Amendments to Commission's Rules of Practice and Procedure-Subparts E and L, 12528-12542 [2012-4690]

Agencies

• Federal Maritime Commission

[Federal Register Volume 77, Number 41 (Thursday, March 1, 2012)]
[Proposed Rules]
[Pages 12528-12542]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-4690]


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FEDERAL MARITIME COMMISSION

46 CFR Part 502

[Docket No. 11-05]
RIN 3072-AC43


Amendments to Commission's Rules of Practice and Procedure--
Subparts E and L

AGENCY: Federal Maritime Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Maritime Commission proposes to amend Subpart E 
(Proceedings; Pleadings; Motions; Replies) and Subpart L (Depositions, 
Written Interrogatories, and Discovery) of its Rules of Practice and 
Procedure to update and clarify the rules and to reduce the burden on 
parties to proceedings before the Commission.

DATES: Comments or suggestions due on or before April 30, 2012.

ADDRESSES: Address all comments concerning this proposed rule to: Karen 
V. Gregory, Secretary, Federal Maritime Commission, 800 North Capitol 
Street NW., Washington, DC 20573-0001, Phone: (202) 523-5725, Email: 
secretary@fmc.gov.

SUPPLEMENTARY INFORMATION: 
    Submit Comments: Submit an original and five (5) copies in paper 
form, and if possible, send a PDF of the document by email to 
secretary@fmc.gov. Include in the subject line: Docket No. 11-05, and 
[Company/Individual Name].

Background

    The Commission's Rules of Practice and Procedure, 46 CFR part 502, 
govern procedures before the Commission. 46 CFR 502.1-.991. The rules 
are in place to secure just, speedy, and inexpensive resolution of 
proceedings before the Commission. The Commission has determined to 
amend Part 502 of Title 46 of the Code of Federal Regulations to update 
and improve the Commission's Rules of Practice and Procedure and to 
reduce the burden on parties to proceedings before the Commission.
    As a first step in updating and improving its procedural rules, the 
Commission already issued a Final Rule with respect to certain rules in 
Subparts A, H, I, S, and T of its Rules of Practice and Procedure. 76 
FR 10258 (February 24, 2011). The Commission also issued an Advance 
Notice of Proposed Rulemaking (ANPR) to seek comments on further 
amendments to improve its rules. 76 FR 19022 (April 6, 2011).
    In continuance of its efforts to modernize its rules, the 
Commission proposes to amend Subpart E (Proceedings; Pleadings; 
Motions; Replies) and Subpart L (Disclosures and Discovery) of its 
Rules of Practice and Procedure.

Comments in Response to ANPR

    In response to the ANPR, the Commission received comments from 
Nathan Barillo, student at Villanova University School of Law 
(Barillo), and the Law Firm of Rodriguez O'Donnell Gonzalez & Williams, 
P.C., Washington DC (ROGW). Barillo's comments focused on electronic 
delivery systems that the Commission should consider in connection with 
its filing and docket requirements. Based on experience with various 
systems, he advocates the use of a cloud computing system in which 
documents can be filed giving multiple users ability to access 
information from a remote location and server. Such a system would 
permit the Commission to receive documents electronically and allow 
Commission personnel and public users to access the documents at any 
time and from any location. He names several commercial systems as 
viable options for an online submission system, and also suggests that 
a government created system could alleviate security concerns. Barillo 
believes that cloud computing would streamline efficiency and reduce 
staff labor in dealing with paper, but nevertheless acknowledges that 
the Commission must also consider the needs of a small segment of the 
population that may not have access to a computer.
    ROGW's attorneys frequently appear before the Commission in 
adjudications, rulemakings, and various other regulatory matters. ROGW 
commends the recent amendments to the Commission's rules addressing 
electronic filing in PDF format as well as paper. ROGW recommends 
adoption of a filing system similar to the Public Access to Court 
Electronic Records (PACER) system currently used in the federal courts. 
Through PACER, the federal judiciary allows and in most cases, 
requires, electronic filing of documents and public access to filings 
through a centralized system. ROGW believes that if funding permits, 
adoption of such a system would permit Commission personnel and private 
practitioners to obtain access to formal and informal proceedings and 
public docket information via the Internet.
    With respect to the substance of certain rules, ROGW states that 
the applicability of the Federal Rules of Civil Procedure (FRCP) in 
Commission proceedings is not always clear and that the federal rules 
should be applied whenever possible. Specifically, ROGW suggests that 
adoption of FRCP 56 procedures for summary judgment would allow for 
more expeditious litigation. Similarly, ROGW recommends that the FRCP 
41 procedures for voluntary and involuntary dismissals be included in 
the Commission's rules. ROGW explains that under the Commission's 
rules, after reaching a settlement in a case, the litigants cannot 
simply file a notice dismissing the complaint, but rather must file a 
motion for approval of the settlement. ROGW asserts that this 
requirement results in unnecessary expense of resources for the 
Commission and the parties and believes that the better approach is 
provided by the federal rule. Finally, ROGW supports adoption of the 
discovery rules in the FRCP, in particular the requirements for initial 
disclosures, identification of expert witnesses, procedures for 
claiming privilege and protection of trial preparation materials, 
limitations on depositions and interrogatories, and the 30-day response 
period for production of documents and interrogatories. Based on its 
experience, ROGW submits that mandatory disclosures would reduce the 
need to file motions to compel. However, ROGW believes that in 
considering adoption of these federal rules, due regard should be given 
to the differences in the nature of proceedings and practice in the 
federal courts and before the Commission.

Subpart E--Proceedings; Pleadings; Motions; Replies

    The revisions to Subpart E are intended both to streamline the 
current rules for ease of use by the public and to provide parties to 
Commission proceedings with greater clarity as to the requirements 
pertaining to the conduct of proceedings, specifically motions, 
intervention and dismissals. Also as described below, this proposed 
amendment sets out a new procedure for the conduct of Commission 
initiated enforcement proceedings. Minor changes are also proposed to 
reorder sections and enhance clarity generally.

Rule 62--Private Party Complaints for Formal Adjudication

    Rule 62, 46 CFR 502.62, governs the filing of private party 
complaints for formal adjudication and has been revised for 
clarification and modernized

[[Page 12529]]

to request email addresses for parties to proceedings. Rules related to 
the filing of answers to complaints (currently found at 46 CFR 502.64) 
and statutes of limitations (currently found at 46 CFR 502.63) have 
been consolidated into Rule 62. Proposed Rule 62 explains more fully 
what is required in an answer and also provides for the filing of 
counterclaims, cross-claims, and third party complaints. Commission 
rules have not previously addressed these types of claims, though they 
have been filed and adjudicated. Proposed Rule 62 references decisions 
on default for failure to answer a complaint, counterclaim, cross-
claim, or third-party complaint. Administrative Law Judges (ALJs) have 
adjudicated decisions on default in the past in various fashions, but 
the proposed rule better defines when an initial decision on default 
may be issued. The new default rule is discussed in greater detail 
below.
    Exhibit 1 to Subpart E currently contains a complaint form and a 
checklist of information required when filing a complaint. The proposed 
rule would remove this form from the rules as the Commission plans to 
publish a revision of this form on its Web site along with other forms 
and further helpful information for complaint filers, with information 
oriented particularly to pro se filers.

Rule 63--Commission Enforcement Action

    Proposed Rule 63 provides a new procedure at the initial stages of 
Commission enforcement proceedings designed to more efficiently utilize 
Commission resources, provide for expeditious resolution of cases where 
a respondent defaults or otherwise chooses not to appear, and ensures 
due process to respondents. Under current procedure, the Commission 
issues an Order of Investigation and Hearing that advises respondents 
of the issues under investigation, designates the Commission's Bureau 
of Enforcement (BOE) as a party to the proceeding to prosecute the 
case, and assigns the matter to the Office of Administrative Law Judges 
to conduct the proceeding and issue an initial decision. There is no 
requirement in the current procedural rules that a respondent answer or 
otherwise respond to the Order. Typically, the presiding officer issues 
an initial order to the parties followed by a scheduling order setting 
forth dates by which certain aspects of the case must be completed and 
generally setting a schedule for the proceeding. It is not uncommon, 
however, for a respondent to fail to appear or to initially appear and 
then cease participating in the case. Under these procedures, there are 
no Commission rules to address a respondent's failure to appear or 
comply with procedural requirements. Instead, the presiding officer is 
required to undertake a number of sequential procedural steps just to 
put the case in a posture where an initial decision can be issued. 
Unfortunately, these necessary procedural steps can consume several 
months. For example, a motion to compel responses to discovery must be 
filed after the responses were due; followed by a time period for 
respondent to reply to the motion; followed by a time period for the 
ALJ to issue an order; followed by another time period for respondent's 
compliance; followed by BOE's motion for sanctions for failure to 
comply with the ALJ's order; followed by a period of time for 
respondent's reply; followed by issuance of the ALJ's order. Obviously, 
this process is time consuming and wasteful of limited resources in 
prosecuting a case which may well turn out to be an uncontested or a 
default case. The new rule for default is discussed in greater detail 
below.
    Under the proposed procedure, an enforcement action would continue 
to be instituted upon the Commission's issuance of an Order of 
Investigation and Hearing. The Order of Investigation and Hearing would 
set forth specific facts alleged by BOE supporting an assertion that 
the respondent has violated the Shipping Act, require an answer from 
the respondent, and identify the consequences of failure to answer or 
otherwise respond to the Order. Such a procedure is employed by various 
other federal agencies in conducting investigative adjudications 
including the Federal Trade Commission, Commodity Futures Trading 
Commission, Department of Housing and Urban Development, and the new 
Consumer Financial Protection Bureau (interim final rules). The Order 
of Investigation and Hearing would also identify the name and address 
of each respondent subject to the Order; recite the legal authority and 
jurisdiction for instituting the proceeding including designation of 
the statutory provisions and/or Commission regulations alleged to have 
been violated; include a clear and concise statement of facts 
sufficient to inform the respondent of the acts or practices alleged to 
constitute a violation of the law; include a statement of the civil 
penalties, cease and desist order, and any other appropriate penalty 
that may be imposed; specify the date or time period by or in which 
respondent must file an answer with the Commission and serve BOE; and a 
statement of the consequences for failure to file an answer.
    The new rule contains a separate provision addressing the contents 
of an answer to an Order of Investigation and Hearing. The Rule would 
require that a respondent must file an answer with the Commission and 
serve the answer on BOE within 25 days after being served with the 
Order. The rule further provides that the answer must contain a concise 
statement of the facts upon which each ground of defense is based and 
an admission, denial, or explanation of each fact alleged in the Order, 
or, if the respondent does not have sufficient knowledge of the facts 
to prepare a response, a statement to that effect. Factual allegations 
in the Order not answered or addressed would be deemed to be admitted.

Rule 64--Alternative Dispute Resolution

    The Commission has long held the policy of using alternative means 
of dispute resolution to the fullest extent compatible with the law and 
the agency's mission and resources. The Commission's policy statement 
requires parties to consider the use of alternative dispute resolution 
to resolve disputes at an early stage. 46 CFR 502.401. Recently, in 
Fact Finding 27, Potentially Unlawful, Unfair or Deceptive Ocean 
Transportation Practices Related to the Movement of Household Goods or 
Personal Property in U.S.-Foreign Oceanborne Trades, the Fact Finding 
Officer recommended that the Commission adjust its ADR requirements by 
requiring a mandatory mediation period in formal proceedings involving 
household goods. The Commission subsequently adopted this 
recommendation.
    Accordingly, the Commission has determined to modify its rules to 
require a preliminary dispute resolution conference in all formal 
proceedings. Under the new section 502.64, parties will be required to 
participate in a preliminary conference to determine whether the matter 
in dispute may be resolved through the use of mediation or other means 
of voluntary alternative dispute resolution. Following the conference, 
the parties would determine whether to proceed with alternative dispute 
resolution.

Rule 65--Decision on Default

    The Commission is proposing new procedural rules on default which 
should clarify the process that will occur when a party fails to 
participate or respond in a Commission proceeding. The proposed rule 
states in pertinent part that ``[w]hen a party is found to be

[[Page 12530]]

in default, the Commission or the presiding officer may issue a 
decision on default upon consideration of the record.''
    The default rule is modeled on that of other agencies that employ a 
similar enforcement procedure. A defaulting respondent may petition the 
Commission to set aside a decision on default, which may be granted to 
prevent injustice upon a showing of good cause. While the federal rules 
do not set a time limit for the filing of such a motion, it is believed 
that a finite period should be set. The proposed rule requires that a 
motion be filed within 22 days after service of the decision on default 
to coincide with the current time period for the filing of exceptions 
to an initial decision.

Rule 68--Motion for Leave To Intervene

    Proposed Rule 68, addresses motions for leave to intervene 
previously found in Rule 72, 46 CFR 502.72 Petitions for leave to 
intervene. This section has been modernized to reflect intervention of 
right and permissive intervention as provided in the FRCP. The proposed 
rule requires that parties seek leave to intervene in proceedings by 
motion, rather than by petition. The proposed standard recognizes the 
existing standard of the Commission's rule as well as that in FRCP 24 
governing intervention.
    The proposed rule allows for permissive intervention by a federal 
or state government department or agency or the Commission's Bureau of 
Enforcement. The federal or state government or agency or the 
Commission's Bureau of Enforcement is required to show that its 
expertise is relevant to one or more issues involved in the proceeding 
and may assist in the consideration of those issues.

Rule 69--Motions

    Proposed Rule 69 reorders the subparts from current Rule 73 into a 
more logical fashion and adds two new paragraphs. Paragraph (f) 
clarifies when responses to written motions are permitted. Paragraph 
(g) defines dispositive motions, because dispositive and non-
dispositive motions are treated differently pursuant to proposed rules 
70 and 71.

Rule 70--Procedure for Dispositive Motions

    Proposed Rule 70 addresses dispositive motions. Because these 
motions may dispose of all or part of a proceeding, they are handled 
differently from non-dispositive motions. Dispositive motions must 
include specific information. Non-moving parties must file responses 
within 15 days. The moving party may file a reply within 7 days 
thereafter. No further reply may be filed unless requested by the 
presiding officer or upon a showing of extraordinary circumstances. 
Because these motions may be dispositive, the presiding officer may 
request additional briefing to ensure a full record. Previously, 
additional time and briefs were permitted on a case by case basis.

Rule 71--Procedures for Non-Dispositive Motions

    Proposed Rule 71 addresses non-dispositive motions. These are 
frequently motions regarding discovery disputes or requesting an 
extension of a deadline. They do not tend to be as complex and do not 
require as much time to address as dispositive motions. Therefore, 
proposed Rule 71 requires the parties to attempt to confer to try to 
resolve the dispute before filing the motion. If a motion is still 
required (e.g. to extend a date) the motion will state whether it is 
opposed. If the motion is opposed, the non-moving party must file a 
response within 7 days. A reply is only permitted upon a showing of 
extraordinary circumstances. This will allow non-dispositive motions to 
be resolved more quickly and efficiently.

Rule 72--Dismissals

    Proposed Rule 72 clarifies the process for seeking voluntary and 
involuntary dismissals. Without such a rule, parties were not always 
certain how to present these dismissals. The rule is similar to FRCP 
41.

Subpart L--Disclosures and Discovery

    The Commission proposes to revise its discovery rules found in 46 
CFR Subpart L to modernize and more closely conform them to the current 
version of the FRCP and to encourage focused and expeditious use and 
completion of discovery. The Shipping Act of 1984 provides: ``In an 
investigation or adjudicatory proceeding under this part--* * * (2) a 
party may use depositions, written interrogatories, and discovery 
procedures under regulations prescribed by the Commission that, to the 
extent practicable, shall conform to the Federal Rules of Civil 
Procedure (28 App. U.S.C.).'' 46 U.S.C. 41303(a). In 1984, the 
Commission promulgated discovery rules based on the federal rules as 
they then existed. The Commission promulgated minor amendments to Rule 
203 in 1993 and Rule 201 in 1999, but in all other respects the rules 
are unchanged since 1984. The FRCP on discovery, on the other hand, has 
been extensively revised since 1984.
    As a general matter, to ensure that FMC proceedings are conducted 
as efficiently as possible, the Commission does not propose to adopt 
the various deadlines from the FRCP. To ensure parties are present in 
the case, proposed deadlines would run from the date of the filing of 
the answer, as opposed to the complaint, including the deadline for 
filing initial disclosures (Sec.  502.201(b)), completion of discovery 
(Sec.  502.201(g)), and initial duty to confer (Sec.  502.201(h)). The 
Commission is not proposing to adopt many of those rules that pertain 
to trials, as trial-type hearings are currently the exception in 
Commission proceedings. The Commission is at this time incorporating 
references to electronically stored documents and proposing to treat 
those as the FRCP does in the context of discovery.

Rule 201--Duty To Disclose; General Provisions Governing Discovery

    Proposed Rule 201 governs discovery generally, defines the scope of 
discovery and its limits, and provides for limited initial disclosures 
to be made by all parties to any Commission proceeding within seven 
days of receipt of respondent's answer. The proposed requirement to 
make initial disclosures would be a new requirement in Commission 
proceedings. FRCP 26 requires initial disclosures in federal courts, 
and the procedural rules of other federal agencies, such as the Federal 
Trade Commission, require initial disclosure in proceedings. Proposed 
Rule 201 would require the parties to confer within 14 days of receipt 
of respondent's answer, to complete discovery within 120 days of the 
answer and to require supplementation of responses to discovery. 
Currently, discovery must be completed within 120 days of notice of the 
complaint filing. This limitation has proven to be unrealistic, 
particularly because the actual date of receipt of an answer can vary 
greatly. Proposed Rule 201 would adopt the federal rule on the scope of 
discovery as it currently exists in FRCP 26(b)(1).
    Proposed Rule 201 also requires the disclosure of expert witnesses. 
The substance of the requirement tracks the federal rule, except with 
respect to the time for disclosures to be provided. The federal rule 
requires disclosure of experts and their reports no later than 90 days 
before trial. This deadline is not suitable in view of the Commission's 
120 day discovery period. Therefore, parties are required to address 
expert disclosures and discovery as part of the

[[Page 12531]]

``duty to confer'' requirement and, if experts will be used, schedule 
disclosure and exchange of reports in their proposed schedule.

Rule 202--Persons Before Whom Depositions May Be Taken

Rule 203--Depositions by Oral Examination

    Proposed Rules 202 and 203 would modernize Commission rules on 
depositions to conform with current FRCP 28, 29, and 30. While the 
Commission's rules have followed the FRCP in other respects, there are 
currently no limitations on the number of depositions. The proposed 
rule would limit the number of depositions that may be taken without 
stipulation or leave of the presiding officer to 20.

Rule 204--Depositions by Written Questions

Rule 205--Interrogatories to Parties

    Proposed Rules 204 and 205 pertain to interrogatories and also 
conform to FRCP 31 and 33. A party would be permitted to serve no more 
than 50 written interrogatories without stipulation or leave of the 
presiding officer. The Commission seeks comments specifically on the 
issue of whether the limitations described in this paragraph are 
appropriate in Commission proceedings.

Rule 206--Producing Documents, Electronically Stored Information, and 
Tangible Things, or Entering Onto Land, for Inspection and Other 
Purposes

    Proposed Rule 206 would continue to echo FRCP 34, but would 
incorporate reference to production of electronically stored 
information and establishes that responses to requests are due within 
30 days, whereas the current rule does not specify a deadline for such 
a response.

Rule 207--Requests for Admission

Rule 208--Use of Discovery Procedures Directed to Commission Staff 
Personnel

    Proposed Rule 207 generally follows FRCP 36, although it does not 
allow the award of expenses if a party fails to admit a matter that is 
later proven true. Proposed Rule 208 remains unchanged but is reprinted 
in the proposed rule for ease of reference.

Rule 209--Use of Depositions at Hearings

    Proposed Rule 209 continues to follow FRCP 32, but does not 
reference that rule in its entirety as certain provisions, such as FRCP 
32(a)(5) (Limitations on use) are not typically relevant in Commission 
proceedings. References to the Federal Rules of Evidence are removed as 
they do not generally apply to administrative proceedings.

Rule 210--Motions To Compel Initial Disclosure or Compliance With 
Discovery Requests; Failure To Comply With Order To Make Disclosure or 
Answer or Produce Documents; Sanctions; Enforcement

    Proposed Rule 210 is revised to more closely conform to FRCP 
37(b)(2)(A), and makes the failure to make initial disclosures subject 
to a motion to compel and sanctions. The proposed rule also changes the 
response period to 7 days in accordance with the general rule 
applicable to responses to motions.
    Although this rulemaking affects only the Commission's Rules of 
Practice and Procedure, and is therefore not subject to notice-and-
comment requirements of the Administrative Procedure Act, 5 U.S.C. 
553(b)(A), the Commission believes that the views of the public, 
especially practitioners who frequently appear before it, should be 
considered. Therefore, through this Notice of Proposed Rulemaking, the 
Commission again encourages the public to submit views on these 
proposed changes to its procedural rules.
    This proposed rule is not a ``major rule'' under 5 U.S.C. 804(2).

List of Subjects in 46 CFR Part 502

    Administrative practice and procedure, Claims, Equal access to 
justice, Investigations, Lawyers, Maritime carriers, Penalties, 
Reporting and recordkeeping requirements.

    For the reasons stated in the supplementary information, the 
Federal Maritime Commission proposes to amend subparts E and L of 46 
CFR Part 502 as follows.

PART 502--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for part 502 continues to read as 
follows:

    Authority: 5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561-569, 
571-596; 12 U.S.C. 1141j(a); 18 U.S.C. 207; 26 U.S.C. 501(c)(3); 28 
U.S.C. 2112(a); 31 U.S.C. 9701; 46 U.S.C. 305, 40103-40104, 40304, 
40306, 40501-40503, 40701-40706, 41101-41109, 41301-41309, 44101-
44106; E.O. 11222 of May 8, 1965, 30 FR 6469, 3 CFR 1964-1965 Comp. 
p. 306; 21 U.S.C. 853a.

    2. Revise subpart E to read as follows:

Subpart E--Proceedings; Pleadings; Motions; Replies


Sec.  502.61  Proceedings.

    (a) Any person may commence a proceeding by filing a complaint 
(Rule 62) for a formal adjudication under normal or shortened 
procedures (subpart K) or by filing a claim for the informal 
adjudication of small claims (subpart S). A person may also file a 
petition for a rulemaking (Rule 51), for an exemption (Rule 74), for a 
declaratory order (Rule 75), or for other appropriate relief (Rule 76), 
which becomes a proceeding when the Commission assigns a formal docket 
number to the petition. The Commission may commence a proceeding for a 
rulemaking, for an adjudication (including Commission enforcement 
action under Sec.  502.63), or a non-adjudicatory investigation upon 
petition or on its own initiative by issuing an appropriate order.
    (b) In the order instituting a proceeding or in the notice of 
filing of complaint and assignment, the Commission must establish dates 
by which the initial decision and the final Commission decision will be 
issued. These dates may be extended by order of the Commission for good 
cause shown. [Rule 61.]


Sec.  502.62  Private party complaints for formal adjudication.

    (a) Filing a complaint for formal adjudication. (1) A person may 
file a sworn complaint alleging violation of the Shipping Act of 1984, 
46 U.S.C. 40101 et seq.
    (2) Form. Complaints should be drafted in accordance with the rules 
in this section.
    (3) Content of complaint. The complaint must be verified and must 
contain the following:
    (i) The name, street address, and email address of each 
complainant, and the name, address, and email address of each 
complainant's attorney or representative, the name, address, and, if 
known, email address of each person against whom complaint is made;
    (ii) A recitation of the legal authority and jurisdiction for 
institution of the proceeding, with specific designation of the 
statutory provisions alleged to have been violated;
    (iii) A clear and concise factual statement sufficient to inform 
each respondent with reasonable definiteness of the acts or practices 
alleged to be in violation of the law; and
    (iv) A request for the relief and other affirmative action sought.
    (v) Shipping Act violation must be alleged. If the complaint fails 
to indicate the sections of the Act alleged to have been violated or 
clearly to state facts which support the allegations, the Commission 
may, on its own initiative, require the complaint to be amended to

[[Page 12532]]

supply such further particulars as it deems necessary.
    (4) Complaints seeking reparation; statute of limitations. A 
complaint may seek reparation (money damages) for injury caused by 
violation of the Shipping Act of 1984. (See subpart O of this part.)
    (i) Where reparation is sought, the complaint must set forth the 
injury caused by the alleged violation and the amount of alleged 
damages.
    (ii) Except under unusual circumstances and for good cause shown, 
reparation will not be awarded upon a complaint in which it is not 
specifically requested, nor upon a new complaint by or for the same 
complainant which is based upon a finding in the original proceeding.
    (iii) A complaint seeking reparation must be filed within three 
years after the claim accrues. Notification to the Commission that a 
complaint may or will be filed for the recovery of reparation will not 
constitute a filing within the applicable statutory period.
    (iv) Civil penalties must not be requested and will not be awarded 
in complaint proceedings.
    (5) Oral hearing. The complaint should designate whether an oral 
hearing is requested and the desired place for any oral hearing. The 
presiding officer will determine whether an oral hearing is necessary.
    (6) Filing fee. The complaint must be accompanied by remittance of 
a $221 filing fee.
    (7) A complaint is deemed filed on the date it is received by the 
Commission.
    (b) Answer to a complaint. (1) Time for filing. A respondent must 
file with the Commission an answer to the complaint and must serve the 
answer on complainant as provided in subpart H of this part within 25 
days after the date of service of the complaint by the Commission 
unless this period has been extended under Sec.  502.67 or Sec.  
502.102, or reduced under Sec.  502.103, or unless motion is filed to 
withdraw or dismiss the complaint, in which latter case, answer must be 
filed within 10 days after service of an order denying such motion. For 
good cause shown, the presiding officer may extend the time for filing 
an answer.
    (2) Contents of answer. The answer must be verified and must 
contain the following:
    (i) The name, address, and email address of each respondent, and 
the name, address, and email address of each respondent's attorney or 
representative;
    (ii) Admission or denial of each alleged violation of the Shipping 
Act;
    (iii) A clear and concise statement of each ground of defense and 
specific admission, denial, or explanation of facts alleged in the 
complaint, or, if respondent is without knowledge or information 
thereof, a statement to that effect;
    (iv) Any affirmative defenses, including allegations of any 
additional facts on which the affirmative defenses are based; and
    (3) Oral hearing. The answer should designate whether an oral 
hearing is requested and the desired place for such hearing. The 
presiding officer will determine whether an oral hearing is necessary.
    (4) Counterclaims, crossclaims, and third-party complaints. In 
addition to filing an answer to a complaint, a respondent may include 
in the answer a counterclaim against the complainant, a crossclaim 
against another respondent, or a third-party complaint. A counterclaim, 
a crossclaim, or a third-party complaint must allege and be limited to 
violations of the Shipping Act within the jurisdiction of the 
Commission. The service and filing of a counterclaim, a crossclaim, or 
a third-party complaint and answers or replies thereto are governed by 
the rules and requirements of this section for the filing of complaints 
and answers.
    (5) A reply to an answer may not be filed unless ordered by the 
presiding officer.
    (6) Effect of failure to file answer.
    (i) Failure of a party to file an answer to a complaint, 
counterclaim, crossclaim, or third-party complaint within the time 
provided will be deemed to constitute a waiver of that party's right to 
appear and contest the allegations of the complaint, counterclaim, 
crossclaim, or third-party complaint to which it has not filed an 
answer and to authorize the presiding officer to enter an initial 
decision on default as provided for in 46 CFR 502.65. Well pled factual 
allegations in the complaint not answered or addressed will be deemed 
to be admitted.
    (ii) A party may make a motion for initial decision on default. 
[Rule 62.]


Sec.  502.63  Commission enforcement action.

    (a) The Commission may issue an Order of Investigation and Hearing 
commencing an adjudicatory investigation against one or more 
respondents alleging one or more violations of the statutes that it 
administers.
    (b) Contents of Order of Investigation and Hearing. The Order of 
Investigation and Hearing must contain the following:
    (1) The name, street address, and, if known, email address of each 
person against whom violations are alleged;
    (2) A recitation of the legal authority and jurisdiction for 
institution of the proceeding, with specific designation of the 
statutory provisions alleged to have been violated;
    (3) A clear and concise factual statement sufficient to inform each 
respondent with reasonable definiteness of the acts and practices 
alleged to be in violation of the law;
    (4) Notice of penalties, cease and desist order, or other 
affirmative action sought; and
    (5) Notice of the requirement to file an answer and a statement of 
the consequences of failure to file an answer.
    (c) Answer to Order of Investigation and Hearing. (1) Time for 
filing. A respondent must file with the Commission an answer to the 
Order of Investigation and Hearing and serve a copy of the answer on 
the Bureau of Enforcement within 25 days after being served with the 
Order of Investigation and Hearing unless this period has been extended 
under Sec.  502.67 or Sec.  502.102, or reduced under Sec.  502.103, or 
unless motion is filed to withdraw or dismiss the Order of 
Investigation and Hearing, in which latter case, answer must be filed 
within 10 days after service of an order denying such motion. For good 
cause shown, the presiding officer may extend the time for filing an 
answer.
    (2) Contents of answer. The answer must be verified and must 
contain the following:
    (i) The name, address, and email address of each respondent, and 
the name, address, and email address of each respondent's attorney or 
representative;
    (ii) Admission or denial of each alleged violation of the Shipping 
Act;
    (iii) A clear and concise statement of each ground of defense and 
specific admission, denial, or explanation of facts alleged in the 
complaint, or, if respondent is without knowledge or information 
thereof, a statement to that effect; and
    (iv) Any affirmative defenses, including allegations of any 
additional facts on which the affirmative defenses are based.
    (3) Oral hearing. The answer must indicate whether an oral hearing 
is requested and the desired place for such hearing.The presiding 
officer will determine whether an oral hearing is necessary.
    (4) Effect of failure to file answer.
    (i) Failure of a respondent to file an answer to an Order of 
Investigation and Hearing within the time provided will

[[Page 12533]]

be deemed to constitute a waiver of the respondent's right to appear 
and contest the allegations in the Order of Investigation and Hearing 
and to authorize the presiding officer to enter a decision on default 
as provided for in 46 CFR 502.65. Well plead factual allegations in the 
Order of Investigation and Hearing not answered or addressed will be 
deemed to be admitted.
    (ii) The Bureau of Enforcement may make a motion for decision on 
default. [Rule 63.]


Sec.  502.64  Alternative dispute resolution.

    (a) Mandatory Preliminary Conference. (1) Participation. Subsequent 
to service of a complaint or Order of Investigation and Hearing, 
parties must participate in a preliminary conference with the 
Commission's Office of Consumer Affairs and Dispute Resolution Services 
(CADRS) to determine whether the matter may be resolved through the use 
of alternative dispute resolution pursuant to Subpart U of this Part. 
The preliminary conference may be conducted either in person or via 
telephone, video conference, or other forum.
    (2) Timing. The Director of CADRS will appoint a neutral to convene 
the conference within thirty (30) days of the filing of an answer. The 
neutral, within his or her discretion, may confer with each party 
separately at any time.
    (b) Continued Availability of Dispute Resolution Services to 
Resolve Procedural and other Disputes. Termination of a dispute 
resolution proceeding does not preclude the parties from seeking 
dispute resolution services at a later time to explore resolution of 
procedural or substantive issues.
    (c) Proceeding Not Stayed During Dispute Resolution Process. Unless 
otherwise ordered by the presiding officer, a mediation proceeding does 
not stay or delay the procedural time requirements set forth by rule or 
order of the presiding officer.
    (d) Confidentiality. All dispute resolution proceedings are subject 
to the confidentiality provisions set forth in Sec.  502.405 of this 
part. [Rule 64.]


Sec.  502.65  Decision on default.

    (a) A party to a proceeding may be deemed to be in default if that 
party fails:
    (1) To appear, in person or through a representative, at a hearing 
or conference of which that party has been notified;
    (2) To answer, to respond to a dispositive motion within the time 
provided, or otherwise to defend the proceeding; or
    (3) To cure a deficient filing within the time specified by the 
Commission or the presiding officer.
    (b) When a party is found to be in default, the Commission or the 
presiding officer may issue a decision on default upon consideration of 
the record, including the complaint or Order of Investigation and 
Hearing.
    (c) The presiding officer may require additional information or 
clarification when needed to issue a decision on default, including a 
determination of the amount of reparations or civil penalties where 
applicable.
    (d) A respondent who has defaulted may file with the Commission a 
petition to set aside a decision on default. Such a petition must be 
made within 22 days of the service date of the decision, state in 
detail the reasons for failure to appear or defend, and specify the 
nature of the proposed defense. In order to prevent injustice, the 
Commission may for good cause shown set aside a decision on default. 
[Rule 65.]


Sec.  502.66  Amendments or supplements to pleadings.

    (a) Amendments or supplements to any pleading (complaint, Order of 
Investigation and Hearing, counterclaim, crossclaim, third-party 
complaint, and answers thereto) will be permitted or rejected, either 
in the discretion of the Commission or presiding officer. After a case 
is assigned for hearing, no amendment must be allowed which would 
broaden the issues, without opportunity to reply to such amended 
pleading and to prepare for the broadened issues. The presiding officer 
may direct a party to state its case more fully and in more detail by 
way of amendment.
    (b) A response to an amended pleading must be filed and served in 
conformity with the requirements of subpart H of this part and Sec.  
502.69, unless the Commission or the presiding officer directs 
otherwise. Amendments or supplements allowed prior to hearing will be 
served in the same manner as the original pleading, except that the 
presiding officer may authorize the service of amended complaints 
directly by the parties rather than by the Secretary of the Commission.
    (c) Whenever by the rules in this part a pleading is required to be 
verified, the amendment or supplement must also be verified. [Rule 66.]


Sec.  502.67  Motion for more definite statement.

    If a pleading (including a complaint, counterclaim, crossclaim, or 
third-party complaint filed pursuant to Sec.  502.62) to which a 
responsive pleading is permitted is so vague or ambiguous that a party 
cannot reasonably prepare a response, the party may move for a more 
definite statement before filing a responsive pleading. The motion must 
be filed within 15 days of the pleading and must point out the defects 
complained of and the details desired. If the motion is granted and the 
order of the presiding officer is not obeyed within 10 days after 
service of the order or within such time as the presiding officer sets, 
the presiding officer may strike the pleading to which the motion was 
directed or issue any other appropriate order. If the motion is denied, 
the time for responding to the pleading must be extended to a date 10 
days after service of the notice of denial. [Rule 67.]


Sec.  502.68  Motion for leave to intervene.

    (a) A motion for leave to intervene may be filed in any proceeding.
    (b) Procedure for intervention. (1) Upon request, the Commission 
will furnish a service list to any member of the public pursuant to 
part 503 of this chapter.
    (2) The motion must:
    (i) Comply with all applicable provisions of subpart A of this 
part;
    (ii) Indicate the type of intervention sought;
    (iii) Describe the interest and position of the person seeking 
intervention, and address the grounds for intervention set forth in 
paragraph (c) of this section;
    (iv) Describe the nature and extent of its proposed participation, 
including the use of discovery, presentation of evidence, and 
examination of witnesses;
    (v) State the basis for affirmative relief, if affirmative relief 
is sought; and
    (vi) Be served on existing parties by the person seeking 
intervention pursuant to subpart H of this part.
    (3) A response to a motion to intervene must be served and filed 
within 15 days after the date of service of the motion.
    (c)(1) Intervention of right. The presiding officer or Commission 
must permit anyone to intervene who claims an interest relating to the 
property or transaction that is subject of the proceeding, and is so 
situated that disposition of the proceeding may as a practical matter 
impair or impede the ability of such person to protect its interest, 
unless existing parties adequately represent that interest.
    (2) Permissive intervention.
    (i) In general. The presiding officer or Commission may permit 
anyone to intervene who shows that a common issue of law or fact exists 
between such person's interest and the subject matter of the 
proceeding; that intervention

[[Page 12534]]

would not unduly delay or broaden the scope of the proceeding, 
prejudice the adjudication of the rights, or be duplicative of the 
positions of any existing party; and that such person's participation 
may reasonably be expected to assist in the development of a sound 
record.
    (ii) By a government department, agency, or the Commission's Bureau 
of Enforcement. The presiding officer or Commission may permit 
intervention by a federal or state government department or agency or 
the Commission's Bureau of Enforcement upon a showing that its 
expertise is relevant to one or more issues involved in the proceeding 
and may assist in the consideration of those issues.
    (3) The timeliness of the motion will also be considered in 
determining whether a motion will be granted under paragraph (b)(2) of 
this section and should be filed no later than 30 days after 
publication in the Federal Register of the Commission's order 
instituting the proceeding or the notice of the filing of the 
complaint. Motions filed after that date must show good cause for the 
failure to file within the 30-day period.
    (d) Use of discovery by an intervenor. (1) Absent good cause shown, 
an intervenor desiring to utilize the discovery procedures provided in 
subpart L must commence doing so no more than 15 days after its motion 
for leave to intervene has been granted.
    (2) The Commission or presiding officer may impose reasonable 
limitations on an intervenor's participation in order to: (i) Restrict 
irrelevant or duplicative discovery, evidence, or argument; (ii) have 
common interests represented by a spokesperson; and (iii) retain 
authority to determine priorities and control the course of the 
proceeding.
    (3) The use of discovery procedures by an intervenor whose motion 
was filed more than 30 days after publication in the Federal Register 
of the Commission's order instituting the proceeding or the notice of 
the filing of the complaint will not be allowed if the presiding 
officer determines that the use of the discovery by the intervenor will 
unduly delay the proceeding. [Rule 68.]


Sec.  502.69  Motions.

    (a) In any adjudication, an application or request for an order or 
ruling not otherwise specifically provided for in this part must be by 
motion. After the assignment of a presiding officer to a proceeding and 
before the issuance of his or her recommended or initial decision, all 
motions must be addressed to and ruled upon by the presiding officer 
unless the subject matter of the motion is beyond his or her authority, 
in which event the matter must be referred to the Commission. If the 
proceeding is not before the presiding officer, motions must be 
designated as petitions and must be addressed to and ruled upon by the 
Commission.
    (b) Motions must be in writing, except that a motion made at a 
hearing may be sufficient if stated orally upon the record.
    (c) Oral argument upon a written motion may be permitted at the 
discretion of the presiding officer or the Commission.
    (d) A repetitious motion will not be entertained.
    (e) All written motions must state clearly and concisely the 
purpose of and the relief sought by the motion, the statutory or 
principal authority relied upon, and the facts claimed to constitute 
the grounds supporting the relief requested; and must conform with the 
requirements of subpart H of this part.
    (f) Any party may file and serve a response to any written motion, 
pleading, petition, application, etc., permitted under this part except 
as otherwise provided respecting answers (Sec.  502.62), shortened 
procedure (subpart K of this part), briefs (Sec.  502.221), exceptions 
(Sec.  502.227), and reply to petitions for attorney fees under the 
Equal Access to Justice Act (Sec.  502.503(b)(1)).
    (g) Dispositive and non-dispositive motions defined. For the 
purpose of these rules, dispositive motion means a motion for decision 
on the pleadings; motion for summary decision or partial summary 
decision; motion to dismiss all or part of a proceeding or party to a 
proceeding; motion for involuntary dismissal; motion for initial 
decision on default; or any other motion for a final determination of 
all or part of a proceeding. All other motions, including all motions 
related to discovery, are non-dispositive motions. [Rule 69.]


Sec.  502.70  Procedure for dispositive motions.

    (a) A dispositive motion as defined in Sec.  502.69(g) of this 
subpart must include a concise statement of the legal basis of the 
motion with citation to legal authority and a statement of material 
facts with exhibits as appropriate.
    (b) A response to a dispositive motion must be served and filed 
within 15 days after the date of service of the motion. The response 
must include a concise statement of the legal basis of the response 
with citation to legal authority and specific responses to any 
statements of material facts with exhibits as appropriate.
    (c) A reply to the response to a dispositive motion may be filed 
within 7 days after the date of service of the response to the motion. 
A reply may not raise new grounds for relief or present matters that do 
not relate to the response and must not reargue points made in the 
opening motion.
    (d) The non-moving party may not file any further reply unless 
requested by the Commission or presiding officer, or upon a showing of 
extraordinary circumstances.
    (e) Page limits. Neither the motion nor the response may exceed 30 
pages, excluding exhibits or appendices, without leave of the presiding 
officer. A reply may not exceed 15 pages. [Rule 70.]


Sec.  502.71  Procedure for non-dispositive motions.

    (a) Duty to confer. Before filing a non-dispositive motion as 
defined in Sec.  502.69(g) of this subpart, the parties must attempt to 
discuss the anticipated motion with each other in a good faith effort 
to determine whether there is any opposition to the relief sought and, 
if there is opposition, to narrow the areas of disagreement. The moving 
party must state within the body of the motion what attempt was made or 
that the discussion occurred and whether the motion is opposed.
    (b) A response to a non-dispositive motion must be served and filed 
within 7 days after the date of service of the motion.
    (c) The moving party may not file a reply to a response to a non-
dispositive motion unless requested by the Commission or presiding 
officer, or upon a showing of extraordinary circumstances.
    (d) Page limits. Neither the motion nor the response may exceed 10 
pages, excluding exhibits or appendices, without leave of the presiding 
officer. [Rule 71.]


Sec.  502.72  Dismissals.

    (a) Voluntary dismissal--(1) By the complainant. The complainant 
may dismiss an action without an order from the presiding officer by 
filing a notice of dismissal before the opposing party serves either an 
answer, a motion to dismiss, or a motion for summary decision; or a 
stipulation of dismissal signed by all parties who have appeared. 
Unless the notice or stipulation states otherwise, the dismissal is 
without prejudice.
    (2) By order of the presiding officer. Except as provided in 
paragraph (a)(1) of this section, an action may be

[[Page 12535]]

dismissed at the complainant's request only by order of the presiding 
officer or the Commission, on terms the presiding officer considers 
proper. If a respondent has pleaded a counterclaim before being served 
with the complainant's motion to dismiss, the action may be dismissed 
over the respondent's objection only if the counterclaim can remain 
pending for independent adjudication. Unless the order states 
otherwise, a dismissal under this paragraph is without prejudice.
    (b) Involuntary dismissal; effect. If the complainant fails to 
prosecute or to comply with these rules or an order in the proceeding, 
a respondent may move to dismiss the action or any claim against it. 
Unless the dismissal order states otherwise, a dismissal under this 
subpart, except one for lack of jurisdiction or failure to join a 
party, operates as an adjudication on the merits. [Rule 72.]


Sec.  502.73  Order to show cause.

    The Commission may institute a proceeding by order to show cause. 
The order must be served upon all persons named therein, must include 
the information specified in Sec.  502.143, must require the person 
named therein to answer, and may require such person to appear at a 
specified time and place and present evidence upon the matters 
specified. [Rule 73.]


Sec.  502.74  Exemption procedures--General.

    (a) Authority. The Commission, upon application or on its own 
motion, may by order or regulation exempt for the future any class of 
agreements between persons subject to the Shipping Act of 1984 or any 
specified activity of those persons from any requirement of the Act if 
the Commission finds that the exemption will not result in substantial 
reduction in competition or be detrimental to commerce. The Commission 
may attach conditions to any exemption and may, by order, revoke any 
exemption.
    (b) Application for exemption. Any person may petition the 
Commission for an exemption or revocation of an exemption of any class 
of agreements or an individual agreement or any specified activity 
pursuant to section 16 of the Shipping Act of 1984 (46 U.S.C. 40103). A 
petition for exemption must state the particular requirement of the 
Shipping Act of 1984 for which exemption is sought. The petition must 
also include a statement of the reasons why an exemption should be 
granted or revoked, must provide information relevant to any finding 
required by the Act and must comply with Sec.  502.76. Where a petition 
for exemption of an individual agreement is made, the application must 
include a copy of the agreement. Unless a petition specifically 
requests an exemption by regulation, the Commission must evaluate the 
petition as a request for an exemption by order.
    (c) Participation by interested persons. No order or regulation of 
exemption or revocation of exemption may be issued unless opportunity 
for hearing has been afforded interested persons and departments and 
agencies of the United States.
    (d) Federal Register notice. Notice of any proposed exemption or 
revocation of exemption, whether upon petition or the Commission's own 
motion, must be published in the Federal Register. The notice must 
include when applicable:
    (1) A short title for the proposed exemption or the title of the 
existing exemption;
    (2) The identity of the party proposing the exemption or seeking 
revocation;
    (3) A concise summary of the agreement or class of agreements or 
specified activity for which exemption is sought, or the exemption 
which is to be revoked;
    (4) A statement that the petition and any accompanying information 
are available for inspection in the Commission's offices in Washington, 
DC; and
    (5) The final date for filing comments regarding the proposal. 
[Rule 74.]


Sec.  502.75  Declaratory orders and fee.

    (a)(1) The Commission may, in its discretion, issue a declaratory 
order to terminate a controversy or to remove uncertainty.
    (2) Petitions for the issuance thereof must: State clearly and 
concisely the controversy or uncertainty; name the persons and cite the 
statutory authority involved; include a complete statement of the facts 
and grounds prompting the petition, together with full disclosure of 
petitioner's interest; be served upon all parties named therein; and 
conform to the requirements of subpart H of this part.
    (3) Petitions must be accompanied by remittance of a $241 filing 
fee.
    (b) Petitions under this section must be limited to matters 
involving conduct or activity regulated by the Commission under 
statutes administered by the Commission. The procedures of this section 
must be invoked solely for the purpose of obtaining declaratory rulings 
which will allow persons to act without peril upon their own view. 
Controversies involving an allegation of violation by another person of 
statutes administered by the Commission, for which coercive rulings 
such as payment of reparation or cease and desist orders are sought, 
are not proper subjects of petitions under this section. Such matters 
must be adjudicated either by filing of a complaint under section 11 of 
the Shipping Act of 1984 (46 U.S.C. 41301-41302, 41305-41307(a)) and 
Sec.  502.62, or by filing of a petition for investigation under Sec.  
502.76.
    (c) Petitions under this section must be accompanied by the 
complete factual and legal presentation of petitioner as to the desired 
resolution of the controversy or uncertainty, or a detailed explanation 
why such can only be developed through discovery or evidentiary 
hearing.
    (d) Responses to the petition must contain the complete factual and 
legal presentation of the responding party as to the desired 
resolution, or a detailed explanation why such can only be developed 
through discovery or evidentiary hearing. Responses must conform to the 
requirements of Sec.  502.69 and must be served pursuant to subpart H 
of this part.
    (e) No additional submissions will be permitted unless ordered or 
requested by the Commission or the presiding officer. If discovery or 
evidentiary hearing on the petition is deemed necessary by the parties, 
such must be requested in the petition or responses. Requests must 
state in detail the facts to be developed, their relevance to the 
issues, and why discovery or hearing procedures are necessary to 
develop such facts.
    (f)(1) A notice of filing of any petition which meets the 
requirements of this section must be published in the Federal Register. 
The notice will indicate the time for filing of responses to the 
petition. If the controversy or uncertainty is one of general public 
interest, and not limited to specifically named persons, opportunity 
for response will be given to all interested persons including the 
Commission's Bureau of Enforcement.
    (2) In the case of petitions involving a matter limited to 
specifically named persons, participation by persons not named therein 
will be permitted only upon grant of intervention by the Commission 
pursuant to Sec.  502.68.
    (3) Petitions for leave to intervene must be submitted on or before 
the response date and must be accompanied by intervenor's complete 
response including its factual and legal presentation in the matter.
    (g) Petitions for declaratory order which conform to the 
requirements of this section will be referred to a formal docket. 
Referral to a formal docket is not to be construed as the exercise by 
the Commission of its discretion to issue an

[[Page 12536]]

order on the merits of the petition. [Rule 75.]


Sec.  502.76  Petitions--General and fee.

    (a) Except when submitted in connection with a formal proceeding, 
all claims for relief or other affirmative action by the Commission, 
including appeals from Commission staff action, except as otherwise 
provided in this part, must be by written petition, which must state 
clearly and concisely the petitioner's grounds of interest in the 
subject matter, the facts relied upon and the relief sought, must cite 
by appropriate reference the statutory provisions or other authority 
relied upon for relief, must be served upon all parties named therein, 
and must conform otherwise to the requirements of subpart H of this 
part. Responses thereto must conform to the requirements of Sec.  
502.67.
    (b) Petitions must be accompanied by remittance of a $241 filing 
fee. [Rule 76.]


Sec.  502.77  Proceedings involving assessment agreements.

    (a) In complaint proceedings involving assessment agreements filed 
under section 5(e) of the Shipping Act of 1984 (46 U.S.C. 40301(e), 
40305), the Notice of Filing of Complaint and Assignment will specify a 
date before which the initial decision will be issued, which date will 
not be more than eight months from the date the complaint was filed.
    (b) Any party to a proceeding conducted under this section who 
desires to utilize the prehearing discovery procedures provided by 
subpart L of this part must commence doing so at the time it files its 
initial pleading, i.e., complaint, answer, or petition for leave to 
intervene. Discovery matters accompanying complaints must be filed with 
the Secretary of the Commission for service pursuant to Sec.  502.113. 
Answers or objections to discovery requests must be subject to the 
normal provisions set forth in subpart L.
    (c) Exceptions to the decision of the presiding officer, filed 
pursuant to Sec.  502.227, must be filed and served no later than 15 
days after date of service of the initial decision. Replies thereto 
must be filed and served no later than 15 days after date of service of 
exceptions. In the absence of exceptions, the decision of the presiding 
officer must be final within 30 days from the date of service, unless 
within that period, a determination to review is made in accordance 
with the procedures outlined in Sec.  502.227. [Rule 77.]


Sec.  502.78  Brief of an amicus curiae.

    (a) A brief of an amicus curiae may be filed only by leave of the 
Commission or the presiding officer granted on motion with notice to 
the parties, or at the request of the Commission or the presiding 
officer, except that leave must not be required when the brief is 
presented by the United States or any agency or officer of the United 
States. The brief may be conditionally filed with the motion for leave. 
A brief of an amicus curiae must be limited to questions of law or 
policy.
    (b) A motion for leave to file an amicus brief must identify the 
interest of the applicant and must state the reasons why such a brief 
is desirable.
    (c) Except as otherwise permitted by the Commission or the 
presiding officer, an amicus curiae must file its brief no later than 7 
days after the initial brief of the party it supports is received at 
the Commission. An amicus curiae that is not supporting either party 
must file its brief no later than 7 days after the initial brief of the 
first party filing a brief is received at the Commission. The 
Commission or the presiding officer must grant leave for a later filing 
only for cause shown, in which event the period within which an 
opposing party may answer must be specified.
    (d) A motion of an amicus curiae to participate in oral argument 
will be granted only in accordance with the requirements of Sec.  
502.241. [Rule 78.]
    3. Revise subpart L to read as follows:

Subpart L--Disclosures and Discovery


Sec.  502.201  Duty to disclose; general provisions governing 
discovery.

    (a) Applicability. Unless otherwise stated in subpart S, T, or any 
other subpart of this part, the procedures described in this subpart 
are available in all adjudicatory proceedings under the Shipping Act of 
1984.
    (b) Initial disclosures. Except as otherwise stipulated or ordered 
by the Commission or presiding officer, and except as provided in this 
subpart related to disclosure of expert testimony, all parties must, 
within 7 days of service of a respondent's answer to the complaint or 
Order of Investigation and Hearing and without awaiting a discovery 
request, provide to each other:
    (1) The name and, if known, the address and telephone number of 
each individual likely to have discoverable information that the 
disclosing party may use to support its claims or defenses, unless the 
use would be solely for impeachment;
    (2) A copy, or a description by category and location, of all 
documents, electronically stored information, and tangible things that 
the disclosing party has in its possession, custody, or control and may 
use to support its claims or defenses, unless the use would be solely 
for impeachment;
    (3) An estimate of any damages claimed by the disclosing party who 
must also make available for inspection and copying the documents or 
other evidentiary material, unless privileged or protected from 
disclosure, on which the estimate is based, including materials bearing 
on the nature and extent of injuries suffered.
    (c) For parties served or joined later. A party that is first 
served or otherwise joined after the answer is made must make the 
initial disclosures within 5 days after an answer is filed by the late-
joined party, unless a different time is set by stipulation or order of 
presiding officer. All parties must also produce to the late-joined 
party any initial disclosures previously made.
    (d) Disclosure of expert testimony--(1) In general. A party must 
disclose to the other parties the identity of any witness it may use in 
the proceeding to present evidence as an expert.
    (2) Witnesses who are required to provide a written report. Unless 
otherwise stipulated or ordered by the presiding officer, if the 
witness is one retained or specially employed to provide expert 
testimony in the proceeding or one whose duties as the party's employee 
regularly involve giving expert testimony, the disclosure must be 
accompanied by a written report, prepared and signed by the witness. 
The report must contain:
    (i) A complete statement of all opinions the witness will express 
and the basis and reasons for them;
    (ii) The facts or data considered by the witness in forming them;
    (iii) Any exhibits that will be used to summarize or support them;
    (iv) The witness's qualifications, including a list of all 
publications authored in the previous 10 years;
    (v) A list of all other proceedings or cases in which, during the 
previous 4 years, the witness testified as an expert in a trial, an 
administrative proceeding, or by deposition; and
    (vi) A statement of the compensation to be paid for the study and 
testimony in the proceeding.
    (3) Witnesses who are not required to provide a written report. 
Unless otherwise stipulated or ordered by the presiding officer, if the 
witness is not required to provide a written report under paragraph (2) 
above, the disclosure must state:

[[Page 12537]]

    (i) The subject matter on which the witness is expected to present 
evidence as an expert; and
    (ii) Summary of the facts and opinions to which the witness is 
expected to testify.
    (4) Time to disclose expert testimony. The time for disclosure of 
expert testimony must be addressed by the parties when they confer as 
provided in paragraph (h) of this section and, if applicable, must be 
included in the proposed discovery schedule submitted to the presiding 
officer.
    (e) Scope of discovery and limits. (1) Unless otherwise limited by 
the presiding officer, or as otherwise provided in this subpart, the 
scope of discovery is as follows: Parties may obtain discovery 
regarding any nonprivileged matter that is relevant to any party's 
claim or defense--including the existence, description, nature, 
custody, condition, and location of any documents or other tangible 
things and the identity and location of persons who know of any 
discoverable matter. For good cause, the presiding officer may order 
discovery of any matter relevant to the subject matter involved in the 
action. Relevant information need not be admissible at hearing if the 
discovery appears reasonably calculated to lead to the discovery of 
admissible evidence.
    (2) Limitations on frequency and extent--
    (i) Specific limitations on electronically stored information. A 
party need not provide discovery of electronically stored information 
from sources that the party identifies as not reasonably accessible 
because of undue burden or cost. On motion to compel discovery or for a 
protective order, the party from whom discovery is sought must show 
that the information is not reasonably accessible because of undue 
burden or cost. If that showing is made, the presiding officer may 
nonetheless order discovery from such sources if the requesting party 
shows good cause. The presiding officer may specify conditions for the 
discovery.
    (ii) When required. On motion or on its own, the presiding officer 
may limit the frequency or extent of discovery otherwise allowed by 
these rules if the presiding officer determines that:
    (A) The discovery sought is unreasonably cumulative or duplicative, 
or can be obtained from some other source that is more convenient, less 
burdensome, or less expensive;
    (B) The party seeking discovery has had ample opportunity to obtain 
the information by discovery in the action; or
    (C) The burden or expense of the proposed discovery outweighs its 
likely benefit, considering the needs of the proceeding, the amount in 
controversy, the parties' resources, the importance of the issues at 
stake in the action, and the importance of the discovery in resolving 
the issues.
    (f) Scope of discovery and limits--experts. (1) A party may depose 
any person who has been identified as an expert whose opinions may be 
presented in a proceeding. If a report is required of the witness, the 
deposition may be conducted only after the report is provided.
    (2) Drafts of any report or disclosure required by these rules are 
not discoverable regardless of the form in which the draft is recorded.
    (3) Communications between the party's attorney and any expert 
witness required to provide a report are not discoverable regardless of 
the form of communications, except to the extent that the 
communications relate to compensation for the expert's study or 
testimony; identify facts or data that the party's attorney provided 
and that the expert considered in forming the opinions to be expressed; 
or identify assumptions that the party's attorney provided and that the 
expert relied on in forming the opinions to be expressed.
    (4) A party may not by interrogatories or deposition discover facts 
known or opinions held by an expert who has been retained or specially 
employed by another party in anticipation of litigation or to prepare 
for a proceeding and who is not expected to be presented as a witness; 
provided, however, that the presiding officer may permit such discovery 
and may impose such conditions as deemed appropriate upon a showing of 
exceptional circumstances under which it is impracticable for the party 
to obtain facts or opinions on the same subject by other means.
    (g) Completion of discovery. Discovery must be completed within 120 
days of the service of a respondent's answer to the complaint or Order 
of Investigation and Hearing.
    (h) Duty of the parties to confer. In all proceedings in which the 
procedures of this subpart are used, it is the duty of the parties to 
confer within 14 days after receipt of a respondent's answer to a 
complaint or Order of Investigation and Hearing in order to: Establish 
a schedule for the completion of discovery, including disclosures and 
discovery related to experts, within the 120-day period prescribed in 
paragraph (g) of this section; resolve to the fullest extent possible 
disputes relating to discovery matters; and expedite, limit, or 
eliminate discovery by use of admissions, stipulations and other 
techniques. The parties must submit the schedule to the presiding 
officer not later than 5 days after the conference. Nothing in this 
rule should be construed to preclude the parties from conducting 
discovery and conferring at an earlier date.
    (i)(1) Conferences by order of the presiding officer. The presiding 
officer may at any time order the parties or their attorneys to 
participate in a conference at which the presiding officer may direct 
the proper use of the procedures of this subpart or make such orders as 
may be necessary to resolve disputes with respect to discovery and to 
prevent delay or undue inconvenience.
    (2) Resolution of disputes. After making every reasonable effort to 
resolve discovery disputes, a party may request a conference or rulings 
from the presiding officer on such disputes. If necessary to prevent 
undue delay or otherwise facilitate conclusion of the proceeding, the 
presiding officer may order a hearing to commence before the completion 
of discovery.
    (j) Protective orders--(1) In general. A party or any person from 
whom discovery is sought may move for a protective order. The motion 
must include a certification that the movant has in good faith 
conferred or attempted to confer with other affected parties in an 
effort to resolve the dispute without Commission or presiding officer 
action. The Commission or presiding officer may, for good cause, issue 
an order to protect a party or person from annoyance, embarrassment, 
oppression, or undue burden or expense, including one or more of the 
following:
    (i) Forbidding the disclosure or discovery;
    (ii) Specifying terms, including time and place, for the disclosure 
or discovery;
    (iii) Prescribing a discovery method other than the one selected by 
the party seeking discovery;
    (iv) Forbidding inquiry into certain matters, or limiting the scope 
of disclosure or discovery to certain matters;
    (v) Designating the persons who may be present while the discovery 
is conducted;
    (vi) Requiring that a deposition be sealed and opened only on 
Commission or presiding officer order;
    (vii) Requiring that a trade secret or other confidential research, 
development, or commercial information not be disclosed or be disclosed 
only in a specified way; or
    (viii) Requiring that the parties simultaneously file specified 
documents or information in sealed envelopes, to

[[Page 12538]]

be opened as the Commission or presiding officer directs.
    (2) Ordering discovery. If a motion for a protective order is 
denied in whole or in part, the Commission or presiding officer may, on 
just terms, order that any party or person provide or permit discovery.
    (k) Supplementing responses. A party who has made a disclosure 
under paragraph (b) of this section, or who has responded to an 
interrogatory, request for production, or request for admission, must 
supplement or correct its disclosure or response:
    (1) In a timely manner if the party learns that in some material 
respect the disclosure or response is incomplete or incorrect, and if 
the additional or corrective information has not otherwise been made 
known to the other parties during the discovery process or in written 
communication; or
    (2) As ordered by the presiding officer.
    (l) Stipulations. Unless the presiding officer orders otherwise, 
the parties may stipulate that other procedures governing or limiting 
discovery be modified, but a stipulation extending the time for any 
form of discovery must have presiding officer's approval if it would 
interfere with the time set for completing discovery, for adjudicating 
a motion, or for hearing. [Rule 201.]


Sec.  502.202  Persons before whom depositions may be taken.

    (a) Within the United States--(1) In general. Within the United 
States or a territory or insular possession subject to United States 
jurisdiction, a deposition must be taken before:
    (i) An officer authorized to administer oaths either by federal law 
or by the law in the place of examination; or
    (ii) A person appointed by the Commission or the presiding officer 
to administer oaths and take testimony.
    (b) In a foreign country--(1) In general. A deposition may be taken 
in a foreign country:
    (i) Under an applicable treaty or convention;
    (ii) Under a letter of request, whether or not captioned a ``letter 
rogatory'';
    (iii) On notice, before a person authorized to administer oaths 
either by federal law or by the law in the place of examination; or
    (iv) Before a person authorized by the Commission or the presiding 
officer to administer any necessary oath and take testimony.
    (2) Issuing a letter of request or an authorization. A letter of 
request, an authorization, or both may be issued:
    (i) On appropriate terms after an application and notice of it; and
    (ii) Without a showing that taking the deposition in another manner 
is impracticable or inconvenient.
    (3) Form of a request, notice, or authorization. When a letter of 
request or any other device is used according to a treaty or 
convention, it must be captioned in the form prescribed by that treaty 
or convention. A letter of request may be addressed ``To the 
Appropriate Authority in [name of country].'' A deposition notice or an 
authorization must designate by name or descriptive title the person 
before whom the deposition is to be taken.
    (4) Letter of request--admitting evidence. Evidence obtained in 
response to a letter of request need not be excluded merely because it 
is not a verbatim transcript, because the testimony was not taken under 
oath, or because of any similar departure from the requirements for 
depositions taken within the United States.
    (c) Disqualification. A deposition must not be taken before a 
person who is any party's relative, employee, or attorney; who is 
related to or employed by any party's attorney; or who is financially 
interested in the action. [Rule 202.]


Sec.  502.203  Depositions by oral examination.

    (a) When a deposition may be taken--(1) Without leave. A party may, 
by oral questions, depose any person, including a party, without leave 
of the presiding officer except as provided in Sec.  502.203(a)(2). The 
deponent's attendance may be compelled by subpoena under subpart I of 
this part.
    (2) With leave. A party must obtain leave of the presiding officer, 
if the parties have not stipulated to the deposition and:
    (i) The deposition would result in more than 20 depositions being 
taken under this rule or Sec.  502.204 by any party; or
    (ii) The deponent has already been deposed in the case.
    (b) Notice of the deposition; other formal requirements--(1) Notice 
in general. A party who wants to depose a person by oral questions must 
give reasonable written notice to every other party. The notice must 
state the time and place of the deposition and, if known, the 
deponent's name and address. If the name is unknown, the notice must 
provide a general description sufficient to identify the person or the 
particular class or group to which the person belongs.
    (2) Producing documents. If a subpoena duces tecum is to be served 
on the deponent, the materials designated for production, as set out in 
the subpoena, must be listed in the notice or in an attachment. The 
notice to a party deponent may be accompanied by a request under Sec.  
502.206 to produce documents and tangible things at the deposition.
    (3) Method of recording.
    (i) Method stated in the notice. The party who notices the 
deposition must state in the notice the method for recording the 
testimony. Unless the presiding officer orders otherwise, testimony may 
be recorded by audio, audiovisual, or stenographic means. The noticing 
party bears the recording costs. Any party may arrange to transcribe a 
deposition.
    (ii) Additional method. With prior notice to the deponent and other 
parties, any party may designate another method for recording the 
testimony in addition to that specified in the original notice. That 
party bears the expense of the additional record or transcript unless 
the presiding officer orders otherwise.
    (4) By remote means. The parties may stipulate, or the presiding 
officer may on motion order, that a deposition be taken by telephone or 
other remote means.
    (5) Officer's duties--
    (i) Before the deposition. Unless the parties stipulate otherwise, 
a deposition must be conducted before an officer appointed or 
designated under Sec.  502.202. The officer must begin the deposition 
with an on-the-record statement that includes:
    (A) The officer's name and business address;
    (B) The date, time, and place of the deposition;
    (C) The deponent's name;
    (D) The officer's administration of the oath or affirmation to the 
deponent; and
    (E) The identity of all persons present.
    (ii) Conducting the deposition; avoiding distortion. If the 
deposition is recorded nonstenographically, the officer must repeat the 
items in Sec.  502.203(b)(5)(i)(A)-(C) at the beginning of each unit of 
the recording medium. The deponent's and attorneys' appearance or 
demeanor must not be distorted through recording techniques.
    (iii) After the deposition. At the end of a deposition, the officer 
must state on the record that the deposition is complete and must set 
out any stipulations made by the attorneys about custody of the 
transcript or recording and of the exhibits, or about any other 
pertinent matters.
    (6) Notice or subpoena directed to an organization. In its notice 
or subpoena, a party may name as the deponent a public or private 
corporation, a partnership, an association, a governmental agency, or 
other entity

[[Page 12539]]

and must describe with reasonable particularity the matters for 
examination. The named organization must then designate one or more 
officers, directors, or managing representatives, or designate other 
persons who consent to testify on its behalf; and it may set out the 
matters on which each person designated will testify. A subpoena must 
advise a nonparty organization of its duty to make this designation. 
The persons designated must testify about information known or 
reasonably available to the organization. This paragraph (6) does not 
preclude a deposition by any other procedure allowed by these rules.
    (c) Examination and cross-examination; record of the examination; 
objections; written questions--
    (1) Examination and cross-examination. The examination and cross-
examination of a deponent proceed as they would at hearing under the 
provisions of Sec.  502.154. After putting the deponent under oath or 
affirmation, the officer must record the testimony by the method 
designated under Sec.  502.203(b)(3). The testimony must be recorded by 
the officer personally or by a person acting in the presence and under 
the direction of the officer.
    (2) Objections. An objection at the time of the examination, 
whether to evidence, to a party's conduct, to the officer's 
qualifications, to the manner of taking the deposition, or to any other 
aspect of the deposition, must be noted on the record, but the 
examination still proceeds; the testimony is taken subject to any 
objection. An objection must be stated concisely in a nonargumentative 
and nonsuggestive manner. A person may instruct a deponent not to 
answer only when necessary to preserve a privilege, to enforce a 
limitation ordered by the presiding officer, or to present a motion 
under Sec.  502.203(d)(2).
    (3) Participating through written questions. Instead of 
participating in the oral examination, a party may serve written 
questions in a sealed envelope on the party noticing the deposition, 
who must deliver them to the officer. The officer must ask the deponent 
those questions and record the answers verbatim.
    (d) Duration; sanction; motion to terminate or limit--(1) Duration. 
Unless otherwise stipulated or ordered by the presiding officer, a 
deposition is limited to 1 day of 7 hours. The presiding officer must 
allow additional time consistent with Sec.  502.201(e)(2) if needed to 
fairly examine the deponent or if the deponent, another person, or any 
other circumstance impedes or delays the examination.
    (2) Motion to terminate or limit--
    (i) Grounds. At any time during a deposition, the deponent or a 
party may move to terminate or limit it on the ground that it is being 
conducted in bad faith or in a manner that unreasonably annoys, 
embarrasses, or oppresses the deponent or party. The motion may be 
filed with the presiding officer. If the objecting deponent or party so 
demands, the deposition must be suspended for the time necessary to 
obtain an order.
    (ii) Order. The presiding officer may order that the deposition be 
terminated or may limit its scope and manner as provided in Sec.  
502.201(j). If terminated, the deposition may be resumed only by order 
of the Commission or presiding officer.
    (e) Review by the witness; changes--(1) Review; statement of 
changes. On request by the deponent or a party before the deposition is 
completed, the deponent must be allowed 15 days after being notified by 
the officer that the transcript or recording is available in which:
    (i) To review the transcript or recording; and
    (ii) If there are changes in form or substance, to sign a statement 
listing the changes and the reasons for making them.
    (2) Changes indicated in the officer's certificate. The officer 
must note in the certificate prescribed by Sec.  502.203(f)(1) whether 
a review was requested and, if so, must attach any changes the deponent 
makes during the 15-day period.
    (f) Certification and delivery; exhibits; copies of the transcript 
or recording; filing--
    (1) Certification and delivery. The officer must certify in writing 
that the witness was duly sworn and that the deposition, transcript or 
recording accurately records the witness's testimony. The certificate 
must accompany the record of the deposition. Unless the presiding 
officer orders otherwise, the officer must seal the deposition in an 
envelope or package bearing the title of the action and marked 
``Deposition of [witness's name]'' and must promptly send it to the 
attorney who arranged for the transcript or recording. The attorney 
must store it under conditions that will protect it against loss, 
destruction, tampering, or deterioration.
    (2) Documents and tangible things--
    (i) Originals and copies. Documents and tangible things produced 
for inspection during a deposition must, on a party's request, be 
marked for identification and attached to the deposition. Any party may 
inspect and copy them. But if the person who produced them wants to 
keep the originals, the person may:
    (A) Offer copies to be marked, attached to the deposition, and then 
used as originals, after giving all parties a fair opportunity to 
verify the copies by comparing them with the originals; or
    (B) Give all parties a fair opportunity to inspect and copy the 
originals after they are marked, in which event the originals may be 
used as if attached to the deposition.
    (ii) Order regarding the originals. Any party may move for an order 
that the originals be attached to the deposition pending final 
disposition of the case.
    (3) Copies of the transcript or recording. Unless otherwise 
stipulated or ordered by the presiding officer, the officer must retain 
the stenographic notes of a deposition taken stenographically or a copy 
of the recording of a deposition taken by another method. When paid 
reasonable charges, the officer must furnish a copy of the transcript 
or recording to any party or the deponent. [Rule 203.]


Sec.  502.204  Depositions by written questions.

    (a) When a deposition may be taken--(1) Without leave. A party may, 
by written questions, depose any person, including a party, without 
leave of the presiding officer except as provided in paragraph (a)(2) 
of this section. The deponent's attendance may be compelled by subpoena 
under subpart I of this part.
    (2) With leave. A party must obtain leave of the presiding officer, 
if the parties have not stipulated to the deposition and:
    (i) The deposition would result in more than 20 depositions being 
taken under this rule or Sec.  502.203 by any party;
    (ii) The deponent has already been deposed in the case.
    (3) Service; required notice. A party who wants to depose a person 
by written questions must serve them on every other party, with a 
notice stating, if known, the deponent's name and address. If the name 
is unknown, the notice must provide a general description sufficient to 
identify the person or the particular class or group to which the 
person belongs. The notice must also state the name or descriptive 
title and the address of the officer before whom the deposition will be 
taken.
    (4) Questions directed to an organization. A public or private 
corporation, a partnership, an association, or a governmental agency

[[Page 12540]]

may be deposed by written questions in accordance with Sec.  
502.203(b)(6).
    (5) Questions from other parties. Any questions to the deponent 
from other parties must be served on all parties as follows: Cross-
questions, within 14 days after being served with the notice and direct 
questions; redirect questions, within 7 days after being served with 
cross-questions; and recross-questions, within 7 days after being 
served with redirect questions. The presiding officer may, for good 
cause, extend or shorten these times.
    (b) Delivery to the officer; officer's duties. The party who 
noticed the deposition must deliver to the officer before whom the 
deposition will be taken a copy of all the questions served and of the 
notice. The officer must promptly proceed to:
    (1) Take the deponent's testimony in response to the questions;
    (2) Prepare and certify the deposition; and
    (3) Send it to the party, attaching a copy of the questions and of 
the notice.
    (c) Notice of completion or filing--(1) Completion. The party who 
noticed the deposition must notify all other parties when it is 
completed.
    (2) Filing. A party who files the deposition must promptly notify 
all other parties of the filing. [Rule 204.]


Sec.  502.205  Interrogatories to parties.

    (a) In general--(1) Number. Unless otherwise stipulated or ordered 
by the presiding officer, a party may serve on any other party no more 
than 50 written interrogatories, including all discrete subparts. Leave 
to serve additional interrogatories may be granted to the extent 
consistent with Sec.  502.201(e)(2).
    (2) Scope. An interrogatory may relate to any matter that may be 
inquired into under Sec.  502.201(e)-(f). An interrogatory is not 
objectionable merely because it asks for an opinion or contention that 
relates to fact or the application of law to fact, but the presiding 
officer may order that the interrogatory need not be answered until 
designated discovery is complete, or until a prehearing conference or 
some other time.
    (b) Answers and objections--(1) Responding party. The 
interrogatories must be answered:
    (i) By the party to whom they are directed; or
    (ii) If that party is a public or private corporation, a 
partnership, an association, or a governmental agency, by any officer 
or representative, who must furnish the information available to the 
party.
    (2) Time to respond. The responding party must serve its answers 
and any objections within 30 days after being served with the 
interrogatories. A shorter or longer time may be stipulated to as 
provided in Sec.  502.201(l) of this subpart or be ordered by the 
presiding officer.
    (3) Answering each interrogatory. Each interrogatory must, to the 
extent it is not objected to, be answered separately and fully in 
writing under oath.
    (4) Objections. The grounds for objecting to an interrogatory must 
be stated with specificity. Any ground not stated in a timely objection 
is waived unless the presiding officer, for good cause, excuses the 
failure.
    (5) Signature. The person who makes the answers must sign them, and 
the attorney who objects must sign any objections.
    (c) Use. An answer to an interrogatory may be used to the extent 
allowed by the rules in this part.
    (d) Option to produce business records. If the answer to an 
interrogatory may be determined by examining, auditing, compiling, 
abstracting, or summarizing a party's business records (including 
electronically stored information), and if the burden of deriving or 
ascertaining the answer will be substantially the same for either 
party, the responding party may answer by:
    (1) Specifying the records that must be reviewed, in sufficient 
detail to enable the interrogating party to locate and identify them as 
readily as the responding party could; and
    (2) Giving the interrogating party a reasonable opportunity to 
examine and audit the records and to make copies, compilations, 
abstracts, or summaries. [Rule 205.]


Sec.  502.206  Producing documents, electronically stored information, 
and tangible things, or entering onto land, for inspection and other 
purposes.

    (a) In general. A party may serve on any other party a request 
within the scope of Sec.  502.201(e)-(f):
    (1) To produce and permit the requesting party or its 
representative to inspect, copy, test, or sample the following items in 
the responding party's possession, custody, or control:
    (i) Any designated documents or electronically stored information, 
including writings, drawings, graphs, charts, photographs, sound 
recordings, images, and other data or data compilations, stored in any 
medium from which information can be obtained either directly or, if 
necessary, after translation by the responding party into a reasonably 
usable form; or
    (ii) Any designated tangible things; or
    (2) To permit entry onto designated land or other property 
possessed or controlled by the responding party, so that the requesting 
party may inspect, measure, survey, photograph, test, or sample the 
property or any designated object or operation on it.
    (b) Procedure--(1) Contents of the request. The request:
    (i) Must describe with reasonable particularity each item or 
category of items to be inspected;
    (ii) Must specify a reasonable time, place, and manner for the 
inspection and for performing the related acts; and
    (iii) May specify the form or forms in which electronically stored 
information is to be produced.
    (2) Responses and objections.
    (i) Time to respond. The party to whom the request is directed must 
respond in writing within 30 days after being served. A shorter or 
longer time may be stipulated to as provided in Sec.  502.201(l) of 
this subpart or be ordered by the presiding officer.
    (ii) Responding to each item. For each item or category, the 
response must either state that inspection and related activities will 
be permitted as requested or state an objection to the request, 
including the reasons.
    (iii) Objections. An objection to part of a request must specify 
the part and permit inspection of the rest.
    (iv) Responding to a request for production of electronically 
stored information. The response may state an objection to a requested 
form for producing electronically stored information. If the responding 
party objects to a requested form, or if no form was specified in the 
request, the party must state the form or forms it intends to use.
    (v) Producing the documents or electronically stored information. 
Unless otherwise stipulated or ordered by the presiding officer, these 
procedures apply to producing documents or electronically stored 
information:
    (A) A party must produce documents as they are kept in the usual 
course of business or must organize and label them to correspond to the 
categories in the request;
    (B) If a request does not specify a form for producing 
electronically stored information, a party must produce it in a form or 
forms in which it is ordinarily maintained or in a reasonably usable 
form or forms; and
    (C) A party need not produce the same electronically stored 
information in more than one form.
    (c) Nonparties. By subpoena under subpart I of this part, a 
nonparty may be compelled to produce documents and tangible things or 
to permit an inspection. [Rule 206.]

[[Page 12541]]

Sec.  502.207  Requests for admission.

    (a) Scope and procedure--(1) Scope. A party may serve on any other 
party a written request to admit, for the purposes of the pending 
action only, the truth of any nonprivileged relevant matters relating 
to facts, the application of law to fact, or opinions about either, and 
the genuineness of any described documents.
    (2) Form; copies of documents. Each matter must be separately 
stated. A request to admit the genuineness of a document must be 
accompanied by a copy of the document unless it is, or has been, 
otherwise furnished or made available for inspection and copying.
    (3) Time to respond; effect of failure to respond. A matter is 
admitted unless, within 30 days after being served, the party to whom 
the request is directed serves on the requesting party a written answer 
or objection addressed to the matter and signed by the party or its 
attorney. A shorter or longer time for responding may be stipulated to 
as provided in Sec.  502.201(l) of this subpart or be ordered by the 
presiding officer.
    (4) Answer. If a matter is not admitted, the answer must 
specifically deny it or state in detail why the answering party cannot 
truthfully admit or deny it. A denial must fairly respond to the 
substance of the matter; and when good faith requires that a party 
qualify an answer or deny only a part of a matter, the answer must 
specify the part admitted and qualify or deny the rest. The answering 
party may assert lack of knowledge or information as a reason for 
failing to admit or deny only if the party states that it has made 
reasonable inquiry and that the information it knows or can readily 
obtain is insufficient to enable it to admit or deny.
    (5) Objections. The grounds for objecting to a request must be 
stated. A party may not object solely on the ground that the request 
presents a genuine issue for adjudication.
    (6) Motion regarding the sufficiency of an answer or objection. The 
requesting party may move for a determination of the sufficiency of an 
answer or objection. Unless the presiding officer finds an objection 
justified, the presiding officer must order that an answer be served. 
On finding that an answer does not comply with this rule, the presiding 
officer may order either that the matter is admitted or that an amended 
answer be served. The presiding officer may defer a decision until a 
prehearing conference or a specified time prior to hearing.
    (b) Effect of admission; withdrawal or amendment of admission. A 
matter admitted under this rule is conclusively established unless the 
presiding officer, on motion, permits the admission to be withdrawn or 
amended. The presiding officer may permit withdrawal or amendment if it 
would promote the presentation of the merits of the action and if the 
presiding officer is not persuaded that it would prejudice the 
requesting party in maintaining or defending the action on the merits. 
An admission under this rule is not an admission for any other purpose 
and cannot be used against the party in any other proceeding. [Rule 
207.]


Sec.  502.208  Use of discovery procedures directed to Commission staff 
personnel.

    (a) Discovery procedures described in Sec. Sec.  502.202, 502.203, 
502.204, 502.205, 502.206, and 502.207, directed to Commission staff 
personnel must be permitted and must be governed by the procedures set 
forth in those sections except as modified by paragraphs (b) and (c) of 
this section. All notices to take depositions, written interrogatories, 
requests for production of documents and other things, requests for 
admissions, and any motions in connection with the foregoing, must be 
served on the Secretary of the Commission.
    (b) The General Counsel must designate an attorney to represent any 
Commission staff personnel to whom any discovery requests or motions 
are directed. The attorney so designated must not thereafter 
participate in the Commission's decision-making process concerning any 
issue in the proceeding.
    (c) Rulings of the presiding officer issued under paragraph (a) of 
this section must become final rulings of the Commission unless an 
appeal is filed within 10 days after date of issuance of such rulings 
or unless the Commission on its own motion reverses, modifies, or stays 
such rulings within 20 days of their issuance. Replies to appeals may 
be filed within 10 days. No motion for leave to appeal is necessary in 
such instances and no ruling of the presiding officer must be effective 
until 20 days from date of issuance unless the Commission otherwise 
directs. [Rule 208.]


Sec.  502.209  Use of depositions at hearings.

    (a) Using depositions--(1) In general. At a hearing, all or part of 
a deposition may be used against a party on these conditions:
    (i) The party was present or represented at the taking of the 
deposition or had reasonable notice of it;
    (ii) It is used to the extent it would be admissible if the 
deponent were present and testifying; and
    (iii) The use is allowed by Sec.  502.209(a)(2) through (7).
    (2) Impeachment and other uses. Any party may use a deposition to 
contradict or impeach the testimony given by the deponent as a witness, 
or for any other purpose allowed by Sec.  502.156 of subpart J of this 
part.
    (3) Deposition of party, representative, or designee. An adverse 
party may use for any purpose the deposition of a party or anyone who, 
when deposed, was the party's officer, director, managing 
representative, or designee under Sec.  502.203(b)(6) or Sec.  
502.204(a)(4).
    (4) Unavailable witness. A party may use for any purpose the 
deposition of a witness, whether or not a party, if the Commission or 
presiding officer finds:
    (i) That the witness is dead;
    (ii) That the witness cannot attend or testify because of age, 
illness, infirmity, or imprisonment;
    (iii) That the party offering the deposition could not procure the 
witness's attendance by subpoena; or
    (iv) On motion and notice, that exceptional circumstances make it 
desirable, in the interest of justice and with due regard to the 
importance of live testimony at a hearing, to permit the deposition to 
be used.
    (5) Using part of a deposition. If a party offers in evidence only 
part of a deposition, an adverse party may require the offeror to 
introduce other parts that in fairness should be considered with the 
part introduced, and any party may itself introduce any other parts.
    (6) Substituting a party. Substituting a party does not affect the 
right to use a deposition previously taken.
    (7) Deposition taken in an earlier action. A deposition lawfully 
taken and, if required, filed in any federal or state court action may 
be used in a later action involving the same subject matter between the 
same parties, or their representatives or successors in interest, to 
the same extent as if taken in the later action. A deposition 
previously taken may also be used as allowed by Sec.  502.156 of 
subpart J of this part.
    (b) Objections to admissibility. Subject to Rules Sec.  502.202(b) 
and Sec.  502.209(d)(3), an objection may be made at a hearing to the 
admission of any deposition testimony that would be inadmissible if the 
witness were present and testifying.
    (c) Form of presentation. Unless the presiding officer orders 
otherwise, a party must provide a transcript of any deposition 
testimony the party offers, but may provide the presiding officer with 
the testimony in nontranscript form as well.

[[Page 12542]]

    (d) Waiver of objections--(1) To the notice. An objection to an 
error or irregularity in a deposition notice is waived unless promptly 
served in writing on the party giving the notice.
    (2) To the officer's qualification. An objection based on 
qualification of the officer before whom a deposition is to be taken is 
waived if not made:
    (i) Before the deposition begins; or
    (ii) Promptly after the basis for disqualification becomes known 
or, with reasonable diligence, could have been known.
    (3) To the taking of the deposition--
    (i) Objection to competence, relevance, or materiality. An 
objection to a deponent's competence, or to the competence, relevance, 
or materiality of testimony, is not waived by a failure to make the 
objection before or during the deposition, unless the ground for it 
might have been corrected at that time.
    (ii) Objection to an error or irregularity. An objection to an 
error or irregularity at an oral examination is waived if:
    (A) It relates to the manner of taking the deposition, the form of 
a question or answer, the oath or affirmation, a party's conduct, or 
other matters that might have been corrected at that time; and
    (B) It is not timely made during the deposition.
    (iii) Objection to a written question. An objection to the form of 
a written question under Sec.  502.204 of this subpart is waived if not 
served in writing on the party submitting the question within the time 
for serving responsive questions or, if the question is a recross-
question, within 7 days after being served with it.
    (4) To completing and returning the deposition. An objection to how 
the officer transcribed the testimony, or prepared, signed, certified, 
sealed, endorsed, sent, or otherwise dealt with the deposition, is 
waived unless a motion to suppress is made promptly after the error or 
irregularity becomes known or, with reasonable diligence, could have 
been known. [Rule 209.]


Sec.  502.210  Motions to compel initial disclosures or compliance with 
discovery requests; failure to comply with order to make disclosure or 
answer or produce documents; sanctions; enforcement.

    (a) Motion for order to compel initial disclosures or compliance 
with discovery requests. (1) A party may file a motion pursuant to 
Sec.  502.69 for an order compelling compliance with the requirement 
for initial disclosures provided in Sec.  502.201 or with its discovery 
requests as provided in this subpart, if a deponent fails to answer a 
question asked at a deposition or by written questions; a corporation 
or other entity fails to make a designation of an individual who will 
testify on its behalf; a party fails to answer an interrogatory; or a 
party fails to respond that inspection will be permitted, or fails to 
permit inspection, as requested under Sec.  502.206 of this subpart. 
For purposes of this section, a failure to make a disclosure, answer, 
or respond includes an evasive or incomplete disclosure, answer, or 
response.
    (2) A motion to compel must include:
    (i) A certification that the moving party has conferred in good 
faith or attempted to confer with the party failing to make initial 
disclosure or respond to discovery requests as provided in this subpart 
in an effort to obtain compliance without the necessity of a motion;
    (ii) A copy of the discovery requests that have not been answered 
or for which evasive or incomplete responses have been given. If the 
motion is limited to specific discovery requests, only those requests 
are to be included;
    (iii) If a disclosure has been made or an answer or response has 
been given, a copy of the disclosure, answer, or response in its 
entirety;
    (iv) A copy of the certificate of service that accompanied the 
discovery request; and
    (v) A request for relief and supporting argument, if any.
    (3) A party may file a response to the motion within 7 days of the 
service date of the motion. Unless there is a dispute with respect to 
the accuracy of the versions of the discovery requests, responses 
thereto, or the disclosures submitted by the moving party, the response 
must not include duplicative copies of them.
    (4) A reply to a response is not allowed unless requested by the 
presiding officer, or upon a showing of extraordinary circumstances.
    (b) Failure to comply with order compelling disclosures or 
discovery. If a party or a party's officer or authorized representative 
fails or refuses to obey an order requiring it to make disclosures or 
to respond to discovery requests, the presiding officer upon his or her 
own initiative or upon motion of a party may make such orders in regard 
to the failure or refusal as are just. A motion must include a 
certification that the moving party has conferred in good faith or 
attempted to confer with the disobedient party in an effort to obtain 
compliance without the necessity of a motion. An order of the presiding 
officer may:
    (1) Direct that the matters included in the order or any other 
designated facts must be taken to be established for the purposes of 
the action as the party making the motion claims;
    (2) Prohibit the disobedient party from supporting or opposing 
designated claims or defenses, or from introducing designated matters 
in evidence; or
    (3) Strike pleadings in whole or in part; staying further 
proceedings until the order is obeyed; or dismissing the action or 
proceeding or any party thereto, or rendering a decision by default 
against the disobedient party.
    (c) Enforcement of orders and subpoenas. In the event of refusal to 
obey an order or failure to comply with a subpoena, the Attorney 
General at the request of the Commission, or any party injured thereby 
may seek enforcement by a United States district court having 
jurisdiction over the parties. Any action with respect to enforcement 
of subpoenas or orders relating to depositions, written 
interrogatories, or other discovery matters must be taken within 20 
days of the date of refusal to obey or failure to comply. A private 
party must advise the Commission 5 days (excluding Saturdays, Sundays 
and legal holidays) before applying to the court of its intent to seek 
enforcement of such subpoenas and discovery orders.
    (d) Persons and documents located in a foreign country. Orders of 
the presiding officer directed to persons or documents located in a 
foreign country must become final orders of the Commission unless an 
appeal to the Commission is filed within 10 days after date of issuance 
of such orders or unless the Commission on its own motion reverses, 
modifies, or stays such rulings within 20 days of their issuance. 
Replies to appeals may be filed within 10 days. No motion for leave to 
appeal is necessary in such instances and no orders of the presiding 
officer must be effective until 20 days from date of issuance unless 
the Commission otherwise directs. [Rule 210.]

    By the Commission.
Karen V. Gregory,
Secretary.
[FR Doc. 2012-4690 Filed 2-29-12; 8:45 am]
BILLING CODE 6730-01-P