Document Headings

                    Document headings vary by document type but may contain                    the following:                  
                -                       the agency or agencies that issued and signed a document                    
                -                       the number of the CFR title and the number of each part                      the document amends, proposes to amend, or is directly                      related to                    
                -                       the agency docket number / agency internal file number                    
                -                       the RIN which identifies each regulatory action listed in                      the Unified Agenda of Federal Regulatory and Deregulatory                      Actions                    

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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 

# AGENCY:

Federal Aviation Administration (FAA), DOT. 

# ACTION:

Final rule; request for comments.

# 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: mardi.thompson@faa.gov. 

# 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 9-AWA-SBREFA@faa.gov.                     

## 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                               ( print page 2177)                            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, § 405.7 is removed and new § 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*                         §§ 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*                         § 406.103 (definitions of agency attorney and complainant) and § 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 § 406.173 or § 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*                         § 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*                         § 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*                         § 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*                         § 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*                         § 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*                         § 406.103 (definition of mail).                     

                        The FAA contemplates that the parties will file paper documents, with original signatures, see § 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 § 406.111 should be handled.                               ( print page 2178)    

### 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*                         § 413.9. New § 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, § 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                               ( print page 2179)                            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.                               ( print page 2180)    

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. 

§ 405.7 

2. Remove § 405.7. 

3. Revise part 406 to read as follows: 

# PART 406—INVESTIGATIONS, ENFORCEMENT, AND ADMINISTRATIVE REVIEW 

        Subpart A—Investigations and Enforcement 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 

§ 406.1 

(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. 

§ 406.3 

(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 § 406.1. 

§ 406.5 

(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. 

§ 406.7 

§ 406.9 

                                        (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 § 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                                               ( print 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 § 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 § 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 § 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.                                     

      ( print page 2182)    
§ 406.10-406.100 

# Subpart B—Rules of Practice in FAA Space Transportation Adjudications 

§ 406.101 

                                        (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 § 406.9. 

(2) [Reserved] 

(b) [Reserved] 

§ 406.103 

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.                                     

§ 406.105 

                                        (a)                                         *Agency attorney*. The authority to prosecute civil penalties within the FAA is exercised by an agency attorney in accordance with § 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. 

§ 406.107 

(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. 

§ 406.109 

                                        (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 § 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 § 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.                                               ( print page 2183)    

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

§ 406.111 

                                        (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. 

§ 406.113 

                                        (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 § 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 § 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 § 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 § 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 § 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. 

§ 406.115 

                                        (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                                               ( print 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.                                     

§ 406.117 

                                        (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 § 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. 

§ 406.119 

(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. 

§ 406.121 

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                                               ( print 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.                                     

§ 406.123 

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. 

§ 406.127 

                                        (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 § 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 § 406.107.                                     

                                        (3)                                         *Contents of complaint.*                                         The final notice of proposed civil penalty issued under § 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 § 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.                                     

§ 406.133 

                                        (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.                                     

§ 406.135 

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. 

§ 406.137 

(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. 

§ 406.139 

                                        (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                                               ( print 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. 

§ 406.141 

                                        (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 § 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.                                               ( print 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.                                     

§ 406.143 

                                        (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 § 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.                                               ( print 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. 

§ 406.147 

                                        (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      ( print 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.                                     

§ 406.149 

                                        (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.                                     

§ 406.151 

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. 

§ 406.153 

(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. 

§ 406.155 

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

§ 406.157 

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. 

§ 406.159 

                                        (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.                                     

§ 406.161 

                                        (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.                                     

§ 406.163 

(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. 

§ 406.165 

                                        (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                                               ( print page 2190)                                            the parties a reasonable opportunity, not more than 30 days after receipt of the transcript, to prepare and submit the briefs.                                     

§ 406.167 

                                        (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.                                     

§ 406.173 

                                        (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 § 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 § 406.117(c)(2). 

(4) Failure of the administrative law judge to dismiss the proceedings in accordance with § 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.                                     

§ 406.175 

                                        (a)                                         *Notice of appeal.*                                         A party may appeal the initial decision, and any decision not previously appealed pursuant to § 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                                               ( print 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. 

§ 406.177 

                                        (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.                                     

      ( print page 2192)    
§ 406.179 

(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 § 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 § 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