[Federal Register: May 23, 2003 (Volume 68, Number 100)]
[Notices]
[Page 28256-28263]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23my03-125]
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INTERNATIONAL TRADE COMMISSION
Summary of Commission Practice Relating to Administrative
Protective Orders
AGENCY: 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
[[Page 28257]]
Trade Act of 1990. Over time, the Commission has added to its report
discussions of APO breaches in Commission proceedings other than Title
VII and violations of the Commission's rule on bracketing business
proprietary information (``BPI'') (the ``24-hour rule''), 19 CFR
207.3(c). This notice provides a summary of investigations of breaches
in Title VII, sections 202 and 204 of the Trade Act of 1974, as
amended, and section 337 of the Tariff Act of 1930, as amended,
completed during calendar year 2002. There were no completed
investigations of 24-hour rule violations during that period. The
Commission intends that this report educate 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
Internet server (http://www.usitc.gov).
SUPPLEMENTARY INFORMATION: Representatives of parties to investigations
conducted under Title VII of the Tariff Act of 1930, sections 202 and
204 of the Trade Act of 1974, and section 337 of the Tariff Act of
1930, as amended, may enter into APOs that permit them, under strict
conditions, to obtain access to BPI (Title VII) or confidential
business information (``CBI'') (sections 201-204 and section 337) of
other parties. See 19 U.S.C. 1677f; 19 CFR 207.7; 19 U.S.C. 2252(i); 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, including a description of actions taken in response to
breaches. The discussion covers breach investigations completed during
calendar year 2002.
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).
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 2001 a third edition of An Introduction to Administrative
Protective Order Practice in Import Injury Investigations (Pub. L.
3403). 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.
I. In General
The current APO form for antidumping and countervailing duty
investigations, which the Commission has used since March 2001,
requires the applicant to swear that he or she will:
(1) Not divulge any of the BPI obtained under the APO and not
otherwise available to him, 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
decisionmaking for an interested party which is a party to the
investigation; and (d) have submitted to the Secretary a signed
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 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 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;
[[Page 28258]]
(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
BPI 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.
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 BPI. However, Commission employees are subject to strict
statutory and regulatory constraints concerning BPI, 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 rules relating to BPI 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 file has been opened. Upon receiving notification from
the Secretary, the Office of General Counsel (OGC) begins to
investigate the matter. The 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. 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.
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 economists or consultants to obtain
access to BPI under the APO 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). Economists and consultants who obtain access to
BPI 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, and 19
U.S.C. 1677f(g).
The breach most frequently investigated by the Commission involves
the APO's prohibition on the dissemination of BPI to unauthorized
persons. Such dissemination 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 in proprietary documents filed with the Commission; the
failure to report immediately known violations of an APO; and the
failure to supervise adequately non-legal personnel in the handling of
BPI.
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.
[[Page 28259]]
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 2002, the Commission completed two investigations of instances
in which members of a law firm or consultants working with a firm were
granted access to APO materials by the firm although they were not APO
signatories (Cases 1 and 5). In these cases and four others in 2001,
the firm and the person using the BPI mistakenly believed an APO
application had been filed for that person. The Commission determined
in all 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, 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. In all but one case, the Commission issued warning letters because
it was the first time the persons in question were subject to possible
sanctions under section 201.15.
Also in 2002, the Commission found the lead attorney to be
responsible for breaches in at least four cases where he or she failed
to provide adequate supervision over the handling of BPI. (Cases 1, 3,
9, and 10). 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.
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: Four attorneys were investigated for a breach involving the
release of BPI to an attorney in the firm who was not a signatory to
the APO. The attorneys who were involved in the Commission
investigation assumed that they all had been included on the APO and
shared the APO materials with each other. However, one of these
attorneys, an associate, had not been included on the APO. The lead
attorney was found to have breached the APO because he failed to
provide adequate supervision over the handling of BPI and permitted the
release of BPI to an associate in his firm who was not a signatory to
the APO. The other attorneys were found to have breached because they
provided the non-signatory with BPI to use in a Commission
investigation. The fourth attorney did not breach the APO because he
was a non-signatory, but the Commission determined that his actions
were sufficient to demonstrate good cause for the imposition of
sanctions under 19 CFR 201.15. He was not a signatory to the APO when
he reviewed BPI contained in documents received under the APO and
utilized the BPI in the preparation of a brief in the Commission
investigation.
The three attorneys who breached the APO were issued warning
letters. This was their first breach of an APO involving a section
201.15 violation. The attorney who was a non-signatory was issued a
private letter of reprimand. Although this was his first violation
under section 201.15, he had helped to cause a breach of the APO in a
previous matter by failing to redact BPI from the public version of a
brief filed in the Commission investigation. This breach had been
previously investigated and reported. In that APOB investigation, the
Commission found that there was sufficient information to suggest that
a non-signatory outside the firm viewed the BPI.
Case 2: The Commission determined that an attorney, an APO
coordinator, and a legal secretary breached the APO. The APO
coordinator, who was a senior legal secretary, gave another legal
secretary an attorney's edits to a draft brief and provided
instructions regarding redaction of the CBI from brackets and the
subsequent faxing of the draft brief to clients. The legal secretary
did not remove all the CBI from the brackets because she believed it
was the clients' information. She also did not have an attorney review
the document, as required by the firm's procedures, after she made the
edits and before she faxed the document to the clients. In the
affidavits provided by the firm in this APOB investigation, there was a
dispute between the legal secretary and the rest of the firm as to
whether the legal secretary had received adequate instructions from the
APO coordinator regarding the handling of the CBI. One of the attorneys
working on the brief also recalled instructing the legal secretary to
remove all the CBI from the brackets because the information had been
generated by multiple clients.
In defending against the breach allegations, the firm raised issues
about whether the information was CBI. The Commission considered each
of the arguments and determined that CBI had been released.
In spite of the dispute over instructions given to the legal
secretary, the Commission determined that she had breached the APO. In
addition, the Commission determined that the APO coordinator and the
attorney who made the edits to the brief, and who was also the lead
attorney and managing partner in the firm, breached the APO for failure
to provide adequate supervision over the legal secretary.
The Commission issued private letters of reprimand to all three
persons, after considering that persons who were non-signatories to the
APO actually read the
[[Page 28260]]
CBI. The Commission considered the mitigating circumstances that the
firm had reported the breach promptly, took immediate steps to minimize
the effect of the breach, and strengthened procedures to prevent future
breaches. In addition, none of the persons found to have breached had a
record of prior breaches.
Case 3: The Commission determined that two attorneys breached the
APO when one of them sent copies of the Commission's confidential views
to executives of the law firm's clients with an attached cover
memorandum that had been drafted by one attorney and signed by the
firm's lead attorney. In determining that the lead attorney breached
the APO, the Commission considered the fact that the lead attorney had
overall responsibility for APO matters. The Commission issued private
letters of reprimand to both attorneys, even though it was both
attorneys' first breach, because of the serious nature of the breach.
The Commission noted that the confidential brief had been in the
possession of the clients for seven days before the breach was
discovered and that two of the clients read the BPI.
Case 4: The Commission investigated whether two attorneys had
breached the APO. The lead attorney had asked at the Commission hearing
if the confidential record from a prior investigation could be
incorporated into the confidential record of the subject investigation.
The Commission had not yet determined whether to allow the prior record
to be used when the attorney used the BPI from the previous
investigation by referencing it to support arguments in his post-
hearing brief. The Commission determined that the lead attorney
breached the APO by including arguments in his post-hearing brief that
referenced and compared BPI in the previous investigation with BPI in
the subject investigation. The Commission found a breach even though
the BPI was not actually disclosed to non-signatories to the APO.
The Commission noted that it had not found that the attorney
breached the APO by making arguments using public information, by
asking the Commission to include BPI from one investigation in the
confidential record of another investigation, or by asking the
Commission in the subject investigation to consider issues already
discussed in the confidential prehearing staff report of the subject
investigation.
The Commission decided to issue a warning letter after considering
that this was the only breach in which the attorney had been involved
within the two year period prior to the breach, his prompt action to
remedy the breach, and the fact there had been no disclosure of BPI to
persons not already under the APO. The Commission also noted that the
attorney might not have realized that comparing BPI from two different
investigations, and referencing without disclosing BPI from a separate
investigation, could trigger an APO violation.
The Commission decided the second attorney did not breach the APO
because the lead attorney had clearly stated that the decision to put
the arguments in the post-hearing brief was his alone.
Case 5: The Commission investigated a breach involving the use of
CBI by one attorney in a firm who was not a signatory to the APO. The
lead attorney for the firm in the Commission investigation assigned an
associate to the investigation and gave him access to CBI. Both
attorneys thought the associate was a signatory to the APO. The
Commission found that the lead attorney breached the APO by assigning
the associate to handle CBI when he was not a signatory to the APO. The
Commission also found that the lead attorney failed adequately to
supervise the handling of CBI. The Commission found that the associate
did not breach the APO because he was not a signatory. However, the
Commission found there was good cause to caution the associate pursuant
to 19 CFR 201.15(a).
The Commission issued warning letters to both attorneys. The
mitigating circumstances considered by the Commission that led to
warning letters included the facts that the breach was unintentional,
that there were no prior breaches or allegations of violations under
section 201.15 for either attorney within the prior two year period,
that the attorneys immediately notified the Commission of the breach
once they discovered it, that they took action to prevent further
breaches, that the associate protected the CBI as if he had been a
signatory, and that the firm immediately sought APO access to the CBI
for the associate as soon as the breach was discovered.
Case 6: The Commission determined that two attorneys and a records
administrator in a law firm breached the APO for failing to return or
destroy a document containing BPI within the time required by the APO
and for falsely certifying that it had been destroyed. When searching
in an archives file to retrieve documents for litigation purposes, one
of the attorneys discovered a copy of a post-hearing brief that had not
been returned or destroyed with the rest of the APO material obtained
in a Commission investigation. The Commission found that both during
and after the Commission investigation, that attorney and the records
administrator failed to assure that the document in question was filed
and stored in a manner and place that was inaccessible to persons
unauthorized to review APO material, as required by 19 CFR 207.7(b)(1)
and (4).
The Commission found that the senior attorney in the firm committed
a breach because a document containing BPI was not filed properly or
destroyed at the conclusion of the Commission investigation. The
Commission noted that as head of his firm the senior attorney was
responsible for establishing adequate procedures to assure that
documents containing BPI are handled, maintained, and destroyed in a
manner consistent with the Commission's APO regulations.
The Commission issued warning letters to the two attorneys and the
records administrator. It considered the mitigating factors that the
breach was unintentional, that prompt action was taken to report and
remedy the breach, that no unauthorized person accessed the document,
and, with regard to the first attorney and the records administrator,
that this was their first breach. The senior attorney was found to have
breached under similar circumstances in the previous year, but the
Commission declined to issue a sanction because the current breach
occurred prior to the one for which he had already received a warning
letter and he had instituted new procedures at the firm to avoid future
breaches as a result of the previous year's APOB investigation.
Case 7: The Commission determined that three attorneys breached an
APO by failing to redact BPI from one page of the public version of
their prehearing brief. The three attorneys were mid-level associates
and were solely responsible for preparing the public version of the
brief. The brief was filed with the Commission and served on the
parties on the public service list including a non-signatory. The brief
was also sent to several clients who were not signatories.
The Commission determined that three other attorneys whose names
were on the brief did not breach. None of these attorneys participated
in the preparation of the public version of the brief. In addition, the
Commission found that the lead attorney did not breach because he had
reasonably delegated the task of preparing the public version of the
brief to three experienced associates. None of these associates had
previously breached an APO.
[[Page 28261]]
The Commission issued private letters of reprimand to the three
associates after considering the aggravating circumstances that the
Secretary's Office and not the law firm discovered the breach; that the
breach was not discovered until 19 days after the brief had been filed
and served; and that the BPI may have been read by one or more non-
signatories to the APO. The Commission noted that, although the
attorneys stated that no recipients of the brief informed their firm
that they had read, copied, or transmitted the public version of the
brief, it was not clear that non-signatories did not review the BPI.
In reaching its decision to issue private letters of reprimand, the
Commission also considered the mitigating circumstances that the breach
was unintentional, that corrective measures were taken immediately
after the breach was discovered, that there were internal APO
procedures before the breach that were followed, and that these
procedures were strengthened after the breach.
Case 8: The Commission determined that two attorneys breached the
APO by e-mailing an electronic version of a public prehearing brief,
which contained electronically masked but recoverable CBI, to their
clients and to parties that had agreed to that type of service.
Although the brief appeared to be a public document with CBI omitted
from within the brackets, the deleted CBI was retrievable
electronically. Both attorneys believed that they were e-mailing a
document from which CBI was deleted and not retrievable.
The Commission, deciding not to sanction the attorneys, sent them
warning letters. The Commission reached that decision after giving
consideration to the facts that this was the only breach in which
either attorney had been involved within the prior two year period
considered by the Commission in determining sanctions, that the breach
was unintentional, that the breach was discovered by the attorneys,
that there was no indication that anyone not on the APO viewed the CBI,
that prompt action was taken to remedy the breach, and that new
procedures had been established by the firm to avoid a similar APO
violation in the future.
Case 9: The Commission determined that a lead attorney breached the
APO by failing to provide adequate supervision over his firm's
personnel regarding the care of CBI. Another law firm had been added to
the public service list late in an investigation. The clerical
personnel in charge of serving documents manually created mailing
labels for the firm rather than creating computer generated labels that
were segregated between public and APO lists. The secretary who typed
the labels mistakenly typed them for service of APO materials. The
newly added firm received APO materials for two days. The outer
envelopes were opened but the inner envelopes remained sealed and were
returned to the original law firm.
Upon inquiry, the law firm was unable to provide the Commission
with the name of the person responsible for the mislabeling. However,
the Commission did determine that the lead attorney was responsible for
the breach. He had signed the APO application for the clerical
personnel indicating he was responsible for their compliance with APO
requirements.
The Commission issued a warning letter to the lead attorney after
considering that the breach was unintentional, that his firm took
immediate steps to reeducate its personnel regarding the proper
handling of CBI, that non-signatories had not reviewed the BPI, and
that the lead attorney had not breached an APO within a prior two year
period considered by the Commission in determining an appropriate
sanction.
Case 10: The Commission considered whether two attorneys and one
clerical employee breached the APO. The breach occurred when a clerical
employee served a law firm with the BPI version of a post-conference
brief although the firm was not a signatory to the Commission's APO.
The recipient firm notified the law firm that the package was opened,
but the brief was viewed only to the extent of determining that it was
a document containing BPI covered by the Commission's APO, not
Commerce's APO, to which the firm was a signatory. The Commission
determined that, in addition to the clerical employee, the attorney
supervising the clerical employees and the lead attorney in the
investigation were both responsible for the breach.
In a previous APOB investigation concerning the same Commission
investigation, the Commission had found that five clerical employees,
including the one responsible for this breach, and the same attorney
who supervised the clerical employees in the investigations had
breached the APO. Warning letters were issued at that time. The
Commission did not find that the lead attorney had breached because he
had reasonably delegated the responsibility of supervising the clerical
employees to an experienced attorney who had no prior violations.
In the current APOB investigation, the Commission determined that
the lead attorney was responsible for the breach because he was aware
that both the supervising attorney and the clerical employee had
previously breached the APO. Since the lead attorney had recently
received a private letter of reprimand in a different breach
investigation, the Commission issued a private letter of reprimand to
the lead attorney with a requirement that he update the firm's APO
procedures and conduct a training session for attorneys and staff
involved in APO practice in his firm. The supervising attorney and the
clerical employee both received private letters of reprimand. The
Commission considered the unintentional nature of the breach, the fact
that corrective measures were immediately taken to retrieve the
document from the non-signatory law firm and to remove the project
assistant from the APO, the immediate reporting of the incident to the
Commission, and that no non-signatory viewed the BPI as mitigating
circumstances and the prior breaches of both attorneys and the clerical
employee as an aggravating circumstance.
Case 11: The Commission determined that two attorneys and a legal
secretary breached the APO. An associate attorney and the secretary
worked together to prepare the public version of a draft post-
conference brief. The attorney e-mailed the brief in an electronic form
that masked the BPI. However, one footnote contained unredacted BPI.
The Microsoft Word macro that was used to mask BPI in the brief did not
mask BPI in the footnotes. The secretary missed the BPI in one of the
footnotes when she did a manual review of the brief before the attorney
e-mailed it to eight clients. The attorney did not check the brief to
be sure all BPI was masked before he e-mailed the document. The
information provided in the APOB investigation indicated that the
persons involved in the breach did not know that the BPI was
recoverable by the recipients of the e-mail.
When the lead attorney who had been out of the office while the
public brief was prepared and transmitted to the client returned, he
reviewed the brief and discovered that one of the footnotes contained
unmasked BPI. The associate attorney was directed to take immediate
action to contact the Commission, to inform the recipients of the draft
brief to destroy all paper and electronic versions of it, and to
prepare a revised electronic brief with masked BPI and e-mail that to
the same clients.
The Commission found that the lead secretary breached the APO by
failing to
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redact BPI from the draft public brief which resulted in possession of
the BPI by several non-signatories, including one who actually viewed
the BPI. The Commission issued a warning letter to the secretary rather
than a private letter of reprimand largely because she, as a clerical
employee, was under the direct supervision of an attorney at the time
of the breach. In addition, this was her first breach, the breach was
unintentional, prompt action was taken to remedy the breach, and
actions were taken by the firm to improve APO compliance procedures.
The Commission found that the lead attorney breached the APO
because the associate attorney had e-mailed two versions of the public
draft brief with masked but recoverable BPI. The Commission noted that
the information provided in this APOB investigation indicated that it
was the law firm's practice to e-mail public versions of documents
containing masked but recoverable BPI to its clients. Further, although
the first electronic brief had been retrieved or destroyed, there was
no indication in the record that anyone had attempted to retrieve or
destroy the electronic copies of the revised draft brief sent to the
eight non-signatory clients. Consequently, the masked BPI in those
electronic copies had evidently remained unprotected for at least nine
months, and at risk of disclosure to APO non-signatories. The
Commission determined that the lead attorney was not responsible for
the breach involving BPI remaining visible in the one footnote as his
delegation of the preparation of the public version of a brief to a
mid-level associate was reasonable. However, the Commission issued the
lead attorney a private letter of reprimand because of the serious
problem raised by e-mailing electronic documents containing masked but
retrievable BPI. The lead attorney had no prior breaches.
The associate attorney was also given a private letter of
reprimand. The Commission reached its decision to sanction the
associate after giving consideration to the existence of several
mitigating factors with respect to the unredacted BPI, including the
unintentional nature of the breach, the fact that corrective measures
were immediately taken, the breach was reported to the Secretary's
Office the following day, and certain procedures at the law firm were
strengthened to prevent future breaches. The Commission noted that,
with respect to the breach involving masked but recoverable BPI in both
versions of the electronic brief, the breach was inadvertent. The
Commission also considered the fact this was the associate's first
breach. A sanction was warranted, however, because a non-signatory
viewed the unredacted BPI in the footnote in the first draft brief.
Moreover, the Commission and not the law firm identified the breach
involving the masked but recoverable BPI. Finally, there was no
information on the record suggesting that anyone in the law firm had
attempted to prevent disclosure to unauthorized persons of recoverable
BPI contained in the revised draft brief.
Case 12: The Commission determined that three attorneys breached
the APO. All three attorneys, who were from two different firms, had
been responsible for preparing the public version of a joint brief in
which not all BPI received under the APO had been redacted. After the
public brief was completed, one of the firms sent copies to two of its
clients where one office at each of the companies viewed the brief with
the unredacted BPI. The Commission issued two of the attorneys private
letters of reprimand and the third attorney received a private letter
of reprimand with the additional requirement that he conduct an APO
compliance seminar at his firm. This was the first breach for the first
two attorneys, but the third attorney had breached another APO within
two years of the occurrence of this breach. In issuing these sanctions,
the Commission considered that BPI was viewed by non-signatories to the
APO, and also considered the mitigating circumstances that the breach
was unintentional; that corrective measures were taken immediately;
that internal APO procedures existed before the breach and they had
been followed; and that these procedures were strengthened.
A fourth attorney initially was found by the Commission to have
breached the APO. His involvement with the preparation of the public
brief had been solely to check the adequacy of the bracketing in the
confidential version. He had delegated preparation of the public
version to an attorney in his firm who was an experienced trade lawyer.
The fourth attorney had sent the public brief to his clients not
knowing that it contained unredacted BPI. During the sanctions phase of
the APOB investigation, the fourth attorney cited a Commission summary
of an APOB investigation completed in 2001 which had not been published
during the breach phase of the current APOB investigation. The attorney
argued that, since the facts contained in the summary were very similar
to his circumstances and, in that case, the supervising attorney was
found not to have breached, the Commission should reconsider and
reverse its decision that he had breached the APO. Based on these new
arguments that had not been available to the attorney earlier, the
Commission reconsidered and reversed its previous decision that he had
breached.
Case 13: The Commission determined that a lead economic consultant
breached the APO by failing to return or destroy confidential documents
and certify that the documents were returned or destroyed within 60
days after the Commission's publication of its final remedy
determination in the Federal Register. The Commission issued a warning
letter to the lead consultant, while determining that other consultants
in his firm were not responsible for the breach of the APO. The
Commission, in reaching its determination, considered that this was the
only breach in which the consultant had been involved within a two year
period examined by the Commission for purposes of determining
sanctions; that the consultant and other employees who were signatories
to the APO executed and filed certificates of return or destruction of
CBI materials less than one month after the deadline; that there was no
indication in the record that any non-signatory had access to the CBI
in question; and that the consultant's firm had implemented, pursuant
to requirements imposed by litigation in which it was involved, a
strict document retention policy which required various approvals
before documents could be destroyed.
Case 14: The Commission determined that one attorney breached the
APO when he filed a public version of a prehearing brief containing
BPI. The BPI, the name of a business that was the source of a lost
revenue allegation, had been contained in the confidential staff report
at an earlier phase of the investigation. That report bracketed the
name of a business in all but one place. The name of the business was
deleted from the public version of the report in all locations. The
attorney argued that he didn't breach the APO because the information
was publicly available, since it was not consistently bracketed in the
staff report. In response, the Commission noted that the confidential
staff report was distributed only to parties who were signatories to
the APO and was not distributed to the public. The public version of
the staff report was distributed to the public, but it did not reveal
the identify of the source of the lost revenue allegation. The attorney
also argued that the information in question theoretically could have
been obtained from public sources, i.e., from information contained in
public files for
[[Page 28263]]
litigation to which his client was a party. The Commission determined
that the ``theoretical'' availability of information through public
sources cannot justify the use of BPI obtained through the APO.
Finally, the attorney argued that counsel for the person who previously
owned the company from which the information had been received did not
object to disclosures of ``historical information'' about the firm.
Nevertheless, the Commission noted that the company had not waived
confidential treatment for the questionnaires it submitted to the
Commission which contained the information in question.
There were several aggravating factors in the investigation. The
breach was discovered by the Commission, the attorney did not act
promptly to cure the breach, and the brief had been distributed to a
non-signatory who retained the document for almost three weeks.
Nonetheless, the Commission issued a warning letter to the attorney. In
deciding not to issue sanctions, the Commission considered the fact
that this was the attorney's first breach and that he failed to redact
the BPI is good faith after relying on the incomplete bracketing in the
confidential staff report.
Case 15: The Commission investigated whether two attorneys breached
the APO in an investigation by serving on other counsel a document that
indicated on its face it did not contain CBI but did in fact contain
CBI. The Commission determined that the attorneys breached the APO and
issued a warning letter to them. The Commission considered the
mitigating factors that the release was inadvertent, that there was no
actual dissemination of CBI to non-signatories to the APO, and that
immediate steps were taken to remedy the situation once counsel became
aware of the breach. In addition, the attorneys implemented new
procedures regarding preparation of non-proprietary submissions in
order to prevent future breaches.
IV. Investigations in Which No Breach Was Found
During 2002, four additional APO breach investigations were
initiated. In one investigation the Commission determined that no
breach had occurred. In the other three, the investigations were closed
administratively. The reasons that the investigations were closed or
that there was a ``no breach'' determination included that: (1) The
breach concerned a judicial protective order, not a Commission APO; (2)
the information at issue that ordinarily would be entitled to treatment
as BPI was not consistently treated as such in the public record
including by persons entitled to claim it was BPI; (3) testimony at a
hearing did not reveal BPI because the information in question had been
previously revealed on the public record; and (4) while information
that was revealed in an attachment to a document filed with the
Commission might have been proprietary under the terms of an agreement
connected with outside litigation, the information was not obtained
under the APO and, therefore, its disclosure could not constitute a
breach of the APO.
By order of the Commission.
Issued: May 19, 2003.
Marilyn R. Abbott,
Secretary to the Commission.
[FR Doc. 03-12935 Filed 5-22-03; 8:45 am]
BILLING CODE 7020-02-P