Section 4 of the original version of S. 382 gave special powers to the Attorney General and the Federal Trade Commission in dealing with independent regulatory agencies. One of those special powers has been withdrawn, and those that remain are now applicable to all Federal agencies. I expressed reservations about two parts of Section 4 that have not been affected by the amendments. First, the bill still provides that the Attorney General and the FTC may appear as parties of right "in any administrative or judicial proceeding subject to Section 3." I have no objection to their appearance as of right in an administrative proceeding, but if they have not appeared at the administrative level, they should not be admitted as of right at the judicial review stage. It is not clear what the bill means by "judicial proceeding subject to Section 3," since only agency actions are subject to Section 3. The section-by-section analysis of the proposed amendments only describes the provision as applying to "agency proceedings," so some clarification is needed. Second, the amended version retains intact the permission for the Attorney General and the FTC to use their full discovery powers in all matters under the proposed law. These powers would include use of discovery tools, such as CID's, that would be unavailable to other parties, including the agency. In fairness, the Attorney General and FTC should be restricted to the normal discovery powers applicable to the agency and parties to the proceeding, and if they are permitted to use their special powers, then all parties should be extended similar privileges. Other changes to the bill are either in line with my earlier recommendations or unobjectionable. The requirement of former Section 5(a) that the "agency has the burden of establishing by substantial evidence based on the record as a whole that the requirements of Section 3(a) have been met" has been removed as recommended. The old requirements of Section 6 that the agencies must "utilize a systematic approach," consult with the Attorney General and the FTC, and review its statutory authority and report to the President and Congress have been eliminated, leaving a one-sentence requirement, without time deadline, that the agency "review and modify its rules, regulations, policies, practices and procedures." This gives agencies more flexibility and discretion on how to implement the provisions of the Act, emphasizing the objective of adopting anticompetitive policies, rather than the actual process of internal review. Finally Section 9 would make the proposed legislation applicable to all agency action begun after enactment. old version would have applied to all agency actions not final within 120 days after enactment. The amended version is preferable, as it avoids the possible need to reopen substantially completed cases. The I repeat my strong support for S. 382, in either of its two versions. Although I favor the broader scope of the original draft, I agree with the other changes made in the new draft. The essential message is that agencies should not rest on outdated practices and policies, no matter how wellestablished, but they should think creatively to carry out their mandate in the least anticompetitive manner. Nor do I think that the CAB should be exempted from S. 382. As a co-author of the Airline Deregulation Act of 1978, you clearly understand how far toward competitive goals that legislation moves the agency. The fact of its passage and the pro-competitive direction it takes do not, however, mean that the general approach of S. 382 is not relevant to the CAB. Since we already regulate (or deregulate) in the least anticompetitive manner, S. 382's passage will have very little impact on our decisions, but it would be a serious mistake in my view to attempt to judge the degree to which an agency already applies--by organic statute or choice--S. 382's principles in order to decide whether to exempt particular agencies from S. 382. S. 382 should apply to all agencies and the CAB should be no exception. Please let me know if I can be of further assistance. Sincerely, Manen Marvin S. Cohen We are pleased to respond to your request for comments on S.382. It is our understanding that comment is sought on the modified version of S. 382 that is now contained in Title II of the draft "Administrative Practice and Regulatory Control Act of 1979." The thrust of Title II is the requirement that agencies assess the anticompetitive impact of certain agency actions. Title II's applicability is limited to the four types of regulatory action set out in § 602 (a) (1)− (4). The Consumer Product Safety Commission does not engage in agency action within the scope of $ 602 (a) (1), (a) (2) or (a) (4). The Commission does, however, take action, such as the issuance of descriptive standards and bans, that may have the effect of limiting the production or distribution of types and classes of consumer products and hazardous substances. Additionally, the Commission's remedial powers of recall and seizure directly interrupt product distribution. The Commission, however, takes no regulatory action to accomplish health and safety objectives by setting numerical limits on the products that may be produced or distributed, or by allocating that production or distribution. We assume $ 602 (a) (3) refers to the latter form of regulatory actions and is not intended to apply to the actions traditionally taken by the Commission. We would suggest that the bill and its legislative history make this clear. Please call us if we can be of further assistance. Sincerely, Busan B. Kay Susan B. King Chairman As the Judiciary Committee begins its consideration of S. 382, the Competition Improvements Act of 1979, I wish to pledge the active cooperation and support of President Carter in your effort to eliminate unnecessary regulatory burdens on the competitive market processes of our economy. We believe that this effort will make a major contribution to the broader historic re-examination of the role of regulation in our economy, which you and the Administration continue to place at the top of our common agenda. The recent trend has been away from antitrust immunities and regulatory schemes, and toward increased reliance on free market mechanisms. In recent years, the Administration and the Congress have taken significant steps to deregulate specific industries. In 1975, Congress abolished the system of fixed brokerage commissions for securities transactions. In 1976, Congress passed the 4R Act that contained limitations of ICC rate-making authority for railroads and confined the ability of railroads to agree on rates. 1977 saw substantial legislative deregulation of air cargo carriers, and in 1978, Congress greatly reduced economic regulation of air passenger carriers. In 1978 also, the President promulgated Executive Order 12044 on Improving Government Regulations, which among other things requires Federal agency heads to choose regulatory approaches which are both effective and minimally burdensome to the competitive process. In 1979 in his State of the Union Message, President Carter pledged to continue his efforts to reduce unwarranted government regulation. The President has also - must stated that "[o]f all our weapons against inflation, I know that you share our recognition both that many regulatory and other governmental programs serve vital public purposes, and our determination to ensure that in their design and administration, these programs preserve and enhance competition to the maximum feasible extent. Over the coming weeks, we look forward to cooperating with you and the Committee in the development of legislation that will reconcile these shared commitments, and thereafter, to securing its enactment in this session of the 96th Congress. Sineerely yours, 46-505 0 - 79 - 12 John H. Shenefield Antitrust Division |
