U.S. FEDERAL TRADE COMMISSION:
ATTORNEY ETHICS DEFENSE (16 CFR PART 4)

FREQUENTLY ASKED QUESTIONS

The Federal Trade Commission (“Commission”) has specific regulations that relate to allegations of misconduct by attorneys practicing before it. They are located in 16 CFR Part 4 and apply to “allegations of misconduct by attorneys practicing before the Commission who are not employed by the Commission.”

The Nissenbaum Law Group welcomes potential clients who are seeking legal advice concerning Federal Trade Commission attorney ethics investigations, complaints and hearings into potential violations of the Commission’s standards of conduct for attorneys practicing before it. To be clear, these can be matters that were originally filed in a wide variety of applicable regions within the United States: the Northeast, Southwest, Southeast, East Central, Midwest, Western Los Angeles, Western San Francisco and Northwest.

The following are a series of frequently asked questions (FAQs) that emerge from a review of the underlying regulations which serve to elaborate upon the scope and parameters of this process.

FAQ # 1 – What are the basic grounds for discipline against an attorney practicing before the Commission who violates the disciplinary regulations of the Federal Trade Commission?

There are four grounds upon which an attorney may be reprimanded, suspended or disbarred from practice before the Commission. The specifics are set forth in 16 CFR 4.1(e) as follows:

The Commission may publicly reprimand, suspend, or disbar from practice before the Commission any such person who has practiced, is practicing, or holds himself or herself out as entitled to practice before the Commission if it finds that such person:

(A) Does not possess the qualifications required by § 4.1(a);

(B) Has failed to act in a manner consistent with the rules of  professional conduct of the attorney’s state(s) of licensure;

(C) Has engaged in obstructionist, contemptuous, or unprofessional conduct during the course of any Commission proceeding or investigation; or

(D) Has knowingly or recklessly given false or misleading information, or has knowingly or recklessly participated in the giving of false information to the Commission or any officer or employee of the Commission.

FAQ # 2 – Do these procedures apply to the Commission’s attorney staff?

It is important to note that the internal attorney staff of the Commission are subject to a distinctly different ethics code. Specifically, those relating to the Office of Inspector General. (“The standards of conduct and disciplinary procedures under this § 4.1(e) apply only to outside attorneys practicing before the Commission and not to Commission staff. Allegations of misconduct by Commission employees will be handled pursuant to procedures for employee discipline or pursuant to investigations by the Office of Inspector General.” Id.).

FAQ # 3 – Are there any qualifications necessary for the complainant who brings a grievance against the attorney?

It should be noted that there is no limitation on who can bring an allegation of misconduct against an attorney practicing before the Commission. Further, the grievance can be submitted in any form, such as orally or in writing. (“Allegations of attorney misconduct in violation of paragraph (e)(1) of this section may be proffered by any person possessing information concerning the alleged misconduct. Any such allegations may be submitted orally or in writing to a Bureau Officer who will evaluate the sufficiency of the allegations in the first instance to determine whether further action by the Commission is warranted.” Id. at Section 2)

FAQ # 4 – What is the general procedure for the Federal Trade Commission’s administrative disciplinary proceeding against an attorney?

The procedure for the administrative disciplinary proceeding by which the allegation of ethics violations against an attorney practicing before the Commission will be determined involves the standard quasi due process applicable to many federal administrative agency hearings.

If the Commission has reason to believe, after review of the Bureau Officer’s recommendation, that an attorney has engaged in professional misconduct of the type described in paragraph (e)(1) of this section, the Commission may institute administrative disciplinary proceedings proposing public reprimand, suspension, or disbarment of the attorney from practice before the Commission. Except as provided in paragraph (e)(7) of this section, administrative disciplinary proceedings shall be handled in accordance with the following procedures:

(i) The Commission shall serve the respondent attorney with an order to show cause why the Commission should not impose sanctions against the attorney. The order to show cause shall specify the alleged misconduct at issue and the possible sanctions. The order to show cause shall be accompanied by all declarations, deposition transcripts, or other evidence the staff wishes the Commission to consider in support of the allegations of misconduct.

(ii) Within 14 days of service of the order to show cause, the respondent may file a response to the allegations of misconduct. If the response disputes any of the allegations of misconduct, it shall do so with specificity and include all materials the respondent wishes the Commission to consider relating to the allegations. If no response is filed, the allegations shall be deemed admitted.

(iii) If, upon considering the written submissions of the respondent, the Commission determines that there remains a genuine dispute as to any material fact, the Commission may order further proceedings to be presided over by an Administrative Law Judge or by one or more Commissioners sitting as Administrative Law Judges (hereinafter referred to collectively as the Administrative Law Judge), or by the Commission. The Commission order shall specify the nature and scope of any proceeding, including whether live testimony will be heard and whether any pre-hearing discovery will be allowed and if so to what extent. The attorney respondent shall be granted due opportunity to be heard in his or her own defense and may be represented by counsel. If the written submissions of the respondent raise no genuine dispute of material fact, the Commission may issue immediately any or all of the sanctions enumerated in the order to show cause provided for in paragraph (e)(5)(i) of this section.

(iv) Commission counsel shall be appointed by the Bureau Officer to prosecute the allegations of misconduct in any administrative disciplinary proceedings instituted pursuant to this rule.

(v) If the Commission assigns the matter to an Administrative Law Judge, the Commission will establish a deadline for an initial decision. The deadline shall not be modified by the Administrative Law Judge except that it may be amended by leave of the Commission.

(vi) Based on the entirety of the record of administrative proceedings, the Administrative Law Judge or the Commission if it reviews the matter in the first instance, shall issue a decision either dismissing the allegations or, if it is determined that the allegations are supported by a preponderance of the evidence, specify an appropriate sanction. An Administrative Law Judge’s decision may be appealed to the Commission by either party within 30 days. If the Administrative Law Judge’s decision is appealed, the Commission will thereafter issue a scheduling order governing the appeal.

(vii) Investigations and administrative proceedings prior to the hearing on the order to show cause will be nonpublic unless otherwise ordered by the Commission. Any administrative hearing on the order to show cause, and any oral argument on appeal, shall be open to the public unless otherwise ordered for good cause by the Commission or the Administrative Law Judge.

Id. at Section 5

FAQ # 5 – May the matter be referred to the ethics committee of the state bar in which that attorney is licensed?

Yes, the matter may be referred to the state bar in which the attorney is licensed for further investigation or a hearing regardless of the determination by the Commission. (“Regardless of any action or determination the Commission may or may not make, the Commission may direct the General Counsel to refer the allegations of misconduct to the appropriate state, territory, or District of Columbia bar or any other appropriate authority for further action.” Id. at Section 6)

FTC Attorney Defense Inquiries

The Nissenbaum Law Group welcomes inquiries from attorneys practicing before the US Federal Trade Commission who may be in need of representation with regard to an ethics investigation, complaint or hearing.