identity Theft Complaint Management System—FTC

Freedom of Information Act Requests and Appeals—FTC

Privacy Act Requests and Appeals—FTC

Information Retrieval and Indexing System—FTC

(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; 64 FR

3014, Jan. 20, 1999; 64 FR 69397, Dec. 13, 1999; 66 FR 64144, Dec. 12, 2001; 67 FR 123, Jan. 2, 2002]

§ 4.14 Conduct of business.

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(a) Matters before the Commission for consideration may be resolved either at a meeting under §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) A majority of the members of the Commission in office and not recused from participating in a matter (by virtue of 18 U.S.C. 208

or otherwise) constitutes a quorum for the transaction of business in that matter.

(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; 70 FR 53297, Sept. 8, 2005]

§ 4.15 Commission meetings.

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(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 theFederal Registerfor 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.

(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,

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in accordance with §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]

§ 4.16 Privilege against self-incrimination.

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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 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]

§ 4.17 Disqualification of Commissioners.

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(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]

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