[Federal Register Volume 73, Number 166 (Tuesday, August 26, 2008)]
[Proposed Rules]
[Pages 50532-50538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19677]



[[Page 50531]]

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Part V





Postal Regulatory Commission





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39 CFR Part 3007



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Administrative Practice and Procedure, Confidential Business 
Information, Postal Service; Proposed Rule

Federal Register / Vol. 73, No. 166 / Tuesday, August 26, 2008 / Proposed Rule

[[Page 50532]]


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POSTAL REGULATORY COMMISSION

39 CFR 3007

[Docket No. RM2008-1; Order No. 96]


Administrative Practice and Procedure, Confidential Business 
Information, Postal Service

AGENCY: Postal Regulatory Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission is proposing rules on the treatment of non-
public material submitted by the Postal Service. Issuance of this 
proposal will allow interested parties to comment on the Commission's 
approach to implementing a new statutory requirement.

DATES: Initial comments due September 25, 2008; reply comments due 
October 10, 2008.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at http://www.prc.gov.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
202-789-6820 and <a href="/cdn-cgi/l/email-protection#dfacabbaafb7bab1f1acb7beadb9b2beb19fafadbcf1b8b0a9"><span class="__cf_email__" data-cfemail="dba8afbeabb3beb5f5a8b3baa9bdb6bab59baba9b8f5bcb4ad">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: The Postal Regulatory Commission 
(Commission) proposes to implement 39 U.S.C. 504(g) by adopting 
regulations applicable to confidentiality of materials submitted by the 
Postal Service to the Commission.

I. Statutory Standards for According Confidentiality to Postal Service 
Materials

    39 U.S.C. 504(g)(1) holds that the Postal Service may determine 
``that any document or other matter it provides to the Postal 
Regulatory Commission'' is exempt from public disclosure under 39 
U.S.C. 410(c) or 5 U.S.C. 552(b). The Postal Service must give reasons, 
in writing, for its claim. See 39 U.S.C. 504(g)(1). Unless the 
Commission has established rules for determining the appropriate degree 
of protection of information or materials claimed to be non-public by 
the Postal Service, the Commission may not (1) ``use such information 
for purposes other than the purposes for which it is supplied,'' or (2) 
``permit anyone who is not an officer or employee of the Commission to 
have access to any such information.'' See 39 U.S.C. 504(g)(2).
    Under 39 U.S.C. 410(c), the Postal Service may claim as exempt from 
public disclosure the name and address information of postal customers; 
certain commercial information, for example, trade secrets; certain 
information related to the negotiation of collective bargaining 
agreements; information prepared for proceedings before the Commission 
or the federal courts concerning postal rates, classes and services; 
reports and memoranda prepared by outside sources unless their 
disclosure would have been required if the Postal Service had prepared 
the reports or memoranda itself; and investigatory files compiled for 
law enforcement purposes, unless legally available to parties other 
than the Postal Service.
    Under 5 U.S.C. 552(b), records that may be withheld from public 
disclosure include, but are not limited to, matters concerning only 
internal personnel matters of an agency; matters specifically exempted 
from public disclosure by statute; trade secrets and privileged or 
confidential commercial or financial information; non-public 
interagency or intra-agency memoranda or letters; privacy protected 
personnel, medical and other files; and certain law enforcement records 
or information. Section 552(b) provides that any portions of records 
subject to disclosure that can be segregated from records otherwise 
exempt from disclosure must be provided.
    Upon adopting appropriate regulations under 5 U.S.C. 553 that 
``establish a procedure for according appropriate confidentiality,'' 
the Commission may publicly disclose information which the Postal 
Service asserts is exempt from disclosure under 39 U.S.C. 410(c) or 5 
U.S.C. 552(b). In determining what degree of protection is appropriate, 
the Commission is directed to ``balance the nature and extent of the 
likely commercial injury to the Postal Service against the public 
interest in maintaining the financial transparency of a government 
establishment competing in commercial markets.'' 39 U.S.C. 
504(g)(3)(A).\1\
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    \1\ Compare Postal Rate Commission Order No. 1025 at 14. (The 
Commission notes that ``[t]he standards by which commercial 
information is accorded confidential treatment under [Fed. R. Civ. 
P. 26(c)], * * * are essentially those that govern the invocation of 
Freedom of Information (FOIA) exemption (b)(4), except that the 
alleged commercial harm of disclosure is balanced against the 
alleged need for the information. See, e.g., Covey Oil v. 
Continental Oil Co., 340 F.2d 993 (10th Cir. 1965).''
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    Similarly, section 504(g)(3)(B) provides that in the narrower 
context of any ``discovery procedure'' that is part of a Commission 
``proceeding,'' the Commission has the authority to require the Postal 
Service to produce information that the Postal Service has claimed as 
exempt from production. As under section 504(g)(3)(A) and before 
requiring such disclosure, the Commission ``shall, by regulations based 
on rule 26(c) of the Federal Rules of Civil Procedure, establish 
procedures for ensuring appropriate confidentiality for information 
furnished to any party.'' \2\
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    \2\ Rule 26(c), which is entitled ``Protective Conditions,'' 
authorizes the court to issue a variety of orders to protect parties 
or witnesses in the discovery process. See Charles Alan Wright, 
Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure 
Sec.  2035, et seq. (2d ed. 1994).
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    Section 504(g)(3)(B) appears to be a specific application, in the 
context of discovery, of the more general authority granted in 39 
U.S.C. 504(g)(3)(A) to disclose information obtained from the Postal 
Service if disclosure is found appropriate and consistent with the kind 
of balancing of interests that is performed by federal civil courts 
when asked to establish protective conditions under rule 26(c) of the 
Federal Rules of Civil Procedure.
    The general parameters for disclosure, and conversely protection of 
confidentiality, of information during the discovery process under 
section 504(g)(3)(B) must be gleaned from the federal case law 
pertaining to Federal Rule of Civil Procedure 26, and those parameters 
are, as stated above, a more specific application of the parameters 
established by the balancing test laid out in section 504(g)(3)(A).\3\ 
Case law surrounding Federal Rule of Civil Procedure 26 identifies 
several non-exclusive factors to be applied under the rule 26(c) ``good 
cause balancing test.''\4\ In the 2007 Arnold decision, the Third 
Circuit reaffirms the balancing test factors it developed in its 1994 
Pansy decision:
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    \3\ See, e.g., Arnold v. Penn. Dep't of Transp., 477 F.3d 105 
(3d Cir. 2007) at 109-110; Pansy v. Borough of Stroudsburg, 23 F.3d 
772 (3d Cir. 1994) at 788; Leucadia, Inc. v. Applied Extrusion 
Technologies, 998 F.2d 157 (3d Cir. 1993) at 167. See generally 
Arthur R. Miller, Confidentiality, Protective Orders, and Public 
Access to the Courts, 105 Harv. L. Rev. 427 (1991).
    \4\ See Arnold v. Penn. Dep't of Transp., 477 F.3d 105, 108 (3d 
Cir. 2007).

    (1) [T]he interest in privacy of the party seeking protection; 
(2) whether the information is being sought for a legitimate purpose 
or an improper purpose; (3) the prevention of embarrassment, and 
whether that embarrassment would be particularly serious; (4) 
whether the information sought is important to public health and 
safety; (5) whether sharing of the information among litigants would 
promote fairness and efficiency; (6) whether the party benefiting 
from the order of confidentiality is a public entity or official; 
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and (7) whether the case involves issues important to the public.

Id. (citing Pansy, 23 F.3d at 787-88). Most of the seven specific 
factors listed by the Pansy court appear to be applicable to the 
general balancing test

[[Page 50533]]

weighing the competing interests of the Postal Service against the 
public interest for transparency.\5\
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    \5\ Of the enumerated factors, ``embarrassment'' and ``public 
health concerns'' probably will be the least applicable in the 
majority of matters before the Commission, but fairness, public 
interest, efficiency and so forth should all be considered when 
deciding whether the need for transparency outweighs the need for 
protecting the commercial or other interests of the Postal Service.
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    It must be noted, nonetheless, that section 504(g)(3)(B) 
specifically and particularly instructs the Commission to establish 
procedures for assuring confidentiality when requiring production of 
information during the discovery process based on Federal Rule of Civil 
Procedure 26(c). Under Federal Rule of Civil Procedure 26(c), a party 
or person may during the discovery process request a protective order. 
Under the rule, a court may, for good cause, issue a protective order 
``to protect a party or person from annoyance, embarrassment, 
oppression, or undue burden or expense * * *.'' Federal Rule of Civil 
Procedure 26(c) lists several possible procedures to limit discovery 
and ensure confidentially of information, including (1) completely 
forbidding the disclosure; (2) specifying terms for disclosure, for 
example, specifying the time and/or place of discovery; (3) ordering a 
specific method of discovery; (4) limiting the scope of discovery as it 
relates to certain matters; (5) limiting who may be present during 
discovery; (6) sealing a deposition; and (7) requiring that a trade 
secret or other confidential information be revealed only in a specific 
and limited manner.
    Because the Commission interprets the Postal Accountability and 
Enhancement Act (PAEA) as intending that the Commission engage in 
essentially the same balancing of interests under the standards in both 
sections 504(g)(3)(A) and 504(g)(3)(B), and the universe of specific 
procedures to assure the protection of information, when appropriate, 
is essentially the same, the Commission is initially of the view that a 
single rule governing disclosure applying to both sections 504(g)(3)(A) 
and 504(g)(3)(B) is sufficient.\6\
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    \6\ In application of the proposed disclosure rule, the 
decision-maker will also take into account relevant factors such as 
the procedural stage a matter is in (for example, discovery versus a 
formal hearing before the Commission) when deciding whether 
protection or non-disclosure of information sought by the Postal 
Service is appropriate. Another factor to be considered is whether 
the information at issue relates to market dominant or competitive 
products.
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    Section 504 recognizes the need to balance the Postal Service's 
legitimate expectation to keep commercially sensitive information 
confidential with the public's expectation for accountability and 
transparency of a governmental entity operating in commercial markets. 
The PAEA relies on public transparency, in addition to regulation, to 
achieve its goal of Postal Service accountability. Therefore, as 
directed by the provisions of the PAEA and because the Commission 
considers it necessary and appropriate, the Commission proposes rules 
that could lead to public disclosure of information initially claimed 
by the Postal Service as non-public. In developing proposed rules, the 
Commission is mindful of, and takes very seriously, its responsibility 
to achieve a fair balance between the commercial interests of the 
Postal Service and the public interest in disclosure of information 
concerning a public entity that operates in commercial markets.
    The Commission will obtain information from the Postal Service, and 
must manage access to that information, in three basic contexts. In the 
first context, the Postal Service will file information pursuant to a 
specific statutory requirement or Commission rules. In these instances, 
with respect to some reports, the PAEA explicitly authorizes the Postal 
Service to designate portions as non-public annexes or to otherwise 
avail itself of the protections afforded Postal Service documents or 
other matters under the procedures of section 504(g). See 39 U.S.C. 
3642(d), 3652(f), and 3654(f). Under proposed rule 3007.20, the Postal 
Service would notify the Commission at the time that it files the 
information that it considers specifically identified portions of its 
report or annex to be non-public and to qualify for a degree of 
protection from public disclosure. The Postal Service in its 
application for relief from disclosure must also include its reasons 
for concluding that the information should not be publicly disclosed. 
See proposed rule 3007.21.
    In the second major context, the Commission may request information 
or materials from the Postal Service by way of a data or information 
request, or, if necessary, by issuance of a subpoena.\7\ When the 
Commission identifies information that it needs for the preparation of 
reports, for the conduct of ``proceedings,'' or other functions under 
the PAEA, the normal procedure contemplated for obtaining that 
information will be the issuance of data or information requests under 
proposed rule 3007.3. Data or information requests in the proposed 
rules are similar to requests that were issued in the former Postal 
Rate Commission's international mail dockets as part of its preparation 
of its reports to Congress on international mail. The proposed rules 
contemplate that, where it perceives it to be necessary, the Postal 
Service would file an application for relief under proposed rule 
3007.20 with regard to data or information provided in response to a 
request issued by the Commission. In its application for relief, the 
Postal Service would ask for a necessary degree of protection from 
public disclosure, for example, by requesting limiting the scope of the 
information to be produced, or restricting the dissemination of the 
information provided, as is commonly done in the application of rule 
26(c) of the Federal Rules of Civil Procedure in federal civil courts.
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    \7\ Information and materials required to be provided to the 
Commission in response to a subpoena that the Postal Service 
determines to be exempt are subject to the same rules under proposed 
part 3007 as information or materials provided in response to a data 
or information request. See 39 U.S.C. 504(f), (g).
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    In both instances, the non-public information would initially be 
protected from disclosure until such time as the Commission decides 
what actual degree of protection, if any, from public disclosure should 
be afforded such non-public information. However, before acting on its 
own initiative to require disclosure of information claimed to be non-
public by the Postal Service, the Commission will give the Postal 
Service an opportunity to respond within seven days of the issuance of 
the Commission's notice that it considers certain information to be not 
confidential.
    In the third context, a person (as defined by the Commission's 
rules) may file a motion for access to the materials claimed to be non-
public by the Postal Service. Access to such non-public information, if 
any, will most often be granted under a protective order. Such 
protective order could, for example, specify that no person involved in 
competitive decision-making for any entity that might gain competitive 
advantage from use of the information at issue should be granted access 
to the materials. In addition, restrictions could be imposed on any 
person granted access to the materials at issue limiting or prohibiting 
its dissemination.
    Because the Commission frequently operates under tight deadlines, 
it is important to have procedures in place that prevent unnecessary 
delay in determining whether granting a person access to non-public 
materials is appropriate. See, e.g., 39 U.S.C. 3653(a) (annual 
determination of compliance). Therefore, the Commission proposes a 
streamlined procedure for persons who

[[Page 50534]]

agree to abide by the Commission's standard protective conditions. If a 
person attaches an executed copy of the Commission's standard 
protective conditions to its motion, answers to that motion are due 
within three days after such a motion is filed. On the other hand, if 
an executed copy of the Commission's standard protective conditions is 
not attached, answers are due within seven days after such a motion is 
filed.
    The Commission will publish its standard protective conditions on 
its Web site. The Commission is cognizant of the fact that in many 
instances it will be necessary to tailor protective conditions to the 
circumstances of a particular case. For example, protective conditions 
may have to be stricter if a direct competitor of the Postal Service 
requests access to non-public materials concerning competitive products 
than when a non-competitor requests access. The Commission will publish 
several examples of protective orders in this docket that will be 
representative of the standard protective conditions the Commission 
intends to publish on it website. The Commission also invites comments 
regarding the form such standard protective conditions should take.
    The proposed rules also include a ``sunset provision'' stating that 
protective conditions afforded to any non-public materials filed by the 
Postal Service shall expire 10 years after such filing, unless the 
Commission or its authorized representative enters an order providing 
for an extension of the protective conditions. The Commission or its 
authorized representative can enter such an order in its own discretion 
or upon a motion by the Postal Service.
    The Commission in rule 3004.8 already provides that information 
submitted to the Commission and claimed to be exempt from disclosure 
under 5 U.S.C. 552(b) (namely, trade secrets or commercially or 
financially sensitive materials) and then determined to be exempt by 
the Commission will lose such exemption 10 years after its submission. 
A longer exemption period from disclosure may be requested by the 
person submitting the information, but must be specifically justified 
by the requestor and approved by the Commission. 39 CFR 3004.8.
    The Commission believes that administrative convenience and sound 
records management practices will be served by such a provision. It 
initially appears to the Commission that the 10-year period for the 
sunset provision should be adequate to protect the commercial interest 
of the Postal Service, but invites comments as to whether the proposed 
time period is appropriate. In addition, the Commission is interested 
in comments as to whether any specific category of non-public materials 
should be exempted from the sunset provision.Initial comments are due 
within 30 days of the publication of this Notice in the Federal 
Register. Reply comments are due within 45 days of the publication of 
this Notice in the Federal Register.

II. Analysis of Proposed Rules

    Below, the Commission provides a concise description of each rule 
designed to assist commenters in understanding the scope and nature of 
the proposed rules.
    Rule 3007.1 Definitions. This provision simply sets forth 
definitions used in part 3007. The term ``non-public materials'' is 
defined as any information, documents, and things filed by the Postal 
Service which, pursuant to 39 U.S.C. 504(g), it determines to be exempt 
from disclosure. As used in the rules, the phrase ``materials claimed 
to be non-public'' has the same meaning as non-public materials.
    Rule 3007.2 Scope. This provision sets forth the scope of 
information, documents, and things that the Commission (or its 
authorized representative) may require the Postal Service to provide in 
connection with the Commission's responsibilities under title 39. It is 
intended to encompass information, documents, and things in whatever 
form that are likely to materially assist the Commission in fulfilling 
its statutory responsibilities.
    Rule 3007.3 Data or Information requests. This proposed rule 
provides that the Commission (or its authorized representative) may 
issue data or information requests to the Postal Service concerning 
materials covered by proposed rule 3007.2.
    Rule 3007.10 Submission of non-public materials under seal. This 
proposed rule sets forth the manner in which non-public materials are 
to be filed with the Commission. More specifically, it provides that 
non-public materials are not to be filed electronically pursuant to 
rule 3001.9, but are to be filed in sealed envelopes clearly marked as 
confidential. The proposed rule requires non-public materials to be 
filed in hard copy as well as electronic form (compact discs), with the 
latter subject to certain conditions to ensure their usefulness. In 
addition, the proposed rule requires that a redacted copy of the non-
public materials be filed electronically pursuant to rule 3001.9.
    Rule 3007.20 Application for non-public treatment. This provision 
directs the Postal Service to file an application for relief from 
public disclosure whenever it files non-public materials.
    Rule 3007.21 Form and content of the application for non-public 
treatment. This proposed rule requires the Postal Service to identify 
the materials it asserts are non-public and to provide a detailed 
statement in support thereof, addressing, among other things, the 
rationale for the claim, including the statutory authority, the nature 
and extent of any commercial harm, a hypothetical example of such harm, 
the extent of public protection from public disclosure deemed necessary 
by the Postal Service, and any other factors relevant to the 
application for relief.
    Rule 3007.22 Treatment of material claimed to be non-public. This 
proposed rule provides that the Commission will not disclose non-public 
materials except as pursuant to the rules in part 3007.
    Rule 3007.23 Access to non-public material. This proposed rule 
permits Commissioners and Commission employees access to non-public 
material subject to the limitations in 39 U.S.C. 504(g)(2)(A) and (B).
    As a matter of course, the Commission will review non-public 
material submitted by the Postal Service for substance, and in the 
course of such review may have cause to question the claim that part or 
all of the material should not be disclosed. Thus, the proposed rule 
also provides that the Commission (or its authorized representative) 
may issue a notice of preliminary determination concerning the 
appropriate degree of protection, if any, to be accorded non-public 
material filed by the Postal Service.\8\ If a notice of preliminary 
determination is issued, the Postal Service and any interested person 
may submit a responsive pleading within 7 days (or such longer period 
as specified in the notice). Given the expedited timetables under which 
the Commission ordinarily operates, the proposed rules do not 
contemplate any reply to the responsive pleadings. Thus, those 
submitting responsive pleadings should address all issues relevant to 
whether the non-public materials should be publicly disclosed. 
Following the receipt of the responsive pleadings, if any, the 
Commission will issue an

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order concerning access to the non-public material.
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    \8\ This aspect of the rule is designed to enable the Commission 
to address claims of confidentiality by the Postal Service on its 
own initiative. It is not intended to imply that the Commission will 
necessarily make a preliminary determination with respect to each 
filing by the Postal Service of non-public materials.
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    The Commission will not provide access to material subject to 
protective conditions to contractors or experts hired by the 
Commission, its authorized representative, or the public 
representative, unless a notice of access is filed giving the Postal 
Service an opportunity to object to such access. The Postal Service may 
interpose an objection within 3 days of the filing of such notice.
    Rule 3007.24 Request for access to non-public material. This 
proposed rule provides procedures for any interested person to request 
access to non-public material. Any person requesting access must file a 
motion, which must include a detailed statement and rationale in 
support of granting access and must also address the pertinent 
provisions included in the Postal Service's application for relief 
filed under rule 3007.21(b). Again, given the expedited timetables 
under which the Commission generally operates, the proposed rules 
contemplate procedures that will expedite the process. Thus, the 
proposed rule provides that the person submitting the motion may agree 
in advance to abide by standard Commission protective conditions by 
executing a copy of the standard conditions to its motion. In that 
event, answers to the motion are due within 3 days.\9\ Recognizing that 
protective conditions may vary based on the nature of the non-public 
material at issue, the Commission encourages any person attaching 
protective conditions to tailor the conditions to fit that situation, 
e.g., limiting access to competitive information to certain 
individuals. Persons attaching protective conditions should describe 
those conditions, particularly alterations to the standard form. If a 
copy of the standard protective conditions is not attached, answers to 
the motion are due in 7 days. Following the filing of the answer, the 
Commission (or its authorized representative) will issue an order 
concerning access to the non-public material.
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    \9\ Consistent with the Commission's rules, any prescribed time 
period of 5 days or less excludes Saturdays, Sundays, and legal 
holidays. See Sec.  3001.15 of this chapter.
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    Rule 3007.25 Standard for decision. This proposed rule memorializes 
the balancing test prescribed in 39 U.S.C. 504(g)(3)(A) for determining 
the appropriate degree of confidentiality to be accorded non-public 
material. In addition, the proposed rule also provides a standard for 
determining the appropriate degree of confidentiality to be accorded 
information claimed to be confidential by the Postal Service but not 
filed pursuant to 39 U.S.C. 504(g)(1). This may include, for example, 
information for which a specific evidentiary privilege is claimed.
    Rule 3007.30 Limitations on access to non-public material. This 
proposed rule identifies various limitations on access to non-public 
material that may be ordered by the Commission. These limitations, 
which are generally similar to relief provided by federal civil courts 
in discovery disputes under rule 26(c) of the Federal Rules of Civil 
Procedure include, inter alia, not requiring the public disclosure of 
the material, specifying the terms for public disclosure, ordering a 
specific method of disclosure, restricting to whom the information may 
be disclosed, specifying a time when access terminates, and such other 
relief as the Commission deems appropriate.
    Rule 3007.31 Notice of access to material subject to protective 
order. This proposed rule requires that, with certain exceptions, 
persons seeking access to material subject to a protective order must 
file a notice of access. Persons not required to file a notice of 
access include Commissioners, Commission employees, and court 
personnel. Notice of access, which must be filed under rules 3001.9 
through 3001.12, must include the name, title, and company of each 
individual to have access. The proposed rule provides that access will 
not be granted for 2 days to afford the Postal Service time to 
interpose an objection. Any objection must provide written 
justification for the Postal Service's position. If an objection is 
filed, the person subject to it may file a response within 2 days. The 
shortened time periods are consistent with past practice and deemed 
necessary given the expedited schedule under which the Commission 
generally operates.
    Rule 3007.32 Motion for removal of protective conditions. This 
proposed rule sets forth procedures whereby a person, having reviewed 
the non-public material subject to a protective order, requests by 
motion that the protective conditions be removed.
    Rule 3007.33 Expiration of protective conditions. This proposed 
rule provides that unless otherwise ordered by the Commission (or its 
authorized representative), protective conditions afforded to non-
public materials expire 10 years after the filing of such material.
    In the context of FOIA requests, the Commission in rule 3004.8 
already provides that information submitted to the Commission and 
claimed to be exempt from disclosure under 5 U.S.C. 552(b) (namely, 
trade secrets or commercially or financially sensitive material) and 
then determined to be exempt by the Commission will lose such exemption 
10 years after its submission. The Commission believes that a 10-year 
sunset provision in this instance will also serve administrative 
convenience and sound records management practices while adequately 
protecting the commercial interest of the Postal Service.
    Rule 3007.40 Continued effectiveness of protective conditions. This 
proposed rule specifies procedures to be followed if a court or other 
administrative agency subpoenas (or otherwise orders production of) 
non-public materials which a person has obtained pursuant to a 
protective order issued by the Commission under protection. This 
proposed rule also requires that any person seeking to disclose non-
public materials to a reviewing court make a good faith effort to 
obtain protective conditions in accord with those prescribed by the 
Commission. The proposed rule also provides that unless overridden by 
the reviewing court, the protective conditions of the Commission (or 
its authorized representative) remain in effect. The procedures require 
notice to the Postal Service.
    Rule 3007.50 Sanctions for violations of protective order. This 
proposed rule reiterates the protective conditions, barring the 
dissemination of non-public materials by every person granted access to 
such materials to any person not authorized to access such materials. 
The sanctions include dismissing the proceeding in whole or part, 
issuing a default judgment against the violator of the protective 
conditions, and such other relief as the Commission (or its authorized 
representative) deems appropriate. In addition, the rule provides that 
the Postal Service may pursue whatever remedies may be available to it 
under law against the violator as well as the entity on whose behalf 
that person was acting.

III. Public Representative

    Pursuant to 39 U.S.C. 505, Kenneth E. Richardson is appointed to 
serve as officer of the Commission (Public Representative) to represent 
the interests of the general public in the captioned docket.

IV. Ordering Paragraphs

It is Ordered:

    1. Docket No. RM2008-1 is established for the purpose of receiving 
comments on the Commission's proposed rules under the Postal 
Accountability and Enhancement Act

[[Page 50536]]

establishing procedures for the treatment of information which the 
Postal Service requests should not be publicly disclosed.
    2. Interested persons may submit initial comments no later than 30 
days from the date of publication of this Notice in the Federal 
Register.
    3. Reply comments may be filed no later than 45 days from the date 
of publication of this Notice in the Federal Register.
    4. Kenneth E. Richardson is designated as the Public Representative 
representing the interests of the general public in this proceeding.
    5. The Secretary shall arrange for publication of this Notice in 
the Federal Register.

List of Subjects

39 CFR Part 3007

    Administrative practice and procedure, Confidential business, 
Postal Service.

    Issued August 13, 2008.

    Signed August 20, 2008.

    By the Commission.
Judith M. Grady,
Acting Secretary.
    For the reasons stated in the preamble, under the authority at 39 
U.S.C. 504, the Postal Regulatory Commission proposes to amend 39 CFR 
chapter III by adding part 3007 to read as follows:

PART 3007--TREATMENT OF NON-PUBLIC INFORMATION PROVIDED BY THE 
POSTAL SERVICE

Sec.
3007.1 Definitions.
3007.2 Scope.
3007.3 Data or information requests.
3007.10 Submission of non-public materials under seal.
3007.20 Application for relief.
3007.21 Form and content of the application for non-public 
treatment.
3007.22 Treatment of material claimed to be non-public.
3007.23 Access to non-public material.
3007.24 Request for access to non-public material.
3007.25 Standard for decision.
3007.30 Limitations on access to non-public material.
3007.31 Notice of access to material subject to protective order.
3007.32 Motion for removal of protective conditions.
3007.33 Expiration of protective conditions.
3007.40 Continued effectiveness of protective conditions.
3007.50 Sanctions for violations of protective order.

    Authority: 39 U.S.C. 504.


Sec.  3007.1  Definitions.

    For purposes of this part:
    (a) Authorized representative means any Commissioner designated by 
the Chairman, any administrative law judge appointed by the Commission 
under 5 U.S.C. 3105, and any employee of the Commission designated by 
the Commission. The authorized representative may administer oaths, 
examine witnesses, take depositions, and receive evidence with respect 
to any proceeding before the Commission under title 39 or obtain 
information to assist the Commission in the preparation of a report or 
performance of a function under title 39.
    (b) Non-public materials means any information, documents, and 
things filed with the Commission which are claimed to be exempt from 
disclosure by the Postal Service pursuant to 39 U.S.C. 504(g).


Sec.  3007.2  Scope.

    The Commission or its authorized representative may require the 
Postal Service to provide any information, documents, and things in its 
possession or control, or any information, documents, and things that 
it can obtain through reasonable effort and expense, that are likely to 
materially assist the Commission in its conduct of proceedings, in its 
preparation of reports, or in performance of its functions under title 
39. Information, documents, and things the Postal Service may be 
required to provide, include, but are not limited to, paper hard copy 
and electronically stored data and materials--including writings, 
notes, e-mails, drawings, graphs, charts, photographs, sound 
recordings, images, and other data or data compilations--stored in any 
medium from which information can be obtained either directly or, if 
necessary, after translation into a reasonably usable form; or any 
tangible things.


Sec.  3007.3  Data or information requests.

    The Commission or its authorized representative may issue data or 
information requests to the Postal Service seeking documents, 
information, and things covered by Sec.  3007.2. A data or information 
request shall describe the documents, information, and things sought, 
briefly explain the reason for the request, and specify a timeframe for 
receiving the requested information and materials.


Sec.  3007.10  Submission of non-public materials under seal.

    (a) Non-public materials shall not be filed electronically pursuant 
to Sec.  3001.9 of this chapter, but shall be filed in sealed envelopes 
clearly marked ``Confidential. Do Not Post on Web.'' The person filing 
the non-public materials shall submit two copies consisting, where 
practicable, of two paper hard copies as well as two copies in easily 
usable electronic form such as compact discs (CDs) or digital video 
discs (DVDs) of the non-public materials which shall also be clearly 
marked ``Confidential. Do Not Post on Web.'' Spreadsheets submitted in 
electronic form shall display the formulas used, their links to related 
spreadsheets, and shall not be password protected. Each page of any 
paper hard copy non-public materials submitted shall be clearly marked 
as non-public.
    (b) The person submitting the non-public materials shall also file 
an electronic public (redacted) copy of the non-public materials 
pursuant to Commission rule 3001.9. As part of its publicly available 
electronic filing, the Postal Service must appropriately redact 
materials that contain both public and non-public information. For 
example, the Postal Service may not identify a whole page or a whole 
table as non-public material if the page or table contains both public 
and non-public information, but must redact only the information it 
claims to be non-public. If necessary and appropriate for efficient 
document management, the Postal Service shall sequentially number each 
page of the materials identified as non-public.
    (c) The Postal Service shall mark each page, item, and thing, or 
portion thereof that it seeks to protect from disclosure in a manner 
reasonably calculated to alert custodians of the confidential nature of 
the information or material.


Sec.  3007.20  Application for relief.

    Whenever the Postal Service files non-public information or 
materials with the Commission, it shall, at the same time, file an 
application for relief from public disclosure.


Sec.  3007.21  Form and content of the application for non-public 
treatment.

    (a) The application for relief from public disclosure must clearly 
identify all non-public information or materials and describe the 
circumstances causing them to be submitted to the Commission.
    (b) When identifying materials it claims to be non-public pursuant 
to 39 U.S.C. 504(g)(1), the Postal Service must file a specific and 
detailed statement which shall include:
    (1) The rationale for claiming that the materials are non-public, 
including, but not limited to, a specific statement as to whether the 
Postal Service considers the materials claimed to be non-public 
commercially sensitive, or otherwise

[[Page 50537]]

protectable within the meaning of 39 U.S.C. 410(c); to be exempt from 
disclosure under 5 U.S.C. 552(b); and to qualify for a particular 
evidentiary privilege recognized by federal civil courts, in particular 
Federal Rule of Civil Procedure 26(c);
    (2) A specific and detailed description of the materials claimed to 
be non-public in a manner that, without revealing the materials at 
issue, would allow a person to thoroughly evaluate the basis for the 
claim that they are non-public;
    (3) In cases of allegations of commercial harm, particular 
identification of the nature and extent of commercial harm alleged and 
the likelihood of such harm;
    (4) At least one specific hypothetical, illustrative example of 
each alleged harm;
    (5) The extent of protection from public disclosure deemed to be 
necessary by the Postal Service;
    (6) The length of time the Postal Service deems necessary for the 
information or material to be protected from public disclosure with 
justification thereof; and
    (7) Any other factors or reasons relevant to support the 
application for relief.


Sec.  3007.22  Treatment of material claimed to be non-public.

    The Commission will not publicly disclose non-public materials 
except as provided in the rules of this part.


Sec.  3007.23  Access to non-public material.

    (a) Access to non-public material is permitted for Commissioners 
and Commission employees with a need to know for purposes of carrying 
out their appropriate responsibilities. Except as pursuant to the rules 
in this part, no officer or employee of the Commission may, with 
respect to any materials claimed to be non-public by the Postal 
Service:
    (1) Use such materials for purposes other than the purposes for 
which it is supplied; or
    (2) Permit anyone who is not an employee of the Commission to have 
access to any such materials.
    (3) Before granting access to material subject to protective 
conditions to contractors or experts hired by the Commission, its 
authorized representative, or the public representative to assist in 
the conduct of their official duties, the Commission, its authorized 
representative, or the public representative shall file a notice of 
access pursuant to Sec.  3007.31(b) for such a contractor or expert, 
and the Postal Service shall have 2 days to object.
    (b) The Commission or its authorized representative may issue a 
notice of preliminary determination concerning the appropriate degree 
of protection, if any, to be accorded to the materials claimed to be 
non-public by the Postal Service.
    (1) Responsive pleadings (by any interested person, including the 
Postal Service) are due within 7 days after such a notice is filed, 
unless a longer period as specified in the notice of preliminary 
determination;
    (2) Following the filing of responsive pleadings, if any, the 
Commission, or its authorized representative, will issue an order 
determining the appropriate degree of access, if any, to be accorded to 
the materials claimed to be non-public by the Postal Service; and
    (3) Unless the Commission or its authorized representative 
otherwise provides, no reply to a responsive pleading or any other 
further responsive document shall be filed.


Sec.  3007.24  Request for access to non-public material.

    (a) Any person may file a motion requesting access to the materials 
claimed to be non-public by the Postal Service. The person filing the 
motion shall file a detailed statement and rationale for why access 
should be granted, making specific reference to the pertinent rationale 
provided on the application for relief submitted pursuant to Sec.  
3007.21(b).
    (b) Any person seeking access to non-public materials may agree to 
abide by standard Commission protective conditions as published on the 
Commission's Web site. Such person shall attach an executed copy of the 
standard protective conditions to its motion; and
    (1) If the person agrees to abide by standard Commission protective 
conditions, answers are due within 2 days after such a motion is filed.
    (2) If the person does not agree to standard protective conditions, 
answers are due within 7 days after such a motion is filed.
    (c) Following the filing of responsive pleadings, if any, the 
Commission or its authorized representative will issue an order 
determining the appropriate degree of access, if any, and the 
appropriate degree of protection, if any, to be accorded to the 
materials claimed to be non-public by the Postal Service.
    (d) Unless the Commission or its authorized representative 
otherwise provides, no reply to an answer or any other further 
responsive document shall be filed.
    (e) Once the reason for obtaining access to non-public information 
is no longer applicable, or the person with access to the information 
withdraws or otherwise no longer is involved in the matter, that 
person's access to the information shall terminate.


Sec.  3007.25  Standard for decision.

    (a) The Commission or its authorized representative shall balance 
the nature and extent of the likely commercial or other injury 
identified by the Postal Service against the public interest in 
maintaining the financial transparency of a government entity operating 
in commercial markets in determining whether to issue an order 
requiring disclosure of the information or materials filed under 39 
U.S.C. 504(g)(1).
    (b) The Commission or its authorized representative shall balance 
the nature and extent of the likelihood that non-public materials would 
invade a specific evidentiary privilege that is recognized in federal 
civil courts, or would constitute an undue burden that the Postal 
Service has quantified to the best of its ability against the public 
interest that would be served by providing access to the non-public 
materials in determining whether to issue an order requiring disclosure 
of non-public materials.


Sec.  3007.30  Limitations on access to non-public material.

    Limitations on access to non-public materials at any stage of a 
proceeding before the Commission, or in connection with any other 
purpose under title 39, include:
    (a) Not requiring the public disclosure of the materials claimed to 
be non-public by the Postal Service under 39 U.S.C. 504(g)(1);
    (b) Specifying terms for public disclosure of the materials;
    (c) Ordering a specific method for disclosing the information or 
materials;
    (d) Restricting the scope of the disclosure of information or 
materials as they relate to certain matters;
    (e) Restricting to whom the information or materials may be 
disclosed;
    (f) Sealing a deposition or part of a proceeding;
    (g) Requiring that a trade secret be revealed only in specific and 
limited manner or to limited or specified persons; and
    (h) Such other relief as the Commission or its authorized 
representative determines to be appropriate.


Sec.  3007.31  Notice of access to material subject to protective 
order.

    (a) Non-public materials, unless specifically ordered otherwise, 
may be

[[Page 50538]]

disclosed to the following persons, and without their filing a notice 
of access to the extent necessary to assist in the Commission's 
performance of any function that is authorized by title 39, or any 
appeals or reconsiderations thereof:
    (1) Members of the Commission;
    (2) Commission employees on a need-to-know basis;
    (3) Court reporters, stenographers, or persons operating audio or 
video recording equipment for such court reporters or stenographers at 
hearings or depositions; and
    (4) Reviewing courts and their staffs.
    (b) Except as provided in paragraph (a) or a Commission order, each 
person seeking access to non-public materials subject to protective 
conditions must file a notice, under Sec.  3001.9-12 of this chapter, 
identifying each individual to have access by name, company, and title.
    (c) Access will not be granted for 2 days after a notice seeking 
access is filed to allow the Postal Service or other interested person 
to interpose an objection. If the Postal Service or another interested 
person does object, it must provide written justification for its 
position.
    (d) The person subject to the objection may submit a written 
response to the objection no later than 2 days after such an objection 
is filed.


Sec.  3007.32  Motion for removal of protective conditions.

    (a) After reviewing non-public materials subject to protective 
conditions, a person may file a motion requesting an order that such 
non-public materials should not be subject to protective conditions, 
but should be publicly disclosed. Each such request must provide the 
Commission with a specific and detailed statement and rationale why the 
material should be made public. The motion, however, shall not publicly 
disclose any of the information or materials subject to protective 
conditions. If it is necessary to use the protected information or 
materials to formulate the argument in favor of public disclosure, the 
argument utilizing the non-public materials shall be filed under seal.
    (b) Answers are due within 7 days after such a motion is filed.
    (c) Following responsive pleadings, if any, the Commission or its 
authorized representative will issue an order determining whether the 
non-public materials, or any part thereof, shall be made public.
    (d) Unless the Commission or its authorized representative 
otherwise provides, no reply to an answer or any other further 
responsive document shall be filed.


Sec.  3007.33  Expiration of protective conditions.

    (a) Protective conditions afforded to any non-public materials 
filed by the Postal Service shall expire 10 years after such filing 
unless the Commission or its authorized representative enters an order 
extending or shortening the protective conditions.
    (b) The Commission or its authorized representative may initiate 
such action in its own discretion or upon a motion by the Postal 
Service.
    (c) Interested persons shall be provided with the opportunity to 
submit written comments and reply comments before the applicable period 
is altered.


Sec.  3007.40  Continued effectiveness of protective conditions.

    (a) If a court or other administrative agency subpoenas or orders 
production of non-public materials which a person has obtained under 
protective conditions ordered by the Commission, the target of the 
subpoena or order shall promptly, within 2 days of receipt of the 
subpoena or order for production, notify the Postal Service of the 
pendency of the subpoena or order to allow the Postal Service time to 
object to the production or to seek a protective order or seek such 
other relief as it deems appropriate.
    (b) Any person seeking to disclose protected information to a 
reviewing court shall make a good faith effort to obtain protective 
conditions at least as effective as those set forth in the Commission 
order establishing the protective conditions.
    (c) The protective conditions ordered by the Commission or its 
authorized representative under Sec.  3007.24 shall remain in effect 
throughout any subsequent review unless overridden by the action of the 
reviewing court.


Sec.  3007.50  Sanctions for violations of protective order.

    (a) No individual who has been granted access to materials subject 
to protective conditions shall disseminate the materials in whole or in 
part to any individual not authorized to obtain access under the 
protective conditions imposed by the Commission. If an individual who 
has been granted access to such non-public materials under a protective 
order violates the terms of such order, the Commission or its 
authorized representative shall impose sanctions on the persons or 
entities on whose behalf the individual was acting, or both. The 
sanctions may include:
    (1) Dismissing the proceeding in whole or in part;
    (2) Ruling by default against the person who violated the 
protective order; and
    (3) Such other sanctions as the Commission or its authorized 
representative deems appropriate.
    (b) The Postal Service, in its discretion, may pursue any remedies 
available to it under the law against the individual who violated the 
protective order, or the persons or entities on whose behalf the 
individual was acting, or both.

[FR Doc. E8-19677 Filed 8-25-08; 8:45 am]
BILLING CODE 7710-FW-P


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