Summary of Commission Practice Relating to Administrative Protective Orders, 39355-39362 [E6-10914]

Agencies

• INTERNATIONAL TRADE COMMISSION

[Federal Register Volume 71, Number 133 (Wednesday, July 12, 2006)]
[Notices]
[Pages 39355-39362]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-10914]


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INTERNATIONAL TRADE COMMISSION


Summary of Commission Practice Relating to Administrative 
Protective Orders

AGENCY: U.S. International Trade Commission.

ACTION: Summary of Commission practice relating to administrative 
protective orders.

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SUMMARY: Since February 1991, the U.S. International Trade Commission 
(``Commission'') has issued an annual report on the status of its 
practice with respect to violations of its administrative protective 
orders (``APOs'') in investigations under Title VII of the Tariff Act 
of 1930 in response to a direction contained in the Conference Report 
to the Customs and Trade Act of 1990. Over time, the Commission has 
added to its report discussions of APO breaches in Commission 
proceedings other than under Title VII and violations of the 
Commission's rules including the rule on bracketing business 
proprietary information (``BPI'') (the ``24-hour rule''), 19 CFR 
207.3(c). There were no completed investigations of rule violations 
during calendar year 2005. This notice provides a summary of 
investigations completed during calendar year 2005 of breaches in 
proceedings under Title VII, section 421 of the Trade Act of 1974, as 
amended, section 337 of the Tariff Act of 1930, as amended, and one 
conducted under the procedures for imposing sanctions for violation of 
the provisions of a protective order issued during NAFTA dispute 
resolution panel and Extraordinary Challenge Committee proceedings. The 
Commission intends that this report inform representatives of

[[Page 39356]]

parties to Commission proceedings as to some specific types of APO 
breaches encountered by the Commission and the corresponding types of 
actions the Commission has taken.

FOR FURTHER INFORMATION CONTACT: Carol McCue Verratti, Esq., Office of 
the General Counsel, U.S. International Trade Commission, telephone 
(202) 205-3088. Hearing impaired individuals are advised that 
information on this matter can be obtained by contacting the 
Commission's TDD terminal at (202) 205-1810. General information 
concerning the Commission can also be obtained by accessing its 
Internet server (https://www.usitc.gov).

SUPPLEMENTARY INFORMATION: Representatives of parties to investigations 
or other proceedings conducted under Title VII of the Tariff Act of 
1930, sections 202 and 204 of the Trade Act of 1974, section 421 of the 
Trade Act of 1974, section 337 of the Tariff Act of 1930, and NAFTA 
Article 1904.13, 19 U.S.C. 1516a (g)(7)(A) may enter into APOs that 
permit them, under strict conditions, to obtain access to BPI (Title 
VII) or confidential business information (``CBI'') (section 421, 
sections 201-204, and section 337) of other parties. See 19 U.S.C. 
1677f; 19 CFR 207.7; 19 CFR 207.100, et. seq.; 19 U.S.C. 2252(i); 19 
U.S.C. 2451a(b)(3); 19 CFR 206.17; 19 U.S.C. 1337(n); 19 CFR 210.5, 
210.34. The discussion below describes APO breach investigations that 
the Commission has completed during calendar year 2005, including a 
description of actions taken in response to these breaches.
    Since 1991, the Commission has published annually a summary of its 
actions in response to violations of Commission APOs and the 24-hour 
rule. See 56 FR 4846 (Feb. 6, 1991); 57 FR 12,335 (Apr. 9, 1992); 58 FR 
21,991 (Apr. 26, 1993); 59 FR 16,834 (Apr. 8, 1994); 60 FR 24,880 (May 
10, 1995); 61 FR 21,203 (May 9, 1996); 62 FR 13,164 (March 19, 1997); 
63 FR 25064 (May 6, 1998); 64 FR 23355 (April 30, 1999); 65 FR 30434 
(May 11, 2000); 66 FR 27685 (May 18, 2001); 67 FR 39425 (June 7, 2002); 
68 FR 28256 (May 23, 2003); 69 FR 29972 (May 26, 2004); 70 FR 42382 
(July 25, 2005). This report does not provide an exhaustive list of 
conduct that will be deemed to be a breach of the Commission's APOs. 
APO breach inquiries are considered on a case-by-case basis.
    As part of the effort to educate practitioners about the 
Commission's current APO practice, the Commission Secretary issued in 
March 2005 a fourth edition of An Introduction to Administrative 
Protective Order Practice in Import Injury Investigations (Pub. No. 
3755). This document is available upon request from the Office of the 
Secretary, U.S. International Trade Commission, 500 E Street, SW., 
Washington, DC 20436, tel. (202) 205-2000 and on the Commission's Web 
site at https://www.usitc.gov.

I. In General

    The current APO form for antidumping and countervailing duty 
investigations, which was revised in March 2005, requires the applicant 
to swear that he or she will:
    (1) Not divulge any of the BPI obtained under this APO or otherwise 
obtained in this investigation and not otherwise available to him or 
her, to any person other than--
    (i) Personnel of the Commission concerned with the investigation
    (ii) The person or agency from whom the BPI was obtained,
    (iii) A person whose application for disclosure of BPI under this 
APO has been granted by the Secretary, and
    (iv) Other persons, such as paralegals and clerical staff, who: (a) 
Are employed or supervised by and under the direction and control of 
the authorized applicant or another authorized applicant in the same 
firm whose application has been granted; (b) have a need thereof in 
connection with the investigation; (c) are not involved in competitive 
decision making for an interested party which is a party to the 
investigation; and (d) have signed the acknowledgment for clerical 
personnel in the form attached hereto (the authorized applicant shall 
also sign such acknowledgment and will be deemed responsible for such 
persons' compliance with the APO);
    (2) Use such BPI solely for the purposes of the above-captioned 
Commission investigation or for judicial or binational panel review of 
such Commission investigation;
    (3) Not consult with any person not described in paragraph (1) 
concerning BPI disclosed under this APO or otherwise obtained in this 
investigation without first having received the written consent of the 
Secretary and the party or the representative of the party from whom 
such BPI was obtained;
    (4) Whenever materials (e.g., documents, computer disks, etc.) 
containing such BPI are not being used, store such material in a locked 
file cabinet, vault, safe, or other suitable container (N.B.: storage 
of BPI on so-called hard disk computer media is to be avoided, because 
mere erasure of data from such media may not irrecoverably destroy the 
BPI and may result in violation of paragraph C of the APO);
    (5) Serve all materials containing BPI disclosed under this APO as 
directed by the Secretary and pursuant to section 207.7(f) of the 
Commission's rules;
    (6) Transmit each document containing BPI disclosed under this APO:
    (i) with a cover sheet identifying the document as containing BPI,
    (ii) with all BPI enclosed in brackets and each page warning that 
the document contains BPI
    (iii) if the document is to be filed by a deadline, with each page 
marked ``Bracketing of BPI not final for one business day after date of 
filing,'' and
    (iv) If by mail, within two envelopes, the inner one sealed and 
marked ``Business Proprietary Information--To be opened only by [name 
of recipient]'', and the outer one sealed and not marked as containing 
BPI;
    (7) Comply with the provision of this APO and section 207.7 of the 
Commission's rules;
    (8) Make true and accurate representations in the authorized 
applicant's application and promptly notify the Secretary of any 
changes that occur after the submission of the application and that 
affect the representations made in the application (e.g., change in 
personnel assigned to the investigation);
    (9) Report promptly and confirm in writing to the Secretary any 
possible breach of the APO; and
    (10) Acknowledge that breach of the APO may subject the authorized 
applicant and other persons to such sanctions or other actions as the 
Commission deems appropriate, including the administrative sanctions 
and actions set out in this APO.
    The APO further provides that breach of an APO may subject an 
applicant to:
    (1) Disbarment from practice in any capacity before the Commission 
along with such person's partners, associates, employer, and employees, 
for up to seven years following publication of a determination that the 
order has been breached;
    (2) Referral to the United States Attorney;
    (3) In the case of an attorney, accountant, or other professional, 
referral to the ethics panel of the appropriate professional 
association;
    (4) Such other administrative sanctions as the Commission 
determines to be appropriate, including public release of or striking 
from the record any information or briefs submitted by, or on behalf 
of, such person or the party he represents; denial of further access to 
business proprietary information in the

[[Page 39357]]

current or any future investigations before the Commission, and 
issuance of a public or private letter of reprimand; and
    (5) Such other actions, including but not limited to, a warning 
letter, as the Commission determines to be appropriate. APOs in 
investigations other than those under Title VII contain similar, though 
not identical, provisions.
    Commission employees are not signatories to the Commission's APOs 
and do not obtain access to BPI through APO procedures. Consequently, 
they are not subject to the requirements of the APO with respect to the 
handling of CBI and BPI. However, Commission employees are subject to 
strict statutory and regulatory constraints concerning BPI and CBI, and 
face potentially severe penalties for noncompliance. See 18 U.S.C. 
1905; Title 5, U.S. Code; and Commission personnel policies 
implementing the statutes. Although the Privacy Act (5 U.S.C. 552a) 
limits the Commission's authority to disclose any personnel action 
against agency employees, this should not lead the public to conclude 
that no such actions have been taken.
    An important provision of the Commission's Title VII and safeguard 
rules relating to BPI/CBI is the ``24-hour'' rule. This rule provides 
that parties have one business day after the deadline for filing 
documents containing BPI to file a public version of the document. The 
rule also permits changes to the bracketing of information in the 
proprietary version within this one-day period. No changes--other than 
changes in bracketing--may be made to the proprietary version. The rule 
was intended to reduce the incidence of APO breaches caused by 
inadequate bracketing and improper placement of BPI. The Commission 
urges parties to make use of the rule. If a party wishes to make 
changes to a document other than bracketing, such as typographical 
changes or other corrections, the party must ask for an extension of 
time to file an amended document pursuant to section 201.14(b)(2) of 
the Commission's rules.

II. Investigations of Alleged APO Breaches

    Upon finding evidence of an APO breach or receiving information 
that there is a reason to believe one has occurred, the Commission 
Secretary notifies relevant offices in the agency that an APO breach 
investigation has commenced and that an APO breach investigation file 
has been opened. Upon receiving notification from the Secretary, the 
Office of the General Counsel (OGC) prepares a letter of inquiry to be 
sent to the possible breacher over the Secretary's signature to 
ascertain the possible breacher's views on whether a breach has 
occurred.\1\ If, after reviewing the response and other relevant 
information, the Commission determines that a breach has occurred, the 
Commission often issues a second letter asking the breacher to address 
the questions of mitigating circumstances and possible sanctions or 
other actions. The Commission then determines what action to take in 
response to the breach. In some cases, the Commission determines that 
although a breach has occurred, sanctions are not warranted, and 
therefore has found it unnecessary to issue a second letter concerning 
what sanctions might be appropriate. Instead, it issues a warning 
letter to the individual. A warning letter is not considered to be a 
sanction.
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    \1\ Procedures for inquiries to determine whether a prohibited 
act such as a breach has occurred and for imposing sanctions for 
violation of the provisions of a protective order issued during 
NAFTA panel or committee proceedings are set out in 19 CFR 207.100-
207.120. Those investigations are initially conducted by the 
Commission's Office of Unfair Import Investigations. During 2005, 
one investigation regarding a possible violation of a protective 
order issued during a NAFTA panel or committee proceeding was 
completed under those procedures.
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    Sanctions for APO violations serve two basic interests: (a) 
Preserving the confidence of submitters of BPI that the Commission is a 
reliable protector of BPI; and (b) disciplining breachers and deterring 
future violations. As the Conference Report to the Omnibus Trade and 
Competitiveness Act of 1988 observed, ``[T]he effective enforcement of 
limited disclosure under administrative protective order depends in 
part on the extent to which private parties have confidence that there 
are effective sanctions against violation.'' H.R. Conf. Rep. No. 576, 
100th Cong., 1st Sess. 623 (1988).
    The Commission has worked to develop consistent jurisprudence, not 
only in determining whether a breach has occurred, but also in 
selecting an appropriate response. In determining the appropriate 
response, the Commission generally considers mitigating factors such as 
the unintentional nature of the breach, the lack of prior breaches 
committed by the breaching party, the corrective measures taken by the 
breaching party, and the promptness with which the breaching party 
reported the violation to the Commission. The Commission also considers 
aggravating circumstances, especially whether persons not under the APO 
actually read the BPI. The Commission considers whether there are prior 
breaches by the same person or persons in other investigations and 
multiple breaches by the same person or persons in the same 
investigation.
    The Commission's rules permit an economist or consultant to obtain 
access to BPI/CBI under the APO in a Title VII or safeguard 
investigation if the economist or consultant is under the direction and 
control of an attorney under the APO, or if the economist or consultant 
appears regularly before the Commission and represents an interested 
party who is a party to the investigation. 19 CFR 207.7(a)(3)(B) and 
(C); 19 CFR 206.17(a)(3)(B) and (C). Economists and consultants who 
obtain access to BPI/CBI under the APO under the direction and control 
of an attorney nonetheless remain individually responsible for 
complying with the APO. In appropriate circumstances, for example, an 
economist under the direction and control of an attorney may be held 
responsible for a breach of the APO by failing to redact APO 
information from a document that is subsequently filed with the 
Commission and served as a public document. This is so even though the 
attorney exercising direction or control over the economist or 
consultant may also be held responsible for the breach of the APO.
    The records of Commission investigations of alleged APO breaches in 
antidumping and countervailing duty cases are not publicly available 
and are exempt from disclosure under the Freedom of Information Act, 5 
U.S.C. 552, section 135(b) of the Customs and Trade Act of 1990, 19 
U.S.C. 1677f(g).
    The two types of breaches most frequently investigated by the 
Commission involve the APO's prohibition on the dissemination of BPI or 
CBI to unauthorized persons and the APO's requirement that the 
materials received under the APO be returned or destroyed and that a 
certificate be filed indicating which action was taken within a 
specified period after the termination of the investigation or any 
subsequent appeals of the Commission's determination. The dissemination 
of BPI usually occurs as the result of failure to delete BPI from 
public versions of documents filed with the Commission or transmission 
of proprietary versions of documents to unauthorized recipients. Other 
breaches have included: The failure to bracket properly BPI/CBI in 
proprietary documents filed with the Commission; the failure to report 
immediately known violations of an APO; and the failure to adequately 
supervise non-legal personnel in the handling of BPI/CBI.

[[Page 39358]]

    Counsel participating in Title VII investigations have reported to 
the Commission potential breaches involving the electronic transmission 
of public versions of documents. In these cases, the document 
transmitted appears to be a public document with BPI omitted from 
brackets. However, the BPI is actually retrievable by manipulating 
codes in software. The Commission has found that the electronic 
transmission of a public document containing BPI in a recoverable form 
was a breach of the APO.
    The Commission advised in the preamble to the notice of proposed 
rulemaking in 1990 that it will permit authorized applicants a certain 
amount of discretion in choosing the most appropriate method of 
safeguarding the confidentiality of the BPI. However, the Commission 
cautioned authorized applicants that they would be held responsible for 
safeguarding the confidentiality of all BPI to which they are granted 
access and warned applicants about the potential hazards of storage on 
hard disk. The caution in that preamble is restated here:

    [T]he Commission suggests that certain safeguards would seem to 
be particularly useful. When storing business proprietary 
information on computer disks, for example, storage on floppy disks 
rather than hard disks is recommended, because deletion of 
information from a hard disk does not necessarily erase the 
information, which can often be retrieved using a utilities program. 
Further, use of business proprietary information on a computer with 
the capability to communicate with users outside the authorized 
applicant's office incurs the risk of unauthorized access to the 
information through such communication. If a computer malfunctions, 
all business proprietary information should be erased from the 
machine before it is removed from the authorized applicant's office 
for repair. While no safeguard program will insulate an authorized 
applicant from sanctions in the event of a breach of the 
administrative protective order, such a program may be a mitigating 
factor. Preamble to notice of proposed rulemaking, 55 FR 24100, 
24103 (June 14, 1990).

    In the past several years, the Commission completed APOB 
investigations which involved members of a law firm or consultants 
working with a firm who were granted access to APO materials by the 
firm although they were not APO signatories. In these cases, the firm 
and the person using the BPI mistakenly believed an APO application had 
been filed for that person. The Commission determined in all of these 
cases that the person who was a non-signatory, and therefore did not 
agree to be bound by the APO, could not be found to have breached the 
APO. Action could be taken against these persons, however, under 
Commission rule 201.15 (19 CFR 201.15) for good cause shown. In all 
cases in which action was taken, the Commission decided that the non-
signatory was a person who appeared regularly before the Commission and 
was aware of the requirements and limitations related to APO access and 
should have verified his or her APO status before obtaining access to 
and using the BPI. The Commission notes that section 201.15 may also be 
available to issue sanctions to attorneys or agents in different 
factual circumstances where they did not technically breach the APO but 
where their actions or inactions did not demonstrate diligent care of 
the APO materials even though they appeared regularly before the 
Commission and were aware of the importance the Commission placed on 
the care of APO materials. In 2005 there was one investigation where 
the Commission considered issuing a sanction to an attorney under 
section 201.15, but determined that there was not good cause, and one 
investigation where a private letter of reprimand was issued to an 
attorney for good cause shown, pursuant to section 201.15.
    Also in recent years the Commission has found the lead attorney to 
be responsible for breaches where he or she failed to provide adequate 
supervision over the handling of BPI. Lead attorneys should be aware 
that their responsibilities for overall supervision of an 
investigation, when a breach has been caused by the actions of someone 
else in the investigation, may lead to a finding that the lead attorney 
has also violated the APO. The Commission has found that a lead 
attorney did not violate the APO in cases where his delegation of 
authority was reasonable. A prior breach by a subordinate attorney 
would suggest that delegation of authority to that attorney may not be 
reasonable.

III. Specific Investigations in Which Breaches Were Found

    The Commission presents the following case studies to educate users 
about the types of APO breaches found by the Commission. The studies 
provide the factual background, the actions taken by the Commission, 
and the factors considered by the Commission in determining the 
appropriate actions. The Commission has not included some of the 
specific facts in the descriptions of investigations where disclosure 
of such facts could reveal the identity of a particular breacher. Thus, 
in some cases, apparent inconsistencies in the facts set forth in this 
notice result from the Commission's inability to disclose particular 
facts more fully.
    Case 1. The Commission determined that a lead attorney, a second 
attorney, and an economist breached the APO by failing to redact BPI 
from a public statement filed on behalf of their client. The BPI 
consisted of the position on the petition taken by a non-petitioner 
member of the domestic industry. Although the persons accused of 
breaching the APO argued that the information was public information, 
the Commission found that it was BPI at the time the information was 
left unredacted in their client's statement. The Commission found that 
the lead attorney committed a second breach by allowing access to the 
BPI by a third attorney in the firm who was not a signatory to the APO.
    The Commission issued private letters of reprimand to the first two 
attorneys and the economist. In reaching its decision, the Commission 
considered the existence of mitigating factors, including the 
unintentional nature of the breaches, the fact that some corrective 
measures were taken immediately, and the absence of any prior breaches 
during the previous two year period usually considered by the 
Commission for purposes of determining sanctions. The Commission noted 
that the two attorneys and the economist did not provide the Commission 
with information indicating that non-signatories who had access to the 
BPI did not read the information. Based on the information available, 
including the amount of time the BPI was available to its client, the 
Commission presumed that the BPI was read by non-signatories to the 
APO.
    The Commission also issued a private letter of reprimand by finding 
good cause under Commission rule 201.15(a) to sanction the third 
attorney, who failed to apply for APO access before handling BPI and 
for his role in supervising the preparation of the public statement 
containing BPI that was the subject of this APO breach investigation. 
The Commission considered the unintentional nature of the breach, the 
fact that some corrective measures were immediately taken, the fact 
that his firm had internal APO procedures in place, and the absence 
within the past two years of any prior breaches or other rule 201.15 
allegations involving the use of BPI as a non-signatory to an APO. The 
Commission also gave consideration to the presumption that unauthorized 
persons read the BPI.
    Case 2. A law firm that was representing a foreign government in a 
World Trade Organization (WTO)

[[Page 39359]]

dispute settlement proceeding provided its client with a confidential 
version of a Commission remand opinion on the same product in dispute. 
This opinion was used as one of many exhibits attached to the foreign 
government's first brief in the WTO dispute. Consequently, the document 
became available for about a month to WTO officials and their staffs, 
third party countries, and the government filing the document. The law 
firm did not discover the inclusion of the confidential opinion, but 
was instead informed by its client, the foreign government.
    Inquiries with the law firm did not extract clear information on 
how the confidential opinion had ended up as an exhibit in the brief. 
Based on the information that was available, the Commission decided to 
issue a private letter of reprimand to the lead attorney for the firm 
in the Commission investigation that resulted in the Commission remand 
opinion. The Commission found that as lead attorney under the APO, the 
attorney had overall responsibility for the conduct of the 
investigation at his firm, including the safeguarding of BPI. The 
Commission reached its decision to issue the private letter of 
reprimand after giving consideration to the existence of several 
mitigating factors including the unintentional nature of the breach, 
the fact that appropriate corrective measures were taken immediately, 
and the absence of any prior breaches in the previous two years. The 
Commission also gave consideration to the aggravating factor that the 
BPI in question may have been viewed by unauthorized persons. The 
Commission found that even though the BPI constituted a very small part 
of a large submission, the large number of parties that had received it 
and the length of time they had the BPI, caused the Commission to 
presume that the BPI was read by non-signatories to the APO.
    The Commission also determined that there was good cause under 
Commission rule 201.15(a) to sanction two attorneys in the firm who 
were not on the Commission APO but were representing the foreign 
government in the WTO dispute settlement proceeding for the use of the 
confidential Commission remand opinion as an exhibit in the foreign 
government's brief. These attorneys were experienced in the 
international trade area and should have taken greater care to check 
the exhibits that were provided to the foreign government for inclusion 
in its brief. The Commission issued private letters of reprimand to 
these attorneys after considering the same mitigating and aggravating 
factors noted with regard to the first attorney.
    Case 3. The Commission issued warning letters to two attorneys for 
a breach of the APO when a package containing CBI on an electronic disk 
was misplaced, and recovered unopened after 14 days, by a courier 
service used by their law firm. The two attorneys, the lead attorney 
and a partner in the firm who was most directly involved in the day to 
day decisions including the handling of the APO materials, were found 
to have breached because the APO materials in the package were made 
available to unauthorized persons during the period the package was 
misplaced, although the package was not opened and the materials were 
not viewed by unauthorized persons. The Commission also found that the 
materials were not stored in accordance with the requirements of the 
APO during the period they were misplaced. There had been no previous 
problems with the courier service prior to this particular incident.
    The Commission considered the attorneys' argument that the 
Commission was time-barred under its rules from finding that a breach 
occurred. The Commission's rules require that the APOB investigation be 
commenced within 60 days of the alleged breach. The attorneys 
mistakenly believed that the investigation began when they were 
notified by letter about the APOB investigation. Instead, an APOB 
investigation begins when the Commission Secretary opens a breach file 
and notifies the appropriate Commission offices that a breach file has 
been opened. This was done well within the 60-day requirement.
    The Commission issued warning letters rather than a sanction after 
giving consideration to the facts that the breach was unintentional, 
the attorneys had no record of prior breaches, the breach was reported 
promptly, and there was no evidence that the APO materials were 
reviewed by unauthorized persons.
    After the Commission issued the warning letters, the attorneys 
filed a request that the Commission reconsider its decision because a 
Commission decision not available to the attorneys at the time they 
filed their responses, but reached before the decision in their case, 
was inconsistent with the Commission's decision in their case. The 
Commission decided to reconsider its earlier decision regarding the 
attorneys because they did not have the other Commission decision 
available to them at the time they filed their responses. However, the 
Commission concluded that the decisions in question were not 
inconsistent and, accordingly, denied their request to reverse the 
decision.
    Case 4. The Commission issued a private letter of reprimand to an 
attorney who was responsible for reviewing the public version of a 
document that was filed with the Commission and served on other persons 
with CBI obtained under the APO left in brackets in a footnote. The 
Commission did not accept counsel's argument that the submitter's 
counsel had waived confidential treatment and that the information was 
not CBI. The attempted waiver was obtained after the alleged breach; 
the attorney offered no evidence that the CBI was publicly available at 
the time of the alleged breach; the CBI in question was contained in 
the staff report and was the work product of a Commission staff member; 
and the information was treated as CBI throughout the Commission 
investigation, even after the alleged breach.
    The Commission reached its decision to sanction the attorney after 
giving consideration to the unintentional nature of the breach, the 
fact that corrective measures were taken immediately, and the fact that 
the law firm had changed its practices since the breach to increase the 
level of review. The Commission found two aggravating circumstances 
present. First, the Commission presumed that the CBI was viewed by 
unauthorized persons, including the firm's clients and other persons to 
whom the firm sent the document, as well as by unauthorized persons who 
may have viewed the CBI while it was in the Commission's public file. 
Second, the breach was discovered by the Commission's staff.
    Case 5. The Commission issued a private letter of reprimand to the 
lead attorney and warning letters to two attorneys and a legal 
assistant/non-attorney APO records coordinator for failure to destroy 
or return materials which contained BPI obtained under the APO in a 
timely manner. The Commission issued a private letter of reprimand to 
the lead attorney after considering as mitigating circumstances that 
the BPI was not disclosed to any unauthorized persons, the breach was 
reported promptly upon its discovery, and that the lead attorney was 
not aware of serious health problems affecting the attorney who held 
the day-to-day responsibility for APO compliance in the investigation. 
The aggravating circumstances considered were the fact that this was 
the lead attorney's third APO breach in a relatively short period of 
time and the fact that the firm had

[[Page 39360]]

retained the BPI materials for a long period of time after they should 
have been returned or destroyed.
    The Commission issued warning letters to the two attorneys after 
considering that the BPI was not disclosed to any unauthorized person 
and the two attorneys had previously not violated an APO. The 
Commission found an additional mitigating factor for the first 
attorney, who was originally responsible for the day-to-day conduct of 
the case, in that he had been experiencing symptoms consistent with a 
potentially life-threatening medical condition. The Commission found an 
additional mitigating factor for the second attorney, who had taken 
over responsibility for the investigation after the first attorney left 
the firm, in that he was not responsible for the APO compliance at the 
time the breach commenced. The Commission issued a warning letter to 
the legal assistant, although he had received a warning letter within 
the previous two years, after considering that the legal assistant was 
acting under the supervision of an attorney during the period in 
question, that BPI was not disclosed to any unauthorized person; and 
that the breach was reported promptly once it was discovered by the 
firm. The Commission found that the duration of the breach was an 
aggravating factor for the two attorneys and the legal assistant.
    The Commission also considered whether there was good cause under 
Commission rule 201.15(a) to sanction an attorney in the firm who was 
not on the APO but was the attorney-APO coordinator for the firm. The 
Commission determined that there was not good cause to sanction the 
attorney after reviewing the description of his duties as the attorney-
APO coordinator.
    Case 6. The Commission issued warning letters to two attorneys, a 
legal assistant, and a professional assistant for failure to remove all 
bracketed BPI from the public version of a brief. The confidential 
brief had been rebracketed as authorized by the Commission's 24-hour 
rule. During the efforts to remove the BPI from those brackets for the 
public version of the brief, the computer program redacting the BPI 
failed. The program had previously been accurate in its redaction of 
BPI from brackets. Consequently, under the constraint of limited time, 
the document was redacted manually. In spite of the efforts of the two 
attorneys and the assistants, BPI remained in the brief and was filed 
with the Commission. Before the brief was sent to other parties, the 
error was found. One attorney contacted the Commission and immediately 
requested that the brief not be entered into EDIS. The redaction was 
corrected before the brief was sent to the other parties.
    A warning letter and not a sanction was issued because the breach 
was unintentional; the firm took immediate steps to notify the 
Commission and to rectify the matter and protect the BPI; the firm 
revamped its APO procedures to allow more time for the redacting after 
adding brackets under the Commission's 24-hour rule; and none of the 
participants in the breach had previously breached a Commission APO. In 
addition, there was no information suggesting that any unauthorized 
person had reviewed the BPI.
    Case 7. The Commission issued a warning letter to one attorney who 
had been responsible for preparing the public version of a draft brief 
which contained several pages of unredacted BPI and which he sent to 
his clients for review. The Commission decided not to sanction the 
attorney because he had no prior breaches within the previous two 
years, the breach was unintentional, prompt action was taken to remedy 
the breach, and none of the non-signatories who received the draft 
containing BPI read the document. A second attorney who responded to 
the original inquiry concerning a possible breach was found not to have 
breached because he was only involved in drafting the original brief 
but not involved in preparing the public version of that document.
    Case 8. The Commission considered whether a number of firm 
personnel had been responsible for a breach of the APO by filing with 
the Commission and serving on the parties listed on the public service 
list a public version of a brief containing BPI that was unbracketed 
and unredacted on one page of the brief. The Commission found that all 
individuals in the firm except a senior associate were not responsible 
for the breach.
    The Commission found that the senior associate was responsible for 
the breach and issued a warning letter. The Commission decided not to 
sanction the attorney because this was the only breach in which he was 
involved within the period generally examined by the Commission for 
purposes of determining sanctions; the breach was unintentional; the 
breach was discovered by the firm; prompt action was taken to remedy 
the breach and the record in the APOB investigation suggested that the 
BPI likely was not revealed to unauthorized parties. Each of the 
attorneys who were served with the public version of the brief were 
signatories to the APO. In addition, each attorney served with the 
brief was notified very quickly about the mistake, and was provided 
with a replacement page and a request that they destroy the page 
containing the BPI. Each firm confirmed that this was done and that the 
brief containing the BPI was not copied or otherwise disclosed to non-
signatory persons.
    The lead attorney was not found to have breached even though he 
signed the public version of the brief containing the BPI. At the time 
he signed the brief, he instructed the senior associate to redact the 
BPI before filing, but the senior associate failed to do this. The 
Commission found that the lead attorney's delegation to the senior 
associate to make the final corrections to the brief was reasonable, 
especially in light of the associate's years of experience practicing 
before the Commission with no prior breaches.
    Case 9. The Commission issued a warning letter to an attorney who 
was responsible for transmitting an electronic version of a document 
containing BPI to a client who was a non-signatory to the APO. Before 
transmitting the document, the attorney had converted the original Word 
document to a .pdf file after using a ``white-out'' program that had 
visibly removed the BPI from the document. The client, in an effort to 
type notes on the document, converted the document back to Word which 
caused the BPI to become visible.
    In determining to issue a warning letter instead of a sanction, the 
Commission considered the fact that the breach was inadvertent, the 
attorney endeavored at all times to abide by the APO; the attorney's 
office and the client took immediate steps to remedy the situation; and 
the firm implemented new procedures regarding the creation of non-
confidential versions of documents containing business proprietary 
information. The client only read portions he annotated and never 
viewed the BPI before sending the document back to the attorney.
    Case 10. The Commission initiated an APOB investigation into 
possible breaches by three attorneys. Two attorneys in a law firm which 
represented respondents in the underlying Commission investigation were 
issued private letters of reprimand for two breaches. The first breach 
was the failure to comply in a timely manner with the return or destroy 
and certification requirements of the APO after judicial proceedings 
ended in connection with the petitioner's appeal of the Commission 
determination. The certificate of destruction was filed approximately 
three months after the judicial proceedings ended. The second breach 
was the failure to inform the

[[Page 39361]]

Commission that one of the two attorneys, who had been the lead 
attorney during the Commission investigation, had left the firm after 
the investigation had ended but before resulting litigation had been 
completed. The second of the two attorneys became the lead attorney for 
the duration of the appeals.
    The Commission found that the first attorney, by failing to inform 
the Commission that he had left the law firm and should no longer be a 
signatory to the APO, retained an obligation to ensure that his former 
firm complied with the APO requirements for returning and destroying 
the materials. The Commission issued the private letter of reprimand to 
the first attorney after considering the mitigating factor that there 
was no disclosure of BPI to unauthorized persons. The Commission also 
considered two aggravating factors. First, it considered the fact that 
he was responsible for a second breach by not informing the Commission 
of his departure from the law firm. Second, he failed to expeditiously 
arrange for destruction or return of BPI upon learning of the breach 
from the Commission Secretary. In spite of his oral assurance that he 
would work with his former colleagues to cure the breach, he took no 
action until he received the Commission's letter of inquiry, over a 
month later.
    The second attorney, who was the lead attorney during the time when 
the certificate of return or destruction should have been filed, failed 
to file it in a timely manner. He also breached the APO by not 
informing the Commission that the first lead attorney had left the 
firm. The Commission issued a private letter of reprimand to the second 
attorney after consideration of two mitigating factors: The lack of any 
disclosure of BPI to unauthorized persons and the fact that he took 
appropriate corrective measures immediately once he learned of the 
breach. The Commission also considered the fact that he was responsible 
for two breaches in this one investigation and the fact that when he 
took over as the lead attorney after the departure of the first 
attorney, he did not make efforts to review and comprehend the APO or 
the Commission's rules on handling APO materials to compensate for his 
inexperience with Commission investigations.
    An attorney from a second law firm, which represented other 
respondents in the Commission investigation, certified to the 
destruction of all materials released under the APO thirty-two days 
after the firm representing the petitioner filed its certificate of 
destruction of the APO materials. The petitioner filed its certificate 
a week after the time lapsed for filing a writ of certiorari to the 
Supreme Court. There is no specific time limit for returning or 
destroying the materials after an appeal has ended but the Commission 
considered whether the certificate was filed within a reasonable period 
of time. The Commission found that this attorney filed the certificate 
within a reasonable period of time and, therefore, did not breach the 
APO.
    Case 11. The Commission investigated whether an attorney, an 
economist, and a secretary in a law firm had breached the APO when the 
secretary transmitted the confidential version of a brief to a client 
who was not a signatory to the APO. The Commission found that the 
attorney had not committed a breach even though he was the lead 
attorney and had signed the Acknowledgment for Clerical Personnel as 
the individual exercising direction and control. The attorney was not 
personally involved in giving directions and supervision to the 
secretary regarding the transmittal of the brief. Instead, the attorney 
had delegated responsibilities for portions of the Commission 
investigation to the economist and it was the economist who directed 
the secretary to mail the document and did not check the material 
before it was mailed. The delegation from the attorney to the economist 
was reasonable in that the economist had no previous breaches and was 
an experienced and fairly senior member of the firm's trade practice 
who had previously given similar assignments to the firm's clerical 
personnel.
    The Commission found that the economist and the secretary were 
responsible for the breach and issued private letters of reprimand to 
them. The economist failed in his supervision of the secretary and the 
secretary, who had worked on Commission investigations for many years, 
had inappropriately mailed a confidential document to a non-signatory 
of the APO. In determining to sanction the economist and the secretary, 
the Commission considered the mitigating factors that they had no prior 
breaches within the previous two years, the breach was unintentional, 
and the firm took appropriate corrective measures once it learned of 
the breach. The Commission also considered the aggravating factor that 
the BPI in question was viewed by an unauthorized person.
    Case 12. The lead attorney in a law firm filed a certificate of 
return or destruction of APO materials 15 months after the conclusion 
of a Commission investigation after an associate in the firm discovered 
that the APO files remained in the firm's secure storage. No appeal had 
been taken so the deadline for the return or destruction of the 
materials was 60 days after the conclusion of the investigation. The 
lead attorney argued that the firm's policy laid the responsibility for 
ensuring that the return and destruction deadline was met with the most 
senior associate assigned to an investigation. In this case the 
associate in question had left the firm six months after the 
investigation had concluded but had sent a certification to the 
Commission upon leaving the firm that all APO materials in his personal 
possession were returned or destroyed. He argued that responsibility to 
return or destroy the materials held in the firm's secure storage was 
that of the lead attorney and the paralegal assigned to the 
investigation.
    The Commission found that both the lead attorney and the associate 
were responsible for the failure to return or destroy the APO materials 
and to certify thereto within the deadline provided in the APO. The 
Commission determined to issue warning letters and not sanctions to the 
two attorneys after giving consideration to the nature of the violation 
and the facts that their failure to fully comply with the APO was 
unintentional, that this was the only failure to comply with an APO in 
which they were involved within the two year period generally examined 
by the Commission for purposes of determining sanctions, and that the 
BPI was fully protected and was not released to any third party while 
it remained at the firm. In addition, with regard to the lead attorney, 
he notified the Commission immediately upon discovering the belated 
destruction and he took further action by changing the firm's 
procedures to prevent future delays in complying with the return or 
destruction requirements of a Commission APO.
    There were investigations in which no breach was found. For 
example, in one case no breach was found because the alleged BPI was 
otherwise publicly available at the time the public version of the pre-
hearing brief containing the alleged BPI was filed; and in another 
case, no breach was found because the attorneys had applied to be 
subject to the APO on behalf of their new clients and the Secretary's 
office had approved the application before they filed a post hearing 
brief containing BPI they had acquired through their representation of 
another client.


[[Page 39362]]


    By order of the Commission.

    Issued: July 6, 2006.
Marilyn R. Abbott,
Secretary to the Commission.
[FR Doc. E6-10914 Filed 7-11-06; 8:45 am]
BILLING CODE 7020-02-P