[Federal Register Volume 60, Number 144 (Thursday, July 27, 1995)]
[Rules and Regulations]
[Pages 38612-38633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18325]
[[Page 38611]]
_______________________________________________________________________
Part III
Department of Health and Human Services
_______________________________________________________________________
Food and Drug Administration
_______________________________________________________________________
21 CFR Part 5 et al.
Civil Money Penalties: Biologics, Drugs, and Medical Devices; Rule
_______________________________________________________________________
Statement of Organization, Functions, and Delegations of Authority;
Notice
Federal Register / Vol. 60, No. 144 / Thursday, July 27, 1995 / Rules
and Regulations
[[Page 38612]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 5, 10, 17, and 20
[Docket No. 91N-0447]
RIN 0905-AD59
Civil Money Penalties: Biologics, Drugs, and Medical Devices
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
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SUMMARY: The Food and Drug Administration (FDA) is issuing final
regulations to establish hearing procedures for use when FDA proposes
the imposition of administrative civil money penalties. This rule
implements the civil money penalty provisions of several statutes: the
National Childhood Vaccine Injury Act of 1986 (NCVIA), the Prescription
Drug Marketing Act of 1988 (PDMA), the Safe Medical Devices Act of 1990
(SMDA), the Generic Drug Enforcement Act of 1992 (GDEA), and the
Mammography Quality Standards Act of 1992 (MQSA).
EFFECTIVE DATE: August 28, 1995.
FOR FURTHER INFORMATION CONTACT: Joseph M. Sheehan, Center for Devices
and Radiological Health (HFZ-84), Food and Drug Administration, 2098
Gaither Rd., Rockville MD 20850, 301-594-4765.
SUPPLEMENTARY INFORMATION:
I. Background
In the Federal Register of May 26, 1993 (58 FR 30680), FDA issued a
notice of proposed rulemaking (NPRM) to establish procedures for
hearings concerning the administrative imposition of civil money
penalties by the agency. The NPRM noted that Congress had in recent
years given FDA authority to impose civil money penalties in the NCVIA,
the PDMA, the SMDA, and the GDEA. FDA requested that comments be filed
by July 26, 1993.
Subsequently, a trade association requested an extension of time to
file comments, and, in the Federal Register of July 27, 1993 (58 FR
40103), the agency extended the deadline for comments to August 25,
1993. In the July 27, 1993, Federal Register, FDA corrected an
inadvertent error in the proposed rule and added a reference to civil
money penalties authority provided for in the MQSA. The MQSA was added
to the list of statutes covered by proposed part 17 insofar as the MQSA
provided for the administrative imposition of civil money penalties.
Also, as an interim measure pending adoption of proposed part 17,
FDA issued a regulation in the Federal Register of September 22, 1993
(58 FR 49190), under which it could temporarily conduct civil money
penalties hearings pursuant to part 12 (21 CFR part 12). FDA is now
revoking procedural regulations that it issued as a temporary measure
pending adoption of part 17. This revocation will be effective when
these part 17 regulations become effective. Specifically, Sec. 5.99 (21
CFR 5.99) (as published at 58 FR 34212, June 24, 1993) and
Sec. 10.50(c)(21) (21 CFR 10.50(c)(21)) (as published at 58 FR 49190)
were issued to allow FDA to use part 12 for civil money penalties
proceedings on an interim basis. Because this delegation is no longer
needed and because retention of these provisions in the Code of Federal
Regulations would be confusing, FDA is revoking Secs. 5.99 and
10.50(c)(21) when the new part 17 becomes effective.
As to any pending civil money penalty administrative actions that
were subject to Notices of Opportunity for Hearing under part 12, when
these part 17 regulations become effective, FDA will send letters to
the respondents explaining that the agency intends to reinitiate the
actions by the complaint and answer process of part 17. None of the
pending actions has yet reached the point in the process of publication
of a Notice of Hearing under 21 CFR 12.35. Since part 17 was
specifically drafted to govern administrative hearings on civil money
penalty assessments, its use for pending actions will not prejudice the
respondents and will assure consistency in the adjudication of these
matters. If, for any reason, there is a stay of the effectiveness of
these part 17 regulations, the agency will proceed with the pending
civil money penalty administrative actions under current 21 CFR 5.99,
10.50(c)(21), and part 12.
II. Summary of and Response to Comments
In response to FDA's NPRM, the agency received 12 public comments.
Most came from device manufacturers or their representatives and device
manufacturer trade associations. In addition, one consumer group and
the Administrative Conference of the United States commented. What
follows is a summary of and response to each comment. Most of those
commenting made more than one comment. Except for those comments that
are not germane to a particular proposed section of part 17, the
comments are considered in connection with the proposed sections to
which they are related. In addition to the changes discussed below, a
number of editorial changes to the text of the final rule have been
made to improve the clarity of the regulation.
A. General Comments on the Preamble
In responding to comments and formulating a final rule, FDA has
balanced competing concerns: Namely, the interests of potential
defendants in securing as many procedural safeguards as practicable,
and the interests of the public in an efficient process that
effectively implements the statutes. FDA is very conscious of the need
to provide due process for companies and individuals from whom the
Government is seeking civil money penalties, and the comments were
carefully evaluated against this standard. At the same time, for the
civil money penalty remedy to become an effective enforcement tool
under the statute, the administrative process must be able to proceed
with predictability and efficiency. The industry, as a whole, benefits
from an efficient administrative civil penalties process in that such a
system will help to maintain consistency in enforcement and thereby
protect the majority of companies who stay in compliance against unfair
competition from the small minority of firms that do not.
Accordingly, in developing this final rule, FDA has sought to
establish an efficient, predictable system that processes cases in a
fair and responsible manner, while affording defendants adequate
procedural safeguards. As benchmarks, the agency has examined other
existing civil money penalty processes, particularly as administered by
the Environmental Protection Agency (EPA) and by the Inspector General
of the Department of Health and Human Services (HHS). (See HHS
regulation on Medicare Exclusions and Civil Money Penalties, 42 CFR
part 1005; EPA Civil Penalties and Permit Revocation Regulation, 40 CFR
part 22; Program Fraud Civil Remedies Regulation for HHS, 45 CFR part
79; and Program Fraud Civil Remedies Regulation for EPA, 40 CFR part
27).
These regulations provide a variety of procedural rights. FDA has
selected from among these various provisions to create a fair hearing
process. In response to comments, FDA has made over 25 changes in the
final rule (see concluding section of this preamble), in addition to
numerous clarifications throughout the preamble. For example,
procedural safeguards under part 17 include motions for summary
decisions, interlocutory appeal from rulings of the presiding officer,
settlement conferences, allowing the parties to determine an
appropriate settlement, and providing additional time before the
[[Page 38613]]
hearing for the exchange of exhibits, witness lists, and written
testimony. All of the EPA and HHS regulations provide for appeal of a
presiding officer's initial decision to an appeals board. EPA has an
Environmental Appeals Board, while HHS has the Departmental Appeals
Board (DAB). FDA has determined (see paragraph 101 below) that it would
be an appropriate use of agency resources, as well as an efficient and
effective means for handling appeals, to have the DAB serve as the
reviewing authority for appeals of decisions by presiding officers on
civil penalty actions.
The DAB is generally recognized as a fair and effective
adjudicative forum. The DAB is an independent body within HHS with
expertise in adjudication of civil money penalties. Accordingly, FDA
will use that board, at least initially, for the adjudication of all
appeals, including review of default judgments, interlocutory appeals,
and appeals from initial decisions under this part. Elsewhere in this
issue of the Federal Register, FDA is publishing a final rule in which
the Commissioner of Food and Drugs delegates to the DAB the authority
for the adjudication of appeals.
While a number of comments to the proposed rule sought procedures
virtually identical to procedural rights available in civil litigation
in Federal district courts, another comment urged that FDA use a more
efficient complaint and answer procedure to streamline the process.
These part 17 regulations provide a level of procedural safeguards
consistent with that provided in other existing civil money penalties
regulations. FDA believes that these procedures afford a respondent an
impartial forum for the adjudication of any contested civil money
penalty assessments.
1. Two comments questioned the use of administrative civil money
penalties in connection with the PDMA and the NCVIA. Those commenting
argued that, without specific congressional authority, FDA may not
administratively impose civil money penalties, but must seek them
through court proceedings. Additionally, another comment argued that
FDA may not bind any future statutory grant of civil money penalties
authority to part 17 hearing procedures.
FDA disagrees with the position that civil money penalties in
connection with the PDMA and the NCVIA may not be imposed
administratively, for the reasons stated in the preamble to the NPRM
(58 FR 30680 through 30681). FDA acknowledges that the issue has not
been directly addressed by the courts, but it agrees with the comment
of the Administrative Conference of the United States that ``any
challenge to FDA's authority to impose penalties administratively under
such statutes (as the NCVIA) should be unsuccessful, cf., United States
v. International Harvester, 387 F. Supp. 1338 (D.D.C. 1974).''
As to implementation of any future civil money penalty statutory
provision, FDA has reconsidered the desirability of determining in
advance the use of part 17 procedures. Although the use of part 17
procedures to implement future civil money penalty legislation may be
entirely appropriate, the agency prefers to preserve the flexibility to
determine the procedures that will apply to specific statutory language
once enacted. Section 17.1 has been modified to reflect this change.
2. One comment raised the concern that FDA has thus far not been
delegated authority to impose civil money penalties by the Secretary of
Health and Human Services (the Secretary). The comment's premise is
incorrect. The Secretary has delegated to the Commissioner of Food and
Drugs (the Commissioner) all authority given the Secretary under the
Federal Food, Drug, and Cosmetic Act (the act). (See Sec. 5.10(a)(1).)
(See also section 903 of the act (21 U.S.C. 393).) In addition, the
Secretary has delegated to the Commissioner authority to perform all
functions vested in the Secretary by Congress under section 351 of the
Public Health Service Act (the PHS Act) (42 U.S.C. 262) concerning
biologic recall orders. (See 5 CFR 5.10(a)(5).) The Secretary has
granted the Commissioner authority to impose civil money penalties
under the NCVIA. (See Sec. 5.10(a)(35).) Also the Secretary delegated
to the Commissioner authority granted the Secretary under the MQSA,
which includes authority to impose civil money penalties. (See 21 CFR
5.10(a)(36).)
3. One comment requested FDA to correct its misquoting in the NPRM
regarding the language of section 17(f) of the SMDA (21 U.S.C. 333(g))
by using ``and'' when the statute provided ``or''.
The preamble to the NPRM stated (58 FR 30680 at 30681) that ``civil
money penalties are not authorized against persons who violate section
519(a) of the act (21 U.S.C. 360i(a)) * * * or section 520(f) of the
act (21 U.S.C. 360j(f)) * * * unless the violation constitutes a
significant and knowing departure from such requirements or a risk to
the public health.'' [emphasis added.] In the July 27, 1993, Federal
Register (58 FR 40103 through 40104), FDA corrected its inadvertent
misquote. Section 17(f) of the SMDA (21 U.S.C. 333(g)(1)(B)) states
that civil money penalties shall not apply to any person who violates
the requirements of section 519(a) or 520(f) ``* * * unless such
violation constitutes (I) a significant or knowing departure from such
requirements, or (II) a risk to public health * * *.'' [emphasis added]
Conversely, another comment argued that FDA had been inadvertently
correct and that the legislative history shows that Congress had
actually intended that the violations in question constitute
significant and knowing departures in order to be punishable by civil
money penalties. FDA rejects this argument because Congress' intent is
clear from the language of the statute. The legislative history
contained in the Conference Report on the SMDA also supports FDA's
interpretation (H. Conf. Rept. 959, 101st Cong., 2d Sess. 29 (1990)).
4. Another comment stated that FDA should make clear that civil
money penalties are in addition to other remedies available under law,
not in lieu of them. FDA agrees that the agency has the authority to
use civil money penalties in addition to other judicial and
administrative remedies, if appropriate.
5. One comment asserted that violations of medical device
reporting, current good manufacturing practice (CGMP), and tracking
regulations should be enforced through civil money penalties. FDA
agrees that these violations, as well as others, are suitable
candidates for civil money penalty actions where authorized by the
SMDA. FDA does not intend to rule out the use of civil money penalties
in any situation provided for by law. Nor does FDA believe that civil
money penalties need be the only remedy it may use to enforce these
violations.
6. A comment urged the use of civil money penalties in lieu of
warning letters for serious violations of law. FDA advises that its
normal practice is to give prior notice by a warning letter or other
means before taking more significant enforcement action. However, in
the case of very serious violations or other special circumstances, the
agency can and will continue to initiate judicial enforcement actions,
as may be appropriate with or without the customary prior notice. Civil
money penalties were not intended to take the place of warning letters;
rather, civil money penalties were intended to assist the agency in
safeguarding the regulatory system.
On April 21, 1995, President Clinton directed agencies to use
discretion to modify penalties for small businesses. FDA's traditional
approach, by which the agency usually provides written
[[Page 38614]]
warning to encourage voluntary correction of violations before
undertaking the imposition of regulatory sanctions, is in keeping with
the President's directive. Also, as discussed in paragraph 25, in
addition to establishing the respondent's liability, FDA must prove the
appropriateness of the penalty under the applicable statute in
administrative civil money penalty actions.
7. One comment requested that the agency set forth specific
examples of what will constitute substantial compliance with device
tracking regulations such as assigning a percentage of trackable
devices that would constitute ``substantial compliance.'' Until FDA has
gathered more information on how and to what extent industry has
complied with the device tracking regulations, it would be premature
for the agency to present such specific, defining examples. FDA
declines to do this at this time.
8. Yet another comment proposed that all civil money penalty
proposals be cleared through the Department of Health and Human
Services prior to implementation. Because the Commissioner of Food and
Drugs has been delegated authority to impose civil money penalties as
noted in comment 2 of section II.A. of this document, the agency
declines to adopt the comment's suggestion. However, as previously
noted in the preamble and in paragraph 101 below, FDA has selected the
DAB, at least initially, as the reviewing authority for appeals of
civil penalty matters. Thus, the DAB's decision will constitute final
agency action on contested FDA civil money penalties matters.
9. Several comments noted the absence of any prohibition against ex
parte communications with the presiding officer. FDA agrees that
restrictions on communications with the presiding officer concerning
matters involved in part 17 hearings would be appropriate. Therefore,
the agency has added Sec. 17.20 to provide restrictions on ex parte
communications.
10. Another comment requested that FDA specifically state that its
part 17 regulation does not provide for a private right of action. FDA
advises that only Congress can create a private right of action. FDA's
regulations are not intended to create such a right.
11. One comment requested that FDA make explicit the authority of
the parties and of the presiding officer to use alternative dispute
resolution (ADR) in resolving a dispute under part 17. FDA agrees that
settlement discussions should be encouraged. Therefore, the presiding
officer has been given authority to require the parties to attend
settlement conferences, which could include a conference held before an
impartial third party, including the presiding officer, another
administrative law judge, or a professional mediator. This change is
reflected in revised Sec. 17.19, and the agency believes it is a
sufficient authorization for the use of ADR procedures.
12. The same comment suggested that FDA clarify whether an appeal
to the Commissioner after an initial decision is required before a
respondent may seek judicial review. The comment noted that in Darby v.
Cisneros, 113 S.Ct. 2539 (1993), the Supreme Court determined that
agency regulations that permit, but do not require, an aggrieved party
to seek administrative review of a presiding officer's decision, allow
parties to forego the option of administrative review and proceed
directly to court. The comment stated a preference for requiring that a
party seek administrative review of a presiding officer's decision
before going to court, asserting that to be a sensible allocation of
responsibilities between courts and agencies. FDA agrees and accepts
the suggestion that FDA recast the regulation to ensure that a
respondent must request administrative review, which is now made to the
DAB, before seeking judicial review. Section 17.51(c) has been revised
accordingly.
13. One comment criticized the proposal on grounds that the new
part 17 will limit respondents' ability to reasonably contest the
agency's allegations, but did not provide specifics to support the
assertion. Absent any specific concerns raised by the comment, FDA can
only reiterate that the agency believes these procedures reasonably
accord due process and offer respondents a fair opportunity to contest
the Center's allegations before an impartial presiding officer.
14. One comment took issue with that portion of the preamble of the
NPRM which establishes FDA headquarters in Rockville, MD, as the
``venue of choice for hearing procedures.'' The author of the comment
urged that hearings take place in the FDA district office in whose
jurisdiction the violations are alleged to have occurred. The author
further argued that the burden of proof for change of venue from the
districts where the alleged violations occurred should rest with the
Center rather than the respondent. FDA believes this comment would be
more persuasive if the presiding officer were an FDA official from the
pertinent district office. However, since the administrative law
judge's principal office is in Rockville, MD, and other types of
administrative hearings are held there (e.g., hearings under part 12 of
FDA's procedural regulations), Rockville, MD, is the most logical and
appropriate venue in most cases. FDA notes that the presiding officer
has ample discretion to change the venue of the hearing when the
Rockville location would present a significant hardship to the
respondent.
15. Another comment recommended that FDA establish an internal
procedure such as an intra-agency council of senior compliance
officials and representatives from the Office of the Chief Counsel to
assure the fair exercise of prosecutorial discretion in choosing which
civil penalty cases to bring and how large a penalty to seek.
FDA agrees that it is important to exercise enforcement discretion
in a fair and reasonable manner. Due to the newness of the civil
penalties authority and the lack of FDA precedents in this area, the
Office of Regulatory Affairs, Office of Enforcement, will establish
coordinating procedures to help assure consistent policies in
exercising civil money penalties authority agencywide. This will
augment FDA's existing multilevel process that reviews all compliance
actions proposed by the field and Centers, including civil money
penalties, and which includes review by the Office of the Chief
Counsel. If FDA determines that additional review procedures are
appropriate after further experience assessing civil money penalties,
it can establish those as a matter of internal agency procedure and not
regulation.
B. Comments on Specific Sections
Section 17.3--Definitions
16. One comment noted that proposed Sec. 17.3 defined several terms
including ``defective,'' ``knowing departure,'' ``significant
departure,'' and ``minor violations,'' used in the SMDA, but that the
defined terms were not used elsewhere in the proposed rule and,
therefore, were unnecessary. The comment urged that it should be made
clear that the purpose of the definitions section is to define certain
terms used in the SMDA, not terms used in 21 CFR part 17.
FDA agrees that the final rule should clarify that these defined
terms apply to specific acts giving rise to civil money penalties, and
has revised Sec. 17.3 to reflect these changes. The agency has also
modified the definition of ``person'' or ``respondent'' in Sec. 17.3(b)
to provide additional examples of potential respondents. Finally, FDA
has included by reference in Sec. 17.3 definitions from the act, Title
21, Code of Federal
[[Page 38615]]
Regulations, and the PHS Act as they may be used in part 17
proceedings.
17. Another comment took issue with FDA's interpretation of the
phrase ``significant departure'' as that term is used at 21 U.S.C.
333(g)(1)(B)(i), which applies to certain recordkeeping and reporting
requirements for devices (21 U.S.C. 360i(a)) and to CGMP requirements
for devices (21 U.S.C. 360j(f)). Proposed Sec. 17.3(c), which is now
Sec. 17.3(a)(1), defined significant departure as a ``departure from
requirements which is neither isolated nor inconsequential.'' The
comment contended that this definition is likely to be met more often
than not in the case of CGMP violations. The comment further argued
that this result was contrary to the intent of Congress.
FDA notes that the comment cited no statutory language or
legislative history regarding the definition of ``significant
departure,'' although a review of the conference report (H.R. Conf.
Rep. No. 959, 101st Cong., 2d Sess. 29 (1990)) indicates that Congress
did not limit a ``significant departure'' as the comment advocated. FDA
believes, however, that the proposed definition could be improved to
state that a significant departure includes a single major incident or
a series of incidents that collectively are consequential. Section 17.3
has been amended to reflect this interpretation and to clarify that
``significant departure'' is being defined for the purposes of
interpreting 21 U.S.C. 333(g)(1)(B)(i).
The agency emphasizes that it will not seek assessments of civil
money penalties for trivial violations. FDA cannot list all violations
that it regards as ``inconsequential,'' and believes that it can and
will make reasonable judgments about the importance of violations.
18. One comment requested that the definition of ``knowing
departure'' be revised. The author would have ``knowing'' limited to
actual knowledge. FDA's proposed definition stated that ``knowing
departure means actual knowledge of departure from requirements, or
acting in deliberate ignorance of such departure, or acting in reckless
disregard of such departure.'' FDA disagrees with the comment. Part 17
defines ``knowing'' consistently with the definitions of ``knowingly''
or ``knew'' in the act as amended by the GDEA in 1992 (now 21 U.S.C.
321(bb)). Nothing in the SMDA or its legislative history suggests that
the definition of ``knowing'' in 21 U.S.C. 333(g)(1)(B)(i) was intended
to be more restrictive than the definitions of ``knowingly'' or
``knew'' that were added to the act by the GDEA in 1992. FDA has
revised the definition of ``knowing'' to clarify that it is being
defined for the purposes of interpreting 21 U.S.C. 333(g)(1)(B)(i).
19. Another comment maintained that the specific acts giving rise
to civil money penalties are defined much too broadly. For example the
author of the comment maintained that ``minor violations'' is too
broadly defined. In proposed Sec. 17.3, the term ``minor violations''
was defined as ``violations which are isolated and inconsequential.''
The term ``minor violations,'' as used in 21 U.S.C.
333(g)(1)(B)(ii), prohibits the assessment of civil money penalties for
minor violations against a person who demonstrates substantial
compliance with the requirements of 21 U.S.C. 360i(e) and (f), which
relate to device tracking and correction reports. FDA believes that the
term ``minor violations'' was used by Congress to prohibit the
assessment of civil penalties when a departure from requirements does
not rise to a level of single major incident or a series of incidents
that are collectively consequential. FDA has revised the final rule
(Sec. 17.3(a)(3)) accordingly and has clarified that ``minor
violations'' is being defined for the purposes of interpreting 21
U.S.C. 333(g)(1)(B)(ii). FDA notes that this definition of ``minor
violation'' is the converse of that adopted for significant departure
as used in 21 U.S.C. 333(g)(1)(B).
20. FDA received several comments on the definition of
``defective.'' As proposed, Sec. 17.3(a)(4) defined defective to
include ``any defect in performance, manufacture, construction,
components, materials, specifications, design, installation,
maintenance, service, or any defect in mechanical, physical and
chemical properties in a device.'' The comments expressed concern about
possible broad implications of the proposed definition. In the final
rule, FDA has generally retained the proposed definition but clarified
that it is included in the defined terms solely for the purpose of
interpreting 21 U.S.C. 333(g)(1)(B)(iii), which pertains to the very
narrow area of devices that may be prepared, packed or held under
insanitary conditions.
One comment argued that the inclusion of ``performance'' in the
definition of ``defective'' is overly broad because it includes
potential user error in the operation of the device. The comment
suggested ``performance'' should be eliminated from the definition.
The intent of 21 U.S.C. 333(g)(1)(B)(iii) was to exempt, from
potential assessment of civil penalties, those violations that may
result from preparing, packing, or holding devices under insanitary
conditions but that do not involve ``defective'' devices.
FDA agrees that performance failures based solely on user error
unrelated to the conditions stated in 21 U.S.C. 351(a)(2)(A) or
unrelated to problems with the device itself would not be considered a
``defect in performance'' of the device. The agency has revised the
definition to make it clearer that ``defect in performance'' refers to
``defect in performance of a device,'' not to defect in performance of
a user.
21. The same comment also recommended that the definition of
``defective'' in Sec. 17.3 be amended to add the following statement:
``Defective service and maintenance are included within the scope of
this definition only to the extent that such defects are the result of
negligence.''
FDA does not believe that a different standard should be applied to
service and maintenance than to other activities covered by the
definition, such as manufacture and construction. Therefore, the agency
is not adopting the suggested amendment to the definition. FDA notes
that it does not envision minor deviations from established maintenance
or service schedules as being the basis for a civil money penalty
action. FDA has clarified the definition of ``defective'' to substitute
``or'' for ``and'' in the phrase ``any defect in the mechanical,
physical, or chemical properties of a device,'' since a defect in any
one of these properties would cause the device to be ``defective.''
22. Another comment requested that the definition of ``defective''
for purposes of civil money penalty actions incorporate the concept
that a device is defective only if the device could reasonably be
expected to pose a risk of some harm or not to function as intended
because of the defect.
FDA disagrees. FDA will not seek civil money penalties because of
trivial defects. However, defects are deviations that can affect the
quality or performance characteristics of a device. To require a
showing that the deviation is expected to cause harm or malfunction
would shift the standard to allow more deviations and to provide less
public health protection. The civil money penalty remedy is intended to
promote the public health and the adopted definition of ``defective''
for purposes of 21 U.S.C. 333(g)(1)(B)(iii) supports this goal.
Section 17.5--Complaint
23. A comment remarked that Sec. 17.5 does not contain any
safeguards to ensure that FDA will only bring actions
[[Page 38616]]
in those instances where it believes in good faith after properly
conducting an investigation that violations have occurred sufficient to
warrant civil money penalties. The comment did not identify what those
safeguards should be. Although FDA declines to change Sec. 17.5, as the
answer to comment 15 makes clear, FDA's review process for assessing
civil money penalties should ensure that the agency will bring such
actions only under the circumstances stated in the comment.
24. One comment argued that a complaint should specify ``all
facts'' on which FDA is relying. FDA believes that the requirement
regarding the contents of the complaint filed under part 17, as
proposed, is consistent with other civil processes. For example, a
complaint filed under Rule 8(a) of the ``Federal Rules of Civil
Procedure,'' requires only ``* * * (2) a short and plain statement of
the claim showing that the pleader is entitled to relief * * *.'' The
requirements for a complaint are also consistent with the previously
cited EPA and HHS Program Fraud Civil Remedies regulations.
FDA intends to file complaints that provide a reasonable
description in sufficient detail for a respondent to have a fair
understanding of the bases for the action. Moreover, the regulations
requiring production of documents (Sec. 17.23) and exchanges of witness
statements and exhibits (Sec. 17.25) provide for detailed presentations
of factual information.
25. The same comment argued that the complaint should justify the
amount of civil penalties being sought in accordance with factors
identified in Sec. 17.34. Again, FDA believes that a complaint filed
under part 17 satisfies the requirements of notice pleading.
FDA recognizes that under the Administrative Procedure Act (APA) (5
U.S.C. 556(d)), as interpreted by the Supreme Court in Director, OWCP
v. Greenwich Collieries, 114 S. Ct. 2251, 2257 (1994), the agency has
the burden of proof on the respondent's liability and on the
appropriateness of the penalty in light of the factors specified in the
statute to be taken into account in determining the penalty. However,
the proof that is required by the APA and specified in Sec. 17.33(b) is
to be presented by the Center at the time of the hearing, not, as the
comment suggests, in the complaint. In order to clarify that the burden
of proof referenced in the APA requires the Center to prove the
respondent's liability and the appropriateness of the penalty under the
applicable statute, Sec. 17.33(b) has been revised to state that ``in
order to prevail, the Center must prove respondent's liability and the
appropriateness of the penalty under the applicable statute by a
preponderance of the evidence.''
26. This same comment called for ``the intervention of [an]
impartial, non-investigating party regarding whether an administrative
complaint is sustainable.'' FDA believes that part 17 already provides
for such an ``impartial non-investigating party'' in the form of a
presiding officer, who is an administrative law judge qualified under 5
U.S.C. 3105.
27. Another comment objected that the regulation does not provide
for a separation of investigatory and adjudicatory functions and stated
that civil money penalty proceedings should be among those hearings to
which separation of functions applies. FDA has added Sec. 17.20 to
provide restrictions on ex parte communications with the presiding
officer. Since the DAB will be adjudicating appeals in civil money
penalties proceedings, there is no need to adopt separation-of-
functions rules in these proceedings.
28. Yet another comment complained that Sec. 17.5(a) fails to
identify anyone in FDA management who must approve the decision to
impose a civil money penalty. Further, the author of the comment stated
a belief that an initial determination of whether or not civil money
penalties should be imposed should be made prior to the service of a
complaint.
FDA advises that such an initial determination is in fact made. As
described in paragraph 15, FDA has an established review procedure for
enforcement cases, and that process will have added coordination for
civil money penalties cases due to the newness of the authority and the
lack of FDA precedents. However, since this is an institutional
decision, it is not appropriate to designate a single individual as the
agency's decisionmaker.
29. Yet another comment argued that notice pleading such as that
provided for in Sec. 17.5(b)(1) is inappropriate in light of the
limited discovery provided for under these regulations. The comment
called for either a more detailed notice in the complaint or greater
discovery.
As discussed in paragraphs 24 and 61, FDA believes expanded
discovery and pleading are not necessary. FDA intends to file
complaints that provide a reasonable description in sufficient detail
for respondents to have a fair understanding of the bases for the
action.
30. One comment requested that FDA first put a respondent on notice
via a warning letter before it files a claim for civil money penalties.
FDA advises that as with FDA's judicial enforcement remedies, it will
normally give prior notice by a warning letter or other means, although
there may be exceptional circumstances where no prior warning would be
given.
Section 17.7--Service of Complaint
31. One comment stated that an affidavit as proof of service should
suffice only when service is made by personal delivery. FDA agrees that
an affidavit is most appropriate when service is made by personal
delivery, and has amended Sec. 17.7(b)(1) to refer to ``personal
delivery.''
32. A comment expressed concerns about the costs to be incurred by
both the Center and the respondent as a result of these administrative
procedures. FDA was mindful of the costs of litigation when it proposed
part 17, and has sought to draft these procedures to minimize costs to
all concerned. For example, providing for written direct testimony
rather than oral direct testimony will significantly reduce the time
and costs associated with hearings before the presiding officer.
Section 17.9--Answer
33. One comment argued that Sec. 17.9 should provide for amendments
to an answer after submission. FDA advises that it intends that
complaints and answers may be amended on motion of the parties
throughout the proceeding to conform to proof as justice may require.
The ``Federal Rules of Civil Procedure'' follow this method for
amendment of pleadings, allowing the motions to be ruled on by the
district judge. Similarly, the presiding officer has been given this
authority, which is so provided in the final rule (Sec. 17.9(d)).
34. A comment argued that 30 days is not sufficient to file an
answer and that 60 days should be allowed for this purpose. FDA advises
that if 30 days is not sufficient, a respondent may apply for more time
upon a showing of good cause. (See Sec. 17.9(c).)
35. One comment observed that Sec. 17.9(c) provides for a request
for an extension of time within which to file an answer, which request
is to be ruled on by the presiding officer, who at that stage will not
have been appointed. Under proposed Sec. 17.12, the presiding officer
is appointed only after the respondent has answered. The comment
requested that the final rule change the procedure.
FDA agrees and is changing the rules to eliminate Sec. 17.12, which
is unnecessarily repetitious, to include the
[[Page 38617]]
definition of ``presiding officer'' in Sec. 17.3, and to add a
provision to Sec. 17.5(d) for the assignment of the presiding officer
upon the filing of the complaint.
36. Another comment objected that the proposed rules allow for the
default of a respondent who fails to answer a complaint because
extraordinary circumstances prevented it from responding within a
particular timeframe.
FDA believes the regulation, as proposed, adequately addresses this
point. Section 17.9(c) provides for an extension of time within which
to file an answer when the respondent can show good cause.
Additionally, a respondent may file a motion to reopen a default
judgment on the grounds that extraordinary circumstances prevented the
respondent from filing an answer. This should provide the relief that
the comment requested.
Section 17.11--Default Upon Failure to File An Answer
37. A comment argued that Sec. 17.11 should apply an ``excusable
neglect'' standard, not an ``extraordinary circumstances'' test, for
determining when relief from default for failure to answer should be
granted. FDA prefers the ``extraordinary circumstances'' test, which,
although somewhat harder to meet, is justified by the need to encourage
respondents to respond in a timely fashion. Additionally, both EPA's
and HHS's Program Fraud Civil Remedies regulations use an
``extraordinary circumstances'' test for determining whether to set
aside a default judgment.
38. Another comment recommended that the language set forth in
Sec. 17.11(a) be modified to contain a requirement for the Commissioner
to stay the initial decision of default upon a showing of extraordinary
circumstances. FDA has changed Sec. 17.11 regarding the issuance of a
decision based upon default to allow the presiding officer to issue the
initial decision rather than the Commissioner. The determination of
whether to set aside a default judgment is an administrative matter
that is better suited for initial review by the presiding officer, and
which would be subject to appeal to the DAB.
39. The same comment stated that it is imperative that the term
``extraordinary circumstances'' be fully defined. FDA disagrees. To
attempt to define and thus limit the circumstances which will be deemed
``extraordinary'' would be futile. FDA could not possibly anticipate
all ``extraordinary circumstances.'' Indeed, such an attempt would
probably not be in the interest of respondents as a group, since it
would necessarily limit the kinds of circumstances that could be
considered ``extraordinary'' and, therefore, in which a default
decision could be set aside.
40. Yet another comment requested that no time limit be imposed on
the remedy set forth in proposed Sec. 17.11(c) concerning late filing
of an answer. FDA disagrees. It is difficult to conceive of
``extraordinary circumstances'' that would justify extending the period
for filing an answer or motion before the initial decision becomes
final and binding. The regulation sets forth a reasonable procedure for
the presiding officer to set aside a default judgment upon the showing
of extraordinary circumstances by the respondent.
41. A comment requested that, in order for a default judgment to be
entered for failure to answer a complaint, the Center should be
required to prove that the complaint was received by the respondent.
FDA agrees and has amended Sec. 17.11 accordingly.
42. A comment advocated a provision authorizing a party to move to
disqualify a presiding officer in order to assure a fair and impartial
hearing. The agency advises that such a motion, carefully documented
and based upon good cause, may be filed without a provision in these
rules specifically authorizing it. The APA (5 U.S.C. 556(b)) authorizes
disqualification of a presiding officer based on the filing in good
faith of a timely and sufficient affidavit.
Section 17.13--Notice of Hearing
43. One comment argued that Sec. 17.13 should contain clear
standards, with reasonable timeframes, for setting the date, time, and
place of the hearing or prehearing conference. Further, the comment
suggested that the rules should clarify that the presiding officer sets
all hearing dates.
FDA believes that it is currently clear that the presiding officer
sets all hearing dates. However, FDA disagrees that the rules should
set timeframes for a hearing or prehearing conference. Scheduling
depends on many variables, including the schedule of the presiding
officer, the length of the hearing, the number of witnesses, etc. The
presiding officer needs flexibility to schedule prehearing conferences,
testimony, and briefing within the limits set forth in the regulation.
Accordingly, additional specific time limitations are not being added
to the regulations.
44. One comment requested that Sec. 17.13 explicitly provide that
either the notice of hearing or the complaint state specifically and in
detail each violation alleged and the factual basis for it. The
complaint is required to state the allegations of liability against the
respondent, including the statutory basis for liability, to identify
the violations that are the basis for the alleged liability, and to
state the reasons that the respondent is responsible for the
violations. In addition, the notice of hearing requires a statement as
to the nature of the hearing and the legal authority and jurisdiction
under which the hearing is to be held, as well as a description of the
procedures for the conduct of the hearing.
FDA declines to make the requested change. The agency believes that
the regulations, including Sec. 17.5(b), require that a complaint
provide a respondent with a reasonable description in sufficient detail
for a respondent to have a fair understanding of the bases for the
action and the issues for the hearing. FDA has clarified in Sec. 17.13
that the notice of hearing is to be served on the respondent after the
answer has been filed.
45. Another comment expressed the view that proposed Sec. 17.13(f),
which is now Sec. 17.13(e), allows ex parte communications between the
Center and the presiding officer without participation or comment by
the respondent. The comment requested that ex parte communications not
be permitted.
As noted in comment 9 above, Sec. 17.20 has been added to restrict
ex parte communications under part 17. However, FDA believes that ex
parte contacts are necessary with respect to scheduling of the hearing
or prehearing conference, and are contemplated for such administrative
purposes. Ex parte scheduling contacts are common at agencies
throughout the Federal Government and are not improper under
Sec. 17.20. All scheduling decisions made before the notice of hearing
is served are subject to change on motion of the respondent, in any
event.
Section 17.15--Parties to the Hearing
46. One comment argued that Sec. 17.15 should specify that parties
may settle issues prior to the hearing without admitting liability. FDA
advises that there is no need to specifically state that the parties
can stipulate that a settlement does not carry with it an admission of
liability.
The regulation provides that the parties may agree to a settlement
of all or a part of the matter. It would be inappropriate to limit by
regulation the issues that may or may not be covered in a settlement
agreement. The final rule allows for wide latitude in settlement
agreements.
[[Page 38618]]
47. Another comment requested that FDA specifically state that
respondent's counsel may be present and participate at the hearing. FDA
agrees, and has amended the regulation to add Sec. 17.15(c)
accordingly.
48. A comment recommended that the final rule state whether a
settlement pursuant to Sec. 17.15(b) is to be incorporated in the
initial decision or is instead to be an independent agreement between
the parties. The comment went on to state that, if the settlement is to
be incorporated in an independent agreement, the complaint should be
dismissed.
FDA advises that a settlement agreement is to be an independent
agreement. However, FDA believes that it is not necessary to require
the dismissal of the complaint upon the filing of a settlement
agreement, as the case will be considered resolved and closed by the
filing of the settlement agreement, and the agreement will so provide.
Section 17.17--Summary Decisions
49. A comment objected to the inclusion of a summary decision
procedure in proposed part 17. FDA affirms the desirability of summary
decision procedures in this context. In many situations, the facts will
be undisputed and the only question to be decided is one of law. In
such cases, time and money can be saved through a summary decision
procedure.
50. The author of the same comment urged that, if summary decision
procedures are retained, time to respond to a motion for summary
decision should be 30 days, not 10. FDA agrees that 10 days is a short
time in which to respond. Therefore, FDA is extending from 10 to 30
days the period in which to respond to a motion for summary decision.
51. Another comment argued that summary judgment for the Center
should never be granted without the filing of an affidavit prior to the
motion being filed. The comment asserts that failure to require an
initial affidavit prior to a motion for summary decision denies the
respondent the opportunity to verify the facts set forth in the
complainant's pleadings.
The language in Sec. 17.17 setting forth the use of affidavits in
filing for a motion for summary decision is virtually identical to the
language in Rule 56 of the ``Federal Rules of Civil Procedure.''
Respondent may oppose the motion for summary decision with specific
facts or opposing affidavits. The presiding officer may only grant the
motion if the pleadings, affidavits, and other material in the record
show that there is no genuine issue as to any material fact.
Additionally, the presiding officer may direct further evidentiary
proceedings on facts still at issue. Accordingly, FDA believes the rule
provides adequate safeguards for the due process rights of the
respondent.
52. Another comment asked the following: (1) Whether or not a
proceeding will be stayed pending an interlocutory appeal granting
partial summary decision, and (2) whether judicial review of such a
decision is a prerequisite to interlocutory relief.
The decision to stay a proceeding pending appeal is within the
discretion of the presiding officer, who will make such a decision
based on the facts before him or her at the time. Similarly, FDA
believes that in some circumstances it would not be necessary or
appropriate to have an interlocutory appeal of a presiding officer's
partial summary judgment decision on civil money penalties. A decision
by a district court granting partial summary judgment is usually not
reviewable by the court of appeals on an interlocutory basis. (See,
e.g., King v. California Co., 224 F.2d 193 (5th Cir.), cert. denied,
352 U.S. 1007 (1955); Marino v. Nevitt, 311 F.2d 406 (3rd Cir. 1963);
Acha v. Blame, 570 F.2d 57 (2nd Cir. 1978).)
53. Another comment suggested that respondents should be given an
opportunity to conduct discovery before FDA may bring a motion for
summary decision. FDA advises that the presiding officer has the
discretion to deny the motion, grant the motion, or order a continuance
to permit affidavits or additional evidence to be obtained under
Sec. 17.23(a).
54. Another comment argued that a party should have the option of
taking an interlocutory appeal on a partial summary decision order or
appealing the issue after a final disposition of the entire matter. FDA
believes that a party should be permitted to request interlocutory
appeal and has amended Sec. 17.17 and added Sec. 17.18 accordingly.
Economy of effort dictates that partial summary decisions not be
appealed routinely to the entity designated by the Commissioner to
decide appeals (currently the DAB) on an interlocutory basis, but FDA
has agreed to provide the option to permit interlocutory appeal within
the discretion of the presiding officer and the entity hearing the
appeal. In general, appeal of all issues after a final disposition of
the entire matter would reduce unnecessary review time for resolution
of civil money penalty cases.
55. One comment expressed a concern about language in the preamble
of the proposed rule to the effect that the SMDA permits FDA to bypass
the administrative hearing procedure and pursue the imposition of civil
money penalties in Federal court. FDA has reconsidered the language
stated in the NPRM.
The statute authorizes assessment of civil money penalties in an
administrative procedure under the SMDA (21 U.S.C. 333(g)(2)), and this
is the most efficient manner of imposing civil money penalties.
Judicial review would only occur in the United States Court of Appeals
as initiated by the respondent (21 U.S.C. 333(g)(3)).
Section 17.19--Authority of the Presiding Officer
56. A comment objected that Sec. 17.19 does not set forth criteria
upon which the presiding officer is to base the assignment of a hearing
date. This hearing date, according to the comment, should be within at
least 30 days of the giving of written notice in all hearings.
FDA does not believe it is necessary to set forth such criteria.
The presiding officer will set dates based upon factors such as his or
her own schedule, the length of the hearing, and the number of
witnesses. FDA hopes that hearings will be completed expeditiously, but
a 30-day period from notice until actual hearing may not be enough time
in complex hearings.
57. A comment complained that proposed Sec. 17.19(b)(14), which is
now paragraph (b)(15), does not define ``related or similar
proceedings.'' FDA chose not to define this phrase because of the
difficulty of anticipating all proceedings that might be ``related or
similar.'' The comment provides no help in defining the phrase, and the
agency does not believe that a definition is necessary.
58. A comment argued that FDA should not have the power to subpoena
documents because this would impermissibly broaden FDA's enforcement
powers. FDA disagrees. Congress has specifically provided that FDA may
subpoena documents under certain circumstances in civil money penalty
proceedings. (See 21 U.S.C. 333(g)(2)(A) and 21 U.S.C. 335(b)(1)(A)).
This statutory authority is similar to that granted to, and exercised
by, other Federal entities, such as the EPA and the HHS Inspector
General, and the agency expects to use this authority to the extent
provided by law. (See paragraph 60 below.)
59. Yet another comment complained that proposed Sec. 17.19(b)(16),
which is now paragraph (b)(17), which permits the presiding officer to
``waive, suspend, or modify any rule,'' gives too much discretion to
the presiding officer. The
[[Page 38619]]
comment urged that this language be deleted. FDA disagrees. Under 21
CFR 12.70(m), the presiding officer in formal FDA evidentiary hearings
has had this authority for many years, and there have been few, if any,
allegations that this authority has been abused.
60. One comment opposed the authorization in Sec. 17.19(b)(5) for
issuance of subpoenas by the presiding officer in proceedings under
section 303(g)(2)(A) of the act (21 U.S.C. 333(g)(2)(A)). The author of
the comment stated that this section of the SMDA authorizes only an
investigative subpoena, not a hearing subpoena.
FDA disagrees with the comment's interpretation of the SMDA, which,
in pertinent part, reads as follows: ``In the course of any
investigation, the Secretary may issue subpoenas requiring the
attendance and testimony of witnesses and the production of evidence
that relates to matters under investigation.'' FDA interprets this to
allow the agency to issue subpoenas related to a civil money penalty
proceeding at any time, including during the adjudication of the
penalty. The legislative history indicates that the agency was given
authority to subpoena records and witnesses relevant to the civil
penalty proceeding. In addition, the statutory phrase ``attendance and
testimony of witnesses and the production of evidence'' reflects an
intention that the testimony and documents be useable at the hearing
itself.
Section 17.23--Discovery
61. A comment stated that FDA should authorize depositions, written
interrogatories, and requests for admissions. The comment argued that,
while brevity and economy are worthwhile goals, respondents need fuller
discovery. The comment asserts that discovery depositions are necessary
tools in the formation of a response to a civil money penalties
complaint. Specifically, the comment objects to the presentation of
hearing testimony orally without the opportunity to depose witnesses
before the hearing.
FDA disagrees, and does not believe that additional forms of
discovery are necessary for due process to be accorded to respondents.
EPA and HHS adjudicative procedures provide these discovery mechanisms
under their regulations enacted pursuant to the Program Fraud Civil
Remedies Act (31 U.S.C. 3801, et. seq.). However, 31 U.S.C.
3803(g)(3)(B)(ii) requires that discovery be authorized to the extent
allowed by the presiding officer. The program statutes that these part
17 provisions implement do not require that discovery be provided and
FDA is not required to provide for discovery under the APA, which
governs these procedures. (See Pacific Gas and Electric Co. v.
F.E.R.C., 746 F.2d 1383, 1387 (9th Cir. 1984); McClelland v. Andrus,
606 F.2d 1278, 1285 (D.C. Cir. 1979).)
FDA has discretion to determine the extent of discovery to which a
party is entitled in an administrative hearing. In order to allow the
parties to present a witness' testimony in the event that a witness
would be unavailable for the hearing, FDA has added Sec. 17.23(e) to
provide for depositions in limited circumstances. Specifically, the
presiding officer may order depositions upon a showing that the
information sought is not available by alternative methods and there is
a substantial reason to believe that relevant and probative evidence
may not otherwise be preserved for presentation by a witness at the
hearing.
In order to provide advance notice of each witness' testimony prior
to cross-examination at the hearing, FDA has changed Sec. 17.37(b) to
require that direct testimony of witnesses be submitted in written
form. Section 17.25(a) requires that parties exchange written testimony
at least 30 days before the hearing. This should eliminate any concern
that a party may be unfairly surprised by a witness' testimony
presented at a hearing. Section 17.19(b)(10) has also been changed to
authorize the presiding officer to recall a witness for additional
testimony upon a showing of good cause. The failure of a party to
provide written direct testimony of a witness before a hearing will
result in exclusion of the witness' testimony.
The prehearing production of documents and exchange of exhibits by
both parties, coupled with the right to cross-examine witnesses at the
hearing and recall witnesses upon a showing of good cause, obviates the
need for routine depositions, written interrogatories, and requests for
admission. Recent changes to the ``Federal Rules of Civil Procedure''
have significantly reduced the number of depositions available to
parties in Federal court litigation because of their expensive and time
consuming nature (Fed. R. Civ. Proc. 30(a)(2)). FDA believes that its
provision for written direct testimony is more cost effective for all
concerned. Additionally, to ensure timely exchange of documents between
the parties, Sec. 17.23(a) has been changed to require that requests
for production of documents be answered 30 days after the request, and
that the request be made no later than 60 days before the hearing,
unless otherwise ordered by the presiding officer.
62. Another comment argued that Sec. 17.23 should specifically
authorize the presiding officer to grant protective orders for trade
secrets and confidential commercial information.
FDA agrees and has added a new paragraph to Sec. 17.19(b)(18) to
the final rule authorizing the presiding officer to issue protective
orders for the protection of trade secrets and confidential commercial
information. In order to reflect this change and to eliminate any
confusion that resulted from the proposed rule, FDA has revised
Secs. 17.28, 17.33, and 17.41 to more clearly state the disclosure
rules related to part 17 hearings. Additionally, in Sec. 17.23(d)(3)
FDA has added that the burden of showing that a protective order is
necessary is on the party seeking the order.
63. A comment argued that Sec. 17.23 should specifically exempt
``privileged'' information from access by FDA, even under a protective
order. The comment expressed concern that the subsection authorizing
the presiding officer to grant a protective order does not address
trade secrets and confidential commercial information.
The agency believes that it would not be appropriate for FDA to be
denied access to such information. FDA typically has broad access to
confidential documents through its regulatory activities and carefully
safeguards the confidentiality of those documents. As discussed in
comment 62, the presiding officer is authorized to issue a protective
order that will prevent public disclosure of such information.
Section 17.25--Exchange of Witness Lists, Witness Statements, and
Exhibits
64. A comment took issue with the harshness of the ``extraordinary
circumstances'' test for relief for failure to exchange witness lists,
statements, and exhibits. The author argued that this relief should be
granted only when a party did not substantially comply or noncompliance
was in bad faith.
FDA disagrees with the comment's interpretation of proposed
Sec. 17.25(b)(2). However, the agency has clarified that Sec. 17.25
(b)(2) and (b)(3) refer to the timely exchange of witness lists under
Sec. 17.25(a). The exclusion of other evidence not exchanged in
accordance with Sec. 17.25(a) is within the discretion of the presiding
officer as noted in Sec. 17.25(b)(1). The agency believes that it is
fair and appropriate to grant relief from sanctions for failure to
follow the requirements for the timely exchange of witness lists only
if there are ``extraordinary circumstances.''
[[Page 38620]]
To provide additional time for the parties to prepare for the
hearing, FDA has changed the deadline for the exchange of witness
lists, exhibits, and prior written statements of witnesses from 15 days
to 30 days before the hearing. Section 17.25(c) has also been changed
to add that objections to authenticity of documents, exchanged pursuant
to Sec. 17.25(a), must be made no later than 5 days before the hearing,
or the documents will be deemed authentic.
Section 17.27--Hearing Subpoenas
65. A comment argued that the authority of the presiding officer
under Sec. 17.27 to subpoena witnesses broadens FDA's power and is not
authorized under the PDMA and the NCVIA. FDA agrees that because
neither the PDMA nor the NCVIA grants FDA subpoena powers, Sec. 17.27
should not be made applicable to hearings under these statutes.
FDA is altering Sec. 17.27 to clarify that subpoenas may only be
issued by the presiding officer to the extent authorized by law. In
order to ensure that a party can prove that a witness has been served
with a subpoena, FDA has deleted the provision on service of subpoenas
by first-class mail. Revised Sec. 17.27(e) provides that subpoenas
shall be served in the manner prescribed for service of a complaint in
Sec. 17.7.
Section 17.30--Computation of Time
66. Another comment contended that the ``less than 7 days'' time
period stated in proposed Sec. 17.30(b) should be changed to be ``less
than 11 days'' if the summary decision response time in Sec. 17.17
remains at 10 days. The comment explained that Rule 6(a) of the
``Federal Rules of Civil Procedure'' uses the ``less than 11 days''
rule specifically to avoid routine requests for extension of the 10-day
time for responding to most motions, a period that may include only 5
business days. FDA is changing the summary decision response time to 30
days (see paragraph 50), which should obviate the need for routine
requests for extension of the time for responding to motions for
summary decision.
Section 17.33--The Hearing and Burden of Proof
67. A comment urged that the presiding officer be required to
exclude from the public portion of a hearing all evidence involving
what he or she has determined to be trade secrets or confidential
commercial information. FDA believes that this is unnecessary.
The agency has revised Sec. 17.33(d) to clarify the scope of
information that may be presented in a closed hearing. Under Sec. 17.33
the presiding officer will apply existing laws and regulations to
protect trade secrets and confidential commercial information from
public disclosure.
68. Yet another comment urged that the Center be required to prove
its case by ``clear and convincing evidence'' in light of what the
comment refers to as the extremely broad definitions of punishable acts
in Sec. 17.3, rather than by a ``preponderance of evidence'' as
provided for in the proposal.
FDA believes that the definitions in Sec. 17.3 as revised provide
adequate explanation of the defined terms. The acts for which civil
money penalties may be assessed, however, are delineated in the various
statutory schemes for civil penalties to which part 17 applies. The
``preponderance of evidence'' test is common in many civil proceedings,
and is the appropriate standard of proof to be applied by the presiding
officer under 5 U.S.C. 556(d). (See Sea Island Broadcasting of S.C. v.
Federal Communications Commission, 627 F.2d 240 (D.C.Cir.), reh. den.,
cert. denied, 449 U.S. 834 (1980).) FDA rejects the comment.
Section 17.34--Determining the Amount of Penalties and Assessments
69. Two comments urged that FDA include ``degree of culpability''
as a factor in determining the amount of a civil money penalty under
Sec. 17.34. The degree of culpability is listed as a factor to be
considered in 21 U.S.C. 333(g)(2)(B). Because the statutory civil money
penalty provisions implemented by this regulation differ, FDA has
referenced the statutory scheme under which the penalty is assessed for
purposes of determining the amount of penalty, rather than listing
factors in Sec. 17.34. Accordingly, FDA rejects the comment.
70. Another comment argued that FDA should factor in the degree to
which a respondent has cooperated with FDA. FDA believes that the
presiding officer could properly consider the extent of cooperation
under the authority provided in Sec. 17.34(c).
Section 17.35--Sanctions
71. Another comment argued that the sanctions section (Sec. 17.35)
is unclear, unnecessarily harsh, and goes beyond the authority
delegated to FDA. The comment urged FDA to describe the types of
misconduct to which the section applies and to limit sanctions. Such
sanction provisions are not novel. For example, they are included in
regulations used by EPA and HHS to implement statutory civil money
penalty provisions and are designed to enable the presiding officer to
manage proceedings effectively. FDA cannot anticipate all types of
misbehavior and misconduct that could give rise to sanctions. Further,
FDA cannot anticipate what sanctions may be appropriate for particular
conduct in a particular situation. The presiding officer must have
discretion in this area, and Sec. 17.35 is consistent with the
discretion that may be delegated to the presiding officer under the APA
(5 U.S.C. 556(c)). FDA therefore declines to accept the comment.
72. A comment argued that FDA needs to provide a means of appeal of
an order of the presiding officer imposing sanctions. FDA agrees.
Sanctions should be subject to requests for interlocutory appeal.
Section 17.18 has been added to allow for interlocutory appeal of
matters certified by the presiding officer to need immediate review.
However, the rule does not contain a provision for the automatic stay
of proceedings before the presiding officer pending appeal.
73. A comment argued that the sanctions listed in Sec. 17.35 are
too harsh and that financial penalties might be more appropriate than
the loss of the right to defend against or prosecute a civil money
penalty claim.
FDA disagrees. The sanctions imposed in Sec. 17.35 are similar to
sanctions available under Rule 37 of the ``Federal Rules of Civil
Procedure,'' as well as under the Program Fraud Civil Remedies
regulations of EPA and HHS, and are a justifiable means of compelling
the parties to adhere to the orders and rulings of the presiding
officer. As in a proceeding before a judge in Federal court, a party's
recalcitrance in disobeying a presiding officer's order in an
administrative hearing should not be tolerated. The wide range of
sanctions listed in Sec. 17.35 provide flexibility for the presiding
officer who might be presented with a party's failure to comply with an
order through refusal or neglect.
74. In connection with appellate rights, one comment urged that the
parties be afforded the right of judicial review of sanctions imposed
during a part 17 hearing.
FDA advises that it has no authority to provide for an appeal to
the courts before the agency's final decision is issued. Under
Sec. 17.51, the final decision constitutes final agency action which is
subject to judicial review. The entire record that forms the basis of
the final decision would be available to the reviewing Court of
Appeals.
75. Another comment disagreed with proposed Sec. 17.35(g), which
provides
[[Page 38621]]
that the presiding officer may order a party to pay expenses. This
remedy, the author argued, is unenforceable and outside the authority
of the Government to provide.
FDA does not agree that it lacks the authority or that such an
order of the presiding officer is unenforceable. However, because of
the wide range of other sanctions available to the presiding officer
for regulating the conduct of the hearing, FDA has made the change
requested by the comment and eliminated Sec. 17.35(g) as proposed.
Section 17.37--Witnesses
76. One comment took issue with what was viewed as a requirement
that a cross-examining party pay a witness' travel expenses in a
situation where direct testimony was submitted in writing. This was not
FDA's intention in drafting Sec. 17.37. FDA advises that it intends
that a party submitting a witness' testimony in writing is responsible
for paying the travel and other expenses of that witness on cross-
examination at the hearing. FDA has added Sec. 17.37(g) to clarify its
intention.
77. A comment objected to Sec. 17.37 because it could be
interpreted to permit rebuttal witnesses and evidence to be submitted
without any provision for discovery or identification, as provided for
in connection with a party's presentation of its case in chief. FDA
advises that, because rebuttal testimony and other rebuttal evidence
are limited in scope and in quantity, requirements for notice and
discovery are not necessary. Thus, FDA is not specifically providing
for discovery or notice of a rebuttal witness' appearance. However,
Sec. 17.39(g) allows the presiding officer to permit the parties to
introduce rebuttal witnesses and evidence. Implicit in this authority
is the authority to set the terms of rebuttal testimony, as justice may
require.
78. Yet another comment argued that Sec. 17.37(e) is unduly broad
in permitting cross-examination of witnesses on matters other than
those within the scope of his or her direct examination. The comment
recommended that the rules for cross-examination be predicated upon the
``Federal Rules of Evidence.''
FDA disagrees. In the interest of truth seeking in general and in
the interest of procedural economy, FDA prefers Sec. 17.37(e) as
proposed. This provision is similar to what EPA and HHS provide in
their Program Fraud Civil Remedies of regulations, which give the
presiding officer discretion to allow cross-examination of witnesses
beyond the scope of their direct examination, rather than limiting
cross-examination to only those matters within the scope of direct
examination. Otherwise, the opposing party would have to request that a
subpoena be issued to a witness by the presiding officer, making the
witness its own in a manner that unnecessarily wastes time.
Section 17.39--Evidence
79. One comment objected to Sec. 17.39 to the extent that it
renders privileged information nondiscoverable. Section 17.39 is
similar to Rule 45 of the ``Federal Rules of Civil Procedure,'' which
allows privileged information to be withheld by a person responding to
a subpoena. FDA rejects the comment.
80. Another comment objected to language in Sec. 17.39(b), which
allows the presiding officer discretion to apply the ``Federal Rules of
Evidence.'' According to the comment, the presiding officer is given
authority to invoke the ``Federal Rules of Evidence'' in an arbitrary
and capricious fashion, which, the comment alleges, abridges the due
process rights of both parties. The comment does not, however, provide
any details to support its assertion.
FDA disagrees with the comment. To the contrary, under
Sec. 17.39(b) the presiding officer is allowed to apply the ``Federal
Rules of Evidence'' when appropriate which is similar to what EPA and
HHS provide in their Program Fraud Civil Remedies regulations. Section
17.39(f) has been changed to substitute the relevant language of Rule
408 of the ``Federal Rules of Evidence'' in place of the reference to
Rule 408 in the proposed rule.
Section 17.41--The Administrative Record
81. A comment suggested that Sec. 17.41 should include an explicit
exemption to the ``open record'' provision, not subject to the
discretion of the presiding officer, if the officer has determined that
a portion of the record contains trade secrets or confidential
commercial information.
FDA believes this to be a good suggestion, and has so provided.
Trade secrets, confidential commercial information, information the
disclosure of which would constitute a clearly unwarranted invasion of
personal privacy, or other information that would be withheld from
public disclosure under 21 CFR part 20 are to be protected from
disclosure by order of the presiding officer. Additionally, FDA is
amending 21 CFR 20.86, concerning disclosure of information in
administrative proceedings, to include part 17.
82. Another comment was concerned that the proposal does not
contain a provision authorizing the correction of the hearing
transcript and recommended that a provision similar to that contained
in 21 CFR 12.98(d) be included in Sec. 17.41. FDA has made the
requested change in Sec. 17.41(a).
Section 17.43--Posthearing Briefs
83. A comment objected to the requirement that briefs be filed
simultaneously and be limited to 30 pages. According to the comment,
these restrictions may prejudice respondents, however, the comment does
not state how respondents may be prejudiced.
Under Sec. 17.43, a party may file a longer brief if the presiding
officer has found that the issues in the proceeding are so complex or
the administrative record is so voluminous as to justify longer briefs.
In the absence of a showing that simultaneous briefs will prejudice a
party unfairly, FDA sees no reason to change this requirement.
Additionally, parties may file proposed findings of fact and
conclusions of law. FDA has added to Sec. 17.43 that proposed findings
of fact and conclusions of law are also limited to 30 pages unless the
presiding officer orders otherwise.
84. Another comment requested that Sec. 17.43 be clarified to state
whether the 30-page limitation includes exhibits and attachments. FDA
advises that the 30-page limitation does not include exhibits and
attachments unless some material is made part of an exhibit or
attachment to avoid the 30-page limitation when the material should
reasonably have been included in the main portion of the brief itself.
Section 17.45--Initial Decision
85. One comment complained that requiring the presiding officer to
decide the case within 90 days will inherently increase the risk of an
incorrect result, thereby allegedly denying due process. FDA disagrees.
Ninety days should be an ample amount of time for a presiding officer
to decide most part 17 hearings. If the presiding officer needs more
time, he or she may request that the entity deciding the appeal set a
new deadline under Sec. 17.45(c). As stated in the preamble, the DAB
will be deciding, at least initially, appeals to the Commissioner for
presiding officer decisions under this part, including a presiding
officer's request for extending deadlines.
86. Another comment urged FDA to include timeframes for extensions
of deadlines for rendering an initial decision. This would assure a
speedier process, according to the comment. FDA disagrees. It is
difficult if not impossible to set forth in a regulation the criteria
for extending timeframes in issuing
[[Page 38622]]
hearing decisions. FDA believes that attempting to do so would be
unworkable.
87. Yet another comment urged that the initial decision be required
to include a discussion of the reasons for the findings and conclusions
upon which the decision is based. However, Sec. 17.45 already requires
that the initial decision shall contain findings of fact, conclusions
of law, and the amount of any penalties imposed. Section 17.45(b)
further elaborates on this requirement. In FDA's view, the regulation
as proposed does not permit a ``conclusory'' initial decision as the
comment seems to presuppose. FDA declines to make the requested change.
88. One comment requested that Sec. 17.45 provide that the initial
decision be automatically stayed pending disposition of an appeal or
motion for reconsideration. FDA disagrees. The agency does not believe
that such a provision is necessary since no civil money penalty can be
imposed until there has been final agency action. The initial decision
would not become final agency action until any appeal has been acted
on, the appeal time has expired, or the respondent has stated an
intention not to seek an appeal.
89. Another comment recommended that the word ``may'' (in
Sec. 17.45(c)), as it applies to the Commissioner's authority to set a
new timeframe for issuing the initial decision, be changed to
``shall.'' This, the comment alleges, would preclude indefinite delay
in the issuance of an initial decision. FDA declines to adopt this
comment. As indicated under comment 86, FDA believes it would be
unworkable to specify all the criteria for determining when timeframes
for issuing initial decisions may be extended. FDA reaffirms its
intention that all such decisions be made promptly.
Section 17.47--Appeals
90. A comment suggested that Sec. 17.47 should be modified to
explicitly provide for an automatic stay of a decision pending an
appeal or motion for reconsideration. As stated in a prior response
(see paragraph 88 above), such an automatic stay is not necessary.
91. A comment requested that FDA make clear that the Commissioner's
decision, which has been delegated to the DAB, not to consider an
appeal or the affirmation of the presiding officer's decision on appeal
constitutes final agency action subject to judicial review. FDA agrees
with the comment and affirms that such events do constitute final
agency action. However, the agency sees no reason to amend any
regulation to accomplish this. This statement in the preamble should
suffice.
92. A comment urged that oral argument of an appeal to the entity
designated by the Commissioner to decide appeals (currently the DAB) be
allowed. FDA disagrees. Oral argument would not provide the DAB with
any additional information that could not be included in the briefs
allowed to be filed by the parties under Sec. 17.47. The time required
to conduct oral argument does not justify any advantage that might be
gained from it.
93. A comment urged that FDA allow 60 days for submission of an
appellate brief, especially considering the complexity of likely
issues. The comment cites the part 12 practice of allowing 60 days for
an appellate brief. FDA disagrees with the comment. The agency believes
that issues raised in part 17 hearings will generally be less complex
and the volume of testimony smaller than is the case concerning part 12
hearings. Thus, 30 days should be sufficient. If not, Sec. 17.47
provides for extensions upon a showing of good cause.
94. A comment alleged that proposed Sec. 17.47(f), which has been
redesignated as Sec. 17.47(g), favors appellees (which it alleges will
usually be the Center) by allowing the appellee to make any argument
based on the record in support of the initial decision or decision
granting summary decision. This, the comment alleges, is unfair because
the appellant does not have as much leeway.
FDA disagrees. The appellant has the discretion to determine the
specific exceptions to the initial decision that are to be urged on
appeal. Section 17.47(c) has been changed to clarify that in the notice
of appeal the appellant must identify and support specific exceptions
with citations to the record and explain the basis for the exceptions.
Since the appellant may urge whatever exceptions it finds appropriate,
FDA sees no prejudice in allowing the appellee to make arguments on
matters contained in the record. If the entity deciding the appeal
(currently the DAB) reverses on issues that the presiding officer
considered pivotal, it may still affirm on other grounds if the
appellee has raised such other grounds below. There should be no
prejudice to either side as both sides have the record before them and
can brief on appeal all issues raised in it. As explained in paragraph
95 below, FDA is amending Sec. 17.47(h) to allow the DAB to request
additional briefing when an issue has not been adequately briefed by
the appellant.
95. Similar objection was raised to Sec. 17.47(g), relating to the
appellee's right to make any argument based on the record. The comment
stated that if the purpose of this provision is to allow the appellee
to anticipate sua sponte decisions by the Commissioner favorable to the
appellant, the regulation would be better if recast as allowing the
Commissioner to request both parties to address issues not raised by
the appellant but determined to be important by the Commissioner.
As previously discussed, the Commissioner has initially designated
the DAB to conduct appeals of civil money penalty proceedings under
this part. FDA advises that the purpose of the provision in
Sec. 17.47(g) is to allow the DAB or other entity deciding the appeal
to affirm a decision based on issues raised before the presiding
officer but that did not serve as a basis for the presiding officer's
decision. This will allow the entity deciding the appeal to overrule
the presiding officer on an issue considered pivotal by the presiding
officer, but nevertheless to decide the matter in favor of the appellee
on other issues based on evidence adduced at the hearing. However, FDA
agrees with the comment that the entity deciding the appeal may wish to
decide an issue that is not fully briefed by both parties. Therefore,
FDA is amending Sec. 17.47(h) to allow that entity discretion to
request additional briefing if it: (a) Proposes to affirm an initial
decision based on arguments not fully briefed by appellant, and (b)
believes that additional briefing is necessary.
96. One comment took issue with the review standard of
``substantial evidence on the whole record'' in Sec. 17.47. The comment
argued that the standard of substantial evidence on the whole record is
applicable for appellate court review of agency action, but should not
be applied by an agency head when the agency does not preside at the
evidentiary hearing under the APA, 5 U.S.C. 557(b). The comment went on
to state that the burden of proof by a preponderance of the evidence
rests upon the complainant under 5 U.S.C. 556(d).
FDA agrees that the appropriate burden of proof before the
presiding officer is a preponderance of the evidence, as explained in
paragraph 68 above. However, the agency may limit review of the initial
decision by the presiding officer if the powers of review have been
limited by rule. See 5 U.S.C. 557(b).
FDA has provided that an administrative law judge serve as the fact
finder in its civil money penalty actions. As the fact finder, the
presiding officer is required to make his or her
[[Page 38623]]
findings based on the preponderance of the evidence standard.
When an appeal is made to the DAB under part 17, the DAB, if it
decides to review the initial decision, will review disputed issues of
fact based on the standard of whether the initial decision is supported
by substantial evidence on the whole record. Additionally, the final
regulation in Sec. 17.47 has set the standard of review on a disputed
issue of law to be whether the initial decision is erroneous. These
standards of review are similar to the HHS regulation on appeals of
Medicare exclusions, 42 CFR part 1005. The purpose of limiting the
scope of the DAB's review of appeals from the presiding officer is to
allow the presiding officer to serve as the fact finder and to limit
the DAB's reviewing powers to be similar to that of an appellate court.
The APA permits the standards of review set forth in Sec. 17.47 for the
DAB's review of initial and summary decisions by the presiding officer.
97. Another comment suggested that only the respondent should be
permitted to appeal an adverse initial decision. The comment supports
its argument by noting that FDA's proposed procedures did not follow
the EPA model, which precludes appeals by any party other than the
defendant. However, as the comment points out, the EPA provision tracks
the statute, 31 U.S.C. 3803(i)(2)(A)(i), with procedures that are
statutorily imposed on EPA.
In enacting the civil money penalty provisions in the statutes to
which this regulation applies, Congress did not choose to prescribe,
other than in a general manner, the administrative procedures to be
followed in FDA's assessment of civil money penalties. FDA therefore
does not believe the Center should be precluded from requesting the DAB
to review an initial decision with which the Center disagrees.
The comment questioned the fairness of allowing the Center to
appeal an initial decision in favor of the respondent. Because FDA has
revised the appeals provisions in the final rule to designate the DAB,
at least initially, to make the decision for the Commissioner, the
independent review by the DAB should eliminate speculation of possible
bias of the reviewing authority. FDA notes that in civil cases where
the United States is a party plaintiff, district court decisions that
are adverse to the plaintiff may be subject to appeal by the plaintiff.
For example, the act (21 U.S.C. 360pp(a)) provides that Federal
district courts shall have jurisdiction over civil penalties arising
from prohibited acts (21 U.S.C. 360oo) pertaining to the regulation of
electronic products. If the United States disagrees with a district
court judgment as to the amount or lack of penalty, the Federal Rules
of Appellate Procedure (Rule 4) authorize an appeal. Under part 17, the
Center's right to appeal an initial decision to the DAB is consistent
with appellate review authorized for civil cases in Federal district
courts.
In cases that are appealed to the DAB, the DAB will normally issue
a decision within 60 days. In circumstances where that is not
practicable, the DAB will notify the parties of the anticipated time
period for ruling on the appeal. Accordingly, Sec. 17.47(j) has been
changed to add ``if practicable'' to the 60-day timeframe for the DAB's
decision.
98. A comment requested that the time to file an appeal be set at
60 days and that the time to submit a brief be set by the presiding
officer. FDA disagrees. The only reason given by the author of the
comment for this extension of time is that the issues involved are
likely to be more factually and legally complex than those in the
typical civil penalty adjudications by other agencies. Further, the
comment suggested that a change in the deadlines would avoid routine
requests for extension of time.
The agency believes that it is far from clear that the issues
involved in part 17 hearings will be more factually and legally complex
than those in ``typical civil penalty adjudication.'' However, in order
to alleviate the concerns expressed by the comment, FDA changed
Sec. 17.47(b)(2) to provide that the 30-day time limit to file the
notice of appeal may be extended by the Commissioner or the entity
designated by the Commissioner to hear appeals (currently the DAB),
within his or her discretion, upon request of the appealing party for
good cause shown. In order to ensure that a party has adequate time to
respond to the brief filed in support of the appeal, Sec. 17.47(d) has
also been changed to allow the entity deciding appeals, within his or
her discretion, to extend the time limit for the filing of a brief in
opposition to the appeal upon request of the party and a showing of
good cause.
99. Another comment recommended that Sec. 17.47(d) not prohibit an
appellant's reply brief. The comment stated that, on a practical level,
motions for leave to reply will regularly be filed typically
accompanied by a brief. Further, the comment argues that, based on past
practice, such briefs will be routinely read and considered in any
case. FDA agrees and is amending Sec. 17.47 to allow for a short (no
more than 10 pages) reply brief.
100. One comment requested that FDA explain more clearly what FDA
means in proposed Sec. 17.47(i), which is Sec. 17.47(j) in the final
rule, for the Commissioner to ``decline to review the case.'' Indeed,
FDA agrees, as the comment presupposes, a decision to decline to review
the case has the same legal effect as a decision to affirm the initial
decision summarily without further comment. Such a summary decision may
be issued without findings of fact or conclusions of law.
In Sec. 17.47(j), FDA has added that a decision by the DAB to
decline to review the case shall be the final decision, rendering the
initial decision final and binding on the parties 30 days after the
declination. For clarification of the possible actions by the entity
designated by the Commissioner to decide the appeal, currently the DAB,
FDA has changed Sec. 17.47(j) in the final rule to authorize the entity
to reverse the initial decision or decision granting summary decision.
The proposed Sec. 17.47(i) only provided that the Commissioner could
reverse the penalty, but did not explicitly state that the initial
decision could be reversed.
101. Another comment opposed any form of summary affirmance of a
decision appealed by the Center. The author of the comment alleged that
a respondent is entitled to an explanation, however concise, of the
reasons why the Commissioner agrees with the presiding officer.
According to the comment, the right to omit such an explanation invites
cursory review and inappropriately relieves the Commissioner of the
burden of responsibility that accompanies the authority to penalize a
manufacturer.
FDA rejects the comment and, in so doing, notes that summary
affirmances are routinely used by the courts of appeals. Additionally,
the EPA and HHS regulations on program fraud that were previously cited
provide for similar affirmance of an initial decision by the presiding
officer, as does the HHS regulation on Medicare exclusions and civil
penalties. FDA continues to believe that a summary disposition is
appropriate in various circumstances, such as where issues are not
complex and where the evidence heavily favors the appellee.
Underlying the comment may be the concern that the Commissioner
might be biased in favor of the Center, when deciding an appeal and
using summary affirmances to do so. In order to provide the parties
with an independent review of civil penalty appeals, eliminate
speculation of possible bias by the reviewing authority, and to allow
for
[[Page 38624]]
more efficient and effective use of the Commissioner's resources, FDA
has elected to designate the DAB to decide appeals under this part, at
least initially.
The DAB serves as the reviewing authority for HHS administrative
hearings in the previously cited regulations, as does the Environmental
Appeals Board for EPA. These Boards have the training and resources to
review appeals of civil penalty actions, whereas the Commissioner would
be required to set up a separate process for handling civil penalty
appeals. The DAB is the logical choice, at least initially, to review
appeals of decisions rendered by the presiding officer in part 17
matters, while efficiently and effectively using agency resources.
FDA will use the DAB to decide appeals under part 17 for at least a
4-year period. After 4 years, FDA will evaluate the DAB's role and the
Commissioner will determine whether to maintain or alter the delegation
to the DAB.
Section 17.49--Delegated Functions
102. A comment suggested that Sec. 17.49 should contain criteria
for selecting and delegating authority to an individual under that
section. Because FDA is initially providing that the DAB be designated
as the entity to decide any appeals under this part, Sec. 17.49 has
been eliminated.
103. A comment alleged that Sec. 17.49 allows the Commissioner to
assign an agency party with an interest in the litigation to make the
final decision on appeal, as long as the individual was not assigned to
advise the Center. As noted in paragraph 101, appeals will initially be
handled by the DAB. Therefore, any concern about an agency party's
influence on the final decision should be eliminated.
104. A comment argued that all civil money penalty assessments
should be finally decided by the Commissioner without delegation to
another FDA official. As noted in the preceding paragraphs, FDA has
provided, at least initially, for appeals to the DAB for a variety of
reasons. Therefore, FDA rejects the comments.
Section 17.51--Judicial Review
105. A comment urged that FDA should not be allowed to seek
judicial review of an adverse decision. Only a respondent should be
allowed to do so, according to the comment. FDA agrees. Section 17.51
should not be interpreted to provide for the Center to seek judicial
review. Once a final decision is rendered denying civil money
penalties, this becomes the decision of the agency from which there is
no judicial appeal by FDA or any of its Centers. Section 17.51 is being
amended to clarify this issue.
III. Summary of Changes
1. In Sec. 17.1, concerning the scope of the regulation, the
reference to future statutory civil money penalty authority has been
deleted. (See comment paragraph 1.)
2. In Sec. 17.3(a), (b), (d), (e), and (f), references to
definitions in the applicable statutes and regulations have been added.
In Sec. 17.3(a) the definition of ``significant departure'' has been
changed to either a single major incident, or a series of incidents
that are collectively consequential (paragraph 17). In section 17.3(a)
the definition of ``minor violations'' has been changed to ``departures
from requirements that do not rise to a level of a single major
incident or a series of incidents that are collectively consequential''
(paragraph 19). Section 17.3(a)(4) has been revised to clarify that ``*
* * defect in performance * * *'' refers to ``* * * defect in
performance, * * * or service of a device,'' (paragraph 20). In
Sec. 17.3(b) scientific or academic establishment or governmental
agency or organizational unit has been added to the definition of
``person or respondent'' (paragraph 16). In Sec. 17.3(c) the definition
of ``presiding officer'' has been added (paragraph 35). In Sec. 17.3(g)
the definition of Departmental Appeals Board has been added (paragraph
101).
3. Section 17.5(c) has been revised to provide for the right of the
Center to amend its complaint (paragraph 33). Section 17.5(d) has been
revised to provide that the presiding officer is assigned to the case
upon filing of the complaint (paragraph 35).
4. Section 17.9(a) is revised to add that the respondents may
answer without requesting a hearing. Section 17.9(b) is revised to add
that allegations not denied are deemed to be admitted, and that all
defenses must be stated in the answer (paragraph 33). Section 17.9(d)
was added to provide that respondents may amend their answers
(paragraph 33).
5. Section 17.11(a) is revised to add a requirement for proof of
service and the authority of the presiding officer to enter default
judgments and hold hearings on motions to reopen default judgments
(paragraph 38). In Sec. 17.11(a) the reference to the Commissioner has
been deleted (paragraph 38).
6. Section 17.12 has been eliminated because the presiding officer
is now appointed when the complaint is filed (paragraph 35).
7. Section 17.13 was changed to clarify that the notice of hearing
is to be served on a respondent after an answer has been filed
(paragraph 44).
8. Section 17.15(b) was revised to add a provision that settlement
agreements are to be filed in the docket and do not require
ratification by the presiding officer (paragraph 48). Section 17.15(c)
was added to clarify that parties may be represented by counsel at the
hearing (paragraph 47).
9. In Sec. 17.17(a) the response time to motions for summary
judgment has been extended from 10 days to 30 days (paragraph 50).
Section 17.17(b) was changed to clarify that summary decision shall be
granted when there is no genuine issue as to any material fact
(paragraph 51). Section 17.17(e) now limits the ability of a party to
obtain interlocutory review of a partial summary decision and refers to
the DAB as, currently, the reviewing authority (paragraph 52).
10. New Sec. 17.18 was added to provide for interlocutory appeal
from a ruling of the presiding officer (paragraph 54).
11. Section 17.19(b)(3) was changed to authorize the presiding
officer to require parties to attend conferences for settlement
(paragraph 11). A new Sec. 17.19(b)(10) was added to authorize the
presiding officer to allow a witness to be recalled for additional
testimony (paragraph 61). Proposed Sec. 17.19(b)(10) through (b)(17)
have been renumbered. For consistency of language, in Sec. 17.19(b)(13)
(proposed Sec. 17.19(b)(12)) summary ``judgment'' now reads summary
``decision'' when there is no ``genuine'' issue of material fact. A new
Sec. 17.19(b)(18) has been added to authorize the presiding officer to
issue protective orders (paragraph 62).
12. New Sec. 17.20, has been added to provide restrictions on ex
parte communications (paragraph 9).
13. Section 17.21(c)(8) now includes discussion of ``scheduling
dates for completion of discovery'' as an authorized use of a
prehearing conference (paragraph 61). Section 17.21(d) has been changed
to require the presiding officer to issue an order after a prehearing
conference (paragraph 61).
14. In Sec. 17.23(a) a requirement has been added that requests for
``production, inspection, and copying'' of documents be made no later
than 60 days before the date of the hearing, unless otherwise ordered
by the presiding officer.
The party served with the request must respond no later than 30
days after the request has been made (paragraph 61). In Sec. 17.23(c) a
reference to new Sec. 17.23(e) has been added. A new Sec. 17.23(d)(3)
now places the burden of showing that a protective order is necessary
on the party seeking the order
[[Page 38625]]
(paragraph 62). Proposed Sec. 17.23(d)(3) has been renumbered (d)(4).
Section 17.23(e) has been added to provide for oral depositions under
limited circumstances (paragraph 61).
15. Section 17.25(a) has been revised to change the deadline for
the exchange of witness lists, prior written statements, and exhibits
from 15 days to 30 days before the hearing (paragraph 64). For
clarification, Sec. 17.25(b)(2) and (b)(3) have been changed to
specifically clarify that the paragraphs concern the admission of
testimony by any witness whose name does not appear on the witness
lists exchanged under Sec. 17.25(a). Section 17.25(c) now imposes a
deadline of ``5 days'' prior to the hearing for objection to
authenticity of documents (paragraph 64).
16. Section 17.27(a) now explicitly limits the issuance of
subpoenas to when such issuance is ``authorized by law'' (paragraph
65). For ease of proving service, Sec. 17.27(e) has been changed to
delete the provision on service of subpoenas by first class mail
(paragraph 65).
17. Section 17.28(b) was revised to clarify that a protective order
may be issued to protect information that would be withheld from public
disclosure under the agency's public information regulations in 21 CFR
part 20 (paragraph 63).
18. For clarification, Sec. 17.31(b) was changed to provide that an
opposing party must be served with a copy of a document no later than
when the document is filed in the docket. Section 17.32(a) now requires
that the presiding officer also be served with a copy of documents
filed with the Dockets Management Branch.
19. For clarification, in Sec. 17.33(b) and (c) ``is to'' was
replaced with ``must''.
Section 17.33(b) has been clarified to add that the Center has the
burden of proof to establish that the proposed penalty is appropriate
under the applicable statute (paragraph 25). Section 17.33(d) was
revised to include a reference to information that would be withheld
from public disclosure under 21 CFR part 20.
20. Section 17.34 has been changed to refer to the statute under
which the penalty is assessed for purposes of determining the amount of
the penalty. The DAB has been referenced as the entity currently
designated by the Commissioner to decide appeals under this part in
Sec. 17.34(a) and (c) (paragraph 101).
21. Proposed Sec. 17.35(g), which authorized the presiding officer
to order the payment of costs as a sanction, has been deleted
(paragraph 75). New Sec. 17.35(g) now provides for interlocutory appeal
to the entity designated by the Commissioner to decide appeals
(currently the DAB) of sanctions imposed by the presiding officer
(paragraph 72).
22. Section 17.37(b) now requires, rather than permits, that direct
testimony of witnesses be submitted by written declaration under
penalty of perjury. The proposed provision in Sec. 17.37(b) on
``sufficient time for other parties to subpoena witness'' has been
deleted in light of the addition of new Sec. 17.37(g) (paragraph 76).
For clarity, Sec. 17.37(f)(2) was modified to explain more clearly that
an officer or employee of a party who is ``designated to be the party's
sole representative for purposes of the hearing'' may not be excluded
from hearing the testimony of other witnesses. Section 17.37(f)(3) has
also been revised to make clear that each party may also have an
individual, such as an expert witness, present at the hearing who would
not be excluded from hearing other witnesses' testimony. New
Sec. 17.37(g) was added to clarify that a cross-examining party need
not subpoena the witness, and to require that a sponsoring party
produce a witness at its own expense (paragraph 76).
23. In Sec. 17.39(f), a modified version of the language of Rule
408 of the ``Federal Rules of Evidence'' has been substituted for the
proposed reference to Rule 408 (paragraph 80). For clarification, in
Sec. 17.39(g) a reference to the discretion of the presiding officer
was added.
24. In Sec. 17.41(a) a provision has been added to allow for
corrections for transcription errors (paragraph 82). Section 17.41(b)
has been changed to reference the DAB as the entity currently
designated by the Commissioner to decide appeals under this part.
Section 17.41(c) has been revised to clarify that upon motion of any
party the presiding officer shall protect from disclosure documents
that would be withheld from public disclosure under the agency's public
information regulations at 21 CFR part 20 (paragraph 81).
25. Section 17.43 has been revised to add a page limit provision
for filing of proposed findings of fact and conclusions of law
(paragraph 83).
26. Section 17.45(c) has been changed to reference ``the
Commissioner or the entity deciding the appeal.''
27. Section 17.47 has been changed to authorize appeals to the DAB
instead of to the Commissioner (paragraph 101). Section 17.47(b)(2) now
provides that the Commissioner or other entity designated by the
Commissioner to hear appeals (currently the DAB) has discretion to
extend the 30-day time limit to file an appeal upon request of a party
and a showing of good cause.
Section 17.47(c) has been revised to add a page limitation for
briefs in support of appeals and a requirement that exceptions listed
in the notice of appeal be explicitly supported by citations to the
record (paragraph 94). The prohibition on the filing of an appellant's
reply brief in proposed Sec. 17.47(d) has been deleted. Section
17.47(d) has been changed to allow the Commissioner or the entity
designated by the Commissioner to hear appeals, currently the DAB, to
extend the 30-day time limit for the filing of a brief opposing the
appeal upon request of the party and a showing of good cause. New
Sec. 17.47(e) has been added to provide the right of an appellant to
file a reply brief within 10 days of being served with the appellee's
brief (paragraph 99). Section 17.47(h) has been renumbered as
Sec. 17.47(k) and has been revised to add that the standard of review
on a disputed issue of law is whether the initial decision is erroneous
(paragraph 101). Proposed Sec. 17.47(e) through (i) have been
renumbered. New Sec. 17.47(h) has been added to authorize the entity
deciding the appeal (currently the DAB) to request additional briefing
by the parties (paragraph 95). Section 17.47(j) has added ``if
practicable'' to the 60-day deadline for the decision on appeal. For
consistency of language, ``summary judgment'' was changed to ``summary
decision'' in Sec. 17.47(j), which was proposed Sec. 17.47(i). In
Sec. 17.47(j) explicit language authorizing the entity deciding the
appeal (currently the DAB) to reverse the initial decision or decision
granting summary decision has been added (paragraph 100). Section
17.47(j) now clarifies that a decision by the entity deciding the
appeal (currently the DAB) to decline to review the case shall be the
final action of the agency and the initial decision shall be final and
binding on the parties 30 days after the declination.
28. Section 17.48 has been changed to reference the DAB as the
entity currently designated by the Commissioner to decide appeals under
this part.
29. Section 17.49 has been deleted.
30. Section 17.51(a) now states that only a respondent may petition
for judicial review or file a petition for stay of a decision by the
Commissioner (paragraph 105). New Sec. 17.51(c) makes explicit that
exhaustion of an appeal to the entity deciding the appeal (currently
the DAB) is a jurisdictional prerequisite to judicial review (paragraph
12).
31. Section 17.54 has been revised to state amounts assessed under
part 17 are to be delivered to the Director of FDA's
[[Page 38626]]
Division of Financial Management and then deposited in the U.S.
Treasury.
32. In addition, the following revisions have been made to other
regulations:
a. Section 5.99, regarding issuance of notices and orders relating
to civil money penalties, has been deleted (see the Background section
of this document).
b. Section 10.50(c)(21), regarding opportunities for a hearing
under 21 CFR part 12, has been deleted (paragraph 9).
c. Section 20.86, regarding disclosure of data and information in
administrative proceedings, has been revised to include part 17
(paragraph 81).
IV. Environmental Impact
The agency has determined under 21 CFR 25.24(a)(8) that this action
is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore, neither an
environmental assessment nor an environmental impact statement is
required.
V. Analysis of Impacts
FDA has examined the impacts of the final rule under Executive
Order 12866 and the Regulatory Flexibility Act (Pub. L. 96-354).
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, when regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes that
this final rule is consistent with the regulatory philosophy and
principles identified in the Executive Order. In addition, the final
rule is not a significant regulatory action as defined by the Executive
Order and so is not subject to review under the Executive Order.
The Regulatory Flexibility Act requires agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. The final rule specifies the procedures to be
followed by persons who have the right to a hearing on the
administrative imposition of civil money penalties by the agency. As
such, the rule does not impose any burden on regulated industry.
Because the procedures themselves are protections and do not impose
significant costs beyond what the underlying statute imposes, the
agency certifies that the final rule will not have a significant
economic impact on a substantial number of small entities. Therefore,
under the Regulatory Flexibility Act, no further analysis is required.
List of Subjects
21 CFR Part 5
Authority delegations (Government agencies), Imports, Organization
and functions (Government agencies).
21 CFR Part 10
Administrative practice and procedure, News media.
21 CFR Part 17
Administrative practice and procedure, Animal drugs, Biologics,
Civil money penalties hearings, Drugs, Generic drugs, Prescription
drugs samples, Medical devices.
21 CFR Part 20
Confidential business information, Courts, Freedom of information,
Government employees.
Therefore, under the Federal Food, Drug, and Cosmetic Act and the
Public Health Service Act and under authority delegated to the
Commissioner of Food and Drugs, Title 21, Chapter 1 of the Code of
Federal Regulations is amended as follows:
PART 5--DELEGATIONS OF AUTHORITY AND ORGANIZATION
1. The authority citation for 21 CFR part 5 continues to read as
follows:
Authority: 5 U.S.C. 504, 552, App. 2; 7 U.S.C. 138a, 2271; 15
U.S.C. 638, 1261-1282, 3701-3711a; secs. 2-12 of the Fair Packaging
and Labeling Act (15 U.S.C. 1451-1461); 21 U.S.C. 41-50, 61-63, 141-
149, 467f, 679(b), 801-886, 1031-1309; secs. 201-903 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321-394); 35 U.S.C. 156;
secs. 301, 302, 303, 307, 310, 311, 351, 352, 354, 361, 362, 1701-
1706, 2101, 2125, 2127, 2128 of the Public Health Service Act (42
U.S.C. 241, 242, 242a, 242l, 242n, 243, 262, 263, 263b, 264, 265,
300u-300u-5, 300aa-1, 300aa-25, 300aa-27, 300aa-28); 42 U.S.C.
1395y, 3246b, 4332, 4831(a), 10007-10008; E.O. 11490, 11921, and
12591; secs. 312, 313, 314 of the National Childhood Vaccine Injury
Act of 1986, Pub. L. 99-660 (42 U.S.C. 300aa-1 note).
Sec. 5.99 [Removed]
2. Section 5.99 Issuance of notices and orders relating to the
administrative imposition of civil money penalties under various
statutes is removed.
PART 10--ADMINISTRATIVE PRACTICES AND PROCEDURES
3. The authority citation for 21 CFR part 10 continues to read as
follows:
Authority: Secs. 201-903 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 321-394); 21 U.S.C. 41-50, 141-149, 467f, 679, 821,
1034; secs. 2, 351, 354, 361 of the Public Health Service Act (42
U.S.C. 201, 262, 263b, 264); secs. 2-12 of the Fair Packaging and
Labeling Act (15 U.S.C. 1451-1461); 5 U.S.C. 551-558, 701-721; 28
U.S.C. 2112.
Sec. 10.50 [Amended]
4. Section 10.50 Promulgation of regulations and orders after an
opportunity for a formal evidentiary public hearing is amended by
removing paragraph (c)(21).
5. New part 17 is added to read as follows:
PART 17--CIVIL MONEY PENALTIES HEARINGS
Sec.
17.1 Scope.
17.3 Definitions.
17.5 Complaint.
17.7 Service of complaint.
17.9 Answer.
17.11 Default upon failure to file an answer.
17.13 Notice of hearing.
17.15 Parties to the hearing.
17.17 Summary decisions.
17.18 Interlocutory appeal from ruling of presiding officer.
17.19 Authority of the presiding officer.
17.20 Ex parte contacts.
17.21 Prehearing conferences.
17.23 Discovery.
17.25 Exchange of witness lists, witness statements, and exhibits.
17.27 Hearing subpoenas.
17.28 Protective order.
17.29 Fees.
17.30 Computation of time.
17.31 Form, filing, and service of papers.
17.32 Motions.
17.33 The hearing and burden of proof.
17.34 Determining the amount of penalties and assessments.
17.35 Sanctions.
17.37 Witnesses.
17.39 Evidence.
17.41 The administrative record.
17.43 Posthearing briefs.
17.45 Initial decision.
17.47 Appeals.
17.48 Harmless error.
17.51 Judicial review.
17.54 Deposit in the Treasury of the United States.
Authority: Secs. 301, 303, 307, 501, 502, 505, 510, 513, 516,
519, 520, 701 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
331, 333, 337, 351, 352, 355, 360, 360c, 360f, 360i, 360j, 371);
sec. 351, 354, 2128 of the Public Health Service Act (42 U.S.C. 262,
263b, 300aa-28); 5 U.S.C. 554, 555, 556, 557.
Sec. 17.1 Scope.
This part sets forth practices and procedures for hearings
concerning the administrative imposition of civil money penalties by
FDA. Listed below are the statutory provisions that as of August 28,
1995, authorize civil money
[[Page 38627]]
penalties that are governed by these procedures.
(a) Section 303 (b)(2) through (b)(4) of the Federal Food, Drug,
and Cosmetic Act (the act) authorizing civil money penalties for
certain violations of the act that relate to prescription drug
marketing practices.
(b) Section 303(g) of the act authorizing civil money penalties for
certain violations of the act that relate to medical devices.
(c) Section 307 of the act authorizing civil money penalties for
certain actions in connection with an abbreviated new drug application
or certain actions in connection with a person or individual debarred
under section 306 of the act.
(d) Section 351(d)(2)(B) of the Public Health Service Act (the PHS
Act) authorizing civil money penalties for violations of biologic
recall orders.
(e) Section 354(h)(2) of the PHS Act, as amended by the Mammography
Quality Standards Act of 1992, authorizing civil money penalties for
failure to obtain a certificate, failure to comply with established
standards, among other things.
(f) Section 2128 of the PHS Act authorizing civil money penalties
for intentionally destroying, altering, falsifying, or concealing any
record or report required to be prepared, maintained, or submitted by
vaccine manufacturers pursuant to that section of the PHS Act.
Sec. 17.3 Definitions.
The following definitions are applicable in this part:
(a) For specific acts giving rise to civil money penalty actions
brought under 21 U.S.C. 333(g)(1):
(1) Significant departure, for the purpose of interpreting 21
U.S.C. 333(g)(1)(B)(i), means a departure from requirements that is
either a single major incident or a series of incidents that
collectively are consequential.
(2) Knowing departure, for the purposes of interpreting 21 U.S.C.
333(g)(1)(B)(i), means a departure from a requirement taken: (a) With
actual knowledge that the action is such a departure, or (b) in
deliberate ignorance of a requirement, or (c) in reckless disregard of
a requirement.
(3) Minor violations, for the purposes of interpreting 21 U.S.C.
333(g)(1)(B)(ii), means departures from requirements that do not rise
to a level of a single major incident or a series of incidents that are
collectively consequential.
(4) Defective, for the purposes of interpreting 21 U.S.C.
333(g)(1)(B)(iii), includes any defect in performance, manufacture,
construction, components, materials, specifications, design,
installation, maintenance, or service of a device, or any defect in
mechanical, physical, or chemical properties of a device.
(b) Person or respondent includes an individual, partnership,
corporation, association, scientific or academic establishment,
government agency or organizational unit thereof, or other legal
entity, or as may be defined in the act or regulation pertinent to the
civil penalty action being brought.
(c) Presiding officer means an administrative law judge qualified
under 5 U.S.C. 3105.
(d) Any term that is defined in the act has the same definition for
civil money penalty actions that may be brought under that act.
(e) Any term that is defined in Title 21 of the Code of Federal
Regulations has the same definition for civil money penalty actions
that may arise from the application of the regulation(s).
(f) Any term that is defined in the PHS Act has the same definition
for civil money penalty actions that may be brought under that act.
(g) Departmental Appeals Board (DAB) means the Departmental Appeals
Board of the Department of Health and Human Services.
Sec. 17.5 Complaint.
(a) The Center with principal jurisdiction over the matter involved
shall begin all administrative civil money penalty actions by serving
on the respondent(s) a complaint signed by the Office of the Chief
Counsel attorney for the Center and by filing a copy of the complaint
with the Dockets Management Branch (HFA-305), Food and Drug
Administration, rm. 1-23, 12420 Parklawn Dr., Rockville, MD 20857.
(b) The complaint shall state:
(1) The allegations of liability against the respondent, including
the statutory basis for liability, the identification of violations
that are the basis for the alleged liability, and the reasons that the
respondent is responsible for the violations;
(2) The amount of penalties and assessments that the Center is
seeking;
(3) Instructions for filing an answer to request a hearing,
including a specific statement of the respondent's right to request a
hearing by filing an answer and to retain counsel to represent the
respondent; and
(4) That failure to file an answer within 30 days of service of the
complaint will result in the imposition of the proposed amount of
penalties and assessments, as provided in Sec. 17.11.
(c) The Center may, on motion, subsequently amend its complaint to
conform with the evidence adduced during the administrative process, as
justice may require.
(d) The presiding officer will be assigned to the case upon the
filing of the complaint under this part.
Sec. 17.7 Service of complaint.
(a) Service of a complaint may be made by:
(1) Certified or registered mail or similar mail delivery service
with a return receipt record reflecting receipt; or
(2) Delivery in person to:
(i) An individual respondent; or
(ii) An officer or managing or general agent in the case of a
corporation or unincorporated business.
(b) Proof of service, stating the name and address of the person on
whom the complaint was served, and the manner and date of service, may
be made by:
(1) Affidavit or declaration under penalty of perjury of the
individual serving the complaint by personal delivery;
(2) A United States Postal Service or similar mail delivery service
return receipt record reflecting receipt; or
(3) Written acknowledgment of receipt by the respondent or by the
respondent's counsel or authorized representative or agent.
Sec. 17.9 Answer.
(a) The respondent may request a hearing by filing an answer with
the Dockets Management Branch (HFA-305), Food and Drug Administration,
rm. 1-23, 12420 Parklawn Dr., Rockville, MD 20857, within 30 days of
service of the complaint. Unless stated otherwise, an answer shall be
deemed to be a request for hearing.
(b) In the answer, the respondent:
(1) Shall admit or deny each of the allegations of liability made
in the complaint; allegations not specifically denied in an answer are
deemed admitted;
(2) Shall state all defenses on which the respondent intends to
rely;
(3) Shall state all reasons why the respondent contends that the
penalties and assessments should be less than the requested amount; and
(4) Shall state the name, address, and telephone number of the
respondent's counsel, if any.
(c) If the respondent is unable to file an answer meeting the
requirements of paragraph (b) of this section within the time provided,
the respondent shall, before the expiration of 30 days from service of
the complaint, file a request for an extension of time within which to
file an answer that meets the requirements of paragraph (b) of this
[[Page 38628]]
section. The presiding officer may, for good cause shown, grant the
respondent up to 30 additional days within which to file an answer that
meets the requirements of paragraph (b) of this section.
(d) The respondent may, on motion, amend its answer to conform with
the evidence as justice may require.
Sec. 17.11 Default upon failure to file an answer.
(a) If the respondent does not file an answer within the time
prescribed in Sec. 17.9 and if service has been effected as provided in
Sec. 17.7, the presiding officer shall assume the facts alleged in the
complaint to be true, and, if such facts establish liability under the
relevant statute, the presiding officer shall issue an initial decision
within 30 days of the time the answer was due, imposing:
(1) The maximum amount of penalties provided for by law for the
violations alleged; or
(2) The amount asked for in the complaint, whichever amount is
smaller.
(b) Except as otherwise provided in this section, by failing to
file a timely answer, the respondent waives any right to a hearing and
to contest the amount of the penalties and assessments imposed under
paragraph (a) of this section, and the initial decision shall become
final and binding upon the parties 30 days after it is issued.
(c) If, before such a decision becomes final, the respondent files
a motion seeking to reopen on the grounds that extraordinary
circumstances prevented the respondent from filing an answer, the
initial decision shall be stayed pending a decision on the motion.
(d) If, on such motion, the respondent can demonstrate
extraordinary circumstances excusing the failure to file an answer in a
timely manner, the presiding officer may withdraw the decision under
paragraph (a) of this section, if such a decision has been issued, and
shall grant the respondent an opportunity to answer the complaint as
provided in Sec. 17.9(a).
(e) If the presiding officer decides that the respondent's failure
to file an answer in a timely manner is not excused, he or she shall
affirm the decision under paragraph (a) of this section, and the
decision shall become final and binding upon the parties 30 days after
the presiding officer issues the decision on the respondent's motion
filed under paragraph (c) of this section.
Sec. 17.13 Notice of hearing.
After an answer has been filed, the Center shall serve a notice of
hearing on the respondent. Such notice shall include:
(a) The date, time, and place of a prehearing conference, if any,
or the date, time, and place of the hearing if there is not to be a
prehearing conference;
(b) The nature of the hearing and the legal authority and
jurisdiction under which the hearing is to be held;
(c) A description of the procedures for the conduct of the hearing;
(d) The names, addresses, and telephone numbers of the
representatives of the government and of the respondent, if any; and
(e) Such other matters as the Center or the presiding officer deems
appropriate.
Sec. 17.15 Parties to the hearing.
(a) The parties to the hearing shall be the respondent and the
Center(s) with jurisdiction over the matter at issue. No other person
may participate.
(b) The parties may at any time prior to a final decision by the
entity deciding any appeal agree to a settlement of all or a part of
the matter. The settlement agreement shall be filed in the docket and
shall constitute complete or partial resolution of the administrative
case as so designated by the settlement agreement. The settlement
document shall be effective upon filing in the docket and need not be
ratified by the presiding officer or the Commissioner of Food and
Drugs.
(c) The parties may be represented by counsel, who may be present
at the hearing.
Sec. 17.17 Summary decisions.
(a) At any time after the filing of a complaint, a party may move,
with or without supporting affidavits (which, for purposes of this
part, shall include declarations under penalty of perjury), for a
summary decision on any issue in the hearing. The other party may,
within 30 days after service of the motion, which may be extended for
an additional 10 days for good cause, serve opposing affidavits or
countermove for summary decision.
The presiding officer may set the matter for argument and call for
the submission of briefs.
(b) The presiding officer shall grant the motion if the pleadings,
affidavits, and other material filed in the record, or matters
officially noticed, show that there is no genuine issue as to any
material fact and that the party is entitled to summary decision as a
matter of law.
(c) Affidavits shall set forth only such facts as would be
admissible in evidence and shall show affirmatively that the affiant is
competent to testify to the matters stated. When a motion for summary
decision is made and supported as provided in this regulation, a party
opposing the motion may not rest on mere allegations or denials or
general descriptions of positions and contentions; affidavits or other
responses must set forth specific facts showing that there is a genuine
issue of material fact for the hearing.
(d) If, on motion under this section, a summary decision is not
rendered on all issues or for all the relief asked, and if additional
facts need to be developed, the presiding officer will issue an order
specifying the facts that appear without substantial controversy and
directing further evidentiary proceedings on facts still at issue. The
facts specified not to be at issue shall be deemed established.
(e) Except as provided in Sec. 17.18, a party may not obtain
interlocutory review by the entity deciding the appeal (currently the
DAB) of a partial summary decision of the presiding officer. A review
of final summary decisions on all issues may be had through the
procedure set forth in Sec. 17.47.
Sec. 17.18 Interlocutory appeal from ruling of presiding officer.
(a) Except as provided in paragraph (b) of this section, rulings of
the presiding officer may not be appealed before consideration on
appeal of the entire record of the hearing.
(b) A ruling of the presiding officer is subject to interlocutory
appeal to the entity deciding the appeal (currently the DAB) if the
presiding officer certifies on the record or in writing that immediate
review is necessary to prevent exceptional delay, expense, or prejudice
to any participant, or substantial harm to the public interest.
(c) When an interlocutory appeal is made, a participant may file a
brief on the appeal only if specifically authorized by the presiding
officer or the entity deciding the appeal (currently the DAB), and if
such authorization is granted, only within the period allowed by the
presiding officer or the entity deciding the appeal. If a participant
is authorized to file a brief, any other participant may file a brief
in opposition, within the period allowed by the entity deciding the
appeal (currently the DAB). The deadline for filing an interlocutory
appeal is subject to the discretion of the presiding officer.
Sec. 17.19 Authority of the presiding officer.
(a) The presiding officer shall conduct a fair and impartial
hearing, avoid delay, maintain order, and assure that a record of the
proceeding is made.
(b) The presiding officer has the authority to:
[[Page 38629]]
(1) Set and change the date, time, and place of the hearing on
reasonable notice to the parties;
(2) Continue or recess the hearing in whole or in part for a
reasonable time;
(3) Require parties to attend conferences for settlement, to
identify or simplify the issues, or to consider other matters that may
aid in the expeditious disposition of the proceeding;
(4) Administer oaths and affirmations;
(5) Issue subpoenas requiring the attendance and testimony of
witnesses and the production of evidence that relates to the matter
under investigation;
(6) Rule on motions and other procedural matters;
(7) Regulate the scope and timing of discovery consistent with
Sec. 17.23;
(8) Regulate the course of the hearing and the conduct of the
parties;
(9) Examine witnesses;
(10) Upon motion of a party for good cause shown, the presiding
officer may allow a witness to be recalled for additional testimony;
(11) Receive, rule on, exclude, or limit evidence;
(12) Upon motion of a party or on the presiding officer's own
motion, take official notice of facts;
(13) Upon motion of a party, decide cases, in whole or in part, by
summary decision when there is no genuine issue of material fact;
(14) Conduct any conference, argument, or hearing on motions in
person or by telephone;
(15) Consolidate related or similar proceedings or sever unrelated
matters;
(16) Limit the length of pleadings;
(17) Waive, suspend, or modify any rule in this part if the
presiding officer determines that no party will be prejudiced, the ends
of justice will be served, and the action is in accordance with law;
(18) Issue protective orders pursuant to Sec. 17.28; and
(19) Exercise such other authority as is necessary to carry out the
responsibilities of the presiding officer under this part.
(c) The presiding officer does not have the authority to find
Federal statutes or regulations invalid.
Sec. 17.20 Ex parte contacts.
No party or person (except employees of the presiding officer's
office) shall communicate in any way with the presiding officer on any
matter at issue in a case, unless on notice and opportunity for all
parties to participate. This provision does not prohibit a person or
party from inquiring about the status of a case or asking routine
questions concerning administrative functions or procedures.
Sec. 17.21 Prehearing conferences.
(a) The presiding officer may schedule prehearing conferences as
appropriate.
(b) Upon the motion of any party, the presiding officer shall
schedule at least one prehearing conference at a reasonable time in
advance of the hearing.
(c) The presiding officer may use a prehearing conference to
discuss the following:
(1) Simplification of the issues;
(2) The necessity or desirability of amendments to the pleadings,
including the need for a more definite statement;
(3) Stipulations and admissions of fact as to the contents and
authenticity of documents;
(4) Whether the parties can agree to submission of the case on a
stipulated record;
(5) Whether a party chooses to waive appearance at an oral hearing
and to submit only documentary evidence (subject to the objection of
the other party) and written argument;
(6) Limitation of the number of witnesses;
(7) Scheduling dates for the exchange of witness lists and of
proposed exhibits;
(8) Discovery and scheduling dates for completion of discovery;
(9) The date, time, and place for the hearing; and
(10) Such other matters as may tend to expedite the fair and just
disposition of the proceedings.
(d) The presiding officer shall issue an order containing all
matters agreed upon by the parties or ordered by the presiding officer
at a prehearing conference.
Sec. 17.23 Discovery.
(a) No later than 60 days prior to the hearing, unless otherwise
ordered by the presiding officer, a party may make a request to another
party for production, inspection, and copying of documents that are
relevant to the issues before the presiding officer. Documents must be
provided no later than 30 days after the request has been made.
(b) For the purpose of this part, the term ``documents'' includes
information, reports, answers, records, accounts, papers and other data
and documentary evidence. Nothing contained in this section may be
interpreted to require the creation of a document, except that
requested data stored in an electronic data storage system must be
produced in a form readily accessible to the requesting party.
(c) Requests for documents, requests for admissions, written
interrogatories, depositions, and any forms of discovery, other than
those permitted under paragraphs (a) and (e) of this section, are not
authorized.
(d)(1) Within 10 days of service of a request for production of
documents, a party may file a motion for a protective order.
(2) The presiding officer may grant a motion for a protective
order, in whole or in part, if he or she finds that the discovery
sought:
(i) Is unduly costly or burdensome,
(ii) Will unduly delay the proceeding, or
(iii) Seeks privileged information.
(3) The burden of showing that a protective order is necessary
shall be on the party seeking the order.
(4) The burden of showing that documents should be produced is on
the party seeking their production.
(e) The presiding officer shall order depositions upon oral
questions only upon a showing that:
(1) The information sought cannot be obtained by alternative
methods, and
(2) 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.
Sec. 17.25 Exchange of witness lists, witness statements, and
exhibits.
(a) At least 30 days before the hearing, or by such other time as
is specified by the presiding officer, the parties shall exchange
witness lists, copies of prior written statements of proposed
witnesses, and copies of proposed hearing exhibits, including written
testimony.
(b)(1) If a party objects to the proposed admission of evidence not
exchanged in accordance with paragraph (a) of this section, the
presiding officer will exclude such evidence if he or she determines
that the failure to comply with paragraph (a) of this section should
result in its exclusion.
(2) Unless the presiding officer finds that extraordinary
circumstances justified the failure to make a timely exchange of
witness lists under paragraph (a) of this section, he or she must
exclude from the party's hearing evidence the testimony of any witness
whose name does not appear on the witness list.
(3) If the presiding officer finds that extraordinary circumstances
existed, the presiding officer must then determine whether the
admission of the testimony of any witness whose name does not appear on
the witness lists exchanged under paragraph (a) of this section would
cause substantial prejudice to the objecting party. If the presiding
officer
[[Page 38630]]
finds that there is not substantial prejudice, the evidence may be
admitted. If the presiding officer finds that there is substantial
prejudice, the presiding officer may exclude the evidence, or at his or
her discretion, may postpone the hearing for such time as is necessary
for the objecting party to prepare and respond to the evidence.
(c) Unless a party objects within 5 days prior to the hearing,
documents exchanged in accordance with paragraph (a) of this section
will be deemed to be authentic for the purpose of admissibility at the
hearing.
Sec. 17.27 Hearing subpoenas.
(a) A party wishing to procure the appearance and testimony of any
individual at the hearing may, when authorized by law, request that the
presiding officer issue a subpoena.
(b) A subpoena requiring the attendance and testimony of an
individual may also require the individual to produce documents at the
hearing.
(c) A party seeking a subpoena shall file a written request
therefor not less than 20 days before the date fixed for the hearing
unless otherwise allowed by the presiding officer, upon a showing by
the party of good cause. Such request shall specify any documents to be
produced and shall designate the witnesses and describe the address and
location thereof with sufficient particularity to permit such witnesses
to be found.
(d) The subpoena shall specify the time and place at which the
witness is to appear and any documents the witness is to produce.
(e) The party seeking the subpoena shall serve it in the manner
prescribed for service of a complaint in Sec. 17.7.
(f) If a party or the individual to whom the subpoena is directed
believes a subpoena to be unreasonable, oppressive, excessive in scope,
or unduly burdensome, or if it wishes to raise any other objection or
privilege recognized by law, the party or individual may file a motion
to quash the subpoena within 10 days after service or on or before the
time specified in the subpoena for compliance if it is less than 10
days after service. Such a filing will state the basis for the motion
to quash. The presiding officer may quash or modify the subpoena or
order it implemented, as justice may require.
Sec. 17.28 Protective order.
(a) A party or a prospective witness may file a motion for a
protective order with respect to discovery sought by a party or with
respect to the hearing, seeking to limit the availability or disclosure
of evidence.
(b) When issuing a protective order, the presiding officer may make
any order which justice requires to protect a party or person from
oppression or undue burden or expense, or to protect trade secrets or
confidential commercial information, as defined in Sec. 20.61 of this
chapter, information the disclosure of which would constitute a clearly
unwarranted invasion of personal privacy, or other information that
would be withheld from public disclosure under 21 CFR part 20. Such
orders may include, but are not limited to, one or more of the
following:
(1) That the discovery not be had;
(2) That the discovery may be had only on specified terms and
conditions, including a designation of the time or place;
(3) That the discovery may be had only through a method of
discovery provided for by this part other than that requested;
(4) That certain matters not be inquired into, or that the scope of
discovery be limited to certain matters;
(5) That the contents of discovery or evidence be sealed;
(6) That the information not be disclosed to the public or be
disclosed only in a designated way; or
(7) That the parties simultaneously file specified documents or
information enclosed in sealed envelopes to be opened as directed by
the presiding officer.
Sec. 17.29 Fees.
The party requesting a subpoena shall pay the cost of the fees and
mileage of any witness subpoenaed in the amounts that would be payable
to a witness in a proceeding in a United States District Court. A check
for witness fees and mileage shall accompany the subpoena when served.
Sec. 17.30 Computation of time.
(a) In computing any period of time under this part or in an order
issued thereunder, the time begins with the day following the act or
event, and includes the last day of the period, unless either such day
is a Saturday, Sunday, or Federal holiday, in which event the time
includes the next business day.
(b) When the period of time allowed is less than 7 days,
intermediate Saturdays, Sundays, and Federal holidays shall be excluded
from the computation.
(c) When a document has been served or issued by placing it in the
mail, an additional 5 days will be added to the time permitted for any
response.
Sec. 17.31 Form, filing, and service of papers.
(a) Form. (1) Documents filed with the Dockets Management Branch
(HFA-305), Food and Drug Administration, rm. 1-23, 12420 Parklawn Dr.,
Rockville, MD 20857, shall include an original and two copies.
(2) The first page of every pleading and paper filed in the
proceeding shall contain a caption setting forth the title of the
action, the case number assigned by the Office of the Chief Counsel,
and designation of the pleading or paper (e.g., ``motion to quash
subpoena'').
(3) Every pleading shall be signed by, and shall contain the
address and telephone number of, the party or the person on whose
behalf the pleading was filed, or his or her counsel.
(4) Pleadings or papers are considered filed when they are received
by the Dockets Management Branch.
(b) Service. A party filing a document with the Dockets Management
Branch under this part shall, no later than the time of filing, serve a
copy of such document on every other party. Service upon any party of
any document, other than service of a complaint, shall be made by
delivering a copy personally or by placing a copy of the document in
the United States mail or express delivery service, postage prepaid and
addressed, to the party's last known address. When a party is
represented by counsel, service shall be made on such counsel in lieu
of the actual party.
(c) Proof of service. A certificate of the individual serving the
document by personal delivery or by mail, setting forth the time and
manner of service, shall be proof of service.
Sec. 17.32 Motions.
(a) Any application to the presiding officer for an order or ruling
shall be by motion. Motions shall state the relief sought, the
authority relied upon, and the facts alleged, and shall be filed with
the Dockets Management Branch (HFA-305), Food and Drug Administration,
rm. 1-23, 12420 Parklawn Dr., Rockville, MD 20857, delivered to the
presiding officer, and served on all other parties.
(b) Except for motions made during a prehearing conference or at
the hearing, all motions shall be in writing. The presiding officer may
require that oral motions be reduced to writing.
(c) Within 15 days after a written motion is served, or such other
time as may be fixed by the presiding officer, any party may file a
response to such motion.
(d) The presiding officer may not grant a written motion before the
time for filing responses thereto has expired, except upon consent of
the parties or
[[Page 38631]]
following a hearing on the motion, but may overrule or deny such motion
without awaiting a response.
Sec. 17.33 The hearing and burden of proof.
(a) The presiding officer shall conduct a hearing on the record to
determine whether the respondent is liable for a civil money penalty
and, if so, the appropriate amount of any such civil money penalty
considering any aggravating or mitigating factors.
(b) In order to prevail, the Center must prove respondent's
liability and the appropriateness of the penalty under the applicable
statute by a preponderance of the evidence.
(c) The respondent must prove any affirmative defenses and any
mitigating factors by a preponderance of the evidence.
(d) The hearing shall be open to the public unless otherwise
ordered by the presiding officer, who may order closure only to protect
trade secrets or confidential commercial information, as defined in
Sec. 20.61 of this chapter, information the disclosure of which would
constitute a clearly unwarranted invasion of personal privacy, or other
information that would be withheld from public disclosure under part 20
of this chapter.
Sec. 17.34 Determining the amount of penalties and assessments.
(a) When determining an appropriate amount of civil money penalties
and assessments, the presiding officer and the Commissioner of Food and
Drugs or entity designated by the Commissioner to decide the appeal
(currently the DAB) shall evaluate any circumstances that mitigate or
aggravate the violation and shall articulate in their opinions the
reasons that support the penalties and assessments imposed.
(b) The presiding officer and the entity deciding the appeal shall
refer to the factors identified in the statute under which the penalty
is assessed for purposes of determining the amount of penalty.
(c) Nothing in this section shall be construed to limit the
presiding officer or the entity deciding the appeal from considering
any other factors that in any given case may mitigate or aggravate the
offense for which penalties and assessments are imposed.
Sec. 17.35 Sanctions.
(a) The presiding officer may sanction a person, including any
party or counsel for:
(1) Failing to comply with an order, subpoena, rule, or procedure
governing the proceeding;
(2) Failing to prosecute or defend an action; or
(3) Engaging in other misconduct that interferes with the speedy,
orderly, or fair conduct of the hearing.
(b) Any such sanction, including, but not limited to, those listed
in paragraphs (c), (d), and (e) of this section, shall reasonably
relate to the severity and nature of the failure or misconduct.
(c) When a party fails to comply with a discovery order, including
discovery and subpoena provisions of this part, the presiding officer
may:
(1) Draw an inference in favor of the requesting party with regard
to the information sought;
(2) Prohibit the party failing to comply with such order from
introducing evidence concerning, or otherwise relying upon, testimony
relating to the information sought; and
(3) Strike any part of the pleadings or other submissions of the
party failing to comply with such request.
(d) The presiding officer may exclude from participation in the
hearing any legal counsel, party, or witness who refuses to obey an
order of the presiding officer. In the case of repeated refusal, the
presiding officer may grant judgment to the opposing party.
(e) If a party fails to prosecute or defend an action under this
part after service of a notice of hearing, the presiding officer may
dismiss the action or may issue an initial decision imposing penalties
and assessments.
(f) The presiding officer may refuse to consider any motion,
request, response, brief, or other document that is not filed in a
timely fashion or in compliance with the rules of this part.
(g) Sanctions imposed under this section may be the subject of an
interlocutory appeal as allowed in Sec. 17.18(b), provided that no such
appeal will stay or delay a proceeding.
Sec. 17.37 Witnesses.
(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) Direct testimony shall be admitted in the form of a written
declaration submitted under penalty of perjury. Any such written
declaration must be provided to all other parties along with the last
known address of the witness. Any prior written statements of witnesses
proposed to testify at the hearing shall be exchanged as provided in
Sec. 17.25(a).
(c) The presiding officer shall exercise reasonable control over
the manner and order of questioning witnesses and presenting evidence
so as to:
(1) Make the examination and presentation effective for the
ascertainment of the truth;
(2) Avoid undue consumption of time; and
(3) Protect witnesses from harassment or undue embarrassment.
(d) The presiding officer shall permit the parties to conduct such
cross-examination as may be required for a full disclosure of the
facts.
(e) At the discretion of the presiding officer, a witness may be
cross-examined on relevant matters without regard to the scope of his
or her direct examination. To the extent permitted by the presiding
officer, a witness may be cross-examined on relevant matters with
regard to the scope of his or her direct examination. To the extent
permitted by the presiding officer, cross-examination on matters
outside the scope of direct examination shall be conducted in the
manner of direct examination and may proceed by leading questions only
if the witness is a hostile witness, an adverse party, or a witness
identified with an adverse party.
(f) Upon motion of any party, the presiding officer may order
witnesses excluded so that they cannot hear the testimony of the 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, an officer or
employee of the party designated to be the party's sole representative
for purposes of the hearing; or
(3) An individual whose presence is shown by a party to be
essential to the presentation of its case, including an individual
employed by a party engaged in assisting counsel for the party.
(g) If a witness' testimony is submitted in writing prior to cross-
examination, the cross-examining party need not subpoena the witness or
pay for his or her travel to the hearing. The sponsoring party is
responsible for producing the witness at its own expense, and failure
to do so shall result in the striking of the witness' testimony.
Sec. 17.39 Evidence.
(a) The presiding officer shall determine the admissibility of
evidence.
(b) Except as provided in this part, the presiding officer shall
not be bound by the ``Federal Rules of Evidence.'' However, the
presiding officer may apply the ``Federal Rules of Evidence'' when
appropriate, e.g., to exclude unreliable evidence.
(c) The presiding officer shall exclude evidence that is not
relevant or material.
(d) Relevant evidence may be excluded if its probative value is
substantially outweighed by the danger of unfair prejudice, confusion
of the issues, or by considerations of undue
[[Page 38632]]
delay or needless presentation of cumulative evidence.
(e) Relevant evidence may be excluded if it is privileged under
Federal law.
(f) Evidence of furnishing or offering or promising to furnish, or
accepting or offering or promising to accept, a valuable consideration
in settling or attempting to settle a civil money penalty assessment
which was disputed as to either validity or amount, is not admissible
to prove liability for or invalidity of the civil money penalty or its
amount. Evidence of conduct or statements made in settlement
negotiations is likewise not admissible. This rule does not require the
exclusion of any evidence otherwise discoverable merely because it is
presented in the course of settlement negotiations. This rule also does
not require exclusion when the evidence is offered for another purpose,
such as proving bias or prejudice of a witness or opposing a contention
of undue delay.
(g) The presiding officer may in his or her discretion permit the
parties to introduce rebuttal witnesses and evidence.
(h) All documents and other evidence offered or taken for the
record shall be open to examination by all parties, unless otherwise
ordered by the presiding officer pursuant to Sec. 17.28.
Sec. 17.41 The administrative record.
(a) The hearing will be recorded and transcribed. Witnesses,
participants, and counsel have 30 days from the time the transcript
becomes available to propose corrections in the transcript of oral
testimony. Corrections are permitted only for transcription errors. The
presiding officer shall promptly order justified corrections.
Transcripts may be obtained following the hearing from the Dockets
Management Branch at a cost not to exceed the actual cost of
duplication.
(b) The transcript of testimony, exhibits, and other evidence
admitted at the hearing and all papers and requests filed in the
proceeding constitute the administrative record for the decision by the
presiding officer and the entity designated by the Commissioner of Food
and Drugs to decide the appeal, currently the DAB.
(c) The administrative record may be inspected and copied (upon
payment of a reasonable fee) by anyone unless otherwise ordered by the
presiding officer, who shall upon motion of any party order otherwise
when necessary to protect trade secrets or confidential commercial
information, as defined in Sec. 20.61 of this chapter, information the
disclosure of which would constitute a clearly unwarranted invasion of
personal privacy, or other information that would be withheld from
public disclosure under part 20.
Sec. 17.43 Posthearing briefs.
Any party may file a posthearing brief. The presiding officer shall
fix the time for filing such briefs (which shall be filed
simultaneously), which shall not exceed 60 days from the date the
parties received 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 presiding officer may permit the
parties to file responsive briefs. No brief may exceed 30 pages
(exclusive of proposed findings and conclusions) unless the presiding
officer has previously found that the issues in the proceeding are so
complex, or the administrative record is so voluminous, as to justify
longer briefs, in which case the presiding officer may set a longer
page limit. Proposed findings of fact and conclusions of law shall not
exceed 30 pages unless the presiding officer has previously found that
the issues in the proceeding are so complex, or the administrative
record is so voluminous, as to justify longer proposed findings and
conclusions, in which case the presiding officer may set a longer page
limit.
Sec. 17.45 Initial decision.
(a) The presiding officer shall issue an initial decision based
only on the administrative record. The decision shall contain findings
of fact, conclusions of law, and the amount of any penalties and
assessments imposed.
(b) The findings of fact shall include a finding on each of the
following issues:
(1) Whether the allegations in the complaint are true, and, if so,
whether respondent's actions identified in the complaint violated the
law;
(2) Whether any affirmative defenses are meritorious; and
(3) If the respondent is liable for penalties or assessments, the
appropriate amount of any such penalties or assessments, considering
any mitigating or aggravating factors that he or she finds in the case.
(c) The presiding officer shall serve the initial decision or the
decision granting summary decision on all parties within 90 days after
the time for submission of posthearing briefs and responsive briefs (if
permitted) has expired. If the presiding officer believes that he or
she cannot meet the 90-day deadline, he or she shall notify the
Commissioner of Food and Drugs or other entity designated by the
Commissioner to decide the appeal of the reason(s) therefor, and the
Commissioner or that entity may then set a new deadline.
(d) Unless the initial decision or the decision granting summary
decision of the presiding officer is timely appealed, the initial
decision or the decision granting summary decision shall constitute the
final decision of FDA and shall be final and binding on the parties 30
days after it is issued by the presiding officer.
Sec. 17.47 Appeals.
(a) Either the Center or any respondent may appeal an initial
decision, including a decision not to withdraw a default judgment, or a
decision granting summary decision to the Commissioner of Food and
Drugs or other entity the Commissioner designates to decide the appeal.
The Commissioner has currently designated the Departmental Appeals
Board (DAB) to decide appeals under this part. Parties may appeal to
the DAB by filing a notice of appeal with the DAB, rm. 637-D, Hubert H.
Humphrey Bldg., 200 Independence Ave. SW., Washington, DC 20201, and
the Dockets Management Branch (HFA-305), Food and Drug Administration,
rm. 1-23, 12420 Parklawn Dr., Rockville, MD 20857, in accordance with
this section.
(b) (1) A notice of appeal may be filed at any time within 30 days
after the presiding officer issues an initial decision or decision
granting summary decision.
(2) The Commissioner or the entity designated by the Commissioner
to hear appeals may, within his or her discretion, extend the initial
30-day period for an additional period of time if the Center or any
respondent files a request for an extension within the initial 30-day
period and shows good cause.
(c) A notice of appeal shall be accompanied by a written brief of
no greater length than that allowed for the posthearing brief. The
notice must identify specific exceptions to the initial decision, must
support each exception with citations to the record, and must explain
the basis for each exception.
(d) The opposing party may file a brief of no greater length than
that allowed for the posthearing brief in opposition to exceptions
within 30 days of receiving the notice of appeal and accompanying
brief, unless such time period is extended by the Commissioner or the
entity designated by the Commissioner to hear appeals on request of the
opposing party for good cause shown. Any brief in opposition to
exceptions shall be filed with the Dockets
[[Page 38633]]
Management Branch and the DAB (addresses above).
(e) The appellant may file a reply brief not more than 10 pages in
length within 10 days of being served with appellee's brief.
(f) There is no right to appear personally before the Commissioner
of Food and Drugs or other entity deciding the appeal (currently the
DAB).
(g) The entity deciding the appeal will consider only those issues
raised before the presiding officer, except that the appellee may make
any argument based on the record in support of the initial decision or
decision granting summary decision.
(h) If on appeal the entity deciding the appeal considers issues
not adequately briefed by the parties, the entity may ask for
additional briefing. However, no such additional briefs will be
considered unless so requested.
(i) If any party demonstrates to the satisfaction of the entity
deciding the appeal (currently the DAB) that additional evidence not
presented at the hearing is relevant and material and that there were
reasonable grounds for the failure to adduce such evidence at the
hearing, the entity deciding the appeal may remand the matter to the
presiding officer for consideration of the additional evidence.
(j) The Commissioner of Food and Drugs or other entity deciding the
appeal (currently the DAB) will issue a decision on the appeal within
60 days, if practicable, of the due date for submission of the
appellee's brief. In the decision, the entity deciding the appeal may
decline to review the case, affirm the initial decision or decision
granting summary decision (with or without an opinion), or reverse the
initial decision or decision granting summary decision, or increase,
reduce, reverse, or remand any civil money penalty determined by the
presiding officer in the initial decision. If the entity deciding the
appeal declines to review the case, the initial decision or the
decision granting summary decision shall constitute the final decision
of FDA and shall be final and binding on the parties 30 days after the
declination by the entity deciding the appeal.
(k) The standard of review on a disputed issue of fact is whether
the initial decision is supported by substantial evidence on the whole
record. The standard of review on a disputed issue of law is whether
the initial decision is erroneous.
Sec. 17.48 Harmless error.
No error in either the admission or the exclusion of evidence, and
no error or defect in any ruling or order or in any act done or omitted
by the presiding officer or by any of the parties is grounds for
vacating, modifying, or otherwise disturbing an otherwise appropriate
ruling or order or act, unless refusal to take such action appears to
the presiding officer or the Commissioner of Food and Drugs or other
entity deciding the appeal (currently the DAB) to be inconsistent with
substantial justice. The presiding officer and the entity deciding the
appeal at every stage of the proceeding will disregard any error or
defect in the proceeding that does not affect the substantial rights of
the parties.
Sec. 17.51 Judicial review.
(a) The final decision of the Commissioner of Food and Drugs or
other entity deciding the appeal (currently the DAB) constitutes final
agency action from which a respondent may petition for judicial review
under the statutes governing the matter involved. Although the filing
of a petition for judicial review does not stay a decision under this
part, a respondent may file a petition for stay of such decision under
Sec. 10.35 of this chapter.
(b) The Chief Counsel of FDA has been designated by the Secretary
of Health and Human Services as the officer on whom copies of petitions
for judicial review are to be served. This officer is responsible for
filing the record on which the final decision is based. The record of
the proceeding is certified by the entity deciding the appeal
(currently the DAB).
(c) Exhaustion of an appeal to the entity deciding the appeal
(currently the DAB) is a jurisdictional prerequisite to judicial
review.
Sec. 17.54 Deposit in the Treasury of the United States.
All amounts assessed pursuant to this part shall be delivered to
the Director, Division of Financial Management (HFA-100), Food and Drug
Administration, rm. 11-61, 5600 Fishers Lane, Rockville, MD 20857, and
shall be deposited as miscellaneous receipts in the Treasury of the
United States.
PART 20--PUBLIC INFORMATION
7. The authority citation for part 20 continues to read as follows:
Authority: Secs. 201-903 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 321-393); secs. 301, 302, 303, 307, 310, 311, 351,
352, 354-360F, 361, 362, 1701-1706, 2101 of the Public Health
Service Act (42 U.S.C. 241, 242, 242a, 242l, 242n, 243, 262, 263,
263b-263n, 264, 265, 300u-300u-5, 300aa-1); 5 U.S.C. 552; 18 U.S.C.
1905.
Sec. 20.86 [Amended]
8. Section 20.86 is amended by revising the first sentence to read
as follows:
Sec. 20.86 Disclosure in administrative or court proceedings.
Data and information otherwise exempt from public disclosure may be
revealed in Food and Drug Administration administrative proceedings
pursuant to parts 10, 12, 13, 14, 15, 17, and 19 of this chapter or
court proceedings, where data or information are relevant. * * *
Dated: July 12, 1995.
William B. Schultz,
Deputy Commissioner for Policy.
[FR Doc. 95-18325 Filed 7-26-95; 8:45 am]
BILLING CODE 4160-01-P