Organization
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67
CHAPTER III
ORGANIZATION
A. Chairman or Chairwoman (Chair) and Commissioners
The rules governing the operations and procedures of the Federal
Trade Commission (FTC or Commission) are found in a variety of
statutes, regulations, court decisions, and internal operating guidelines.
The FTC Act describes the appointment and tenure of Commissioners.
1
The FTC Rules of Practice (Rules of Practice or Rules) provide more
detailed rules regarding Commission meetings, the disqualification of
Commissioners, ex parte communications with Commissioners, and
appearances before the Commission. Internal operations manuals and
Commission minutes describe the assignment process, voting
procedures, procedures related to the issuance of Commission Opinions
and Final Orders, and the role of the Office of the Secretary.
2
1.
Appointment and Tenure of Commissioners
The FTC has five Commissioners who are appointed by the
President and confirmed by the Senate.
3
The Commission is necessarily
bipartisan (or “multipartisan”) because no more than three members may
belong to the same political party.
4
The seat of each Commissioner has a
seven-year term.
5
If a Commissioner vacates his or her seat before the
expiration of the term in which he or she was appointed, the President
may appoint a new Commissioner to serve during the balance of the
term. A Commissioner may continue to serve after the expiration of his
or her term until a replacement has been “qualified”, t hat is, confirmed
1
. 15 U.S.C. § 41.
2
. 16 C.F.R. Parts 0-5.
3
. 15 U.S.C. § 41. The President can make a recess appointment without
Senate confirmation.
4
. Id. Some Commissioners are neit her Democrats nor Republicans. The
Commission has had “independent” Commissioners and, in the agency’s
early years, some Commissioners were members of the Progressive Party.
During the latter part of the 1980s, for example, the Commission was
composed of three Republicans, one Independent, and one Democrat.
5
. A recess appointee req uires Senate confirmation in order to serve beyond
the limits for a recess appointment.
68 FTC Practice and Procedure Manual
by the Senate and sworn into office. A Commissioner may be removed
during his or her tenure only for “inefficiency, neglect of duty, or
malfeasance in office.”
6
While serving as a Commissioner,
Commissioners may not engage in any other business, vocation, or
employment.
7
The President designates a Chair from among the sitting
Commissioners. Because the President may do so at any time, the FTC
usually receives a new Chair after a change in Presidential
administrations, especially when the political party of the President
changes.
8
The Chair serves as the chief executive of the FTC, overseeing
the appointment and supervision of high-ranking, policy-making
Commission personnel such as the Directors of the Bureaus of
Competition, Consumer Protection, and Economics, the Executive
Director, and the General Counsel.
9
The Chair’s appointments of the
heads of major administrative units are, however, subject to Commission
approval.
10
The Chair i s also responsible for the assignment of
responsibilities among staff
11
and the expenditure of funds appropriated
by Congress.
12
Each Commissioner, including the Chair, has one vote on substantive
matters that reach the Commission for disposition. Through her
administrative authority, however, the Chair exercises a more significant
role influencing the Commission’s philosophy and direction than other
6
(1935).
7
. 15 U.S.C. § 41.
8
. See Reorganization Plan No. 8 of 1950, 15 Fed. Reg. 3175 § 3 (Ma y 24,
1950) [hereinafter Reorganization Plan No. 8] (codified as amended at 15
U.S.C. § 41) (transferring power to name the Chair from members of the
Commission to the President, and expanding the Chair’s powers).
However, Janet Steiger, appointed as a Commissioner and designated as
Chair by President George H.W. Bush in 1989, remained Chair until 1995
even though the Administration changed from Republican to Democrat
when President Clinton took office in 1993.
9
10
. Reorganization Plan No. 8, supra note 8, at § 1(b)(1)-(4). The Chair’s
authority does not extend to the personal staffs of other Commissioners.
Id.
11
. Reorganization Plan No. 4 of 1961, 26 Fed. Reg. 6191 (July 9, 1961).
12
. Reorganization P lan No. 8, sup ra note 8, at § 1(a)(3). The Commission
retained its functions with respect to revising budget estimates and with
respect to determining t he distribution of appropriated funds according to
major programs and purposes.
Organization 69
Commissioners. For example, former Chairman Timothy J. Muris
created a new division within the Commission’s Bureau of Competition
(now Mergers IV) that, among other things, has investigated
consummated hospital mergers and anticompetitive effects that may have
resulted from those mergers. The creation of this division reallocated
members of the FTC staff to a previously less scrutinized area and
resulted in the opening of several investigations. Since then, the
Commission has challenged a number of proposed and consummated
hospital mergers and acquisitions, both by filing federal court actions and
by issuing administrative complaints alleging that the transactions in
question either violated or would if consummated violate Section 7 of the
Clayton Act and/or Section 5 of the FTC Act.
13
2.
Types of Commission Matters
All matters considered by the Commission may be classified as
either adjudicative or nonadjudicative in character. Adjudicative matters
are governed by the Administrative Procedure Act and Part 3 of the
Commission Rules of Practice.
14
Commission Rule 3.2 defines
adjudicative matters as those “formal pr oceedings conducted under one
or more of the statutes administered by the Commission which are
required by statute to be determined on the record after opportunity for
an agency hearing.” 16 C.F.R. § 3.2. All other Commission matters are
classified as nonadjudicative in character and include a variety of
different types of proceedings governed by different parts of the
Commission Rules of Practice. Part 1 of the Rules prescribes general
procedures, and in particular, Subpart A of Part 1 governs the provision
of industry guidance—through both advisory opinions and industry
guides—while Subpart B governs trade regulation rule proceedings;
Subpart C governs all other types of rulemaking proceedings; and the
remaining Subparts of Part 1 govern a variety of more specialized types
of proceedings and procedures. Part 2 of the Rules describes the different
types of nonadjudicative procedures on which the Commission relies. In
particular, Subpart A covers inquiries, investigations, and the use of
compulsory process; Subpart B covers petitions filed under Section 7A
of the Clayton Act for review of second requests; Subpart C covers
13
. See ProMedica Health Sys., 2012 WL 1155392 (2012); FTC v.
ProMedica Health Sys. 2011 WL 1219281 (N.D. Ohio, 2011); Evanston
Nw. Hea lthcare & ENH Med. Grp., 2004 FTC LEXIS 9, at *1, (2004)
(complaint); 2005 FTC LEXIS 146 (2005) (initial decision).
14
. 16 C.F.R. Part 3.
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