new hearing examiner for the one originally designated, any motion predicated upon such substitution shall be made within five (5) days thereafter.

(f) Interference. In the performance of their adjudicative functions, hearing examiners shall not be responsible to or subject to the supervision or direction of any officer, employee, or agent engaged in the performance of investigative or prosecuting functions for the Commission, and all directions by the Commission to hearing examiners concerning any adjudicative proceeding shall appear in and be made a part of the record.

(g) Disqualification of hearing examiner. (1) When a hearing examiner deems himself disqualified to preside in a particular proceeding, he shall withdraw therefrom by notice on the record and shall notify the Director of Hearing Examiners of such withdrawal.

(2) Whenever any party shall deem the hearing examiner for any reason to be disqualified to preside, or to continue to preside, in a particular proceeding, such party may file with the Commission a motion to disqualify and remove the hearing examiner, such motion to be supported by affidavits setting forth the alleged grounds for disqualification. Copy of the motion shall be served by the Commission on the hearing examiner whose removal is sought, and the hearing examiner shall have ten (10) days from such service within which to reply. If the hearing examiner does not disqualify himself within ten (10) days, then the Commission shall promptly determine the validity of the grounds alleged, either directly or on the report of another hearing examiner appointed to conduct a hearing for that purpose. §3.16

Hearings; transcripts.

(a) Public hearings. All hearings in adjudicative proceedings shall be public unless otherwise ordered by the Commission.

(b) Rights of parties. Every party, except intervenors, shall have the right of due notice, cross-examination, presentation of evidence, objection, motion, argument, and all other rights essential to a fair hearing.

(c) Adverse witnesses. An adverse party, or an officer, agent, or employee thereof, and any witness who appears to be hostile, unwilling, or evasive, may be interrogated by leading questions and

may also be contradicted and impeached by the party calling him.

(d) Expedition. Hearings shall proceed with all reasonable expedition. Unless the Commission otherwise orders upon a certificate of necessity therefor by the hearing examiner, all hearings shall be held at one place and shall continue without suspension until concluded. (This does not bar overnight, weekend, or holiday recesses, or other brief intervals of the sort normally involved in judicial proceedings.)

(e) Transcripts. Hearings shall be stenographically reported and transcribed by the official reporter of the Commission under the supervision of the hearing examiner, and the original transcript shall be a part of the record and the sole official transcript. Copies of transcripts are available to respondents and to the public from the reporter at rates not to exceed the maximum rates fixed by contract between the Commission and the reporter.

(f) Corrections of the transcript. Corrections of the official transcript may be made only when they involve errors affecting substance and then only in the manner herein provided: Corrections ordered by the hearing examiner or agreed to in a written stipulation signed by all counsel and approved by the hearing examiner shall be included in the record, and such stipulations, except to the extent they are capricious or without substance, shall be approved by the hearing examiner. Corrections shall not be ordered by the hearing examiner except upon notice and opportunity for the hearing of objections. Such corrections shall be made by the Official Reporter by furnishing substitute typed pages, under the usual certificate of the Reporter, for insertion in the official record. The original uncorrected pages shall be retained in the files of the Commission.

(g) In camera (definition). Except as hereinafter provided, documents and testimony made subject to in camera orders are not made a part of the public record, but are kept confidential, and only respondents, their counsel, authorized Commission personnel, and court personnel concerned with judicial review shall have access thereto. The right of the hearing examiner, the Commission, and reviewing courts to disclose in camera data to the extent necessary for the proper disposition of the proceeding is specifically reserved.

(h) In camera treatment of documents and testimony. Hearing examiners shall have authority, but only in those unusual and exceptional circumstances when good cause is found on the record (see Commission's interlocutory decision in H. P. Hood & Sons, Inc., Docket 7709, March 14, 1961, 58 FTC 1184), to order oral testimony and documents received in evidence to be placed in camera. The order shall specify the date on which in camera treatment expires and shall include (1) a description of the documents and testimony, (2) a full statement of the reasons for granting in camera treatment, and (3) a full statement of the reasons for the date on which in camera treatment expires. Any party desiring, for the preparation and presentation of the case, to disclose in camera documents or testimony to experts, consultants, prospective witnesses, or witnesses, shall make application to the hearing examiner setting forth the justification therefor. The hearing examiner, in granting such application for good cause found, shall enter an order protecting the rights of the affected parties and preventing unnecessary disclosure of information. In camera documents and the transcript of testimony subject to an in camera order shall be segregated from the public record and filed in a sealed envelope, bearing the title and docket number of the proceeding, the notation "In Camera Record under § 3.16," and the date on which in camera treatment expires, and said documents and testimony are to be placed in the public record.

(i) Release of in camera information. In camera documents and testimony shall be subject to the provisions of §§ 1.133 and 1.134 of the Commission's statement of General Procedures. However, the Commission, on its own motion without notice to any affected party, may make in camera documents and testimony available for inspection, copying, or use by an agency of the Federal or a State Government.

(j) Briefing of in camera information. In the submittal of proposed findings, briefs, or other papers, counsel for all parties should make a good faith attempt to refrain from disclosing the specific details of in camera documents and testimony. This shall not preclude references in such proposed findings, briefs, or other papers to such documents or testimony including generalized statements based on their contents. Separate proposed findings, briefs, or other papers

containing detailed in camera information which are filed, are to be marked "confidential", and not made a part of the public record.

[28 F.R. 7086, July 11, 1963, as amended at 31 F.R. 5122, Mar. 30, 1966]

§3.17 Subpoenas and orders requiring

access.

(a) Subpoenas ad testificandum. Application for issuance of a subpoena requiring a witness to appear and testify before a designated hearing examiner or a person designated under § 3.10 to take depositions, at a specified time and place shall be made to the hearing examiner.

(b) Subpoenas duces tecum. Application for issuance of a subpoena requiring a witness to appear before a designated hearing examiner or a person designated under § 3.10 to take depositions at a specified time and place and produce specified documents shall be made in writing to the hearing examiner, and shall specify as exactly as possible the documents to be produced, showing the general relevancy of the documents and the reasonableness of the scope of the subpoena. Any motion to limit or quash such subpoena shall be filed within ten (10) days after service thereof, or if the return date is less than ten (10) days after service of the subpoena, within such other time as the hearing examiner may allow.

Appli

(c) Orders requiring access. cation for issuance of an order requiring any corporation being proceeded against to grant access to files for the purpose of examination and the right to copy documentary evidence shall be made in writing to the hearing examiner, and shall specify as exactly as possible the files to which access is requested, showing the general relevancy of the files and the reasonableness of the scope of the order. Any motion to limit or quash such an order shall be filed within ten (10) days after service thereof, or, if the date for compliance is less than ten (10) days after service of the order, within such other time as the hearing examiner may allow.

(d) Disposition. Applications for the issuance of subpoenas and orders requiring access shall be ruled upon by the hearing examiner. In the event the hearing examiner is not available, any such application may be ruled upon by the Director of Hearing Examiners or

such other hearing examiner as the Director may designate.

(e) Service. A subpoena or an order requiring access shall be served as provided in § 4.4 (a) of this chapter.

(f) Appeal. An appeal to the Commission from the hearing examiner's ruling granting or denying an application to issue or a motion to limit or quash any subpoena or order requiring access will be entertained by the Commission only upon a showing that the ruling complained of involves substantial rights and will materially affect the final decision and that a determination of its correctness before conclusion of the hearing will better serve the interests of justice. Such appeals shall be in the form of a brief not to exceed thirty (30) pages in length and shall be filed within five (5) days after notice of the ruling complained of. Answer thereto may be filed within five (5) days after service of the appeal brief. The appeal shall not operate to suspend the hearing unless otherwise ordered by the hearing examiner or the Commission. §3.18 Witnesses and fees.

(a) Witnesses at formal hearings shall be examined orally. Witnesses shall be paid the same fees and mileage as are paid witnesses in the courts of the United States.

(b) Witnesses whose depositions are taken, and the persons taking such depositions, shall severally be entitled to the same fees as are paid for like services in the courts of the United States.

(c) Witness fees and mileage, and fees for depositions, shall be paid by the party at whose instance witnesses appear. §3.19 Proposed findings, conclusions, and order.

At the close of the reception of evidence, or within a reasonable time thereafter fixed by the hearing examiner, any party may file with the Secretary of the Commission for consideration of the hearing examiner proposed findings of fact, conclusions of law, and order, together with reasons therefor and briefs in support thereof. Such proposals shall be in writing, shall be served upon all parties, and shall contain adequate references to the record and authorities relied

§ 3.20 Interlocutory appeals.

(a) Except as provided in §§ 3.15(d) and 3.17(f), interlocutory appeals from rulings of a hearing examiner may be filed only after permission is first obtained from the Commission. Any request for such permission shall be in writing, not to exceed ten (10) pages in length, and shall be filed within five (5) days after notice of the ruling complained of. Permission will not be granted except in extraordinary circumstances where an immediate decision by the Commission is clearly necessary to prevent detriment to the public interest.

(b) Interlocutory appeals shall be in the form of a brief, not to exceed thirty (30) pages in length, and shall be filed within five (5) days after notice of permission to file. Answer thereto may be filed within five (5) days after service of the appeal brief. The appeal shall not operate to suspend the hearing unless otherwise ordered by the hearing examiner or the Commission.

(a) When filed and when effective. Within ninety (90) days after completion of the reception of evidence in a proceeding (or within thirty (30) days in cases of (1) default under § 3.5(c), or of (2) waiver by the parties of the filing of proposed findings of fact, conclusions of law and order provided for in § 3.19), or within such further time as the Commission may allow by order entered in the record based upon the hearing examiner's written request, the hearing examiner shall file an initial decision which shall become the decision of the Commission thirty (30) days after service thereof upon the parties, unless prior thereto (i) an appeal is perfected under § 3.22; (ii) the Commission by order stays the effective date of the decision; or (iii) the Commission issues an order placing the case on its own docket for review; provided, however, that the failure of an appellant to file an appeal brief within the time prescribed by § 3.22 shall extend for ten (10) days the period within which the Commission may by order stay the effective date of the initial decision or place the case on its own docket for review.

(b) Content. An initial decision shall include a statement of (1) findings (with specific page references to principal supporting items of evidence in the record)

and conclusions, as well as the reasons or basis therefor, upon all the material issues of fact, law, or discretion presented on the record, and (2) an appropriate order. Initial decisions shall be based upon a consideration of the whole record and supported by reliable, probative and substantial evidence.

(c) By whom made. The initial decision shall be made and filed by the hearing examiner who presided over the hearings, except when he shall have become unavailable to the Commission.

(d) Reopening of proceeding by hearing examiner; termination of jurisdiction. (1) At any time prior to the filing of his initial decision, a hearing examiner may reopen the proceeding for the reception of further evidence.

(2) Except for the correction of clerical errors, the jurisdiction of the hearing examiner is terminated upon the filing of his initial decision, unless and until the proceeding is remanded to him by the Commission.

[28 F.R. 7086, July 11, 1963, as amended at 31 F.R. 5123, Mar. 30, 1966]

§ 3.22 Appeal from initial decision.

(a) Who may file; notice of intention. Any party to a proceeding may appeal an initial decision to the Commission, provided that within ten (10) days after completion of service of the initial decision such party files a notice of intention to appeal.

(b) Appeal brief. (1) The appeal shall be in the form of a brief, filed within thirty (30) days after completion of service of the initial decision, and shall contain, in the order indicated, the following:

(i) A subject index of the matter in the brief, with page references, and a table of cases (alphabetically arranged), text books, statutes, and other material cited, with page references thereto;

(ii) A concise statement of the case; (iii) A specification of the questions intended to be urged; and

(iv) The argument representing clearly the points of fact and law relied upon in support of the position taken on each question, with specific page references to the transcript and the legal or other material relied upon.

(2) In addition, the brief shall contain a proposed form of order for the Commission's consideration in lieu of the order contained in the initial decision.

(c) Answering brief. Within thirty

(30) days after service of the brief upon the opposing party, such party may file an answering brief which shall also contain a subject index, with page references, and a table of cases (alphabetically arranged), text books, statutes, and other material cited with page references thereto. It shall present clearly the points of fact and law relied upon in support of the position taken on each question, with specific page references to the transcript and legal or other material relied upon.

(d) Reply brief. Reply briefs shall be limited to rebuttal of matter in answering briefs and will be received if filed and served within seven (7) days after receipt of the answering brief or the day preceding the oral argument, whichever comes first. No answer to a reply brief will be permitted.

(e) Length of briefs. No brief in excess of sixty (60 pages, including any appendices, shall be filed without leave of the Commission.

(f) Oral argument. (1) Oral arguments will be held in all cases on appeal to the Commission, unless the Commission otherwise orders upon its own initiative or upon request of any party made at the time of filing his brief. Oral arguments before the Commission shall be reported stenographically, unless otherwise ordered.

(2) The purpose of oral argument is to emphasize and clarify the written argument appearing in the briefs. Reading at length from the briefs or other texts is not favored.

§ 3.23

Review of initial decision in absence of appeal.

Where the Commission has entered an order placing the case on its own docket for review, its order will set forth the scope of such review and the issues which will be considered and will make provision for the filing of briefs if deemed appropriate by the Commission.

§ 3.24 Decision on appeal or review.

(a) Upon appeal from or review of an initial decision, the Commission will consider such parts of the record as are cited or as may be necessary to resolve the issues presented; and in addition will, to the extent necessary or desirable, exercise all the powers which it could have exercised if it had made the initial decision.

(b) In rendering its decision, the Commission will adopt, modify, or set aside

Within twenty (20) days after completion of service of a Commission decision, any party may file with the Commission a petition for reconsideration of such decision, setting forth the relief desired and the grounds in support thereof. Any petition filed under this subsection must be confined to new questions raised by the decision or final order and upon which the petitioner had no opportunity to argue before the Commission.

Any party desiring to oppose such a petition shall file an answer thereto within ten (10) days after service upon him of the petition. The filing of a petition for reconsideration shall not operate to stay the effective date of the decision or order or to toll the running of any statutory time period affecting such decision or order unless specifically so ordered by the Commission. § 3.26 Reports of compliance.

(a) In every proceeding in which the Commission has issued an order to cease and desist, each respondent named in such order shall file with the Commission, within sixty (60) days after service thereof, a report in writing, signed by the respondent, setting forth in detail the manner and form of his compliance with the order, and shall thereafter file with the Commission such further signed, written reports of compliance as it may require. Reports of compliance shall be under oath if so requested. Where the order prohibits the use of a false advertisement of a food, drug, device, or cosmetic which may be injurious to health because of results from its use under the conditions prescribed in the advertisement, or under such conditions as are customary or usual, or if the use of such advertisement is with intent to defraud or mislead, an interim report stating whether and how respondents intend to comply shall be filed within ten

(10) days after service of the order. Where court review of an order of the Commission is pending, respondent shall file only such reports of compliance as the court may require. Thereafter, the time for filing report of compliance shall begin to run de novo from the final judicial determination. The Commission will review such reports of compliance and will advise each respondent whether the actions set forth therein constitute compliance with the Commission's order.

(b) Any respondent subject to a Commission order may request advice from the Commission as to whether a proposed course of action, if pursued by it, will constitute compliance with such order. The request for advice should be submitted in writing to the Secretary of the Commission and should include full and complete information regarding the proposed course of action. On the basis of the facts submitted, as well as other information available to the Commission, the Commission will inform the respondent whether or not the proposed course of action, if pursued, would constitute compliance with its order.

(c) The Commission may at any time reconsider its approval of any report of compliance or any advice given under this section and, where the public interest requires, rescind or revoke its prior approval or advice. In such event the respondent will be given notice of the Commission's intent to revoke or rescind and will be given an opportunity to submit its views to the Commission. The Commission will not proceed against a respondent for violation of an order with respect to any action which was taken in good faith reliance upon the Commission's approval or advice under this section, where all relevant facts were fully, completely and accurately presented to the Commission and where such action was promptly discontinued upon notification of rescission or revocation of the Commission's approval.

Subpart H-Reopening of Proceedings § 3.27 Authority.

Except while pending in a United States court of appeals on a petition for review (after the transcript of the record has been filed) or in the United States Supreme Court, a proceeding may be reopened by the Commission at any time. Such a reopening may be either on the