Title 39—Postal Service--Volume 1
PART 962—PROGRAM FRAUD CIVIL REMEDIES ACT
§ 962.1   Purpose.
This part establishes the procedures governing the hearing and appeal rights of any person alleged to be liable for civil penalties and assessments under the Program Fraud Civil Remedies Act of 1986 (codified at 31 U.S.C. 3801-3812).
§ 962.2   Definitions.
(a) Attorney refers to an individual authorized to practice law in any of the United States or the District of Columbia or a territory of the United States.
(b) Complaint refers to the administrative Complaint served by the Reviewing Official on a Respondent pursuant to § 273.8 of this title.
(c) Initial Decision refers to the written decision which the Presiding Officer is required by § 962.20 to render, and includes a revised initial decision issued following a remand.
(d) Investigating Official refers to the Inspector General of the United States Postal Service or any designee within the Office of the Inspector General.
(e) Judicial Officer refers to the Judicial Officer or Acting Judicial Officer of the United States Postal Service or for purposes other than specified in § 962.21 any designee within the Judicial Officer Department.
(f) Party refers to the Postal Service or the Respondent.
(g) Person refers to any individual, partnership, corporation, association, or private organization.
(h) Postmaster General refers to the Postmaster General of the United States or his designee.
(i) Presiding Officer refers to an Administrative Law Judge designated by the Chief Administrative Law Judge to conduct a hearing authorized by 31 U.S.C. 3803.
(j) Recorder refers to the Recorder of the United States Postal Service, 2101 Wilson Boulevard, Suite 600, Arlington, VA 22201-3078.
(k) Representative refers to an attorney or other advocate.
(l) Respondent refers to any person alleged to be liable for a civil penalty or assessment under 31 U.S.C. 3802.
(m) Reviewing Official refers to the General Counsel of the Postal Service or any designee within the Law Department who serves in a position for which the rate of basic pay is not less than the minimum rate payable under section 5376 of title 5 of the United States Code.
§ 962.3   Petition for hearing.
Within 30 days of receiving the Postal Service's Complaint, issued pursuant to § 273.8 of this title, alleging liability under 31 U.S.C. 3802, the Respondent may request a hearing under the Program Fraud Civil Remedies Act by filing a written Hearing Petition with the Recorder in accordance with § 962.22(b). The Respondent's Petition must include the following:
(a) The words “Petition for Hearing Under the Program Fraud Civil Remedies Act,” or other words reasonably identifying it as such;
(b) The name of the Respondent as well as his or her work and home addresses, and work and home telephone numbers; or other address and telephone number where the Respondent may be contacted about the hearing proceedings;
(c) A statement of the date the Respondent received the Complaint issued by the Reviewing Official;
(d) A statement indicating whether the Respondent requests an oral hearing or a decision on the record;
(e) If the Respondent requests an oral hearing, a statement proposing a city for the hearing site, with justification for holding the hearing in that city, as well as recommended dates for the hearing; and
(f) A statement admitting or denying each of the allegations of liability made in the Complaint, and stating any defense on which the Respondent intends to rely.
§ 962.4   Referral of complaint.
(a) If the Respondent fails to request a hearing within the specified period, the Reviewing Official shall transmit the Complaint to the Judicial Officer for referral to a Presiding Officer, who shall issue an initial decision based upon the information contained in the Complaint.
(b) If the Respondent files a Hearing Petition, the Reviewing Official, upon receiving a copy of the Petition, shall promptly transmit to the Presiding Officer a copy of the Postal Service's Complaint.
§ 962.5   Scope of hearing; evidentiary standard.
(a) A hearing under this part shall be conducted by the Presiding Officer on the record (1) to determine whether the Respondent is liable under 31 U.S.C. 3802, and (2) if so, to determine the amount of any civil penalty or assessment to be imposed.
(b) The Postal Service must prove its case against a Respondent by a preponderance of the evidence.
(c) The parties may offer at a hearing on the merits such relevant evidence as they deem appropriate and as would be admissible under the generally accepted rules of evidence applied in the courts of the United States in nonjury trials, subject, however, to the sound discretion of the Presiding Officer in supervising the extent and manner of presentation of such evidence. In general, admissibility will hinge on relevancy and materiality. However, relevant evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
§ 962.6   Notice of hearing.
(a) Within a reasonable time after receiving the Respondent's Hearing Petition and the Complaint, the Presiding Officer shall serve, in accordance with § 962.23, upon the Respondent and the Reviewing Official, a Notice of Hearing containing the information set forth in paragraph (b) of this section.
(b) The Notice of Hearing required by paragraph (a) of this section must include:
(1) The tentative hearing site, date, and time;
(2) The legal authority and jurisdiction under which the hearing is to be held;
(3) The nature of the hearing;
(4) The matters of fact and law to be decided;
(5) A description of the procedures governing the conduct of the hearing; and
(6) Such other information as the Presiding Officer deems appropriate.
§ 962.7   Hearing location.
An oral hearing under this part shall be held
(a) In the judicial district of the United States in which the Respondent resides or transacts business; or
(b) In the judicial district of the United States in which the claim or statement upon which the allegation of liability under 31 U.S.C. 3802 was made, presented, or submitted; or
(c) In such other place as may be agreed upon by the Respondent and the Presiding Officer.
§ 962.8   Rights of parties.
Any party to a hearing under this part shall have the right
(a) To be accompanied, represented, and advised, by a representative of his own choosing;
(b) To participate in any prehearing or post-hearing conference held by the Presiding Officer;
(c) To agree to stipulations of fact or law, which shall be made part of the record;
(d) To make opening and closing statements at the hearing;
(e) To present oral and documentary evidence relevant to the issues at the hearing;
(f) To submit rebuttal evidence;
(g) To conduct such cross-examination as may be required for a full and true disclosure of the facts; and
(h) To submit written briefs, proposed findings of fact, and proposed conclusions of law.
§ 962.9   Responsibilities and authority of presiding officer.
(a) The Presiding Officer shall conduct a fair and impartial hearing, avoid delay, maintain order, and assure that a record of the proceeding is made.
(b) The Presiding Officer's authority includes, but is not limited to, the following:
(1) Establishing, upon adequate notice to all parties, the date and time of the hearing, as well as, in accordance with § 962.7, selecting the hearing site;
(2) Holding conferences, by telephone or in person, to identify or simplify the issues, or to consider other matters that may aid in the expeditious disposition of the proceeding;
(3) Continuing or recessing the hearing in whole or in part for a reasonable period of time;
(4) Administering oaths and affirmations to witnesses;
(5) Issuing subpoenas, requiring the attendance and testimony of witnesses and the production of all information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence which the Presiding Officer considers relevant and material to the hearing;
(6) Ruling on all offers, motions, requests by the parties, and other procedural matters;
(7) Issuing any notices, orders, or memoranda to the parties concerning the proceedings;
(8) Regulating the scope and timing of discovery;
(9) Regulating the course of the hearing and the conduct of the parties and their representatives;
(10) Examining witnesses;
(11) Receiving, ruling on, excluding, or limiting evidence in order to assure that relevant, reliable and probative evidence is elicited on the issues in dispute, but irrelevant, immaterial or repetitious evidence is excluded;
(12) Deciding cases, upon motion of a party, in whole or in part by summary judgment where there is no disputed issue of material fact;
(13) Establishing the record in the case; and
(14) Issuing a written initial decision containing findings of fact, conclusions of law, and determinations with respect to whether a penalty or assessment should be imposed, and if so, the amount of such penalty or assessment.
§ 962.10   Prehearing conferences.
(a) At a reasonable time in advance of the hearing, and with adequate notice to all parties, the Presiding Officer may conduct, in person or by telephone, one or more prehearing conference to discuss the following:
(1) Simplification of the issues;
(2) The necessity or desirability of amendments to the pleadings, including the need for a more definite statement;
(3) Stipulations or admissions of fact or as to the contents and authenticity of documents;
(4) Limitation of the number of witnesses;
(5) Exchange of witness lists, copies of prior statements of witnesses, and copies of hearing exhibits;
(6) Scheduling dates for the exchange of witness lists and of proposed exhibits;
(7) Discovery;
(8) Possible changes in the scheduled hearing date, time or site; and
(9) Any other matters related to the proceeding.
(b) Within a reasonable time after the completion of a prehearing conference, the Presiding Officer shall issue an order detailing all matters agreed upon by the parties, or ordered by the Presiding Officer, at such conference.
§ 962.11   Respondent access to information.
(a)(1) Except as provided in paragraph (a)(2) of this section, the Respondent, at any time after receiving the Notice of Hearing required by § 962.6, may review, and upon payment of a duplication fee established under § 265.8(c) of this title, may obtain a copy of, all relevant and material documents, transcripts, records, and other materials, which relate to the allegations of liability, and upon which the findings and conclusions of the Investigating Official under § 273.5 of this title are based.
(2) The Respondent is not entitled to review or obtain a copy of any document, transcript, record, or other material which is privileged under Federal law.
(b) At any time after receiving the Notice of Hearing required by § 962.6, the Respondent shall be entitled to obtain all exculpatory information in the possession of the Investigating Official or the Reviewing Official relating to the allegations or liability under 31 U.S.C. 3802. Paragraph (a)(2) of this section does not apply to any document, transcript, record, or other material, or any portion thereof, in which such exculpatory information is contained.
(c) Requests to review or copy material under this section must be directed to the Reviewing Official who must respond within a reasonable time.
§ 962.12   Depositions; interrogatories; admission of facts; production and inspection of documents.
(a) General Policy and protective orders. The parties are encouraged to engage in voluntary discovery procedures. In connection with any discovery procedure permitted under this part, 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. Such orders may include limitations on the scope, method, time and place for discovery, and provisions for protecting the secrecy of confidential information or documents. Each party shall bear its own expenses relating to discovery.
(b) Depositions. (1) After the issuance of a Notice of Hearing described in § 962.6, the parties may mutually agree to, or the Presiding Officer may, upon application of either party and for good cause shown, order the taking of testimony of any person by deposition upon oral examination or written interrogatories before any officer authorized to administer oaths at the place of examination, for use as evidence or for purposes of discovery. The application for order shall specify whether the purpose of the deposition is discovery or for use as evidence.
(2) The time, place, and manner of taking depositions shall be as mutually agreed by the parties, or failing such agreement, governed by order of the Presiding Officer.
(3) No testimony taken by depositions shall be considered as part of the evidence in the hearing unless and until such testimony is offered and received in evidence at such hearing. Depositions will not ordinarily be received in evidence if the deponent is present and can testify personally at the hearing. In such instances, however, the deposition may be used to contradict or impeach the testimony of the witness given at the hearing. In cases submitted for a decision on the record, the Presiding Officer may, in his discretion, receive depositions as evidence in supplementation of that record.
(c) Interrogatories to parties. After the issuance of a Notice of Hearing described in § 962.6, a party may serve on the other party written interrogatories to be answered separately in writing, signed under oath and returned within 30 days. Upon timely objection by the party, the Presiding Officer will determine the extent to which the interrogatories will be permitted.
(d) Admission of facts. After the issuance of a Notice of Hearing described in § 962.6, a party may serve upon the other party a request for the admission of specified facts. Within 30 days after service, the party served shall answer each requested fact or file objections thereto. The factual propositions set out in the request shall be deemed admitted upon the failure of a party to respond to the request for admission.
(e) Production and inspection of documents. Upon motion of any party showing good cause therefor, and upon notice, the Presiding Officer may order the other party to produce and permit the inspection and copying or photographing of any designated documents or objects, not privileged, specifically identified, and their relevance and materiality to the cause or causes in issue explained, which are reasonably calculated to lead to the discovery or admissible evidence. If the parties cannot themselves agree thereon, the Presiding Officer shall specify just terms and conditions in making the inspection and taking the copies and photographs.
(f) Limitations. Under no circumstances may a discovery procedure be used to reach
(1) Documents, transcripts, records, or other material which a person is not entitled to review pursuant to § 962.11;
(2) The notice sent to the Attorney General from the Reviewing Official under § 273.6 of this title; or
(3) Other documents which are privileged under Federal law.
§ 962.13   Subpoenas.
(a) General. Upon written request of either party filed with the Recorder or on his own initiative, the Presiding Officer may issue a subpoena requiring:
(1) Testimony at a deposition. The deposing of a witness in the city or county where he resides or is employed or transacts his business in person, or at another location convenient for him that is specifically determined by the Presiding Officer;
(2) Testimony at a hearing. The attendance of a witness for the purpose of taking testimony at a hearing; and
(3) Production of books and papers. In addition to paragraphs (a)(1) and (a)(2) of this section, the production by the witness at the deposition or hearing of books and papers designated in the subpoena.
(b) Voluntary cooperation. Each party is expected (1) to cooperate and make available witnesses and evidence under its control as requested by the other party, without issuance of a subpoena, and (2) to secure voluntary attendance of desired third-party books, papers, documents, or other tangible things whenever possible.
(c) Requests for subpoenas. (1) A request for a subpoena shall normally be filed at least:
(i) 15 days before a scheduled deposition where the attendance of a witness at a deposition is sought;
(ii) 30 days before a scheduled hearing where the attendance of a witness at a hearing is sought.
(2) A request for a subpoena shall state the reasonable scope and general relevance to the case of the testimony and of any books, papers, documents, or other tangible things sought.
(3) The Presiding Officer, in his discretion, may honor requests for subpoenas not made within the time limitations specified in this paragraph.
(d) Requests to quash or modify. Upon written request by the person subpoenaed or by a party, made within 10 days after service but in any event not later than the time specified in the subpoena for compliance, the Presiding Officer may (1) quash or modify the subpoena if it is unreasonable and oppressive or for other good cause shown, or (2) require the person in whose behalf the subpoena was issued to advance the reasonable cost of producing subpoenaed books and papers. Where circumstances require, the Presiding Officer may act upon such a request at any time after a copy has been served upon the opposing party.
(e) Form; issuance. (1) Every subpoena shall state the title of the proceeding, shall cite 31 U.S.C. 3804(b) as the authority under which it is issued, and shall command each person to whom it is directed to attend and give testimony, and if appropriate, to produce specified books and papers at a time and place therein specified. In issuing a subpoena to a requesting party, the Presiding Officer shall sign the subpoena and may, in his discretion, enter the name of the witness and otherwise leave it blank. The party to whom the subpoena is issued shall complete the subpoena before service.
(2) Where the witness is located in a foreign country, a letter rogatory or subpoena may be issued and served under the circumstances and in the manner provided in 28 U.S.C. 1781-1784.
(f) Service. (1) The party requesting issuance of a subpoena shall arrange for service.
(2) A subpoena requiring the attendance of a witness at a deposition or hearing may be served at any place. A subpoena may be served by a United States marshal or deputy marshal, or by any other person who is not a party and not less than 18 years of age. Service of a subpoena upon a person named therein shall be made by personally delivering a copy to that person and tendering the fees for one day's attendance and the mileage provided by 28 U.S.C. 1821 or other applicable law.
(3) The party at whose instance a subpoena is issued shall be responsible for the payment of fees and mileage of the witness and of the officer who serves the subpoena. The failure to make payment of such charges on demand may be deemed by the Presiding Officer as sufficient ground for striking the testimony of the witness and the evidence the witness has produced.
§ 962.14   Enforcement of subpoenas.
In the case of contumacy or refusal to obey a subpoena issued pursuant to §§ 962.9(b)(5) and 962.13, the district courts of the United States have jurisdiction to issue an appropriate order for the enforcement of such subpoena. Any failure to obey such order of the court may be punishable as contempt. In any case in which the Postal Service seeks the enforcement of a subpoena under this section, the Postal Service shall request the Attorney General to petition the district court for the district in which a hearing under this part is being conducted or in which the person receiving the subpoena resides or conducts business to issue such an order.
§ 962.15   Sanctions.
(a) The Presiding Officer may sanction a person, including any party or representative, for
(1) Failing to comply with a lawful order or prescribed procedure;
(2) Failing to prosecute or defend an action; or
(3) Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.
(b) Any such sanction, including but not limited to those listed in paragraphs (c), (d), and (e) of this section, shall reasonably relate to the severity and nature of the failure or misconduct.
(c) Failure to comply with an order. When a party fails to comply with an order, including an order for taking a deposition, the production of evidence within the party's control, or a request for admission, the Presiding Officer may:
(1) Draw an inference in favor of the requesting party with regard to the information sought;
(2) Prohibit such party from introducing evidence concerning, or otherwise relying upon, testimony relating to the information sought;
(3) Permit the requesting party to introduce secondary evidence concerning the information sought; and
(4) Strike any part of the pleadings or other submissions of the party failing to comply with such request.
(d) Failure to prosecute or defend. If a party fails to prosecute or defend an action under this part commenced by service of a Complaint, the Presiding Officer may dismiss the action or enter an order of default.
(e) Failure to make timely filing. The Presiding Officer may refuse to consider any motion or other pleading, report, or response which is not filed in a timely fashion.
§ 962.16   Disqualification of reviewing official or presiding official.
If a Respondent believes, in good faith, that the Reviewing Official or Presiding Officer should be disqualified because of personal bias, or other reason, the Respondent may file a timely and sufficient affidavit alleging such belief with supporting evidence. If the Presiding Officer finds that such allegations concerning the Reviewing Official are meritorious, he may direct the Reviewing Official to disqualify himself and request the appointment of a new Reviewing Official. Where a Respondent seeks the disqualification of a Presiding Officer, such Presiding Officer, may, in his discretion, disqualify himself at any time during the proceeding. In the event a Reviewing Official or Presiding Officer withdraws from a hearing, the proceeding shall be stayed until the assignment of a new Reviewing Official or Presiding Officer.
§ 962.17   Ex parte communications.
Communications between a Presiding Officer and a party shall not be made on any matter in issue unless on notice and opportunity for all parties to participate. This prohibition does not apply to procedural matters. A memorandum of any communication between the Presiding Officer and a party shall be transmitted by the Presiding Officer to all parties.
§ 962.18   Post-hearing briefs.
Post-hearing briefs and reply briefs may be submitted upon such terms as established by the Presiding Officer at the conclusion of the hearing.
§ 962.19   Transcript of proceedings.
Testimony and argument at hearings shall be reported verbatim, unless the Presiding Officer orders otherwise. Transcripts or copies of the proceedings may be obtained by the parties at such rates as may be fixed by contract between the reporter and the Postal Service.
§ 962.20   Initial decision.
(a) After the conclusion of the hearing, and the receipt of briefs, if any, from the parties, the Presiding Officer shall issue a written initial decision, including his or her findings and determinations. Such decision shall include the findings of fact and conclusions of law which the Presiding Officer relied upon in determining whether the Respondent is liable under 31 U.S.C. 3802, and, if liability is found, shall set forth the amount of any penalties and assessments imposed.
(b) The Presiding Officer shall promptly send to each party a copy of his or her initial decision, and a statement describing the right of any person determined to be liable under 31 U.S.C. 3802, to appeal, in accordance with § 962.21, the decision of the Presiding Officer to the Judicial Officer.
(c) Unless the Respondent appeals the Presiding Officer's initial decision, such decision, including the findings and determinations, is final.
§ 962.21   Appeal of initial decision to judicial officer.
(a) Notice of appeal and supporting brief. (1) A Respondent may appeal an adverse initial decision by filing, within 30 days after the Presiding Officer issues an initial decision, a Notice of Appeal with the Recorder. The Judicial Officer may extend the filing period if the Respondent files a request for an extension within the initial 30-day period and demonstrates good cause for such extension.
(2) The Respondent's Notice of Appeal must be accompanied by a written brief specifying the Respondent's exceptions, and any reasons for such exceptions, to the Presiding Officer's initial decision.
(3) Within 30 days of receiving the Respondent's brief, the Reviewing Official may file with the Judicial Officer a response to the Respondent's specified exceptions to the Presiding Officer's initial decision.
(b) Form of review. (1) Review by the Judicial Officer will be based entirely on the record and written submissions.
(2) The Judicial Officer may affirm, reduce, reverse, or remand any penalty or assessment determined by the Presiding Officer.
(3) The Judicial Officer shall not consider any objection that was not raised in the hearing unless the interested party demonstrates that the failure to raise the objection before the Presiding Officer was caused by extraordinary circumstances.
(4) If any party demonstrates to the satisfaction of the Judicial Officer that additional evidence not presented at the hearing is material and that there were reasonable grounds for the failure to present such evidence, the Judicial Officer shall remand the matter to the Presiding Officer for consideration of such additional evidence.
(c) Decision of judicial officer. (1) The Judicial Officer shall promptly serve each party to the appeal with a copy of his decision and a statement describing the right to judicial review under 31 U.S.C. 3805 of any Respondent determined to be liable under 31 U.S.C. 3802.
(2) The decision of the Judicial Officer constitutes final agency action and becomes final and binding on the parties 60 days after it is issued unless a petition for judicial review is filed.
§ 962.22   Form and filing of documents.
(a) All pleadings and documents required under this part must be filed using the Judicial Officer electronic filing system unless the presiding officer permits otherwise. The Judicial Officer electronic filing system website is accessible 24 hours a day at https://usps-judicialoffice.journaltech.com . Every pleading filed in a proceeding under this part must:
(1) Contain a caption setting forth the title of the action, the docket number (after assignment by the Recorder), and a designation of the document (e.g., “Motion to Quash Subpoena”);
(2) Contain the name, address, and telephone number of the party or other person on whose behalf the paper was filed, or the name, address and telephone number of the representative who prepared such paper; and
(3) Be signed by the party or other person submitting the document, or by such party's or person's representative.
(b) Documents submitted using the electronic filing system are considered filed as of the date/time (Eastern Time) reflected in the system. Documents mailed to the Recorder are considered filed on the date mailed as evidenced by a United States Postal Service postmark. Filings by any other means are considered filed upon receipt by the Recorder of a complete copy of the filing during normal business hours. Normal business hours are between 8:45 a.m. and 4:45 p.m. (Eastern Time), Monday through Friday except holidays.
(c) Pleadings or document transmittals to, or communications with, the Postal Service, other than to the Recorder under paragraph (b) of this section, shall be made through the Reviewing Official or designated Postal Service attorney. If a notice of appearance by a representative is filed on behalf of a Respondent, pleadings or document transmittals to, or communications with, the Respondent shall be made through his representative.
§ 962.23   Service.
If both parties are participating in the electronic filing system, separate service upon the opposing party is not required. Otherwise, documents shall be served personally or by mail on the opposing party, noting on the document filed, or on the transmitting letter, that a copy has been so furnished.
§ 962.24   Computation of time.
(a) In computing any period of time provided for by this part, or any order issued pursuant to this part, the time begins with the day following the act, event, or default, and includes the last day of the period, unless it is a Saturday, Sunday, or legal holiday observed by the Federal Government, in which event it includes the next business day.
(b) When the applicable period of time is less than seven days, intermediate Saturdays, Sundays, and legal holidays observed by the Federal Government shall be excluded from the computation.
§ 962.25   Continuances and extensions.
Continuances and extensions may be granted under these rules for good cause shown.
§ 962.26   Settlement.
(a) Either party may make offers of settlement or proposals of adjustment at any time.
(b) The Reviewing Official has the exclusive authority to compromise or settle any allegations or determinations of liability under 31 U.S.C. 3802 without the consent of the Presiding Officer, except during the pendency of an appeal to the appropriate United States district court pursuant to 31 U.S.C. 3805 or during the pendency of an action to collect any penalties or assessments pursuant to 31 U.S.C. 3806.
(c) The Attorney General has the exclusive authority to compromise or settle any penalty or assessment the determination of which is the subject of a pending petition for judicial review, or a pending action to recover such penalty or assessment.
(d) The Reviewing Official may recommend settlement terms to the Attorney General, as appropriate.
§ 962.27   Limitations.
A hearing under this part concerning a claim or statement allegedly made, presented, or submitted in violation of 31 U.S.C. 3802 shall be commenced within six years after the date on which such claim or statement is made, presented, or submitted.