2016-30745. Rules of Practice and Procedure; Presentation of Evidence in Commission Proceedings

AGENCY:

Federal Maritime Commission.

ACTION:

Final rule

SUMMARY:

The Federal Maritime Commission is reorganizing several subparts of its Rules of Practice and Procedure and revising its rules regarding presentation of evidence in Commission proceedings.

DATES:

Effective January 27, 2016.

FOR FURTHER INFORMATION CONTACT:

Rachel E. Dickon, Assistant Secretary, Federal Maritime Commission, 800 North Capitol Street NW., Washington, DC 20573-0001. Phone: [phone]. Email: [e-mail].

SUPPLEMENTARY INFORMATION:

The Commission is updating or reorganizing several subparts of 46 CFR part 502, its Rules of Practice and Procedure, and substantively revising the subpart regarding how hearings are conducted to improve guidance concerning the presentation of evidence in Commission proceedings. Certain current rules are also removed to clarify current practice and eliminate duplication.

On May 3, 2016, the Commission issued a Notice of Proposed Rulemaking (NPRM) seeking public comment on the proposed amendments. 81 FR 26517. The Commission received one comment in response to the NPRM from the American Association of Port Authorities (AAPA) that addressed proposed § 502.204, revising and renumbering § 502.156. Current § 502.156 states “[u]nless inconsistent with the requirements of the Administrative Procedure Act and these Rules, the Federal Rules of Evidence . . . will also be applicable.” As explained in the NPRM, the proposed revision is intended to simplify the language in the rule by restating the liberal Administrative Procedure Act (APA) standard for admissibility and also to provide that the presiding officer may continue to look to the Federal Rules of Evidence (FRE) for guidance.

The Commission adopted the original language in § 502.156 in 1976, shortly after the FRE went into effect. 41 FR 20585, 20588 (May 19, 1976). In the 1975 notice proposing the language the Commission asserted that, as a general matter, the FRE did not appear to be inconsistent with the APA and that the FRE could be of great use to the Commission's administrative law judges (ALJs) in disposing of evidentiary issues that arise in Commission proceedings, so long as they were consistent with the requirements of the APA. 40 FR 43295, 43927 (Sep. 24, 1975). Since promulgation of the section, however, the Commission “has recognized the liberal standards of admissibility of evidence in administrative proceedings and has repeatedly `. . . identified the need for considerable relaxation of the rules of evidence followed by the federal courts in proceedings before the Commission.' ” EuroUSA Shipping, Inc., Tober Group, Inc.—Possible Violations, 31 S.R.R. 540, 547 (FMC 2008) (hereinafter Tober) (quoting Pacific Champion Express Co., Ltd.—Possible Violations, 28 S.R.R. 1102, 1105-06 (ALJ 1999)). Given the divergence between the FRE and APA standards, the current section's attempt to apply both standards simultaneously creates a tension in the regulation and could be confusing to parties. Accordingly, the Commission is now explicitly providing that presiding officers may look to the FRE for guidance when determining the admissibility of evidence. The AAPA notes that current rule § 502.156, states that the FRE “will be applicable” to Commission proceedings “unless inconsistent with” the requirements of the APA whereas the proposed language provides that the presiding officer “may look to the FRE for guidance.” The AAPA inquires whether such a change is intended to loosen the admissibility standard in cases before the Commission, and if so, to what to degree. The new rule does not loosen the admissibility standards, but rather clarifies, based on Commission and judicial precedent, that the standard of admissibility is governed by the APA, not the FRE. While the presiding officer may consider the FRE for guidance, they are neither controlling nor binding. In response to the AAPA's expressed concern that the revised language suggests a change in the presiding officer's discretion, we clarify the final rule by replacing the language “look to the FRE for guidance” with the language “consider the FRE for guidance” as it better reflects the discretion of the presiding officer.

The Commission recently addressed the utility of applying the FRE in proceedings before it in Tober. Pointing to its own precedent, the Commission noted that it has long recognized the liberal standards of admissibility of evidence in administrative proceedings and the need for considerable relaxation of the rules of evidence followed by the federal courts in proceedings before the Commission. Applying those standards to the ALJ's exclusion of certain exhibits on the basis of the FRE, the Commission held that challenged exhibits were admissible under the APA standard and that “to the extent that the Commission's rules and the APA diverge from the FRE, the FRE are not controlling and the Commission is not bound by their requirements.” Id., 549.

The AAPA also states that the proposed rule could impact motions for summary judgment. It noted that in federal court, a party opposing a motion on the grounds that there are material facts in genuine dispute must show that there is admissible evidence on its side of the asserted dispute. The AAPA appears to be concerned that a loosening of the standard may limit the utility of summary judgment motions. The Commission addressed the admissibility of evidence in the context of motions for summary judgment in Tober. Citing the Supreme Court's decision in Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986), the Commission stated: “While the nonmoving party is to show facts that present a genuine issue worthy of trial, the nonmoving party at the summary judgment stage is not required to produce evidence in a form that would be admissible at trial.” Id., 31 S.R.R. at 549 (emphasis added). Thus, the Commission made clear that at the summary judgment stage, the nonmoving party only needs to show facts that present a genuine issue worthy of trial. Id. This standard is applied to ensure that doubts are resolved in favor of the nonmoving party. As the Commission noted, it has denied summary judgment even when the nonmovant has not submitted any evidence, as well as when evidence has been deemed to be incomplete. Id., 546. In short, there is no requirement in the federal courts or at the Commission that the party opposing a motion for summary judgment present evidence that would be admissible at trial or hearing. To the extent that the question of admissibility might arise at the summary judgment stage, the proposed rule does not change existing standards but simply continues application of the liberal standard mandated by the APA.

The AAPA also expresses concern that making reliance on the FRE discretionary may create discrepancies in the decisions of Presiding Officers, either because a Presiding Officer may choose to follow the FRE in one case but choose not to follow it in another, or because different Presiding Officers may apply different standards.

The revised rule does not create new or different standards. There is only one standard as provided in the APA, i.e., “all evidence which is relevant, material, reliable and probative, and not unduly repetitious or cumulative, shall be admissible.” 46 CFR 502.156; 5 U.S.C. 556(d). The FRE will continue to be available to the presiding officer as a resource for guidance in determining admissibility of evidence under the APA standard. Any legal inconsistency in decisions on the admissibility of evidence will be subject to review by the Commission under the APA standard as in Tober.

Finally, the AAPA expressed concern that the Presiding Officer may perceive that the revised rule does not accord discretion to exclude evidence considered unreliable. Both the current and revised language are governed however by the same standard set forth in the APA.

The APA standard of admissibility has been the governing standard since this regulation was originally adopted in 1965. Since incorporation into the existing regulation in 1976, the FRE have always been subservient to the liberal APA standard. The revised language in the proposed rule adheres to this standard as required by the APA, while recognizing the usefulness of the FRE for guidance.

In 1986, the Administrative Conference of the United States (ACUS) published recommendations regarding the use of the FRE in administrative proceedings. ACUS compared three general categories of agency evidentiary rules. 1986 ACUS 6, 51 FR 25642. The category that is most analogous to current § 502.156 included “rules that require presiding officers to apply the [FRE] `so far as practicable.'” Id. ACUS identified four significant disadvantages with respect to this standard including:

(1) Courts seem confused as to what it means or how to enforce it; (2) instructing presiding officers to exclude evidence based on the standard forces them to undertake a difficult and hazardous task; (3) excluding evidence on the basis that it is inadmissible in a jury trial is totally unnecessary to insure that agencies act only on the basis of reliable evidence; and (4) agencies, like other experts, should be permitted to rely on classes of evidence broader than those that can be considered by lay jurors.

Id. Accordingly, ACUS recommended that “Congress should not require agencies to apply the [FRE], with or without the qualification `so far as practicable,' to limit the discretion of presiding officers to admit evidence in formal adjudications.” Id. ACUS also recognized, however, the disadvantages of relying on the APA standard alone, and the Commission has concluded that the FRE can be useful as a guide for litigants and presiding officers.

Reorganization of Part 502

Part 502 sets out the rules governing procedure in all types of Commission proceedings. However, after years of revisions, some users find the grouping and ordering of the subparts confusing. The Commission will reorder and rename certain subparts to better reflect the chronology of a typical adjudication, and to distinguish other types of proceedings, as enumerated in this table:

Current 46 CFR part 502	New 46 CFR part 502	Revisions
Subpart A, General Information		Redesignate § 502.141 as § 502.14.
Subpart E, Proceedings; Pleadings; Motions; Replies	Subpart E, Private Complaints and Commission Investigations	Separate subpart E in to subparts E and F, relocate and regroup rules within both subparts.
Subpart F, Settlement; Prehearing Procedure	Subpart F, Petitions, Exemptions and Orders to Show Cause	Separate subpart E in to subparts E and F, relocate and regroup rules within both subparts.
Subpart J, Hearings; Presiding Officers; Evidence	Subpart L, Presentation of Evidence	Revise several sections and relocate all (see Table below).
Subpart K, Shortened Procedure	Subpart K [Reserved]	Remove subpart K in its entirety.
Subpart L, Disclosures and Discovery	Subpart J, Disclosures and Discovery	Relocate and redesignate all rules to subpart J.
Subpart M, Briefs; Requests for Findings; Decisions; Exceptions	Subpart M; Decisions, Appeals, Exceptions	Relocate § 502.153, remove § 502.222 and retitle.

Subpart A

In subpart A, several cross references are corrected and current § 502.141 which establishes that the Commission may hold hearings that are not part of an adjudicatory process, is moved to this subpart as general information and retitled.

Subpart D

Cross references are corrected in subpart D.

Subpart E

Subpart E, currently “Proceedings, Pleading, Motions, Replies” is renamed “Private Complaints and Commission Investigations.” Revised subpart E contains the procedures for institution of those proceedings, motions practice, opportunity for settlement, and other related rules. Section 502.61 which opens the subpart is revised by moving and amending a rule on notice of hearings from subpart J. Section 502.91 which deals with informal settlements is being moved to subpart E in order to clarify chronologically when informal settlement is most likely to occur. This change is not intended to limit the applicability of the section which would apply in any proceeding, including the proceedings described in subpart F.

Subpart F

Current subpart F addresses Settlement and Prehearing Procedure. Inasmuch as those subject areas are part of the process in adjudicatory proceedings, they are divided and moved into subpart E and a revised subpart L governing presentation of evidence.

Subpart F is revised to apply to proceedings other than private complaints and Commission investigations, titled: “Petitions, Exemptions, and Orders to Show Cause.” These types of proceedings are generally distinct from complaint and investigation proceedings. With clear headings, the new rules are intended to be easier for the user to locate. Revised subpart F encompasses current §§ 502.73 through 502.77.

Subparts J, and L

The Commission is changing subpart J, “Hearings; Presiding Officers; Evidence”, and subpart L, “Disclosure and Discovery” to more logically and chronologically group the processes conducted in a formal adjudication. Subpart L, Disclosure and Discovery is moved in its entirety to subpart J. Current subpart J, Hearings, is revised to encompass all rules governing the presentation of evidence and presented in revised subpart L titled “Presentation of Evidence.” The revisions to subpart J are discussed more extensively below.

Subpart K

The Commission is removing and reserving subpart K, “Shortened Procedure.” Shortened Procedure regulations provides that, if the respondent consents, after briefing by the parties, the record is closed and a decision may be issued without discovery or an oral hearing. The procedure has rarely been requested, although parts of the procedure have become standard practice (e.g., not requiring an oral hearing). The procedure has not resulted in an ALJ decision in recent history, as the three proceedings utilizing shortened procedure since 1998 have resulted in settlement. The Commission has made several rule revisions in the past five years that have enhanced the efficiency of formal complaint proceedings including the requirement for initial disclosures in discovery, (current § 502.201), and the establishment of default rules in the absence of an answer, § 502.62(b)(6). Shortened procedure rules are not consistent with the requirement for initial disclosures, which help expedite all proceedings. If parties want to further limit discovery, that is possible without the provisions of subpart K. Moreover, the subparts S and T small claims proceedings may offer a solution to litigants seeking faster resolution of their disputes. The rules governing small claims proceedings are designed to make the litigation process faster and simpler for litigants seeking reparations of $50,000 or less.

Subpart M

The Commission revises subpart M to cover only matters that occur after conclusion of the parties' presentations in proceedings (i.e., decisions, appeals and exceptions). The rules concerning briefs are moved into revised subpart L, “Presentation of Evidence.” However, rules governing briefs to accompany exceptions will remain in subpart M. Current § 502.153, Appeals from ruling of presiding officer other than orders of dismissal in whole or in part are moved into subpart M, as it concerns an appeal.

Subpart M current section	New section	Revisions
§ 502.221, Briefs; requests for findings	Subpart L, § 502.214, Briefs	Revised for clarity.
§ 502.222, Requests for enlargement of time for filing briefs	Subpart L, § 502.215	Revised for clarity.
§§ 502.223 through 502.229	Text unchanged.
§ 502.230, Reopening by presiding officer or Commission	§ 502.230, Reopening by Commission	Rule concerning supplementing evidence prior to an initial decision will be moved to § 502.216, Supplementing the record.

Subpart J, Hearings—Presentation of Evidence

Currently subpart J, Hearings, presents the Commission's rules on hearings and presentation of evidence. These rules governing presentation of evidence are revised and presented in revised subpart L. The revisions are intended to reflect the procedures currently used by the Commission, to utilize current language and standards set by the Federal Rules of Civil Procedure where appropriate, and to clarify and simplify rules where possible. Several rules currently in the subpart will be removed in their entirety to eliminate duplication and reflect current practice. The revisions to subpart J are enumerated in the table below:

Subpart J current section	New Subpart L	Revisions
§ 502.141, Hearings not required by statute	Move to subpart A	Does not pertain to adjudicatory hearings.
§ 502.142, Hearings required by statute	§ 502.201, Applicability and Scope	Revised to define “hearing”.
§ 502.143, Notice of nature of hearing, jurisdiction and issues	Moved to § 502.61(c), Proceedings
§ 502.144, Notice of time and place of hearing; postponement of hearing	§ 502.211	Regroup with other rules pertaining only to oral hearings.
§§ 502.145 through 502.149 [Reserved].
§ 502.150, Further evidence required by presiding officer during hearing	Remove	Within presiding officer's authority to regulate a hearing in § 502.25(b)(3).
§ 502.151, Exceptions to rulings of presiding officer unnecessary	§ 502.212	Regroup with other rules pertaining only to oral hearings.
§ 502.152, Offer of Proof	§ 502.204(b)	Moved because related to admissibility.
§ 502.153, Appeal from ruling of presiding officer other than orders of dismissal in whole or in part	Subpart M, § 502.221	Revised and moved to subpart M as it concerns an appeal.
§ 502.154, Rights of parties as to presentation of evidence	§ 502.202	Revised to mirror APA.
§ 502.155, Burden of proof	§ 502.203	Revised for clarity.
§ 502.156, Evidence admissible	§ 502.204	Revised to clarity.
§ 502.157, Written evidence	Removed	Within presiding officer's authority to regulate a hearing in § 502.25(b)(3).
§ 502.158, Documents containing matter not material	Removed	Within presiding officer's authority to regulate a hearing in § 502.25(b)(3).
§ 502.159 [Reserved].
§ 502.160, Records in other proceedings	§ 502.205.
§ 502.161, Commission's files	§ 502.206, Incorporation by reference	Revised for clarity.
§ 502.162, Stipulations	§ 502.207	Revised for clarity.
§ 502.163, Receipt of documents after hearing	Removed	Covered by § 502.216, Supplementing the record.
§ 502.164, Oral argument at hearing	Removed	Within presiding officer's authority to regulate a hearing in § 502.25(b)(3).
§ 502.165, Official Transcript	§ 502.213	Revised and modernized.
§ 502.166, Correction of transcript	§ 502.213.
§ 502.167, Objection to public disclosure of information	§ 502.208	Revised to cross reference § 502.5.
§ 502.168, Copies of data or evidence	Removed	Covered by § 502.212.
§ 502.169, Record of decision	§ 502.217	Revised for clarity.

Following is a more detailed description of each new rule that will appear in revised subpart L.

§ 502.201, Applicability and Scope

§ 502.201 is derived and moved from current § 502.142 and sets out the proceedings for which the rules in the subpart will apply. The term hearing is defined as “a formal adjudicatory proceeding in which evidence is presented orally, or through written statement, or by combination thereof” to reflect the broader and more inclusive meaning of the term in current administrative practice.

§ 502.202, Right of Parties To Present Evidence

§ 502.202 is derived and moved from current § 502.154 but is revised to reflect that the presiding officer may limit introduction of evidence if it is “irrelevant, immaterial, or unduly repetitious” mirroring the Administrative Procedure Act.

§ 502.203, Burden of Proof

§ 502.203 is derived and moved from current § 502.155 and clarifies the language to include reference to motions for ease of understanding the burden of proof.

§ 502.204, Evidence Admissible

Discussion of § 502.204(a) is above in discussion of the AAPA comment. Also, the text of current § 502.152 has been modernized to clarify the procedures governing when and how to make an offer of proof. The rule is moved into revised § 502.204 as paragraph (b) as a logical part of the rule governing admissibility of evidence. The final rule revises slightly the proposed rule for clarity.

§§ 502.205 and 502.206, Documents Incorporated Into the Record by Reference

Revising current § 502.160 (revised § 502.205) allows documents in another Commission proceeding to be incorporated into the record by reference. The final rule revises slightly the proposed rule for clarity. § 502.206 allows material in any document on file with the Commission that is also available to the public to be incorporated into the record by reference.

§ 502.207, Stipulations

Current § 502.162 allows for stipulation. The rule is moved to § 502.207 and revises the language for clarity.

§ 502.208, Objection to Public Disclosure of Information

§ 502.208 revises current § 502.167, Objection to public disclosure of information. The change adds a cross reference to § 502.5 where the Commission recently spelled out its requirements for submission of confidential material in a final rule. 80 FR 14318 (Mar. 19, 2015.)

§§ 502.209 and 502.210, Prehearing Conference and Statements

Current §§ 502.94 and 502.95 are moved from subpart E as they pertain to hearings. The language is clarified to reflect current practice of filing a motion instead of a petition in Rule 502.209. The procedure and timeline for filing a prehearing statement are provided in 502.210.

§§ 502.211 Through 502.213, Oral Hearings

§§ 502.211 through 502.213 deal with oral hearings and consist of the provisions found in current §§ 502.144, 502.151, and 502.165. Current § 502.165, Official transcript, requires revision as it currently contains a description of section 11 of the Federal Advisory Committee Act (FACA) and the Office of Management and Budget's (OMB) interpretation of that section, which are the basis for the Commission's regulations with respect to obtaining copies of transcripts. In order to simplify these provisions, the Commission includes in the new § 502.213 only the relevant requirements and deletes the aforementioned references to FACA and OMB's interpretation.

§§ 502.214 and 502.215, Briefs

Sections 502.221 and 502.222 concerning briefs are included in this subpart and renumbered as §§ 502.214 and 502.215. The last sentence of § 502.221(a), which requires that the period of time for filing briefs will be the same for both parties, is removed as setting time is within the powers of the presiding officer as established in recently revised § 502.25. Section 502.221(c) is deleted as it is not current practice for the Presiding Officer to “require the Bureau of Enforcement to file a request for findings of fact and conclusions within a reasonable time prior to the filing of briefs.” Generally, the Commission's Bureau of Enforcement (BOE) files the first brief unless concurrent briefs are appropriate for the particular case; this is more appropriate to address in the scheduling order issued in each particular proceeding.

§ 502.216, Supplementing the Record

Current § 502.230(a), Motion to Reopen, is renumbered, renamed and revised to provide instructions concerning submission of evidence after final presentations in a proceeding and prior to issuance of an initial decision. The language of the rule and the heading “Supplementing the record” is more descriptive of the current practice before the Commission's Administrative Law Judges but does not substantively revise the process or rights of a party to a proceeding.

§ 502.217, Record of Decision

Current § 502.169 is moved to subpart L and the reference to “filing and motions” replaces “paper and requests.”

The Commission has found that several regulations reference these rules, and that these references may now be inaccurate due to shifts in numbering. The Commission plans to correct these references in the near future through technical corrections, which will be published in the Federal Register.

Rulemaking Analyses and Notices

Regulatory Flexibility Act

The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 601-612) provides that whenever an agency promulgates a final rule after being required to publish a notice of proposed rulemaking under the Administrative Procedure Act (APA) (5 U.S.C. 553), the agency must prepare and make available a final regulatory flexibility analysis (FRFA) describing the impact of the rule on small entities. 5 U.S.C. 604. An agency is not required to publish a FRFA, however, for the following types of rules, which are excluded from the APA's notice-and-comment requirement: interpretative rules; general statements of policy; rules of agency organization, procedure, or practice; and rules for which the agency for good cause finds that notice and comment is impracticable, unnecessary, or contrary to public interest. See 5 U.S.C. 553(b).

Although the Commission elected to seek public comment on its proposed regulatory amendments to part 502, these amendments concern the Commission's practice and procedures. Therefore, the APA does not require publication of a notice of proposed rulemaking in this instance, and the Commission is not required to prepare a FRFA.

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. 44 U.S.C. 3507. The agency must submit collections of information in rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11. This final rule does not contain any collections of information, as defined by 44 U.S.C. 3502(3) and 5 CFR 1320.3(c).

Regulation Identifier Number

The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda, available at http://www.reginfo.gov/​public/​do/​eAgendaMain.

List of Subjects in 46 CFR Part 502

• Administrative practice and procedure
• Archives and records
• Business and industry
• Classified information
• Confidential business information
• Consumer protection
• Freedom of information
• Government in the Sunshine Act
• Government publications
• Health records
• Information
• Newspapers and magazines
• Paperwork requirements
• Printing, publications
• Privacy
• Public meetings
• Record retention
• Records
• Reporting and recordkeeping requirements
• Trade names
• Trade practices

For the reasons stated in the preamble, the Federal Maritime Commission amends 46 CFR part 502 as follows:

PART 502—RULES OF PRACTICE AND PROCEDURE

1. The authority citation for part 502 continues to read as follows:

Authority: 5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561-569, 571-596, 18 U.S.C. 207; 28 U.S.C. 2112(a); 31 U.S.C. 9701; 46 U.S.C. 305, 40103-40104, 40304, 40306, 40501-40503, 40701-40706, 41101-41109, 41301-41309, 44101-44106; E.O. 11222 of May 8, 1965.

§ 502.5

[Amended]

2. Amend § 502.5:

a. In the introductory text, by removing the phrase “502.167, 502.201(j)(1)(vii)” and adding in its place the phrase “502.141(j)(1)(vii), 502.208”, and by removing the reference “§ 502.201(j)” and adding in its place the reference “§ 502.141(j)”; and

b. In paragraph (b) by removing the reference “§ 502.201(j)(1)(vii)” and adding in its place the reference “§ 502.141(j)(1)(vii)”.

§ 502.6

[Amended]

3. Amend § 502.6(c) by removing the phrase “§ 502.203 or § 502.204” and adding in its place the phrase “§ 502.143 or § 502.144”.

§ 501.10

[Amended]

4. Amend § 502.10 by removing the reference “502.153” and adding in its place the reference “502.221”.

Subpart D—Rulemaking

§ 502.52

[Amended]

5. Amend § 502.52 by removing the citation “§ 502.143” and adding in its place the citation “§ 502.61(c)”.

§ 502.53

[Amended]

6. Amend § 502.53(a) by removing the reference “subpart J” and adding in its place the reference “subpart L”.

Subpart E—Private Complaints and Commission Investigations

7. Revise the subpart E heading to read as set forth above.

8. Amend § 502.61 by removing the words “under normal or shortened procedures (subpart K)” and the last sentence from paragraph (a); redesignating paragraph (b) as paragraph (d) and adding a new paragraph (b) and paragraph (c) to read as follows:

§ 502.61

Proceedings

* * * * *

(b) The Commission may commence a proceeding for a rulemaking, for an adjudication (including Commission enforcement action under § 502.63), or a non-adjudicatory investigation upon petition or on its own initiative by issuing an appropriate order.

(c) Persons entitled to notice of hearings, except those notified by complaint service under § 502.113, will be duly and timely informed of the nature of the proceeding, the legal authority and jurisdiction under which the proceeding is conducted, and the terms, substance, and issues involved, or the matters of fact and law asserted, as the case may be. Such notice will be published in the Federal Register unless all persons subject thereto are named and either are served or otherwise have notice thereof in accordance with law.

* * * * *

§ 502.69

[Amended]

9. Amend § 502.69(f) by removing “shortened procedure (subpart K of this part)” and removing the citation “§ 502.221” and adding in its place the citation “§ 502.214”.

Subpart F—Petitions, Exemptions, and Orders to Show Cause

10. Revise the subpart F heading to read as set forth above.

§§ 502.91 through 502.95

[Removed]

11. Remove §§ 502.91 through 502.95.

§§ 502.73 through 502.77

[Redesignated as §§ 502.91 through 502.95 and Transferred to Subpart F]

12. Redesignate §§ 502.73 through 502.77 as §§ 502.91 through 502.95, respectively, and transfer them to subpart F.

§§ 502.78 and 502.79

[Redesignated as §§ 502.73 and 502.74]

13. Redesignate §§ 502.78 and 502.79 as §§ 502.73 and 502.74, respectively, in subpart E.

14. Add a new § 502.75 to subpart E to read as follows:

§ 502.75

Opportunity for informal settlement.

(a) Parties are encouraged to make use of all the procedures of this part that are designed to simplify or avoid formal litigation, and to assist the parties in reaching settlements whenever it appears that a particular procedure would be helpful.

(b) Where time, the nature of the proceeding, and the public interest permit, all interested parties will have the opportunity for the submission and consideration of facts, argument, offers of settlement, or proposal of adjustment, without prejudice to the rights of the parties.

(c) No settlement offer, or proposal will be admissible in evidence over the objection of any party in any hearing on the matter.

(d) As soon as practicable after the commencement of any proceeding, the presiding officer will direct the parties or their representatives to consider the use of alternative dispute resolution, including but not limited to mediation, and may direct the parties or their representatives to consult with the Federal Maritime Commission Alternative Dispute Resolution Specialist about the feasibility of alternative dispute resolution.

(e) Any party may request that a mediator or other neutral be appointed to assist the parties in reaching a settlement. If such a request or suggestion is made and is not opposed, the presiding officer will appoint a mediator or other neutral who is acceptable to all parties, coordinating with the Federal Maritime Commission Alternative Dispute Resolution Specialist. The mediator or other neutral will convene and conduct one or more mediation or other sessions with the parties and will inform the presiding officer, within the time prescribed by the presiding officer, whether the dispute resolution proceeding resulted in a resolution or not, and may make recommendations as to future proceedings. If settlement is reached, it will be submitted to the presiding officer who will issue an appropriate decision or ruling. All such dispute resolution proceedings are subject to the provisions of subpart U of this part.

(f) Any party may request that a settlement judge be appointed to assist the parties in reaching a settlement. If such a request or suggestion is made and is not opposed, the presiding officer will advise the Chief Administrative Law Judge who may appoint a settlement judge who is acceptable to all parties. The settlement judge will convene and preside over conferences and settlement negotiations and will report to the presiding officer within the time prescribed by the Chief Administrative Law Judge, on the results of settlement discussions with appropriate recommendations as to future proceedings. If settlement is reached, it must be submitted to the presiding officer who will issue an appropriate decision or ruling. [Rule 75.]

15. Revise the newly redesignated § 502.91 to read as follows:

§ 502.91

Order to show cause.

The Commission may institute a proceeding by order to show cause. The order will be served upon all persons named therein, will include the information specified in § 502.221, will require the person named therein to answer, and may require such person to appear at a specified time and place and present evidence upon the matters specified. [Rule 91.]

Exhibit No. 1 to Subpart F of Part 502 [Removed]

16. Remove reserved Exhibit No. 1 to Subpart F of Part 502.

Subpart H—Service of Documents

§ 502.114

[Amended]

17. Amend § 502.114(a) by removing the citation “§ 502.145” and adding in its place the citation “§ 502.131”.

§ 502.118

[Removed]

18. Remove § 502.118.

Subpart I—Subpoenas

§ 502.132

[Amended]

19. Amend § 502.132(c) by removing the citation “§ 502.203” and adding in its place the citation “§ 502.143”.

§ 502.136

[Amended]

20. Amend § 502.136 by removing the citation “§ 502.210(b)” and adding in its place the citation “§ 502.150(b)”.

Subpart J—Disclosures and Discovery

21. Revise the subpart J heading to read as set forth above.

22. Redesignate § 502.141 as § 502.14, transfer it to subpart A, and revise the section heading to read as follows:

§ 502.14

Public hearings.

* * * * *

§§ 502.142 through 502.150

[Removed]

23. Remove §§ 502.142 through 502.150.

§§ 502.201 through 502.210

[Redesignated as §§ 502.141 through 502.150 and Transferred to Subpart J]

24. Redesignate §§ 502.201 through 502.210 as §§ 502.141 through 502.150, respectively, and transfer them to subpart J.

§ 502.143

[Amended]

25. Amend newly redesignated § 502.143:

a. In paragraph (a)(1) by removing the citation “§ 502.03(a)(2)” and adding in its place the citation “§ 502.143(a)(2)”;

b. In paragraph (a)(2)(i) by removing the citation “§ 502.204” and adding in its place the citation “§ 502.144”;

c. In paragraph (b)(2) by removing the citation “§ 502.206” and adding in its place the citation “§ 502.146”;

d. In paragraph (b)(5)(i) by removing the citation “§ 502.202” and adding in its place the citation“§ 502.142”;

e. In paragraph (b)(5)(ii) by removing the citation “§ 502.203(b)(5)(i)(A)” and adding in its place the citation “§ 502.143(b)(5)(i)(A)”;

f. In paragraph (c)(1) by removing the citation “§ 502.154” and adding in its place the citation “§ 502.202” and by removing the citation “§ 502.203(b)(3)” and adding in its place the citation “§ 502.143(b)(3)”;

g. In paragraph (c)(2) by removing the citation “§ 502.203(d)(2)” and adding in its place the citation “§ 502.143(d)(2)”;

h. In paragraph (d)(1) by removing the citation “§ 502.201(e)(2)” and adding in its place the citation “§ 502.141(e)”;

i. In paragraph (d)(2)(ii) by removing the citation “§ 502.201(j)” and adding in its place the citation “§ 502.141(j)”; and

j. In paragraph (e)(2) by removing the citation “§ 502.203(f)(1)” and adding in its place the citation “§ 502.143(f)(1)”.

§ 502.144

[Amended]

26. Amend newly redesignated § 502.144:

a. In paragraph (a)(2)(i) by removing the citation“§ 502.203” and adding in its place the citation “§ 502.143”;

b. In paragraph (1)(4) by removing the citation “§ 502.203(b)(6)” and adding in its place the citation “§ 502.143(b)(6)”.

§ 502.145

[Amended]

27. Amend newly redesignated § 502.145:

a. In paragraph (a)(1) by removing the citation “§ 502.201(e)(2)” and adding in its place the citation “§ 502.141(e)(2)”;

b. In paragraph (a)(2) by removing the citation “§ 502.201(e) and (f)” and adding in its place the citation “§ 502.141(e) and (f)” ; and

c. In paragraph (b)(2) by removing the citation “§ 502.201(l)” and adding in its place the citation “§ 502.141(l)”.

§ 502.146

[Amended]

28. Amend newly redesignated § 502.146:

a. In paragraph (a) by removing the citation “§ 502.201(e) and (f)” and adding in its place the citation “§ 502.141(e) and (f)”; and

b. In paragraph (b)(2) by removing the citation “§ 502.201(l)” and adding in its place the citation “§ 502.141(l)”.

§ 502.147

[Amended]

29. Amend newly redesignated § 502.147(a)(3) by removing the citation “§ 502.201(l)” and adding in its place the citation “§ 502.141(l)”.

§ 502.148

[Amended]

30. Amend newly redesignated § 502.148(a) by removing the citation “§§ 502.202 through 502.207” and adding in its place the citation “§§ 502.142 through 502.147”.

§ 502.149

[Amended]

31. Amend newly redesignated § 502.149:

a. In paragraph (a)(1)(iii) by removing the citation “§ 502.209(a)(2) through (7)” and adding in its place the citation“§ 502.149(a)(2) through (7)”;

b. In paragraph (a)(2) by removing the citation “§ 502.156 of subpart J” and adding in its place the citation “§ 502.204 of subpart L”;

c. In paragraph (a)(3) by removing the phrase “§ 502.203(b)(6) or § 502.204(a)(4)” and adding in its place the phrase “§ 502.143(b)(6) or § 502.144(a)(4);

d. In paragraph (a)(7) by removing the citation “§ 502.156 of subpart J” and adding in its place the citation “§ 502.204 of subpart L”;

e. In paragraph (b) by removing the phrase “§ 502.202(b) and § 502.209(d)(3)” and adding in its place the phrase “§ 502.142(b) and § 502.149(d)(3)”; and

f. In paragraph (d)(3)(iii) by removing the citation “§ 502.204” and adding in its place the citation “§ 502.144”.

§ 502.150

[Amended]

32. Amend newly redesignated § 502.150(a)(1) by removing the citation “§ 502.201” and adding in its place the citation “§ 502.141” and by removing the citation “§ 502.206” and adding in its place the citation “§ 502.146”.

§§ 502.151 through 502.169

[Removed and reserved]

33. Remove and reserve §§ 502.151 through 502.169.

Subpart K [Removed and Reserved]

34. Remove and reserve subpart K, consisting of §§ 502.181 through 502.187.

35. Revise subpart L to read as follows:

Subpart L—Presentation of Evidence

502.201

Applicability and scope.

502.202

Right of parties to present evidence.

502.203

Burden of proof.

502.204

Evidence admissible.

502.205

Records in other proceedings.

502.206

Documents incorporated into the record by reference.

502.207

Stipulations.

502.208

Objection to public disclosure of information.

502.209

Prehearing conference.

502.210

Prehearing statements.

502.211

Notice of time and place of oral hearing; postponement of hearing.

502.212

Exceptions to rulings of presiding officer unnecessary.

502.213

Official transcript.

502.214

Briefs; requests for findings.

502.215

Requests for enlargement of time for filing briefs.

502.216

Supplementing the record.

502.217

Record of decision.

§ 502.201

Applicability and scope.

(a) The rules in this subpart apply to adjudicatory proceedings conducted under the statutes administered by the Commission involving matters which require determination after notice and opportunity for hearing. Adjudicatory proceedings are formal proceedings commenced upon the filing of a sworn complaint or by Order of the Commission. Such proceedings will be conducted pursuant to the Administrative Procedure Act, 5 U.S.C. 551-559, and the rules in this subpart.

(b) The term hearing means a formal adjudicatory proceeding in which evidence is presented orally, or through written statements, or by combination thereof. The term oral hearing means a hearing at which evidence is presented through oral testimony of a witness. [Rule 201].

§ 502.202

Right of parties to present evidence.

Every party has the right to present its case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts. The presiding officer, however, has the right and duty to limit the introduction of evidence and the examination and cross-examination of witnesses when, in his or her judgment, such evidence or examination is irrelevant, immaterial, or unduly repetitious. [Rule 202.]

§ 502.203

Burden of proof.

In all cases governed by the requirements of the Administrative Procedure Act, 5 U.S.C. 556(d), the burden of proof is on the proponent of the motion or the order. [Rule 203.]

§ 502.204

Evidence admissible.

(a) In any proceeding under the rules in this part and in accordance with the Administrative Procedure Act, all evidence which is relevant, material, reliable and probative, and not unduly repetitious or cumulative, will be admissible. All other evidence will be excluded. The presiding officer may consider the Federal Rules of Evidence for guidance.

(b) A party who objects to a ruling of the presiding officer rejecting or excluding proffered evidence may make an offer of proof. If the ruling excludes proffered oral testimony, an offer of proof may consist of a statement by counsel of the substance of the evidence that would be adduced, or in the discretion of the presiding officer, testimony of the witness. If the ruling excludes documents offered as evidence or reference to documents or records, the documents or records shall be marked for identification and will constitute the offer of proof. [Rule 204.]

§ 502.205

Records in other proceedings.

Portions of the record of other proceedings may be received in evidence. A true copy of the records sought to be admitted must be presented in the form of an exhibit unless the presiding officer accepts the parties' stipulation that such records may be incorporated by reference. [Rule 205.]

§ 502.206

Documents incorporated into the record by reference.

Any matter contained in a document on file with the Commission that is available to the public may be received in evidence through incorporation by reference without producing such document, provided that the matter so offered is specified in such manner as to be clearly identified, with sufficient particularity, and readily located electronically. [Rule 206.]

§ 502.207

Stipulations.

The parties may, and are encouraged to, stipulate any facts involved in the proceeding and include them in the record with the consent of the presiding officer. A stipulation may be admitted even if all parties do not agree, provided that any party who does not agree to the stipulation has the right to cross-examine and offer rebuttal evidence. [Rule 207.]

§ 502.208

Objection to public disclosure of information.

(a) If any party wishes to present confidential information or upon objection to public disclosure of any information sought to be elicited, the requirements and procedures in § 502.5 will apply.

(b) In an oral hearing, the presiding officer may in his or her discretion order that a witness will disclose such information only in the presence of the parties and those designated and authorized by the presiding officer. Any transcript of such testimony will be held confidential to the extent the presiding officer determines. Copies of transcripts will be served only to authorized parties or their representatives or other parties as the presiding officer may designate.

(c) Any information given pursuant to this section may be used by the presiding officer or the Commission if deemed necessary to a correct decision in the proceeding. [Rule 208.]

§ 502.209

Prehearing conference.

(a)(1) Prior to any hearing, the Commission or presiding officer may direct all interested parties, by written notice, to attend one or more prehearing conferences for the purpose of considering any settlement under § 502.91, formulating the issues in the proceeding, and determining other matters to aid in its disposition. In addition to any offers of settlement or proposals of adjustment, the following may be considered:

(i) Simplification of the issues;

(ii) The necessity or desirability of amendments to the pleadings;

(iii) The possibility of obtaining admissions of fact and of documents that will avoid unnecessary proof;

(iv) Limitation of the number of witnesses;

(v) The procedure to be used at the hearing;

(vi) The distribution to the parties prior to the hearing of written testimony and exhibits;

(vii) Consolidation of the examination of witnesses by counsel;

(viii) Such other matters as may aid in the disposition of the proceeding.

(2) Prior to the hearing, the presiding officer may require exchange of exhibits and any other material that may expedite the hearing. The presiding officer will assume the responsibility of accomplishing the purposes of the notice of prehearing conference so far as this may be possible without prejudice to the rights of any party.

(3) The presiding officer will rule upon all matters presented for decision, orally upon the record when feasible, or by subsequent ruling in writing. If a party determines that a ruling made orally does not cover fully the issue presented, or is unclear, such party may file a motion requesting a further ruling within ten (10) days after receipt of the transcript.

(b) In any proceeding under the rules in this part, the presiding officer hold an informal conference prior to the taking of testimony, or may recess the hearing for such a conference, with a view to carrying out the purposes of this section.

(c) At any prehearing conference, consideration may be given to whether the use of alternative dispute resolution would be appropriate or useful for the disposition of the proceeding whether or not there has been previous consideration of such use. [Rule 209.]

§ 502.210

Prehearing statements.

(a) Unless a waiver is granted by the presiding officer, it is the duty of all parties to a proceeding to prepare a statement or statements at a time and in the manner to be established by the presiding officer provided that there has been reasonable opportunity for discovery. To the extent possible, joint statements should be prepared.

(b) The prehearing statement must state the name of the party or parties on whose behalf it is presented and briefly set forth the following matters, unless otherwise ordered by the presiding officer:

(1) Issues involved in the proceeding.

(2) Facts stipulated pursuant to the procedures together with a statement that the party or parties have communicated or conferred in a good faith effort to reach stipulation to the fullest extent possible.

(3) Facts in dispute.

(4) Witnesses and exhibits by which disputed facts will be litigated.

(5) A brief statement of applicable law.

(6) The conclusion to be drawn.

(7) Suggested time and location of hearing and estimated time required for presentation of the party's or parties' case.

(8) Any appropriate comments, suggestions, or information which might assist the parties in preparing for the hearing or otherwise aid in the disposition of the proceeding.

(c) The presiding officer may, for good cause shown, permit a party to introduce facts or argue points of law outside the scope of the facts and law outlined in the prehearing statement. Failure to file a prehearing statement, unless waiver has been granted by the presiding officer, may result in dismissal of a party from the proceeding, dismissal of a complaint, judgment against respondents, or imposition of such other sanctions as may be appropriate under the circumstances.

(d) Following the submission of prehearing statements, the presiding officer may, upon motion or otherwise, convene a prehearing conference for the purpose of further narrowing issues and limiting the scope of the hearing if, in his or her opinion, the prehearing statements indicate lack of dispute of material fact not previously acknowledged by the parties or lack of legitimate need for cross-examination and is authorized to issue appropriate orders consistent with the purposes stated in this section. [Rule 210.]

§ 502.211

Notice of time and place of oral hearing; postponement of hearing.

(a) The notice of an oral hearing will designate the time and place the person or persons who will preside, and the type of decision to be issued. The date or place of a hearing for which notice has been issued may be changed when warranted. Reasonable notice will be given to the parties or their representatives of the time and place of the change thereof, due regard being had for the public interest and the convenience and necessity of the parties or their representatives. Notice may be served by mail, facsimile transmission, or electronic mail.

(b) Motions for postponement of any hearing date must be filed in accordance with § 502.104. [Rule 211.]

§ 502.212

Exceptions to rulings of presiding officer unnecessary.

A formal exception to a ruling or order is unnecessary. When the ruling or order is requested or made, the party doing so need only state the action that it wants the presiding officer to take or that it objects to, along with the grounds for the request or objection. Failing to object does not prejudice a party who had no opportunity to do so when the ruling or order was made. [Rule 212.]

§ 502.213

Official transcript.

(a) The Commission will designate the official reporter for all hearings. The official transcript of testimony taken, together with any exhibits and any briefs or memoranda of law filed therewith, will be filed with the Commission. Transcripts of testimony will be available in any proceeding under the rules in this part, at actual cost of duplication.

(b)(1) Where the Commission does not request daily copy service, any party requesting such service must bear the incremental cost of transcription above the regular copy transcription cost borne by the Commission, in addition to the actual cost of duplication. Where the requesting party applies for and demonstrates that the furnishing of daily copy is indispensable to the protection of a vital right or interest in achieving a fair hearing, the presiding officer in the proceeding in which the application is made will order that daily copy service be provided the requesting party at the actual cost of duplication, with the full cost of transcription being borne by the Commission.

(2) In the event a request for daily copy is denied by the presiding officer, the requesting party, in order to obtain daily copy, must pay the cost of transcription over and above that borne by the Commission, i.e., the incremental cost between that paid by the Commission when it requests regular copy and when it requests daily copy. The decision of the presiding officer in this situation is interpreted as falling within the scope of the functions and powers of the presiding officer, as defined in § 502.25(a).

(c) Motions made at the hearing to correct the transcript will be acted upon by the presiding officer. Motions made after an oral hearing to correct the record must be filed with the presiding officer within twenty-five (25) days after the last day of hearing or any session thereof, unless otherwise directed by the presiding officer, and must be served on all parties. If no objections are received within ten (10) days after date of service, the transcript will, upon approval of the presiding officer, be changed to reflect such corrections. If objections are received, the motion will be acted upon with due consideration of the stenographic record of the hearing. [Rule 213.]

§ 502.214

Briefs; requests for findings.

(a) The presiding officer will determine the time and manner of filing briefs and any enlargement of time.

(b) Briefs will be served upon all parties pursuant to subpart H of this part.

(c) Unless otherwise ordered by the presiding officer, opening or initial briefs must contain the following matters in separately captioned sections:

(1) Introductory section describing the nature and background of the case;

(2) Proposed findings of fact in serially numbered paragraphs with reference to exhibit numbers and pages of the transcript;

(3) Argument based upon principles of law with appropriate citations of the authorities relied upon; and

(4) Conclusions.

(d) All briefs must contain a subject index or table of contents with page references and a list of authorities cited.

(e) All briefs filed pursuant to this section must ordinarily be limited to eighty (80) pages in length, exclusive of pages containing the table of contents, table of authorities, and certificate of service, unless the presiding officer allows the parties to exceed this limit for good cause shown and upon application filed not later than seven (7) days before the time fixed for filing of such a brief or reply. [Rule 214.]

§ 502.215

Requests for enlargement of time for filing briefs.

Requests for enlargement of time to file briefs must conform to the requirements of § 502.102. [Rule 215.]

§ 502.216

Supplementing the record.

A motion to supplement the record, pursuant to § 502.69, should be filed if submission of evidence is desired after the parties' presentation in a proceeding, but before issuance by the presiding officer of an initial decision. [Rule 216.]

§ 502.217

Record of decision.

The transcript of testimony and exhibits, together with all filings and motions filed in the proceeding, will constitute the exclusive record for decision. [Rule 217.]

Subpart M—Decisions; Appeals; Exceptions

36. Revise the subpart M heading to read as set forth above.

37. Revise § 502.221 to read as follows:

§ 502.221

Appeal from ruling of presiding officer other than orders of dismissal in whole or in part.

(a) Rulings of the presiding officer may not be appealed prior to or during the course of the hearing, or subsequent thereto, if the proceeding is still before him or her, except where the presiding officer finds it necessary to allow an appeal to the Commission to prevent substantial delay, expense, or detriment to the public interest, or undue prejudice to a party.

(b) Any party seeking to appeal must file a motion for leave to appeal no later than fifteen (15) days after written service or oral notice of the ruling in question, unless the presiding officer, for good cause shown, enlarges or shortens the time. Any such motion must contain the grounds for leave to appeal and the appeal itself.

(c) Replies to the motion for leave to appeal and the appeal may be filed within fifteen (15) days after date of service thereof, unless the presiding officer, for good cause shown, enlarges or shortens the time. If the motion is granted, the presiding officer must certify the appeal to the Commission.

(d) Unless otherwise provided, the certification of the appeal will not operate as a stay of the proceeding before the presiding officer.

(e) The provisions of § 502.10 do not apply to this section. [Rule 221.]

§ 502.222

[Removed and Reserved]

38. Remove and reserve § 502.222.

39. Revise § 502.230 to read as follows:

§ 502.230

Reopening by Commission.

(a) Reopening by the Commission. After an initial decision by the presiding officer, or in a matter otherwise pending before the Commission, but before issuance of a Commission decision, the Commission may, after petition and reply in conformity with paragraphs (b) and (c) of this section, or upon its own motion, reopen a proceeding for the purpose of taking further evidence.

(b) Motion to reopen. A motion to reopen shall be served in conformity with the requirements of subpart H and will set forth the grounds requiring reopening of the proceeding, including material changes of fact or law alleged to have occurred.

(c) Reply. Within ten (10) days following service of a motion to reopen, any party may reply to such motion.

(d) Remand by the Commission. Nothing contained in this rule precludes the Commission from remanding a proceeding to the presiding officer for the taking of addition evidence or determining points of law. [Rule 230.]

By the Commission.

Rachel E. Dickon,

Assistant Secretary.