Nonadjudicative Procedures

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BILLING CODE C70S-O1-M FEDERAL TRADE COMMISSION 16 CFR Part 2 Nonadjudicative Procedures AGENCY: Federal Trade Commission. a c t io n : Final rule. SUMMARY: The Commission has approved two procedural amendments to Rule 2.51(a) of its Rules of Practice and Procedure. The rule governs requests to reopen and modify final orders. The first amendment provides that such requests must be supported by affidavits). Under section 5(b) of the FTC Act, 15 U.S.C. 45(b), requests to reopen must make a “satisfactory showing” of the basis for relief. The Commission has concluded that affidavits are required to support factual assertions made in requests filed under section 5(b). The second amendment provides that requests to reopen must contain at the time they are filed ”[a]ll information and material that the requester wishes the Commission to consider.” This change is intended to ensure that all the information filed in support of the request is available to die public during the public comment period, and that the entire 129-day statutory period is available for Commission consideration of all submitted materials relevant to the request.

e f f e c t iv e d a t e : The rule is effective October 19,1988, and applies to requests to reopen and modify filed after that date.

FOR FURTHER INFORMATION CONTACT: Elliot Feinberg, Bureau of Competition, Federal Trade Commission, 6th Street and Pennsylvania Avenue NW., Washington, DC 20580, (202) 328-2687. SUPPLEMENTARY INFORMATION: The Commission has clarified the requirements of Rule 2.51(b) of its Rules of Practice regarding the filing of requests to reopen and modify final orders. Commission orders represent the final resolution of the Commission’s law enforcement efforts. Before reopening and modifying such orders, the Commission wishes to ensure that requesters meet the tests of section 5(b) of the FTC Act and Commission Rule 2.51(b), which require a petitioner to make a "satisfactory showing” that reopening and modification are mandated by changed conditions or that reopening and modification are in the public interest. Requests to reopen orders must not only allege facts that, if true, would constitute the necessary showing, but must also credibly demonstrate that the factual assertions

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40868 Federal Register / Vol. 53, No, 202 / W ednesday, October 19, 1988 / Rules and Regulations are reliable. The amended rule therefore specifically requires that requesters provide one or more affidavits to support facts alleged in petitions to reopen and modify orders. This amendment will not only help the Commission in its decision making process but, by clarifying the applicable standard, aid requesters in presenting meritorious cases. In the past, the Commission required substantiation for material factual allegations contained in these petitions. This amendment specifies the procedural method for substantiating factual assertions. The Commission further wishes to ensure that the entire 120-day statutory period within which the Commission must act (see 15 U.S.C. 5(b)) is available for consideration of all submitted materials relevant to the request. The Commission seeks also to assure that all submitted information is available to the public during the 30-day comment period applicable to petitions to reopen. See Rule 2.51(c). Therefore, the second amendment to Rule 2.51(b) provides that all the material that the requester wishes the Commission to consider must be contained in the request at the time of filing. This amendment will promote more knowledgeable and relevant public comments and thus increase their utility to the Commission. This amendment also reflects procedures contained in the Commission’s July 1984 “Statement of Policy Concerning Supplementation of Requests to Reopen.” Under that statement, which discusses in greater detail how the Commission views supplementation of requests to reopen, a requester wishing to supplement its request to reopen must generally withdraw the request and file a supplemented version, thus restarting the statutory 120-day time period.1 For these reasons, the Commission has amended Rule 2.51(b) of its Rules of Practice to require that requests to reopen and modify a final order be supported by affidavit(s) and to make clear that requests to reopen must be complete when filed.

List of Subjects in 16 CFR Part 2 Administrative practice and procedure, Requests to reopen. 16 CFR Part 2 is amended to read as follows:

P A R T 2— N O N A D JU D IC A TIV E P R O CED U R ES 1. The authority for Part 2 continues to read as follows:

Authority: Sec. 6, 38 Stat. 721 (15 U.S.C. 46). The full text of the Commission's Statement is included as an appendix to this notice. 2. Section 2.51(b) is revised to read as follows:

§ 2.51 Requests to reopen.

(a) * * * (b) Contents. A request under this section shall contain a satisfactory showing that changed conditions of law or fact require the rule or order to be altered, modified or set aside, in whole or in part or that the public interest so requires. This requirement shall not be deemed satisfied if a request is merely conclusory or otherwise fails to set forth by affidavit(s) specific facts demonstrating in detail the nature of the changed conditions and the reasons why these changed conditions or the public interest require the requested modifications of the rule of order. Each affidavit shall set forth facts that would be admissible in evidence and shall show that the affiant is competent to testify to the matters stated therein. All information and material that the requester wishes the Commission to consider shall be contained in the request at the time of filing. * * * * * By direction of the Commission. Donald S. Clark, Secretary.

Statement of Policy Concerning Supplementation of Requests To Reopen The Federal Trade Commission is releasing this statement of policy to clarify for the legal and business communities the Commission’s treatment of supplemental information provided to support requests filed pursuant to Rule 2.51 of the Commission’s Rules of Practice for the purpose of modifying final orders to cease and desist. Section 5(b) of the Federal Trade Commission Act and Rule 2.51 require the Commission to act on requests to reopen within 120 days of the time of filing. Rule 2.51 further specifies that such requests must set forth specific facts demonstrating in detail the nature of any changed conditions alleged and the reasons why these changed conditions require the requested modifications.2 Given the While Section 5(b) of the Federal Trade Commission Act provides for requests to reopen solely on the basis that changed conditions of law or fact require that an order be modified, the section also provides that the Commission may modify orders on its own motion if, in the opinion of the Commission, the public interest so requires. Thus, Rule 2.51 invites respondents requesting reopening to address public interest considerations that may favor reopening as well. As with requests premised on changed conditions, such requests must demonstrate in detail the reasons why the public interest may require the desired modifications. limited time for review and the need to evaluate fully the facts and arguments presented, the Commission generally will not accept or consider additional information to support a request to reopen supplied by the requester after the date of filing, unless the requester states in writing that the Commission should consider the request withdrawn and refiled as supplemented, thus restarting the statutory time period. Additionally, the Commission would be deprived of the full benefits of public comments were it to accept and consider materials supplementing a request to reopen after comments on the original request had been filed. The Commission’s purpose in seeking such comments, which is to aid it in making informed decisions, might be hindered to the extent persons commenting on a given request had not reviewed all of the facts and arguments on which the request is premised. Moreover, the absence of such facts and arguments from what is placed on the public record might affect even decisions on whether to comment. Therefore, when a pending request to reopen is supplemented, not only must the 120-day statutory period for the Commission’s consideration of the request be restarted, but the entire refiled request, as supplemented, must be placed on the public record for comments as provided in Rule 2.51(c).3 The Commission recognizes that comments filed in response to requests to reopen may sometimes raise new issues which those requesting modification may want to address. Therefore, the Commission will consider replies by requesters that are limited in scope to issues raised by such comments, provided that any reply to comments on a given request is filed within ten days of the close of the comment period. However, if a reply exceeds the scope of the comments, the Commission will not consider the reply unless the requester states in writing that the Commission should consider the request withdrawn and refiled as supplemented by the reply. Moreover, the Commission will not reopen an order where an essential element of the “satisfactory showing” that modification is required (as described in Rule 2.51) was not contained in the original request, but only in a reply to comments on the original request. Therefore, unless the Commission requires otherwise Rule 2.51(c) recognizes that the Commission’s interest in receiving public comments is subject to the rights of requesters, pursuant to the Federal Trade Commission Act, to maintain the confidentiality of trade secrets and financial or commercial information that is privileged or confidential,

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Federal Register / Vol. 53, No. 202 / W ednesday, October 19, 1988 / Rules and Regulations 40869 when a pending request to reopen is supplemented, not only must the 120 day statutory period for the Commission’s consideration be restarted, but the entire refiled request, as supplemented, will generally be placed on the public record for comments as provided in Rule 2.51(c).

This statement of policy does not preclude the Commission’s staff from asking requesters to provide documents or other additional information in order to clarify the arguments and factual claims made in connection with the requests to reopen. The staff may, at any time, also seek from third parties information concerning such requests. The supplying of such information will not affect the Commission’s obligation to decide a request within 120 days of the date it was filed. However, where supplemental information supplied by a Requester is necessary to show that changed conditions or the public interest require modification, refiling of the request will be necessary. Generally, supplemental information will require refiling when the Request does not address an issue necessary to finding that modification is required or when the information in the request is too conclusory to warrant modification of a final order. The determination whether supplemental information is essential to show that modification is required will depend on the facts of the particular case and necessarily must be decided on a case-by-case basis. Of course, requesters retain the right to have the Commission act on requests to reopen as originally filed, without consideration of any additional information. In summary, except as provided above the Commission will not consider supplemental information provided after a request to reopen has been filed unless the requester, in writing, asks the Commission to consider the request withdrawn and refiled as of the time the supplemental information is submitted to the Commission.4 In that case, the Commission will again place the request, including the supplementary materials, on the public record in accordance with Rule 2.51(c). The Commission will consider the original petition and supplementary materials, any additional public comments filed in response to the original petition as well as any comments filed in response to the amended request. The Commission will also consider, without requiring the In the event a requester should, during the 120day period, decide to modify its request to reopen to seek only part of the relief originally requested, while rescinding other parts of the request, refiling of the request will not be necessary unless the Commission determines that it would be in the public interest to do so. refiling of a request, a reply by the requester made in response to any comments if it is filed within 10 days of the close of the comment period and if it does not exceed the scope of the comments.8 [FR Doc. 88-24106 Filed 10-18-88; 8:45 am]