Trade Regulations Rulemaking Procedures Notice of Proposed Rulemaking The Commission proposes the following rules to implement its trade regulation rulemaking authority under Pub. L

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FEDERAL REGISTER, VOL. 40, NO. 66— FRIDAY, APRIL 4, 1975

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PROPOSED RULES 15237 FEDERAL TRADE COMMISSION [ 16 CFR Part 1 ] TRADE REGULATIONS RULEMAKING PROCEDURES Notice of Proposed Rulemaking The Commission proposes the follow­ ing rules to implement its trade regula­ tion rulemaking authority under Pub. L. 93-637. These rules supplement rules published under separate announcement which are effective on publication. Com­ ments on these proposed rules shall be received by the Commission through May 5, 1975. Such comments should be ad­ dressed to the Secretary, Federal Trade Commission, Washington, D.C. 20580. Hie following rules would replace the existing Subpart B and establish pro­ cedures for the promulgation of trade regulation rules pursuant to Pub. L. 93- 637.

Accordingly, it is proposed to amend Part 1 of Title 16 as set forth below : Subpart B— Rules and Rulemaking Under Section 18(a)(1)(B ) of the F TC Act as Amended by Public Law 93-637 1, Section 1.12 is added to read as follows :

§ 1.12 Final notice.

A final notice of proposed rulemaking shall be published in the F ederal R egis­ ter, and to the extent practicable, other­ wise made available to interested per­ sons. The final notice may include: (a) Designated issues which are to be con­ sidered in accordance with § 1.13(d) (5) and (6) ; (b) the time and place of an informal hearing; (c) instructions to interested persons seeking to make oral presentations; (d) a requirement that interested persons who desire to avail themselves of the procedures of § 1.13 (d) (5) and (6) with respect to any issue designated in paragraph (a) of this sec­ tion must identify their interests with respect to those issues in such manner as may be established by the presiding of­ ficer; and (e) an incorporation by reference of the contents of the initial notice.

2. Section 1.13 is amended by adding paragraphs (c) through (h) as follow: § 1.13 Rulemaking proceeding.

* * * * * (c) Presiding officer. Upon commence­ ment of a proposed trade regulation rule proceeding, the Commission shall ap­ point a presiding officer who shall be re­ sponsible for the orderly conduct of the rulemaking proceeding. He shall have all powers necessary to that end including the following; (1) To publish a final no­ tice in accordance with § 1.12 or issue any other public notice that may be nec­ essary for the orderly conduct of the rulemaking proceeding; (2) to designate, modify, or delete issues for considera­ tion in accordance with § .1.13(d) (5) and (6) ; (3) to set the time and place of the informal hearing and to change any time periods prescribed in this subpart; (4) to prescribe rules or issue rulings to avoid unnecessary costs or delay. Such rulings may include, but are not limited to, the imposition of reasonable time limits on each person’s oral presentation and re­ quirements that any examination, in­ cluding cross-examination, which a per­ son may be entitled to conduct or have conducted under this subpart be con­ ducted in such a manner as the presid­ ing officer shall determine to be appro­ priate and to be required for a full and true disclosure with respect to any issue designated for consideration in accord­ ance with § 1.13(d) (5) and (6); (5) to make rules and rulings limiting the rep­ resentation of interested persons for the purpose of examination, including crossexamination, and governing the manner in which such examination is limited, in­ cluding the selection of a representative from among a group of persons with the same or similar interests; (6) to compel the attendance of persons or the produc­ tion of documents or to obtain responses to written questions; (7) to require testi-v mony at the informal hearing to be un­ der oath; (8) to require that oral pres­ entations at the informal hearing be sub­ mitted in writing in advance of pres­ entation; and (9) to certify questions to the Commission for its determination. Applications for review of a ruling will not be entertained by the Commission prior to its review of the record pursuant to § LI4, unless the presiding officer cer­ tifies in writing to the Commission that a ruling involves a controlling question of law or policy as to which there is sub­ stantial ground for difference of opinion and that an immediate review of the rul­ ing may materially advance the ultimate termination of the proceeding or subse­ quent review will be an inadequate rem­ edy and the Commission permits review. Certification of such rulings shall not stay the rulemaking proceeding unless the presiding officer or the Commission shall so order.

(d) Informal hearings. An informal hearing with the opportunity for oral presentations on all issues shall be con­ ducted by the presiding officer. In addi­ tion, if an issue is designated pursuant to these rules for consideration in ac­ cordance with § 1.13(d) (5) and (6), the informal hearing on such issues shall be conducted in accordance with those sub­ sections. For all other issues the presid­ ing officer may in his discretion employ, in whole or in part, the procedures of those subparagraphs.

(1) Designation of issues for consider­ ation in accordance uoith § 1.13(d) (5) and (6). The presiding officer may at any time on his own motion or pursuant to a written petition by interested persons, modify the issues designated pursuant to § 1.12(a). No such petition shall be con­ sidered unless good cause is shown why any such proposed issue could not have been proposed pursuant to § 1.13(b). (2) Nature of issues for consideration in accordance with § 1.13(d) (5) and (6).— (i) Issues that must be considered in accordance with § 1.13(d) (5) and (6). The only issues that must be designated for consideration in accordance with paragraphs (d) (5) and (6) of this sec­ tion are disputed Issues of specific fact, in contrast to legislative fact, that are determined by the Commission or the presiding officer to be material and nec­ essary to resolve.

(ii) Issues that may be considered in accordance with § 1.13(d) (5) and (6). The Commission and the presiding officer retain the power to designate any other issues for consideration- in accordance with paragraphs (d) (5) and (6) of this section.

(3) Identification of interests. Not later than twenty (20) days after publication of the final notice each interested per­ son who desires to avail himself of the procedures of paragraphs (d) (5) and (6) of this section shall notify the presid­ ing officer in writing of his particular in­ terest with respect to each issue desig­ nated for consideration in accordance with those subsections. In the event that new issues are designated, each inter­ ested person shall promptly notify the presiding officer of his particular interest with respect to each such issue. (4) Examination and cross-examina­ tion by the staff of the Commission. The staff of the Commission may examine, including cross-examine, persons making oral presentations subject only to the dis­ cretion of the presiding officer. (5) Examination and cross-examina­ tion by interested versons.— (i) In gen­ eral. The presiding officer shall conduct or allow to be conducted examination, in­ cluding cross-examination of oral pres­ entations and the presentation of rebut­ tal submissions relevant to the issues designated for consideration in accord­ ance with paragraphs (d) (5) and (6) of this section.

Examination, including cross-examination, shall be allowed to the extent to which it is appropriate and is required for a full and true disclosure with respect to those issues. Requests for an opportunity to examine, including cross-examine, shall be accompanied by a specific justification therefor. In de­ termining whether or not to grant such requests the presiding officer shall take into account the following considera­ tions:

(A) The extent to which a full and true disclosure with respect to any designated issue can be achieved through rebuttal submissions or the presentation of addi­ tional oral submissions;

(B) The extent to which there are cir­ cumstantial guarantees of the trust­ worthiness of the presentations; (C) Whether a particular person’s presentation is required for the resolu­ tion of the designated issues; and (D) Whether a dispute concerns facts in contrast to the inferences and con­ clusions to be drawn from facts. (ii) Selection of representatives for cross-examination. After consideration of the information supplied in response to the final notice, the presiding officer shall identify groups of persons with the same or similar interests in the proceed­ ing. Such groups may be required to se­ lect a single representative for the pur­ pose of examination, including crossexamination. If a group is unable to se­ lect a representative then the presiding FEDERAL REGISTER, VOL. 40, NO. 66— FRIDAY, APRIL 4, 1975

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15238 PROPOSED RULES officer shall select a representative of each such group.

(iii) Inability to select representative for examination, including cross-exam­ ination. No person shall be denied the opportunity to conduct, or have con­ ducted, examination, including crossexamination, under paragraph (d) (5) (i) of this section if he is a member of a group as described in paragraph (d) (5) (ii) of this section and is unable to agree upon group representation with other group members after a good faith effort to do so and seeks to present substantial and relevant issues which will not be adequately presented by the group rep­ resentative. In that event he shall be al­ lowed to conduct or have conducted any examination, including cross-examina­ tion, to which he is entitled on issues des­ ignated for consideration in accordance with paragraphs (d) (5) and (6) of this section and which affect his particular interest.

(iv) Conduct of examination and cross-examination by presiding officer. The presiding officer may conduct any examination, including cross-examina­ tion, to which a person may be entitled. For that purpose he may require-sub­ missions of written requests for presen­ tation of questions to any person making oral presentations and shall determine whether to ask such questions or any other questions. All requests for presen­ tation of questions shall be placed in the rulemaking record.

(6) Requests to compel the attendance of persons or the production of docu­ ments or to obtain responses to written questions. During the course of the rulemaking proceeding the presiding officer shall entertain requests from interested persons to compel the attendance of per­ sons or the production of documents or to obtain responses to written questions on behalf of the Commission’s staff or any interested person. The presiding of­ ficer may require the payment of a fee to any person to whom such requests are directed in accordance with § 4.5 of this chapter. Requests to compel the attend­ ance of persons or the production of doc­ uments or to obtain responses to written questions shall contain a statement showing the general relevancy of the ma­ terial, information or presentation, and the reasonableness of the scope of the request, together with a showing that such material, information or presenta­ tion is not available by voluntary meth­ ods and cannot be obtained through ex­ amination, including cross-examination, of oral presentations or the presentation of rebuttal submissions, and is appropri­ ate and required for a full and true dis­ closure with respect to the issues desig­ nated for consideration in accordance with paragraphs (d) (5) and (6) of this section.

(e) Written transcript. A verbatim transcript shall be made of the informal hearing which transcript shall be placed in the rulemaking record. (f) Summary and findings. After the close of the informal hearing, the presid­ ing officer shall prepare a summary of the record, both written and oral, re­ lating to the issues designated for con­ sideration in accordance with para­ graphs (d) (5) and (6) of this section and make initial factual findings and conclusions as to these issues and other findings and conclusions as he sees fit. (g) Staff recommendations. The staff shall make recommendations to the Commission in a report based on the rulemaking record and taking into ac­ count the presiding officer’s findings of fact. Such report shall contain its analy­ sis of the record and its recommenda­ tions as to the form of the final rule. (h) Post record comment. The find­ ings and conclusions of the presiding officer as well as the staff report shall be the subject of public comment for a pe­ riod of sixty (60) days after the staff recommendations are placed in the rulemaking record. Such comments shall be confined to information already in the record and may include requests for re­ view by the Commission of determina­ tions made by the presiding officer. 3.

Section 1.14 is added to read as follows:

§ 1.14 Promulgation.

(a) The Commission shall review the rulemaking record including the sum­ mary, findings, and conclusions of the presiding officer as to the issues desig­ nated for consideration in accordance with § 1.13(d) (5) and (6), the verbatim transcript of the informal hearing, the report and recommendations of the staff and any public comments thereon, to de­ termine what form of rule, if any, it should promulgate. The Commission may issue, modify, or decline to issue any rule. Where it believes that it should have further information or additional views of interested persons as to the form and content of the rule, it may withhold final action pending the receipt of such addi­ tional information or views. If it deter­ mines to issue a rule, it shall adopt a Statement of Basis and Purpose to ac­ company the rule. If it determines not to issue a rule, it may adopt and publish an explanation for not doing stf. The State­ ment of Basis and Purpose to accompany a rule promulgated under this subpart shall include (1) a statement as to the prevalence of the acts or practices treated by the rule, (2) a statement as to the manner and context in which such acts or practices are unfair or deceptive, and (3) a statement as to the economic effect of the rule, taking into account the effect on small businesses and consumers. (b) The final rule and Statement of Basis and Purpose shall be published in the F ederal R e g ister not less than thirty (30) days prior to the effective date of the rule except where the Commission for good cause found and published with the rule sets an earlier effective date. Sections 1.17 through 1.20 are added as follows:

§ 1.17 Compensation for representation in rulemaking proceedings. (a) Purpose of compensation. The Commission may provide compensation to any person who has or represents an interest which would not otherwise be adequately represented in a rulemaking proceeding, and representation of which is necessary for a fair determination of the rulemaking proceeding taken as a whole, and who is unable effectively to participate in such proceeding because such person cannot afford to pay costs of making oral presentations, conducting cross-examination, and making rebuttal submissions in such proceeding. (b) Level of funding. At or after the time of the initial notice of proposed rulemaking, the Commission may an­ nounce a tentative total level of funding for compensation for participation in that proceeding.

(c) Applications. An application for compensation for participation in a rulemaking proceeding may be filed at any time after the publication of the initial notice of proposed rulemaking. An ap­ plication for compensation shall be filed prior to the time when the costs for which compensation is sought are in­ curred. Such application shall contain the following:

(1) A description of the interest the applicant has or represents in the rulemaking proceeding;

(2) A statement of the reasons rep­ resentation of such interest is necessary for a fair determination of the proceed­ ing taken as a whole taking into account the number and complexity of the issues involved, and the importance of a fair, balanced representation of all interests; (3) The reasons why such interest would not otherwise be adequately rep­ resented in the proceeding; (4) A statement of the reasons the applicant is unable effectively to par­ ticipate in the rulemaking proceeding without financial assistance including information relating to:

(1) The economic stake of the interest involved as compared with the costs of participation;

(ii) The feasibility of contributions to the costs of participation by individual representatives of the interests; (iii) The resources of the applicant, or of the interest represented by the applicant;

(5) Insofar as possible, a specific state­ ment of the expenses to be incurred for which compensation is sought, including an estimate of the total anticipated ex­ penses; and (6) A statement of the applicant’s or­ ganizational and financial status in such form as the Commission may prescribe. (d) Determination of applications.— (1) By the presiding officer. The presid­ ing officer shall consider applications for compensation filed under this section and forward initial findings to the Director of the Bureau of Consumer Protection as to whether the applicant meets the criteria of paragraph (a) of this section. In connection with his determination the presiding officer may conduct such in­ quiry of the applicant or require the pro­ duction of such documents as he deems necessary.

(2) By the Director of the Bureau of Consumer Protection. The Director of the Bureau of Consumer Protection shall re­ view applications and the initial findings FEDERAL REGISTER, VOL. 40, NO. 66— FRIDAY, APRIL 4, 1975

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PROPOSED RULES 15239 of the presiding officer and determine, in his discretion, to what extent compensa­ tion shall be authorized under this sec­ tion.

(e) Payment of compensation.— (1) In general. The Commission will compensate the applicant only for those authorized expenses actually incurred. Appropriate proof of actual expenditures may be re­ quired by the Commission. The Commis­ sion may make any payments under this section in advance where necessary to permit effective participation in the rulemaking proceeding. Payment will be con­ ditioned upon the execution by the ap­ plicant of an appropriate agreement setting forth the terms and conditions of the compensation.

* (2) Attorneys’ Fees; Expert Witness Fees. Attorneys’ fees at a rate in excess of $50 per hour will be considered pre­ sumptively unreasonable and compensa­ tion will not be provided for such excess in the absence of sufficient justification. Experts and consultants will be compen­ sated a rate not to exceed the highest rate at which experts and consultants to the Commission are compensated. § 1.18 Public availability of rulemaking record.

(a) Rulemaking record. For the pur­ poses of these rules the term “rulemaking record” includes the rule, its Statement of Basis and Purpose, the verbatim transcript of the informal hearing, writ­ ten submissions, and any other informa­ tion which the Commission considers rel­ evant to the rule.

(b) Public availability of written sub­ missions. Written submissions comment­ ing on the proposed rule as well as the verbatim transcript of the informal hear­ ing, shall be made publicly available ex­ cept when the presiding officer, for good cause shown, determines that it is in the public interest to allow any such submis­ sions to be received in camera subject to the provisions of § 4.11 of this chapter. § 1.19 Modification of a rule by the Com­ mission at the time of judicial review. In the event that a reviewing court determines under section 18(e) (2) of the Federal Trade Commission Act, as amended by Pub. L. 93-637, to allow fur­ ther submissions and presentations on the rule, the Commission may modify or set aside its rule or make a new rule by reason of the additional submissions and presentations. Such modified or new rule shall then be filed with the court to­ gether with an appropriate Statement of Basis and Purpose and the return of such submissions and presentations. § 1.20 Expeditious procedure.

Any or all of the procedures estab­ lished in this subpart may be dispensed with by the Commission, to the extent that they are not otherwise required by law, when it finds, for good cause, that such procedures are impractical, un­ necessary, or contrary to the public in­ terest. In that case the Commission shall publish with the rule or amendment a brief statement of its reasons for dis­ pensing with any such procedures. By direction of the Commission dated March 11,1975.

[ s e a l ] V i r g i n i a M . H a r d i n g , Acting Secretary, [P R D o c .7 6 —8491 P ile d 4 - 3 - 7 5 ;8 :4 5 a m ] [16CFRPart3] RULES GOVERNING DISCOVERY AND COMPULSORY PROCESS IN ADJUDICA­ TIVE PROCEEDINGS Proposed Rule Changes The Federal Trade Commission is con­ sidering a general revision of its rules governing discovery and compulsory process in adjudicative proceedings to adopt a system modeled on the Federal Rules of Civil Procedure, with modifica­ tions adapted to the Commission’s struc­ ture.

The proposed rules would, among other changes, allow discovery to be initiated in most instances by the parties to the pro­ ceeding, without the requirement of ob­ taining the permission of the presiding administrative law judge. They would add to the list of available methods of discovery between parties written inter­ rogatories and requests for production of documents.

Under the proposed rules, discovery from Commission counsel supporting an administrative complaint is treated as discovery from a party, and discovery from the remainder of the Commission is classified as discovery from a nonparty. Particularly in the context of the pro­ posed liberalized discovery between par­ ties, this approach reflects the distinct functions which various segments of the Commission perform in an adjudicative proceeding.

The proposed rules are promulgated under the authority granted by the Fed­ eral Trade Commission Act, 15 U.S.C. section 41 et seq.

Written comments on the proposed rules will be received by the Commission on or before May 5, 1975. Comments should be filed in duplicate and addressed to the Secretary, Federal Trade Com­ mission, Pennsylvania Avenue and Sixth Street NW„ Washington, D.C. 20580. Comments from the Commission’s ad­ ministrative law judges, operating bu­ reaus, and regional offices will be received in the same manner as comments from members of the public.

All comments, including those received from the Commission’s staff, will be available for public inspection during normal business hours at the Division of Legal and Public Records, Room 130, Federal Trade Commission Building, Pennsylvania Avenue and Sixth Street NW., Washington, D.C.

The proposed changes are set forth below.

Subpart D— Discovery; Compulsory Process 1. Sections 3.33 through 3.38 are re­ vised and incorporated into proposed §§3.31-9, 3.31-11, and 3.31-12 as set forth below.

§ 3.31—10 [Redesignated] 2. The present 53.31 is proposed to be redesignated as § 3.31-10. 3. Sections 3.31-1 through 3.31-9 and 3.31-11 and 3.31-12 are proposed to read as follows:

§ 3.31—1 Definitions governing discov­ ery.

(a) The following definitions shall ap­ ply to the rules of discovery for Com­ mission adjudicative proceedings, infra, §§ 3.31-2 through 3.31-13: (1) “Party” means each respondent named in the complaint, Commission complaint counsel, and any intervenor under the provisions of § 3.14. (2) “Person” means any natural per­ son, corporation (including a corpora­ tion as defined in section 4 of the Fed­ eral Trade Commission Act), partner­ ship, or unincorporated association not a party to the proceeding or an officer, director, partner, or employee of a party; and any government agency, or officer or employee thereof.

(3) “Government agency” means any unit of government, Federal or State, including, unless otherwise indicated, the Commission itself with the excep­ tion of complaint counsel. (4) “Complaint counsel” means, for purposes of a particular adjudicative proceeding,"all Commission counsel re­ sponsible for supporting the allegations of the complaint in the adjudicative proceeding, in their capacity as com­ plaint counsel in that proceeding. (b) Discovery which may be sought from a party by any of the means pro­ vided by §§ 3.31-2 through 3.31-12 shall, as to discovery sought from complaint counsel, extend to all documents which are within the possession, custody, and control of the Commission, and all in­ formation within the knowledge of com­ plaint counsel, which relate to the al­ legations of the complaint at issue. It shall not extend to documents or infor­ mation relating to proceedings against other respondents whether or not simi­ lar as to their legal bases, to other pro­ ceedings against the same respondent or respondents, or to other Commission investigations or non-adjudicative ac­ tivities; and all such documents or in­ formation shall be sought only in ac­ cordance with the procedures provided for discovery from persons hot parties. For purposes of seeking discovery from the Commission other than complaint counsel, the Secretary of the Commis­ sion shall be deemed to have possession, custody, and control of all documents in the possession, custody, and control of the Commission and shall also be the Commission's agent for the service of all motions under §§ 3.31-5 and 3.31-6 for the taking of depositions of Com­ mission officers or employees other than complaint counsel.

(c) Nothing contained herein or in §§ 3.31-2 through 3.31-12 shall in any way alter or affect any restriction upon discovery of documents within the pos­ session and control of, or information within the knowledge of, the Commission (including complaint counsel) or any FEDERAL REGISTER, VOL. 40, NO. 66— FRIDAY, APRIL 4, 1975

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15240 PROPOSED RULES other government agency, or alter or af­ fect any privilege or other exemption from discovery of such documents or information, heretofore or hereafter es­ tablished by statute, rule, regulation or precedent of judicial or administrative body, except insofar as such restriction, privilege, or exemption is solely depend­ ent upon a Commission rule abolished by the promulgation of these discovery rules.

(d) Nothing contained herein shall prevent the Administrative Law Judge presiding over an adjudicative proceed­ ing, on motion or sua sponte, from plac­ ing such limits upon the kind or amount of discovery to be had, or the period of time during which discovery may be car­ ried out, as shall be consistent with justice and the public interest in an exneditious resolution of the proceeding. (e) These amended discovery rules, including this section and §§3.31-2 through 3.31-12, shall take effect on ----------*__ , 1975. They govern sill dis­ covery in Commission adjudicative pro­ ceedings initiated after they take effect and also all further discovery in such proceedings then pending except to the extent that , in the opinion of the Ad­ ministrative Law Judge or the Commis­ sion their application in a particular proceeding would not be feasible or would work injustice, in which event the former discovery rules apply. § 3.31—2 General provisions governing discovery.

(a) Discovery methods. Parties may obtain discovery by one or more of the following methods : depositions upon oral examination or written questions; writ­ ten interrogatories; production of docu­ ments or things for inspection and other purposes; and requests for admission. Unless the Administrative Law Judge orders otherwise under paragraph (c) of this section or § 3.31-1, the frequency of use of these methods is not limited. — (b) Scope of discovery. Unless other­ wise limited by order of the Adminis­ trative Law Judge in accordance with these rules, the scope of discovery is as follows:

(1) In general. Parties may obtain discovery regarding any matter, not priv­ ileged, which is relevant to the subject matter involved in the pending proceed­ ing, whether it relates to the allegations of the complaint or to the defense of any respondent, including the existence, de­ scription, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowl­ edge of any discoverable matter. It is not ground for objectibn that the informa­ tion sought will be inadmissible at hear­ ing if the information sought appears reasonably calculated to lead to the dis­ covery of admissible evidence. (2) Trial preparation: Materials, (i) Subject to the provisions of paragraph (b) (3) of this section, a party may ob­ tain discovery of documents and tangible things otherwise discoverable under paragraph (b) (1) of this section and prepared in anticipation of litigation or for hearing by or for another party or by or for that other party’s representa­ tive (including his attorney, consultant, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of his case and that he is unable with­ out undue hardship to obtain the sub­ stantial equivalent of the materials by other means. In ordering discovery of such materials when the required show­ ing has been made, the Administrative Law Judge shall protect against disclo­ sure of the mental impressions, conclu­ sions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation. (ii) A party may obtain without the required showing a statement concerning the action or its subject matter previ­ ously made by that party. Upon request, a person not a party may obtain without the required showing a statement con­ cerning the action or its subject matter previously made by that person. If the request is refused, the person may move the Administrative Law Judge for an order. For purposes of this paragraph, a statement previously made is (A) a writ­ ten statement signed or otherwise adopted or approved by the person mak­ ing it, or (B) a stenographic, mechani­ cal, electrical, or other recording, or a transcription thereof, which is a substan­ tially verbatim recital of an oral state­ ment by the person making it and con­ temporaneously recorded. (3) Hearing preparation: Experts. Dis­ covery of facts known and opinions held by experts, otherwise discoverable under the provisions of paragraph (b )(1) of this section and required or developed in anticipation of litigation or for hearing, may be obtained only as follows: (i) (A) A party may through interroga­ tories require any other party to identify each person whom the other party ex­ pects to call as an expert witness at hearing, to state the subject matter on which the expert is expected to testify, and to state the substance of the facts and opinions to which the expert is ex­ pected to testify and a summary of the grounds for each opinion. (B) Upon mo­ tion, the Administrative Law Judge may order further discovery by other méans, subject to such restrictions as to scope as the Administrative Law Judge may deem appropriate.

(ii) A party may discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litiga­ tion or preparation for hearing and who is not expected to be called as a witness at hearing, only upon a showing of ex­ ceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means. (iii) The Administrative Law Judge may require as a condition of discovery that the party seeking discovery pay the expert a reasonable fee for time spent in responding to discovery under para­ graphs (b) (3) (i) (B) and (b) (3) (ii) of this section.

(c) Protective orders. Upon motion by a party or by the person from whom discovery is sought, and for good cause shown, the Administrative Law Judge may make any order which may appear necessary and appropriate for the pro­ tection of the public interest or which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (1) That the discovery not be had; (2) that the discovery may be had only on specified terms and conditions, in­ cluding a designation of the time or place; (3) that the discovery may be had only by a method of discovery other than that selected by the party seeking discovery; (4) that certain matters not be inquired into, or that the scope of the discovery be limited to certain mat­ ters; (5) that discovery be conducted with no one present except persons des­ ignated by the Administrative Law Judge; (6) that a deposition after being sealed be opened only by order of the Administrative Law Judge; (7) that a trade secret or other confidential re­ search, development, or commercial in­ formation not be disclosed or be dis­ closed only in a designated way; (8) that the parties simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the Administrative Law Judge. If the motion for a protective order is denied in whole or in part, the Adminis­ trative Law Judge may, oil such terms and conditions as are just, order that any party or person «provide or permit discovery.

(d) Sequence and timing of discovery. Unless the Administrative Law Judge upon motion, for the convenience of par­ ties and witnesses and in the interests of justice, orders otherwise, methods of discovery may be used in any sequence and the fact that a party is conducting discovery, whether by deposition or otherwise, shall not operate to delay any other party’s discovery. (e) Supplementation of responses. A party who has responded to a request for discovery with a response that was complete when made is under no duty to supplement his response to include in­ formation thereafter acquired, except as follows :

(1) A party is under a duty seasonably to supplement his response with respect to any question directly addressed to (i) the identity and location of persons hav­ ing knowledge of discoverable matters, and (ii) the identity of each person ex­ pected to> be called as an expert witness at hearing, the subject matter on which he is expected to testify, and the sub­ stance of his testimony. (2) A party is under a duty season­ ably to amend a prior response if he ob­ tains information upon the basis ,of which (i) he knows that the response was incorrect when made, or (ii) he knows that the response though correct when made is no longer true and the cir­ cumstances are such that a failure to FEDERAL REGISTER, VOL. 40, NO. 66— FRIDAY, APRIL 4, 1975

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PROPOSED RULES 15241 amend the response is in substance a knowing concealment.

(3) A duty to supplement responses may be imposed by order of the Admin­ istrative Law Judge, agreement of the parties, or at any time prior to hearing through new requests for supplementa­ tion of prior responses.

§ 3.31—3 Persons before whom deposi- ' tion may be taken.

(a) Within the United States. Within the United States or within a territory or insular possession subject to the do­ minion of the United States, depositions shall be taken before an officer author­ ized to administer oaths by the laws of the United States or of the place where the examination is held, or before such person as the parties may stipulate under § 3.31-4.

(b) In foreign countries. In a foreign country, depositions may be taken (1) on notice before a person authorized to administer oaths in the place in which the examination is held, either by the law thereof or by the law of the United States, or (2) before a person commis­ sioned by the Administrative Law Judge, and a person so commissioned shall have the power by virtue of his commission to administer any necessary oath and take testimony, or (3) before such per­ son as the parties may stipulate under § 3.31-4, or (4) pursuant to a letter rog­ atory. A commission or a letter roga­ tory shall be issued on application and notice and on terms that are just and appropriate. It is not requisite to the issuance of a commission or a letter rog­ atory that the taking of the deposition in any other manner is impracticable or inconvenient; and both a commission and a letter rogatory may be issued in proper cases. A notice or commission may designate the person before whom the deposition is to be taken either my name or descriptive title. A letter rogatory may be addressed “To the Appropriate Au­ thority in [here name the country].” Evidence obtained in response to a let­ ter rogatory need not be excluded merely for the reason that It is not a verbatim transcript or that the testimony was not taken under oath or for any similar de­ parture from the requirements for dep­ ositions taken within the United States under these rules.

§ 3.31—4 Stipulations regarding discov­ ery procedure.

Unless the Administrative Law Judge orders otherwise, the parties may by written stipulation (a) provide that dep­ ositions may be taken before any person, at any time or place, upon any notice, .and in any manner and when So taken may be used like other depositions, and (b) modify the procedures provided by these rules for other methods of discov­ ery, except that stipulations extending the time provided in §§ 3.31-8, -9, and -10 for responses to discovery may be made only with the approval of the Ad­ ministrative Law Judge.

§ 3.31—5 Depositions upon oral exami­ nation.

<a) When depositions may he taken. After service of the complaint, any party may take the testimony of any person, including a party, by deposition upon oral examination. Leave of the Adminis­ trative Law Judge, granted with or with­ out notice, must be obtained only if the plaintiff seeks to take a deposition prior to the expiration of 30 days after service of the complaint upon any respondent, except that leave is not required (1) if a respondent has served a notice of taking deposition or otherwise sought discovery, or (2) if special notice is given as pro­ vided in paragraph (b)(2) of this section. The attendance of witnesses may be com­ pelled by subpoena as provided in § 3.31- 12.

(b) Notice of examination: General requirements; special notice; Non-steno­ graphic recording; production of docu­ ments and things; depositions of orga­ nization.

(1) A party desiring to take the de­ position of any person other than a per­ son described in paragraph (b) (2) of this section upon oral examination shall give reasonable notice in writing to every other party to the action. Reasonable no­ tice is defined to be not less than 10 days, but the Administrative Law Judge may designate a shorter or longer time. The notice shall state the time and place for taking the deposition and the name and address of each person to be examined, if known, and, if the name is not known, a general description sufficient to iden­ tify him or the particular class or group to which he belongs. If a subpoena duces tecum is to be served on the person to be examined, the designation of the ma­ terials to be produced as set forth in the subpoena shall be attached to or in­ cluded in the notice.

(2) A party desiring to take the dep­ osition of an officer or employee of the Commission other than complaint coun­ sel, or of an officer or employee of an­ other government agency, or to obtain documents, or other physical exhibits in the custody, control and possession of such officer or employee, shall proceed by written motion to the Administrative Law Judge, filed in accordance with the provisions of § 3.22(a), for leave to apply for a subpoena under § 3.31-12. Such a motion shall be granted only upon a showing that the information expected to be obtained thereby is within the scope of discovery permitted by § 3.31-2(b) and cannot be obtained without undue hard­ ship by alternative means. No motion for an order or subpoena for production of documents grounded upon § 4.11 of this chapter or upon the Freedom of In­ formation Act shall be entertained by the Administrative Law Judge. (3) The Administrative Law Judge may upon motion order that the testi­ mony at a deposition be recorded by other than stenographic means, in which event the order shall designate the man­ ner of recording, preserving, and .filing the deposition, and may include other provisions to assure that the recorded testimony will be accurate and trust­ worthy.

(4) The notice to a party deponent may be accompanied by a request made in compliance with § 3.31-9 for the pro­ duction of documents and tangible things at the taking of the deposition. The procedure of § 3.31-9 shall apply to the request.

(5) A party may in his notice and in a subpoena name as the deponent a public or private corporation or a partnership or association or governmental agency and describe with reasonable particular­ ity the matters on which examination is requested. In that event, the organization so named shall designate one or more of­ ficers, directors, or managing agents, or other persons who consent to testify on its behalf, and may set forth, for each person designated, the matters on which he will testify. A subpoena shall advise a nonparty organization of its duty to make such a designation. The persons so designated shall testify as to matters known or reasonably available to the or­ ganization. This paragraph (b) (5) does not preclude taking a deposition by any other procedure authorized in these rules.

(c) Examination and cross-examina­ tion; record of examination; oath; ob­ jections. (1) Examination and cross-ex­ amination of witnesses may proceed as permitted at the hearing under the pro­ visions of § 3.43. The officer before Whom the deposition is to be taken shall put the witness on oath and shall personally, or by someone acting under his direction and in his presence, record the testimony of the witness. The testimony shall be taken stenographically or recorded by any other means ordered in accordance with paragraph (b) (4) of this section. If requested by one of the parties, the testi­ mony shall be transcribed. (2) All objections made at time of the examination to the qualifications of the officer taking the deposition, or to the manner of taking it, or to the evidence presented, or to the conduct of any party, and any other objection to the proceed­ ings, shall be noted by the officer upon the deposition. Evidence objected to shall be taken subject to the objections. In lieu of participating in the oral examina­ tion, parties may serve Written questions in a sealed envelope on the party taking the deposition and he shall transmit them to the officer, who shall propound them to the witness and record the an­ swers verbatim.

id) Motion to terminate or limit ex­ amination. At any time during the tak­ ing of the deposition, on motion of a party or of the deponent and upon à showing that the examination is being conducted in bad faith or in such man­ ner as unreasonably to annoy, embarrass, or oppress the deponent or party, the Ad­ ministrative Law Judge may order the officer conducting the examination to cease forthwith from taking the deposi­ tion, or may limit the scope and man- FEDERAL REGISTER, VOL. 40, NO. 66— FRIDAY, APRIL 4, 1975

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PROPOSED RULES 15242 V "

tier of the taking of the deposition as provided in § 3.31-2 (c). If the order made termihates the examination, it shall be resumed thereafter only upon the order of the Administrative Law Judge. Upon demand of the objecting party or depo­ nent, the taking of the deposition shall be suspended for the time necessary to make a motion for an order. (e) Submission to witness; changes; signing. When the testimony is fully transcribed the deposition shall be sub­ mitted to the witness for examination and shall be read to or by him, unless such examination and reading are waived by the witness and by the parties. Any changes in form or substance which the witness desires to make shall be en­ tered upon the deposition by the officer with a statement of the reasons given by the witness for making them. The depo­ sition shall then be signed by the witness, unless the parties by stipulation waive the signing or the witness is ill or cannot be found or refuses to sign. If the depo­ sition is not signed by the witness within 30 days of its submission to him, the officer shall sign it and state on the rec­ ord the fact of the waiver or of the illness or absence of the witness or the fact of the refusal to sign together with the reason, if any, given therefor; and the deposition may then be used as fully as though signed unless on a motion to suppress under § 3.31-7(d)(4) the Ad­ ministrative Law Judge holds that the reasons given for the refusal to sign re­ quire rejection of the deposition in whole or in part.

(f) Certification and filing by officer; exhibits; copies; notice of filing. (I) (i) The officer shall certify on the deposition that the witness was duly sworn by him and that the deposition is a true record of the testimony given by the witness. He shall then securely seal the deposition in an envelope indorsed with the title of the action and marked “Deposition of there insert name of witness]” and shall promptly file it with the Secretary of the Commission.

til) Documents and things produced for inspection during the examination of the witness, shall, upon the request of a party, be marked for identification and annexed to and returned with the deposition, and may be inspected and copied by any party, except that (A) the person producing the materials may sub­ stitute copies to be marked for identifi­ cation, if he affords to all parties fair opportunity to verify the copies by com­ parison with the originals, and (B) if the person producing the materials re­ quests their return, the officer shall mark them, give each party an opportunity to inspect and copy them, and return them to the person producing them, and the materials may then be used in the same manner as if annexed to and returned with the deposition. Any party may move for an order that the original be annexed to and returned with the deposition to the Secretary of the Commission, pend­ ing final disposition of the case. (2) Upon payment of reasonable charges therefor, the officer shall fur­ nish a copy of the deposition to any party or to the deponent. (3) The party taking the deposition shall give prompt notice of its filing to all other parties.

§ 3.31—6 Depositions upon written ques- - tions.

(a) Serving questions; notice. (1) After service of the complaint, any party may take the testimony of any person, including a party, by deposition upon written questions, except that the de­ position by written questions of an of­ ficer or employee of the Commission other than complaint counsel, or the deposition of an officer or employee of another government agency, may be taken only with leave of the Adminis­ trative Law Judge given in response to a motion and upon a showing as specified by § 3.31-5(b) (2). The attendance of witnesses may be compelled by the use of subpoena as provided in § 3.31-12. (2) A party desiring to take a deposi­ tion upon written questions shall serve them upon every other party with a no­ tice stating (i) the name and address of the person who is to answer them, if known, and if the name is not known, a general description sufficient to iden­ tify him or the particular class or group to which he belongs, and (ii) the name or descriptive title and address of the officer before whom the deposition is to be taken. A deposition upon written ques­ tions may be taken of a public or private corporation or a partnership or associa­ tion or governmental agency in accord­ ance with the provisions of § 3.31-5 (b) (5).

(3) Within 30 days after the notice and written questions are served, a party may serve cross questions upon all other parties. Within 10 days after being served with cross questions, a party may serve redirect questions upon all other parties. Within 10 days after being served with redirect questions, a party may serve recross questions upon all other parties. The Administrative Law Judge may for cause shown enlarge or shorten the time. (b) Officer to take responses and pre­ pare record. A copy of the notice and copies of all questions served shall be de­ livered by the party taking the deposi­ tion to the officer designated in the no­ tice, who shall proceed promptly, in the manner provided by § 3.31-5 (c), (e), and (f), to take the testimony of the witness in response to the questions and to prepare, certify, and file or mail the deposition, attaching thereto the copy of the notice and the questions received by him.

(c) Notice of filing. When the deposi­ tion is filed the party taking it shall promptly give notice thereof to all other parties.

§ 3.31—7 Use of depositions in adjudica­ tive proceedings.

(a) TJse of depositions. At hearing or upon the hearing of a motion or an inter­ locutory proceeding, any part or all of a deposition, so far as admissible under the rules of evidence applied as though the witness were then present and testi­ fying, may be used against any party who was present or represented at the taking of the deposition or who had reasonable notice thereof, in accordance with any of the following provisions: (1) Any deposition may be used by any party for the purpose of contradicting or impeaching the testimony of deponent as a witness.

(2) The deposition of a party or of anyone who at the time of taking the deposition was an officer, director, or managing agent, or a person designated under §§ 3.31-5(b) (5) or 3.31-6(a) to testify on behalf of a public or private corporation, or partnership or associa­ tion or governmental agency which is a party or on behalf of complaint coun­ sel may be used by an adverse party for any purpose.

(3) The deposition of a witness, whether or not a party, may be used by any party for any purpose if the Admin­ istrative Law Judge finds: (i) that the witness is dead; or (ii) that the witness is out of the United States, unless it appears that the absence of the witness was procured by the party offering the deposition; or (iii) that the witness is unable to attend or testify because of age, illness, infirmity, or imprisonment; or (iv) that the party offering the depo­ sition has been unable to procure the at­ tendance of the witness by subpoena; or (v) upon application and notice, that such exceptional circumstances exist as to make it desirable, in the interest of justice and with due regard to the im­ portance of presenting the testimony of witnesses orally at hearing, to allow the deposition to be used.

(4) If only part of a deposition is offered in evidence by a party, an ad­ verse party may require him to introduce any other part which ought in fairness to be considered with the part introduced, and any party may introduce any other parts.

Substitution of parties does not affect the right to use depositions previously taken; and, when a complaint has been dismissed and another complaint involv­ ing the same subject matter is after­ ward brought against the same parties or their representatives or successors in in­ terest, all depositions lawfully taken and duly filed in the former proceeding may be used in the latter as if originally taken therefor.

(b) Objections to admissibility. Sub­ ject to the provisions of § 3.31-3 (b) and paragraph (d) (3) of this section, objec­ tion may be made at the hearing to re­ ceiving; in evidence any deposition or part thereof for any reason which would require the exclusion of the evidence if the witness were then present and testi­ fying.

(c) Effect of talcing or using deposit turns. A party does not make a person his own witness for any purpose by tak­ ing his deposition. The introduction in evidence of the deposition or any part thereof for any purpose other than that of contradicting, or impeaching the de­ ponent makes the deponent the witness of the party introducing the deposition, FEDERAL REGISTER, VOL. 40, NO. 66— FRIDAY, APRIL 4, 1975

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PROPOSED RULES 15243 but this shall not apply to the use by any adverse party of a deposition under paragraph (a) (2) of this section: At the hearing any party may rebut any rele­ vant evidence contained in a deposition whether introduced by him or by any other party.

(d) Effect of Errors and Irregularities in Depositions. (1) As to notice. All er­ rors and irregularities in the notice for taking a deposition are waived unless written objection is promptly served upon the party giving the notice. (2) As to disqualification of officer. Objection to taking a deposition because of disqualification of the officer before whom it is to be taken is waived unless made before the taking of the deposi­ tion begins or as soon thereafter as the disqualification becomes known or could be discovered with reasonable diligence. (3) As to taking of deposition, (i) Ob­ jections to the competency of a witness or to the competency, relevancy, or ma­ teriality of testimony are not waived by failure to make them before or during the taking of the deposition, unless the ground of the objection is one which might have been obviated or removed if presented at that time.

(ii) Errors and irregularities occur­ ring at the oral examination in the man­ ner of taking the deposition, in the form of the questions or answers, in the oath or affirmation, or in the conduct of parties, and errors of any kind which might be obviated, removed, or cured if promptly presented, are waived unless reasonable objection thereto is made at the taking of the deposition. (iii) Objections to the form of written questions submitted under § 3.31-6 are waived unless served in writing upon the party propounding them within the time allowed for serving the succeeding cross or other questions and within 5 days after service of the "last questions authorized.

(4) As to completion and return of deposition. Errors and irregularities in the manner in which the testimony is transcribed or the deposition is prepared, signed, certified, sealed, indorsed, trans­ mitted, filed, or otherwise dealt with by the officer under §§ 3.31-5 and -6 are waived unless a motion to suppress the deposition or some part thereof is made with reasonable promptness after such defect is, or with due diligence might have been, ascertained.

§ 3.31—8 Interrogatories to parties. (a) Availability; procedures for use. (1) Any party may serve upon any other party written interrogatories to be an­ swered by the party served or, if the party served is a corporation or a part­ nership or association, by any officer or agent or if complaint counsel, by any one of complaint counsel, who shall furnish such information as is available to the party.

Interrogatories may, without leave of the Administrative Law Judge, be served upon complaint counsel after service of the complaint and upon the respondent or respondents with or after service of the complaint upon that party. (2) Each interrogatory shall be an­ swered separately and fully in writing under oath, unless it is objected to, in which event the reasons for objection shall be stated in lieu of an answer. The answers are to be signed by the person making them, and the objections signed by the attorney making them. The party upon whom the interrogatories have been served shall serve a copy of the answers, and objections if any, within 30 days after the service of the inter­ rogatories, except that a respondent may serve answers or objections within 45 days after service of the complaint upon that respondent. The Administra­ tive Law Judge may allow a shorter or longer time. The party submitting the interrogatories may move for an order under § 3.31-11 (a) with respect to any objection to or other failure to answer an interrogatory.

(b) Scope; use at hearing. (1) Inter­ rogatories may relate to any matters which can be inquired into under § 3.31- 2(b), and the answers may be used to the extent permitted by the rules of evi­ dence.

(2) An interrogatory otherwise proper is not necessarily objectionable merely because an answer to the interrogatory involves an opinion or contention that relates to fact or the application of law to fact, but the Administrative Law Judge may order that such an interro­ gatory need not be answered until after designated discovery has been completed or until a pretrial conference or other later time.

(c) Option to Produce Records. Where the answer to an interrogatory may be derived or ascertained from the records of the party upon whom the interrogatory has been served or from an examination, audit or inspection of such records, or from a compilation, abstract or summary based thereon, and the burden of deriv­ ing or ascertaining thé answer is sub­ stantially the same for the party serv­ ing the interrogatory as for the party served, it is a sufficient answer to such interrogatory to specify the records from which the answer may be derived or ascertained and to afford to the party serving the interrogatory reasonable op­ portunity to examine, audit or; inspect such records and to make copiest com­ pilations, abstracts or summaries. § 3.31—9 Production of documents and things for inspection and other pur­ poses.

(a) Scope. Any party may serve on any other party a request (1) to produce and permit the party making the re­ quest, or someone acting on his behalf, to inspect and copy, any designated documents (including writings, drawings, graphs, charts, photographs, phono-rec­ ords, and other data compilations from which information can be obtained, translated, if necessary, by the party upon whom the request is served through detection devices into reasonably usable form), or to inspect and copy, test, or sample any tangible things which con­ stitute or contain matters within the scope of § 3.31-2 (b) and which are in the possession, custody or control of the party upon whom the request is served. (b) Procedure. (1) The request may, without leave of the Administrative Law Judge, be served upon complaint coun­ sel after service of the complaint and upon the respondent or respondents with or after service of the complaint upon that respondent. The request shall set forth the items to be inspected either by individual item or by category, and de­ scribe each item and category with rea­ sonable particularity. The request shall specify a reasonable time, place, and manner of making the inspection and performing the related acts. (2) The party upon whom the request is served shall serve a written response within 30 days after the service of the request, except that a respondent may serve a response within 45 days after service of the complaint upon that re­ spondent. The Administrative Law Judge may allow a shorter or longer time. The response shall state, with respect to each item or category, that inspection and re­ lated-activities will be permitted as re­ quested, unless the request is objected to, in which event the reasons for objection shall be stated. If objection is made to part of an item or category, the part shall be specified. The party submitting the request may move for an order under Section 3.31-11 with respect to any ob­ jection to or other failure to respond to the request or any part thereof, or any failure to permit inspection as requested. § 3.31—11 Failure to make discovery: sanctions.

(a) Motion for order compelling dis­ covery. A party, upon reasonable notice to other parties and all persons affected thereby, may apply to the Administrative Law Judge for an order compelling dis­ covery as follows:

(1) Motion, (i) If a deponent fails to answer a question propounded or sub­ mitted under § 3.31-5 or § 3.31-6, or a corporation or other entity fails to make a designation under § 3.31-5(b) (5) or § 3.31-6(a), or a party fails to answer an interrogatory submitted under § 3.31-8, or if a party, in response to a request for inspection submitted under Section 3.31- 9, fails to respond that inspection will be permitted as requested or fails to permit inspection as requested, the discovering party may move for an order compelling an answer, or a designation, or an order compelling inspection in accordance with the request. When taking a deposition on oral examination, the proponent of the question may complete or adjourn the examination before he applies for an order.

(ii). If the Administrative Law Judge denies the motion in whole or in part, he may make such protective order as , he would have been empowered to make on a motion made pursuant to § 3.31-2 (c).

(2) Evasive or incomplete answer. For purposes qf this subdivision an evasive or incomplete answer is to be treated as a failure to answer.

(b) Failure to comply with order. If a j party or an officer or agent of a party or j FEDERAL REGISTER, VOL. 40, NO. 66— FRIDAY, APRIL 4, 1975

Page 106

15244 PROPOSED RULES a person designated under § 3.31-5 (b) (5) or § 3.31-6(a) to testify on behalf of a party fails to obey an order to pro­ vide or permit discovery, including an order made under paragraph (a) of this section, the Administrative Law Judge may make such orders in regard to the failure as are just, and among others the following:

(1) Infer that the admission, testi­ mony, documents or other evidence would have been adverse to the party; (2) Rule that for the purposes of the proceeding the matter or matters con­ cerning which the order or subpoena was issued be taken as established adversely to the party;

(3) Rule that the party may not intro­ duce into evidence or otherwise rely, in support of any claim or defense, upon testimony by such party, officer, or agent, or the documents or other evidence; (4) Rule that the party may not be heard to object to introduction and use of secondary evidence to show what the withheld admission, testimony, docu­ ments, or other evidence would have shown;

(5) Rule that a pleading, or part of a pleading, or a motion or other submis­ sion by the party, concerning which the order or subpoena was issued, be stricken, or that a decision of the proceeding be rendered against the party, or both. (c) (i) Action under paragraph (b) of this section may be taken by written or oral order issued in the course of the proceeding or by inclusion in an initial decision of the Administrative Law Judge or an order or opinion of the Commis­ sion. It shall be the duty of parties to seek and the Administrative Law Judge to grant such of the means of relief listed in paragraph (b) of this section or other appropriate relief as may be sufficient to compensate for the lack of testimony, documents, or other evidence withheld by a party. If in the Administrative Law Judge’s opinion such relief would not be sufficient, or in the case of a subpoena or other discovery order against a person, not a party, would be inappropriate, and if the party who obtained the subpoena or other discovery order so requests, he shall certify to the Commission a request that court enforcement of thé subpoena or other discovery order be sought. (ii) Any request for enforcement of a subpoena or other discovery order against a party certified by an Administrative Law Judge to the Commission shall con­ tain a statement that the party who ob­ tained the subpoena or other discovery order has sought relief of the type listed in paragraph (b) hereof and that the Administrative Law Judge finds that such relief would be insufficient under the cir­ cumstances.

§ 3.31—12 Subpoenas.

(a) Issuance of subpoenas ad testifi­ candum and duces tecum. Subpoenas re­ quiring a person to appear and depose or testify and subpoenas requiring a person to depose or testify and to produce specified documents or other tangible things, at the taking of a deposition or at a hearing, shall be issued by the Adminis­ trative Law Judge, signed and sealed but otherwise in blank, to a party request­ ing it, who shall fill each subpoena in before service.

(b) Form of subpoenas duces tecum. Subpoenas duces tecum shall specify as exactly as possible the documents or physical exhibits to be produced. When the subpoena is sought for discovery pur­ poses, the documents or physical ex­ hibits sought shall constitute or contain matters within the scope of examination permitted by § 3.31-2(b), and the sub­ poena shall be subject to the provisions of § 3.31-2(c) and of paragraph (c) of this section.

(c) Objections to subpoenas duces tecum. The person to whom a subpoena duces tecum is directed may, within 10 days after the service thereof, or such other time as the Administrative Law Judge shall allow, serve upon the attor­ ney designated in the subpoena and file with the Secretary of the Commission written objection to inspection or copy­ ing of any or all of the material sought. If objection is made, the party serving the subpoena shall not be entitled to in­ spect and copy the materials except pur­ suant to an order of the Administrative Law Judge. The party serving the sub­ poena may, if objection has been made, move upon notice to the person to whom the subpoena is directed, within 20 days or such other time as the Administra­ tive Law Judge shall allow after service of the objections, for an order directing compliance with the subpoena or any part thereof. The party upon whom the subpoena is served may move within the time allowed for service of objections or within 20 days after service of a motion for an order directing compliance, or such other time as the Administrative Law Judge shall allow, for an order quashing or modifying the subpoena upon any ground contained in § 3.31-2 (b) or (c).

(d) Objections to subpoenas for nonparty Commission records or for records or personnel of other government agen­ cies. (1) Subpoenas duces tecum served upon the-Commission or Commission offi­ cials or employees other than complaint counsel or upon other government agen­ cies or their officials or employees shall be subject to objection and motion to quash or modify as provided in para­ graph (c) of this section and upon the further ground, if applicable, that the information contained in these materials or their substantial equivalent as evi­ dence could be obtained without undue hardship by alternative means. (2) Subpoenas ad testificandum served upon the Commission or Commission offi­ cials or employees other than complaint counsel or upon other government agen­ cies or their officials or employees shall include a statement of the subject mat­ ter of the testimony sought, and shall be subject to objection and motion to quash or limit as provided in paragraph (c) of this section, and upon the further grounds, if applicable, that such testi­ mony would be contrary to the public interest, or that the information or evi­ dence sought could be obtained without undue hardship by alternative means. Subpart C— Prehearing Procedures; Mo­ tions; Interlocutory Appeals; Summary Decisions 4. Sections 3.21 Ob) and 3.23(a) are re­ vised to conform with the proposed sub­ stantive and formal changes in §§ 3.31- 3.38.

§ 3.21 Prehearing conferences.

* * * * * (b) Subpoenas.

Prehearing confer­ ences may be convened for the purpose of accepting returns on subpoenas duces tecum issued pursuant to the provisions of § 3.31-12.

§ 3.23 Interlocutory appeals.

* * * * * (a) Appeals without a determination by the Administrative Law Judge. The Commission may, in its discretion, en­ tertain interlocutory appeals where a ruling of the Administrative Law Judge: (1) Requires the disclosure of documents within the possession, custody and con­ trol of the Secretary of the Commission or information within the knowledge of Commission personnel other than com­ plaint counsel; (2) requires the appear­ ance of other government officials or the disclosure of the records of another gov­ ernment agency; (3) suspends an attor­ ney from participation in a particular proceeding pursuant to § 3.42(d); or (4) grants or denies an application for inter­ vention pursuant to the provisions of § 3.14. Appeal from such a ruling may be sought by filing with the Commission an application for review, not to exceed fif­ teen (15) pages, within five (5) days after notice of the Administrative Law Judge’s ruling. Answer thereto may be filed within five (5) days after service of the application for review. The applica­ tion for review should specify the person or party taking the appeal; should desig­ nate the ruling or part thereof from which appeal is being taken; and should specify under which provisions hereof review is being sought. The Commission upon its own motion may enter an order staying the return date of an order for discovery pursuant to §§ 3.31-1 through 3.31-12 of these rules which will require the disclosure of documents within the possession, custody and control of the Secretary of the Commission or infor­ mation within the knowledge of Com­ mission personnel other than complaint counsel, or the appearance of other gov­ ernment officials or the disclosure of the records of another government agency, and such order may place the matter on the Commission’s docket for review. Any order placing the matter on the Commis­ sion’s docket for review will set forth the scope of the review and the issues which, will be considered and will make provi­ sion for the filing of briefs if deemed ap­ propriate by the Commission. § 3.32 [Redesignated] 5. Section 3.39 is proposed to be re-j designated as § 3.32.

FEDERAL REGISTER, VOL. 40, NO. 66— FRIDAY, APRIL 4, 1975

Page 107

PROPOSED RULES 15245 Subpart E— Hearings 6.

Section 3.41 (f ) is revised to conform ■with thé redesignation of § 3.39 as pro­ posed § 3.32.

§ 3.41 General rules.

* * * * ~ * (f) Requests for an order requiring a witness to testifÿ or provide other infor­ mation and granting immunity under Title 18, Section 6002, of the United States Code, shall be disposed of in ac­ cordance with § 3.32.

By direction of the Commission dated March 11,1975.

[ s e a l ] V i r g i n i a M . H a r d i n g , Acting Secretary.

[PR D o c .7 5 -8 4 9 2 F ile d 4 -3 -7 5 ; 8 :45 am] [ 16 CFR Part 4 ] RULES OF PRACTICE AND PROCEDURE Separation of Functions and Ex Parte Communications Notice is hereby given that the Federal Trade Commission, pursuant to section 6 of the Federal Trade Commission Act, 38 Stat. 721 (15 U.S.C. 46) (1970) and 5 U.S.C. 552 (1970), 80 Stat. 383, as amended, 81 Stat. 54 (formerly section 3 of-the Administrative Procedure Act) is proposing a revision of § 4.7 of its rules of practice and procedure, 16 CFR 4.7. Under the proposal, present § 4.7 would be revised to separate arid distinguish restrictions on ex parte communications between, on the one hand, Commission decisionmakers and staff investigators and prosecutors of an adjudicative pro­ ceeding or a factually related adjudica­ tive proceeding, and between, on the other hand, Commission decisionmakers and persons outside the Commission. Proposed § 4.7 (a) would concern the first type of communications and! would in­ corporate language which conforms to the “separation of functions” provision of 5 U.S.C. 554(d) (formerly section 5 (c) of the Administrative Procedure Act). Proposed § 4.7(b) would focus ex­ clusively on the second type of communi­ cations, would expand the prohibition to include any communication “about” an adjudicative proceeding, as distinguished from “the merits” of the proceeding, ex­ cept for an ex parte communication au­ thorized by law or the Commission’s Rules or a request for information about the status of a proceeding, and would substitute the phrase “a member of a Commissioner’s personal staff” for the present phrase “any employee involved in the decisional process in such a pro­ ceeding”. Proposed § 4.7(c) would elim­ inate the requirement of present §,4.7 (c) that the Commission be informed of the substance of a prohibited ex parte communication, would provide that any such communication be placed on the public records of the Commission, but not considered as part of the record in the proceeding for purposes of decision unless introduced into evidence and would retain a discretionary right of the Commission to take such further ac­ tion for a violation of the section as it may deem appropriate.

Section 4.7 would be revised to read as follows :

§ 4.7 Separation of functions and ex parte communications.

(a) No Commission employee or agent who has performed an investigative or prosecuting function for the Commission in connection with an adjudicative pro­ ceeding shall, in that or a factually re­ lated adjudicative proceeding, partici­ pate or advise in any decision therein of the Administrative Law Judge or of the Commission except as a witness or as counsel in public proceedings. (b) No person not employed by the Commission shall communicate about an adjudicative proceeding to the Adminis­ trative Law Judge presiding therein, to a Commissioner or to a member of a Commissioner’s personal staff except to the extent required for the disposition of ex parte matters as authorized by law or as authorized by the Commission’s Rules to be disposed of on an ex parte basis. A request for information with respect to the status of an adjudicative proceeding shall not be deemed to be a communication prohibited by this sub­ section.

(c) If a communication is made in vio­ lation of paragraphs (a) or (b) of this section, the recipient thereof shall file a copy of the pertinent part*of such communication, if written, or a sum­ mary of such communication, if oral, with the Secretary for inclusion in the docket binder of the case to which it pertains and it shall be made part of the public records of the Commission. However, such communications will not be considered by the Commission as part of the record for purposes of decision un­ less introduced into evidence. The Com­ mission may take such further action as it may deem appropriate for violation of this section.

Written comments on the foregoing proposed revision of § 4.7 may be sent to the Secretary, Federal Trade Commis­ sion, Pennsylvania Avenue and 6th Street NW., Washington, D.C. 20580 on or before May 5, 1975. Such comments will be entered on the public records of the Commission and will be available for inspection in Room 130 at the above ad­ dress during normal business hours. By direction of the Commission dated March 11, 1975.

[ s e a l ! V i r g i n i a M . H a r d i n g , Acting Secretary.

[F R D o c .7 5 -8 4 9 3 F ile d 4 -3 -7 5 ; 8 :4 5 a m ] FEDERAL REGISTER, VOL 40, NO. 66—-FRIDAY, APRIL 4, 1975

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FRIDAY, APRIL 4, 1975 WASHINGTON, D.C.

Volume 40 ■ Number 66 DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE Office of Education BASIC EDUCATIONAL OPPORTUNITY GRANT PROGRAM Expected Family Contribution For Academic Year 197 5—1976

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