[Federal Register Volume 60, Number 227 (Monday, November 27, 1995)]
[Proposed Rules]
[Pages 58282-58297]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28508]
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SMALL BUSINESS ADMINISTRATION
13 CFR Parts 132 and 134
Rules of Procedure Governing Cases Before the Office of Hearings
and Appeals
AGENCY: Small Business Administration.
ACTION: Proposed rule.
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SUMMARY: In response to President Clinton's government-wide regulatory
reform initiative, the Small Business Administration (SBA) has
completed a page-by-page, line-by-line review of all of its existing
regulations to determine which might be revised or eliminated. The
regulations proposed here would reorganize all but one of the
regulations pertaining to procedures before the Office of Hearings and
Appeals (``OHA'') and consolidate them in one part. In addition, the
proposed regulations would clarify, simplify, and significantly shorten
the existing regulations governing OHA. Finally, a number of
substantive changes are proposed.
DATES: Comments must be submitted on or before December 27, 1995.
ADDRESSES: Written comments should be addressed to David R. Kohler,
Regulatory Reform Team Leader, Attention: Part 134, U.S. Small Business
Administration, 409 3rd Street, S.W., Suite 13, Washington, D.C. 20416.
FOR FURTHER INFORMATION CONTACT: Gary Fox, Chief Counsel for Special
Litigation, at (202) 205-6643.
SUPPLEMENTARY INFORMATION: On March 4, 1995, President Clinton issued a
memorandum to Federal agencies, directing them to simplify their
regulations. In response to this directive, SBA has completed a page-
by-page, line-by-line review of all of its existing regulations to
determine which might be revised or eliminated. This proposed rule
would consolidate all the existing regulations governing proceedings
before OHA into part 134 with the exception of proceedings under the
Program Fraud Civil Remedies Act, which would be covered in part 142 of
this chapter. It would also clarify, simplify and revise the current
rules, reorganize sections for ease of use, and eliminate unnecessary
provisions.
As background, the following analysis discusses the anticipated
effect of this proposed rule on SBA's current regulations.
The proposed rule would be divided into four subparts. Subpart A
would contain general rules (currently subpart A). Subpart B (currently
subpart B and Secs. 124.210 and 124.211 (d) through (i)) would contain
rules of practice applicable to all cases before OHA except size and
SIC code appeals and proceedings under the Program Fraud Civil Remedies
Act. Subpart C would contain the rules applicable to size and SIC code
appeals (currently Secs. 121.1701-1722). Subpart D would contain the
rules for implementation of the Equal Access to Justice Act, currently
contained in part 132. Proceedings covered by the Program Fraud Civil
Remedies Act would continue to be contained in part 142 of this
chapter.
A number of policy changes are also proposed. OHA's jurisdiction
would be expanded to include cases brought under the Age Discrimination
Act. At the same time, its jurisdiction would be narrowed to exclude
contractor debarment and suspension proceedings, employee formal stage
grievances,
[[Page 58283]]
arbitrations concerning labor agreements, and certain civil rights
cases.
The service and filing requirements would be simplified
considerably. Certification requirements and format requirements would
be eliminated. The requirement that submissions be filed and served by
certified or registered mail would be deleted, and the time limits for
filing petitions and answers would be simplified and made uniform for
all types of proceedings to the extent possible. In addition, the
reviewing official on requests for review of all initial OHA decisions
would be SBA's Administrator or his or her designee.
The proposed rule would expand the rights of parties in a number of
ways. The rule would stay the time to answer a petition when a motion
for summary decision is filed. The section on intervention would be
broadened. The use of alternative dispute resolution procedures would
be authorized where all parties consented. Finally, a number of time
limits would be enlarged for the benefit of the public.
The proposed rule would also modify the rights of parties in a
number of respects in the interests of efficiency and uniformity, and
to conserve limited resources. For proceedings other than size and SIC
code appeals, an oral hearing would not be granted unless there was a
genuine dispute as to a material fact that could not be resolved except
by the taking of testimony and the confrontation of witnesses. Oral
hearings would not be permitted at all in SIC code appeals, and would
be permitted in size appeals only under extraordinary circumstances.
Discovery would be permitted in cases other than size, SIC code, and
certain MED appeals only where a showing of good cause was made. No
discovery would be permitted in size or SIC code appeals, and limited
discovery would be permitted in certain MED appeals. There would no
longer be an absolute right to review by OHA of a size determination.
Instead, OHA would decide in its discretion whether to consider the
appeal. Evidence would not be admitted in size appeals unless directed
by the Judge. A size determination by an Area Office would be upheld
unless the Judge found clear error of fact or law. Finally, the right
to file motions for reconsideration of a Judge's decision in size and
SIC code cases would be eliminated.
Subpart D would be reorganized, condensed, and rewritten in plain
language. The text would be presented in a question and answer format
for clarity and ease of use. Minimal substantive changes are proposed
to clarify existing ambiguities and eliminate obsolete directions or
references.
Section-by-Section Analysis
The following is a section by section analysis of each provision of
SBA's regulations that would be affected by this proposed rule:
Proposed Sec. 134.101 would provide that the rules in this part
would govern the conduct of cases before OHA.
Proposed Sec. 134.102 would provide definitions applicable to all
subparts within part 134. Many of the definitions in current Sec. 134.2
would be shortened and simplified. Some definitions would be deleted as
unnecessary; others would be added with the incorporation of portions
of parts 121 and 124 into part 134. Minor language changes would also
be made. The definition of ``hearing'' would clarify that a hearing may
or may not include live testimony or argument. The definition of
``Judge'' would be expanded to include the Assistant Administrator for
Hearings and Appeals (``AA/OHA'') when acting in the capacity of an
Administrative Judge. The definition of ``pleading'' would be narrowed
to include only the petition, appeal, answer, or any supplement or
amendment to these documents. The current rule defines ``pleading'' to
include all submissions other than documentary or testimonial evidence.
Proposed Sec. 134.103 would list proceedings over which OHA has
jurisdiction and would amend current Sec. 134.3. Paragraph (a) of the
current rule would be deleted because contractor debarment and
suspension proceedings can be more appropriately handled by the program
office.
Current Sec. 134.3(d) would be amended to delete all proceedings
except those under the Rehabilitation Act of 1973 (29 U.S.C. Sec. 794,
as amended). Proceedings under the Age Discrimination Act (42 U.S.C.
Secs. 6101 et seq.) would be added. The remainder of the proceedings in
current Sec. 134.3(d) can be more appropriately conducted in other
forums.
Current Secs. 134.3(e) and (f) would be deleted. Thus, employee
formal stage grievances and arbitrations arising under a pertinent
labor agreement no longer would be under OHA's jurisdiction.
Proceedings to determine allowance of fees and expenses under the
Equal Access to Justice Act (5 U.S.C. Sec. 504), size and SIC code
appeals, and proceedings pursuant to the Program Fraud Civil Remedies
Act against persons who make false claims or statements would be added
to the jurisdictional section.
Section 134.104 would restate in clear language the statutory limit
on OHA's jurisdiction over certain types of MED appeals. Those
limitations are currently set forth in Sec. 124.210(d).
Proposed Sec. 134.105 would restate in clear language the rules for
computing time (current Sec. 134.2(b)(2)) and modifying time limits
(current Sec. 134.4(a)). Paragraph (b) of current Sec. 134.4 would be
deleted.
Proposed Sec. 134.201 would explain the scope of subpart B. Subpart
B would cover all cases over which OHA has jurisdiction, except appeals
from size determinations and SIC code designations, which would be
covered in subpart C, and proceedings under the Program Fraud Civil
Remedies Act, which would be covered in part 142.
Proposed Sec. 134.202 would explain how to commence a case, and
would provide revised time limits for filing petitions for various
types of proceedings. The current regulation contains seven different
rules pertaining to time limits for filing petitions, depending on the
type of case. The proposed rule would provide that, with two
exceptions, all petitions must be filed no later than 45 days from the
date of service of the SBA action or determination to which the
petition relates.
Proposed Sec. 134.203 would specify the information required in a
petition and provide that insufficient petitions may be dismissed. It
would also incorporate the rules for filing petitions in certain MED
appeals currently contained in Sec. 124.210(b).
Proposed Sec. 134.204 would amend the current rule on service and
filing (Sec. 134.14). It would delete the requirement that multiple
copies of pleadings be filed, and would add a provision permitting
service and filing by facsimile transmission, United States express
mail, or commercial delivery service. It is intended that ``commercial
delivery service'' includes overnight or other expedited delivery by
private business concerns. In cases where the filing is sent by first-
class United States mail, it would change the date of filing with OHA
from date of receipt to date of mailing, as determined by the postmark.
It would also provide that in cases where the postmark is illegible or
incomplete, the submission would be presumed to have been mailed five
days prior to receipt. Finally, it would add a requirement that any
filing by personal delivery or commercial delivery service must be made
between the hours of 8:30 AM and 5:00 PM.
Current Sec. 134.14(d), on waiver of rights to service, and current
Sec. 134.15, on format requirements, would be
[[Page 58284]]
deleted, as would the requirement that a certification be made as to
the truth and accuracy of a filing. Under proposed Sec. 134.209(b), a
person's signature on a document would represent an express
certification.
Proposed Sec. 134.205 (currently Sec. 134.11(c)) would be written
in simpler language. The time limit for serving and filing a motion for
a more definite statement would be increased from 15 to 20 days after
service of a petition or order to show cause, so as to allow sufficient
time in light of proposed Sec. 134.204(e) pertaining to service. The
rule would clarify that, where a motion for a more definite statement
is filed, the Judge would establish the time for serving and filing an
answer.
Proposed Sec. 134.206, on answers, corresponds to Sec. 134.12 of
the current regulation. The current rule provides that answers for some
types of cases must be filed within 30 days and others within 45 days
after the filing of a petition. The proposed rule would provide that
all answers must be filed no later than 45 days after the service of a
petition, with the exception of debt collection proceedings for which a
30-day time limit would apply. The provision on notification to the
Office of General Counsel of the docketing of a case would be deleted
because it is an internal administrative procedure. Paragraph (d) of
the current rule would be deleted. Proposed paragraphs (d) and (e)
would clarify that SBA must submit the administrative record to OHA,
and that the Judge can direct its compliance if necessary.
Proposed Sec. 134.207, on amendments and supplemental pleadings,
would not change the current rule substantially other than to simplify,
shorten and reorganize it. It would limit the filing of amendments and
supplements to pleadings in certain MED appeals to cases where a
showing of good cause is made, with the Judge determining the time to
answer. Current Sec. 134.13(b), on conformance to evidence, would be
deleted.
Proposed Sec. 134.208, concerning representation in cases before
OHA, would shorten the current section on appearances. Paragraphs (b)
and (e) of current Sec. 134.16 would be deleted as unnecessary
practices. Paragraph (d) would also be eliminated since attorneys are
presumed to know the ethical standards under which they must practice.
Proposed Sec. 134.209 would adopt the signature requirements found
elsewhere in the current rule, and would provide that the signing of a
submission by a party or its counsel attests that the submission is
true and is not being filed for delay or harassment. This provision
would replace the requirement in current Sec. 134.15 requiring a
separate, express certification.
Proposed Sec. 134.210, on intervention, would eliminate the
distinction between intervention as of right and discretionary
intervention, and would broaden and simplify the current rule by adding
a provision permitting intervention at the Judge's discretion to
protect the moving party's interests. The proposed rule would provide
SBA a right to intervene at any time until final decision.
Proposed Sec. 134.211 would state in summary form the requirements
of motion practice. Paragraph (d) of the current rule relating to the
disposition of motions when the assigned Judge is unavailable would be
deleted. The response time in the proposed rule would be enlarged to 20
days after the service of a motion to allow sufficient time in light of
proposed Sec. 134.204(e) pertaining to service.
Proposed Sec. 134.212 would summarize the current provision on
summary decision (current Sec. 134.22) with some minor revisions.
Current paragraph (d) relating to the content of the Judge's order when
a motion is granted would be deleted. A new paragraph (d) would be
added to stay the response time for filing an answer when a motion for
summary decision has been filed, and to provide that the Judge would
determine the response time for answering any claims remaining after a
decision on the motion is rendered.
Proposed Sec. 134.213 would require the establishment of good cause
as a prerequisite to discovery in non-MED matters. Current
Sec. 124.210(h)(3)(i), governing discovery in certain MED program
appeals, would be incorporated in this proposed rule. Current
Sec. 134.18(c), Protective orders, and current Sec. 134.26, Motions to
compel, would be summarized and incorporated in the proposed rule on
discovery.
Proposed Sec. 134.214, on subpoenas, would modify the current rule
with respect to both application requirements and service. While the
current rule permits a party to apply for a subpoena both orally on the
record and ex parte by written application, the proposed rule would
limit all subpoena requests to written applications. Service in the
proposed rule would be limited to personal delivery only, eliminating
service by certified mail. The proposed rule would require the subpoena
and the affidavit of service to be filed with OHA within two days of
service. The time for response to a motion to quash would be enlarged
in the proposed rule. Finally, the rule would clarify that a Judge can
issue a subpoena on his or her own initiative.
Proposed Sec. 134.215 would simplify the current procedure for
interlocutory appeals by designating the AA/OHA or his or her designee
as the reviewing official for purposes of all interlocutory appeals.
The time for filing a motion to certify a ruling for an interlocutory
appeal would be enlarged. The proposed rule also would make it clear
that if the Judge declined to certify a ruling for interlocutory
appeal, the affected party would be able to raise the adverse ruling in
a subsequent request for review under Sec. 134.228.
Proposed Sec. 134.216 is new. This provision would permit the use
of alternative dispute resolution techniques, such as arbitration and
mediation, to resolve cases before OHA and would provide that, when
such procedures are employed, the Judge would stay the proceedings
before OHA as appropriate.
Proposed Sec. 134.217 would shorten the current rule on settlements
considerably. Cumulative information would be deleted and the
requirements concerning the content of the agreement would be
eliminated. The proposed rule would allow for partial settlements by
eliminating paragraph (5) of the current rule. The remainder of the
rule, while reorganized, would not be substantially revised.
Proposed Sec. 134.218 would both shorten and modify current
Sec. 134.18 on Judges. It would require that an Administrative Law
Judge be assigned to all proceedings under the Administrative Procedure
Act. It would clarify that the AA/OHA could assign any other proceeding
to himself or herself, provided that he or she is a duly licensed
attorney. The duties and powers of the Judge would be stated broadly,
clarifying that they can take such action as may be required to
regulate proceedings and issue decisions. The proposed rule would
eliminate paragraph (c) because protective orders are covered in
proposed Sec. 134.204(g), Service and filing requirements, and in
Sec. 134.213(d), Discovery. The proposed rule would also eliminate
paragraph (e) on interference, which would be covered in proposed
Sec. 134.220, Prohibition against ex parte communications. The current
paragraph on recusal would be rewritten in summary form. Paragraph (f),
Substitution of Judges, would be eliminated because OHA's substitution
procedures are consistent with court practice.
Proposed Sec. 134.219 would modify the current rule on sanctions to
clarify the type of conduct for which sanctions
[[Page 58285]]
might be imposed and to clarify that no sanctions imposing fees, costs,
or monetary penalties can be ordered by the Judge. The rest of the rule
would be more broadly stated, but its scope would not be substantively
expanded.
Proposed Sec. 134.220 would adopt the summary language of
Sec. 121.1715, now deleted, which also deals with the topic of ex parte
communications. Rather than list the duties and obligations of a Judge
as in current Sec. 134.38, the proposed rule would incorporate by
reference the Administrative Procedure Act, 5 U.S.C. Sec. 557(d)(1).
This statute contains explicit instructions for Judges who have been
contacted ex parte. The proposed rule would reiterate current
Sec. 134.38 in emphasizing that prohibited communications may result in
the imposition of sanctions.
Proposed Sec. 134.221 would be shortened and rewritten in summary
format instead of listing possible matters to be considered in a
prehearing conference.
Proposed Sec. 134.222, on oral hearings, would restate in clear
language the intention of the current rule to leave oral hearings to
judicial discretion. In the proposed rule, the Judge could permit an
oral hearing in a non-MED matter only if he or she concluded that
confrontation of witnesses was necessary to resolve a genuine dispute
as to a material fact. The proposed rule would eliminate the provision
in current Sec. 134.19(a) restricting the time period within which a
motion requesting an oral hearing may be submitted. However, current
Sec. 124.210(h)(3), which restricts the ability to request an oral
hearing in certain MED program appeals, would be incorporated in
Sec. 134.222. Section 124.210(g) would also be modified and
incorporated in this proposed rule. Selection of the location for all
oral hearings would be committed to judicial discretion. Current
Secs. 124.211(e) and 124.211(h), relating to hearings on MED
suspensions, would be incorporated in this part and expanded to provide
that, for good cause, a Judge may waive the requirement that an oral
hearing commence no more than 20 days after the ruling granting such
hearing. Current paragraphs (c) and (d) of Sec. 134.19, which track
common federal court practices, would be eliminated, and current
paragraphs (e)-(g) would be summarized for brevity's sake.
Proposed Sec. 134.223, on evidence, would clarify OHA's use of the
Federal Rules of Evidence as a general guide in its proceedings.
Accordingly, paragraphs (b), (c), (d), (e), (f), and (g) of the current
rule would be eliminated or shortened both for the sake of brevity, and
because these paragraphs track the federal rules. Current
Sec. 124.210(h)(1) would be revised and incorporated in paragraph (c)
and in proposed Sec. 134.224, Standards for decision. Current
Sec. 124.210(h)(3)(i) would be reorganized for clarity and moved to
this section, insofar as it relates to the submission of evidence, and
to Sec. 134.211(b), insofar as it relates to discovery. Section
124.210(h)(2) would also be incorporated in paragraph (d) of the
proposed rule, clarifying that the Judge would retain jurisdiction
during any remand.
Proposed Sec. 134.224, on standards for decision, would set forth
the burden of proof in factual matters arising in cases before OHA.
This language is currently set forth in Sec. 134.31, Contents of
decisions. It would also incorporate current Sec. 124.210(h)(1), which
provides the standard of review in cases involving MED program appeals.
The scope of review would not change from the current rule.
Proposed Sec. 134.225, dealing with the record, would be shortened
considerably. The proposed rule would refer to the ``record'', instead
of the ``docket file'', which would comport with the terminology used
in the Administrative Procedure Act. Information relating to the
internal administration of OHA would be deleted. The proposed rule
would incorporate portions of current Sec. 134.31, which would be
deleted in its entirety. The remaining sections of the current rule on
records would be eliminated or summarized for the sake of brevity.
Proposed Sec. 134.226 would require that all decisions pertaining
to the collection of debt owed to SBA and the United States under the
Debt Collection Act of 1982 and part 140 of this chapter, must be
rendered within 60 days after a petition is filed. Further it would
incorporate, without modification, Sec. 124.210(j), relating to
decisions in certain MED proceedings, and would amend current
Sec. 124.211(i) to eliminate the requirement that a decision be
rendered at the close of a suspension hearing, where one is held. It
would also adopt the remaining portions of Sec. 134.31, Contents of
decisions.
Proposed Sec. 134.227, on finality of decisions, would be rewritten
to reflect the jurisdictional changes in Sec. 134.103. Since OHA would
no longer have jurisdiction over employee formal stage grievances or
arbitrations involving labor agreements, current paragraphs
134.31(a)(1) and (a)(2) would be deleted. Paragraph (b) would be
rewritten consistent with the jurisdictional changes in proposed
Sec. 134.103. Because OHA would no longer have jurisdiction in
contractor debarment and suspension proceedings, former paragraph (c)
would also be eliminated. The remaining portions of paragraphs (a) and
(b) would be rewritten for clarity.
Proposed Sec. 134.228, on review of initial decisions, is based
upon current Sec. 134.34, but would permit the filing of a request for
review directly with OHA. The term ``agency reviewing official'' would
be eliminated. Upon a request for review, SBA's Administrator or his or
her designee would review the initial decision and could set aside a
decision if it were found to be based upon an erroneous finding of fact
or an erroneous interpretation of case law, statute, regulation, or SBA
policy. Time frames for filing a response to a petition for review
would be enlarged.
Proposed Sec. 134.229 would be rewritten for clarity.
Proposed Sec. 134.301 would define the scope of subpart C. Subpart
C would cover the rules on appeals from size determinations and SIC
code designations currently found in Secs. 121.1701 et seq. It would
shorten and simplify current Sec. 121.1701, deleting any reference to
Regional Offices since authority to make size determinations has been
transferred from Regional Offices to Government Contracting Area
Offices.
Proposed Sec. 134.302 corresponds to current Sec. 121.1703 and
would specify who may appeal a size determination or SIC code
designation. This section would delete the reference to the Regional
Administrator (since Regional Offices are no longer involved in size
determinations), and clarify that the procuring agency contracting
officer responsible for the relevant procurement has an appeal right.
Proposed Sec. 134.303 would incorporate a policy decision to make
the review of size appeals by OHA a matter of its discretion. This
change would conserve limited resources and avoid the necessity of
deciding cases where the regulation or case precedent is clear.
Proposed Sec. 134.304 would specify the time limits for appeal,
simplifying the current rule considerably. Time limits for appealing
size determinations would now run from the date of service of the
determination rather than from the date of receipt. The time periods
for filing would be lengthened for certain types of appeals and
shortened for others. Time limits for appeals from SIC code
designations would run from the date the solicitation is issued. The
current time limits for appeals of SIC code designations run backwards
from the bid opening date or deadline for submitting proposals or
quotations and are complex and difficult to use. The
[[Page 58286]]
rule on counting Saturdays, Sundays and holidays would be amended to
conform to the rule for other OHA proceedings and would be incorporated
in Sec. 134.105. The remainder of the current section would be
reorganized, but not substantively changed.
Proposed Sec. 134.305 concerning the appeal petition would simplify
current Sec. 121.1706. A telefaxed notice would no longer need to be
confirmed by next day mailing of a written notice. A signed
certification as to the truth and accuracy of the appeal petition would
no longer be required. In size appeals, the appellant would no longer
be required to serve a copy of the appeal petition on all alleged
affiliates of the concern whose size is at issue. The requirement would
provide separate requirements for service of an SIC code appeal
petition as opposed to a size appeal petition. A provision would be
added clarifying that appeals may be dismissed if they do not contain
all the required information.
Proposed Sec. 134.306 would restate current Sec. 121.1706(b)
concerning transmission of the case file from the office that made the
size determination to OHA.
Proposed Sec. 134.307 would incorporate by reference proposed
Sec. 134.204. The rule for service and filing of submissions for size
and SIC code appeals would be the same as that for filing petitions
under subpart B, with the rule in subpart B incorporated by reference.
The requirement in the current rule (Sec. 121.1712) that service be
made by certified or registered mail would be deleted to ease the
burden on the public. The current requirement that an express
certification be made as to the truth and accuracy of any submission to
OHA would be deleted. Under proposed Sec. 134.209 (incorporated by
reference), any person signing a document attests to its truth and
accuracy. Proposed Sec. 134.307 would incorporate by reference a rule
on determining the date of service or filing. Proposed Sec. 134.105
would incorporate the rule on modification of time limits in current
Sec. 121.1712(e).
Proposed Sec. 134.308 is new and would provide that evidence not
presented to the SBA official whose size determination is being
appealed would only be considered when ordered by the Judge. A new
provision would also be added to provide that the Judge could draw
adverse inferences against parties who do not submit evidence in their
possession when directed to do so.
Proposed Sec. 134.309, concerning responses to the appeal petition,
corresponds to current Sec. 121.1708. It would be reorganized for
clarity, would enlarge the time to file a response to an appeal from 5
to 10 days, and would clarify that replies to responses would not be
permitted unless directed by the Judge.
Proposed Sec. 134.310 on discovery would incorporate the current
policy of OHA not to permit discovery in either size or SIC code
proceedings.
Proposed Sec. 134.311 would provide that oral hearings not be held
in SIC code appeals, and be held in size appeals only under exceptional
circumstances. In SIC code cases, short time frames make the use of
oral hearings impracticable. Moreover, there is rarely a need to
confront witnesses in an SIC code appeal. Under exceptional
circumstances, oral hearings may be appropriate in size determination
appeals. In such instances, the proceedings would be conducted in
accordance with those rules in subpart B deemed appropriate by the
Judge.
Proposed Sec. 134.312 would incorporate by reference certain
paragraphs in Sec. 134.223 for cases where evidence is admitted. There
is no separate rule on evidence in the current regulations relating to
appeals from size determinations and SIC code designations.
Proposed Sec. 134.313 would incorporate by reference certain other
provisions in subpart B. The rules for amendments to pleadings,
representation, signature, intervention, motions, subpoenas, Judges,
sanctions, and the prohibition against ex parte communications, would
be identical to those for other proceedings before OHA. For the sake of
brevity and simplicity, these sections would be incorporated by
reference in subpart C rather than repeated verbatim.
The proposed rule on amendments to pleadings does not appear in the
current rule and would permit parties to amend pleadings if permitted
by the Judge. The proposed rule on representations does not appear in
the current rules and would limit the types of persons who could
represent parties in proceedings before OHA. The current rule on
intervention (Sec. 121.1709) would be broadened to permit OHA to allow
an interested person to intervene if the Judge determines that the
person's participation in the proceedings would likely assist in the
efficient, prompt, and fair determination of the case. The proposed
rule on signatures would include a provision that by signing a
submission a person attests to its truth and accuracy. This would
replace the requirement in current Sec. 121.1712(d) that an express
certification be made as to the truth and accuracy of a document. The
proposed section on motions is new and would clarify what is required
when filing a motion in these proceedings. The section on Judges would
be shortened considerably. The current rule on Judges (Sec. 121.1713)
lists all the various powers of a Judge in OHA. The proposed rule would
state the duties and powers of the Judge in broad terms. The current
section on ex parte communications (Sec. 121.1715) would not be
substantially changed except that the Administrative Procedure Act
would be cited with regard to a Judge's duty to disclose ex parte
communications. The provision on sanctions (current Sec. 121.1713(p))
would be shortened, and the list of the types of sanctions that could
be imposed would be deleted.
Proposed Sec. 134.314 would provide that the standard of review in
size and SIC code appeals would be whether the determination was based
on clear error of law or fact. In cases where new evidence was
submitted, it is recognized that clear error of law or fact could be
found as a result of such new evidence.
Proposed Sec. 134.315, concerning the record, would incorporate by
reference certain paragraphs in Sec. 134.225, and would add a sentence
providing that the contents of the record would also include the file
submitted to OHA by the Area Office and any materials submitted by the
contracting officer.
Proposed Sec. 134.316, on the decision, corresponds to current
Sec. 121.1720. The current rule would be shortened considerably.
References to hearings and post-hearing procedures would be eliminated.
The statement concerning oral notification of the ultimate
determination would be eliminated. Judges may provide oral notice of
the decision as a matter of practice under their powers as Judges.
Proposed Sec. 134.317 is new and would clarify that OHA's
jurisdiction would terminate upon the issuance of the decision.
Proposed Sec. 134.318 would inform the public that the case file
would be returned to the transmitting Area Office upon termination of
OHA's jurisdiction.
A number of sections in the current rules would be deleted or
incorporated elsewhere. The definitions in current Sec. 121.1702 would
be incorporated in proposed Sec. 134.102, the definitional section for
all of part 134. Current Sec. 121.1704 would be incorporated in
proposed Sec. 134.204 on service and filing requirements. Current
Sec. 121.1710 would be substantially incorporated in proposed
Sec. 134.225. Current Sec. 121.1711 would be deleted since the
assignment of a Judge is an internal administrative procedure. The
right to request reconsideration in current Sec. 121.1712 would be
eliminated in order to streamline the appellate process.
[[Page 58287]]
Current Sec. 121.1716, on subpoenas, would be deleted since proposed
Sec. 134.313 would incorporate by reference proposed Sec. 134.214.
Current Sec. 121.1717, concerning in camera orders, would be deleted
since proposed Sec. 134.307 would incorporate by reference proposed
Sec. 134.204(g), and proposed Sec. 134.315 would incorporate by
reference proposed Sec. 134.225(b). Current Sec. 121.1719, concerning
post-hearing procedures, would be eliminated since oral hearings would
no longer be held in SIC code appeals, and only rarely in size appeals.
Current Sec. 121.1722, concerning the delegation of authority when a
Judge is not available, would be deleted since it is an internal
procedure and is a matter of general practice in administrative and
judicial forums.
Proposed Sec. 134.401 corresponds to existing Sec. 132.101. There
are no substantive changes in the proposed section. This section, and
the sections which follow, are organized in question and answer format
to make the information more accessible.
Current Sec. 132.102 which discusses the sunset of the Equal Access
to Justice Act (the ``Act'') would be deleted because Public Law 99-80
enacted August 5, 1984 reauthorized the Act.
Proposed Sec. 134.402 describes generally the types of proceedings
under which you may apply for reimbursement. This proposed section
corresponds to current Secs. 132.101, 132.103, and 132.105.
Proposed Sec. 134.403 corresponds to existing Sec. 132.103. The
proposed section defines which types of proceedings conducted by OHA
are ``agency adversary adjudications'' covered by the Act. The proposed
section would revise the current section to be consistent with
Sec. 134.103 in subpart A of this rule, which lists the types of
proceedings in which OHA has jurisdiction. Note that only a few
categories of OHA proceedings qualify as ``agency adversary
adjudications'': proceedings concerning the revocation or suspension of
SBIC licensees, cease and desist orders, and the removal or suspension
of SBIC directors and officers; proceedings under the Debt Collection
Act of 1982; and MED eligibility appeals relating to admission,
termination, graduation, and waiver denials under Sec. 124.317.
Proposed Sec. 134.404 is new. It describes generally the type of
benefits you may claim.
Proposed Sec. 134.405 corresponds to existing Sec. 132.105. The
material is revised in the proposed rule to provide clarification of
certain terms used in the current section, such as ``position of the
agency''. The proposed section would incorporate the clarified
definition added to the Act in the 1984 amendment at 5 U.S.C.
Sec. 504(b)(1)(E) and in the amended Model Rule at 1 C.F.R.
Sec. 315.105(a). The definition now includes the position taken by the
agency in the administrative proceeding, as well as the agency's
position in the underlying action which triggered the administrative
proceeding. The proposed section would also provide that although no
presumption arises that SBA's position was not substantially justified
simply because it did not prevail in a proceeding, nonetheless, upon
the assertion that the position of SBA was not substantially justified,
SBA would be required to establish that its position was reasonable in
fact and law.
Proposed Sec. 134.406(a) clarifies the definition of eligible party
found in current Sec. 132.104. The current section does not define
``party'' but instead refers to the definition in 5 U.S.C. Sec. 551(3).
This reference is confusing because the definition of ``party'' in that
statute could include federal agencies. Federal agencies are not
parties eligible for reimbursement under the Act. The proposed new
section actually defines an eligible party in a manner consistent with
the Act. Proposed Sec. 134.406(b) corresponds to existing
Sec. 132.104(h).
Proposed Sec. 134.407 corresponds to existing Secs. 132.104(b),
(c), (d) and (e), which describe eligibility criteria. The proposed
section summarizes the material on eligibility in the form of a chart
and revises it to reflect the amendment to the Act which increased the
net worth eligibility ceiling.
Proposed Sec. 134.408 corresponds to existing subsections
132.104(f) and (g). The reorganized material summarizes all the special
rules for calculating eligibility in one section.
Proposed Sec. 134.409 describes the difference between fee and
expense.
Proposed Sec. 134.410 describes the limitations on reimbursement of
professional fees and expenses found in current Secs. 132.201 and
132.202. That portion of the proposed section pertaining to fees
presents the information in more succinct form, but does not
substantively revise it. That portion of the proposed section relating
to expenses revises the current rule so that it will be consistent with
the proposed rule relating to fees. The current section would not
otherwise be substantively revised.
Proposed Sec. 134.411 corresponds to existing Sec. 132.301. The
proposed section reorganizes material relating to applications and
conforms the service and filing requirements to the requirements of
Sec. 134.204. The lengthy requirements of the current section would be
revised and summarized for ease of reference. A chart would be added to
clarify what each type of party must attach as exhibits to the
petition.
Proposed Sec. 134.412 corresponds to existing Sec. 132.302. The
proposed section reorganizes material relating to net worth exhibits
and presents it in simplified form. The text is significantly
condensed. Redundant information is deleted.
Proposed Sec. 134.413 corresponds to existing Sec. 132.303. The
proposed section sets forth the requirements of the current rule in a
clearer format for ease of reference. Additional specificity is
provided in the proposed section respecting the submission of
statements or invoices for expenses. This language was added so that
the requirements for expense invoices would be consistent with the
requirements for fee statements.
Proposed Sec. 134.414 corresponds to existing Secs. 132.301 and
132.402. The proposed section reorganizes material relating to the
filing deadline of applications. The proposed section also effectuates
the stay language in the Act, at 5 U.S.C. Sec. 504(a)(2), which
provides for a stay of award requests if the SBA or another party
appeals the underlying decision. The Act requires award requests to be
stayed until a final unreviewable decision is rendered in the
underlying adjudication. This information is not contained in the
current SBA regulations although it is both in the Act and in the Model
Rule for Implementation of the Equal Access to Justice Act at 1 CFR
Sec. 315.204.
Proposed Sec. 134.415 incorporates the procedural requirements of
subpart B by reference.
Proposed Sec. 134.416 corresponds to existing Secs. 132.402(a) and
132.403. The proposed section reorganizes the material relating to the
ALJ's decision. The current text would be condensed and summarized in
the proposed rule, but not otherwise revised.
Proposed Sec. 134.417 corresponds to existing Sec. 132.404. The
proposed section clarifies the avenues available to an applicant to
seek review of an ALJ's decision on an award, and the time frames which
must be observed. The proposed section adds new language to current
Sec. 134.404 as to what type of SBA decision is a ``determination''
under the Act for purposes of judicial review.
Proposed Sec. 134.418 corresponds to existing Sec. 132.501. The
proposed section would add the SBA's address for Financial Operations
to expedite payment of awards but would not otherwise revise the
section.
[[Page 58288]]
Compliance With Executive Orders 12612, 12778, and 12866, the
Regulatory Flexibility Act (5 U.S.C. Secs. 601, et seq.), and the
Paperwork Reduction Act (44 U.S.C. Ch. 35)
SBA certifies that this proposed rule would not have a significant
economic impact on a substantial number of small entities within the
meaning of Executive Order 12866 or the Regulatory Flexibility Act, 5
U.S.C. Secs. 601 et seq. This rule would reorganize and simplify the
rules governing procedures before SBA's Office of Hearings and Appeals.
Contracting opportunities and financial assistance for small business
would not be affected by this proposed rule. Therefore, it is not
likely to have an annual economic effect of $100 million or more,
result in a major increase in costs or prices, or have a significant
adverse effect on competition or the United States economy.
For purposes of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA
certifies that this proposed rule, if adopted in final form, would
contain no new reporting or record keeping requirements.
For purposes of Executive Order 12612, SBA certifies that this rule
would not have any federalism implications warranting the preparation
of a Federalism Assessment.
For purposes of Executive Order 12778, SBA certifies that this rule
is drafted, to the extent practicable, in accordance with the standards
set forth in section 2 of that Order.
List of Subjects
13 CFR Part 132,
Claims, Equal Access to Justice, Lawyers.
13 CFR Part 134
Administrative practice and procedure, Organization and functions
(Government agencies).
For the above reasons, and under the authority of 15 U.S.C.
634(b)(6), SBA proposes to amend 13 CFR Chapter I as follows:
1. Part 134 would be revised to read as follows:
PART 134--RULES OF PROCEDURE GOVERNING CASES BEFORE THE OFFICE OF
HEARINGS AND APPEALS
Subpart A--General Rules
Sec.
134.101 Scope of the rules in this part 134.
134.102 Definitions used in this part 134.
134.103 Jurisdiction of OHA.
134.104 Limitation on the jurisdiction of OHA.
134.105 Rules applicable to time periods provided in this part 134.
Subpart B--Rules of Practice for Most Cases
134.201 Scope of the rules in subpart B.
134.202 Commencement of cases.
134.203 The petition.
134.204 Service and filing requirements.
134.205 Motion for a more definite statement.
134.206 The answer.
134.207 Amendments and supplemental pleadings.
134.208 Representation in cases before OHA.
134.209 Requirement of signature.
134.210 Intervention.
134.211 Motions.
134.212 Summary decision.
134.213 Discovery.
134.214 Subpoenas.
134.215 Interlocutory appeals.
134.216 Alternative dispute resolution procedures.
134.217 Settlement.
134.218 Judges.
134.219 Sanctions.
134.220 Prohibition against ex parte communications.
134.221 Prehearing conferences.
134.222 Oral hearing.
134.223 Evidence.
134.224 Standards for decision.
134.225 The record.
134.226 The decision.
134.227 Finality of decisions.
134.228 Review of initial decisions.
134.229 Termination of jurisdiction.
Subpart C--Rules of Practice for Appeals From Size Determinations and
SIC Code Designations
134.301 Scope of the rules in subpart C.
134.302 Who may appeal.
134.303 No absolute right to an appeal from a size determination.
134.304 Commencement of appeals from size determinations and SIC
code designations.
134.305 The appeal petition.
134.306 Transmission of the case file.
134.307 Service and filing requirements.
134.308 Limitation on the submission of new evidence in appeals
from size determinations.
134.309 Response to an appeal petition.
134.310 Discovery.
134.311 Oral hearings.
134.312 Evidence.
134.313 Applicability of subpart B provisions.
134.314 Standard of review.
134.315 The record.
134.316 The decision.
134.317 Termination of jurisdiction.
134.318 Return of the case file.
Subpart D--Implementation of the Equal Access to Justice Act
134.401 What is the purpose of this subpart?
134.402 Under what circumstances may I apply for reimbursement?
134.403 What is an agency adversary adjudication?
134.404 What benefits may I claim?
134.405 Under what circumstances are fees and expenses
reimbursable?
134.406 Who is eligible for possible reimbursement?
134.407 How do I know which eligibility requirement applies to me?
134.408 What are the special rules for calculating net worth and
number of employees?
134.409 What is the difference between a fee and an expense?
134.410 Are there limitations on reimbursement for fees and
expenses?
134.411 What should I include in my application for an award?
134.412 What must a net worth exhibit contain?
134.413 What documentation do I need for fees and expenses?
134.414 What deadlines apply to my petition for an award and where
do I send it?
134.415 How will proceedings relating to my application for fees
and expenses be conducted?
134.416 How will I know if I receive an award?
134.417 May I seek review of the ALJ's decision on my award?
134.418 How are awards paid?
Authority: 5 U.S.C. 504; 15 U.S.C. 634(b)(6) and 637(a).
Subpart A--General Rules
Sec. 134.101 Scope of the rules in this part 134.
The rules in this part 134 govern the conduct of all proceedings
before OHA except those governed by part 142 of this chapter.
Sec. 134.102 Definitions used in this part 134.
As used in this part:
AA/OHA means the Assistant Administrator for OHA.
Address means the primary home or business address of a person or
entity, including the street location or postal box number, city or
town, state, and postal zip code.
Area Office means a Government Contracting Area Office or a
Disaster Area Office of the Small Business Administration.
Day means a calendar day, unless a Judge specifies otherwise.
Hearing means the presentation and consideration of argument and
evidence. A hearing may or may not include live testimony or argument.
Judge means an Administrative Law Judge or an Administrative Judge
of OHA, or the AA/OHA when he or she acts in the capacity of an
Administrative Judge.
OHA means the Office of Hearings and Appeals.
Party means the petitioner, respondent, or intervenor.
Person means an individual, or a partnership, association,
corporation, or other business entity.
Petition means a written complaint, a written notice of appeal from
an SBA
[[Page 58289]]
determination, or a written request for the initiation of proceedings
before OHA.
Petitioner means any person or governmental agency which has
brought a proceeding before OHA.
Pleading means a petition, an order to show cause commencing a
case, a notice of appeal, or an answer, as well as any amendment or
supplement to those documents.
Respondent means any person or governmental agency against which a
case has been brought before OHA.
SBA means the United States Small Business Administration.
SIC code means Standard Industrial Classification code.
Size determination means a formal size determination made by an
Area Office.
Sec. 134.103 Jurisdiction of OHA.
OHA has authority to conduct proceedings in the following types of
cases:
(a) The revocation or suspension of Small Business Investment
Company licenses, cease and desist orders, and the removal or
suspension of directors and officers of licensees, under the Small
Business Investment Act of 1958, 15 U.S.C. 681 et seq. and part 107 of
this chapter;
(b) Alleged violations of the Age Discrimination Act of 1975, 42
U.S.C. 6101 et seq. and part 112, subparts A and B, of this chapter,
and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, as
amended, and part 112, subpart C, of this chapter;
(c) The revocation of the privilege of any applicant or agent to
conduct business with SBA under the Small Business Act, 15 U.S.C. 634
and 642 and part 103 of this chapter;
(d) The eligibility of, or preferred or certified status of, any
bank or non-bank lender to continue to participate in SBA loan programs
under the Small Business Act, 15 U.S.C. 634 et seq. and part 120 of
this chapter;
(e) The suspension or termination of surety bond program
participants under 15 U.S.C. 694a et seq. and part 115 of this chapter;
(f) The rights, privileges, or obligations of development companies
under sections 501, 502, 503, and 504 of the Small Business Investment
Act of 1958, 15 U.S.C. 695 et seq. and part 120, subpart H, of this
chapter;
(g) Allowance of fees and expenses under the Equal Access to
Justice Act, 5 U.S.C. 504 and subpart D of this part;
(h) Debarment from appearance before the SBA because of post-
employment restrictions under 18 U.S.C. 207 and part 105 of this
chapter;
(i) Collection of debts owed to SBA and the United States under the
Debt Collection Act of 1982 and part 140 of this chapter;
(j) Appeals from the following SBA determinations involving the MED
program under the Small Business Act, 15 U.S.C. 637 and part 124 of
this chapter:
(1) Denial of program admission based solely on a negative finding
as to social disadvantage, economic disadvantage, ownership or control;
program termination; program graduation; or denial of a waiver of the
requirement to perform to completion a MED contract; and
(2) Program suspension;
(k) Appeals from size determinations and SIC code designations
under part 121 of this chapter;
(l) The imposition of civil penalties and assessments against
persons who make false claims or statements to SBA under the Program
Fraud Civil Remedies Act, 31 U.S.C. 3801-3812 and part 142 of this
chapter; and
(m) Any other hearing, determination, or appeal proceeding referred
to OHA by the Administrator of SBA.
Sec. 134.104 Limitation on the jurisdiction of OHA.
A Judge considering a MED program appeal arising under
Sec. 134.103(j)(1) of this part must not accept jurisdiction if:
(a) The appeal does not allege facts that, if true, would warrant
reversal or modification of the determination; or
(b) The appeal is not filed on time and in accordance with the
requirements of this part; or
(c) The matter has been decided or is the subject of a pending case
before a court.
Sec. 134.105 Rules applicable to time periods provided in this part
134.
(a) Computing time. In computing time, the day from which the time
is computed is not counted. The last day of the time period is counted,
unless it is a Saturday, Sunday, or Federal holiday, in which event the
next business day is counted.
(b) Modification of time limits. At the Judge's discretion, or upon
the motion of a party showing good cause, the Judge may modify any of
the time limits set forth in this part, other than those established by
statute and those governing when a case may be commenced. However, any
motion to extend a time limit must be filed and served before the
expiration of that time limit.
Subpart B--Rules of Practice for Most Cases
Sec. 134.201 Scope of the rules in subpart B.
The rules of practice in subpart B of this part apply to all
proceedings over which OHA has jurisdiction, except for appeals from
size determinations and SIC code designations and proceedings governed
by part 142 of this chapter.
Sec. 134.202 Commencement of cases.
(a) Commencement of a case by a person. A case may be commenced by
a person by filing a written petition within the following time
periods:
(1) Except as otherwise provided by this paragraph, no later than
45 days from the date of service of the SBA action or determination to
which the petition relates;
(2) In the case of debt collection proceedings under part 140 of
this chapter, no later than 15 days after receipt of a notice of
indebtedness and intention to collect such debt by salary or
administrative offset;
(3) In the case of applications for an award of fees pursuant to
subpart D of this part, no later than 30 days after the decision to
which it applies becomes final.
(b) Commencement of a case by SBA. A case may be commenced by SBA
by filing a written order to show cause.
Sec. 134.203 The petition.
(a) Required contents of a petition. A petition must contain the
following information:
(1) The basis of OHA's jurisdiction over the case;
(2) A clear and concise statement of the factual basis of the case
and, if the case is a MED program appeal arising under
Sec. 134.103(j)(1) of this part, the reasons why the determination is
alleged to be arbitrary, capricious, or contrary to law;
(3) The relief being sought; and
(4) The name, address, telephone number, and signature of the
petitioner or its attorney.
(b) Dismissal of insufficient petitions. A petition which does not
contain all of the information required by paragraph (a) of this
section may be dismissed, with or without prejudice, by the Judge at
his or her own initiative, or upon motion of the respondent.
Sec. 134.204 Service and filing requirements.
(a) Service. Each party is responsible for the service of its
pleadings and other submissions upon all other parties or their
attorneys. Unless otherwise ordered by the Judge, service is made by
providing each party, or its attorney, with a copy of the pleading or
other submission by personal delivery, first-
[[Page 58290]]
class United States mail, United States express mail, facsimile
transmission, or commercial delivery service. If service is to be by
first-class United States mail or United States express mail, it must
be accomplished as follows:
(1) By mailing to a party's last-known residence or business
address if it has not yet appeared in the case, or by mailing to the
address of a party which has appeared as shown in its submission;
(2) If a party has appeared in the case through an attorney, by
mailing to the address of the attorney shown in the party's submission
or in a notice of appearance;
(3) If to SBA, unless an attorney is specified in SBA's submissions
to OHA, by mailing to: Office of General Counsel, Small Business
Administration, 409 Third Street, S.W.--Seventh Floor, Washington, D.C.
20416.
(b) Filing. (1) All pleadings and other submissions must be filed
with OHA by personal delivery, first-class United States mail, United
States express mail, facsimile transmission, or commercial delivery
service. Filing may only be accomplished at the following address:
Office of Hearings and Appeals, Small Business Administration, 409
Third Street, S.W.--Mail Code 2441, Washington, D.C. 20416.
(2) If filing is to be by personal delivery or commercial delivery
service, such filing must be accomplished between the hours of 8:30
a.m. and 5:00 p.m. If filing is to be by facsimile transmission, the
telephone number to be used may be obtained by calling OHA in
Washington, D.C.
(c) Number of copies which must be filed. Only the original of a
pleading or other submission must be filed with OHA. In the case of a
document offered as evidence, an authenticated copy may be filed
instead of the original.
(d) Certificate of service. A signed certificate stating how and
when service was made on all parties must be attached to each pleading
or other submission filed with OHA.
(e) Date of service and filing. Unless otherwise specified by the
Judge, the date of service or filing is as follows:
(1) In the case of service or filing by facsimile transmission, the
date of transmission;
(2) In the case of service or filing by first-class United States
mail, the date of postmark; and
(3) In the case of service or filing by personal delivery, United
States express mail, or commercial delivery service, the date of
receipt.
(f) Presumption relating to the date of service or filing by first-
class United States mail. Where the determination of the date of
service or filing is dependent upon the date of postmark, and the
postmark is illegible or incomplete, there will be a rebuttable
presumption that the postmark was dated five days prior to the date of
receipt.
(g) Treatment of confidential information. Any information in
pleadings or other submissions that is believed by the submitting party
to constitute proprietary or confidential information need not be
served upon other parties so long as the deletions are clearly
identified and generally described in the documents which are served.
Upon motion, the Judge may direct that the withheld information be
provided to other parties, subject to any appropriate protective order.
Sec. 134.205 Motion for a more definite statement.
(a) Procedure. No later than 20 days after service of the petition
or order to show cause, the respondent may serve and file a motion
requesting a more definite statement by the petitioner of particular
allegations in the petition or order to show cause identified by the
respondent. Where the respondent makes a reasonable showing that a
response cannot be made in the absence of further detail by the
petitioner, the Judge will issue an order directing the petitioner to
serve and file a more definite statement.
(b) Stay. The serving and filing of a motion for a more definite
statement stays the time for serving and filing an answer. In the order
determining the motion for a more definite statement, the Judge will
establish the time for serving and filing an answer.
Sec. 134.206 The answer.
(a) Time due. A respondent must serve and file an answer within 45
days after the service of a petition or order to show cause, except
that debt collection proceeding answers are due within 30 days.
(b) Required contents of an answer. The answer must contain the
following:
(1) An admission or denial of each of the factual allegations
contained in the petition or order to show cause, or a statement that
the respondent denies knowledge or information sufficient to determine
the truth of a particular allegation;
(2) Any affirmative defenses; and
(3) The name, address, telephone number, and signature of the
respondent or its attorney.
(c) Failure to deny. Allegations in the petition or order to show
cause which are not answered in accordance with paragraph (b)(1) of
this section will be deemed admitted unless injustice would occur.
(d) Submission of the written administrative record. Upon an appeal
from an SBA determination concerning the MED program, SBA must serve
and file the written administrative record pertaining to that
determination within the same time period applicable to the service and
filing of its answer. If SBA fails to serve and file the written
administrative record within the appropriate time period, the Judge
will issue an order directing SBA to serve and file the administrative
record by a specified date.
(e) Default. If the respondent fails to serve and file an answer
within the time period set forth in paragraph (a) of this section, or
within any extended time period granted by the Judge, that failure will
constitute a default. Following such a default, the respondent will be
prohibited from participating further in the case, except to serve and
file the written administrative record in accordance with paragraph (d)
of this section. The Judge will then proceed to issue a decision.
Sec. 134.207 Amendments and supplemental pleadings.
(a) Amendment of pleadings. Upon motion, and under terms needed to
avoid prejudice to any non-moving party, the Judge may permit the
service and filing of amendments to pleadings. However, an amendment
will not be permitted if it would cause unreasonable delay in the
determination of the matter.
(b) Supplemental pleadings. Upon motion, and under terms needed to
avoid prejudice to any non-moving party, the Judge may permit the
service and filing of a supplemental pleading setting forth relevant
transactions or occurrences that have taken place since the filing of
the original pleading.
(c) Limitation applicable to MED program appeals arising under
Sec. 134.103(j)(1) of this part. In MED program appeals arising under
Sec. 134.103(j)(1) of this part, amendments to pleadings and
supplemental pleadings will be permitted by the Judge only upon a
showing of good cause.
(d) Answer to a petition or order to show cause which has been
amended or supplemented. In an order permitting the serving and filing
of an amended or supplemented petition or order to show cause, the
Judge will establish the time for serving and filing an answer.
Sec. 134.208 Representation in cases before OHA.
(a) Representation pro se or by an attorney. A party to a case
before OHA may represent itself, or be represented by a duly licensed
attorney. A member
[[Page 58291]]
of a partnership may represent the partnership, and an officer may
represent a corporation, trust, or association.
(b) Notice of appearance. An attorney for a party who did not
appear on behalf of that party in the party's first filing with OHA,
must serve and file a written notice of appearance.
(c) Withdrawal of appearance. An attorney seeking to withdraw from
a case must serve and file a motion for the withdrawal of his or her
appearance.
Sec. 134.209 Requirement of signature.
(a) Requirement of signature. Every written submission to OHA,
other than evidence, must be signed by the party filing that
submission, or by the party's attorney.
(b) Meaning of signature. By signing a submission to OHA, a party
or its attorney attests that the statements and allegations in that
submission are true to the best of its knowledge, and that the
submission is not being filed for the purpose of delay or harassment.
Sec. 134.210 Intervention.
(a) Intervention by SBA. SBA may intervene as of right at any time
in any case until final decision.
(b) Intervention by interested persons. Any individual,
partnership, association, corporation, trust, or governmental agency
may move to intervene at any time until final decision by serving and
filing a motion to intervene containing a statement of the movant's
interest in the case and the necessity for intervention, to protect
such interest. The Judge may grant leave to intervene upon such terms
as he or she deems appropriate.
Sec. 134.211 Motions.
(a) Contents. All motions must state the relief being requested, as
well as the grounds and any authority for that relief.
(b) Response. No later than 20 days after the service of a motion,
all non-moving parties must serve and file a response or be deemed to
have consented to the relief sought. Unless the Judge directs
otherwise, the moving party will have no right to reply to a response,
nor will oral argument be heard on the motion.
(c) Service of written orders. OHA will serve upon all parties any
written order issued in response to a motion.
Sec. 134.212 Summary decision.
(a) Grounds. A party may move for summary decision at any time as
to all, or any portion of, the case, on the grounds that there is no
genuine issue as to any material fact, and that the moving party is
entitled to a decision in its favor as a matter of law.
(b) Contents of motion. The motion must include a statement of the
material facts believed not to be disputed, and relevant law.
Supporting affidavits may also be included.
(c) Cross-motions. In its response to a motion for summary
decision, a party may cross-move for summary decision in its own favor.
The initial moving party may serve and file a response to any cross-
motion for summary decision within 20 days after the service of that
cross-motion.
(d) Stay. A motion for summary decision stays the time to answer.
If appropriate, the Judge will establish the time for serving and
filing an answer in the order determining the motion for summary
decision.
Sec. 134.213 Discovery.
(a) Discovery in cases other than those involving MED program
appeals arising under Sec. 134.103(j)(1) of this part. In cases other
than those involving MED program appeals arising under
Sec. 134.103(j)(1) of this part, a party may obtain discovery only upon
motion, and for good cause shown.
(b) Discovery in MED program appeals arising under
Sec. 134.103(j)(1) of this part. In MED program appeals arising under
Sec. 134.103(j)(1) of this part, discovery will be permitted only upon
motion, and only if it is determined by the Judge that the requesting
party has made a substantial showing, based upon credible evidence, and
not mere allegation, that the SBA determination in question may have
resulted from bad faith or improper behavior. Any permitted discovery
will be limited to facts relating to the alleged bad faith or improper
behavior asserted by the party seeking discovery.
(c) Forms of permissible discovery. The forms of discovery which a
Judge can order under paragraphs (a) and (b) of this section include
requests for admissions, requests for production of documents,
interrogatories, and depositions.
(d) Limitations upon discovery. Discovery may be limited in
accordance with the terms of a protective order. Further, privileged
information and irrelevant issues or facts will not be subject to
discovery.
(e) Motions available to resolve a discovery dispute. If a dispute
should arise between the parties over a particular discovery request,
the party seeking discovery may serve and file a motion to compel
discovery. Discovery may be opposed on the grounds of harassment,
needless embarrassment, irrelevance, undue burden or expense,
privilege, or confidentiality.
Sec. 134.214 Subpoenas.
(a) Availability of subpoenas. At the request of a party, or upon
his or her own initiative, a Judge may issue a subpoena requiring a
witness to appear and testify, or to produce particular documents, at a
specified time and place.
(b) Requests for the issuance of a subpoena. A request for the
issuance of a subpoena must be written, served upon all parties, and
filed. The request must clearly identify the witness and any documents
to be subpoenaed, and must set forth the relevance of the testimony or
documents sought.
(c) Service. A subpoena may only be served by personal delivery.
The individual making service shall prepare an affidavit stating the
date, time, and place of the service. The party which obtained the
subpoena must serve upon all other parties, and file with OHA, a copy
of the subpoena and affidavit of service within 2 days after service is
made.
(d) Motion to quash. A motion to limit or quash a subpoena must be
served and filed within 10 days after service of the subpoena, or by
the return date of the subpoena, whichever date comes first. Any
response to the motion must be served and filed within 10 days after
service of the motion, unless a shorter time is specified by the Judge.
No oral argument will be heard on the motion unless the Judge directs
otherwise.
Sec. 134.215 Interlocutory appeals.
(a) General rules. A motion for leave to take an interlocutory
appeal from a Judge's ruling will not be entertained in those
proceedings in which OHA issues final decisions. In all other cases, an
interlocutory appeal will be permitted only if, upon motion by a party,
or upon the Judge's own initiative, the Judge certifies that his or her
ruling raises a question which is immediately appealable. Interlocutory
appeals will be decided by the AA/OHA or a designee.
(b) Motion for certification. A party must serve and file a motion
for certification no later than 20 days after issuance of the ruling to
which the motion applies. A denial of the motion does not preclude
objections to the ruling in any subsequent request for review of an
initial decision.
(c) Basis for certification. The Judge will certify a ruling for
interlocutory appeal only if he or she determines that:
(1) The ruling involves an important question of law or policy
about which
[[Page 58292]]
there is substantial ground for a difference of opinion; and
(2) An interlocutory appeal will materially expedite completion of
the case, or denial of an interlocutory appeal would cause undue
hardship to a party.
(d) Stay of proceedings. A stay of the proceedings, while an
interlocutory appeal is pending, will be at the discretion of the
Judge.
Sec. 134.216 Alternative dispute resolution procedures.
At any time during the pendency of a case, the parties may submit a
joint motion requesting that the Judge permit the use of alternative
dispute resolution procedures to assist in resolving the matter. If the
motion is granted, the Judge will also stay the proceedings before OHA,
in whole or in part, as he or she deems appropriate, pending the
outcome of the alternative dispute resolution procedures.
Sec. 134.217 Settlement.
(a) Contents of a Settlement Agreement. At any time during the
pendency of a case, the parties may submit a settlement agreement,
signed by all settling parties, to the Judge.
(b) Admissibility. Settlement negotiations, and rejected settlement
agreements, are not admissible into evidence.
Sec. 134.218 Judges.
(a) Assignment of Judges. The AA/OHA will assign all cases subject
to the Administrative Procedure Act, 5 U.S.C. Secs. 551 et seq., to an
Administrative Law Judge. The AA/OHA will assign all other cases before
OHA to either an Administrative Law Judge or an Administrative Judge,
or, if the AA/OHA is a duly licensed attorney, to himself or herself.
(b) Authority of a Judge. Except as otherwise limited by this part,
or by statute or other regulation, a Judge has the authority to take
all appropriate action to ensure the efficient, prompt, and fair
determination of a case, including, but not limited to, the authority
to administer oaths and affirmations and to subpoena and examine
witnesses.
(c) Recusal. Upon the motion of a party, or upon the Judge's own
initiative, a Judge will promptly recuse himself or herself from
further participation in a case whenever disqualification is
appropriate due to conflict of interest, bias, or some other
significant reason. A denial of a motion for recusal may be immediately
appealed to the AA/OHA, or to the Administrative Law Judge if the AA/
OHA is the Judge, but that appeal will not stay proceedings in the
case.
Sec. 134.219 Sanctions.
A Judge may impose appropriate sanctions, except for fees, costs,
or monetary penalties, which he or she deems necessary to serve the
ends of justice, if a party or its attorney:
(a) Fails to comply with an order of the Judge;
(b) Fails to comply with the rules set forth in this part;
(c) Acts in bad faith or for purposes of delay or harassment;
(d) Submits false statements knowingly, recklessly, or with
deliberate disregard for the truth; or
(e) Otherwise acts in an unethical or disruptive manner.
Sec. 134.220 Prohibition against ex parte communications.
No person shall consult or communicate with a Judge concerning any
fact, question of law, or SBA policy relevant to a case before that
Judge except on prior notice to all parties, and with the opportunity
for all parties to participate. In the event of such prohibited
consultation or communication, the Judge will disclose the occurrence
in accordance with the Administrative Procedure Act, 5 U.S.C.
557(d)(1), and may impose such sanctions as he or she deems
appropriate.
Sec. 134.221 Prehearing conferences.
Prior to a hearing, the Judge, at his or her own initiative, or
upon the motion of any party, may direct the parties or their attorneys
to appear, by telephone or in person, in order to consider any matter
which may assist in the efficient, prompt, and fair determination of
the case. The conference may be recorded verbatim at the discretion of
the Judge, and, if so, a party may purchase a transcript, at its own
expense, from the recording service.
Sec. 134.222 Oral hearing.
(a) Availability of an oral hearing. At his or her own initiative,
or upon the motion of any party, the Judge may order an oral hearing if
he or she concludes that there is a genuine dispute as to a material
fact that cannot be resolved except by the taking of testimony and the
confrontation of witnesses. However, in MED program appeals arising
under Sec. 134.103(j)(1) of this part, an oral hearing will not be
permitted unless the Judge determines that there has been a substantial
showing, based upon credible evidence, that the SBA determination in
question may have resulted from bad faith or improper behavior.
(b) Place and time of oral hearings. The place and time of oral
hearings is within the discretion of the Judge, who shall give due
regard to the necessity and convenience of the parties, their
attorneys, and witnesses. The Judge may direct that an oral hearing be
conducted by telephone. In cases arising from a MED program suspension
determination, any oral hearing granted by the Judge must commence as
soon as possible, but not more than 20 days after the ruling granting
the oral hearing except upon a showing of good cause.
(c) Public access to oral hearings. Unless otherwise ordered by the
Judge, all oral hearings are public.
(d) Payment of witnesses subpoenaed to attend oral hearings. A
party which obtains a witness's presence at an oral hearing by
subpoena, must pay to that witness the fees and mileage costs to which
the witness would be entitled in the Federal Courts.
(e) Recording of an oral hearing. Oral hearings will be recorded
verbatim. A transcript of a recording may be purchased by a party, at
its own expense, from the recording service.
Sec. 134.223 Evidence.
(a) Applicability of the Federal Rules of Evidence. Unless contrary
to a particular rule in this part, or it is otherwise ordered by the
Judge, the Federal Rules of Evidence will be used as a general guide in
all cases before OHA.
(b) Admissibility of hearsay. Hearsay evidence is admissible if it
is deemed by the Judge to be relevant and reliable.
(c) Certain decisions based upon the written administrative record.
Unless it is determined by the Judge, upon motion, that there has been
a substantial showing, based upon credible evidence, that the SBA
determination in question may have resulted from bad faith or improper
behavior, any MED program appeal arising under Sec. 134.103(j)(1) of
this part will be decided solely on a review of the written
administrative record.
(d) Remand for further consideration. If, upon a MED program appeal
arising under Sec. 134.103(j)(1) of this part, the Judge determines
that, due to the absence in the written administrative record of the
reasons upon which the determination in question was based, the
administrative record is insufficient to decide whether the
determination is arbitrary, capricious, or contrary to law, the Judge
will remand the case for further consideration. The Judge will retain
jurisdiction of the matter during the period of remand.
[[Page 58293]]
Sec. 134.224 Standards for decision.
The decision of a Judge in cases other than those involving MED
program appeals arising under Sec. 134.103(j)(1) of this part will be
based upon a preponderance of the evidence. In MED program appeals
arising under Sec. 134.103(j)(1) of this part, the determination will
be sustained unless it is found to be arbitrary, capricious, or
contrary to law.
Sec. 134.225 The record.
(a) Contents of record. The record of a case before OHA will
consist of all pleadings, motions, and other non-evidentiary
submissions, all admitted evidence, all orders and decisions, and any
transcripts of proceedings in the case.
(b) Public access. Except for information subject to a protective
order, proprietary or confidential information withheld in accordance
with this part, or any other information which is excluded from
disclosure by law or regulation, the record will be available at OHA
for public inspection during normal business hours. Copies of the
documents available for public inspection may be obtained by the public
upon payment of any duplication charges.
(c) Closure of the pre-decisional record. The Judge will set the
date upon which the pre-decisional record of the case will be closed,
and after which no additional evidence or argument will be accepted.
Sec. 134.226 The decision.
(a) Contents. Following closure of the record, the Judge will issue
a decision containing findings of fact and conclusions of relevant law,
reasons for such findings and conclusions, and any relief ordered. The
contents of the record will constitute the exclusive basis for a
decision.
(b) Time limit for certain decisions. Decisions pertaining to the
collection of debts owed to SBA and the United States under the Debt
Collection Act of 1982 and part 140 of this chapter must be rendered
within 60 days after a petition is filed. Decisions pertaining to MED
program appeals arising under Sec. 134.103(j)(1) of this part will be
rendered, insofar as practicable, within 90 days after a petition is
filed.
(c) Service. OHA will serve a copy of all written decisions on:
(1) Each party, or, if represented by counsel, on its counsel; and
(2) SBA's General Counsel, or his or her designee, if SBA is not a
party.
Sec. 134.227 Finality of decisions.
(a) Final decisions. A decision on the merits shall be a final
decision, upon issuance, in the following cases:
(1) Proceedings concerning the collection of debts owed to SBA and
the United States, under the Debt Collection Act of 1982 and part 140
of this chapter; and
(2) Appeals from determinations relating to SBA's MED program.
(b) Initial decisions. All decisions on the merits other than those
set forth in paragraph (a) of this section are initial decisions.
However, unless a request for review is filed pursuant to
Sec. 134.228(a), an initial decision shall become the final decision of
SBA 30 days after its issuance.
Sec. 134.228 Review of initial decisions.
(a) Request for review. Within 30 days after the service of an
initial decision, any party, or SBA's Office of General Counsel, may
serve and file with OHA a request for review. A request for review must
set forth the filing party's specific objections to the initial
decision, and any alleged support for those objections in the record,
or in case law, statute, regulation, or SBA policy. A party must serve
its request for review upon all other parties and upon SBA's Office of
General Counsel.
(b) Response to a request for review. Within 20 days after the
service of a request for review, any party so served, or SBA's Office
of General Counsel, may serve and file with OHA a response. A party
must serve its response upon all other parties and upon SBA's Office of
General Counsel.
(c) Transfer of the record to the Administrator for review. Upon
receipt of all possible responses, but in no case later than 30 days
after the filing of a request for review, OHA will transfer the record
of the case to the Administrator. The Administrator, or his or her
designee, will then review the record.
(d) Standard of review. Upon review, the Administrator, or his or
her designee, will sustain the initial decision unless it is based on
an erroneous finding of fact or an erroneous interpretation or
application of case law, statute, regulation, or SBA policy.
(e) Order. After consideration of the record, the Administrator, or
his or her designee, will:
(1) Affirm, reverse, or modify the initial decision, which
determination will become the final decision of the SBA upon issuance;
or
(2) Remand the initial decision to the Judge for appropriate
further proceedings.
Sec. 134.229 Termination of jurisdiction.
The jurisdiction of OHA will terminate upon the issuance of a
decision by a Judge resolving all material issues of fact and law
unless the case is subsequently remanded for appropriate further
proceedings, pursuant to Sec. 134.228(e)(2) of this part.
Subpart C--Rules of Practice for Appeals From Size Determinations
and SIC Code Designations
Sec. 134.301 Scope of the rules in subpart C.
The rules of practice in subpart C of this part apply to all
appeals to OHA from:
(a) Formal size determinations made by an SBA Government
Contracting Area Office, under part 121 of this chapter, or by a
Disaster Area Office, in connection with applications for disaster
loans; and
(b) SIC code designations, pursuant to part 121 of this chapter.
Sec. 134.302 Who may appeal.
Appeals from size determinations and SIC code designations may be
filed with OHA by the following, as applicable:
(a) Any person adversely affected by a size determination;
(b) Any person adversely affected by a SIC code designation.
However, with respect to a MED contract, only the Associate
Administrator for Minority Enterprise Development may appeal a SIC code
designation;
(c) The Associate or Assistant Administrator for the SBA program
involved, through SBA's Office of General Counsel; and
(d) The procuring agency contracting officer responsible for the
procurement affected by a size determination.
Sec. 134.303 No absolute right to an appeal from a size determination.
It is within the discretion of the Judge whether to accept an
appeal from a size determination. If the Judge decides not to consider
such an appeal, he or she will issue an order denying review, and
specifying the reasons for the decision.
Sec. 134.304 Commencement of appeals from size determinations and SIC
code designations.
(a) When appeals must be commenced. Appeals from size
determinations and SIC code designations must be commenced by serving
and filing a notice of appeal as follows:
(1) If appeal is from a size determination in a pending procurement
or pending Government property sale, then the notice of appeal must be
served and filed within 15 days after service of the size
determination;
[[Page 58294]]
(2) If appeal is from a size determination other than one in a
pending procurement or pending Government property sale, then the
notice of appeal must be served and filed within 30 days after service
of the size determination;
(3) If appeal is from a SIC code designation, then the notice of
appeal must be served and filed within 10 days after the issuance of
the initial invitation for bids or initial request for proposals or
quotations.
(b) Untimely appeals. An untimely appeal will be dismissed.
However, an appeal which is untimely under paragraph (a)(1) of this
section, with respect to a pending procurement or sale, may, if timely
under paragraph (a)(2) of this section, proceed with respect to future
procurements or sales.
Sec. 134.305 The appeal petition.
(a) Form. There is no required format for an appeal petition.
However, it must include the following information:
(1) The Area Office which issued the size determination, or the
contracting office which designated the SIC code;
(2) The solicitation or contract number, and the name, address, and
telephone number of the contracting officer;
(3) A full and specific statement as to why the size determination
or SIC code designation is alleged to be in error, together with
argument supporting such allegations; and
(4) The name, address, telephone number, and signature of the
appellant or its attorney.
(b) Who must be served with a size determination appeal petition.
The appellant must serve the appeal petition upon each of the
following:
(1) The SBA official who issued the size determination;
(2) The contracting officer responsible for the procurement
affected by a size determination;
(3) The business concern whose size status is at issue;
(4) All persons who filed protests; and
(5) SBA's Office of General Counsel.
(c) Who must be served with a SIC code appeal petition. The
appellant must serve the contracting officer who made the SIC code
designation.
(d) Certificate of service. The appellant must attach to the appeal
petition a signed certificate identifying each person or governmental
agency which was served with the notice of appeal, and how and when
each of those persons or governmental agencies was served.
(e) Dismissal of insufficient appeal petitions. An appeal petition
which does not contain all of the information required in paragraph (a)
of this section may be dismissed, with or without prejudice, by the
Judge at his or her own initiative, or upon motion of a respondent.
Sec. 134.306 Transmission of the case file.
Upon receipt of an appeal petition pertaining to a size
determination, the Area Office which issued the size determination must
immediately send to OHA the entire case file relating to that
determination. Upon receipt of an appeal petition pertaining to a SIC
code designation, the contracting officer who designated the SIC code
must immediately send to OHA the solicitation relating to that
designation.
Sec. 134.307 Service and filing requirements.
The provisions of Sec. 134.204 of this part apply to the service
and filing of all pleadings and other submissions permitted under this
subpart.
Sec. 134.308 Limitation on the submission of new evidence in appeals
from size determinations.
(a) When new evidence may be submitted. Evidence not previously
presented to the Area Office which issued the size determination being
appealed will not be considered by a Judge unless:
(1) The Judge, on his or her own initiative, orders the submission
of such evidence; or
(2) A motion is served and filed establishing good cause for the
submission of such evidence.
(b) Adverse inference resulting from the failure to comply with an
order to submit evidence. If the submission of evidence is ordered by a
Judge, and the party in possession of that evidence does not submit it,
the Judge may draw adverse inferences against that party.
Sec. 134.309 Response to an appeal petition.
(a) Who may respond. Any person served with an appeal petition, or
any other interested person, may serve and file a response supporting
or opposing the appeal. The response should present argument.
(b) Time limits for serving and filing a response. Unless otherwise
specified by the Judge, a respondent must serve and file a response
within 10 days after service of the appeal petition upon it.
(c) Who must be served. The respondent must serve its response upon
the appellant and upon each of the persons identified in the
certificate of service attached to the appeal petition pursuant to
Sec. 134.305 of this part.
(d) Reply to a response. No reply to a response will be permitted
unless the Judge directs otherwise.
Sec. 134.310 Discovery.
Discovery will not be permitted in appeals from size determinations
or SIC code designations.
Sec. 134.311 Oral hearings.
Oral hearings will not be held in appeals from SIC code
designations, and will be held in appeals from size determinations only
upon a finding by the Judge of extraordinary circumstances. If such an
oral hearing is ordered, the proceeding shall be conducted in
accordance with those rules of subpart B of this part as the Judge
deems appropriate.
Sec. 134.312 Evidence.
To the extent the rules in this subpart permit the submission of
evidence, the provisions of Secs. 134.223 (a) and (b) apply.
Sec. 134.313 Applicability of subpart B provisions.
The following sections from subpart B apply to an appeal under this
subpart: Sec. 134.207(a) (pertaining to amendments to pleadings);
Sec. 134.208 (Representation in cases before OHA); Sec. 134.209
(Requirement of signature); Sec. 134.210 (Intervention); Sec. 134.211
(Motions); Sec. 134.214 (Subpoenas); Sec. 134.218 (Judges);
Sec. 134.219 (Sanctions); and Sec. 134.220 (Prohibition against ex
parte communications).
Sec. 134.314 Standard of review.
The standard of review is whether the size determination or SIC
code designation was based on clear error of fact or law.
Sec. 134.315 The record.
Where relevant, the provisions of Secs. 134.225 (a), (b), and (c)
apply. In an appeal under this subpart, the contents of the record also
include the case file or solicitation submitted to OHA in accordance
with Sec. 134.306.
Sec. 134.316 The decision.
(a) Contents. Following closure of the record, the Judge will issue
a decision containing findings of fact and conclusions of law, reasons
for such findings and conclusions, and any relief ordered.
(b) Finality of the decision. The decision is the final decision of
the SBA and becomes effective upon issuance.
(c) Service. OHA will serve a copy of all written decisions on:
(1) Each party, or, if represented by counsel, on its counsel; and
(2) SBA's General Counsel, or his or her designee, if SBA is not a
party.
[[Page 58295]]
Sec. 134.317 Termination of jurisdiction.
The jurisdiction of OHA will terminate upon the issuance of a
decision.
Sec. 134.318 Return of the case file.
Upon termination of jurisdiction, OHA will return the case file to
the transmitting Area Office. The remainder of the record will be
retained by OHA.
Subpart D--Implementation of the Equal Access to Justice Act
Sec. 134.401 What is the purpose of this subpart?
The Equal Access to Justice Act, 5 U.S.C. 504, establishes
procedures by which prevailing parties in certain administrative
proceedings may apply for reimbursement of fees and other expenses.
Eligible parties may receive awards when they prevail over SBA, unless
SBA's position in the proceeding was ``substantially justified'' or
special circumstances make an award unjust. The rules of this subpart
which follow explain which OHA proceedings are covered, who may be
eligible for an award of fees and expenses, and how to apply for such
an award.
Sec. 134.402 Under what circumstances may I apply for reimbursement?
You may apply for reimbursement under this subpart if you meet the
eligibility requirements in Sec. 134.406 and you prevail over SBA in a
final decision in:
(1) The type of administrative proceeding which qualifies as an
``agency adversary adjudication'' under Sec. 134.403; or
(2) An ancillary or subsidiary issue in that administrative
proceeding that is sufficiently significant and discrete to merit
treatment as a separate unit; or
(3) A matter which the agency has designated in its order for
hearing as an ``agency adversary adjudication'' under 5 U.S.C. 554.
Sec. 134.403 What is an agency adversary adjudication?
For purposes of this subpart, agency adversary adjudications are
administrative proceedings before OHA which involve SBA as a party and
which are required to be conducted by an Administrative Law Judge
(``ALJ''). These adjudications (``administrative proceedings'') include
those proceedings listed in Secs. 134.103(a), 134.103(i), and
134.103(j)(1), but do not include other OHA proceedings such as those
listed in Sec. 134.103(k). In order for an administrative proceeding to
qualify, SBA must have been represented by counsel or by another
representative who enters an appearance and participates in the
proceeding.
Sec. 134.404 What benefits may I claim?
You may seek reimbursement for certain reasonable fees and expenses
incurred in prosecuting or defending a claim in an administrative
proceeding.
Sec. 134.405 Under what circumstances are fees and expenses
reimbursable?
(a) If you are a prevailing eligible party, you may receive an
award for reasonable fees and expenses unless the position of the
agency in the proceeding is found by the ALJ to be ``substantially
justified'', or special circumstances exist which make an award unjust.
The ``position of the agency'' includes not only the position taken by
SBA in the administrative proceeding, but also the position which it
took in the action which led to the administrative proceeding. No
presumption arises that SBA's position was not substantially justified
simply because it did not prevail in a proceeding. However, upon your
assertion that the position of SBA was not substantially justified, SBA
will be required to establish that its position was reasonable in fact
and law.
(b) The ALJ may reduce or deny an award for reimbursement, if you
have unreasonably protracted the administrative proceeding or if other
circumstances would make the award unjust.
(c) Awards for fees and expenses incurred before the date on which
an administrative proceeding was initiated are allowable only if you
can demonstrate that they were reasonably incurred in preparation for
the proceeding.
Sec. 134.406
Who is eligible for possible reimbursement?
(a) You are eligible for possible reimbursement if:
(1) You are an individual, sole proprietorship, partnership,
corporation, association, organization, or unit of local government;
and
(2) You are identified as a party in a petition or order to show
cause; and
(3) You are the prevailing party; and
(4) You meet certain net worth and employee eligibility
requirements set forth in Sec. 134.407.
(b) You are not eligible for possible reimbursement if you
participated in the administrative proceeding only on behalf of persons
or entities that are ineligible.
Sec. 134.407 How do I know which eligibility requirement applies to
me?
Follow this chart to determine your eligibility. You should
calculate your net worth and the number of your employees as of the
date the administrative proceeding was initiated.
------------------------------------------------------------------------
If your participation in the proceeding
was: Eligibility requirements:
------------------------------------------------------------------------
For individual or personal interests... Personal net worth may not
exceed 2 million dollars.
As sole owner of an unincorporated Personal net worth may not
business. exceed 7 million dollars
and
No more than 500 employees.
As a partnership, corporation, Business net worth may not
association, organization, or unit of exceed 7 million dollars
local government.
and
No more than 500 employees.
As a charitable or other tax exempt No net worth limitations
organization described in section and
501(c)(3) of the Internal Revenue Code No more than 500 employees.
(26 U.S.C. 501(c)(3)).
As a cooperative association as defined No net worth limitations
in section 15(a) of the Agricultural and
Marketing Act (12 U.S.C. 1141j(a)). No more than 500 employees.
------------------------------------------------------------------------
Sec. 134.408 What are the special rules for calculating net worth and
number of employees?
(a) Your net worth must include the value of any assets disposed of
for the purpose of meeting an eligibility standard, and must exclude
any obligation incurred for that purpose. Transfers of assets, or
obligations incurred, for less than reasonably equivalent value will be
presumed to have been made for the purpose of meeting an eligibility
standard.
[[Page 58296]]
(b) If you are a sole owner of an unincorporated business, or a
partnership, corporation, association, organization, or unit of local
government, your net worth must include the net worth of all of your
affiliates. ``Affiliates'' are corporations or other business entities
which directly or indirectly own or control a majority of the voting
shares or other ownership interests in the applicant concern.
``Affiliates'' are also corporations or other business entities in
which the applicant concern directly or indirectly owns or controls a
majority of the voting shares or other ownership interests.
(c) Your employees include all those persons regularly working for
you at the time the administrative proceeding was initiated, whether or
not they were at work on that date. Part-time employees must be
included on a proportional basis. You must include the employees of all
your affiliates in your total number of employees.
Sec. 134.409 What is the difference between a fee and an expense?
A fee is a charge to you for the professional services of
attorneys, agents, or expert witnesses rendered in connection with your
case. An expense is the cost to you of any study, analysis, engineering
report, test, project, or similar matter prepared in connection with
your case.
Sec. 134.410 Are there limitations on reimbursement for fees and
expenses?
(a) Awards will be calculated on the basis of fees and expenses
actually incurred. If services were provided by one or more of your
employees, or were made available to you free, you may not seek an
award for those services. If services were provided at a reduced rate,
fees and expenses will be calculated at that reduced rate.
(b) In determining the reasonableness of the fees for attorneys,
agents or expert witnesses, the ALJ will consider:
(1) That provider's customary fee for like services;
(2) The prevailing rate for similar services in the community in
which that provider ordinarily performs services;
(3) The time actually spent in representing you; and
(4) The time reasonably spent in light of the difficulty and
complexity of the issues.
(c) An award for the fees of an attorney or agent may not exceed
$75 per hour, and an award for the fees of an expert witness may not
exceed $25 per hour, regardless of the rate charged.
(d) An award for the reasonable cost of any study, analysis,
engineering report, test, project or similar matter prepared on your
behalf may not exceed the prevailing rate payable for similar services,
and you may be reimbursed only if the study or other matter was
necessary to the preparation of your case.
Sec. 134.411 What should I include in my application for an award?
(a) Your application must be in the form of a written petition
which is served and filed in accordance with Sec. 134.204 of this part.
It must contain the following information:
(1) A statement that OHA has jurisdiction over the case pursuant to
Sec. 134.103(g);
(2) An identifying reference to the administrative proceeding for
which you are seeking an award;
(3) A statement that you have prevailed, and a list of each issue
in which you claim the position of SBA was not substantially justified;
(4) Whether you are an individual, sole proprietorship,
partnership, corporation, association, organization, or unit of local
government;
(5) Your net worth and number of employees as of the date the
administrative proceeding was initiated, or a statement that one or
both of these eligibility requirements do not apply to you;
(6) The amount you are seeking;
(7) A description of any affiliates (as that term is defined in
Sec. 134.408), or a statement that no affiliates exist;
(8) A statement that the petition and any attached statements and
exhibits are true and complete to the best of your knowledge and that
you understand a false statement on these documents is a felony
punishable by fine and imprisonment under 18 U.S.C. 1001; and
(9) Your name, address, and telephone number, and the signature of
you or your attorney.
(b) You should follow this chart to determine which attachments
must be included with your petition:
------------------------------------------------------------------------
Party Required attachment
------------------------------------------------------------------------
Individual............................. Net worth exhibit
and
Statement of fees and/or
expenses for the services of
each provider for which you
seek reimbursement.
Sole owner of unincorporated business.. Net worth exhibit
or and
Partnership, corporation, association, Statement of fees and/or
organization, or unit of local expenses for the services of
government. each provider for which you
seek reimbursement.
Organization qualified as tax exempt Copy of a ruling by the
under section 501(c)(3) of the Internal Revenue Service that
Internal Revenue Code (26 U.S.C. you qualify as a 501(c)(3)
501(c)(3)). organization
or
Statement that you were listed
in the current edition of IRS
Bulletin 78 as of the date the
administrative proceeding was
initiated,
and
Statement of fees and/or
expenses for the services of
each provider for which you
seek reimbursement.
Tax exempt religious organization not Description of your
required to obtain a ruling from the organization and the basis for
Internal Revenue Service on its exempt your belief you are exempt
status. and
Statement of fees and/or
expenses for the services of
each provider for which you
seek reimbursement.
Cooperative association as defined in Copy of your charter or
section 15(a) of the Agricultural articles of incorporation
Marketing Act (12 U.S.C. 1141j(a)). and
Copy of your bylaws and
Statement of fees and expenses
for the services of each
provider for which you seek
reimbursement.
------------------------------------------------------------------------
[[Page 58297]]
Sec. 134.412 What must a net worth exhibit contain?
(a) A net worth exhibit may be in any format, but it must:
(1) List all assets and liabilities for you and each affiliate in
detail sufficient to show your eligibility;
(2) Aggregate net worth for you and all affiliates; and
(3) Describe any transfers of assets or obligations incurred by you
or your affiliates within one year of the initiation of the
administrative proceeding which have reduced your total net worth below
the eligibility ceiling, or state that no such transfers occurred.
(b) The net worth exhibit must be filed with your petition, but
will not be part of the public record of the proceeding. Further, in
accordance with the provisions of Sec. 134.204(g), you do not have to
serve your net worth exhibit on other parties.
Sec. 134.413 What documentation do I need for fees and expenses?
You must submit a separate itemized statement or invoice for the
services of each provider for which you seek reimbursement. All
expenses claimed must be verifiable. Each separate statement or invoice
must contain:
(a) The hours worked in connection with the proceeding by each
individual providing a billable service;
(b) A description of the specific services performed by these
individuals;
(c) The rate at which fees were computed for each individual
working on your case;
(d) Where applicable, a description of any study, analysis, report,
test, project, or other similar matter prepared in connection with your
case;
(e) The total charged by the provider on that statement or invoice;
and
(f) The provider's verification that the statement or invoice is
true to the best of his or her knowledge and that he or she understands
that a false statement is punishable by fine and imprisonment under 18
U.S.C. 1001.
Sec. 134.414 What deadlines apply to my petition for an award and
where do I send it?
After you have prevailed in an administrative proceeding or in a
discrete unit thereof, you must serve, and file with OHA, your written
petition for an award, and its attachments, no later than 30 days after
the decision in the administrative proceeding becomes final under
Sec. 134.227 of this part. The deadline for filing a petition for an
award may not be modified. If SBA or another party requests review of
the decision in the underlying administrative proceeding, your request
for an award for fees and expenses may still be filed, but it will not
be considered by the ALJ until a final decision is rendered.
Sec. 134.415 How will proceedings relating to my application for fees
and expenses be conducted?
Proceedings will be conducted in accordance with the provisions in
subpart B of this part.
Sec. 134.416 How will I know if I receive an award?
The ALJ will issue an initial decision on the merits of your
request for an award which will become final in 30 days unless a
request for review is filed under Sec. 134.228 of this part. The
decision will include findings on your eligibility, on whether SBA's
position was substantially justified, and on the reasonableness of the
amount you requested. Where applicable, there will also be findings on
whether you have unduly protracted the proceedings or whether other
circumstances make an award unjust, and an explanation of the reason
for the difference, if any, between the amount requested and the amount
awarded. If you have sought an award against more than one federal
agency in the administrative proceeding, the decision will allocate
responsibility for payment among the agencies with appropriate
explanation.
Sec. 134.417 May I seek review of the ALJ's decision on my award?
You may request review of the ALJ's decision on your award by
filing a request for review in accordance with Sec. 134.228. A request
for review must be filed within 30 days of service of the ALJ's initial
decision. You may also seek judicial review of the decision of the ALJ
as provided in 5 U.S.C. 504(c)(2). For purposes of judicial review, the
initial decision of the ALJ is not an appealable ``determination''
under that statute until it becomes a final decision as provided in
Sec. 134.227. Judicial review of the ALJ's decision on your award must
be requested within 30 days of the final decision.
Sec. 134.418 How are awards paid?
If you are seeking payment of an award, you must submit a copy of
the ALJ's final award to SBA along with your certification that you are
not seeking review of the ALJ's decision in the award proceeding. The
request must be sent to the Chief Financial Officer, Office of
Financial Operations, SBA, P.O. Box 205, Denver, CO 80201-0205. SBA
will pay you the amount awarded within 60 days of receipt of your
request unless it is notified that you or another party has sought
judicial review of the ALJ's decision on the award or of the decision
in the underlying administrative proceeding.
PART 132--[REMOVED]
2. Part 132 is hereby removed.
Dated: November 13, 1995.
Philip Lader,
Administrator.
[FR Doc. 95-28508 Filed 11-24-95; 8:45 am]
BILLING CODE 8025-01-P
