[Federal Register Volume 90, Number 128 (Tuesday, July 8, 2025)]
[Proposed Rules]
[Pages 30019-30024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-12638]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 90, No. 128 / Tuesday, July 8, 2025 /
Proposed Rules
[[Page 30019]]
FEDERAL LABOR RELATIONS AUTHORITY
5 CFR Part 2419
Implementation of the Administrative False Claims Act
AGENCY: Federal Labor Relations Authority.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would establish procedural regulations for
the Administrative False Claims Act (AFCA) at the Federal Labor
Relations Authority (FLRA). The Administrative False Claims Act is at
31 U.S.C. 3801 through 3812.
DATES: Written comments must be received on or before September 8,
2025.
ADDRESSES: You may send comments, which must include the caption
``Implementation of the Administrative False Claims Act,'' by one of
the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for sending comments.
Email: [email protected]. Include the caption
``Implementation of the Administrative False Claims Act'' in the
subject line of the message.
Mail: Thomas Tso, Solicitor, Federal Labor Relations
Authority, 1400 K Street NW, Washington, DC 20424-0001.
Instructions: Do not mail written comments if they have been
submitted via email. Interested persons who mail written comments must
submit an original and 4 copies of each written comment, with any
enclosures, on 8\1/2\ x 11 inch paper. Do not deliver comments by hand.
Docket: For access to the docket to read background documents or
comments received, go to https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Thomas Tso, Solicitor and Federal
Register Liaison, (771) 444-5779, [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Congress originally enacted the Program Fraud Civil Remedies Act
(PFCRA) in 1986. The purpose of the PFCRA was twofold: (1) to provide
agencies that were the victims of false claims and statements an
administrative remedy; and (2) to provide due process for all parties
subject to that remedy. Public Law 99-509, sec. 6102 (October 21, 1986)
(findings and purposes at 31 U.S.C. 3801 note).
On December 23, 2024, the Servicemember Quality of Life Improvement
and National Defense Authorization Act for Fiscal Year 2025 amended the
PFCRA. Among other things, the amendments changed the PFCRA's name to
the Administrative False Claims Act (AFCA). Public Law 118-159, sec.
5203(a). In that legislation, Congress also mandated that agencies
promulgate regulations and procedures to carry out the AFCA within 180
days of enactment. Public Law 118-159, sec. 5203(j). This proposed rule
includes the regulations required by that provision. The intent of this
proposed rule is to cite the controlling statute when possible,
repeating statutory provisions in the regulation only where necessary
for the convenience of the regulated public.
Initial Inflation Adjustment of Penalties
The Bipartisan Budget Act of 2015 included the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015
Inflation Adjustment Act). Public Law 114-74, sec. 701 (November 2,
2015). The 2015 Inflation Adjustment Act amended a previous statutory
scheme in order to improve the effectiveness of civil monetary
penalties and to maintain their deterrent effect. Among other things,
the 2015 Inflation Adjustment Act mandated an initial catch-up
inflation adjustment for certain civil penalties by August 1, 2016, to
be followed by annual inflation adjustments each year thereafter. 28
U.S.C. 2461 note. The statute capped the initial inflation increase at
150% of the original penalty.
The FLRA did not have regulations for the Program Fraud Civil
Remedies Act, the previous name of the AFCA, in 2015. The FLRA,
therefore, could not adjust penalties under the 2015 Inflation
Adjustment Act contemporaneously with the first adjustment period. We
have determined that the FLRA can, however, adjust AFCA penalties
consistent with the 2015 Inflation Adjustment Act. That adjustment
remains constrained by the initial inflation adjustment cap.
Accordingly, we are adjusting the penalty amount for the AFCA from
the statutory $5,000 to $12,500. We arrived at this figure by
determining the maximum increase permitted by the 2015 Inflation
Adjustment Act--150 percent of $5,000, or $7,500--and adding that
amount to the base $5,000 penalty to yield a $12,500 adjusted penalty
amount. This adjustment resulted in a lower increase than a full
Consumer Price Index adjustment comparing October 1984 with March 2025
on the publicly available Bureau of Labor Statistics website at https://www.bls.gov/data/inflation_calculator.htm (last accessed April 22,
2025). The FLRA invites public comment on its adjustment methodology
and results.
II. Findings and Certifications
Regulatory Planning and Review: Executive Orders 12866, 14215, and
14192 direct agencies to assess the costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits. This proposed rule
has not been designated a ``significant regulatory action'' under
section 3(f) of Executive Order 12866. Accordingly, this proposed rule
has not been reviewed by the Office of Management and Budget (OMB) as a
significant regulatory action.
This regulatory action determination is based on the limited scope
of the proposed rule and the FLRA's statutory mission. The proposed
regulations are required by the AFCA and would only affect an entity
suspected of making a false claim or statement related to the FLRA.
Furthermore, claims and statements subject to the AFCA are capped at $1
million.
Legality and National Interest: Executive Order 14219 directs
agencies to evaluate potential new regulations under factors related to
legality and the national interest. The FLRA has determined the
proposed rule is lawful and in the national interest as the proposed
rule is narrowly tailored to comply with the AFCA and will provide a
tool for the FLRA to recover
[[Page 30020]]
misappropriated taxpayer funds and deter misconduct.
Regulatory Flexibility Analysis: Pursuant to section 605(b) of the
Regulatory Flexibility Act, 5 U.S.C. 605(b), the FLRA has determined
that this proposed rule will not have a significant impact on a
substantial number of small entities. The AFCA only affects entities
suspected of making false claims or statements and, except in
proceedings arising from such suspected false claims or statements,
imposes no duties or obligations on small entities.
Unfunded Mandates Reform Act of 1995: This proposed rule change
will not result in the expenditure by state, local, and tribal
governments, in the aggregate, or by the private sector, of
$100,000,000 or more in any one year, and it will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
Small Business Regulatory Enforcement Fairness Act of 1996: This
action is not a major rule as defined by section 804 of the Small
Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804.
This proposed rule will not result in an annual effect on the economy
of $100,000,000 or more; a major increase in costs or prices; or
significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
companies to compete with foreign-based companies in domestic and
export markets.
Paperwork Reduction Act: The proposed rule contains no additional
information collection or record-keeping requirements under the
Paperwork Reduction Act of 1995, 44 U.S.C. 3501, et seq.
Providing Accountability Through Transparency Act: The Providing
Accountability Through Transparency Act (Pub. L. 118-9) requires each
agency, in providing notice of a rulemaking, to post online a brief
plain-language summary of the proposed rule. The required summary of
the document is available at https://www.regulations.gov.
List of Subjects in 5 CFR Part 2419
Administrative practice and procedure
For the reasons stated in the preamble, the FLRA proposes to amend
5 CFR chapter XIV as set forth below:
Add part 2419 to read as follows:
PART 2419--THE ADMINISTRATIVE FALSE CLAIMS ACT
Sec.
2419.1 Background.
2419.2 Definitions.
2419.3 Pre-complaint Procedures.
2419.4 Complaint and Prehearing Procedures.
2419.5 Hearing Procedures.
2419.6 Post-hearing Procedures.
Authority: 31 U.S.C. 3803(g), 3809; Sec. 5203(j), Pub. L. 118-
159, 138 Stat. 2440.
Sec. 2419.1 Background.
(a) Legal authority. This subpart implements the Administrative
False Claims Act, codified at 31 U.S.C. 3801 through 3812. Section 3809
of that Act requires each authority head to promulgate regulations
necessary to implement the provisions of the statute. Administrative
False Claims Act liability is identified at 31 U.S.C. 3802. Liability
for false claims can include an assessment of up to twice the amount of
the false claim and a civil penalty. Liability for a false statement is
a civil penalty. The civil penalty for a false claim or false statement
actionable under that section is $12,500.
(b) Limitations. A notice to a person alleged to be liable under
the Administrative False Claims Act referenced in 31 U.S.C. 3803(d)(1)
must be mailed or delivered by the timeframes noted in 31 U.S.C.
3808(a). Those timeframes are the later of: 6 years after the date on
which the violation of 31 U.S.C. 3802 is committed; or 3 years after
the date on which facts material to the action are known or reasonably
should have been known by the authority head, but in no event more than
10 years after the date on which the violation is committed. A civil
action to recover a penalty or assessment must be commenced within the
3-year timeframe noted in 31 U.S.C. 3808(b).
(c) Computation of time. In computing any period of time under this
part or in an order issued thereunder, the time begins with the day
following the act, event, or default, and includes the last day of the
period, unless the last day is a Saturday, Sunday, or legal holiday
observed by the Federal Government, in which event the period includes
the next business day.
(1) When the period of time allowed is less than 7 days,
intermediate Saturdays, Sundays, and legal holidays observed by the
Federal Government shall be excluded from the computation.
(2) Where a document has been served or issued by placing it in the
mail, an additional 5 days will be added to the time permitted for any
response.
(d) Stays ordered by the Department of Justice. If, at any time,
the Attorney General or an Assistant Attorney General designated by the
Attorney General transmits to the authority head a written finding that
continuation of the administrative process described in this part with
respect to a claim or statement may adversely affect any pending or
potential criminal or civil action related to such claim or statement,
the authority head shall stay the process immediately. The authority
head may order the process resumed only upon receipt of the written
authorization of the Attorney General, the Assistant Attorney General
who ordered the stay, or other appropriate Department of Justice
Official.
(e) Additional referrals. Federal agencies that receive or discover
any specific information regarding bribery, gratuities, conflict of
interest, or other corruption or similar activity in relation to a
false claim or statement, must immediately report that information
consistent with the requirements of 31 U.S.C. 3808(c) to the Attorney
General and agency Inspector General as appropriate.
(f) Board of contract appeals. If a Federal agency uses a presiding
officer who is a member of a board of contract appeals as permitted by
31 U.S.C. 3801(a)(7)(C) for a matter, the procedural rules implemented
by that board of contract appeals will control the litigation of that
matter to the extent there is an inconsistency between the board's
procedural rules and the procedural rules of this part.
Sec. 2419.2 Definitions.
(a) Definitions from the statute. The definitions of ``authority,''
``claim,'' ``investigating official,'' ``knows or has reason to know,''
``person,'' ``presiding officer,'' ``reviewing official,''
``statement,'' ``material,'' and ``obligation'' are found in 31 U.S.C.
3801. The investigating official at the Federal Labor Relations
Authority is identified as the Federal Labor Relations Authority's
Inspector General, and the Federal Labor Relations Authority's
Solicitor is designated to be the reviewing official by the authority
head at the Federal Labor Relations Authority.
(b) Complaint means the administrative complaint served by the
reviewing official on the defendant under Sec. 2419.4(c) of this
chapter.
(c) Defendant means any person alleged in a complaint under Sec.
2419.4(a) of this chapter to be liable for a civil penalty or
assessment under Sec. 2419.1 of this chapter.
[[Page 30021]]
(d) Authority Head means the Chairman of the Federal Labor
Relations Authority.
Sec. 2419.3 Pre-complaint Procedures.
(a) Investigating Official. The investigating official may elect to
investigate matters potentially resulting in an Administrative False
Claims Act action using the subpoena authority at 31 U.S.C. 3804, or
any other authority granted to the investigating official, such as the
authority of the Inspector General Act at 5 United States Code, Chapter
4.
(1) If the investigating official concludes that an action under
the Administrative False Claims Act may be warranted, the investigating
official shall submit a report containing the findings and conclusions
of such investigation to the reviewing official.
(2) Nothing in this section shall preclude or limit the
investigating official's discretion to refer allegations directly to
the Department of Justice for suit under the False Claims Act (31
U.S.C. 3729-3733) or other civil relief, or to defer or postpone a
report or referral to the reviewing official to avoid interference with
a criminal investigation or prosecution.
(3) Nothing in this section modifies any responsibility of the
investigating official to report violations of criminal law to the
Attorney General.
(b) Reviewing Official. The procedures for the reviewing official
are as follows:
(1) Determination. If, based on the report of the investigating
official under Sec. 2419.3(a)(2), the reviewing official determines
that there is adequate evidence to believe that a person is liable
under the Administrative False Claims Act, and there is a reasonable
prospect of collecting, from a person with respect to whom the
reviewing official is referring allegations of liability in such
notice, the amount for which such person may be liable, the reviewing
official shall transmit to the Attorney General a written notice of the
reviewing official's intention to have a complaint issued under Sec.
2419.4(a) of this chapter.
(2) Written Notice. A written notice of the reviewing official's
intention to have a complaint issued under Sec. 2419.4(a) of this
chapter shall include:
(i) A statement of the reviewing official's reasons for issuing a
complaint;
(ii) A statement specifying the evidence that supports the
allegations of liability;
(iii) A description of the claims or statements upon which the
allegations of liability are based;
(iv) An estimate of the amount of money, or the value of property,
services, or other benefits, requested or demanded in violation of the
Administrative False Claims Act;
(v) A statement of any exculpatory or mitigating circumstances that
may relate to the claims or statements known by the reviewing official
or the investigating official; and
(vi) A statement that there is a reasonable prospect of collecting
an appropriate amount of penalties and assessments.
(c) Request for Authorization from the Department of Justice. The
reviewing official may issue a complaint under Sec. 2419.4(a) of this
chapter only if:
(1) The Department of Justice approves the issuance of a complaint
in a written statement described in 31 U.S.C. 3803(b)(1), and
(2) In the case of allegations of liability under 31 U.S.C.
3802(a)(1) with respect to a claim, the reviewing official determines
that, with respect to such claim or a group of related claims submitted
at the same time such claim is submitted, the amount of money, or the
value of property or services, demanded or requested in violation of
section 3802(a)(1) does not exceed $1,000,000.
(3) For the purposes of this section, a related group of claims
submitted at the same time shall include only those claims arising from
the same transaction (e.g., grant, loan, application, or contract) that
are submitted simultaneously as part of a single request, demand, or
submission.
(4) Nothing in this section shall be construed to limit the
reviewing official's authority to join in a single complaint against a
person, claims that are unrelated or were not submitted simultaneously,
regardless of the amount of money, or the value of property or
services, demanded or requested.
(d) Written Notifications. The reviewing official shall make all
appropriate written notifications required by section 3803(j)(2) of
title 31 of the United States Code.
Sec. 2419.4 Complaint and Pre-Hearing Procedures.
(a) Complaint. The reviewing official will identify the allegations
of liability in a complaint. The complaint must identify the following:
(1) The allegations of liability against the defendant, including
the statutory basis for liability, an identification of the claims or
statements that are the basis for the alleged liability, and the
reasons why liability allegedly arises from such claims or statements;
(2) The maximum amount of penalties and assessments for which the
defendant may be held liable;
(3) Instructions for filing an answer, including a specific
statement of the defendant's right to request a hearing and to be
represented by a representative;
(4) Identification and contact information for the governmental
employee representing the reviewing official in the matter if the
reviewing official is not handling the matter personally; and
(5) The fact that failure to file an answer within 30 days of
service of the complaint will result in the imposition of the maximum
amount of penalties and assessments without right to appeal, as
provided in Sec. 2419.4(e).
(6) At the same time the reviewing official serves the complaint,
he or she shall serve the defendant with a copy of these regulations or
identify a free online resource where the defendant can access these
regulations.
(b) Service of the complaint. The Federal Labor Relations Authority
must mail or deliver the complaint to the person alleged to be liable
in accordance with 31 U.S.C. 3803(d)(1) within the time limitations
identified at 31 U.S.C. 3808(a).
(c) Answer. The defendant may file an answer to the complaint
within 30 days of service of the complaint by mail or facsimile to the
reviewing official (current mailing address and facsimile numbers
posted at https://www.flra.gov/components-offices/offices/office-solicitor).
(1) In the answer, the defendant:
(i) Shall admit or deny each of the allegations of liability made
in the complaint;
(ii) Shall state any defense on which the defendant intends to
rely;
(iii) May state any reasons why the defendant contends that the
penalties and assessments should be less than the statutory maximum;
and
(iv) Shall state the name, postal address, electronic mail address,
and telephone number of the person authorized by the defendant to act
as defendant's representative, if any.
(2) Hearing. The defendant may request a hearing with the presiding
officer within 30 days of service of the complaint. Upon receipt of an
answer, the reviewing official shall file the complaint and answer with
the presiding officer.
(3) General answer. If the defendant is unable to file an answer
meeting the requirements of paragraph (1) of this section within the
time provided, the defendant may, before the expiration of 30 days from
service of the complaint,
[[Page 30022]]
file with the reviewing official a general answer denying liability and
requesting a hearing, and a request for an extension of time within
which to file an answer meeting the requirements of paragraph (1) of
this section. The reviewing official shall file promptly with the
presiding officer the complaint, the general answer denying liability,
and the request for an extension of time as provided in Sec. 2419.4(e)
of this chapter. For good cause shown, the presiding officer may grant
the defendant up to 30 additional days within which to file an answer
meeting the requirements of paragraph (1) of this section. The
presiding officer shall decide expeditiously whether the defendant
shall be granted an additional period of time to file such answer.
(e) Default upon failure to file an answer. If the defendant does
not file an answer within the time prescribed in Sec. 2419.4 of this
chapter, the reviewing official must refer the complaint to the
presiding officer within a reasonable time.
(1) Upon the referral of the complaint, the presiding officer shall
promptly serve on the defendant in the manner prescribed in Sec.
2419.4(c) of this chapter, a notice that an initial decision will be
issued under this section.
(2) The presiding officer shall assume the facts alleged in the
complaint to be true and, if such facts establish liability under 31
U.S.C. 3802, the presiding officer shall issue an initial decision
imposing the maximum amount of penalties and assessments allowed under
the statute.
(3) Except as otherwise provided in this section, by failing to
file a timely answer the defendant waives any right to further review
of the penalties and assessments imposed under paragraph (2) of this
section and the initial decision shall become final and binding upon
the parties 30 days after it is issued.
(4) If, before such an initial decision becomes final, the
defendant files a motion with the presiding officer seeking to reopen
on the grounds that extraordinary circumstances prevented the defendant
from filing an answer, the initial decision shall be stayed pending the
presiding officer's decision on the motion.
(5) If, on such motion, the defendant can demonstrate extraordinary
circumstances excusing the failure to file a timely answer, the
presiding officer shall withdraw the initial decision in paragraph (2)
of this section, if such a decision has been issued, and shall grant
the defendant an opportunity to answer the complaint.
(6) A decision of the presiding officer denying a defendant's
motion under paragraph (4) of this section is not subject to
reconsideration under Sec. 2419.6(d) of this chapter.
(7) The defendant may appeal to the authority head the decision
denying a motion to reopen by filing a notice of appeal with the
authority head within 15 days after the presiding officer denies the
motion. The timely filing of a notice of appeal shall stay the initial
decision until the authority head decides the issue.
(8) If the defendant files a timely notice of appeal with the
authority head, the presiding officer shall forward the record of the
proceeding to the authority head.
(9) The authority head shall decide expeditiously whether
extraordinary circumstances excuse the defendant's failure to file a
timely answer based solely on the record before the presiding officer.
(10) If the authority head decides that extraordinary circumstances
excused the defendant's failure to file a timely answer, the authority
head shall remand the case to the presiding officer with instructions
to grant the defendant an opportunity to answer.
(11) If the authority head decides that the defendant's failure to
file a timely answer is not excused, the authority head shall reinstate
the initial decision of the presiding officer, which shall become final
and binding upon the parties 30 days after the authority head issues
such decision.
(f) Presiding officer disqualification and authorities. A presiding
officer may be removed from a case on the presiding officer's own
initiative or on motion by the parties for disqualification of the
presiding officer.
(1) Motion and Affidavit. The motion shall be accompanied by an
affidavit alleging personal bias or other reason for disqualification.
(i) Such motion and affidavit shall be filed promptly upon the
party's discovery of reasons requiring disqualification, or such
objections shall be deemed waived.
(ii) Such affidavit shall state specific facts that support the
party's belief that personal bias or other reason for disqualification
exists and the time and circumstances of the party's discovery of such
facts. It shall be accompanied by a certificate of the representative
of record that it is made in good faith.
(iii) Upon the filing of such a motion and affidavit, the presiding
officer shall proceed no further in the case until he or she resolves
the matter of disqualification in accordance with this section.
(2) Authority of the presiding officer. The presiding officer shall
conduct a fair and impartial hearing, avoid delay, maintain order, and
assure that a record of the proceeding is made. The presiding officer
has the authority to:
(i) Set and change the date, time, and place of the hearing upon
reasonable notice to the parties;
(ii) Continue or recess the hearing in whole or in part for a
reasonable period of time;
(iii) Hold conferences to identify or simplify the issues, or to
consider other matters that may aid in the expeditious disposition of
the proceeding;
(iv) Administer oaths and affirmations;
(v) For the purpose of conducting a hearing, the presiding officer
may issue subpoenas requiring the attendance and testimony of witnesses
as well as the production of information as set forth in 31 U.S.C.
3804(b)(2);
(vi) Rule on motions and other procedural matters;
(vii) Regulate the requirements regarding motions including
requiring any oral motion to be reduced to writing and establishing the
time within which a response to any written motion will be due if the
motion will not be due within 15 days after the written motion is
served;
(viii) Regulate the scope and timing of discovery;
(ix) Regulate the course of the hearing and the conduct of
representatives and parties to include imposing sanctions such as
drawing adverse inferences, striking pleadings, deeming items admitted,
restricting use of evidence, dismissing an action, or issuing an
initial decision--that reasonably relate to the severity and nature of
the failure or misconduct;
(x) Examine witnesses;
(xi) Receive, rule on, exclude, or limit evidence;
(xii) Upon motion of a party, take official notice of facts;
(xiii) Upon motion of a party, decide cases, in whole or in part,
by summary judgment where there is no disputed issue of material fact;
(xiv) Conduct any conference, argument, or hearing on motions in
person or by telephone, videoconference, or other virtual method; and
(xv) Exercise such other authority as is necessary to carry out the
responsibilities of the presiding officer under this part.
(xvi) Irrespective of any implications of the above, the presiding
officer does not have the authority to find Federal statutes or
regulations invalid.
(xvii) Additionally, the presiding officer shall not, except to the
extent
[[Page 30023]]
required for the disposition of ex parte matters as authorized by law:
(A) Consult a person or party on a fact in issue, unless on notice
and opportunity for all parties to the hearing to participate; or
(B) Be responsible to or subject to the supervision or direction of
the investigating official or the reviewing official.
(g) Prehearing. The prehearing procedures are as follows:
(1) Entitlement to review and obtain information. Defendants
receiving notice of the hearing from the presiding officer under 31
U.S.C. 3803(d)(2)(B) are entitled to information identified in 31
U.S.C. 3803(e), including a copy of all relevant and material
documents, transcripts, records, and other materials, which relate to
the allegations and upon which the findings and conclusions of the
investigating official are based. Defendants should request any such
information from the Government's point of contact identified in the
complaint. The Government's point of contact will provide all requested
information expeditiously. Information subject to payment of a fee will
be expeditiously provided upon payment of any applicable reasonable
duplication fee.
(2) Discovery. Unless mutually agreed to by the parties, discovery
is available only as ordered by the presiding officer.
(i) The presiding officer may order the following types of
discovery:
(A) Requests for production of documents for inspection and
copying;
(B) Requests for admissions of the authenticity of any relevant
document or of the truth of any relevant fact;
(C) Written interrogatories; and
(D) Depositions.
(ii) A party seeking discovery must file a motion with the
presiding officer. Such a motion shall be accompanied by a copy of the
requested discovery, or in the case of depositions, a summary of the
scope of the proposed deposition. Within 10 days of service, a party
may file an opposition to the motion and/or a motion for protective
order as provided in Sec. 2419.4(g)(3) of this chapter. The presiding
officer may grant a motion for discovery only if he or she finds that
the discovery sought:
(A) Is necessary for the expeditious, fair, and reasonable
consideration of the issues;
(B) Is not unduly costly or burdensome;
(C) Will not unduly delay the proceeding; and
(D) Does not seek privileged information.
(iii) The burden of showing that discovery should be allowed is on
the party seeking discovery.
(iv) The presiding officer shall regulate the timing of discovery.
(3) Protective orders. A party or a prospective witness or deponent
may file a motion for a protective order with respect to discovery
sought by an opposing party or with respect to the hearing, seeking to
limit the availability or disclosure of evidence. The presiding officer
may issue any order which justice requires to protect a party or person
from annoyance, embarrassment, oppression, or undue burden or expense,
including one or more of the following:
(i) That the discovery not be had;
(ii) That the discovery may be had only on specified terms and
conditions, including a designation of the time or place;
(iii) That the discovery may be had only through a method of
discovery other than that requested;
(iv) That certain matters not be the subject of inquiry, or that
the scope of discovery be limited to certain matters;
(v) That discovery be conducted with no one present except persons
designated by the presiding officer;
(vi) That the contents of discovery or evidence be sealed;
(vii) That a sealed deposition be opened only by order of the
presiding officer;
(viii) That a trade secret or other confidential research,
development, commercial information, or facts pertaining to any
criminal investigation, proceeding, or other administrative
investigation not be disclosed or be disclosed only in a designated
way; or
(ix) That the parties simultaneously file specified documents.
(4) Prehearing orders. The presiding officer shall issue scheduling
orders the presiding officer deems appropriate to ensure a fair and
impartial hearing, avoid delay, maintain order, and assure that a
record of the proceeding is made. At a minimum, the presiding officer
must issue an order that:
(i) Sets the hearing in a location permissible under 31 U.S.C.
3803(g)(4);
(ii) Provides the written notice required by 31 U.S.C.
3803(g)(2)(A);
(iii) Governs the exchange of witness lists, statements, and
exhibits;
(iv) Ensures the defendant has an opportunity to present their
case, to submit rebuttal evidence, and to conduct such cross-
examination as may be required for a full and true disclosure of the
facts; and
(v) Includes in any written notice of a hearing to a defendant a
description of the procedures for the conduct of the hearing.
Sec. 2419.5 Hearing.
(a) Determinations. The presiding officer will conduct the hearing
consistent with that officer's authority to make the determinations
identified in 31 U.S.C. 3803(f) by a preponderance of the evidence.
(b) Determining the amount of penalties and assessments. In
determining an appropriate amount of civil penalties and assessments,
the presiding officer and the authority head, upon appeal, should
evaluate any circumstances that mitigate or aggravate the violation and
should articulate in their opinions the reasons that support the
penalties and assessments they impose. Because of the intangible costs
of fraud, the expense of investigating such conduct, and the need to
deter others who might be similarly tempted, double damages and a
significant civil penalty ordinarily should be imposed. Although not
exhaustive, the following factors are among those that may influence
the presiding officer and the authority head in determining the amount
of penalties and assessments to impose with respect to the misconduct
(i.e., the false, fictitious, or fraudulent claims or statements)
charged in the complaint:
(1) The number of false, fictitious or fraudulent claims or
statements;
(2) The time period over which such claims or statements were made;
(3) The degree of the defendant's culpability with respect to the
misconduct;
(4) The amount of money or the value of the property, services, or
benefit falsely claimed;
(5) The cost of the Government's actual loss as a result of the
misconduct, including foreseeable consequential damages and the costs
of investigation;
(6) The relationship of the amount imposed as civil penalties to
the amount of the Government's loss;
(7) The potential or actual impact of the misconduct upon public
confidence in the management of Government programs and operations;
(8) Whether the defendant has engaged in a pattern of the same or
similar misconduct;
(9) Whether the defendant attempted to conceal the misconduct;
(10) The degree to which the defendant has involved others in the
misconduct or in concealing it;
(11) Where the misconduct of employees or agents is imputed to the
defendant, the extent to which the defendant's practices fostered or
attempted to preclude such misconduct;
(12) Whether the defendant cooperated in or obstructed an
investigation of the misconduct;
[[Page 30024]]
(13) Whether the defendant assisted in identifying and prosecuting
other wrongdoers;
(14) The complexity of the program or transaction, and the degree
of the defendant's sophistication with respect to it, including the
extent of the defendant's prior participation in the program or in
similar transactions;
(15) Whether the defendant has been found, in any criminal, civil,
or administrative proceeding to have engaged in similar misconduct or
to have dealt dishonestly with the Government of the United States or
of a state, directly or indirectly;
(16) The need to deter the defendant and others from engaging in
the same or similar misconduct; and
(17) The potential impact of the misconduct on the rights of
others.
(c) Other factors. Nothing in this section shall be construed to
limit the presiding officer or the authority head from considering any
other factors that in any given case may mitigate or aggravate the
offense for which penalties and assessments are imposed.
(d) The Record. The hearing shall be recorded and transcribed.
(1) Transcripts shall be available following the hearing at a cost
not to exceed the actual cost of duplication and any court reporter's
reasonable fee.
(2) The transcript of testimony, exhibits and other evidence
admitted at the hearing, and all documents filed in the proceeding
constitute the record for the decision by the presiding officer and the
authority head.
(3) The record may be inspected and copied by anyone upon payment
of a reasonable fee, unless otherwise ordered by the presiding officer.
Sec. 2419.6 Post-Hearing Procedures.
(a) Post-hearing motions. The presiding officer may decide any
post-hearing motions.
(b) Post-hearing briefs. Any party may file a post-hearing brief.
The presiding officer shall fix the time for filing such briefs, not to
exceed 60 days from the date the parties receive the transcript of the
hearing or, if applicable, the stipulated record. Such briefs may be
accompanied by proposed findings of fact and conclusions of law. The
presiding officer may permit the parties to file reply briefs.
(c) Decision. Except for good cause, the presiding officer shall
issue a written decision required by 31 U.S.C. 3803(h) within 90 days
after the time for submission of post-hearing briefs and reply briefs,
if permitted, has expired.
(d) Appeal to the authority head. Parties may not appeal
interlocutory rulings by the presiding officer to the authority head.
(1) Except in case of default, if the defendant is determined in
the decision to be liable for a civil penalty or assessment, the
defendant may appeal such decision to the authority head by filing a
notice of appeal with the authority head in accordance with this
section. A notice of appeal shall be accompanied by a written brief
specifying exceptions to the decision and reasons supporting the
exceptions.
(i) A notice of appeal may be filed at any time within 30 days
after the presiding officer issues the decision.
(ii) The authority head may extend the initial 30-day period for an
additional 30 days if the defendant files with the authority head a
request for an extension within the initial 30-day period and shows
good cause.
(2) The reviewing official's representative or other designated
agency official may file a brief in opposition to the notice of appeal
within 30 days of receiving the notice of appeal and accompanying
brief.
(3) The authority head's review will occur within the limitations
noted in 31 U.S.C. 3803(i)(2)(B) and (C). There is no right to appear
personally before the authority head.
(e) Judicial review. Section 3805 of title 31, United States Code,
authorizes judicial review by an appropriate United States District
Court of a final decision of the authority head imposing penalties and/
or assessments under this part and specifies the procedures for such
review.
(f) Collection. Sections 3806 and 3808(b) of title 31, United
States Code, authorize actions for collection of civil penalties and
assessments imposed under this part and specify the procedures for such
actions.
Dated: July 3, 2025.
Thomas Tso,
Solicitor, Federal Labor Relations Authority.
[FR Doc. 2025-12638 Filed 7-7-25; 8:45 am]
BILLING CODE 7627-01-P