Organization, Procedures, and Rules of Practice

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BILLING CODE 6320-01-M FEDERAL TRADE COMMISSION 16 CFR Parts 3 and 4 Organization, Procedures, and Rules of Practice AGENCY: Federal Trade Commission. action: Final rule.

Summary: The Commission has amended §§ 3.43(g) and 4.1(a) of its Rules of Practice and Procedure to allow non-attorney experts to participate personally in the cross-examination of other experts in the same discipline during Commission adjudicative proceedings. Such Cross-examination by a non-attorney expert would elicit more precise and useful information from an expert witness than would crossexamination by an attorney who lacks technical expertise in the particular discipline.

EFFECTIVE DATE: September 30,1983. FOR FURTHER INFORMATION CONTACT: Bruce G. Freedman, (202) 523-3487, Office of General Counsel, Federal Trade Commission, 6th Street and Pennsylvania Avenue, NW„ Washington, D.C. 20580. SUPPLEMENTARY INFORMATION: On March 3,1983 at 48 FR 9289, the Commission published for comment proposed amendments to its Rules of Practice and Procedure which would allow non-attorney experts to participate personally in the crossexamination of other experts in the same discipline. The proposed amendments were to apply to Commission adjudicative proceedings. The amendments to § § 3.43(g) and 4.1(a) of the Commission Rules of Practice and Procedure were proposed after the Commission tentatively concluded thdt, in some cases, crossexamination by a non-attorney expert would elicit more precise and useful information from an expert witness than would cross-examination by an attorney who lacks technical expertise in the particular disipline.

Five comments were filed during the public comment period which closed May 18,1983. Comments in favor of the proposed amendments were filed by Thomas M. Susman on behalf of the Division of Antitrust, Trade Regulation and Consumer Affairs of the District of Columbia Bar (“D.C. Bar Antitrust Division”) and Jonathan Rose, professor of law at Arizona State University College of Law. Professor Rose also submitted a copy of a draft report, which he had previously prepared for the Administrative Conference of the United States. Comments in opposition to the proposed amendments were submitted by Irving Sommer, Chairman of the National Conference of Administrative Law Judges; Joseph S. Brownman, an attorney in the Bureau of Competition of the Federal Trade Commission; and Ray W. Harvey, Jr., Esquire.

The Commission believes that the comments do not raise any new issues that would militate against adoption of the proposal. Instead, on balance, they support alldwing non-lawyer experts to cross-examine other experts where the ALJ believes it appropriate. A discussion of the major issues raised by the proposal and the comments follows. A. The Expert As Witness and Advocate During the course of Commission adjudications under the proposed amendments it could be expected that the expert who conducts crossexamination may also serve as an expert witness. Several comments raise the possibility that this could result in a potential conflict of interest analogous to that proscribed by the model codes of professional responsibility approved by the American Bar Association and by rules adopted by various states and other jurisdictions. These rules generally prohibit an attorney from acting as an advocate at a trial where he or she is likely to be a necessary or material witness. See Rule 3.7, ABA Model Rules of Professional Conduct, 52 U.S.L.W. 19 (Aug. 16,1983); DR 5-101, ABA Code of Professional Responsibility (1975). Although these rules do not apply to non-lawyer "advocates,” the policies underlying the prohibition are relevant to the Commission’s proposal. One justification for the disqualification rule is that “the public might think that the lawyer-is distorting the truth for the sake of his client." International Electronics Corp. v. Flanzer, 527 F.2d 1288,1294 (2d Cir. 1975). This justification is based on the reasonable assumption that a witness’ objectivity may be undermined by any interests he or she may have in the litigation, for example, in the case of an attorney, the fact that he or she is being compensated by one of the parties and, perhaps even more important, the fact that the attorney has an ethical duty to attempt to promote the interests of the client. A related justification for the rule is that the attorney’s effectiveness as a witness may be impaired because he or she can be impeached for interest See American Bar Foundation, Annotated Code of Professional Responsibility 213 (1979).

Nevertheless, a compensated expert witness, unlike the ordinary lay witness who testifies about facts he or she has observed, normally already has a financial interest in the litigation, an interest which, in our view, would not be significantly increased if the expert was also called upon to participate personally in cross-examination. Expert witnesses often assist counsel in developing a case, selecting witnesses, and developing questions for direct as well as cross-examination; indeed, expert witnesses frequently sit at the counsel table. In view of the litigation role experts already play, we do not see how the additional limited role they would assume under the Commission’s proposal would create any reasonable

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44766 Federal Register / Vol. 48, No. 191 / Friday, September 30, 1983 / Rules and Regulations concern that they would be prompted to distort the truth. For the same reasons, we do not believe that this limited additional role would undermine their effectiveness as witnesses. Other justifications for the attorneywitness disqualification rule are plainly inapplicable. For example, “[a]s an advocate, the attorney is said to be placed in the ‘unseemly’ position of arguing his or her own credibility.” Id. The Commission’s proposal would not authorize non-lawyer experts to present oral or written argument on credibility issues.

One commentary suggests a further rationale, that “opposing counsel may be handicapped in challenging the testimony of the attorney-witness.” It explains that this assertion is based upon the premise that a laywer’s professional courtesy will inhibit him or her from fully cross-examining a professional colleague. The commentary, however, characterizes this as “the most questionable rationale." Id. Nevertheless, assuming that this rationale has any validity, we believe that the attorney in charge of the litigation should be trusted to make a sensible judgment whether an expert will be inhibited from fully crossexamining an opposing expert. Finally, there is a concern that the switching of roles may frustrate the adjudicatory process because factfinders may confuse the role of advocate and witness and, thus, give evidentiary weight “to statements that in reality constitute nothing more than mere argument.” Opinion No. 44, Legal Ethics Committee of the District of Columbia Bar (Jan. 24,1978). This is obviously not a concern where the factfinder is an ALJ.

The Commission agrees with Professor Rose that the limited, additional role that the Commission’s proposal would provide expert witnesses would not create a conflict of interest or undermine their ability to provide candid testimony. On the contrary, cross-examination by a person trained in the relevant discipline should result in more careful testing of an expert witness and therefore produce more candid and useful testimony. B. Legal Skills Two comments suggest that a non­ lawyer’s lack of legal training might present possible problems. The attorney in charge of the litigation, however, is under a professional duty to assure that the client is effectively represented. The Commission’s proposal would not require a non-lawyer expert to conduct cross-examination, and we have no reason to assume that the attorney would permit an expert to conduct all or a portion of cross-examination unless that attorney believed that the crossexamination would be competently conducted. We are confident that the lawyers who appear before this agency will be able to make sensible judgments about when their clients will be best served by cross-examination conducted by a person who does not happen to be an attorney but who is more expert than counsel in the subject matter of the direct testimony. ‘ C. Discipline for Misconduct The Commission has considered the question whether it would be able to impose adequate discipline on nonlawyer participants to control their conduct. The Commission has implied authority to impose reasonable standards of conduct upon those who practice before it. In the case of lawyers, the Commission relies on the established codes of professional responsibility and may suspend or disbar from practice before the agency any attorney who engages in serious misconduct. See 16 CFR 4.1(e). The Administrative Law Judge is also empowered to "regulate the course of the hearings and the conduct of the parties and their counsel”and to suspend or bar from participation in a particular proceeding any attorney who engages in “disorderly, dilatory, obstructionist, or contumacious conduct * * 16 CFR 3.42(c)(6), 3.42(d). If the circumstances warrant further action, the Commission may also refer cases of misconduct to appropriate disciplinary bodies.

Although the existing rules might not permit the Commission to proceed against the non-lawyer who engaged in serious misconduct, it is unclear that the activities associated with cross­ -examination would be particularly likely to generate disciplinary problems. Moreover, the ALJ would retain the authority to halt cross-examination which was disorderly or otherwise inappropriate. The Commission, however, will consider appropriate amendments to assure adequate sanctions for non-attorneys. D. Other Issues The proposed amendments would permit cross-examination by an expert in the "same discipline” as the expert witness. The Commission contemplates that the ALJ’s will define the term “same discipline” in the same manner that they define relevant disciplines in deciding whether an expert witness is qualified to testify.

The Commission has also considered the question whether the proposed changes would authorize non-attorneys to engage in the practice of law. Crossexamination is a function typically performed by members of the bar, although as noted in D.C. Bar Antitrust Division comment, it is a function that is no longer exclusively performed by attorneys. In the Commission’s view, non-attorneys should be allowed to perform this limited role as long as they can do it competently.1 Finally, the Commission sees no need to “sunset” the proposed revisions as suggested by the D.C. Bar Antitrust Division. The Commission, however, agrees with the Division that the Commission should evaluate the effects of the amendments and also continue to consider whether non-lawyer practitioners should be allowed to perform additional functions in litigation.

After careful consideration of all the comments submitted, the Commission has determined to promulgate the amendments set forth below, pursuant to the authority of the Federal Trade Commission Act, 15 U.S.C. 41 et seq. List of Subjects 16 CFR Part 3 Administrative practice and procedure, Claims, Equal access to justice, Lawyers.

16 CFR Part 4 Administrative practice and procedure, Freedom of information, Privacy, Sunshine Act.

Accordingly, the Commission amends 18 CFR 3.43 and 4.1 as follows: PART 3— RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS By revising § 3.43(g) to read as follows:

§ 3.43 Evidence.

* * ★ * * (g) Excluded evidence.—When an objection to a question propounded to a witness is sustained, the questioner may make a specific offer of what he expects to prove by the answer of the witness, or the Administrative Law Judge may, in his discretion, receive and report the evidence in full. Rejected exhibits, adequately marked for identification, shall be retained in the record so as to 1 The Administrative Procedure Act provides that, “if permitted by an agency,” a party may be represented or advised by a person other than counsel. 5 U.S.C. 555(b). This provision appears to allow agencies to authorize non-attorneys to perform all the functions of counsel. Therefore, the modest role non-attorneys would perform under the Commission’s proposal will not amount to the "unauthorized practice of law.”

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Federal Register / Vol. 48, No. 191 / Friday, Septem ber 30, 1983 / Rules and Regulations 44787 be available for consideration by any reviewing authority.

PART 4— MISCELLANEOUS RULES By adding § 4.1(a)(3) to read as follows:

§ 4.1 Appearances.

(a) * * * (3) At the request of counsel representing any party in an adjudicative proceeding, the Administrative Law Judge may permit an expert in the same discipline as an expert witness to conduct all or a portion of the cross-examination of such witness.

(15 U.S.C. 46(g).) By direction of the Commission, dated September 15,1983.

Emily H. Rock, Secretary.

[FR Doc. 83-20719 Filed 9-29-83; 8:45 am]