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UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

PUBLIC

In the matter of: 

Intuit Inc., Docket No. 9408 a corporation, 

Respondent. 

COMPLAINT COUNSEL’S OPPOSITION TO INTUIT INC.’S MOTION TO 

COMPEL PRODUCTION OF DOCUMENTS 

This case is about Respondent Intuit Inc.’s (“Intuit’s”) advertising practices. 

Shifting focus from its own conduct, Intuit seeks to embark on a fishing expedition into 

the FTC itself through its discovery requests and its Motion to Compel Production of 

Documents (“Motion” or “MTC”), with which it seeks to compel Complaint Counsel to 

exceed the limitations of Rule 3.31 when searching for documents. Intuit also seeks to 

compel the production of certain documents by October 21, 2022, and to compel 

Complaint Counsel to provide a list of custodians it searched to identify documents to 

produce. Intuit’s Motion should be denied. 

A motion to compel should be denied when “the Administrative Law Judge 

determines that the objection is justified.” Rule 3.38(a). Complaint Counsel objected to 

Intuit’s First Set of Requests for Production of Documents (“RFPs”)1 on various 

grounds, including that the requests (1) exceed the limitations on discovery imposed by 

the Rules in Part 3; (2) seek privileged information or attorney work product; (3) seek 

materials that are not relevant; and (4) are overbroad and unduly burdensome. See MTC 

Ex. D. These objections are justified. Moreover, as to materials that Complaint Counsel 

has already produced or agreed to produce, Intuit’s Motion is unnecessary and 

unreasonable. 

1 Complaint Counsel understands Intuit’s motion to be limited to its First Set of 

Requests for Production, the only RFPs that Intuit and Complaint Counsel have met 

and conferred about. 

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I. Background 

On April 21, 2022, Complaint Counsel served Intuit with initial disclosures, 

including documents obtained from third parties pursuant to Civil Investigative 

Demands and that third parties produced to Complaint Counsel voluntarily. Plett Dec. 

(“PD”) ¶4. These initial disclosures encompassed well over 700 documents. Id. On May 

4, 2022, Intuit moved to withdraw this matter from adjudication. The matter was 

withdrawn from adjudication on May 6, 2022, and all deadlines, including discovery 

deadlines, were stayed. The matter was returned to adjudication on August 19, 2022, 

and Intuit served Complaint Counsel with its RFPs that same day. MTC Ex. A.2 

Complaint Counsel promptly began organizing and reviewing documents within the 

scope of Rule 3.31 for responsive, nonprivileged documents. On September 26, 2022, 

Complaint Counsel produced 5,207 documents to Intuit. PD ¶5. On October 13, 2022, 

Complaint Counsel produced an additional 1,247 documents to Intuit. Id. ¶6.3 

II. Intuit Seeks to Exceed the Limitations of Rule 3.31 Without Good Cause 

Intuit seeks to impose on Complaint Counsel obligations outside of the 

requirements of Rule 3.31 without good cause. Discovery in adjudicative proceedings is 

limited in two relevant respects. First, Rule 3.31(c)(2) provides that Complaint Counsel 

“need only search for materials that were collected or reviewed in the course of the 

investigation of the matter or prosecution of the case and that are in the possession, 

custody or control of the Bureaus or Offices of the Commission that investigated the 

matter.” Rule 3.31(c)(2). Second, it provides that no party “is required to search for 

materials generated and transmitted between an entity’s counsel (including counsel’s 

2 Intuit failed to specify a date by which the production was to be made, see MTC Ex. 

A, contrary to the requirement of Rule 3.37 (“Each such request shall also specify a 

reasonable time, place, and manner of making the production or inspection and 

performing the related acts.). 

3 During several meet and confer conferences with Intuit, Complaint Counsel 

explained to Intuit that it was working as quickly as possible to review and produce 

documents on a rolling basis. PD ¶¶ 8, 9. Complaint Counsel also explained that, after 

identifying responsive documents, it takes the FTC’s document processing unit at least 

a week to produce such documents. Id. ¶10. 

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legal staff or in-house counsel) and not shared with anyone else, or between complaint 

counsel and non-testifying Commission employees.” Id. The requesting party must 

show “good cause” to overcome these rules. Id. The purpose of these limitations is to 

exclude materials that are duplicative or protected by a privilege. 74 Fed. Reg. 1803 at 

1812 (Jan. 13, 2009) (Ex. A). 

To show good cause, Intuit must show that (1) the material is relevant, (2) the 

request is “reasonable in scope and stated with reasonable particularity,” and (3) the 

request seeks information “not obtainable through other means.” In re 1-800 Contacts, 

Inc., 2016 FTC LEXIS 233, *9 (F.T.C. Dec. 20, 2016). Good cause is unlikely to exist where 

the documents sought are “duplicative, privileged or work product.” See Id. at *3 n.4. 

Here, Intuit fails to demonstrate good cause to burden Complaint Counsel with broad 

requests for privileged materials irrelevant to any disputed issue in this case. 

A. Materials Sought by Intuit Are Irrelevant 

The materials sought by Intuit are irrelevant. Here, the “issue to be tried is 

whether Respondent disseminated false and misleading advertising, not the 

Commission’s decision to file the Complaint.” In re Basic Research, 2004 FTC LEXIS 210, 

*10-11 (F.T.C. Nov. 4, 2004). Intuit states that communications with Commissioners may 

be relevant because of its affirmative defenses, MTC at 8, but its vague reference to two 

of those defenses is not sufficient to show relevance. Intuit is not allowed to probe “the 

internal decision-making process of an administrative agency . . . on bare suspicion or 

to license extended fishing expeditions in waters of unknown productivity in the vague 

hope of catching the odd one.” In re School Services, Inc. 1967 FTC LEXIS 125, *7 (F.T.C. 

June 16, 1967) (cleaned up); see also In re Metagenics, Inc., 1995 FTC LEXIS 23, * 1 (F.T.C. 

Feb. 2, 1995) (denying as irrelevant discovery on respondent’s unfair prosecution claim). 

Moreover, Intuit’s motion is not limited to discovery related to the two affirmative 

defenses it references in its Motion, but seeks to impose obligations beyond the 

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limitations in Rule 3.31 for all its RFPs, see Proposed Order on Respondent’s Motion to 

Compel, though many are overbroad and entirely irrelevant. 

Intuit makes additional conclusory statements, for example that, for all its RFPs, 

“[r]esponsive communications capturing information provided by third parties but not 

otherwise available would likewise be relevant” MTC at 8. Intuit does not say how this 

information is relevant to any of its affirmative defenses or otherwise. Conclusory 

statements alone to not prove relevance. In re LabMD, Inc., 2014 FTC LEXIS 22, *12 

(F.T.C. Jan. 30, 2014) (“conclusory, unsupported assertions do not demonstrate 

relevance.”). 

Complaint Counsel has objected to many of Intuit’s RFPs as irrelevant, and they 

do not become relevant merely because Intuit claims they are. Even the example cited 

by Intuit in its Motion, which seeks “[a]ll DOCUMENTS relating to OR reflecting rules 

OR guides adopted, provided, OR administered by the FTC about how to 

ADVERTISEMENTS [sic] for ‘free’ merchandise or services,” MTC at 8, seeks 

documents not relevant to the central inquiry: whether Intuit’s advertisements violated 

Section 5 of the FTC Act. 

B. Intuit’s Requests Are Not Reasonable in Scope 

Intuit has moved to compel the production of three categories of documents 

outside the scope of Rule 3.31, but as a practical matter, because Intuit’s RFPs in many 

instances contain no other limitations (as described below), requiring Complaint 

Counsel to search documents outside of Rule 3.31(c) would create a tremendous 

burden. Intuit’s RFPs are overbroad and unreasonable in scope. Intuit’s RFPs, 

repeatedly rely on the defined term “YOU,” which includes “the Federal Trade 

Commission (‘FTC’) AND ANY current OR former Commissioners, employees, agents, 

representatives, assigns, OR ANY other PERSON acting OR purporting to act on behalf 

of OR under the direction, authorization, OR control of the FTC.” MTC Ex. A. This 

definition appears in instructions, see MTC Ex. A General Instructions 1 & 2, and in the 

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definition of “Document”, see MTC Ex. A., Definition 7, which is referenced in 12 of 14 

RFPs. MTC Ex. A. “Document” is referenced in the definition of “Communications” 

which appears in an additional RFP. Id. This nesting, all-encompassing construction 

means that nearly all of Intuit’s RFPs seek responsive records from every FTC 

employee, agent, or representative, and possibly even the Administrative Law Judge.4 

Further, several RFPs are not limited in time. See, e.g., RFPs 6 & 8. Thus, as 

drafted, if Intuit’s Motion were granted, Intuit’s RFPs would require Complaint 

Counsel to search the records of every Commission employee, agent, Commissioners 

themselves, and Administrative Law Judges, dating back to the creation of the agency 

in 1914, for responsive documents. For instance, it would require Complaint Counsel to 

search all internal Commission communications spanning more than a century related 

to policy discussions about “free” advertising, see RFP 6-8, in the event that they reflect 

“conversations with third parties” or otherwise reflect information from external 

sources that are not known to Intuit.5 This outcome is entirely unreasonable. 

C. Materials are Obtainable Through Other Means 

Intuit claims it needs the discovery requested for its affirmative defenses, making 

a passing reference to “prejudgment” and its allegation that the Complaint is invalid 

because the Commission did not vote on the final Complaint. MTC at 8. But Intuit’s 

affirmative defense for prejudgment relies on publicly available evidence already in its 

possession, namely a tweet and an interview. See Intuit’s Opp. to Summary Decision at 

29, RX 102 and 103. Intuit also seems to be trying to make an end-run around making 

the showing required by Rule 3.36(b) to seek documents from offices such as the 

Secretary or the Commissioners with its overbroad RFPs. 

4 The Commission delegates the performance of several functions to the ALJ, 16 C.F.R. 

§ 0.14., so Intuit’s definition of “You” likely encompasses the ALJ. 

5 Intuit’s request that Complaint Counsel search for materials that “reflect information 

from external sources that are not known to Intuit” is vague and lacks any particularity 

as Complaint Counsel does not know what information is known to Intuit. 

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D. Materials are Privileged 

Complaint Counsel does not, and need not, formally assert any applicable 

privileges at this time because Rule 3.31(c)(2) relieves Complaint Counsel of the 

obligation to search for responsive materials absent a showing of good cause, which 

Intuit has not made. That notwithstanding, the categories of the documents sought by 

Intuit are privileged and attorney work product, and discovery of those documents 

should be denied. See Rule 3.31(c)(4) (“Discovery shall be denied or limited . . . to 

preserve the privilege of a . . . governmental agency.”); Rule 3.31(c)(5) (discovery of 

documents prepared in anticipation of litigation permissible only upon a showing of 

substantial need); In re Axon Enter., 2020 FTC LEXIS 127, *7 (F.T.C. July 21, 2020) (“[T]he 

reasons for issuing a complaint and the information considered or evaluated prior to 

issuance, are outside the scope of discovery, absent extraordinary circumstances.” 

(cleaned up)). 

In particular, the categories of documents sought by Intuit include sensitive 

internal documents. First, Intuit seeks “communications and other materials sent to and 

from the Commissioners or the Commissioners’ offices.” MTC at 4. These 

communications are subject to the attorney-client privilege and the deliberative process 

privilege. The deliberative process privilege protects communications that are part of 

the decision-making process of a governmental agency. In re Basic Research LLC, 2004 

FTC LEXIS 210, *4 (F.T.C. Nov. 4, 2004). Next, Intuit seeks communications and other 

materials sent between FTC counsel or other FTC legal staff that reflect conversations 

with third parties. These materials again are sensitive and contain work product, as 

they reflect “the mental processes of this agency in investigating respondents and the 

decision leading up to the complaint in this matter.” In re LabMD, Inc., 2014 FTC LEXIS 

45, *8 (F.T.C. March 10, 2014). Finally, the last category Intuit seeks are 

“communications and other materials that otherwise reflect information from external 

sources that are not known to Intuit,” which is so vague and broad that it includes work 

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product and privileged materials. To the extent such non-privileged materials are not 

covered by the limitations of Rule 3.31(c), Complaint Counsel will produce them. But 

beyond the limits of the Rule, these materials reflect Complaint Counsel’s and the FTC’s 

work product and mental process. Granting Intuit’s request to set aside the limitations 

of Rule 3.31(c)(2) will not result in Intuit actually obtaining any documents, but it will 

impose a massive burden on Complaint Counsel to review and log myriad privilege 

claims. 

III. Intuit’s Motion is Otherwise Unnecessary and Sets an Unreasonable Time for

Production 

Though Complaint Counsel has produced over 7,000 documents to Intuit to date, 

PD ¶7, Intuit also seeks to compel the production of certain documents by particular 

dates. For example, Intuit seeks to compel the production of certain documents 

described in initial disclosures (category J), and documents related to Professor 

Novemsky’s Declarations.6 In fact, much of category J was produced on October 13, 

2022, PD ¶6, and Complaint Counsel intends to identify and/or produce documents it 

has agreed to produce that are covered by Intuit’s RFPs related to Professor 

Novemsky’s Declarations by October 28, 2022. Complaint Counsel has explained to 

Intuit the time required to technically prepare documents for production, PD ¶10, but 

Intuit continues to set unreasonable and arbitrary deadlines for production, including 

with this motion, setting the date it seeks to compel production (October 21) one 

business day after the likely date of this Court’s Order. Complaint Counsel will 

continue to produce documents it has agreed to produce as quickly as it is able, on a 

rolling basis in accordance with the scheduling order. The relief Intuit seeks is wholly 

unnecessary. Complaint Counsel believes it will be able to complete substantially all of 

6 Intuit states that the production of these documents has been delayed by five months 

and seems to imply that there has been some impropriety in the “delay.” MTC at 6. 

Intuit is referring to the time after it moved to withdraw the matter from adjudication, 

during which all deadlines were stayed, when Intuit sought to have the FTC abandon 

this suit. Intuit propounded discovery on August 19, 2022, less than two months ago, to 

which Complaint Counsel has been responding on a rolling basis. 

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the production of documents it has agreed to produce pursuant to Intuit’s First Set of 

RFPs by November 4, 2022. 

To the extent Intuit argues that Complaint Counsel has not searched the relevant 

documents covered by Rule 3.31(c)(2), it is mistaken. Subject to the limitations 

permitted by Rule 3.31(c)(2), Complaint Counsel has made diligent efforts to collect, 

review, and produce materials where they are relevant, responsive, and non-privileged. 

Such efforts are ongoing. 

IV. Conclusion 

For the foregoing reasons Intuit’s Motion to Compel Production of Documents 

should be denied. 

Respectfully submitted, 

Dated: October 17, 2022 /s/ Rebecca Plett 

Roberto Anguizola, IL Bar No. 6270874 

Rebecca Plett, VA Bar No. 90988 

James Evans, VA Bar No. 83866 

Federal Trade Commission 

600 Pennsylvania Ave., NW, CC-6316 

Washington, DC 20580

(202) 326-3284 / ranguizola@ftc.gov 

(202) 326-3664 / rplett@ftc.gov 

(202) 326-2026 / james.evans@ftc.gov 

Counsel Supporting the Complaint

Federal Trade Commission 

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CERTIFICATE OF SERVICE 

I hereby certify that on October 17, 2022, I electronically filed the foregoing 

Complaint Counsel’s Opposition to Intuit Inc.’s Motion to Compel electronically using 

the FTC’s E-Filing system, which will send notification of such filing to: 

April Tabor

Office of the Secretary

Federal Trade Commission 

600 Pennsylvania Avenue, NW

Suite CC-5610 

Washington, DC 20580

ElectronicFilings@ftc.gov 

Secretary of the Commission

Clerk of the Court 

Hon. D. Michael Chappell

Chief Administrative Law Judge

Federal Trade Commission 

600 Pennsylvania Avenue, NW

Suite H-110 

Washington, DC 20580 

Administrative Law Judge 

I further certify that on October 17, 2022, I caused the foregoing document to be 

served via email on: 

David Z. Gringer 

Phoebe Silos 

Charles Bridge

Eleanor Davis 

Wilmer Cutler Pickering Hale & Dorr LLP

7 World Trade Center 

250 Greenwich Street 

New York, NY 10007

David.Gringer@wilmerhale.com

Phoebe.Silos@wilmerhale.com

Charles.Bridge@wilmerhale.com

Eleanor.Davis@wilmerhale.com 

(212) 230-8800 

Shelby Martin 

Wilmer Cutler Pickering Hale & Dorr LLP

1225 Seventeenth Street, Suite 2600 

Denver, CO 80202

Shelby.Martin@wilmerhale.com 

(720) 274-3135 

Katherine Mackey

Wilmer Cutler Pickering Hale & Dorr LLP

60 State Street 

Boston, MA 02109

Katherine.Mackey@wilmerhale.com

(617) 526-6000 

Jonathan E. Paikin 

Jennifer Milici 

Derek A. Woodman 

Vinecia Perkins 

Andres Salinas 

Spencer Todd

Jocelyn Berteaud

Benjamin Chapin

Margaret (Molly) Dillaway

Reade Jacob 

Wilmer Cutler Pickering Hale & Dorr LLP

1875 Pennsylvania Avenue NW 

Washington, DC 20006

Jonathan.Paikin@wilmerhale.com 

Jennifer.Milici@wilmerhale.com

Derek.Woodman@wilmerhale.com

Vinecia.Perkins@wilmerhale.com 

Andres.Salinas@wilmerhale.com 

Spencer.Todd@wilmerhale.com

Joss.Berteaud@wilmerhale.com

Benjamin.Chapin@wilmerhale.com 

Molly.Dillaway@wilmerhale.com 

Reade.Jacob@wilmerhale.com 

(202) 663-6000 

Attorneys for Respondent, Intuit Inc. 

/s/ Rebecca Plett 

Rebecca Plett 

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UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

PUBLIC

In the matter of: 

Intuit Inc., Docket No. 9408 a corporation, 

Respondent. 

DECLARATION OF REBECCA PLETT IN SUPPORT OF COMPLAINT 

COUNSEL’S OPPOSITION TO RESPONDENT INTUIT INC.’S MOTION TO 

COMPEL THE PRODUCTION OF DOCUMENTS 

I, Rebecca Plett, have personal knowledge of the facts and matters set forth below. If 

called as a witness, I could and would testify as follows: 

1. I am one of the counsel supporting the Complaint in In re Intuit Inc., 

Docket No. 9408, an adjudicative proceeding pending before the Federal Trade 

Commission. 

2. I am over twenty-one years old and am a citizen of the United States. I am 

a member in good standing of the Virginia State Bar (Bar No. 90988). My business 

address is 600 Pennsylvania Avenue, NW, Mailstop CC-6316, Washington, DC 20580. 

3. I submit this declaration in support of Complaint Counsel’s Opposition to 

Intuit Inc.’s Motion to Compel the Production of Documents. 

4. On April 21, 2022, Complaint Counsel served initial disclosures on Intuit 

Inc. (“Intuit”). The initial disclosures included over 700 documents, including 

documents received from a third party pursuant to a Civil Investigative Demand in this 

investigation. The documents also included many produced voluntarily to the FTC by 

third parties during the course of the investigation of this matter. 

5. On September 26, 2022, Complaint Counsel produced 5,207 nonprivileged, responsive documents to Intuit. 

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6. On October 13, 2022, Complaint Counsel produced 1,247 non-privileged, 

responsive documents to Intuit. These documents reflect most of Complaint Counsel’s 

non-privileged communications with third parties, including documents identified in 

Category J of Complaint Counsel’s initial disclosures. 

7. In total, Complaint Counsel have produced over 7,000 documents to 

Intuit. 

8. On September 27, 2022, Complaint Counsel met and conferred with 

counsel for Intuit. Complaint Counsel confirmed the efforts they were making to review 

documents and identify responsive documents. 

9. On October 3, 2022, Complaint Counsel met and conferred with counsel 

for Intuit. Complaint Counsel explained the efforts they were making to review and 

produce responsive documents to Intuit. 

10. In at least one instance when Complaint Counsel met and conferred with 

counsel for Intuit, Complaint Counsel explained that they were working to review and 

produce documents to Intuit. Complaint Counsel explained that after identifying 

responsive documents, it takes BCP’s Division of Litigation Technology and Analysis 

(which is responsible for managing BCP’s document review and production software) 

at least a week to prepare the electronic documents and images (if applicable) for 

production. 

11. A true and correct copy of 74 Fed. Reg. 1803 (Jan. 13, 2009) is attached as 

Exhibit A. 

I declare that the foregoing is true and correct under penalty of perjury. 

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Dated: October 17, 2022 /s/ Rebecca Plett 

Durham, North Carolina Roberto Anguizola, IL Bar No. 6270874 

Rebecca Plett, VA Bar No. 90988 

James Evans, VA Bar No. 83866 

Federal Trade Commission 

600 Pennsylvania Ave., NW, CC-6316 

Washington, DC 20580

(202) 326-3284 / ranguizola@ftc.gov 

(202) 326-3664 / rplett@ftc.gov 

(202) 326-2026 / james.evans@ftc.gov 

Counsel Supporting the Complaint

Federal Trade Commission 

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Exhibit A 

=·"'"""" '~ US.GOVERNMENT 

!Nl'ORMATION 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 10/17/2022 | Document No. 605872 | PAGE Page 14 of 47 * PUBLIC *; 

CPO 

Tuesday, 

January 13, 2009 

Part III 

Federal Trade 

Commission 

16 CFR Parts 3 and 4 

Rules of Practice; Final Rule 

PUBLIC
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1804 Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Rules and Regulations 

PUBLIC

FEDERAL TRADE COMMISSION 

16 CFR Parts 3 and 4 

Rules of Practice 

AGENCY: Federal Trade Commission 

(‘‘Commission’’ or ‘‘FTC’’). 

ACTION: Interim final rules with request 

for comment. 

SUMMARY: The FTC is amending Parts 3 

and 4 of its Rules of Practice, 16 CFR 

Parts 3 and 4, in order to further 

expedite its adjudicative proceedings, 

improve the quality of adjudicative 

decision making, and clarify the 

respective roles of the Administrative 

Law Judge (‘‘ALJ’’) and the Commission 

in Part 3 proceedings. 

DATES: These interim final rules are 

effective on January 13, 2009. These 

amendments will govern all 

Commission adjudicatory proceedings 

that are commenced after January 13, 

2009 The rules that were in effect before 

January 13, 2009 will govern all 

currently pending Commission 

adjudicatory proceedings. Written 

comments must be received on or before 

February 12, 2009. 

ADDRESSES: Interested parties are 

invited to submit written comments 

electronically or in paper form. 

Comments should refer to ‘‘Parts 3 and 

4 Rules of Practice Rulemaking -

P072104’’ to facilitate the organization 

of comments. Please note that comments 

will be placed on the public record of 

this proceeding—including on the 

publicly accessible FTC website at 

(http://www.ftc.gov/os/ 

publiccomments.shtm) — and therefore 

should not include any sensitive or 

confidential information. In particular, 

comments should not include any 

sensitive personal information, such as 

an individual’s Social Security number; 

date of birth; driver’s license number or 

other state identification number, or 

foreign country equivalent; passport 

number; financial account number; or 

credit or debit card number. Comments 

also should not include any sensitive 

health information, such as medical 

records and other individually 

identifiable health information. In 

addition, comments should not include 

any ‘‘[t]rade secret or any commercial or 

financial information which is obtained 

from any person and which is privileged 

or confidential. * * *,’’ as provided in 

Section 6(f) of the Federal Trade 

Commission Act (‘‘FTC Act’’), 15 U.S.C. 

46(f), and Commission Rule 4.10(a)(2), 

16 CFR 4.10(a)(2). Comments containing 

material for which confidential 

treatment is requested must be filed in 

paper form, must be clearly labeled 

‘‘Confidential,’’ and must comply with 

Commission Rule 4.9(c).1 

Because paper mail in the Washington 

area, and specifically to the FTC, is 

subject to delay due to heightened 

security screening, please consider 

submitting your comments in electronic 

form. Comments filed in electronic form 

should be submitted by using the 

following weblink: (https:// 

secure.commentworks.com/ftcpart3rules) (and following the 

instructions on the web-based form). To 

ensure that the Commission considers 

an electronic comment, you must file it 

on the web-based form at the weblink: 

(https://secure.commentworks.com/ftcpart3rules). If this document appears at 

(http://www.regulations.gov/search/ 

index.jsp), you may also file an 

electronic comment through that 

website. The Commission will consider 

all comments that regulations.gov 

forwards to it. You may also visit the 

FTC website at www.ftc.gov to read this 

document and the news release 

describing it. 

A comment filed in paper form 

should include the ‘‘Parts 3 and 4 Rules 

of Practice Rulemaking - P072104’’ 

reference both in the text and on the 

envelope, and should be mailed or 

delivered by courier to the following 

address: Federal Trade Commission, 

Office of the Secretary, Room H-135 

(Annex R), 600 Pennsylvania Avenue, 

NW, Washington, DC 20580. 

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives, 

whether filed in paper or electronic 

form. Comments received will be 

available to the public on the FTC 

website, to the extent practicable, at 

(http://www.ftc.gov/os/ 

publiccomments.shtm). As a matter of 

discretion, the Commission makes every 

effort to remove home contact 

information for individuals from the 

public comments it receives before 

placing those comments on the FTC 

website. More information, including 

routine uses permitted by the Privacy 

Act, may be found in the FTC’s privacy 

policy, at (http://www.ftc.gov/ftc/ 

privacy.shtm). 

1 The comment must be accompanied by an 

explicit request for confidential treatment, 

including the factual and legal basis for the request, 

and must identify the specific portions of the 

comment to be withheld from the public record. 

The request will be granted or denied by the 

Commission’s General Counsel, consistent with 

applicable law and the public interest. See 

Commission Rule 4.9(c), 16 CFR 4.9(c). 

FOR FURTHER INFORMATION CONTACT: 

Michael D. Bergman, Attorney, (202) 

326-3184, or Lisa M. Harrison, Attorney, 

(202) 326-3204, Office of the General 

Counsel, Federal Trade Commission, 

600 Pennsylvania Avenue, NW, 

Washington DC 20580. 

SUPPLEMENTARY INFORMATION: This 

discussion contains the following 

sections: 

I. Overview of Proposal and Comments 

Received 

II. Section-by-Section Analysis of 

Interim Final Rule Revisions 

III. Invitation to Comment 

IV. Interim Final Rule Revisions 

I. Overview of Proposal and Comments 

Received 

In its October 7, 2008, Notice of 

Proposed Rulemaking (‘‘NPRM’’),2 the 

Commission invited public comment on 

proposed amendments to its Rules of 

Practice governing formal adjudicatory 

(‘‘Part 3’’) proceedings. This public 

comment period closed on November 6, 

2008. The Commission observed in the 

NPRM that it has periodically engaged 

in reform efforts to minimize delay and 

improve the quality of the 

administrative decisionmaking process 

in a fair manner fully consistent with 

the Administrative Procedure Act 

(‘‘APA’’)3 without prejudicing the due 

process rights of the parties in these 

proceedings. Past reforms and the ones 

proposed in the NPRM have primarily 

dealt with the long-standing concerns of 

the courts and the bar that the 

Commission’s Part 3 adjudicatory 

process has been too protracted.4 

In merger cases, parties frequently 

argue that drawn out proceedings will 

result in their abandoning transactions 

before the antitrust merits can be 

adjudicated and indeed the protracted 

nature of Part 3 proceedings has 

contributed to the reluctance of some 

federal courts to grant preliminary relief 

in merger cases brought under Section 

2 73 FR 58832 (Oct. 7, 2008). 

3 5 U.S.C. 551 et seq. 

4 See, e.g., FTC v. Freeman Hosp., 911 F. Supp. 

1213, 1228 n.8 (W.D. Mo. 1995) (‘‘The average time 

from the issuance of a complaint by the FTC to an 

initial decision by an administrative law judge 

averaged nearly three years in 1988. Moreover, 

additional time will be required if that initial 

decision is appealed.’’), aff’d, 69 F.3d 260 (8th Cir. 

1995); see also National Dynamics Corp. v. FTC, 

492 F.2d 1333, 1335 (2d Cir. 1974) (remarking upon 

the ‘‘leisurely course typical of FTC proceedings’’); 

J. Robert Robertson, FTC Part III Litigation: Lessons 

from Chicago Bridge and Evanston Northwestern 

Healthcare, 20 ANTITRUST 12 (Spring 2006); Report of 

the American Bar Association Section of Antitrust 

Law Special Committee to Study the Role of the 

Federal Trade Commission, 58 ANTITRUST L.J. 43, 116 

n.167 (1989) (‘‘It is disappointing that the 

Commission * * * continues to have problems of 

delay.’’). 
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13(b) of the FTC Act, 15 U.S.C. 53(b). 

Moreover, protracted Part 3 proceedings 

do not necessarily result in decisions 

that are more just or fair, and instead 

may result in substantially increased 

litigation costs for the Commission and 

respondents whose transactions or 

practices are challenged. For example, 

protracted discovery schedules and 

pretrial proceedings can result in 

nonessential discovery and motion 

practice that can be very costly to the 

Commission, respondents, and third 

parties. 

One of the most critical advantages of 

administrative adjudications, and a 

cornerstone characteristic of 

administrative agencies, is expertise. As 

detailed more fully in the NPRM, the 

Congress and the Executive have long 

recognized that the ability of 

administrative agencies to apply their 

expertise and to devote substantial 

resources to complex problems calling 

for specialized knowledge is a critical 

advantage and an important reason for 

the creation of those agencies.5 In 

creating the Commission, Congress 

intended the agency to use its 

substantive expertise and administrative 

adjudicative authority as a ‘‘uniquely 

effective vehicle for the development of 

antitrust law in complex settings in 

which the agency’s expertise [could] 

make a measurable difference,’’6 as well 

as to apply its specialized knowledge to 

consumer protection matters. Certainty 

and quality in Commission opinions 

could serve not only to improve the 

resolution of individual cases, but to 

provide broad guidance to industry and 

the public and help set the policy 

agenda.7 With its expertise and unique 

institutional tools, the Commission was 

created to be—and continues to function 

as—a forum for expert adjudication. 

The Commission also recognizes that 

the APA and the ATTORNEY GENERAL’S 

FINAL REPORT8 contemplated an 

important role for the hearing examiner 

(the predecessor of the ALJ) in the 

adjudicatory process when acting as the 

presiding official to preside over 

prehearing proceedings, hear evidence 

and issue an initial decision.9 Under the 

5 FINAL REPORT OF THE ATTORNEY GENERAL’S 

COMMITTEE ON ADMINISTRATIVE PROCEDURE 16 (1941) 

[hereinafter ATTORNEY GENERAL’S FINAL REPORT]; see 

also Marc Winerman, The Origins of the FTC: 

Concentration, Cooperation, Control, and 

Competition, 71 ANTITRUST L.J. 15 (2003) (discussing 

the formation and history of the FTC); D. Bruce 

Hoffman & M. Sean Royall, Administrative 

Litigation at the FTC: Past, Present, and Future, 71 

ANTITRUST L.J. 319 (2003) (discussing the evolution 

of administrative adjudication at the FTC). 

6 Hoffman & Royall, supra note 5, at 319-20. 

7 Id. 

8 See supra note 5. 

9 See 5 U.S.C. 556(c). 

APA, the ALJ’s authority is, however, 

‘‘subject to the published rules of the 

agency,’’ a qualification which ‘‘is 

intended to make clear the authority of 

the agency to lay down policies and 

procedural rules which will govern the 

exercise of such powers by [ALJs].’’10 

Thus, while the Commission’s rules 

provide the presiding ALJ with 

necessary tools to ‘‘conduct fair and 

impartial hearings, to take all necessary 

action to avoid delay in the disposition 

of proceedings, and to maintain 

order,’’11 and with important duties 

including initial fact finding 

responsibilities, the ALJ must ultimately 

adhere to Commission decisions. The 

Commission believes the rules issued in 

this notice strike the appropriate 

balance between the important role 

played by the ALJ and the need to apply 

the Commission’s expertise. 

The proposed amendments 

announced in the October 7, 2008, 

NPRM were the culmination of a recent 

broad and systematic internal review to 

improve the Commission’s Part 3 

practices and procedures in light of 

recent adjudicatory experiences. The 

Commission undertook this effort in 

order to improve the Part 3 process 

through a comprehensive review, rather 

than piecemeal modifications of a 

limited number of rules, which would 

ensure that the rules are consistent with 

one another and that they are workable 

in practice. Input was obtained from 

various bureaus and offices within the 

Commission and staff further reviewed 

the APA’s legal standards, the rules and 

procedures of the federal courts, and 

other agencies’ adjudicative procedures. 

The Commission intended for the 

proposed amendments to balance three 

important interests: the public interest 

in a high quality decisionmaking 

process, the interests of justice in an 

expeditious resolution of litigated 

matters, and the interest of the parties 

in litigating matters without 

unnecessary expense. For example, in 

principle, expedited adjudications, 

while maintaining the high quality of 

the proceeding, may impose costs on the 

parties or the agency that they may not 

need bear if the demands of a given case 

permit a more leisurely adjudicative 

process. Alternatively, attempts to 

increase efficiency or decrease costs to 

10 ATTORNEY GENERAL’S MANUAL ON THE 

ADMINISTRATIVE PROCEDURE ACT 74-75 (1947) 

[hereinafter ATTORNEY GENERAL’S MANUAL]; see also 

Vermont Yankee Nuclear Power Corp. v. Natural 

Res. Def. Council, Inc., 435 U.S. 519, 524 (1978) 

(holding that agencies have discretion to enact 

procedures where Congress provided agencies with 

‘‘the responsibility for substantive judgments.’’). 

11 16 CFR 3.42(c). 

those involved could lead to trade offs 

in the quality of the ultimate result. 

The most significant of the proposals 

in the NPRM included tighter time 

limits during the adjudicatory process 

leading up to the issuance of the initial 

decision, changes to ensure that the 

Commission can appropriately apply its 

legal and policy expertise earlier in the 

adjudicatory process, reforms in 

discovery and motions practice, the 

streamlining and expedition of 

evidentiary hearings, and a change in 

the Commission’s process for handling 

motions to dismiss or to withdraw a 

case from administrative adjudication 

after a federal court’s denial of a 

preliminary injunction in an action 

brought by the Commission. 

The Commission received eight 

comments on the proposed amendments 

from seven individuals or entities: a 

joint comment from Robert Pitofsky12 

and Michael N. Sohn,13 the Section of 

Antitrust Law of the American Bar 

Association (‘‘Section’’), Whole Foods 

Market, Inc. (‘‘Whole Foods’’) (two 

comments), Linda Blumkin,14 the 

Chamber of Commerce of the United 

States of America (‘‘Chamber’’), Stephen 

Nagin,15 and Richard Hallberg. Some 

commenters endorsed the objectives of 

the Commission’s proposed 

amendments. The Section commented 

that it ‘‘supports the Commission’s 

efforts to expedite certain adjudicative 

proceedings, improve the quality of its 

adjudicative decision making, and 

clarify the respective roles’’ of the 

Commission and the ALJ. The PitofskySohn comment noted that ‘‘expediting 

Part 3 proceedings is a step in the right 

direction.’’ 

But these and other commenters 

objected to various specific proposals 

and the absence of any proposal that 

would set a deadline on the 

Commission itself, in particular: 

(i) the proposed time limits did not 

set deadlines for the Commission to 

resolve appeals from initial decisions; 

(ii) the time limits imposed on ALJs 

were too rigid and might deprive 

respondents in some proceedings of 

their due process right to be heard; (iii) 

the proposals enabled the Commission 

to decide dispositive motions while a 

case is pending before an ALJ and 

would, therefore, undermine the ALJ’s 

12 Counsel to Arnold & Porter LLP and Sheehy 

Professor of Trade Regulation Law, Georgetown 

University Law Center. Mr. Pitofsky served as 

Chairman of the Commission and previously held 

other positions in the agency. 

13 Senior Partner, Arnold & Porter LLP and 

former General Counsel of the Commission. 

14 Former Assistant Director for General 

Litigation in the Bureau of Competition. 

15 Nagin, Gallup & Figueredo, PA. 
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1806 Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Rules and Regulations 

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independence; (iv) the Commission was 

changing its policy on when it would 

pursue a case after a denial of a 

preliminary injunction; and (v) the 

proposed rule explicitly stating that the 

Commission or a designated 

Commissioner could oversee portions of 

the pretrial process infringed on the 

ALJ’s independence. Several 

commenters argued that the 30-day 

comment period was inadequate. 

i) Deadlines on Commission decision 

making. 

Upon consideration of the various 

comments, the Commission agrees that 

the proposed rules should set deadlines 

on the Commission to act on appeals of 

initial decisions. The Commission is 

now adopting in Rule 3.52 tight 

deadlines on its resolution of appeals. 

For cases in which the Commission 

seeks preliminary relief under Section 

13(b) of the FTC Act, 15 U.S.C. 53(b), 

there will be automatic Commission 

review of the initial decision (i.e., no 

notice of appeal will need to be filed), 

briefing will be completed within 45 

days of the issuance of the initial 

decision, and the Commission will 

commit to issue its final decision within 

45 days of oral argument (i.e., within 

100 days of the initial decision).16 For 

all other cases, an appealing party will 

need to file its objections to the initial 

decision by filing a notice of appeal, all 

briefing will be completed within 67 

days of the initial decision, and the 

Commission will commit to issue its 

final decision within 100 days of oral 

argument (i.e., within six months of the 

initial decision). 

Consistent with the need for 

expedited procedures, the Commission 

is also setting deadlines for when it 

must rule on dispositive motions, 

applications for interlocutory appeals, 

and motions to dismiss after the denial 

of a preliminary injunction. 

ii) Deadlines leading up to Initial 

Decision. 

The comments filed so far do not 

persuade the Commission that its 

default timing deadlines are unfair. 

Comments that the revised rules would 

unduly limit respondents’ ability to 

engage in adequate discovery or develop 

their defenses, and, hence, would 

violate their right to due process, have 

yet to provide support for this argument. 

The APA does not expressly require 

discovery. See McClelland v. Andrus, 

606 F.2d 1278, 1285 (D.C. Cir. 1979). 

16 The timing deadlines for the Commission’s 

decisions on appeal or review, as with other rule 

deadlines, are subject to the timing requirements in 

Rule 4.3(a), which addresses, inter alia, when 

deadlines fall on a weekend or holiday. 

Although ‘‘discovery must be granted if 

in the particular situation a refusal to do 

so would so prejudice a party as to deny 

him due process,’’ id. at 1286, it is 

difficult to see how the five and eight 

month deadlines from complaint to 

hearing, and the duration of pretrial 

discovery imposed by Rule 3.11(b), fail 

to satisfy due process. The comments 

thus far fail to demonstrate that 

respondents would not have adequate 

time to pursue broad discovery. Indeed, 

the revised rules allow the parties to 

move for more time upon a showing of 

good cause. Antitrust cases in federal 

court, such as the government’s 

monopoly case against Microsoft and its 

merger case against Oracle, have gone to 

trial on roughly similar schedules, 

suggesting the reasonableness of such 

time frames.17 

Further, the criticism in the 

comments received thus far that the 

time limits are too short fails to give 

adequate weight to provisions that 

authorize the Commission to grant 

extensions for ‘‘good cause.’’ The 

Commission anticipates that this 

authority will be used sparingly but is 

determined to use this authority 

whenever necessary to ensure that the 

parties have adequate time to prepare 

for trial and to present their case. 

iii) Dispositive motions. 

Commenters’ concerns about the role 

of the Commission in deciding legal and 

policy issues early in the proceeding 

have not demonstrated that early 

Commission involvement improperly 

interferes with the independence of the 

ALJ. This is especially true in view of 

the role that Congress envisioned for the 

Commission as an expert adjudicator. 

Moreover, as explained in the analysis 

of Rule 3.22, while the APA does confer 

a variety of powers on the ALJ primarily 

during and after the conduct of the 

evidentiary hearing, this does not 

include the authority to rule on 

prehearing motions that turn on legal 

and policy determinations.18 Rather, the 

ALJ’s authority to rule on such motions 

depends on whether an agency has 

provided the ALJ with this power in an 

agency rule. Commission Rule 3.22 

previously granted ALJ’s this power, 

and the Commission plainly has the 

authority to limit it. 

17 See, e.g., United States v. Microsoft, 253 F.3d 

34 (D.C. Cir. 2001); United States v. Oracle Corp., 

331 F. Supp. 2d 1098 (N.D. Cal. 2004). 

18 For example, the APA authorizes the ALJ to 

‘‘dispose of procedural requests or similar matters’’ 

during the hearing, subject to the published rules 

of the agency. 5 U.S.C. 556(c)(9). 

iv) 1995 Policy Statement and 

procedures related to Part 3 proceedings 

following denial of a preliminary 

injunction. 

The Commission has adopted its 

proposal to amend Rule 3.26 to 

eliminate automatic withdrawals from 

adjudication or stays of Part 3 

proceedings when a party files a motion 

for withdrawal or to dismiss based on 

the denial of a preliminary injunction in 

an ancillary federal court action brought 

by the Commission. The Commission, 

however, has also amended the Rule to 

promote more prompt consideration of 

whether to proceed with Part 3 by 

providing for the filing of such motions 

long before the Commission has an 

opportunity to exhaust its appeals as 

provided in the previous Rule, and has 

also set a 30-day deadline for the 

Commission to decide such motions. 

The Commission also reaffirms in this 

document its adherence to its 1995 

Policy Statement calling for a case-bycase analysis of whether the 

Commission should pursue Part 3 

litigation after it loses a preliminary 

injunction.19 

v) The proposed amendment providing 

express authority for the Commission or 

a Commissioner to preside over 

prehearing procedures. 

Commenters criticized as infringing 

on the independence of the ALJ 

proposed Rule 3.42(a) that would have 

made explicit the authority of the 

Commission or one of its members to 

preside over discovery or certain other 

prehearing procedures before 

transferring the matter to the ALJ. The 

Commission or its members have the 

authority to preside over prehearing 

procedures under the APA, 5 U.S.C. 

556(b), as well as unamended Rule 3.42, 

and the collection of rule revisions 

adopted today reduce the need for early 

Commission involvement in case 

management. For these reasons, and to 

ensure there is no public misperception 

that the proposed revision unfairly 

enlarged the Commission’s authority, 

the Commission has decided not to 

adopt the proposed revision to this rule. 

vi) Improving Part 3 litigation while 

protecting the rights of the parties. 

Upon consideration of all the 

comments received so far, the 

Commission believes that the rules will 

improve the Part 3 litigation process. 

The timing deadlines, while aggressive, 

are consistent with the manner in which 

federal courts can move in complex 

antitrust cases, and parties can seek to 

extend them when necessary. The rules 

19 60 FR 39741 (Aug. 3, 1995). 
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bring the Commission’s expertise to bear 

sooner in the process, which can be 

expected to streamline cases, especially 

where the principal issue is legal not 

factual, while ensuring that the ALJs 

will continue to play the dominant role 

in managing the litigation and 

overseeing the evidentiary hearing. 

vii) Comment periods. 

As stated in the NPRM, the 

Commission sought public comment 

even though the proposed rule revisions 

relate solely to agency practice, and thus 

are not subject to the notice and 

comment requirements of the APA, 5 

U.S.C. 553(b)(A). The Commission has 

been well served by the public comment 

period and the quality of many of the 

criticisms and suggestions undercuts the 

argument of some commenters that the 

30-day comment period was too short. 

In any event, the rule amendments 

published in this notice are being issued 

only on an interim basis, and any rules 

that the Commission re-promulgates 

after the current comment period are not 

necessarily permanent. Instead, the 

Commission is instructing its internal 

Standing Committee on the Part 3 rules, 

as announced in the NPRM, to make 

recommendations bi-annually to the 

Commission on the need for changes to 

the Part 3 rules, including the rule 

revisions that become effective today 

and any rules that the Commission repromulgates after the current comment 

period. 

In view of the many modifications 

and additions to rule amendments 

proposed in the NPRM and described in 

Part II of this document, the 

Commission is requesting further 

comments on its adjudicatory reforms. 

The Commission will consider 

comments on any of the rule revisions 

issued today, but will especially 

welcome comment on any amendments 

that were not proposed in the NPRM. 

The comments are addressed in more 

detail in the following section-bysection analysis of the interim final rule 

revisions.20 

20 The final rule amendments are not subject to 

the requirements of the Regulatory Flexibility Act, 

5 U.S.C. 601(2) or the requirements of the 

Paperwork Reduction Act, 44 U.S.C. 

3518(c)(1)(B)(ii); 5 CFR 1320.4 (exempting 

information collected during the conduct of 

administrative proceedings or investigations). 

II. Section-by-Section Analysis of 

Interim Final Rule Revisions 

Subpart A—Scope of Rules; Nature of 

Adjudicative Proceedings 

Section 3.1: Scope of the rules in this 

part. 

The proposed amendment would 

have allowed the ALJ or the 

Commission to shorten time periods set 

by the Rule, provided that the shortened 

time periods would not unfairly 

prejudice any party. This authority is 

intended for use in proceedings where 

expedited procedures would serve the 

public interest (e.g., unconsummated 

mergers) or where the issues do not 

require elaborate discovery or 

evidentiary hearings (e.g., cases where 

the parties agree that a copious 

evidentiary record already exists that 

merely needs to be supplemented). In 

response to a comment, the Commission 

is amending the Rule to provide that the 

ALJ or the Commission may shorten 

time periods with the consent of the 

parties. Because consent will be 

required, the Commission is eliminating 

as unnecessary the qualifications that 

the shortening of a time period must not 

‘‘unfairly prejudice any party’’ and not 

violate a party’s legal rights. The 

Commission has also amended the Rule 

to state that the Part 3 rules generally 

apply only to ‘‘formal’’ adjudicative 

proceedings, i.e., those actions that are 

governed by the adjudicatory provisions 

of the APA, 5 U.S.C. 554, 556-57. 

Section 3.2: Nature of adjudicative 

proceedings. 

The Commission proposed technical 

revisions to this Rule that would clarify 

that Commission consideration of 

consent orders—in addition to 

negotiations of consent orders—are not 

adjudicative proceedings. The proposed 

changes also omitted from the list of 

excluded items proceedings under 

specific statutes that have rarely 

occurred in recent decades. No 

comments were received on the 

proposed revisions, and the 

Commission adopts them as proposed. 

Subpart B—Pleadings 

Section 3.11: Commencement of 

proceedings. 

The Commission proposed amending 

Rule 3.11(b) to specify that the actual 

date for the evidentiary hearing would 

be five months from the date the 

complaint is issued in merger cases and 

eight months from the date of the 

complaint in all other cases, while 

allowing the Commission discretion to 

determine a different date for the 

evidentiary hearing when it issues the 

complaint. The Commission would also 

be able to extend the date of the 

evidentiary hearing upon a good cause 

showing by movants, as set out in 

proposed Rule 3.21(c). 

The Section and Whole Foods 

asserted that the five and eight month 

deadlines, along with the deadlines in 

other rules, are ‘‘one-size-fits-all’’ rules. 

These comments overlooked the 

Commission’s ability to extend the 

hearing date for all types of cases where 

a party can show that it needs more time 

to prepare for trial. The Commission, in 

its discretion, could also consider other 

factors in determining whether to find 

good cause to extend the hearing date, 

for example, if a respondent agrees not 

to consummate a merger that has not 

been enjoined by a court during the 

pendency of the Part 3 proceeding. 

The Section stated further that the 

five month deadline for consummated 

merger cases ‘‘may be appropriate in 

some cases and not in other cases’’ and 

that ‘‘whether the matter was the subject 

of a preliminary injunction hearing’’ 

should be one of the factors considered 

in setting the hearing date for 

consummated mergers. The Commission 

believes this comment has merit and is 

revising the Rule so that only those 

cases in connection with which the 

Commission has sought or is seeking 

relief under Section 13(b) of the FTC 

Act21 will be subject to the five month 

deadline, unless of course the 

Commission sets a different date for the 

evidentiary hearing when it issues the 

complaint.The eight month deadline 

will apply to all other cases unless the 

Commission sets a different deadline 

when it issues the complaint. For 

example, it is possible that the 

Commission might set a consummated 

merger case, that was not the subject of 

a Section 13(b) action, under the five 

month schedule if an expedited 

schedule would be in the public 

interest. 

The Commission typically seeks 

preliminary injunctive relief under 

Section 13(b) when it challenges an 

unconsummated merger, and the Part 3 

proceedings in these cases are 

frequently the ones that are most in 

need of expedition. As noted above, 

parties have argued that protracted 

proceedings for merger cases could 

result in their abandoning transactions 

before their antitrust merits can be 

adjudicated. The interim final Rule, like 

the proposed Rule, provides the 

Commission discretion to determine a 

different date for the evidentiary hearing 

when it issues the complaint, and Rule 

3.21(c) provides that the Commission 

21 15 U.S.C. 53(b). 
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may subsequently extend the date of the 

hearing upon a good cause showing by 

movants. 

The Chamber and Whole Foods 

asserted that rules expediting 

proceedings may violate due process if 

they deny respondents a fair 

opportunity to develop their defense. 

Whole Foods stated further that the 

deadlines favor complaint counsel 

because respondents do not share 

complaint counsel’s power to obtain fact 

discovery during the pre-complaint 

investigation conducted pursuant to 

Part 2 of the Commission’s Rules of 

Practice.22 The five and eight month 

pretrial periods, however, should 

provide sufficient time for respondents 

to obtain discovery. Rule 3.31(a) 

requires both complaint counsel and 

respondent’s counsel to make 

comprehensive initial disclosures 

within five days of receipt of 

respondent’s answer to the complaint. 

These disclosures include documents 

complaint counsel has obtained from 

third parties, subject to the limitations 

on discovery in Rule 3.31(c)(2). The 

rules allow respondents to serve 

immediately on other parties 

interrogatories and requests for 

production of documents. Further, the 

rules allow respondents to issue 

immediately subpoenas for discovery, 

subject to the restrictions of Rules 3.36 

and 3.31(c)(2). In the unlikely event that 

a respondent does not have adequate 

time for discovery, the respondent may 

file a motion with the Commission to 

delay the hearing date. 

Further, the APA does not expressly 

provide for discovery, and as at least 

two appellate courts have observed: 

The extent of discovery to which a 

party to an administrative proceeding 

is entitled is primarily determined by 

the particular agency. . . . [C]ourts 

have consistently held that agencies 

need not observe all the rules and 

formalities applicable to courtroom 

proceedings. If an agency has adopted 

rules providing for discovery in its 

proceedings, the agency is bound by 

those rules and must ensure that its 

procedures meet due process 

requirements.23 

As demonstrated above, and based on 

the comments received thus far, the five 

and eight month deadlines more than 

satisfy due process requirements 

because respondent will have ample 

time for broad discovery and a 

respondent may also move for more 

22 16 CFR 2.1 et seq. 

23 Pacific Gas & Elec. Co. v. FERC, 746 F.2d 1383, 

1387-88 (9th Cir. 1984) (citing McClelland v. 

Andrus, 606 F.2d 1278, 1285 (D.C. Cir. 1979)). 

time upon a showing of good cause 

under Rule 3.21(c). 

The deadlines in Rule 3.11 are similar 

to the schedules established in some 

complex antitrust cases in federal 

district court, some of which have gone 

to trial in five months or less.24 

Moreover, other federal agencies 

provide limits on the pretrial process. 

For example, the Securities and 

Exchange Commission (‘‘SEC’’) puts 

cases on one of three tracks when it 

issues an order instituting 

administrative proceedings. For the 

longest track, SEC rules require that the 

hearing commence approximately four 

months from the date of the order.25 

In contrast to the concerns raised by 

the Chamber and Whole Foods, the 

Section supported a far more 

accelerated pretrial schedule for 

unconsummated mergers. The Section 

advocated a five month period from 

complaint issuance to final Commission 

order for these cases. The Section’s 

recommendation was based on its 

concern, shared by the Pitofsky-Sohn 

comment, that the proposed rules ‘‘will 

not expedite Part 3 proceedings nearly 

enough to make them practicable for 

unconsummated mergers.’’26 

The Commission also proposed 

deleting Rule 3.11(c), which allowed the 

respondent to file a motion for more 

definite statement. These motions are 

seldom filed and even less likely to be 

granted because Commission 

complaints are typically very detailed. 

Moreover, under previous Rule 3.12, if 

a respondent elected to file a motion for 

more definite statement, the motion 

tolled the deadline for the answer to the 

complaint and would result in 

substantial delay in the proceedings. As 

noted below, respondents may still raise 

similar objections in a motion to 

dismiss. The Commission therefore 

adopts this change. 

Section 3.12: Answer. 

Proposed Rule 3.12(a) shortened the 

deadline for filing an answer from 20 to 

14 days. The Section opposed a 

reduction in the time to answer the 

complaint, arguing that complaints can 

be very detailed and that respondents 

need adequate time to analyze the 

factual and legal allegations to respond 

properly, while the time saved by the 

24 See, e.g., United States v. Microsoft, 253 F.3d 

34 (D.C. Cir. 2001); United States v. Oracle Corp., 

331 F. Supp. 2d 1098 (N.D. Cal. 2004). 

25 17 CFR 201.360(a)(2). 

26 Both sets of comments noted that the proposed 

Rule fails to address a substantial source of delay— 

the time it takes the Commission to issue a final 

decision. As discussed below in the analysis of Rule 

3.52, the Commission is responding to this concern 

by adopting rules that will expedite Commission 

review of initial decisions in all cases. 

Rule is modest. The Commission 

continues to believe, however, that 14 

days to answer the complaint are 

sufficient for respondents who have 

become familiar with the issues during 

the Part 2 precomplaint investigation. 

While the Section argues that Part 2 ‘‘is 

not a substitute for’’ Part 3 proceedings 

and that respondents often are not made 

aware of ‘‘the full range of facts’’ or gain 

a complete understanding of the 

Commission’s legal theory during Part 2, 

the fact remains that very few, if any, 

Part 3 cases are ever initiated without 

the respondent having had extensive 

meetings with the Commissioners and 

staff. By the time the Commission issues 

a complaint, the parties should be well 

aware of the agency’s factual and legal 

assertions. Further, if necessary, the 

Commission may exercise its authority 

to extend the 14 days for good cause. 

See Rule 4.3(b). The Commission is 

adopting the revision as proposed. 

Proposed Rule 3.12(a) also eliminated 

the provision in the Rule that allowed 

the filing of any motion to toll the 

deadline for respondents to file an 

answer to the complaint.27 The 

Commission was concerned that this 

provision too broadly permitted the 

filing of any motion, regardless of its 

merit or requested relief, to substantially 

delay the beginning of the Part 3 

proceeding. The Section objected that 

no answer should be required until, at 

least, resolution of a motion for a more 

definite statement or to strike that 

challenges the sufficiency of a 

complaint. The Commission notes that 

its complaints tend to be highly detailed 

and that motions for a more definite 

statement are rarely filed and more 

rarely granted. Respondents may, 

however, always file a motion to 

dismiss to challenge the sufficiency of 

the complaint if necessary. The 

revisions to Rule 3.12(a) will ensure an 

earlier prehearing conference, earlier 

discovery, and will expedite the 

ultimate resolution of the proceeding. 

The Commission adopts the revisions to 

Rule 3.12(a) as proposed. 

The Commission also proposed in 

Rule 3.12(b) and (c) to eliminate the 

ALJ’s authority to render an initial 

decision when the allegations of the 

complaint are admitted or there is a 

default. In those cases, the Commission 

would issue a final decision on the basis 

of the facts alleged in the complaint. 

While the Section suggested that a 

decision by an independent ALJ can be 

useful even without a record to review, 

the Commission believes that in these 

27 This provision had been added by the 

Commission in its 2001 Rule amendments. See 66 

FR 17622 (Apr. 3, 2001). 
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circumstances cases can be resolved 

more expeditiously without the 

intermediate step of an ALJ’s initial 

decision; the only issues in such cases 

are legal or policy ones, in which the 

Commission’s expertise is most 

relevant. The proposed revisions are 

adopted. 

Subpart C—Prehearing Procedures; 

Motions: Interlocutory Appeals; 

Summary Decisions 

Rule 3.21: Prehearing procedures. 

The Commission proposed 

amendments to Rule 3.21 that would 

impose tighter deadlines on prehearing 

procedures. No comments on this Rule 

were received, and the Commission 

adopts the rule revisions as proposed. 

Rule 3.21(a) requires that the parties’ 

initial meet-and-confer session take 

place within five days of the answer and 

requires the parties to discuss 

electronically stored information 

(‘‘ESI’’) at that time, including the scope 

of and the time period for the exchange 

of ESI and the format for exchanging 

such information. This change is 

intended to help expedite the case and 

facilitate resolution of production issues 

in ways that minimize costs. Rule 

3.21(a) is also modified by deleting a 

phrase that suggested the parties should 

discuss a proposed hearing date because 

that date will already have been set by 

the Commission when it issued the 

complaint and the date can be modified 

only by the Commission upon a 

showing of good cause. Rule 3.21(a), as 

amended, specifies broad subjects to be 

discussed at the parties’ meet-andconfer session(s) before the scheduling 

conference. 

Rule 3.21(b) advances the deadline for 

the scheduling conference from 14 days 

after the answer is filed to 10 days after 

the answer is filed. Although the 

Commission extended the deadline to 

14 days in 2001,28 it believes the ten day 

deadline is reasonable for most cases. 

The Rule includes additional items to be 

discussed at the scheduling conference, 

such as stages of the proceeding that 

may be expedited. Under the Rule, the 

Commission contemplates that the 

parties will inform the ALJ of the results 

of their initial meeting(s) regarding their 

proposed discovery plan, including the 

disclosure of ESI, and that the ALJ will 

incorporate in the scheduling order a 

discovery plan that he or she deems 

appropriate. 

Rule 3.21(c)(1) specifies that the ALJ’s 

scheduling order will establish a 

schedule of proceedings that will permit 

the evidentiary hearing to commence on 

28 Id. 

the date set by the Commission. The 

Rule also states that the Commission 

may, upon a showing of good cause, 

order a later date for the evidentiary 

hearing than the one specified in the 

complaint. The deadline for the 

prehearing scheduling conference and 

order and the more detailed 

requirements for both are intended to 

help keep the prehearing proceedings 

on track and enable the parties to 

contribute to a high quality record on 

which the ALJ can base his or her 

decisions. 

Rule 3.21(c)(2) authorizes the ALJ to 

extend, upon a showing of good cause, 

any deadline in the scheduling order 

other than the date of the evidentiary 

hearing. Rule 3.21(f) states that the ALJ 

shall hold additional prehearing and 

status conferences or enter additional 

orders as may be needed to ‘‘ensure the 

just and expeditious disposition of the 

proceeding and to avoid unnecessary 

cost.’’ These revisions give the ALJ 

substantial flexibility and discretion to 

manage particular cases. 

Section 3.22: Motions. 

The proposed revision to Rule 3.22(a) 

provided that the Commission would 

resolve in the first instance motions to 

strike, motions for summary decision, 

and prehearing motions to dismiss, but 

provided the Commission discretion to 

refer the motion to the ALJ and to set 

a deadline in which the ALJ must rule 

on the motion. Significantly, the Section 

acknowledged in its comment that 

‘‘[e]arlier Commission involvement [to 

resolve dispositive motions] will 

undoubtedly result in more efficient 

resolution of these issues. Moreover, it 

will allow the Commission to apply its 

antitrust expertise to matters at an 

earlier stage. Delay occasioned by an 

erroneous ALJ decision on a dispositive 

motion * * * provides little benefit and 

exacts a toll on all participants in the 

process.’’ 

Nonetheless, commenters (including 

the Section) criticized the proposed 

Rule change as unfairly invading the 

province of the independent ALJ and 

compromising the Commission’s dual 

roles as prosecutor and adjudicator. For 

example, the Section argued that the 

proposed changes, while ‘‘likely [to] 

reduce or avoid delay,’’ could raise 

concerns about the impartiality and 

fairness of the Part 3 proceeding by 

permitting the Commission to 

adjudicate dispositive issues, including 

motions to dismiss challenging the 

facial sufficiency of a complaint, shortly 

after the Commission has voted out the 

complaint finding that it has ‘‘reason to 

believe’’ there was a law violation, 

without the benefit of an opinion by an 

independent ALJ. The Section added 

that, while ‘‘it may sometimes be 

desirable for the Commission to address 

dispositive motions in the first instance, 

changing the Part 3 rules to make that 

the default procedure is unnecessary,’’ 

and that ‘‘concern about improving the 

quality of Commission decisions is 

better addressed by enhancing the 

antitrust expertise of the ALJs.’’ The 

Pitofsky-Sohn comment similarly 

argued that the proposed rules, 

including Rule 3.22, would arguably 

infringe on the fairness of the Part 3 

proceeding if the Commission more 

frequently ‘‘invades what has heretofore 

been the province of an independent 

ALJ.’’ Whole Foods argued that the rule 

change would compromise the 

independence of the ALJ, who will lose 

the opportunity to ‘‘live with the case,’’ 

will not write his initial decision on a 

‘‘clean slate,’’ but will be unduly 

influenced by the ‘‘entirely transparent 

views of the Commission delivered on 

less than a full record,’’ and will lose his 

ability to effectively manage discovery. 

The Chamber and Blumkin comments 

similarly argued that this change would 

compromise the ALJ’s independent 

decision making role. 

Commenters, however, provided 

essentially no legal support for their 

argument that the Commission’s 

resolution of dispositive motions in the 

first instance will unfairly prejudice 

litigants in Part 3 proceedings or would 

violate the APA. Most important, these 

comments failed to undermine the 

central premise supporting the rule 

change: that the Commission has the 

authority and expertise to rule initially 

on dispositive motions and that doing 

so will improve the quality of the 

decisionmaking and (as acknowledged 

by the Section) will expedite the 

proceeding.29 This is because an 

erroneous decision by the ALJ on a 

dispositive motion dismissing the 

complaint may lead to unnecessary 

briefing, hearing, and reversal, resulting 

in substantial costs and delay to the 

litigants. Moreover, the APA does not 

confer on an ALJ the specific authority 

to rule on dispositive motions, and 

indeed, permits the Commission or 

Commissioners to act as presiding 

officers. See 5 U.S.C. 556(b).30 It is 

29 The Commission has in recent practice 

retained jurisdiction to resolve legal issues raised in 

a dispositive motion. See, e.g., In re S. Carolina 

State Bd. of Dentistry, 136 F.T.C. 229 (2004) 

(Commission retained jurisdiction to hear motions 

to dismiss and denied at that stage respondent’s 

legal defense that its alleged unlawful activities 

were protected by the state action doctrine). 

30 Under the APA, the Commission or one of its 

Commissioners may take evidence at the hearing, 5 

U.S.C. 556(b), and the Commission, on appeal or 

Continued 
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therefore hard to see how allowing the 

Commission to rule on dispositive 

motions deprives an ALJ of the 

independence conferred by the APA or 

is unfair to the parties. 

Codifying this approach will likely 

expedite the proceedings and save 

litigants resources to the extent the case 

is dismissed or the issues narrowed by 

the resolution of the legal or public 

interest issue. For example, a 

Commission order denying a motion to 

dismiss can articulate the legal standard 

to be applied to the facts alleged in the 

complaint and can be a useful tool to 

apply as facts are developed during 

discovery.31 

Concerns raised by the Section that 

this rule change will result in ‘‘the 

practical unavailability of a motion to 

dismiss’’ because the Commission had 

just previously found there to be a 

‘‘reason to believe’’ there was a law 

violation, are without support and are 

refuted by recent Commission 

practice.32 Further, the logic of the 

argument about the benefit of delaying 

the Commission’s involvement with the 

legal issues in a case would cast doubt 

on any effort to significantly reduce the 

time it takes for a case to reach the 

Commission for a final decision on both 

the law and the facts of the case. Indeed, 

the Section’s proposal that the 

Commission issue a final decision in all 

unconsummated merger cases within 

five months after issuance of the 

complaint would have the Commission 

resolve the facts and law of the case 

within a few months after it voted to 

bring the case. 

The Commission also proposed in 

paragraph (a) that rulings on motions to 

dismiss based on the alleged failure to 

establish a prima facie case would be 

deferred until after the hearing record is 

closed, and eliminated the provision in 

review, may make its own legal determinations and 

de novo factual findings from the hearing record. 

See, e.g., 5 U.S.C. 557(b) (‘‘On appeal from or 

review of the initial decision, the agency has all the 

powers which it would have in making the initial 

decision except as it may limit the issues on notice 

or by rule.’’). 

31 Whole Foods mistakenly asserted that by 

deciding dispositive motions, such as motions for 

summary decision, the Commission will be taking 

away the independent role of the ALJ to interpret 

facts and parse the evidentiary record. On the 

contrary, such motions inherently do not resolve 

factual disputes, but rather resolve legal or policy 

issues where there are no genuine issues of material 

facts in dispute. This commenter acknowledged 

that motions raising ‘‘purely legal defenses’’ might 

be appropriate for the Commission to resolve. 

32 See, e.g., S. Carolina State Bd. of Dentistry, 

136 F.T.C. 229 (denying respondent’s motion to 

dismiss on state action grounds, but refusing to 

deny respondent’s motion to dismiss on mootness 

grounds as urged by complaint counsel in favor of 

remanding to ALJ for limited discovery on 

mootness issue). 

the previous Rule for a recommended 

ruling by the ALJ when certifying to the 

Commission a motion outside his or her 

authority to decide. The Commission 

received no comments on these 

proposals and they have been adopted 

as proposed. 

Proposed paragraph (b) required that 

proceedings before the ALJ not be 

stayed during the Commission’s 

consideration of the motion, unless 

otherwise ordered by the Commission. 

The Commission has revised the caption 

of paragraph (b) to ‘‘Proceedings not 

stayed,’’ to more accurately describe the 

subject matter of the paragraph. 

Proposed paragraph (e) required the ALJ 

to decide all motions within 14 days of 

the filing of all motion papers unless 

otherwise provided by rule or if the 

Commission extends the time for good 

cause. The purpose of proposed 

paragraph (b) was to ensure that 

discovery and other prehearing 

proceedings continue while the 

Commission deliberates over the 

dispositive motions, and paragraph (e) 

is similarly intended to expedite the 

proceedings. The Section objected that 

eliminating the stay for pre-answer 

motions will result in inadequate review 

of the sufficiency of a complaint, but as 

explained above, the Commission’s 

complaints tend to be highly detailed 

and, in any event, respondents retain 

the right to challenge the sufficiency of 

a complaint by filing a motion to 

dismiss. Except for the revision of the 

caption of paragraph (b), paragraphs (b) 

and (e) are adopted as proposed. 

The Section commented, however, 

that by not staying the Part 3 case 

during the pendency of a dispositive 

motion before the Commission and with 

no deadlines imposed on the 

Commission to resolve such motions, 

litigants (and the ALJ) will be 

disadvantaged by not knowing the 

precise scope of the issues to be 

addressed at the hearing or, indeed, 

whether there will be any hearing at all. 

The Commission agrees and has 

therefore revised paragraph (a) to 

require that the Commission resolve any 

dispositive motion within 45 days of the 

filing of the motion papers unless it 

finds there to be good cause for an 

extension. In those cases where the 

Commission grants a dispositive 

motion, that decision will constitute the 

agency’s final decision in the case, and 

this 45 day period for deciding 

dispositive motions is therefore the 

same amount of time as the Commission 

has allocated for issuing its final 

decision following oral argument in 

cases where the Commission has sought 

relief under Section 13(b). 

Proposed paragraph (c) also imposed 

word count limits on motion papers. 

Briefs in support of, and in opposition 

to, dispositive motions were to be 

limited to 10,000 words (approximately 

40 double-spaced pages), and briefs in 

support of, and in opposition to, nondispositive motions were limited to 

2,500 words (approximately 10 doublespaced pages). The Commission 

received no comments on these word 

count limitations and they have been 

adopted as proposed. 

Proposed paragraph (d) provided an 

automatic right of reply in support of 

dispositive motions, stated that reply 

and surreply briefs in support of nondispositive motions ‘‘shall be permitted 

only in circumstances where the parties 

wish to draw the ALJ’s or the 

Commission’s attention to recent 

important developments or controlling 

authority that could not have been 

raised earlier in the party’s principal 

brief,’’ and imposed a five day filing 

deadline for any authorized reply to a 

motion. No comments were received on 

these provisions and they are adopted as 

proposed. 

The other proposed changes to Rule 

3.22, such as eliminating previous 

paragraph (e) and redesignating 

previous paragraph (f) as paragraph (g), 

generated no comments and are 

adopted. 

Section 3.23: Interlocutory appeals. 

The Commission proposed 

amendments to Rule 3.23 that would 

expedite consideration by the ALJ and 

the Commission of certain applications 

by a party that seek discretionary review 

of an interlocutory ruling by the ALJ. As 

noted in the NPRM, the proposal left 

unchanged in paragraph (a) the types of 

rulings that the parties can ask the 

Commission to review without a 

determination by the ALJ that 

interlocutory review is appropriate. 

In paragraph (b), the proposal 

continued to allow applications for 

interlocutory review of other rulings 

only on a determination 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.’’ In order to reduce 

delay, the Commission proposed 

requiring the ALJ to make his or her 

determination whether the application 

for review involves such a controlling 

question within three days after the 

filing by a party of a request for such a 

determination. The revision eliminated 

the requirement that the ALJ provide a 
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written justification for his or her 

determination. It also allowed the party 

to file its application for review with the 

Commission if the ALJ does not make a 

timely ruling on its request for a 

determination on the appropriateness of 

review. The Commission adopts these 

revisions as proposed. 

Because the pendency of an 

application for review may leave a 

cloud over the proceeding before the 

ALJ, paragraph (d) of the proposed Rule 

would have treated the failure of the 

Commission to act within three days as 

a denial of the application. As suggested 

by the Section’s comment, the 

Commission has eliminated this default 

provision and the Rule now requires 

instead that the Commission decide 

whether to entertain an appeal within 

three days after the filing of the answer 

to the application. The Commission has 

also adopted the Section’s suggestion 

that the Rule make explicit that the 

denial of an application does not 

constitute a ruling on the merits of the 

appeal. 

Also, to avoid unnecessary delay, the 

proposed Rule set shorter deadlines 

than the previous Rule for the filing of 

applications and answers and, to reduce 

burdens, imposed tighter limits than the 

previous Rule on the length of these 

filings. No comments were received on 

these provisions and the Commission 

has adopted them. 

Section 3.24: Summary decisions. 

Proposed paragraph (a), in 

conjunction with proposed Rule 3.22, 

was revised to permit the Commission 

in the first instance to resolve 

dispositive motions unless referred by 

the Commission to the ALJ. This 

proposal was criticized by many of the 

commenters as improperly infringing on 

the independence of the ALJ. These 

commenters asserted that, after the 

Commission issues a complaint, it 

should not intervene in the Part 3 

proceedings until after the ALJ has 

conducted the Part 3 hearing and issued 

an initial decision. As noted in the 

analysis of Rule 3.22, the Commission 

may properly make initial rulings on 

dispositive motions presenting legal or 

public interest issues and doing so does 

not infringe on the ALJ’s ability to 

preside over the evidentiary hearing and 

issue an initial decision. 

Proposed paragraph (a) also required 

that summary decision motions be filed 

no later than 30 days before the 

evidentiary hearing instead of 20 days 

as in the unamended Rule. The 

proposed Rule also extended the 

deadline for filing affidavits in 

opposition to a summary decision 

motion from 10 to 14 days in order to 

provide the nonmoving party more time 

to oppose the motion where the moving 

party may have had months in which to 

prepare its summary decision brief and 

supporting papers. No comments were 

received on these proposals and they are 

therefore being adopted. 

Proposed paragraph (a) also 

eliminated the previous 30 day deadline 

for ruling on a motion for summary 

decision but allowed the Commission to 

set a deadline for a decision when 

referring such a motion to the ALJ. As 

discussed above, several commenters 

complained that the lack of a 

Commission deadline to rule on 

dispositive motions while the Part 3 

case is proceeding may unfairly 

prejudice litigants who do not know if 

or how the issues will be narrowed 

before the beginning of the evidentiary 

hearing. In response, in Rule 3.22 the 

Commission has imposed on itself a 45 

day deadline to resolve dispositive 

motions. As noted earlier, this 45 day 

period for deciding dispositive motions 

is the same amount of time as the 

Commission has allocated for issuing its 

final decision following oral argument 

in cases where the Commission has 

sought relief under Section 13(b). 

Finally, commenter Nagin suggested 

that, where an affidavit in support of or 

in opposition to a motion for summary 

decision is filed in bad faith, the list of 

possible disciplinary actions under Rule 

3.24(b) be expanded, from ‘‘reprimand, 

suspension or disbarment’’ to include 

‘‘notice to all professional licensing, 

registration and certification entities to 

which a lawyer is subject to discipline.’’ 

The Commission has the authority to 

refer unethical conduct to state bar 

associations and does not believe that a 

special provision for this is needed in 

the Rule on summary decisions. 

Section 3.26: Motions following denial 

of preliminary injunctive relief. 

Rule 3.26 was first adopted in 

connection with a 1995 Policy 

Statement, which explained that the 

Commission takes a case-by-case 

approach in deciding whether to pursue 

administrative litigation of a merger 

case following the denial of a 

preliminary injunction in federal 

court.33 Many commenters objected to 

the Commission’s proposal to eliminate 

provisions in the Rule for automatic 

withdrawals from adjudication or stays 

when a party moves for withdrawal or 

to dismiss after the Commission loses a 

motion for preliminary injunction in a 

merger case. Several commenters argued 

that the Commission should not pursue 

administrative litigation in merger cases 

33 60 FR 39741 (1995). 

if it loses its application for a 

preliminary injunction. Of course, if the 

Commission were to adopt a policy 

uniformly disclaiming any intent to 

pursue the Part 3 adjudication on the 

merits after losing a preliminary 

injunction, there would be no need for 

Rule 3.26 at all. The Commission does 

not choose to take that approach and 

instead adheres to the case-by-case 

approach of the 1995 Policy Statement. 

Several comments argued that, by 

stating in the NPRM that continuation of 

the Part 3 adjudication after loss of a 

preliminary injunction should be the 

‘‘norm,’’ the Commission’s proposed 

amendment amounted to a reversal of 

its 1995 Policy Statement. According to 

that Statement, 

[I]t would not be in the public interest 

to forego an administrative trial solely 

because a preliminary injunction has 

been denied. Nor would it be in the 

public interest to require an 

administrative trial in every case in 

which a preliminary injunction has 

been denied. Thus, a case-by-case 

determination is appropriate. This 

approach gives the Commission the 

opportunity to assess such matters as 

(i) the factual findings and legal 

conclusions of the district court or 

any appellate court, (ii) any new 

evidence developed during the course 

of the preliminary injunction 

proceeding, (iii) whether the 

transaction raises important issues of 

fact, law, or merger policy that need 

resolution in administrative litigation, 

(iv) an overall assessment of the costs 

and benefits of further proceedings, 

and (v) any other matter that bears on 

whether it would be in the public 

interest to proceed with the merger 

challenge.34 

The 1995 Statement, however, offered 

no view on whether the typical outcome 

of a case-by-case analysis would be to 

continue or to abandon Part 3 litigation. 

The Pitofsky-Sohn comment states that 

‘‘articulating such a ‘norm’ leaves the 

impression that the Commission will 

take little or no notice of what 

preliminary injunction courts have to 

say’’ and points out that the NPRM was 

‘‘silent with respect to whether any or 

all of the factors [listed in the 1995 

Statement and quoted above] will 

continue to be considered.’’ 

The Commission continues to 

consider the five factors as highly 

relevant to any determination whether 

to proceed with Part 3 and anticipates 

that the parties will address them in 

their motion papers and, if a motion for 

withdrawal is granted, in their 

presentations during the time the case is 

34 Id. at 39743. 
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withdrawn. The Commission, of course, 

will also continue to consider carefully 

the rulings by the district court and any 

appellate court rulings in deciding 

whether to proceed with Part 3. In this 

connection, the Commission urges 

parties to address anything in the 

judicial rulings that they believe is 

relevant to the public interest in further 

proceedings. Besides the factors listed 

in the 1995 Policy Statement, this 

would include, for example, a 

discussion of whether any judicial 

ruling on the merits of the challenge to 

the merger was based on a 

determination that the Commission had 

not even raised ‘‘questions going to the 

merits so serious, substantial, difficult 

and doubtful as to make them fair 

ground for thorough investigation, 

study, deliberation and determination 

by the FTC in the first instance and 

ultimately by the Court of Appeals,’’ the 

test articulated in such decisions as FTC 

v. H.J. Heinz Co.35 and FTC v. Whole 

Foods Market, Inc.36 for whether the 

Commission had made a sufficient 

showing of likelihood of success on the 

merits to warrant preliminary injunctive 

relief. Such a determination would itself 

raise serious questions about whether 

the Part 3 case should continue. 

Although the Commission will 

maintain the case-by-case approach 

outlined in the 1995 Statement, this 

approach does not warrant the delays 

that result from automatic withdrawals 

or stays. The Commission, however, is 

committed to a prompt and careful 

consideration of the public interest and 

has accordingly added a requirement 

that it rule on motions to dismiss or for 

withdrawal from adjudication not later 

than 30 days after the filing of motion 

papers. 

The Commission is making another 

change to the proposed amendment to 

ensure prompt consideration of the 

public interest in proceeding with the 

Part 3 litigation. Proposed paragraph (b) 

would have made explicit a requirement 

in the original Rule37 that a motion to 

dismiss or for withdrawal be filed only 

after the exhaustion of appeals from the 

district court’s denial of the preliminary 

injunction. This restriction could 

prevent the filing of motions to dismiss 

or for withdrawal from adjudication 

under this Rule until many months after 

the district court decision. In order to 

allow much more prompt consideration 

of the public interest in determining 

35 246 F.3d 708, 714-15 (D.C. Cir. 2001). 

36 No. 07-5276, 2008 U.S. App. LEXIS 24092, at 

*10 (D.C. Cir. Nov. 21, 2008) (Brown, J.); id. at *30 

(Tatel, J., concurring). 

37 See 60 FR 39640, 39641; In re Equitable 

Resources, Inc., No. 9322, 2007 F.T.C. LEXIS 49 

(May 30, 2007). 

whether to proceed with the Part 3 case, 

the Commission has revised paragraph 

(b) to authorize the filing of a motion to 

dismiss or for withdrawal at any time 

within 14 days after, but not earlier 

than, a court of appeals has denied a 

Commission request for an injunction or 

stay pending appeal. For cases in which 

the Commission has not sought relief 

from the court of appeals within seven 

days following the denial of a 

preliminary injunction, the Rule 

revision authorizes the filing of a 

motion to dismiss or for withdrawal at 

any time within 14 days after the 

district court denies a Commission 

request for preliminary relief. 

Subpart D—Discovery; Compulsory 

Process 

Section 3.31: General discovery 

provisions. 

The Commission proposed to revise 

Rule 3.31(b) to specify that the 

documents to be disclosed as part of the 

parties’ mandatory initial disclosures 

include declarations or affidavits, as 

well as transcripts of investigational 

hearings and depositions, and that 

initial disclosures also include ESI. The 

reference to ESI would update the term 

‘‘data compilations’’ and would parallel 

the 2006 amendment to Fed. R. Civ. P. 

26(a)(1)(B). The proposed limitations on 

disclosure of ESI in Rule 3.31(c)(3) 

follow Fed. R. Civ. P. 26(b)(2)(B). In 

particular, the proposed provision in 

Rule 3.31(c)(3) that a party need not 

provide discovery of ESI from sources 

that the party identifies as not 

reasonably accessible because of undue 

burden or cost is anticipated to reduce 

delays and costs to the parties. There 

were no comments on these revisions 

and the Commission adopts them as 

proposed. As discussed below, the 

Commission also proposed to treat 

expert discovery in a new Rule 3.31A, 

thereby eliminating the provisions in 

paragraphs (b) and (c) governing expert 

discovery. 

The proposed revisions to Rule 

3.31(c)(2) would limit the scope of 

discovery for complaint counsel, 

respondents, and third parties who 

receive a discovery request. Complaint 

counsel would only need to search for 

materials that were collected or 

reviewed in the course of the 

investigation of the matter or 

prosecution of the case and that are in 

the possession, custody, or control of 

the Bureaus or Offices of the 

Commission that investigated the 

matter, including the Bureau of 

Economics. The ALJ could authorize for 

good cause additional discovery of 

materials in the possession, custody, or 

control of those Bureaus or Offices, or 

authorize other discovery pursuant to 

Rule 3.36. Neither complaint counsel, 

respondent, nor a third party receiving 

a discovery request under the rules 

would be required to search for 

materials generated and transmitted 

between an entity’s counsel (including 

counsel’s legal staff or in-house counsel) 

and not shared with anyone else, or 

between complaint counsel and nontestifying Commission employees, 

unless the ALJ determines there is good 

cause to provide such materials. 

The Section argued that requiring 

respondents to satisfy the ‘‘heightened 

requirements’’ of good cause for agency 

materials that fall outside these limits 

could create a disparity in substantive 

outcomes in Part 3 proceedings and 

those in federal court. In fact, however, 

the proposed rule is similar to the 

restrictions on discovery in the Federal 

Rules of Civil Procedure. The Section 

admitted that ‘‘the FRCP generally limit 

the discovery of evidence that is 

duplicative, privileged, or work 

product.’’ As the Commission stated in 

the NPRM, the materials excluded by 

the proposed rule are frequently 

duplicative and almost always protected 

by the deliberative process or attorneyclient privileges or as work product. In 

the rare event that material excluded by 

the proposed rule is not duplicative, 

privileged or work product, it should 

not be difficult for respondent to satisfy 

a good cause standard or the 

requirements of Rule 3.36. Moreover, 

any alleged disadvantage for 

respondents is offset by the 

corresponding limitations on discovery 

of materials held by respondents and 

third parties. The Commission is 

adopting the revisions to Rule 3.31(c)(2) 

as proposed. 

Proposed Rule 3.31(d) would require 

the ALJ to issue the standard protective 

order set forth in an appendix to the 

Rule. The Section argued that the 

parties should be able to negotiate 

orders suited to the needs of the 

particular case. These negotiations, 

however, can substantially delay 

discovery, prevent the Commission from 

protecting confidential material in a 

uniform manner in all Part 3 cases, and 

reduce the confidence of third party 

submitters that their confidential 

submissions will be protected. 

The Section specifically objected to a 

provision that would prohibit disclosure 

of confidential discovery materials to a 

respondent’s in-house counsel. It 

asserted that, in many cases, this 

restriction would inhibit a respondent’s 

ability to defend itself. The 

Commission’s statutory obligation to 

maintain the confidentiality of 
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commercially sensitive information,38 

however, raises serious questions about 

the wisdom of allowing disclosure of 

information in its custody to in-house 

counsel, who might intentionally or 

unintentionally use it for purposes other 

than assisting in respondent’s 

representation, for example, by making 

or giving advice about the company’s 

business decisions.39 The Commission 

believes it is not sound policy to allow 

third party competitively sensitive 

information to be delivered to people 

who are in a position to misuse such 

information, even if inadvertently. 

The proposed standard protective 

order covered ‘‘sensitive personal 

information,’’ which includes, but is not 

limited to, an individual’s Social 

Security number, taxpayer identification 

number, financial account number, 

credit card or debit card number, 

driver’s license number, state-issued 

identification number, passport number, 

date of birth (other than year), and any 

sensitive health information identified40 

by individual, such as an individual’s 

medical records. The Commission is 

retaining this provision, and as 

discussed below, is making further 

conforming amendments to Rule 3.45, 

which will accord in camera treatment 

if such material is to be introduced as 

evidence or otherwise used in the 

proceeding. Likewise, the Commission 

is amending Rule 4.2, as explained 

further below, to govern the use of 

sensitive personal information in filings 

to the Commission. 

The Nagin comment suggested several 

modifications to the standard protective 

order, including barring disclosure of 

confidential material to anyone 

affiliated with or employed ‘‘directly or 

indirectly’’ by a respondent, requiring 

notice if a party receives a discovery 

request from another government 

agency without regard to whether the 

request is part of an agency 

‘‘proceeding,’’ and adding specific 

requirements for the disposition of 

electronically stored discovery materials 

at the end of the proceeding. It also 

recommended that parties maintain logs 

of all recipients of confidential 

discovery materials. 

Although the term ‘‘proceeding’’ is 

broad enough to encompass government 

investigations, the Commission is 

38 E.g., FTC Act 6(f), 15 U.S.C. 46(f). 

39 Although protective orders could limit inhouse counsel’s access only to less sensitive third 

party information, third party submitters during a 

Part 2 investigation could only guess what degree 

of protection would eventually be afforded their 

confidential information in a subsequent Part 3 

proceeding. 

40 The final version of the standard protective 

order substitutes ‘‘identifiable’’ for ‘‘identified.’’ 

revising paragraph 11 of the standard 

order to apply to discovery requests 

‘‘received in any investigation or in any 

other proceeding or matter.’’ The 

Commission, however, is not convinced 

that the comment’s other recommended 

modifications are needed to protect 

confidential discovery material. 

The Commission has also eliminated 

paragraph (g) from the previous Rule. 

This paragraph applied to applications 

for the issuance of subpoenas to compel 

testimony at an adjudicative hearing 

pursuant to Rule 3.34. Because the 

Commission has amended Rule 3.34 to 

eliminate such applications, this 

paragraph is unnecessary. 

Rule 3.31(g) (proposed Rule 3.31(h)), 

as revised, addresses the resources used 

to avoid the risk of privilege and work 

product waiver, which add to the costs 

and delay of discovery. The risk of 

waiver, and the time and effort needed 

to avoid it, are aggravated when the 

party is producing ESI. The proposed 

amendment would limit the risk of 

waivers resulting from inadvertent 

disclosures as long as parties take 

reasonable measures to protect 

privileged materials. The proposal did 

not address obligations imposed by state 

bar rules on attorneys who receive 

materials that appear to be subject to a 

privilege claim. 

The FTC Act requires the Commission 

to protect ‘‘privileged or confidential’’ 

information.41 By providing that the 

Commission will not treat genuinely 

inadvertent disclosures as waivers of 

privilege claims, the proposed 

amendment, together with the relevant 

provisions of the FTC Act, was intended 

to assure respondents and third parties 

alike that if otherwise privileged 

materials are held by the FTC, those 

materials will not readily find their way 

into the public record. In this regard, the 

protective order expressly includes 

privileged information in the order’s 

definition of ‘‘confidential materials’’ 

subject to the protective order. No 

comments were received on the 

provision regarding inadvertent 

disclosure, and the Commission adopts 

it as proposed. 

Rule 3.31(h) (proposed Rule 3.31(i)), 

as revised, prohibits the filing of 

discovery materials with the Office of 

the Secretary, the ALJ, or otherwise 

providing such materials to the 

Commission, except when used to 

support or oppose a motion or to offer 

as evidence. This change is similar to 

Fed. R. Civ. P. 5(d), which generally 

prohibits the filing of discovery material 

unless ordered by the court or used in 

41 FTC Act, 6(f), 21(d)(1)(B), 15 U.S.C. 46(f), 57b2(d)(1)(B). 

the proceeding. No comments were 

received on this provision and the 

Commission adopts it as proposed. 

Section 3.31A: Expert discovery. 

Proposed Rule 3.31A mandated a 

schedule for the disclosure of potential 

expert witnesses, the production of 

expert reports, and the start and 

completion of expert depositions. The 

proposed Rule also incorporated and 

revised certain provisions contained in 

previous Rule 3.31(b) and (c). As 

discussed below, the Commission is 

revising the Rule to expressly address 

respondent’s ability, in limited 

circumstances, to call surrebuttal 

witnesses and to file surrebuttal reports. 

The Commission is adopting the 

remaining provisions of Rule 3.31A as 

proposed. 

The scheduling provisions in the Rule 

will provide for expert discovery in a 

more orderly and expeditious manner 

than what has occurred in past 

proceedings by not permitting expert 

discovery to begin until fact discovery is 

essentially completed. The Commission 

believes that discovery of experts, 

including the production of expert 

reports, will be less than thorough if 

facts potentially relevant to their 

opinions have yet to be discovered. The 

Rule requires the parties to serve each 

other with a list of experts that they 

intend to call at the hearing no later 

than one day after the close of fact 

discovery. Commenter Nagin asserted 

that requiring respondents to disclose 

their expert witnesses at the close of fact 

discovery invades the work product of 

respondents. The disclosure of expert 

witnesses is necessary, however, to 

allow the parties to prepare for 

depositions and to engage in other 

discovery relevant to that witness. 

The Rule also limits the number of 

expert witnesses to five per side. The 

Section claimed that the revision should 

allow each party to call five experts, 

instead of limiting the number of 

experts to five per ‘‘side.’’ It has been 

the Commission’s experience, however, 

that five expert witnesses per side is 

sufficient for each party to present its 

case in the vast majority of cases. The 

Rule also has a safety valve that allows 

a party to seek leave to call additional 

expert witnesses in extraordinary 

circumstances. 

The Rule requires that each expert 

who will testify at the evidentiary 

hearing produce a written report, 

thereby eliminating the ALJ’s authority 

to dispense with them. Preparation of a 

written expert report is a common 

requirement in federal courts and, given 

the Commission’s goal of expedited 

proceedings, will be required during the 
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discovery period to allow the parties 

more effective and targeted discovery. 

Paragraph (c) of the Rule specifies 

additional requirements for expert 

reports, including ‘‘a listing of any other 

cases in which the witness has testified 

as an expert at trial or by deposition 

within the preceding 4 years.’’ The 

Nagin comment argued that every expert 

should be required to maintain a 

database with substantial information 

about his or her testimony in other 

proceedings. This suggestion overlooks 

the fact that individuals may serve as 

experts in proceedings in other forums 

before being asked to be an expert in a 

Commission Part 3 matter. An FTC rule 

could not require individuals to 

‘‘maintain’’ such information when they 

are not involved in Commission 

proceedings, and to require an 

individual to create such a database 

once they are selected as an expert for 

a Part 3 matter would be unduly 

burdensome. The comment suggested 

further that the FTC maintain a database 

of all expert reports and expert 

testimony submitted in all Part 3 

proceedings. The Commission already 

makes all of the trial testimony and 

exhibits available to the public—except 

for confidential material—and has 

begun posting trial testimony at 

www.ftc.gov.42 The Commission 

declines the invitation to assume the 

additional burden suggested by the 

commenter. 

The Rule provides that complaint 

counsel submit their initial expert 

reports first, followed by respondents’ 

expert reports. Respondents’ reports, of 

course, can rebut material in complaint 

counsel’s initial expert reports. The 

Rule also explicitly authorizes 

complaint counsel to call rebuttal 

experts and, if complaint counsel 

intends to exercise this option, requires 

the experts to prepare rebuttal expert 

reports. Thus, the Rule allows 

complaint counsel’s experts an 

opportunity to respond to respondents’ 

expert reports. The Section asserted that 

respondents should also have the 

express right to call surrebuttal experts 

in all situations, not just when material 

outside the scope of a fair rebuttal is 

presented. While the Commission 

continues to believe that respondents 

should only be able to call surrebuttal 

experts in order to respond to new 

arguments raised by complaint 

counsel’s rebuttal experts, it is clarifying 

the Rule so that the ‘‘appropriate relief’’ 

sought by respondents in this 

circumstance explicitly includes the 

42 For example, the trial transcript for the In re 

Rambus, Inc. matter is available at (http:// 

www.ftc.gov/os/adjpro/d9302/exhibits/index.shtm). 

right to seek leave to call surrebuttal 

experts and to file a surrebuttal report, 

and includes a deadline for respondents 

to file such a motion. 

The Rule also excludes from expert 

discovery anyone who has been retained 

or specially employed by another party 

in anticipation of litigation or 

preparation for hearing unless he or she 

is expected to be called as a witness at 

the hearing, so as to prevent the 

discovery of the unpublished work 

product of non-testifying experts, 

particularly where such materials are 

proprietary and highly confidential. The 

discovery of such marginally relevant 

materials can be a major distraction 

from the central case and can have an 

adverse effect on the willingness of nontestifying experts to consult in the 

future. 

Section 3.33: Depositions. 

The Commission has added to 

paragraph (a) a reference to Rule 3.36, 

which provides that certain subpoenas 

requiring the appearance of certain 

persons may issue only upon a motion 

approved by the ALJ. 

The proposed Rule added paragraph 

(b) to Rule 3.33, which allows the ALJ, 

upon a party’s motion, to prevent the 

taking of a deposition if it would not 

meet the scope of discovery standard 

under Rule 3.31(c) or 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 based on considerations 

of undue delay, waste of time, or 

needless presentation of cumulative 

evidence (as set forth under Rule 

3.43(b)). Proposed paragraph (b) also 

clarified that the fact that a witness 

testifies in an investigative hearing does 

not preclude the deposition of that 

witness. 

The Section contended that the 

proposed revision is inconsistent with 

the Federal Rules of Civil Procedure, 

because Fed. R. Civ. P. 30(a)(2) sets out 

only limited circumstances when 

permission from a federal judge is 

required to take a deposition. In 

addition, the Section asserted that the 

revision imposes a burden on a party 

seeking to take the deposition to show 

that the evidence will be admissible. 

However, the Commission is adopting 

the revision as proposed. Under general 

principles of motions practice, the party 

filing a motion has the burden of 

persuasion. In this situation, the party 

moving to prevent the taking of the 

deposition would have the burden of 

showing that the evidence should be 

excluded for the reasons stated in the 

proposed Rule; there would not be a 

burden on the party seeking to take the 

deposition to show that the evidence 

will be admissible. The revision is 

therefore not a significant departure 

from the federal rules. 

The Commission proposed revising 

paragraph (c) to stop the practice of 

filing notices of deposition with the 

Office of the Secretary, the ALJ, or 

otherwise providing such notices to the 

Commission, except as provided in 

proposed Rule 3.31(h). Such notices 

serve no purpose for the ALJ or the 

agency, and receipt of these notices 

causes unnecessary processing costs for 

the Commission. No comments were 

received on this proposal and the 

Commission adopts it as proposed. 

Consistent with Rule 3.43, the 

Commission has proposed eliminating 

previous Rule 3.33(g)(1) because it 

contains hearsay-based limitations for 

the use of depositions. Revised Rule 

3.43 reflects existing case law by 

providing for the admission of hearsay 

evidence in the evidentiary hearing if 

the evidence is ‘‘relevant, material, and 

bears satisfactory indicia of reliability so 

that its use is fair.’’ If meeting this 

standard, depositions, investigational 

hearings, and other prior testimony may 

be admitted. As discussed further 

below, the Commission is adopting Rule 

3.43 as proposed, and accordingly is 

eliminating previous Rule 3.33(g)(1). 

Section 3.34: Subpoenas. 

The Commission proposed amending 

paragraphs (a) and (b) to authorize 

counsel for a party to sign and issue a 

subpoena on a form provided by the 

Secretary. These revisions are intended 

to expedite the commencement of 

hearings by speeding the issuance of 

discovery and hearing subpoenas. The 

definition of ‘‘documents’’ would also 

be revised to parallel Fed. R. Civ. P. 

45(c)(1). No comments were received on 

these rule changes and the Commission 

adopts them as proposed. 

The Commission also proposed 

revising paragraph (c) to reflect revised 

Rule 3.36, discussed below, which 

requires a special showing of need for 

subpoenas directed to the offices of the 

Commissioners, the General Counsel, 

Bureaus and Offices not involved in the 

matter, the ALJs, or the Secretary. No 

comments were received on the 

proposed revisions to Rule 3.36 and the 

Commission is adopting them as well as 

the corresponding changes in Rule 

3.34(c).43 The Commission is also 

adding a reference to the discovery 

limitations in Rule 3.31(c)(2). 

43 See infra note 44. 
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Section 3.35: Interrogatories to parties. 

The Commission proposed to add 

Rule 3.35(a)(3) to provide that 

interrogatories should not be filed with 

the Office of the Secretary, the ALJ, or 

otherwise provided to the Commission 

except as provided in proposed Rule 

3.31(i) because ordinarily there is no 

reason to file discovery pleadings. No 

comments were received on this 

proposal and the Commission is 

adopting Rule 3.35(a)(3) as proposed. 

Proposed Rule 3.35(b)(2) would allow 

parties to delay answering a contention 

interrogatory until the close of 

discovery, the pretrial conference, or 

‘‘other later time.’’ Although the Section 

recognized that contention 

interrogatories usually are not answered 

in federal court cases until the end of 

fact discovery, it nonetheless asserted 

that the proposed Rule unfairly shifts 

the burden of seeking a response to a 

contention interrogatory to the party 

who propounds it. The Section also 

commented that the phrase ‘‘other later 

time’’ is ambiguous and may allow the 

recipient of such an interrogatory to 

evade an answer altogether. The 

purpose of the proposed Rule is to 

conform Commission practice with 

federal court practice and consistently 

allow a party to delay answering a 

contention interrogatory until fact 

discovery is almost complete. However, 

the proposed Rule also allowed a party 

posing a contention interrogatory to 

secure an earlier answer, if one was 

necessary, by filing a motion seeking an 

earlier answer. The Rule is not intended 

to allow an answering party to evade an 

answer, but to postpone answering until 

it has all the information it needs to 

supply a full answer. Accordingly, the 

Rule now clarifies that contention 

interrogatories must be answered by the 

time designated discovery has been 

completed, but in no case later than 

three days before the final pretrial 

conference. 

Section 3.36: Applications for 

subpoenas for records of or appearances 

by certain officials or employees of the 

Commission or officials or employees of 

governmental agencies other than the 

Commission, and subpoenas to be 

served in a foreign country. 

The Commission proposed to revise 

Rule 3.36 to require a special showing 

of need for subpoenas directed to the 

offices of the Commissioners, the 

General Counsel, Bureaus and Offices 

not involved in the matter, the ALJs, 

and the Secretary because these offices 

are unlikely to possess relevant, 

discoverable information that is not 

available from other sources. The 

Commission believed that the lack of 

useful additional information likely to 

be available from these offices suggested 

that the burden (and delay) of searches 

for responsive records and the creation 

of privilege logs should not be imposed 

without strong justification. The 

Commission’s proposed revision to 

paragraph (b)(3) would require a 

showing of ‘‘compelling need’’ as the 

corresponding standard for witness 

testimony. No comments were received 

on these proposed amendments to Rule 

3.36 and they are adopted as 

proposed.44 

Section 3.37: Production of documents, 

electronically stored information, and 

any tangible thing; access for inspection 

and other purposes. 

The Commission proposed to amend 

Rule 3.37 to include provisions from 

Fed. R. Civ. P. 34 on electronic 

discovery. The proposed amendment 

also provided that requests under this 

Rule not be filed with the Office of the 

Secretary, the ALJ or otherwise 

provided to the Commission, except as 

provided in proposed Rule 3.31(i). No 

comments were received on this 

proposal and it is adopted as proposed. 

Section 3.38: Motion for order 

compelling disclosure or discovery; 

sanctions. 

The Commission proposed amending 

Rule 3.38 to impose short deadlines for 

responses to and rulings on motions to 

compel and a 2,500 word limit for 

motions and answers. The Commission 

also proposed to amend the Rule to 

consolidate the sanctions for failure to 

comply with discovery and disclosure 

requirements and to add as a sanction 

the inability to call a witness who was 

not disclosed under Rule 3.31(b) or an 

expert not disclosed under proposed 

Rule 3.31A. No comments were received 

on the proposed amendments to Rule 

3.38 and they are adopted as proposed. 

Section 3.38A: Withholding requested 

material. 

The Commission proposed to amend 

Rule 3.38A to modify the requirement 

that a privilege/work product log always 

contain specific information for each 

item being withheld. The Commission 

proposed to substitute the more flexible 

requirement in Fed. R. Civ. P. 

26(b)(5)(A) that the schedule of 

withheld items ‘‘describe the nature of 

the documents, communications, or 

tangible things not produced or 

44 The Section did object to a related provision 

in proposed Rule 3.31(c)(2) to limit the scope of 

complaint counsel’s obligation to search. As 

discussed earlier, the Commission is not persuaded 

by that objection. 

disclosed — and do so in a manner that, 

without revealing information itself 

privileged or protected, will enable 

other parties to assess the claim.’’ This 

proposed requirement would permit 

parties to describe withheld items by 

categories, but only if the description 

‘‘will enable other parties to assess the 

claim.’’ Unless such descriptions are 

sufficient, item-by-item descriptions 

would be required. 

The proposed Rule also clarified that 

the log need not describe any material 

outside the scope of the duty to search 

set forth in revised Rule 3.31(c)(2) 

except to the extent that the ALJ has 

authorized additional discovery as 

provided in that Rule. 

No comments were received on the 

proposed amendments to this Rule and 

they are adopted. 

Section 3.39: Orders requiring witnesses 

to testify or provide other information 

and granting immunity. 

The Commission proposed various 

technical revisions to this Rule. No 

comments were received on the 

proposed amendments and they are 

adopted. 

Subpart E—Hearings 

Section 3.41: General hearing rules. 

The proposed revisions to Rule 

3.41(b) required that the evidentiary 

hearing commence on the date set in the 

notice accompanying the complaint, 

limited the length of the evidentiary 

hearing to 210 hours (or the equivalent 

of 30 seven hour trial days) unless 

extended by the Commission, and 

established reasonable time allocations. 

The goal of these proposed revisions 

was to expedite the proceedings. 

The Section commented that the 

proposed Rule should allow ‘‘additional 

flexibility’’ for the ALJ to extend the 

hearing length particularly for 

nonmerger cases involving multiple 

parties. Whole Foods complained that 

the proposed rule unfairly limited the 

ALJ’s discretion over the length of the 

hearing and cited to the lack of such a 

limit in a recent Part 3 scheduling order, 

and the Chamber similarly asserted that 

the ALJ should decide if a longer trial 

is needed. The Commission believes 

that, in the vast majority of cases, 30 

trial days is more than sufficient to 

complete the evidentiary hearing. 

Further, the Rule permits the 

Commission ‘‘upon a showing of good 

cause’’ to extend the commencement 

date or the length of the hearing if the 

case involves, for example, a 

particularly lengthy record or complex 

legal issues. For these reasons, the Rule 

is adopted as proposed. 
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Commenter Nagin recommended that 

under paragraph (b)(3), the Commission 

should clarify that the ALJ can hold a 

separate segment of the hearing relating 

to one or more respondents in case any 

particular claim or issue necessitates 

such treatment. The current language of 

this provision, which permits the 

Commission or ALJ to order separate 

hearings of any claim, any separate 

issue, or any number of claims or issues, 

sufficiently covers the scenario raised 

by this commenter and, therefore, no 

change to this provision is necessary. 

Finally, the Commission’s proposed 

amendment included a new paragraph 

(f), a provision moved (and revised) 

from previous Rule 3.51(a) concerning 

the effect of collateral federal court 

actions on Part 3 proceedings. The new 

provision states that the pendency of a 

collateral federal action will stay the 

Part 3 proceeding only if the 

Commission (as opposed to the ALJ) so 

orders ‘‘for good cause,’’ and that 

deadlines set by the rules will be tolled 

during the period of the stay. The 

Commission, and not the ALJ, should be 

authorized to stay the Part 3 proceeding 

pending a collateral action in federal 

court, since the granting of a stay is 

likely to implicate public interest 

considerations that the Commission, 

rather than the ALJ, should resolve. 

Section 3.42: Presiding officials. 

The proposed amendment would 

make explicit provision for the 

Commission to retain jurisdiction over a 

matter during some or all of the 

prehearing proceedings and to designate 

one or more Commissioners to preside. 

The Section objected that by 

‘‘‘codifying’ the Commission’s right to 

interject itself into prehearing case 

management, it may undermine the 

integrity of the process, compromise the 

ALJ, and create an appearance of 

unfairness.’’ The Pitofsky-Sohn 

comment argued that ‘‘the more the 

Commission invades what has 

heretofore been the province of an 

independent ALJ, the more it lends 

credence to concerns regarding the 

fairness of the Part 3 adjudicative 

process.’’ 

The APA, 5 U.S.C. 556(b), and 

unamended Rule 3.42(a) allow the 

Commission or one or more 

Commissioners to preside over the 

hearing as ALJ. It therefore remains 

unclear how authorizing the 

Commission or a Commissioner to 

preside over the initial phases of the 

pretrial proceeding raises a legal issue 

or, for that matter, creates an appearance 

of unfairness. The package of rule 

amendments governing scheduling, 

discovery, and other aspects of the 

pretrial proceedings, however, will 

reduce the need for early Commission or 

Commissioner involvement in case 

management. Nor is the proposed Rule 

needed to authorize the Commission or 

a Commissioner to preside over the 

initial phases of the pretrial process; 

that authority is already implicit in Rule 

3.42(a), which authorizes the 

Commission or one or more 

Commissioners to preside. The 

Commission, therefore, views the 

proposed amendment to Rule 3.42(a) as 

unnecessary and has not adopted it. 

Section 3.43: Evidence. 

The proposed revision in paragraph 

(b) defined hearsay evidence and 

expressly provided for the admission of 

such evidence if it ‘‘is relevant, material, 

and bears satisfactory indicia of 

reliability so that its use is fair.’’ The 

Section complained that expressly 

permitting the admission of hearsay 

evidence would create unnecessary 

disparities between Part 3 and federal 

court procedures that could lead to 

substantive differences in case 

outcomes. It also asserted that the 

unamended Rule, which it interprets as 

applying a case-by-case approach to 

hearsay, is preferable to ‘‘the new 

default rule admitting hearsay evidence 

in every circumstance’’ that might 

unfairly disadvantage respondents. 

However, it is settled law that the 

Commission’s Rules of Practice already 

permit the introduction of hearsay 

evidence, provided that it meets the 

standards of materiality, reliability, and 

relevance. See, e.g., In re ScheringPlough Corp., 136 F.T.C. 956, 1007 

(2003), vacated on other grounds, 402 

F.3d 1056 (11th Cir. 2005). As stated in 

the NPRM, and as acknowledged by the 

Section, administrative agencies are not 

bound by the stricter hearsay rules in 

the Federal Rules of Evidence, but must 

independently assess the reliability of 

the evidence itself.45 The ALJ in the first 

instance, and the Commission in its de 

novo review, must determine the 

45 See 5 U.S.C. 556(d) (APA provides that ‘‘[a]ny 

oral or documentary evidence may be received, but 

the agency as a matter of policy shall provide for 

the exclusion of irrelevant, immaterial or unduly 

repetitious evidence. A sanction may not be 

imposed or rule or order issued except on 

consideration of the whole record or those parts 

thereof cited by a party and supported by and in 

accordance with the reliable, probative, and 

substantial evidence.’’); see also J.A.M. Builders, 

Inc. v. Herman, 233 F.3d 1350, 1354 (11th Cir. 

2000) (hearsay admissible in administrative 

proceedings if ‘‘reliable and credible’’); FTC v. 

Cement Inst., 333 U.S. 683, 705-06 (1948); 

Richardson v. Perales, 402 U.S. 389, 407-08 (1971); 

Calhoun v. Bailar, 626 F.2d 145, 148 (9th Cir. 1980); 

Buchwalter v. FTC, 235 F.2d 344 (2d Cir. 1956) 

(hearsay evidence is admissible in FTC 

administrative cases). 

admissibility and probative value, if 

any, to be given to hearsay evidence by 

analyzing, for example, the possible bias 

of an out-of-court declarant, the context 

in which the hearsay material was 

created, whether the statement was 

sworn to, and whether it is corroborated 

or contradicted by other forms of direct 

evidence. 

Proposed paragraph (b) also provided 

concrete examples of this principle by 

expressly stating that depositions, 

investigational hearings, and prior 

testimony in Commission and other 

proceedings, and any other form of 

hearsay, would be admissible and 

would not be excluded solely because 

they constitute or contain hearsay, if the 

testimony or other form of hearsay was 

sufficiently reliable and probative. 

Proposed paragraph (b) also provided 

that relevant statements or testimony by 

a party-opponent would be admitted; 

such statements do not constitute 

hearsay. 

The proposed Rule was intended to 

ensure that ALJs do not take an overly 

narrow approach to admitting hearsay 

evidence. The proposed Rule did not, 

however, provide for the admission of 

hearsay evidence ‘‘in every 

circumstance,’’ but only where such 

evidence is sufficiently relevant, reliable 

and probative ‘‘so that its use is fair.’’ 

The Commission is adopting the hearsay 

provision in paragraph (b) as proposed. 

The Section also argued that, if the 

amendment is to be adopted, it should 

require parties to provide notice every 

time they intend to introduce hearsay 

evidence to permit the opposing party to 

rebut the evidence, relying on the 

residual hearsay exception rule in Fed. 

R. Evid. 807 that requires such notice. 

Rule 807, however, does not govern the 

most familiar forms of admissible 

hearsay exceptions and the Commission 

is not persuaded that a blanket notice 

rule should apply to the admission of 

hearsay evidence in Part 3 proceedings. 

The Commission notes that the Rule 

contains provisions designed to protect 

against the unfair use of hearsay 

evidence by prohibiting the admission 

of unreliable, immaterial or duplicative 

hearsay evidence, by excluding relevant 

hearsay evidence ‘‘if its probative value 

is substantially outweighed by the 

danger of unfair prejudice,’’ and by 

providing the right of parties ‘‘to submit 

rebuttal evidence’’ to counter the 

admission of any hearsay evidence. 

The Commission also proposed a new 

paragraph (c) to facilitate the 

admissibility of third party documents 

by self-authentication through a written 

declaration of the third party document 

custodian. This provision is analogous 

to Fed. R. Evid. 902(11). The 
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Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Rules and Regulations 1817 

Commission received no comments on 

this provision and it is adopted as 

proposed. 

Proposed paragraph (d)(1) expressly 

incorporated the APA standard in 5 

U.S.C. 556(d) to allow a party ‘‘to 

present its case or defense by sworn oral 

testimony and documentary evidence, 

to submit rebuttal evidence, and to 

conduct such cross-examination, as in 

the discretion of the Administrative Law 

Judge, may be required for a full and 

true disclosure of the facts.’’ While the 

Section objected that the proposed 

provision might be interpreted to limit 

cross-examination in violation of the 

APA, the new provision expressly 

incorporates the APA standard for the 

presentation of evidence. While the 

APA standard does not impose an 

absolute or unlimited right of cross 

examination,46 it necessarily allows for 

all cross-examination in order to 

ascertain the ‘‘full and true disclosure of 

the facts.’’ This revision is adopted as 

proposed. 

Commenter Nagin recommended that 

paragraph (e), which allows the 

disclosure and offering into evidence of 

any information obtained by the 

Commission, be amended to require 

adherence to other Part 3 rules in order 

to prevent ‘‘unfairness or surprise.’’ 

There is a large difference, however, 

between offering such evidence into the 

record and its admission into the record, 

and—given the mandatory disclosure 

requirements and other discovery 

obligations—there are sufficient 

protections in these rules against any 

unfair use of evidence by complaint 

counsel. The Commission is not 

persuaded that this change is necessary. 

Finally, the Commission proposed in 

re-designated paragraph (f) a definition 

of ‘‘official notice,’’ and to provide that 

a party may controvert an officially 

noticed fact either by opposing the other 

party’s request that official notice be 

taken or after it has been noticed by the 

ALJ or the Commission. Previous Rule 

3.43 did not define official notice or 

what constitutes such notice. The 

Commission received no comments on 

this revision and it is adopted as 

proposed. 

Other paragraphs in the proposed 

Rule were redesignated to accommodate 

new paragraphs and will be adopted as 

proposed. 

Section 3.44: Record. 

The Commission proposed to revise 

Rule 3.44 to require that witness 

46 See, e.g., Citizens Awareness Network, Inc. v. 

United States, 391 F.3d 338, 351 (1st Cir. 2004); 

Central Freight Lines, Inc. v. United States, 669 F.2d 

1063 (5th Cir. 1982). 

testimony be video recorded digitally 

and made part of the official record 

along with the witness’s written 

transcript. As noted in the NPRM, the 

purpose of the proposed revision is to 

enable the Commission, which is tasked 

with reviewing the record de novo, to 

independently assess witness demeanor 

when necessary. Courts have recognized 

the ‘‘added value of demeanor 

evidence’’ from video recording.47 

Requiring video recording of witness 

testimony will improve the quality of 

Commission decisions whenever 

witness demeanor is an important issue. 

No comments criticized this provision 

and it is adopted as proposed. 

The Commission also proposed to 

revise paragraph (c) by deleting the 

word ‘‘immediately’’ at the beginning of 

the first sentence to provide the parties 

with three business days to review the 

record to determine if it is complete or 

needs to be supplemented. This revision 

generated no comments and is adopted 

as proposed. 

Section 3.45: In camera orders. 

The Commission proposed revising 

paragraph (b) to add a paragraph making 

clear that parties have no obligation to 

file or provide in camera versions of 

filings with sensitive materials with 

anyone other than opposing counsel and 

the ALJ during the proceedings, as well 

as with the Commission or federal 

courts during any appeals. No 

comments were received on this 

revision and the Commission adopts it 

as proposed. 

Additional amendments are being 

made to conform the Commission’s in 

camera procedures to the standard 

protective order that the Commission 

has adopted as final as an appendix to 

Rule 3.31, discussed above. 

Accordingly, paragraph (b) of Rule 3.45 

has been further amended to incorporate 

the order’s definition of ‘‘sensitive 

personal information’’ to be accorded in 

camera treatment if such material is to 

be introduced as evidence or otherwise 

used in the proceeding. Thus, where a 

party’s proposed findings, briefs, or 

other documents, filings, and 

submissions contain such information, 

parties will be required to prepare 

public (redacted) and non-public (in 

camera) versions in order to avoid 

public disclosure, just as the parties are 

currently required to do under the Rule 

for other material granted in camera 

treatment or subject to a protective 

order. See Rule 3.45(d), (e). Likewise, 

the Commission is amending Rule 4.2, 

as explained further below, to require 

47 See FTC v. Tarriff, 557 F. Supp. 2d 92, 97 

(D.D.C. 2008). 

that parties minimize or omit sensitive 

personal information in their filings 

when such information is not needed 

for the conduct of the proceeding. 

Section 3.46: Proposed findings, 

conclusions, and order. 

The Commission proposed to revise 

paragraph (a) to provide expressly for 

the simultaneous filing of proposed 

findings of fact, conclusions of law, rule 

or order, and supporting briefs within 

21 days of the close of the hearing 

record, as well as the optional filing of 

proposed reply findings, conclusions, 

and briefs within 10 days of the filing 

of the initial proposed findings. The 

previous Rule did not impose any 

deadlines or specify the order of these 

filings, requiring instead that such 

submissions be filed ‘‘[u]pon the closing 

of the hearing record, or within a 

reasonable time thereafter fixed by the 

Administrative Law Judge.’’ The 

proposed change was intended to 

require the orderly and timely 

submission of proposed findings and 

conclusions on which the ALJ may 

consult and to expedite the post-hearing 

phase and issuance of the initial 

decision. 

Whole Foods commented that the 

proposed change ‘‘revokes the ALJ’s 

discretion over the timing of proposed 

findings of fact, conclusions of law and 

briefs in favor of rigid, one-size-fits-all 

time schedules.’’ The schedule outlined 

in the proposed Rule, however, should 

be reasonable in the vast majority of 

cases. In the unusual situation, a party 

may move the ALJ under Rule 4.3 for an 

extension ‘‘[f]or good cause shown.’’ 

The revision is adopted as proposed. 

Subpart F—Decision 

Section 3.51: Initial decision. 

The Commission proposed to revise 

paragraph (a) to require the initial 

decision to be filed within 70 days after 

the last-filed proposed findings of fact 

and conclusions of law (or 85 days after 

the closing of the hearing record if the 

parties waive filing proposed findings), 

but allowed the ALJ to extend these 

deadlines by 30 days ‘‘for good cause.’’ 

The previous Rule required that the 

initial decision be filed within 90 days 

of the close of the hearing record, but 

the Commission determined that setting 

the initial decision deadline to the filing 

of proposed findings and conclusions, 

on which the ALJ may consult in 

preparing his or her decision, was more 

reasonable than basing the deadline on 

the closing of the hearing record. 

The proposed revision also 

maintained the previous Rule’s over-all 

one year deadline for the issuance of the 
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initial decision, but added that only the 

Commission could extend the one year 

deadline ‘‘upon a finding of 

extraordinary circumstances and if 

appropriate in the public interest.’’ The 

previous Rule permitted the ALJ to grant 

consecutive 60 day extensions upon a 

finding of ‘‘extraordinary 

circumstances,’’ but the Commission 

believed that the proposed revision 

would prevent protracted delays while 

still providing sufficient time for the 

ALJ to review the evidence and issue 

the initial decision. 

The Section’s comment was generally 

favorable, stating that while it ‘‘believes 

that in most cases, expediting the 

merger review process is a positive step, 

such timing requirements are not 

universally applicable. The Section 

applauds this revision to speed up an 

ALJ’s decision.’’ The Section noted, 

however, that based on other deadlines 

imposed in these rules, the schedule for 

cases in which the hearing will typically 

be set for eight months after the 

complaint issues will likely result in the 

initial decision being filed slightly 

beyond the one year deadline. The 

Commission has eliminated the overall 

one year deadline for all cases. The 

Commission concludes that the filing of 

the initial decision within 70 days after 

the filing of the last-filed proposed 

findings and conclusions (or 30 days 

beyond that if the ALJ directs the onetime extension for ‘‘good cause’’) 

provides a sufficient time limit. 

Based on these revisions to this 

paragraph, the Commission is also 

slightly modifying a sentence in the 

proposed Rule to now state that: ‘‘The 

Commission may further extend any of 

these time periods for good cause.’’ This 

modification imposes a standard for 

extensions and clarifies that the ALJ 

cannot extend the deadline beyond the 

30 days provided in the Rule. 

The Commission has also removed 

language from previous Rule 3.51(a) 

regarding the effect of a pending 

collateral federal court proceeding on a 

Part 3 case, and inserted revised 

language into Rule 3.41 as the stay and 

tolling provisions incident to collateral 

federal actions potentially affect more 

than the deadline for filing the initial 

decision. 

Commenter Nagin recommended that 

paragraph (c), regarding the evidence to 

support an initial decision, be changed 

from ‘‘reliable and probative evidence,’’ 

to ‘‘competent and reliable, probative 

evidence’’ so as to be consistent with 

certain scientific nomenclature. The 

Commission does not believe that such 

a change materially alters the standard 

of evidence necessary to support an 

initial decision and therefore does not 

revise the Rule as suggested. 

Finally, proposed paragraph (c)(2) 

required that the initial decision be filed 

in a word processing format that is 

accessible to the Commission on review. 

This revision generated no comments 

and is adopted as proposed. 

Section 3.52: Appeal from initial 

decision. 

The Commission proposed to revise 

paragraphs (b) and (c) to shorten the 

word counts for the principal appellate 

briefs from 18,750 words to 14,000 

words (approximately 55 double-spaced 

pages), to revise paragraph (d) to shorten 

the word count limits for reply briefs to 

half of the principals’ briefs (or 7,000 

words), to make explicit that parties 

cannot raise new arguments or matters 

in reply briefs that could have been 

raised earlier, to revise paragraph (c) to 

reduce the word count limit for crossappeal briefs to 16,500 words, and to 

revise paragraph (j) to limit the word 

count limit on amicus briefs to ‘‘no 

more than one-half the maximum length 

authorized by these rules for a party’s 

principal brief.’’ The Commission also 

proposed to revise paragraph (k) to 

specify the contents of the brief that 

would count toward the word count 

limit. While the Commission is not 

required to follow the Federal Rules of 

Appellate Procedure in its Rules of 

Practice, these new word count limits 

are consistent with limits for analogous 

briefs under Fed. R. App. P. 28.1, 29 and 

32. 

As explained in the NPRM, while 

lengthier appellate briefs could be 

justified by the Commission’s obligation 

to review the record de novo, the 

Commission’s review is also enhanced 

by its access to the parties’ proposed 

findings and conclusions filed with the 

ALJ. Further, the Commission may 

extend these word count limits if the 

case involves a particularly large record 

or complex legal issues. As noted in 

paragraph (k), however, the Commission 

will not lightly permit such extensions. 

The Commission received no comments 

on these suggested word count revisions 

and they are adopted as proposed. 

The Commission is also imposing 

deadlines on the issuance of its final 

decision. The Commission had 

announced in the NPRM ‘‘its intention 

to make best efforts to expedite its 

preparation and disposition of final 

orders and opinions in its review of 

initial decisions in adjudicatory 

proceedings.’’48 The Commission 

recognized that complaints about the 

protracted nature of Part 3 proceedings 

48 73 FR at 58834. 

extend both to proceedings before the 

ALJ and to the Commission’s issuance 

of the final decision. 

Nonetheless, given the Commission’s 

stated goal of expediting the Part 3 

process, several commenters criticized 

the absence in the proposed rules of any 

formal deadlines for the Commission to 

issue its final decision of an appeal. For 

example, according to the Pitofsky-Sohn 

comment: 

The proposed changes to Part 3 do not 

address the absence in the present 

rules of any limitation on the 

Commission’s time to render a 

decision in the event of an appeal 

from the ALJ’s decision. It has been 

said that since 2000, it has taken the 

Commission an average of 18 months 

to render its own decision, even in 

those cases where no complicated 

remedial issues requiring further 

proceedings were involved. This hole 

should be plugged with a rule change 

requiring the Commission to render 

its decision within six months of the 

ALJ’s ruling, except in narrow and 

unusual circumstances. 

The Section commented that the rule 

proposals ‘‘fail sufficiently to expedite 

Part 3 proceedings by not imposing a 

time within which the Commission 

should issue a final decision,’’ which is 

‘‘the stage of the proceeding that 

consumes the greatest time.’’ The 

Section recommended that, in 

unconsummated merger cases, the final 

Commission order be issued within five 

months from filing of the complaint and 

that, in general, the Commission issue 

its final order within 90 days after the 

initial decision. The Chamber also 

asserted that the Commission failed to 

place a deadline on ‘‘a decision by the 

Commissioners, which is very often a 

source of substantial delay.’’ Based on 

these concerns, the Commission is 

setting strict deadlines for the issuance 

of its final decisions in all Part 3 cases. 

For cases in which the Commission 

has sought preliminary relief under 

Section 13(b) of the FTC Act49 (typically 

unconsummated merger cases), the 

Commission has provided that it will 

review all initial decisions—without 

requiring a notice of appeal—and issue 

a final decision within 45 days of oral 

argument (i.e., within 100 days of the 

filing of the initial decision).50 Although 

the Section has urged the Commission 

to decide all merger cases within five 

months of the filing of the complaint, 

49 15 U.S.C. 53(b). 

50 The timing deadlines for the Commission’s 

decisions on appeal or review, as with other rule 

deadlines, are subject to the timing requirements in 

Rule 4.3(a). Thus, these deadlines may be enlarged 

slightly if, for example, a deadline were to fall on 

a weekend or holiday. 
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the Commission believes that this is a 

pace that unduly rushes the parties and 

virtually precludes any opportunity for 

the Commission to treat exhaustively 

any novel issues that may arise in a 

particular case. This deadline would 

also be faster than what federal courts 

frequently manage even for expedited 

permanent injunction cases on the 

merits (after which, like Commission 

decisions, appeals are to be filed in 

federal appellate courts).51 This rule 

revision institutionalizes an approach 

for dealing with such cases on a 

consistent and even-handed basis as 

opposed to an expedited schedule being 

issued ad hoc on a case-by-case basis. 

The Commission is also setting 

deadlines in all other cases in which 

preliminary relief was not sought, 

although on a less rapid schedule. These 

cases will typically include cases 

involving allegations of anticompetitive 

conduct, most cases challenging 

consummated mergers, and most 

consumer protection cases. In these 

matters, the Commission will issue its 

final decision within 100 days after oral 

argument (i.e., within six months of the 

issuance of the initial decision). 

To accommodate those expedited 

deadlines, the Commission is reducing 

the time in which parties may file briefs 

from the initial decision. For cases in 

which the Commission has sought 

preliminary relief under Section 13(b), 

there will be automatic Commission 

review of the initial decision (i.e., no 

notice of appeal will be required). In 

these cases, a party objecting to any 

portion of the initial decision (e.g., 

decision on liability or scope of remedy) 

must file its opening brief within 20 

days of the issuance of the initial 

decision. Parties would respond to any 

objections filed by another party by 

filing answering briefs within 20 days of 

service of the opening brief, and any 

reply briefs would be due within five 

days of service of the answering brief. 

The Commission will schedule oral 

argument within 10 days after the 

deadline for the filing of any reply briefs 

and will issue its final decision within 

45 days after oral argument.52 

51 United States v. Carilion Health Sys., 707 F. 

Supp. 840, 841 (W.D. Va.), aff’d, No. 89-2625, 1989 

WL 157282 (4th Cir. Nov. 29, 1989) (decision issued 

approximately nine months after complaint filed); 

United States v. Primestar, Inc., No. 98-CV-01193 

(D.D.C. filed May 12, 1998) (approximately nine 

months from complaint to trial on the merits). 

52 In the event that no objections to the initial 

decision are filed, the Commission in its discretion 

may schedule oral argument within 10 days after 

the deadline for the filing of objections, and will 

issue its final decision within 45 days after oral 

argument. If no oral argument is scheduled, the 

Commission will issue its final decision within 45 

days after the deadline for the filing of objections. 

For all other cases, review by the 

Commission will not be automatic, but 

will normally be initiated by a party 

filing a notice of appeal (as under the 

previous Rule).53 In these cases, any 

party objecting to any portion of the 

initial decision must file a notice of 

appeal within 10 days of the initial 

decision, or within five days of the 

initial notice if a party is filing a crossappeal. Any party filing a notice of 

appeal (including a cross-notice of 

appeal) must then perfect its appeal by 

filing its opening brief within 30 days of 

the issuance of the initial decision. 

Parties may respond to opening briefs 

by filing answering briefs within 30 

days of service of the opening briefs and 

may file reply briefs within seven days 

of service of the answering briefs. The 

Commission will schedule oral 

argument within 15 days after the 

deadline for the filing of the reply briefs, 

and the Commission will issue its final 

decision within 100 days after oral 

argument.54 

The new Rule requires simultaneous 

briefing on review for all cases brought 

in Part 3. For that reason, the word 

count limitations in the former Rule for 

a combined answering and cross-appeal 

brief, and the additional rounds of 

briefing provided in the former Rule for 

cross-appeals, are unnecessary, and 

these provisions have been eliminated 

in the new Rule. 

Finally, the Commission’s proposal to 

revise paragraph (h) regarding oral 

arguments by striking the last two 

sentences generated no comments and 

will be adopted. 

Section 4.2: Requirements as to form, 

and filing of documents other than 

correspondence. 

The Commission has added a new 

paragraph (c)(4), and redesignated 

existing paragraph (c)(4) as (c)(5), to 

require that filing parties redact or omit 

‘‘sensitive personal information’’ from 

their filings when such information is 

not needed for the conduct of the 

proceeding. Sensitive personal 

information, which is also protected by 

the standard protective order contained 

in Appendix A of Rule 3.31, will be 

accorded in camera treatment pursuant 

to Rule 3.45 if such material is to be 

introduced as evidence or otherwise 

used in the proceeding. These 

procedures, as amended, are intended to 

safeguard the confidentiality of such 

information in the event such 

53 The Commission has retained Rule 3.53, 

which authorizes the Commission to place a case 

on its docket for review in the absence of an appeal. 

54 If no argument is scheduled, the Commission 

will issue its final decision within 100 days after 

the deadline for the filing of any reply briefs. 

information must be filed or otherwise 

used in the proceeding. 

Section 4.3: Time. 

The proposed revision to Rule 4.3(b) 

specified that the ALJ may extend a time 

period set by a Commission order only 

if the order expressly authorizes the ALJ 

to do so. It also added time limits 

regarding motions directed to the 

Commission to the list of extensions 

that only the Commission may grant. 

The revision also clarified that the ALJ 

may not enlarge any deadline that a rule 

specifically authorizes only the 

Commission to extend. No comments 

were received on these revisions and the 

Commission adopts them as proposed. 

III. Invitation To Comment 

The Commission invites interested 

members of the public to submit written 

comments addressing any issues raised 

by the interim rule amendments. Such 

comments must be filed by February 12, 

2009, and must be filed in accordance 

with the instructions in the ADDRESSES 

section of this document. While the 

Commission will consider all comments 

it receives, it is inviting comment in 

particular on the rules it is adopting 

which reflect changes from the 

proposed amendments. 

IV. Interim Final Rule Revisions 

List of Subjects in 16 CFR Part 3 

Administrative practice and 

procedure. 

List of Subjects in 16 CFR Part 4 

Administrative practice and 

procedure. 

■ For the reasons set forth in the 

preamble, the Federal Trade 

Commission amends Title 16, Chapter 1, 

Subchapter A of the Code of Federal 

Regulations, parts 3 and 4, as follows: 

PART 3—RULES OF PRACTICE FOR 

ADJUDICATIVE PROCEEDINGS 

■ 1. The authority citation for part 3 

continues to read as follows: 

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

noted. 

■ 2. Revise § 3.1 to read as follows: 

§ 3.1 Scope of the rules in this part. 

The rules in this part govern 

procedure in formal adjudicative 

proceedings. To the extent practicable 

and consistent with requirements of 

law, the Commission’s policy is to 

conduct such proceedings 

expeditiously. In the conduct of such 

proceedings the Administrative Law 

Judge and counsel for all parties shall 

make every effort at each stage of a 

proceeding to avoid delay. The 
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Commission, at any time, or the 

Administrative Law Judge at any time 

prior to the filing of his or her initial 

decision, may, with the consent of the 

parties, shorten any time limit 

prescribed by these Rules of Practice. 

■ 3. Revise § 3.2 to read as follows: 

§ 3.2 Nature of adjudicative proceedings. 

Adjudicative proceedings are those 

formal proceedings conducted under 

one or more of the statutes administered 

by the Commission which are required 

by statute to be determined on the 

record after opportunity for an agency 

hearing. The term includes hearings 

upon objections to orders relating to the 

promulgation, amendment, or repeal of 

rules under sections 4, 5 and 6 of the 

Fair Packaging and Labeling Act, but 

does not include rulemaking 

proceedings 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. The term also 

includes proceedings for the assessment 

of civil penalties pursuant to § 1.94 of 

this chapter. The term does not include 

other proceedings such as negotiations 

for and Commission consideration of 

the entry of consent orders; 

investigational hearings as 

distinguished from proceedings after the 

issuance of a complaint; requests for 

extensions of time to comply with final 

orders or other proceedings involving 

compliance with final orders; 

proceedings for the promulgation of 

industry guides or trade regulation 

rules; or the promulgation of substantive 

rules and regulations. 

■ 4. Revise § 3.11 to read as follows: 

§ 3.11 Commencement of proceedings. 

(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 specific date, time 

and place for the evidentiary hearing. 

Unless a different date is determined by 

the Commission, the date of the 

evidentiary hearing shall be 5 months 

from the date of the administrative 

complaint in a proceeding in which the 

Commission, in an ancillary proceeding, 

has sought or is seeking relief pursuant 

to Section 13(b) of the FTC Act, 15 

U.S.C. 53(b), and 8 months from the 

date of issuance of the administrative 

complaint in all other proceedings 

■ 5. Revise § 3.12 to read as follows: 

§ 3.12 Answer. 

(a) Time for filing. A respondent shall 

file an answer within 14 days after being 

served with the complaint. 

(b) Content of answer. An answer 

shall conform to the following: 

(1) If allegations of complaint are 

contested. An answer in which the 

allegations of a complaint are contested 

shall contain: 

(i) A concise statement of the facts 

constituting each ground of defense; 

(ii) Specific admission, denial, or 

explanation of each fact alleged in the 

complaint or, if the respondent is 

without knowledge thereof, a statement 

to that effect. Allegations of a complaint 

not thus answered shall be deemed to 

have been admitted. 

(2) If allegations of complaint are 

admitted. If the respondent elects not to 

contest the allegations of fact set forth 

in the complaint, the answer shall 

consist of a statement that the 

respondent 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 

Commission shall issue a final decision 

containing appropriate findings and 

conclusions and a final order disposing 

of the proceeding. In such an answer, 

the respondent may, however, reserve 

the right to submit proposed findings of 

fact and conclusions of law under 

§ 3.46. 

(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 

Commission, without further notice to 

the respondent, to find the facts to be as 

alleged in the complaint and to enter a 

final decision containing appropriate 

findings and conclusions and a final 

order disposing of the proceeding. 

■ 6. Revise § 3.21 to read as follows: 

§ 3.21 Prehearing procedures. 

(a) Meeting of the parties before 

scheduling conference. As early as 

practicable before the prehearing 

scheduling conference described in 

paragraph (b) of this section, but in any 

event no later than 5 days after the 

answer is filed by the last answering 

respondent, 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. The parties shall 

also agree, if possible, on (1) a proposed 

discovery plan specifically addressing a 

schedule for depositions of fact 

witnesses, the production of documents 

and electronically stored information, 

and the timing of expert discovery 

pursuant to § 3.31A. The parties’ 

agreement regarding electronically 

stored information should include the 

scope of and a specified time period for 

the exchange of such information that is 

subject to §§ 3.31(b)(2), 3.31(c), and 

3.37(a), and the format for the disclosure 

of such information, consistent with 

§ 3.31(c)(3) and § 3.37(c); (2) a 

preliminary estimate of the time 

required for the evidentiary hearing; and 

(3) any other matters to be determined 

at the scheduling conference. 

(b) Scheduling conference. Not later 

than 10 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: (1) 

their factual and legal theories; (2) the 

current status of any pending motions; 

(3) a schedule of proceedings that is 

consistent with the date of the 

evidentiary hearing set by the 

Commission; (4) steps taken to preserve 

evidence relevant to the issues raised by 

the claims and defenses; (5) the scope of 

anticipated discovery, any limitations 

on discovery, and a proposed discovery 

plan, including the disclosure of 

electronically stored information; (6) 

issues that can be narrowed by 

agreement or by motion, suggestions to 

expedite the presentation of evidence at 

trial, and any request to bifurcate issues, 

claims or defenses; and (7) other 

possible agreements or steps that may 

aid in the just and expeditious 

disposition of the proceeding and to 

avoid unnecessary cost. 

(c) Prehearing scheduling order. (1) 

Not later than 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 that will permit the 

evidentiary hearing to commence on the 
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date set by the Commission, including 

a plan of discovery that addresses the 

deposition of fact witnesses, timing of 

expert discovery, and the production of 

documents and electronically stored 

information, 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. 

The Commission may, upon a showing 

of good cause, order a later date for the 

evidentiary hearing than the one 

specified in the complaint. (2) The 

Administrative Law Judge may, upon a 

showing of good cause, grant a motion 

to extend any deadline or time specified 

in this scheduling order other than the 

date of the evidentiary hearing. 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, the complexity of the issues, 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 just and expeditious 

disposition of the proceeding and to 

avoid unnecessary cost. Such 

conferences shall be held in person to 

the extent practicable. 

(g) Public access and reporting. 

Prehearing conferences shall be public 

unless the Administrative Law Judge 

determines in his or her discretion that 

the conference (or any part thereof) shall 

be closed to the public. The 

Administrative Law Judge shall have 

discretion to determine whether a 

prehearing conference shall be 

stenographically reported. 

■ 7. Revise § 3.22 to read as follows: 

§ 3.22 Motions. 

(a) Presentation and disposition. 

Motions filed under § 3.26 or § 4.17 

shall be directly referred to and ruled on 

by the Commission. Motions to dismiss 

filed before the evidentiary hearing, 

motions to strike, and motions for 

summary decision shall be directly 

referred to the Commission and shall be 

ruled on by the Commission unless the 

Commission in its discretion refers the 

motion to the Administrative Law 

Judge. Motions not referred to the 

Administrative Law Judge shall be ruled 

on by the Commission within 45 days 

of the filing of the last-filed answer or 

reply to the motion, if any, unless the 

Commission determines there is good 

cause to extend the deadline. If the 

Commission refers the motion to the 

Administrative Law Judge, it may set a 

deadline for the ruling by the 

Administrative Law Judge, and a party 

may seek review of the ruling of the 

Administrative Law Judge in accordance 

with § 3.23. During the time a 

proceeding is before an Administrative 

Law Judge, all other motions shall be 

addressed to and decided by the 

Administrative Law Judge, if within his 

or her authority. The Administrative 

Law Judge shall certify to the 

Commission a motion to disqualify filed 

under § 3.42(g) if the Administrative 

Law Judge does not disqualify himself 

or herself within 10 days. The 

Administrative Law Judge shall certify 

to the Commission forthwith any other 

motion upon which he or she has no 

authority to rule. Rulings containing 

information granted in camera status 

pursuant to § 3.45 shall be filed in 

accordance with § 3.45(f). 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 shall defer 

ruling thereon until immediately after 

all evidence has been received and the 

hearing record is closed. 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) Proceedings not stayed. A motion 

under consideration by the Commission 

shall not stay proceedings before the 

Administrative Law Judge unless the 

Commission so orders. 

(c) Content. All written motions shall 

state the particular order, ruling, or 

action desired and the grounds therefor. 

Memoranda in support of, or in 

opposition to, any dispositive motion 

shall not exceed 10,000 words. 

Memoranda in support of, or in 

opposition to, any other motion shall 

not exceed 2,500 words. Any reply in 

support of a dispositive motion shall not 

exceed 5,000 words and any reply in 

support of any other motion authorized 

by the Administrative Law Judge or the 

Commission shall not exceed 1,250 

words. These word count limitations 

include headings, footnotes, and 

quotations, but do not include the cover, 

table of contents, table of citations or 

authorities, glossaries, statements with 

respect to oral argument, any 

addendums containing statutes, rules or 

regulations, any certificates of counsel, 

proposed form of order, and any 

attachment required by § 3.45(e). 

Documents that fail to comply with 

these provisions shall not be filed with 

the Secretary. Motions 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 2 

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(d) 

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. 

(d) Responses. Within 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 
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opposing party shall file 2 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 for dispositive motions or 

as otherwise permitted by the 

Administrative Law Judge or the 

Commission. Reply and surreply briefs 

to motions other than dispositive 

motions shall be permitted only in 

circumstances where the parties wish to 

draw the Administrative Law Judge’s or 

the Commission’s attention to recent 

important developments or controlling 

authority that could not have been 

raised earlier in the party’s principal 

brief. The reply may be conditionally 

filed with the motion seeking leave to 

reply. Any reply with respect to a 

dispositive motion, or any permitted 

reply to any other motion, shall be filed 

within 5 days after service of the last 

answer to that motion. 

(e) Rulings on motions. Unless 

otherwise provided by a relevant rule, 

the Administrative Law Judge shall rule 

on motions within 14 days after the 

filing of all motion papers authorized by 

this section. The Commission, for good 

cause, may extend the time allowed for 

a ruling. 

(f) 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. 

(g) 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. 

■ 8. Revise § 3.23 to read as follows: 

§ 3.23 Interlocutory appeals. 

(a) Appeals without a determination 

by the Administrative Law Judge. 

(1) The Commission may, in its 

discretion, entertain interlocutory 

appeals where a ruling of the 

Administrative Law Judge: 

(i) 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, an 

individual Commissioner, or the Office 

of the General Counsel; 

(ii) Suspends an attorney from 

participation in a particular proceeding 

pursuant to § 3.42(d); or 

(iii) Grants or denies an application 

for intervention pursuant to the 

provisions of § 3.14. 

(2) Appeal from such rulings may be 

sought by filing with the Commission an 

application for review within 3 days 

after notice of the Administrative Law 

Judge’s ruling. An answer may be filed 

within 3 days after the application for 

review is filed. The Commission upon 

its own motion may enter an order 

staying compliance with a discovery 

demand authorized 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 

memoranda of law if deemed 

appropriate by the Commission. 

(b) Other interlocutory appeals. A 

party may request the Administrative 

Law Judge to determine 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 appeal from the 

ruling may materially advance the 

ultimate termination of the litigation or 

subsequent review will be an 

inadequate remedy. An answer may be 

filed within 3 days after the application 

for review is filed. The Administrative 

Law Judge shall issue a ruling on the 

request for determination within 3 days 

of the deadline for filing an answer. The 

party may file an application for review 

with the Commission within 1 day after 

notice that the Administrative Law 

Judge has issued the requested 

determination or 1 day after the 

deadline has passed for the 

Administrative Law Judge to issue a 

ruling on the request for determination 

and the Administrative Law Judge has 

not issued his or her ruling. 

(c) The application for review shall 

attach the ruling from which appeal is 

being taken and any other portions of 

the record on which the moving party 

relies. Neither the application for review 

nor the answer shall exceed 2,500 

words. This word count limitation 

includes headings, footnotes, and 

quotations, but does not include the 

cover, table of contents, table of 

citations or authorities, glossaries, 

statements with respect to oral 

argument, any addendums containing 

statutes, rules or regulations, any 

certificates of counsel, proposed form of 

order, and any attachment required by 

§ 3.45(e). The Commission may order 

additional briefing on the application. 

(d) Ruling on application for review. 

Within 3 days after the deadline for 

filing an answer, the Commission will 

determine whether to grant the 

application for review. The denial of an 

application shall not constitute a ruling 

on the merits of the ruling that is the 

subject of the application. 

(e) Proceedings not stayed. An 

application for review and appeal 

hereunder shall not stay proceedings 

before the Administrative Law Judge 

unless the Judge or the Commission 

shall so order. 

■ 9. Revise § 3.24 to read as follows: 

§ 3.24 Summary decisions. 

(a) Procedure. (1) Any party 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 no genuine issue for trial. 

Counsel in support of the complaint 

may so move at any time after 20 days 

following issuance of the complaint and 

any 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 30 days before the date fixed for 

the hearing. 

(2) Any other party may, within 14 

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 
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provided in § 3.24(a)(3). The parties may 

file memoranda of law in support of, or 

in opposition to, the motion consistent 

with § 3.22(c). 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 2 

versions of the document in accordance 

with the procedures set forth in 

§ 3.45(e). If the Commission (or, when 

appropriate, the Administrative Law 

Judge) determines that there is no 

genuine issue as to any material fact 

regarding liability or relief, it shall issue 

a final decision and order. In the event 

that the motion has been referred to the 

Administrative Law Judge, such 

determination by the Administrative 

Law Judge shall constitute his or her 

initial decision and shall conform to 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 

relief. 

(3) Affidavits shall set forth such facts 

as would be admissible in evidence and 

shall show affirmatively that the affiant 

is competent to testify to the matters 

stated therein. The Commission (or, 

when appropriate, 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 or her pleading; the response, by 

affidavits or as otherwise provided in 

this rule, must set forth specific facts 

showing that there is a genuine issue of 

material 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 it cannot, for reasons stated, present 

by affidavit facts essential to justify its 

opposition, the Commission (or, when 

appropriate, the Administrative Law 

Judge) may deny the motion 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 Commission 

(or, when appropriate, the 

Administrative Law Judge) shall issue 

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 Commission (or, when appropriate, 

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 

Commission (or, when appropriate, 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 Commission 

(or, when appropriate, the 

Administrative Law Judge) concludes 

that action to suspend or remove an 

attorney from the case is warranted, it 

shall take action as specified in 

§ 3.42(d). If the Administrative Law 

Judge to whom the Commission has 

referred a motion for summary decision 

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 Administrative Law Judge shall 

certify the matter, with his or her 

findings and recommendations, to the 

Commission for its consideration of 

disciplinary action in the manner 

provided by the Commission’s rules. If 

the Commission has addressed the 

motion directly, it may consider such 

disciplinary action without a 

certification by the Administrative Law 

Judge. 

■ 10. Revise § 3.26 to read as follows: 

§ 3.26 Motions following denial of 

preliminary injunctive relief. 

(a) This section sets forth two 

procedures by which respondents may 

obtain consideration of whether 

continuation of an adjudicative 

proceeding is in the public interest after 

a court has denied preliminary 

injunctive relief in a separate 

proceeding brought under section 13(b) 

of the Federal Trade Commission Act, 

15 U.S.C. 53(b), in aid of the 

adjudication. 

(b) A motion under this section shall 

be addressed to the Commission and 

filed with the Secretary of the 

Commission. If the Commission has 

filed a request for a stay, injunction, or 

other emergency relief pending appeal 

to a court of appeals, the motion must 

be filed within 14 days after, but no 

earlier than, the court of appeals has 

denied the Commission’s request. In 

cases in which the Commission has not 

sought relief from the court of appeals 

within 7 days following the denial of a 

preliminary injunction, the motion must 

be filed within 14 days after the district 

court has denied preliminary 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 proceeding be 

withdrawn from adjudication in order to 

consider whether or not the public 

interest warrants further litigation. Such 

a motion shall be filed jointly or 

separately by each of the respondents in 

the adjudicative proceeding. Complaint 

counsel may file a response within 14 

days after such motion is filed. The 

matter will not be withdrawn from 

adjudication unless the Commission so 

directs. 

(d) Consideration on the record. 

Instead of a motion to withdraw the 

matter from adjudication, 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. Complaint counsel 

may file a response within 14 days after 

such motion is filed. The filing of a 

motion to dismiss shall not stay the 

proceeding unless the Commission so 

directs. 

(e) Form. Memoranda in support of or 

in opposition to such motions shall not 

exceed 10,000 words. This word count 

limitation includes headings, footnotes, 

and quotations, but does not include the 

cover, table of contents, table of 

citations or authorities, glossaries, 

statements with respect to oral 

argument, any addendums containing 

statutes, rules or regulations, any 

certificates of counsel, proposed form of 

order, and any attachment required by 

§ 3.45(e). 

(f) 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 2 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 
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will begin to run upon service of the in 

camera version of the motion (including 

any supporting briefs and memoranda). 

(g) Ruling by Commission. The 

Commission shall rule on any motion 

authorized by this section within 30 

days after the filing of the motion and 

any memoranda in support of or in 

opposition to the motion. 

■ 11. Revise § 3.31 to read as follows: 

§ 3.31 General discovery provisions. 

(a) Discovery methods. Parties may 

obtain discovery by one or more of the 

following methods: Depositions upon 

oral examination or written questions; 

written interrogatories; production of 

documents or things for inspection and 

other purposes; and requests for 

admission. Except as provided in the 

rules, or 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) Mandatory initial disclosures. 

Complaint counsel and respondent’s 

counsel shall, within 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); 

and 

(2) A copy of, or a description by 

category and location of, all documents 

and electronically stored information 

including declarations, transcripts of 

investigational hearings and 

depositions, 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 

subject to the limitations in § 3.31(c)(2), 

privileged as defined in § 3.31(c)(4), 

pertain to hearing preparation as 

defined in § 3.31(c)(5), pertain to experts 

as defined in § 3.31A, or are obtainable 

from some other source that is more 

convenient, less burdensome, or less 

expensive. A party shall make its 

disclosures based on the information 

then reasonably available to it and is not 

excused from making its disclosures 

because it has not fully completed its 

investigation. 

(c) Scope of discovery. Unless 

otherwise limited by order of the 

Administrative Law Judge or the 

Commission in accordance with these 

rules, the scope of discovery is as 

follows: 

(1) In general. 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, other tangible things, 

electronically stored information, 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. 

(2) Limitations. Complaint counsel 

need only search for materials that were 

collected or reviewed in the course of 

the investigation of the matter or 

prosecution of the case and that are in 

the possession, custody or control of the 

Bureaus or Offices of the Commission 

that investigated the matter, including 

the Bureau of Economics. The 

Administrative Law Judge may 

authorize for good cause additional 

discovery of materials in the possession, 

custody, or control of those Bureaus or 

Offices, or authorize other discovery 

pursuant to § 3.36. Neither complaint 

counsel, respondent, nor a third party 

receiving a discovery request under 

these rules is required to search for 

materials generated and transmitted 

between an entity’s counsel (including 

counsel’s legal staff or in-house counsel) 

and not shared with anyone else, or 

between complaint counsel and nontestifying Commission employees, 

unless the Administrative Law Judge 

determines there is good cause to 

provide such materials. 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 or she 

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. 

(3) Electronically stored information. 

A party need not provide discovery of 

electronically stored information from 

sources that the party identifies as not 

reasonably accessible because of undue 

burden or cost. On a motion to compel 

discovery, the party from whom 

discovery is sought must show that the 

information is not reasonably accessible 

because of undue burden or cost. If that 

showing is made, the Administrative 

Law Judge may nonetheless order 

discovery if the requesting party shows 

good cause, considering the limitations 

of paragraph (c)(2). The Administrative 

Law Judge may specify conditions for 

the discovery. 

(4) Privilege. Discovery shall be 

denied or limited in order 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. 

(5) Hearing preparations: Materials. 

Subject to the provisions of § 3.31A, 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. 

(d) Protective orders; orders to 

preserve evidence. In order to protect 

the parties and third parties against 

improper use and disclosure of 

confidential information, the 

Administrative Law Judge shall issue a 

protective order as set forth in the 

appendix to this section. The 

Administrative Law Judge may also 

deny discovery or make any other 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 
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upon a showing that there is substantial 

reason to believe that such evidence 

would not otherwise be available for 

presentation at the hearing. 

(e) Supplementation of disclosures 

and responses. A party who has made 

a mandatory 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 

mandatory 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 to amend 

in a timely manner 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) Inadvertent production. The 

inadvertent production of information 

produced by a party or third party in 

discovery that is subject to a claim of 

privilege or immunity for hearing 

preparation material shall not waive 

such claims as to that or other 

information regarding the same subject 

matter if the Administrative Law Judge 

determines that the holder of the claim 

made efforts reasonably designed to 

protect the privilege or the hearing 

preparation material, provided, 

however, this provision shall not apply 

if the party, or an entity related to that 

party, who inadvertently produced the 

privileged information relies upon such 

information to support a claim or 

defense. 

(h) Restriction on filings. Unless 

otherwise ordered by the Administrative 

Law Judge in his or her discretion, 

mandatory initial and supplemental 

disclosures, interrogatories, depositions, 

requests for documents, requests for 

admissions, and answers and responses 

thereto shall be served upon other 

parties but shall not be filed with the 

Office of the Secretary, the 

Administrative Law Judge, or otherwise 

provided to the Commission, except to 

support or oppose a motion or to offer 

as evidence. 

Appendix A to § 3.31: Standard 

Protective Order. 

For the purpose of protecting the 

interests of the parties and third parties 

in the above-captioned matter against 

improper use and disclosure of 

confidential information submitted or 

produced in connection with this 

matter: 

IT IS HEREBY ORDERED THAT this 

Protective Order Governing Confidential 

Material (‘‘Protective Order’’) shall 

govern the handling of all Discovery 

Material, as hereafter defined. 

1. As used in this Order, ‘‘confidential 

material’’ shall refer to any document or 

portion thereof that contains privileged, 

competitively sensitive information, or 

sensitive personal information. 

‘‘Sensitive personal information’’ shall 

refer to, but shall not be limited to, an 

individual’s Social Security number, 

taxpayer identification number, 

financial account number, credit card or 

debit card number, driver’s license 

number, state-issued identification 

number, passport number, date of birth 

(other than year), and any sensitive 

health information identifiable by 

individual, such as an individual’s 

medical records. ‘‘Document’’ shall refer 

to any discoverable writing, recording, 

transcript of oral testimony, or 

electronically stored information in the 

possession of a party or a third party. 

‘‘Commission’’ shall refer to the Federal 

Trade Commission (‘‘FTC’’), or any of its 

employees, agents, attorneys, and all 

other persons acting on its behalf, 

excluding persons retained as 

consultants or experts for purposes of 

this proceeding. 

2. Any document or portion thereof 

submitted by a respondent or a third 

party during a Federal Trade 

Commission investigation or during the 

course of this proceeding that is entitled 

to confidentiality under the Federal 

Trade Commission Act, or any 

regulation, interpretation, or precedent 

concerning documents in the possession 

of the Commission, as well as any 

information taken from any portion of 

such document, shall be treated as 

confidential material for purposes of 

this Order. The identity of a third party 

submitting such confidential material 

shall also be treated as confidential 

material for the purposes of this Order 

where the submitter has requested such 

confidential treatment. 

3. The parties and any third parties, 

in complying with informal discovery 

requests, disclosure requirements, or 

discovery demands in this proceeding 

may designate any responsive document 

or portion thereof as confidential 

material, including documents obtained 

by them from third parties pursuant to 

discovery or as otherwise obtained. 

4. The parties, in conducting 

discovery from third parties, shall 

provide to each third party a copy of 

this Order so as to inform each such 

third party of his, her, or its rights 

herein. 

5. A designation of confidentiality 

shall constitute a representation in good 

faith and after careful determination 

that the material is not reasonably 

believed to be already in the public 

domain and that counsel believes the 

material so designated constitutes 

confidential material as defined in 

Paragraph of this Order. 

6. Material may be designated as 

confidential by placing on or affixing to 

the document containing such material 

(in such manner as will not interfere 

with the legibility thereof), or if an 

entire folder or box of documents is 

confidential by placing or affixing to 

that folder or box, the designation 

‘‘CONFIDENTIAL—FTC Docket No. 

XXXX’’ or any other appropriate notice 

that identifies this proceeding, together 

with an indication of the portion or 

portions of the document considered to 

be confidential material. Confidential 

information contained in electronic 

documents may also be designated as 

confidential by placing the designation 

‘‘CONFIDENTIAL—FTC Docket No. 

XXXX’’ or any other appropriate notice 

that identifies this proceeding, on the 

face of the CD or DVD or other medium 

on which the document is produced. 

Masked or otherwise redacted copies of 

documents may be produced where the 

portions deleted contain privileged 

matter, provided that the copy produced 

shall indicate at the appropriate point 

that portions have been deleted and the 

reasons therefor. 

7. Confidential material shall be 

disclosed only to: (a) the Administrative 

Law Judge presiding over this 

proceeding, personnel assisting the 

Administrative Law Judge, the 

Commission and its employees, and 

personnel retained by the Commission 

as experts or consultants for this 

proceeding; (b) judges and other court 

personnel of any court having 

jurisdiction over any appellate 

proceedings involving this matter; (c) 

outside counsel of record for any 

respondent, their associated attorneys 

and other employees of their law 

firm(s), provided they are not employees 

of a respondent; (d) anyone retained to 

assist outside counsel in the preparation 

or hearing of this proceeding including 
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consultants, provided they are not 

affiliated in any way with a respondent 

and have signed an agreement to abide 

by the terms of the protective order; and 

(e) any witness or deponent who may 

have authored or received the 

information in question. 

8. Disclosure of confidential material 

to any person described in Paragraph 7 

of this Order shall be only for the 

purposes of the preparation and hearing 

of this proceeding, or any appeal 

therefrom, and for no other purpose 

whatsoever, provided, however, that the 

Commission may, subject to taking 

appropriate steps to preserve the 

confidentiality of such material, use or 

disclose confidential material as 

provided by its Rules of Practice; 

sections 6(f) and 21 of the Federal Trade 

Commission Act; or any other legal 

obligation imposed upon the 

Commission. 

9. In the event that any confidential 

material is contained in any pleading, 

motion, exhibit or other paper filed or 

to be filed with the Secretary of the 

Commission, the Secretary shall be so 

informed by the Party filing such 

papers, and such papers shall be filed in 

camera. To the extent that such material 

was originally submitted by a third 

party, the party including the materials 

in its papers shall immediately notify 

the submitter of such inclusion. 

Confidential material contained in the 

papers shall continue to have in camera 

treatment until further order of the 

Administrative Law Judge, provided, 

however, that such papers may be 

furnished to persons or entities who 

may receive confidential material 

pursuant to Paragraphs 7 or 8. Upon or 

after filing any paper containing 

confidential material, the filing party 

shall file on the public record a 

duplicate copy of the paper that does 

not reveal confidential material. 

Further, if the protection for any such 

material expires, a party may file on the 

public record a duplicate copy which 

also contains the formerly protected 

material. 

10. If counsel plans to introduce into 

evidence at the hearing any document 

or transcript containing confidential 

material produced by another party or 

by a third party, they shall provide 

advance notice to the other party or 

third party for purposes of allowing that 

party to seek an order that the document 

or transcript be granted in camera 

treatment. If that party wishes in camera 

treatment for the document or 

transcript, the party shall file an 

appropriate motion with the 

Administrative Law Judge within 5 days 

after it receives such notice. Except 

where such an order is granted, all 

documents and transcripts shall be part 

of the public record. Where in camera 

treatment is granted, a duplicate copy of 

such document or transcript with the 

confidential material deleted therefrom 

may be placed on the public record. 

11. If any party receives a discovery 

request in any investigation or in any 

other proceeding or matter that may 

require the disclosure of confidential 

material submitted by another party or 

third party, the recipient of the 

discovery request shall promptly notify 

the submitter of receipt of such request. 

Unless a shorter time is mandated by an 

order of a court, such notification shall 

be in writing and be received by the 

submitter at least 10 business days 

before production, and shall include a 

copy of this Protective Order and a 

cover letter that will apprise the 

submitter of its rights hereunder. 

Nothing herein shall be construed as 

requiring the recipient of the discovery 

request or anyone else covered by this 

Order to challenge or appeal any order 

requiring production of confidential 

material, to subject itself to any 

penalties for non-compliance with any 

such order, or to seek any relief from the 

Administrative Law Judge or the 

Commission. The recipient shall not 

oppose the submitter’s efforts to 

challenge the disclosure of confidential 

material. In addition, nothing herein 

shall limit the applicability of Rule 

4.11(e) of the Commission’s Rules of 

Practice, 16 CFR 4.11(e), to discovery 

requests in another proceeding that are 

directed to the Commission. 

12. At the time that any consultant or 

other person retained to assist counsel 

in the preparation of this action 

concludes participation in the action, 

such person shall return to counsel all 

copies of documents or portions thereof 

designated confidential that are in the 

possession of such person, together with 

all notes, memoranda or other papers 

containing confidential information. At 

the conclusion of this proceeding, 

including the exhaustion of judicial 

review, the parties shall return 

documents obtained in this action to 

their submitters, provided, however, 

that the Commission’s obligation to 

return documents shall be governed by 

the provisions of Rule 4.12 of the Rules 

of Practice, 16 CFR 4.12. 

13. The provisions of this Protective 

Order, insofar as they restrict the 

communication and use of confidential 

discovery material, shall, without 

written permission of the submitter or 

further order of the Commission, 

continue to be binding after the 

conclusion of this proceeding. 

■ 12. Add § 3.31A to read as follows: 

§ 3.31A Expert discovery. 

(a) The parties shall serve each other 

with a list of experts they intend to call 

as witnesses at the hearing not later than 

1 day after the close of fact discovery, 

meaning the close of discovery except 

for depositions and other discovery 

permitted under § 3.24(a)(4), and 

discovery for purposes of authenticity 

and admissibility of exhibits. Complaint 

counsel shall serve the other parties 

with a report prepared by each of its 

expert witnesses not later than 14 days 

after the close of fact discovery. Each 

respondent shall serve each other party 

with a report prepared by each of its 

expert witnesses not later than 14 days 

after the deadline for service of 

complaint counsel’s expert reports. 

Complaint counsel shall serve 

respondents with a list of any rebuttal 

expert witnesses and a rebuttal report 

prepared by each such witness not later 

than 10 days after the deadline for 

service of respondent’s expert reports. 

Aside from any information required by 

paragraph (c), a rebuttal report shall be 

limited to rebuttal of matters set forth in 

a respondent’s expert reports. If material 

outside the scope of fair rebuttal is 

presented, a respondent may file a 

motion not later than 5 days after the 

deadline for service of complaint 

counsel’s rebuttal reports, seeking 

appropriate relief with the 

Administrative Law Judge, including 

striking all or part of the report, leave 

to submit a surrebuttal report by 

respondent’s experts, or leave to call a 

surrebuttal witness and to submit a 

surrebuttal report by that witness. 

(b) No party may call an expert 

witness at the hearing unless he or she 

has been listed and has provided reports 

as required by this section. Each side 

will be limited to calling at the 

evidentiary hearing 5 expert witnesses, 

including any rebuttal or surrebuttal 

expert witnesses. A party may file a 

motion seeking leave to call additional 

expert witnesses due to extraordinary 

circumstances. 

(c) Each report shall be signed by the 

expert and contain a complete statement 

of all opinions to be expressed and the 

basis and reasons therefor; the data, 

materials, 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 10 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 
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within the preceding 4 years. A rebuttal 

or surrebuttal report need not include 

any information already included in the 

initial report of the witness. 

(d) A party may depose any person 

who has been identified as an expert 

whose opinions may be presented at 

trial. Unless otherwise ordered by the 

Administrative Law Judge, a deposition 

of any expert witness shall be 

conducted after the disclosure of a 

report prepared by the witness in 

accordance with paragraph (a). 

Depositions of expert witnesses shall be 

completed not later than 65 days after 

the close of fact discovery. 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. A party, 

however, may not 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 listed as a witness for the 

evidentiary hearing. 

■ 13. Revise § 3.33 to read as follows: 

§ 3.33 Depositions. 

(a) In general. Any party may take a 

deposition of any 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) and subject 

to the requirements in § 3.36. 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) The Administrative Law Judge 

may rule on motion by a party that a 

deposition shall not be taken upon a 

determination that such deposition 

would not be reasonably expected to 

meet the scope of discovery set forth 

under § 3.31(c), or that the value of the 

deposition would be outweighed by the 

considerations set forth under § 3.43(b). 

The fact that a witness testifies at an 

investigative hearing does not preclude 

the deposition of that witness. 

(c)(1) 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 of the Federal 

Trade Commission, and describe with 

reasonable particularity the matters on 

which examination is requested. The 

organization so named 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 or she 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. 

(2) Notice to Commission. Except as 

provided in § 3.31(h), notices of 

depositions shall not be filed with the 

Office of the Secretary, the 

Administrative Law Judge, or otherwise 

provided to the Commission. 

(d) Taking of deposition. Each 

deponent shall be duly sworn, and any 

party shall have the right to question 

him or her. 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 § 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 or her. 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 or her, 

unless the parties by stipulation waive 

the signing or the deponent is 

unavailable or cannot be found or 

refuses to sign. If the deposition is not 

signed by the deponent within 30 days 

of its submission or attempted 

submission, the officer shall sign it and 

certify that the signing has 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 

§ 3.33(g)(2)(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 

or her remarks, stating with specificity 

the alleged errors in the transcript. 

(g) Objections; errors and 

irregularities. 
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(1) Objections to admissibility. Subject 

to the provisions of paragraph (g)(2) 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. 

(2) 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. 

■ 14. Revise § 3.34 to read as follows: 

§ 3.34 Subpoenas. 

(a) Subpoenas ad testificandum. 

Counsel for a party may sign and issue 

a subpoena, on a form provided by the 

Secretary, requiring a person to appear 

and give testimony at the taking of a 

deposition to a party requesting such 

subpoena or to attend and give 

testimony at an adjudicative hearing. 

(b) Subpoenas duces tecum; 

subpoenas to permit inspection of 

premises. Counsel for a party may sign 

and issue a subpoena, on a form 

provided by the Secretary, 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 

written materials, electronically stored 

information, and tangible things. 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. Any motion by the subject 

of a subpoena to limit or quash the 

subpoena shall be filed within the 

earlier of 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 

§ 3.22(g). Nothing in paragraphs (a) and 

(b) of this section authorizes the 

issuance of subpoenas except in 

accordance with § 3.31(c)(2) and § 3.36. 

■ 15. Revise § 3.35 to read as follows: 

§ 3.35 Interrogatories to parties 

(a) Availability; procedures for use. (1) 

Any party may serve upon any other 

party written interrogatories, not 

exceeding 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 or her 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 

30 days after the service of the 

interrogatories. The Administrative Law 

Judge may allow a shorter or longer 

time. 

(3) Except as provided in § 3.31(h), 

interrogatories shall not be filed with 

the Office of the Secretary, the 

Administrative Law Judge, or otherwise 

provided to the Commission. 

(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 such an interrogatory need 

not be answered until after designated 

discovery has been completed, but in no 

case later than 3 days before the final 

pretrial conference. 

(c) Option to produce records. Where 

the answer to an interrogatory may be 

derived or ascertained from the records 

of the party upon whom the 

interrogatory has been served or from an 

examination, audit, or inspection of 

such records, or from a compilation, 

abstract, or summary based thereon, and 

the burden of deriving or ascertaining 

the answer is substantially the same for 

the party serving the interrogatory as for 

the party served, it is a sufficient answer 

to such interrogatory to specify the 

records from which the answer may be 

derived or ascertained and to afford to 

the party serving the interrogatory 

reasonable opportunity to examine, 

audit or inspect such records and to 

make copies, compilations, abstracts or 

summaries. The specification shall 

include sufficient detail to permit the 

interrogating party to identify readily 

the individual documents from which 

the answer may be ascertained. 

■ 16. Revise § 3.36 to read as follows: 
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§ 3.36 Applications for subpoenas for 

records of or appearances by certain 

officials or employees of the Commission 

or officials or employees of governmental 

agencies other than the Commission, and 

subpoenas to be served in a foreign 

country. 

(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 request requiring 

the production of or access to 

documents, other tangible things, or 

electronically stored information for the 

purposes described in § 3.37(a), in the 

possession, custody, or control of the 

Commissioners, the General Counsel, 

any Bureau or Office not involved in the 

matter, the office of Administrative Law 

Judges, or the Secretary in his or her 

capacity as custodian or recorder of any 

such information, or their respective 

staffs, or 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 a Commissioner, the 

General Counsel, an official of any 

Bureau or Office not involved in the 

matter, an Administrative Law Judge, or 

the Secretary in his or her capacity as 

custodian or recorder of any such 

information, or their respective staffs, or 

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 make a 

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) If for purposes of discovery, the 

information or material sought cannot 

reasonably be obtained by other means 

or, if for purposes of compelling a 

witness to appear at the evidentiary 

hearing, the movant has a compelling 

need for the testimony; 

(4) With respect to subpoenas to be 

served in a foreign country, that the 

party seeking discovery or testimony 

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 or testimony 

is sought and that any additional 

procedural requirements have been or 

will be met before the subpoena is 

served; and 

(5) If the subpoena requires access to 

documents or other tangible things, it 

meets the requirements of § 3.37. 

(c) Execution. If an Administrative 

Law Judge 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. 

■ 17. Revise § 3.37 to read as follows: 

§ 3.37 Production of documents, 

electronically stored information, and any 

tangible things; access for inspection and 

other purposes. 

(a) Availability; procedures for use. 

Any party may serve on another party 

a request: to produce and permit the 

party making the request, or someone 

acting on the party’s behalf, to inspect 

and copy any designated documents or 

electronically stored information, 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 produced or 

inspected, or the property to be entered. 

Each such request shall also specify a 

reasonable time, place, and manner of 

making the production or inspection 

and performing the related acts. Each 

request may specify the form in which 

electronically stored information is to be 

produced, but the requested form of 

electronically stored information must 

not be overly burdensome or 

unnecessarily costly to the producing 

party. 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. Except as provided in § 3.31(h), 

requests under this section shall not be 

filed with the Office of the Secretary, 

the Administrative Law Judge, or 

otherwise provided to the Commission. 

(b) Response; objections. No more 

than 30 days after receiving the request, 

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 response may 

state an objection to a requested form for 

producing electronically stored 

information. If the responding party 

objects to a requested form - or if no 

form was specified in the request - the 

party must state the form it intends to 

use. 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. 

(c) Production of documents or 

electronically stored information. 

Unless otherwise stipulated or ordered 

by the Administrative Law Judge, these 

procedures apply to producing 

documents or electronically stored 

information: 

(i) A party must produce documents 

as they are kept in the usual course of 

business or must organize and label 

them to correspond to the categories in 

the request; 

(ii) If a request does not specify a form 

for producing electronically stored 

information, a party must produce it in 

a form in which it is ordinarily 

maintained or in a reasonably usable 

form; and 

(iii) A party need not produce the 

same electronically stored information 

in more than one form. 

■ 18. Revise § 3.38 to read as follows: 

§ 3.38 Motion for order compelling 

disclosure or discovery; sanctions. 

(a) Motion for order to compel. A 

party may apply by motion to the 

Administrative Law Judge for an order 

compelling disclosure or discovery, 

including a determination of the 

sufficiency of the answers or objections 

with respect to the mandatory initial 

disclosures required by § 3.31(b), a 

request for admission under § 3.32, a 

deposition under § 3.33, an 

interrogatory under § 3.35, or a 

production of documents or things or 

access for inspection or other purposes 

under § 3.37. Any memorandum in 

support of such motion shall be no 

longer than 2,500 words. Any response 
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to the motion by the opposing party 

must be filed within 5 days of receipt of 

service of the motion and shall be no 

longer than 2,500 words. These word 

count limitations include headings, 

footnotes, and quotations, but do not 

include the cover, table of contents, 

table of citations or authorities, 

glossaries, statements with respect to 

oral argument, any addendums 

containing statutes, rules or regulations, 

any certificates of counsel, proposed 

form of order, and any attachment 

required by § 3.45(e). The 

Administrative Law Judge shall rule on 

a motion to compel within 3 business 

days of the date in which the response 

is due. Unless the Administrative Law 

Judge determines that the objection is 

justified, the Administrative Law Judge 

shall order that an initial disclosure or 

an answer to any requests for 

admissions, documents, depositions, or 

interrogatories be served or disclosure 

otherwise be made. 

(b) If a party or an officer or agent of 

a party fails to comply with any 

discovery obligation imposed by these 

rules, upon motion by the aggrieved 

party, the Administrative Law Judge or 

the Commission, or both, may take such 

action in regard thereto as is just, 

including but not limited to the 

following: 

(1) Order that any answer be amended 

to comply with the request, subpoena, 

or order; 

(2) Order that the matter be admitted 

or that the admission, testimony, 

documents, or other evidence would 

have been adverse to the party; 

(3) 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; 

(4) 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, 

agent, expert, or fact witness, or the 

documents or other evidence, or upon 

any other improperly withheld or 

undisclosed materials, information, 

witnesses, or other discovery; 

(5) 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; 

(6) 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 or 

she shall certify to the Commission a 

request that court enforcement of the 

subpoena or order be sought. 

■ 19. Revise § 3.38A to read as follows: 

§ 3.38A Withholding requested material. 

(a) Any person withholding material 

responsive to a subpoena issued 

pursuant to § 3.34 or § 3.36, 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 which describes the 

nature of the documents, 

communications, or tangible things not 

produced or disclosed - and does so in 

a manner that, without revealing 

information itself privileged or 

protected, will enable other parties to 

assess the claim. The schedule need not 

describe any material outside the scope 

of the duty to search set forth in 

§ 3.31(c)(2) except to the extent that the 

Administrative Law Judge has 

authorized additional discovery as 

provided in that paragraph. 

(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 of the FTC Act (15 U.S.C. 45)) 

■ 20. Revise § 3.39 to read as follows: 

§ 3.39 Orders requiring witnesses to 

testify or provide other information and 

granting immunity. 

(a) Where Commission complaint 

counsel desire the issuance of an order 

requiring a witness or deponent to 

testify or provide other information and 

granting immunity under 18 U.S.C. 

6002, 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 or 

her 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 or her 

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 or her 

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 18 U.S.C. 6002 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 or 

her 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 or her designee) has 

granted such approval, to issue such 

order when the witness or deponent has 

invoked his or her privilege against selfincrimination and it cannot be 

determined that such privilege was 

improperly invoked. 

(18 U.S.C. 6002, 6004) 

■ 21. Revise § 3.41, to read as follows: 

§ 3.41 General hearing rules. 

(a) Public hearings. All hearings in 

adjudicative proceedings shall be public 

unless an in camera order is entered by 

the Administrative Law Judge pursuant 

to § 3.45(b) of this chapter or unless 

otherwise ordered by the Commission. 
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(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. 

The hearing will take place on the date 

specified in the notice accompanying 

the complaint, pursuant to § 3.11(b)(4), 

and should be limited to no more than 

210 hours. The Commission, upon a 

showing of good cause, may order a 

later date for the evidentiary hearing to 

commence or extend the number of 

hours for the hearing. 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 prehearing procedure if 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 Commission or the Administrative 

Law Judge may order a joint hearing of 

any or all the matters in issue in the 

actions; the Commission or the 

Administrative Law Judge may order all 

the actions consolidated; and the 

Commission or 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 Commission or 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. 

(4) Each side shall be allotted no more 

than half of the trial time within which 

to present its opening statements, in 

limine motions, all arguments excluding 

the closing argument, direct or cross 

examinations, or other evidence. 

(5) Each side shall be permitted to 

make an opening statement that is no 

more than 2 hours in duration. 

(6) Each side shall be permitted to 

make a closing argument no later than 

5 days after the last filed proposed 

findings. The closing argument shall last 

no longer than 2 hours. 

(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 or 

her. 

(e) Requests for an order requiring a 

witness to testify or provide other 

information and granting immunity 

under 18 U.S.C. 6002 shall be disposed 

of in accordance with § 3.39. 

(f) Collateral federal court actions.The 

pendency of a collateral federal court 

action that relates to the administrative 

adjudication shall not stay the 

proceeding unless a court of competent 

jurisdiction, or the Commission for good 

cause, so directs. A stay shall toll any 

deadlines set by the rules. 

■ 22. Revise § 3.43 to read as follows: 

§ 3.43 Evidence. 

(a) Burden of proof. Counsel 

representing the Commission, or any 

person who has filed objections 

sufficient to warrant the holding of an 

adjudicative hearing pursuant to § 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. 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 

based on considerations of undue delay, 

waste of time, or needless presentation 

of cumulative evidence. Evidence that 

constitutes hearsay may be admitted if 

it is relevant, material, and bears 

satisfactory indicia of reliability so that 

its use is fair. Hearsay is a statement, 

other than one made by the declarant 

while testifying at the hearing, offered 

in evidence to prove the truth of the 

matter asserted. If otherwise meeting the 

standards for admissibility described in 

this paragraph, depositions, 

investigational hearings, prior testimony 

in Commission or other proceedings, 

and any other form of hearsay, shall be 

admissible and shall not be excluded 

solely on the ground that they are or 

contain hearsay. Statements or 

testimony by a party-opponent, if 

relevant, shall be admitted. 

(c) Admissibility of third party 

documents. Extrinsic evidence of 

authenticity as a condition precedent to 

admissibility of documents received 

from third parties is not required with 

respect to the original or a duplicate of 

a domestic record of regularly 

conducted activity by that third party 

that otherwise meets the standards of 

admissibility described in paragraph (b) 

if accompanied by a written declaration 

of its custodian or other qualified 

person, in a manner complying with any 

Act of Congress or rule prescribed by 

the Supreme Court pursuant to statutory 

authority, certifying that the record: 

(1) was made at or near the time of the 

occurrence of the matters set forth by, or 

from information transmitted by, a 

person with knowledge of those matters; 

(2) was kept in the course of the 

regularly conducted activity; and 

(3) was made by the regularly 

conducted activity as a regular practice. 

(d) Presentation of evidence. 

(1) A party is entitled to present its 

case or defense by sworn oral testimony 

and documentary evidence, to submit 

rebuttal evidence, and to conduct such 

cross-examination as, in the discretion 

of the Commission or the 

Administrative Law Judge, may be 

required for a full and true disclosure of 

the facts. 

(2) 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. 

(3) 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. 

(e) 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 

(f) Official notice. ‘‘Official notice’’ 

may be taken of any material fact that 

is not subject to reasonable dispute in 

that it is either generally known within 

the Commission’s expertise or capable 

of accurate and ready determination by 

resort to sources whose accuracy cannot 

reasonably be questioned. If official 

notice is requested or is taken of a 

material fact not appearing in the 
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evidence in the record, the parties, upon 

timely request, shall be afforded an 

opportunity to disprove such noticed 

fact. 

(g) 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. 

(h) Exceptions. Formal exception to 

an adverse ruling is not required. 

(i) Excluded evidence. When an 

objection to a question propounded to a 

witness is sustained, the questioner may 

make a specific offer of what he or she 

expects to prove by the answer of the 

witness, or the Administrative Law 

Judge may, in his or her 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. 

■ 23. Revise § 3.44 to read as follows: 

§ 3.44 Record. 

(a) Reporting and transcription. 

Hearings shall be stenographically 

reported and transcribed by the official 

reporter of the Commission under the 

supervision of the Administrative Law 

Judge, and the original transcript shall 

be a part of the record and the sole 

official transcript. The live oral 

testimony of each witness shall be video 

recorded digitally, and the video 

recording and the written transcript of 

the testimony shall be made part of the 

record. 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. 

Upon completion of the evidentiary 

hearing, the Administrative Law Judge 

shall issue an order closing the hearing 

record after giving the parties 3 business 

days to determine if the record is 

complete or needs to be supplemented. 

The Administrative Law Judge shall 

retain the discretion to permit or order 

correction of the record as provided in 

§ 3.44(b). 

■ 24. Revise § 3.45 to read as follows: 

§ 3.45 In camera orders. 

(a) Definition. Except as hereinafter 

provided, material made subject to an in 

camera order will be kept confidential 

and not placed on the public record of 

the proceeding in which it was 

submitted. Only respondents, their 

counsel, authorized Commission 

personnel, and court personnel 

concerned with judicial review may 

have access thereto, provided that the 

Administrative Law Judge, the 

Commission and reviewing courts may 

disclose such in camera material to the 

extent necessary for the proper 

disposition of the proceeding. 

(b) In camera treatment of material. 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 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 shall 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 or after finding that the 

material constitutes sensitive personal 

information. ‘‘Sensitive personal 

information’’ shall include, but shall not 

be limited to, an individual’s Social 

Security number, taxpayer identification 

number, financial account number, 

credit card or debit card number, 

driver’s license number, state-issued 

identification number, passport number, 

date of birth (other than year), and any 

sensitive health information identifiable 

by individual, such as an individual’s 

medical records. For material other than 

sensitive personal information, a finding 

that public disclosure will likely result 

in a clearly defined, serious injury 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, except in the case of sensitive 

personal information, which shall be 

accorded permanent in camera 

treatment unless disclosure or an 

expiration date is required or provided 

by law. For in camera material other 

than sensitive personal information, an 

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 3 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. Parties are not required to provide 

documents subject to in camera 

treatment, including documents 

obtained from third parties, to any 

individual or entity other than the 

Administrative Law Judge, counsel for 

other parties, and, during an appeal, the 

Commission or a federal court. 
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(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 2 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 

Administrative Law Judge 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 

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 

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 2 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 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 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. 

■ 26. Revise § 3.46 to read as follows: 

§ 3.46 Proposed findings, conclusions, 

and order. 

(a) General. Within 21 days of the 

closing of the hearing record, each party 

may file with the Secretary 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 2 versions 

of the proposals in accordance with the 

procedures set forth in § 3.45(e). Reply 

findings of fact, conclusions of law, and 

briefs may be filed by each party within 

10 days of service of the initial proposed 

findings. 

(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. 

(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 
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proceeding otherwise informs the 

parties of the action taken. 

■ 27. Revise § 3.51 to read as follows: 

§ 3.51 Initial decision. 

(a) When filed and when effective. 

The Administrative Law Judge shall file 

an initial decision within 70 days after 

the filing of the last filed initial or reply 

proposed findings of fact, conclusions of 

law and order pursuant to § 3.46, within 

85 days of the closing the hearing record 

pursuant to § 3.44(c) where the parties 

have waived the filing of proposed 

findings, or within 14 days after the 

granting of a motion for summary 

decision following a referral of such 

motion from the Commission. The 

Administrative Law Judge may extend 

any of these time periods by up to 30 

days for good cause. The Commission 

may further extend any of these time 

periods for good cause. Except in cases 

subject to § 3.52(a), once issued, the 

initial decision shall become the 

decision of the Commission 30 days 

after service thereof upon the parties or 

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, format for filing. (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 of fact 

(with specific page references to 

principal supporting items of evidence 

in the record) and conclusions of law, 

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) The initial decision shall be 

prepared in a common word processing 

format, such as WordPerfect or 

Microsoft Word, and shall be filed by 

the Administrative Law Judge with the 

Office of the Secretary in both electronic 

and paper versions. 

(3) 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 or 

she shall have become unavailable to 

the Commission. 

(e) Reopening of proceeding by 

Administrative Law Judge; termination 

of jurisdiction. (1) At any time from the 

close of the hearing record pursuant to 

§ 3.44(c) until the filing of his or her 

initial decision, an Administrative Law 

Judge may reopen the proceeding for the 

reception of further evidence for good 

cause shown. 

(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 or her 

initial decision with respect to those 

issues decided pursuant to paragraph 

(c)(1) of this section. 

■ 28. Revise § 3.52 to read as follows: 

§ 3.52 Appeal from initial decision. 

(a) Automatic review of cases in 

which the Commission sought 

preliminary relief in federal court; 

timing. For proceedings with respect to 

which the Commission has sought 

preliminary relief in federal court under 

15 U.S.C. 53(b), the Commission will 

review the initial decision without the 

filing of a notice of appeal. 

(1) In such cases, any party may file 

objections to the initial decision or 

order of the Administrative Law Judge 

by filing its opening appeal brief, 

subject to the requirements in paragraph 

(c), within 20 days of the issuance of the 

initial decision. Any party may respond 

to any objections filed by another party 

by filing an answering brief, subject to 

the requirements of paragraph (d), 

within 20 days of service of the opening 

brief. Any party may file a reply to an 

answering brief, subject to the 

requirements of paragraph (e), within 5 

days of service of the answering brief. 

Unless the Commission determines 

there shall be no oral argument, it will 

schedule oral argument within 10 days 

after the deadline for the filing of any 

reply briefs. The Commission will issue 

its final decision pursuant to § 3.54 

within 45 days after oral argument. If no 

oral argument is scheduled, the 

Commission will issue its final decision 

pursuant to § 3.54 within 45 days after 

the deadline for the filing of any reply 

briefs. 

(2) If no objections to the initial 

decision are filed, the Commission may 

in its discretion schedule oral argument 

within 10 days after the deadline for the 

filing of objections, and will issue its 

final decision pursuant to § 3.54 within 

45 days after oral argument. If no oral 

argument is scheduled, the Commission 

will issue its final decision pursuant to 

§ 3.54 within 45 days after the deadline 

for the filing of objections. 

(b) Review in all other cases; timing. 

(1) In all cases other than those subject 

to paragraph (a), any party may file 

objections to the initial decision or 

order of the Administrative Law Judge 

by filing a notice of appeal with the 

Secretary within 10 days after service of 

the initial decision. The notice shall 

specify the party or parties against 

whom the appeal is taken and shall 

designate the initial decision and order 

or part thereof appealed from. If a timely 

notice of appeal is filed by a party, any 

other party may thereafter file a notice 

of appeal within 5 days after service of 

the first notice, or within 10 days after 

service of the initial decision, 

whichever period expires last. 

(2) In such cases, any party filing a 

notice of appeal must perfect its appeal 

by filing its opening appeal brief, 

subject to the requirements in paragraph 

(c), within 30 days of the issuance of the 

initial decision. Any party may respond 

to the opening appeal brief by filing an 

answering brief, subject to the 

requirements of paragraph (d), within 30 

days of service of the opening brief. Any 

party may file a reply to an answering 

brief, subject to the requirements of 

paragraph (e), within 7 days of service 

of the answering brief. Unless the 

Commission determines there shall be 

no oral argument, it will schedule oral 

argument within 15 days after the 

deadline for the filing of any reply 

briefs. The Commission will issue its 

final decision pursuant to § 3.54 within 

100 days after oral argument. If no oral 

argument is scheduled, the Commission 

will issue its final decision pursuant to 

§ 3.54 within 100 days after the deadline 

for the filing of any reply briefs. 

(c) Appeal brief. (1) The opening 

appeal brief 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), 
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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 14,000 

words. 

(d) Answering brief. The answering 

brief 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. The answering brief shall 

not, without leave of the Commission, 

exceed 14,000 words. 

(e) Reply brief. The reply brief shall be 

limited to rebuttal of matters in the 

answering brief and shall not, without 

leave of the Commission, exceed 7,000 

words. The Commission will not 

consider new arguments or matters 

raised in reply briefs that could have 

been raised earlier in the principal 

briefs. No further briefs may be filed 

except by leave of the Commission. 

(f) In camera information. If a party 

includes in any brief to be filed under 

this section information that has been 

granted in camera status pursuant to 

§ 3.45(b) or is subject to confidentiality 

provisions pursuant to a protective 

order, the party shall file 2 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. 

(g) Signature. (1) The original of each 

brief filed shall have a hand-signed 

signature by an attorney of record for 

the party, or in the case of parties not 

represented by counsel, by the party 

itself, or by a partner if a partnership, 

or by an officer of the party if it is a 

corporation or an unincorporated 

association. 

(2) Signing a brief constitutes a 

representation by the signer that he or 

she has read it; that to the best of his 

or her knowledge, information, and 

belief, the statements made in it are 

true; that it is not interposed for delay; 

that it complies with 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. 

(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 or review 

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 or 

her 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. 

(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. 

An amicus brief may be no more than 

one-half the maximum length 

authorized by these rules for a party’s 

principal brief. 

(k) Word count limitation. The word 

count limitations in this section include 

headings, footnotes and quotations, but 

do not include the cover, table of 

contents, table of citations or 

authorities, glossaries, statements with 

respect to oral argument, any 

addendums containing statutes, rules or 

regulations, any certificates of counsel, 

proposed form of order, and any 

attachment required by § 3.45(e). 

Extensions of word count limitations 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. 

PART 4—MISCELLANEOUS RULES 

■ 1. The authority citation for part 4 

continues to read as follows: 

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

noted. 

■ 2. Revise § 4.2 to read as follows: 

§ 4.2 Requirements as to form, and filing 

of documents other than correspondence. 

(a) Filing. (1) Except as otherwise 

provided, all documents submitted to 

the Commission, including those 

addressed to the Administrative Law 

Judge, shall be filed with the Secretary 

of the Commission; Provided, however, 

That 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. 
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(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, 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, 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 email, 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) Sensitive personal information, as 

defined in § 3.45(b), shall not be 

included in, and must be redacted or 

omitted from, filings where the filing 

party determines that such information 

is not relevant or otherwise necessary 

for the conduct of the proceeding. 

(5) 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 noncompliance would not interfere with the 

functions of the Commission. 

■ 3. Amend § 4.3 by revising paragraph 

(b) as follows: 

§ 4.3 Time. 

* * * * * 

(b) Extensions. For good cause shown, 

the Administrative Law Judge may, in 

any proceeding before him or her: (1) 

Extend any time limit prescribed or 

allowed by order of the Administrative 

Law Judge or the Commission (if the 

Commission order expressly authorizes 

the Administrative Law Judge to extend 

time periods); or (2) extend any time 

limit prescribed by the rules in this 

chapter, except those governing motions 

directed to the Commission, 

interlocutory appeals and initial 

decisions and deadlines that the rules 

expressly authorize only the 

Commission to extend. 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 or she may properly rule 

shall be made to the Administrative Law 

Judge. Notwithstanding the above, 

where a motion to extend is made after 

the expiration of the specified period, 

the motion may be considered where 

the untimely filing was the result of 

excusable neglect. 

* * * * * 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. E9–296 Filed 1–12–09: 8:45 am] 

BILLING CODE 6750–01–S