1VAC45-10 Regulations Governing Disclosure of CID (Civil Investigative Demand)

REGULATIONS

Vol. 32 Iss. 2 - September 21, 2015

TITLE 1. ADMINISTRATION

OFFICE OF THE ATTORNEY GENERAL

Chapter 10

Fast-Track Regulation

Title of Regulation: 1VAC45-10. Regulations Governing Disclosure of CID (Civil Investigative Demand)  (amending 1VAC45-10-10 through 1VAC45-10-50, 1VAC45-10-70 through 1VAC45-10-100; repealing 1VAC45-10-20).

Statutory Authority: § 59.1-9.10 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: October 21, 2015.

Effective Date: November 5, 2015.

Agency Contact: Christopher J. Pitera, Assistant Attorney General and Regulatory Coordinator, Department of Law, 900 East Main Street, Richmond, VA 23219, telephone [phone], FAX [phone], or email [e-mail].

Basis: Section 59.1-9.10 of the Code of Virginia authorizes the Attorney General to promulgate rules and regulations pertaining to civil investigative demands issued pursuant to the Virginia Antitrust Act. Sections 57-59, 59.1-201.1, and 59.1-516 of the Code of Virginia incorporate the provisions of § 59.1-9.10, thereby authorizing the Attorney General to promulgate regulations pertaining to civil investigative demands issued pursuant to the Solicitation of Contributions law, the Virginia Consumer Protection Act, and the Virginia Telephone Privacy Protection Act.

Purpose: The proposed amendments are necessary to modernize the regulation and to expand its coverage to the statutes that incorporate the Virginia Antitrust Act's civil investigative demand provision. This action will protect the welfare of citizens by giving local law-enforcement officials, who have concurrent enforcement authority under those statutes, the ability to access evidence and information obtained by the Attorney General through civil investigative demands, thus encouraging enforcement of those laws.

Rationale for Using Fast-Track Process: This action is expected to be noncontroversial because it does not directly affect the public. Its direct effect is limited to those law-enforcement authorities that represent the Commonwealth, its political subdivisions, or its public agencies that are empowered to enforce the Virginia Antitrust Act and the other statutes that incorporate its civil investigative demands provision. In addition, this action is not designed to limit those officials' access to the material the Attorney General obtains through civil investigative demands. Instead, it is designed to set up a formal, transparent process for the Attorney General to evaluate information sharing requests.

Substance: The proposed amendments do not add any new provisions. The only substantive changes brought about by the proposed amendments are (i) extending the coverage of the regulations to materials obtained through civil investigative demands issued under the Virginia Consumer Protection Act, the Virginia Telephone Privacy Protection Act, and the Solicitation of Contributions law; and (ii) requiring any requesting authority to show that it is subject to confidentiality requirements similar to those found in § 59.1-20 N of the Code of Virginia, as opposed to requiring the authority to show that it will comply with those confidentiality requirements, to better reflect the requirements of the statute.

Issues: There are no disadvantages to the public or the Commonwealth in implementing the proposed regulations. The primary advantage to the Commonwealth and the public is that the regulations will create a clear framework for information sharing with local officials, which will encourage those officials to exercise their authority to enforce those statutes.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Department of Law/Office of the Attorney General (OAG) proposes to update and amend for clarity its Regulations Governing Disclosure of CID (Civil Investigative Demand).

Result of Analysis. Benefits likely outweigh costs for these proposed regulatory changes.

Estimated Economic Impact. This regulation was promulgated in 1981 and is being updated in this action. This regulation sets procedures by which local law enforcement authorities may access case evidence and information that is in the possession of the OAG. The OAG was originally authorized by Virginia Code 59.1-9.10(M) to promulgate a regulation for civil investigative demands (CIDs) pertaining to the Virginia Antitrust Act. Several pieces of legislation have been enacted since then that incorporate the mandate for CID regulations (Virginia Code 57-59(C), 59.1-201.1, and 59.1-516 incorporate the provisions of Virginia Code 59.1-9.10, thereby authorizing the Attorney General to promulgate regulations pertaining to CIDs).

The OAG now proposes to update its regulation so that CIDs initiated pursuant to investigations under the Virginia Consumer Protection Act, Virginia Telephone Privacy Protection Act or the Solicitation of Contributions law are covered under this regulation. The OAG also proposes to amend this regulation to make it more clear that requesting local law enforcement agencies are bound to keep information given confidential with the exceptions that such material may be presented in a court of law and may be disclosed when required by the Code of Virginia or other controlling law.

No entity is likely to incur costs on account of these proposed changes. To the extent that these changes make this regulation more complete (by updating references to existing law) and more clear, readers will benefit.

Businesses and Entities Affected. The OAG reports that all local law enforcement entities that pursue CIDs will be affected by these regulatory changes.

Localities Particularly Affected. No locality will be particularly affected by this proposed regulatory action.

Projected Impact on Employment. This proposed regulation will likely have no effect on employment in the Commonwealth.

Effects on the Use and Value of Private Property. This proposed regulation will likely have no effect on the use or value of private property in the Commonwealth

Small Businesses: Costs and Other Effects. No small business is likely to incur any costs on account of the proposed regulation.

Small Businesses: Alternative Method that Minimizes Adverse Impact. No small business is likely to incur any costs on account of the proposed regulation.

Real Estate Development Costs. This proposed regulation is unlikely to affect real estate development costs.

Legal Mandate. General: The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order Number 17 (2014). Section 2.2-4007.04 requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the report should include but not be limited to:

• the projected number of businesses or other entities to whom the proposed regulation would apply,

• the identity of any localities and types of businesses or other entities particularly affected,

• the projected number of persons and employment positions to be affected,

• the projected costs to affected businesses or entities to implement or comply with the regulation, and

• the impact on the use and value of private property.

Small Businesses: If the proposed regulation will have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include:

• an identification and estimate of the number of small businesses subject to the proposed regulation,

• the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents,

• a statement of the probable effect of the proposed regulation on affected small businesses, and

• a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation.

Additionally, pursuant to § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules is notified at the time the proposed regulation is submitted to the Virginia Register of Regulations for publication. This analysis shall represent DPB's best estimate for the purposes of public review and comment on the proposed regulation.

Agency's Response to Economic Impact Analysis: The agency concurs with the economic impact analysis prepared by the Department of Planning and Budget.

Summary:

The amendments (i) extend the coverage of the chapter to materials obtained through civil investigative demands issued under the Virginia Consumer Protection Act, the Virginia Telephone Privacy Protection Act, and the Solicitation of Contributions law; (ii) require any requesting authority to establish that it is subject to confidentiality requirements similar to those in subsection N of § 59.1-9.10 of the Code of Virginia; and (iii) make stylistic and other nonsubstantive changes.

1VAC45-10-10. Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

"Law-enforcement authority" shall mean any public official, and his designees, (i) representing the Commonwealth, which includes his its political subdivisions or his and its public agencies, and (ii) empowered to bring civil actions to enforce the Commonwealth's antitrust laws regulating commerce in any manner authorized by those laws the Virginia Antitrust Act, Virginia Consumer Protection Act, Virginia Telephone Privacy Protection Act, or the Solicitation of Contributions law.

"Material" shall include, but is not limited to, names, testimony, documents or answers to interrogatories which are means any information taken, furnished, received, examined, or copied pursuant to CIDs civil investigative demands issued by the Attorney General pursuant to the Virginia Antitrust Act, the Virginia Consumer Protection Act, the Virginia Telephone Privacy Protection Act, or the Solicitation of Contributions law, including, but not limited to, names, testimony, documents, or answers to interrogatories.

"Person" shall mean any natural person, corporation, trust, partnership, proprietorship or association of any type, company, or any other legal entity.

"Solicitation of Contributions law" means Chapter 5 (§ 57-48 et seq.) of Title 57 of the Code of Virginia.

"Virginia Antitrust Act" means Chapter 1.1 (§ 59.1-9.1 et seq.) of Title 59.1 of the Code of Virginia.

"Virginia Consumer Protection Act" means Chapter 17 (§ 59.1-196 et seq.) of Title 59.1 of the Code of Virginia.

"Virginia Telephone Privacy Protection Act" means Chapter 44 (§ 59.1-510 et seq.) of Title 59 of the Code of Virginia.

1VAC45-10-20. Purpose and applicability of chapter. (Repealed.)

To provide a regular procedure for the sharing of material between the Attorney General and other law-enforcement authorities of the Commonwealth; to ensure that material furnished is maintained subject to the confidentiality requirements of § 59.1-9.10(n) of the Code of Virginia; to facilitate the investigation of antitrust violations and full enforcement of the law in exercise of the Commonwealth's police power regulating commerce; to create penalties for violation of this chapter.

1VAC45-10-30. Applicability.

This chapter shall apply to all law-enforcement authorities that request material from the Attorney General which was obtained through CIDs issued pursuant to the Virginia Antitrust Act. This chapter shall not apply to federal law-enforcement authorities.

1VAC45-10-40. Procedure for making material available.

Any law-enforcement authority may request of material from the Attorney General material obtained directly through CIDs. The request shall be in writing. The request shall state with reasonable specificity the material desired, subject matter of the investigation for which material is desired, and the specific statute police powers of the Commonwealth regulating commerce that the authority is empowered to enforce under which the investigation is being conducted. All requests shall be directed to the Attorney General and signed by the chief officer of the law-enforcement authority. All requests for material shall recite that the law-enforcement authority acknowledges that, when provided, the material shall be used exclusively as delineated by statute and by these regulations this chapter. The request for material shall further include an affirmative showing, to the satisfaction of the Attorney General, that the law-enforcement authority will comply with is subject to confidentiality requirements similar to the confidentiality requirements of § 59.1-10(n) subsection N of § 59.1-9.10 of the Code of Virginia.

1VAC45-10-50. Responses to requests for material.

Within seven days of receipt of a request for material, the Attorney General, in his discretion, shall inform the chief officer of the law-enforcement authority: (i) of his refusal to disclose any material; or (ii) that no such material exists; or (iii) that all or part of the material shall be made available, at the discretion of the Attorney General, for examination at the Office of the Attorney General; or (iv) that all or part of the material shall be made available, at the discretion of the Attorney General, for copying at the Office of the Attorney General. If option (iii) or (iv) is exercised, it shall be so exercised within 21 days of the receipt of the request.

1VAC45-10-70. Restrictions on use.

The law-enforcement authority and its custodian in receipt of material shall strictly maintain the confidentiality of CID the material. The law-enforcement authority shall use material provided pursuant to this chapter to conduct an investigation into violations of the Commonwealth's laws regulating commerce and prohibiting restraints on trade Virginia Antitrust Act, the Virginia Consumer Protection Act, the Virginia Telephone Privacy Protection Act, and the Solicitation of Contributions law or to conduct any litigation related to such violations. Nothing herein in this section shall preclude the use of the materials provided by this chapter before a court of law except as may otherwise be precluded by law.

1VAC45-10-80. Restrictions on use disclosure.

The law-enforcement authority and its custodian in receipt of materials shall not release material provided pursuant to this chapter, either directly or indirectly, to any person not employed by or assigned to the law-enforcement authority for purposes of enforcement of the antitrust laws, Virginia Antitrust Act, the Virginia Consumer Protection Act, the Virginia Telephone Privacy Act, or the Solicitation of Contributions law, nor to any other law-enforcement authority.

1VAC45-10-90. Future regulations.

The law-enforcement authority and its custodian in receipt of materials shall be bound to abide by any further regulations promulgated by the Attorney General pertaining to the safekeeping and custody of civil investigative demands such material.

1VAC45-10-100. Penalties.

In addition to the criminal penalties enumerated in the Virginia Antitrust Act, when applicable, any Any law-enforcement authority found to have used material provided by the Attorney General in a manner inconsistent with this chapter shall be required to immediately return all materials material provided, as well as copies thereof, and information derived therefrom. The Attorney General may also suspend for a definite period the law-enforcement authority from receiving materials additional material pursuant to this chapter.

VA.R. Doc. No. R16-3843; Filed August 21, 2015, 3:23 p.m.