Summary of Commission Practice Relating to Administrative Protective Orders, 78945-78949 [2011-32523]

Agencies

• INTERNATIONAL TRADE COMMISSION

[Federal Register Volume 76, Number 244 (Tuesday, December 20, 2011)]
[Notices]
[Pages 78945-78949]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32523]


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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). This notice provides a summary of investigations completed 
during calendar year 2010 of breaches in proceedings under title VII, 
section 337 of the Tariff Act of 1930, and section 421 of the Trade Act 
of 1974. There were no rules violation investigations completed in 
2010. The Commission intends that this report inform representatives of 
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 Web 
site (https://www.usitc.gov).

[[Page 78946]]


SUPPLEMENTARY INFORMATION: Representatives of parties to investigations 
or other proceedings conducted under title VII of the Tariff Act of 
1930, section 337 of the Tariff Act of 1930, the North American Free 
Trade Agreement (NAFTA) Article 1904.13. and safeguard-related 
provisions such as section 202 of the Trade Act of 1974, may enter into 
APOs that permit them, under strict conditions, to obtain access to BPI 
(title VII) and confidential business information (``CBI'') (safeguard-
related provisions and section 337) of other parties. See, e.g., 19 
U.S.C. 1677f; 19 CFR 207.7; 19 U.S.C. 1337(n); 19 CFR 210.5, 210.34; 19 
U.S.C. 2252(i); 19 CFR 206.17; and 19 U.S.C. 1516a(g)(7)(A); 19 CFR 
207.100, et seq. The discussion below describes APO breach 
investigations that the Commission completed during calendar year 2010, 
including a description of actions taken in response to these breaches 
and rules violations.
    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 (February 6, 1991); 57 FR 12335 (April 9, 1992); 
58 FR 21991 (April 26, 1993); 59 FR 16834 (April 8, 1994); 60 FR 24880 
(May 10, 1995); 61 FR 21203 (May 9, 1996); 62 FR 13164 (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); 71 FR 39355 (July 12, 2006); 72 FR 50119 (August 
30, 2007); 73 FR 51843 (September 5, 2008); 74 FR 54071 (October 21, 
2009); and 75 FR 66127 (October 27, 2010). 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 disclosed 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 this 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 this 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 this APO; and
    (10) Acknowledge that breach of this 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 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

[[Page 78947]]

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/CBI 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/CBI. 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 finds 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.
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    Sanctions for APO violations serve two basic interests: (a) 
Preserving the confidence of submitters of BPI/CBI that the Commission 
is a reliable protector of BPI/CBI; 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/CBI. The Commission considers whether there have 
been 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, section 337 investigations, 
and safeguard investigations are not publicly available and are exempt 
from disclosure under the Freedom of Information Act, 5 U.S.C. 552. See 
19 U.S.C. 1677f(g), 19 U.S.C. 1333(h).
    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 after the 
termination of the investigation or any subsequent appeals of the 
Commission's determination. The dissemination of BPI/CBI usually occurs 
as the result of failure to delete BPI/CBI 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-lawyers in the handling of BPI/CBI.
    Occasionally, the Commission conducts APOB investigations that 
involve 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 many of 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

[[Page 78948]]

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 in which they did not technically breach the APO, but 
when 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.
    Counsel have been cautioned to be certain that each authorized 
applicant files within 60 days of the completion of an import injury 
investigation or at the conclusion of judicial or binational review of 
the Commission's determination a certificate that to his or her 
knowledge and belief all copies of BPI/CBI have been returned or 
destroyed and no copies of such material have been made available to 
any person to whom disclosure was not specifically authorized. This 
requirement applies to each attorney, consultant, or expert in a firm 
who has been granted access to BPI/CBI. One firm-wide certificate is 
insufficient. This same information is also being added to 
notifications sent to new APO applicants.
    In addition, attorneys who are signatories to the APO representing 
clients in a section 337 investigation should send a notice to the 
Commission if they stop participating in the investigation or the 
subsequent appeal of the Commission's determination. The notice should 
inform the Commission about the disposition of CBI obtained under the 
APO that was in their possession or they could be held responsible for 
any failure of their former firm to return or destroy the CBI in an 
appropriate manner.

III. Specific Investigations

APO Breach Investigations

    Case 1: The Commission determined that two associates and a partner 
breached the APO when the associates, under the direction of the 
partner, reviewed deposition transcripts that contained CBI from a 
section 337 investigation in connection with a parallel proceeding in 
the federal district court and provided, as directed by the partner, 
citations to those transcripts to a non-signatory of the APO. The 
Commission also found that the partner responsible for this first 
breach also committed a second breach by providing to a non-signatory a 
partially redacted deposition transcript that had been designated as 
confidential and should have been treated as confidential in its 
entirety pending declassification by consent of the parties or pursuant 
to the Commission's rules. Moreover, the record is not clear that the 
attorney had removed all of the CBI from the transcript before 
providing it to the non-signatory.
    After giving consideration to the mitigating factor that the 
partner had not been found liable for an APO breach within the last two 
years, the Commission decided to sanction the partner and issue a 
private letter of reprimand rather than a warning because of the 
presence of aggravating factors. The Commission determined that both 
breaches were intentional. The partner deliberately released to a non-
signatory a deposition transcript that should have been treated as 
confidential in its entirety unless the content was declassified by 
following the procedures in the Commission's rules for challenging the 
classification of documents. In addition, the partner specifically 
instructed his associates to review transcripts of affidavits from the 
section 337 investigation and to provide citations from the transcripts 
to a non-signatory for use in a federal district court case. In 
addition, the breaches were brought to the attention of the Commission 
by someone other than the partner's firm.
    The Commission issued a warning letter to the two associates after 
giving due consideration to several mitigating factors and one 
aggravating factor. The Commission determined their breach to be 
unintentional because both attorneys had misgivings about reviewing the 
transcripts for a purpose other than for the section 337 investigation 
and communicated those misgivings to the partner. They only reviewed 
the transcripts and provided citations to the transcripts to a non-
signatory for use in a federal district court case at the direction of 
the partner after another associate, who was also a signatory to the 
APO, researched the question and advised they would not violate the APO 
by following the partner's directions. In addition, no CBI was divulged 
to any person not subject to the APO as a result of their breach and 
this was the only breach the two associates were involved in within the 
two-year period generally examined by the Commission for the purpose of 
determining sanctions. The only aggravating factor was that someone 
other than the associates' firm discovered and reported the breach.
    The Commission also decided that two additional associates who were 
signatories to the APO, including the associate who performed the 
research, were not responsible for a breach of the APO.
    Case 2: One lead attorney and a legal secretary under her 
supervision failed to delete fully all BPI in the public version of a 
post-hearing brief which was available on the Commission's Electronic 
Document Information System (EDIS) for five days. Additionally, the 
attorney failed to provide an Acknowledgement for Clerical Personnel 
signed by the secretary, thereby allowing the secretary, as an 
individual not subject to the APO, access to BPI.
    The Commission issued a private letter of reprimand to the 
attorney. In reaching this decision, the Commission considered as 
mitigating circumstances that the breach was unintentional and the 
attorney had no prior violations of an APO within the past two years, 
the period normally considered by the Commission in sanctions 
determinations. The Commission disagreed with the attorney's argument 
that the stressful state of her office, in which there were multiple 
filings scheduled for that same day, should be considered a mitigating 
circumstance, noting that the attorney is a partner in the law firm 
and, therefore, had some responsibility for the stressful state of her 
office. The Commission also considered three aggravating circumstances. 
First, since there was no signed Acknowledgement for Clerical 
Personnel, the legal secretary was a non-signatory to the APO who had 
full access to the document containing the BPI. In addition, the 
Commission assumed that non-signatories other than the legal secretary 
had access to and read BPI because the attorney on several occasions 
failed to answer directly the question whether anyone, other than a 
signatory to the APO, had access to the APO; the BPI was publicly 
available on EDIS for five days; and the document containing BPI had 
been served on an attorney who was on the public service list but not 
the APO service list. Second, the Commission found that the attorney's 
failure to comply with the APO by making sure that all clerical 
personnel who were given access to the BPI signed an Acknowledgement 
for Clerical Personnel was a separate

[[Page 78949]]

aggravating circumstance. Third, the fact that the breach was 
discovered by Commission staff rather than the attorney's firm was also 
an aggravating circumstance.
    The Commission issued a warning letter to the legal secretary. The 
Commission found that he did not breach the APO because he had not 
signed an Acknowledgement for Clerical Personnel but that there was 
good cause to issue the warning letter, pursuant to Commission rule 
201.15(a), (19 CFR 201.15(a)), for his failure to redact the BPI from 
the law firm's brief. In deciding to issue a warning letter rather than 
a sanction, the Commission considered mitigating circumstances such as 
that the breach was unintentional; the secretary had no APO breaches in 
the last two years; he was under the direction and control of the 
attorney; and he had been overloaded with work on the day of the breach 
which had contributed to his failure to remove all the BPI from the 
public version of the brief.
    Case 3: Attorneys for a party in a section 337 investigation that 
had already been terminated filed a complaint in a district court 
alleging that attorneys from another firm disclosed confidential 
business information (CBI) to unauthorized persons in breach of the 
Commission's APO. The complaint named specific attorneys alleged to 
have disclosed the CBI. Although the filing attorneys subsequently 
moved to place the complaint under seal, the complaint had been 
disseminated on the Internet and reported in the legal press before the 
court could rule on the motion.
    The Commission found that the attorneys breached the APO by 
publicly disclosing the identity of the alleged breachers in their 
complaint, and it issued private letters of reprimand to them. In 
reaching this conclusion, the Commission considered certain mitigating 
circumstances such as the unintentional nature of the breach, the fact 
that this was the attorneys' first breach of a Commission APO, and the 
fact that the attorneys took corrective action as soon as they 
discovered the breach. There is one aggravating circumstance, however, 
which caused the Commission to issue a private letter of reprimand 
instead of a warning letter. Although the attorneys took the corrective 
action to place the complaint under seal, that did not prevent the 
release of the complaint to the public. The Commission presumed that 
the complaint was reviewed by at least one unauthorized person.
    The Commission also considered whether to sanction under Commission 
rule 19 CFR 201.15 another attorney who was in-house counsel for the 
party filing the complaint and, therefore, was not a signatory to the 
APO. Although the attorney participated in the drafting and filing of 
the complaint, he was not subject to the APO and he did not practice 
regularly before the Commission. The Commission noted that once the 
attorney became aware of the Commission rule treating the names of 
alleged breachers as CBI and prohibiting release of those names, he 
promptly attempted to mitigate disclosure of the CBI. The Commission 
decided to issue a cautionary letter to the attorney advising him that 
he was not found to have violated the APO but, if he intended to 
practice before the Commission in the future, he needed to keep abreast 
of the Commission's rules.
 APO Breach Investigation in Which No Breach Was Found
    Case 1: In the public version of final comments, several attorneys 
in a law firm were responsible for failing to bracket information 
identified by the Commission as CBI. The information was from a 
Commission staff member's telephone notes and included the identity of 
a source. The notes had been released under the APO. Although the 
Commission normally considers telephones notes of conversations and the 
identities of persons contacted by the Commission staff to be CBI, the 
Commission determined that disclosure of this information in the public 
version of the final comments did not breach the APO. The attorneys 
were able to demonstrate that the information and the identity of the 
source were publicly available at the time the public version of the 
final comments were filed. The Commission cautioned the attorneys to 
take care in the future when citing to any information released by the 
Commission under APO.

    By order of the Commission.

    Issued: December 14, 2011.
James R. Holbein,
Secretary to the Commission.
[FR Doc. 2011-32523 Filed 12-19-11; 8:45 am]
BILLING CODE 7020-02-P