FTC Finalizes Changes to Internal Rules of Practice | Practical Law

FTC Finalizes Changes to Internal Rules of Practice | Practical Law

The FTC recently finalized changes to Parts 2 and 4 of its Rules of Practice. 

FTC Finalizes Changes to Internal Rules of Practice

Practical Law Legal Update 0-522-4212 (Approx. 3 pages)

FTC Finalizes Changes to Internal Rules of Practice

Published on 16 Nov 2012 • USA (National/Federal)
The FTC recently finalized changes to Parts 2 and 4 of its Rules of Practice.
The FTC issued a press release announcing updates to Parts 2 and 4 of its internal Rules of Practice. FTC Chairman Jon Leibowitz stated that the purpose of the changes is to increase the efficiency of the FTC and to modernize its processes to keep in line with electronic discovery.
In addition, Chairman Leibowitz issued a statement responding to Commissioner Rosch's criticism that the changes were insufficient because they did not mandate the use of compulsory process in all full-phase investigations. Chairman
Leibowitz explained that while use of the compulsory process was strongly encouraged, the final rule changes leave the FTC staff attorneys room for flexibility depending on their individual cases.
Regarding Part 2, the changes are intended to streamline non-adjudicative FTC investigations, increasing their efficiency. These changes include, among other things:
  • Mandating a meeting between FTC staff and the recipient of a civil investigative demand (CID) or subpoena within 14 days after its receipt to address compliance and other related issues.
  • Prohibiting consideration of petitions to quash or limit the CID or subpoena:
    • in absence of the mandatory meeting with the FTC staff; or
    • regarding issues not raised during that meeting.
  • Conditioning grants of compliance extensions on the requesting party's continued progress to comply.
  • Expediting the pre-merger review process by allowing the FTC's General Counsel to commence enforcement proceedings against parties that fail to comply with a Hart-Scott-Rodino Second Request.
  • Increasing privilege log disclosures by requiring information sufficient to allow the FTC staff to assess the privilege claim.
  • Relieving parties to FTC investigations from preserving related documents and evidence if they have not received written communication from the FTC in at least 12 months.
  • Codifying the FTC's practice of disclosing the existence of an investigation and its participants to certain third parties, including customers, competitors and potential witnesses who are contacted for information during an investigation.
Part 4 changes deal with the methods for evaluating and responding to conduct violations by attorneys practicing before the FTC, which include:
  • Reprimanding, suspending or disbarring from practice before the FTC those attorneys who, among other things:
    • lack appropriate qualifications;
    • act in an unprofessional, contemptuous or obstructionist manner; or
    • knowingly or recklessly supply false information.
  • Setting out a clear procedure for reporting and reviewing allegations of attorney misconduct.
The FTC voted 4-1 in favor of the changes, which took effect on November 9, 2012.