Organization

• Pages: 57-89

57

CHAPTER III

ORGANIZATION

A. Chairman 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, 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 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 bipartisan and 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 seat before the expiration of the term in which he was

appointed, the President may appoint a new commissioner to fulfill the

balance of the term. A commissioner may be removed during his tenure

only for “inefficiency, neglect of duty, or malfeasance in office.”6 While

1. 15 U.S.C. § 41.

2. 16 C.F.R. §§ 0-5.

3. 15 U.S.C. § 41. The President can make a recess appointment without

Senate confirmation.

4. Id. Some Commissioners are neither 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 1980s, for example, the Commission was composed of three

Republicans, one Independent, and one Democrat.

5. A recess appointee requires Senate confirmation in order to serve beyond

the limits for a recess appointment.

6. Id.; see Humphrey’s Ex’r v. United States, 295 U.S. 602, 632 (1935).

58 FTC Practice and Procedure Manual

serving as a commissioner, commissioners may not engage in any other

business, vocation, or employment.7

The President designates a Chairman from among the sitting

commissioners and, because the President may do so at any time, the

FTC usually receives a new Chairman after a change in Presidential

administrations, especially when the political party changes.8 The

Chairman 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 Chairman’s appointments of the

heads of major administrative units are, however, subject to Commission

approval.10 The Chairman is also responsible for the assignment of

responsibilities among staff11 and the expenditure of funds appropriated

by Congress.12

Each Commissioner, including the Chairman, has one vote on

substantive matters that reach the Commission for disposition. Through

his administrative authority, however, the Chairman exercises a more

significant role influencing the Commission’s philosophy and direction

than other Commissioners. For example, the immediate past 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

7. 15 U.S.C. § 41.

8. See Reorganization Plan No. 8 of 1950, 15 Fed. Reg. 3175 § 3 (May 24,

1950) (codified as amended at 15 U.S.C. § 41 (transferring power to

name the Chairman from members of the Commission to the President,

and expanding the Chairman’s powers) [hereinafter Reorganization Plan

No. 8]. However, Janet Steiger, appointed by George Bush in 1989,

remained Chairman until 1995 even though the Administration changed

from Republican to Democrat when President Clinton took office in

1993.

9. Id. § 1(a); see 16 C.F.R. § 0.8.

10. Reorganization Plan No. 8, supra note 8, at § 1(b)(1)-(4). The

Chairman’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)

[hereinafter Reorganization Plan No. 4].

12. Reorganization Plan No. 8, supra note 8, at § 1(a)(3). The Commission

retained its functions with respect to revising budget estimates and with

respect to determining the distribution of appropriated funds according to

major programs and purposes.

Organization 59

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. The

Commission recently issued an administrative complaint alleging that a

consummated hospital merger violated Section 7 of the Clayton Act and

Section 5 of the FTC Act.13

2. Assignments

All Commission actions start in one of three ways. The Commission

may receive a recommendation, motion, petition, or other formal request

for action from the Commission staff (for instance, from one of the

Bureaus) or a formal request from an outside party.14 In addition, the

Commission may begin a matter by contacting staff. The

recommendation or request for action first goes to the Office of the

Secretary, where it is assigned to a commissioner. With few exceptions,

the assignment process occurs on a rotational basis.15 The Office of the

Secretary makes sure that each commissioner has roughly an equal

number of assignments, without regard to the complexity of the

matters.16 After a matter is assigned to a particular commissioner, the

Office of the Secretary will forward subsequent assignments involving

the same matter to the same commissioner.17 For example, after

compulsory process has been granted by the Commission, the

Commissioner to whom the matter is assigned typically reviews and

signs subpoenas and civil investigative demands (CIDs) recommended

by staff.

There are four exceptions to the typical rotational assignment process

at the Commission. First, certain issues go directly to the Chairman,

including matters relating to Commission personnel and management,

planning, regional offices, liaison with other government agencies,

organizational matters, procedural matters, congressional inquiries,

matters before federal or state legislative and administrative bodies, trade

13. See Evanston Nw. Healthcare Corp. & ENH Med. Group Inc., Dkt. No.

9135, 2004 FTC LEXIS 9, *1, (Feb. 10, 2004) (complaint); 2005 LEXIS

146 (Oct. 20, 2005) (initial decision).

14. FTC, Notes from an Open Commission Meeting (Sep. 15, 1983)

[hereinafter 1983 Minutes].

15. Id.

16. Id.

17. Id.