Subpoena Procedures, 51815-51823 [E9-24222]

Agencies

• POSTAL REGULATORY COMMISSION

[Federal Register Volume 74, Number 194 (Thursday, October 8, 2009)]
[Proposed Rules]
[Pages 51815-51823]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-24222]


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POSTAL REGULATORY COMMISSION

39 CFR Parts 3001 and 3005

[Docket No. RM2009-12; Order No. 293]


Subpoena Procedures

AGENCY: Postal Regulatory Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission is proposing rules to address issuance of, 
compliance with, and enforcement of administrative subpoenas directed 
to the Postal Service. The proposed rules also address orders related 
to depositions and interrogatory responses. The Commission has 
developed this proposal in response to new statutory authority. It 
invites comments on its proposed approach to implementation of this new 
authority.

DATES: Comments due November 9, 2009. Reply comments due November 23, 
2009.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at https://www.prc.gov.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
202-789-6820 or stephen.sharfman@prc.gov.

SUPPLEMENTARY INFORMATION:

I. Introduction
II. Background
III. Changes Made by the PAEA
IV. Discussion of the Proposed Rules
V. Section-by-Section Analysis
VI. Public Representative
VII. Ordering Paragraphs

I. Introduction

    This notice of proposed rulemaking is the latest in a series of 
actions being taken by the Postal Regulatory Commission (Commission) to 
implement provisions of the Postal Accountability and Enhancement Act 
(PAEA), Public Law 109-435, 120 Stat. 3198, December 20, 2006. Section 
602 of the PAEA amends section 504 of title 39 of the United States 
Code by adding a new paragraph 504(f) \1\ which, among other things, 
authorizes: (a) The issuance of subpoenas requiring officers, 
employees, agents, or contractors of the United States Postal Service 
(Postal Service) to appear and present testimony or to produce 
documentary or other evidence; and (b) the issuance of orders that 
require the taking of depositions and responses to written 
interrogatories by any of those same persons. As amended, section 504 
further authorizes the enforcement of subpoenas by appropriate district 
courts of the United States. See 39 U.S.C. 504(f)(3).
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    \1\ Section 601(a)(3) of the PAEA created section 504 by re-
designating then-existing section 3604 of title 39 as section 504.
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II. Background

    Prior to passage of the PAEA, the Commission's authority to compel 
the production of relevant information from the Postal Service was 
limited. Section 3603 of the Postal Reorganization Act (PRA) \2\ gave 
the Commission's predecessor, the Postal Rate Commission, the authority 
to
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    \2\ Sections 601(a)(3), 604(a) and 1010(c)(1) of the PAEA 
renumbered section 3603 of the PRA as Sec.  503 and amended Sec.  
503 by, inter alia, replacing ``Postal Rate Commission'' with 
``Postal Regulatory Commission.''

promulgate rules and regulations and establish procedures, subject 
to chapters 5 [Administrative Procedure] and 7 [Judicial Review] of 
* * * [the Administrative Procedure Act, 5 U.S.C. 101, et seq.] * * 
*, and [to] take any other action they deem necessary and proper to 
carry out their functions and obligations to the Government of the 
United States and the people as prescribed under this chapter [of 
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the PRA].

Acting pursuant to these authorities, the Postal Rate Commission 
established a number of procedures and adopted rules of practice.
    Among the procedures regularly used by the Commission and presiding 
officers in proceedings over the years has been the procedure of 
issuing information requests. Such requests have been routinely issued 
to obtain information that supplemented, clarified or more fully 
explained information presented by, or positions taken by, the Postal 
Service and other participants in Commission proceedings.
    In addition, the Commission's original rules of practice were 
codified as 39 CFR part 3001. Rule 3 of those rules states that ``[t]he 
rules of practice in this part are applicable to proceedings before the 
* * * Commission under the Act, including those which involve a hearing 
on the record before the Commission or its designated presiding 
officer.'' Several rules govern discovery in Commission proceedings: 
Rule 25 (Discovery--general policy); rule 26 (Interrogatories for the 
purpose of discovery); rule 27 (Requests for production of documents or 
things for purpose of discovery); and rule 28 (Requests for admission 
for purpose of discovery).
    Prior to passage of the PAEA, there were occasions on which the 
Commission and the Postal Service could not agree on whether certain 
information requested by the Commission had to be produced. While in 
most cases the Commission and the Postal Service were able to resolve 
their disagreements in a mutually satisfactory manner, there were cases 
in which disagreements proved to be irreconcilable. In those instances, 
the Postal Service's refusal to provide information delayed and 
complicated the Commission's ability to carry out its duties.\3\ The 
Postal Service's refusal to provide the requested information forced 
the Commission to rely upon alternate and less desirable information in 
order to carry out its statutory responsibilities.
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    \3\ See PRC Op. R94-1, paras. 3188-93 (refusal of Postal Service 
to comply with order compelling responses to interrogatories); and 
PRC Op. MC96-3 at 35 (refusal of Postal Service to comply with order 
directing it to present additional cost presentations).
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    The Commission's inability to obtain the specific information it 
had requested in those cases was ultimately due to the fact that the 
Commission could not enforce its orders. Neither the PRA, nor the 
Administrative Procedure Act (APA), authorized the Commission to seek a 
court order directing production of the requested information.
    The typical mechanism for enabling an administrative agency to 
compel production of information is the judicially enforceable 
administrative subpoena.\4\ Without the authority to

[[Page 51816]]

issue subpoenas and enforce them in court, the Commission's only 
recourse was to deal indirectly with the Postal Service's refusal to 
provide the desired information.\5\
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    \4\ See Report to Congress on the Use of Administrative Subpoena 
Authorities by Executive Branch Agencies and Entities, U.S. 
Department of Justice Office of Legal Policy (December 2002). 
Administrative subpoenas and their enforcement by courts must be 
specifically provided for by statute. Id. The PRA contains no 
provision for issuing administrative subpoenas. Section 555(d) of 
the APA provides that ``[a]gency subpoenas authorized by law shall 
be issued to a party on request and, when required by rules of 
procedure, on a statement or showing of general relevance and 
reasonable scope of the evidence sought.'' (Emphasis added.) Without 
further authorization by law, Sec.  555(d) does not give an agency 
the power to issue subpoenas. Similarly, Sec.  556(c)(2) authorizes 
presiding officers at agency hearings to ``issue subpoenas 
authorized by law * * *.'' (Emphasis added.) Once again, further 
authorization is needed for an agency to issue an administrative 
subpoena. Without the authority to issue a subpoena, an agency 
cannot seek judicial enforcement of its attempts to obtain 
information.
    \5\ For example, the remedy for failing to obey a Commission 
order directing compliance with a discovery request is narrowly 
limited. Rule 25 of the rules of practice states that ``[t]he 
Commission or the presiding officer may make such orders in regard 
to the failure as are just, and among others, may direct that the 
matters regarding which the order was made or any other designated 
facts shall be taken to be established for the purposes of the 
proceeding in accordance with the claim of the participants 
obtaining the order, or prohibit the disobedient participant from 
introducing designated matters in evidence, or strike the evidence, 
complaint or pleadings or parts thereof.'' 39 CFR 3001.25(c). 
Notwithstanding the potential availability of those remedies, there 
have been occasions on which the Postal Service has refused to 
produce data requested by a party to a Commission proceeding. See, 
e.g., Docket No. 94-1, Statement of the United States Postal Service 
Concerning Order No. 1034, November 3, 1994, at 2 (Postal Service 
refusal to release disputed international mail data under amended 
protective order).
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III. Changes Made by the PAEA

    While limitations on the Commission's ability to compel the 
production of information may have been acceptable prior to the passage 
of the PAEA, that is no longer the case. Implementation of the PAEA's 
``modern system of regulation'' requires that the Commission have 
access to information needed to insure financial transparency and to 
make informed decisions.\6\ To enable the Commission to carry out its 
mission, the PAEA strengthened the Commission's ability to obtain 
information by giving it authority under section 504(f) to compel the 
production of relevant and material information by order and by 
subpoena.
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    \6\ Prior to enactment of the PAEA, the Commission's need for 
enhanced authority to compel the production of needed information 
was expressly recognized by the 2003 Report of the President's 
Commission on the United States Postal Service entitled Embracing 
the Future: Making the Tough Choices to Preserve Universal Mail 
Service (Presidential Commission Report). That report recommended 
that the Commission be given ``the authority to request accurate and 
complete financial information from the Postal Service, including 
through the use of subpoena powers, if necessary. * * *'' Commission 
access to such information was deemed essential for it ``to ensure 
financial transparency and make fully informed determinations on 
issues ranging from rate ceilings to cross-subsidies. * * *'' Id. at 
69.
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    The pre-PAEA mechanisms for seeking information from the Postal 
Service remain available to the Commission. For example, the Commission 
continues to issue information requests.\7\ In addition, the rules of 
practice in 39 CFR part 3001 remain in effect and will continue to 
provide important mechanisms for seeking needed information and data 
from the Postal Service.
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    \7\ E.g., Docket No. ACR2008, Commission Information Request No. 
1, January 14, 2009; Docket No. CP2009-20, Chairman's Information 
Request No. 1 and Notice of Filing of Questions (Under Seal), 
January 18, 2009.
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    Building upon the Commission's existing information collection 
mechanisms, Congress enacted 39 U.S.C. 504(f)(2)(A) authorizing the 
issuance of subpoenas and 39 U.S.C. 504(f)(2)(B) authorizing the 
issuance of orders to take depositions and to provide responses to 
written interrogatories.
    Hopefully, the mere availability of the new authorities in section 
504 will facilitate the resolution of future disagreements between the 
Commission and the Postal Service over the appropriateness of producing 
requested information and resort to compulsory measures will be 
rare.\8\
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    \8\ Successful implementation of the PAEA depends heavily upon 
the cooperation of all participants, including the Postal Service. 
While the Commission considers its authority to compel the 
production of information an important addition to its regulatory 
tools, it hopes that resort to that new authority will be 
unnecessary.
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IV. Discussion of the Proposed Rules

    The Commission is proposing the adoption of a new part 3005 
organized in three subparts. Subpart A integrates subpart 3005 into the 
Commission's existing rules and regulations by making various existing 
rules applicable to part 3005. Conforming changes are proposed to 39 
CFR 3001.3 of the rules of practice to make clear that the rules of 
practice apply to the new part 3005. Subpart B establishes regulations 
governing the issuance and enforcement of subpoenas under the authority 
of 39 U.S.C. 504(f)(2)(A) and 504(f)(3). Finally, subpart C implements 
39 U.S.C. 504(f)(2)(B), which authorizes the ordering of depositions 
and responses to written interrogatories. Both the regulations in 
subpart B (governing subpoenas) and subpart C (providing for orders 
that require depositions and responses to written interrogatories) 
apply to ``covered persons'' as defined in 39 U.S.C. 504(f)(4).

A. Part 3001--Rules of Practice and Procedure

    Subpart A--Rules of General Applicability. The Commission's 
authority under 39 U.S.C. 504(f)(2) to compel the Postal Service to 
provide information applies both to proceedings before the Commission 
and to situations in which the Commission requires information from the 
Postal Service to prepare a report in order to carry out its functions 
and obligations. In both situations, procedures are needed to invoke 
the authority of 39 U.S.C. 504(f)(2). The proposed amendment to rule 3 
is being made to clarify that the rules of practice are to be used in 
conjunction with part 3005. This change is consistent with the 
inclusion of references in part 3005 to specific rules of practice.

B. Part 3005--Procedures for Compelling Production of Information by 
the Postal Service

    Subpart A--General. This subpart confirms that part 3005 implements 
39 U.S.C. 504(f); makes the Commission's rules of practice applicable 
to part 3005; and defines certain terms consistent with the definitions 
and usage of those terms in 39 U.S.C. 504(f).

C. Part 3005--Procedures for Compelling the Production of Information 
by the Postal Service

    Subpart B--Subpoenas. Under the provisions of 39 U.S.C. 
504(f)(2)(A), the Chairman, Commissioners designated by the Chairman, 
and administrative law judges appointed by the Commission may, upon 
compliance with certain statutory requirements, issue subpoenas to a 
``covered person.'' A ``covered person'' is defined in 39 U.S.C. 
504(f)(4) to mean ``an officer, employee, agent, or contractor of the 
Postal Service.'' For a subpoena to be issued, a majority of the 
Commissioners holding office must concur in writing prior to its 
issuance. 39 U.S.C. 504(f)(2). The Commission can apply to an 
appropriate United States district court to enforce its subpoena. 39 
U.S.C. 504(f)(3). Failure to obey an order of the court is punishable 
as contempt.
    The Commission expects that in most cases, its subpoena authority 
will be exercised as an enforcement mechanism in the sense that it will 
be used to compel the production of information if a prior attempt to 
obtain the information was unsuccessful.\9\ Any Commissioner, 
administrative law judge, presiding officer, or third party will have 
an opportunity to invoke the procedures for issuing a subpoena.\10\
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    \9\ The exception, discussed below, would be presented in those 
situations in which the Commissioners authorize the issuance of a 
subpoena without an information request having previously been made 
because of unique circumstances that require the immediate 
production of information.
    \10\ While Sec.  504(f) authorizes only the Chairman, 
Commissioners designated by the Chairman, and administrative law 
judges to issue subpoenas, nothing in that section precludes other 
persons from seeking the issuance of a subpoena by one of the three 
authorized officials.

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[[Page 51817]]

    The Commission would emphasize that a subpoena issued under 39 
U.S.C. 504(f)(2)(A) is not intended to be a new discovery tool for 
third parties. Instead, it will, in most cases, be a mechanism for 
enforcing information requests and discovery orders. Issuance of a 
subpoena will give the Commission the power to obtain information, but 
will not unnecessarily burden the Postal Service. Accordingly, when 
discovery disputes arise during a Commission proceeding, the Commission 
will not, in general, consider the issuance of a subpoena until the 
normal process of seeking information by means of an order to compel 
has been unsuccessful. It is at that point that enforcement could be 
sought by subpoena.
    As a means of enforcing information requests or Commission orders 
to compel, a Commission subpoena differs in important ways from 
judicial subpoenas.\11\ For example, in the district courts of the 
United States, rule 45 of the Federal Rules of Civil Procedure 
authorizes the issuance of subpoenas by the clerk of the court or by 
attorneys as officers of the court without prior court approval. By 
contrast, the Commission's subpoena power under 39 U.S.C. 504(f)(2) is 
more narrowly circumscribed and can only be issued by the Chairman, 
Commissioners designated by the Chairman, or administrative law judges 
appointed by the Commission under 5 U.S.C. 3105. Moreover, to be 
issued, a subpoena must receive prior written concurrence from the 
majority of Commissioners then holding office.
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    \11\ This is not unusual since the issuance of an administrative 
subpoena is typically authorized by specific statutory provisions 
that reflect the unique mission and needs of a particular agency. 
See Report to Congress on the Use of Administrative Subpoena 
Authorities by Executive Branch Agencies and Entities Pursuant to 
Public Law 106-544, U.S. Department of Justice, Office of Legal 
Policy (2001).
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    While third parties, such as parties or participants in Commission 
proceedings, will not be able to issue their own subpoenas unilaterally 
as is the case in court litigation, they can benefit indirectly from 
the availability of subpoenas by having the opportunity to request the 
Commissioners or an administrative law judge to issue a subpoena. The 
proposed regulations expressly authorize such requests. These requests 
are analogous to, and a further extension of, the long-standing 
procedure available to participants in Commission hearings under which 
they can seek a Commission order compelling compliance with a discovery 
request. For example, proposed rule 3005.13(a)(1) would permit a party 
to seek Commission enforcement by subpoena of a Commission order to 
compel a Postal Service response to the party's discovery request.\12\
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    \12\ The same would be true with respect to a Commission 
information request. Under current practice, any interested person 
can request the Commission to issue an information request. See, 
e.g., Docket No. ACR2008, Valpak Direct Marketing Systems, Inc. and 
Valpak Dealers' Association, Inc. Motion For Issuance of Commission 
Information Request Concerning Core Costing Data On Detached Address 
Labels, January 13, 2009; and United States Postal Service FY2008 
Annual Compliance Report, January 30, 2009. If the Commission issues 
the requested information request, an interested person could also 
request the issuance of a subpoena to enforce the information 
request.
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    Another important difference between a judicial subpoena and a 
subpoena authorized by 39 U.S.C. 504(f)(2)(A) is that while a judicial 
subpoena can be issued to obtain information from almost anyone upon 
whom service can be made, a subpoena authorized by 39 U.S.C. 
504(f)(2)(A) can only seek information in the possession of a ``covered 
person,'' i.e., ``an officer, employee, agent, or contractor of the 
Postal Service.''
    The process whereby a third party seeks issuance of a subpoena 
would begin by filing a written motion under rule 21(a) of the rules of 
practice. In cases in which hearings have been ordered by the 
Commission, the motion would be filed with the presiding officer.\13\ 
In the interest of avoiding delay, the Commission is proposing that 
requests for administrative subpoenas be served on the Postal Service 
even if the information being sought is apt to be in the possession of 
a third party, such as a Postal Service contractor. Service upon the 
Postal Service would seem appropriate since the information being 
sought is information related to the Postal Service and the Postal 
Service is therefore the real party in interest. Moreover, the Postal 
Service is in the best position to know who within, or outside of, the 
Postal Service is in possession of the information. In the event the 
information is in the possession of such a third party covered person, 
the Postal Service would be required to transmit the request to the 
third party.
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    \13\ The presiding officer could be the Chairman, another 
Commissioner, an administrative law judge appointed under 5 U.S.C. 
3105 or a Commission employee.
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    The Postal Service and others would be permitted to file answers 
under rule 21(b). Since a covered person other than the Postal Service 
could ultimately be responsible for producing the requested 
information, the Postal Service will be required to obtain from that 
covered person any objections that are personal to that covered person 
and to presenting such objections in the answer that it files pursuant 
to rule 21(b).\14\
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    \14\ By giving individuals served with a subpoena the 
opportunity to raise objections unique to them, the procedure will 
ensure their rights to due process are protected. This procedure 
will also obviate the need, as there is in court litigation, for a 
motion to quash the subpoena. See Fed. R. Civ. P. 45(c)(3). While 
there would be no motion to quash, per se, objections, attempts to 
reduce the scope of a subpoena, or requests for protective 
conditions by the Postal Service, covered persons, and others would 
be made and considered before issuance of the subpoena.
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    Upon consideration of the motion, the responses, and any oral 
presentations, the presiding officer would forward a recommendation to 
the Commission together with the pleadings and relevant portions of the 
record. The Commissioners would decide whether issuance of a subpoena 
is appropriate and, if so, whether any conditions should be attached to 
the subpoena, including conditions requiring confidential treatment 
pursuant to part 3007 of the Commission's regulations. In reaching 
their decision, the Commissioners could, if they deemed it necessary, 
entertain further written or oral submissions before deciding whether 
to approve the issuance of a subpoena.
    The Commissioners who approve of the issuance of a subpoena would 
give their approval in writing and the subpoena would be issued by the 
Chairman, a Commissioner designated by the Chairman, or by the 
presiding officer (provided the presiding officer was an administrative 
law judge appointed under 5 U.S.C. 3105).\15\
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    \15\ Attached to this notice is a suggested form for subpoenas 
that would be issued under this part 3005. Comments are invited on 
this illustrative sample.
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    A similar process for requesting the issuance of subpoenas would 
apply in situations in which hearings have not been ordered by the 
Commission. For example, if the Postal Service fails or refuses to 
respond to an information request issued by the Commission, a third 
party could file a request for the issuance of a subpoena. In such a 
case, a motion would be filed with the Secretary of the Commission 
under rule 21(a). The Postal Service and other interested persons could 
file answers pursuant to rule 21(b) and the Commission would determine 
whether the subpoena should be issued.
    Individual Commissioners and presiding officers would also be able 
to seek the enforcement of information and discovery requests by 
subpoena in the absence of a third party request. Requests by a 
Commissioner or presiding officer would be made directly to the full 
Commission. If a majority of the Commissioners give

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written approval, a subpoena would be issued by the Chairman, a 
Commissioner designated by the Chairman, or an administrative law 
judge. Since neither the Postal Service, nor any other interested 
person would have had an opportunity to oppose the subpoena, the 
subpoena would be subject to motions to quash, limit, or condition the 
subpoena.
    Although the Commission views the principal purpose of a subpoena 
to be the enforcement of information or discovery requests, a subpoena 
could also be used as a primary information collection tool. For 
example, a properly authorized and issued subpoena could be used to 
obtain information even if an information or discovery request has not 
previously been presented to the Postal Service. To insure the 
availability of subpoenas for this purpose, the Commission has included 
provisions in its proposed regulations expressly providing for the 
issuance of subpoenas without requiring prior information requests as a 
precondition to such issuance.\16\ Subpoenas issued as primary 
information collection tools would also be subject to motions to quash, 
limit, or condition the subpoena.
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    \16\ These provisions are contained in proposed section 3005.12 
and are described, infra.
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    Section 504(f)(2)(A) does not specify on whom the subpoena must be 
served. In a judicial context, when a subpoena seeks information from a 
particular person or entity, such as a corporation, the subpoena is 
served upon that person or entity. The judicial procedure is 
facilitated by the fact that in court litigation there is usually both 
sufficient time and opportunity (by means of other discovery methods) 
to ascertain who possesses the needed information. By contrast, the 
timeframe in which the Commission must act in the wake of the PAEA is 
relatively tight given the amount of review and analysis that must be 
accomplished. Moreover, the identity of the individuals or entities in 
possession of the required information may not be known to the 
Commission at the time the information is sought.
    To facilitate the transmission of the subpoena to the appropriate 
person or persons, the proposed rules provide that subpoenas would be 
served on the Postal Service. The Postal Service would, in turn, be 
required to transmit the subpoena to the persons responsible for 
providing the requested information. After delivery of the subpoena to 
the appropriate person, the Postal Service would be required to certify 
to the Commission that the subpoena had been delivered and to advise 
the Commission of the manner, date, and time of delivery, and the name, 
business address, telephone number and e-mail address of the person 
receiving the subpoena. The Postal Service would also be required to 
confirm that the person receiving the subpoena had been advised of the 
return date of the subpoena.
    The proposed rules would also establish the parameters for 
responses to subpoenas. For example, documents are to be produced in 
the form they are kept in the usual course of business; and claims of 
undue burden and confidentiality must be adequately supported.
    Finally, the rules contemplate the possible need for judicial 
enforcement of an administrative subpoena issued by the Commission. The 
filing and service requirements are governed by other federal statutes 
and rules of court applicable to proceedings in the United States 
district courts.

D. Part 3005--Procedures for Compelling the Production of Information 
by the Postal Service

    Subpart C--Orders Regarding Depositions and Responses to Written 
Interrogatories. Section 504(f)(2)(B) of title 39 expressly authorizes 
the Chairman, Commissioners authorized by the Chairman, and 
administrative law judges appointed by the Commission to ``order the 
taking of depositions and responses to written interrogatories by a 
covered person.'' Concurrence by a majority of the Commissioners is not 
required for the issuance of such an order.
    The authorities contained in this section are in addition to the 
authorities provided by the PRA and APA which underlie the part 3001 
rules of practice and authorize orders compelling discovery. It is the 
Commission's view that the authority to issue orders under Sec.  
504(f)(2)(B) can therefore be exercised in the context of an 
adjudicatory hearing as an alternative to the procedures in part 3001 
for compelling discovery. An order can also be issued under Sec.  
504(f)(2)(B) outside the context of a Commission proceeding.

V. Section-By-Section Analysis

    Section 3001.3 Scope of rules. The amendment to rule 3 of the rules 
of practice is intended to clarify that the rules of practice apply 
both to proceedings before the Commission and to the procedures in part 
3005 for compelling the production of information by the Postal 
Service. This change is consistent with the inclusion in part 3005 of 
references to specific rules of practice.
    Section 3005.1 Scope of rules. This proposed rule states that part 
3005 implements 39 U.S.C. 504(f). It also makes applicable the rules of 
practice in part 3001, unless otherwise ordered by the Commission.
    Section 3005.2 Terms defined. This proposed rule provides 
definitions for the terms ``administrative law judge,'' ``Chairman,'' 
``covered person,'' and ``designated Commissioner'' as used in part 
3005.
    Section 3005.11 General rule--subpoenas. This proposed rule sets 
forth the basic requirements for the issuance of a subpoena pursuant to 
39 U.S.C. 504(f)(2)(A). Subpoenas may only be issued by the Chairman, a 
designated Commissioner or an administrative law judge. When authorized 
in writing by a majority of the Commissioners then in office, a 
subpoena shall be issued by the Chairman, a designated Commissioner, or 
an administrative law judge. This rule also lists the purposes for 
which a subpoena may be issued; the types of conditions or limitations 
that may be imposed on the subpoena to protect the recipient of the 
subpoena from oppression, undue burden, or expense, including the 
possible imposition of confidentiality or non-disclosure conditions as 
provided in part 3007 of this chapter; and identifies the rule that 
establishes the service requirements for a subpoena. A proposed form of 
subpoena is provided as Appendix A to Part 3005--Subpoena Form.
    Section 3005.12 Subpoenas issued without receipt of a third-party 
request. This proposed rule provides for the issuance of a subpoena 
without a request having been received from a third party. For example, 
the Commission could deem a subpoena necessary if the Postal Service 
were to refuse to provide information during preliminary review of a 
Postal Service filing. Or a subpoena could be needed if the Postal 
Service were to refuse to provide information needed for the 
preparation of a report. Finally, a presiding officer might deem it 
necessary to obtain the issuance of a subpoena to enforce a presiding 
officer's information request. In such cases, there would be no ``third 
party'' request for the subpoena.
    From a procedural standpoint, the request would be made directly to 
the full Commission by a Commissioner or presiding officer. To insure 
that the Postal Service and other interested persons, including covered 
persons potentially affected by the subpoena, have an opportunity to 
oppose the subpoena, or to limit or condition its scope and operation, 
any duly authorized subpoena would be subject

[[Page 51819]]

to a motion under rule 21(a) to quash, limit, or condition the 
subpoena. Replies to such a motion could be made by any interested 
person under rule 21(b).
    As a general rule, the Postal Service would be given an opportunity 
to produce information voluntarily before a subpoena is issued under 
this section. However, provision is also made for the summary issuance 
of a subpoena without issuance of a prior information request. While 
the Commission would expect the summary issuance of a subpoena to 
rarely, if ever, be necessary, it is including provision for such 
summary issuance in order to insure the ability to act promptly if 
necessary. In such cases, the Postal Service would have an opportunity 
following issuance of the subpoena to file a motion to quash the 
subpoena, limit its scope, or to place conditions on the subpoena. 
Objections by covered persons could be asserted in any such filing by 
the Postal Service. Pending resolution of the Postal Service's motion, 
the Postal Service and all covered persons would be required to 
maintain the information being sought by the subpoena.
    Section 3005.13 Subpoenas issued in response to a third-party 
request. This proposed rule establishes procedures by which subpoenas 
can be requested by third parties. One set of procedures applies to 
those situations in which the Commission has ordered hearings. 
Typically, in those cases the subpoena will be available as a means of 
enforcing the discovery rules in the Commission's part 3001 rules of 
practice. A second set of procedures applies to situations in which no 
hearings have been ordered, such as an annual compliance review. In 
these cases, information will typically be sought by means of 
information requests, including information requests that have been 
proposed by a third party and issued by the Commission or a 
Commissioner. In this latter situation, a third party would be able to 
request the issuance of a subpoena to enforce the information request. 
Requests under either procedure must include certain minimum showings 
and demonstrations in order to be granted, including showings of 
relevance of the information and adequate specification of the 
information requested.
    Requirements are imposed upon the Postal Service to insure that the 
covered person expected to produce the requested information has an 
opportunity to present any objections to the issuance of a subpoena 
that are unique to that covered person.
    Section 3005.14 Service of subpoenas. This proposed rule specifies 
the manner in which subpoenas are to be served on covered persons. The 
Commission is proposing that subpoenas will be served initially upon 
the Postal Service with the requirement that the Postal Service 
transmit and deliver the subpoena to the person or contractor 
ultimately responsible for testifying or for otherwise providing the 
information being sought and that the Postal Service file proof of 
service with the Secretary of the Commission that identifies the 
covered person expected to supply the requested information. Finally, 
provision is made for advising the public as to the return date of the 
subpoena.
    Section 3005.15 Duties in responding to a subpoena. This proposed 
rule specifies the manner in which the recipient of a subpoena will be 
required to respond to the subpoena. It covers such subjects as the 
form in which documentary information is to be produced; the manner in 
which electronically stored information is to be produced; and the 
showing that must be made if information is not disclosed on grounds of 
privilege, confidentiality, or trade secret. Requests for confidential 
treatment of information produced in response to a subpoena are to be 
made in the manner provided in part 3007 of the Commission's 
regulations.
    Section 3005.16 Enforcement of subpoenas. This proposed rule 
implements the authority in 39 U.S.C. 504(f)(3) under which the 
Commission can seek judicial enforcement of an administrative subpoena 
issued pursuant to 39 U.S.C. 504(f)(2)(A).
    Section 3005.21 Authority to order depositions and responses to 
written interrogatories. This proposed rule implements the authority of 
the Chairman, any designated Commissioner or any administrative law 
judge to order that a deposition be taken of a covered person or that 
the covered person respond to a written interrogatory.

VI. Public Representative

    Pursuant to 39 U.S.C. 505, Cassandra Hicks is appointed to serve as 
officer of the Commission (Public Representative) to represent the 
interests of the general public in the captioned docket.

VII. Ordering Paragraphs

    It is ordered:
    1. Docket No. RM2009-12 is established for the purpose of receiving 
comments on the Commission's proposed rules establishing procedures for 
obtaining information from the Postal Service under the Postal 
Accountability and Enhancement Act.
    2. Interested persons may submit initial comments no later than 30 
days from the date of publication of this notice in the Federal 
Register.
    3. Reply comments may be filed no later than 45 days from the date 
of publication of this notice in the Federal Register.
    4. Pursuant to 39 U.S.C. 505, Cassandra Hicks is appointed to 
represent the interests of the general public in this docket.
    5. The Secretary shall arrange for publication of this notice in 
the Federal Register.

List of Subjects

39 CFR Part 3001

    Administrative practice and procedure, Postal Service.

39 CFR Part 3005

    Administrative practice and procedure, Confidential business 
information, Postal Service, Reporting and recordkeeping requirements.

    By the Commission.
Shoshana M. Grove,
Secretary.

    For the reasons discussed in the preamble, the Postal Regulatory 
Commission proposes to amend chapter III of title 39 of the Code of 
Federal Regulations as follows:

PART 3001--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for 39 CFR part 3001 is revised to read 
as follows:

    Authority:  39 U.S.C. 404(d); 503; 504; 3661.

    2. Revise Sec.  3001.3 to read as follows:


Sec.  3001.3  Scope of rules.

    The rules of practice in this part are applicable to proceedings 
before the Postal Regulatory Commission under the Act, including those 
which involve a hearing on the record before the Commission or its 
designated presiding officer and, as specified in part 3005 of this 
chapter to the procedures for compelling the production of information 
by the Postal Service. They do not preclude the informal disposition of 
any matters coming before the Commission not required by statute to be 
determined upon notice and hearing.
    3. Add part 3005 to read as follows:

PART 3005--PROCEDURES FOR COMPELLING PRODUCTION OF INFORMATION BY 
THE POSTAL SERVICE

Subpart A--General
Sec.

[[Page 51820]]

3005.1 Scope and applicability of other parts of this title.
3005.2 Terms defined for purposes of this part.
Subpart B--Subpoenas
3005.11 General rule--subpoenas.
3005.12 Subpoenas issued without receipt of a third-party request.
3005.13 Subpoena issued in response to a third-party request.
3005.14 Service of subpoenas.
3005.15 Duties in responding to a subpoena.
3005.16 Enforcement of subpoenas.
Subpart C--Depositions and Written Interrogatories
3005.21 Authority to order depositions and responses to written 
interrogatories.
Appendix A to Part 3005--Subpoena Form

    Authority:  39 U.S.C. 503; 504; 3651(c); 3652(d).

Subpart A--General


Sec.  3005.1  Scope and applicability of other parts of this title.

    (a) The rules in this part govern the procedures for compelling the 
production of information by the Postal Service pursuant to 39 U.S.C. 
504(f).
    (b) Part 3001, subpart A of this chapter applies unless otherwise 
stated in this part or otherwise ordered by the Commission.


Sec.  3005.2  Terms defined for purposes of this part.

    (a) Administrative law judge means an administrative law judge 
appointed by the Commission under 5 U.S.C. 3105.
    (b) Chairman means the Chairman of the Commission.
    (c) Covered person means an officer, employee, agent, or contractor 
of the Postal Service.
    (d) Designated Commissioner means any Commissioner who has been 
designated by the Chairman to act under this part.

Subpart B--Subpoenas


Sec.  3005.11  General rule--subpoenas.

    (a) Subject to the provisions of this part, the Chairman, any 
designated Commissioner, and any administrative law judge may issue a 
subpoena to any covered person.
    (b) The written concurrence of a majority of the Commissioners then 
holding office shall be required before any subpoena may be issued 
under this subpart. When duly authorized by a majority of the 
Commissioners then holding office, a subpoena shall be issued by the 
Chairman, a designated Commissioner, or an administrative law judge.
    (c) Subpoenas issued pursuant to this subpart may require the 
attendance and presentation of testimony or the production of 
documentary or other evidence with respect to any proceeding conducted 
by the Commission under title 39 of the United States Code or to obtain 
information for preparation of a report under said title 39.
    (d) Subpoenas issued pursuant to this subpart shall include such 
conditions as may be necessary or appropriate to protect a covered 
person from oppression, or undue burden or expense, including the 
following:
    (1) That disclosure may be had only on specified terms and 
conditions, including the designation of the time or place;
    (2) That certain matters not be inquired into, or that the scope of 
disclosure be limited to certain matters;
    (3) That disclosure occur with no one present except persons 
designated by the Commission;
    (4) That a trade secret or other confidential research, 
development, or commercial information not be revealed or be revealed 
only in a designated way as provided in part 3007 of this chapter; and
    (5) Such other conditions deemed necessary and appropriate under 
the circumstances presented.
    (e) Subpoenas shall be served in the manner provided by Sec.  
3005.14.


Sec.  3005.12  Subpoenas issued without receipt of a third-party 
request.

    (a) A subpoena duly authorized by a majority of the Commissioners 
then holding office may be issued by the Chairman, a designated 
Commissioner, or an administrative law judge under Sec.  3005.11 of 
this part without a request having been made by a third party under 
Sec.  3005.13.
    (b) Except as provided in paragraph (c) of this section, a subpoena 
shall not be issued until after the Postal Service has been provided an 
opportunity to produce the requested information voluntarily.
    (c) A subpoena may be issued summarily without first providing an 
opportunity to produce the requested information voluntarily if a delay 
in the issuance of the subpoena could unreasonably limit or prevent 
production of the information being sought.
    (d) Subpoenas issued under this section shall be issued subject to 
the right of the Postal Service and other interested persons to file a 
motion pursuant to Sec.  3001.21(a) of this chapter to quash the 
subpoena, to limit the scope of the subpoena, or to condition the 
subpoena as provided in Sec.  3005.11(d) of this section. Such motion 
shall include any objections to the subpoena that are personal to the 
covered person responsible for providing the information being sought. 
Answers to the motion may be filed by any interested person pursuant to 
Sec.  3001.21(a) of this chapter. Pending the resolution of any such 
motion, the Postal Service shall secure and maintain the requested 
information.


Sec.  3005.13  Subpoena issued in response to a third-party request.

    (a) Procedure for requesting and issuing subpoenas when hearings 
have been ordered. A participant in any proceeding in which a hearing 
has been ordered by the Commission may request the issuance of a 
subpoena to a covered person pursuant to Sec.  3005.11.
    (1) Subpoenas may be requested to enforce an order to compel 
previously issued pursuant to the rules of practice with which the 
Postal Service has failed to comply.
    (2) Requests for subpoenas under this section shall be made by 
written motion filed with the presiding officer in the manner provided 
in Sec.  3001.21(a) of this chapter. The Postal Service shall transmit 
a copy of the request to any covered person that it deems likely to be 
affected by the request.
    (3) Answers to the motion may be filed by the Postal Service and by 
any other participant. In filing an answer, the Postal Service must 
obtain from the covered person responsible for providing the 
information being sought any objections that are personal to that 
covered person and must provide those objections in its answer together 
with the objections, if any, that the Postal Service wishes to assert 
on its own behalf. Answers shall be filed as required by Sec.  
3001.21(b).
    (4) The presiding officer shall forward copies of the motion and 
any responses to the Commission together with a recommendation of 
whether or not the requested subpoena should be issued and, if so, the 
scope and content thereof and conditions, if any, that should be placed 
on the subpoena. Copies of the presiding officer's recommendation shall 
be served in accordance with Sec.  3001.12 of this chapter.
    (5) Following receipt of the materials forwarded by the presiding 
officer, the Commissioners shall determine whether the requested 
subpoena should be issued and, if so, whether any conditions should be 
placed on the scope or content of the subpoena or on the responses to 
the subpoena. The Commissioners may, but are not required, to entertain 
further oral or written submissions from the Postal Service or the 
participants before acting on the request. In making their

[[Page 51821]]

determination, the Commissioners are not bound by any recommendation of 
a presiding officer.
    (b) Procedure for requesting and issuing subpoenas when no hearings 
have been ordered. Any person may request the issuance of a subpoena to 
a covered person pursuant to Sec.  3005.11 to enforce an information 
request issued by the Commission or a Commissioner even though no 
hearings have been ordered by the Commission.
    (1) A request for the issuance of a subpoena shall be made by 
motion as provided by Sec.  3001.21 of this chapter. A copy of the 
request shall be served upon the Postal Service as provided by Sec.  
3001.12 of this chapter and by forwarding a copy to the General Counsel 
of the Postal Service, or such other person authorized to receive 
process by personal service, by Express Mail or Priority Mail, or by 
First-Class Mail, Return Receipt requested. Proof of service of the 
request upon the Postal Service shall be filed with the Secretary by 
the person requesting the subpoena. The Secretary shall issue a notice 
of the filing of proof of service and the deadline for the Postal 
Service's answer to the request.
    (2) Answers to the motion may be filed by the Postal Service and by 
any other participant. In filing an answer, the Postal Service must 
obtain from the covered person responsible for providing the 
information being sought any objections that are personal to that 
covered person responsible for providing the information being sought 
and must provide those objections in its answer together with the 
objections, if any, that the Postal Service wishes to assert on its own 
behalf. Answers shall be filed as required by Sec.  3001.21 of this 
chapter.
    (3) Following receipt of the request and any answers to the 
request, the Commissioners shall determine whether the requested 
subpoena should be issued and, if so, whether any conditions should be 
placed on the scope or content of the subpoena or on the responses to 
the subpoena. The Commissioners may, but are not required, to entertain 
further oral or written submissions before acting. A majority of the 
Commissioners then holding office must concur in writing before a 
subpoena may be issued.
    (c) Contents of requests for subpoenas. Each motion requesting the 
issuance of a subpoena shall include the following:
    (1) A demonstration that the subpoena is being requested with 
respect to a proceeding conducted by the Commission under title 39 of 
the United States Code or that the purpose of the subpoena is to obtain 
information to be used by the Commission to prepare a report under 
title 39 of the United States Code;
    (2) A showing of the relevance and materiality of the testimony, 
documentary or other evidence being sought;
    (3) Specification with particularity of any books, papers, 
documents, writings, drawings, graphs, charts, photographs, sound 
recordings, images, or other data or data compilations stored in any 
medium from which information can be obtained, including, without 
limitation, electronically stored information which is being sought 
from the covered person;
    (4) In situations in which a hearing has been ordered, the request 
must include in addition to the information required by paragraphs 
(c)(1), (2) and (3) of this section, a certification that the Postal 
Service has failed to comply with an order compelling discovery 
previously issued pursuant to the Commission's rules of practice; and
    (5) In situations in which a hearing has not been ordered, the 
request must include in addition to the information required by 
paragraphs (c)(1), (2) and (3) of this section, an explanation of the 
reason for the request and the purposes for which the appearance, 
testimony, documentary or other evidence is being sought, and a 
certification that the Postal Service has failed to comply with a 
previously issued Commission order or information request.


Sec.  3005.14  Service of subpoenas.

    (a) Manner of service. In addition to electronic service as 
provided by Sec.  3005.12(a), subpoenas must be served by personal 
service upon the General Counsel of the Postal Service or upon such 
other representative of the Postal Service as is authorized to receive 
process. Upon receipt of the subpoena, the Postal Service shall 
transmit and deliver the subpoena to the person or contractor 
responsible for providing the information being sought by the subpoena. 
Service upon any such person or contractor shall be accompanied by a 
written notice of the return date of the subpoena.
    (b) Return of service. Proof of service upon the covered person 
designated as responsible for responding to the subpoena must be filed 
with the Secretary by the Postal Service within 2 business days 
following service, unless a shorter period is ordered by the 
Commission, and must be accompanied by certifications of:
    (1) The manner, date, and time of delivery of the subpoena to the 
person designated as responsible for responding to the subpoena;
    (2) The name, business address, telephone number, and e-mail 
address of the person designated as responsible for responding to the 
subpoena; and
    (3) The return date of the subpoena.
    (c) Notice of service. The Secretary shall post a notice of service 
upon the Commission's Web site which specifies the return date of the 
subpoena.


Sec.  3005.15  Duties in responding to a subpoena.

    (a) A covered person responding to a subpoena to produce documents 
shall produce them as they are kept in the usual course of business or 
shall organize and label them to correspond with the categories in the 
subpoena.
    (b) If a subpoena does not specify the form or forms for producing 
electronically stored information, a covered person responding to a 
subpoena must produce the information in a form or forms in which the 
covered person ordinarily maintains it or in a form or forms that are 
reasonably usable.
    (c) A covered person responding to a subpoena need not produce the 
same electronically stored information in more than one form.
    (d) A covered person commanded to produce and permit inspection or 
copying of designated electronically stored information, books, papers, 
or documents need not appear in person at the place of production or 
inspection unless commanded to appear for deposition, hearing, or 
trial.
    (e) A covered person who fails or refuses to disclose or provide 
discovery of electronically stored information on the grounds that the 
sources of such information is not reasonably accessible because of 
undue burden or cost must show by clear and convincing evidence that 
the burden or costs are undue.
    (f) A covered person who fails or refuses to disclose or provide 
discovery of information on the grounds that the information is 
privileged or subject to protection as a trade secret or other 
confidential research, development, or commercial information must 
expressly support all such claims and shall provide a description of 
the nature of the information and the potential harm that is sufficient 
to enable the Commission to evaluate and determine the propriety of the 
claim.
    (g) Request for confidential treatment of information shall be made 
in accordance with part 3007 of this chapter.


Sec.  3005.16  Enforcement of subpoenas.

    In the case of contumacy or failure to obey a subpoena issued under 
this subpart, the Commission may apply for

[[Page 51822]]

an order to enforce its subpoena as permitted by 39 U.S.C. 504(f)(3).

Subpart C--Depositions and Written Interrogatories


Sec.  3005.21  Authority to order depositions and responses to written 
interrogatories.

    The Chairman, any designated Commissioner, or any administrative 
law judge may order the taking of depositions and responses to written 
interrogatories by a covered person with respect to any proceeding 
conducted under title 39 of the United States Code or to obtain 
information to be used to prepare a report under title 39.

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