 Good morning and welcome to this public meeting of the United States Consumer Product Safety Commission We have one item on the agenda this morning a public briefing on staff's provoked proposed revisions to the rules of practice for adjudicative proceedings Before we begin I'd like to go over some ground rules for today's meeting My understanding is staff intends to brief us at a high level about the proposed changes However because the revisions are based in part on its recent experience with the adjudicative proceedings We face the possibility that questions may arise with regard to specific cases If we have questions about specific cases I'm gonna ask that we reserve them for our private meetings with the general counsel Because if we discuss them here, we run the risk of disclosing non-public privilege Information and I'm gonna look to our general counsel and see if you have anything to add to that point No, I appreciate your Respect for the the issues that we have to deal with here. Thank you very much We'll start with the staff's presentation followed by rounds of questions by the commissioners I'll call on each commissioner in order of seniority We'll start with five-minute rounds But as you know, I'd like to be flexible and we certainly can go as many rounds as needed Today we're gonna hear from attorneys in the office of the general counsel division of enforcement and in for information Mary House Trish Vieira Amy Colvin Behind them is Mary Murphy Assistant general counsel for compliance. Thank you for being here this morning and thank you for the presentation. You may now begin Good morning, act and chairman adler commissioners As you stated we're here this morning to brief the commission on a supplemental notice of proposed rulemaking to update The rules of practice for adjudicative proceedings My name is Mary House. I'm actually an attorney in the regulatory affairs division of the general counsel And here with me at the table are Amy Colvin and Patricia Vieira who are attorneys in the regular I'm sorry the enforcement and information division of the office of the general counsel As you are aware, we have experience with the rules of practice Serving as advisors to the commission on several recent adjudicative proceedings And seated just behind us are mary murphy who is the assistant general counsel for the division of compliance As well as daniel vice and gregory reyes who are trial attorneys in the division of compliance And as you are aware, they have experienced using the rules of practice as they serve as complaint counsel in adjudicative proceedings They're going to be here this morning to help answer some of your questions As you know, the commission issued an npr in 2016 and as I understand it at that time The npr was done by the compliance attorneys. I'm not sure exactly who but at least One individual who spearheaded that Served as the assistant executive director in the office of compliance for a while and also moved to the general counsel's office and assisted with an adjudicative proceeding so That npr was informed by a hearing that had just occurred and so complaint counsel's experience with the rules About a year ago. We were tasked by then general counsel the three of us To review the 20s and patricia hans if you remember she tasked us with Looking at that npr and from the decision maker side Because at that point now we've had experience the commission has gone through An appeal of an initial decision in order and issuing a final decision in order So from the decision maker side where there are additional proposals that we had after looking at it So we considered revisions and we looked obviously at the administrative procedure act of the apa We considered the model rules of practice that were recently put out by the administrative conference of the united states or agus And I think they put those rules out in 2018 We looked at the federal rules of civil procedure and other agencies rules to see if There were provisions that they had that our rules didn't have so gaps because we did identify several gaps in our rules So over the last year the three of us have gone through each of the rule sections And I want to thank patty hans for her support during this process and especially getting us several interns to help us work on this project So we had two interns um, um ha sirtzu who is a Law student at georgetown university And kandace jones who is a law student at howard university and they're very bright young people who kept us on track We're very patient and diligent and just kept us moving forward. So I want to thank them um After we developed a draft for each rule section We shared those drafts with our supervisors and with attorneys and compliance To get their thoughts and I want to thank everybody for their Thorough review of our drafts and we had many many many conversations about those drafts And especially the attorneys and compliance who reviewed the sections Expeditiously thoroughly and very thoughtfully. So we appreciate their contributions So the draft that you've received is a consensus of the career attorneys in the office of the general counsel We're not saying that this is the only way and i'm sure Through this experience, we've learned that every attorney comes to this With their own expertise and their own experience having used rules So we fully expect that to continue these lively discussions as you review The rules So with that, I think uh, I will turn to the slides Several statutes administered by the commission require that a commission adjudication be Determined on the record after an opportunity for an agency hearing CPSC statute that contain this language are listed on this slide So typically adjudications of the commission arise under sections 15c and d of the consumer product safety act Where the staff is alleging that a consumer product contains a substantial product hazard and should be subject to a corrective action So the rules of practice could be used for actions brought under these other statutes But as far as I know Typically the actions being brought are under sections 15c and d of the cpsa Section 554 of the apa states that these provisions are required in every adjudication That must be determined on the record after opportunity for agency hearing So the apa basically sets a procedural floor for the aspects of an agency hearing For example, the apa mandates that a respondent be given notice Of the time place and nature of the hearing the legal authority and jurisdiction under which the hearing is held And the matters of fact and law asserted Additionally, the apa requires that an agency give interested parties the opportunity for submission and consideration of Facts arguments offers of settlement proposals of adjustment when time nature and proceeding nature of the proceeding in the public interest permit And to the extent the parties are unable to determine a controversy by consent A hearing and decision on notice in accordance with sections 556 and 557 of the apa So typically an agency's rules are going to contain provisions for all of these things So the rules of practice have been in place for Approximately 40 years beginning in 1974 when the commission first proposed for use the rules on an interim basis Then approximately three years later in 1977 the commission revised and published for use on an interim basis and for public comment In 1980 the commission adopted the rules of practice that are now codified in part 10 25 After considering public comments and having experience with using the existing interim rules And then in 1982 the commission amended the rules to apply them to hearings required under section 15 of the federal hazardous substances act So on may 12th 2015 the commission directed staff to update the rules of practice with the goal of streamlining future adjudications And aligning the rules with the federal rules of silver procedure So approximately one year later on april 13th 2016 the commission published the npr in the federal register And the 2016 npr proposed Modernizing the rules of practice to reflect changes in civil and administrative litigation since adoption of the rules in 1980 As mary gave an overview just before the supplemental npr Retains multiple revisions that were originally proposed in the 2016 npr In addition based upon experience that A number of attorneys and ogc have gained with using these rules in the past two adjudications We have supplemented the 2016 npr with additional proposed revisions And the supplemental npr responds to comments that we received on the 2016 npr There are a number of reasons for the proposed revision to the rules of practice as the commission directed in 2015 we have revised them to Align the rules with the federal rules of civil procedure We've we've modified them to increase the efficiency of and decrease the burden of preparing for and litigating adjudicative matters We've provided clarity and reflect modern administrative law practices familiar to cpsc staff and practitioners We've aligned a number of the rules to Based upon rules of practice that are used by other agencies including the federal trade commission and the consumer financial protection bureau And as mary has discussed we've updated them considerably to reflect commission and staff experience with adjudicative proceeding since the 2016 npr There are a number of changes throughout the supplemental npr that reflect coordination with the federal rules of civil procedure For example with respect to discovery in 10 25 point 31 You'll see that the rules proposed to align with the provisions In 26a that are relevant to cpsc's adjudications We think these changes will expedite adjudicative proceedings and also reflect trial procedures that most practitioners are familiar with Another example with respect to electronically stored information or esi The rules are updated to include a definition that tracks the federal rules The rules are also updated throughout to reflect the handling of esi the supplemental npr also Updates the rules to increase efficiency and decrease burdens to that end We propose changes that are more Proposed to make the rules more efficient and adjudicative matters and decrease possible impediments associated with adjudicative matters for example Both the 2016 npr and the supplemental npr give the presiding officer discretion to consolidate matters fully or partially on issues like discovery or pretrial procedure Similarly, there are many changes throughout that reflect the discretion of the presiding officer to manage the case in a way That promotes efficiency and adjudicative matters and decreases the burdens on all parties Like the presiding officer's discretion to manage the pace and progress of discovery The supplemental npr also provides clarity and reflects modern administrative practices Another goal of the update is to modernize the rules and make the rules better reflect practices that cpsc staff And most practitioners are familiar with for example Both the 2016 and the supplemental npr incorporate electronic processes like Use of an electronic docket docket or filing electronically, which most everyone is familiar with electronic service and also provision for cpsc to maintain an electronic docket except where the presiding officer Prefers a different electronic docket such as the docket for the agency the alj primarily hears cases for Another big update is to reflect modern trial practices Would be a new provision for mediation The provisions encourage the parties to mediate disputes at any stage of the proceedings as a way to promptly resolve matters The supplemental npr also aligns with other agencies similar rules A number of other changes are proposed that reflect the practices adopted by other agencies notably the ftc Whose rules cpscs were originally modeled after and the cfpb because That agency's rules are fairly recent Some of the changes include new definitions in the definition section to reflect roles of the various staff and others who participate in adjudicative proceedings Rebuttal provisions for official notice. We noticed that cpsc's rules allowed for an official notice But did not allow a party to object to the taking of official notice And commissioner disqualification our existing rules had a procedure for presiding officer disqualification But not for commissioner disqualification. So the supplemental npr adopts the procedure used by the ftc Finally the supplemental npr is intended to update and reflect commission and staff experience with the rules For example in proposed 10 25.23 c which regards motions both in the 2016 npr and the supplemental npr It proposes to expand the time to respond to motions from 10 to 14 days Staff stated in the 2016 npr that 10 days was insufficient time to respond to a motion Particularly when weekend days are considered in the computation of time Staff continues to propose for additional days to respond to motions in the supplemental npr Stating that it should provide adequate time to respond to a motion without having unnecessary delay Additionally in proposed 10 25.41 which is about general rules regarding hearings in both the 2016 npr and the supplemental npr It proposes to limit the duration of an adjudicative hearing to no more than 210 hours apps in a showing of good cause This time limit is based on the commission's experience and common practice in other agencies The 2016 npr stated that 210 hours provides ample time to conduct most hearings But allowed deviation for good cause shown Another example is in 10 25.47 regarding the record in an adjudicative proceeding The supplemental npr proposes several additions It describes when the hearing record is closed cpsc's existing rules of practice are silent regarding the closing of a hearing record So staff identified a gap in our rules and we considered the ftc and the cfpb's rules to craft this proposal Which requires the presiding officer to issue an order closing the hearing record after giving the parties three business days To determine if the record is complete or needs to be supplemented or corrected The presiding officer would have discretion to permit or order correction of the hearing record Additionally, the supplemental rule specifies the contents of an adjudicative record The apa generally states what the adjudicative record should contain but our rule existing rule doesn't have any description of the administrative record It also doesn't require presiding officer to certify the record to the commission or to provide an index of the hearing record So these are issues that came up. We identified a gap and we looked to other agencies as to how they handle those issues and proposed New provisions in the rule to accommodate that accommodate those issues This concludes our high level briefing I did want to remind the commission that this is a proposed rule So we're putting it out for notice and comment. I think there are plenty of issues in there for everybody Lots of continuing discussion. I'm sure but Staffs goal, you know, our rules are almost 40 years old. So we'd like to move forward in some way And so we put some a proposal out for you guys to chew on and we welcome your consideration and your questions Thank you very much for an excellent presentation and thank you for the Many months of hard work that you put into it I can see that there's an enormous amount of effort that went into it Just a couple of quick comments. First of all I would appreciate it if you would share with us a red line version of the changes I lived through the changes in 2016 and as I was going through it there were times when I couldn't remember whether This was something that was in the original rules or something was changed. So A mask that we be given a copy of the red line version Can I clarify a red line of the supplemental to the existing of the supplemental to The existing and also of the supplemental to the 2016 npr Because I liked a lot of the provisions in the 2016 npr some of which are no longer there So I'd like to know With respect to that what was changed And in particular some of those I'd like to know why So I guess my question and I should know the answer to this are the comments that were filed in response to the npr Easily available to us to examine We can certainly provide those they should be I would appreciate that if you do that we can provide the comments as well and they are summarized in the Actually, I'd like to read the raw comments if I might sure thank you So Let me preface this question with a with an observation And I'm somebody who lived through the changes in the rules from the original one in 1974 Through the 1980 and through the 2016 proposal And I just want to reiterate something that at least concerns me We're not like a lot of other agencies We're like some but we're not like a lot of other agencies because our main duty is to protect people's lives and limbs from dangerous products If we're going to do that we need to act as quickly as possible Consistent with due process I think that's particularly critical when it comes to adjudicating cases where consumers are at risk And they're at risk during months of litigation and that's something that is always uppermost in my mind And as I say I can remember going back to 1980 if you read some of the language in the federal register notice The big mover was cases aren't expeditiously handled. We've got to come up with rules that promote expeditiousness in the process I don't think we've seen much progress if anything to my mind. We've seen some regression I'm sure there are a lot of factors that contribute to delays, but I wanted to mention two that particularly trouble me First I see Unreasonable discovery delays that ALJs simply will not police And second aside from the discovery abuses I see ALJs who simply will not move cases quickly In part from my perspective because they don't seem very knowledgeable about our law And they seem to want to relitigate settled case law And that's just a general observation, but here's my question and concern So the stated goal of aligning our rules of practice with the federal rules of civil procedure And I heard you say this a couple times was to align them to rules that practitioners And cpsc staff are comfortable with I think that's an important consideration But for me that shouldn't be dispositive I think the controlling criterion always has to be can we move cases efficiently and swiftly even if it means that we depart From the federal rules of civil procedure So let me just mention a couple of things that caused me concern And that has to do with the length of proceedings. First of all, we've removed from the 2016 npr Proposed 150 day time limit for completing discovery And the reason was commentators commenters thought that wasn't enough, but that's a five month extension We extended the time for an initial decision to become final from 40 to 50 days We added 30 days to the time for the presiding officer to file an initial decision. That's from 60 days to 90 days We added time for filing initial disclosure to 14 days instead of five And we the filing of pretrial briefs now it's a 30 day and not a 10 day period before the hearing Um, and so I guess my question. I think your your observation was we did this because Um, we've tried to put ourselves in the shoes of the decision maker, but I'm Also a decision maker and I'm not sure I like that. So can you Explain sort of in general summary fashion why we did so much that ended up adding time limits is instead of shortening them I'll take a stab at at least one of those It's a broad question on the 30 days for example on the Um final pre-hearing brief the the change from 10 to 30 days I think that the reason for that tracks very closely The concepts that underlie the mediation section more specifically if Final pre-hearing briefs are due 30 days before the hearing It still gives parties a chance to get to the table to get to yes If there were only do 10 days before We're running out of time at that point exhibits are being printed prepared shipped Parties may be less likely to come to the table. So I can at least tell you with respect to that provision That was to complement mediation and try to Encourage that process to go forward as much as possible up until the hearing I appreciate that and that's why I would like to read some of the comments To the npr to get a better sense of what was going on I've used up my time commissioner k Thank you, mr. Chairman and thank you to the team and all the rest of the staff that really did an excellent job It's obviously been a number of years the commission has been looking at this and this is a very productive step forward And so we deeply appreciate the work and we look forward to continuing the dialogue I just wanted to I guess give you a chance to continue answering Chairman adler's Question if there's more that you wanted to address on the time factor. I have a similar question But if you had not completed your answer, I wanted to give you a chance to finish I think on each of these issues there's going to be A different kind of thing that we were looking at it's not an overall kind of Answer right you're going to have to look specifically to each one. I think one of them he mentioned was when a When an initial decision becomes a final decision And that's because I think the supplemental npr explains And people may remember three things are due on the same day so at 5 p.m on the 40th day The appeal has to be perfected If an appeal isn't perfected the commission has to decide whether it wants to review the initial decision On its own accord at the same time and also the secretariat is supposed to Um enter an order of making the initial decision the final decision if there's no appeal and no commission review Unless otherwise directed by the commission and they all have to happen at the same time So it's just in practice. You don't know what's happening at that point So we spaced it out if you don't like five days a day But if everything is due at five o'clock on the same day It's kind of chaos. We need to space it out a little bit. So the secretariat So the commission knows was the appeal perfected. Okay, maybe we got to think do we want to review this or not? Um, and then if neither of those things happen the secretariat then has time to say okay neither of those things happen Now i'm supposed to do this other thing Which is create this order making the initial decision the final order. So it's not to add delay It's just practical and if five days is too much it's you know Another another amount of time would be sufficient But it's just solving a practical issue and one day or even a few hours would help So that all of these things aren't due at the same time on the same day Thank you. That's very helpful and obviously the some of the experience that has been gained over the past few years is certainly some of the best And most useful evidence The practical experience that the teams have had to try to enhance the rules consistent with the goals Does the general counsel's office have a sense as to How long cases should take now that there's been a time limit as chairman abler mentioned removed like a hard cap So we have a sense in terms of of days of what the expectation is based on The if we moved into this model of how long a case would take I think um the compliance attorneys have mapped out the time in cases and maybe They would be able to provide a better answer. That would be great. Thank you Thank you. Miss murphy Good morning I think that there is an expectation that there would be a 300 day time from the beginning of the complaint until the the hearing Because we have imposed some of the federal rules of civil procedure for discovery We're hoping that we have a more condensed efficient discovery process We now limit the number of interrogatories consistent with the federal rule The number of depositions none of which was in our original Rules so we really are trying to be more efficient that way I would be hopeful that we could do it within 30 days within 300 days I think sometimes if there are you know, very significant Discovery matters that might take longer But we certainly move to because we very much share commissioner adler's statement about the importance of Obtaining a voluntary recall for a matter which involves a defective product that can harm consumers And presumably you obviously would not have proposed something or Proposed that the commission proposed something if you didn't think that it was going to help With those goals of being efficient And also fair at the same time. I think that's case. Yes and chairman adler actually raised a really interesting point about the Administrative law judges and from your experience miss murphy in particular Having sat in the rooms and obviously, please don't talk about any specific alj's but just as a general matter Do you find that the alj's have a lack of Understanding of our specific laws and if so, how much does that impact The adjudication itself? I think it's variable Okay, so nothing that should be addressed through the rules for instance in terms of how we would try to find an alj Or the expectations of alj's I can't imagine how you would build something into the rules that would Account for that. Okay, great. My time has expired. Thank you so much Thank you. We turn to now our resident litigation expert commissioner. Bianco. Thank you Thank you all for this. This is a huge project. I sat on a federal rules committee before for a short period of time and I I appreciate what You you went through to try to put this together and Let me say a couple things. I am a supporter of the Mediation concept, so I'm glad to see that's in here. I think that's helpful I am I appreciate the time issues and so chairman adler I was 13 when the original rules came into place So I can't really speak to those but the last 20 years I acted and Acted under and lived through the application of the federal rules. So I think I understand them and I will try to Help in any way I can on that point to to address something that commission or k raised on the on the Administrative law judges do they do they understand our laws and and and miss murphy indicated that it's variable I don't think that's any different than being in a state or federal court I mean sometimes you get a judge who's familiar with your issue and sometimes you don't and I I'm sure that judges spend As much time as possible getting to know the issue and bringing themselves up to speed But I I agree that it just depends on on who you get and who you draw on what the issues are I I I know you spent a lot of time on this The one overarching thing that does trouble me, however Is the discretion we've given the presiding officer and the reason that troubles me is because I'm hearing discussions on You know, we want to make this efficient and we want to make this You know no delays and try to try to move things along So you've done all this work and then basically you've given a presiding officer Who's variable the opportunity to throw it all out the window. So I'm not a big fan of that I think that that needs to be tightened up and I and you know, we can talk about this in the weeds Later on but you know, I think there should be a baseline that the presiding officer has to follow So we can keep the matters moving on But to give such broad discretion for he for him or her to throw everything out the window I just think cuts against us on the timing issue. So I'm looking at the slide number 13 So we're we're changing the time to respond to motions from 10 days to 14 days Okay with that not a big fan And I'll tell you why in a second the duration of the adjudicative hearing to know more than 210 hours absent a showing of good cause Again, it's a it's a choice we can make and I'm not a big fan of this of shortening the time only because I sometimes I think it's to put a case depending upon the issue Conceptually, it's fine. But to put a case in a number of hours sometimes ties the hands of either side including our side So I just caution you on that But I can live with that. It's the next one. I can't live with anybody who's ever tried to put a hearing an appeal record together Three days is just And and again, I want to stay away from the weeds, but I think we ought to look at some of this stuff A little bit close more closely. Ms. House I you you raised a very good point that when some of this stuff is due on the same day It's just a lot So there are areas that I agree with you. We might need to just make some tweaks and adjustments as far as time I I have a general question. I wanted to ask so I I've heard um, you know, and I've seen in in your presentation We've tried to align these rules with the federal rules of civil procedure I think miss veera said we coordinated with the federal rules of civil procedure and we looked to other agencies What process did you use to decide when well, first of all, let me ask what does a line mean? What does that mean? Well, typically in the discovery area, we adopted, you know, interrogatories You know the broad discovery sections. We just adopted it in 10 25.31 The compliance attorneys actually went through the federal rule 26 some of it applies in our cases some of it doesn't And um, we decided to do something more affirmative and list all of the sections. We were actually adopting so Did you did you adopt them wholesale when you adopted the federal rules? Did you adopt them wholesale because Let me ask a finer question. Just to close this loop There were instances where definitions were provided for in the federal rules But we chose instead to go with the ftc rule. How was that decision made? When did how did we decide when to adopt the language in the federal rules as opposed to let's go with the ftc rule here If you look at aligning with the federal rules, typically that's going to be in the discovery section When it's all of these other agency specific kinds of practices, then we would be looking at Typically the other agencies and what they've done and as we said our rules were originally modeled after the ftc So we actually went through all of you know, we might have looked at two or three different agencies the model rules And you know for a year went methodically through this and tried to decide What makes sense for our agency based on our experience? Thank you my time is up Thank you commission felbin. Thank you and thank you all for being here and for the clear hard work that went into drafting a fairly sizable effort at revamping the the the rules of procedure Moving forward. I think we all share the goal that the adjudicative rules that we apply be fair and transparent and provide for an expeditious process on our end So that we're able to accomplish our mission And so that we're able to get it the right outcome as quick as possible Building on some of commissioner biacco's questioning It seems that that and i'm still working through this so bear with me But there are provisions that are sort of lifted wholesale from the federal rules there are provisions in here that are borrowed from sister agencies And then the third category would be sort of updates that are designed to reflect the commission and staff experiences in recent adjudications And recognizing the restrictions on the public questioning here and not being able to get into specific cases The concern that I have and and reading through this with a closer eye will be To make sure that these updates aren't sort of modeled after scenarios where The commission has been Bound by the existing rules and unable to get at a certain outcome that it wanted to get at And therefore sort of ad hoc adopting new rules that are designed to Get at a particular outcome at the expense of due process or procedural fairness to the respondents The one question that I I do have actually I have a couple Are any of the updates here designed with the with an eye towards expediency to make it easier for respondents to get into district court quicker where the federal rule is fully applied? Not that i'm aware of okay And under the current administrative procedures Do you have statistics about the success rate of respondents in agency administrative procedures? I don't have that information. Okay, could you get that? Thank you and um likewise my next question is if if you were able to talk a little bit about what the Commission's appellate success rate is with decisions coming out of our process I don't think we're prepared to speak on that, but that's something else that we can get for you I'd appreciate that. I've got more questions, but I'll save them for a later date. Thank you Thank you commissioner Feldman resuming a question I have and again going to A more general approach to this Really when I remember when I was in law school taking an administrative law course one of the hallmarks of administrative law Approaches especially adjudication was that they're supposed to be More informal and speedier than cases in the courts And so picking up on a point that commissioner biakko was making about what do you mean by alignment? It sounds to me like In many places we just made them the same as the federal rules because everybody knows what they are And they're comfortable with them and I certainly think that's an important consideration But as I said, I'm not sure that's the most important consideration So did we Try to look at this from a very fresh perspective and say the federal rules provide a good framework if you're in federal district court But these are administrative cases and they're supposed to be more informal and more speedy. Did did did that? Control your thinking as you were assessing the rules I did want to point out that the federal rules of several procedure were updated substantially in 2015 to make them more efficient to make them more speedy So it's not like um, we weren't aware of that issue part of the reason why we adopted it is because They have changed and they're supposed to be more efficient and move cases along To enable, you know to manage discovery to make it more limited in certain cases to Provide for initial mandatory disclosures early in the case, which should help to move things along So it's not that we adopted the federal rules just because everybody knows them That's certainly an advantage and when we have ALJs who have no experience at our agency It certainly helps right because they understand these rules. So that should make it More efficient. They should be able to apply this law more quickly because they're going to have experience with it Um, and if I've left anything out mary. I mean that it wasn't just because That was an easy thing to do. It actually is more efficient than what we've got Yeah, you make a good point the federal rules now have been in effect You said since 2015 have there been studies about whether that's actually promoted greater efficiency and speed within the federal courts I don't know but we can find out I'd be very curious Because it we probably now at a point where there should be some returns That would tell us whether they're actually doing what they were supposed to do and I certainly appreciate that answer Let me ask about the federal rules of evidence when I looked at page 125 It says the federal rules of evidence shall apply to all adjudicative proceedings held pursuant to this part And again, I go back to my point Why do we Stick so closely to the federal rules of evidence and I'll just pick one specific example that concerns me And that is with respect to hearsay When I recall the 2016 NPR We had a broader section addressing hearsay in which we said That hearsay would be admitted if it's relevant material and bears satisfactory addition or reliability so that its use is fair And we got a comment that I think from the ABA saying well, that's self contradictory and I can't figure out why it's self contradictory But it looks like we're going to be locked more closely to The federal rules of evidence when it comes to hearsay and it seems to me that ought to be one of the big areas where we depart from the federal rules of evidence We have a comment or response to that I I think that part of the basis for applying the federal rules of evidence again was to kind of lay a groundwork for everyone's Understanding the presiding officer always has the discretion To allow evidence in and I think the beginning of the evidence section is that evidence that would be inadmissible Is not just inadmissible because it would be inadmissible under that and it's there is still some Some significantly way for the presiding officer to move things through Yeah, and I want to go back to a point that commissioner biakko made my problem is that when we give presiding officers This much discretion The result at least from my perspective hasn't been that good and the language you just cited was language that we had in the 2016 npr but it also Gave this additional explanation about when we would permit hearsay and that Additional language was removed and I I must admit i'm baffled when I look at the ABA comment that it's self contradictory We didn't seem self contradictory at all to me What we did is we looked at other agencies and how they dealt with this issue There's no doubt that the the rules of evidence are relaxed at an agency proceeding And if you look at 10 25 point 43a We adopted some language from other agencies that basically makes this clear. So this provision now Since we do have loaned alj's has precedent in other agencies and how it's been interpreted So we'll be able to use that to move things along. It's not just going to be us as a one-off With a comment about hearsay. We're going to apply law that's been used at other agencies to relax the federal rules of evidence Yeah, I wish I I wish us good luck and again back to uh commissioner biakos point Uh, I don't like the idea that we're giving so much discretion to the presiding officer I look at page 84 and it says our rules vest broad discretion in the presiding officer to allow him or her to alter time limitations And other procedural aspects of a of a case is required by the complexity of the particular matter involved and in the abstract You can't really dispute that But this is what our current rules do Which means that we have not been able to control what alj's do So I guess I do have a question Is there no way to put in some limits and some deadlines on what alj's do and just to think out loud for one example If an alj wants to extend anything during a proceeding for good cause And if it's a long extension shouldn't we require the alj to put that right in writing and At a certain point come to the commission and say should this be extended for good cause I realize it's very difficult to police alj's and we want to give them discretion But it feels to me like we're giving them more discretion to extend than discretion to narrow So if you have a response I'd be Definitely the rules talk about The alj has the ability to shorten time limits, but you're right typically they're lengthening time limits and that language is Currently here. So certainly there are ways that you could try to encourage or rein in too much discretion But I think one of your comments was about giving the presiding officer additional time to for example draft the initial decision in order And you know, I think about our loaned alj's for example and randy butterini And all of them are loaned Who's often retirement land you can have it done quickly or you can have it done well And so we're trying to balance that so I think in the 2016 npr you had a hard deadline of 60 days The commission gives itself 90 days and we're also asking the presiding officer now to give us To certify the record right and to give us an index so we're adding things So in every case is going to be different and then the issues and complexities the amount of evidence in every case is going to be different So we were trying to just align How much time the commission is going to take with how much time the presiding officer gets Recognizing these new things but also limiting it. There's only an extra 30 days And certainly this is a proposal and you guys can consider it, but what happens for example, if it's not done So we're trying to create a balance and the commission made one to strike a different balance But this is the staff's proposal for that balance And that's an excellent point and I really appreciate that am I into my overtime? I well, I apologize for that and I'll pick up on the next round Commission okay. Thank you, mr. Chairman. I don't have any more questions. I just wanted to thank the team again for the great work I think the experience that you've gone through and shared with us has helped tremendously I'm sure there'll be a lot of dialogue back and forth and I did also want to note that this work As you all have said built on the 2016 Effort and that was led by our then general counsel current executive director mary boyle And so thank you for all the work that she did to even get us to that point That was I know a major lift and we wouldn't be here talking about this if we hadn't had the work that she had done then Thank you again. Look forward to the dialogue on this Commissioner biaco Thank you Miss house. I couldn't say it better than you did There's a difference between getting something done quickly and getting something done well And I think all of us agree that getting it done well is important and you also bring up a good point about if it's not done What are we going to do about it? I mean it's not done And so I I appreciate putting the framework in that that you all did I just I do think that Giving the the discretion to the ALJ was an intent to either, you know exercise Good discretion in extending or as I've experienced myself having a judge that says, you know what I appreciate that the federal rules Give you this amount of time, but You're getting this amount of time. So there are opportunities and I I can If you would like I and be happy to you know tweak some of the language That that I've seen to achieve that because I think that's ultimately what what the goal is with regard to commissioner or chairman adler's comment about the hearsay That one that one scares me a little bit bob I think I agree that the rules of evidence federal rules of evidence are relaxed and administrative Proceeding as they should be But the federal rules of evidence are time tested You don't may not like all the rules Depends on you know your position, but they are time tested and they do strike a balance between You know due process and reliability, which is which is an important goal But I I can't see Throwing out hearsay or departing from that to an extent where we would promote just gossip and accusations And I think that we have to make sure that we're not in a position Where relaxing the federal rules of evidence and administrative proceeding Encourages or allows an ALJ or the commission to consider You know accusations that have no support or Are based on you know opinions and nothing that's Suited in reliability. So I think that's what the ABA meant when it was self contradictory And I I'm comfortable with that I um I have a lot of specific questions of you know, why you chose this as opposed to that and I I see some inconsistencies between you know, where we adopt the federal rules And to the extent we adopt them, I mean some of the areas I mean we change for example The amount of time to file an answer from 20 days to 21 days, which is directly consistent with the federal rules But in some other areas we look at the we say we adopt the federal rules But it's not completely there and the one that jumps into my mind is the definition of a complaint Our definition our proposed definition of a complaint does vary significantly From the federal rules and I'm curious as to why we just didn't Adopt that language wholesale and how we made a decision to adopt something different I'm trying to get an understanding of the process used to we'll use the federal rules here We'll use the federal rule concept and modify it and we'll reject the federal rules and apply FTC or sec Do you follow my question? That's a lot Can you cite a section to where we define a complaint? On papers here We do too. I don't I don't see it. Um Thank you dotty on page 13. For example, we say Um, I don't know if it's not on here. It's not on 85 Okay, uh, let's look on page 87. For example, this is um We have here form and content of a complaint a complaint shall contain the following and and um, I I just wrote in the margin Why did we not use the language and rule federal rule of civil procedure 8? Why did we select this language? Where did it come from and and how was that decision made? This is existing language. I don't think we changed it at all So to the extent it wasn't a problem. We haven't litigated it. It hasn't been an issue We didn't necessarily update every single thing to match the federal rules So this would be consistent with probably the FTC's language and our sister agencies So we didn't change it because it hasn't been an issue Um, the one so I would I would challenge that a little bit because as we discussed the federal rules have been updated to Promote efficiency and one of the things that changed in the federal rules was, you know, whether there was notice pleading Which did not require the detail that um factual pleading did and so I I would um, I would encourage us to Look at whether or not we should adopt some of the language wholesale to keep it consistent throughout And I I appreciate your point of view. We didn't have an issue with it before But if our goal for ultimate goal is to align the rules to modernize and update them We should consider That throughout because then i'm not sure we're going to have a match and I did see some gaps Because of the way we adopted some language and then not the others That's just a suggestion. Thank you Thank you, uh commission felbin Thanks, and again, I wanted to reiterate my appreciation for all the work that you all have done on this Um, a couple of questions and uh, I'll try to be brief Um one would it be possible to get a red line copy of the changes that are being proposed here vis-a-vis the 2016 document? Yes, we can provide that. Okay um, and secondly with respect to sort of the commission's role in the process, uh, in terms of approving complaints um, can you talk a little bit about how these, uh, provisions would contemplate staff's ability to amend complaints add counts add parties right so in the 2016 npr the staff sent up a version regarding amendments and the commission changed it at the time they voted to publish the rule um, and it Narrowed the staff's ability. I'm sorry the presiding officers ability to have any discretion at all with regard to amendments I don't know if you've looked at it, but it narrowed um Basically, it said the presiding officer had none if if a proposed amendment would have the effect of adding or removing a party or account um Unduly broaden the issues in the proceeding cause undue delay Or didn't fall within the scope of an authorized complaint. It wasn't In the purview of the presiding officer anymore. It went directly to the commission So us looking at this language again kind of our thought about it was Very complicated and there are a lot of clauses So we wanted to and it would be unique to our agency So we wanted to streamline that idea and also Get the commission to reconsider whether it really wants to see all of those directly Because every time something comes to the commission it adds delay And you're going to reconsider the whole thing all over again So we we thought about it the way it's written. It's very strict If the name of a party changes for example, if we sue boxes rs, and I'm just making this up boxes rs Corporation and it should have been boxes rs ink It has to go to the commission the way it's written the presiding officer has no discretion to do that um If for example, all of the facts are alleged in the complaint And the only amendment is to stick in a header with the count, but the facts don't change Is that really something the commission wants to review again? You obviously it's in your prerogative. You have the authority to do this no question What we wanted to do is streamline it get you to reconsider whether you really want to see all of these because it would add delay And if you give some discretion back to the presiding officer You need to give a criteria that that presiding officer can use that's been used elsewhere so We got a comment from the aba saying that it was consistent with the ftc's language, which says Does not reasonably it's reasonably within the scope of the original complaint So we put that as the criteria And we it's not to achieve any particular result But so that the presiding officer has a criteria Where they'll be precedent from another agency that does a lot more of these cases and they can apply that precedent Would that reasonably related language get to sort of the difference in Making a clerical distinction between getting You know incorporated versus limited or or uh the particulars of a particular corporate name correct versus for example adding Corporate officer in his personal capacity That is the idea I don't want to give any legal conclusions here because it depends on the facts in each case in the law So I don't want to apply anything here, but that is the idea that there would be a distinction between that Also, we changed the provision of when the commission would review Um, so If the presiding officer grants a motion to amend It wouldn't immediately go to the commission The parties would litigate that issue and the commission would review that decision at the end at the final decision in order The thought being that the parties now have litigated the issue and the commission can review it at the end However, if the presiding officer denies a motion to amend This means the presiding officer has found that it doesn't reasonably fall within the original complaint the scope of the original complaint Which means the parties won't be litigating it So at that point is an appropriate time for the commission to step in with a policy or a legal view of this and decide Is this something we want to allow to go forward? And so that the presiding officer would have the discretion at that point to Certify that to the commission at that point for a decision Because if you wait the the commission can still review it at the final decision in order stage But if you wait till the end and the parties haven't litigated it Then you might be in a situation if you thought it should have been allowed or you're gonna have to remand for additional fact-taking You know that would might be prejudice. Some of the parties adds a lot of time So that is the thought behind it and it's a proposal and I recognize that the commission might have a different view of this But we wanted to provide something for you to consider To reconsider whether you really want that strict language That requires you to review every single thing with no not even a recommended decision by the presiding officer I appreciate that and my time's over. Thank you Uh, thank you very much commissioner Feldman. Um, I did make want want to make one quick observation, which is um This is a very complex proposal. Uh, there are lots of details and we could Get very granular and we would go on for hours and hours and hours. I do expect that we will have further discussions I certainly look forward to having more discussions with my colleagues in particular with our litigation expert commissioner biakko And so, uh, I'm going to try to keep things on a cosmic level except maybe one or two little questions, but I did also want to Give a variation on the butterini rule do it Quicker do it well. Uh, the old line usually was do it Well do it cheap and do it fast you get two And that that is a big tradeoff My concern is at least for me some of the tradeoffs in terms of wanting to make things look come out well Means we're really sacrificing doing things quick And if I thought that we were um an agency that was litigating unbelievably complex technical and engineering issues And we do get those from time to time I just haven't seen many of those that uh end up in section 15 It seems to me most of these cases are relatively simple cases that have gotten bogged down in discovery with Uh respondent saying we want to talk to every single person who had whoever touched a piece of paper and find out What he or she was thinking as they went about Compiling the case and that's where I would love to see a presiding officer Exercise his or her discretion to say no, we're not going to permit that and I realize you can only write the rules You can't make the Every presiding officer Address them in an appropriate manner Um, I would also say just a quick response I don't disagree with almost everything you said about hearsay commissioner biako But I will say that in addition to the years of experience in federal courts There are also years of experience in administrative proceedings with having these more relaxed rules And all I'm trying to say is that I I would like to make sure that we capture the wisdom Of those rules with respect to hearsay. So here are my less than cosmic questions And uh, I noticed on page 87 that the complaint language is supposed to include a Quote a request for relief, which is in the public interest And I'm curious is that the language that's in every Language of complaints because uh, you could you could get into lots of argument about whether Perfectly justifiable rules in the public interest, which is a fairly vague thing Why not simply say that? Relief should be pursuant to an authority contained in whatever the statute is that's applicable to the proceeding I presume that if it's consistent with the statute that would it be it would be in the public interest I'm just worried about giving somebody cause to file objections That aren't there just quick question. I think that's in the existing rules. We didn't No, I understand that I'm saying but why why way back in the day was it there and you probably weren't there to Realize it. I was there And it went right by me But uh, would you have any objection to being more explicit about saying just it's consistent with the statute and the statute to statutory authority Think about it. Yeah, we'll think about it We don't want to provide any legal advice here, but generally speaking things that make it more efficient or streamlined. We're We're all about it I also want to applaud the Language that you put in on page 121 about subpoenas I think if the commission denies an application for subpoena, we ought to state the factual and legal basis for denial And I think that's all to the good But what I didn't see was any authority for the Party seeking the subpoena Having seen the commission's factual and legal grounds for denying the application for subpoena to modify And resubmit the subpoena. Is that something that you would That do you think is implicit in there? Or is this something that you're not permitting? I just want to add my colleagues have said that that public interest language is in the statute. That's why it's there Um, and as for regarding subpoenas The parties can reciprocate subpoena requests. Okay, I didn't see that explicitly stated. So I would Be curious I would urge us to consider putting some explicit language to that effect I have no further questions at this time commissioner k none. Thank you commissioner. But bhiaco um I'm not going to get into weeds, but I agree with you on the public interest. I think that could be corrected I want to look at the statute and see if we can maybe blend that because that leaves a big area But I can't Agree with the comment that our cases are not are very simple. I think there's very complex and when there's Products and science involved. I do think we see a lot more Complexity, which is why we end up in litigation to begin with so I do appreciate There are situations where you know, there's one one is more Simple than the other depending upon your background So I I I had to I just wanted to address that I didn't want to suggest that you guys are just doing The everyday run in the middle side. I think that what we address here is is pretty technical and significant I think your question about the subpoena is a good one as well I I think that we can I think we do have to state the reasons why we've denied denied it and Whether or not a party one side or the other wants to come back and reissue it based on that finding Is something that I think the rules do not prohibit But I appreciate if you wanted to outline that outline that but what I want to add then is I'll just ask this question and then I'll stop with the weeds Why we didn't adopt the rest of the federal rules with regard to experts and third party subpoenas because they are different standards and the third party subpoena does jump into my mind because The reason for that rule and the reason for the difference in that rule is because a third party is a they didn't ask to be in this lawsuit the The standard for getting a subpoena with regard to a party is is certainly lower because they are in the lawsuit But to bother a third party without stating why you can't get the evidence from the party I think is a significant Difference and I wonder why we didn't adopt that as well I think our rules provide for mechanisms for obtaining the deposition of a non-party has to be through a subpoena I don't know that we considered the other federal rules But I think that might be something that we can certainly have a discussion with Based on your expertise. We're happy to look at it. Well, it's not it's thank you. I appreciate that But I I think there are many things that it would help if we just had a discussion because I learned some things From you know your perspective today. It's not just you know my perspective Of course, I love my perspective, but it's not at the end. Also, I appreciate that I just want to say that the apa also addresses subpoenas and I think Initially, you know in other agencies the presiding officer has the authority to issue subpoenas It's only under the commission's odd rule that it stays with the commission and you're kind of dropping in Then in the middle of a lawsuit to decide a subpoena issue I think originally they were supposed to be it's just an application. It was supposed to be An easy thing to do and if you look at our rule now, there are no really criteria It just says stating the reasons that's not to say that we shouldn't It's to say there might be other law that we need to look at before moving in that direction So you're right We don't have criteria in our rules and when this had come up before the commission before My research suggested that there was There was case law out there that said if if the federal rule in the Or if the administrative rule doesn't address the issue The the agency should look to the federal rules of civil procedure. So it does kick you back there And I think that that would be a way to just if we're trying to streamline and fill in some gaps That would be a one that we should consider gives the commission Direction, I know it's an odd rule that we have subpoena power But the standard should be the same whether it's the commission issuing the subpoena or the alj That rests with the commission, but the standard should still be the same Thank you. That's all I have commissioner Feldman Thanks, um, I don't have much more, but I do want to wholeheartedly agree with what commissioner biakko just said In terms of the complexity of the cases that the agency deals with the so-called easy cases Don't make it to this stage. Those are the cases in which we would expect to see Negotiated and voluntary Uh, corrective action plans already in place It's where that level of complexities introduced that that that gives rise to the need to proceed in an adjudicative proceeding to begin with In these cases can be complicated particularly when we're dealing with in adjudicative Proceeding that's based on a violation for example of the child nicotine poisoning prevention act Which we don't have any existing case law To guide us on or to the extent that the agency is playing a stronger hand with respect to its jurisdiction over emerging technologies where a particular adjudication May well hinge on a novel interpretation of what constitutes a substantial product hazard So I think those are all important things to to to keep in mind here I did want to circle back very briefly to the discussion of our evidentiary standards and And in particular this this question about hearsay admissibility When you look to the evidentiary rules at the federal trade commission Is hearsay evidence admissible? You know, I think the way they said is it's not inadmissible, right? Just because it may be inadmissible under the federal rules So they would apply Whatever the precedent is at that. So we we didn't we haven't gone back and done all that research So I can't tell you here today. What every scenario all I can say is in general There is relaxed hearsay and you can admit hearsay and an agency proceeding Okay, is hearsay evidence admissible before the CFPB? I think all of the agencies have some variation of that idea that the rules of evidence are relaxed So I don't want to go through every agency and tell you exactly because I don't want to be inaccurate But we can certainly go through but I think all of the agencies have a relaxed hearsay admissibility I don't want maybe I shouldn't say that blanket But that's the idea in an agency proceeding is that the federal rules are relaxed Okay, and under the f re hearsays just blanketly inadmissible Right, I would unless an exception applies exactly. I think those are probably more suited like scenarios in a offline discussion Okay, so I don't give anything inaccurate Thank you Just one quick word of defense about technical and engineering challenges I think you'll find if you look at the actual amount of time expended in the administrative proceedings There is not that much that is dedicated to the technical and the engineering that a lot more goes into who did what And who said what and and legal issues that That at least to me sometimes they're long settled law, but they're they're being relitigated But that's a factual question that we can't resolve now I have no further questions other than to Make sure that any of my colleagues have any further questions commissioner k Commissioner biaco, you look like you're researching the federal rules right before us, but I do really appreciate your expertise and I look forward to working with you Commissioner Feldman any additional questions if not, thank you for a really superb effort and an excellent presentation It's clear you've put in an enormous amount of work and you have all of these provisions at your fingertips I'm truly impressed With that this hearing is over. Thank you very much