[Federal Register Volume 64, Number 141 (Friday, July 23, 1999)]
[Rules and Regulations]
[Pages 40138-40190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17337]
[[Page 40137]]
_______________________________________________________________________
Part V
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 22
Consolidated Rules of Practice Governing the Administrative Assessment
of Civil Penalties, Issuance of Compliance or Corrective Action Orders,
and the Revocation, Termination or Suspension of Permits; Final Rule
Federal Register / Vol. 64, No. 141 / Friday, July 23, 1999 / Rules
and Regulations
[[Page 40138]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 22
[FRL-6373-3]
RIN 2020-AA13
Consolidated Rules of Practice Governing the Administrative
Assessment of Civil Penalties, Issuance of Compliance or Corrective
Action Orders, and the Revocation, Termination or Suspension of Permits
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: This Rule revises the Consolidated Rules of Practice
(``CROP''), including expansion of these procedural rules to include
certain permit revocation, termination and suspension actions, and new
rules for administrative proceedings not governed by section 554 of the
Administrative Procedure Act. The CROP has not been substantially
revised since 1980. This Rule will remove inconsistencies, fill in gaps
in the CROP by codifying accepted procedures, and make the CROP more
clear and easily understood. Most of these changes will not produce any
procedural or substantive difference in the Agency's administrative
enforcement actions. Other changes make the CROP more efficient and
more effective, or to conform to new statutory requirements and new
judicial decisions.
DATES: Effective Date: This rule shall become effective August 23,
1999.
Applicability Date: This rule shall be applicable to all
proceedings commenced on or after August 23, 1999. Proceedings
commenced before August 23, 1999 shall become subject to this rule on
August 23, 1999, unless to do so would result in substantial injustice.
FOR FURTHER INFORMATION CONTACT: Scott Garrison (202-564-4047), Office
Enforcement and Compliance Assurance, Office of Regulatory Enforcement
(2248A), U.S. Environmental Protection Agency, Washington, D.C. 20460.
SUPPLEMENTARY INFORMATION:
The following outline is provided to assist the reader in locating
topics of interest in the preamble.
I. Background
II. Response to Public Comments
A. Significant Comments Supporting Proposed Revisions
B. Significant Comments Critical of Proposed Revisions
1. Scope (40 CFR 22.1)
2. Powers and Duties of the Environmental Appeals Board,
Regional Judicial Officer and Presiding Officer; disqualification,
withdrawal and reassignment (40 CFR 22.4)
3. Filing, Service, and Form of Documents (40 CFR 22.5(a)-(c))
4. Confidentiality of Business Information (40 CFR 22.5(d))
5. Computation and Extension of Time (40 CFR 22.7)
6. Ex Parte Discussion of Proceeding (40 CFR 22.8)
7. Intervention and Non-Party Briefs (40 CFR 22.11)
8. Commencement of a Proceeding (40 CFR 22.13)
9. Complaint (40 CFR 22.14)
10. Answer to the Complaint (40 CFR 22.15)
11. Default (40 CFR 22.17)
12. Quick Resolution (40 CFR 22.18(a))
13. Settlement and Scope of Resolution or Settlement (40 CFR
22.18(b)&(c))
14. Alternative Dispute Resolution (40 CFR 22.18(d))
15. Prehearing Exchange; Prehearing Conference (40 CFR
22.19(a)&(b))
16. Other Discovery (40 CFR 22.19(e))
17. Supplementing Prior Exchanges, and Failure To Exchange
Information (40 CFR 22.19(f)&(g))
18. Evidence (40 CFR 22.22)
19. Filing the Transcript (40 CFR 22.25)
20. Initial Decision (40 CFR 22.27)
21. Appeal From or Review of Initial Decision (40 CFR 22.30)
22. Final Order (40 CFR 22.31)
23. Motion To Reconsider a Final Order (40 CFR 22.32)
24. Supplemental Rules Governing the Administrative Assessment
of Civil Penalties Under the Clean Air Act (40 CFR 22.34)
25. Scope of Subpart I (40 CFR 22.50)
26. Presiding Officer (40 CFR 22.51)
27. Information Exchange and Discovery (40 CFR 22.52)
28. Interlocutory Orders or Rulings (40 CFR 22.53)
29. Clean Air Act Field Citations
30. Other Comments Not Related to a Particular Section of the
Proposed Rule
III. Miscellaneous Revisions
A. Section Numbering
B. Definitions (40 CFR 22.3)
C. Filing and Service of Rulings, Orders and Decisions (40 CFR 22.6)
D. Examination of Documents Filed (40 CFR 22.9)
E. Consolidation and Severance (40 CFR 22.12)
F. Motions (40 CFR 22.16)
G. Record of the Prehearing Conference (40 CFR 22.19(c))
H. Accelerated Decision; Decision to Dismiss (40 CFR 22.20)
I. Assignment of Presiding Officer; Scheduling a Hearing (40 CFR
22.21)
J. Offers of Proof (40 CFR 22.23(b))
K. Proposed Findings, Conclusions, and Order (40 CFR 22.26)
L. Motion to Reopen a Hearing (40 CFR 22.28)
M. Interlocutory Appeals (40 CFR 22.29)
N. Supplemental Rules Governing the Administrative Assessment of
Civil Penalties Under the Federal Insecticide, Fungicide, and
Rodenticide Act (40 CFR 22.35)
O. Supplemental Rules of Practice Governing the Administrative
Assessment of Civil Penalties Under the Clean Water Act (40 CFR
22.38)
P. Supplemental Rules Governing the Administrative Assessment of
Civil Penalties Under CERCLA Section 109 (40 CFR 22.39)
Q. Supplemental Rules Governing the Administrative Assessment of
Civil Penalties for Violations of Compliance Orders Issued to Owners
or Operators of Public Water Systems Under Part B of the Safe
Drinking Water Act (40 CFR 22.42)
R. Supplemental Rules Governing the Administrative Assessment of
Civil Penalties Against a Federal Agency Under the Safe Drinking
Water Act. (40 CFR 22.43)
S. Supplemental Rules Governing the Termination of Permits Under
Section 402(a) of the Clean Water Act or Under Section 3005(d) of
the Resource Conservation and Recovery Act (40 CFR 22.44)
T. Supplemental Rules Governing Public Notice and Comment in
Proceedings Under Section 309(g) of the Clean Water Act and Section
300h-2(c) of the Safe Drinking Water Act (40 CFR 22.45)
U. Appendices
IV. Administrative Requirements
A. The Regulatory Flexibility Act
B. Executive Order 12866
C. Paperwork Reduction Act
D. Unfunded Mandates Reform Act
E. Executive Order 12875
F. Executive Order 13045
G. Executive Order 13084
H. National Technology Transfer and Advancement Act
I. Submission to Congress and the Comptroller General
I. Background
The Consolidated Rules of Practice (``CROP''), 40 CFR part 22, are
procedural rules for the administrative assessment of civil penalties,
issuance of compliance or corrective action orders, and the revocation,
termination or suspension of permits, under most environmental
statutes. The CROP were first promulgated on April 9, 1980 (45 FR
24360). On February 25, 1998, (63 FR 9464) EPA issued a notice of
proposed rule making giving public notice and soliciting comments on
proposed revisions to the CROP.
During the public comment period, EPA received substantive comments
from Dow Chemical Company (``Dow''), the U.S. Air Force (``USAF''), the
Utility Air Regulatory Group (``UARG''), the Utility Water Act Group
(``UWAG''), the Corporate Environmental Enforcement Council (``CEEC''),
and joint comments
[[Page 40139]]
from the Chemical Manufacturers Association and the American Petroleum
Institute (``CMA/API''). The original public comment period closed on
April 27, 1998. On May 6, 1998 (63 FR 25006), EPA published a second
notice reopening the public comment period for an additional 60 days.
During this reopened public comment period, EPA received one set of
supplementary comments from CEEC.
All of the public comments submitted in response may be reviewed at
the Enforcement and Compliance Docket and Information Center, room 4033
of the Ariel Rios Federal Building, 1200 Pennsylvania Avenue, N.W.,
Washington, DC. Persons interested in reviewing the comments must make
advance arrangements to do so by calling 202-564-2614. A reasonable fee
may be charged by EPA for copying docket materials. The public comments
may also be viewed on the internet at http://www.epa.gov/oeca/
forepart22.html.
Today's final rule includes most of the revisions identified in the
proposed rule, with certain additional changes (both to the proposed
revisions and to other provisions of the existing rule) responding to
public comments. EPA's response to the public comments appears below.
II. Response to Public Comments
A. Significant Comments Supporting Proposed Revisions
Dow stated that ``[m]ost of the CROP provisions appear to reflect
an appropriate balancing of interests'' and that it has a ``favorable
impression of part 22 as a whole.'' CMA/API support EPA's efforts to
simplify and clarify the CROP. CEEC states that it supports ``many of
the types of changes EPA has proposed, as they will increase efficiency
and reduce complexity in the administrative process.'' The following
are specific comments supporting particular provisions of the proposed
rule.
Commenters generally support the consolidation of the various rules
into a single set of CROP procedures for APA and non-APA proceedings.
CMA/API supports the Agency's decision to use the CROP instead of the
proposed part 28 procedures for Class I proceedings under the Clean
Water Act and the Safe Drinking Water Act (56 FR 29996 (July 1, 1991)).
Dow and UARG support the use of CROP procedures in lieu of the
procedures originally proposed for use under the Clean Air Act Field
Citation Program.
Dow states that it supports the ``change'' in Sec. 22.4(d)(1)
1 that would make appeals from a denial of a motion to
disqualify a Presiding Officer go to the Environmental Appeals Board
(``EAB'') ``rather than the Administrator.'' EPA notes that this
revision of Sec. 22.4(d)(1) is not intended to change the substance of
the existing rule but merely to eliminate any implication that the
Administrator must personally rule on appeals from the denial of
disqualification requests made to Presiding Officers. See In re
Woodcrest Manufacturing, Inc., EPCRA Appeal No. 97-2, slip op. at 11-12
(EAB, July 23, 1998)(stating that the term ``Administrator'' is defined
at 40 CFR 22.4(d)(1) to include the Administrator's delegate, and
therefore ``the Administrator is not required to act personally on
disqualification issues, but may instead delegate this authority to
other individuals within the EPA'').
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\1\ To conform the CROP to the preferred style of the U.S.
Government Printing Office, EPA has converted Sec. 22.01 to
Sec. 22.1, Sec. 22.02 to Sec. 22.2, etc., in this final rule. For
simplicity, this preamble will use the new numbering system
throughout, even when referring to sections of the proposed rule or
the 1980 CROP.
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Dow supports the proposed change to Sec. 22.5(c)(5), giving the
Presiding Officer and the EAB, rather than the hearing clerks,
authority to rule on the adequacy of documents filed. Dow strongly
supports the inclusion of language in Sec. 22.5(d) stating that the
Agency's rules governing treatment of Confidential Business Information
(40 CFR part 2) apply in CROP proceedings.
Dow supports proposed changes to Secs. 22.5 and 22.6 allowing
service of documents by reliable commercial delivery services other
than the U.S. Mail, and supports the decision to expand the ``mail box
rule'' of Sec. 22.7(c) to provide that service is complete when the
document is placed in the custody of a reliable commercial delivery
service.
CMA/API support the provision in the proposed Sec. 22.14(a)(6)
requiring that the complaint give notice whether subpart I, non-APA
procedures apply to the proceeding.
CMA/API and Dow support the proposed revision to Sec. 22.15(a)
expanding to 30 days the time allowed to file an answer.
CMA/API and Dow support the provisions in the proposed rule
extending the time period for filing a response to a motion from 10
days to 15 days. Additionally, CMA/API supports not placing page limits
on motion papers.
Dow supports the revisions to Sec. 22.17(a) & (c) that give the
Presiding Officers greater discretion in determining the appropriate
relief in the default orders, because this ``flexibility will let the
Presiding Officer ensure that any relief ordered is supported by the
administrative record.'' CMA/API ``support the provision requiring the
Presiding Officer, when issuing a default order, to determine that the
relief sought in the complaint is consistent with the applicable
statute.''
CEEC supports the Agency's explicit recognition of Alternative
Dispute Resolution in the proposed Sec. 22.18(d). Dow supports the
provisions of the proposed Sec. 22.18(d)(2) that permit the Presiding
Officer to grant extensions of time for the parties to engage in
alternative dispute resolution procedures.
CMA/API support the proposed Sec. 22.19 allowing amendment of
prehearing exchanges without restriction, and support the Sec. 22.19(f)
requirement that parties promptly supplement or correct information
known to be incomplete, inaccurate or outdated, without requiring the
parties to constantly check the accuracy of their information
exchanges. CEEC supports the proposed revisions to Secs. 22.19 and
22.22 that would allow use of information that has not been timely
provided to the opposing party, upon a showing of ``good cause'' for
the failure to timely provide that information. CEEC also supports the
proposed limitation that ``other discovery'' pursuant to Sec. 22.19(e)
should be available only after the prehearing exchange required under
Sec. 22.19(a).
The CMA/API comments support the proposed change in Sec. 22.27(b)
``requiring the Presiding Officer in all cases to explain how the civil
penalty imposed corresponds to the statutory penalty criteria, rather
than just the Agency's penalty policies.'' Dow notes its support for
the provision in Sec. 22.27(b) requiring that the Presiding Officer
articulate how the amount of penalty conforms to the criteria set forth
in the law under which the proceeding has been commenced. Dow supports
the proposed revision of Sec. 22.27(c) that would make an initial
decision inoperative pending review by the EAB, because it ``will avoid
premature recourse to the Federal courts'' and avoid harm to
respondents whose appeals might be successful. Dow also supports the
provision in the proposed Sec. 22.28(b) under which a motion to reopen
a hearing would expressly stay the deadlines for appeal or EAB review
of the initial decision.
Both CMA/API and Dow support the new provision in Sec. 22.30(a)
allowing a party who has initially declined to
[[Page 40140]]
appeal an additional 20 days to raise additional issues in a cross
appeal.
EPA received no significant public comment on many of the proposed
revisions to the CROP. Proposed revisions to Secs. 22.2, 22.6, 22.12,
22.21, 22.23, 22.24, 22.29, 22.33, and 22.35-22.45 elicited no specific
comments at all. Today's final rule incorporates all of the changes
identified in the February 25, 1998, Notice of Proposed Rule Making,
except as noted below.
B. Significant Comments Critical of Proposed Revisions
1. Scope (40 CFR 22.1)
a. Summary of Proposed Rule. Section 22.1(a) identifies, statute by
statute, the types of proceedings that are subject to the CROP. The
proposed rule would bring within the scope of the CROP a number of
proceedings that had previously used other procedures or that had no
formal procedures: field citation proceedings under the Clean Air Act
(42 U.S.C. 7413(d)(3)), proceedings to suspend or revoke a permit
issued under section 402(a) of the Clean Water Act (33 U.S.C. 1342(a))
or to suspend or revoke a permit under sections 3005(d) and 3008(h) of
the Solid Waste Disposal Act (42 U.S.C. 6925(d) and 6928(h))
(originally proposed in 60 FR 65280, December 11, 1996), proceedings
for the assessment of administrative civil penalties under section 6001
of the Solid Waste Disposal Act (42 U.S.C. 6961), section 311(b)(6) of
the Clean Water Act (33 U.S.C. 1321(b)(6)), and sections 1423(c) and
1447(b) of the Safe Drinking Water Act, 42 U.S.C. 300h-2(c) and 300j-6,
including orders requiring both compliance and the assessment of a
civil penalty under 1423(c), and proceedings for the assessment of
civil penalties or the issuance of compliance orders under the Mercury-
Containing and Rechargeable Battery Management Act (42 U.S.C. 14304).
Other amendments would clarify the applicability of the CROP to
proceedings already within its scope, and delete outdated references.
Section 22.1(b) explains the interrelation between the subpart H,
the new subpart I, and the provisions of subparts A-G. Section 22.1(c)
empowers the Administrator, the Regional Administrator, and the
Presiding Officer to resolve procedural matters not covered in the
CROP. The proposed revision to Sec. 22.1(c) would make explicit the
authority of the EAB to resolve such procedural matters.
b. Significant Comments and EPA Response. CEEC objects to expanding
the scope of the CROP to include non-APA proceedings, arguing that EPA
has failed to explain why the proposed CROP is more suitable than other
procedures. Dow and CMA/API strongly support revised CROP procedures
replacing the procedures proposed for the part 59 field citation
program. CMA/API also supports the decision to include non-APA
proceedings within the CROP, rather than as a distinct set of
procedures under part 28.
The preamble to the proposed rule explained generally why EPA
considers the proposed CROP suitable for non-APA enforcement cases, but
it did not expressly contrast the suitability of alternative sets of
procedures. In drafting the proposed CROP, EPA had the benefit of the
public comments received in response to the 1991 proposed part 28
procedures and the 1994 proposed field citations procedures, and the
benefit of practical case experience with both the proposed part 28
procedures and the existing CROP procedures. The proposed CROP
revisions drew from the best provisions of each set of procedures, and
is as a result more clear, more simple and more efficient than its
predecessors.
CEEC questions EPA's decision to use the CROP procedures for non-
APA cases, asserting that it is inappropriate for EPA ``to assume that
one size fits all.'' CEEC does not identify any class of cases for
which the proposed CROP might be unsuitable, nor does it identify other
procedures that might be more suitable. EPA has taken into account the
limits to a ``one size fits all'' approach through the inclusion of
statute-specific supplemental rules (subpart H) and the special rules
for non-APA proceedings (subpart I).
In apparent contradiction to its criticism of the ``one size fits
all'' approach of the CROP, CEEC also faults EPA for failing to explain
why the scope of the CROP fails to encompass corrective action orders
pursuant to Solid Waste Disposal Act (``SWDA'') sections 3008(h) and
9003(h)(4), and pesticide cancellation proceedings pursuant to section
6 of the Federal Insecticide, Fungicide, and Rodenticide Act
(``FIFRA''). Although the proposed rule would expand the scope of the
CROP, EPA did not propose that it should replace all administrative
adjudicatory procedures.
EPA determined in 1988 that less formal procedures are appropriate
for corrective action orders because of the need for quick response to
hazardous waste spills, because such cases present fewer factual issues
than cases where a regulatee may be forced to pay a civil penalty for
violating the law, and because the cost of the formal CROP procedures
is twice as high as the cost of the informal procedures. 53 FR 12256,
12257 (April 13, 1988). EPA's procedures for corrective action orders,
codified at 40 CFR part 24, were challenged upon issuance and upheld by
the Court of Appeals for the District of Columbia Circuit. The D.C.
Circuit agreed with EPA that ``to the modest extent that EPA's Part 24
regulations do implicate the private interest in avoiding the expense
of unnecessary corrective actions, formal procedures [i.e., the CROP]
do not promise a sufficient lowering of the risk of error to justify
their significant expense to the Government.'' Chemical Waste
Management, Inc. and Waste Management of North America, Inc., v. U.S.
Environmental Protection Agency, 873 F.2d 1477, 1485 (D.C. Cir. 1989).
EPA continues to believe that the informal procedures of part 24,
rather than the CROP, are appropriate for SWDA sections 3008(h) and
9003(h)(4) corrective action orders.
Pesticide cancellation proceedings are subject to rules codified at
40 CFR part 164, as are other proceedings related to the registration
status of a pesticide. Although some sections of part 164 are very
similar, or identical, to provisions of the CROP, there are also
fundamental differences, that reflect differences between FIFRA section
6 and the statutory authorities for various CROP proceedings. Although
it would be possible to draft a single set of procedures that could
apply to all corrective action orders and pesticide cancellation
proceedings, as well as the proceedings within the scope of the CROP,
it would call for extensive revisions and elaborate supplemental rules.
At this time, it does not appear that combining either part 24 or part
164 with the CROP would produce significant efficiencies or
improvements.
c. Final Rule. EPA has adopted Sec. 22.1 as proposed, with minor
changes. In the December 11, 1996, ``Round Two'' permit streamlining
proposed rule, EPA proposed to remove the procedures existing in 40 CFR
part 124, subpart E, for proceedings to revoke or suspend a permit
issued under section 402(a) of the Clean Water Act (33 U.S.C. 1342(a))
or to revoke or suspend a permit under sections 3005(d) and 3008(h) of
the Solid Waste Disposal Act (42 U.S.C. 6925(d) and 6928(h)). See 61 FR
65268 (December 11, 1996). EPA proposed that such proceedings would be
conducted pursuant to the CROP procedures, and proposed CROP revisions
to accomplish this. These changes were incorporated into the February
25, 1998, proposed CROP revisions. As EPA has not yet finalized the
Round Two permit
[[Page 40141]]
streamlining rule and 40 CFR part 124, subpart E remains in effect, EPA
has removed from Sec. 22.1 (a)(4) and (a)(6) the proposed references to
permit revocation, suspension and termination. EPA anticipates that
these references will be restored when the Round Two permit
streamlining rule is finalized.
EPA has deleted the word ``conducted'' from paragraphs (a)(1),
(a)(3) and (a)(5). This word is unnecessary, and the deletions make
these paragraphs more consistent with the rest of Sec. 22.1(a). In
Sec. 22.1(a)(4)(i), EPA has replaced the word ``and'' in the first
parenthetical list of citations to the U.S. Code, with the word ``or''
for consistency.
In the proposed Sec. 22.1(b), the word ``establish'' appeared twice
in the first sentence. EPA has deleted the redundant word. EPA has also
revised the last sentence of 22.1(b) for clarity.
2. Powers and Duties of the Environmental Appeals Board, Regional
Judicial Officer and Presiding Officer; Disqualification, Withdrawal
and Reassignment. (40 CFR 22.4)
a. Summary of Proposed Rule. Proposed revisions to Sec. 22.4(a)
clarify the role of the Environmental Appeals Board, to which the
Administrator has delegated the authority to rule on appeals. The
proposed rule clarifies that the Environmental Appeals Board rules on
appeals from decisions, rulings and orders of a Presiding Officer in
proceedings under the CROP, acts as Presiding Officer until an answer
is filed in cases initiated at EPA Headquarters, and approves
settlement of such cases. The proposed rule provides that appeals and
motions must be directed to the Environmental Appeals Board except
those in matters referred by the Environmental Appeals Board to the
Administrator, and motions for disqualification under paragraph (d).
Proposed revisions to Sec. 22.4(b) describe the function of the
Regional Judicial Officer, requiring each Regional Administrator to
designate one or more Regional Judicial Officers to act as Presiding
Officers in proceedings under subpart I, and to act as Presiding
Officers in APA CROP proceedings until an answer is filed. The proposed
rule provides that the Regional Administrator may delegate to a
Regional Judicial Officer the authority to approve settlement of
proceedings, ratify consent agreements and issue consent orders.
EPA proposed deleting from Sec. 22.4(b) certain limitations on the
Regional Judicial Officers. One proposed deletion is the current
prohibition on employment of a Regional Judicial Officer by the
Region's Enforcement Division or the Regional Division directly
associated with the type of violation at issue in the proceeding. The
other is the prohibition, derived from section 554(d) of the
Administrative Procedure Act, against a Regional Judicial Officer
having ``performed prosecutorial or investigative functions in
connection . . . with any factually related hearing.'' The proposed
rule would add new language precluding an individual from serving as
Regional Judicial Officer in any case in which he or she has any
``interest in the outcome.'' The proposed rule retains the provisions
that prohibit an individual from serving as Regional Judicial Officer
in the same case in which he or she performed prosecutorial or
investigative functions, and that require that Regional Judicial
Officers be attorneys employed by a Federal agency.
EPA proposed editorial revisions to Sec. 22.4(c), describing the
role of the Presiding Officer, that do not introduce any substantive
change.
The proposed Sec. 22.4(d) establishes new procedures for seeking
disqualification of the Administrator, a Regional Administrator, a
member of the EAB, a Regional Judicial Officer (``RJO''), or an
Administrative Law Judge (``ALJ''), from performing functions they are
authorized to perform under the CROP. Under the existing rules, any
party may seek the disqualification of a Regional Judicial Officer by
motion to the Regional Administrator; or may seek the disqualification
of any of the other individuals by motion to the Administrator. Under
the proposed rules, any party must first file a motion with the
particular individual requesting that he or she disqualify himself or
herself from the proceeding. If the party has moved to disqualify a
Regional Administrator, a Regional Judicial Officer, an ALJ, or a
member of the EAB, and the motion is denied, the party may appeal the
denial of the motion administratively. The proposed rule does not
provide for administrative appeal from the Administrator's denial of a
motion to disqualify herself.
The proposed Sec. 22.4(d) provides that an interlocutory appeal may
be taken when an ALJ denies a motion that he disqualify himself or
herself from a proceeding. However, EPA asked for comments on whether
to prohibit such interlocutory appeals.
b. Significant Comments and EPA Responses
22.4(a). Dow suggests clarifying the rule by adding the word
``initial'' before the word ``decisions'' in the description of the
Environmental Appeals Board's role in ruling on decisions, rulings and
orders of a Presiding Officer. EPA accepts the suggested change.
22.4(b). CEEC states that it opposes expansion of the role of RJOs
through the CROP. The preamble to the proposed rule stated that EPA had
no current plans to use the subpart I procedures for any cases other
than those arising under Clean Water Act (``CWA'') sections
309(g)(2)(A) and 311(b)(6)(B)(i) (33 U.S.C. 1319(g)(2)(A) and
1321(b)(6)(B)(i)), and Safe Drinking Water Act (``SDWA'') sections
1414(g)(3)(B) and 1423(c) (42 U.S.C. 300g-3(g)(3)(B) and 300h-2(c)).
See 63 FR at 9479. To codify that point, EPA has revised the proposed
Sec. 22.50 so that it applies only to these cases. With this revision,
today's rule clearly does not represent any practical expansion of the
RJOs' role. Since the 1980's, RJOs have presided over cases under CWA
sections 309(g)(2)(A) and 311(b)(6)(B)(i), and SDWA sections
1414(g)(3)(B) and 1423(c), under the procedures proposed (but not
finalized) as part 28 and under other Agency guidance (e.g. Guidance on
UIC Administrative Order Procedures, November 28, 1986). Now they
preside over the same kinds of cases using the CROP.
Of the six commenters on the proposed rule, five (UWAG, UARG, CEEC,
CMA/API, and Dow) expressed concern that the proposed rule fails to
protect constitutional due process rights and assure the independence
and impartiality of Regional Judicial Officers. UARG and UWAG oppose
use of any EPA attorneys as Presiding Officers, arguing that Agency
loyalty will create bias or the appearance of bias. CEEC, CMA/API, Dow
and (by implication) UARG and UWAG oppose the use of EPA enforcement
attorneys as Presiding Officers. These commenters argue that allowing
enforcement personnel to be Presiding Officers creates actual or
apparent bias by commingling the investigative, prosecutorial and
adjudicative functions. Particular concerns include EPA enforcement
attorneys presiding over cases brought by their colleagues, and over
cases with issues or defendants in common with cases the Presiding
Officer has litigated. Dow, UARG and UWAG urge the Agency to use
Administrative Law Judges for adjudication of all administrative
enforcement proceedings, arguing that ALJs are more qualified and are
insulated against institutional bias.
In response to these concerns, EPA has made several changes to
Sec. 22.4(b). First, EPA has added a requirement that a ``Regional
Judicial Officer shall not prosecute enforcement cases and shall
[[Page 40142]]
not be supervised by any person who supervises the prosecution of
enforcement cases, but may be supervised by the Regional Counsel.''
This change will assure that the persons presiding over subpart I
proceedings will be able to freely exercise independent judgment,
without fear of adverse action by EPA enforcement managers.
Commenters suggested various independence criteria: Dow suggested
that the CROP should mandate either that the employment and advancement
of each EPA attorney serving as RJO expressly be made independent of
his or her rulings as Presiding Officer, or the attorney has no direct
or indirect supervision (for a total of at least two levels of
supervision) by persons or offices responsible for enforcement. UARG
and UWAG believe that hearings should be run only by ALJs, but if the
Agency refuses to implement that suggestion, they support the idea
presented in the preamble to the proposed rule that the Presiding
Officer not be directly supervised by any person who directly
supervises the prosecution of the case. CMA/API suggested a requirement
that the Regional Judicial Officer ``should not be employed by or
supervised by any enforcement component, whether that component is in
the Office of Regional Counsel or the Regional Office of Enforcement.''
EPA has considered the various independence criteria suggested by
the commenters, and has concluded that prohibiting RJOs from
prosecuting enforcement cases, and prohibiting RJOs from being
supervised by persons who supervise the prosecution of enforcement
cases, will sufficiently separate RJOs from enforcement. Although
Regional Administrators and Regional Counsels necessarily have
significant responsibility for their Regions' enforcement program, they
have other responsibilities which give them a broader perspective.
Accordingly, there is little risk that they would exert improper
influence over the decisions of an RJO. In order to avoid any
confusion, the rule explicitly allows supervision by the Regional
Counsel. The Regional Administrators' authority to personally supervise
the RJOs is implicit, but may not be delegated to a person who
supervises the prosecution of enforcement cases (except the Regional
Counsel).
EPA's experience with non-APA adjudications to date indicates that
RJOs maintain their independence and impartiality, and their decisions
reveal no bias toward the complainant. Only four decisions by EPA
attorneys serving as Presiding Officer have been reversed on appeal out
of over 180 decisions rendered over a period of approximately 10 years.
Moreover, there has not been a single penalty or corrective action case
where a respondent has appealed a denial of a motion to disqualify a
Regional Judicial Officer, nor where a respondent has alleged a
Regional Judicial Officer's actual bias among its grounds for appeal.
These results demonstrate that the RJOs' present levels of competence
and independence are reasonable. Today's rule assures that this
independence will not be compromised.
The more restrictive requirements suggested in some of the comments
would not be feasible to implement. Prohibiting supervision by Agency
officials who have any enforcement responsibilities would prohibit
virtually all upper management in the Regional Offices, including the
Regional Administrators, from such supervision. The RJOs' record to
date indicates that such restrictive standards are not necessary. Other
suggested standards would invite time consuming litigation over side
issues, such as whether a supervisor or office is responsible for
``enforcement'' or whether someone is ``indirectly'' supervising the
RJO, when the proper questions are whether an RJO is in fact biased and
whether such bias affected the outcome of a particular case.
Second, EPA has included in the final rule a provision precluding a
Regional Judicial Officer from knowingly presiding over a case
involving any party concerning which the Regional Judicial Officer
performed any functions of prosecution or investigation within the 2
years preceding the initiation of the case. CMA/API recommended that
Regional Judicial Officers should not currently be involved in any
other proceedings involving the same defendants and should not have
been involved in the investigation or prosecution of the defendant
within the previous 5 years. EPA agrees that it could create at least
an appearance of bias if an EPA attorney were to serve as prosecutor of
one complaint and shortly thereafter function as adjudicator of another
complaint against the same party. It is neither necessary nor practical
for EPA to adopt CMA/API's recommendation that the CROP prohibit
prosecutorial or investigative activity against the respondent for 5
years. EPA has included in the final rule a provision precluding a
Regional Judicial Officer from knowingly presiding over a case
involving any party concerning which the Regional Judicial Officer
performed any functions of prosecution or investigation within the 2
years preceding the initiation of the case. EPA has made this
requirement contingent upon the RJO's knowledge because name changes
are sufficiently common in modern industry that a RJO might preside
over a case without being aware that he or she had previous dealings
with the same company. Upon becoming aware of such prior relationship,
the RJO must promptly disqualify himself or herself from the
proceeding. If, in a particular case, a party were to believe that
participation in a similar case more than 2 years earlier would bias
the RJO, that party could move for disqualification under Sec. 22.4(d).
Note also that, owing to the new prohibition against RJOs prosecuting
enforcement cases, the potential for these conflicts will decrease over
time.
In the response to the public comments, EPA has revised the
proposed Sec. 22.4(b) to increase the independence of RJOs (prohibiting
RJOs from prosecuting enforcement cases, prohibiting their supervision
by persons who supervises prosecution of enforcement cases, and
prohibiting the RJO from knowingly presiding over a case involving any
party concerning which he or she performed any functions of prosecution
or investigation within the 2 years). Other changes sought by the
commenters are impractical and unnecessary.
In proceedings subject to section 554 of the APA, Congress has
determined that Presiding Officers may not be ``engaged in the
performance of investigative or prosecuting functions for [EPA] in * *
* a factually related case * * *'', and may not ``be responsible to or
subject to the supervision or direction of [persons] engaged in the
performance or investigative or prosecuting functions for [EPA].'' 5
U.S.C. 554(d). However, subpart I is designed for use in proceedings
that are not subject to section 554 of the APA. Congress has expressly
authorized EPA to assess civil penalties through procedures that do not
meet the standards of section 554. Despite the broad range of options
this allows, EPA has chosen as a matter of policy to make subpart I
procedures adhere closely to the APA requirements. The subpart I
procedures depart from the requirements of section 554 only in regard
to the independence of the Presiding Officer. The commenters who object
to subpart I for failing to provide this same level of independence are
objecting, in effect, to the statutes that authorize non-APA
proceedings. The Agency does not agree that such a broad limitation on
its authority is appropriate.
[[Page 40143]]
Whether adjudication by EPA attorneys under subpart I provides
adequate protection for respondents' due process rights must be
evaluated according to the three part standard established in Mathews
v. Eldridge, 424 U.S. 319 (1976):
``[O]ur prior decisions indicate that identification of the
specific dictates of due process generally requires consideration of
three distinct factors: First, the private interest that will be
affected by the official action; second, the risk of an erroneous
deprivation of such interest through the procedures used, and the
probable value, if any, of additional or substitute procedural
safeguards; and finally, the Government's interest, including the
function involved and the fiscal and administrative burdens that the
additional or substitute procedural requirement would entail.'' Id.
at 334-35.
The private interests in a proceeding under subpart I of the CROP
are the impact on respondent of a civil penalty and on respondent's
reputation from a finding of liability, and perhaps in the expense and
burden of the hearing itself. Although these interests are important,
they are less important than the private interest at stake in Mathews
v. Eldridge, where the governmental agency summarily discontinued an
individual's social security disability benefits while the benefit
termination hearing was pending. The private interests at stake in CROP
proceedings do not rise to this level. Moreover, the interests at stake
certainly are not so significant as individual interests in liberty or
bodily integrity.
The risk of an erroneous deprivation of respondents' private
interests through adjudications by EPA attorneys is low, and certainly
lower than in Mathews v. Eldridge, where the disability benefits were
terminated before any hearing was afforded. In a CROP subpart I
proceeding, the respondent first has an opportunity for a hearing
before an RJO (including the opportunity to present evidence and to
cross examine the Agency's witnesses), and has opportunities for
administrative review before the penalty is assessed (i.e., appeal of
the initial decision to the EAB). The risk of an erroneous deprivation
of a respondent's interests should correspond closely to the frequency
with which decisions by EPA attorneys serving as Presiding Officer are
reversed on appeal by either the EAB or a federal court, and as
described above, this rate has been extremely low.
Balanced against the private interests at stake and the risk of
their impairment is the government's interest. The government's primary
interest in having EPA attorneys preside over certain enforcement cases
is in making efficient use of Agency resources. The costs for an ALJ to
travel from Washington, D.C., to the hearing location is greater than
the cost for an EPA attorney to travel from the Regional office to the
hearing location. In addition, ALJs are paid more than the EPA
attorneys who serve as Presiding Officers. The other government
interest is in having the flexibility to increase the number of
Presiding Officers to meet the administrative case load. In the recent
past, the number of ALJs was clearly inadequate to handle the number of
cases. Although the number of ALJs is today more commensurate with the
number of cases, future imbalances might be alleviated by temporarily
expanding or contracting the number of EPA attorneys who may serve as
Presiding Officer.
To summarize the results of this Mathews v. Eldridge three-step
balancing test, there appears to be a relatively small risk of
impairment of private interests that are of a moderate level of
importance. This small risk of impairing moderately important interests
must be balanced against the government's interests in making best use
of its resources. Although it is not possible to weigh these factors
with mathematical precision, it is clear that the use of EPA attorneys
as Presiding Officers, subject to the provisions adopted in this rule
and with the right to appeal to the EAB, is not a violation of
respondents' rights to due process of law.
CMA/API recommend that, if EPA allows Agency personnel to serve as
Regional Judicial Officers, they should be members in good standing
with a bar. EPA notes that under the Federal personnel rules all
attorney positions require bar membership, so this need not be
addressed in Sec. 22.4(b). CMA/API also argues that Regional Judicial
Officers should have substantial litigation experience including
adjudication. The position descriptions for Regional Judicial Officers
require that they be senior attorneys with substantial litigation
experience, and EPA believes that its internal procedures and controls
are adequate to assure that Regional Judicial Officers have substantial
litigation experience. EPA intends to continue its practice of sending
each of its Regional Judicial Officers to the National Judicial College
for training in presiding over administrative hearings. This level of
experience and training is sufficient to prepare Agency attorneys to
preside over the relatively straight-forward cases expected under
subpart I.
Some commenters (CMA/API, UWAG, UARG) were concerned that the
physical proximity, friendships or colleague relationships of the
Regional Judicial Officers with Agency prosecuting attorneys would
create an appearance of partiality, where they may share work and
social activities, training and secretarial support, and where Regional
Judicial Officers may overhear statements made by prosecutors. EPA and
its RJOs make efforts to avoid such contacts where feasible, and the
contacts that remain are unlikely to result in an actual bias. It does
not appear that any solution short of complete physical isolation of
Regional Judicial Officers from the enforcement offices could
completely eliminate this concern. Such separation would also pose
significant logistical difficulties for EPA's Regional offices.
Accordingly, this comment is not adopted in the final rule. EPA
Regional Offices will continue to take prudent measures to physically
separate Regional Judicial Officers from personnel responsible for
enforcement case development and prosecution to the extent feasible.
CMA/API suggested that a Regional Judicial Officer should not
adjudicate any case involving the same counsel as another case in which
he or she performed prosecutorial or investigative functions. EPA
disagrees. Counsel serve merely as representatives of their clients,
and bias cannot be presumed to attach merely to a representative.
CEEC and Dow suggested that the final sentence of the proposed
Sec. 22.4(b), which stated that RJOs may not have ``any interest in the
outcome of any case'', is unclear and should incorporate explanatory
language from the preamble to the proposed rule indicating that it
includes ``a financial interest, personal interest, or career interest
in the outcome of the action''. 63 FR at 9467. EPA notes that any
interpretation of this clause would have to conform to the Standards of
Ethical Conduct for Employees of the Executive Branch, 5 CFR part 2635,
which are intended to supersede all agency ethics standards (except
those approved by the Office of Governmental Ethics and promulgated as
supplemental ethics regulations pursuant to 5 CFR 2635.105). In order
to avoid creating a standard which might be interpreted differently
than these government-wide ethics standards, EPA has removed this
clause from the final rule.
A general principle of the government-wide ethics regulations,
particularly 5 CFR 2635.101, is that all federal employees must perform
their duties impartially. If an RJO held any interest or bias which
would compromise his or her ability to preside
[[Page 40144]]
impartially in a particular proceeding, this would be grounds for
disqualification under Sec. 22.4(d).
Dow suggests that the CROP prohibit enforcement attorneys from
serving as Presiding Officers unless the attorney has not issued
potentially relevant interpretations of the statute or regulations
allegedly violated. Dow suggests possible bias where the Regional
Judicial Officer had previously issued interpretations of the
regulations at issue in a case before him, that may create a reluctance
to overrule his own prior interpretation. However, all adjudicators
face the possibility of having to overrule their own prior
interpretation of a rule, as contained in their own prior decisions.
EPA is unaware of any court where adjudicators are barred from deciding
cases where their earlier positions are precedent. In every case, the
adjudicator's decision must be supported by the evidence and applicable
law, and parties may appeal any adverse decision to the EAB.
Accordingly, EPA has not made the suggested change in the final rule.
UARG and UWAG argue that anyone who has participated in a rule
making proceeding that leads to the promulgation of a substantive rule
would have an interest and bias in the interpretation of that rule, and
should not serve as Presiding Officer in a case where that rule is at
issue. Although Regional Judicial Officers have presided at public rule
making hearings during the public comment period, their role is limited
to conducting an orderly hearing--they are not responsible for weighing
the evidence and do not participate substantively in the regulatory
decision making. EPA believes that participation in substantive rule
making is unlikely to result in bias in the interpretation of the rule.
The Presiding Officer's decisions must include findings of fact and
conclusions of law based upon the record in the case, and their
interpretations of regulations are subject to appellate review. EPA
declines to add the suggested prohibition with regard to rule making.
The proposed rule would delete from Sec. 22.4(b) language
precluding a Presiding Officer from hearing a case that is ``factually
related'' to one in which he or she performed investigative or
prosecutorial functions. The 1980 CROP was intended to provide
procedures for hearings conforming to section 554 of the APA, and the
``factually related'' clause was derived from section 554(d), that
provides that ``An employee or agent engaged in the performance of
investigative or prosecuting functions for an agency in a case may not,
in that or a factually related case, participate or advise in the
decision [or] recommended decision * * *.'' As the revised CROP is
intended for use in proceedings that are not subject to section 554, as
well as APA proceedings, provisions of the 1980 CROP such as the
``factually related hearing'' clause are no longer appropriate for
RJOs.
It is very probable that any EPA attorney sufficiently experienced
to be selected as RJO would have prosecuted a substantial number of the
type of routine cases which are expected to form the bulk of subpart I
practice, and these cases may contain similar factual issues. Moreover,
the geographical limits on each Region's enforcement efforts make it
likely that highly experienced EPA attorneys will have prosecuted cases
that have parties, locations, or other facts in common with cases they
might hear as an RJO. The prohibition on hearing ``factually related''
cases is too broad for subpart I proceedings, where the cases will
mainly involve well settled law and simple factual issues. The mere
fact that two cases have some facts in common need not present any
significant risk of bias or ``will to win,'' but it may result in
unnecessary litigation over whether the cases are ``factually
related.'' Although EPA acknowledges that experience with cases that
are factually related in a substantial way could potentially be a cause
for concern, there are many more cases where the factual relation is
too trivial to result in bias.
Today's final rule will provide respondents in subpart I
proceedings a fair and impartial decision maker. Any party may move to
have a decision maker disqualified, or a decision overturned, on the
basis of partiality where ``a disinterested observer may conclude that
[the agency] has in some measure adjudged the facts as well as the law
of a particular case in advance of hearing it.'' Cinderella Career and
Finishing School v. FTC, 425 F.2d 583, 591 (D.C. Cir. 1970). In the
event that an RJO who performed prosecutorial or investigative
functions in a factually related case denies a motion for
disqualification, respondent can appeal that decision, and, if the
appellate body finds that the RJO was not impartial, then the RJO's
decision will undoubtedly be reversed.
22.4(c). A comment as to paragraph (c) urges EPA to provide further
sanctions, in addition to the existing sanction authorizing the
Presiding Officer to draw adverse inferences against a party. For
example, the rule should authorize, when a party willfully disregards
discovery orders, sanctions up to the level of dismissal with prejudice
or default, such as striking a count from a complaint or striking a
specific defense. The commenter suggests adding to the rule that a
Presiding Officer may impose any other appropriate sanction that could
be imposed by a Federal court in a civil proceeding.
EPA believes that it is not necessary to add any additional
language with regard to sanctions that may be imposed by a Presiding
Officer. The broad language of Sec. 22.4(c)(10) to ``[d]o all other
acts and take all measures necessary'' authorizes the Presiding Officer
to impose a broad array of sanctions appropriate for management of
cases, to ensure the ``maintenance of order and for the efficient, fair
and impartial adjudication of issues.'' Pursuant to that authority,
Presiding Officers impose sanctions such as limiting the evidence a
party may present. See, Paul Durham, d/b/a Windmill Hill Estates Water
System, EPA Docket No. [SDWA]-C930036, 1997 SDWA LEXIS 1, nn. 5, 6
(ALJ, April 14, 1997). In addition, Sec. 22.17(a) and 22.19(g)
specifically provide for sanctions of default or dismissal with
prejudice, and for exclusion of the information from evidence for
failure to comply with information exchange required by Sec. 22.19 or
with an order of the Presiding Officer.
22.4(d). Commenters generally favor the proposed disqualification
procedures, but have proposed several revisions to the proposed
regulation:
CEEC recommends that EPA add a provision that ``requires the
individual for whom disqualification is sought to specify reasons for
his decision'' on the disqualification motion. EPA does not agree with
the recommendation because it is unnecessary. When a decision maker
rules on any motion under the CROP, the decision maker provides reasons
for the ruling unless the reasons therefor are patently evident. The
precise level of detail provided will depend upon the decision maker's
informed discretion and the circumstances of the case. There is no
reason to single out disqualification rulings for purposes of imposing
an explicit requirement to articulate the basis for the ruling and no
reason for limiting a decision maker's discretion in this regard.
Dow proposes that ``EPA should provide a procedure for appeal, in
cases where the Administrator denies a motion to disqualify himself.''
EPA rejects the commenter's suggestion. Since all Agency officials are
supervised by the Administrator, there is no
[[Page 40145]]
Agency official who could appropriately resolve such an appeal.
Moreover, any need for such a requirement is remote, for the occasions
when the Administrator acts or serves as the deciding official under
the CROP are extremely rare. In practice, the EAB performs the role of
final decision maker pursuant to its delegation from the Administrator
under the regulations. For the most part, the Administrator's role is
residual and limited to cases specifically referred to her by the EAB.
The EAB has not made such a referral since its creation in 1992. A
slightly different role is reserved for the Administrator under
proposed Sec. 22.31(f) (Sec. 22.31(e) of this final rule), which
provides that, if the EAB were to issue a final order to a Federal
agency, the agency may request a conference with the Administrator.
This opportunity is not available to other recipients of EAB orders. If
a conference occurs as provided in the provision, a decision by the
Administrator may become the final decision. Nonetheless, EPA does not
expect that many such requests will be made pursuant to this provision.
If the Administrator were to deny a motion to disqualify herself from
participating in a proceeding, the appropriate recourse would be to
federal court, upon issuance of the final agency action at the end of
the administrative proceeding.
Under both the existing rule and the proposed rule (except for
subpart I cases), an interlocutory appeal under Sec. 22.29 is available
where a Presiding Officer denies a motion for disqualification. EPA
requested comment on whether to prohibit interlocutory appeals to the
EAB following the denial of a disqualification motion, consistent with
federal court practice.
In response to EPA's request for comment, Dow and CEEC recommend
that interlocutory appeals of motions for disqualification be allowed
because ``there is a far greater likelihood of bias under CROP
proceedings than in Federal courts,'' especially where the presiding
officer is not an ALJ. Dow adds, therefore, that although it might be
acceptable to prohibit an interlocutory appeal from the denial of a
motion to disqualify an ALJ, because ``ALJs are insulated against
actual bias,'' it is not appropriate to prohibit an interlocutory
appeal from the denial of a motion for disqualification where the
presiding officer is not an ALJ. CEEC argues that prohibiting
interlocutory appeals would contribute to delay because the
unavailability of an interlocutory appeals process would increase the
number of proceedings that would have to be overturned on appeal.
EPA has considered these comments, but has decided to add a
provision to the rules prohibiting interlocutory appeals from the
denial of disqualification motions. EPA believes a prohibition against
interlocutory appeals will not significantly affect the impartiality of
the administrative adjudicative process and at the same time will
prevent unnecessary delays. Based on the Agency's experience to date,
motions to disqualify decision makers have been very infrequent.
Therefore, the Agency expects that the circumstances will be extremely
rare in which either the Agency or private litigants will have the
burden of a retrial.
CEEC proposes that the regulatory bases for disqualifying a
decision maker be expanded to include ``the appearance of
impropriety.'' Courts have held that appearance of impropriety, without
more, does not warrant disqualification under due process standards.
Del Vecchio v. Illinois Department of Corrections, 31 F.3d 1363, 1371-
72 (7th Cir. 1994). Courts have also declined to extend the judicial
system's strict separation of functions standard to multi-function
agencies. See e.g., Simpson v. OTS, 29 F.3d 1418, 1424 (9th Cir. 1994);
EDF v. EPA, 510 F.2d at 1305. Likewise, the more stringent
``appearance'' standard in 28 U.S.C. 455(a), that requires a Federal
judge to disqualify himself whenever his impartiality ``might
reasonably be questioned'', does not apply to agency adjudicators. See,
e.g., Marine Shale Processors, Inc. v. EPA, 81 F.3d 1371, 1386 (5th
Cir. 1996). Although EPA intends that RJOs should avoid the appearance
of impropriety, EPA does not believe that the CROP should create a
disqualification standard based on appearance of impropriety.
The criteria for disqualification in a CROP proceeding are whether
decision makers have ``a financial interest or [a] relationship with a
party or with the subject matter which would make it inappropriate for
them to act''. Whether a financial interest or a relationship is
inappropriate is determined by reference to the Standards of Ethical
Conduct for Employees of the Executive Branch, 5 CFR part 2635.
Decision makers who fail to conform to these government-wide ethics
standards are subject to disqualification.
c. Final Rule. EPA has reconsidered the proposed change to the
title of Sec. 22.4, and has decided to retain the original title
``Powers and duties of the Environmental Appeals Board * * *.''
EPA has adopted the language proposed under Sec. 22.4(a), with the
addition of the word ``initial'' before the word ``decisions'' in the
first sentence, as recommended by a commenter. This paragraph appears
as Sec. 22.4(a)(1) in today's final rule. As noted above in the
response to comments on Sec. 22.4(c), a commenter recommended that
Presiding Officers be given additional authority to impose sanctions.
Although Sec. 22.4(c) and other sections of the CROP provide adequate
authority to impose procedural sanctions, EPA notes that Sec. 22.4(c)
applies only to the Presiding Officer, and not the EAB. In order that
the CROP should expressly authorize the EAB to employ equivalent
procedural sanctions, EPA has added a new paragraph to Sec. 22.4(a).
This new paragraph (a)(2) makes explicit the EAB's authority to impose
procedural sanctions for failures to conform to CROP requirements and
to orders of the EAB, an authority that the Agency has always
considered implicit:
(2) In exercising its duties and responsibilities under these
Consolidated Rules of Practice, the Environmental Appeals Board may
do all acts and take all measures as are necessary for the
efficient, fair and impartial adjudication of issues arising in a
proceeding, including imposing procedural sanctions against a party
who without adequate justification fails or refuses to comply with
these Consolidated Rules of Practice or with an order of the
Environmental Appeals Board. Such sanctions may include drawing
adverse inferences against a party, striking a party's pleadings or
other submissions from the record, and denying any or all relief
sought by the party in the proceeding.
EPA has also made a minor editorial revision to the last sentence
of what is now Sec. 22.4(a)(1), for reasons of grammar and clarity. EPA
has changed the last clause from ``motions * * * where the
Environmental Appeals Board has referred a matter to the
Administrator'' to ``motions filed in matters that the Environmental
Appeals Board has referred to the Administrator.''
As discussed in the response to comments above, EPA has made
several changes to Sec. 22.4(b) in response to public comments. EPA has
added a new sentence to Sec. 22.4(b): ``A Regional Judicial Officer
shall not prosecute enforcement cases and shall not be supervised by
any person who supervises the prosecution of enforcement cases, but may
be supervised by the Regional Counsel.'' EPA has also included in the
final rule a provision precluding a Regional Judicial Officer from
knowingly presiding over a case involving any party concerning which
the Regional Judicial Officer performed any functions of prosecution or
investigation within the 2 years preceding the initiation of the case.
EPA has deleted from the final
[[Page 40146]]
sentence of the proposed Sec. 22.4(b) language prohibiting RJOs having
``any interest in the outcome'' of any proceeding. EPA has also revised
Sec. 22.50(a) to limit the applicability of subpart I to cases under
CWA sections 309(g)(2)(A) and 311(b)(6)(B)(i) (33 U.S.C. 1319(g)(2)(A)
and 1321(b)(6)(B)(i)), and SDWA sections 1414(g)(3)(B) and 1423(c) (42
U.S.C. 300g-3(g)(3)(B) and 300h-2(c)).
EPA has also made a minor, editorial change to Sec. 22.4(b),
unrelated to the public comments. The first sentence of the proposed
Sec. 22.4(b) stated that the ``Regional Administrator shall designate
one or more Regional Judicial Officers to act as Presiding
Officer....'' EPA has revised this sentence to say that the Regional
Administrator shall ``delegate'' that authority.
EPA has adopted the proposed Sec. 22.4(c) without change.
As discussed above, EPA has revised Sec. 22.4(d) by adding a
provision prohibiting interlocutory appeals from the denial of
disqualification motions.
EPA has made three minor changes to correct errors in the proposed
Sec. 22.4(d). Contrary to the Agency's express intent that all motions
for disqualification be made first to the official whose
disqualification is sought (see 63 FR at 9467), the proposed
Sec. 22.4(d) erroneously includes a statement that motions for
disqualification of a Regional Judicial Officer should be made to the
Regional Administrator. The final rule requires that all motions for
disqualification must first be made to the official whose
disqualification is sought.
In the final rule, EPA has corrected another error in the proposed
rule by substituting ``Administrative Law Judge'' for ``Presiding
Officer'' in Sec. 22.4(d). In Sec. 22.3 of the 1980 CROP, ``Presiding
Officer'' was defined as an Administrative Law Judge who has been
designated by the Chief Administrative Law Judge to serve as Presiding
Officer. However, under the proposed rules, the definition of
``Presiding Officer'' has been revised to mean either an Administrative
Law Judge or a Regional Judicial Officer. The proposed Sec. 22.4(d)
failed to reflect this change. Because the proposed Sec. 22.4(d) used
the term ``Presiding Officer'' solely to refer to Administrative Law
Judges, EPA has revised this paragraph to use the term ``Administrative
Law Judge'' instead.
Finally, the phrase ``they deem themselves'' should be singular,
rather than plural. EPA has substituted the phrase ``he deems
himself''.
3. Filing, Service, and Form of Documents (40 CFR 22.5(a)-(c))
a. Summary of Proposed Rule. EPA proposed revisions of Sec. 22.5(a)
clarifying the requirements for filing documents with the hearing clerk
or the clerk of the EAB. Proposed revisions of Sec. 22.5(b) clarify the
requirements for serving documents on other parties and on the
Presiding Officer. The proposed paragraph (b)(1) would allow service of
the complaint by any reliable commercial delivery service that provides
written verification of delivery, and paragraph (b)(2) would allow
service of all documents other than the complaint by any reliable
commercial delivery service.
The proposed Sec. 22.5(c) added provisions which would require more
information on the first page of every pleading and to require tables
of contents and tables of authorities for all legal briefs and
memoranda greater than 20 pages in length (excluding attachments) to
simplify review. The provision that allowed Hearing Clerks to determine
the adequacy of documents was deleted, leaving that authority solely
with Presiding Officers or the Environmental Appeals Board.
b. Significant Comments and EPA Response. Dow says that it is
unclear whether the language in Sec. 22.5(b)(1) allowing service of the
complaint ``by certified mail, return receipt requested'' refers to one
method of service or two alternative methods. EPA has amended this
phrase to read ``by certified mail with return receipt requested''.
Dow suggests that Sec. 22.5(b)(1) should allow respondent to waive
the requirement that EPA send a copy of the CROP with the complaint.
EPA acknowledges that this is superfluous in many cases, but
nevertheless believes that this requirement is the most certain way of
assuring that respondents are aware of their procedural rights.
USAF requests that the phrase ``officer or'' be deleted from
Sec. 22.5(b)(1)(ii)(B), questioning EPA's authority to file
administrative cases against officers of the United States for actions
within the scope of their employment. EPA agrees that the words
``officer or'' should be deleted from the proposed section for the
reasons stated. EPA agrees that under normal circumstances, officers of
the United States acting outside the scope of their employment would be
treated in the same manner as other individuals. Where the real party
in interest is a Federal agency, that agency should be named as
respondent.
USAF also notes that the proposed Sec. 22.5(b)(1)(ii)(B) provides
less guidance as to the manner of service on Federal agencies than the
language presently codified at Sec. 22.5(b)(1)(iii). USAF urges the
adoption of language clearly providing for service as provided by
regulation, and absent regulation, service upon the chief attorney and
on the senior executive officer responsible for the overall operations
of the geographical unit of the agency being served. The language
describing this latter official is adapted from 40 CFR
Sec. 270.11(a)(3)(ii), that designates who must sign waste permit
applications. EPA agrees with the Air Force that the proposed rule does
not succeed in clarifying who must be served. EPA has revised this
paragraph to require service as provided by the respondent agency's
regulations, or in the absence of controlling regulation, as otherwise
provided by law. This will clearly allow Federal agencies to specify
how they are to be served, and where they do not do so, it will allow
EPA to serve the agency in any manner permitted by the Federal courts.
EPA recognizes the benefits of assuring that those directly in
charge of a federal facility get prompt notice of a complaint, and so,
has added to the final rule a direction that the complainant should
send an additional copy of the complaint to the senior executive
official having responsibility for the overall operations of the
geographical unit where the alleged violations arose. This language,
proposed by USAF, is derived from EPA's regulation designating who must
sign applications for hazardous waste permits, 40 CFR 270.11(a)(3)(ii).
EPA recognizes that the term ``geographical unit'' may be subject to
varying interpretations, but has concluded that the imprecision is both
necessary given the wide variety of federal facilities, and acceptable
given that this copy of the complaint merely supplements the official
service of the complaint. In recognition of this imprecision, this new
provision uses the word ``should'' rather than ``shall.'' EPA will make
a good faith effort to provide a copy of the complaint to the base
commander, or equivalent, however, so long as complainant properly
serves the federal agency according to its regulations or as otherwise
provided by law, the requirements of Sec. 22.5(b)(1)(iii) are
satisfied.
USAF finds the phrase ``all pleadings and documents other than the
complaint'', used in Sec. 22.5(b)(2) and elsewhere, to be confusing.
USAF recommends using ``answer'' and/or ``complaint'' in place of
``pleading'' and ``all filed documents'' or ``all filings'' in place of
``pleadings and documents''. EPA agrees with this recommendation.
Dow recommends that Sec. 22.5(c)(2) should specify how respondent
is to
[[Page 40147]]
determine the docket number. EPA agrees that the proposed rule leaves
this unclear. EPA has stricken the parenthetical clause ``(after the
filing of the complaint)'' in order to assure that the docket number
shall appear on the complaint.
Dow and CEEC observe that under Sec. 22.5(c)(4) a party who fails
to furnish or update its name, address, and telephone number, and those
of its attorney or representative, if any, completely waives its right
to notice and service. The commenters argue that this sanction is too
severe for harmless errors. EPA has amended this provision so that
where a party fails to update information concerning its representative
and/or service address, service to the outdated representative or
address shall satisfy the requirements of Sec. 22.5(b)(2) and
Sec. 22.6. In this manner, the consequences of any failure to update
this information will be commensurate with the severity of the error.
In its comments on Secs. 22.17(a) and 22.34(c), Dow notes that
default is too harsh a sanction for minor errors in service or filing.
The proposed Sec. 22.5(c)(5) would allow the EAB or the Presiding
Officer to exclude from the record any document that does not comply
with Sec. 22.5(c). This would apparently preclude exclusion for service
errors as significant as those in Sec. 22.5(c) (e.g., failure to serve
the opposing party, failure to include a certificate of service per
Sec. 22.5(a)(3), failure to file the original document per
Sec. 22.5(a)(1)). Therefore, the final rule expands this sanction to
include failures to conform to paragraphs (a), (b) and (d), as well as
(c).
The Agency solicited comments on whether electronic filing and
service should be allowed, and if so, under what conditions, but
received no comments. After further consideration, EPA has decided that
the CROP should permit the Presiding Officer and the EAB, in
consultation with the parties and the affected hearing clerk, to
authorize facsimile or electronic service and/or filing on a case-by-
case basis. Accordingly, language is added to Secs. 22.5(a)(1) and
22.5(b)(2) allowing the Presiding Officer or the EAB to authorize
facsimile or electronic service and/or filing, subject to any
appropriate conditions and limitations.
c. Final Rule In response to public comments, EPA has adopted a
modified version of the proposed Sec. 22.5(a), (b), and (c). EPA has
revised this and other sections to use the more general term
``document'' in place of ``pleadings and documents'', and to use
``complaint'' or ``answer'' where reference to one or the other is
specifically intended. EPA has edited Sec. 22.5(b)(1) to read ``by
certified mail with return receipt requested''. EPA deletes the phrase
``officer or'' from Sec. 22.5(b)(1)(ii)(B), and revises the proposed
Sec. 22.5(b)(1)(ii)(B) as follows:
``Where respondent is an agency of the United States,
complainant shall serve that agency as provided by that agency's
regulations, or in the absence of controlling regulation, as
otherwise permitted by law. Complainant should also provide a copy
of the complaint to the senior executive official having
responsibility for the overall operations of the geographical unit
where the alleged violations arose.''
EPA has stricken from Sec. 22.5(c)(2) the parenthetical clause
``(after the filing of the complaint)''. EPA has revised
Sec. 22.5(c)(4) as follows:
``(4) The first document filed by any person shall contain the
name, address, and telephone number of an individual authorized to
receive service relating to the proceeding. Parties shall promptly
file any changes in this information with the Regional Hearing
Clerk, and serve copies on the Presiding Officer and all parties to
the proceeding. If a party fails to furnish such information or any
changes thereto, service to the party's last known address shall
satisfy the requirements of Sec. 22.5(b)(2) and Sec. 22.6.''
EPA has revised the proposed Sec. 22.5(c)(5) to allow the EAB or
the Presiding Officer to exclude from the record any document that does
not comply with any requirement of Sec. 22.5.
In addition to the changes suggested by the commenters, EPA has
made several other minor changes to Sec. 22.5. EPA has amended
Sec. 22.5(a)(1) to allow the Presiding Officer and the EAB the
discretion to allow facsimile or electronic filing under such
circumstances and limitations as they deem appropriate. EPA also has
added to Sec. 22.5(b)(2) language allowing the Presiding Officer or the
EAB to authorize facsimile or electronic service, subject to such
conditions and limitations as they deem appropriate. EPA has added a
reference to the EAB to Sec. 22.5(b): ``A copy of each document filed
in the proceeding shall be served on the Presiding Officer or the
Environmental Appeals Board, and on each party.''
EPA has determined that additional clarifications are appropriate
for Sec. 22.5(b)(2). EPA notes that the U.S. Postal Service considers
overnight express and priority mail to be forms of first class mail.
EPA has revised Sec. 22.5(b)(2) to allow service ``by first class mail
(including certified mail, return receipt requested, Overnight Express
and Priority Mail), or by any reliable commercial delivery service.
This change necessitates a corresponding change in Sec. 22.7(c),
because 5 day grace period for responding to motions sent by first
class mail is unnecessary for documents served by overnight or same-day
delivery.
Finally, EPA has revised the CROP to present numbers consistently,
adopting the preferred style of the U.S. Government Printing Office.
Numbers of 10 or more are expressed in figures and not spelled out.
Accordingly, EPA has revised Sec. 22.5(c) to require a table of
contents and a table of authorities for all briefs and legal memoranda
``greater than 20 pages in length''.
4. Confidentiality of Business Information (40 CFR 22.5(d))
a. Summary of Proposed Rule. The proposed Sec. 22.5(d) addresses
treatment of information claimed as Confidential Business Information
(``CBI'') in documents filed in CROP proceedings. The proposed
paragraph (d)(1) would provide that any business confidentiality claim
shall be made in the manner prescribed by 40 CFR part 2 at the time
that the document is filed. It warns that a document filed without a
claim of business confidentiality will be available to the public for
inspection and copying pursuant to Sec. 22.9.
Paragraph (d)(2) would require the submission of a redacted, non-
confidential version in addition to the full document containing the
information claimed confidential, and describes the process for
preparing these documents. Paragraph (d)(3) describes the procedures
for serving documents containing claimed-confidential information and
makes clear that only a redacted version of any document may be served
on a party, amici, or other representative thereof not authorized to
receive the confidential information. Paragraph (d)(4) provides that
only the redacted version of a document with claimed-confidential
information will become part of the public record of the proceeding,
and further provides that an EPA officer or employee may disclose
information claimed confidential only as provided by 40 CFR part 2.
b. Significant Comments and EPA Response. Dow and CEEC express
concern that under the proposed rule a failure to include a CBI claim
at the time a document is submitted forecloses any future protection of
the document. They argue that even where a company has inadvertently
placed information in the public record, there is still value to in
preventing further disclosure. They also point out that the Agency's
CBI regulations at 40 CFR 2.203(c) provide that the Agency ``will make
such efforts as are administratively practicable to
[[Page 40148]]
associate [a] late [confidentiality] claim with copies of . . .
previously-submitted information in EPA files. . . .''
Section 2.203(c) expresses an Agency intent to give effect to late
claims of business confidentiality, to the extent administratively
practicable. While it is often administratively practicable to provide
meaningful protection for a document that has been submitted in a non-
confidential manner to an EPA office for EPA's own regulatory use, it
is not administratively practicable to protect information that has
become a matter of public record. There are significant costs
associated with maintaining the confidentiality of documents EPA uses,
and EPA must balance them against the potential benefits of protecting
information that is already likely to be circulating among the public.
The criteria for determining whether business information is entitled
to confidential treatment, at Sec. 2.208, include whether the business
has taken reasonable measures to protect the confidentiality of the
information. Placing a document in the public record falls short of
those reasonable measures. Some of EPA's enforcement dockets receive
daily visitors, while others are less frequently examined. Accordingly,
once a person has filed a document with a hearing clerk, a subsequent
effort by that person to assert a business confidentiality claim for
information contained in that document will generally be ineffective.
EPA will consider untimely confidentiality claims on a case-by-case
basis, but claims asserted more than a few days after the original
filing are unlikely to be granted.
CEEC also faults EPA for failing to draw sufficient attention in
the notice of proposed rule making to the provisions addressing CBI.
CEEC asserts that EPA missed an opportunity to work with the regulated
community to achieve important regulatory reforms. EPA disagrees. It is
the purpose of a notice of proposed rule making to elicit comment from
the public to better inform the Agency's rule making process. EPA has
made many changes in this final rule in response to the helpful
comments submitted by CEEC and other commenters. Although EPA has not
agreed with CEEC's one substantive comment on the CBI provisions, EPA
appreciates the comment and carefully considered CEEC's point.
c. Final Rule. EPA adopts Sec. 22.5(d) as proposed, except for
replacing the phrase ``pleading or document'' with ``document'' as
discussed in the response to public comments on Sec. 22.5(a), (b) and
(c), and replacing ``amici'' with ``non-party participant'' for
consistency with changes to Sec. 22.11(b).
5. Computation and Extension of Time (40 CFR 22.7)
a. Summary of Proposed Rule. Section 22.7(a) defines time periods
for determining the date upon which a document is due. The proposed
rule would revise the term ``legal holiday'' to ``Federal holiday'' for
clarity.
Section 22.7(b) sets forth conditions under which the due date may
be extended. The proposed revision to that paragraph would require that
a motion for extension of time be filed sufficiently in advance of the
due date so as to allow other parties an opportunity to respond and to
allow time for the Presiding Officer or EAB to issue a ruling upon the
motion.
Section 22.7(c) of the proposed rule would expand the ``mailbox
rule'' to provide that service of documents other than the complaint is
complete either upon mailing or when placed in custody of a reliable
commercial delivery service, and to allow 5 additional days to respond
not only to documents served by mail but also to documents served by
reliable commercial delivery service.
b. Significant Comments and EPA Response. Dow requested an
exception from including Saturdays, Sundays and holidays where the time
period is 10 days or less. The commenter is concerned that there are
not enough work days and mail delivery days to respond to a document.
In effect, this would extend the time period for a party's reply to
a response, which is 10 days, under Sec. 22.16(b). EPA believes that
two different ways of calculating time periods would cause confusion
and inconsistency. When a party needs more than 10 days to file a
document, an adequate solution would be to request an extension of
time.
Dow suggested a ``good cause'' exception to the time limit for
filing a motion for extension of time. EPA believes that including such
an exception in the rule is unnecessary and may encourage untimeliness,
and thereby adversely affect the Agency's efforts to make
administrative proceedings more efficient. A motion for leave to file a
document beyond the time limit (``out of time''), stating reasons for
not having filed within the time limit, may be submitted in accordance
with Sec. 22.16(a), along with the document sought to be filed. The
time limit provided in the proposed revision does not require a motion
for extension to be filed so far in advance of the due date so as to
allow other parties the 15 days provided by Sec. 22.16(b) to respond to
the motion. A ``reasonable opportunity to respond'' and ``reasonable
opportunity to issue an order'' will be construed based on the
circumstances of the case.
c. Final Rule. Today's additional clarifications to
Sec. 22.5(b)(2), which define first class mail as including Overnight
Express and Priority Mail, expressly allow for service by EPA's
internal mail system, and provide the Presiding Officer and the EAB
discretion to authorize facsimile or electronic filing, require a
corresponding change to Sec. 22.7(c). To assume 5 days for delivery by
mail of a document, and thus to allow 5 additional days for a response,
is appropriate where a document is served by first class mail and some
forms of commercial delivery. However, it is not appropriate to make
such assumption and allowance where there is a date of receipt, logged
or stamped by the postal or commercial delivery service, showing that
the document was sent by same day or overnight delivery. Accordingly,
EPA is revising the third sentence of Sec. 22.7(c) to exempt documents
served by overnight or same-day delivery. According to the preferred
style of the U.S. Government Printing Office, measurements of time are
to be expressed in figures and not spelled out. EPA has revised
Sec. 22.7(c) to say that ``5 days shall be added''.
6. Ex Parte Discussion of Proceeding (40 CFR 22.8)
a. Summary of Proposed Rule. The existing Sec. 22.8 prohibits the
decision making officials in a proceeding from discussing the merits of
the proceeding with any interested person outside the Agency, with any
Agency staff member who performs a prosecutorial or investigative
function in the proceeding or a factually related proceeding. This
prohibition is also imposed on representatives and to persons likely to
advise the decision making officials on the proceeding. The proposed
rule would add a sentence that would exempt officials who have formally
recused themselves from all adjudicatory functions, including the
approval of consent agreements and issuance of final orders.
b. Significant Comments and EPA Response. Dow argues that the CROP
should also restrict ex parte contacts before a complaint is issued, in
order to avoid the potential for an adjudicator developing a bias in
favor of the complainant. Dow suggests that the CROP should prohibit
any communication regarding contemplated or reasonably foreseeable
enforcement
[[Page 40149]]
proceedings between potential adjudicators and Agency enforcement
personnel. Dow also suggests that where Agency enforcement attorneys
may potentially serve as Presiding Officers, any communications
regarding contemplated or reasonably foreseeable enforcement
proceedings should be recorded, kept on file, and served on respondent
as soon as that attorney is designated Presiding Officer.
EPA agrees that EPA attorneys who may serve as Presiding Officers
should avoid communications regarding contemplated or reasonably
foreseeable enforcement proceedings over which they might preside.
However, a complete prohibition is neither feasible nor necessary.
In some instances, it is appropriate for Agency enforcement
personnel to have prefiling discussions concerning specific enforcement
cases with Agency attorneys who may be called upon act as Presiding
Officers. When considering whether to assign a new case to a particular
Agency enforcement attorney, it may be necessary to inquire of that
attorney whether a prospective case may present a conflict with any
cases in which the attorney is acting as Presiding Officer. So long as
those discussions are carefully limited to transmitting the identity of
the prospective respondent and a bare statement of the statutory or
regulatory provisions allegedly violated, and to exploring whether
there is any potential conflict of interest, but do not address the
merits of the potential action, such discussions could not influence
the decisions of the prospective adjudicator, and should not be
considered prohibited ex parte communications.
Sound management of the Agency's enforcement program also
periodically requires some discussion between complainants and
adjudicators concerning anticipated work loads. For example, EPA
periodically offers compliance audit programs (see, e.g., Registration
and Agreement for TSCA Section 8(e) Compliance Audit Program, 56 FR
4128 (Feb. 1, 1991)) where large numbers potential cases are
simultaneously settled on essentially identical terms, and it is
appropriate in such cases for the complainant to discuss process issues
with the persons who would be responsible for approving the consent
agreements and issuing final orders. Discussions of how many consent
agreements might be submitted for approval, when they might be
submitted, whether or to what extent the consent agreements vary, are
all permissible procedural matters that are not prohibited ex parte
communications.
Compliance audit programs encourage violators to identify their
violations and disclose them to EPA in exchange for a settlement and
release of liability on favorable terms. Obtaining advance approval of
the generic consent agreements could reassure those members of the
regulated community who are wary of disclosing violations that the
Agency will in fact conclude the cases according to the terms offered.
Although this would result in substantive discussion of the terms of
settlement between prospective complainants and adjudicators, this is
permissible under the peculiar circumstances of a compliance audit
program. It is permissible because compliance audit programs are
entirely voluntary. Each compliance audit program is an offer by the
Agency to the regulated community at large, and EPA typically engages
in these efforts precisely because it does not know who is in violation
and it wants to bring a large and ill-defined sector of the industry
into compliance. No regulatee is obligated to identify itself as a
violator or to participate in the program; each chooses to do so only
if it considers the terms offered by the Agency to be in its best
interest. Accordingly, where complainants wish to confer with Agency
officials responsible for approving consent agreements and issuing
final orders concerning potential compliance audit programs, they may
do so without violating Sec. 22.8.
Dow's suggested limitations also pose significant implementation
problems. Parties may disagree about when an investigation becomes a
``contemplated or reasonably foreseeable enforcement proceeding'' and
about what communications concern such a proceeding. For the foregoing
reasons, EPA has not added any prohibition against communications
concerning cases before the filing of the complaint. Similarly, EPA
does not believe that it is necessary to require by rule that potential
adjudicators retain a written record of all communications regarding
potential cases. The prohibition in Sec. 22.4(d)(1) against individuals
serving as Presiding Officer in regard to ``any matter in which they
have any relationship with a party or with the subject matter which
would make it inappropriate for them to act'' provides adequate
protection against any bias that might arise through communications
prior to the filing of a complaint.
Dow also comments that where an adjudicator obtains advice from
other EPA personnel, any such advice should be served on the
respondent. The focus of Dow's concern is that EPA personnel such as
technical experts, rule writers, and attorneys might be advising
adjudicators on the merits of a proceeding. EPA shares Dow's opinion
that such ex parte advice is generally unnecessary and inappropriate,
and believes that it is in fact extremely uncommon. EPA agrees with the
commenter that adjudicators should not be receiving such advice without
all parties having the opportunity to review and respond to it. The
CROP provides suitable procedures for adjudicators to solicit such
advice (e.g., by calling for an expert to testify pursuant to
Sec. 22.19(e)(4)) and for EPA personnel to volunteer such advice
(through amicus briefs subject to Sec. 22.11(b)) without risk of ex
parte communication.
There are, however, circumstances where it is appropriate for
adjudicators to obtain from other EPA personnel advice that is not
served on the parties. Administrative Law Judges periodically consult
with each other, as do the Agency's RJOs. Adjudicators routinely
receive advice from the attorneys and law clerks on the staff of the
Environmental Appeals Board and the Office of Administrative Law
Judges, and on occasion from hearing clerks and from Agency ethics
officials. Accordingly, EPA declines to require that all advice to
adjudicators from EPA personnel be served on the parties.
c. Final Rule. EPA is adopting Sec. 22.8 as proposed, with minor
changes. EPA notes that Sec. 22.8 refers in three places to both
Regional Judicial Officers and Presiding Officers. In order to avoid
redundancy and potential confusion, EPA has stricken the words ``the
Regional Judicial Officer.'' Other minor editorial changes in the first
sentence are the substitution of the word ``proceeding'' for ``case'',
so as to consistently use the word ``proceeding'' when referring to a
particular administrative adjudication, and substitution of ``any
decision'' for ``the decision'' to clarify ex parte communication is
prohibited in regard to small matters as well as large ones. These
editorial changes do not alter the substance of the CROP.
The preamble to the proposed rule indicated that the prohibitions
on ex parte communications would apply to persons who approve consent
agreements and issue final orders. 63 FR at 9468 (``For purposes of
this provision [Sec. 22.8], the Agency would consider the approval of
consent agreements and issuance of consent orders to be adjudicatory
functions.''). In some instances, Regional Administrators have
delegated the authority to review settlements and issue final orders to
[[Page 40150]]
persons associated with the Regions' enforcement programs. The Agency
has reconsidered the position expressed in the preamble to the proposed
rule, and has determined that the person who ultimately approves
settlements on the Agency's behalf and issues these final orders need
not be as independent as those who adjudicate contested issues. To make
this change clear, EPA has amended the last sentence of Sec. 22.8 to
state that the ex parte restrictions shall not apply to a person who
issues final orders only pursuant to Sec. 22.18(b)(3).
7. Intervention and Non-party Briefs (40 CFR 22.11)
a. Summary of Proposed Rule. Section 22.11(a) describes the process
for intervening in a CROP proceeding. The proposed rule provides more
specific procedures and would make the standard for intervention
equivalent to the standard used in the Federal courts. Paragraph (b)
describes the procedures for motion for leave to file an amicus brief;
the major change proposed was to provide a uniform 15 day period for
responses to an amicus brief, rather than leaving this to the
discretion of the Presiding Officer or the EAB.
b. Significant Comments and EPA Response. Dow suggests that
Sec. 22.11(b) should expressly allow 15 days for parties to respond to
a motion for leave to file an amicus brief, as well as 15 days to
respond to the brief itself. This change is not necessary, because
``motions'' are subject to Sec. 22.16, which provides for responses
within 15 days. Nevertheless, EPA accepts Dow's suggestion and has
revised Sec. 22.11(a) and (b) so that all CROP requirements apply to
any motion for leave to file an amicus brief or motion to intervene in
the same manner as if the movant were a party.
c. Final Rule. EPA is adopting the proposed Sec. 22.11 with
modifications. EPA has amended the language of Sec. 22.11(a) and (b) so
that all requirements of the CROP shall apply to any motion for leave
to intervene or motion for leave to file an amicus brief as if the
movant were a party.
EPA has also made two other changes to Sec. 22.11(b) on its own
initiative. First, it has replaced the terms ``amicus curiae'' and
``amicus brief'' with ``non-party brief.'' Second, EPA has replaced the
requirement that motions for leave to file a non-party brief ``state
the reasons why the proposed amicus brief is desirable'' with the
requirement that it ``explain the relevance of the brief to the
proceeding.'' Both changes are intended to improve the clarity and
specificity of the CROP, and neither is intended to make a substantive
change.
To conform to the preferred style of the U.S. Government Printing
Office, EPA has revised Sec. 22.7(c) to state the time allowed for
responding to a non-party brief with the numeral ``15'.
8. Commencement of a Proceeding (40 CFR 22.13)
a. Summary of Proposed Rule. EPA proposed amending Sec. 22.13 to
define the commencement of an administrative enforcement proceeding,
and to allow the simultaneous commencement and conclusion of a case
through the filing of a consent agreement and a final order where pre-
commencement negotiations result in settlement.
b. Significant Comments and EPA Response. CEEC recommends that the
CROP should require discussions with a prospective respondent before
the filing of a complaint. CEEC argues that pre-filing discussions
would expedite the proceeding by allowing the parties to resolve the
matter cooperatively, and by allowing early elimination of
inappropriate allegations or penalties. CEEC proposes that the CROP
should require that complainant determine whether a potential
respondent had fair notice of the regulatory requirement(s) that it is
alleged to have violated, and require EPA to disclose both the
information in EPA's possession suggesting the violation and the
information EPA will utilize to set the proposed penalty. CEEC argues
that such a pre-filing process would maximize the opportunity to
resolve compliance matters cooperatively and expeditiously.
EPA has often found it advantageous to engage in pre-filing
discussions with prospective respondents under the existing CROP, and
the proposed revisions will increase EPA's incentives to do so. Nothing
in the proposed rule prevents EPA from engaging in the sort of pre-
filing process CEEC proposes. However, EPA declines to go as far as
CEEC proposes and create a mandatory pre-filing process. EPA's
experience with pre-filing negotiations has been mixed: While in many
cases pre-filing negotiations have produced expedited settlements, in
other cases they have resulted in delay. Sometimes a respondent is not
interested in settlement, but uses settlement discussions as a tactic
in efforts to forestall enforcement. In contrast, active management of
the case by a neutral presiding officer is generally effective in
keeping both parties actively engaged in settlement efforts, and
provides an alternative process when settlement efforts fail.
Although EPA does not at this time believe that a mandatory pre-
filing process should be part of the CROP, EPA will consider ways to
expand use of pre-filing negotiations. Although statutory public
commenter provisions somewhat limit the Agency's authority to pursue
pre-filing negotiations, the final rule does not add any further limits
to EPA's discretion in this regard.
c. Final Rule. EPA is adopting Sec. 22.13 of the CROP as proposed,
with two minor changes. The first resolves conflicting language in the
proposed rule concerning whether a case subject to public comment
requirements of Sec. 22.45 could be commenced through the filing of a
consent agreement and final order pursuant to Sec. 22.13(b). Although
the proposed Sec. 22.13(b) states that it is limited to cases not
subject to Sec. 22.45, the proposed Sec. 22.45(b)(1) and (2) describe a
process for public notice in cases commenced pursuant to Sec. 22.13(b).
EPA has revised the public comment procedures of Sec. 22.45 to better
accommodate cases commenced pursuant to Sec. 22.13(b). Accordingly, EPA
has deleted from Sec. 22.13(b) the clause which would have made it
inapplicable in cases subject to the public comment provisions of
Sec. 22.45. Second, as noted in the discussion of public comments on
Sec. 22.18(b) and (c), EPA has eliminated the term ``consent order,''
and is using the term ``final order'' instead.
9. Complaint (40 CFR 22.14)
a. Summary of Proposed Rule. The primary substantive change
proposed in Sec. 22.14 was the addition of explicit authority for
complainants to use, at their discretion, a notice pleading approach
comparable to that used in administrative enforcement proceedings under
the proposed part 28 procedures and in the Federal courts. The proposed
Sec. 22.14(a)(4) would expressly permit EPA to file a complaint without
specifying the precise penalty sought, as an alternative to pleading a
specific penalty. Where complainant elects not to demand a specific
penalty in the complaint, complainant is nonetheless obligated to
provide a brief explanation of the severity of each violation alleged
and a citation to the statutory penalty authority applicable for each
violation alleged in the complaint. The text originally in paragraph
(c) would be deleted to avoid the possibility of conflict with the
notice pleading option proposed under Sec. 22.14(a)(4)(ii).
The proposed Sec. 22.14(a)(6) would require the complainant to
specify in the complaint whether the non-APA procedures in subpart I
shall apply to the proceeding. If a complaint does not contain an
explicit statement that subpart I applies, the ensuing
[[Page 40151]]
proceeding shall be conducted in conformance with section 554 of the
APA.
EPA also proposed editorial revisions, primarily to consolidate the
provisions applicable to complaints for assessment of civil penalties
with the essentially parallel provisions for revocation, termination or
suspension of permits, and to explicitly provide for the issuance of
compliance and corrective action orders.
b. Significant Comments and EPA Response
Four of the commenters, CMA/API, CEEC, UWAG and USAF, opposed the
proposed notice pleading option.
Implicit in these comments is a concern that respondents will not
be able to fairly gauge the amount of their potential penalty liability
based on the information in the complaint. EPA agrees that complaints
should provide more information than is required under the proposed
rule. The proposed Sec. 22.14(a)(4)(ii) arguably would allow issuance
of complaints which do not clearly identify the number of violations
charged, for example, where a statute authorizes EPA to assess a
separate penalty for each day a violation continues. In order to ensure
that respondents understand from the complaint how many violations are
charged, EPA has revised Sec. 22.14(a)(4)(ii) to require that the
complaint specify ``the number of violations (where applicable, days of
violation) for which a penalty is sought''.
CMA/API objected to the notice pleading option and recommended that
it be rejected, noting that allowing complaints to issue without
stating a sum certain would make it ``too easy'' for EPA to proceed
with an administrative penalty action without gathering sufficient
information to make an informed decision, and that the Agency might
file meritless complaints that would nonetheless have a ``stigmatizing
impact'' on respondents. EPA notes that the proposed Sec. 22.14 would
still require complainant to state the factual basis for alleging the
violation, and to specify each provision of a statute, regulation,
permit or order that respondent is alleged to have violated. The
proposed change would only allow EPA, at its discretion, to postpone
stating the extent of the relief sought. Owing to the retention of
provisions that require complainant to specifically allege respondent's
violation, the risk that EPA might file meritless complaints is not
increased by the proposed change.
CMA/API objects that notice pleading will allow EPA to use the
administrative complaint as a form of discovery to obtain information
from the respondent, and argues that EPA's existing information
gathering tools are adequate for that purpose. EPA does not view the
administrative complaint as an investigation or discovery tool, but
rather, the product of an investigation through which EPA has collected
evidence reasonably supporting the conclusion that the respondent has
violated the law. However, in some cases the litigation process is the
only mechanism by which EPA can obtain the financial information
necessary to determine what penalty is appropriate for those violations
(see, e.g., FIFRA section 8(b), 7 U.S.C. 136f(b), and Toxic Substances
Control Act (``TSCA'') section 11(b), 15 U.S.C. 2610(b), which
expressly prohibit inspections seeking financial information).
The USAF argues that the proposed change potentially shifts to
respondents the burden of demonstrating that something less than the
maximum penalty is appropriate. EPA disagrees, as the proposed
Sec. 22.24(a) states that complainant bears both ``the burdens of
presentation and persuasion * * * that the relief sought is
appropriate'', while respondents only bear ``the burden of presenting *
* * any response or evidence with respect to the appropriate relief.''
Notice pleading is common practice in the state and federal courts, and
in those courts notice pleading does not put the burden of persuasion
on the respondent, is not inherently unfair, and does not violate a
defendant's due process rights.
USAF objects that notice pleading is unnecessary to achieve the
Agency's stated goal of ``provid[ing] the Agency with added flexibility
in issuing a complaint under circumstances where only the violator
possesses information crucial to the proper determination of the
penalty * * *.'' USAF suggests that a better approach would be to
require a specific penalty proposal in the complaint, but allow the
complainant to amend the proposed penalty based on information it
timely obtains after the commencement of a suit.
EPA agrees that the approach USAF identified is appropriate in many
cases. However, where EPA does not have adequate information to
confidently recommend a specific penalty, EPA would be misleading the
respondent were it to propose an arbitrary penalty which does not
reflect significant facts of the case. An unreasonable penalty demand
may also make EPA liable for respondent's attorneys' fees under the
Equal Access to Justice Act (``EAJA''), 5 U.S.C. 504. The Small
Business Regulatory Enforcement Fairness Act of 1996 (``SBREFA''),
Pub.L. 104-121, expanded the EAJA to allow recovery of attorney's fees
where an initial penalty demand is later shown to be unreasonable.
Notice pleading is an appropriate and responsible choice in
circumstances where liability is clear, but where EPA is not able to
determine with confidence the reasonableness of a specific penalty
amount before filing the case.
If EPA were not to provide the option of notice pleading, the
SBREFA amendments would make it possible for polluters to escape high
penalties if they can effectively hide from EPA their financial status
or the economic benefits derived from their noncompliance with
environmental regulation. Some statutes require EPA to consider a
respondent's ability to pay the proposed penalty or its economic
benefit of noncompliance in assessing a penalty (e.g., FIFRA section
14(a)(4), TSCA section 16(a)(2)(B), CWA section 309(g)(3), Clean Air
Act (``CAA'') section 113(e)(1)), and EPA generally considers these
factors relevant in penalty assessment under other statutes as well.
However, authority for EPA to gather such information is not always
clear, and under some statutes it has been expressly withheld (see,
e.g., FIFRA section 8(b), 7 U.S.C. 136f(b), TSCA section 11(b), 15
U.S.C. 2610(b)). The SBREFA amendments to the EAJA make the Agency wary
of seeking large penalties against individuals or privately held
corporations (who do not generally make public disclosures of their
financial condition) absent reliable financial information. Because EPA
does not have the resources to inspect any but the largest facilities
more than once every few years, inspections typically reveal violations
that are several years old. The 5-year federal statute of limitations
may limit the Agency's ability to sanction violators for older
violations, so a respondent need only hide its financial status for a
short time in order to forestall EPA from seeking penalties
commensurate with a serious violation. Notice pleading increases the
deterrent effect of EPA's enforcement program, and levels the
regulatory playing field for publicly held and privately held
corporations.
CEEC noted in its comments that the February 25, 1998, FR Notice of
Proposed Rule Making did not analyze the proposed notice pleading
option in light of the SBREFA amendments to the EAJA. The proposed
rule, as well as today's final rule, is fully consistent with the EAJA
as amended by SBREFA. The EAJA does not prohibit notice
[[Page 40152]]
pleading, and nothing in the SBREFA legislative history suggests any
intent by Congress to limit its use in judicial or administrative
enforcement. The EAJA does not require the agencies to include specific
penalty demands in their complaints.
When a complainant makes an express demand, the remedies of the
EAJA may be invoked. However, the EAJA explicitly excludes from the
definition of ``demand'' any ``recitation of the maximum statutory
penalty'' in the administrative or civil complaint. Consistent with
this provision, EPA may postpone making a ``demand'' by exercising the
notice pleading option of Sec. 22.14(a)(4)(ii), and providing ``a brief
explanation of the severity of each violation alleged and a citation to
the statutory penalty authority applicable for each violation alleged
in the complaint'' instead of a specific penalty demand.
Civil administrative penalty complaints should communicate the
significance that the Agency places on the alleged violations. The CROP
accomplishes this in both the traditional method embodied in
Sec. 22.14(a)(4)(i), and the notice pleading option in
Sec. 22.14(a)(4)(ii). Section 22.14(a)(4)(i) requires that the
complaint state ``[t]he amount of the civil penalty which is proposed
to be assessed, and a brief explanation of the proposed penalty,''
while Sec. 22.14(a)(4)(ii) requires ``a brief explanation of the
severity of each violation alleged and a citation to the statutory
penalty authority applicable for each violation alleged in the
complaint''. Moreover, EPA intends to maintain the practice developed
in the notice pleading cases under the proposed part 28 administrative
enforcement rules of concurrently supplementing complaints with early,
informal settlement overtures to respondents. EPA has found this
process expedites settlement while also providing respondents with more
specific guidance on the penalty value the Agency places on its
enforcement case.
EPA notes that notice pleading is not mandatory, but is instead an
option. EPA expects that administrative complaints containing specific
penalty proposals will continue to be a central part of the Agency's
administrative enforcement program. However, one clear mandate of
SBREFA is that the Agency should not make a penalty demand unless it
has evidence to fully support that demand. Notice pleading balances the
goals of SBREFA with those of the statutes EPA is charged with
enforcing, as it allows the Agency to pursue enforcement in cases where
adequate financial information is either unavailable or withheld by the
respondent during the case development process.
Today's final rule is fully consistent with the spirit and intent
of the Equal Access to Justice Act, in that the CROP produces
complaints that are substantially justified by the facts, circumstances
and relevant statutory and regulatory requirements alleged to be
violated. The limitations on discovery in CROP proceedings practically
force complainants to have in hand at the time an administrative
complaint is filed virtually all the evidence necessary to prove the
alleged violations and the appropriateness of the penalty. This is in
marked contrast to the rules governing civil judicial enforcement, that
allow complaints to be filed so long as the allegations and factual
contentions ``are likely to have evidentiary support after a reasonable
opportunity for further investigation or discovery * * *.'' See Rule
11(b)(3) of the Federal Rules of Civil Procedure. The notice pleading
option does not ease the Agency's pre-filing burdens associated with
documenting that a regulatee has violated the law, but merely allows
the filing of a complaint with somewhat less information about what
penalty might be appropriate for those violations.
UWAG also questioned the efficacy of the notice pleading option,
asserting that the Agency will be no better informed at the time of
prehearing exchange or default than it is at the time the complaint is
issued. EPA has shared this concern, and requested comments on whether
complainant might postpone stating a specific proposed penalty for an
additional 30 days, or longer, after prehearing exchange. 63 FR at
9472. Dow objected to postponement beyond prehearing exchange (although
it did not state any objection to allowing complainant to state a
specific proposed penalty for the first time in prehearing exchange).
As discussed in the response to comments on Sec. 22.19(a) below, it is
appropriate to allow complainant to review respondent's prehearing
exchange for 15 days before specifying a proposed penalty. EPA believes
that this process properly balances the parties' competing interests.
Most regulatees will engage in settlement discussions with the
Agency once a complaint has been filed. Such settlement discussions,
often accompanied by voluntary exchanges of certain documents, almost
always give EPA additional information about the merits of the Agency's
allegations and the appropriateness of a penalty. In addition,
Sec. 22.15(b) requires respondent to state in its answer the
``circumstances or arguments which are alleged to constitute the
grounds of any defense; the facts which respondent disputes; [and] the
basis for opposing any proposed relief * * *.'' As a result of the
information received through the answer and settlement discussions,
complainant generally has a better understanding of whether respondent
has financial limitations significant enough to warrant assessing a
lower penalty. EPA recognizes that in some cases, a respondent may
still resist providing necessary information. In such cases, the
Agency's recourse would be to postpone proposing a specific penalty
until 15 days after respondent has filed its prehearing exchange, in
accordance with Sec. 22.19(a)(4). If respondent's prehearing exchange
fails to contain necessary information, complainant could then move for
a discovery order, and subsequently amend the penalty demand as
necessary.
Several commenters noted that notice pleading might impede quick
resolution and settlement. CEEC notes that failure to provide a
specific penalty amount early in the process can frustrate quick
resolution of the proceedings. UWAG states that the failure to specify
a sum-certain penalty in the complaint will undercut the Agency's goal
of resolution of administrative complaints with a minimum of cost and
delay, since a party will ``have no choice'' but to engage in
settlement discussions in order to ascertain ``exactly what penalty''
the Agency is seeking. CMA/API notes that requiring a specific penalty
demand amount encourages settlement because it makes clear to the
respondent the extent of the penalty relief that EPA is seeking. CMA/
API states that without a specific penalty amount stated in the
complaint, a respondent can neither judge whether settlement is a
realistic possibility nor gauge EPA's view of the significance of the
matter. USAF states that the proposed change reduces the respondent's
ability to negotiate and removes any incentive to negotiate.
The Agency acknowledges that notice pleading may impede use of the
quick resolution process, and that it has the potential to delay
settlement relative to cases where a sum certain penalty amount is
stated in the complaint. However, notice pleading also provides an
additional incentive to settle by preserving EPA's full penalty claim
in the event settlement is not achieved. In those cases where the
Agency perceives critical information gaps relevant to the amount of
the penalty, these potential inefficiencies are an acceptable price to
[[Page 40153]]
pay in order to avoid making an unreasonable penalty demand.
EPA's introduction of the notice pleading option into CROP
proceedings does not signal any intention to alter the Agency's
longstanding policies and practices favoring expeditious settlements.
Over the past 20 years, more than 98 per cent of all administrative
cases have been settled without trials. Today's final rule evidences
EPA's continuing commitment to non-adversarial resolution with new
provisions such as commencement of pre-negotiated cases with a final
order pursuant to Sec. 22.13(b), the quick resolution of Sec. 22.18(a),
and procedures supporting alternative dispute resolution at
Sec. 22.18(d). Although notice pleading could possibly delay
settlement, it is expected that the need to make efficient use of
enforcement resources will restrain EPA's use of notice pleading if, in
actual practice, it significantly reduces the frequency of settlements
or the pace at which settlements are reached.
c. Final Rule. EPA has adopted Sec. 22.14 as proposed, with several
changes. As noted above, EPA has revised Sec. 22.14(a)(4)(ii) to
require that where complainant chooses not to specify a proposed
penalty in the complaint, the complaint must state ``the number of
violations (where applicable, days of violation) for which a penalty is
sought''.
EPA also has made several minor changes at its own initiative. The
proposed Sec. 22.14(a)(6) required complainant to specify in the
complaint whether subpart I ``applies to such hearing.'' EPA has
revised this paragraph to clarify that where subpart I applies, it
applies to the entire proceeding, and not just the evidentiary hearing
phase.
EPA has added two new requirements as to content of the complaint.
Section 22.14(a) now requires in paragraph (7) that the complaint
include the address of the Regional Hearing Clerk, and in paragraph (8)
requires instructions for paying penalties, if applicable. EPA has
observed that the names and addresses of the lock box banks change
often, and that it would be difficult to keep the proposed Appendix B
up to date. EPA also notes that Appendix A is redundant with 40 CFR
1.7, and moreover, notes that these addresses are of less value to
respondent than the specific address of the Regional Hearing Clerk. EPA
has decided to expand Sec. 22.14(a) to require that the relevant
information appear in the complaint, and to delete both appendices.
In recognition of the fact that most complaints allege more than
one violation, EPA has amended Sec. 22.14(a)(3) to require that the
complaint state the factual basis ``for each violation alleged.''
For the convenience of respondents receiving complaints which do
not specify a proposed penalty, EPA has amended Sec. 22.14(a)(4)(ii) to
clarify that the complaint shall include ``a recitation of'', rather
than a mere ``citation to'', the applicable statutory penalty
authority.
EPA has revised Sec. 22.14(a)(4)(iii) and (a)(5), as well as other
sections of the CROP, to replace the unwieldy phrase ``revocation,
termination or suspension of all or part of a permit'' with a new term
``Permit Action.'' EPA has moved the ``revocation, termination or
suspension'' language into the definition of ``Permit Action'' at
Sec. 22.3(a), which makes the remainder of the CROP easier to read, and
will facilitate any future efforts to bring other permit actions within
the scope of the CROP.
EPA has changed the title of this section from ``Content and
amendment of the complaint'' to the more general ``Complaint''.
Finally, to conform to the preferred style of the U.S. Government
Printing Office, EPA has revised Sec. 22.14(c) to state the time
allowed for responding to an amended complaint with the numeral ``20''.
10. Answer to the Complaint (40 CFR 22.15)
a. Summary of Proposed Rule. EPA proposed to amend Sec. 22.15(a)
to clarify requirements for filing and serving the answer to a
complaint, and to extend the time allowed for the filing of an answer
from 20 days to 30 days. EPA proposed to add to paragraph (b) a new
requirement that the answer state the basis for opposing any proposed
penalty, compliance or corrective action order, or permit revocation,
termination or suspension. EPA proposed editorial changes to paragraph
(c), and proposed no changes to paragraphs (d) or (e).
b. Significant Comments and EPA Response. USAF notes that where
complainant has elected not to specify a penalty in the complaint,
respondent cannot comply with the proposed requirement in Sec. 22.15(b)
that the answer state respondent's basis for opposing the proposed
relief. In response, the final rule now requires that the answer shall
state ``the basis for opposing any proposed relief * * *''
CEEC urges that EPA amend Sec. 22.15(e) to allow respondent to
amend its answer as a matter of right, arguing that respondent is
unlikely to have all the necessary information at the time the answer
is due. Allowing amendment of the answer as a matter of right would not
encourage diligence in answering the complaint, and could disrupt the
orderly progress of proceedings. Accordingly, EPA declines to adopt
CEEC's suggestion.
The existing CROP allows amendments of the answer at the presiding
officer's discretion, and motions to amend pleadings are generally
granted. See, e.g., In re Port of Oakland and Great Lakes Dredge and
Dock Co., 4 E.A.D. 170, 205 (EAB 1992) (``the Board adheres to the
generally accepted legal principle that administrative pleadings are
liberally construed and easily amended'') (citations omitted).
Moreover, in paragraph (a) EPA already has expanded by 50% the time
allowed for assembling information and preparing an answer. Although
leave to amend pleadings is liberally granted, allowing amendments to
the answer as a matter of right would make the CROP significantly less
efficient. The purpose of the answer is to clarify what is contested
and what is not contested at an early stage of the proceeding. Allowing
amendment of the answer as a matter of right would not encourage due
diligence in framing the issues, and could unfairly prejudice
complainant if, for example, respondent were to substantially alter its
defenses shortly before, or even after, the evidentiary hearing.
Accordingly, CEEC's recommendation is rejected, except in circumstances
where the complaint has been amended.
c. Final Rule. For the foregoing reasons, EPA has adopted
Sec. 22.15 of the CROP as proposed, with the exception of certain
changes. As discussed above, the language of Sec. 22.15(b) is amended
to require that the answer state ``the basis for opposing any proposed
relief * * *'', and the proposed Sec. 22.15(e) is amended to allow
amendment as of right whenever the complaint is amended.
Section 22.15(c) of both the proposed rule and the 1980 CROP states
that ``[a] hearing ... shall be held if requested by respondent in its
answer.'' As used in this context, the word ``hearing'' refers to an
adjudicatory proceeding, and encompasses a determination on motion
papers alone. See In re Green Thumb Nursery, Inc., 6 E.A.D. 782, 790 &
n.14 (EAB 1997) (holding that there is no right to an oral evidentiary
hearing). Elsewhere in both the proposed rule and the 1980 CROP,
``hearing'' refers specifically to the oral evidentiary hearing phase
of a proceeding. In today's final rule, EPA has endeavored to use the
term ``hearing'' to refer specifically to the oral evidentiary hearing.
In order to avoid the implication that a request for a hearing
[[Page 40154]]
necessarily results in an oral evidentiary hearing, EPA has replaced
the word ``shall'' with ``may.''
Consistent with the changes noted in Sec. 22.14(a)(4)(iii) and
(a)(5) above, EPA has revised Sec. 22.15(a) by replacing the phrase
``permit revocation, termination or suspension'' with a new term
``Permit Action.'' To conform to the preferred style of the U.S.
Government Printing Office, EPA has revised Sec. 22.15(a) to state the
time allowed for filing an answer with the numeral ``30''.
11. Default (40 CFR 22.17)
a. Summary of Proposed Rule. The proposed Sec. 22.17 would
reorganize the entire section to indicate the role of each of the
parties and the Presiding Officer in a sequential manner.
Paragraph (a) would describe the actions of each party that may
result in a finding of default and the consequences of such a finding
for each of the parties. Provisions describing the end of the process
(i.e., when penalty monies come due, when a permit revocation,
termination or suspension becomes effective) would be moved to
paragraph (d).
Paragraph (b) would describe content requirements for motions for
default and would include a requirement that when the motion requests
the assessment of a penalty or the imposition of other relief against a
defaulting party, the movant must specify the penalty or other relief
sought and must put into the record the legal and factual grounds for
the relief requested. This amendment accommodates the change in
Sec. 22.14 that allows notice pleading in which the complainant elects
not to demand a specific penalty in the complaint.
Paragraph (c) would describe the default order itself, would
provide that a default order shall be an initial decision, and would
clarify the standards for granting the default order, for granting the
relief proposed, and for setting the order aside. In addition, proposed
paragraph (c) would remove the apparent restriction on the Presiding
Officers' discretion in existing Sec. 22.17(a), in which a default
order automatically assesses the penalty proposed in the complaint, or
automatically revokes or terminates the permit according to the
conditions proposed in the complaint. Although the proposed paragraph
(c) would acknowledge that the Presiding Officer has some discretion
regarding default orders, it would require that the proposed relief
must be granted unless the record clearly demonstrates that the
requested relief is inconsistent with the Act.
Paragraph (d) would specify when penalties assessed by default are
due, and the effective dates for the default revocation, termination or
suspension of permits, and for the default issuance of compliance or
corrective action orders.
b. Significant Comments and EPA Response. Dow suggests revising
Sec. 22.17(a) to allow other less serious sanctions. Dow argues that
minor or technical defaults, such as not including a proof of service
in a responsive document when proper service is perfected or failing to
appear at a conference due to weather conditions, do not deserve the
severe sanctions delineated in the section. Dow's objection seems to be
two-fold: that issuance of an order of default is mandated upon the
violative conduct and that an issued order of default might be too
severe under certain circumstances.
Dow's objection concerns language that has been in Sec. 22.17(a)
since 1980. The CROP has not mandated and does not now mandate
automatic determination of default liability. The proposed rule
retained the language in Sec. 22.17(a) which states that a ``party may
be found to be in default'', and in Sec. 22.17(c) included the old
Sec. 22.17(d) language ``[f]or good cause shown, the Presiding Officer
may set aside a default order'' [emphasis added]. Moreover, the
proposed rule adds a new provision at Sec. 22.17(c), which states that
``[w]hen the Presiding Officer finds that default has occurred, he
shall issue a default order against the defaulting party unless the
record shows good cause why a default order should not be issued''.
Therefore, the new provisions at Sec. 22.17 would allow Presiding
Officers to exercise discretion in issuing a default order for ``minor
or technical default.''
Furthermore, Presiding Officers do have authority to impose
sanctions less than a complete finding of default when appropriate.
Section 22.16(b) provides that any party who fails to respond to a
motion within the designated period waives any objection to the
granting of the motion. Section 22.19(g) provides that a when a party
fails to respond to a discovery or prehearing exchange order as
required, the Presiding Officer may draw adverse inferences and exclude
information from evidence. As noted above in the response to comments
on Sec. 22.5(c), EPA has amended Sec. 22.5(c)(5) so that the Presiding
Officer may exclude from the record documents that are improperly
served or untimely filed.
EPA has made no change to Sec. 22.17(a) in response to Dow's
comment because the CROP does not mandate default for minor errors and
because other provisions of the CROP authorize less severe sanctions
that are appropriate for types of nonperformance that fall short of
default. Nevertheless, EPA has revised Sec. 22.17(c) to emphasize the
Presiding Officer's discretion, as discussed below.
The proposed Sec. 22.17(b) would require complainant to specify the
penalty sought and the legal and factual grounds therefor in any motion
that ``requests the assessment of a penalty or the imposition of other
relief against a defaulting party * * *'' This provision was added in
order to complement the notice pleading option in Sec. 22.14(a)(4)(ii),
giving respondents notice of complainant's specific penalty demand
assuring that record will support the penalty assessed. CEEC argues
that delaying disclosure of the penalty demand until this stage
``delays resolution, fails to give respondents sufficient notice;
frustrates small entities' or small business' rights under SBREFA; and
thwarts EPA's goal to increase administrative efficiency.'' For the
reasons stated above in the response to comments on Sec. 22.14(a)(4),
EPA disagrees. Because EPA has retained the notice pleading option in
Sec. 22.14(a)(4), EPA also retains in Sec. 22.17(b) the requirement
that complainant specify a penalty and state the legal and factual
grounds therefor.
In its objection to the notice pleading option, CEEC states that
the new provision requires disclosure of the penalty demand in ``any
motion for default'' when such demand has not been disclosed in the
complaint. This statement does not correspond exactly to the text of
the Sec. 22.17(b), which only requires that motions for default specify
a penalty sought ``[w]here the motion requests the assessment of a
penalty * * *'' Section 22.17(b), consistent with accepted practice
under the existing CROP, allows parties to make motions that merely ask
the Presiding Officer to determine whether a default has occurred,
without arguing at that time what penalty should be assessed.
As noted in the response to comments on Sec. 22.17(a), not all
failures to conform to the CROP will warrant a default judgment. Until
such time as a respondent is found to be liable for a default judgment,
it is not necessary for the parties to commit their resources to
arguing what relief is appropriate. Motions for default may be likened
to motions for accelerated decision: It is appropriate in many
instances to file a motion for partial accelerated decision, that
merely attempts to resolve whether as a matter of law respondent is or
is not liable for a violation, leaving the determination of the proper
penalty for
[[Page 40155]]
a subsequent motion if liability is established. This approach spares
the parties from burdensome litigation over an issue that may be moot.
CEEC's statement mirrors a statement in the preamble to the
proposed rule (63 FR at 9469). EPA acknowledges that this statement,
while generally accurate, is overly broad in that it incorrectly
implies that every motion for default must specify a penalty. In order
to avoid unnecessary burdens on the litigants, EPA intends that the
CROP should continue to allow parties to make motions that merely ask
the Presiding Officer to determine whether a default has occurred,
without specifying a penalty in that particular motion. Pursuant to the
second sentence of paragraph (b), complainant will still be obliged to
specify a penalty if it moves for the assessment of a penalty against a
defaulting party. However, this may be a second motion that follows a
finding that default judgment against respondent is warranted.
In order to eliminate any confusion resulting from the overly broad
statement in the preamble or ambiguity in the regulation itself, EPA
has added an additional clarifying sentence to Sec. 22.17(b): ``The
motion may seek resolution of all or part of the proceeding.''
Dow supports the revision of Sec. 22.17(c) that gives the Presiding
Officers greater discretion in determining the appropriate relief in
the default orders because this ``flexibility will let the Presiding
Officer ensure that any relief ordered is supported by the
administrative record.'' Dow's comment is essentially reiterated by CMA
and API: both organizations ``support the provision requiring the
Presiding Officer, when issuing a default order, to determine that the
relief sought in the complaint is consistent with the applicable
statute.''
Even though there were no adverse comments regarding this
provision, the preceding discussion of paragraphs (a) and (b) suggests
some useful revisions of paragraph (c). First, corresponding to
Sec. 22.17(b)'s statement that a default ``motion may seek resolution
of any or all parts of the proceeding'', Sec. 22.17(c) is revised to no
longer require that a default order must be an initial decision, unless
it resolves ``all issues and claims in the proceeding.'' This will
allow Presiding Officers to find a party liable in default, without
necessarily determining the appropriate relief in the same order.
Second, EPA has also relaxed the proposed requirement that ``the
relief proposed in the complaint or the motion for default shall be
ordered unless the record clearly demonstrates that the requested
relief is inconsistent with the Act.'' Under this proposed language, if
a proposed penalty were inconsistent with the record (e.g., owing to a
mathematical error), though not to such a degree as to be clearly
inconsistent with the statutory penalty authority, the Presiding
Officer would apparently be required to assess the proposed penalty. In
order to prevent injustice, EPA has amended this language to allow the
Presiding Officer to impose other relief where ``the requested relief
is clearly inconsistent with the record or the Act''.
c. Final Rule. EPA is adopting Sec. 22.17 as proposed, but with
several modifications. As discussed above, EPA has added one sentence
to Sec. 22.17(b). EPA has also noted that the rest of the proposed
Sec. 22.17(b) repeats parts of Sec. 22.16(a). Section 22.16 applies to
all motions, except as otherwise provided, so restatement is not
necessary in Sec. 22.17(b). Moreover, the failure to include all of
Sec. 22.16(a) in Sec. 22.17(b) introduces potential confusion.
Accordingly, EPA has deleted from the final rule those parts of the
proposed Sec. 22.17(b) that are redundant with the general requirements
for motions at Sec. 22.16.
The proposed Sec. 22.17(a) provided that a default by respondent
would constitute a waiver of respondent's ``right to a hearing'' on the
factual allegations in the complaint. Throughout today's final rule,
for clarity and consistency, EPA has endeavored to use the term
``hearing'' only to refer to oral evidentiary hearings. As there is no
right to an oral evidentiary hearing (see, e.g., In re Green Thumb
Nursery, Inc., 6 E.A.D. 782 (1997)), EPA has revised Sec. 22.17(a) to
state that default by respondent constitutes a waiver of respondent's
``right to contest'' the factual allegations in the complaint. EPA has
replaced the undefined word ``action'' in Sec. 22.17(a) with the word
``proceeding,'' which is defined in today's final rule as discussed
below.
EPA has revised Sec. 22.17(c) as follows: (1) EPA has added the
clause ``as to all or part of the proceeding,'' to the first sentence,
before ``unless the record shows''; (2) EPA has revised the second
sentence to say ``If the order resolves all outstanding issues and
claims in the proceeding, it shall constitute the initial decision
under these Consolidated Rules of Practice.''; (3) EPA has expanded the
next to last sentence in order to allow the Presiding Officer to impose
relief other than that requested by complainant if it is clearly
inconsistent with the record of the proceeding. In addition, EPA has
split the second sentence of the proposed Sec. 22.17(c) into two
sentences. This editorial revision is not intended to effect a
substantive change.
For consistency with changes elsewhere in the CROP, EPA has revised
Sec. 22.17(d) to refer to the effective date of a ``Permit Action''
rather than the effective date of a permit revocation or suspension. To
conform to the preferred style of the U.S. Government Printing Office,
EPA has also revised Sec. 22.17(d) to state the time allowed for paying
default penalties with the numeral ``30''.
12. Quick Resolution (40 CFR 22.18(a))
a. Summary of Proposed Rule. In cases where the complaint proposes
a specific penalty amount (and seeks no other relief), the proposed
Sec. 22.18(a)(1) would provide that the respondent can resolve the case
at any time by simply paying the proposed penalty in full. The only
restriction on when the respondent can take advantage of the quick
resolution provision is in cases involving the public comment
provisions of Sec. 22.45. In these cases, the respondent must wait
until 10 days after the period for public comment has closed before
submitting the penalty payment.
Where the complaint includes a specific proposed penalty, the
proposed Sec. 22.18(a)(2) would allow respondent to resolve an action
without filing an answer by paying the penalty within 30 days of
receipt of the complaint. By paying the proposed penalty within that 30
day time frame, the action is resolved before the answer is due and
hence there is no need for respondent to file an answer.
If the respondent wishes to resolve the matter by paying the
proposed penalty in full but needs additional time in which to do so,
Sec. 22.18(a)(2) would allow the respondent to file a written statement
with the Regional Hearing Clerk within 30 days of receiving the
complaint in which it agrees to pay the penalty within 60 days of
receipt of the complaint.
b. Significant Comments and EPA Response. Dow noted that in actions
subject to the public comment provisions, the 30 day public comment
period may require respondent to file an answer even though it wants to
resolve the action, because the last sentence of Sec. 22.18(a)(1)
provides that a respondent cannot utilize the quick resolution
provision until 10 days after the close of the public comment period.
This commenter suggested amending the last sentence of Sec. 22.18(a)(1)
to explicitly provide that the respondent does not have to file an
answer if it wishes to settle the action by paying the full penalty.
Instead, EPA believes that the
[[Page 40156]]
better approach is for respondent to file a statement agreeing to pay
the full penalty, in accordance with Sec. 22.18(a)(2), and delay
payment until the eleventh day after the close of the public comment
period. Section 22.18(b)(2) provides ample time for paying the proposed
penalty after the close of the public comment period, so long as the
public notice is issued contemporaneously with the complaint. If the
public notice is delayed, a motion for extension of time may be
necessary.
CEEC supports the proposed inclusion of the ``quick resolution''
process, but noted that the quick resolution option is not available to
respondents if the complaint does not propose a specific penalty. The
proposed language would have prevented respondents who receive
complaints that did not contain specific penalty demands from
exercising the quick resolution option even after EPA has made a
specific penalty demand. This was unintended, and EPA has revised
Sec. 22.18(a)(1) so that once complainant has made a specific penalty
demand, respondent may resolve the proceeding by paying the proposed
penalty in full. The option of notice pleading in lieu of pleading a
specific penalty amount is intended to provide EPA with flexibility in
those situations where only the violator possesses information crucial
to the proper determination of the penalty, such as the economic
benefit the violator derived from its noncompliance, or its ability to
pay the penalty. Under such circumstances, EPA needs to obtain and
review the necessary information before proposing a penalty. Section
22.19 of the rule provides that EPA must at the prehearing exchange
stage propose a specific penalty. Once EPA proposes a specific penalty,
the respondent may, if it wishes, utilize the quick resolution
provision and pay the proposed penalty in full at that time. As a
result of this revision, notice pleading does not prevent the use of
the quick resolution provision by the respondent, it only delays it.
While the respondent, under such circumstances, would not be able to
take advantage of the quick settlement until after the prehearing
exchange, respondents always have the option of early resolution of the
proceeding pursuant to Sec. 22.18(b), by informally negotiating
settlement with the Agency.
The same commenter noted that the quick resolution option was
available to respondents only if they are willing to pay the full
amount of the proposed penalty. This commenter also noted that the
quick resolution provision should include safeguards to prevent or
redress those situations where EPA may have pled an excessive penalty
amount. These comments appear to envision a quick resolution that is
entirely unlike that proposed in Sec. 22.18(a), but which does not
appear to differ significantly from the settlement process in
Sec. 22.18(b) and (c). As presently codified, the CROP does not
explicitly provide for a ``no contest'' plea. EPA intended to remedy
this by explicitly providing in the proposed Sec. 22.18(a) a formal
process for a respondent who--upon receipt of the complaint or at any
later time--wishes to simply pay the proposed penalty and disengage
from the proceeding. In contrast, the settlement provisions of
Sec. 22.18(b) and (c) provide opportunity to negotiate a settlement
that could terminate the proceeding upon payment of a lesser penalty.
If the respondent believes that EPA has pled an excessive amount, the
respondent has the option of informally discussing the matter with EPA
during settlement negotiations, or formally contesting the proposed
penalty through the hearing process. Consequently, there is no need to
amend the proposed Sec. 22.18(a) to safeguard respondents' interests.
The USAF noted that, because of fiscal law requirements, it would
be difficult for a federal agency to make a penalty payment within 60
days of complaint issuance, thereby effectively foreclosing federal
agencies from taking advantage of the quick resolution provision. The
USAF suggests that 18 months would be appropriate. EPA acknowledges
that it may be difficult for a federal agency, or a state or local
agency, to pay a penalty within 60 days of receipt of the complaint.
However, EPA does not believe that the intended purpose of the quick
resolution provision would be served by such an extension of the
payment period. Where respondent is unable to pay the penalty within 60
days, EPA believes that the Sec. 22.18(b) settlement process would be
the appropriate process for terminating the proceeding.
The USAF also noted that this section obligates respondent to admit
the jurisdictional allegations of the complaint and waive its right to
appeal a final order, and argues that this deprives the federal
respondent its right to elevate the matter to the President. The Agency
maintains that if a federal agency wishes to contest a proposed
penalty, it should exercise its right to hearing and raise the matter
through the appeal processes provided. If, on the other hand, the
federal agency wishes to conclude the action, it must be willing to
agree to waive its rights to further appeals.
c. Final Rule. As noted above, EPA has amended the proposed
Sec. 22.18(a)(1) to allow quick resolution at any point in a proceeding
once complainant has proposed a specific penalty, including penalties
specified in complainant's prehearing exchange, and by moving from the
first to the second sentence the language that limited quick resolution
to cases where the complaint contained a specific proposed penalty.
As discussed in connection with the revisions to Sec. 22.14, EPA
has deleted Appendix B. Accordingly, EPA has revised the first sentence
of Sec. 22.18(a)(1) to require that payment be made as specified by
complainant, and deleted reference to Appendix B. In order to address
interbank funds transfers, EPA has expanded Sec. 22.18(a)(1) to include
other instruments of payment. With these changes, the first two
sentences of Sec. 22.18(a)(1) now read as follows:
A respondent may resolve the action at any time by paying the
specific penalty proposed in the complaint or in complainant's
prehearing exchange in full as specified by complainant and by
filing with the Regional Hearing Clerk a copy of the check or other
instrument of payment. If the complaint contains a specific proposed
penalty and respondent pays that proposed penalty in full within 30
days after receiving the complaint, then no answer need be filed.
The proposed Sec. 22.18(a)(3) provided that quick resolution would
constitute a waiver of respondent's ``rights to a hearing''. Throughout
today's final rule, for clarity and consistency, EPA has endeavored to
use the term ``hearing'' only to refer to oral evidentiary hearings. As
there is no right to an oral evidentiary hearing (see, e.g., In re
Green Thumb Nursery, Inc., 6 E.A.D. 782 (EAB 1997)), EPA has revised
Sec. 22.18(a)(3) to state that quick resolution constitutes a waiver of
respondent's ``rights to contest the factual allegations in the
complaint''.
EPA has also corrected a typographical error in the word
``section'' that appeared in the third sentence of the proposed
Sec. 22.18(a)(1). In the third sentence of Sec. 22.18(a)(1), EPA has
replaced the phrase ``to revoke, terminate or suspend a permit'' with
the term ``Permit Action'', as discussed in connection with revisions
to Sec. 22.3(a) and Sec. 22.14(a)(4)(iii).
EPA has replaced the undefined word ``action'' in Sec. 22.18(a)(1)
and (2) with the word ``proceeding,'' which is defined in today's final
rule as discussed below. Finally, to conform to the preferred style of
the U.S. Government Printing Office, EPA has revised Sec. 22.18(a)(1)
and (2) to state all time periods with numerals.
[[Page 40157]]
13. Settlement and Scope of Resolution or Settlement (40 CFR
22.18(b)&(c))
a. Summary of Proposed Rule. The proposed Sec. 22.18(b) would
clarify the existing settlement process. Paragraph (b)(2) would specify
that consent agreements contain an express waiver of the respondent's
right to a hearing and appeal of the final order, and establishes
additional content requirements for consent agreements in cases where
the complainant proposes to simultaneously commence and conclude a case
pursuant to Sec. 22.13(b) through filing of a consent agreement and
final order negotiated before a complaint is issued.
Paragraph (b)(3) would be revised to expressly provide that an
administrative action is settled only when the Regional Judicial
Officer or Regional Administrator, or, in cases commenced at EPA
Headquarters, the Environmental Appeals Board, approves a consent
agreement and issues a final order.
Paragraph (c) would provide that the effect of settlements and full
payment of proposed penalties is limited to those facts and violations
specifically alleged in the complaint, and reserves the Agency's right
to pursue injunctive relief or criminal sanctions.
b. Significant Comments and EPA Response. Dow urges that
Sec. 22.18(b)(2) should expressly provide for partial or contingent
settlements. Dow's particular concern is that paragraph (b)(2) should
not require respondent to waive its right to hearing or to appeal
matters that are raised in the complaint but not included in the
consent agreement or the final order. Dow's comments do not take issue
with the waiver of rights to hearing or appeal in settlements of the
entire proceeding.
Paragraphs (a), (b) and (c) of Sec. 22.18 define the process by
which the parties may resolve an entire proceeding, and so, consent
agreements pursuant to Sec. 22.18(b)(2) and final orders under
Sec. 22.18(b)(3) can be neither partial nor contingent. Nevertheless,
EPA disagrees with Dow's conclusion that the proposed rule precludes
partial or contingent settlements. Where the parties wish to settle
some of the counts in a complaint, they may file stipulations as to a
respondent's liability, and/or to the appropriate relief, for those
counts. Where the parties seek a more final resolution, they may move
pursuant to Sec. 22.12(b) to sever the case ``with respect to any or
all parties or issues.'' Upon severance, the parties may settle the
uncontested portions and litigate the contested portions. Contingent
settlements (e.g., where the parties agree that if a contested issue is
resolved in a certain manner, then the parties agree to settle on
predetermined terms) are possible under the proposed rule, however, the
documents committing the parties to the contingency agreement would not
themselves constitute ``consent agreements'' pursuant to
Sec. 22.18(b)(2). Such contingent settlements could be accomplished,
for example, through formal stipulations as to the appropriateness of
certain relief in the event that liability is established, or
agreements to sign a specific ``consent agreement'' when the agreed
conditions are met. As the problems Dow describes can easily be
avoided, EPA believes that the language in the proposed rule is
desirable in that it gives respondents unambiguous notice that consent
agreements waive respondents' rights to a hearing and all rights of
appeal, including appeal to the federal courts as well as appeal to the
EAB under Secs. 22.30 and 22.32.
CMA/API object to language proposed for Sec. 22.18(c) that would
limit the scope of relief available in settlements to those
``violations and facts'' alleged in the complaint. CMA/API feel this
provision prevents the parties from taking advantage of the economies
that result from resolving in a single settlement additional violations
that may come to light during the proceeding. EPA agrees that it is, in
many cases, desirable to resolve in a single proceeding additional
violations that become apparent as a case progresses. However, such
expansions of a proceeding should be accomplished through motions to
amend the complaint, pursuant to Sec. 22.14(c). Although even a joint
or uncontested motion to amend the complaint is somewhat more
burdensome that expanding the case through a consent agreement alone,
this burden is outweighed by the interest of assuring a clear public
record of the Agency's administrative enforcement proceedings.
This is particularly important where statutes require public notice
of a proposal to assess penalties for specific violations. Such
statutes envision that interested members of the public will have had
notice of all violations cited in the complaint and all violations
resolved by consent agreement, in order to properly avail themselves of
their statutory rights as to those actions.
CEEC also objects to the proposed language limiting settlements to
``the facts and violations alleged in the complaint'', on the grounds
that it is improper for the Agency to assess in a subsequent proceeding
additional penalties for other violations arising out of the same
circumstances identified in the initial proceeding. As noted above, EPA
is well aware that resolving as many violations as possible within a
single proceeding generally demands less resources than pursuing
multiple cases involving similar facts or issues, and EPA generally can
be counted on to take advantage of such cost-saving opportunities.
There are, however, circumstances where this may be inadvisable or
impossible. For example, where one violation is straightforward and
undisputed, neither party would gain from delaying resolution of that
case in order to address within the same proceeding another violation
sharing certain facts with the first, but concerning a different
statute, an unsettled area of the law, and presenting substantial
evidentiary disputes. In other circumstances, where new facts
establishing other violations come to light after the close of a case,
it would be impossible to resolve these newly discovered violations
through the closed case. EPA therefore disagrees with CEEC's contention
that it is necessarily improper for EPA to seek penalties in a
subsequent proceeding for violations related to the initial proceeding.
Section 22.14(a) requires that a complaint specify each statutory
provision, regulation, permit or order that respondent is alleged to
have violated, and a concise statement of the factual basis for
alleging the violation. The complaint thereby describes the violations
at issue in the case, in terms of the specific legal requirements and
their specific factual circumstances; anything else is outside the
scope of the proceeding. This description of the violations that
comprise the case must also describe the scope of any settlement. Any
violations that are outside the scope of the complaint must necessarily
be outside the scope of any possible settlement.
The language of Sec. 22.18(c) to which CEEC objects merely states
that payment of a penalty ``shall only resolve respondent's liability *
* * for the violations and facts alleged in the complaint.'' This
provision defines the scope of settlement in its most obvious and
straightforward sense.
c. Final Rule. EPA is adopting Sec. 22.18(b) and (c) as proposed,
with minor editorial changes. The proposed Sec. 22.18(b)(2) provided
that in a consent agreement, respondent must waive ``any right to a
hearing''. For the reasons noted in the discussion of Sec. 22.18(a)(3)
above, EPA has revised this to require that respondent waive ``any
right to contest the factual allegations in the complaint''. EPA has
also replaced the term ``consent order'' with the term ``final order''
or ``proposed final order'' in paragraph (b) and elsewhere (Secs. 22.3
[[Page 40158]]
(definition of final order), 22.13(b), and 22.45(b)(4)). A consent
order is in fact a final order, and CROP's suggestion that there is a
distinction only adds potential for confusion. EPA has replaced the
phrase ``permit revocation, termination or suspension'' with ``Permit
Action'', as discussed in connection with revisions to Sec. 22.3(a) and
Sec. 22.14(a)(4)(iii). Finally, reflecting changes to Sec. 22.14(a)
noted above, EPA has added the requirement that in proceedings
commenced pursuant to Sec. 22.13(b), the consent agreement shall also
contain the information required in Sec. 22.14(a)(8).
14. Alternative Dispute Resolution (40 CFR 22.18(d))
a. Summary of Proposed Rule. The proposed Sec. 22.18(d) would add a
new provision that recognizes the use of alternative dispute resolution
(``ADR'') within the scope of the Alternative Dispute Resolution Act, 5
U.S.C. 581 et seq. The proposed rule would provide that, while the
parties engage in ADR, the enforcement proceeding is not automatically
stayed, jurisdiction remains with the Presiding Officer, and all
provisions of the CROP remain in effect. The parties may select any
person to act as a neutral, or may file a motion with the Presiding
Officer to request a neutral. If the Presiding Officer concurs with the
motion, the Presiding Officer forwards the motion to the Chief
Administrative Law Judge who designates a qualified neutral.
b. Significant Comments and EPA Response. Those who commented on
the proposed Sec. 22.18(d) support the Agency's use of ADR and
inclusion in the CROP of a provision that recognizes ADR. CEEC believes
that the proposed rule does not go far enough to encourage ADR, that it
seems to employ ADR only after a complaint is filed, and that it limits
the use of ADR by not staying the enforcement proceeding when the ADR
process is commenced. CEEC urges the Agency to make available and
encourage the use of a broad array of ADR options, by formalizing the
availability of the complete range of ADR. Dow Chemical supports the
allowance upon request of temporary stays and extensions for motions,
discovery and hearings during ADR proceedings, to encourage voluntary
settlement and to avoid imposing undue burdens on the parties and the
Presiding Officer.
EPA believes that the absence of an automatic stay provision in the
rule does not unreasonably limit the use of ADR. The Presiding Officer
always has the discretion to grant a stay in connection with the
parties' use of ADR, but such a decision should be made for each case
individually depending on the circumstances, and a stay may be
inappropriate in cases of excessive delay.
EPA agrees that a broad array of ADR options should be made
available to parties, but believes that it is not necessary to list in
the rule, and thereby possibly limit, the range of ADR options. Section
22.18(d)(1) provides for ``any process within the scope of the
Alternative Dispute Resolution Act.'' The neutral serving in the
particular case may discuss ADR options with the parties.
CEEC objected that the CROP does not require the Agency to attempt
to resolve a case before filing the complaint. The CROP does not limit
ADR to the time after a complaint is filed. The parties may agree to
use ADR prior to the filing of a complaint.
c. Final Rule. EPA has adopted Sec. 22.18(d) as proposed, with
minor technical revisions to paragraph (d)(3) intended to address two
concerns. First, in subpart I cases, it is appropriate for a neutral to
be appointed by the Regional Administrator rather than by the Chief
Administrative Law Judge. Second, it is more accurate to say the
Presiding Officer ``grants'' a motion, rather than ``concurs with'' a
motion.
15. Prehearing Exchange; Prehearing Conference (40 CFR 22.19(a)&(b))
a. Summary of Proposed Rule. EPA proposed to amend Sec. 22.19(a)
and (b) by reversing paragraphs (a) and (b) in order from the existing
CROP, reflecting the fact that the information exchange is more common
than, and usually precedes, a prehearing conference. The requirements
for the prehearing exchange would now appear in paragraph (a). In
addition to the information required to be exchanged under
Sec. 22.19(b) of the existing CROP, EPA proposed that the complainant
would specify a proposed penalty if it has not done so in the complaint
and state the basis for that penalty. The respondent would be required
to provide all factual information it considers relevant to the
assessment of a penalty, even if the complainant did not identify a
specific penalty in the complaint. EPA also proposed under Sec. 22.22
to tighten the standards for admitting into evidence information that
was not timely exchanged.
In addition, EPA requested comments on whether it is necessary for
the complainant to specify a proposed penalty in the prehearing
exchange when it has not specified a specific penalty in the complaint
(notice pleading). Comments were also requested on the merits of
allowing the complainant to postpone for an additional 30 days, or
indefinitely, the making of a specific penalty demand where EPA has not
specified a specific penalty in the complaint. EPA also requested
comments on the merits of requiring by rule that the parties
simultaneously perform their prehearing information exchange 90 or 120
days after the filing of the answer, rather than requiring a prehearing
exchange order from the Presiding Officer. 63 FR at 9472.
EPA proposed to revise paragraph (b) to no longer compel the
Presiding Officer to require the parties to ``appear at a conference
before him'', but instead would make the nature of the conference more
flexible.
b. Significant Comments and EPA Response. CEEC opposes allowing EPA
to postpone making a specific proposed penalty until the prehearing
information exchange, insisting that the proposed penalty appear in the
complaint. Dow does not object to postponing the specific penalty until
prehearing exchange, but objects to any further postponement. Dow notes
that if information obtained during or after the prehearing exchange
warrants a change in the proposed penalty, the CROP already allows for
amendment of the pleadings. Dow maintains that requiring a specific
proposed penalty is not a hardship for the complainant, however,
postponing it beyond prehearing exchange would impose a hardship on the
respondent. Respondents need to know the proposed penalty amounts to
make informed decisions about settling or contesting violations.
Therefore, Dow argues that no further delays or extensions should be
allowed, except with the consent of the respondent. UWAG suggested that
the proposal would be ineffective because complainant would be no
better informed at the time of prehearing exchange than it is at the
time the complaint is issued.
As set forth in the discussion concerning Sec. 22.14, EPA has
retained Sec. 22.14(a)(4)(ii), which allows EPA to elect not to specify
a specific penalty in the complaint. When complainant has incomplete or
unreliable information on subjects such as the economic benefit
respondent received from its unlawful conduct and its ability to pay a
penalty, it would be of little benefit to respondent for complainant to
make an uninforme--and possibly unrealistic--penalty demand, which
would need to be amended when better information becomes available.
Complainant would risk specifying either a too-high figure that could
result in EAJA claims, or a too-low figure that fails to achieve
[[Page 40159]]
deterrence, and then be forced to defend its guesswork in the penalty
litigation. EPA has concluded that complainants should not have to
specify a penalty demand until after prehearing exchange.
EPA continues to believe that there is merit to giving respondents
a specific penalty demand at the earliest practical stage of a
proceeding, and has therefore not adopted the approach used in the
federal courts, where specific penalty demands generally are not made
until the end of the proceeding. Today's final rule requires
complainant to specify a proposed penalty no later than 15 days after
respondent has filed its prehearing exchange. The final rule requires
each party to include in its prehearing information exchange all
factual information it considers relevant to the assessment of a
penalty, as well as exhibits and documents it intends to use at the
hearing, names of witnesses and summaries of their anticipated
testimony. Owing to the general nature of these prehearing exchange
requirements, further discovery may still be appropriate, and
complainants may need to amend their proposed penalties, but the
prehearing information exchange nonetheless will provide complainants
with a substantial basis for formulating a specific penalty demand.
CEEC and Dow oppose automatic prehearing exchange, stating that
during productive settlement discussions such attention could be better
spent on settlement. Dow proposes one of the following options: (1)
making the prehearing exchange totally dependent on an order from the
Presiding Officer, or (2) making the prehearing exchange automatic, but
expressly allowing the Presiding Officer to issue a temporary stay or
to extend the deadline. CMA/API recommend a default time period of 90
days prehearing exchanges as a starting point, which the parties would
be allowed to modify by mutual agreement.
Today's final rule does not require the automatic filing of
prehearing exchanges. Although such a requirement may expedite
resolution of many cases, EPA believes that it would be a distraction
and an unnecessary burden in that greater number of cases that progress
readily toward settlement. Furthermore, the Presiding Officer may
require additional information from the parties as part of his or her
prehearing scheduling order than is provided in Sec. 22.19(a).
Therefore, the prehearing exchanges will not be required until ordered
by the Presiding Officer.
Regarding the proposed Sec. 22.19(b), Dow notes that EPA failed to
delete the phrase ``before him'', as discussed in the preamble to the
proposed rules. EPA agrees that this editorial change would help
clarify that Sec. 22.19(b) no longer requires that the parties
personally appear before the Presiding Officer, but allows the
Presiding Officer to conduct telephonic prehearing conferences.
CEEC proposes that EPA should be required, as part of its
prehearing exchange, to provide a respondent with all information
relevant to whether the respondent had fair notice of the regulatory
requirement(s). Many different offices in EPA conduct compliance
assistance, provide speakers, and otherwise publicize regulatory
requirements, and documenting all such efforts in every case would
present an unreasonable and unnecessary burden on complainant,
particularly because fair notice of the law is rarely an issue.
Moreover, it is unlikely that EPA would have evidence showing that
respondent does not know something. Accordingly, EPA rejects this
proposal.
CEEC also proposes that EPA should also be required to disclose all
information it uses, or chooses to ignore, in determining the penalty
it seeks for each alleged violation. The proposed Sec. 22.19(a) would
require complainant to state the basis for the penalty in its
prehearing exchange, as well as to provide narrative summaries of
witnesses' expected testimony, and copies of all documents and exhibits
that it intends to introduce into evidence at the hearing. These
requirements would assure that complainant discloses all information it
uses in determining the appropriate penalty. It would not, however,
require disclosure of all information that EPA ``chooses to ignore.''
EPA believes that little or no reliable, relevant information is ever
knowingly ignored in determining proposed penalties. Moreover, such
exculpatory evidence and evidence of concerning a respondent's
inability to pay the proposed penalty is almost always in respondent's
hands, and not in complainant's. Accordingly, it would be exceedingly
rare for the requirement proposed by CEEC to provide a respondent with
new information. This potential benefit is greatly outweighed by the
burden on the complainant to identify, document, and exchange all the
information that it has not considered in determining the proposed
penalty.
EPA agrees with CEEC's recommendation that Sec. 22.19(a) should be
amended to make the complainant's and respondent's burdens more equal.
In the proposed Sec. 22.19(a), complainant would be required to state
the basis for the proposed penalty, while respondent would have to
provide ``all factual information it considers relevant to the
assessment of a penalty''. For cases where complainant has specified a
proposed penalty before prehearing exchange, Sec. 22.19(a)(3) of
today's final rule now requires that ``complainant shall explain in its
prehearing information exchange how the proposed penalty was calculated
in accordance with any criteria set forth in the Act, and the
respondent shall explain in its prehearing information exchange why the
proposed penalty should be reduced or eliminated.'' For those cases
where EPA has not specified a proposed penalty, Sec. 22.19(a)(4)
imposes on each party the identical burden of providing ``all factual
information it considers relevant to the assessment of a penalty.''
c. Final Rule. For the foregoing reasons, EPA is adopting
Sec. 22.19(a) with the two substantive changes noted above. In response
to CEEC's comment, EPA has amended the proposed Sec. 22.19(a) to
provide a more equitable burden concerning providing information
concerning the proposed penalty. EPA has also revised Sec. 22.19(a) to
allow complainant to specify a proposed penalty 15 days after
prehearing exchange, rather than in its prehearing exchange as
proposed.
The parties information exchange burdens necessarily differ
depending on whether complainant has specified a proposed penalty
before the prehearing exchange, but the proposed rule did not fully
address these differences. In order to make the prehearing information
exchange process address these differences, EPA has significantly
reorganized and revised Sec. 22.19(a). Paragraph (a)(1) contains the
provisions describing the nature and effect of the prehearing
information exchange. The only significant differences between the
provisions of paragraph (a)(1) and their counterparts in the proposed
rule are that paragraph (a)(1) expressly requires that prehearing
exchange be ``filed'' (Sec. 22.5(b) provides for service on the
Presiding Officer and opposing parties), and clarifies that an order of
the Presiding Officer initiates prehearing exchange.
Paragraph (a)(2) describes the contents of prehearing information
exchange, other than those that depend upon whether complainant has
specified a proposed penalty. These requirements are unchanged.
As discussed in the response to comments above, paragraph (a)(3)
provides that where complainant has already specified a proposed
penalty, complainant shall include in its prehearing information
exchange an explanation of how the proposed
[[Page 40160]]
penalty was calculated in accordance with any criteria set forth in the
Act, and the respondent shall include an explanation why the proposed
penalty should be reduced or eliminated.
Paragraph (a)(4) applies where complainant has not specified a
proposed penalty, and requires each party to include in its prehearing
information exchange all factual information it considers relevant to
the assessment of a penalty. It also requires that complainant file a
document specifying a proposed penalty and explaining how the proposed
penalty was calculated in accordance with any criteria set forth in the
Act 15 days after respondent has filed its prehearing information
exchange.
EPA has adopted Sec. 22.19(b) as proposed, except that in response
to comment, EPA has deleted the words ``before him''.
16. Other Discovery (40 CFR 22.19(e))
a. Summary of Proposed Rule. The proposed Sec. 22.19(e) would
provide a mechanism for discovery should any be necessary after the
parties have completed their prehearing exchange. Under the CROP, other
discovery has always been limited in comparison to the extensive and
time-consuming discovery typical in the Federal courts, and designed to
discourage dilatory tactics and unnecessary and time-consuming motion
practice.
The proposed revisions to Sec. 22.19(e)(1) would require additional
detail in motions for discovery, and refine the substantive standards
for issuance of a discovery order. The proposed rule would add a
prohibition against discovery that would unreasonably burden the other
party. The proposal would also elaborate the existing requirement that
discovery seeks ``information [that] has significant probative value'',
by the addition of the clause ``on a disputed issue of material fact
relevant to liability or the relief sought.'' The proposed rule would
clarify the existing prohibition on discovery where ``[t]he information
to be obtained is not otherwise obtainable'', by substituting a
requirement that discovery is permissible so long as it ``[s]eeks
information that is most reasonably obtained from the non-moving party,
and which the non-moving party has refused to provide voluntarily''.
Paragraph (e)(2) of the proposed rule would expressly prohibit
discovery of a party's settlement positions and information regarding
their development, specifically including penalty calculations that are
based on Agency settlement policies. Paragraph (e)(3) would clarify
that the Presiding Officer may order depositions upon oral questions
only where additional conditions, over and above those in paragraph
(e)(1), are satisfied. Paragraph (e)(4) would consolidate in the main
body of the CROP the subpoena standards presently scattered through the
supplemental rules. This consolidation does not signify any general
subpoena authority: Subpoenas are available in CROP proceedings only
where authorized by the Act giving rise to the cause of action.
Paragraph (e)(5) states that none of the Sec. 22.19(e) limitations
on discovery limit a party's right to request admissions or
stipulations, a respondent's right to request Agency records under the
Federal Freedom of Information Act (``FOIA''), 5 U.S.C. 552, or EPA's
authority under the Act to conduct inspections, issue information
request letters or administrative subpoenas, or otherwise obtain
information.
b. Significant Comments and EPA Response. Several of the commenters
object to proposed changes to Sec. 22.19(e)(1) that would allow
discovery only where it ``[w]ill neither unreasonably delay the
proceeding nor unreasonably burden the non-moving party'', and where it
``[s]eeks information that has significant probative value on a
disputed issue of material fact relevant to liability or the relief
sought.'' UWAG and UARG are concerned that these criteria are vague and
might prevent respondents from discovering documents relating to the
basis for the Agency's determination that a violation has occurred and
concerning how the Agency determined the proposed penalty. UWAG and
UARG believe that respondents cannot meaningfully respond to a
complaint without access to such documents. CEEC states that while
efforts to lessen the burden of discovery are admirable, the proposed
limitations on discovery are one-sided and disadvantage respondents.
CMA/API believe that the proposed criteria of Sec. 22.19(e)(1) are
``unfair and fundamentally tip the balance in favor of EPA.'' CMA/API
say the ``unreasonably burdensome'' standard is vague, subjective, and
too easily abused.
EPA believes that the changes to Sec. 22.19(e)(1) will not
significantly alter the amount of discovery permitted, although it is
hoped that they will reduce the amount of litigation over whether
discovery is to be allowed. EPA notes that the provisions to which the
commenters object are less vague than the comparable provisions of the
existing rule, which have been reasonably effective for 18 years.
Although the standard ``neither unreasonably delay nor unreasonably
burden'' does not achieve mathematical exactness, it is the sort of
standard that judges are accustomed to apply. EPA is confident that the
impartial presiding officers can implement these standards in a fair
and efficient manner.
Although commenters express concern that the proposed discovery
criteria may prevent respondents from discovering information important
to their defense, no commenter has identified any specific information
or category of information that could not be discovered under the
proposed discovery standards. None of the commenters have articulated
any reason why discovery should extend to information that does not
have significant probative value on a disputed issue of material fact
relevant to liability or the relief sought, or why a presiding officer
should allow unreasonable delay or unreasonable burdens. EPA perceives
no basis for the contention that these proposed discovery criteria
unfairly limit discovery. The proposed changes to the standards for
granting a discovery motion are incremental, and are unlikely to
produce different results in the majority of cases. The proposed
changes are beneficial in that they clarify the types of discovery that
are appropriate and help prevent inappropriate discovery.
There is no inherent unfairness in rules that permit less extensive
discovery than those of the Federal courts. Restrictions on discovery
work as both an burden and an advantage, and as some of the commenters
acknowledge, respondents share in the advantages as well as the
burdens. For example, the extensive discovery allowed in the Federal
courts allows EPA to expand a judicial case through discovery of all
manner of violations. The CROP limits the Agency's discovery to
``information that has significant probative value on a disputed issue
of material fact relevant to liability or the relief sought.'' As a
result, EPA foregoes in its administrative proceedings the
opportunities afforded by extensive discovery in exchange for the
benefits of more expeditious case resolution.
EPA finds no merit to the contention that respondents cannot
meaningfully respond to a complaint without broader discovery of
documents relating to the basis for the Agency's determination that a
violation has occurred and concerning how the Agency determined the
proposed penalty. EPA is unlikely to have unique information relevant
to the case. Respondents are generally in a better position than is EPA
to obtain
[[Page 40161]]
first hand information about whether or not they have conducted their
activities in violation of the law, and about the circumstances
surrounding any violations. The evidence upon which EPA bases its
enforcement action is generally acquired from the respondent through an
inspection or information collection request that is well known to
respondent, or through respondent's own reporting. The proposed
Sec. 22.14(a) requires EPA to articulate the regulatory and factual
basis of its case in the complaint. The proposed Sec. 22.19(a) requires
EPA in prehearing exchange to identify all witnesses it intends to call
at hearing, provide summaries of their expected testimony, provide
copies of all exhibits and documents to be introduced as evidence, and
specify the basis of the proposed penalty. In this context, it cannot
reasonably be argued that the limitations on other discovery imposed
through Sec. 22.19(e) would prevent respondents' full and meaningful
participation in the hearing.
Dow asserts that it is not appropriate for Sec. 22.19(e)(2) to
preclude discovery of penalty calculations based on ``settlement
policies,'' because this would leave respondent without information
necessary to respond to the proposed penalty. Dow observes that EPA
does not have separate written policies for settlement and for pleading
penalties, and Dow asserts that EPA uses its ``settlement'' policies
for both purposes. Dow argues that Sec. 22.19(e)(2) should allow
discovery of any calculations used to derive a proposed penalty for
pleading purposes or otherwise pursued in the proceeding.
EPA had intended that the proposed Sec. 22.19(e)(2) should make
clear that a party's settlement positions and information regarding
their development are not discoverable. There is merit to Dow's
contention that EPA should not be able to shield from discovery the
basis for a proposed penalty simply by basing it on a document formally
titled a ``settlement policy.'' The preamble to the proposed rule
describes this paragraph in a manner that appears to avoid this
problem, ``the proposed revision would prohibit discovery of a party's
settlement positions and information regarding their development
specifically including penalty calculations for purposes of settlement
based on Agency settlement policies.'' 63 Fed. Reg. at 9473.
Accordingly, EPA has replaced the parenthetical clause from the
proposed paragraph (e)(2), ``(such as penalty calculations based upon
Agency settlement policies)'', with more restrictive language taken the
preamble, ``(such as penalty calculations for purposes of settlement
based on Agency settlement policies)''.
CMA/API express their understanding and support of limitations on
discovery and use of settlement positions, but indicate concern that
Sec. 22.19(e)(2) might signal an EPA intention to abandon its practice
of sharing penalty and economic benefit calculations in settlement
negotiations. This revision of CROP draws on two very different
antecedents, as it merges the different approaches of the part 22 and
the proposed part 28 procedures. In those programs that have
historically relied on the 1980 version of the CROP, the Agency has
specified a penalty demand in the complaint and has provided a copy of
the applicable penalty policy and penalty calculation worksheets
typically at initial settlement conferences, but never later than
prehearing exchange. In contrast, in its CWA and SDWA class I
administrative enforcement programs under the proposed part 28 rules,
EPA did not generally argue the basis of a penalty or specify a penalty
demand until post hearing briefs, in the manner of enforcement
proceedings in the Federal courts. For those programs where the
practice has been to specify a penalty in the complaint, EPA does not
intend any dramatic change from current practice regarding disclosure
of penalty and economic benefit calculations in settlement
negotiations. For those programs that evolved in the Federal courts and
under the proposed part 28 procedures, specifying a penalty and the
basis for that penalty at prehearing exchange will be a major change,
but it is certainly a change that will be to respondents' advantage.
Dow argues that the word ``reasonably'' should be inserted into
Sec. 22.29(e)(3)(i) so as to allow depositions on oral questions in
circumstances where the information ``cannot reasonably be obtained by
alternative methods of discovery.'' EPA agrees that the suggested
change should result in more efficient proceedings, and has therefore
adopted this recommendation.
The proposed Sec. 22.19(e)(5) also elicited several comments. Some
commenters seem to misinterpret the Agency's proposal as if it were
offering FOIA and EPA's other information collection authorities as
substitutes for discovery opportunities taken away in Sec. 22.19(e)(1).
As noted above, the changes to Sec. 22.19(e)(1) will only produce an
incremental restriction of discovery, and would preclude only
inappropriate discovery. Accordingly, substitutes for discovery are
neither needed nor appropriate, and suggestions that FOIA rights be
expanded are rejected. EPA proposed Sec. 22.19(e)(5) simply to make
clear that FOIA requests, inspections, statutorily provided information
collection requests, and administrative subpoenas issued by an
authorized Agency official other than the Presiding Officer do not
constitute discovery and are not restricted by the CROP. The proposed
revision does not change the CROP, because these activities have never
been subject to a Presiding Officer's control.2
---------------------------------------------------------------------------
\2\ See, e.g., In Re: Dominick's Finer Foods, Inc., Docket No.
CERCLA/EPCRA-007-95 (February 15, 1996) (holding that a pending
action in which the parties are subject to the discovery rules of
Sec. 22.19(f) ``is by no means a basis for restricting EPA's
information gathering rights'' under CERCLA Sec. 104(e)). Cases
holding that EPA may not be enjoined from exercising its
investigative authority under the Solid Waste Disposal Act solely
because of the pendency of a related administrative action: Del Val
Ink and Color, Inc., RCRA II-91-0104 (January 12, 1993), at 6-7;
Florida Dept. Of Transportation, RCRA 92-16-R (October 29, 1993), at
3-6; and Coors Brewing Co., RCRA-VIII-90-09 (January 4, 1991), at
11-15. Comparable federal court decisions: Linde Thomson Langworthy
Kohn & Van Dyke v. RTC, 5 F.3d 1508 1518 (D.C. Cir. 1993) (Statute
authorizing RTC investigations does not contemplate the termination
of investigative authority upon commencement of civil proceedings.);
National-Standard Company v. Adamkus, 881 F.2d 352, 363 (7th Cir.
1989)(''The mere pendency of a related civil action does not
automatically preclude EPA's use of other authorized law enforcement
techniques. * * *''); and In Re Stanley Plating Co., 637 F.Supp. 71,
72-73 (D.Conn. 1986) (Nothing in RCRA suggesting that civil action
restricts EPA to investigative techniques in accordance with
discovery rules).
---------------------------------------------------------------------------
EPA acknowledges that the statutory information collection tools
available to the Agency are substantial, however, EPA does not believe
that this undermines the fairness of the CROP proceedings. The central
factual issue of a CROP proceeding is whether respondent's conduct has
been consistent with the law, and respondent's ability to gather
information about its own conduct is always greater than EPA's,
statutory information collection authorities notwithstanding. In any
event, it is uncommon for EPA to initiate inspections, information
collection requests, or administrative subpoenas (other than those
issued by the Presiding Officer) to gather information to support cases
that have already commenced.
EPA notes that the clause ``EPA's authority under the Act'' may
have contributed to some commenters' view of paragraph (e)(5) as
endorsing the use of information collection authorities outside of
those in Sec. 22.19 to ``otherwise obtain information'' support ongoing
cases. EPA's primary motivation in proposing Sec. 22.19(e)(5) is that
its authority to conduct investigations
[[Page 40162]]
unrelated to the particular proceeding, perhaps under other statutes or
at other facilities, should not be restricted by an unrelated
enforcement proceeding. EPA has replaced the phrase ``authority under
the Act'' with the more general phrase ``under any applicable law'' in
order to better convey EPA's intention that activities unrelated to an
ongoing CROP proceeding are not to be subject to the Sec. 22.19(e)
limitations.
EPA cannot agree with commenters' suggestions that EPA's
information collection authorities be restricted during the pendency of
a case. EPA administers fourteen different regulatory statutes, several
of which impose a wide variety of requirements on EPA and on
regulatees. Many corporations have dozens, or even hundreds, of
facilities that are regulated by EPA. EPA needs to continually conduct
inspections and exercise other information collection authorities both
to identify noncompliance with existing regulations and to determine
the need for new or revised regulations, whether or not a company is
presently subject to a CROP proceeding. In effect, the commenters ask
EPA to blind itself to anything a respondent might do at any facility
during the course of a CROP proceeding. EPA would be derelict in its
regulatory and enforcement responsibilities if it were to forego its
statutorily authorized information collection tools, even for a
relatively short time.
Dow stated that although it agrees generally with the proposed
Sec. 22.19(e)(5), it believes that the CROP should allow for protective
orders and/or sanctions to prevent a party from abusing or harassing
another party. The Presiding Officer has the authority, under
Secs. 22.4(c)(6), 22.4(c)(10), 22.17, and 22.22, to impose certain
sanctions against a party, such as exclusion of evidence, that are not
provided in the statute under which a case is commenced. The Presiding
Officer in a CROP proceeding does not have the broad powers of a
Federal court judge, and can order only such relief (e.g. penalty,
compliance order) as is authorized by the statute(s) under which the
case is commenced. None of the statutes EPA administers authorize
protective orders or contempt sanctions for misuse of the information
collection authorities noted in Sec. 22.19(e)(5).
The USAF urges that Sec. 22.19(e)(5) state that where EPA seeks to
obtain information from a respondent represented by an attorney in a
proceeding under the CROP, it shall seek such information through the
respondent's attorney. The USAF observes that Sec. 22.10 requires
representatives of parties to conform to the standards of conduct and
ethics applicable in the Federal courts, and that one such rule would
require that information collection efforts concerning the subject of
the litigation are to be made through counsel for the party. EPA notes
that these ethical rules are already applicable to attorneys and
representatives for all parties through Sec. 22.10, and need not be
restated in Sec. 22.19(e)(5).
More importantly, EPA's ability to enforce an information
collection request will depend on whether the request has been made of
the proper individual. Some statutory information collection
authorities are only applicable to specified persons (e.g., Section
308(a) of the Clean Water Act, authorizes EPA to require the owner or
operator of a point source to submit reports and provide information).
Although an attorney may represent respondent in a particular
proceeding, it is not clear that the scope of that representation will
always make the attorney the surrogate of the proper recipient of an
information collection request. In addition, EPA is a large and
decentralized agency, and regulates many large and decentralized
corporations. As a result, it is possible that the individuals
responsible for a particular enforcement proceeding and those
responsible for a particular information request may have no knowledge
of each other's activities. For these reasons, it is not appropriate
for EPA to commit itself by rule to send all information collection
requests to respondent's attorney.
c. Final Rule. As stated above, EPA is adopting the Sec. 22.19(e)
as proposed with three modifications: Paragraph (e)(2) shall contain
the language ``(such as penalty calculations for purposes of settlement
based on Agency settlement policies)''. Paragraph (e)(3)(i) will allow
depositions on oral questions in circumstances where the information
``cannot reasonably be obtained by alternative methods of discovery.''
Paragraph (e)(5) shall state that ``. . . Nothing in paragraph (e) of
this section shall limit * * * EPA's authority, under any applicable
law, to conduct inspections, issue information request letters or
administrative subpoenas, or otherwise obtain information''.
EPA has also noted an unintended side effect of moving the subpoena
provisions from the supplemental rules into the discovery section of
the proposed rule. In many cases, subpoenas are not used as discovery
tools, but merely to ensure the attendance of a witness at hearing. The
witness may also be totally independent from the parties. In these
circumstances, the standards set forth in Sec. 22.19(e)(1) are
inappropriate. Therefore, EPA has revised Sec. 22.19(e)(4) so that it
applies only to subpoenas issued for discovery purposes. Other
subpoenas would be at the Presiding Officer's discretion, pursuant to
Sec. 22.4(c)(9). Corresponding language is also added to Sec. 22.21 to
provide for subpoenas not used as discovery tools.
17. Supplementing Prior Exchanges, and Failure To Exchange Information
(40 CFR 22.19(f) & (g))
a. Summary of Proposed Rule. Section 22.19(f) would clarify that
parties may freely supplement their information exchanges, and
additionally impose on each party a duty to supplement or correct prior
exchanges of information when the party learns that a prior exchange is
deficient. Section 22.19(g) clarifies that a failure of a party to
provide information within its control pursuant to an order of the
Presiding Officer may lead to an inference that the information sought
would be adverse to the non-exchanging party, to exclusion of the
information from evidence, or to issuance of a default order.
b. Significant Comments and EPA Response. CMA/API support the
proposed changes to Sec. 22.19(f). Dow suggests that Sec. 22.19(g)
should state that ``the Presiding Officer may, in his discretion,''
impose the specified sanctions, in order to clarify that the ``abuse of
discretion'' standard applies on appeal. EPA accepts this suggestion.
c. Final Rule. EPA is adopting the proposed Sec. 22.19(f) and (g)
with minor modifications. In the first sentence of paragraph (f), EPA
has replaced the word ``responded'' with the more expressive phrase
``exchanged information in response.'' In response to Dow's comment
noted above, EPA has added the phrase ``in his discretion'' to the
language of Sec. 22.19(g). EPA also corrected an erroneous citation in
paragraph (g)(3): it should refer to Sec. 22.17(c) rather than
Sec. 22.17(a). For consistency with the other paragraphs in Sec. 22.19,
EPA has added a heading to paragraph (g), ``Failure to exchange
information''.
18. Evidence (40 CFR 22.22)
a. Summary of Proposed Rule. Section 22.22(a) proposes both
structural and substantive changes. Structurally, EPA proposes
splitting subsection (a) into two paragraphs, (a)(1) and (a)(2).
Paragraph (a)(1) proposes to add an exclusionary provision for
information not provided to the opposing party at least 15 days before
the hearing date unless there was good cause and the
[[Page 40163]]
information was provided as soon as it had control of it or there was
good cause for not providing the information. Paragraph (a)(2) proposes
to clarify how and when confidential business information (``CBI'') may
be used as evidence in accordance with, and specifically referencing
EPA's general confidentiality requirements in 40 CFR Part 2. In
conforming with Part 2 requirements, a proposed significant change
would authorize the Presiding Officer and EAB to consider CBI
information outside the presence of the public or a party as necessary
to preserve the confidentiality of business information.
b. Significant Comments and EPA Response. Dow opposes the automatic
exclusion of information that is not exchanged in a timely manner
unless good cause is shown, as proposed in Sec. 22.22(a)(1). Dow
presents hypothetical situations where it believes a respondent would
be unable to get exculpatory or mitigating information that comes to
its attention admitted into evidence, if EPA ``deliberately chooses to
withhold'' such information ``instead of exchanging it in a timely
manner.'' In such situations, Dow reasons that there would be no ``good
cause'' for EPA's failure to exchange the information. As a result, Dow
advocates the proposed exclusionary provision be revised to state that
the ``information will be excluded from evidence only upon objection by
the innocent party (i.e., the party who did not fail to exchange the
information in a timely manner).''
Dow's fears are unfounded. If party A withholds information until
just before the hearing, and party B seeks to have that information
admitted into evidence, then party A's failure to disclose would
constitute ``good cause'' for the innocent party B's inability to
produce the information 15 days prior to the hearing. If the party was
required to disclose the information in prehearing exchange or other
discovery, Sec. 22.19(g) gives the Presiding Officer some authority to
sanction the party who withheld the information. Section 22.19(f)
prohibits knowing concealment of deficiencies in information that has
previously been exchanged. It imposes an affirmative duty to promptly
supplement or correct information provided previously in a prehearing
exchange, a response to a request for information, or a response to a
discovery order when a party learns that the information is
``incomplete, inaccurate or outdated, and the additional or corrective
information has not otherwise been disclosed to the other party. * *
*'' Id. An opposing party's failure to supplement as required under
Sec. 22.19(f) would provide ``good cause'' for admission of evidence.
In addition, Sec. 22.4(c)(10) empowers the Presiding Officer do all
acts and measures needed for a fair adjudication of the proceedings.
The preamble to the proposed rule noted that the CROP is aimed at
the practice of full and complete exchange of information in order to
expedite hearings and avoid unnecessary and costly motion practice.
E.g., 63 FR at 9472, 9473. The Agency believes that the exclusionary
provision facilitates this end and provides a mechanism to enforce the
failure of a party to engage in such full disclosure. For parties that
act in bad-faith, the CROP, as discussed above, provides adequate
safeguards to address these situations and ensure a fair adjudication.
Regarding Sec. 22.22(a)(2), CEEC supports the Agency's proposal to
allow the Presiding Officer to review CBI evidence outside the presence
of a party if it is necessary to preserve the confidentiality of the
business information. In contrast, Dow believes that viewing CBI
evidence outside the presence of a party can impede the non-attending
party's ability to effectively participate in the hearing and the
fairness of the hearing. Dow requests that the Agency include a
provision for disclosure of CBI to all parties and to neutral experts,
as needed, with safeguards to prevent against using the information
outside the scope of the hearing.
The Agency acknowledges the legitimacy of Dow's concerns, however,
today's rule and 40 CFR part 2 provide adequate mechanisms to
accomplish most of Dow's suggestions. Notwithstanding today's revision
of Sec. 22.22(a)(2), EPA retains the authority to disclose CBI in a
CROP proceeding where appropriate, pursuant to several statute-specific
provisions of part 2 (see, e.g., 40 CFR 2.301(g), 2.302(g), 2.304(g),
2.305(g), 2.306(i), 2.310(g)). Disclosure to a neutral expert could be
accomplished through these authorities, or through the statute-specific
provisions of part 2 that authorize disclosure to persons performing
work under contract to EPA (see, e.g., 40 CFR 2.301(h), 2.302(h),
2.304(h), 2.305(h), 2.306(j), 2.307(h), 2.310(h)). The Agency does not,
however, have the authority to enforce secrecy agreements between
respondent and an intervener, nor does it have the authority to impose
sanctions (other than procedural sanctions such as default) for
violations of protective orders that might be issued under the
authority of Sec. 22.4(a)(2) or (c). Therefore, it may be advisable for
owners of CBI to make such agreements enforceable as contracts.
As expressed in the preamble to the proposed rule, the Agency
believes that allowing the independent Presiding Officers the
``discretion to review confidential evidence outside the presence of a
party * * * strike[s] an appropriate balance between the right of
confrontation and the statutory mandates to protect confidential
business information.'' 63 FR at 9474. Contrary to the Dow's
suggestion, the Presiding Officer is competent to handle these
infrequent situations, including the concern about CBI evidence being
unduly relied upon to the detriment of the non-present party. The
Presiding Officers handle cases daily involving the Agency's technical
regulations and corresponding business information. As an impartial
trier of fact, trained to assure that all cases are fairly adjudicated,
the Presiding Officer can take into account the failure of a party to
be present and to rebut any CBI evidence. Additionally, the Presiding
Officer can pose questions to the absent party about any non-CBI issues
that exist once the hearing resumes in full. Moreover, as this
commenter acknowledges, the CROP provides that a party will have access
to a redacted version of the CBI documents. Thus, a right to
confrontation and to present its defense will not be unfairly impeded.
c. Final Rule. EPA is adopting Sec. 22.22 as proposed, with four
minor changes. In addition to excluding information required to be
exchanged under Sec. 22.19(a) or (f) that has not been provided to the
opposing party at least 15 days before the hearing date,
Sec. 22.22(a)(1) should also exclude information that has not been
timely provided pursuant to a Sec. 22.19(e) discovery order. This is a
technical change, in as much as Sec. 22.19(g)(2) already permits the
exclusion of information not provided pursuant to a discovery order,
and that it is clearly the intent of the proposed rule to exclude
information that has not been provided to opposing parties in a timely
manner. EPA has therefore added to Sec. 22.22(a)(1) a reference to
Sec. 22.19(e) discovery orders.
To conform to the preferred style of the U.S. Government Printing
Office, EPA has revised Sec. 22.22(a) to state the duration of this
exclusion period with the numeral ``15''.
EPA has made an editorial change to Sec. 22.22(b), which requires
witnesses to testify ``orally, under oath or affirmation, except as
otherwise provided in these Consolidated Rules of Practice or by the
Presiding Officer.'' EPA has replaced the phrase ``in these
Consolidated Rules of Practice'' with the more specific language ``in
paragraphs
[[Page 40164]]
(c) and (d) of this section''. No provisions of the CROP other than
Sec. 22.22(b), (c) and (d) address whether witnesses must testify
orally, under oath or affirmation.
EPA notes that although the existing Sec. 22.22(c) places the
burden of delivering copies of a witnesses' written testimony on the
witness, this burden should fall on the party who would call that
witness to testify. EPA has revised this paragraph to require that
``the party who has called the witness shall deliver a copy of the
testimony to the Presiding Officer, the reporter, and opposing
counsel.''
19. Filing the Transcript (40 CFR 22.25)
a. Summary of Proposed Rule. Section 22.25 provides that the
hearing shall be transcribed, and that the reporter shall transmit
copies to the Presiding Officer, and to the Regional Hearing Clerk who
shall make copies available to the parties. EPA proposed a new
provision specifically allowing motions to conform the transcript to
the actual testimony, provided that such motions are filed within 20
days after notice of the availability of the transcript.
b. Significant Comments and EPA Response. Dow asserts that 20 days
is insufficient time for attorneys and employee witnesses to review,
correct, and move to amend a hearing transcript, even if the 20 days
commenced upon receipt of the transcript. Dow recommends that
Sec. 22.25 be revised to allow motions to conform the transcript to the
actual testimony either 30 days from the date the transcript is
received, or 45 days from service of the notice of availability. EPA
agrees with Dow's recommendation that additional time be allowed.
EPA originally proposed that the time allowed should be measured
time from date the parties are notified that the transcript is
available, as this appeared to be a single, well-defined reference
point. In practice, this has not been the case, because complainants on
occasion receive the transcript itself before receiving a formal notice
of its availability. Moreover, the proposed standard would generally
give complainant more time than respondent, because complainant
typically receives the transcript as soon as it becomes available. The
commenter's suggestion of 30 days from the date the transcript is
received is good benchmark, as it allows each party the same amount of
time to review the transcript, however, it is open-ended for so long as
a respondent declines to request or pay for its copy of the transcript.
In order to balance fairness to each party with the need for finality,
EPA has adopt a standard building on both of the commenter's
suggestions: ``Any party may file a motion to conform the transcript to
the actual testimony within 30 days after receipt of the transcript, or
45 days after the parties are notified of the availability of the
transcript, whichever is sooner.''
c. Final Rule. EPA is adopting the rule as proposed with the
exception of modifying the language of Sec. 22.25 to read ``Any party
may file a motion to conform the transcript to the actual testimony
within 30 days after receipt of the transcript, or 45 days after the
parties are notified of the availability of the transcript, whichever
is sooner.''
20. Initial Decision (40 CFR 22.27)
a. Summary of Proposed Rule. Section 22.27 is concerned with
initial decision, and it consists (in both the existing and proposed
versions) of three paragraphs. Paragraph (a) is concerned with the
issuance of an initial decision, what it shall contain, and to whom
copies shall be sent. Paragraph (b) outlines the factors a Presiding
Officer must take into consideration in determining the amount of a
civil penalty and the procedures for determining a civil penalty upon a
default. Paragraph (c) sets forth when an initial decision becomes a
final order and when it does not; this provision also states that the
effect of an initial decision appealed to the EAB is stayed pending a
decision on an appeal by the EAB.
Many of the changes in Sec. 22.27(a) are intended to clarify the
language. Other changes include requiring that an initial decision,
where appropriate, include a compliance order, corrective action order
or permit revocation, termination or suspension. This provision also
designates to whom, in addition to the parties, copies of the initial
decision are to be sent.
The revised Sec. 22.27(b) would require that the Presiding Officer
explain in the initial decision how the penalty recommended to be
assessed therein corresponds to the evidence in the record and any
penalty criteria set forth in the statute under which the action has
been commenced. It also establishes that in case of default, the
penalty recommended to be assessed shall not exceed the lesser of
amount sought in either the complaint or motion for default.
In Sec. 22.27(c), the ways in which a party can prevent an initial
decision from becoming a final order are set forth. The proposed rule
states that pending the issuance of decisions on appeals of them to the
EAB, initial decisions are neither final nor operative. This amendment
is to prevent a party from seeking judicial review prior to seeking
review from EPA's administrative appellate body, the Environmental
Appeals Board.
b. Significant Comments and EPA Response. Dow notes that the second
sentence of Sec. 22.27(a) arguably requires that every initial decision
must include a civil penalty assessment. To remedy this, Dow recommends
that the words ``if appropriate'' be moved so that they follows the
phrase ``as well as reasons therefor, and''. EPA agrees, and adopts
Dow's proposed revision.
Dow supports the inclusion in Sec. 22.27(c) of the provision that
states, ``An initial decision that is appealed to the Environmental
Appeals Board shall not be final or operative pending the Environmental
Appeals Board's issuance of a final order'' as properly balancing the
needs of EPA and respondents. While Dow is pleased that this ``will
avoid premature recourse to Federal courts'', Dow argues that EPA
should not require appeal to the EAB for those issues that cannot be
adjudicated administratively. As examples of matters that an agency
cannot address, Dow cites challenges involving constitutional
questions, challenges to an agency's interpretation of a statute and
challenges to an agency's authority.
EPA does not agree with the recommendation that the CROP should not
require an appeal to the EAB of ``issues that cannot be adjudicated
administratively.'' It cannot be left to a party to determine the scope
of the EAB's jurisdiction, and respondents should not bear the burden
of attempting to predict whether a particular issue must be appealed to
the EAB as a prerequisite to judicial review. Also, issues that may not
be adjudicated administratively are often mixed with issues that may be
adjudicated by the Board. It is appropriate, and in the interest of
both the Agency and the parties, for the EAB to decide which issues may
be adjudicated administratively. This will ensure that the EAB has the
opportunity to exercise its full review authority and protect
respondents from losing their right to appeal based on a failure to
exhaust administrative remedies.
CEEC also objects to the proposed changes to Sec. 22.27(c), arguing
that it is inappropriate to require respondents to appeal any initial
decisions to the EAB before appealing to the federal courts. CEEC's
initial comments (April 27, 1998) gave no reasons why this is
inappropriate. CEEC reiterated this objection in its supplemental
comments (June 4, 1998), again without significant explanation. CEEC's
supplemental comments elaborated on this point only
[[Page 40165]]
to the extent of echoing Dow's comment, stating that it is especially
inappropriate ``where the issue to be addressed is a constitutional
challenge, a challenge to an Agency interpretation, or a challenge to
the Agency's authority.''
As EPA has already discussed issues specific to requiring appeal to
the EAB as a prerequisite to judicial review ``where the issue to be
addressed is a constitutional challenge, a challenge to an Agency
interpretation, or a challenge to the Agency's authority'', this
response will address the larger issue raised by CEEC, whether
respondents should be required to appeal any decisions of a Presiding
Officer to the EAB as a prerequisite to judicial review.
The EAB is responsible for assuring consistency in Agency
adjudications by all of the ALJs and RJOs. The appeal process of the
CROP gives the Agency an opportunity to correct erroneous decisions
before they are appealed to the federal courts. The EAB assures that
final decisions represent with the position of the Agency as a whole,
rather than just the position of one Region, one enforcement office, or
one Presiding Officer. EPA considers this a necessary and important
function, and rejects CEEC's suggestion that this internal appeal and
review process be abandoned. In addition to meeting EPA's institutional
needs, this process also offers enormous advantages to respondents who
are dissatisfied with an initial decision, in that appeals to the EAB
are much quicker and much less expensive than appeals to a federal
court.
CEEC's comment may be based on a misreading of the proposed rule as
requiring respondent to make an interlocutory appeal to the EAB every
time there is an adverse decision: ``In its Preliminary Comments, CEEC
noted its concerns with the proposal requiring appeal to the EAB after
every ``initial'' decision or order of the Presiding Officer before
seeking judicial review.''
To the extent that this comment is intended to apply to any ruling
or order other than an initial decision (as the latter term is defined
in Sec. 22.3), it is based on a misreading of the proposed rule. The
proposed rule would only require that initial decisions (as
specifically defined in Sec. 22.3) be appealed to the EAB as a
prerequisite to judicial review. EPA did not propose to require
interlocutory appeal of rulings and orders other than initial decisions
as a prerequisite to judicial review.
CEEC also objects to the process by which EPA has proposed the
revisions relating to exhaustion of remedies. Terming the inclusion of
the exhaustion requirement a ``major revision'' to the CROP, CEEC says
that ``Given the magnitude of this proposed change, EPA should have
brought this proposal to the attention of the regulated community in
the summary of its proposed rule-change, and explained it thoroughly.''
First, the February 25, 1998, Federal Register notice of proposed
rule making provided adequate notice of EPA's intention to address the
exhaustion doctrine in its rules of administrative procedure. The one-
sentence summary that begins the notice of proposed rule making
accurately describes the subject of the notice, though it does not
attempt to summarize all of the issues raised in the proposal. The body
of the notice and the proposed regulations clearly identified and
discussed this issue in detail. See 63 FR 9474-75, 9489. The proposed
rule allowed 60 days for the public to comment on the entire proposal.
In addition, in response to CEEC's concern, EPA published a second
notice on May 6, 1998, reopening the public comment period for an
additional 60 days.
CEEC's contention that the initial proposal did not give adequate
notice of the magnitude of the proposed changes is not persuasive. The
original notice of proposed rule making attracted the attention of a
broad spectrum of the regulated community, and elicited comments from
major trade associations representing the chemical manufacturing
industry, the petrochemical industry and the utility industry, and
individual comments from the U.S. Air Force and one major chemical
company, in addition to the companies represented by CEEC. These
comments were generally detailed and well considered. Only two of the
comments addressed Sec. 22.27(c), and only CEEC considered this an
extraordinary revision. CEEC's contention that the initial proposal did
not allow enough time to consider and comment on the proposed changes
is also undermined by the fact that CEEC's supplemental comments were
the only comments received during reopened comment period, as well as
by the fact that those supplemental comments did not raise any
significant issues that were not raised during the original public
comment period.
Second, EPA disagrees with CEEC's characterization of the magnitude
of the proposed changes. EPA considers appeals of an initial decision
to the EAB as a prerequisite to judicial review under the CROP as
previously codified, and that, during such appeal, the initial decision
is inoperative. The regulated community also appears to share this
understanding, as respondents consistently seek EAB review before
appealing to the federal courts. The proposed explicit inclusion of the
exhaustion doctrine simply clarifies the status quo, and thus does not
represent something that would significantly alter or impact a
respondent's rights or position under the CROP.
Although the proposed revision of Sec. 22.27(c) was designed to
make it explicit that an initial decision must be appealed to the EAB
as a prerequisite for judicial review, Dow points out that
Sec. 22.27(c) does not actually say anything about the need for
administrative appeal before judicial review. An explicit statement
appears in Sec. 22.31(e)(1) of the proposed rule, however, EPA
acknowledges that it would be more helpful if the provision advising a
respondent of the consequences of failing to appeal an initial decision
to the EAB were included in the section discussing initial decisions,
rather than the section concerned with final orders. Accordingly,
language from Sec. 22.31(e)(1) of the proposed rule now appears in a
new Sec. 22.27(d).
c. Final Rule. In response to comment, EPA has moved the words ``if
appropriate'' from the end of the second sentence in Sec. 22.27(a) to
follow the phrase ``as well as reasons therefor, and'', in order to
clarify that not all initial decisions will assess a penalty.
Language from Sec. 22.27(c) and Sec. 22.31(e)(1) relating to
exhaustion of administrative remedies has been combined in a new
Sec. 22.27(d). The remainder of Sec. 22.27(c) has also been subdivided
into four paragraphs for easier reading.
EPA has made an additional substantive change to Sec. 22.27(a) on
its own initiative. The existing and proposed rules specify that the
Regional Hearing Clerk shall forward the entire record of the
proceeding to EPA Headquarters as soon as an initial decision is
issued, regardless of whether the case is appealed to the EAB. For
administrative efficiency, this requirement has been deleted. Regional
Hearing Clerks will retain the record of the proceeding unless the EAB
requests it. This change should have no effect on respondents'
interests.
EPA has made minor editorial changes to Sec. 22.27(a) as well: EPA
has deleted the word ``reply'' from the first sentence to make it more
general, and has replaced the phrase ``permit revocation and
suspension'' with ``Permit Action'', as discussed in connection with
revisions to Sec. 22.3(a) and Sec. 22.14(a)(4)(iii)..
In the fourth and fifth sentences of paragraph (b), the proposed
rule uses the phrase ``penalty recommended to be
[[Page 40166]]
assessed in the complaint''. The convention elsewhere in the CROP is to
describe the penalty proposed by complainant as the ``proposed
penalty'', and the penalty determined by the Presiding Officer as the
``recommended penalty''. In order to eliminate the ``recommended to be
assessed'' language and to provide for cases where complainant makes
its specific penalty proposal in its prehearing exchange, EPA has
replaced ``penalty recommended to be assessed in the complaint'' in the
fourth sentence with the phrase ``penalty proposed by complainant''. In
the fifth sentence, EPA has substituted the phrase ``proposed by
complainant in the complaint, the prehearing information exchange or
the motion for default''.
EPA has also changed the order of the sentences in paragraph (b).
The sentence stating that ``[t]he Presiding Officer shall explain in
detail in the initial decision how the penalty to be assessed
corresponds to the any penalty criteria set forth in the Act'' has been
moved up to follow the sentence stating that ``the Presiding Officer
shall consider any penalty guidelines issued under the Act.'' This will
make it clearer that the obligation to explain in detail how the
penalty corresponds to the penalty criteria of the Act is not limited
to circumstances where the Presiding Officer assesses a penalty
different from that proposed in the complaint.
As discussed above in connection with public comments on
Sec. 22.17, EPA has revised the CROP to clarify that a motion for
default or a default order may apply to all or part of a proceeding.
EPA has made a corresponding change to Sec. 22.27(c)(3), to clarify
that it applies only to those default orders that constitute initial
decisions.
To conform to the preferred style of the U.S. Government Printing
Office, EPA has revised Sec. 22.27(c) to state the time after which an
initial decision becomes a final order with the numeral ``45''.
21. Appeal From or Review of Initial Decision (40 CFR 22.30)
a. Summary of Proposed Rule. The proposed revisions to
Sec. 22.30(a) would extend the time to file an appeal from 20 to 30
days, clarify the procedure for filing appeals, including, but not
limited to, provisions addressing service and filing, and describing
the contents of any appeal brief. The proposed rule also contained a
new provision whereby a party who initially declined to appeal, but who
receives a notice of appeal from another party, is granted an
additional 20 days to raise other issues on appeal. This change would
eliminate the need for protective filings by parties who otherwise
would have elected not to file an appeal.
Proposed revisions to paragraph (b) would clarify the respective
roles of the Regional Hearing Clerk and the Clerk of the Board.
Paragraph (c) of the proposed rule added a provision expressly limiting
the scope of appeals to issues raised during the course of the
proceeding or by the initial decision. Minor editorial changes were
made to the proposed paragraph (d), as well as to the other paragraphs.
EPA proposed a new paragraph (e) that would specify that the
general requirements for motions at Sec. 22.16 apply to motions made in
appeals to the EAB. EPA proposed a new paragraph (f), consisting
largely of the language formerly contained in Sec. 22.31(a). Paragraph
(f) describes the scope of review by the EAB and its authority to
increase or decrease a penalty, or to modify any compliance order,
corrective action order, or any permit revocation, termination and
suspension. The proposed Sec. 22.30(f) would allow the EAB to increase
the amount of a penalty assessed in a default order, but would not
allow the EAB to increase the default penalty to an amount greater than
that proposed in the complaint or in a motion for default, whichever is
less.
b. Significant Comments and EPA Responses. CMA/API support the
provision extending the time for filing appeals from 20 to 30 days,
while Dow objects that 30 days is not sufficient time to review the
initial decision and file an appeal brief. CROP proceedings have worked
effectively since 1980 with a 20 day appeal period, and with extensions
in appropriate cases. Expanding the appeal period by fifty percent
should substantially reduce the burdens felt by counsel, as well as
allow improvement in the quality of the briefs filed. While today's
final rule expands several time periods, EPA still intends that CROP
proceedings should progress quickly from the filing of the complaint to
the issuance of a final order. EPA believes that further expansion of
the appeals period is not necessary at this time.
Dow also commented that the deadline for response briefs would be
ambiguous under the proposed Sec. 22.30(a)(2) in cases where two or
more notices of appeal are filed in serial fashion. EPA concedes that
in such cases there would not be a single date upon which all reply
briefs are due, however, the proposed CROP is clear as to when the
response briefs are due: A brief responding to an appeal is due within
20 days of service of the appeal brief to which it responds. Requiring
all reply briefs to be filed on the same day would give the person
filing the last appeal the most time to respond to the opposing party's
appeal, while EPA's proposed approach gives each party the same amount
of time to respond.
CEEC recommends that the CROP include procedures to ensure that
members of the regulated community have access to all administrative
complaints, decisions, orders, settlements, etc. EPA notes that all
such documents appear in the public docket for each case. The formal
opinions of the EAB are published in a series of bound volumes titled
Environmental Administrative Decisions (E.A.D.), which may be purchased
from the U.S. Superintendent of Documents. The full text of all formal
EAB opinions may also be accessed electronically at the EAB's World
Wide Web Site (http://www.epa.gov.eab). Decisions and ``substantive''
orders (i.e., having some discussion of legal argument) of the Agency's
ALJs are on http://www.epa.gov/oalj going back to November 1996. A web
site for RJO decisions is under construction. Hard copies of ALJ
decisions (and substantive orders since 1997) may be obtained from the
Headquarters Hearing Clerk, and RJO decisions may be obtained from the
Regional Hearing Clerks. Several commercial sources also make available
the EAB formal opinions, most ALJ decisions and orders, and some RJO
decisions and orders.
The Agency's practice has been for the Regional Hearing Clerk to
maintain a complete docket up through the initial decision, and for the
Clerk of the Board to maintain the docket of subsequent proceedings.
EPA acknowledges that this system has made it difficult for persons
reviewing a case docket in an EPA Regional office to review the entire
case record. In order that the Regional Hearing Clerk's docket should
indicate that a case had been appealed, EPA proposed in
Sec. 22.30(a)(1) that each appellant shall serve copies of its notice
of appeal and brief with the Regional Hearing Clerk. In response to
CEEC's comment, EPA has revised Sec. 22.30(a) and (b) to require that
copies of all documents filed with, or by, the EAB shall also be served
on the Regional Hearing Clerk.
Finally, Dow notes that despite EPA's stated intention of removing
the words ``sua sponte'' from the CROP, EPA neglected to replace this
expression in the title of Sec. 22.30(b). EPA has finished this task by
revising this title to read ``Review initiated by the Environmental
Appeals Board.''
[[Page 40167]]
c. Final Rule. EPA has adopted Sec. 22.30 as proposed, with several
modifications. As discussed above, EPA has revised the title of
Sec. 22.30(b) to read ``Review initiated by the Environmental Appeals
Board'', and has revised Sec. 22.30(a) to require that copies of all
documents filed with, or by, the EAB shall also be served on the
Regional Hearing Clerk. EPA has made several other minor revisions on
its own initiative:
As discussed above in connection with the revisions to Sec. 22.11,
EPA has replaced the term ``amicus curie'' in Sec. 22.30(a)(1) and
(a)(2) with the term ``non-party participant.''
In order that the Presiding Officer may be aware of the status of
his or her decision, EPA has also revised paragraph (a)(1) to require
that a copy of the notice of appeal be served on the Presiding Officer,
and revised paragraph (b) to require that the EAB serve on the
Presiding Officer a copy of its notice of intent to review a decision.
EPA has also replaced the expression ``Clerk of the Environmental
Appeals Board'' with ``Clerk of the Board,'' using the term defined at
Sec. 22.3(a) for consistency.
Because response briefs are to be filed with the Clerk of the
Board, the words ``and serve'' are unnecessary and potentially
confusing as they appear in the proposed Sec. 22.30(a)(2), and have
therefore been deleted from today's final rule.
The proposed Sec. 22.30(c) included a new provision: ``The parties'
rights of appeal shall be limited to those issues raised during the
course of the proceeding and by the initial decision.'' In order to
reflect the well established principle that the question of subject
matter jurisdiction cannot be waived and may be raised at any stage of
a proceeding, EPA has revised this provision by adding the clause ``and
to issues concerning subject matter jurisdiction.''
The proposed Sec. 22.30(f) may incorrectly suggest that a final
order is the only possible outcome from an EAB decision on appeal of an
initial decision. However, it is not uncommon for the EAB to remand a
case. EPA has revised paragraph (f) by adding the following sentence:
``The Environmental Appeals Board may remand the case to the Presiding
Officer for further action.''
EPA has replaced the phrase ``any permit revocation, termination or
suspension'' in Sec. 22.30(f) with ``Permit Action'', as discussed in
connection with revisions to Sec. 22.3(a) and Sec. 22.14(a)(4)(iii). To
conform to the preferred style of the U.S. Government Printing Office,
EPA has revised Sec. 22.30 to state all time periods with numerals
only.
22. Final Order (40 CFR 22.31)
a. Summary of Proposed Rule. Section 22.31 is concerned with final
orders, and the proposed section consists of six sub-paragraphs.
Paragraph (a) would specify the effect of the final order. It states
that a final order constitutes final Agency action and specifies that a
final order neither affects the right of the United States to seek
criminal or civil relief for any violation of law nor waives a
respondent's obligations to comply with applicable law. Paragraph (b)
would establish the effective date of a final order. Paragraph (c)
would set forth procedures for paying any civil penalties assessed in a
final order. Paragraph (d) would establish that any corrective action
or compliance order, or any permit revocation, termination or
suspension becomes effective and enforceable as of the effective date
of a final order unless otherwise specified in the final order. The
proposed paragraph (e) is concerned with exhaustion of administrative
remedies, and would specify that where a respondent fails to appeal an
initial decision or enters into a consent agreement, the right of
subsequent judicial review is waived. The proposed paragraph (f)
discusses final orders issued to Federal agencies. This provision would
specify that where the head of an affected agency seeks the
intervention of the EPA Administrator, the decision by the
Administrator will be the final order; this provision would also
specify that a motion for reconsideration does not affect the 30-day
time period for the effective date of final orders against Federal
agencies.
b. Significant Comments and EPA Responses. The proposed inclusion
in Sec. 22.31(e) of a provision explicitly addressing exhaustion of
administrative remedies as a prerequisite to judicial review is viewed
by CEEC as a ``major'' revision of the CROP. CEEC argues that:
``Given the magnitude of this proposed change, EPA should have
brought this proposal to the attention of the regulated community in
the summary of its proposed rule-change, and explained it
thoroughly.''
As discussed in EPA's response to comments on Sec. 22.27(c), above,
EPA disagrees with CEEC's characterization of the magnitude of this
change, and maintains that the proposed rule gave adequate notice of
the proposed change.
As discussed in EPA's response to comments on Sec. 22.27(c), above,
EPA agrees with Dow's comment that the requirement that an
administrative appeal is a predicate for subsequent judicial review
should appear in Sec. 22.27. Therefore, the language that appeared in
the proposed Sec. 22.31(e)(1) has been deleted and moved to
Sec. 22.27(c). The proposed Sec. 22.31(e)(2), which would specify that
``[a] respondent which elects to resolve a proceeding pursuant to
Sec. 22.18 waives its rights to judicial review'', is redundant with
Sec. 22.18(a)(3) and (b)(2) and can be deleted without substantive
change. The proposed Sec. 22.31(f) has been redesignated as
Sec. 22.31(e) in today's final rule.
The proposed Sec. 22.31(f) describes the manner in which the head
of another Federal agency may bring disputes over a final order
directly to the EPA Administrator, and provides that the EAB's decision
shall not be effective pending the Administrator's review. Essentially
the same provision already appears in the supplemental rule governing
Solid Waste Disposal Act cases, Sec. 22.37(g). The proposed rule would
move this provision from that supplemental rule into the main body of
the CROP, in order that this process should be available in any CROP
case brought against a Federal agency.
The USAF opposes moving this provision from the supplemental rule
governing Solid Waste Disposal Act cases into the main text of the
CROP. USAF argues that instead of a generally applicable provision,
such procedures should be confined to the statute-specific supplemental
rules. USAF argues that EPA should be required to amend the CROP each
time Congressional action expands EPA's authority to enforce against
another Federal agency, in order to provide a forum for resolving
constitutional and jurisdictional issues.
The proposed change does not expand EPA's jurisdiction to assess
civil penalties against a Federal facility, nor does it expand the
scope of the CROP as it pertains to Federal facilities. EPA can assess
penalties against Federal facilities for violations of the Safe
Drinking Water Act (42 U.S.C. 300j-6), the Resource Conservation and
Recovery Act (``RCRA'') (42 U.S.C. 6961), and the Clean Air Act (42
U.S.C. 7413(d), 7524(c) and 7545(d)(1)) through a CROP proceeding
regardless of whether the proposed language is adopted. Should other
authorities for assessing penalties against Federal facilities become
available in the future, this will be true for those authorities as
well. The only effect of the change proposed in Sec. 22.31(f) is to
provide a mutually understood process for staying a final order while
the head of the respondent Federal Agency confers with the EPA
Administrator.
[[Page 40168]]
The proposed Sec. 22.31(f) is a procedural provision, not a
jurisdictional provision. It does not, on its own, establish authority
to assess administrative penalties. It merely provides the process to
follow where Congress has provided such authority to EPA. Although EPA
has not made the change USAF seeks, EPA has made a minor change to the
proposed Sec. 22.31(f)(1) (promulgated today as Sec. 22.31(e)(1)) that
should help reduce the chance that this might be misperceived as a
jurisdictional provision, by moving the words ``pursuant to
Sec. 22.30'', to follow the word ``issued.''
c. Final Rule. EPA has made no substantive change in response to
the comments on the proposed Sec. 22.31. As described above, EPA has
deleted the proposed Sec. 22.31(e) because equivalent provisions now
appear in Secs. 22.18 and 22.27(c). Also as noted above, EPA has
changed the proposed paragraph (f) to ``(e)'', and has moved the words
``pursuant to Sec. 22.30'', to follow the word ``issued'' in
Sec. 22.31(e)(1).
On its own initiative, EPA has made several other editorial changes
to Sec. 22.31. First, the third sentence of the proposed Sec. 22.31(a)
is inartfully drafted and subject to misinterpretation. The relevance
of the terms ``liability'' and ``violation'' is not clear in relation
to proceedings for permit actions. For example, permit actions may
often involve facts which could establish violations of the permit or
of environmental regulations, however, permit action proceedings do not
adjudicate respondents' liability for such violations. In order to
avoid the implication that a final order in permit action proceeding
might ``resolve Respondent's liability for a civil penalty'', or
conversely, that a final order in a penalty proceeding might resolve
``the status of a permit or authority to operate'', this sentence must
be revised. In addition, this sentence does not address proceedings
commenced with a consent agreement and final order pursuant to
Sec. 22.13(b). Accordingly, EPA has revised the third sentence of the
proposed Sec. 22.31(a) to state that: ``The final order shall resolve
only those causes of action alleged in the complaint, or for
proceedings commenced pursuant to Sec. 22.13(b), alleged in the consent
agreement.''
Second, EPA has significantly simplified the second sentence of
Sec. 22.31(c), by removing the requirements concerning who shall be the
payee on the check and where the check should be sent, and by amending
Sec. 22.14(a) to require that these be specified in the complaint. EPA
notes that the proposed Sec. 22.31(c) was deficient in that it did not
provide a mechanism to accommodate changes in the lock box banks or
bank addresses other than by amending the CROP, and that it did not
provide for cases under Section 311(b)(6) of the Clean Water Act, where
penalties must be paid to the ``Oil Spill Liability Trust Fund.''
Moreover, the focus on the ``check'' left it unclear whether interbank
funds transfers were permitted. Requiring that the complaint address
these issues allows EPA to replace the second and third sentences of
Sec. 22.31(c) with a much simpler statement:
``Payment shall be made by sending a cashier's check or
certified check to the payee specified in the complaint, unless
otherwise instructed by the complainant. The check shall note the
case title and docket number. Respondent shall serve copies of the
check or other instrument of payment on the Regional Hearing Clerk
and on complainant.''
Third, EPA has replaced the phrase ``permit revocation, termination
or suspension'' in Sec. 22.31(d) with ``Permit Action'', as discussed
in connection with revisions to Sec. 22.3(a) and Sec. 22.14(a)(4)(iii).
Fourth, EPA has clarified an imprecise sentence in the proposed
Sec. 22.31(f)(1) (now Sec. 22.31(e)(1). The last sentence of the
proposed Sec. 22.31(f)(1) stated that ``In that event, a decision by
the Administrator shall become the final order.'' EPA has replaced ``In
that event'' with the more explicit statement, ``If a timely request is
made''.
Finally, to conform to the preferred style of the U.S. Government
Printing Office, EPA has revised Sec. 22.31 to state all time periods
with numerals only.
23. Motion to Reconsider a Final Order (40 CFR 22.32)
a. Summary of Proposed Rule. Section 22.32 of the 1980 CROP
provides that parties may move for reconsideration of a final order
within 10 days of service of the final order, and describes the
procedure. The proposed rule made only trivial editorial changes.
b. Significant Comments and EPA Response. Dow objects that 10 days
is insufficient time to perform the extensive reviews and legal
research on specific issues raised by the final order. Dow concedes
that 10 days is sufficient to file a motion for reconsideration,
provided that additional time is allowed for the filing of briefs in
support of the motion.
The purpose of Sec. 22.32 is to provide a mechanism to bring to the
EAB's attention a manifest error, such as a simple oversight, or a
mistake of law or fact, or a change in the applicable law. See In the
Matter of Cypress Aviation, Inc., 4 E.A.D. 390, 392 (EAB 1992). The
motion for reconsideration is not intended as a forum for rearguing
positions already considered or raising new arguments that could have
been made before. This narrow scope of Sec. 22.32 is reflected in the
fact that the CROP does not require a respondent to seek
reconsideration in order to exhaust its administrative remedies as a
prerequisite for judicial review. Accordingly, EPA has not expanded the
time allotted to file a motion for reconsideration or to file briefs in
support of a motion for reconsideration.
c. Final Rule. EPA is adopting Sec. 22.32 as proposed, with two
modifications. As noted in the discussion of public comments on
Sec. 22.18(b)&(c), EPA has eliminated the term ``consent order,'' and
is using the term ``final order'' instead. In the interests of
exhaustion of remedies and finality, motions for reconsideration are
not appropriate where the final order results from settlement or quick
resolution, nor where the parties have declined to appeal an initial
decision and it has become final by operation of Sec. 22.27(c).
Accordingly, EPA has amended Sec. 22.32 to clarify that it is limited
to motions for reconsideration of a final order issued pursuant to
Sec. 22.30. In addition, to conform to the preferred style of the U.S.
Government Printing Office, EPA has revised Sec. 22.32 to state the
time period allowed for motions for reconsideration with the numeral
``10''.
24. Supplemental Rules Governing the Administrative Assessment of Civil
Penalties Under the Clean Air Act (40 CFR 22.34)
a. Summary of Proposed Rule. Section 22.34 presents supplemental
rules applicable to Clean Air Act penalty cases. Paragraph (b)
reiterates the requirement of 42 U.S.C. 7413(d)(2)(A) that before
issuing an order assessing a civil penalty (i.e., a final order), EPA
shall give written notice to the person against whom penalty is to be
assessed the order is to be issued, and give that person the
opportunity to request a hearing. It clarifies the relationship between
this statutory requirement and the CROP by stating that the such notice
shall be provided by issuance of a complaint. EPA proposed only minor
editorial changes to Sec. 22.34(b).
EPA proposed a new paragraph (c), which would apply to default
orders for failure to answer a field citation. Section 59.5(d) of the
proposed rule governing CAA field citations (59 FR 22776, May 3, 1994)
would provide that when a respondent fails to file a timely answer to a
field citation (and fails to offer to pay the penalty under the quick
[[Page 40169]]
resolution procedure at Sec. 22.18(a)(2)), the Presiding Officer shall
issue a default order assessing the penalty proposed in the complaint.
b. Significant Comments and EPA Response. Dow commented that
respondents should be able to waive the written notice required
pursuant to Sec. 22.34(b), because this is a procedural protection
provided merely for respondents' benefit. EPA agrees that the second
sentence of Sec. 22.34(b) appears to require issuance of a complaint in
every case. In order to allow the parties to take full advantage of the
efficiencies of Sec. 22.13(b) where prefiling negotiations produce a
settlement, EPA has amended this provision to specify that a complaint
is sufficient to satisfy this notice requirement, but without requiring
that a complaint necessarily must be served. The second sentence of
Sec. 22.34(b) now reads: ``Service of a complaint or a consent
agreement and final order pursuant to Sec. 22.13 satisfies this notice
requirement.''
c. Final Rule. EPA is adopting Sec. 22.34(a) as proposed, and has
adopted the proposed Sec. 22.34(b) with the exception of modifying the
second sentence to read ``Service of a complaint or a consent agreement
and final order pursuant to Sec. 22.13 satisfies this notice
requirement.'' EPA has deleted the proposed Sec. 22.34(c), pending
adoption of a final rule governing CAA field citations. Any changes
necessary to accommodate field citations will be made when the proposed
Field Citation rule is finalized.
25. Scope of Subpart I (40 CFR 22.50)
a. Summary of Proposed Rule. Section 22.50 defines the scope of
subpart I and its relationship to other provisions of Part 22. The
proposed paragraph (a) would restrict the scope of subpart I to
adjudicatory proceedings that are initiated by a complaint stating that
subpart I shall apply. The proposed paragraph (a) would clarify that
subpart I does not apply to any proceeding where the statute requires a
hearing subject to section 554 of the Administrative Procedure Act
(APA).
Paragraph (b) lists the provisions of subparts A through G which do
not apply to subpart I proceedings. Almost all provisions of subparts A
through G apply to a subpart I proceeding. Paragraph (b) also addresses
the potential for conflicting provisions in the preceding sections of
the CROP, providing that where any provisions of subparts A though G
conflict with any provision of subpart I, the latter supersedes the
former.
The preamble to the proposed rule stated that EPA does not intend
to alter its present practice of providing the full APA process in
cases pursuant to section 109(a) of the Comprehensive Environmental
Response, Compensation and Liability Act (``CERCLA'') (42 U.S.C.
9609(a)) or section 325(b)(1), (c), and (d) of the Emergency Planning
and Community Right-To-Know Act (``EPCRA'') (42 U.S.C. 11045(b)(1),
(c), and (d)), but invited comment as to the types of CERCLA and EPCRA
penalty cases for which non-APA procedures would be appropriate, if the
Agency decides in the future to assess EPCRA and CERCLA penalties
through non-APA proceedings.
b. Significant comments and EPA response. Most commenters (Dow,
CEEC, UWAG, UARG) oppose any proposed expansion of the role of RJOs
under subpart I. The preamble to the proposed rule stated that EPA did
not expect to use non-APA procedures except in the kinds of cases where
they have historically been used for the foreseeable future. As
discussed in the response to comments on Sec. 22.4(b), EPA has revised
Sec. 22.50(a) to expressly limit the applicability of subpart I to
cases under CWA sections 309(g)(2)(A) and 311(b)(6)(B)(i) (33 U.S.C.
1319(g)(2)(A) and 1321(b)(6)(B)(i)), and SDWA sections 1414(g)(3)(B)
and 1423(c)(42 U.S.C. 300g-3(g)(3)(B) and 300h-2(c)). This change makes
clear that the scope of the RJOs' activities will remain much the same
as it has been in recent years.
All who commented on the proposed subpart I (CMA/API, Dow, CEEC,
UWAG, UARG) expressed concern that it would not protect constitutional
due process rights. In particular, CEEC considers such a proposal a
``major concern'' and submits that subpart I procedures do not meet the
due process standard set forth in Mathews v. Eldridge, 424 U.S. 319
(1976). Dow, UWAG and UARG believe that there is too great a chance
that RJOs would have a pro-Agency bias, and suggest that EPA should
eliminate subpart I and apply APA procedures universally. Dow suggests
in the alternative that either party should be allowed to opt out of
subpart I and have APA procedures applied upon request.
EPA has addressed this due process question in the discussion of
public comments on Sec. 22.4(b). Also as noted above in the discussion
of Sec. 22.4(b), the Agency has implemented adequate measures to ensure
the impartiality of the Regional Judicial Officers. If a litigant has
reason to believe that a Regional Judicial Officer is biased, then a
motion for disqualification pursuant to Sec. 22.4(d) may be submitted.
As to Dow's suggestion of providing parties the option of having
APA procedures apply upon request, Congress has provided for this
option only in section 1414(g)(3)(B) of the Safe Drinking Water Act. If
APA procedures were provided upon respondent's request in all
proceedings brought under subpart I, the regulated community, rather
than EPA, would be determining the course of the Agency's enforcement
program, and imbalances of Agency resources might result. Nevertheless,
the Agency acknowledges that, on occasion, a complainant may not
recognize until after a case has been commenced that the subpart I
procedures would not be adequate, for example, where intervention,
amici, subpoena, or additional discovery appear crucial to the case, or
where the issues are such that the proceeding would greatly benefit
from the unquestioned independence of an ALJ. In those instances, a
complainant may move to withdraw the complaint without prejudice in
order that the proceeding be recommenced as an APA proceeding, or
either party might move that subpart I should not be applied to the
proceeding.
As to paragraph (b), Dow and CEEC suggest deleting the reference to
Sec. 22.11 and allowing intervention and amici curiae. This would be
inconsistent with the purpose of subpart I, that is to have simpler and
more efficient proceedings. To add to subpart I more of the provisions
of subparts A through G would frustrate this purpose. If a party
believes that intervention or amici curiae would be of crucial
importance to a particular case, then as discussed above, it may file a
motion requesting withdrawal or dismissal without prejudice to allow
refiling under the APA procedures.
c. Final Rule. EPA has revised Sec. 22.50(a) to limit the
applicability of subpart I to cases under CWA sections 309(g)(2)(A) and
311(b)(6)(B)(i) (33 U.S.C. 1319(g)(2)(A) and 1321(b)(6)(B)(i)), and
SDWA sections 1414(g)(3)(B) and 1423(c) (42 U.S.C. 300g-3(g)(3)(B) and
300h-2(c)). EPA adopts Sec. 22.50(b) as proposed, with one correction.
The February 25, 1998, FR notice included a typographical error in
Sec. 22.50(b). The section number that appeared as ``22011'' has been
corrected to read ``22.1.''
26. Presiding Officer (40 CFR 22.51)
a. Summary of Proposed Rule. The proposed Sec. 22.51 presents the
key modification to the CROP facilitating use of the CROP in
administrative adjudications not subject to section 554 of the APA,
that the Presiding Officer
[[Page 40170]]
need not be an Administrative Law Judge (``ALJ''). Instead, the
Presiding Officer in a ``non-APA'', subpart I proceeding would be a
Regional Judicial Officer (``RJO''). Unlike an APA proceeding, where an
RJO presides until an answer is filed and the RJO is replaced by an
ALJ, in a subpart I proceeding the RJO serves as Presiding Officer
until the initial decision has become final or has been appealed.
b. Significant Comments and EPA Responses. Several commenters
objected to EPA attorneys, rather than ALJs, serving as Presiding
Officers in subpart I proceedings. Their objections have been fully
addressed in the discussion of public comments on the proposed
Sec. 22.4, and are not repeated here.
c. Final Rule. EPA has adopted Sec. 22.51 as proposed, but with a
minor addition. EPA has observed that while Sec. 22.51 provides that
the Presiding Officer ``shall rule on all motions until an initial
decision has become final or has been appealed'', it does not
explicitly state that the Presiding Officer will conduct the hearing.
As is clear from the preamble to the proposed rule, and from the
responses of the commenters, conduct of the hearing is the key element
in the Presiding Officer's role in such cases, as it is for ALJ
Presiding Officers in APA cases. In order to avoid any future
confusion, the final rule includes an explicit statement that: ``The
Presiding Officer shall conduct the hearing, and rule on all motions *
* *''
27. Information Exchange and Discovery (40 CFR 22.52)
a. Summary of Proposed Rule. The proposed Sec. 22.52 would define
the parameters of an information exchange in non-APA proceedings.
Parties would be subject to the prehearing exchange authorized in
Sec. 22.19(a), but most additional discovery would be prohibited under
Subpart I. The proposed Sec. 22.52 would require the respondent to
provide in its prehearing exchange information concerning any economic
benefit it may have enjoyed as a result of the alleged non-compliance
or a failure to act.
Although proposed Sec. 22.52 would prohibit most additional
discovery that would otherwise be allowed under Sec. 22.19(e), the
complainant would be entitled to discovery of information concerning
respondent's economic benefit of non-compliance and of financial
records probative of respondent's ability to pay a penalty.
b. Significant Comments and EPA Response. CMA/API and CEEC believe
that it is unfair to prohibit discovery by private parties but
authorize discovery by EPA for penalty information. CMA/API and Dow
oppose requiring respondents to provide information on economic benefit
in the prehearing exchange because this requirement imposes a burden
only upon the respondent. CMA/API argues that the prehearing exchange
burdens for each party should be made equivalent, particularly given
EPA's far greater information collection powers.
Dow asserts that Sec. 22.52 is unnecessary because Sec. 22.19(d)
already provides ways to avoid excessive discovery. Dow argues that
Sec. 22.19(d) provides ample authority for the Presiding Officer to
protect against excessive or abusive discovery practices. Dow expresses
concern that the comparatively less formal procedures of subpart I
might be used in very complex cases involving a multitude of separate
alleged violations. In such cases, it is likely that additional
discovery would be needed and appropriate. Dow urges that EPA abandon
the subpart I modifications and apply the standard CROP procedures
universally, as this would allow Presiding Officers to tailor the scope
of discovery to the needs of each individual case.
While EPA acknowledges that the prehearing exchange requirements
and discovery limits of the proposed Sec. 22.52 are asymmetric, EPA
disagrees with the contention that they are unfair. The comments
suggest that the commenters perceive ``fairness'' to require that the
parties be exact equals subject to the exact same rules. However, the
parties are never equals in a CROP proceeding: The complainant alone
carries the burden of persuasion, and carries most of the burden of
presentation. Yet the statutes generally require penalty assessment to
be based in large part on information held by the respondent, not the
complainant. The proposed discovery regime redresses this imbalance in
knowledge and burden by requiring a respondent to provide such
information to the party required to put it forward to the neutral.
There is nothing ``unfair'' about this arrangement. Indeed, it is a
logistical necessity.
Being subject to such discovery does not invest in the respondent a
reciprocal right to make discovery of the complainant on ``fairness''
grounds. EPA is not obligated to provide additional discovery in order
to satisfy the requirements of the due process clause. Matthews v.
Eldridge, 424 U.S. 319, 344-45 (1976); also see Chemical Waste
Management, Inc. v. U.S.E.P.A., 873 F.2d 1477 (D.C. Cir. 1989).
Non-APA proceedings are typically for enforcement cases that do not
raise significant factual or legal issues. See, e.g., Sen. Rep. 99-50
(99th Cong., 1st. Sess.), reprinted in ``A Legislative History of the
Water Quality Act of 1987, Congressional Research Service of the
Library of Congress (November 1988) at 1448, which states:
``To serve its intended function, this administrative
enforcement tool should be tailored to the less complex cases for
which it is intended. Administrative enforcement should be as
flexible and unencumbered by procedural complexities as possible,
consistent with due process considerations while providing for
effective input by citizens who may be affected by the violations.
Administrative cases should be resolved promptly * * *. Because
administrative penalty assessments will be used in smaller cases and
often will be based on discharge monitoring reports routinely
submitted by permittees, formal administrative procedures strictly
in accordance with the formal adjudicatory procedures of the
Administrative Procedures [sic] Act are not required. EPA therefore
has the flexibility to streamline its decisionmaking process and
procedural rules through promulgation of procedural regulations that
provide appropriate due process protection.''
Requiring that subpart I provide discovery equal to Sec. 22.19(e)
would undermine the objective of subpart I: non-APA proceedings that
are more efficient than APA proceedings. See, Superfund
Reauthorization: Judicial and Legal Issues, Oversight Hearings before
the Subcommittee on Administrative Law and Governmental Relations of
the House Judiciary Committee, 99 Cong. 1st Sess. 64 (1985)(statement
of F. Henry Habicht II, Assistant Attorney General, Land and Resources
Division)(EPA objected to requiring APA procedures for imposition of
administrative penalties under CERCLA, stating that such procedures
were too lengthy and laborious). Section 22.52 accounts for most of the
streamlining in these non-APA procedures relative to the APA
procedures. If the same procedures apply to subpart I proceedings as
apply to APA proceedings, the only differences remaining are the
qualifications and independence of the adjudicator and the absence of
the right to interlocutory appeal. Congress intended that the non-APA
process provide faster, simpler, less costly and more efficient
administrative proceedings, not just an additional corps of
adjudicators.
The types of cases that are to be brought under the non-APA
provisions are typically factually simple. Expanding discovery in
subpart I would raise costs to the litigants and invite
[[Page 40171]]
delaying motions and fishing expeditions. The inquiry should be
centered on the conduct of the respondent and any penalty assessment
factors. Allowing additional discovery of EPA beyond the prehearing
exchange would not serve those goals, but would raise the complexity
and cost of proceedings that Congress intended to be as unencumbered as
possible.
c. Final Rule. EPA adopts Sec. 22.52 as proposed. EPA notes that
this section does not affect the authority of the Presiding Order to
require the attendance of witnesses by subpoena, if authorized by the
Act, in accordance with Sec. 22.4(c).
28. Interlocutory Orders or Rulings (40 CFR 22.53)
a. Summary of Proposed Rule. The proposed Sec. 22.53 stated that,
for proceedings subject to subpart I, ``[i]nterlocutory review as set
forth in Sec. 22.29 is prohibited.''
b. Significant Comments and EPA Response. Dow argues that the
prohibition on interlocutory appeals in subpart I proceedings is
unnecessary, because Sec. 22.29 already imposes substantial limits on
interlocutory appeals. Dow believes that interlocutory appeal is
warranted in any case where the criteria of Sec. 22.29(b) are met
(i.e., ``(1) The order or ruling involves an important question of law
or policy concerning which there is substantial grounds for difference
of opinion; and (2) either an immediate appeal from the order or ruling
will materially advance the ultimate termination of the proceeding, or
review after the final order is issued will be inadequate or
ineffective.'')
EPA intends to use subpart I primarily for cases where EPA has
substantial prior enforcement experience, which do not appear to
present significant new issues of law, and where the sanctions sought
are relatively modest. In these circumstances, meritless appeals are
likely to greatly exceed meritorious appeals. Because the likely
advantages of interlocutory appeal are outweighed by the anticipated
delays that would result from meritless appeals, the final rule retains
the prohibition on interlocutory appeal in subpart I cases.
c. Final Rule. In today's final rule, EPA adopts the proposed
prohibition on interlocutory appeals in subpart I cases. However, EPA
has concluded that the proposed Sec. 22.53 is redundant, because
Sec. 22.50(b) states that Sec. 22.29, which provides for interlocutory
appeals, does not apply to subpart I proceedings. Although the proposed
Sec. 22.53 highlighted this provision for purposes of soliciting public
comment, EPA has concluded that this redundancy is inappropriate in the
final rule. Accordingly, EPA has deleted the proposed Sec. 22.53. The
prohibition against interlocutory appeals in subpart I cases is
accomplished through Sec. 22.50(b)'s exclusion of Sec. 22.29.
29. Clean Air Act Field Citations
a. Summary of Proposed Rule. EPA proposed that revisions to the
CROP would supersede and replace the rules governing non-APA hearings
on field citations under section 113(d)(3) of the Clean Air Act
(``CAA''). The Field Citation rules were proposed (59 FR 22776, May 3,
1994) but not yet final at the time EPA proposed the CROP revisions,
and EPA expected that the Field Citation rules would be published as a
final rule before the CROP revisions. The preamble to the proposed CROP
stated that EPA intended to use the procedures that would appear as
subpart B of the Field Citation rules until the CROP revisions were
made final.
b. Significant Comments and EPA Response. CMA/API, Dow and CEEC
opposed the interim use of the procedures in subpart B of the Field
Citation rules pending publication of the final CROP. These commenters
urged EPA to postpone publication of the Field Citation rules until
after publication of the final CROP procedures
EPA agrees that commencing a field citation program using one set
of procedures for a short time before switching to the CROP procedures
could result in unnecessary burdens and confusion. EPA has postponed
issuing a final rule governing hearing procedures for CAA field
citations.
c. Final Rule. Today's final rule does not contain the provisions
in the proposed rule relating to the removal from the CFR of procedures
for CAA field citations. A decision on appropriate hearing procedures
for field citations, inclusion in subpart I of the CROP, will be made
when the Field Citation rules are finalized.
30. Other Comments Not Related to a Particular Section of the Proposed
Rule
a. Significant Comments and EPA Response. CEEC suggests that the
CROP should provide respondents an opportunity to review enforcement
related press releases and raise objections to the Presiding Officer.
CEEC notes that unfair and misleading press releases reduce incentives
to reach settlement. EPA makes every effort to assure that press
releases are accurate, based on the information available to the Agency
at the time. A complainant may, at its discretion, allow a respondent
to review a press release before issuance, but EPA does not negotiate
the terms of enforcement related press releases. To include in the CROP
a provision providing respondents the right to review EPA's press
releases and raise objections to the Presiding Officer would create the
appearance that the government's ability to communicate with the public
is subject to a private party's control. EPA therefore rejects this
suggestion.
b. Final Rule. EPA has made no changes to the proposed rule in
response to CEEC's suggestion that the CROP should provide respondents
an opportunity to review enforcement related press releases and raise
objections to the Presiding Officer.
III. Miscellaneous Revisions
Through the process of analyzing the public comments, and pursuant
to EPA's own internal review of the proposed rule, EPA has identified a
number of typographical and drafting errors. In addition, EPA has
identified parts of the proposed rule that could be stated more
clearly, as mandated by Executive Order 12866 (September 30, 1993) and
the President's memorandum of June 1, 1998, which require each agency
to write all rules in plain language. In this final rule EPA adopts a
number of changes on its own initiative, and not in response to any
particular public comment. Where such revisions pertain to a section of
the proposed rule that received significant public comment, the changes
have already been discussed above. This section identifies the
remaining revisions, which pertain to sections of the proposed rule
that received no significant public comment. Public notice of proposed
rule making is not required ``when the agency for good cause finds * *
* that notice and public procedure thereon are impractical,
unnecessary, or contrary to the public interest.'' 5 U.S.C.
553(b)(3)(B). EPA has determined that the following revisions do not
significantly affect respondents' substantive or procedural rights.
Accordingly, EPA has determined that providing an additional round of
public notice before making these minor changes to this procedural rule
would be unnecessary and contrary to the public interest.
A. Section Numbering
EPA has converted those section numbers that had contained a
preceding zero (Secs. 22.01, 22.02, etc.) to conform the CROP to the
standard numbering of the Code of Federal Regulations set out in the
regulations of the Administrative
[[Page 40172]]
Committee of the Federal Register at CFR 21.11 (Secs. 22.1, 22.2, etc.)
in this final rule. For simplicity, this preamble uses the new
numbering system throughout, even when referring to sections of the
proposed rule or the 1980 CROP.
B. Definitions (40 CFR 22.3)
EPA has deleted from the definition of ``Administrative Law Judge''
the superfluous Public Law citation.
EPA has revised the definition of ``Clerk of the Board'' to clarify
that it means the Clerk of the Environmental Appeals Board.
In the definition of ``Complainant'', EPA has replaced the
ambiguous word ``decision'' with ``adjudication''.
Under the proposed Sec. 22.3, ``Hearing means a hearing on the
record open to the public and conducted under these Consolidated Rules
of Practice.'' It is not clear from this definition whether the hearing
is the proceeding as a whole, or just the oral evidentiary hearing.
``Hearing'' is used throughout the CROP, most often in reference to the
oral evidentiary hearing (e.g., prehearing exchange, motion to reopen a
hearing), and sometimes in the more general sense (e.g., in the
definition of ``party'' and ``Hearing Clerk''). Moreover, the
definition of hearing does not acknowledge the fact that protection of
confidential business information may require that all or part of a
hearing be closed to the public. EPA has clarified the definition of
``hearing'' as follows:
Hearing means an evidentiary hearing on the record, open to the
public (to the extent consistent with Sec. 22.22(a)(2)), conducted
as part of a proceeding under these Consolidated Rules of Practice.
Although the terms ``proceeding'' and ``action'' are used
throughout the CROP, they have not previously been defined. In the
final rule, EPA avoids the term ``action'' in reference to a particular
proceeding, and has added to the CROP the following definition:
Proceeding means the entirety of a single administrative
adjudication, from the filing of the complaint through the issuance
of a final order, including any action on a motion to reconsider
under Sec. 22.32.
For consistency with these new definitions of ``hearing'' and
``proceeding'', EPA has substituted ``proceeding'' for ``hearing'' in
the definition of ``party.''
EPA has simplified the definition of ``Initial Decision'' by
deleting the superfluous phrase ``based on the record of the
proceedings out of which it arises.''
EPA has converted the definition of ``permit'' into a definition of
a new term ``Permit Action.'' By its nature, the CROP provides a set of
common procedures applicable to various administrative proceedings
under a large number of regulatory statutes, each of which have their
own specific terminology. In order to avoid conflict between terms used
differently in different regulatory programs, EPA has adopted the new
term ``Permit Action'' as a generic term applicable solely within the
CROP. This change allows EPA to replace the unwieldy ``permit
revocation, termination or suspension'' language elsewhere in the CROP
with ``Permit Action,'' improving the clarity of the CROP and
facilitating any future efforts to bring other permit actions within
the scope of the CROP.
EPA has deleted from this definition the references to permits
issued under section 402(a) of the Clean Water Act (33 U.S.C. 1342(a))
and permits issued under sections 3005(d) and 3008(h) of the Solid
Waste Disposal Act (42 U.S.C. 6925(d) and 6928(h)). EPA anticipates
that these references will be restored when the Round Two permit
streamlining rule (61 FR 65,268) is finalized, involving revocation of
40 CFR part 124, subpart E. In addition, EPA has added a parallel
citation to the U.S. Code.
EPA has made two revisions to the definition of ``Regional Hearing
Clerk.'' First, EPA has added a clause to the first sentence,
specifying that the Regional Hearing Clerk ``shall be neutral in every
proceeding.'' Second, EPA has revised the second sentence, which in the
proposed rule states that ``Correspondence may be addressed to the
Regional Hearing Clerk, U.S. Environmental Protection Agency (address
of Regional Office--see Appendix A).'' EPA has created a new
Sec. 22.14(a)(7) which requires that the complaint contain the address
of the Regional Hearing Clerk, which should provide more effective and
more specific notice than the reference to Appendix A contained in the
definition of Regional Hearing Clerk. EPA has therefore revised this
sentence as follows: ``Correspondence with the Regional Hearing Clerk
shall be addressed to the Regional Hearing Clerk at the address
specified in the complaint.''
EPA has revised the definition of ``Respondent'' for clarity,
replacing ``any person proceeded against in the complaint'' with ``any
person against whom the complaint states a claim for relief.''
C. Filing and Service of Rulings, Orders and Decisions (40 CFR 22.6)
The proposed revisions to Sec. 22.6 were intended to delete certain
references as surplusage and to allow documents issued by adjudicators
to be served by any reliable commercial delivery service. The proposed
deletions, however, are inconsistent with the current practice that
copies of all rulings, orders and decisions (except initial decisions)
issued by an Administrative Law Judge are served on all parties by the
Administrative Law Judge's legal staff assistant. Copies of all initial
decisions are served on the parties by the Regional Hearing Clerk.
Section 22.6 is amended to be consistent with this practice.
As noted in the response to comments on Sec. 22.5(b)(2), the U.S.
Postal Service considers overnight express and priority mail to be
forms of first class mail. In addition, the proposed rule makes no
mention of EPA's internal mail system. EPA's internal mail delivery
system has proven to be generally effective, and it is in fact
ultimately responsible for delivering first class mail (including
certified mail) to individual EPA personnel. To address these points,
EPA has revised Sec. 22.6 to allow service ``by first class mail
(including certified mail, return receipt requested, Overnight Express
and Priority Mail), by EPA's internal mail, or by any reliable
commercial delivery service.''
EPA has also replaced the expression ``Clerk of the Environmental
Appeals Board'' with ``Clerk of the Board,'' using the term defined at
Sec. 22.3(a) for consistency.
D. Examination of Documents Filed (40 CFR 22.9)
EPA has replaced the term ``Environmental Appeals Board'' with
``Clerk of the Board,'' to specify the official document custodian.
E. Consolidation and Severance (40 CFR 22.12)
EPA has added ``or the Environmental Appeals Board'' to
Sec. 22.12(a) and (b), in order to clarify that the EAB has authority
to consolidate or sever cases. This authority applies to cases pending
before the EAB and to cases before a Presiding Officer through
interlocutory appeal of a denial of a motion to consolidate or sever.
In order to keep subpart I proceedings expeditious, EPA has also added
a new requirement that subpart I proceedings may be consolidated only
where all parties agree. This should eliminate the risk of litigation
delays over whether one proceeding might be consolidated with another.
[[Page 40173]]
F. Motions (40 CFR 22.16)
EPA is adopting Sec. 22.16 as proposed, except that a reference to
Sec. 22.51 has been added to Sec. 22.16(c) in order to avoid any
apparent conflict between Sec. 22.16(c) and Sec. 22.51, and the
implication that an ALJ must rule on motions in proceedings under
subpart I. EPA has also rearranged the sentences of Sec. 22.16(a) to
improve clarity. To conform to the preferred style of the U.S.
Government Printing Office, EPA has revised Sec. 22.16(b) to state the
time allowed for responses and replies with the numerals ``15'' and
``10'', respectively.
G. Record of the Prehearing Conference (40 CFR 22.19(c))
The scope of the requirement that the Presiding Officer prepare and
file ``for the record a written summary of the action taken'' at a
prehearing conference is not clear. Just as a transcript of a
prehearing conference may discourage frank and open discussion, the
implication that the Presiding Officer may produce a formal summary of
the conference may also reduce the effectiveness of such conferences.
Moreover, the CROP is not clear whether the Presiding Officer's summary
is supposed to constitute a finding of law or fact, nor is it clear
whether the parties have the right to object and change the summary.
EPA has revised the last two sentences in order to clarify that the
Presiding Officer is only responsible for ensuring that the record of
the proceeding includes any stipulations and agreements reached, and
rulings and orders issued, during the conference.
H. Accelerated Decision; Decision to Dismiss (40 CFR 22.20)
Section 22.20(b)(2) provides for accelerated decisions and
decisions to dismiss some but not all issues or claims in a proceeding.
The last sentence requires that the Presiding Officer ``shall issue an
interlocutory order specifying the facts which appear substantially
uncontroverted, and the issues and claims upon which the hearing will
proceed.'' This sentence is somewhat ambiguous, in that it might be
construed as requiring an interlocutory order separate from, and in
addition to, any partial accelerated decision or decision to dismiss
certain counts. Such an interpretation would be unwarranted, would
unnecessarily complicate the CROP, and would be contrary to the
customary practice of the Agency's ALJs. Rule 56(d) of the Federal
Rules of Civil Procedure, from which this language is derived, does not
require a separate interlocutory order specifying the facts which
appear substantially uncontroverted, and the issues and claims upon
which the hearing will proceed. To clarify that a single decision or
order can accomplish all the requirements of Sec. 22.20(b)(2), EPA has
amended the last sentence of that paragraph to state that: ``The
partial accelerated decision or the order dismissing certain counts
shall specify the facts which appear substantially uncontroverted, and
the issues and claims upon which the hearing will proceed.''
I. Assignment of Presiding Officer; Scheduling a Hearing (40 CFR 22.21)
EPA has amended Sec. 22.21(a) to clarify that the Regional Hearing
Clerk forwards copies, not originals, of the complaint, answer, and
other documents in the record to the Chief Administrative Law Judge
upon receipt of the answer.
According to Sec. 22.20(a), an accelerated decision is appropriate
``if no genuine issue of material fact exists and a party is entitled
to judgment as a matter of law.'' Where this standard is not met, a
hearing is appropriate. EPA has revised Sec. 22.21(b) to use the same
criterion as Sec. 22.20(a): The first sentence of Sec. 22.21(b) now
states that, ``The Presiding Officer shall hold a hearing if the
proceeding presents genuine issues of material fact.'' In addition to
making Sec. 22.20 and Sec. 22.21 more clearly complementary, this
change clarifies that the mere request for a hearing does not require
that a hearing be held. Neither Sec. 22.21(b) nor Sec. 22.15(c) of the
1980 CROP required an oral evidentiary hearing merely upon respondent's
request for a hearing. See, e.g., In re Green Thumb Nursery, Inc., 6
E.A.D. 782 (EAB 1997) (holding that there is no right to an oral
evidentiary hearing).
EPA has also expanded the notice period before a hearing from 20 to
30 days. This will allow the parties, their attorneys, and witnesses
additional time to make travel arrangements and to prepare for the
hearing.
As noted in the discussion of Sec. 22.19(e), EPA has added to
Sec. 22.21(b) an explicit statement of the Presiding Officer's
authority (where provided by the Act) to require the attendance of
witnesses or the production of documentary evidence by subpoena. This
statement includes criteria for issuing subpoenas that appeared in the
1980 CROP (see, e.g., Sec. 22.37(f)(1).
J. Offers of Proof (40 CFR 22.23(b))
The proposed Sec. 22.23(b) provides for offers of proof regarding
``evidence * * * excluded from the record.'' Although the Presiding
Officer may decline to admit certain documents, exhibits or testimony
into evidence, and may refuse to consider them in his or her decision,
it is incorrect to describe the status of such documents as ``excluded
from the record.'' This information is indisputably part of ``the
record'' of the proceeding for purposes of appellate review.
Accordingly, EPA has revised this paragraph to state that ``Whenever
the Presiding Officer denies a motion for admission into evidence, the
party offering the information may make an offer of proof * * *.'' For
purposes of clarity, EPA has revised this paragraph (b) using the word
``information'' in place of ``evidence'' where the subject is
information which has not been admitted into evidence.
K. Proposed Findings, Conclusions, and Order (40 CFR 22.26)
Section 22.26 provides that the Presiding Officer must allow 20
days after receipt of notice of the availability of the transcript
before requiring the parties to file proposed findings of fact,
conclusions of law, and a proposed order. In the response to public
comments on Sec. 22.25 above, EPA announced that it would amend that
section to allow motions to conform the transcript to the actual
testimony to be filed ``within 30 days after receipt of the transcript,
or 45 days after the parties are notified of the availability of the
transcript, whichever is less.'' EPA has amended Sec. 22.26 in order to
assure that parties need not file proposed findings of fact,
conclusions of law, and the proposed order before the last date for
filing motions to conform the transcript to the actual testimony
pursuant to Sec. 22.26. For additional clarity, EPA has reorganized
this section and has also substituted the word ``filed'' for the
undefined term ``submitted.''
After the hearing, any party may file proposed findings of fact,
conclusions of law, and a proposed order, together with briefs in
support thereof. The Presiding Officer shall set a schedule for filing
these documents and any reply briefs, but shall not require them before
the last date for filing motions under Sec. 22.25 to conform the
transcript to the actual testimony. All submissions shall be in
writing, shall be served upon all parties, and shall contain adequate
references to the record and authorities relied on.
L. Motion to Reopen a Hearing (40 CFR 22.28)
The CROP does not specify when a motion is ``made'', so in the
interest of clarity, EPA has substituted the word ``filed'' for
``made'' in the first sentence of Sec. 22.28(a). To conform to the
[[Page 40174]]
preferred style of the U.S. Government Printing Office, EPA has revised
Sec. 22.28(a) and (b) to state the time periods associated with a
motion to reopen a hearing with numerals only.
M. Interlocutory Appeals (40 CFR 22.29)
EPA has corrected a typographical error in the last sentence of the
proposed Sec. 22.29(a) ``forward the order or ruling to the
Environmental Appeals Board * * *.'' EPA has corrected a typographical
error in the proposed Sec. 22.29(b) by replacing the semicolon that
follows ``proceeding'' with a comma. EPA has also changed the title of
paragraph (c) from ``Decision'' to ``Interlocutory review.'' The CROP
does not specify when a motion is ``made'', so in the interest of
clarity, EPA has substituted the word ``filed'' for ``made'' in the
last sentence of Sec. 22.29(c). To conform to the preferred style of
the U.S. Government Printing Office, EPA has revised Sec. 22.29 to
state all time periods with numerals only.
N. Supplemental Rules Governing the Administrative Assessment of Civil
Penalties Under the Federal Insecticide, Fungicide, and Rodenticide Act
(40 CFR 22.35)
As discussed below, EPA has deleted Appendix A. In Sec. 22.35(b),
EPA has replaced the reference to Appendix A with a reference to 40 CFR
1.7, which contains the same EPA offices.
O. Supplemental Rules of Practice Governing the Administrative
Assessment of Civil Penalties Under the Clean Water Act (40 CFR 22.38)
EPA has revised Sec. 22.38(b) to provide notice to State agencies
in proceedings commenced without a complaint, pursuant to
Sec. 22.13(b). For ease of administration, EPA has made the timing of
such notice consistent with the public notice requirements of
Sec. 22.45(b)(1). Where Sec. 22.38(c) refers to section 509(b)(1) of
the CWA, EPA has added a parallel citation to 33 U.S.C. 1369(b)(1). As
discussed above, EPA deleted from the proposed Sec. 22.31(c) the
requirement specifying to whom payment of penalties must be made, in
favor of the more flexible requirement that complainant direct
respondent as to how payment should be made. In view of this change to
Sec. 22.31(c), the proposed Sec. 22.38(d) is unnecessary and has been
deleted.
P. Supplemental Rules Governing the Administrative Assessment of Civil
Penalties Under CERCLA Section 109 (40 CFR 22.39)
The proposed Sec. 22.39(b) says petitions for judicial review must
be filed ``within 30 days of the date the order making the assessment
was issued.'' As the CROP does not specify when an order is ``issued,''
EPA has amended this provision to state that petitions for judicial
review must be filed within 30 days after the order has been served on
the parties. Where Sec. 22.39(b) refers to CERCLA section 109, EPA has
specified the relevant paragraphs and has added parallel citations to
the U.S. Code.
EPA has deleted from Sec. 22.39 a superfluous quotation mark that
appeared in the proposed rule.
Q. Supplemental Rules Governing The Administrative Assessment of Civil
Penalties for Violations of Compliance Orders Issued to Owners or
Operators of Public Water Systems Under Part B of the Safe Drinking
Water Act (40 CFR 22.42)
EPA has revised the title of this section to explicitly state that
it applies to cases against owners or operators of public water
systems.
Where Sec. 22.42(a) refers to section 1414(g)(3)(B) of the SDWA,
EPA has added a parallel citation to 42 U.S.C. Sec. 300g-3(g)(3)(B).
EPA has also revised Sec. 22.42(b) to provide more certain notice
to respondents in subpart I proceedings of their right to choose that
hearings be conducted in accordance with section 554 of the APA.
Paragraph (b) now requires that the complaint must include notice of
such right to choose, and notice that the right is waived if respondent
does not indicate such choice in its answer. EPA has also revised the
final sentence to require that the hearing clerk notify the parties of
any changes if the pleadings have been recaptioned.
R. Supplemental Rules Governing the Administrative Assessment of Civil
Penalties Against a Federal Agency Under the Safe Drinking Water Act
(40 CFR 22.43)
Where Sec. 22.43(a) refers to section 1447(b) of the SDWA, EPA has
added a parallel citation to 42 U.S.C. Sec. 300j-6(b). To conform to
the preferred style of the U.S. Government Printing Office, EPA has
revised Sec. 22.43(b) and (c)(6) to state time periods with the numeral
``30''.
In paragraph (c)(6), EPA has added a missing comma after the word
``may'', and has clarified the reference to 40 CFR part 135. The
proposed rule required that the public notice include reference to the
requirements of 40 CFR 135. EPA has expanded this clause to state that
the public notice shall instruct prospective appellants to provide
copies of any appeal to the persons described in 40 CFR 135.11(a).
S. Supplemental Rules Governing the Termination of Permits Under
Section 402(a) of the Clean Water Act or Under Section 3005(d) of the
Resource Conservation and Recovery Act (40 CFR 22.44)
In the December 11, 1996, ``Round Two'' permit streamlining
proposed rule, EPA proposed to remove the procedures existing in 40 CFR
part 124, subpart E, for proceedings to revoke or suspend a permit
issued under section 402(a) of the Clean Water Act (33 U.S.C. 1342(a))
or to revoke or suspend a permit under sections 3005(d) and 3008(h) of
the Solid Waste Disposal Act (42 U.S.C. 6925(d) and 6928(h)). See 61 FR
65,268 (December 11, 1996). EPA proposed that such proceedings would be
conducted pursuant to the CROP procedures, and proposed CROP revisions
to accomplish this. These changes were incorporated into the February
25, 1998, proposed CROP revisions. As EPA has not yet finalized the
Round Two permit streamlining rule and 40 CFR part 124, subpart E
remains in effect, EPA has removed and reserved Sec. 22.44. EPA
anticipates that this section will be restored when the Round Two
permit streamlining rule is finalized.
T. Supplemental Rules Governing Public Notice and Comment in
Proceedings Under Section 309(g) of the Clean Water Act and Section
300h-2(c) of the Safe Drinking Water Act (40 CFR 22.45)
The proposed Sec. 22.45 contains several minor errors. The
paragraph number ``(1)'' was omitted from Sec. 22.45(b), and the
reference to ``paragraph (d)(1) of this section'' in Sec. 22.45(c)(3)
should instead refer to section (c)(1). EPA has corrected these
typographical errors in today's final rule. EPA has revised the heading
of this section to refer to ``section 1423(c)'' of the SDWA, rather
than ``section 300h-2(c),'' which is the U.S. Code section number.
In addition to correcting the above-mentioned errors, EPA has
expanded the scope of Sec. 22.45 so that these public comment
procedures shall apply to class II civil penalty cases under the oil
pollution provisions of Section 311(b)(6)(B)(ii) of the Clean Water Act
(33 U.S.C. 1321(b)(6)(B)(ii)). Section 311(b)(6)(C)(i) (33 U.S.C.
1321(b)(6)(C)(i)) requires that EPA provide public notice of and
reasonable opportunity to comment on the proposed issuance of a class
II civil penalty order.
EPA has also revised paragraphs (b)(1), (b)(2)(i), (c)(1) and
(c)(3) to better accommodate cases commenced through the filing of a
consent
[[Page 40175]]
agreement and final order pursuant to Sec. 22.13(b).
EPA has revised paragraphs (b)(1) and (c)(1) to clarify when the
public comment period begins and ends.
EPA has revised Sec. 22.45(b)(2)(ii) and (v) to clarify that
comments must be submitted to the Regional Hearing Clerk.
EPA has replaced the undefined word ``action'' in paragraphs
(b)(2)(ii), (c)(1)(i), (c)(4)(v)(C), (c)(4)(vii) and (c)(4)(viii), with
the word ``proceeding,'' which today's rule defines as discussed above.
In Sec. 22.45(b)(2)(iv), EPA has added the word ``and'' after the
semi-colon.
EPA has edited Sec. 22.45(c)(1)(iii) and (iv) to refer to
commenters in the singular, for consistency with the other provisions
of Sec. 22.45.
EPA has also revised Sec. 22.45(c)(4)(ii) to more clearly and
succinctly state that a commenter may petition to set aside a consent
agreement and proposed final order only on the basis that material
evidence was not considered.
EPA has edited the proposed Sec. 22.45(c)(4)(vii) to correct
deficiencies in grammar.
U. Appendices
The information in Appendix A of the proposed CROP (``Appendix'' in
the 1980 CROP) is redundant with 40 CFR 1.7. For that reason, EPA has
deleted Appendix A. This deletion should have no substantive effect.
Section 22.5(c)(4) requires that the complaint include complainant's
address, and the revised Sec. 22.14(a)(7) requires that the complaint
contain the address of the Regional Hearing Clerk, so respondents will
have ample notice of the addresses relevant to their cases.
EPA has observed that the names and addresses of the lock box banks
change often, and that it would be difficult to keep the proposed
Appendix B up to date. EPA has decided to delete the proposed Appendix
B, and instead to require under Sec. 22.14(a)(8) that the complaint
provide information on how to pay penalties.
IV. Administrative Requirements
A. The Regulatory Flexibility Act
Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, whenever an
agency is required to publish a general notice of rule making for any
proposed or final rule, it must prepare and make available for public
comment a regulatory flexibility analysis that describes the impact of
the rule on small entities, i.e., small business, small organizations,
and small governmental jurisdictions. The analysis is not required,
however, where the Administrator certifies that the rule will not have
a significant economic impact on a substantial number of small
entities.
This regulation will impose no significant costs on any small
entities, because it creates no new regulatory requirements, but
instead simplifies existing procedural rules. The overall economic
impact on small entities is therefore believed to be nominal, if any at
all. Accordingly, I hereby certify that this final regulation will not
have a significant impact on a substantial number of small entities.
B. Executive Order 12866
Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines ``significant regulatory action'' as
one that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
It has been determined that this rule is not a ``significant
regulatory action'' under the terms of Executive Order 12866 and is
therefore not subject to OMB review.
C. Paperwork Reduction Act
This rule contains no information collection activities and,
therefore, no information collection request (``ICR'') will be
submitted to the Office of Management and Budget for review in
compliance with the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA''),
Public Law 104-4, establishes requirements for Federal agencies to
assess the effects of their regulatory actions on State, local, and
tribal governments and the private sector. Under section 202 of the
UMRA, EPA generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures to State, local, and tribal
governments, in the aggregate, or to the private sector, of $100
million or more in any one year. When a written statement is needed for
an EPA rule, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, giving
them meaningful and timely input in the development of EPA regulatory
proposals with significant Federal intergovernmental mandates, and
informing, educating, and advising them on compliance with the
regulatory requirements.
Today's rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, or tribal
governments or the private sector. The rule imposes no enforceable
duties on any of these governmental entities or the private sector.
E. Executive Order 12875
Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and that creates a mandate upon a State, local
or tribal government, unless the Federal government provides the funds
necessary to pay the direct compliance costs incurred by those
governments, or EPA consults with those governments. If EPA complies by
consulting, Executive Order 12875 requires EPA to provide to the Office
of Management and Budget a description of the extent of EPA's prior
consultation with representatives of affected State, local and tribal
governments, the nature of their concerns, copies of any written
communications from the governments, and a statement supporting the
need to issue the regulation. In addition, Executive Order 12875
requires EPA to
[[Page 40176]]
develop an effective process permitting elected officials and other
representatives of State, local and tribal governments ``to provide
meaningful and timely input to the development of regulatory proposals
containing significant unfunded mandates.''
Today's rule does not create a mandate on State, local or tribal
governments. This rule does not impose any enforceable duties on these
entities. Instead, it merely revises the procedural rules governing
EPA's administrative enforcement proceedings.
F. Executive Order 13045
Executive Order 13045: ``Protection of Children from Environmental
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that: (1) is determined to be ``economically significant''
as defined under E.O. 12866, and (2) concerns an environmental health
or safety risk that EPA has reason to believe may have a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
This final rule is not subject to the E.O. 13045 because it is not
``economically significant'' as defined in E.O. 12866, and because it
does not involve decisions based on environmental health or safety
risks.
G. Executive Order 13084
Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments, or EPA consults with those
governments. If EPA complies by consulting, Executive Order 13084
requires EPA to provide to the Office of Management and Budget, in a
separately identified section of the preamble to the rule, a
description of the extent of EPA's prior consultation with
representatives of affected tribal governments, a summary of the nature
of their concerns, and a statement supporting the need to issue the
regulation. In addition, Executive Order 13084 requires EPA to develop
an effective process permitting elected and other representatives of
Indian tribal governments ``to provide meaningful and timely input in
the development of regulatory policies on matters that significantly or
uniquely affect their communities.''
Today's rule does not significantly or uniquely affect the
communities of Indian tribal governments. Accordingly, the requirements
of section 3(b) of Executive Order 13084 do not apply to this rule.
H. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C.
272 note), directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, business practices) that are developed or adopted
by voluntary consensus standards bodies. The NTTAA requires EPA to
provide Congress, through OMB, explanations when the Agency decides not
to use available and applicable voluntary consensus standards.
This action does not involve technical standards. Therefore, EPA
did not consider the use of any voluntary consensus standards.
I. Submission to Congress and the Comptroller General
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. The EPA will submit a report containing this rule and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. This rule is not a
``major rule'' as defined by 5 U.S.C. 804(2).
List of Subjects in 40 CFR Part 22
Environment protection, Administrative practice and procedure, Air
pollution control, Hazardous substances, Hazardous waste, Penalties,
Pesticides and pests, Poison prevention, Superfund, Waste treatment and
disposal, Water pollution control, Water supply.
Dated: June 30, 1999.
Carol M. Browner,
Administrator.
Therefore, 40 CFR part 22 is revised to read as follows:
PART 22--COSOLIDATED RULES OF PRACTICE GOVERNING THE ADMINISTRATIVE
ASSESSMENT OF CIVIL PENALTIES, ISSUANCE OF COMPLIANCE OR CORRECTIVE
ACTION ORDERS, AND THE REVOCATION, TERMINATION OR SUSPENSION OF
PERMITS
Subpart A--General
Sec.
22.1 Scope of this part.
22.2 Use of number and gender.
22.3 Definitions.
22.4 Powers and duties of the Environmental Appeals Board, Regional
Judicial Officer and Presiding Officer; disqualification,
withdrawal, and reassignment.
22.5 Filing, service, and form of all filed documents; business
confidentiality claims.
22.6 Filing and service of rulings, orders and decisions.
22.7 Computation and extension of time.
22.8 Ex parte discussion of proceeding.
22.9 Examination of documents filed.
Subpart B--Parties and Appearances
22.10 Appearances.
22.11 Intervention and non-party briefs.
22.12 Consolidation and severance.
Subpart C--Prehearing Procedures
22.13 Commencement of a proceeding.
22.14 Complaint.
22.15 Answer to the complaint.
22.16 Motions.
22.17 Default.
22.18 Quick resolution; settlement; alternative dispute resolution.
22.19 Prehearing information exchange; prehearing conference; other
discovery.
22.20 Accelerated decision; decision to dismiss.
Subpart D--Hearing Procedures
22.21 Assignment of Presiding Officer; scheduling the hearing.
22.22 Evidence.
22.23 Objections and offers of proof.
22.24 Burden of presentation; burden of persuasion; preponderance
of the evidence standard.
22.25 Filing the transcript.
22.26 Proposed findings, conclusions, and order.
Subpart E--Initial Decision and Motion to Reopen a Hearing
22.27 Initial decision.
22.28 Motion to reopen a hearing.
Subpart F--Appeals and Administrative Review
22.29 Appeal from or review of interlocutory orders or rulings.
22.30 Appeal from or review of initial decision.
[[Page 40177]]
Subpart G--Final Order
22.31 Final order.
22.32 Motion to reconsider a final order.
Subpart H--Supplemental Rules
22.33 [Reserved]
22.34 Supplemental rules governing the administrative assessment of
civil penalties under the Clean Air Act.
22.35 Supplemental rules governing the administrative assessment of
civil penalties under the Federal Insecticide, Fungicide, and
Rodenticide Act.
22.36 [Reserved]
22.37 Supplemental rules governing administrative proceedings under
the Solid Waste Disposal Act.
22.38 Supplemental rules of practice governing the administrative
assessment of civil penalties under the Clean Water Act.
22.39 Supplemental rules governing the administrative assessment of
civil penalties under section 109 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
22.40 [Reserved]
22.41 Supplemental rules governing the administrative assessment of
civil penalties under Title II of the Toxic Substance Control Act,
enacted as section 2 of the Asbestos Hazard Emergency Response Act
(AHERA).
22.42 Supplemental rules governing the administrative assessment of
civil penalties for violations of compliance orders issued to owners
or operators of public water systems under part B of the Safe
Drinking Water Act.
22.43 Supplemental rules governing the administrative assessment of
civil penalties against a federal agency under the Safe Drinking
Water Act.
22.44 [Reserved]
22.45 Supplemental rules governing public notice and comment in
proceedings under sections 309(g) and 311(b)(6)(B)(ii) of the Clean
Water Act and section 1423(c) of the Safe Drinking Water Act.
22.46-22.49 [Reserved]
Subpart I--Administrative Proceedings Not Governed by Section 554 of
the Administrative Procedure Act
22.50 Scope of this subpart.
22.51 Presiding Officer.
22.52 Information exchange and discovery.
Authority: 7 U.S.C. 136l; 15 U.S.C. 2610(c), 2615(a) and 2647;
33 U.S.C. 1319(g), 1321(b)(6), 1342(a), 1415(a) and (f) and 1418; 42
U.S.C. 300g-3(g)(3)(B), 300h-2(c), 300j-6(a), 6912, 6925, 6928,
6945(c)(2), 6961, 6991b, 6991e, 7413(d), 7524(c), 7545(d), 7547(d),
7601, 7607(a), 9609, 11045, and 14304.
Subpart A--General
Sec. 22.1 Scope of this part.
(a) These Consolidated Rules of Practice govern all administrative
adjudicatory proceedings for:
(1) The assessment of any administrative civil penalty under
section 14(a) of the Federal Insecticide, Fungicide, and Rodenticide
Act as amended (7 U.S.C. 136l(a));
(2) The assessment of any administrative civil penalty under
sections 113(d), 205(c), 211(d) and 213(d) of the Clean Air Act, as
amended (42 U.S.C. 7413(d), 7524(c), 7545(d) and 7547(d));
(3) The assessment of any administrative civil penalty or for the
revocation or suspension of any permit under section 105(a) and (f) of
the Marine Protection, Research, and Sanctuaries Act as amended (33
U.S.C. 1415(a) and (f));
(4)(i) The issuance of a compliance order pursuant to section
3008(a), section 4005(c)(2), section 6001(b), or section 9006(a) of the
Solid Waste Disposal Act (``SWDA'') (42 U.S.C. 6925(d) & (e), 6928(a),
6945(c)(2), 6961(b), or 6991e(a)); or the assessment of any
administrative civil penalty under sections 3008, 4005(c)(2), 6001(b),
and 9006 of the SWDA (42 U.S.C. 6928, 6945(c)(2), 6961(b), and 6991e),
except as provided in 40 CFR parts 24 and 124.
(ii) The issuance of corrective action orders under section 3008(h)
of the SWDA only when such orders are contained within an
administrative order which:
(A) Includes claims under section 3008(a) of the SWDA; or
(B) Includes a suspension or revocation of authorization to operate
under section 3005(e) of the SWDA; or
(C) Seeks penalties under section 3008(h)(2) of the SWDA for non-
compliance with a order issued pursuant to section 3008(h).
(iii) The issuance of corrective action orders under section
9003(h)(4) of the SWDA only when such orders are contained within
administrative orders which include claims under section 9006 of the
SWDA;
(5) The assessment of any administrative civil penalty under
sections 16(a) and 207 of the Toxic Substances Control Act (15 U.S.C.
2615(a) and 2647);
(6) The assessment of any administrative civil penalty under
sections 309(g) and 311(b)(6) of the Clean Water Act (33 U.S.C. 1319(g)
and 1321(b)(6));
(7) The assessment of any administrative civil penalty under
section 109 of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended (42 U.S.C. 9609);
(8) The assessment of any administrative civil penalty under
section 325 of the Emergency Planning and Community Right-To-Know Act
of 1986 (``EPCRA'') (42 U.S.C. 11045);
(9) The assessment of any administrative civil penalty under
sections 1414(g)(3)(B), 1423(c), and 1447(b) of the Safe Drinking Water
Act as amended (42 U.S.C. 300g-3(g)(3)(B), 300h-2(c), and 300j-6(b)),
or the issuance of any order requiring both compliance and the
assessment of an administrative civil penalty under section 1423(c);
(10) The assessment of any administrative civil penalty or the
issuance of any order requiring compliance under Section 5 of the
Mercury-Containing and Rechargeable Battery Management Act (42 U.S.C.
14304).
(b) The supplemental rules set forth in subparts H and I of this
part establish special procedures for proceedings identified in
paragraph (a) of this section where the Act allows or requires
procedures different from the procedures in subparts A through G of
this part. Where inconsistencies exist between subparts A through G of
this part and subpart H or I of this part, subparts H or I of this part
shall apply.
(c) Questions arising at any stage of the proceeding which are not
addressed in these Consolidated Rules of Practice shall be resolved at
the discretion of the Administrator, Environmental Appeals Board,
Regional Administrator, or Presiding Officer, as provided for in these
Consolidated Rules of Practice.
Sec. 22.2 Use of number and gender.
As used in these Consolidated Rules of Practice, words in the
singular also include the plural and words in the masculine gender also
include the feminine, and vice versa, as the case may require.
Sec. 22.3 Definitions.
(a) The following definitions apply to these Consolidated Rules of
Practice:
Act means the particular statute authorizing the proceeding at
issue.
Administrative Law Judge means an Administrative Law Judge
appointed under 5 U.S.C. 3105.
Administrator means the Administrator of the U.S. Environmental
Protection Agency or his delegate.
Agency means the United States Environmental Protection Agency.
Business confidentiality claim means a confidentiality claim as
defined in 40 CFR 2.201(h).
Clerk of the Board means the Clerk of the Environmental Appeals
Board, Mail Code 1103B, U.S. Environmental Protection Agency, 401 M St.
S.W., Washington, DC 20460.
Commenter means any person (other than a party) or representative
of such person who timely:
[[Page 40178]]
(1) Submits in writing to the Regional Hearing Clerk that he is
providing or intends to provide comments on the proposed assessment of
a penalty pursuant to sections 309(g)(4) and 311(b)(6)(C) of the Clean
Water Act or section 1423(c) of the Safe Drinking Water Act, whichever
applies, and intends to participate in the proceeding; and
(2) Provides the Regional Hearing Clerk with a return address.
Complainant means any person authorized to issue a complaint in
accordance with Secs. 22.13 and 22.14 on behalf of the Agency to
persons alleged to be in violation of the Act. The complainant shall
not be a member of the Environmental Appeals Board, the Regional
Judicial Officer or any other person who will participate or advise in
the adjudication.
Consolidated Rules of Practice means the regulations in this part.
Environmental Appeals Board means the Board within the Agency
described in 40 CFR 1.25.
Final order means:
(1) An order issued by the Environmental Appeals Board or the
Administrator after an appeal of an initial decision, accelerated
decision, decision to dismiss, or default order, disposing of the
matter in controversy between the parties;
(2) An initial decision which becomes a final order under
Sec. 22.27(c); or
(3) A final order issued in accordance with Sec. 22.18.
Hearing means an evidentiary hearing on the record, open to the
public (to the extent consistent with Sec. 22.22(a)(2)), conducted as
part of a proceeding under these Consolidated Rules of Practice.
Hearing Clerk means the Hearing Clerk, Mail Code 1900, U.S.
Environmental Protection Agency, 401 M St. SW., Washington, DC 20460.
Initial decision means the decision issued by the Presiding Officer
pursuant to Secs. 22.17(c), 22.20(b) or 22.27 resolving all outstanding
issues in the proceeding.
Party means any person that participates in a proceeding as
complainant, respondent, or intervenor.
Permit Action means the revocation, suspension or termination of
all or part of a permit issued under section 102 of the Marine
Protection, Research and Sanctuaries Act (33 U.S.C. 1412).
Person includes any individual, partnership, association,
corporation, and any trustee, assignee, receiver or legal successor
thereof; any organized group of persons whether incorporated or not;
and any officer, employee, agent, department, agency or instrumentality
of the Federal Government, of any State or local unit of government, or
of any foreign government.
Presiding Officer means an individual who presides in an
administrative adjudication until an initial decision becomes final or
is appealed. The Presiding Officer shall be an Administrative Law
Judge, except where Secs. 22.4(b), 22.16(c) or 22.51 allow a Regional
Judicial Officer to serve as Presiding Officer.
Proceeding means the entirety of a single administrative
adjudication, from the filing of the complaint through the issuance of
a final order, including any action on a motion to reconsider under
Sec. 22.32.
Regional Administrator means, for a case initiated in an EPA
Regional Office, the Regional Administrator for that Region or any
officer or employee thereof to whom his authority is duly delegated.
Regional Hearing Clerk means an individual duly authorized to serve
as hearing clerk for a given region, who shall be neutral in every
proceeding. Correspondence with the Regional Hearing Clerk shall be
addressed to the Regional Hearing Clerk at the address specified in the
complaint. For a case initiated at EPA Headquarters, the term Regional
Hearing Clerk means the Hearing Clerk.
Regional Judicial Officer means a person designated by the Regional
Administrator under Sec. 22.4(b).
Respondent means any person against whom the complaint states a
claim for relief.
(b) Terms defined in the Act and not defined in these Consolidated
Rules of Practice are used consistent with the meanings given in the
Act.
Sec. 22.4 Powers and duties of the Environmental Appeals Board,
Regional Judicial Officer and Presiding Officer; disqualification,
withdrawal, and reassignment.
(a) Environmental Appeals Board. (1) The Environmental Appeals
Board rules on appeals from the initial decisions, rulings and orders
of a Presiding Officer in proceedings under these Consolidated Rules of
Practice; acts as Presiding Officer until the respondent files an
answer in proceedings under these Consolidated Rules of Practice
commenced at EPA Headquarters; and approves settlement of proceedings
under these Consolidated Rules of Practice commenced at EPA
Headquarters. The Environmental Appeals Board may refer any case or
motion to the Administrator when the Environmental Appeals Board, in
its discretion, deems it appropriate to do so. When an appeal or motion
is referred to the Administrator by the Environmental Appeals Board,
all parties shall be so notified and references to the Environmental
Appeals Board in these Consolidated Rules of Practice shall be
interpreted as referring to the Administrator. If a case or motion is
referred to the Administrator by the Environmental Appeals Board, the
Administrator may consult with any EPA employee concerning the matter,
provided such consultation does not violate Sec. 22.8. Motions directed
to the Administrator shall not be considered except for motions for
disqualification pursuant to paragraph (d) of this section, or motions
filed in matters that the Environmental Appeals Board has referred to
the Administrator.
(2) In exercising its duties and responsibilities under these
Consolidated Rules of Practice, the Environmental Appeals Board may do
all acts and take all measures as are necessary for the efficient, fair
and impartial adjudication of issues arising in a proceeding, including
imposing procedural sanctions against a party who without adequate
justification fails or refuses to comply with these Consolidated Rules
of Practice or with an order of the Environmental Appeals Board. Such
sanctions may include drawing adverse inferences against a party,
striking a party's pleadings or other submissions from the record, and
denying any or all relief sought by the party in the proceeding.
(b) Regional Judicial Officer. Each Regional Administrator shall
delegate to one or more Regional Judicial Officers authority to act as
Presiding Officer in proceedings under subpart I of this part, and to
act as Presiding Officer until the respondent files an answer in
proceedings under these Consolidated Rules of Practice to which subpart
I of this part does not apply. The Regional Administrator may also
delegate to one or more Regional Judicial Officers the authority to
approve settlement of proceedings pursuant to Sec. 22.18(b)(3). These
delegations will not prevent a Regional Judicial Officer from referring
any motion or case to the Regional Administrator. A Regional Judicial
Officer shall be an attorney who is a permanent or temporary employee
of the Agency or another Federal agency and who may perform other
duties within the Agency. A Regional Judicial Officer shall not have
performed prosecutorial or investigative functions in connection with
any case in which he serves as a Regional Judicial Officer. A Regional
Judicial Officer shall not knowingly preside over a case involving any
party concerning whom the
[[Page 40179]]
Regional Judicial Officer performed any functions of prosecution or
investigation within the 2 years preceding the commencement of the
case. A Regional Judicial Officer shall not prosecute enforcement cases
and shall not be supervised by any person who supervises the
prosecution of enforcement cases, but may be supervised by the Regional
Counsel.
(c) Presiding Officer. The Presiding Officer shall conduct a fair
and impartial proceeding, assure that the facts are fully elicited,
adjudicate all issues, and avoid delay. The Presiding Officer may:
(1) Conduct administrative hearings under these Consolidated Rules
of Practice;
(2) Rule upon motions, requests, and offers of proof, and issue all
necessary orders;
(3) Administer oaths and affirmations and take affidavits;
(4) Examine witnesses and receive documentary or other evidence;
(5) Order a party, or an officer or agent thereof, to produce
testimony, documents, or other non-privileged evidence, and failing the
production thereof without good cause being shown, draw adverse
inferences against that party;
(6) Admit or exclude evidence;
(7) Hear and decide questions of facts, law, or discretion;
(8) Require parties to attend conferences for the settlement or
simplification of the issues, or the expedition of the proceedings;
(9) Issue subpoenas authorized by the Act; and
(10) Do all other acts and take all measures necessary for the
maintenance of order and for the efficient, fair and impartial
adjudication of issues arising in proceedings governed by these
Consolidated Rules of Practice.
(d) Disqualification, withdrawal and reassignment. (1) The
Administrator, the Regional Administrator, the members of the
Environmental Appeals Board, the Regional Judicial Officer, or the
Administrative Law Judge may not perform functions provided for in
these Consolidated Rules of Practice regarding any matter in which they
have a financial interest or have any relationship with a party or with
the subject matter which would make it inappropriate for them to act.
Any party may at any time by motion to the Administrator, Regional
Administrator, a member of the Environmental Appeals Board, the
Regional Judicial Officer or the Administrative Law Judge request that
he or she disqualify himself or herself from the proceeding. If such a
motion to disqualify the Regional Administrator, Regional Judicial
Officer or Administrative Law Judge is denied, a party may appeal that
ruling to the Environmental Appeals Board. If a motion to disqualify a
member of the Environmental Appeals Board is denied, a party may appeal
that ruling to the Administrator. There shall be no interlocutory
appeal of the ruling on a motion for disqualification. The
Administrator, the Regional Administrator, a member of the
Environmental Appeals Board, the Regional Judicial Officer, or the
Administrative Law Judge may at any time withdraw from any proceeding
in which he deems himself disqualified or unable to act for any reason.
(2) If the Administrator, the Regional Administrator, the Regional
Judicial Officer, or the Administrative Law Judge is disqualified or
withdraws from the proceeding, a qualified individual who has none of
the infirmities listed in paragraph (d)(1) of this section shall be
assigned as a replacement. The Administrator shall assign a replacement
for a Regional Administrator who withdraws or is disqualified. Should
the Administrator withdraw or be disqualified, the Regional
Administrator from the Region where the case originated shall replace
the Administrator. If that Regional Administrator would be
disqualified, the Administrator shall assign a Regional Administrator
from another Region to replace the Administrator. The Regional
Administrator shall assign a new Regional Judicial Officer if the
original Regional Judicial Officer withdraws or is disqualified. The
Chief Administrative Law Judge shall assign a new Administrative Law
Judge if the original Administrative Law Judge withdraws or is
disqualified.
(3) The Chief Administrative Law Judge, at any stage in the
proceeding, may reassign the case to an Administrative Law Judge other
than the one originally assigned in the event of the unavailability of
the Administrative Law Judge or where reassignment will result in
efficiency in the scheduling of hearings and would not prejudice the
parties.
Sec. 22.5 Filing, service, and form of all filed documents; business
confidentiality claims.
(a) Filing of documents. (1) The original and one copy of each
document intended to be part of the record shall be filed with the
Regional Hearing Clerk when the proceeding is before the Presiding
Officer, or filed with the Clerk of the Board when the proceeding is
before the Environmental Appeals Board. A document is filed when it is
received by the appropriate Clerk. The Presiding Officer or the
Environmental Appeals Board may by order authorize facsimile or
electronic filing, subject to any appropriate conditions and
limitations.
(2) When the Presiding Officer corresponds directly with the
parties, the original of the correspondence shall be filed with the
Regional Hearing Clerk. Parties who correspond directly with the
Presiding Officer shall file a copy of the correspondence with the
Regional Hearing Clerk.
(3) A certificate of service shall accompany each document filed or
served in the proceeding.
(b) Service of documents. A copy of each document filed in the
proceeding shall be served on the Presiding Officer or the
Environmental Appeals Board, and on each party.
(1) Service of complaint. (i) Complainant shall serve on
respondent, or a representative authorized to receive service on
respondent's behalf, a copy of the signed original of the complaint,
together with a copy of these Consolidated Rules of Practice. Service
shall be made personally, by certified mail with return receipt
requested, or by any reliable commercial delivery service that provides
written verification of delivery.
(ii)(A) Where respondent is a domestic or foreign corporation, a
partnership, or an unincorporated association which is subject to suit
under a common name, complainant shall serve an officer, partner, a
managing or general agent, or any other person authorized by
appointment or by Federal or State law to receive service of process.
(B) Where respondent is an agency of the United States complainant
shall serve that agency as provided by that agency's regulations, or in
the absence of controlling regulation, as otherwise permitted by law.
Complainant should also provide a copy of the complaint to the senior
executive official having responsibility for the overall operations of
the geographical unit where the alleged violations arose. If the agency
is a corporation, the complaint shall be served as prescribed in
paragraph (b)(1)(ii)(A) of this section.
(C) Where respondent is a State or local unit of government,
agency, department, corporation or other instrumentality, complainant
shall serve the chief executive officer thereof, or as otherwise
permitted by law. Where respondent is a State or local officer,
complainant shall serve such officer.
(iii) Proof of service of the complaint shall be made by affidavit
of the person making personal service, or by properly executed receipt.
Such proof of service
[[Page 40180]]
shall be filed with the Regional Hearing Clerk immediately upon
completion of service.
(2) Service of filed documents other than the complaint, rulings,
orders, and decisions. All filed documents other than the complaint,
rulings, orders, and decisions shall be served personally, by first
class mail (including certified mail, return receipt requested,
Overnight Express and Priority Mail), or by any reliable commercial
delivery service. The Presiding Officer or the Environmental Appeals
Board may by order authorize facsimile or electronic service, subject
to any appropriate conditions and limitations.
(c) Form of documents. (1) Except as provided in this section, or
by order of the Presiding Officer or of the Environmental Appeals Board
there are no specific requirements as to the form of documents.
(2) The first page of every filed document shall contain a caption
identifying the respondent and the docket number. All legal briefs and
legal memoranda greater than 20 pages in length (excluding attachments)
shall contain a table of contents and a table of authorities with page
references.
(3) The original of any filed document (other than exhibits) shall
be signed by the party filing or by its attorney or other
representative. The signature constitutes a representation by the
signer that he has read the document, that to the best of his
knowledge, information and belief, the statements made therein are
true, and that it is not interposed for delay.
(4) The first document filed by any person shall contain the name,
address, and telephone number of an individual authorized to receive
service relating to the proceeding. Parties shall promptly file any
changes in this information with the Regional Hearing Clerk, and serve
copies on the Presiding Officer and all parties to the proceeding. If a
party fails to furnish such information and any changes thereto,
service to the party's last known address shall satisfy the
requirements of paragraph (b)(2) of this section and Sec. 22.6.
(5) The Environmental Appeals Board or the Presiding Officer may
exclude from the record any document which does not comply with this
section. Written notice of such exclusion, stating the reasons
therefor, shall be promptly given to the person submitting the
document. Such person may amend and resubmit any excluded document upon
motion granted by the Environmental Appeals Board or the Presiding
Officer, as appropriate.
(d) Confidentiality of business information. (1) A person who
wishes to assert a business confidentiality claim with regard to any
information contained in any document to be filed in a proceeding under
these Consolidated Rules of Practice shall assert such a claim in
accordance with 40 CFR part 2 at the time that the document is filed. A
document filed without a claim of business confidentiality shall be
available to the public for inspection and copying.
(2) Two versions of any document which contains information claimed
confidential shall be filed with the Regional Hearing Clerk:
(i) One version of the document shall contain the information
claimed confidential. The cover page shall include the information
required under paragraph (c)(2) of this section and the words
``Business Confidentiality Asserted''. The specific portion(s) alleged
to be confidential shall be clearly identified within the document.
(ii) A second version of the document shall contain all information
except the specific information claimed confidential, which shall be
redacted and replaced with notes indicating the nature of the
information redacted. The cover page shall state that information
claimed confidential has been deleted and that a complete copy of the
document containing the information claimed confidential has been filed
with the Regional Hearing Clerk.
(3) Both versions of the document shall be served on the Presiding
Officer and the complainant. Both versions of the document shall be
served on any party, non-party participant, or representative thereof,
authorized to receive the information claimed confidential by the
person making the claim of confidentiality. Only the redacted version
shall be served on persons not authorized to receive the confidential
information.
(4) Only the second, redacted version shall be treated as public
information. An EPA officer or employee may disclose information
claimed confidential in accordance with paragraph (d)(1) of this
section only as authorized under 40 CFR part 2.
Sec. 22.6 Filing and service of rulings, orders and decisions.
All rulings, orders, decisions, and other documents issued by the
Regional Administrator or Presiding Officer shall be filed with the
Regional Hearing Clerk. All such documents issued by the Environmental
Appeals Board shall be filed with the Clerk of the Board. Copies of
such rulings, orders, decisions or other documents shall be served
personally, by first class mail (including by certified mail or return
receipt requested, Overnight Express and Priority Mail), by EPA's
internal mail, or any reliable commercial delivery service, upon all
parties by the Clerk of the Environmental Appeals Board, the Office of
Administrative Law Judges or the Regional Hearing Clerk, as
appropriate.
Sec. 22.7 Computation and extension of time.
(a) Computation. In computing any period of time prescribed or
allowed in these Consolidated Rules of Practice, except as otherwise
provided, the day of the event from which the designated period begins
to run shall not be included. Saturdays, Sundays, and Federal holidays
shall be included. When a stated time expires on a Saturday, Sunday or
Federal holiday, the stated time period shall be extended to include
the next business day.
(b) Extensions of time. The Environmental Appeals Board or the
Presiding Officer may grant an extension of time for filing any
document: upon timely motion of a party to the proceeding, for good
cause shown, and after consideration of prejudice to other parties; or
upon its own initiative. Any motion for an extension of time shall be
filed sufficiently in advance of the due date so as to allow other
parties reasonable opportunity to respond and to allow the Presiding
Officer or Environmental Appeals Board reasonable opportunity to issue
an order.
(c) Service by mail or commercial delivery service. Service of the
complaint is complete when the return receipt is signed. Service of all
other documents is complete upon mailing or when placed in the custody
of a reliable commercial delivery service. Where a document is served
by first class mail or commercial delivery service, but not by
overnight or same-day delivery, 5 days shall be added to the time
allowed by these Consolidated Rules of Practice for the filing of a
responsive document.
Sec. 22.8 Ex parte discussion of proceeding.
At no time after the issuance of the complaint shall the
Administrator, the members of the Environmental Appeals Board, the
Regional Administrator, the Presiding Officer or any other person who
is likely to advise these officials on any decision in the proceeding,
discuss ex parte the merits of the proceeding with any interested
person outside the Agency, with any Agency staff member who performs a
prosecutorial or investigative function in such proceeding or a
factually related proceeding, or with any representative of such
person. Any ex parte memorandum or other communication
[[Page 40181]]
addressed to the Administrator, the Regional Administrator, the
Environmental Appeals Board, or the Presiding Officer during the
pendency of the proceeding and relating to the merits thereof, by or on
behalf of any party shall be regarded as argument made in the
proceeding and shall be served upon all other parties. The other
parties shall be given an opportunity to reply to such memorandum or
communication. The requirements of this section shall not apply to any
person who has formally recused himself from all adjudicatory functions
in a proceeding, or who issues final orders only pursuant to
Sec. 22.18(b)(3).
Sec. 22.9 Examination of documents filed.
(a) Subject to the provisions of law restricting the public
disclosure of confidential information, any person may, during Agency
business hours inspect and copy any document filed in any proceeding.
Such documents shall be made available by the Regional Hearing Clerk,
the Hearing Clerk, or the Clerk of the Board, as appropriate.
(b) The cost of duplicating documents shall be borne by the person
seeking copies of such documents. The Agency may waive this cost in its
discretion.
Subpart B--Parties and Appearances
Sec. 22.10 Appearances.
Any party may appear in person or by counsel or other
representative. A partner may appear on behalf of a partnership and an
officer may appear on behalf of a corporation. Persons who appear as
counsel or other representative must conform to the standards of
conduct and ethics required of practitioners before the courts of the
United States.
Sec. 22.11 Intervention and non-party briefs.
(a) Intervention. Any person desiring to become a party to a
proceeding may move for leave to intervene. A motion for leave to
intervene that is filed after the exchange of information pursuant to
Sec. 22.19(a) shall not be granted unless the movant shows good cause
for its failure to file before such exchange of information. All
requirements of these Consolidated Rules of Practice shall apply to a
motion for leave to intervene as if the movant were a party. The
Presiding Officer shall grant leave to intervene in all or part of the
proceeding if: the movant claims an interest relating to the cause of
action; a final order may as a practical matter impair the movant's
ability to protect that interest; and the movant's interest is not
adequately represented by existing parties. The intervenor shall be
bound by any agreements, arrangements and other matters previously made
in the proceeding unless otherwise ordered by the Presiding Officer or
the Environmental Appeals Board for good cause.
(b) Non-party briefs. Any person who is not a party to a proceeding
may move for leave to file a non-party brief. The motion shall identify
the interest of the applicant and shall explain the relevance of the
brief to the proceeding. All requirements of these Consolidated Rules
of Practice shall apply to the motion as if the movant were a party. If
the motion is granted, the Presiding Officer or Environmental Appeals
Board shall issue an order setting the time for filing such brief. Any
party to the proceeding may file a response to a non-party brief within
15 days after service of the non-party brief.
Sec. 22.12 Consolidation and severance.
(a) Consolidation. The Presiding Officer or the Environmental
Appeals Board may consolidate any or all matters at issue in two or
more proceedings subject to these Consolidated Rules of Practice where:
there exist common parties or common questions of fact or law;
consolidation would expedite and simplify consideration of the issues;
and consolidation would not adversely affect the rights of parties
engaged in otherwise separate proceedings. Proceedings subject to
subpart I of this part may be consolidated only upon the approval of
all parties. Where a proceeding subject to the provisions of subpart I
of this part is consolidated with a proceeding to which subpart I of
this part does not apply, the procedures of subpart I of this part
shall not apply to the consolidated proceeding.
(b) Severance. The Presiding Officer or the Environmental Appeals
Board may, for good cause, order any proceedings severed with respect
to any or all parties or issues.
Subpart C--Prehearing Procedures
Sec. 22.13 Commencement of a proceeding.
(a) Any proceeding subject to these Consolidated Rules of Practice
is commenced by filing with the Regional Hearing Clerk a complaint
conforming to Sec. 22.14.
(b) Notwithstanding paragraph (a) of this section, where the
parties agree to settlement of one or more causes of action before the
filing of a complaint, a proceeding may be simultaneously commenced and
concluded by the issuance of a consent agreement and final order
pursuant to Sec. 22.18(b)(2) and (3).
Sec. 22.14 Complaint.
(a) Content of complaint. Each complaint shall include:
(1) A statement reciting the section(s) of the Act authorizing the
issuance of the complaint;
(2) Specific reference to each provision of the Act, implementing
regulations, permit or order which respondent is alleged to have
violated;
(3) A concise statement of the factual basis for each violation
alleged;
(4) A description of all relief sought, including one or more of
the following:
(i) The amount of the civil penalty which is proposed to be
assessed, and a brief explanation of the proposed penalty;
(ii) Where a specific penalty demand is not made, the number of
violations (where applicable, days of violation) for which a penalty is
sought, a brief explanation of the severity of each violation alleged
and a recitation of the statutory penalty authority applicable for each
violation alleged in the complaint;
(iii) A request for a Permit Action and a statement of its proposed
terms and conditions; or
(iv) A request for a compliance or corrective action order and a
statement of the terms and conditions thereof;
(5) Notice of respondent's right to request a hearing on any
material fact alleged in the complaint, or on the appropriateness of
any proposed penalty, compliance or corrective action order, or Permit
Action;
(6) Notice if subpart I of this part applies to the proceeding;
(7) The address of the Regional Hearing Clerk; and
(8) Instructions for paying penalties, if applicable.
(b) Rules of practice. A copy of these Consolidated Rules of
Practice shall accompany each complaint served.
(c) Amendment of the complaint. The complainant may amend the
complaint once as a matter of right at any time before the answer is
filed. Otherwise the complainant may amend the complaint only upon
motion granted by the Presiding Officer. Respondent shall have 20
additional days from the date of service of the amended complaint to
file its answer.
(d) Withdrawal of the complaint. The complainant may withdraw the
complaint, or any part thereof, without prejudice one time before the
answer has been filed. After one withdrawal before the filing of an
answer, or after the filing of an answer, the complainant may withdraw
the complaint, or any part thereof, without prejudice only upon motion
granted by the Presiding Officer.
[[Page 40182]]
Sec. 22.15 Answer to the complaint.
(a) General. Where respondent: Contests any material fact upon
which the complaint is based; contends that the proposed penalty,
compliance or corrective action order, or Permit Action, as the case
may be, is inappropriate; or contends that it is entitled to judgment
as a matter of law, it shall file an original and one copy of a written
answer to the complaint with the Regional Hearing Clerk and shall serve
copies of the answer on all other parties. Any such answer to the
complaint must be filed with the Regional Hearing Clerk within 30 days
after service of the complaint.
(b) Contents of the answer. The answer shall clearly and directly
admit, deny or explain each of the factual allegations contained in the
complaint with regard to which respondent has any knowledge. Where
respondent has no knowledge of a particular factual allegation and so
states, the allegation is deemed denied. The answer shall also state:
The circumstances or arguments which are alleged to constitute the
grounds of any defense; the facts which respondent disputes; the basis
for opposing any proposed relief; and whether a hearing is requested.
(c) Request for a hearing. A hearing upon the issues raised by the
complaint and answer may be held if requested by respondent in its
answer. If the respondent does not request a hearing, the Presiding
Officer may hold a hearing if issues appropriate for adjudication are
raised in the answer.
(d) Failure to admit, deny, or explain. Failure of respondent to
admit, deny, or explain any material factual allegation contained in
the complaint constitutes an admission of the allegation.
(e) Amendment of the answer. The respondent may amend the answer to
the complaint upon motion granted by the Presiding Officer.
Sec. 22.16 Motions.
(a) General. Motions shall be served as provided by
Sec. 22.5(b)(2). Upon the filing of a motion, other parties may file
responses to the motion and the movant may file a reply to the
response. Any additional responsive documents shall be permitted only
by order of the Presiding Officer or Environmental Appeals Board, as
appropriate. All motions, except those made orally on the record during
a hearing, shall:
(1) Be in writing;
(2) State the grounds therefor, with particularity;
(3) Set forth the relief sought; and
(4) Be accompanied by any affidavit, certificate, other evidence or
legal memorandum relied upon.
(b) Response to motions. A party's response to any written motion
must be filed within 15 days after service of such motion. The movant's
reply to any written response must be filed within 10 days after
service of such response and shall be limited to issues raised in the
response. The Presiding Officer or the Environmental Appeals Board may
set a shorter or longer time for response or reply, or make other
orders concerning the disposition of motions. The response or reply
shall be accompanied by any affidavit, certificate, other evidence, or
legal memorandum relied upon. Any party who fails to respond within the
designated period waives any objection to the granting of the motion.
(c) Decision. The Regional Judicial Officer (or in a proceeding
commenced at EPA Headquarters, the Environmental Appeals Board) shall
rule on all motions filed or made before an answer to the complaint is
filed. Except as provided in Secs. 22.29(c) and 22.51, an
Administrative Law Judge shall rule on all motions filed or made after
an answer is filed and before an initial decision has become final or
has been appealed. The Environmental Appeals Board shall rule as
provided in Sec. 22.29(c) and on all motions filed or made after an
appeal of the initial decision is filed, except as provided pursuant to
Sec. 22.28.
(d) Oral argument. The Presiding Officer or the Environmental
Appeals Board may permit oral argument on motions in its discretion.
Sec. 22.17 Default.
(a) Default. A party may be found to be in default: after motion,
upon failure to file a timely answer to the complaint; upon failure to
comply with the information exchange requirements of Sec. 22.19(a) or
an order of the Presiding Officer; or upon failure to appear at a
conference or hearing. Default by respondent constitutes, for purposes
of the pending proceeding only, an admission of all facts alleged in
the complaint and a waiver of respondent's right to contest such
factual allegations. Default by complainant constitutes a waiver of
complainant's right to proceed on the merits of the action, and shall
result in the dismissal of the complaint with prejudice.
(b) Motion for default. A motion for default may seek resolution of
all or part of the proceeding. Where the motion requests the assessment
of a penalty or the imposition of other relief against a defaulting
party, the movant must specify the penalty or other relief sought and
state the legal and factual grounds for the relief requested.
(c) Default order. When the Presiding Officer finds that default
has occurred, he shall issue a default order against the defaulting
party as to any or all parts of the proceeding unless the record shows
good cause why a default order should not be issued. If the order
resolves all outstanding issues and claims in the proceeding, it shall
constitute the initial decision under these Consolidated Rules of
Practice. The relief proposed in the complaint or the motion for
default shall be ordered unless the requested relief is clearly
inconsistent with the record of the proceeding or the Act. For good
cause shown, the Presiding Officer may set aside a default order.
(d) Payment of penalty; effective date of compliance or corrective
action orders, and Permit Actions. Any penalty assessed in the default
order shall become due and payable by respondent without further
proceedings 30 days after the default order becomes final under
Sec. 22.27(c). Any default order requiring compliance or corrective
action shall be effective and enforceable without further proceedings
on the date the default order becomes final under Sec. 22.27(c). Any
Permit Action ordered in the default order shall become effective
without further proceedings on the date that the default order becomes
final under Sec. 22.27(c).
Sec. 22.18 Quick resolution; settlement; alternative dispute
resolution.
(a) Quick resolution. (1) A respondent may resolve the proceeding
at any time by paying the specific penalty proposed in the complaint or
in complainant's prehearing exchange in full as specified by
complainant and by filing with the Regional Hearing Clerk a copy of the
check or other instrument of payment. If the complaint contains a
specific proposed penalty and respondent pays that proposed penalty in
full within 30 days after receiving the complaint, then no answer need
be filed. This paragraph (a) shall not apply to any complaint which
seeks a compliance or corrective action order or Permit Action. In a
proceeding subject to the public comment provisions of Sec. 22.45, this
quick resolution is not available until 10 days after the close of the
comment period.
(2) Any respondent who wishes to resolve a proceeding by paying the
proposed penalty instead of filing an answer, but who needs additional
time to pay the penalty, may file a written statement with the Regional
Hearing Clerk within 30 days after receiving the complaint stating that
the respondent agrees to pay the proposed penalty in accordance with
paragraph (a)(1) of this section. The written statement need not
contain any response to, or admission of, the allegations in the
complaint.
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Within 60 days after receiving the complaint, the respondent shall pay
the full amount of the proposed penalty. Failure to make such payment
within 60 days of receipt of the complaint may subject the respondent
to default pursuant to Sec. 22.17.
(3) Upon receipt of payment in full, the Regional Judicial Officer
or Regional Administrator, or, in a proceeding commenced at EPA
Headquarters, the Environmental Appeals Board, shall issue a final
order. Payment by respondent shall constitute a waiver of respondent's
rights to contest the allegations and to appeal the final order.
(b) Settlement. (1) The Agency encourages settlement of a
proceeding at any time if the settlement is consistent with the
provisions and objectives of the Act and applicable regulations. The
parties may engage in settlement discussions whether or not the
respondent requests a hearing. Settlement discussions shall not affect
the respondent's obligation to file a timely answer under Sec. 22.15.
(2) Consent agreement. Any and all terms and conditions of a
settlement shall be recorded in a written consent agreement signed by
all parties or their representatives. The consent agreement shall state
that, for the purpose of the proceeding, respondent: Admits the
jurisdictional allegations of the complaint; admits the facts
stipulated in the consent agreement or neither admits nor denies
specific factual allegations contained in the complaint; consents to
the assessment of any stated civil penalty, to the issuance of any
specified compliance or corrective action order, to any conditions
specified in the consent agreement, and to any stated Permit Action;
and waives any right to contest the allegations and its right to appeal
the proposed final order accompanying the consent agreement. Where
complainant elects to commence a proceeding pursuant to Sec. 22.13(b),
the consent agreement shall also contain the elements described at
Sec. 22.14(a)(1)-(3) and (8). The parties shall forward the executed
consent agreement and a proposed final order to the Regional Judicial
Officer or Regional Administrator, or, in a proceeding commenced at EPA
Headquarters, the Environmental Appeals Board.
(3) Conclusion of proceeding. No settlement or consent agreement
shall dispose of any proceeding under these Consolidated Rules of
Practice without a final order from the Regional Judicial Officer or
Regional Administrator, or, in a proceeding commenced at EPA
Headquarters, the Environmental Appeals Board, ratifying the parties'
consent agreement.
(c) Scope of resolution or settlement. Full payment of the penalty
proposed in a complaint pursuant to paragraph (a) of this section or
settlement pursuant to paragraph (b) of this section shall not in any
case affect the right of the Agency or the United States to pursue
appropriate injunctive or other equitable relief or criminal sanctions
for any violations of law. Full payment of the penalty proposed in a
complaint pursuant to paragraph (a) of this section or settlement
pursuant to paragraph (b) of this section shall only resolve
respondent's liability for Federal civil penalties for the violations
and facts alleged in the complaint.
(d) Alternative means of dispute resolution. (1) The parties may
engage in any process within the scope of the Alternative Dispute
Resolution Act (``ADRA''), 5 U.S.C. 581 et seq., which may facilitate
voluntary settlement efforts. Such process shall be subject to the
confidentiality provisions of the ADRA.
(2) Dispute resolution under this paragraph (d) does not divest the
Presiding Officer of jurisdiction and does not automatically stay the
proceeding. All provisions of these Consolidated Rules of Practice
remain in effect notwithstanding any dispute resolution proceeding.
(3) The parties may choose any person to act as a neutral, or may
move for the appointment of a neutral. If the Presiding Officer grants
a motion for the appointment of a neutral, the Presiding Officer shall
forward the motion to the Chief Administrative Law Judge, except in
proceedings under subpart I of this part, in which the Presiding
Officer shall forward the motion to the Regional Administrator. The
Chief Administrative Law Judge or Regional Administrator, as
appropriate, shall designate a qualified neutral.
Sec. 22.19 Prehearing information exchange; prehearing conference;
other discovery.
(a) Prehearing information exchange. (1) In accordance with an
order issued by the Presiding Officer, each party shall file a
prehearing information exchange. Except as provided in Sec. 22.22(a), a
document or exhibit that has not been included in prehearing
information exchange shall not be admitted into evidence, and any
witness whose name and testimony summary has not been included in
prehearing information exchange shall not be allowed to testify.
Parties are not required to exchange information relating to settlement
which would be excluded in the federal courts under Rule 408 of the
Federal Rules of Evidence. Documents and exhibits shall be marked for
identification as ordered by the Presiding Officer.
(2) Each party's prehearing information exchange shall contain:
(i) The names of any expert or other witnesses it intends to call
at the hearing, together with a brief narrative summary of their
expected testimony, or a statement that no witnesses will be called;
and (ii) Copies of all documents and exhibits which it intends to
introduce into evidence at the hearing.
(3) If the proceeding is for the assessment of a penalty and
complainant has already specified a proposed penalty, complainant shall
explain in its prehearing information exchange how the proposed penalty
was calculated in accordance with any criteria set forth in the Act,
and the respondent shall explain in its prehearing information exchange
why the proposed penalty should be reduced or eliminated.
(4) If the proceeding is for the assessment of a penalty and
complainant has not specified a proposed penalty, each party shall
include in its prehearing information exchange all factual information
it considers relevant to the assessment of a penalty. Within 15 days
after respondent files its prehearing information exchange, complainant
shall file a document specifying a proposed penalty and explaining how
the proposed penalty was calculated in accordance with any criteria set
forth in the Act.
(b) Prehearing conference. The Presiding Officer, at any time
before the hearing begins, may direct the parties and their counsel or
other representatives to participate in a conference to consider:
(1) Settlement of the case;
(2) Simplification of issues and stipulation of facts not in
dispute;
(3) The necessity or desirability of amendments to pleadings;
(4) The exchange of exhibits, documents, prepared testimony, and
admissions or stipulations of fact which will avoid unnecessary proof;
(5) The limitation of the number of expert or other witnesses;
(6) The time and place for the hearing; and
(7) Any other matters which may expedite the disposition of the
proceeding.
(c) Record of the prehearing conference. No transcript of a
prehearing conference relating to settlement shall be made. With
respect to other prehearing conferences, no transcript of any
prehearing conferences shall be made unless ordered by the Presiding
Officer. The Presiding Officer
[[Page 40184]]
shall ensure that the record of the proceeding includes any
stipulations, agreements, rulings or orders made during the conference.
(d) Location of prehearing conference. The prehearing conference
shall be held in the county where the respondent resides or conducts
the business which the hearing concerns, in the city in which the
relevant Environmental Protection Agency Regional Office is located, or
in Washington, DC, unless the Presiding Officer determines that there
is good cause to hold it at another location or by telephone.
(e) Other discovery. (1) After the information exchange provided
for in paragraph (a) of this section, a party may move for additional
discovery. The motion shall specify the method of discovery sought,
provide the proposed discovery instruments, and describe in detail the
nature of the information and/or documents sought (and, where relevant,
the proposed time and place where discovery would be conducted). The
Presiding Officer may order such other discovery only if it:
(i) Will neither unreasonably delay the proceeding nor unreasonably
burden the non-moving party;
(ii) Seeks information that is most reasonably obtained from the
non-moving party, and which the non-moving party has refused to provide
voluntarily; and
(iii) Seeks information that has significant probative value on a
disputed issue of material fact relevant to liability or the relief
sought.
(2) Settlement positions and information regarding their
development (such as penalty calculations for purposes of settlement
based upon Agency settlement policies) shall not be discoverable.
(3) The Presiding Officer may order depositions upon oral questions
only in accordance with paragraph (e)(1) of this section and upon an
additional finding that:
(i) The information sought cannot reasonably be obtained by
alternative methods of discovery; or
(ii) There is a substantial reason to believe that relevant and
probative evidence may otherwise not be preserved for presentation by a
witness at the hearing.
(4) The Presiding Officer may require the attendance of witnesses
or the production of documentary evidence by subpoena, if authorized
under the Act. The Presiding Officer may issue a subpoena for discovery
purposes only in accordance with paragraph (e)(1) of this section and
upon an additional showing of the grounds and necessity therefor.
Subpoenas shall be served in accordance with Sec. 22.5(b)(1). Witnesses
summoned before the Presiding Officer shall be paid the same fees and
mileage that are paid witnesses in the courts of the United States. Any
fees shall be paid by the party at whose request the witness appears.
Where a witness appears pursuant to a request initiated by the
Presiding Officer, fees shall be paid by the Agency.
(5) Nothing in this paragraph (e) shall limit a party's right to
request admissions or stipulations, a respondent's right to request
Agency records under the Federal Freedom of Information Act, 5 U.S.C.
552, or EPA's authority under any applicable law to conduct
inspections, issue information request letters or administrative
subpoenas, or otherwise obtain information.
(f) Supplementing prior exchanges. A party who has made an
information exchange under paragraph (a) of this section, or who has
exchanged information in response to a request for information or a
discovery order pursuant to paragraph (e) of this section, shall
promptly supplement or correct the exchange when the party learns that
the information exchanged or response provided is incomplete,
inaccurate or outdated, and the additional or corrective information
has not otherwise been disclosed to the other party pursuant to this
section.
(g) Failure to exchange information. Where a party fails to provide
information within its control as required pursuant to this section,
the Presiding Officer may, in his discretion:
(1) Infer that the information would be adverse to the party
failing to provide it;
(2) Exclude the information from evidence; or
(3) Issue a default order under Sec. 22.17(c).
Sec. 22.20 Accelerated decision; decision to dismiss.
(a) General. The Presiding Officer may at any time render an
accelerated decision in favor of a party as to any or all parts of the
proceeding, without further hearing or upon such limited additional
evidence, such as affidavits, as he may require, if no genuine issue of
material fact exists and a party is entitled to judgment as a matter of
law. The Presiding Officer, upon motion of the respondent, may at any
time dismiss a proceeding without further hearing or upon such limited
additional evidence as he requires, on the basis of failure to
establish a prima facie case or other grounds which show no right to
relief on the part of the complainant.
(b) Effect. (1) If an accelerated decision or a decision to dismiss
is issued as to all issues and claims in the proceeding, the decision
constitutes an initial decision of the Presiding Officer, and shall be
filed with the Regional Hearing Clerk.
(2) If an accelerated decision or a decision to dismiss is rendered
on less than all issues or claims in the proceeding, the Presiding
Officer shall determine what material facts exist without substantial
controversy and what material facts remain controverted. The partial
accelerated decision or the order dismissing certain counts shall
specify the facts which appear substantially uncontroverted, and the
issues and claims upon which the hearing will proceed.
Subpart D--Hearing Procedures
Sec. 22.21 Assignment of Presiding Officer; scheduling the hearing.
(a) Assignment of Presiding Officer. When an answer is filed, the
Regional Hearing Clerk shall forward a copy of the complaint, the
answer, and any other documents filed in the proceeding to the Chief
Administrative Law Judge who shall serve as Presiding Officer or assign
another Administrative Law Judge as Presiding Officer. The Presiding
Officer shall then obtain the case file from the Chief Administrative
Law Judge and notify the parties of his assignment.
(b) Notice of hearing. The Presiding Officer shall hold a hearing
if the proceeding presents genuine issues of material fact. The
Presiding Officer shall serve upon the parties a notice of hearing
setting forth a time and place for the hearing not later than 30 days
prior to the date set for the hearing. The Presiding Officer may
require the attendance of witnesses or the production of documentary
evidence by subpoena, if authorized under the Act, upon a showing of
the grounds and necessity therefor, and the materiality and relevancy
of the evidence to be adduced.
(c) Postponement of hearing. No request for postponement of a
hearing shall be granted except upon motion and for good cause shown.
(d) Location of the hearing. The location of the hearing shall be
determined in accordance with the method for determining the location
of a prehearing conference under Sec. 22.19(d).
Sec. 22.22 Evidence.
(a) General. (1) The Presiding Officer shall admit all evidence
which is not irrelevant, immaterial, unduly
[[Page 40185]]
repetitious, unreliable, or of little probative value, except that
evidence relating to settlement which would be excluded in the federal
courts under Rule 408 of the Federal Rules of Evidence (28 U.S.C.) is
not admissible. If, however, a party fails to provide any document,
exhibit, witness name or summary of expected testimony required to be
exchanged under Sec. 22.19 (a), (e) or (f) to all parties at least 15
days before the hearing date, the Presiding Officer shall not admit the
document, exhibit or testimony into evidence, unless the non-exchanging
party had good cause for failing to exchange the required information
and provided the required information to all other parties as soon as
it had control of the information, or had good cause for not doing so.
(2) In the presentation, admission, disposition, and use of oral
and written evidence, EPA officers, employees and authorized
representatives shall preserve the confidentiality of information
claimed confidential, whether or not the claim is made by a party to
the proceeding, unless disclosure is authorized pursuant to 40 CFR part
2. A business confidentiality claim shall not prevent information from
being introduced into evidence, but shall instead require that the
information be treated in accordance with 40 CFR part 2, subpart B. The
Presiding Officer or the Environmental Appeals Board may consider such
evidence in a proceeding closed to the public, and which may be before
some, but not all, parties, as necessary. Such proceeding shall be
closed only to the extent necessary to comply with 40 CFR part 2,
subpart B, for information claimed confidential. Any affected person
may move for an order protecting the information claimed confidential.
(b) Examination of witnesses. Witnesses shall be examined orally,
under oath or affirmation, except as otherwise provided in paragraphs
(c) and (d) of this section or by the Presiding Officer. Parties shall
have the right to cross-examine a witness who appears at the hearing
provided that such cross-examination is not unduly repetitious.
(c) Written testimony. The Presiding Officer may admit and insert
into the record as evidence, in lieu of oral testimony, written
testimony prepared by a witness. The admissibility of any part of the
testimony shall be subject to the same rules as if the testimony were
produced under oral examination. Before any such testimony is read or
admitted into evidence, the party who has called the witness shall
deliver a copy of the testimony to the Presiding Officer, the reporter,
and opposing counsel. The witness presenting the testimony shall swear
to or affirm the testimony and shall be subject to appropriate oral
cross-examination.
(d) Admission of affidavits where the witness is unavailable. The
Presiding Officer may admit into evidence affidavits of witnesses who
are unavailable. The term ``unavailable'' shall have the meaning
accorded to it by Rule 804(a) of the Federal Rules of Evidence.
(e) Exhibits. Where practicable, an original and one copy of each
exhibit shall be filed with the Presiding Officer for the record and a
copy shall be furnished to each party. A true copy of any exhibit may
be substituted for the original.
(f) Official notice. Official notice may be taken of any matter
which can be judicially noticed in the Federal courts and of other
facts within the specialized knowledge and experience of the Agency.
Opposing parties shall be given adequate opportunity to show that such
facts are erroneously noticed.
Sec. 22.23 Objections and offers of proof.
(a) Objection. Any objection concerning the conduct of the hearing
may be stated orally or in writing during the hearing. The party
raising the objection must supply a short statement of its grounds. The
ruling by the Presiding Officer on any objection and the reasons given
for it shall be part of the record. An exception to each objection
overruled shall be automatic and is not waived by further participation
in the hearing.
(b) Offers of proof. Whenever the Presiding Officer denies a motion
for admission into evidence, the party offering the information may
make an offer of proof, which shall be included in the record. The
offer of proof for excluded oral testimony shall consist of a brief
statement describing the nature of the information excluded. The offer
of proof for excluded documents or exhibits shall consist of the
documents or exhibits excluded. Where the Environmental Appeals Board
decides that the ruling of the Presiding Officer in excluding the
information from evidence was both erroneous and prejudicial, the
hearing may be reopened to permit the taking of such evidence.
Sec. 22.24 Burden of presentation; burden of persuasion; preponderance
of the evidence standard.
(a) The complainant has the burdens of presentation and persuasion
that the violation occurred as set forth in the complaint and that the
relief sought is appropriate. Following complainant's establishment of
a prima facie case, respondent shall have the burden of presenting any
defense to the allegations set forth in the complaint and any response
or evidence with respect to the appropriate relief. The respondent has
the burdens of presentation and persuasion for any affirmative
defenses.
(b) Each matter of controversy shall be decided by the Presiding
Officer upon a preponderance of the evidence.
Sec. 22.25 Filing the transcript.
The hearing shall be transcribed verbatim. Promptly following the
taking of the last evidence, the reporter shall transmit to the
Regional Hearing Clerk the original and as many copies of the
transcript of testimony as are called for in the reporter's contract
with the Agency, and also shall transmit to the Presiding Officer a
copy of the transcript. A certificate of service shall accompany each
copy of the transcript. The Regional Hearing Clerk shall notify all
parties of the availability of the transcript and shall furnish the
parties with a copy of the transcript upon payment of the cost of
reproduction, unless a party can show that the cost is unduly
burdensome. Any person not a party to the proceeding may receive a copy
of the transcript upon payment of the reproduction fee, except for
those parts of the transcript ordered to be kept confidential by the
Presiding Officer. Any party may file a motion to conform the
transcript to the actual testimony within 30 days after receipt of the
transcript, or 45 days after the parties are notified of the
availability of the transcript, whichever is sooner.
Sec. 22.26 Proposed findings, conclusions, and order.
After the hearing, any party may file proposed findings of fact,
conclusions of law, and a proposed order, together with briefs in
support thereof. The Presiding Officer shall set a schedule for filing
these documents and any reply briefs, but shall not require them before
the last date for filing motions under Sec. 22.25 to conform the
transcript to the actual testimony. All submissions shall be in
writing, shall be served upon all parties, and shall contain adequate
references to the record and authorities relied on.
Subpart E--Initial Decision and Motion To Reopen a Hearing
Sec. 22.27 Initial Decision.
(a) Filing and contents. After the period for filing briefs under
Sec. 22.26 has expired, the Presiding Officer shall issue an initial
decision. The initial decision shall contain findings of fact,
[[Page 40186]]
conclusions regarding all material issues of law or discretion, as well
as reasons therefor, and, if appropriate, a recommended civil penalty
assessment, compliance order, corrective action order, or Permit
Action. Upon receipt of an initial decision, the Regional Hearing Clerk
shall forward copies of the initial decision to the Environmental
Appeals Board and the Assistant Administrator for the Office of
Enforcement and Compliance Assurance.
(b) Amount of civil penalty. If the Presiding Officer determines
that a violation has occurred and the complaint seeks a civil penalty,
the Presiding Officer shall determine the amount of the recommended
civil penalty based on the evidence in the record and in accordance
with any penalty criteria set forth in the Act. The Presiding Officer
shall consider any civil penalty guidelines issued under the Act. The
Presiding Officer shall explain in detail in the initial decision how
the penalty to be assessed corresponds to any penalty criteria set
forth in the Act. If the Presiding Officer decides to assess a penalty
different in amount from the penalty proposed by complainant, the
Presiding Officer shall set forth in the initial decision the specific
reasons for the increase or decrease. If the respondent has defaulted,
the Presiding Officer shall not assess a penalty greater than that
proposed by complainant in the complaint, the prehearing information
exchange or the motion for default, whichever is less.
(c) Effect of initial decision. The initial decision of the
Presiding Officer shall become a final order 45 days after its service
upon the parties and without further proceedings unless:
(1) A party moves to reopen the hearing;
(2) A party appeals the initial decision to the Environmental
Appeals Board;
(3) A party moves to set aside a default order that constitutes an
initial decision; or
(4) The Environmental Appeals Board elects to review the initial
decision on its own initiative.
(d) Exhaustion of administrative remedies. Where a respondent fails
to appeal an initial decision to the Environmental Appeals Board
pursuant to Sec. 22.30 and that initial decision becomes a final order
pursuant to paragraph (c) of this section, respondent waives its rights
to judicial review. An initial decision that is appealed to the
Environmental Appeals Board shall not be final or operative pending the
Environmental Appeals Board's issuance of a final order.
Sec. 22.28 Motion to reopen a hearing.
(a) Filing and content. A motion to reopen a hearing to take
further evidence must be filed no later than 20 days after service of
the initial decision and shall state the specific grounds upon which
relief is sought. Where the movant seeks to introduce new evidence, the
motion shall: state briefly the nature and purpose of the evidence to
be adduced; show that such evidence is not cumulative; and show good
cause why such evidence was not adduced at the hearing. The motion
shall be made to the Presiding Officer and filed with the Regional
Hearing Clerk.
(b) Disposition of motion to reopen a hearing. Within 15 days
following the service of a motion to reopen a hearing, any other party
to the proceeding may file with the Regional Hearing Clerk and serve on
all other parties a response. A reopened hearing shall be governed by
the applicable sections of these Consolidated Rules of Practice. The
filing of a motion to reopen a hearing shall automatically stay the
running of the time periods for an initial decision becoming final
under Sec. 22.27(c) and for appeal under Sec. 22.30. These time periods
shall begin again in full when the motion is denied or an amended
initial decision is served.
Subpart F--Appeals and Administrative Review
Sec. 22.29 Appeal from or review of interlocutory orders or rulings.
(a) Request for interlocutory appeal. Appeals from orders or
rulings other than an initial decision shall be allowed only at the
discretion of the Environmental Appeals Board. A party seeking
interlocutory appeal of such orders or rulings to the Environmental
Appeals Board shall file a motion within 10 days of service of the
order or ruling, requesting that the Presiding Officer forward the
order or ruling to the Environmental Appeals Board for review, and
stating briefly the grounds for the appeal.
(b) Availability of interlocutory appeal. The Presiding Officer may
recommend any order or ruling for review by the Environmental Appeals
Board when:
(1) The order or ruling involves an important question of law or
policy concerning which there is substantial grounds for difference of
opinion; and
(2) Either an immediate appeal from the order or ruling will
materially advance the ultimate termination of the proceeding, or
review after the final order is issued will be inadequate or
ineffective.
(c) Interlocutory review. If the Presiding Officer has recommended
review and the Environmental Appeals Board determines that
interlocutory review is inappropriate, or takes no action within 30
days of the Presiding Officer's recommendation, the appeal is
dismissed. When the Presiding Officer declines to recommend review of
an order or ruling, it may be reviewed by the Environmental Appeals
Board only upon appeal from the initial decision, except when the
Environmental Appeals Board determines, upon motion of a party and in
exceptional circumstances, that to delay review would be contrary to
the public interest. Such motion shall be filed within 10 days of
service of an order of the Presiding Officer refusing to recommend such
order or ruling for interlocutory review.
Sec. 22.30 Appeal from or review of initial decision.
(a) Notice of appeal. (1) Within 30 days after the initial decision
is served, any party may appeal any adverse order or ruling of the
Presiding Officer by filing an original and one copy of a notice of
appeal and an accompanying appellate brief with the Environmental
Appeals Board (Clerk of the Board (Mail Code 1103B), United States
Environmental Protection Agency, 401 M Street, SW, Washington, DC,
20460. Hand deliveries may be made at Suite 500, 607 14th Street, NW.).
One copy of any document filed with the Clerk of the Board shall also
be served on the Regional Hearing Clerk. Appellant also shall serve a
copy of the notice of appeal upon the Presiding Officer. Appellant
shall simultaneously serve one copy of the notice and brief upon all
other parties and non-party participants. The notice of appeal shall
summarize the order or ruling, or part thereof, appealed from. The
appellant's brief shall contain tables of contents and authorities
(with page references), a statement of the issues presented for review,
a statement of the nature of the case and the facts relevant to the
issues presented for review (with appropriate references to the
record), argument on the issues presented, a short conclusion stating
the precise relief sought, alternative findings of fact, and
alternative conclusions regarding issues of law or discretion. If a
timely notice of appeal is filed by a party, any other party may file a
notice of appeal on any issue within 20 days after the date on which
the first notice of appeal was served.
(2) Within 20 days of service of notices of appeal and briefs under
paragraph (a)(1) of this section, any other party or non-party
participant may
[[Page 40187]]
file with the Environmental Appeals Board an original and one copy of a
response brief responding to argument raised by the appellant, together
with reference to the relevant portions of the record, initial
decision, or opposing brief. Appellee shall simultaneously serve one
copy of the response brief upon each party , non-party participant, and
the Regional Hearing Clerk. Response briefs shall be limited to the
scope of the appeal brief. Further briefs may be filed only with the
permission of the Environmental Appeals Board.
(b) Review initiated by the Environmental Appeals Board. Whenever
the Environmental Appeals Board determines to review an initial
decision on its own initiative, it shall file notice of its intent to
review that decision with the Clerk of the Board, and serve it upon the
Regional Hearing Clerk, the Presiding Officer and the parties within 45
days after the initial decision was served upon the parties. The notice
shall include a statement of issues to be briefed by the parties and a
time schedule for the filing and service of briefs.
(c) Scope of appeal or review. The parties' rights of appeal shall
be limited to those issues raised during the course of the proceeding
and by the initial decision, and to issues concerning subject matter
jurisdiction. If the Environmental Appeals Board determines that issues
raised, but not appealed by the parties, should be argued, it shall
give the parties reasonable written notice of such determination to
permit preparation of adequate argument. The Environmental Appeals
Board may remand the case to the Presiding Officer for further
proceedings.
(d) Argument before the Environmental Appeals Board. The
Environmental Appeals Board may, at its discretion, order oral argument
on any or all issues in a proceeding.
(e) Motions on appeal. All motions made during the course of an
appeal shall conform to Sec. 22.16 unless otherwise provided.
(f) Decision. The Environmental Appeals Board shall adopt, modify,
or set aside the findings of fact and conclusions of law or discretion
contained in the decision or order being reviewed, and shall set forth
in the final order the reasons for its actions. The Environmental
Appeals Board may assess a penalty that is higher or lower than the
amount recommended to be assessed in the decision or order being
reviewed or from the amount sought in the complaint, except that if the
order being reviewed is a default order, the Environmental Appeals
Board may not increase the amount of the penalty above that proposed in
the complaint or in the motion for default, whichever is less. The
Environmental Appeals Board may adopt, modify or set aside any
recommended compliance or corrective action order or Permit Action. The
Environmental Appeals Board may remand the case to the Presiding
Officer for further action.
Subpart G--Final Order
Sec. 22.31 Final order.
(a) Effect of final order. A final order constitutes the final
Agency action in a proceeding. The final order shall not in any case
affect the right of the Agency or the United States to pursue
appropriate injunctive or other equitable relief or criminal sanctions
for any violations of law. The final order shall resolve only those
causes of action alleged in the complaint, or for proceedings commenced
pursuant to Sec. 22.13(b), alleged in the consent agreement. The final
order does not waive, extinguish or otherwise affect respondent's
obligation to comply with all applicable provisions of the Act and
regulations promulgated thereunder.
(b) Effective date. A final order is effective upon filing. Where
an initial decision becomes a final order pursuant to Sec. 22.27(c),
the final order is effective 45 days after the initial decision is
served on the parties.
(c) Payment of a civil penalty. The respondent shall pay the full
amount of any civil penalty assessed in the final order within 30 days
after the effective date of the final order unless otherwise ordered.
Payment shall be made by sending a cashier's check or certified check
to the payee specified in the complaint, unless otherwise instructed by
the complainant. The check shall note the case title and docket number.
Respondent shall serve copies of the check or other instrument of
payment on the Regional Hearing Clerk and on complainant. Collection of
interest on overdue payments shall be in accordance with the Debt
Collection Act, 31 U.S.C. 3717.
(d) Other relief. Any final order requiring compliance or
corrective action, or a Permit Action, shall become effective and
enforceable without further proceedings on the effective date of the
final order unless otherwise ordered.
(e) Final orders to Federal agencies on appeal. (1) A final order
of the Environmental Appeals Board issued pursuant to Sec. 22.30 to a
department, agency, or instrumentality of the United States shall
become effective 30 days after its service upon the parties unless the
head of the affected department, agency, or instrumentality requests a
conference with the Administrator in writing and serves a copy of the
request on the parties of record within 30 days of service of the final
order. If a timely request is made, a decision by the Administrator
shall become the final order.
(2) A motion for reconsideration pursuant to Sec. 22.32 shall not
toll the 30-day period described in paragraph (e)(1) of this section
unless specifically so ordered by the Environmental Appeals Board.
Sec. 22.32 Motion to reconsider a final order.
Motions to reconsider a final order issued pursuant to Sec. 22.30
shall be filed within 10 days after service of the final order. Motions
must set forth the matters claimed to have been erroneously decided and
the nature of the alleged errors. Motions for reconsideration under
this provision shall be directed to, and decided by, the Environmental
Appeals Board. Motions for reconsideration directed to the
Administrator, rather than to the Environmental Appeals Board, will not
be considered, except in cases that the Environmental Appeals Board has
referred to the Administrator pursuant to Sec. 22.4(a) and in which the
Administrator has issued the final order. A motion for reconsideration
shall not stay the effective date of the final order unless so ordered
by the Environmental Appeals Board.
Subpart H--Supplemental Rules
Sec. 22.33 [Reserved]
Sec. 22.34 Supplemental rules governing the administrative assessment
of civil penalties under the Clean Air Act.
(a) Scope. This section shall apply, in conjunction with Secs. 22.1
through 22.32, in administrative proceedings to assess a civil penalty
conducted under sections 113(d), 205(c), 211(d), and 213(d) of the
Clean Air Act, as amended (42 U.S.C. 7413(d), 7524(c), 7545(d), and
7547(d)). Where inconsistencies exist between this section and
Secs. 22.1 through 22.32, this section shall apply.
(b) Issuance of notice. Prior to the issuance of a final order
assessing a civil penalty, the person to whom the order is to be issued
shall be given written notice of the proposed issuance of the order.
Service of a complaint or a consent agreement and final order pursuant
to Sec. 22.13 satisfies this notice requirement.
[[Page 40188]]
Sec. 22.35 Supplemental rules governing the administrative assessment
of civil penalties under the Federal Insecticide, Fungicide, and
Rodenticide Act.
(a) Scope. This section shall apply, in conjunction with Secs. 22.1
through 22.32, in administrative proceedings to assess a civil penalty
conducted under section 14(a) of the Federal Insecticide, Fungicide,
and Rodenticide Act as amended (7 U.S.C. 136l(a)). Where
inconsistencies exist between this section and Secs. 22.1 through
22.32, this section shall apply.
(b) Venue. The prehearing conference and the hearing shall be held
in the county, parish, or incorporated city of the residence of the
person charged, unless otherwise agreed in writing by all parties. For
a person whose residence is outside the United States and outside any
territory or possession of the United States, the prehearing conference
and the hearing shall be held at the EPA office listed at 40 CFR 1.7
that is closest to either the person's primary place of business within
the United States, or the primary place of business of the person's
U.S. agent, unless otherwise agreed by all parties.
Sec. 22.36 [Reserved].
Sec. 22.37 Supplemental rules governing administrative proceedings
under the Solid Waste Disposal Act.
(a) Scope. This section shall apply, in conjunction with Secs. 22.1
through 22.32, in administrative proceedings under sections 3005(d) and
(e), 3008, 9003 and 9006 of the Solid Waste Disposal Act (42 U.S.C.
6925(d) and (e), 6928, 6991b and 6991e) (``SWDA''). Where
inconsistencies exist between this section and Secs. 22.1 through
22.32, this section shall apply.
(b) Corrective action and compliance orders. A complaint may
contain a compliance order issued under section 3008(a) or section
9006(a), or a corrective action order issued under section 3008(h) or
section 9003(h)(4) of the SWDA. Any such order shall automatically
become a final order unless, no later than 30 days after the order is
served, the respondent requests a hearing pursuant to Sec. 22.15.
Sec. 22.38 Supplemental rules of practice governing the administrative
assessment of civil penalties under the Clean Water Act.
(a) Scope. This section shall apply, in conjunction with Secs. 22.1
through 22.32 and Sec. 22.45, in administrative proceedings for the
assessment of any civil penalty under section 309(g) or section
311(b)(6) of the Clean Water Act (``CWA'')(33 U.S.C. 1319(g) and
1321(b)(6)). Where inconsistencies exist between this section and
Secs. 22.1 through 22.32, this section shall apply.
(b) Consultation with States. For proceedings pursuant to section
309(g), the complainant shall provide the State agency with the most
direct authority over the matters at issue in the case an opportunity
to consult with the complainant. Complainant shall notify the State
agency within 30 days following proof of service of the complaint on
the respondent or, in the case of a proceeding proposed to be commenced
pursuant to Sec. 22.13(b), no less than 40 days before the issuance of
an order assessing a civil penalty.
(c) Administrative procedure and judicial review. Action of the
Administrator for which review could have been obtained under section
509(b)(1) of the CWA, 33 U.S.C. 1369(b)(1), shall not be subject to
review in an administrative proceeding for the assessment of a civil
penalty under section 309(g) or section 311(b)(6).
Sec. 22.39 Supplemental rules governing the administrative assessment
of civil penalties under section 109 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(a) Scope. This section shall apply, in conjunction with
Secs. 22.10 through 22.32, in administrative proceedings for the
assessment of any civil penalty under section 109 of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. 9609). Where inconsistencies exist between this
section and Secs. 22.1 through 22.32, this section shall apply.
(b) Judicial review. Any person who requested a hearing with
respect to a Class II civil penalty under section 109(b) of CERCLA, 42
U.S.C. 9609(b), and who is the recipient of a final order assessing a
civil penalty may file a petition for judicial review of such order
with the United States Court of Appeals for the District of Columbia or
for any other circuit in which such person resides or transacts
business. Any person who requested a hearing with respect to a Class I
civil penalty under section 109(a)(4) of CERCLA, 42 U.S.C. 9609(a)(4),
and who is the recipient of a final order assessing the civil penalty
may file a petition for judicial review of such order with the
appropriate district court of the United States. All petitions must be
filed within 30 days of the date the order making the assessment was
served on the parties.
(c) Payment of civil penalty assessed. Payment of civil penalties
assessed in the final order shall be made by forwarding a cashier's
check, payable to the ``EPA, Hazardous Substances Superfund,'' in the
amount assessed, and noting the case title and docket number, to the
appropriate regional Superfund Lockbox Depository.
Sec. 22.40 [Reserved].
Sec. 22.41 Supplemental rules governing the administrative assessment
of civil penalties under Title II of the Toxic Substance Control Act,
enacted as section 2 of the Asbestos Hazard Emergency Response Act
(AHERA).
(a) Scope. This section shall apply, in conjunction with Secs. 22.1
through 22.32, in administrative proceedings to assess a civil penalty
conducted under section 207 of the Toxic Substances Control Act
(``TSCA'') (15 U.S.C. 2647). Where inconsistencies exist between this
section and Secs. 22.1 through 22.32, this section shall apply.
(b) Collection of civil penalty. Any civil penalty collected under
TSCA section 207 shall be used by the local educational agency for
purposes of complying with Title II of TSCA. Any portion of a civil
penalty remaining unspent after a local educational agency achieves
compliance shall be deposited into the Asbestos Trust Fund established
under section 5 of AHERA.
Sec. 22.42 Supplemental rules governing the administrative assessment
of civil penalties for violations of compliance orders issued to owners
or operators of public water systems under part B of the Safe Drinking
Water Act.
(a) Scope. This section shall apply, in conjunction with Secs. 22.1
through 22.32, in administrative proceedings to assess a civil penalty
under section 1414(g)(3)(B) of the Safe Drinking Water Act, 42 U.S.C.
300g-3(g)(3)(B). Where inconsistencies exist between this section and
Secs. 22.1 through 22.32, this section shall apply.
(b) Choice of forum. A complaint which specifies that subpart I of
this part applies shall also state that respondent has a right to elect
a hearing on the record in accordance with 5 U.S.C. 554, and that
respondent waives this right unless it requests in its answer a hearing
on the record in accordance with 5 U.S.C. 554. Upon such request, the
Regional Hearing Clerk shall recaption the documents in the record as
necessary, and notify the parties of the changes.
Sec. 22.43 Supplemental rules governing the administrative assessment
of civil penalties against a federal agency under the Safe Drinking
Water Act.
(a) Scope. This section shall apply, in conjunction with Secs. 22.1
through 22.32, in administrative proceedings to assess a civil penalty
against a federal agency under section 1447(b) of the Safe Drinking
Water Act, 42 U.S.C. 300j-6(b).
[[Page 40189]]
Where inconsistencies exist between this section and Secs. 22.1 through
22.32, this section shall apply.
(b) Effective date of final penalty order. Any penalty order issued
pursuant to this section and section 1447(b) of the Safe Drinking Water
Act shall become effective 30 days after it has been served on the
parties.
(c) Public notice of final penalty order. Upon the issuance of a
final penalty order under this section, the Administrator shall provide
public notice of the order by publication, and by providing notice to
any person who requests such notice. The notice shall include:
(1) The docket number of the order;
(2) The address and phone number of the Regional Hearing Clerk from
whom a copy of the order may be obtained;
(3) The location of the facility where violations were found;
(4) A description of the violations;
(5) The penalty that was assessed; and
(6) A notice that any interested person may, within 30 days of the
date the order becomes final, obtain judicial review of the penalty
order pursuant to section 1447(b) of the Safe Drinking Water Act, and
instruction that persons seeking judicial review shall provide copies
of any appeal to the persons described in 40 CFR 135.11(a).
Sec. 22.44 [Reserved]
Sec. 22.45 Supplemental rules governing public notice and comment in
proceedings under sections 309(g) and 311(b)(6)(B)(ii) of the Clean
Water Act and section 1423(c) of the Safe Drinking Water Act.
(a) Scope. This section shall apply, in conjunction with Secs. 22.1
through 22.32, in administrative proceedings for the assessment of any
civil penalty under sections 309(g) and 311(b)(6)(B)(ii) of the Clean
Water Act (33 U.S.C. 1319(g) and 1321(b)(6)(B)(ii)), and under section
1423(c) of the Safe Drinking Water Act (42 U.S.C. 300h-2(c)). Where
inconsistencies exist between this section and Secs. 22.1 through
22.32, this section shall apply.
(b) Public notice.--(1) General. Complainant shall notify the
public before assessing a civil penalty. Such notice shall be provided
within 30 days following proof of service of the complaint on the
respondent or, in the case of a proceeding proposed to be commenced
pursuant to Sec. 22.13(b), no less than 40 days before the issuance of
an order assessing a civil penalty. The notice period begins upon first
publication of notice.
(2) Type and content of public notice. The complainant shall
provide public notice of the complaint (or the proposed consent
agreement if Sec. 22.13(b) is applicable) by a method reasonably
calculated to provide notice, and shall also provide notice directly to
any person who requests such notice. The notice shall include:
(i) The docket number of the proceeding;
(ii) The name and address of the complainant and respondent, and
the person from whom information on the proceeding may be obtained, and
the address of the Regional Hearing Clerk to whom appropriate comments
shall be directed;
(iii) The location of the site or facility from which the
violations are alleged, and any applicable permit number;
(iv) A description of the violation alleged and the relief sought;
and
(v) A notice that persons shall submit comments to the Regional
Hearing Clerk, and the deadline for such submissions.
(c) Comment by a person who is not a party. The following
provisions apply in regard to comment by a person not a party to a
proceeding:
(1) Participation in proceeding. (i) Any person wishing to
participate in the proceedings must notify the Regional Hearing Clerk
in writing within the public notice period under paragraph (b)(1) of
this section. The person must provide his name, complete mailing
address, and state that he wishes to participate in the proceeding.
(ii) The Presiding Officer shall provide notice of any hearing on
the merits to any person who has met the requirements of paragraph
(c)(1)(i) of this section at least 20 days prior to the scheduled
hearing.
(iii) A commenter may present written comments for the record at
any time prior to the close of the record.
(iv) A commenter wishing to present evidence at a hearing on the
merits shall notify, in writing, the Presiding Officer and the parties
of its intent at least 10 days prior to the scheduled hearing. This
notice must include a copy of any document to be introduced, a
description of the evidence to be presented, and the identity of any
witness (and qualifications if an expert), and the subject matter of
the testimony.
(v) In any hearing on the merits, a commenter may present evidence,
including direct testimony subject to cross examination by the parties.
(vi) The Presiding Officer shall have the discretion to establish
the extent of commenter participation in any other scheduled activity.
(2) Limitations. A commenter may not cross-examine any witness in
any hearing and shall not be subject to or participate in any discovery
or prehearing exchange.
(3) Quick resolution and settlement. No proceeding subject to the
public notice and comment provisions of paragraphs (b) and (c) of this
section may be resolved or settled under Sec. 22.18, or commenced under
Sec. 22.13(b), until 10 days after the close of the comment period
provided in paragraph (c)(1) of this section.
(4) Petition to set aside a consent agreement and proposed final
order. (i) Complainant shall provide to each commenter, by certified
mail, return receipt requested, but not to the Regional Hearing Clerk
or Presiding Officer, a copy of any consent agreement between the
parties and the proposed final order.
(ii) Within 30 days of receipt of the consent agreement and
proposed final order a commenter may petition the Regional
Administrator (or, for cases commenced at EPA Headquarters, the
Environmental Appeals Board), to set aside the consent agreement and
proposed final order on the basis that material evidence was not
considered. Copies of the petition shall be served on the parties, but
shall not be sent to the Regional Hearing Clerk or the Presiding
Officer.
(iii) Within 15 days of receipt of a petition, the complainant may,
with notice to the Regional Administrator or Environmental Appeals
Board and to the commenter, withdraw the consent agreement and proposed
final order to consider the matters raised in the petition. If the
complainant does not give notice of withdrawal within 15 days of
receipt of the petition, the Regional Administrator or Environmental
Appeals Board shall assign a Petition Officer to consider and rule on
the petition. The Petition Officer shall be another Presiding Officer,
not otherwise involved in the case. Notice of this assignment shall be
sent to the parties, and to the Presiding Officer.
(iv) Within 30 days of assignment of the Petition Officer, the
complainant shall present to the Petition Officer a copy of the
complaint and a written response to the petition. A copy of the
response shall be provided to the parties and to the commenter, but not
to the Regional Hearing Clerk or Presiding Officer.
(v) The Petition Officer shall review the petition, and
complainant's response, and shall file with the Regional Hearing Clerk,
with copies to the parties, the commenter, and the Presiding Officer,
written findings as to:
(A) The extent to which the petition states an issue relevant and
material to the issuance of the proposed final order;
[[Page 40190]]
(B) Whether complainant adequately considered and responded to the
petition; and
(C) Whether a resolution of the proceeding by the parties is
appropriate without a hearing.
(vi) Upon a finding by the Petition Officer that a hearing is
appropriate, the Presiding Officer shall order that the consent
agreement and proposed final order be set aside and shall establish a
schedule for a hearing.
(vii) Upon a finding by the Petition Officer that a resolution of
the proceeding without a hearing is appropriate, the Petition Officer
shall issue an order denying the petition and stating reasons for the
denial. The Petition Officer shall:
(A) File the order with the Regional Hearing Clerk;
(B) Serve copies of the order on the parties and the commenter; and
(C) Provide public notice of the order.
(viii) Upon a finding by the Petition Officer that a resolution of
the proceeding without a hearing is appropriate, the Regional
Administrator may issue the proposed final order, which shall become
final 30 days after both the order denying the petition and a properly
signed consent agreement are filed with the Regional Hearing Clerk,
unless further petition for review is filed by a notice of appeal in
the appropriate United States District Court, with coincident notice by
certified mail to the Administrator and the Attorney General. Written
notice of appeal also shall be filed with the Regional Hearing Clerk,
and sent to the Presiding Officer and the parties.
(ix) If judicial review of the final order is denied, the final
order shall become effective 30 days after such denial has been filed
with the Regional Hearing Clerk.
Secs. 22.46-22.49 [Reserved].
Subpart I--Administrative Proceedings Not Governed by Section 554
of the Administrative Procedure Act
Sec. 22.50 Scope of this subpart.
(a) Scope. This subpart applies to all adjudicatory proceedings
for:
(1) The assessment of a penalty under sections 309(g)(2)(A) and
311(b)(6)(B)(i) of the Clean Water Act (33 U.S.C. 1319(g)(2)(A) and
1321(b)(6)(B)(i)).
(2) The assessment of a penalty under sections 1414(g)(3)(B) and
1423(c) of the Safe Drinking Water Act (42 U.S.C. 300g-3(g)(3)(B) and
300h-2(c)), except where a respondent in a proceeding under section
1414(g)(3)(B) requests in its answer a hearing on the record in
accordance with section 554 of the Administrative Procedure Act, 5
U.S.C. 554.
(b) Relationship to other provisions. Sections 22.1 through 22.45
apply to proceedings under this subpart, except for the following
provisions which do not apply: Secs. 22.11, 22.16(c), 22.21(a), and
22.29. Where inconsistencies exist between this subpart and subparts A
through G of this part, this subpart shall apply. Where inconsistencies
exist between this subpart and subpart H of this part, subpart H shall
apply.
Sec. 22.51 Presiding Officer.
The Presiding Officer shall be a Regional Judicial Officer. The
Presiding Officer shall conduct the hearing, and rule on all motions
until an initial decision has become final or has been appealed.
Sec. 22.52 Information exchange and discovery.
Respondent's information exchange pursuant to Sec. 22.19(a) shall
include information on any economic benefit resulting from any activity
or failure to act which is alleged in the administrative complaint to
be a violation of applicable law, including its gross revenues, delayed
or avoided costs. Discovery under Sec. 22.19(e) shall not be
authorized, except for discovery of information concerning respondent's
economic benefit from alleged violations and information concerning
respondent's ability to pay a penalty.
[FR Doc. 99-17337 Filed 7-22-99; 8:45 am]
BILLING CODE 6560-50-P
