15 U.S.C. § 57b–2a — Confidentiality and delayed notice of compulsory process for certain third parties

submitted 112 years ago by Pub. L. 109-455 to r/title-15-COMMERCE-AND-TRADE · 1,068 words · no verdicts yet

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When the FTC subpoenas financial or communications records about a third party, this section lets a court delay notifying that third party, or bar the record-holder from revealing the subpoena, if disclosure could cause serious harm. Record-holders who stay silent under these rules cannot be sued for it. Antitrust cases are excluded.

(a) How other laws apply. The Right to Financial Privacy Act and chapter 121 of title 18 (the law covering electronic communications records) apply to the Commission, except where this section says otherwise. (b) Delaying notice or barring disclosure. The Commission can use the delayed-notice and disclosure-prohibition procedures (and extensions of them) in those two laws, with two changes: (1) a judge can delay notice or bar disclosure — including extending an existing order — using the Right to Financial Privacy Act's section 1109 procedure or title 18's section 2705 procedure, if the judge finds reason to believe notice or disclosure could cause an "adverse result" as defined in subsection (g); and (2) where chapter 121 of title 18 would otherwise require notice, the Commission itself can delay that notice (or extend the delay) by filing a written certification under section 2705's procedure, if the Commission finds reason to believe notice could cause an adverse result. (c) Commission's own request to bar disclosure. (1) If neither law otherwise requires notice or delayed notice, the Commission can ask a judge, without notifying the other side (ex parte), for an order barring the recipient of a Commission subpoena from telling anyone else that the subpoena exists — overriding any conflicting federal, constitutional, state, or local law. The judge can grant this for up to 60 days if there is reason to believe disclosure could cause an adverse result, and can extend it in 30-day increments, but never beyond a total of 9 months. (2) This only applies where the subpoena recipient is not themselves a target of the investigation when the subpoena is issued. (3) No such order can stop the recipient from telling a federal agency that they received a Commission subpoena. (d) No liability for not notifying. If neither law requires notice or delayed notice, a person who receives a Commission subpoena cannot be held legally liable, under any federal, constitutional, state, or local law or under any contract, for not telling anyone the subpoena was issued or that they gave information in response. This protection does not cover: the underlying conduct being reported; failing to keep records as required by the Right to Financial Privacy Act; or failing to meet any separate duty to tell a federal agency about the subpoena or about giving information to the Commission. (e) Where cases are filed; sealed proceedings. Court cases the Commission brings under the Right to Financial Privacy Act, chapter 121 of title 18, or this section can be filed in the D.C. federal district court or any other proper district court. Multiple ex parte requests from a single investigation can be combined into one case. If the Commission asks, these court proceedings are held privately (in camera) and the records sealed until the delay period ends or the judge allows otherwise. (f) Antitrust cases excluded. This section does not apply to investigations or proceedings under federal or foreign antitrust law. (g) "Adverse result" defined. An adverse result means: endangering someone's life or physical safety; flight from prosecution; destroying or tampering with evidence; intimidating witnesses; or otherwise seriously threatening an investigation or trial related to fraudulent or deceptive commercial practices — including by moving assets or records out of the country, making it harder for the Commission to identify the people involved or trace funds, or hiding, transferring, or dissipating assets the Commission could otherwise recover.

the actual law source: uscode.house.gov ↗public domain

(a) Application with other laws

The Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) and chapter 121 of title 18 shall apply with respect to the Commission, except as otherwise provided in this section.

(b) Procedures for delay of notification or prohibition of disclosure

The procedures for delay of notification or prohibition of disclosure under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) and chapter 121 of title 18, including procedures for extensions of such delays or prohibitions, shall be available to the Commission, provided that, notwithstanding any provision therein—

(1)

a court may issue an order delaying notification or prohibiting disclosure (including extending such an order) in accordance with the procedures of section 1109 of the Right to Financial Privacy Act (12 U.S.C. 3409) (if notification would otherwise be required under that Act), or section 2705 of title 18 (if notification would otherwise be required under chapter 121 of that title), if the presiding judge or magistrate judge finds that there is reason to believe that such notification or disclosure may cause an adverse result as defined in subsection (g) of this section; and

(2)

if notification would otherwise be required under chapter 121 of title 18, the Commission may delay notification (including extending such a delay) upon the execution of a written certification in accordance with the procedures of section 2705 of that title if the Commission finds that there is reason to believe that notification may cause an adverse result as defined in subsection (g) of this section.

(1) In general

If neither notification nor delayed notification by the Commission is required under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) or chapter 121 of title 18, the Commission may apply ex parte to a presiding judge or magistrate judge for an order prohibiting the recipient of compulsory process issued by the Commission from disclosing to any other person the existence of the process, notwithstanding any law or regulation of the United States, or under the constitution, or any law or regulation, of any State, political subdivision of a State, territory of the United States, or the District of Columbia. The presiding judge or magistrate judge may enter such an order granting the requested prohibition of disclosure for a period not to exceed 60 days if there is reason to believe that disclosure may cause an adverse result as defined in subsection (g). The presiding judge or magistrate judge may grant extensions of this order of up to 30 days each in accordance with this subsection, except that in no event shall the prohibition continue in force for more than a total of 9 months.

(2) Application

This subsection shall apply only in connection with compulsory process issued by the Commission where the recipient of such process is not a subject of the investigation or proceeding at the time such process is issued.

(3) Limitation

No order issued under this subsection shall prohibit any recipient from disclosing to a Federal agency that the recipient has received compulsory process from the Commission.

(d) No liability for failure to notify

If neither notification nor delayed notification by the Commission is required under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.) or chapter 121 of title 18, the recipient of compulsory process issued by the Commission under this subchapter shall not be liable under any law or regulation of the United States, or under the constitution, or any law or regulation, of any State, political subdivision of a State, territory of the United States, or the District of Columbia, or under any contract or other legally enforceable agreement, for failure to provide notice to any person that such process has been issued or that the recipient has provided information in response to such process. The preceding sentence does not exempt any recipient from liability for—

(1)

the underlying conduct reported;

(2)

a failure to comply with the record retention requirements under section 1104(c) of the Right to Financial Privacy Act (12 U.S.C. 3404[c]), where applicable; or

(3)

any failure to comply with any obligation the recipient may have to disclose to a Federal agency that the recipient has received compulsory process from the Commission or intends to provide or has provided information to the Commission in response to such process.

(e) Venue and procedure

(1) In general

All judicial proceedings initiated by the Commission under the Right to Financial Privacy Act (12 U.S.C. 3401 et seq.), chapter 121 of title 18, or this section may be brought in the United States District Court for the District of Columbia or any other appropriate United States District Court. All ex parte applications by the Commission under this section related to a single investigation may be brought in a single proceeding.

(2) In camera proceedings

Upon application by the Commission, all judicial proceedings pursuant to this section shall be held in camera and the records thereof sealed until expiration of the period of delay or such other date as the presiding judge or magistrate judge may permit.

(f) Section not to apply to antitrust investigations or proceedings

This section shall not apply to an investigation or proceeding related to the administration of Federal antitrust laws or foreign antitrust laws (as defined in paragraphs (5) and (7), respectively, of section 6211 of this title).

(g) Adverse result defined

For purposes of this section the term “adverse result” means—

(1)

endangering the life or physical safety of an individual;

(2)

flight from prosecution;

(3)

the destruction of, or tampering with, evidence;

(4)

the intimidation of potential witnesses; or

(5)

otherwise seriously jeopardizing an investigation or proceeding related to fraudulent or deceptive commercial practices or persons involved in such practices, or unduly delaying a trial related to such practices or persons involved in such practices, including, but not limited to, by—

(A)

the transfer outside the territorial limits of the United States of assets or records related to fraudulent or deceptive commercial practices or related to persons involved in such practices;

(B)

impeding the ability of the Commission to identify persons involved in fraudulent or deceptive commercial practices, or to trace the source or disposition of funds related to such practices; or

(C)

the dissipation, fraudulent transfer, or concealment of assets subject to recovery by the Commission.

Source credit: (Sept. 26, 1914, ch. 311, § 21A, as added Pub. L. 109–455, § 7(a), Dec. 22, 2006, 120 Stat. 3377.)

history & why it existsrecord from the source credit

1914Enacted · Pub. L. 109-455 · 120 Stat. 3377

A history note hasn’t been published yet. The record shows enactment by Pub. L. 109-455 on 1914-09-26.

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