in which event it will take such other action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require), and decision, in disposition of the proceeding.

(c) If an agreement is not so submitted, or if at any time it appears to the operating Bureau in which the matter is then pending that the execution of a satisfactory agreement is unlikely, such Bureau, after notification to the proposed respondents of its intention to do so, shall submit the matter to the Commission, together with any written offers of settlement which the proposed respondents desire to have the Commission consider. The Commission will thereupon take such action as may be appropriate.

(d) After a complaint has been issued, the consent order procedure described in this part will not be available. However, in exceptional and unusual circumstances, the Commission may, upon request and for good cause shown, withdraw a matter from adjudication for the purpose of negotiating a settlement by the entry of a consent order. In such event, the Commission will treat the matter as being in a nonadjudicative status and may consult with and receive advice from its staff members and others. This rule will not preclude the settlement of the case by regular adjudicatory process through the filing of an admission answer or submission of the case to the administrative law judge on a stipulation of facts and an agreed order. [34 F.R. 12992, Aug. 12, 1967, as amended at 37 F.R. 23826, Nov. 9, 1972]

§ 2.35 Notice of proposed adjudicative proceeding records.

General rules.

included in public

Notices and proposed forms of complaints and orders under § 2.31 are included in the public records of the Commission and will be the subject of releases through the Commission's Office of Public Information. Ordinarily, there will be no additional release if and when a complaint is issued under the Commission's adjudicative procedures. All negotiations and communications under §§ 2.32, 2.33, and 2.34 will constitute a part of the confidential records of the Commission, except to the extent otherwise specifically provided therein. [35 F.R. 10584, June 30, 1970]

AUTHORITY: The provisions of this Part 3 issued under sec. 6, 38 Stat. 721; 15 U.S.C. 46, unless otherwise noted.

SOURCE: The provisions of this Part 3 appear at 32 F.R. 8449, June 13, 1967, unless otherwise noted.

NOTE: For nomenclature changes appearing in Part 3 see 37 F.R. 22611, Oct. 20, 1972.

Subpart A-Scope of Rules; Nature of Adjudicative Proceedings

§ 3.1

Scope of the rules in this part.

The rules in this part govern procedure in adjudicative proceedings. It is the policy of the Commission that, to the extent practicable and consistent with requirements of law, such proceedings shall be conducted expeditiously. In the conduct of such proceedings the administrative law judge and counsel for all parties shall make every effort at each state of a proceeding to avoid delay.

§ 3.2 Nature of adjudicative proceedings.

Adjudicative proceedings are those formal proceedings conducted under one or more of the statutes administered by the Commission which are required by statute to be determined on the record after opportunity for an agency hearing. The term includes hearings upon objections to orders relating to the promulgation, amendment, or repeal of rules under sections 4, 5, and 6 of the Fair Packaging and Labeling Act. It does not include other proceedings such as negotiations for the entry of consent orders; investigational hearings as distinguished from proceedings after the issuance of a complaint; hearings for the purpose of inquiring into the manner and extent of compliance with outstanding orders; proceedings for the promulgation of industry guides or trade regulation rules; proceedings for fixing quantity limits under section 2(a) of the Clayton Act; investigations under section 5 of the Export Trade Act; rulemaking proceedings under the Fair Packaging and Labeling Act up to the time when the Commission determines under § 1.16(g) of this chapter that objections sufficient to warrant the holding of a public hearing have been filed; or the promulgation of substantive rules and regulations, determinations of classes of products exempted from statutory requirements, the establishment of name guides, or inspections and industry counseling, under sections 4(d) and 6(a) of the Wool Products Labeling

Act of 1939, sections 7, 8(b), and 8(c) of the Fur Products Labeling Act, sections 5(c) and 5(d) of the Flammable Fabrics Act, and section 7(c), 7(d), and 12(b) of the Textile Fiber Products Identification Act.

§ 3.11

Subpart B-Pleadings

Commencement of proceedings. (a) Complaint. Except as provided in §3.13, an adjudicative proceeding is commenced by the issuance and service of a complaint by the Commission.

(b) Form of complaint. The Commission's complaint shall contain the following:

(1) Recital of the legal authority and jurisdiction for institution of the proceeding, with specific designation of the statutory provisions alleged to have been violated;

(2) A clear and concise factual statement sufficient to inform each respondent with reasonable definiteness of the type of acts or practices alleged to be in violation of the law;

(3) Where practical, a form of order which the Commission has reason to believe should issue if the facts are found to be as alleged in the complaint; and

(4) Notice of the time and place for hearing, the time to be at least thirty (30) days after service of the complaint.

(c) Motion for more definite statement. Where a reasonable showing is made by a respondent that he cannot frame a responsive answer based on the allegations contained in the complaint, he may move for a more definite statement of the charges against him before filing an answer. Such a motion shall be filed within ten (10) days after service of the complaint and shall point out the defects complained of and the details desired.

(a) Time for filing. A respondent shall have thirty (30) days after service of the complaint within which to file an answer thereto: Provided, however, That the filing of a motion for a more definite statement of the charges shall alter this period of time as follows, unless a different time is fixed by the hearing examiner: (1) If the motion is denied, the answer shall be filed within ten (10) days after service of the order of denial or thirty (30) days after service of the complaint, whichever is later; (2) if the motion is granted, in whole or in part, the

more definite statement of the charges shall be filed within ten (10) days after service of the order granting the motion and the answer shall be filed within ten (10) days after service of the more definite statement of the charges.

(b) Content of answer. An answer shall conform to the following:

(1) If allegations of complaint are contested. An answer in which the allegations of a complaint are contested shall contain:

(i) A concise statement of the facts constituting each ground of defense;

(ii) Specific admission, denial, or explanation of each fact alleged in the complaint or, if the respondent is without knowledge thereof, a statement to that effect. Allegations of a complaint not thus answered shall be deemed to have been admitted.

(2) If allegations of complaint are admitted. If the respondent elects not to contest the allegations of fact set forth in the complaint, his answer shall consist of a statement that he admits all of the material allegations to be true. Such an answer shall constitute a waiver of hearings as to the facts alleged in the complaint, and together with the complaint will provide a record basis on which the administrative law judge shall file an initial decision containing appropriate findings and conclusions and an appropriate order disposing of the proceeding. In such an answer, the respondent may, however, reserve the right to submit proposed findings and conclusions under 3.46 and the right to appeal the initial decision to the Commission under § 3.52.

(c) Default. Failure of the respondent to file an answer within the time provided shall be deemed to constitute a waiver of his right to appear and contest the allegations of the complaint and to authorize the administrative law judge, without further notice to the respondent, to find the facts to be as alleged in the complaint and to enter an initial decision containing such findings, appropriate conclusions, and order.

§3.13 Adjudicative hearing on issues arising in rulemaking proceedings under the Fair Packaging and Labeling Act.

(a) Notice of hearing. When the Commission, acting under § 1.16(g) of this chapter, determines that objections which have been filed are sufficient to warrant the holding of an adjudicative

hearing in rulemaking proceedings under the Fair Packaging and Labeling Act, or when the Commission otherwise determines that the holding of such a hearing would be in the public interest, a hearing will be held before an administrative law judge for the purpose of receiving evidence relevant and material to the issues raised by such objections or other issues specified by the Commission. In such case the Commission will publish a notice in the FEDERAL REGISTER Containing a statement of:

(1) The provisions of the rule or order to which objections have been filed;

(2) The issues raised by the objections or the issues on which the Commission wishes to receive evidence;

(3) The time and place for hearing, the time to be at least thirty (30) days after publication of the notice; and

(4) The time within which, and the conditions under which, any person who petitioned for issuance, amendment, or repeal of the rule or order, or any person who filed objections sufficient to warrant the holding of the hearing, or any other interested person, may file notice of intention to participate in the proceeding.

(b) Parties. Any person who petitions for issuance, amendment, or repeal of a rule or order, and any person who files objections sufficient to warrant the holding of a hearing, and who files timely notice of intention to participate, shall be regarded as a party and shall be individually served with any pleadings filed in the proceeding. Upon written application to the administrative law judge and a showing of good cause, any interested person may be designated by the administrative law judge as a party. §3.14

Intervention.

Any individual, partnership, unincorporated association, or corporation desiring to intervene in an adjudicative proceeding shall make written application in the form of a motion setting forth the basis therefor. Such application shall have attached to it a certificate showing service thereof upon each party to the proceeding in accordance with the provisions of § 4.4(b) of this chapter. A similar certificate shall be attached to the answer filed by any party, other than counsel in support of the complaint, showing service of such answer upon the applicant. The administrative law judge or the Commission may by order permit the intervention to

such extent and upon such terms as are provided by law or as otherwise may be deemed proper.

§3.15 Amendments and supplemental pleadings.

(a) Amendments-(1) By leave. If and whenever determination of a controversy on the merits will be facilitated thereby, the administrative law judge may, upon such conditions as are necessary to avoid prejudicing the public interest and the rights of the parties, allow appropriate amendments to pleadings or notice of hearing: Provided, however, That a motion for amendment of a complaint or notice may be allowed by the administrative law judge only if the amendment is reasonably within the scope of the original complaint or notice. Motions for other amendments of complaints or notices shall be certified to the Commission.

(2) Conformance to evidence. When issues not raised by the pleadings or notice of hearing but reasonably within the scope of the original complaint or notice of hearing are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings or notice of hearing; and such amendments of the pleadings or notice as may be necessary to make them conform to the evidence and to raise such issues shall be allowed at any time.

(b) Supplemental pleadings. The administrative law judge may, upon reasonable notice and such terms as are just, permit service of a supplemental pleading or notice setting forth transactions, occurrences, or events which have happened since the date of the pleading or notice sought to be supplemented and which are relevant to any of the issues involved.

Subpart C-Prehearing Procedures; Motions; Interlocutory Appeals; Summary Decisions

§ 3.21 Prehearing conferences.

(a) When appropriate. The administrative law judge in any case may, and upon motion of any party or where it appears probable that the hearing will extend for more than five (5) days he shall, direct counsel for all parties to meet with him for a conference to consider any or all of the following:

(1) Simplification and clarification of the issues;

(2) Necessity or desirability of amendments to pleadings, subject, however, to the provisions of § 3.15;

(3) Stipulations, admissions of fact and of the contents and authenticity of documents;

(4) Expedition in the discovery and presentation of evidence, including, but not limited to, restriction of the number of expert, economic, or technical witnesses;

(5) Matters of which official notice will be taken and matters which may be resolved by reliance upon trade regulation rules pursuant to § 1.12 (c) of this chapter; and

(6) Such other matters as may aid in the orderly and expeditious disposition of the proceeding, including disclosure of the names of witnesses and of documents or other physical exhibits which will be introduced in evidence in the course of the proceeding.

(b) Subpoenas. Prehearing conferences may be convened for the purpose of accepting returns on subpoenas duces tecum issued pursuant to the provisions of § 3.34(b).

(c) Reporting. Prehearing conferences, in the discretion of the administrative law judge, need not be stenographically reported as provided in § 3.44 (b), and whether reported or not shall not be public unless all parties so agree.

(d) Order. The administrative law judge shall enter in the record an order which recites the results of the conference. Such order shall include the administrative law judge's rulings upon matters considered at the conference, together with appropriate directions to the parties. The hearing examiner's order shall control the subsequent course of the proceeding, unless modified to prevent manifest injustice.

§ 3.22 Motions.

(a) Presentation and disposition. During the time a proceeding is before an administrative law judge, all motions therein, except those filed under § 3.42 (g), shall be addressed to the administrative law judge, and if within his authority shall be ruled upon by him. Any motion upon which the administrative law judge has no authority to rule shall be certified by him to the Commission with his recommendation. All written motions shall be filed with the Secretary of the Commission and all motions addressed to the Commission shall be in writing.

(b) Content. All written motions shall state the particular order, ruling, or action desired and the grounds therefor.

(c) Answers. Within ten (10) days after service of any written motion, or within such longer or shorter time as may be designated by the administrative law judge or the Commission, the opposing party shall answer or shall be deemed to have consented to the granting of the relief asked for in the motion. The moving party shall have no right to reply, except as permitted by the administrative law judge or the Commission.

(d) Motions for extensions. As a matter of discretion, the administrative law judge or the Commission may waive the requirements of this section as to motions for extensions of time, and may rule upon such motions ex parte.

(e) Rulings on motions for dismissal. When a motion to dismiss a complaint or for other relief is granted with the result that the proceeding before the administrative law judge is terminated, the administrative law judge shall file an initial decision in accordance with the provisions of § 3.51. If such a motion is granted as to all charges of the complaint in regard to some, but not all, of the respondents, or is granted as to any part of the charges in regard to any or all of the respondents, the administrative law judge shall enter his ruling on the record and take it into account in his initial decision. When a motion to dismiss is made at the close of the evidence offered in support of the complaint based upon an alleged failure to establish a prima facie case, the administrative law judge may, if he so elects, defer ruling thereon until the close of the case for the reception of evidence.

§ 3.23 Interlocutory appeals.

Rulings of the administrative law judge on motions may not be appealed to the Commission prior to appeal from the initial decision except in the following circumstances:

(a) Appeals without a determination by the administrative law judge. The Commission may, in its discretion, entertain interlocutory appeals where a ruling of the administrative law judge: (1) Requires the disclosure of Commission records or the appearance of an official or employee of the Commission pursuant to § 3.36; (2) requires the appearance of other Government officials pursuant to § 3.37; (3) suspends an attorney from

participation in a particular proceeding pursuant to § 3.42(d); or (4) grants or denies an application for intervention pursuant to the provisions of § 3.14. Appeal from such a ruling may be sought by filing with the Commission an application for review, not to exceed fifteen (15) pages, within five (5) days after notice of the administrative law judge's ruling. Answer thereto may be filed within five (5) days after service of the application for review. The application for review should specify the person or party taking the appeal; should designate the ruling or part thereof from which appeal is being taken; and should specify under which provisions hereof review is being sought. The Commission upon its own motion may enter an order staying the return date of an order issued by the administrative law judge pursuant to § 3.36 or § 3.37 or placing the matter on the Commission's docket for review. Any order placing the matter on the Commission's docket for review will set forth the scope of the review and the issues which will be considered and will make provision for the filing of briefs if deemed appropriate by the Commission.

(b) Appeals upon a determination by the administrative law judge. Except as hereinbefore provided in paragraph (a) of this section applications for review of a ruling by the administrative law judge may be allowed only upon request made to the examiner and a determination by the examiner in writing, with justifica tion in support thereof, that the ruling involves a controlling question of law or policy as to which there is substantial ground for difference of opinion and that an immediate appeal from the ruling may materially advance the ultimate termination of the litigation or subsequent review will be an inadequate remedy. Applications for review in writing may be filed, not to exceed fifteen (15) pages, within five (5) days after notice of the administrative law judge's determination. Answer thereto may be filed within five (5) days after service of the application for review. The Commission may thereupon, in its discretion, permit an appeal. Commission review, if permitted, will be confined to the application for review and answer thereto, without oral argument or further briefs, unless otherwise ordered by the Commission.

(c) Proceedings not stayed. Application for review and appeal hereunder shall not stay proceedings before the