[Federal Register Volume 72, Number 73 (Tuesday, April 17, 2007)]
[Rules and Regulations]
[Pages 19108-19109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-7041]



[[Page 19108]]

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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

9 CFR Part 202

RIN 0580-AA97


Rules of Practice Governing Proceedings Under the Packers and 
Stockyards Act

AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION: Final rule.

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SUMMARY: This document amends Chapter 2 of Title 9 CFR to provide 
Supplemental Rules of Practice that will provide a mechanism for 
settling cases without the institution of formal proceedings.

EFFECTIVE DATE: April 17, 2007.

FOR FURTHER INFORMATION CONTACT: S. Brett Offutt, Director, Policy and 
Litigation Division, P&SP, GIPSA, 1400 Independence Ave., SW., 
Washington, DC 20250, (202) 720-7363, [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Grain Inspection, Packers and Stockyards Administration (GIPSA) 
of the U.S. Department of Agriculture (USDA) administers the Packers 
and Stockyards Act of 1921, as amended and supplemented (7 U.S.C. 181-
229) (P&S Act). The P&S Act is a statute that provides comprehensive 
regulation of the marketing of livestock, meat and poultry in 
interstate commerce. Its principal purposes are to enforce fair trade 
practices and financial protections, and to take action against certain 
anticompetitive practices in the livestock, meat and poultry 
industries.
    Under the Administrative Regulations of the Department of 
Agriculture (7 CFR Part 1), any hearing to assess a civil penalty for 
violations of the P&S Act must be conducted in accordance with the 
``Rules of Practice Governing Formal Adjudicatory Proceedings 
Instituted by the Secretary of Agriculture Under Various Statutes'' as 
contained in Subpart H of Part 1, Subtitle A, 7 CFR.
    Chapter 2, Title 9 CFR contains regulations issued pursuant to the 
P&S Act. This document adds new sections to Part 202 to provide 
Supplemental Rules of Practice to provide a mechanism for settling 
cases without the institution of formal proceedings.
    Under the existing rules of practice, persons alleged to be in 
violation of the P&S Act may be served with an administrative complaint 
and may ultimately be required to appear in a hearing before a United 
States Department of Agriculture Administrative Law Judge. Legal fees 
and other expenses related to this administrative process, and 
suspensions and/or civil penalties that may result from a finding of 
violation of the P&S Act, may be costly. This rule provides 
supplemental rules of practice to allow both GIPSA and the violator to 
resolve proceedings in a more timely and less costly manner.

Executive Order 12866 and Regulatory Flexibility Act

    The Office of Management and Budget (OMB) designated this rule as 
not significant for the purposes of Executive Order 12866. This final 
rule implements additional Supplemental Rules of Practice relating to 
circumstances arising in connection with proceedings under the P&S Act. 
These new Supplemental Rules of Practice provide a mechanism for 
settling cases without the institution of formal administrative 
proceedings. The rule allows the Administrator discretion to enter into 
stipulation agreements with persons believed to be in violation of the 
P&S Act. The stipulations will occur before a formal administrative 
complaint is issued and will include payment of a civil penalty. 
Agreeing to the stipulation will be voluntary on the violator's part. 
If the violator does not agree, the Administrator retains the right to 
proceed through formal administrative proceedings.
    For example, if our investigation reveals a person to be 
inaccurately weighing livestock in violation of the P&S Act, we will 
provide notice of the violation and opportunity for a hearing. The 
notice will also give the violator the option to settle the case by 
paying a specified penalty. If the case were to go through the formal 
adjudicatory procedures, we could ask the administrative law judge to 
impose a penalty of $11,000 per violation. By entering a stipulation 
agreement, the alleged violator would pay a discounted civil penalty 
that is substantially less and would save the expense of litigation. 
The government would also save the expense of litigation. If the 
violator elects not to accept the stipulation, we would still have 
opportunity to pursue enforcement through the formal adjudicatory 
process.
    To ensure that stipulations remain an effective tool for achieving 
compliance with the P&S Act, we will adopt internal procedures that 
generally do not allow repeat violators an opportunity to agree to 
stipulated monetary penalties. In most cases, repeat violators and 
those violators whose conduct results in substantial economic harm to 
other persons will not be offered stipulations, but would be subject to 
having a formal administrative complaint filed against them. Our 
procedures to use stipulations for less serious violations will ensure 
that these stipulations will promote efficiency and cost savings while 
still providing an additional deterrent against violations of the P&S 
Act.
    This rule is not a rule as defined by the Regulatory Flexibility 
Act (5 U.S.C. 601-612). Therefore, this rule is exempt from the 
requirements of that Act.

Executive Order 12988

    This rule has been reviewed under E.O. 12988, Civil Justice Reform. 
This action is not intended to have retroactive effect. This rule will 
not pre-empt State or local laws, regulations, or policies, unless they 
present an irreconcilable conflict with this rule. There are no 
administrative procedures that must be exhausted prior to any judicial 
challenge to the provisions of this rule.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) does not 
apply to this rule because the rule does not seek answers to identical 
questions or impose reporting, recordkeeping, or third party disclosure 
requirements on 10 or more persons, and the information collected is 
not used for general statistical purposes.

E-Government Act Compliance

    We are committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

Effective Date

    This rule (1) relates to internal agency management, and (2) 
improves the administration of programs regulated by the Packers and 
Stockyards Act because it affords more timely and less costly 
resolution of cases brought by USDA. No useful purpose would be served 
by delaying the effective date of implementing the use of stipulation 
agreements. Therefore, as allowed in 5 U.S.C. 553, it is found upon 
good cause that notice and other public procedure with respect to this 
rule change are impracticable and contrary to the public interest, and 
good cause is found for making this rule effective less than 30 days 
after publication in the Federal Register.

[[Page 19109]]

List of Subjects in 9 CFR Part 202

    Administrative practice and procedure, Stockyards.

0
For the reasons set forth in the preamble, GIPSA amends 9 CFR part 202 
as follows:

PART 202--RULES OF PRACTICE GOVERNING PROCEEDINGS UNDER THE PACKERS 
AND STOCKYARDS ACT

0
1. Revise the authority citation for part 202 to read as follows:

    Authority: 7 U.S.C. 228(a); 7 CFR 2.22 and 2.81.


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2. Immediately following Sec.  202.123 add a new undesignated center 
heading and Sec. Sec.  202.200 and 202.210 to read as set forth below:

Rules of Practice Applicable to All Other Proceedings


Sec.  202.200  Scope and applicability of rules of practice.

    The Uniform Rules of Practice for the Department of Agriculture 
promulgated in Subpart H of Part 1, Subtitle A, Title 7, Code of 
Federal Regulations, are the Rules of Practice applicable to 
adjudicatory, administrative proceedings under the Packers and 
Stockyards Act, as amended (7 U.S.C. 181 et seq.). In addition, the 
Supplemental Rules of Practice set forth in this part shall be 
applicable to such proceedings.


Sec.  202.210  Stipulations.

    (a) The Administrator may enter into a stipulation with any person 
operating subject to the Packers and Stockyards Act, as amended (P&S 
Act), prior to issuing a complaint that seeks a civil penalty against 
that person.
    (1) The Administrator will give the person notice of an alleged 
violation of the P&S Act or regulations and provide an opportunity for 
a hearing;
    (2) The person has the option to expressly waive the opportunity 
for a hearing and agree to pay a specified civil penalty within a 
designated time;
    (3) The Administrator will agree to settle the matter by accepting 
payment of the specified civil penalty within a designated time;
    (4) If the person does not agree to the stipulation, or does not 
pay the penalty within the specified time, the Administrator may issue 
an administrative complaint citing the alleged violation; and
    (5) The civil penalty that the Administrator proposed in a 
stipulation agreement has no bearing on the civil penalty amount that 
may be sought in a formal administrative proceeding against the same 
person for the same alleged violation.
    (b) [Reserved].

James E. Link,
Administrator, Grain Inspection, Packers and Stockyards Administration.
 [FR Doc. E7-7041 Filed 4-16-07; 8:45 am]
BILLING CODE 3410-KD-P