[Federal Register Volume 66, Number 7 (Wednesday, January 10, 2001)]
[Rules and Regulations]
[Pages 2176-2192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-554]



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Part V





Department of Transportation





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Federal Aviation Administration



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14 CFR Parts 405 and 406



Civil Penalty Actions in Commercial Space Transportation; Final Rule

  Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / 
Rules and Regulations  

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 405 and 406

[Docket No. FAA-2001-8607; Amendment Nos. 405-2 406-2]
RIN 2120-AH18


Civil Penalty Actions in Commercial Space Transportation

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; request for comments.

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SUMMARY: These rules amend the procedures for assessment and 
adjudication of civil penalties in space transportation. The current 
part 406 provides little guidance for respondents and the FAA in the 
prosecution of civil penalties. These new rules provide more detail on 
the procedures the FAA uses to assess civil penalties and on the 
respondents' rights to adjudication. These rules also provide more 
detailed procedures to be used in the adjudication. They are intended 
to provide more clarity and certainty to the civil penalty process.

DATES: These rules become effective February 9, 2001. Comments must be 
received on or before February 9, 2001.

ADDRESSES: Address your comments to the Docket Management System (DMS), 
U.S. Department of Transportation, Room Plaza Level 401, 400 Seventh 
Street, SW., Washington, DC 20590-0001. You must identify the docket 
number ``FAA-2001-8607'' at the beginning of your comments, and you 
must submit two copies of your comments. If you wish to receive 
confirmation that the FAA received your comments, include a self-
addressed, stamped postcard.
    You may also submit comments through the Internet to http://dms.dot.gov. You may review the public docket containing comments to 
these proposed regulations in person in the Dockets Office between 9:00 
a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. The 
Dockets Office is on the plaza level of the NASSIF Building at the 
Department of Transportation at the above address. Also, you may review 
public dockets on the Internet at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: Mardi Ruth Thompson, Office of the 
Chief Counsel (AGC-200A), Federal Aviation Administration, 800 
Independence Avenue, SW., Washington, DC 20591; telephone: (202) 267-
3073, facsimile (202) 267-5106, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    This final rule is being adopted without prior notice and prior 
public comment. The Regulatory Policies and Procedures of the 
Department of Transportation (DOT) (44 FR 1134; February 26, 1979), 
however, provide that, to the maximum extent possible, operating 
administrations for the DOT should provide an opportunity for public 
comment on regulations issued without prior notice. Accordingly, 
interested persons are invited to participate in this rulemaking by 
submitting such written data, views, or arguments, as they may desire. 
Comments relating to environmental, energy, federalism, or 
international trade impacts that might result from this amendment also 
are invited. Comments must include the regulatory docket or amendment 
number and must be submitted in duplicate to the address above. All 
comments received, as well as a report summarizing each substantive 
public contact with FAA personnel on this rulemaking, will be filed in 
the public docket. The docket is available for public inspection before 
and after the comment closing date.
    The FAA will consider all comments received on or before the 
closing date for comments. Late filed comments will be considered to 
the extent practicable. This final rule may be amended in light of the 
comments received.
    Commenters who want the FAA to acknowledge receipt of their 
comments submitted in response to this final rule must include a 
preaddressed, stamped postcard with those comments on which the 
following statement is made: ``Comments to Docket No. FAA-2001-8607.'' 
The postcard will be date-stamped by the FAA and mailed to the 
commenter.

Availability of Rulemaking Documents

    You can get an electronic copy using the Internet by taking the 
following steps:
    (1) Go to the search function of the Department of Transportation's 
electronic Docket Management System (DMS) web page (http://dms.dot.gov/search).
    (2) On the search page type in the last four digits of the Docket 
number shown at the beginning of this notice. Click on ``search.''
    (3) On the next page, which contains the Docket summary information 
for the Docket you selected, click on the document number for the item 
you wish to view.
    You can also get an electronic copy using the Internet through 
FAA's web page at http://www.faa.gov/avr/arm/nprm/nprm.htm or the 
Federal Register's web page at http://www.access.gpo.gov/su_docs/aces/aces140.html.
    You can also get a copy by submitting a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Make 
sure to identify the docket number, notice number, or amendment number 
of this rulemaking.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires the FAA to comply with small entity requests for 
information or advice about compliance with statutes and regulations 
within its jurisdiction. Therefore, any small entity that has a 
question regarding this document may contact its local FAA official, or 
the person listed under FOR FURTHER INFORMATION CONTACT. You can find 
out more about SBRFA on the Internet at our site, http://www.gov/avr/arm/sbrefa.htm. For more information on SBREFA, e-mail us at [email protected].

Background

    The statute under which the Secretary of the Department of 
Transportation regulates commercial space transportation, 49 U.S.C. 
subtitle IX--ch. 701, sections 70101-70121, (the Act) provides for the 
Department to impose civil penalties if a person is found to have 
violated a requirement of the Act, a regulation issued under the Act, 
or any term or condition of a license issued or transferred under the 
Act. The person must have notice and an opportunity for a hearing on 
the record. 49 U.S.C. 70115(c). All authority under the Act has been 
delegated to the Administrator of the FAA, who has delegated the 
authority to the Associate Administrator for Commercial Space 
Transportation.
    Currently 14 CFR 405.7 provides the procedures for the FAA to 
impose civil penalties. That section and 14 CFR part 406 provide 
summary procedures for hearings before an administrative law judge. 
These rules do not provide clear or detailed procedures as to how to 
proceed. They do not state, for instance, what opportunities the person 
who is charged with a violation (the respondent) has to respond to the 
charges before an order is issued, how or when the respondent must 
request a hearing, how discovery may be

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conducted, or other procedures that assist the parties in presenting 
their positions. These new rules provide more clarity and detail to 
assist the parties.

Part Analysis

    This rulemaking partly consolidates parts 405 and 406 into one 
part, part 406. To that end, Sec. 405.7 is removed and new Sec. 406.9 
is added. Section 406.9 states in detail how civil penalties are 
imposed. In accordance with 49 U.S.C. 70115(c), it states that a person 
found by the FAA to have violated a requirement of the Act, a 
regulation issued under the Act, or any term or condition of a license 
issued or transferred under the Act, is liable to the United States for 
a civil penalty of not more than $100,000, as adjusted for inflation. A 
separate violation occurs for each day the violation continues. This 
section is modeled on three current aviation rules: 14 CFR 13.16, which 
the FAA uses to assess civil penalties in certain aviation cases; 14 
CFR 13.19, which the FAA uses to suspend and revoke aviation 
certificates such as pilot and air carrier operating certificates; and 
14 CFR 13.29, which provides for streamlined civil penalty procedures 
for certain security violations.
    Section 406.9 provides for an agency attorney to issue a notice of 
proposed civil penalty to the respondent. The respondent has several 
options, including informal procedures in which the respondent provides 
information and views in writing or at an informal conference. If it 
appears that a civil penalty continues to be warranted after the 
informal procedures, the agency attorney issues a final notice of 
proposed civil penalty. This is the final opportunity for the 
respondent to request a hearing in front of an administrative law 
judge. If the respondent requests a hearing the adjudication is 
conducted under part 406 subpart B.
    Section 406.9 also provides for a compromise order to be issued if 
agreed to by the agency attorney and the respondent. Under a compromise 
order the respondent agrees to pay a civil penalty and the agency 
agrees not to make a finding of violation.
    If a final notice of proposed civil penalty is issued and the 
respondent does not timely appeal, the civil penalty becomes final and 
is imposed. If the respondent does not pay the imposed civil penalty 
the agency will refer it to the Department of Treasury or the 
Department of Justice for collection.

Part 406 Subpart B--Rules of Practice in FAA Space Transportation 
Adjudication's

    This new subpart provides the procedures for a hearing before an 
administrative law judge. This subpart is based largely on 14 CFR part 
13 subpart G, under which certain FAA aviation civil penalty cases are 
adjudicated. Decisions of the FAA decisionmaker in those cases may 
provide guidance as to the meaning of these new rules. This subpart is 
now written only for use in civil penalty actions, but the FAA may 
later expand these provisions to provide for adjudication of license 
determinations.
    Under these rules the respondent may have a hearing before an 
administrative law judge. The rules provide for a complaint and answer, 
motions, and discovery. They provide time limits for various pleadings 
and state how filing and service of documents must be done. They state 
the powers and duties of the administrative law judge. See 
Secs. 406.109, 406.113, 406.115, 406.127, 406.141, and 406.143.

Section 406.105  Separation of Functions for Prosecuting Civil 
Penalties and Advising the FAA Decisionmaker

    Because the FAA decisionmaker is an FAA official, the FAA separates 
the functions of the personnel who investigate and prosecute the civil 
penalty and those who advise the FAA decisionmaker on appeal. See 
Sec. 406.103 (definitions of agency attorney and complainant) and 
Sec. 406.105 (separation of functions). Before a civil penalty action 
is initiated the Associate Administrator may receive investigation 
reports and advice from FAA staff, and may determine whether to 
initiate a civil penalty action. After the agency attorney initiates a 
civil penalty action by issuing a notice of proposed civil penalty, the 
Associate Administrator does not participate in the case unless and 
until the case is appealed to the FAA decisionmaker under Sec. 406.173 
or Sec. 406.175. An administrative law judge at the Department of 
Transportation, who is independent from the FAA and the Associate 
Administrator, hears the case.
    Either party may appeal from the administrative law judge's 
decision to the FAA decisionmaker, who is the Associate Administrator, 
or, for cases where the Associate Administrator is recused or for 
aviation issues, the FAA Administrator. The FAA decisionmaker bases its 
decision on appeal on the record, the briefs, and any oral argument. 
See Sec. 406.175. Unless the decisionmaker's order is timely appealed, 
it becomes an order imposing civil penalty if the FAA decisionmaker 
finds that the alleged violation occurred and a civil penalty is 
warranted. See Sec. 406.9(e)(1)(iv).
    The FAA Chief Counsel, the Assistant Chief Counsel for Litigation, 
and attorneys on the staff of the Assistant Chief Counsel for 
Litigation advise the FAA decisionmaker. These advisors do not 
participate in the investigation or prosecution of civil penalties. See 
Sec. 406.105.

Section 406.109  Administrative Law Judge--Powers and Limitations

    The administrative law judge may make findings of fact and 
conclusions of law, and issue an initial decision. See 
Sec. 406.109(a)(9). If the administrative law judge finds that a 
violation occurred and determines that a civil penalty, in an amount 
found appropriate by the administrative law judge, is warranted, and if 
no one files a timely appeal, the initial decision becomes an order 
imposing civil penalty. See Sec. 406.9(e)(1)(iii).

Section 406.113  Filing of Documents With the Docket Management System 
(DMS), and Sending Documents to the Administrative Law Judge and 
Assistant Chief Counsel for Litigation

    Section 406.113 states how documents must be filed. It requires 
paper filing with the DOT Docket Management System (DMS), an electronic 
docket that handles many DOT adjudication and rulemaking dockets. 
Documents are scanned in to DMS and indexed so that both the index and 
scanned documents are available through the Internet. The parties must 
mail or personally deliver documents to DMS. Mailing includes U.S. mail 
and an express courier service. See Sec. 406.103 (definition of mail).
    The FAA contemplates that the parties will file paper documents, 
with original signatures, see Sec. 406.111 and that these are then 
scanned into DMS. DMS does have the capability to accept documents 
filed by electronic submission as well, and does so for such matters as 
comments on FAA rulemaking. The instructions for using DMS may be found 
at http://dms.dot.gov. These rules do not however, provide for 
electronic filing of documents in space transportation adjudications. 
We request comments as to whether parties should be permitted to file 
documents electronically in space transportation adjudications, and if 
so, how the requirement for a signature found in Sec. 406.111 should be 
handled.

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Section 406.117  Confidential Information

    Section 406.117 provides for non-disclosure of certain information. 
The Act prohibits public disclosure of information that qualifies for 
an exemption under 5 U.S.C. 552(b)(4) (trade secrets and commercial or 
financial information obtained from a person and privileged or 
confidential) or information that is designated as confidential by the 
person or head of the executive agency providing the information, 
unless the FAA decides that withholding the information is contrary to 
the public or national interest. 49 U.S.C. 70114. The rules for 
applying for a launch license, for instance, provide a method for 
applicants to claim confidentiality of information they submit. See 
Sec. 413.9. New Sec. 406.117 provides that a party may move for a 
protective order to prevent release of such information to the public. 
If both parties agree that the information must be protected under the 
Act, the administrative law judge must grant the motion to protect the 
information.

Delegations to the Chief Counsel and the Assistant Chief Counsel for 
Litigation

    The Associate Administrator delegates to the Chief Counsel and the 
Assistant Chief Counsel for Litigation certain functions. The 
delegation is designed to eliminate the need for the Associate 
Administrator to review and consider minor, procedural or unopposed 
matters.
    Under 49 U.S.C. 322(b) and 14 CFR 406.105, the Associate 
Administrator for Commercial Space Transportation hereby delegates to 
the Chief Counsel and the Assistant Chief Counsel for Litigation the 
authority of the FAA decisionmaker in all actions brought under 14 CFR 
406.9 and part 406 subpart B as follows:
    a. To grant or deny extensions of time to file briefs, petitions 
for reconsideration, motions, and replies to petitions for 
reconsideration and motions; to grant or deny motions to file 
additional briefs; and to approve or disapprove other deviations from, 
or requests for changes in, procedural requirements;
    b. To correct typographical, grammatical and similar errors in the 
FAA decisionmaker's orders, and to make editorial changes in those 
orders that do not involve substantive matters;
    c. To issue orders dismissing appeals from initial decisions upon 
request of the appellant, or due to the withdrawal of the complaint; to 
grant or deny motions to dismiss appeals from initial decisions, or to 
issue orders sua sponte for failure to file a timely appeal or failure 
to perfect an appeal;
    d. To stay the effectiveness of decisions and orders pending 
reconsideration by the FAA decisionmaker;
    e. To issue orders staying, pending judicial review, orders of the 
FAA decisionmaker;
    f. To dismiss summarily petitions to reconsider or modify that are 
repetitious or frivolous;
    g. To issue orders construing notices of appeal or other documents 
that meet the requirements for appeal briefs as appeal briefs, and to 
set a date for the filing of a reply brief.
    The Chief Counsel or the Assistant Chief Counsel for Litigation may 
redelegate the authority set forth above to the Manager, Adjudications 
Branch.

Section 406.147: Notice of Hearing

    It is possible for a single incident to involve alleged violations 
of both the commercial space transportation rules (14 CFR Ch. III, 
parts 400 through 1199) and the FAA's aviation rules (14 CFR Ch. I, 
parts 1 through 199). For instance, there may be a launch in violation 
of the commercial space transportation licensing requirements and in 
violation of air traffic control regulations. Hearings for civil 
penalty actions as to the former would be handled under part 406, and 
hearings for civil penalty actions as to the latter would be handled 
under 14 CFR part 13 subpart G. The same office of administrative law 
judges at the Department of Transportation hears the cases, however. In 
the interest of judicial economy, Sec. 406.147(d) makes clear that with 
the consent of the administrative law judge, the parties may agree to 
hold the hearing, or parts of the hearing, together with a hearing 
under 14 CFR part 13 subpart G if the cases involve some common issues 
of fact. In such a case the agency attorney would request that the same 
administrative law judge be assigned to hear both the aviation and the 
space case. The judge would issue one decision, and there would be one 
appeal to the FAA decisionmaker. The Administrator would serve as the 
FAA decisionmaker, with advice from the Associate Administrator for 
Commercial Space Transportation. Judicial review would be separated, 
however. For commercial space cases, judicial review is with the United 
States district court. For aviation cases, judicial review is with the 
United States court of appeals. Consolidating the hearing phase and the 
FAA decisionmaker phase may be beneficial to the parties, the 
administrative law judge, and the FAA decisionmaker, and will reduce 
the chance that the same questions of fact will be decided differently.

Section 406.179:  Judicial Review of a Final Decision and Order

    A respondent may appeal the FAA decisionmaker's final decision and 
order to the United States district court under 5 U.S.C. chapter 7 and 
28 U.S.C. 1331.

Justification for Adoption of Rule With No Prior Notice

    These are purely procedural rules to govern the initiation of civil 
penalty actions and hearings on the record. As such, they are not 
required to be adopted with prior notice and comment. However, the FAA 
recognizes that public comments enhance the rulemaking process. 
Accordingly, interested persons are invited to participate in this 
rulemaking by submitting such written data, views, or arguments, as 
they may desire, in accordance with the instructions above under 
``Comments Invited.''

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995, 44 U.S.C. 3507(d), requires 
that the FAA consider the impact of paperwork and other information 
collection burdens imposed on the public. We have determined that there 
are no new information collection requirements associated with this 
final rule.

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA 
determined that there are no ICAO Standards and Recommended Practices 
that correspond to these regulations.

Regulatory Evaluation

    Changes to Federal regulations are required to undergo several 
economic analyses. First, Executive Order 12866 directs that each 
Federal agency shall propose or adopt a regulation only upon a reasoned 
determination that the benefits of the intended regulation justify its 
costs. Second, the Regulatory Flexibility Act of 1980 requires agencies 
to analyze the economic effect of regulatory changes on small entities. 
Third, the Office of Management and Budget directs agencies to assess 
the effect of regulatory changes on international trade. In conducting 
these

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analyses, the FAA has determined that this rule is not a ``significant 
regulatory action'' as defined in the Executive Order and the 
Department of Transportation Regulatory Policies and Procedures. This 
rule will not have a significant impact on a substantial number of 
small entities and will not constitute a barrier to international 
trade. The FAA invites the public to provide comments, and supporting 
data, on the assumptions made in this evaluation. All comments received 
will be considered in determining whether to amend this regulatory 
evaluation.
    A full regulatory analysis, which includes the identification and 
evaluation of cost-reducing alternatives to this rule, has not been 
prepared. Instead, the agency has prepared a more concise analysis of 
this rule that is presented in the following paragraphs.
    This rulemaking provides more detailed guidance for the parties as 
to how civil penalties are imposed. The rules state the respondent's 
opportunities to respond informally to a notice of proposed civil 
penalty, the manner for conducting discovery, how relief may be sought 
by motions, how filing and service are done, and other details of 
imposing and adjudicating civil penalties.

Costs

    There are no costs associated with this rulemaking. The changes do 
not impose any new economic requirements on the affected parties. The 
rules clarify the options for the respondent to respond to a proposed 
civil penalty. They also clarify the procedures used if an 
administrative law judge hears a matter. Respondents are not required 
to take any additional action based on these rules. Rather, these rules 
set out in detail their options, which they may choose to take 
advantage of or not.

Benefits

    These rules will result in some unquantified cost savings to the 
agency and the respondents by making clear what procedures apply in 
civil penalty cases. The rules make clear that the respondent may 
respond informally before requesting a hearing, potentially increasing 
the opportunity to resolve the matter at lower cost to both parties. If 
the matter proceeds to adjudication before an administrative law judge, 
these rules govern such matters as the content of the complaint and 
answer, motions, discovery, and subpoenas. They will assist both 
parties in preparing the matter for hearing. Without these new rules 
the parties might spend additional time litigating such issues before 
the administrative law judge and the FAA decisionmaker. Having the new 
detailed rules, rather than the current summary rules, is likely to 
result in more certainty and less potential for litigation over how 
such matters should be handled.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statues, to 
fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the Act requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The Act covers a wide-range of small 
entities, including small businesses, not-for-profit organizations and 
small governmental jurisdictions.
    Agencies must perform a review to determine whether a proposed or 
final rule will have a significant economic impact on a substantial 
number of small entities. If the determinations is that it will, the 
agency must prepare a regulatory flexibility analysis as described in 
the Act.
    However, if an agency determines that a proposed or final rule is 
not expected to have a significant economic impact on a substantial 
number of small entities, section 605(b) of the 1980 act provides that 
the head of the agency may so certify and a regulatory flexibility 
analysis is not required. The certification must include a statement 
providing the factual basis for this determination, and the reasoning 
should be clear.
    As discussed above, there are no costs imposed by this rulemaking. 
There are unquantified benefits associated with this rulemaking. For 
this reason, the FAA certifies that there is not a significant economic 
impact on a substantial number of small entities.

International Trade Impact Assessment

    The Trade Agreement Act of 1979 prohibits Federal agencies from 
engaging in any standards or related activities that create unnecessary 
obstacles to the foreign commerce of the United States. Legitimate 
domestic objectives, such as safety, are not considered unnecessary 
obstacles. The statute also requires consideration of international 
standards and where appropriate, that they be the basis for U.S. 
standards. In addition, consistent with the administration's belief in 
the general superiority and desirability of free trade, it is the 
policy of the Administration to remove or diminish to the extent 
feasible, barriers to international trade, including both barriers 
affecting the import of foreign goods and services into the United 
States.
    In accordance with the above statute and policy, the FAA has 
assessed the potential effect of this final rule and has determined 
that it will not impose any costs on domestic and international 
entities and thus has a neutral trade impact.

Executive Order 13132, Federalism

    These regulations will not have substantial direct effects on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 12612, it is determined that this rulemaking will not have 
sufficient federalism implications to warrant the preparation of a 
Federalism Assessment.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (the UMR Act), 
enacted as Public Law 104-4 on March 22, 1995, requires each Federal 
agency, to the extent permitted by law, to prepare a written assessment 
of the effects of any Federal mandate in a proposed or final agency 
rule that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, or $100 
million or more (adjusted annually for inflation) in any one year. 
Section 204(a) of the UMR Act, 2 U.S.C. 1534(a), requires the Federal 
agency to develop an effective process to permit timely input by 
elected officers (or their designees) of State, local, and tribal 
governments on a proposed ``significant intergovernmental mandate.'' A 
``significant intergovernmental mandate'' under the UMR Act is any 
provision in a Federal agency regulation that would impose an 
enforceable duty upon State, local, and tribal governments, in the 
aggregate, of $100 million (adjusted annually for inflation) in any one 
year. Section 203 of the UMR Act, 2 U.S.C. 1533, which supplements 
section 204(a), provides that before establishing any regulatory 
requirements that might significantly or uniquely affect small 
governments, the agency shall have developed a plan that, among other 
things, provides for notice to potentially affected small governments, 
if any, and for a meaningful and timely opportunity to provide input in 
the development of regulatory proposals.

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    This rulemaking does not contain a Federal intergovernmental or 
private sector mandate that exceeds $100 million a year.

Environmental Analysis

    FAA Order 1050.1D defines FAA actions that may be categorically 
excluded from preparation of a National Environmental Policy Act (NEPA) 
environmental impact statement. In accordance with FAA Order 1050.1D, 
appendix 4, paragraph 4(i), regulatory documents which cover 
administrative or procedural requirements, as this rulemaking does, 
qualify for a categorical exclusion.

Energy Impact

    The energy impact of this rulemaking has been assessed in 
accordance with section 6362 of the Energy Policy and Conservation Act 
(EPCA), 42 U.S.C. 6362 and FAA Order 1053.1. It has been determined 
that the EPCA does not apply to this rulemaking.

List of Subjects

14 CFR Part 405

    Investigations, Penalties, Rockets, Space transportation and 
exploration.

14 CFR Part 406

    Administrative practice and procedure, Confidential business 
information, Investigations, Penalties, Rockets, Space transportation 
and exploration.

The Amendments

    In consideration of the foregoing, the Federal Aviation 
Administration amends parts 405 and 406 of chapter III, title 14, Code 
of Federal Regulations as follows:

PART 405--INVESTIGATIONS AND ENFORCEMENT

    1. The authority citation for part 405 continues to read as 
follows:

    Authority: 49 U.S.C. 70101-70121.


Sec. 405.7  [Removed]

    2. Remove Sec. 405.7.

    3. Revise part 406 to read as follows:

PART 406--INVESTIGATIONS, ENFORCEMENT, AND ADMINISTRATIVE REVIEW

Subpart A--Investigations and Enforcement
Sec.
406.1  Hearings in license and payload actions.
406.3  Submissions; oral presentation in license and payload 
actions.
406.5   Administrative law judge's recommended decision in license 
and payload actions.
406.7   [Reserved]
406.9  Civil Penalties.
406.10-406.100   [Reserved]
Subpart B--Rules of Practice in FAA Space Transportation Adjudications
406.101   Applicability.
406.103   Definitions that apply in part 406.
406.105   Separation of functions for prosecuting civil penalties 
and advising the FAA decisionmaker.
406.107   Appearances of parties, and attorneys and representatives.
406.109   Administrative law judges--powers and limitations.
406.111   Signing documents.
406.113   Filing of documents with the Docket Management System 
(DMS) and sending documents to the administrative law judge and 
Assistant Chief Counsel for Litigation.
406.115   Serving documents on other parties.
406.117   Confidential information.
406.119   Computation of time.
406.121   Extension of time.
406.123   Waivers.
406.127   Complaint and answer in civil penalty adjudications.
406.133   Amendment of pleadings.
406.135   Withdrawal of complaint or request for hearing.
406.137   Intervention.
406.139   Joint procedural or discovery schedule.
406.141   Motions.
406.143   Discovery.
406.147   Notice of hearing.
406.149   Evidence.
406.151   Standard of proof.
406.153   Burden of proof.
406.155   Offer of proof.
406.157   Expert or opinion witnesses.
406.159   Subpoenas.
406.161   Witness fees.
406.163   Record.
406.165   Argument before the administrative law judge.
406.167   Initial decision.
406.173   Interlocutory appeals.
406.175   Appeal from initial decision.
406.177   Petition to reconsider or modify a final decision and 
order of the FAA decisionmaker on appeal.
406.179   Judicial review of a final decision and order.

    Authority: 49 U.S.C. 70101-70121.

Subpart A--Investigations and Enforcement


Sec. 406.1  Hearings in license and payload actions.

    (a) Pursuant to 49 U.S.C. 70110, the following are entitled to a 
determination on the record after an opportunity for a hearing in 
accordance with 5 U.S.C. 554.
    (1) An applicant for a license and a proposed transferee of a 
license regarding any decision to issue or transfer a license with 
conditions or to deny the issuance or transfer of such license;
    (2) An owner or operator of a payload regarding any decision to 
prevent the launch or reentry of the payload; and
    (3) A licensee regarding any decision to suspend, modify, or revoke 
a license or to terminate, prohibit, or suspend any licensed activity 
therefore.
    (b) An administrative law judge will be designated to preside over 
any hearing held under this part.


Sec. 406.3  Submissions; oral presentation in license and payload 
actions.

    (a) Determinations in license and payload actions under this 
subpart will be made on the basis of written submissions unless the 
administrative law judge, on petition or on his or her own initiative, 
determines that an oral presentation is required.
    (b) Submissions shall include a detailed exposition of the evidence 
or arguments supporting the petition.
    (c) Petitions shall be filed as soon as practicable, but in no 
event more than 30 days after issuance of decision or finding under 
Sec. 406.1.


Sec. 406.5  Administrative law judge's recommended decision in license 
and payload actions.

    (a) The Associate Administrator, who shall make the final decision 
on the matter at issue, shall review the recommended decision of the 
administrative law judge. The Associate Administrator shall make such 
final decision within thirty days of issuance of the recommended 
decision.
    (b) The authority and responsibility to review and decide rests 
solely with the Associate Administrator and may not be delegated.


Sec. 406.7  [Reserved]


Sec. 406.9  Civil penalties.

    (a) Civil penalty liability. Under 49 U.S.C. 70115(c), a person 
found by the FAA to have violated a requirement of the Act, a 
regulation issued under the Act, or any term or condition of a license 
issued or transferred under the Act, is liable to the United States for 
a civil penalty of not more than $100,000 for each violation, as 
adjusted for inflation. A separate violation occurs for each day the 
violation continues.
    (b) Delegations. The authority to impose civil penalties is 
exercised by an agency attorney as described in Sec. 406.105.
    (c) Notice of proposed civil penalty. A civil penalty action is 
initiated when the agency attorney advises a person, referred to as the 
respondent, of the charges or other reasons upon which the FAA bases 
the proposed action and allows the respondent to answer the charges and 
to be heard as to why the

[[Page 2181]]

civil penalty should not be imposed. A notice of proposed civil penalty 
states the facts alleged; any requirement of the Act, a regulation 
issued under the Act, or any term or condition of a license issued or 
transferred under the Act allegedly violated by the respondent; and the 
amount of the proposed civil penalty. Not later than 30 days after 
receipt of the notice of proposed civil penalty the respondent may 
elect to proceed by one or more of the following:
    (1) Pay the amount of the proposed civil penalty or an agreed upon 
amount, in which case the agency attorney will issue either an order 
imposing civil penalty or a compromise order in that amount.
    (2) Submit to the agency attorney one of the following:
    (i) Written information, including documents and witnesses 
statements, demonstrating that a violation did not occur or that a 
penalty, or the amount of the proposed penalty, is not warranted by the 
circumstances.
    (ii) A written request to reduce the proposed civil penalty, the 
amount of reduction, and the reasons and any document supporting a 
reduction of the proposed civil penalty, including records indicating a 
financial inability to pay or records showing that payment of the 
proposed civil penalty would prevent the person from continuing in 
business.
    (iii) A written request for an informal conference to discuss the 
matter with the agency attorney and to submit relevant information.
    (3) Request that a final notice of proposed civil penalty be issued 
so that the respondent may request a hearing in accordance with 
paragraph (g) of this section.
    (d) Final notice of proposed civil penalty. A final notice of 
proposed civil penalty (final notice) provides the last opportunity for 
the respondent to request a hearing.
    (1) The agency attorney issues a final notice if one of the 
following occurs:
    (i) The respondent fails to respond to the notice of proposed civil 
penalty not later than 30 days after the date the respondent received 
the notice of proposed civil penalty.
    (ii) The parties have not agreed to a resolution of the action 
after participating in informal procedures under paragraph (c)(2) of 
this section.
    (iii) The respondent requests the issuance of a final notice in 
accordance with paragraph (c)(3) of this section.
    (2) Not later than 15 days after the date the respondent received 
the final notice of proposed civil penalty, the respondent shall do one 
of the following:
    (i) Submit the amount of the proposed civil penalty or an agreed-
upon amount, in which case the agency attorney issues either an order 
imposing civil penalty or a compromise order in that amount.
    (ii) Request a hearing in accordance with paragraph (g) of this 
section.
    (e) Order imposing civil penalty. An order imposing civil penalty 
is the final order of the Secretary imposing a civil penalty. An order 
imposing civil penalty is issued for a violation described in paragraph 
(a) of this section after notice and an opportunity for a hearing.
    (1) The agency attorney either issues an order imposing civil 
penalty, or another document becomes an order imposing civil penalty, 
as described below.
    (i) The agency attorney issues an order imposing civil penalty if, 
in response to a notice of proposed civil penalty or a final notice of 
proposed civil penalty, the respondent pays or agrees to pay a civil 
penalty in the amount proposed or an agreed upon amount (other than an 
agreement for a compromise order under paragraph (f) of this section).
    (ii) Unless the respondent requests a hearing not later than 15 
days after the date the respondent received a final notice of proposed 
civil penalty, the final notice of proposed civil penalty becomes an 
order imposing civil penalty.
    (iii) Unless an appeal is filed with the FAA decisionmaker in 
accordance with Sec. 406.175, if the administrative law judge finds 
that a violation occurred and determines that a civil penalty, in an 
amount found appropriate by the administrative law judge, is warranted, 
an initial decision of an administrative law judge under subpart B of 
this part becomes an order imposing civil penalty.
    (iv) Unless a complaint is filed with a United States district 
court in accordance with Sec. 406.176, if the FAA decisionmaker finds 
that a violation occurred and determines that a civil penalty, in an 
amount found appropriate by the FAA decisionmaker, is warranted, a 
final decision and order of the FAA decisionmaker under subpart B of 
this part becomes an order imposing civil penalty. If a person seeks 
judicial review not later than 60 days after the final decision and 
order has been served on the respondent, the final decision and order 
is stayed.
    (2) [Reserved]
    (f) Compromise order. The agency attorney at any time may agree to 
compromise any civil penalty with no finding of violation. Under such 
agreement, the agency attorney issues a compromise order stating:
    (1) The respondent agrees to pay a civil penalty.
    (2) The FAA makes no finding of a violation.
    (3) The compromise order may not be used as evidence of a prior 
violation in any subsequent civil penalty action or license action.
    (g) Request for hearing. Any respondent who has been issued a final 
notice of proposed civil penalty may, not later than 15 days after the 
date the respondent received the final notice, request a hearing under 
subpart B of this part.
    (1) The respondent must file a written request for hearing with the 
Docket Management System (Docket Management System, U.S. Department of 
Transportation, Room PL 401, 400 Seventh Street, SW., Washington, DC 
20590-0001) and must serve a copy of the request on the agency 
attorney. Sections 406.113 and 406.115 state how filing and service 
must be done.
    (2) The request for hearing must be dated and signed.
    (h) Method of payment. A respondent must pay a civil penalty by 
check or money order, payable to the Federal Aviation Administration.
    (i) Collection of civil penalties. If a respondent does not pay a 
civil penalty imposed by an order imposing civil penalty or a 
compromise order within 60 days after service of the final order, the 
FAA may refer the order to the United States Department of Treasury or 
Department of Justice to collect the civil penalty.
    (j) Exhaustion of administrative remedies. A respondent may seek 
judicial review of a final decision and order of the FAA decisionmaker 
as provided in Sec. 406.179. A respondent has not exhausted 
administrative remedies for purposes of judicial review if the final 
order is one of the following:
    (1) An order imposing civil penalty issued by an agency attorney 
under paragraph (e)(1)(i) of this section.
    (2) A final notice of proposed civil penalty that becomes an order 
imposing civil penalty under paragraph (e)(1)(ii) of this section.
    (3) An initial decision of an administrative law judge that was not 
appealed to the FAA decisionmaker.
    (4) A compromise order under paragraph (f) of this section.
    (k) Compromise. The FAA may compromise or remit a civil penalty 
that has been proposed or imposed under this section.

[[Page 2182]]

Sec. 406.10-406.100  [Reserved]

Subpart B--Rules of Practice in FAA Space Transportation 
Adjudications


Sec. 406.101  Applicability.

    (a) Adjudications to which these rules apply. These rules apply to 
the following adjudications:
    (1) A civil penalty action in which the respondent has requested a 
hearing under Sec. 406.9.
    (2) [Reserved]
    (b) [Reserved]


Sec. 406.103  Definitions that apply in 14 CFR part 406.

For the purpose of this part,

    Administrative law judge means an administrative law judge 
appointed pursuant to the provisions of 5 U.S.C. 3105.
    Attorney means a person licensed by a state, the District of 
Columbia, or a territory of the United States to practice law or appear 
before the courts of that state or territory.
    Complainant in a civil penalty action means the proponent of the 
civil penalty in the FAA.
    FAA decisionmaker means the Associate Administrator for Commercial 
Space Transportation, or the Administrator of the Federal Aviation 
Administration, acting in the capacity of the decisionmaker on appeal; 
or a person who has been delegated the authority to act for the FAA 
decisionmaker. As used in this part, the FAA decisionmaker is the 
official authorized to issue a final decision and order of the 
Secretary in an action.
    Mail means U.S. first class mail, U.S. certified mail, U.S. 
registered mail, or an express courier service.
    Party means the respondent or the complainant.
    Personal delivery includes hand-delivery or use of a same-day 
messenger service. ``Personal delivery'' does not include the use of 
Government interoffice mail service.
    Properly addressed means using an address contained in agency 
records; a residential, business, or other address used by a person on 
any document submitted under this part; or any other address determined 
by other reasonable and available means.
    Respondent means a person who has been charged with a violation.


Sec. 406.105  Separation of functions for prosecuting civil penalties 
and advising the FAA decisionmaker.

    (a) Agency attorney. The authority to prosecute civil penalties 
within the FAA is exercised by an agency attorney in accordance with 
Sec. 406.9.
    (1) The following officials have the authority to act as the agency 
attorney under this part: The Deputy Chief Counsel; the Assistant Chief 
Counsel for Enforcement; the Assistant Chief Counsel for Regulations; 
the Assistant Chief Counsel for Europe, Africa, and Middle East Area 
Office; each Regional Counsel; and each Center Counsel. This authority 
may be delegated further.
    (2) An agency attorney may not include:
    (i) The Chief Counsel or the Assistant Chief Counsel for 
Litigation;
    (ii) Any attorney on the staff of the Assistant Chief Counsel for 
Litigation who advises the FAA decisionmaker regarding an initial 
decision or any appeal to the FAA decisionmaker; or
    (iii) Any attorney who is supervised in a civil penalty action by a 
person who provides such advice to the FAA decisionmaker in that action 
or a factually-related action.
    (b) Advisors to the FAA decisionmaker.
    (1) The Chief Counsel, the Assistant Chief Counsel for Litigation 
or an attorney on the staff of the Assistant Chief Counsel for 
Litigation, will advise the FAA decisionmaker regarding an initial 
decision or any appeal of an action to the FAA decisionmaker.
    (2) An agency employee engaged in the performance of investigative 
or prosecutorial functions must not, in that case or a factually-
related case, participate or give advice in a decision by the 
administrative law judge or by the FAA decisionmaker on appeal, except 
as counsel or a witness in the public proceedings.


Sec. 406.107  Appearances of parties, and attorneys and 
representatives.

    (a) Any party may appear and be heard in person.
    (b) Any party may be accompanied, represented, or advised by an 
attorney or representative designated by the party.
    (1) An attorney or representative who represents a party must file 
a notice of appearance in the action with the Docket Management System 
and must serve a copy of the notice of appearance on each other party 
before participating in any proceeding governed by this subpart.
    (2) The attorney or representative must include his or her name, 
address, and telephone number in the notice of appearance.
    (3) That attorney or representative in any proceeding governed by 
this subpart may examine the party.
    (4) Service of a document on the party's attorney or representative 
is considered to be service on the party.
    (c) An agency attorney represents the complainant.


Sec. 406.109  Administrative law judges--powers and limitations.

    (a) Powers of an administrative law judge. In accordance with the 
rules of this subpart, an administrative law judge may:
    (1) Give notice of, and hold, prehearing conferences and hearings;
    (2) Administer oaths and affirmations;
    (3) Issue subpoenas authorized by law and requested by the parties;
    (4) Rule on offers of proof;
    (5) Receive relevant and material evidence;
    (6) Regulate the course of the hearing in accordance with the rules 
of this subpart;
    (7) Hold conferences to settle or to simplify the issues by consent 
of the parties;
    (8) Dispose of procedural motions and requests; and
    (9) Make findings of fact and conclusions of law, and issue an 
initial decision.
    (b) Duties to maintain the record. (1) The administrative law judge 
must file with the DMS, or instruct the party to file with the DMS, a 
copy of each document that is submitted to the administrative law judge 
that has not been filed with DMS, except the portions of those 
documents that contain confidential information.
    (2) The administrative law judge must file with the DMS a copy of 
each ruling and order issued by the administrative law judge, except 
those portions that contain confidential information.
    (3) The administrative law judge must file with the DMS, or 
instruct the court reporter to file with the DMS, a copy of each 
transcript and exhibit, except those portions that contain confidential 
information.
    (4) The administrative law judge must maintain any confidential 
information filed in accordance with Sec. 406.117 and deliver it to the 
Assistant Chief Counsel for Litigation when the administrative law 
judge no longer needs it.
    (c) Limitations on the power of the administrative law judge. The 
administrative law judge may not issue an order of contempt, award 
costs to any party, or impose any sanction not specified in this 
subpart. If the administrative law judge imposes any sanction not 
specified in this subpart, a party may file an interlocutory appeal of 
right pursuant to Sec. 406.173(c). This section does not preclude an 
administrative law judge from issuing an order that bars a person from 
a specific proceeding based on a finding of obstreperous or disruptive 
behavior in that specific proceeding.

[[Page 2183]]

    (d) Disqualification. The administrative law judge may disqualify 
himself or herself at any time. A party may file a motion, pursuant to 
Sec. 406.141(f)(8), requesting that an administrative law judge be 
disqualified from the proceedings.


Sec. 406.111  Signing documents.

    (a) Signature required. The party, or the party's attorney or 
representative, must sign each document tendered for filing or served 
on each party.
    (b) Effect of signing a document. By signing a document, the party, 
or the party's attorney or representative, certifies that he or she has 
read the document and, based on reasonable inquiry and to the best of 
that individual's knowledge, information, and belief, the document is--
    (1) Consistent with these rules;
    (2) Warranted by existing law or that a good faith argument exists 
for extension, modification, or reversal of existing law; and
    (3) Not unreasonable or unduly burdensome or expensive, not made to 
harass any person, not made to cause unnecessary delay, not made to 
cause needless increase in the cost of the proceedings, or for any 
other improper purpose.
    (c) Sanctions. If an individual signs a document in violation of 
this section, the administrative law judge or the FAA decisionmaker 
must:
    (1) Strike the pleading signed in violation of this section;
    (2) Strike the request for discovery or the discovery response 
signed in violation of this section and preclude further discovery by 
the party;
    (3) Deny the motion or request signed in violation of this section;
    (4) Exclude the document signed in violation of this section from 
the record;
    (5) Dismiss the interlocutory appeal and preclude further appeal on 
that issue by the party who filed the appeal until an initial decision 
has been entered on the record; or
    (6) Dismiss the appeal of the administrative law judge's initial 
decision to the FAA decisionmaker.


Sec. 406.113  Filing documents with the Docket Management System (DMS) 
and sending documents to the administrative law judge and Assistant 
Chief Counsel for Litigation.

    (a) The Docket Management System (DMS). (1) Documents filed in a 
civil penalty adjudication are kept in the Docket Management System 
(DMS), except for documents that contain confidential information in 
accordance with Sec. 406.117. The DMS is an electronic docket. 
Documents that are filed are scanned into the electronic docket and an 
index is made of all documents that have been filed so that any person 
may view the index and documents as provided in paragraph (f) of this 
section.
    (2) A party is not required to file written interrogatories and 
responses, requests for production of documents or tangible items and 
responses, and requests for admission and responses with the Docket 
Management System or submit them to administrative law judge, except as 
provided in Sec. 406.143.
    (b) Method of filing. A person filing a document must mail or 
personally deliver the signed original and one copy of each document to 
the DMS at Docket Management System, U.S. Department of Transportation, 
Plaza Level 401, 400 7th Street, SW., Washington, DC 20590-0001. A 
person must serve a copy of each document on each party in accordance 
with Sec. 406.115.
    (c) Date of filing. The date of filing is the date of personal 
delivery; or if mailed, the mailing date shown on any certificate of 
service, the date shown on the postmark if there is no certificate of 
service, or other mailing date shown by other evidence if there is no 
certificate of service or postmark. The date shown in the DMS index is 
not necessarily the date of service. It is the date the DMS received 
the document.
    (d) Form. DMS scans the documents into its electronic docket. To 
ensure that DMS can scan the document and correctly identify it in the 
index, each person filing a document must comply with the following:
    (1) Each document must be legible. It may be handwritten, 
typewritten, or printed from a computer.
    (2) Each document must have a caption on its first page, clearly 
visible, with the following information:
    (i) ``FAA Space Adjudication.''
    (ii) Case name, such as ``In the matter of X Corporation.''
    (iii) FAA Case Number and DMS docket number, if assigned.
    (iv) Name of the document being filed, including the party filing 
the document, such as ``Respondent's Motion to Dismiss.''
    (v) ``Confidential information filed with administrative law 
judge'' or ``Confidential information filed with Assistant Chief 
Counsel for Litigation'' if the party is filing confidential 
information under Sec. 406.117.
    (3) The document must be capable of being scanned and be easy to 
read both in paper form and as scanned into the electronic docket. A 
document that meets the following specifications is capable of being 
scanned using automatic feeders and is easy to read both in paper form 
and as scanned into the electronic docket. Documents that do not meet 
these specifications may not be legible.
    (i) On white paper.
    (ii) On paper not larger than 8\1/2\ by 11 inches.
    (iii) In black ink.
    (iv) Text double-spaced. Footnotes and long quotes may be single 
spaced.
    (v) At least 12 point type.
    (vi) Margins at least 1 inch on each side.
    (vii) The original not bound or hole-punched, only held together 
with removable metal clips or the like. The copy that is filed or sent 
to the administrative law judge or Assistant Chief Counsel for 
Litigation, and the copy served on another party, need not meet this 
specification.
    (viii) The original has no tabs. The copy that is filed or sent to 
the administrative law judge or Assistant Chief Counsel for Litigation, 
and the copy served on another party, need not meet this specification.
    (e) Sending documents to the administrative law judge or Assistant 
Chief Counsel for Litigation. Sending the document directly to the 
administrative law judge or to the Assistant Chief Counsel for 
Litigation is not a substitute for filing the original with the DMS, 
except for confidential information under Sec. 406.117.
    (f) Viewing and copying the record. Any person may view and copy 
the record, except for confidential information, as follows:
    (1) During regular business hours at the Docket Management System, 
U.S. Department of Transportation, Plaza Level 401, 400 7th Street, 
SW., Washington, DC 20590-0001.
    (2) Through the Internet at http://dms.dot.gov..
    (3) By requesting it from the Docket Management System and paying 
reasonable costs.


Sec. 406.115  Serving documents on other parties.

    (a) Service required. A person must serve on each other party at 
the time of filing a copy of any document filed with the Docket 
Management System. Service on a party's attorney or representative of 
record is adequate service on the party.
    (b) Method of service. A person must serve documents by personal 
delivery or by mail.
    (c) Certificate of service. A person may attach a certificate of 
service to a document filed with the DMS. Any certificate of service 
must include a statement, dated and signed by the individual filing the 
document, that the document was served on each party, the

[[Page 2184]]

method of service, and the date of service.
    (d) Date of service. The date of service is the date of personal 
delivery; or if mailed, the mailing date shown on the certificate of 
service, the date shown on the postmark if there is no certificate of 
service, or other mailing date shown by other evidence if there is no 
certificate of service or postmark. The date shown in the DMS index is 
not necessarily the date of service. It is the date the DMS received 
the document.
    (e) Additional time after service by mail. Whenever a party has a 
right or a duty to act or to make any response within a prescribed 
period after service by mail, or on a specified date after service by 
mail, 5 days is added to the prescribed period.
    (f) Service by the administrative law judge. The administrative law 
judge must serve a copy of each document including, but not limited to, 
notices of pre-hearing conferences and hearings, rulings on motions, 
decisions, and orders, upon each party to the proceedings by personal 
delivery or by mail.
    (g) Service made. A document is deemed served in accordance with 
this subpart if it was properly addressed; was sent in accordance with 
this subpart; and was returned, not claimed, or refused. Service is 
considered valid as of the date and the time that the document was 
mailed, or personal delivery of the document was refused.
    (h) Presumption of service. There is a presumption of service where 
a party or a person, who customarily receives mail, or receives it in 
the ordinary course of business, at either the person's residence or 
the person's principal place of business, acknowledges receipt of the 
document.


Sec. 406.117  Confidential information.

    (a) Filing confidential information. If a party wants certain 
information that the party is filing not made available to the public, 
the party must do the following:
    (1) Place the information in a separate sealed envelope and clearly 
mark the envelope ``CONFIDENTIAL.'' At least the first page of the 
document in the envelope also must be marked ``CONFIDENTIAL.''
    (2) Attach to this envelope a cover document marked ``Confidential 
information filed with administrative law judge'' or ``Confidential 
information filed with Assistant Chief Counsel for Litigation.'' The 
cover document must include, at the least, a short statement of what is 
being filed, such as ``Respondent's motion for confidentiality order.''
    (3) Unless such a motion has already been granted, enclose a motion 
for confidentiality order in accordance with paragraph (c) of this 
section. The motion must be in the sealed envelope if it contains 
confidential information; otherwise the motion must be outside of the 
sealed envelope.
    (b) Marked information not made public. If a party files a document 
in a sealed envelope clearly marked ``CONFIDENTIAL'' the document may 
not be made available to the public unless and until the administrative 
law judge or the FAA decisionmaker decides it may be made available to 
the public in accordance with 49 U.S.C. 70114.
    (c) Motion for confidentiality order. If a party is filing, is 
requested to provide in discovery, or intends to offer at the hearing, 
information that the party does not wish to be available to the public, 
the party must file a motion for a confidentiality order.
    (1) The party must state the specific grounds for withholding the 
information from the public.
    (2) If the party claims that the information is protected under 49 
U.S.C. 70114, and if both the complainant and the respondent agree that 
the information is protected under that section, the administrative law 
judge must grant the motion. If one party does not agree that the 
information is protected under 49 U.S.C. 70114 the administrative law 
judge must decide. Either party may file an interlocutory appeal of 
right under Sec. 406.173(c).
    (3) If the party claims that the information should be protected on 
grounds other than those provided by 49 U.S.C. 70114 the administrative 
law judge must grant the motion if, based on the motion and any 
response to the motion, the administrative law judge determines that 
disclosure would be detrimental to safety, disclosure would not be in 
the public interest, or that the information is not otherwise required 
to be made available to the public.
    (4) If the administrative law judge determines that the information 
is not necessary to decide the case or would not otherwise lead to the 
discovery of relevant material, the administrative law judge must 
preclude any inquiry into the matter by any party.
    (5) If the administrative law judge determines that the requested 
material may be disclosed during discovery, the administrative law 
judge may order that the material may be discovered and disclosed under 
limited conditions or may be used only under certain terms and 
conditions.
    (6) If the administrative law judge determines that the requested 
material is necessary to decide the case, or would otherwise lead to 
the discovery of relevant material, and that a confidentiality order is 
warranted, the administrative law judge must--
    (i) Provide an opportunity for review of the document by the 
attorneys of record off the record.
    (ii) Provide procedures for excluding the information from the 
record, or order that portion of the record that includes confidential 
information be closed.
    (iii) Order that the parties must not disclose the information in 
any manner and the parties must not use the information in any other 
proceeding.
    (7) If an administrative law judge orders a record closed, in whole 
or in part:
    (i) The closed record is not available to the public.
    (ii) The closed record is available to the parties' attorneys of 
record.
    (iii) The administrative law judge may determine whether the closed 
record is available to the parties, the parties' representatives, or 
other persons such as witnesses for a party.
    (iv) No party, attorney of record, representative of record, or 
person who receives information from such persons, may disclose 
information that has been protected under this section except to a 
person authorized by this section or the administrative law judge to 
receive it.
    (v) If a person other than one authorized by this section desires 
to view or copy a closed record, the person must file a motion to open 
the record.


Sec. 406.119  Computation of time.

    (a) This section applies to any period of time prescribed or 
allowed by this subpart, by notice or order of the administrative law 
judge or the FAA decisionmaker, or by any applicable statute.
    (b) The date of an act, event, or default, after which a designated 
time period begins to run, is not included in a computation of time 
under this subpart.
    (c) The last day of a time period is included in a computation of 
time unless it is a Saturday, Sunday, or a legal holiday. If the last 
day of the time period is a Saturday, Sunday, or legal holiday, the 
time period runs until the end of the next day that is not a Saturday, 
Sunday, or legal holiday.


Sec. 406.121  Extension of time.

    Before an appeal is filed with the FAA decisionmaker, the parties 
may seek an extension of time as follows:
    (a) Extension of time by agreement of the parties. The parties may 
agree to extend for a reasonable period the time for filing a document 
under this subpart

[[Page 2185]]

with the agreement of the administrative law judge. The party seeking 
the extension of time must submit a draft order to the administrative 
law judge for signature, file it with the Docket Management System, and 
serve it on each party.
    (b) Motion for extension of time. If the parties do not agree to an 
extension of time for filing a document, a party desiring an extension 
may file with the Docket Management System and serve a written motion 
for an extension of time not later than 7 days before the document is 
due unless good cause for the late filing is shown. The administrative 
law judge may grant the extension of time if good cause for the 
extension is shown.
    (c) Failure to rule. If the administrative law judge fails to rule 
on a written motion for an extension of time by the date the document 
is due, the motion for an extension of time is granted for no more than 
20 days after the original date the document was to be filed.


Sec. 406.123  Waivers.

    Waivers of any rights provided by statute or regulation must be in 
writing or by stipulation made at a hearing and entered into the 
record. The parties must set forth the precise terms of the waiver and 
any conditions.


Sec. 406.127  Complaint and answer in civil penalty adjudications.

    (a) Complaint.
    (1) Filing. The complainant must file the original and one copy of 
the complaint with the Docket Management System, or may file a written 
motion pursuant to Sec. 406.141(f)(1) instead of filing a complaint, 
not later than 20 days after receipt by the complainant of a request 
for hearing. The complainant should suggest a location for the hearing 
when filing the complaint.
    (2) Service. The complainant must personally deliver or mail a copy 
of the complaint to the respondent, or the respondent's attorney or 
representative who has filed a notice of appearance in accordance with 
Sec. 406.107.
    (3) Contents of complaint. The final notice of proposed civil 
penalty issued under Sec. 406.9(d) may be filed as the complaint. A 
complaint must set forth the following in sufficient detail to provide 
notice:
    (i) The facts alleged.
    (ii) Any requirement of the Act, a regulation issued under the Act, 
or any term or condition of a license issued or transferred under the 
Act allegedly violated by the respondent.
    (iii) The proposed civil penalty.
    (b) Answer.--(1) Time for filing. The respondent must file an 
answer to the complaint, or may file a written motion pursuant to 
Sec. 406.141(f)(2) instead of filing an answer, not later than 30 days 
after service of the complaint.
    (2) Form. The answer must be in writing. The answer may be in the 
form of a letter but must be dated and signed by the person responding 
to the complaint. The answer must be legible, and may be handwritten, 
typed, or printed from a computer.
    (3) Filing and service. A respondent must file the answer with the 
Docket Management System and serve a copy of the answer on the agency 
attorney who filed the complaint.
    (4) Contents of answer.--(i) Specific denial of allegations 
required. The respondent must admit, deny, or state that the respondent 
is without sufficient knowledge or information to admit or deny, each 
numbered paragraph of the complaint. Any statement or allegation 
contained in the complaint that is not specifically denied in the 
answer constitutes an admission of the truth of that allegation. An 
administrative law judge shall treat a general denial of the complaint 
as a failure to file an answer.
    (ii) Affirmative defenses. The answer must specifically state any 
affirmative defense that the respondent asserts.
    (iii) Request for relief. The answer may include a brief statement 
of any relief requested.
    (iv) Hearing location. The respondent should suggest a location for 
the hearing when filing the answer.
    (5) Failure to file answer. A respondent's failure to file an 
answer without good cause constitutes an admission of the truth of each 
allegation contained in the complaint.


Sec. 406.133  Amendment of pleadings.

    (a) Time. A party must file with the Docket Management System and 
serve on each other party any amendment to a complaint or an answer as 
follows:
    (1) Not later than 15 days before the scheduled date of a hearing, 
a party may amend a complaint or an answer without the consent of the 
administrative law judge.
    (2) Less than 15 days before the scheduled date of a hearing, the 
administrative law judge may allow amendment of a complaint or an 
answer only for good cause shown in a motion to amend.
    (b) Responses. The administrative law judge must allow a reasonable 
time, but not more than 20 days from the date of filing, for other 
parties to respond to an amendment to a complaint or answer.


Sec. 406.135  Withdrawal of complaint or request for hearing.

    At any time before or during a hearing, the complainant may 
withdraw a complaint or a party may withdraw a request for a hearing 
without the consent of the administrative law judge. If the complainant 
withdraws the complaint or a party withdraws the request for a hearing 
and the answer, the administrative law judge must dismiss the 
proceedings under this subpart with prejudice.


Sec. 406.137  Intervention.

    (a) A person may file with the Docket Management System and serve 
on each other party a motion for leave to intervene as a party in an 
adjudication. Except for good cause shown, a motion for leave to 
intervene must be filed not later than 10 days before the hearing.
    (b) The administrative law judge may grant a motion for leave to 
intervene if the administrative law judge finds that--
    (1) Intervention will not unduly broaden the issues or delay the 
proceedings, and
    (2) The intervener will be bound by any order or decision entered 
in the action or the intervener has a property, financial, or other 
legitimate interest that may not be addressed adequately by the 
parties.
    (c) The administrative law judge may determine the extent to which 
an intervener may participate in the proceedings.


Sec. 406.139  Joint procedural or discovery schedule.

    (a) General. The parties may agree to submit a schedule for filing 
all prehearing motions or for conducting discovery or both.
    (b) Form and content of schedule. If the parties agree to a joint 
procedural or discovery schedule, one of the parties must file with the 
Docket Management System and serve the joint schedule, setting forth 
the dates to which the parties have agreed. One of the parties must 
draft an order establishing a joint schedule for the administrative law 
judge.
    (1) The joint schedule may include, but need not be limited to, 
times for requests for discovery, any objections to discovery requests, 
responses to discovery requests, submission of prehearing motions, 
responses to prehearing motions, exchange of exhibits to be introduced 
at the hearing, and lists of witnesses that may be called at the 
hearing.
    (2) Each party must sign the original joint schedule.
    (c) Time. The parties may agree to submit all prehearing motions 
and responses and may agree to close discovery in the proceedings under 
the joint schedule within a reasonable time

[[Page 2186]]

before the date of the hearing, but not later than 15 days before the 
hearing.
    (d) Order establishing joint schedule. The administrative law judge 
must approve the joint schedule filed by the parties by signing the 
joint schedule and filing it with the Docket Management System.
    (e) Disputes. The administrative law judge must resolve any dispute 
regarding discovery or regarding compliance with the joint schedule as 
soon as possible so that the parties may continue to comply with the 
joint schedule.
    (f) Sanctions for failure to comply with joint schedule. If a party 
fails to comply with the order establishing a joint schedule, the 
administrative law judge may direct that party to comply with a motion 
to compel discovery; or, limited to the extent of the party's failure 
to comply with a motion or discovery request, the administrative law 
judge may:
    (1) Strike that portion of a party's pleadings;
    (2) Preclude prehearing or discovery motions by that party;
    (3) Preclude admission of that portion of a party's evidence at the 
hearing; or
    (4) Preclude that portion of the testimony of that party's 
witnesses at the hearing.


Sec. 406.141  Motions.

    (a) General. A party applying for an order or ruling not 
specifically provided in this subpart must do so by motion. A party 
must comply with the requirements of this section when filing a motion 
for consideration by the administrative law judge or the FAA 
decisionmaker on appeal.
    (b) Contents. A party must state the relief sought by the motion 
and the particular grounds supporting that relief. If a party has 
evidence in support of a motion, the party must attach any evidence, 
including affidavits, to the motion.
    (c) Form and time. Except for oral motions heard on the record, a 
motion made prior to the hearing must be in writing. Unless otherwise 
agreed by the parties or for good cause shown, a party must file any 
prehearing motion with the Docket Management System and serve each 
other party not later than 30 days before the hearing.
    (d) Answers to motions. Any party may file and serve an answer, 
with affidavits or other evidence in support of the answer, not later 
than 10 days after service of a written motion on that party. When a 
motion is made during a hearing, the answer may be made at the hearing 
on the record, orally or in writing, within a reasonable time 
determined by the administrative law judge.
    (e) Rulings on motions. The administrative law judge must rule on 
all motions as follows:
    (1) Discovery motions. The administrative law judge must resolve 
all pending discovery motions not later than 10 days before the 
hearing.
    (2) Prehearing motions. The administrative law judge must resolve 
all pending prehearing motions not later than 7 days before the 
hearing. If the administrative law judge issues a ruling or order 
orally, the administrative law judge must serve a written copy of the 
ruling or order, within 3 days, on each party. In all other cases, the 
administrative law judge must issue rulings and orders in writing and 
must serve a copy of the ruling or order on each party.
    (3) Motions made during the hearing. The administrative law judge 
may issue rulings and orders on motions made during the hearing orally. 
Oral rulings or orders on motions must be made on the record.
    (f) Specific motions.--(1) Complainant's motion to dismiss a 
request for a hearing as prematurely filed. The complainant may file a 
motion to dismiss a request for a hearing as prematurely filed instead 
of filing a complaint. If the motion is not granted, the complainant 
must file the complaint and must serve a copy of the complaint on each 
party not later than 10 days after service of the administrative law 
judge's ruling or order on the motion to dismiss. If the motion to 
dismiss is granted and the proceedings are terminated without a 
hearing, the respondent may file an appeal in accordance with 
Sec. 406.175. If required by the decision on appeal, the complainant 
must file a complaint and must serve a copy of the complaint on each 
party not later than 10 days after service of the decision on appeal.
    (2) Respondent's motions instead of an answer. A respondent may 
file one or more of the following motions instead of filing an answer. 
If the administrative law judge denies the motion, the respondent must 
file an answer not later than 10 days after service of the denial of 
the motion.
    (i) Respondent's motion to dismiss complaint for failure to state a 
claim for which a civil penalty may be imposed. A respondent may file a 
motion to dismiss the complaint for failure to state a claim for which 
a civil penalty may be imposed instead of filing an answer. The motion 
must show that the complaint fails to state a violation of the Act, a 
regulation issued under the Act, or any term or condition of a license 
issued or transferred under the Act.
    (ii) Respondent's motion to dismiss allegations or complaint for 
staleness. Instead of filing an answer to the complaint, a respondent 
may move to dismiss the complaint, or that part of the complaint that 
alleges a violation that occurred more than 5 years before an agency 
attorney issued a notice of proposed civil penalty to the respondent, 
as provided by 28 U.S.C. 2462.
    (iii) Respondent's motion for more definite statement. A respondent 
may file a motion requesting a more definite statement of the 
allegations contained in the complaint instead of filing an answer. The 
respondent must set forth, in detail, the indefinite or uncertain 
allegations contained in a complaint or response to any pleading and 
must submit the details that the party believes would make the 
allegation or response definite and certain. If the administrative law 
judge grants the motion, the complainant must supply a more definite 
statement not later than 15 days after service of the ruling granting 
the motion. If the complainant fails to supply a more definite 
statement, the administrative law judge must strike the allegations in 
the complaint to which the motion is directed. If the administrative 
law judge denies the motion, the respondent must file an answer and 
must serve a copy of the answer on each party not later than 10 days 
after service of the order of denial.
    (3) Other motions to dismiss. A party may file a motion to dismiss, 
specifying the grounds for dismissal.
    (4) Complainant's motion for more definite statement. The 
complainant may file a motion requesting a more definite statement if 
an answer fails to respond clearly to the allegations in the complaint. 
The complainant must set forth, in detail, the indefinite or uncertain 
allegations contained in the answer and must submit the details that 
the complainant believes would make the allegation or response definite 
and certain. If the administrative law judge grants the motion, the 
respondent must supply a more definite statement not later than 15 days 
after service of the ruling on the motion. If the respondent fails to 
supply a more definite statement, the administrative law judge must 
strike those statements in the answer to which the motion is directed. 
An administrative law judge shall treat a respondent's failure to 
supply a more definite statement as an admission of unanswered 
allegations in the complaint.

[[Page 2187]]

    (5) Other motions for more definite statement. A party may file a 
motion for more definite statement of any pleading that requires or 
permits a response under this subpart. A party must set forth, in 
detail, each indefinite or uncertain allegation contained in a pleading 
or response and must submit the details that would make each allegation 
definite and certain.
    (6) Motion to strike. Any party may make a motion to strike any 
insufficient allegation or defense, or any redundant, immaterial, or 
irrelevant matter in a pleading. A party must file a motion to strike 
and must serve a copy on each party before a response to that pleading 
is required under this subpart or, if a response is not required, not 
later than 10 days after service of the pleading.
    (7) Motion for decision. A party may make a motion for decision, 
regarding all or any part of the proceedings, at any time before the 
administrative law judge has issued an initial decision in the 
proceedings. The administrative law judge must grant a party's motion 
for decision if the pleadings, depositions, answers to interrogatories, 
admissions, matters that the administrative law judge has officially 
noticed, or evidence introduced during the hearing show that there is 
no genuine issue of material fact and that the party making the motion 
is entitled to a decision as a matter of law. The party making the 
motion for decision has the burden of showing that there is no genuine 
issue of material fact disputed by the parties.
    (8) Motion for disqualification. A party may file a motion for 
disqualification. A party may file the motion at any time after the 
administrative law judge has been assigned to the proceedings but must 
make the motion before the administrative law judge files an initial 
decision in the proceedings.
    (i) Motion and supporting affidavit. A party must state the grounds 
for disqualification, including, but not limited to, personal bias, 
pecuniary interest, or other factors showing reason for 
disqualification, in the motion for disqualification. A party must 
submit an affidavit with the motion for disqualification that sets 
forth, in detail, the matters alleged to constitute grounds for 
disqualification.
    (ii) Answer. A party may respond to the motion for disqualification 
not later than 5 days after service of the motion for disqualification.
    (iii) Decision on motion for disqualification. The administrative 
law judge must issue a decision on the motion for disqualification not 
later than 15 days after the motion has been filed. If the 
administrative law judge finds that the motion for disqualification and 
supporting affidavit show a basis for disqualification, the 
administrative law judge must withdraw from the proceedings 
immediately. If the administrative law judge finds that 
disqualification is not warranted, the administrative law judge must 
deny the motion and state the grounds for the denial on the record. If 
the administrative law judge fails to rule on a party's motion for 
disqualification within 15 days after the motion has been filed, the 
motion is granted.


Sec. 406.143  Discovery.

    (a) Initiation of discovery. Any party may initiate discovery 
described in this section, without the consent or approval of the 
administrative law judge, at any time after a complaint has been filed.
    (b) Methods of discovery. The following methods of discovery are 
permitted under this section: depositions on oral examination or 
written questions of any person; written interrogatories directed to a 
party; requests for production of documents or tangible items to any 
person; and requests for admission by a party. A party is not required 
to file written interrogatories and responses, requests for production 
of documents or tangible items and responses, and requests for 
admission and responses with the Docket Management System or submit any 
of them to the administrative law judge. In the event of a discovery 
dispute, a party must attach a copy of these documents in support of a 
motion filed under this section.
    (c) Service on the agency. A party must serve each discovery 
request directed to the agency or any agency employee with the agency 
attorney.
    (d) Time for response to discovery request. Unless otherwise 
directed by this subpart or agreed by the parties, a party must respond 
to a request for discovery, including filing objections to a request 
for discovery, not later than 30 days after service of the request.
    (e) Scope of discovery. Subject to the limits on discovery set 
forth in paragraph (f) of this section, a party may discover any matter 
that is not privileged and that is relevant to the subject matter of 
the proceeding. A party may discover information that relates to the 
claim or defense of any party including the existence, description, 
nature, custody, condition, and location of any document or other 
tangible item and the identity and location of any person having 
knowledge of discoverable matter. A party may discover facts known, or 
opinions held, by an expert who any other party expects to call to 
testify at the hearing. A party has no ground to object to a discovery 
request on the basis that the information sought would not be 
admissible at the hearing if the information sought during discovery is 
reasonably calculated to lead to the discovery of admissible evidence.
    (f) Limiting discovery. The administrative law judge must limit the 
frequency and extent of discovery permitted by this section if a party 
shows that--
    (1) The information requested is cumulative or repetitious;
    (2) The information requested can be obtained from another less 
burdensome and more convenient source;
    (3) The party requesting the information has had ample opportunity 
to obtain the information through other discovery methods permitted 
under this section; or
    (4) The method or scope of discovery requested by the party is 
unduly burdensome or expensive.
    (g) Confidentiality order. A party or person who has received a 
discovery request for information that is related to a trade secret, 
confidential or sensitive material, competitive or commercial 
information, proprietary data, or information on research and 
development, may file and serve a motion for a confidentiality order in 
accordance with Sec. 406.117.
    (h) Protective order. A party or a person who has received a 
request for discovery may file a motion for protective order and must 
serve a copy of the motion for protective order on each party. The 
party or person making the motion must show that the protective order 
is necessary to protect the party or the person from annoyance, 
embarrassment, oppression, or undue burden or expense. As part of the 
protective order, the administrative law judge may:
    (1) Deny the discovery request;
    (2) Order that discovery be conducted only on specified terms and 
conditions, including a designation of the time or place for discovery 
or a determination of the method of discovery; or
    (3) Limit the scope of discovery or preclude any inquiry into 
certain matters during discovery.
    (i) Duty to supplement or amend response. A party who has responded 
to a discovery request has a duty to supplement or amend the response, 
as soon as the information is known, as follows:
    (1) A party must supplement or amend any response to a question 
requesting the identity and location of any person having knowledge of 
discoverable matters.

[[Page 2188]]

    (2) A party must supplement or amend any response to a question 
requesting the identity of each person who will be called to testify at 
the hearing as an expert witness and the subject matter and substance 
of that witness' testimony.
    (3) A party must supplement or amend any response that was 
incorrect when made or any response that was correct when made but is 
no longer correct, accurate, or complete.
    (j) Depositions. The following rules apply to all depositions taken 
pursuant to this section:
    (1) Form. A deposition must be taken on the record and reduced to 
writing. The person being deposed must sign the deposition unless the 
parties agree to waive the requirement of a signature.
    (2) Administration of oaths. Within the United States, or a 
territory or possession subject to the jurisdiction of the United 
States, a party must take a deposition before a person authorized to 
administer oaths by the laws of the United States or authorized by the 
law of the place where the examination is held. In a foreign country, a 
party must take a deposition in any manner allowed by the Federal Rules 
of Civil Procedure.
    (3) Notice of deposition. A party must serve a notice of 
deposition, stating the time and place of the deposition and the name 
and address of each person to be examined,on the person to be deposed, 
must submit the notice to the administrative law judge, and must file 
the notice with the Docket Management System, and must serve the notice 
on each party, not later than 7 days before the deposition. A party may 
serve a notice of deposition less than 7 days before the deposition 
only with consent of the administrative law judge. If a subpoena duces 
tecum is to be served on the person to be examined, the party must 
attach to the notice of deposition a copy of the subpoena duces tecum 
that describes the materials to be produced at the deposition.
    (4) Use of depositions. A party may use any part or all of a 
deposition at a hearing authorized under this subpart only upon a 
showing of good cause. The deposition may be used against any party who 
was present or represented at the deposition or who had reasonable 
notice of the deposition.
    (k) Interrogatories. (1) A party may not serve more than 30 
interrogatories to each other party. Each subpart of an interrogatory 
must be counted as a separate interrogatory.
    (2) A party must file a motion for leave to serve more than 30 
interrogatories on a party before serving additional interrogatories on 
a party. The administrative law judge must grant the motion only if the 
party shows good cause for the party's failure to inquire about the 
information previously and that the information cannot reasonably be 
obtained using less burdensome discovery methods or be obtained from 
other sources.
    (3) A party must answer each interrogatory separately and 
completely in writing.
    (4) A party, or the party's attorney or representative of record, 
must sign the party's responses to interrogatories.
    (5) If a party objects to an interrogatory, the party must state 
the objection and the reasons for the objection.
    (6) An opposing party may offer into evidence any part or all of a 
party's responses to interrogatories at a hearing under this subpart to 
the extent that the response is relevant, material, and not 
repetitious.
    (l) Requests for admission. A party may serve a written request for 
admission of the truth of any matter within the scope of discovery 
under this section or the authenticity of any document described in the 
request. A party must set forth each request for admission separately. 
A party must serve a copy of each document referenced in the request 
for admission unless the document has been provided or is reasonably 
available for inspection and copying.
    (1) Time. A party's failure to respond to a request for admission 
is not later than 30 days after service of the request constitutes an 
admission of the truth of the statement or statements contained in the 
request for admission. The administrative law judge may determine that 
a failure to respond to a request for admission does not constitute an 
admission of the truth if a party shows that the failure was due to 
circumstances beyond the control of the party or the party's attorney 
or representative.
    (2) Response. A party may object to a request for admission. The 
objection must be in writing and signed by the party or the party's 
attorney or representative of record, and must state the reasons for 
objection. A party may specifically deny the truth of the matter or 
describe the reasons why the party is unable to truthfully deny or 
admit the matter. If a party is unable to deny or admit the truth of 
the matter, the party must show that the party has made reasonable 
inquiry into the matter or that the information known to, or readily 
obtainable by, the party is insufficient to enable the party to admit 
or deny the matter. A party may admit or deny any part of the request 
for admission. If an administrative law judge determines that a 
response does not comply with the requirements of this rule or that the 
response is insufficient, the matter is admitted.
    (3) Effect of admission. Any matter admitted or treated as admitted 
under this section is conclusively established for the purpose of the 
hearing and appeal.
    (m) Motion to compel discovery. A party may make a motion to compel 
discovery if a person refuses to answer a question during a deposition, 
a party fails or refuses to answer an interrogatory, a person gives an 
evasive or incomplete answer during a deposition or when responding to 
an interrogatory, or a party fails or refuses to produce documents or 
tangible items. During a deposition, the proponent of a question may 
complete the deposition or may adjourn the examination before making a 
motion to compel if a person refuses to answer.
    (n) Failure to comply with a discovery order or order to compel. If 
a party fails to comply with a discovery order or an order to compel, 
the administrative law judge, limited to the extent of the party's 
failure to comply with the discovery order or motion to compel, may:
    (1) Strike that portion of a party's pleadings;
    (2) Preclude prehearing or discovery motions by that party;
    (3) Preclude admission of that portion of a party's evidence at the 
hearing; or
    (4) Preclude that portion of the testimony of that party's 
witnesses at the hearing.


Sec. 406.147  Notice of hearing.

    (a) Notice. The administrative law judge must give each party at 
least 60 days notice of the date, time, and location of the hearing.
    (b) Date, time, and location of the hearing. The administrative law 
judge must set a reasonable date, time, and location for the hearing 
within the United States. The administrative law judge must consider 
the need for discovery and any joint procedural or discovery schedule 
submitted by the parties when determining the hearing date. The 
administrative law judge must give due regard to the convenience of the 
parties, the location where the majority of the witnesses reside or 
work, and whether a scheduled air carrier serves the location.
    (c) Earlier hearing. With the consent of the administrative law 
judge, the parties may agree to hold the hearing on an earlier date 
than the date specified in the notice of hearing.
    (d) Space hearing consolidated with aviation hearing under 14 CFR 
part 13

[[Page 2189]]

subpart G. With the consent of the administrative law judge, the 
parties may agree to hold the hearing, or parts of the hearing, 
together with a hearing under 14 CFR part 13 subpart G if the cases 
involve some common issues of fact. If the hearings are consolidated, 
the administrative law judge may issue a consolidated initial decision 
covering both cases. The Administrator will serve as the FAA 
decisionmaker on appeal for both cases and will issue a consolidated 
decision, with the Associate Administrator for Commercial Space 
Transportation serving as an advisor to the FAA decisionmaker.


Sec. 406.149  Evidence.

    (a) General. A party is entitled to present the party's case or 
defense by oral, documentary, or demonstrative evidence, to submit 
rebuttal evidence, and to conduct any cross-examination that may be 
required for a full and true disclosure of the facts.
    (b) Admissibility. A party may introduce any oral, documentary, or 
demonstrative evidence in support of the party's case or defense. The 
administrative law judge must admit any oral, documentary, or 
demonstrative evidence introduced by a party but must exclude 
irrelevant, immaterial, or unduly repetitious evidence.
    (c) Hearsay evidence. Hearsay evidence is admissible in proceedings 
governed by this subpart. The fact that evidence submitted by a party 
is hearsay goes only to the weight of the evidence and does not affect 
its admissibility.


Sec. 406.151  Standard of proof.

    The administrative law judge must issue an initial decision or must 
rule in a party's favor only if the decision or ruling is supported by, 
and in accordance with, the reliable, probative, and substantial 
evidence contained in the record. In order to prevail, the party with 
the burden of proof must prove the party's case or defense by a 
preponderance of reliable, probative, and substantial evidence.


Sec. 406.153  Burden of proof.

    (a) Except in the case of an affirmative defense, in a civil 
penalty adjudication the burden of proof is on the complainant.
    (b) Except as otherwise provided by statute or rule, the proponent 
of a motion, request, or order has the burden of proof.
    (c) A party who has asserted an affirmative defense has the burden 
of proving the affirmative defense.


Sec. 406.155  Offer of proof.

    A party whose evidence has been excluded by a ruling of the 
administrative law judge may offer the evidence for the record on 
appeal.


Sec. 406.157  Expert or opinion witnesses.

    An employee of the FAA may not be called as an expert or opinion 
witness for any party other than the agency, in any proceeding governed 
by this part. An employee of a respondent may not be called as an 
expert or opinion witness for the complainant in any proceeding 
governed by this part to which the respondent is a party.


Sec. 406.159  Subpoenas.

    (a) Request for subpoena. A party may obtain from the 
administrative law judge a subpoena to compel the attendance of a 
witness at a deposition or hearing or to require the production of 
documents or tangible items. The administrative law judge must deliver 
the subpoena, signed by the administrative law judge but otherwise in 
blank, to the party. The party must complete the subpoena, stating the 
title of the action and the date and time for the witness' attendance 
or production of documents or items. The party who obtained the 
subpoena must serve the subpoena on the witness.
    (b) Motion to quash or modify the subpoena. A party, or any person 
upon whom a subpoena has been served, may file a motion to quash or 
modify the subpoena at or before the time specified in the subpoena for 
compliance. The applicant must describe, in detail, the basis for the 
motion to quash or modify the subpoena including, but not limited to, a 
statement that the testimony, document, or tangible evidence is not 
relevant to the proceeding, that the subpoena is not reasonably 
tailored to the scope of the proceeding, or that the subpoena is 
unreasonable and oppressive. A motion to quash or modify the subpoena 
will stay the effect of the subpoena pending a decision by the 
administrative law judge on the motion.
    (c) Enforcement of subpoena. Upon a showing that a person has 
failed or refused to comply with a subpoena, the Secretary may apply to 
the appropriate district court of the United States to seek enforcement 
of the subpoena in accordance with 49 U.S.C. 70115(c). A party may 
request the Secretary to seek such enforcement.


Sec. 406.161  Witness fees.

    (a) General. Unless otherwise authorized by the administrative law 
judge, the party who applies for a subpoena to compel the attendance of 
a witness at a deposition or hearing, or the party at whose request a 
witness appears at a deposition or hearing, must pay the witness fees 
described in this section.
    (b) Amount. Except for an employee of the agency who appears at the 
direction of the agency, a witness who appears at a deposition or 
hearing is entitled to the same fees and mileage expenses as are paid 
to a witness in a court of the United States in comparable 
circumstances.


Sec. 406.163  Record.

    (a) Exclusive record. The transcript of all testimony in the 
hearing; all exhibits received into evidence; the complaint, answer, 
and amendments thereto; all motions, applications, and requests, and 
responses thereto; and all rulings constitute the exclusive record for 
decision of the proceedings and the basis for the issuance of any 
orders in the proceeding.
    (b) A person may keep the original document, data, or other 
evidence, with the consent of the administrative law judge, by 
substituting a legible copy for the record.


Sec. 406.165  Argument before the administrative law judge.

    (a) Argument during the hearing. During the hearing, the 
administrative law judge must give the parties a reasonable opportunity 
to present arguments on the record supporting or opposing motions, 
objections, and rulings if the parties request an opportunity for 
argument. The administrative law judge may request written arguments 
during the hearing if the administrative law judge finds that 
submission of written arguments would be reasonable.
    (b) Final oral argument. At the conclusion of the hearing and 
before the administrative law judge issues an initial decision in the 
proceedings, the parties are entitled to submit oral proposed findings 
of fact and conclusions of law, exceptions to rulings of the 
administrative law judge, and supporting arguments for the findings, 
conclusions, or exceptions. At the conclusion of the hearing, a party 
may waive final oral argument.
    (c) Post-hearing briefs. The administrative law judge may request 
written post-hearing briefs before the administrative law judge issues 
an initial decision if the administrative law judge finds that 
submission of written briefs would be reasonable. If a party files a 
written post-hearing brief, the party must include proposed findings of 
fact and conclusions of law, exceptions to rulings of the 
administrative law judge, and supporting arguments for the findings, 
conclusions, or exceptions. The administrative law judge must give

[[Page 2190]]

the parties a reasonable opportunity, not more than 30 days after 
receipt of the transcript, to prepare and submit the briefs.


Sec. 406.167  Initial decision.

    (a) Contents. The administrative law judge must issue an initial 
decision at the conclusion of the hearing. In each oral or written 
decision, the administrative law judge must include findings of fact 
and conclusions of law, and the grounds supporting those findings and 
conclusions, upon all material issues of fact, the credibility of 
witnesses, the applicable law, any exercise of the administrative law 
judge's discretion, the amount of any civil penalty found appropriate 
by the administrative law judge, and a discussion of the basis for any 
order issued in the proceedings. The administrative law judge is not 
required to provide a written explanation for rulings on objections, 
procedural motions, and other matters not directly relevant to the 
substance of the initial decision. If the administrative law judge 
refers to any previous unreported or unpublished initial decision, the 
administrative law judge must make copies of that initial decision 
available to all parties and the FAA decisionmaker.
    (b) Oral decision. Except as provided in paragraph (c) of this 
section, at the conclusion of the hearing, the administrative law judge 
must issue the initial decision and order orally on the record.
    (c) Written decision. The administrative law judge may issue a 
written initial decision not later than 30 days after the conclusion of 
the hearing or submission of the last posthearing brief if the 
administrative law judge finds that issuing a written initial decision 
is reasonable. The administrative law judge must serve a copy of any 
written initial decision on each party.


Sec. 406.173  Interlocutory appeals.

    (a) General. Unless otherwise provided in this subpart, a party may 
not appeal a ruling or decision of the administrative law judge to the 
FAA decisionmaker until the initial decision has been entered on the 
record. A decision or order of the FAA decisionmaker on an 
interlocutory appeal does not constitute a final order of the Secretary 
for the purposes of judicial review under 5 U.S.C. chapter 7.
    (b) Interlocutory appeal for cause. If a party files a written 
request for an interlocutory appeal for cause, or orally requests an 
interlocutory appeal for cause, the proceedings are stayed until the 
administrative law judge issues a decision on the request. If the 
administrative law judge grants the request, the proceedings are stayed 
until the FAA decisionmaker issues a decision on the interlocutory 
appeal. The administrative law judge must grant an interlocutory appeal 
for cause if a party shows that delay of the interlocutory appeal would 
be detrimental to the public interest or would result in undue 
prejudice to any party.
    (c) Interlocutory appeals of right. If a party notifies the 
administrative law judge of an interlocutory appeal of right, the 
proceedings are stayed until the FAA decisionmaker issues a decision on 
the interlocutory appeal. A party may file an interlocutory appeal, 
without the consent of the administrative law judge, before an initial 
decision has been entered in the case of:
    (1) A ruling or order by the administrative law judge barring a 
party, or a party's attorney or representative, from the proceedings.
    (2) A ruling or order by the administrative law judge allegedly in 
violation of the limitations on the administrative law judge under 
Sec. 406.109(c).
    (3) Failure of the administrative law judge to grant a motion for a 
confidentiality order based on 49 U.S.C. 70114, under 
Sec. 406.117(c)(2).
    (4) Failure of the administrative law judge to dismiss the 
proceedings in accordance with Sec. 406.135.
    (d) Procedure. A party must file with the Docket Management System 
and serve each other party a notice of interlocutory appeal, with 
supporting documents, not later than 10 days after the administrative 
law judge's decision forming the basis of an interlocutory appeal of 
right or not later than 10 days after the administrative law judge's 
decision granting an interlocutory appeal for cause. A party must file 
with the Docket Management System a reply brief, if any, and serve a 
copy of the reply brief on each party, not later than 10 days after 
service of the appeal brief. The FAA decisionmaker must render a 
decision on the interlocutory appeal, on the record and as a part of 
the decision in the proceedings, within a reasonable time after receipt 
of the interlocutory appeal.
    (e) Rejection of interlocutory appeal. The FAA decisionmaker may 
reject frivolous, repetitive, or dilatory appeals, and may issue an 
order precluding one or more parties from making further interlocutory 
appeals in a proceeding in which there have been frivolous, repetitive, 
or dilatory interlocutory appeals.


Sec. 406.175  Appeal from initial decision.

    (a) Notice of appeal. A party may appeal the initial decision, and 
any decision not previously appealed pursuant to Sec. 406.173, by 
filing with the Docket Management System and serving on each party a 
notice of appeal. A party must file the notice of appeal not later than 
10 days after entry of the oral initial decision on the record or 
service of the written initial decision on the parties.
    (b) Issues on appeal. A party may appeal only the following issues:
    (1) Whether each finding of fact is supported by a preponderance of 
reliable, probative, and substantial evidence;
    (2) Whether each conclusion of law is made in accordance with 
applicable law, precedent, and public policy; and
    (3) Whether the administrative law judge committed any prejudicial 
errors during the hearing that support the appeal.
    (c) Perfecting an appeal. Unless otherwise agreed by the parties, a 
party must perfect an appeal, not later than 50 days after entry of the 
oral initial decision on the record or service of the written initial 
decision on the party, by filing an appeal brief.
    (1) Extension of time by agreement of the parties. The parties may 
agree to extend the time for perfecting the appeal with the consent of 
the FAA decisionmaker, who serves a letter confirming the extension of 
time on each party.
    (2) Motion for extension. If the parties do not agree to an 
extension of time for perfecting an appeal, a party desiring an 
extension of time may file a motion for an extension and must serve a 
copy of the motion on each party. The FAA decisionmaker may grant an 
extension if good cause for the extension is shown in the motion.
    (d) Appeal briefs. A party must file the appeal brief with the 
Docket Management System and serve each party.
    (1) A party must set forth, in detail, the party's specific 
objections to the initial decision or rulings in the appeal brief. A 
party also must set forth, in detail, the basis for the appeal, the 
reasons supporting the appeal, and the relief requested in the appeal. 
If the party relies on evidence contained in the record for the appeal, 
the party must specifically refer to the pertinent evidence contained 
in the record in the appeal brief.
    (2) The FAA decisionmaker may dismiss an appeal, on the FAA

[[Page 2191]]

decisionmaker's own initiative or upon motion of any other party, where 
a party has filed a notice of appeal but fails to perfect the appeal by 
timely filing an appeal brief.
    (e) Reply brief. Unless otherwise agreed by the parties, any party 
may file a reply brief with the Docket Management System and serve on 
each other party not later than 35 days after the appeal brief has been 
served on that party. If the party relies on evidence contained in the 
record for the reply, the party must specifically refer to the 
pertinent evidence contained in the record in the reply brief.
    (1) Extension of time by agreement of the parties. The parties may 
agree to extend the time for filing a reply brief with the consent of 
the FAA decisionmaker, who will serve a letter confirming the extension 
of time on each party.
    (2) Motion for extension. If the parties do not agree to an 
extension of time for filing a reply brief, a party desiring an 
extension of time may file and serve a motion for an extension and must 
serve a copy of the motion on each party. The FAA decisionmaker may 
grant an extension if good cause for the extension is shown in the 
motion.
    (f) Other briefs. The FAA decisionmaker may allow any person to 
submit an amicus curiae brief in an appeal of an initial decision. A 
party may not file more than one appeal brief or reply brief without 
permission of the FAA decisionmaker. A party may file with the Docket 
Management System a motion for permission to file an additional brief 
and must serve a copy of the motion on each other party. The party may 
not file the additional brief with the motion. The FAA decisionmaker 
may grant permission to file an additional brief if the party 
demonstrates good cause for allowing additional argument on the appeal. 
The FAA decisionmaker will allow a reasonable time for the party to 
file the additional brief.
    (g) Number of copies. A party must file the original brief and two 
copies of the brief with the Docket Management System and serve one 
copy on each other party.
    (h) Oral argument. The FAA decisionmaker has sole discretion to 
permit oral argument on the appeal. On the FAA decisionmaker's own 
initiative or upon written motion by any party, the FAA decisionmaker 
may find that oral argument will contribute substantially to the 
development of the issues on appeal and may grant the parties an 
opportunity for oral argument.
    (i) Waiver of objections on appeal. If a party fails to object to 
any alleged error regarding the proceedings in an appeal or a reply 
brief, the party waives any objection to the alleged error. The FAA 
decisionmaker is not required to consider any objection or argument in 
a brief if the party does not specifically refer in the brief to the 
pertinent evidence from the record.
    (j) FAA decisionmaker's decision on appeal. The FAA decisionmaker 
will review the record, the briefs on appeal, and the oral argument, if 
any, to determine if the administrative law judge committed prejudicial 
error in the proceedings or that the initial decision should be 
affirmed, modified, or reversed. The FAA decisionmaker may affirm, 
modify, or reverse the initial decision, make any necessary findings, 
or may remand the case for any proceedings that the FAA decisionmaker 
determines may be necessary.
    (1) The FAA decisionmaker may raise any issue, on the FAA 
decisionmaker's own initiative, that is required for proper disposition 
of the proceedings. The FAA decisionmaker will give the parties a 
reasonable opportunity to submit arguments on the new issues before 
making a decision on appeal. If an issue raised by the FAA 
decisionmaker requires the consideration of additional testimony or 
evidence, the FAA decisionmaker will remand the case to the 
administrative law judge for further proceedings and an initial 
decision related to that issue. If an issue raised by the FAA 
decisionmaker is solely an issue of law or the issue was addressed at 
the hearing but was not raised by a party in the briefs on appeal, a 
remand of the case to the administrative law judge for further 
proceedings is not required but may be provided in the discretion of 
the FAA decisionmaker.
    (2) The FAA decisionmaker will issue the final decision and order 
of the Administrator on appeal in writing and will serve a copy of the 
decision and order on each party.
    (3) A final decision and order of the FAA decisionmaker is 
precedent in any other civil penalty action under this part. Any issue, 
finding or conclusion, order, ruling, or initial decision of an 
administrative law judge that has not been appealed to the FAA 
decisionmaker is not precedent in any other civil penalty action.


Sec. 406.177  Petition to reconsider or modify a final decision and 
order of the FAA decisionmaker on appeal.

    (a) General. Any party may petition the FAA decisionmaker to 
reconsider or modify a final decision and order issued by the FAA 
decisionmaker on appeal from an initial decision. A party must file a 
petition to reconsider or modify with the Docket Management System not 
later than 30 days after service of the FAA decisionmaker's final 
decision and order on appeal and must serve a copy of the petition on 
each party. The FAA decisionmaker will not reconsider or modify an 
initial decision and order issued by an administrative law judge that 
has not been appealed by any party to the FAA decisionmaker.
    (b) Contents. A party must state briefly and specifically the 
alleged errors in the final decision and order on appeal, the relief 
sought by the party, and the grounds that support, the petition to 
reconsider or modify.
    (1) If the petition is based, in whole or in part, on allegations 
regarding the consequences of the FAA decisionmaker's decision, the 
party must describe these allegations and must describe, and support, 
the basis for the allegations.
    (2) If the petition is based, in whole or in part, on new material 
not previously raised in the proceedings, the party must set forth the 
new material and include affidavits of prospective witnesses and 
authenticated documents that would be introduced in support of the new 
material. The party must explain, in detail, why the new material was 
not discovered through due diligence prior to the hearing.
    (c) Repetitious and frivolous petition. The FAA decisionmaker will 
not consider a repetitious or frivolous petition. The FAA decisionmaker 
may summarily dismiss any repetitious or frivolous petition to 
reconsider or modify.
    (d) Reply to petition. Any other party may reply to a petition to 
reconsider or modify, not later than 10 days after service of the 
petition on that party, by filing a reply. A party must serve a copy of 
the reply on each party.
    (e) Effect of filing petition. Unless otherwise ordered by the FAA 
decisionmaker, filing a petition under this section stays the effective 
date of the FAA decisionmaker's final decision and order on appeal, and 
tolls the time allowed for judicial review.
    (f) FAA decisionmaker's decision on petition. The FAA decisionmaker 
may affirm, modify, or reverse the final decision and order on appeal, 
or may remand the case for any proceedings that the FAA decisionmaker 
determines may be necessary.

[[Page 2192]]

Sec. 406.179  Judicial review of a final decision and order.

    (a) A person may seek judicial review of a final decision and order 
of the FAA decisionmaker as provided in 5 U.S.C. chapter 7 and 28 
U.S.C. 1331. A party seeking judicial review must file with a United 
States district court.
    (b) In accordance with Sec. 406.9(e)(iv), if a person seeks 
judicial review not later than 60 days after the final decision and 
order has been served on the respondent, the final decision and order 
is stayed.
    (c) In accordance with Sec. 406.9(i), if a respondent does not pay 
a civil penalty and does not file an appeal with the United States 
district court within 60 days after service of the final decision and 
order, the FAA may refer the order to the United States Department of 
Treasury or Department of Justice to collect the civil penalty.

    Issued in Washington, DC on January 3, 2001.
Patricia G. Smith,
Associate Administrator for Commercial Space Transportation.
[FR Doc. 01-554 Filed 1-9-01; 8:45 am]
BILLING CODE 4910-13-U