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A Commissioner shall be disqualified only when there is a clear and convincing showing that the agency member has an unalterably closed mind on matters critical to the disposition of the proceeding. The "clear and convincing" test is necessary to rebut the presumption of administrative regularity. The "unalterably closed mind" test is necessary to permit rulemakers to carry out their proper policy-based functions while disqualifying those unable to consider meaningfully a § 18 hearing under § 18 of the Magnuson-Moss Warranty Federal Trade Commission Improvement Act of 1975.
In 1978, the Federal Trade Commission (FTC) issued a Notice of Proposed Rulemaking that suggested restrictions regarding television advertising directed toward children. Subsequently, the Association of National Advertisers, Inc., the American Association of Advertising Agencies, the American Advertising Federation, and the Toy Manufacturers of America, Inc. (collectively, plaintiffs) petitioned FTC Chairman Michael Pertschuk to recuse himself from participation in the children's advertising inquiry because of a speech delivered by the chairman prior to the proceeding. The district court, relying on Cinderella Career & Finishing Schools, Inc. v. FTC, 138 U.S.App.D.C. 152, 425 F.2d 583 (D.C.Cir.1970), found that Chairman Pertschuk had prejudged issues involved in the rulemaking and ordered him disqualified. The FTC sought review of the decision.
Was it proper to disqualify the Chairman on the basis of the standard set forth in Cinderella Career & Finishing Schools, Inc. v. FTC?
On appeal, the court reversed, holding that the Cinderella standard was not applicable, as this was a rulemaking proceeding. According to the court, an agency member may be disqualified from such a proceeding only when there was a clear and convincing showing that he has an unalterably closed mind on matters critical to the disposition of the rulemaking. In this case, plaintiffs failed to demonstrate the requisite prejudgment.