81 FR 42534 - Ex Parte Communications
POSTAL REGULATORY COMMISSION Federal Register Volume 81, Issue 126 (June 30, 2016)
Federal Register Volume 81, Issue 126 (June 30, 2016)
| Page Range | 42534-42542 | |
| FR Document | 2016-15349 |
[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)] [Rules and Regulations] [Pages 42534-42542] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-15349] ----------------------------------------------------------------------- POSTAL REGULATORY COMMISSION 39 CFR Parts 3000, 3001, and 3008 [Docket No. RM2016-4; Order No. 3379] Ex Parte Communications AGENCY: Postal Regulatory Commission. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Commission is issuing a set of final rules amending existing Commission rules related to ex parte communications. The final rules are consistent with the recommended approach to agency treatment of ex parte communications. Relative to the proposed rules, some rules were restructured based on comments received, others were modified to alleviate confusion. DATES: Effective August 1, 2016. FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 202-789-6820. SUPPLEMENTARY INFORMATION: Regulatory History 81 FR 1931, January 14, 2016. Table of Contents I. Introduction II. Background III. Comments IV. Commission Analysis V. Changes to the Proposed Rules VI. Ordering Paragraphs I. Introduction In this Order, the Commission adopts final rules concerning ex parte communications. The final rules adopted by this Order amend existing Commission rules and remove obsolete rules no longer applicable under the Postal Accountability and Enhancement Act (PAEA), Public Law 109-435, 120 Stat. 3218 (2006). The final rules are located at 39 CFR part 3008. Existing rules located at Sec. Sec. 3000.735-501, 502, 3001.5(o), and 3001.7 are amended to reflect the revised location of the ex parte communications rules. Existing rules located at 39 CFR part 3000 are renumbered for consistency with Federal Register guidance. The rules as adopted incorporate suggestions offered by commenters that restructure some rules as proposed, but do not materially affect their substance. The initial approach taken by the Commission was to codify only what were considered mandatory ex parte communications requirements in the Code of Federal Regulations (CFR) applicable to a limited set of Commission docket types. The Commission also proposed to issue a more comprehensive policy document to include ex parte communications requirements for other possible docket types.\1\ The Commission understands comments suggesting the proposed approach would cause confusion concerning when the mandatory rules apply versus when the policy applies. The Commission has adopted modified rules to alleviate this confusion by making the rules inclusive of all proceeding types before the Commission with specific exceptions. This is a change in form, but not substance.\2\ --------------------------------------------------------------------------- \1\ The opportunity to comment on both the rules and the policy were provided in Order No. 3005. Notice of Proposed Rulemaking Regarding Ex Parte Communications, January 8, 2016 (Order No. 3005). \2\ The Commission's internal policy is revised to reflect the changes in the final rules and will be made available on the Commission's Web site. --------------------------------------------------------------------------- The change in structure also is intended to clarify that the Commission in most instances will effectively take a permit-but- disclose approach to ex parte communications, which was suggested by many of the commenters. However, given the opportunities the Commission provides to participants to avoid ex parte communications issues altogether, the rules do not encourage ex parte communications as the norm.\3\ The proposed changes in structure also are intended to clarify that penalties for violating ex parte communication rules only apply to very limited proceeding types. --------------------------------------------------------------------------- \3\ For example, participants generally have sufficient opportunities to make their views known by filing documents on the Commission's Web site during the course of a proceeding. --------------------------------------------------------------------------- II. Background On January 8, 2016, the Commission issued Order No. 3005, introducing a proposed revision and reorganization of its rules concerning ex parte communications. See Order No. 3005. Order No. 3005 explained that the current rules concerning ex parte communications are located at Sec. Sec. 3000.735-501, 502, and 3001.7. See id. The Commission identified a need to revise the existing rules for several reasons. The existing rules contained significant redundancy between the requirements of Sec. 3000.735-501 and the requirements of Sec. 3001.7. Furthermore, the existing rules made it difficult to identify who qualified as Commission ``decision-making personnel'' without referring to unrelated sections of the CFR. The existing rules also referred to rate and classification cases under 39 U.S.C. 3624, which were eliminated under the PAEA. Finally, the existing rules lacked guidance for Commission personnel on how to treat ex parte communications falling outside the scope of the specific docket types mentioned. The operative statute requires the Commission to restrict ex parte communications only in matters where the Commission must provide an opportunity for a hearing on the record pursuant to 5 U.S.C. 556 through 557. Under the PAEA, the Commission is only required to provide an opportunity for a hearing in matters regarding a change in the nature of postal services pursuant to 39 U.S.C. 3633. In addition to nature of service matters, Commission regulations historically have extended restrictions on ex parte communications to post office appeal cases pursuant to 39 U.S.C. 404(d)(5) and (6) and complaint cases pursuant to 39 U.S.C. 3662. The Commission considers the restriction appropriate because of the potential impact ex parte communications might have on participants and their associated rights in those types of proceedings. See Order No. 3005 at 2-3. In addition to the above three types of proceedings--nature of service, post office closings, and complaints--many other types of proceedings come before the Commission. Accordingly, the Commission attached as a library reference to Order No. 3005 a new proposed internal policy on the treatment of ex parte communications applicable to all cases. For consistency with prevailing principles regarding agency treatment of ex parte [[Page 42535]] communications,\4\ and for simplicity and efficiency of administration, the Commission policy requires Commission personnel to treat ex parte communications similarly in all proceeding types. In Order No. 3005, the Commission sought public comment on the proposed rules and the attached internal policy.\5\ --------------------------------------------------------------------------- \4\ Library Reference PRC-LR-RM2016-4/1, January 8, 2016. See Esa L. Sferra-Bonistalli, Ex Parte Communications in Informal Rulemaking, May 1, 2014 (prepared for consideration of the Administrative Conference of the United States); Administrative Conference of the United States, Administrative Conference Recommendation 2014-4, June 6, 2014 (Recommendation 2014-4). \5\ Order No. 3005 at 8. The Commission granted the Postal Service's request for an extension of time to file comments through February 29, 2016, and to file reply comments through March 15, 2016. Order No. 3076, Order Granting Extension of Time to File Comments, February 12, 2016. See Motion for Extension of Time to Submit Comments on Proposed Ex Parte Communications Rulemaking, February 11, 2016. --------------------------------------------------------------------------- The commenters provide instructive perspectives on the Commission's proposed rules. Notably, the commenters alert the Commission to the confusion caused by proposing both an internal policy applicable to all cases and enforceable only on Commission personnel, and regulations applicable only to specific types of cases and applicable to all persons. This final Order is intended to remedy the confusion surrounding when ex parte restrictions apply, and when and what penalties may be imposed. The changes to the proposed rules reflect the input of the commenters but do not materially change the operation of the proposed rules. The final rules formalize, but do not materially change, the Commission's current practice for handling ex parte communications. III. Comments On February 29, 2016, the Commission received comments from the Postal Service,\6\ the Public Representative,\7\ MPA--the Association of Magazine Media (MPA),\8\ and a group of interested mailer organizations (Joint Commenters).\9\ On March 15, 2016, the Commission received reply comments from the Postal Service \10\ and the Public Representative.\11\ --------------------------------------------------------------------------- \6\ United States Postal Service Comments on Proposed Ex Parte Communications Rules, February 29, 2016 (Postal Service Comments). \7\ Public Representative's Comments, February 29, 2016 (PR Comments). \8\ Comments of MPA--The Association of Magazine Media, February 29, 2016 (MPA Comments). \9\ Joint Comments of the Association of Mail Electronic Enhancement, the American Catalog Mailers Association, Inc., the Association of Postal Commerce, the Direct Marketing Association, Envelope Manufacturers Association, Epicomm, IDEAlliance, the Major Mailers Association, National Postal Policy Council, News Paper Association of America, Parcel Shippers Association, Saturation Mailers Coalition, the American Forest & Paper Association, and the National Association of Presort Mailers, February 29, 2016 (Joint Comments). \10\ Reply Comments of the United States Postal Service, March 15, 2016 (Postal Service Reply Comments). \11\ Public Representative's Reply Comments, March 15, 2016 (PR Reply Comments). --------------------------------------------------------------------------- While the commenters either support the Commission's effort or find it reasonable for the Commission to ensure that its rules concerning ex parte communications promote transparency and fairness,\12\ several commenters have concerns regarding the scope of the restrictions of the proposed rules and internal policy. See Postal Service Comments at 2, 3-7; Joint Comments at 5-7. --------------------------------------------------------------------------- \12\ See Postal Service Comments at 2 (``The Postal Service strongly supports the principles of transparency and fairness the proposed rules and policy are intended to promote. . . .''); PR Comments at 4 (``The Public Representative supports the Commission's interest in taking a fresh look at . . . ex parte communications in light of the enactment of the PAEA in 2006. . . .''); MPA Comments at 1 (``The Commission's decision to review and revise its current ex parte rules is reasonable.''); Joint Comments at 3 (``The Joint Commenters support the goal of promoting the transparency and integrity of proceedings before the Commission.''). --------------------------------------------------------------------------- A. Types of Proceedings to Which the Prohibition Against Ex Parte Communications Applies The Postal Service, MPA, and the Joint Commenters each express concern that the Commission policy treating all case types similarly is more restrictive than is necessary. See Postal Service Comments at 3-7; MPA Comments at 2-5; Joint Comments at 4-5. They note that the Administrative Procedure Act (APA) expressly prohibits ex parte communications in formal rulemakings only. Postal Service Comments at 3; MPA Comments at 3; Joint Comments at 4. The Postal Service, MPA, and the Joint Commenters appear to agree that the proposed rules unnecessarily restrict desirable communications in informal proceedings. See Postal Service Comments at 3; MPA Comments at 3; Joint Comments at 3. Each discuss Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981), to emphasize the value of informal agency contacts with public stakeholders in regulated industry communities. See Postal Service Comments at 7; MPA Comments at 3; Joint Comments at 3. The Postal Service, MPA, and the Joint Commenters express concern that the Commission's policy is not in accord with Recommendation 2014-4. Postal Service Comments at 5-7; MPA Comments at 4-5; Joint Comments at 6. The Joint Commenters state that ``[t]he proposed prohibition on ex parte communications in informal rulemakings is inconsistent with the long- standing recommendation of the Administrative Conference and the prevailing practice among other federal agencies.'' Joint Comments at 7. The Public Representative suggests that enforceability of the internal policy as it affects nonemployees is a potential issue. PR Comments at 5. The Postal Service proposes several modifications to the proposed rules. The Postal Service recommends that ex parte communications be prohibited only ``in `contested proceedings' where there are material issues in dispute.'' Postal Service Comments at 10. It also proposes that the Commission's decision to apply the restrictions to a particular proceeding should be based upon specific criteria and that the Commission should give notice when the rules will apply. Id. The Postal Service proposes that the definition of an ex parte communication be limited to those ``regarding the merits'' of a matter before the Commission. Id. at 14. Another Postal Service proposal suggests exempting communications regarding general issues of domestic or international postal policy, postal operations, or other statutory responsibilities not associated with the merits of a contested proceeding. Id. at 15. In her reply comments, the Public Representative raises concerns about the applicability of the rationale discussed in Sierra Club. PR Reply Comments at 2. Though the D.C. Circuit noted several benefits in allowing or encouraging informal communications with regulatory agencies, the Public Representative notes that the Commission has a ``relatively unique mission'' and generally does not conduct the type of large-scale programs to which the Court may have been referring. Id. The Public Representative also states that the Commission's authority typically does not include exercising the same type of industry enforcement action, such as imposing fines or other penalties for failing to meet federal standards. Id. The Public Representative notes that one of the Court's stated benefits to allowing ex parte communication was ``[s]purring the provision of information which the agency may need.'' Id. (quoting Sierra Club, 657 F.2d 298 at 401). The Public Representative lists current Commission practices highlighting the Commission's commitment to seeking information from outside sources, including providing an opportunity for reply comments in almost all dockets, ``extremely generous policy'' of granting extensions of time to file comments, [[Page 42536]] acceptance of late-filed comments, and reconsideration of stated opinions. PR Reply Comments at 2. The Public Representative characterizes the Commission as going to ``considerable effort to accommodate on-the-record input from those who wish to weigh in on a matter within the Commission's jurisdiction.'' Id. at 3. B. When Matters Are Before the Commission The commenters express concern regarding vagueness in when a matter will be considered to be ``before the Commission.'' MPA states that most agencies do not consider a matter to be before the agency ``until it has issued a formal notice of the commencement of the proceeding, an interested person has filed a complaint or formal request that the agency begin the proceeding, or a person has actual knowledge that the proceeding will be noticed.'' MPA Comments at 5. MPA states the proposed rules do not adequately define the terms ``expected,'' ``actively preparing,'' and ``reasonable period of time.'' Id. at 6. The Joint Commenters state that Recommendation 2014-4 recommends agencies not impose restrictions on ex parte communications before notice is issued. Joint Comments at 6. The Postal Service criticizes the proposed rules' definition of when a matter is before the Commission, expressing concern that certain docket types involve the filing of periodically required reports, namely the Annual Compliance Report. Postal Service Comments at 16. The Postal Service states that because the scope of the Annual Compliance Report is so broad, the proposed rules would prohibit the Postal Service from ever having an off-the-record discussion about costs, revenues, rates, or quality of service, because of the knowledge that proceeding will be before the Commission annually. Id. at 16-17. The Postal Service proposes an amendment to proposed Sec. 3008.3(c)(4), adding that knowledge of the regular filing of periodic reports does not place a matter before the Commission. Id. at 17. Similarly, the Public Representative questions whether the predictability of certain periodic filings necessarily puts participants on notice of certain proceedings. PR Comments at 6-7. C. Recommended Approach: Permit but Disclose Several commenters note that the Administrative Conference of the United States considers a general prohibition on ex parte communications to be undesirable. See, e.g., MPA Comments at 4; Joint Comments at 7. The Postal Service, MPA, and the Joint Commenters each suggest an approach more comparable to the approach employed by other agencies. The Postal Service lists the approaches taken by the Department of Justice (DOJ), Federal Communications Commission (FCC), and Federal Energy Regulatory Commission (FERC). Postal Service Comments at 6-7. The Postal Service states the FERC limits ex parte restrictions to ``contested on-the-record proceedings,'' while the FCC classifies informal rulemakings as ``permit-but-disclose'' proceedings, and the DOJ permits ex parte communications subject to disclosure. Id. at 7 (quoting 18 CFR 385.2201; 47 CFR 1.1206; and 28 CFR 50.17(b) through (c), respectively). MPA suggests that the Commission need not go as far as the FERC, identifying a common alternative of permitting ex parte communications but requiring public disclosure of their substance. MPA Comments at 4. Similarly, the Joint Commenters state that ``[t]he Commission's proposed rules should be revised, consistent with APA requirements for reasoned decision making, to allow the Commission to permit but disclose any ex parte communications that it relies on in the context of an informal rulemaking proceeding.'' Joint Comments at 8. In its reply comments, the Postal Service suggests that Executive Order 11570, issued by President Nixon shortly after the enactment of the Postal Reorganization Act of 1970, and referenced in the Public Representative's comments, may have ``envisioned the `permit-but- disclose' approach'' rather than an outright prohibition. Postal Service Reply Comments at 4. D. Penalties The Public Representative expresses concern about the enforceability of the internal policy on individuals outside the Commission. PR Comments at 5. Although in Order No. 3005 the Commission stated that the policy ``will not be binding on persons outside of the Commission,'' it is evident from the comments that there is uncertainty and ambiguity regarding the applicability of certain restrictions across both the rules and internal policy. See Order No. 3005 at 8. MPA, in its discussion of the ambiguity of the definition of a matter before the Commission, alludes to the ``potentially draconian consequences of an adverse Commission finding.'' MPA Comments at 6. The Joint Commenters state that the penalties listed in proposed Sec. Sec. 3008.7(a) and (b) ``may be appropriate in the context of an improper ex parte contact in an adjudicatory proceeding, but they are excessive in the context of an informal rulemaking.'' Joint Comments at 8-9. The Joint Commenters fear the penalties would be ``especially punitive'' where the communication was made prior to notice of the informal rulemaking. Id. at 9. E. Postal Service's Proposed Changes to the January 2016 Proposed Rule The Postal Service includes its own proposed rules regarding ex parte communications. Postal Service Comments, Appendix A (Postal Service Proposed Rules). The proposed rules are a ``redline'' revision of the Commission's proposed rules and include line changes in particular sections. 1. Part 3000, Subpart B Postal Service Proposed Rule 3000.735-501(a) changes the description of the Commission's internal policy to read that the policy applies only to interactions ``regarding the merits of certain contested proceedings'' before the Commission. Postal Service Proposed Rules 3000.735-501(b) and 3000.735-502 remain unchanged from the Commission's proposed rules. 2. Section 3008.1 The Postal Service does not propose to change the applicability provisions of proposed Sec. Sec. 3008.1(a) through (d). However, Postal Service Proposed Rule 3008.1(e) narrows the scope of the Commission's proposed rule. The Postal Service's revision states that: [a]ny other contested proceeding in which the Commission, in its discretion, determines that it is appropriate to apply the rules of this section based on considerations of fairness or for other reasons, and provides notice on the public record of the proceeding that the rules of this section will apply (and the reasons therefor). For purposes of this section, ``contested proceeding'' means any docketed proceeding before the Commission in which there are multiple adverse parties and/or disputed issues of fact, law or policy. This revision adds specific conditions for the application of ex parte restrictions, including the type and subject of a matter before the Commission. 3. Section 3008.2 The Postal Service's proposed revisions to proposed Sec. 3008.2(a), setting forth the definition of ex parte communications, include adding the qualifier that the communication be one ``regarding the merits of a matter'' before the Commission. Postal Service [[Page 42537]] Proposed Rule 3008.2. The Postal Service defines a communication ``regarding the merits'' as ``one that is intended to affect, or capable of affecting the outcome of a proceeding, or intended to influence, or capable of influencing a Commission decision on any substantive issue in the proceeding.'' Postal Service Proposed Rule 3008.2(a). Postal Service Proposed Rule 3008.2(b) makes a minor revision to proposed Sec. 3008.2(b)(3) and adds two exceptions to the definition of ex parte communications. Proposed Sec. 3008.2 states the exception for communications made during off-the-record technical conferences where public notice of the event is provided and the event is open to all persons participating in the matter. The Postal Service's proposed change revises the exception to read that the event must be open to all persons participating in the matter before the Commission ``as a party, intervenor, or Public Representative.'' Postal Service Proposed Rule 3008.2(b)(3). The Postal Service removes proposed Sec. 3008.2(b)(5), ``communications not material to the matter before the Commission,'' and adds the following two exceptions, located at Sec. Sec. 3008.2(b)(5) and (6): (5) Questions or comments seeking to explain or clarify the meaning or operation of a statement, term, technical reference, or description of methodology used by the Commission or a participant in a proceeding, or to ascertain or confirm the accuracy of the Commission's (or participant's) understanding or interpretation of it; and (6) Communications regarding general issues of domestic or international postal policy, postal operations, or other statutory responsibilities of the Commission not associated with proceedings identified in part 3008.1 of this chapter. The Postal Service states the Commission's proposed Sec. 3008.2(b)(5) is not well defined and would be unnecessary if ex parte communications were limited to those ``regarding the merits.'' Postal Service Comments at 14. The Postal Service suggests the sixth exception to allow for general discussions about the postal industry. Id. at 15. 4. Section 3008.3 The Postal Service proposes that the definition of a matter before the Commission not include matters where the person ``has knowledge that a request to initiate a proceeding is expected to be filed.'' See id. at 17. Postal Service Proposed Rule 3008.3 removes the Commission's proposed Sec. 3008.3(b). The Postal Service also proposes removing the explanation that the mere potential that a request may be filed does not place a matter before the Commission, and that an affirmative action or actively preparing a request with the intent to file must exist. Id. at 16. Alternatively, the Postal Service suggests amending Sec. 3008.3(c)(4) by adding that ``mere knowledge that a periodic report will be filed at regular intervals as required by statute or regulation'' does not place a matter before the Commission. Id. 5. Section 3008.4 The Postal Service does not propose any revisions to proposed Sec. 3008.4, defining the persons subject to the ex parte communications rules. 6. Section 3008.5 The Postal Service proposes to amend the prohibitions set forth in proposed Sec. 3008.5. Postal Service Proposed Rule 3008.5(a) narrows the scope of prohibited communications to only those ``regarding the merits of a matter before the Commission.'' Postal Service Proposed Rule 3008.5(a). The Postal Service also proposes to revise proposed Sec. 3008.5(b), regarding the Commission's reliance on information obtained through ex parte communications. Where the Commission's proposed rule prohibits reliance on information obtained through ex parte communications, the Postal Service proposes to allow reliance if certain circumstances are present, most notably the opportunity for rebuttal. Postal Service Comments at 19-20. Postal Service Proposed Rule 3008.5(b) reads as follows: Commission decision-making personnel may rely upon information obtained through ex parte communications in determining the merits of a proceeding only where the communications are made part of the record pursuant to part 3008.6(b), where an opportunity for rebuttal has been provided pursuant to part 3008.6(d), and where reliance on the information will not cause undue delay or prejudice to any party. The Postal Service states that the revision allows the Commission to consider ``highly relevant'' statements potentially made by those unfamiliar with Commission practice. Postal Service Comments at 19. Furthermore, the Postal Service states that proposed Sec. 3008.6(c), allowing the Commission to disregard a factual assertion or rebuttal, presupposes that the Commission may, in some circumstances, decide to consider the information. Id. Proposed Sec. 3008.5(c) is unchanged by the Postal Service's proposed revisions. 7. Section 3008.6 The Postal Service proposes extensive revisions to proposed Sec. 3008.6. In proposed Sec. 3008.6(a), the Postal Service proposes to change the Commission ``will not'' to the Commission ``may not'' consider an ex parte communication. Postal Service Proposed Rule 3008.6(a). The Postal Services raises concerns about the treatment of sensitive or confidential information submitted in an ex parte communication. Postal Service Comments at 17-18. Postal Service Proposed Rule 3008.6(b) reflects this concern, as the Postal Service includes proposed guidance for the treatment of sensitive information. The Postal Service's adds, in redline, the following: (b) Commission decision-making personnel who receive, or who make or knowingly cause to be made, ex parte communications prohibited by this part shall immediately notify all participants that the communications will need to be disclosed on the public record, and provide an opportunity for the participants to apply for non-public treatment of any materials or information protected from disclosure under applicable law. Any such application shall be submitted to the Commission within five business days after notification. The Commission decision-making personnel shall then promptly place, or cause to be placed, on the public record of the proceeding: (1) All such written communications; (2) Memoranda stating the substance of all such oral communications, including the names of all participants and the date(s) of such communications; . . . (4) In placing information or materials in the public record under this part, the Commission shall withhold any non-public information that a participant in the communication has demonstrated is exempt from disclosure under applicable laws, and file the non- public information under seal pursuant to the procedures identified in its rules of practice and procedure. The Postal Service also adds a requirement upon receipt of communications seeking to explain or clarify the meaning as set forth in Postal Service Proposed Rule 3008.2(b)(5), where the comment ultimately influences the Commission decision. Postal Service Proposed Rule 3008.6(c) reads as follows: Commission decision-making personnel who receive, or who make or knowingly cause to be made, communications that are described in part 3008.2(b)(5) of this chapter shall follow the disclosure requirements set forth herein in part 3008.6(b) in the event that such communications affect the outcome of the proceeding or influence the Commission's decision on any substantive issue in the proceeding. [[Page 42538]] The Postal Service proposes to move the Commission's proposed Sec. 3008.6(c) regarding opportunity for rebuttal to Sec. 3008.6(d) but does not otherwise amend the rule. 8. Section 3008.7 The Postal Service does not propose any amendments to proposed Sec. 3008.7 regarding penalties for violations of the ex parte communication rules. F. Additional Comments The Public Representative points to Recommendation 2014-4, suggesting that agencies should explain whether social media communications fall within the rules' definition of ex parte communications. PR Comments at 7. The Public Representative also provides background information on the Commission's authority for its existing rules, as well as the Administrative Conference of the United States and its relevant report and recommendation. Id. at 8-13. The Public Representative suggests conforming the numerical designation of the rules in 39 CFR part 3000 consistent with the Federal Register's current preferences. Id. at 14. The Public Representative recommends replacing the hyphenated six-digit extensions with standard one-or-two-digit extensions. Id. IV. Commission Analysis A. Application of Rules Concerning Ex Parte Communications and Penalties for Violations The changes to the proposed rules reflect the Commission's recognition of a key area of concern outlined in the submitted comments. Notably, the proposed rules left uncertainty regarding whether ex parte communications were prohibited in all cases and whether penalties were appropriate for violations in informal rulemaking proceedings. Although the proposed rules were intended only to strictly prohibit ex parte communications in three particular types of matters (nature of service proceedings, appeals of post office closing and consolidations, and rate or service complaints), the Commission recognizes that proposed Sec. 3008.1(e) left broad discretion to the Commission to apply the rules to any case. Such broad authority coupled with the guidance set forth in the internal policy gave the impression that the Commission could apply the ex parte prohibition and impose penalties for violations in any matter. Such an interpretation is not the intent of this rulemaking, and therefore clarification and revision are required. The rulemaking is intended to align the Commission's rules with prevailing agency practices and clear the existing rules of redundancy and obsolete references. This rulemaking was not implemented to change, as a practical matter, the status quo for the treatment of ex parte communications. Essentially, this rulemaking was intended to codify the ex parte practices that the Commission has followed for many years. Several commenters share concern over ``draconian'' penalties potentially applied in informal rulemakings. See, e.g., MPA Comments at 6; Joint Comments at 6-7. The final rules address this concern. Final Sec. 3008.1 makes clear that the ex parte restrictions will indeed apply to all cases other than the listed exceptions or cases exempted by order. However, the change to the provision for penalties specifically states that the penalties will not apply to cases other than the three specific types of proceedings listed. In operation, the final rules create three classes of proceedings before the Commission. The first class includes nature of postal service proceedings (N cases), appeals of postal service decisions to close or consolidate post offices (A cases), and rate or service complaints (C cases). These proceedings will be subject to the ex parte rules, and any ex parte communications occurring in these proceedings will be subject to the penalties set forth in Sec. Sec. 3008.7(b) and (c). The second class of proceeding includes public inquiry proceedings (PI cases) and international mail proceedings (IM cases) undertaken pursuant to 39 CFR part 3017. Due to the highly collaborative nature of these proceedings and practical limitations on the ability to disclose each and every communication in these proceedings,\13\ the ex parte rules do not apply. Off-the-record communications in these proceedings are expected and permitted. The Commission may also, when circumstances warrant, suspend the application of the ex parte rules in other particular cases. --------------------------------------------------------------------------- \13\ See Recommendation 2014-4 at 6 (``In formulating policies governing ex parte communications in informal rulemaking proceedings, agencies should consider the following factors: . . . (c) Limitations on agency resources, including staff time, that may affect the ability of agency personnel to accept requests for face- to-face meetings or prepare summaries of such meetings. . . .''). --------------------------------------------------------------------------- The third class of proceeding includes all other case types before the Commission (Annual Compliance Review (ACR), Competitive Products (CP), Mail Classification (MC), Market Test (MT), Rate (R), Rulemaking (RM), and Tax Computation (T)). The ex parte rules will apply to these proceedings, but ex parte communications received by the Commission will not be subject to the penalties set forth in Sec. 3008.7. Instead, the communication will be disclosed pursuant to Sec. 3008.6(b). In this way, the rules will operate similarly to the ``permit-but-disclose'' approach suggested by the Postal Service, MPA, and the Joint Commenters.\14\ --------------------------------------------------------------------------- \14\ See Postal Service Comments at 7 (suggesting the permit- but-disclose approach employed by the DOJ and FCC); MPA Comments at 4 (``A common alternative is to permit ex parte communications but require public disclosure of their substance.''); Joint Comments at 8 (``The Commission's proposed rules should be revised . . . to allow the Commission to permit and disclose any ex parte communications that it relies on in the context of an informal rulemaking proceeding.''). --------------------------------------------------------------------------- While the Commission understands and appreciates the benefits of sharing information and promoting a candid dialogue on key issues,\15\ the Commission, as a matter of policy, prefers that those benefits be achieved through on-the-record communications. Indeed, as the Public Representative notes, the Commission has demonstrated a commitment to providing opportunities for all interested parties to participate in informal rulemakings. See PR Comments at 2-3. The preference for on- the-record discourse is consistent with, and supportive of, the Commission's mission to ``[e]nsure transparency and accountability of the United States Postal Service and foster a vital and efficient universal mail system.'' \16\ --------------------------------------------------------------------------- \15\ See Postal Service Comments at 6. \16\ Postal Regulatory Commission, Strategic Plan 2012-2016, at 4. --------------------------------------------------------------------------- The final rules aim to strike a balance between the Commission's preference for the transparency of on-the-record communication with the Postal Service and interested parties, and the commenters' desire for a permit-but-disclose approach to ex parte communications. While the final rules do not ``permit'' ex parte communications, in practice the rules will operate quite similarly to the approach proposed by the commenters. Where applicable, an ex parte communication received by the Commission--in cases other than N, A, and C cases--will be subject only to public disclosure and nothing more. Thus, while ex parte communications will not be permitted or encouraged by the Commission, the Commission will treat ex parte communications in a similar manner as the other agencies mentioned by the commenters. [[Page 42539]] The application of the rules to all cases--other than those exempted by Sec. Sec. 3008.1(b) through (d)--should alleviate concerns about when the ex parte rules apply. Concerns about ``draconian'' \17\ or ``especially punitive'' \18\ penalties chilling valuable communications should likewise be remedied by the clarification that the penalties will apply only in N, A, and C cases. --------------------------------------------------------------------------- \17\ See MPA Comments at 6; Joint Comments at 6-7. \18\ See Joint Comments at 9. --------------------------------------------------------------------------- By applying the ex parte rules in all case types but only permitting penalties to apply to three specific types of cases, the Commission's final rules aim to eliminate the need for pre- communication evaluation expressed by some commenters of whether a case is a ``contested proceeding'' or whether a communication ``regards the merits'' of a case. The ex parte rules' applicability to all case types and communications (aside from those excepted by final Sec. Sec. 3008.1(b) through (d) and Sec. 3008.2(b)), eliminates uncertainty about the nature of the case and/or communication itself. For example, under the Postal Service's Proposed Rule 3008.2(a), certain terms create uncertainty about the nature of a communication. Specifically, it is unclear how would one determine whether a communication was ``intended to affect or influence'' or was ``capable of affecting or influencing'' a Commission decision. The Postal Service's Proposed Rules would also require a determination of what constitutes a ``substantive issue in the proceeding.'' These necessary determinations would create even more uncertainty than the proposed rules. Accordingly, while the Commission supports the goal of eliminating uncertainty, it declines to adopt the revisions set forth in Postal Service Proposed Rules 3008.1 and 3008.2. B. Commission Reliance on Information Obtained Through Ex Parte Communications The Postal Service's recommendation that Commission decision-making personnel be permitted to rely on information obtained through ex parte communications is consistent with applicable law. As explained in Sierra Club, accepting ex parte communications creates a danger of having one administrative record before the public, and another record before the Commission. Sierra Club, 657 F.2d at 401. However, the danger is avoided where the agency relies only on information that is made part of the public record. Id. Proposed Sec. 3008.6(c) already contemplates giving participants an opportunity to rebut ex parte communications received and placed on the public record. Reliance on the information received in either an ex parte communication, or any rebuttal, is appropriate to consider when the communications are made part of the public record. Accordingly, the final rules adopt, in part, the suggestions made in Postal Service Proposed Rule 3008.5(b), regarding Commission reliance on information obtained through ex parte communications. This change is consistent with prevailing agency guidance \19\ and with the underlying policy of fairness and transparency, particularly given the provision providing an opportunity for rebuttal of information received via ex parte communication and considered in decision-making. The final rules contain slightly different language than the Postal Service Proposed Rules to enhance clarity and consistency throughout part 3008. --------------------------------------------------------------------------- \19\ See Recommendation 2014-4 at 7-8. --------------------------------------------------------------------------- C. When a Matter Is Before the Commission The Commission acknowledges the comments regarding the definition of when a matter is before the Commission, triggering the application of the ex parte restrictions. The commenters correctly point out that some agencies' ex parte restrictions apply only upon formal notice of commencement of the proceeding. However, as the Public Representative notes, the Commission is differently situated than other administrative agencies, and its current practices go to ``considerable effort to accommodate'' on-the-record communications. See PR Reply Comments at 2- 3. Indeed, the Commission generally makes public every matter it considers. The docket system provides ample opportunity for communication on the record. Under specific circumstances, the APA states that an agency's ex parte communications restrictions may be applied ``beginning at such time as the agency may designate,'' but the prohibitions must apply in cases where ``the person responsible for the communication has knowledge that [the case] will be noticed.'' 5 U.S.C. 557(d)(1)(E). If this requirement were to be applied to proceedings involving periodic reports, such as the Annual Compliance Determination (ACD), the Postal Service contends that all communications would be barred because the filing party always will have knowledge that the case will be noticed. See Postal Service Comments at 16. The final rules address this concern by eliminating the prior knowledge provision where the matter before the Commission is a periodic report, such as the ACD, or the Commission's review required by 39 U.S.C. 3622(d)(3) that should commence later this year. The effect of this change is to not consider these types of matters as being before the Commission until the Commission notices the start of proceeding, unless the Commission issues a notice prior to that time specifically restricting ex parte communications. The matter is no longer before the Commission once the Commission issues its final report or review. D. Protection of Sensitive Material The Postal Service expresses concern about the treatment of sensitive or confidential information submitted in ex parte communications. Postal Service Comments at 17-18. The Postal Service suggests revising the proposed rules to require the Commission to advise the disclosing party that the communication must be disclosed and allow an opportunity for an application for non-public treatment to be filed. Postal Service Proposed Rule 3008.6(b). The Commission's rules located at 39 CFR part 3007 set forth the procedures for the treatment of sensitive material filed on the record in docketed proceedings. Proposed Sec. 3008.6(b) dictates that material submitted not in a docketed proceeding but as part of an ex parte communication must be disclosed in order to be considered by the Commission. Until disclosure, however, the Commission will treat known sensitive material as confidential, subject to Freedom of Information Act requirements. For example, the Commission may not allow outside persons access to information provided by the Postal Service and identified as exempt from public disclosure. See 39 U.S.C. 504(g). The existing statutory safeguards render it unnecessary for the Commission's ex parte rules to further protect sensitive material. Accordingly, the Commission declines to adopt the Postal Service's proposed rule on the protection of sensitive material included in an ex parte communication. E. Communications Made via Social Media. The definition of an ex parte communication set forth in proposed Sec. 3008.2(a) includes electronic communications. While most social media interactions are made [[Page 42540]] electronically, social media interactions pose a complex issue requiring further consideration. The Commission takes the Public Representative's suggestion under advisement. F. Recodification of Part 3000 The Commission agrees with the Public Representative that this rulemaking provides an appropriate opportunity to make the numbering of sections in part 3000 consistent with rest of the Commission's rules. As the Public Representative notes, the recodification is not a substantive change to the rules. See PR Comments at 14. This change is consistent with this rulemaking's goal of achieving clarity and ease of understanding in the Commission's procedural rules. V. Changes to the Proposed Rules The final rules incorporate many of the suggestions identified in the comments. While the suggestions require the structure of the final rules to change from those initially proposed in Order No. 3005, the substance of the rules and their effect on participants remains the same. Differences between the proposed and final rules are described below. A. Section 3008.1 Proposed Sec. 3008.1 identified the types of Commission matters subject to ex parte restrictions. Listed among those types of matters were nature of postal service proceedings, appeals of post office closings and consolidations, and rate or service complaints. The rule also made applicable, ``any other matter in which the Commission, in its discretion, determines that it is appropriate to apply the rules.'' Order No. 3005 at 12. In order to address commenters' concerns about vagueness and uncertainty of the rules' applicability, the Commission amends proposed Sec. 3008.1 as follows: 1. Section 3008.1(a) While the proposed rule lists the types of Commission dockets to which the rules apply, the final rules state that the rules of part 3008 apply to all Commission proceedings except for those listed in Sec. Sec. 3008.1(b) through (d). 2. Sections 3008.1(b) Through (d) The final rule identifies three types of proceedings to which the rules concerning ex parte communication will not apply. Section 3008.1(b) exempts public inquiry (PI) proceedings undertaken to gather information and which are not intended to result in a binding Commission decision. Section 3008.1(c) exempts international mail (IM) proceedings undertaken pursuant to 39 CFR part 3017. Section 3008.1(d) permits the Commission to identify particular proceedings where the rules will not apply. B. Section 3008.3 The final rule removes the prior knowledge provision when the matter before the Commission concern matters such as the ACD or Sec. 3622(d)(3) review. These matters will not be considered before the Commission until noticed, or until the Commission issues a prior notice specifically stating that ex parte rules apply. C. Section 3008.5 Proposed Sec. 3008.5(b) states that ``Commission decision-making personnel shall not rely upon any information obtained through ex parte communications.'' The final rules amend this section by allowing the Commission to rely on information obtained through ex parte communications where the communications are made part of the record and the Commission provides an opportunity for rebuttal. D. Section 3008.7 The final rule moves proposed Sec. Sec. 3008.7(a) and (b) to Sec. Sec. 3008.7(b) and (c), respectively. It replaces Sec. 3008.7(a) with an explanation that the penalties for a violation of the ex parte rules are applicable only to nature of postal service proceedings, appeals of post office closings or consolidations, and rate or service complaints. E. Part 3000 In accord with the Public Representative's suggestion of renumbering part 3000, the final rules recodify existing rules in conformance with the Federal Register Document Drafting Handbook. Existing part 3000, subpart A includes: Sec. 3000.735-101 Cross- reference to employee ethical conduct standards and financial disclosure regulations; Sec. 3000.735-102 Counseling and advisory services; Sec. 3000.735-103 Financial interests; and Sec. 3000.735- 104 Outside employment. These four provisions are renumbered with the following two-digit extensions, respectively: Sec. Sec. 3000.05, 3000.10, 3000.15, and 3000.20. Existing part 3000, subpart B is amended as described in Order No. 3005. Additionally, the two provisions are renumbered. Proposed Sec. 3000.735-501 is renumbered as Sec. 3000.50. Proposed Sec. 3000.735- 502 is reserved as Sec. 3000.55. VI. Ordering Paragraphs It is ordered: 1. Parts 3000 and 3001 of title 39, Code of Federal Regulations, are revised as set forth below the signature of this order, effective 30 days after publication in the Federal Register. 2. Part 3008 of title 39, Code of Federal Regulations, is adopted as set forth below the signature of this order, effective 30 days after publication in the Federal Register. 3. The Secretary shall arrange for publication of this order in the Federal Register. List of Subjects 39 CFR Part 3000 Conflicts of interests, Ex parte communications. 39 CFR Part 3001 Administrative practice and procedure, Confidential business information, Ex parte communications, Freedom of information, Sunshine Act. 39 CFR Part 3008 Administrative practice and procedure, Ex parte communications. For the reasons discussed in the preamble, the Commission amends chapter III of title 39 of the Code of Federal Regulations as follows: PART 3000--STANDARDS OF CONDUCT 0 1. The authority citation for part 3000 is revised to read as follows: Authority: 39 U.S.C. 503, 504, 3603; E.O. 12674, 54 FR 15159, 3 CFR,1989 Comp., p. 215, as modified by E.O. 12731, 56 FR 42547, 3 CFR, 1990 Comp., p. 396; 5 CFR parts 2634 and 2635. Subpart A--General Provisions Sec. Sec. 3000.735-101 through 3000.735-104 [Redesignated as Sec. Sec. 3000.5, 3000.10, 3000.15, 3000.20] 0 2. Redesignate Sec. Sec. 3000.735-101 through 3000.735-104 as Sec. Sec. 3000.5, 3000.10, 3000.15, and 3000.20, respectively. 0 3. Revise subpart B of part 3000 to read as follows: Subpart B--Ex Parte Communications Sec. 3000.50 Ex parte communications prohibited. 3000.55 [Reserved] Subpart B--Ex Parte Communications Sec. 3000.50 Ex parte communications prohibited. (a) The Commission maintains a written employee policy regarding ex [[Page 42541]] parte communications applicable to all interactions, oral or in writing (including electronic), between Commission decision-making personnel, and the United States Postal Service or public stakeholders in matters before the Commission. It is the responsibility of all Commission personnel to comply with this policy, including the responsibility to inform persons not employed by the Commission of this policy when required. The policy is available for review on the Commission's Web site at www.prc.gov. (b) Additional ex parte communications requirements, applicable to specific docket types, are described in part 3008 of this chapter. Sec. 3000.55 [Reserved] PART 3001--RULES OF PRACTICE AND PROCEDURE 0 4. The authority citation for part 3001 continues to read as follows: Authority: 39 U.S.C. 404(d); 503; 504; 3661. Sec. 3001.5 [Amended] 0 5. Amend Sec. 3001.5 by removing and reserving paragraph (o). Sec. 3001.7 [Removed and Reserved] 0 6. Remove and reserve Sec. 3001.7. 0 7. Add part 3008 to read as follows: PART 3008--EX PARTE COMMUNICATIONS Sec. 3008.1 Applicability. 3008.2 Definition of ex parte communications. 3008.3 Definition of a matter before the Commission. 3008.4 Definitions of persons subject to ex parte communication rules. 3008.5 Prohibitions. 3008.6 Required action upon ex parte communication. 3008.7 Penalty for violation of ex parte communication rules. Authority: 39 U.S.C. 404(d)(5); 503; 504; 3661(c); 3662. Sec. 3008.1 Applicability. (a) The rules in this section are applicable to all Commission proceedings except for the instances identified in paragraphs (b) through (d) of this section. (b) The rules in this section are not applicable to public inquiry (PI) proceedings, undertaken to gather information and which are not intended to result in a binding Commission decision. (c) The rules in this section are not applicable to international mail (IM) proceedings undertaken pursuant to part 3017 of this chapter. (d) The rules in this section are not applicable to specifically identified proceedings upon written directive from the Commission. Sec. 3008.2 Definition of ex parte communications. (a) Subject to the exceptions specified in paragraph (b) of this section, ex parte communications include all communications, oral or written (including electronic), between Commission decision-making personnel, and the Postal Service or public stakeholders regarding matters before the Commission. (b) Ex parte communications do not include: (1) Documents filed using the Commission's docketing system; (2) Communications during the course of Commission meetings or hearings, or other widely publicized events where the Commission provides advance public notice of the event indicating the matter to be discussed, the event is open to all persons participating in the matter before the Commission, and a summary of the event is provided for the record; (3) Communications during the course of off-the-record technical conferences associated with a matter before the Commission, or the pre- filing conference for nature of service cases required by Sec. 3001.81 of this chapter, where advance public notice of the event is provided indicating the matter to be discussed, and the event is open to all persons participating in the matter before the Commission; (4) Questions concerning Commission procedures, the status of a matter before the Commission, or the procedural schedule of a pending matter, where these issues are not contested matters before the Commission; and (5) Communications not material to the matter before the Commission. Sec. 3008.3 Definition of a matter before the Commission. (a) A matter is before the Commission at such time as the Commission may designate, but in no event later than the earlier of the filing of a request to initiate a proceeding or the Commission noticing a proceeding. (b) A matter is also before the Commission at such time as the person responsible for the communication has knowledge that a request to initiate a proceeding is expected to be filed. (c) Paragraph (b) of this section does not apply to periodic reviews or reports issued by the Commission, or the 10-year review pursuant to 39 U.S.C. 3622(d)(3). (d) The following explanations apply: (1) A matter is no longer before the Commission upon the issuance of the final order or decision in the docketed matter; (2) A matter is again before the Commission upon the filing of a request for reconsideration. The matter remains before the Commission until resolution of the matter under reconsideration; (3) A matter is again before the Commission upon the remand of a Commission's final decision or order by an appellate court. The matter remains before the Commission until resolution of the matter under remand; and (4) The mere potential that a request may be filed does not place a matter before the Commission. An affirmative action announcing, or actively preparing, an actual request with the intent to file within a reasonable period of time must be present. Sec. 3008.4 Definitions of persons subject to ex parte communication rules. (a) Commission decision-making personnel include: (1) The Commissioners and their staffs; (2) The General Counsel and staff; (3) The Director of the Office of Accountability and Compliance and staff; (4) Contractors, consultants, and others hired by the Commission to assist with the Commission's analysis and decision; and (5) Any other employee who may reasonably be expected to be involved in the decisional process. (b) The Postal Service includes all Postal Service employees, contractors, consultants, and others with an interest in a matter before the Commission. Any interaction between the Postal Service and Commission decision-making personnel concerning a matter before the Commission expresses an interest in the matter before the Commission. (c) Public stakeholders include all other persons not previously described, with an interest in a matter before the Commission. This includes the Commission non-decision-making personnel identified in paragraph (d) of this section. Any interaction between a public stakeholder and Commission decision-making personnel concerning a matter before the Commission expresses an interest in the matter before the Commission. (d) Commission non-decision-making personnel include: (1) All Commission personnel other than decision-making personnel; (2) Commission personnel not participating in the decisional process owing to the prohibitions of Sec. 3001.8 of [[Page 42542]] this chapter regarding no participation by investigative or prosecuting officers; (3) The Public Representative and other Commission personnel assigned to represent the interests of the general public pursuant to 39 U.S.C. 505 in the specific case or controversy at issue (regardless of normally assigned duties); and (4) Contractors, consultants, and others hired by the Commission to provide an independent analysis of issues before the Commission (and Commission employees assigned thereto). Sec. 3008.5 Prohibitions. (a) Ex parte communications between Commission decision-making personnel, and the Postal Service or public stakeholders is prohibited. (b) Commission decision-making personnel shall not rely upon any information obtained through ex parte communications unless the communications are made part of the record of the proceeding, where an opportunity for rebuttal has been provided, and reliance on the information will not cause undue delay or prejudice to any party. (c) Paragraph (a) of this section does not constitute authority to withhold information from Congress. Sec. 3008.6 Required action upon ex parte communications. (a) Commission decision-making personnel who receive ex parte communications relevant to the merits of the proceeding shall decline to listen to such communications and explain that the matter is pending for determination. Any recipient thereof shall advise the communicator that the communication will not be considered, and shall promptly and fully inform the Commission in writing of the substance of and the circumstances attending the communication, so that the Commission will be able to take appropriate action. (b) Commission decision-making personnel who receive, or who make or knowingly cause to be made, ex parte communications prohibited by this part shall promptly place, or cause to be placed, on the public record of the proceeding: (1) All such written communications; (2) Memoranda stating the substance of all such oral communications; and (3) All written responses, and memoranda stating the substance of all oral responses, to the materials described in paragraphs (b)(1) and (2) of this section. (c) Requests for an opportunity to rebut, on the record, any facts or contentions contained in an ex parte communication which have been placed on the public record of the proceeding pursuant to paragraph (b) of this section may be filed in writing with the Commission. The Commission will grant such requests only where it determines that the dictates of fairness so require. In lieu of actually receiving rebuttal material, the Commission may in its discretion direct that the alleged factual assertion and the proposed rebuttal be disregarded in arriving at a decision. Sec. 3008.7 Penalty for violation of ex parte communication rules. (a) The penalties for violation of ex parte communication rules specified in this section are applicable only to: (1) Nature of postal service proceedings conducted pursuant to 39 U.S.C. 3661(c); (2) Appeal of Postal Service decisions to close or consolidate any post office conducted pursuant to 39 U.S.C. 404(d)(5); and (3) Rate or service complaints conducted pursuant to 39 U.S.C. 3662. (b) Upon notice of a communication knowingly made or knowingly caused to be made by a participant in violation of Sec. 3008.5(a), the Commission or presiding officer may, to the extent consistent with the interests of justice and the policy of the underlying statutes, require the participant to show cause why his/her claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of such violation. (c) The Commission may, to the extent consistent with the interests of justice and the policy of the underlying statutes administered by the Commission, consider a violation of Sec. 3008.5(a) sufficient grounds for a decision adverse to a party who has knowingly committed such violation or knowingly caused such violation to occur. By the Commission. Stacy L. Ruble, Secretary. [FR Doc. 2016-15349 Filed 6-29-16; 8:45 am] BILLING CODE 7710-FW-P
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the penalty may not exceed $2,733,780 I. Introduction only apply to very limited proceeding
per violation. In this Order, the Commission adopts types.
(e) Reckless mailing of skill contest or final rules concerning ex parte II. Background
sweepstakes matter. Under 39 U.S.C. communications. The final rules
3017(h)(1)(A), any promoter who adopted by this Order amend existing On January 8, 2016, the Commission
recklessly mails nonmailable skill Commission rules and remove obsolete issued Order No. 3005, introducing a
contest or sweepstakes matter may be rules no longer applicable under the proposed revision and reorganization of
liable to the United States for a civil Postal Accountability and Enhancement its rules concerning ex parte
penalty for each mailing to an Act (PAEA), Public Law 109–435, 120 communications. See Order No. 3005.
individual. As adjusted under Public Stat. 3218 (2006). The final rules are Order No. 3005 explained that the
Law 114–74, the penalty is $13,669 per located at 39 CFR part 3008. Existing current rules concerning ex parte
violation. rules located at §§ 3000.735–501, 502, communications are located at
(f) Hazardous material. Under 39 3001.5(o), and 3001.7 are amended to §§ 3000.735–501, 502, and 3001.7. See
U.S.C. 3018(c)(1)(A), the Postal Service reflect the revised location of the ex id. The Commission identified a need to
may impose a civil penalty payable into parte communications rules. Existing revise the existing rules for several
the Treasury of the United States on a rules located at 39 CFR part 3000 are reasons. The existing rules contained
person who knowingly mails renumbered for consistency with significant redundancy between the
nonmailable hazardous materials or fails Federal Register guidance. requirements of § 3000.735–501 and the
to follow postal laws on mailing The rules as adopted incorporate requirements of § 3001.7. Furthermore,
hazardous materials. As adjusted under suggestions offered by commenters that the existing rules made it difficult to
Public Law 114–74, the penalty is at restructure some rules as proposed, but identify who qualified as Commission
least $295, but not more than $117,858 do not materially affect their substance. ‘‘decision-making personnel’’ without
for each violation. The initial approach taken by the referring to unrelated sections of the
Commission was to codify only what CFR.
Stanley F. Mires, were considered mandatory ex parte The existing rules also referred to rate
Attorney, Federal Compliance. communications requirements in the and classification cases under 39 U.S.C.
[FR Doc. 2016–15464 Filed 6–29–16; 8:45 am] Code of Federal Regulations (CFR) 3624, which were eliminated under the
BILLING CODE 7710–12–P applicable to a limited set of PAEA. Finally, the existing rules lacked
Commission docket types. The guidance for Commission personnel on
Commission also proposed to issue a how to treat ex parte communications
POSTAL REGULATORY COMMISSION more comprehensive policy document falling outside the scope of the specific
to include ex parte communications docket types mentioned.
39 CFR Parts 3000, 3001, and 3008 requirements for other possible docket The operative statute requires the
types.1 The Commission understands Commission to restrict ex parte
[Docket No. RM2016–4; Order No. 3379] comments suggesting the proposed communications only in matters where
approach would cause confusion the Commission must provide an
Ex Parte Communications concerning when the mandatory rules opportunity for a hearing on the record
apply versus when the policy applies. pursuant to 5 U.S.C. 556 through 557.
AGENCY: Postal Regulatory Commission.
The Commission has adopted modified Under the PAEA, the Commission is
ACTION: Final rule. rules to alleviate this confusion by only required to provide an opportunity
making the rules inclusive of all for a hearing in matters regarding a
SUMMARY: The Commission is issuing a proceeding types before the Commission change in the nature of postal services
set of final rules amending existing with specific exceptions. This is a pursuant to 39 U.S.C. 3633. In addition
Commission rules related to ex parte change in form, but not substance.2 to nature of service matters,
communications. The final rules are The change in structure also is Commission regulations historically
consistent with the recommended intended to clarify that the Commission have extended restrictions on ex parte
approach to agency treatment of ex parte in most instances will effectively take a communications to post office appeal
communications. Relative to the permit-but-disclose approach to ex parte cases pursuant to 39 U.S.C. 404(d)(5)
proposed rules, some rules were communications, which was suggested and (6) and complaint cases pursuant to
restructured based on comments by many of the commenters. However, 39 U.S.C. 3662. The Commission
received, others were modified to given the opportunities the Commission considers the restriction appropriate
alleviate confusion. provides to participants to avoid ex because of the potential impact ex parte
DATES: Effective August 1, 2016. parte communications issues altogether, communications might have on
FOR FURTHER INFORMATION CONTACT: the rules do not encourage ex parte participants and their associated rights
David A. Trissell, General Counsel, at communications as the norm.3 The in those types of proceedings. See Order
202–789–6820. proposed changes in structure also are No. 3005 at 2–3.
intended to clarify that penalties for In addition to the above three types of
SUPPLEMENTARY INFORMATION: violating ex parte communication rules proceedings—nature of service, post
Regulatory History office closings, and complaints—many
1 The opportunity to comment on both the rules other types of proceedings come before
81 FR 1931, January 14, 2016. and the policy were provided in Order No. 3005. the Commission. Accordingly, the
Notice of Proposed Rulemaking Regarding Ex Parte
srobinson on DSK5SPTVN1PROD with RULES
Table of Contents Communications, January 8, 2016 (Order No. 3005).
Commission attached as a library
2 The Commission’s internal policy is revised to reference to Order No. 3005 a new
I. Introduction reflect the changes in the final rules and will be proposed internal policy on the
II. Background made available on the Commission’s Web site. treatment of ex parte communications
III. Comments 3 For example, participants generally have
IV. Commission Analysis
applicable to all cases. For consistency
sufficient opportunities to make their views known
V. Changes to the Proposed Rules by filing documents on the Commission’s Web site
with prevailing principles regarding
VI. Ordering Paragraphs during the course of a proceeding. agency treatment of ex parte
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![Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Rules and Regulations 42535
communications,4 and for simplicity Commission received reply comments ex parte communications in informal
and efficiency of administration, the from the Postal Service 10 and the Public rulemakings is inconsistent with the
Commission policy requires Representative.11 long-standing recommendation of the
Commission personnel to treat ex parte While the commenters either support Administrative Conference and the
communications similarly in all the Commission’s effort or find it prevailing practice among other federal
proceeding types. In Order No. 3005, the reasonable for the Commission to ensure agencies.’’ Joint Comments at 7. The
Commission sought public comment on that its rules concerning ex parte Public Representative suggests that
the proposed rules and the attached communications promote transparency enforceability of the internal policy as it
internal policy.5 and fairness,12 several commenters have affects nonemployees is a potential
The commenters provide instructive concerns regarding the scope of the issue. PR Comments at 5.
perspectives on the Commission’s restrictions of the proposed rules and The Postal Service proposes several
proposed rules. Notably, the internal policy. See Postal Service modifications to the proposed rules. The
commenters alert the Commission to the Comments at 2, 3–7; Joint Comments at Postal Service recommends that ex parte
confusion caused by proposing both an 5–7. communications be prohibited only ‘‘in
internal policy applicable to all cases ‘contested proceedings’ where there are
A. Types of Proceedings to Which the
and enforceable only on Commission material issues in dispute.’’ Postal
Prohibition Against Ex Parte
personnel, and regulations applicable Service Comments at 10. It also
Communications Applies
only to specific types of cases and proposes that the Commission’s
applicable to all persons. This final The Postal Service, MPA, and the decision to apply the restrictions to a
Order is intended to remedy the Joint Commenters each express concern particular proceeding should be based
confusion surrounding when ex parte that the Commission policy treating all upon specific criteria and that the
restrictions apply, and when and what case types similarly is more restrictive Commission should give notice when
penalties may be imposed. The changes than is necessary. See Postal Service the rules will apply. Id. The Postal
to the proposed rules reflect the input Comments at 3–7; MPA Comments at 2– Service proposes that the definition of
of the commenters but do not materially 5; Joint Comments at 4–5. They note an ex parte communication be limited to
change the operation of the proposed that the Administrative Procedure Act those ‘‘regarding the merits’’ of a matter
rules. The final rules formalize, but do (APA) expressly prohibits ex parte before the Commission. Id. at 14.
not materially change, the Commission’s communications in formal rulemakings Another Postal Service proposal
current practice for handling ex parte only. Postal Service Comments at 3; suggests exempting communications
communications. MPA Comments at 3; Joint Comments at regarding general issues of domestic or
4. The Postal Service, MPA, and the international postal policy, postal
III. Comments Joint Commenters appear to agree that operations, or other statutory
On February 29, 2016, the the proposed rules unnecessarily restrict responsibilities not associated with the
Commission received comments from desirable communications in informal merits of a contested proceeding. Id. at
the Postal Service,6 the Public proceedings. See Postal Service 15.
Representative,7 MPA—the Association Comments at 3; MPA Comments at 3; In her reply comments, the Public
of Magazine Media (MPA),8 and a group Joint Comments at 3. Each discuss Representative raises concerns about the
of interested mailer organizations (Joint Sierra Club v. Costle, 657 F.2d 298 (D.C. applicability of the rationale discussed
Commenters).9 On March 15, 2016, the Cir. 1981), to emphasize the value of in Sierra Club. PR Reply Comments at
informal agency contacts with public 2. Though the D.C. Circuit noted several
4 Library Reference PRC–LR–RM2016–4/1, stakeholders in regulated industry benefits in allowing or encouraging
January 8, 2016. See Esa L. Sferra-Bonistalli, Ex communities. See Postal Service informal communications with
Parte Communications in Informal Rulemaking, Comments at 7; MPA Comments at 3; regulatory agencies, the Public
May 1, 2014 (prepared for consideration of the
Administrative Conference of the United States);
Joint Comments at 3. The Postal Service, Representative notes that the
Administrative Conference of the United States, MPA, and the Joint Commenters express Commission has a ‘‘relatively unique
Administrative Conference Recommendation 2014– concern that the Commission’s policy is mission’’ and generally does not
4, June 6, 2014 (Recommendation 2014–4). not in accord with Recommendation conduct the type of large-scale programs
5 Order No. 3005 at 8. The Commission granted
2014–4. Postal Service Comments at 5– to which the Court may have been
the Postal Service’s request for an extension of time
to file comments through February 29, 2016, and to 7; MPA Comments at 4–5; Joint referring. Id. The Public Representative
file reply comments through March 15, 2016. Order Comments at 6. The Joint Commenters also states that the Commission’s
No. 3076, Order Granting Extension of Time to File state that ‘‘[t]he proposed prohibition on authority typically does not include
Comments, February 12, 2016. See Motion for
Extension of Time to Submit Comments on
exercising the same type of industry
Proposed Ex Parte Communications Rulemaking,
National Association of Presort Mailers, February enforcement action, such as imposing
29, 2016 (Joint Comments).
February 11, 2016. 10 Reply Comments of the United States Postal
fines or other penalties for failing to
6 United States Postal Service Comments on
Service, March 15, 2016 (Postal Service Reply meet federal standards. Id. The Public
Proposed Ex Parte Communications Rules, February Comments). Representative notes that one of the
29, 2016 (Postal Service Comments).
7 Public Representative’s Comments, February 29,
11 Public Representative’s Reply Comments, Court’s stated benefits to allowing ex
March 15, 2016 (PR Reply Comments). parte communication was ‘‘[s]purring
2016 (PR Comments). 12 See Postal Service Comments at 2 (‘‘The Postal
8 Comments of MPA—The Association of the provision of information which the
Service strongly supports the principles of
Magazine Media, February 29, 2016 (MPA transparency and fairness the proposed rules and agency may need.’’ Id. (quoting Sierra
Comments). policy are intended to promote. . . .’’); PR Club, 657 F.2d 298 at 401). The Public
9 Joint Comments of the Association of Mail
Comments at 4 (‘‘The Public Representative Representative lists current Commission
srobinson on DSK5SPTVN1PROD with RULES
Electronic Enhancement, the American Catalog supports the Commission’s interest in taking a fresh
Mailers Association, Inc., the Association of Postal look at . . . ex parte communications in light of the
practices highlighting the Commission’s
Commerce, the Direct Marketing Association, enactment of the PAEA in 2006. . . .’’); MPA commitment to seeking information
Envelope Manufacturers Association, Epicomm, Comments at 1 (‘‘The Commission’s decision to from outside sources, including
IDEAlliance, the Major Mailers Association, review and revise its current ex parte rules is providing an opportunity for reply
National Postal Policy Council, News Paper reasonable.’’); Joint Comments at 3 (‘‘The Joint
Association of America, Parcel Shippers Commenters support the goal of promoting the
comments in almost all dockets,
Association, Saturation Mailers Coalition, the transparency and integrity of proceedings before the ‘‘extremely generous policy’’ of granting
American Forest & Paper Association, and the Commission.’’). extensions of time to file comments,
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acceptance of late-filed comments, and The Postal Service, MPA, and the Joint improper ex parte contact in an
reconsideration of stated opinions. PR Commenters each suggest an approach adjudicatory proceeding, but they are
Reply Comments at 2. The Public more comparable to the approach excessive in the context of an informal
Representative characterizes the employed by other agencies. rulemaking.’’ Joint Comments at 8–9.
Commission as going to ‘‘considerable The Postal Service lists the The Joint Commenters fear the penalties
effort to accommodate on-the-record approaches taken by the Department of would be ‘‘especially punitive’’ where
input from those who wish to weigh in Justice (DOJ), Federal Communications the communication was made prior to
on a matter within the Commission’s Commission (FCC), and Federal Energy notice of the informal rulemaking. Id. at
jurisdiction.’’ Id. at 3. Regulatory Commission (FERC). Postal 9.
Service Comments at 6–7. The Postal
B. When Matters Are Before the Service states the FERC limits ex parte E. Postal Service’s Proposed Changes to
Commission restrictions to ‘‘contested on-the-record the January 2016 Proposed Rule
The commenters express concern proceedings,’’ while the FCC classifies The Postal Service includes its own
regarding vagueness in when a matter informal rulemakings as ‘‘permit-but- proposed rules regarding ex parte
will be considered to be ‘‘before the disclose’’ proceedings, and the DOJ communications. Postal Service
Commission.’’ MPA states that most permits ex parte communications Comments, Appendix A (Postal Service
agencies do not consider a matter to be subject to disclosure. Id. at 7 (quoting 18 Proposed Rules). The proposed rules are
before the agency ‘‘until it has issued a CFR 385.2201; 47 CFR 1.1206; and 28 a ‘‘redline’’ revision of the
formal notice of the commencement of CFR 50.17(b) through (c), respectively). Commission’s proposed rules and
the proceeding, an interested person has MPA suggests that the Commission include line changes in particular
filed a complaint or formal request that need not go as far as the FERC, sections.
the agency begin the proceeding, or a identifying a common alternative of
person has actual knowledge that the permitting ex parte communications but 1. Part 3000, Subpart B
proceeding will be noticed.’’ MPA requiring public disclosure of their Postal Service Proposed Rule
Comments at 5. MPA states the substance. MPA Comments at 4. 3000.735–501(a) changes the
proposed rules do not adequately define Similarly, the Joint Commenters state description of the Commission’s
the terms ‘‘expected,’’ ‘‘actively that ‘‘[t]he Commission’s proposed rules internal policy to read that the policy
preparing,’’ and ‘‘reasonable period of should be revised, consistent with APA applies only to interactions ‘‘regarding
time.’’ Id. at 6. requirements for reasoned decision the merits of certain contested
The Joint Commenters state that making, to allow the Commission to proceedings’’ before the Commission.
Recommendation 2014–4 recommends permit but disclose any ex parte Postal Service Proposed Rules
agencies not impose restrictions on ex communications that it relies on in the 3000.735–501(b) and 3000.735–502
parte communications before notice is context of an informal rulemaking remain unchanged from the
issued. Joint Comments at 6. The Postal proceeding.’’ Joint Comments at 8. Commission’s proposed rules.
Service criticizes the proposed rules’ In its reply comments, the Postal
definition of when a matter is before the Service suggests that Executive Order 2. Section 3008.1
Commission, expressing concern that 11570, issued by President Nixon The Postal Service does not propose
certain docket types involve the filing of shortly after the enactment of the Postal to change the applicability provisions of
periodically required reports, namely Reorganization Act of 1970, and proposed §§ 3008.1(a) through (d).
the Annual Compliance Report. Postal referenced in the Public However, Postal Service Proposed Rule
Service Comments at 16. The Postal Representative’s comments, may have 3008.1(e) narrows the scope of the
Service states that because the scope of ‘‘envisioned the ‘permit-but-disclose’ Commission’s proposed rule. The Postal
the Annual Compliance Report is so approach’’ rather than an outright Service’s revision states that:
broad, the proposed rules would prohibition. Postal Service Reply
prohibit the Postal Service from ever [a]ny other contested proceeding in which
Comments at 4. the Commission, in its discretion, determines
having an off-the-record discussion that it is appropriate to apply the rules of this
about costs, revenues, rates, or quality of D. Penalties
section based on considerations of fairness or
service, because of the knowledge that The Public Representative expresses for other reasons, and provides notice on the
proceeding will be before the concern about the enforceability of the public record of the proceeding that the rules
Commission annually. Id. at 16–17. The internal policy on individuals outside of this section will apply (and the reasons
Postal Service proposes an amendment the Commission. PR Comments at 5. therefor). For purposes of this section,
to proposed § 3008.3(c)(4), adding that Although in Order No. 3005 the ‘‘contested proceeding’’ means any docketed
knowledge of the regular filing of Commission stated that the policy ‘‘will proceeding before the Commission in which
periodic reports does not place a matter not be binding on persons outside of the there are multiple adverse parties and/or
Commission,’’ it is evident from the disputed issues of fact, law or policy.
before the Commission. Id. at 17.
Similarly, the Public Representative comments that there is uncertainty and This revision adds specific conditions
questions whether the predictability of ambiguity regarding the applicability of for the application of ex parte
certain periodic filings necessarily puts certain restrictions across both the rules restrictions, including the type and
participants on notice of certain and internal policy. See Order No. 3005 subject of a matter before the
proceedings. PR Comments at 6–7. at 8. Commission.
MPA, in its discussion of the
C. Recommended Approach: Permit but ambiguity of the definition of a matter 3. Section 3008.2
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Disclose before the Commission, alludes to the The Postal Service’s proposed
Several commenters note that the ‘‘potentially draconian consequences of revisions to proposed § 3008.2(a),
Administrative Conference of the an adverse Commission finding.’’ MPA setting forth the definition of ex parte
United States considers a general Comments at 6. The Joint Commenters communications, include adding the
prohibition on ex parte communications state that the penalties listed in qualifier that the communication be one
to be undesirable. See, e.g., MPA proposed §§ 3008.7(a) and (b) ‘‘may be ‘‘regarding the merits of a matter’’ before
Comments at 4; Joint Comments at 7. appropriate in the context of an the Commission. Postal Service
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The Postal Service proposes to move clarification and revision are required. (CP), Mail Classification (MC), Market
the Commission’s proposed § 3008.6(c) The rulemaking is intended to align the Test (MT), Rate (R), Rulemaking (RM),
regarding opportunity for rebuttal to Commission’s rules with prevailing and Tax Computation (T)). The ex parte
§ 3008.6(d) but does not otherwise agency practices and clear the existing rules will apply to these proceedings,
amend the rule. rules of redundancy and obsolete but ex parte communications received
references. This rulemaking was not by the Commission will not be subject
8. Section 3008.7 to the penalties set forth in § 3008.7.
implemented to change, as a practical
The Postal Service does not propose matter, the status quo for the treatment Instead, the communication will be
any amendments to proposed § 3008.7 of ex parte communications. Essentially, disclosed pursuant to § 3008.6(b). In this
regarding penalties for violations of the this rulemaking was intended to codify way, the rules will operate similarly to
ex parte communication rules. the ex parte practices that the the ‘‘permit-but-disclose’’ approach
Commission has followed for many suggested by the Postal Service, MPA,
F. Additional Comments
years. and the Joint Commenters.14
The Public Representative points to Several commenters share concern While the Commission understands
Recommendation 2014–4, suggesting over ‘‘draconian’’ penalties potentially and appreciates the benefits of sharing
that agencies should explain whether applied in informal rulemakings. See, information and promoting a candid
social media communications fall e.g., MPA Comments at 6; Joint dialogue on key issues,15 the
within the rules’ definition of ex parte Comments at 6–7. The final rules Commission, as a matter of policy,
communications. PR Comments at 7. address this concern. Final § 3008.1 prefers that those benefits be achieved
The Public Representative also provides makes clear that the ex parte restrictions through on-the-record communications.
background information on the will indeed apply to all cases other than Indeed, as the Public Representative
Commission’s authority for its existing the listed exceptions or cases exempted notes, the Commission has
rules, as well as the Administrative by order. However, the change to the demonstrated a commitment to
Conference of the United States and its provision for penalties specifically providing opportunities for all
relevant report and recommendation. Id. states that the penalties will not apply interested parties to participate in
at 8–13. to cases other than the three specific informal rulemakings. See PR
The Public Representative suggests types of proceedings listed. Comments at 2–3. The preference for
conforming the numerical designation In operation, the final rules create on-the-record discourse is consistent
of the rules in 39 CFR part 3000 three classes of proceedings before the with, and supportive of, the
consistent with the Federal Register’s Commission. The first class includes Commission’s mission to ‘‘[e]nsure
current preferences. Id. at 14. The nature of postal service proceedings (N transparency and accountability of the
Public Representative recommends cases), appeals of postal service United States Postal Service and foster
replacing the hyphenated six-digit decisions to close or consolidate post a vital and efficient universal mail
extensions with standard one-or-two- offices (A cases), and rate or service system.’’ 16
digit extensions. Id. complaints (C cases). These proceedings The final rules aim to strike a balance
will be subject to the ex parte rules, and between the Commission’s preference
IV. Commission Analysis for the transparency of on-the-record
any ex parte communications occurring
A. Application of Rules Concerning Ex in these proceedings will be subject to communication with the Postal Service
Parte Communications and Penalties for the penalties set forth in §§ 3008.7(b) and interested parties, and the
Violations and (c). commenters’ desire for a permit-but-
The second class of proceeding disclose approach to ex parte
The changes to the proposed rules communications. While the final rules
reflect the Commission’s recognition of includes public inquiry proceedings (PI
cases) and international mail do not ‘‘permit’’ ex parte
a key area of concern outlined in the communications, in practice the rules
submitted comments. Notably, the proceedings (IM cases) undertaken
pursuant to 39 CFR part 3017. Due to will operate quite similarly to the
proposed rules left uncertainty approach proposed by the commenters.
regarding whether ex parte the highly collaborative nature of these
proceedings and practical limitations on Where applicable, an ex parte
communications were prohibited in all communication received by the
cases and whether penalties were the ability to disclose each and every
communication in these proceedings,13 Commission—in cases other than N, A,
appropriate for violations in informal and C cases—will be subject only to
rulemaking proceedings. the ex parte rules do not apply. Off-the-
record communications in these public disclosure and nothing more.
Although the proposed rules were Thus, while ex parte communications
intended only to strictly prohibit ex proceedings are expected and permitted.
The Commission may also, when will not be permitted or encouraged by
parte communications in three the Commission, the Commission will
particular types of matters (nature of circumstances warrant, suspend the
application of the ex parte rules in other treat ex parte communications in a
service proceedings, appeals of post similar manner as the other agencies
office closing and consolidations, and particular cases.
The third class of proceeding includes mentioned by the commenters.
rate or service complaints), the
Commission recognizes that proposed all other case types before the 14 See Postal Service Comments at 7 (suggesting
§ 3008.1(e) left broad discretion to the Commission (Annual Compliance the permit-but-disclose approach employed by the
Commission to apply the rules to any Review (ACR), Competitive Products DOJ and FCC); MPA Comments at 4 (‘‘A common
alternative is to permit ex parte communications
case. Such broad authority coupled with but require public disclosure of their substance.’’);
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13 See Recommendation 2014–4 at 6 (‘‘In
the guidance set forth in the internal formulating policies governing ex parte Joint Comments at 8 (‘‘The Commission’s proposed
policy gave the impression that the communications in informal rulemaking rules should be revised . . . to allow the
Commission could apply the ex parte proceedings, agencies should consider the Commission to permit and disclose any ex parte
following factors: . . . (c) Limitations on agency communications that it relies on in the context of
prohibition and impose penalties for an informal rulemaking proceeding.’’).
resources, including staff time, that may affect the
violations in any matter. ability of agency personnel to accept requests for 15 See Postal Service Comments at 6.
Such an interpretation is not the face-to-face meetings or prepare summaries of such 16 Postal Regulatory Commission, Strategic Plan
intent of this rulemaking, and therefore meetings. . . .’’). 2012–2016, at 4.
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The application of the rules to all public record. Id. Proposed § 3008.6(c) have knowledge that the case will be
cases—other than those exempted by already contemplates giving participants noticed. See Postal Service Comments at
§§ 3008.1(b) through (d)—should an opportunity to rebut ex parte 16.
alleviate concerns about when the ex communications received and placed on The final rules address this concern
parte rules apply. Concerns about the public record. Reliance on the by eliminating the prior knowledge
‘‘draconian’’ 17 or ‘‘especially information received in either an ex provision where the matter before the
punitive’’ 18 penalties chilling valuable parte communication, or any rebuttal, is Commission is a periodic report, such as
communications should likewise be appropriate to consider when the the ACD, or the Commission’s review
remedied by the clarification that the communications are made part of the required by 39 U.S.C. 3622(d)(3) that
penalties will apply only in N, A, and public record. should commence later this year. The
C cases. Accordingly, the final rules adopt, in effect of this change is to not consider
By applying the ex parte rules in all part, the suggestions made in Postal these types of matters as being before
case types but only permitting penalties Service Proposed Rule 3008.5(b), the Commission until the Commission
to apply to three specific types of cases, regarding Commission reliance on notices the start of proceeding, unless
the Commission’s final rules aim to information obtained through ex parte the Commission issues a notice prior to
eliminate the need for pre- communications. This change is that time specifically restricting ex parte
communication evaluation expressed by consistent with prevailing agency communications. The matter is no
some commenters of whether a case is guidance 19 and with the underlying longer before the Commission once the
a ‘‘contested proceeding’’ or whether a policy of fairness and transparency, Commission issues its final report or
communication ‘‘regards the merits’’ of particularly given the provision review.
a case. The ex parte rules’ applicability providing an opportunity for rebuttal of
D. Protection of Sensitive Material
to all case types and communications information received via ex parte
(aside from those excepted by final communication and considered in The Postal Service expresses concern
§§ 3008.1(b) through (d) and decision-making. The final rules contain about the treatment of sensitive or
§ 3008.2(b)), eliminates uncertainty slightly different language than the confidential information submitted in
about the nature of the case and/or Postal Service Proposed Rules to ex parte communications. Postal Service
communication itself. For example, enhance clarity and consistency Comments at 17–18. The Postal Service
under the Postal Service’s Proposed throughout part 3008. suggests revising the proposed rules to
Rule 3008.2(a), certain terms create require the Commission to advise the
C. When a Matter Is Before the disclosing party that the communication
uncertainty about the nature of a Commission
communication. Specifically, it is must be disclosed and allow an
unclear how would one determine The Commission acknowledges the opportunity for an application for non-
whether a communication was comments regarding the definition of public treatment to be filed. Postal
‘‘intended to affect or influence’’ or was when a matter is before the Service Proposed Rule 3008.6(b).
‘‘capable of affecting or influencing’’ a Commission, triggering the application The Commission’s rules located at 39
Commission decision. The Postal of the ex parte restrictions. The CFR part 3007 set forth the procedures
Service’s Proposed Rules would also commenters correctly point out that for the treatment of sensitive material
require a determination of what some agencies’ ex parte restrictions filed on the record in docketed
constitutes a ‘‘substantive issue in the apply only upon formal notice of proceedings. Proposed § 3008.6(b)
proceeding.’’ These necessary commencement of the proceeding. dictates that material submitted not in a
determinations would create even more However, as the Public Representative docketed proceeding but as part of an ex
uncertainty than the proposed rules. notes, the Commission is differently parte communication must be disclosed
Accordingly, while the Commission situated than other administrative in order to be considered by the
supports the goal of eliminating agencies, and its current practices go to Commission.
uncertainty, it declines to adopt the ‘‘considerable effort to accommodate’’ Until disclosure, however, the
revisions set forth in Postal Service on-the-record communications. See PR Commission will treat known sensitive
Proposed Rules 3008.1 and 3008.2. Reply Comments at 2–3. Indeed, the material as confidential, subject to
Commission generally makes public Freedom of Information Act
B. Commission Reliance on Information every matter it considers. The docket requirements. For example, the
Obtained Through Ex Parte system provides ample opportunity for Commission may not allow outside
Communications communication on the record. persons access to information provided
The Postal Service’s recommendation Under specific circumstances, the by the Postal Service and identified as
that Commission decision-making APA states that an agency’s ex parte exempt from public disclosure. See 39
personnel be permitted to rely on communications restrictions may be U.S.C. 504(g). The existing statutory
information obtained through ex parte applied ‘‘beginning at such time as the safeguards render it unnecessary for the
communications is consistent with agency may designate,’’ but the Commission’s ex parte rules to further
applicable law. As explained in Sierra prohibitions must apply in cases where protect sensitive material. Accordingly,
Club, accepting ex parte ‘‘the person responsible for the the Commission declines to adopt the
communications creates a danger of communication has knowledge that [the Postal Service’s proposed rule on the
having one administrative record before case] will be noticed.’’ 5 U.S.C. protection of sensitive material included
the public, and another record before 557(d)(1)(E). If this requirement were to in an ex parte communication.
the Commission. Sierra Club, 657 F.2d be applied to proceedings involving
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periodic reports, such as the Annual E. Communications Made via Social
at 401. However, the danger is avoided Media.
where the agency relies only on Compliance Determination (ACD), the
information that is made part of the Postal Service contends that all The definition of an ex parte
communications would be barred communication set forth in proposed
17 See MPA Comments at 6; Joint Comments at 6– because the filing party always will § 3008.2(a) includes electronic
7. communications. While most social
18 See Joint Comments at 9. 19 See Recommendation 2014–4 at 7–8. media interactions are made
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![42540 Federal Register / Vol. 81, No. 126 / Thursday, June 30, 2016 / Rules and Regulations
electronically, social media interactions (IM) proceedings undertaken pursuant VI. Ordering Paragraphs
pose a complex issue requiring further to 39 CFR part 3017. Section 3008.1(d) It is ordered:
consideration. The Commission takes permits the Commission to identify 1. Parts 3000 and 3001 of title 39,
the Public Representative’s suggestion particular proceedings where the rules Code of Federal Regulations, are revised
under advisement. will not apply. as set forth below the signature of this
F. Recodification of Part 3000 B. Section 3008.3 order, effective 30 days after publication
in the Federal Register.
The Commission agrees with the The final rule removes the prior 2. Part 3008 of title 39, Code of
Public Representative that this knowledge provision when the matter Federal Regulations, is adopted as set
rulemaking provides an appropriate before the Commission concern matters forth below the signature of this order,
opportunity to make the numbering of such as the ACD or § 3622(d)(3) review. effective 30 days after publication in the
sections in part 3000 consistent with These matters will not be considered Federal Register.
rest of the Commission’s rules. As the before the Commission until noticed, or 3. The Secretary shall arrange for
Public Representative notes, the until the Commission issues a prior publication of this order in the Federal
recodification is not a substantive notice specifically stating that ex parte Register.
change to the rules. See PR Comments rules apply.
at 14. This change is consistent with List of Subjects
this rulemaking’s goal of achieving C. Section 3008.5
39 CFR Part 3000
clarity and ease of understanding in the Proposed § 3008.5(b) states that
Commission’s procedural rules. Conflicts of interests, Ex parte
‘‘Commission decision-making
communications.
V. Changes to the Proposed Rules personnel shall not rely upon any
information obtained through ex parte 39 CFR Part 3001
The final rules incorporate many of communications.’’ The final rules
the suggestions identified in the Administrative practice and
amend this section by allowing the procedure, Confidential business
comments. While the suggestions Commission to rely on information
require the structure of the final rules to information, Ex parte communications,
obtained through ex parte Freedom of information, Sunshine Act.
change from those initially proposed in communications where the
Order No. 3005, the substance of the communications are made part of the 39 CFR Part 3008
rules and their effect on participants record and the Commission provides an
remains the same. Differences between Administrative practice and
opportunity for rebuttal. procedure, Ex parte communications.
the proposed and final rules are
described below. D. Section 3008.7 For the reasons discussed in the
preamble, the Commission amends
A. Section 3008.1 The final rule moves proposed
chapter III of title 39 of the Code of
§§ 3008.7(a) and (b) to §§ 3008.7(b) and
Proposed § 3008.1 identified the types Federal Regulations as follows:
(c), respectively. It replaces § 3008.7(a)
of Commission matters subject to ex
with an explanation that the penalties PART 3000—STANDARDS OF
parte restrictions. Listed among those
for a violation of the ex parte rules are CONDUCT
types of matters were nature of postal
applicable only to nature of postal
service proceedings, appeals of post
service proceedings, appeals of post ■ 1. The authority citation for part 3000
office closings and consolidations, and
office closings or consolidations, and is revised to read as follows:
rate or service complaints. The rule also
rate or service complaints. Authority: 39 U.S.C. 503, 504, 3603; E.O.
made applicable, ‘‘any other matter in
which the Commission, in its discretion, E. Part 3000 12674, 54 FR 15159, 3 CFR,1989 Comp., p.
determines that it is appropriate to 215, as modified by E.O. 12731, 56 FR 42547,
In accord with the Public 3 CFR, 1990 Comp., p. 396; 5 CFR parts 2634
apply the rules.’’ Order No. 3005 at 12.
Representative’s suggestion of and 2635.
In order to address commenters’
renumbering part 3000, the final rules
concerns about vagueness and Subpart A—General Provisions
recodify existing rules in conformance
uncertainty of the rules’ applicability,
with the Federal Register Document §§ 3000.735–101 through 3000.735–104
the Commission amends proposed
Drafting Handbook. [Redesignated as §§ 3000.5, 3000.10,
§ 3008.1 as follows:
Existing part 3000, subpart A 3000.15, 3000.20]
1. Section 3008.1(a) includes: § 3000.735–101 Cross- ■ 2. Redesignate §§ 3000.735–101
While the proposed rule lists the reference to employee ethical conduct through 3000.735–104 as §§ 3000.5,
types of Commission dockets to which standards and financial disclosure 3000.10, 3000.15, and 3000.20,
the rules apply, the final rules state that regulations; § 3000.735–102 Counseling respectively.
the rules of part 3008 apply to all and advisory services; § 3000.735–103 ■ 3. Revise subpart B of part 3000 to
Commission proceedings except for Financial interests; and § 3000.735–104 read as follows:
those listed in §§ 3008.1(b) through (d). Outside employment. These four
provisions are renumbered with the Subpart B—Ex Parte Communications
2. Sections 3008.1(b) Through (d) following two-digit extensions, Sec.
The final rule identifies three types of respectively: §§ 3000.05, 3000.10, 3000.50 Ex parte communications
proceedings to which the rules 3000.15, and 3000.20. prohibited.
3000.55 [Reserved]
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concerning ex parte communication will Existing part 3000, subpart B is
not apply. Section 3008.1(b) exempts amended as described in Order No. Subpart B—Ex Parte Communications
public inquiry (PI) proceedings 3005. Additionally, the two provisions
undertaken to gather information and are renumbered. Proposed § 3000.735– § 3000.50 Ex parte communications
which are not intended to result in a 501 is renumbered as § 3000.50. prohibited.
binding Commission decision. Section Proposed § 3000.735–502 is reserved as (a) The Commission maintains a
3008.1(c) exempts international mail § 3000.55. written employee policy regarding ex
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parte communications applicable to all proceedings undertaken pursuant to (d) The following explanations apply:
interactions, oral or in writing part 3017 of this chapter. (1) A matter is no longer before the
(including electronic), between (d) The rules in this section are not Commission upon the issuance of the
Commission decision-making applicable to specifically identified final order or decision in the docketed
personnel, and the United States Postal proceedings upon written directive from matter;
Service or public stakeholders in the Commission. (2) A matter is again before the
matters before the Commission. It is the Commission upon the filing of a request
§ 3008.2 Definition of ex parte for reconsideration. The matter remains
responsibility of all Commission
communications.
personnel to comply with this policy, before the Commission until resolution
including the responsibility to inform (a) Subject to the exceptions specified of the matter under reconsideration;
persons not employed by the in paragraph (b) of this section, ex parte (3) A matter is again before the
Commission of this policy when communications include all Commission upon the remand of a
required. The policy is available for communications, oral or written Commission’s final decision or order by
review on the Commission’s Web site at (including electronic), between an appellate court. The matter remains
www.prc.gov. Commission decision-making before the Commission until resolution
(b) Additional ex parte personnel, and the Postal Service or of the matter under remand; and
communications requirements, public stakeholders regarding matters (4) The mere potential that a request
applicable to specific docket types, are before the Commission. may be filed does not place a matter
described in part 3008 of this chapter. (b) Ex parte communications do not before the Commission. An affirmative
include: action announcing, or actively
§ 3000.55 [Reserved] (1) Documents filed using the preparing, an actual request with the
Commission’s docketing system; intent to file within a reasonable period
PART 3001—RULES OF PRACTICE (2) Communications during the course of time must be present.
AND PROCEDURE of Commission meetings or hearings, or
other widely publicized events where § 3008.4 Definitions of persons subject to
■ 4. The authority citation for part 3001 ex parte communication rules.
the Commission provides advance
continues to read as follows: (a) Commission decision-making
public notice of the event indicating the
Authority: 39 U.S.C. 404(d); 503; 504; matter to be discussed, the event is open personnel include:
3661. to all persons participating in the matter (1) The Commissioners and their
before the Commission, and a summary staffs;
§ 3001.5 [Amended]
of the event is provided for the record; (2) The General Counsel and staff;
■ 5. Amend § 3001.5 by removing and (3) The Director of the Office of
(3) Communications during the course
reserving paragraph (o). Accountability and Compliance and
of off-the-record technical conferences
§ 3001.7 [Removed and Reserved] associated with a matter before the staff;
Commission, or the pre-filing (4) Contractors, consultants, and
■ 6. Remove and reserve § 3001.7.
conference for nature of service cases others hired by the Commission to assist
■ 7. Add part 3008 to read as follows: with the Commission’s analysis and
required by § 3001.81 of this chapter,
where advance public notice of the decision; and
PART 3008—EX PARTE
event is provided indicating the matter (5) Any other employee who may
COMMUNICATIONS
to be discussed, and the event is open reasonably be expected to be involved
Sec. to all persons participating in the matter in the decisional process.
3008.1 Applicability. before the Commission; (b) The Postal Service includes all
3008.2 Definition of ex parte (4) Questions concerning Commission Postal Service employees, contractors,
communications. procedures, the status of a matter before consultants, and others with an interest
3008.3 Definition of a matter before the in a matter before the Commission. Any
Commission.
the Commission, or the procedural
schedule of a pending matter, where interaction between the Postal Service
3008.4 Definitions of persons subject to ex
parte communication rules. these issues are not contested matters and Commission decision-making
3008.5 Prohibitions. before the Commission; and personnel concerning a matter before
3008.6 Required action upon ex parte (5) Communications not material to the Commission expresses an interest in
communication. the matter before the Commission. the matter before the Commission.
3008.7 Penalty for violation of ex parte (c) Public stakeholders include all
communication rules. § 3008.3 Definition of a matter before the other persons not previously described,
Commission. with an interest in a matter before the
Authority: 39 U.S.C. 404(d)(5); 503; 504;
3661(c); 3662. (a) A matter is before the Commission Commission. This includes the
at such time as the Commission may Commission non-decision-making
§ 3008.1 Applicability. designate, but in no event later than the personnel identified in paragraph (d) of
(a) The rules in this section are earlier of the filing of a request to this section. Any interaction between a
applicable to all Commission initiate a proceeding or the Commission public stakeholder and Commission
proceedings except for the instances noticing a proceeding. decision-making personnel concerning a
identified in paragraphs (b) through (d) (b) A matter is also before the matter before the Commission expresses
of this section. Commission at such time as the person an interest in the matter before the
(b) The rules in this section are not responsible for the communication has Commission.
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applicable to public inquiry (PI) knowledge that a request to initiate a (d) Commission non-decision-making
proceedings, undertaken to gather proceeding is expected to be filed. personnel include:
information and which are not intended (c) Paragraph (b) of this section does (1) All Commission personnel other
to result in a binding Commission not apply to periodic reviews or reports than decision-making personnel;
decision. issued by the Commission, or the 10- (2) Commission personnel not
(c) The rules in this section are not year review pursuant to 39 U.S.C. participating in the decisional process
applicable to international mail (IM) 3622(d)(3). owing to the prohibitions of § 3001.8 of
VerDate Sep<11>2014 20:00 Jun 29, 2016 Jkt 238001 PO 00000 Frm 00089 Fmt 4700 Sfmt 4700 E:\FR\FM\30JNR1.SGM 30JNR1](https://thefederalregister.org/doc/81_FR_42660/page/8.svg)
Document Created: 2018-02-08 07:45:32
Document Modified: 2018-02-08 07:45:32
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective August 1, 2016. | |
| Contact | David A. Trissell, General Counsel, at 202-789-6820. | |
| FR Citation | 81 FR 42534 | |
| CFR Citation | 39
CFR
3000 39 CFR 3001 39 CFR 3008 | |
| CFR Associated | Conflicts of Interests; Ex Parte Communications; Administrative Practice and Procedure; Confidential Business Information; Freedom of Information and Sunshine Act |
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