50532 Federal Register / Vol. 73, No. 166 / Tuesday, August 26, 2008 / Proposed Rule 

1Compare 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).’’ 

2Rule 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 § 2035, et seq. (2d ed. 1994). 

3See, 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). 

4See Arnold v. Penn. Dep’t of Transp., 477 F.3d 

105, 108 (3d Cir. 2007). 

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. 

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 

stephen.sharfman@prc.gov. 

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

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

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 nonexclusive 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: 

(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; 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 


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Federal Register / Vol. 73, No. 166 / Tuesday, August 26, 2008 / Proposed Rule 50533 

5Of 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. 

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. 

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). 

weighing the competing interests of the 

Postal Service against the public interest 

for transparency.5

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

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 nonpublic 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. 

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 nonpublic 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 


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50534 Federal Register / Vol. 73, No. 166 / Tuesday, August 26, 2008 / Proposed Rule 

8This 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 nonpublic materials. 

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 nonpublic’’ has the same meaning as nonpublic 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 nonpublic 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 nonpublic 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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Federal Register / Vol. 73, No. 166 / Tuesday, August 26, 2008 / Proposed Rule 50535 

9Consistent with the Commission’s rules, any 

prescribed time period of 5 days or less excludes 

Saturdays, Sundays, and legal holidays. See 

§ 3001.15 of this chapter. 

order concerning access to the nonpublic material. 

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. 

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) nonpublic 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 


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50536 Federal Register / Vol. 73, No. 166 / Tuesday, August 26, 2008 / Proposed Rule 

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 NONPUBLIC 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. 

§ 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). 

§ 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. 

§ 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 

§ 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. 

§ 3007.10 Submission of non-public 

materials under seal. 

(a) Non-public materials shall not be 

filed electronically pursuant to § 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 nonpublic 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 nonpublic 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 nonpublic. 

(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. 

§ 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. 

§ 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 


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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 nonpublic 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 nonpublic; 

(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. 

§ 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. 

§ 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 § 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 nonpublic 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. 

§ 3007.24 Request for access to nonpublic 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 § 3007.21(b). 

(b) Any person seeking access to nonpublic 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. 

§ 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 nonpublic 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. 

§ 3007.30 Limitations on access to nonpublic 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 nonpublic 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. 

§ 3007.31 Notice of access to material 

subject to protective order. 

(a) Non-public materials, unless 

specifically ordered otherwise, may be 


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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 needto-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 § 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. 

§ 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 nonpublic 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. 

§ 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. 

§ 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 § 3007.24 shall 

remain in effect throughout any 

subsequent review unless overridden by 

the action of the reviewing court. 

§ 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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