Federal Register / Vol. 86, No. 120 / Friday, June 25, 2021 / Proposed Rules
under it, the time begins with the day
following the act, event, or default, and
includes the last day of the period,
unless it is a Saturday, Sunday, or legal
holiday that is observed by the Federal
government, in which event it includes
the next business day.
(b) When the period of time allowed
is less than seven days, intermediate
Saturdays, Sundays, and legal holidays
that are observed by the Federal
government are excluded from the
(c) Where a document has been served
or issued by placing it in the mail, an
additional five days will be added to the
time permitted for any response.
§ 1174.27 The hearing and the burden of
(a) The ALJ conducts a hearing in
order to determine whether a defendant
is liable for a civil penalty, assessment,
or both and, if so, the appropriate
amount of the penalty and/or
(b) The hearing will be recorded and
transcribed. The transcript of testimony,
exhibits and other evidence admitted at
the hearing, and all papers and requests
filed in the proceeding, constitute the
record for the ALJ’s and the authority
(c) The hearing will be open to the
public unless otherwise ordered by the
ALJ for good cause shown.
(d) The authority must prove a
defendant’s liability and any aggravating
factors by a preponderance of the
(e) A defendant must prove any
affirmative defenses and any mitigating
factors by a preponderance of the
§ 1174.28 Presentation of evidence.
(a) The ALJ shall determine the
admissibility of evidence.
(b) Except as provided in this part, the
ALJ shall not be bound by the Federal
Rules of Evidence, but the ALJ may
apply the Federal Rules of Evidence
where he or she deems appropriate.
(c) The ALJ shall exclude irrelevant
and immaterial evidence.
(d) The ALJ may exclude evidence,
although relevant, if its probative value
is substantially outweighed by the
danger of unfair prejudice, confusion of
the issues, or by considerations of
undue delay or needless presentation of
(e) The ALJ shall exclude evidence,
although relevant, if it is privileged
under Federal law.
(f) Evidence concerning compromise
or settlement offers shall be
inadmissible to the extent provided in
Rule 408 of the Federal Rules of
(g) The ALJ shall permit the parties to
introduce rebuttal witnesses and
(h) All documents and other evidence
taken for the record must be open to
examination by all parties unless the
ALJ orders otherwise.
§ 1174.29 Witness testimony.
(a) Except as provided in paragraph
(b) of this section, testimony at the
hearing shall be given orally by
witnesses under oath or affirmation.
(b) At the ALJ’s discretion, the ALJ
may admit testimony in the form of a
written statement or deposition. The
party offering such a statement must
provide it to all other parties along with
the last known address of the witness,
in a manner which allows sufficient
time for other parties to subpoena the
witness for cross-examination at the
hearing. The parties shall exchange
deposition transcripts and prior written
statements of witnesses proposed to
testify at the hearing as provided in
(c) The ALJ shall exercise reasonable
control over the mode and order of
interrogating witnesses and presenting
(d) The ALJ shall permit the parties to
conduct such cross-examination as may
be required for a full and true disclosure
of the facts.
(e) Upon any party’s motion, the ALJ
shall order witnesses excluded from the
hearing room so that they cannot hear
the testimony of other witnesses. This
rule does not authorize exclusion of—
(1) A party who is an individual;
(2) In the case of a party that is not
an individual, the party’s officer or
employee appearing for the entity pro se
or designated by the party’s
(3) An individual whose presence a
party shows to be essential to the
presentation of its case, including an
individual employed by the
Government or engaged in assisting the
§ 1174.30 Ex parte communications.
A party may not communicate with
the ALJ ex parte unless the other party
consents to such a communication
taking place. This does not prohibit a
party from inquiring about the status of
a case or asking routine questions
concerning administrative functions or
§ 1174.31 Sanctions for misconduct.
(a) The ALJ may sanction a person,
including any party or representative,
for failing to comply with an order, or
for engaging in other misconduct that
interferes with the speedy, orderly, and
fair conduct of a hearing.
(b) Any such sanction shall
reasonably relate to the severity and
nature of the misconduct.
(c) When a party fails to comply with
an order, including an order for taking
a deposition, producing evidence within
the party’s control, or responding to a
request for admission, the ALJ may:
(1) Draw an inference in favor of the
requesting party with regard to the
(2) In the case of requests for
admission, deem each matter for which
an admission is requested to be
(3) Prohibit the party failing to
comply with such order from
introducing evidence concerning, or
otherwise relying upon testimony
relating to, the information sought; and
(4) Strike any part of the pleadings or
other submissions filed by the party
failing to comply with such a request.
(d) The ALJ may refuse to consider
any motion, request, response, brief or
other document which is not filed in a
(e) If a party fails to prosecute or
defend an action under this part that is
commenced by service of a hearing
notice, the ALJ may dismiss the action
or may issue an initial decision
imposing penalties and assessments.
§ 1174.32 Post-hearing briefs.
Any party may file a post-hearing
brief. Such briefs are not required,
however, unless ordered by the ALJ.
The ALJ must fix the time for filing such
briefs, not to exceed sixty days from the
date the parties receive the transcript of
the hearing or, if applicable, the
stipulated record. Such briefs may be
accompanied by proposed findings of
fact and conclusions of law. The ALJ
may permit the parties to file reply
Subpart E—Decisions and Appeals
§ 1174.33 Initial decision.
(a) The ALJ will issue an initial
decision based only on the record. It
will contain findings of fact,
conclusions of law, and the amount of
any penalties and assessments.
(b) The ALJ will serve the initial
decision on all parties within ninety
days after the hearing’s close or, if the
ALJ permitted the filing of post-hearing
briefs, within ninety days after the final
post-hearing brief was filed.
(c) The findings of fact must include
a finding on each of the following
(1) Whether any one or more of the
claims or statements identified in the
complaint violate this part; and
(2) If the defendant is liable for
penalties or assessments, the
VerDate Sep<11>2014 16:54 Jun 24, 2021 Jkt 253001 PO 00000 Frm 00044 Fmt 4702 Sfmt 4702 E:\FR\FM\25JNP1.SGM 25JNP1
lotter on DSK11XQN23PROD with PROPOSALS1