Procedures for Administrative Hearings Regarding the Assessment
of Civil Penalties Under Section 502(c)(5) of ERISA [04/09/2003]
Volume 68, Number 68, Page 17506-17511
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2570
RIN 1210-AA64
Procedures for Administrative Hearings Regarding the Assessment
of Civil Penalties Under Section 502(c)(5) of ERISA
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Final rule.
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SUMMARY: This document contains a final rule that describes procedures
relating to administrative hearings, in connection with the assessment
of civil penalties under section 502(c)(5) of the Employee Retirement
Income Security Act of 1974 (ERISA), as amended by the Health Insurance
Portability and Accountability Act of 1996 (HIPAA). Section 502(c)(5)
of ERISA authorizes the Secretary of Labor (the Secretary) to assess a
civil penalty against any person of up to $1,000 a day from the date of
the person's failure or refusal to file the information required to be
filed by such person with the Secretary under regulations prescribed
pursuant to section 101(g) of ERISA. Separate documents are also being
published today in the Federal Register containing final rules
implementing the reporting requirement under section 101(g) of ERISA
and final rules describing the manner in which the Department will
assess civil penalties under ERISA section 502(c)(5).
EFFECTIVE DATE: This final rule is effective January 1, 2004.
FOR FURTHER INFORMATION CONTACT: Amy J. Turner or Deborah S. Hobbs,
Employee Benefits Security Administration, U.S. Department of Labor,
Room C-5331, 200 Constitution Avenue, NW., Washington, DC 20210
(telephone (202) 693-8335).
SUPPLEMENTARY INFORMATION:
A. Background and Overview of Changes in the Final Rule
This document contains a final rule that provides guidance relating
to the procedures for administrative hearings and appeals regarding the
assessment of civil penalties under section 502(c)(5) of ERISA for the
failure or refusal to file a completed report pursuant to section
101(g) of ERISA. This regulation is designed to parallel the procedures
set forth in Sec. 2570.502c-2 regarding civil penalties under section
502(c)(2) of ERISA.
[[Page 17507]]
An interim final rule relating to the procedures for administrative
hearings and appeals relating to the assessment of civil penalties
under section 502(c)(5) of ERISA was published in the Federal Register
on February 11, 2000, 65 FR 7185. In the February 11, 2000 interim
rule, the Department sought comments from those affected by this
regulation. No comments were received.
On October 21, 2002, the Department published interim final rules
relating to notice of blackout periods to participants and
beneficiaries (during which their right to direct or diversify
investments, obtain a loan, or obtain a distribution under a pension
plan may be suspended) and related civil penalties under ERISA section
502(c)(7). Those rules also made conforming changes to the procedural
regulations under this section. Specifically, Sec. 2570.94, which
describes ``consequences of default'' was modified to provide that, if
a respondent fails to file an answer to the notice of determination,
the notice of determination shall become a final order of the Secretary
45 days from the date of service of the notice. No comments were
received with respect to this conforming amendment.
The interim rule is, therefore, being published as a final rule
without change.
B. Regulatory Impact Analysis
Executive Order 12866 Statement
Under Executive Order 12866, the Department must determine whether
a regulatory action is ``significant'' and therefore subject to the
requirements of the Executive Order and subject to review by the Office
of Management and Budget (OMB). Under section 3(f) of the Executive
Order, a ``significant regulatory action'' is an action that is likely
to result in a rule (1) having an annual effect on the economy of $100
million or more, or adversely and materially affecting a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or communities
(also referred to as ``economically significant''); (2) creating
serious inconsistency or otherwise interfering with an action taken or
planned by another agency; (3) materially altering the budgetary
impacts of entitlement grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order. On the
basis of these criteria, it has been determined that this regulatory
action is significant under section 3(f)(4) of the Executive Order.
Accordingly, OMB has reviewed this regulation.
Paperwork Reduction Act
The rule being issued here is not subject to the requirements of
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) because it
does not contain a ``collection of information'' as defined in 44
U.S.C. 3502(3).
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), (RFA)
requires each Federal agency to perform a regulatory flexibility
analysis for all rules subject to the notice and comment requirements
of section 553(b) of the Administrative Procedure Act (5 U.S.C 551 et
seq.) unless the head of the agency certifies that the rule will not,
if promulgated, have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
organizations, and governmental jurisdictions.
Because these rules were issued as interim final rules and not as a
notice of proposed rulemaking, the RFA does not apply and the
Department is not required to either certify that the rule will not
have a significant economic impact on a substantial number of small
entities, or conduct a regulatory flexibility analysis. The Department
does not anticipate that this final rule will impose a significant
impact on a substantial number of small entities, however, regardless
of whether one uses the definition of small entity found in regulations
issued by the Small Business Administration (13 CFR 121.201) or one
defines small entity, on the basis of section 104(a)(2) of ERISA, as an
employee benefit plan with fewer than 100 participants.
Small Business Regulatory Enforcement Fairness Act
The final rule being issued here is subject to the provisions of
the Small Business Regulatory Enforcement Fairness Act of 1996 (5
U.S.C. 801 et seq.) and has been transmitted to Congress and the
Comptroller General for review. The rule is not a ``major rule'' as
that term is defined in 5 U.S.C. 804, because it is not likely to
result in (1) an annual effect on the economy of $100 million or more;
(2) a major increase in costs or prices for consumers, individual
industries, or federal, State, or local government agencies, or
geographic regions; or (3) significant adverse effects on competition,
employment, investment, productivity, innovation, or on the ability of
United States-based enterprises to compete with foreign-based
enterprises in domestic or export markets.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4), as well as Executive Order 12875, this final rule does not
include any Federal mandate that may result in expenditures by State,
local, or tribal governments, and will not impose an annual burden of
$100 million or more on the private sector.
Federalism Statement Under Executive Order 13132
Executive Order 13132 outlines fundamental principles of
federalism, and requires the adherence to specific criteria by federal
agencies in the process of their formulation and implementation of
policies that have substantial direct effects on the states, the
relationship between the national government and the states, or on the
distribution of power and responsibilities among the various levels of
government. Agencies promulgating regulations that have these
federalism implications must consult with state and local officials,
and describe in the preamble to the regulation the extent of their
consultation and the nature of the concerns of state and local
officials, as well as the agency's position supporting the need to
issue the regulation, and a statement of the extent to which the
concerns of state and local officials have been met.
In the Department's view, these final regulations do not have
federalism implications because they do not have substantial direct
effects on the states, the relationship between the national government
and the states, or on the distribution of power and responsibilities
among various levels of government. Not only do these regulations not
reduce state discretion, the reports they require will facilitate state
enforcement of their own laws as they apply to MEWAs since the reports
will be available to the states and will identify MEWAs operating in
each state.
Although the Department concludes that these final regulations do
not have federalism implications, in keeping with the spirit of the
Executive Order that agencies shall closely examine any policies that
may have federalism implications or limit the policy making discretion
of the states, the Department of Labor engages in extensive efforts to
consult with and work cooperatively with affected state and local
officials.
[[Page 17508]]
For example, the Department attends quarterly meetings of the
National Association of Insurance Commissioners (NAIC) to listen to the
concerns of state insurance departments. The NAIC is a non-profit
corporation established by the insurance commissioners in the 50
states, the District of Columbia, and the four U.S. territories that,
among other things, provides a forum for the development of uniform
policy when uniformity is appropriate. Its members meet, discuss, and
offer solutions to mutual problems. The NAIC sponsors quarterly
meetings to provide a forum for the exchange of ideas, and in-depth
consideration of insurance issues by regulators, industry
representatives, and consumers. In addition to the general discussions,
committee meetings, and task force meetings, the NAIC sponsors standing
HIPAA meetings for members during the quarterly conferences, including
a Centers for Medicare and Medicaid Services (CMS)/Department of Labor
(DOL) meeting on HIPAA issues. (This meeting provides CMS and DOL the
opportunity to provide updates on regulations, bulletins, enforcement
actions, and outreach efforts regarding HIPAA.) In these quarterly
meetings, issues relating to MEWAs and the implementation of the Form
M-1 filing requirement are frequently discussed and, periodically,
entire sessions are scheduled that are dedicated exclusively to MEWA/
Form M-1 issues.
The Department also cooperates with the states in several ongoing
outreach initiatives, through which information is shared among federal
regulators, state regulators, and the regulated community. For example,
the Department has established a Health Benefits Education Campaign
with more than 70 partners, including CMS, the NAIC, and many business
and consumer groups. In addition, the Department Web site offers links
to important state Web sites and other resources, facilitating
coordination between the state and federal regulators and the regulated
community.
The Department also coordinates with state insurance departments to
freeze assets when a MEWA operator is committing fraud or operating in
a financially unsound manner. In these situations, typically, a state
will obtain a cease and desist order to stave off further action by the
MEWA in that state. In certain situations, the Department will then
obtain a temporary restraining order (TRO) to freeze assets of the MEWA
nationwide. In one case this year, the Department obtained a TRO to
freeze assets of a MEWA whose operators were committing fraud and not
paying benefits. This case affects more than 23,000 participants and
beneficiaries in 50 states and the amount of unpaid claims could exceed
$6 million. In a similar case last year, the Department obtained a TRO
to freeze assets of a MEWA that was diverting plan assets for personal
use of the MEWA's operators. That case affected at least 1,500
participants and $2.8 million in unpaid claims. A court order was also
issued in that case appointing an independent fiduciary to manage the
MEWA.
In conclusion, the Department has stayed in contact with state
regulators and considered their concerns in developing these
regulations. These regulations should help the states enforce their own
laws as they apply to MEWAs since the reports they require will be
available to them and will identify MEWAs operating in each state.
Statutory Authority
29 U.S.C. 1132(c)(5) and 1135 and Secretary of Labor's Order 1-
2003, 68 FR 5374 (Feb.3, 2003).
List of Subjects in 29 CFR Part 2570
Administrative practice and procedure, Claims, Employee benefit
plans, Law enforcement, Penalties, Pensions, Reporting and
recordkeeping requirements.
0
For the reasons set out in the preamble, Part 2570 of Chapter XXV of
Title 29 of the Code of Federal Regulations is amended as follows:
PART 2570--[AMENDED]
0
1. The authority for part 2570 continues to read:
Authority: 5 U.S.C. 8477, 29 U.S.C. 1002(40), 1021, 1108, 1132,
1135, sec. 102, Reorganization Plan No. 4 of 1978, 43 FR 47713, 3
CFR, 1978 Comp., p. 332, and E.O. 12108, 44 FR 1065, 3 CFR, 1978
Comp., p. 275; Secretary of Labor's Order 1-2003, 68 FR 5374 (Feb.3,
2003).
0
2. Sec. 2570.3 is amended to revise paragraph (a) to read as follows:
Sec. 2570.3 Service: Copies of documents and pleadings.
* * * * *
(a) General. Copies of all documents shall be served on all parties
of record. All documents should clearly designate the docket number, if
any, and short title of all matters. All documents shall be delivered
or mailed to the Chief Docket Clerk, Office of Administrative Law
Judges, 800 K Street, NW., Suite 400, Washington, DC 20001-8002, or to
the OALJ regional Office to which the proceedings may have been
transferred for hearing. Each document filed shall be clear and
legible.
* * * * *
0
3. Subpart E of part 2570 is amended to read as follows:
Subpart E--Procedures for the Assessment of Civil Penalties Under
ERISA Section 502(c)(5)
Sec.
2570.90 Scope of Rules.
2570.91 Definitions.
2570.92 Service: Copies of documents and pleadings.
2570.93 Parties, how designated.
2570.94 Consequnces of default.
2570.95 Consent order or settlement.
2570.96 Scope of discovery.
2570.97 Summary decision.
2570.98 Decision of the administrative law judge.
2570.99 Review by the Secretary.
2570.100 Scope of review.
2570.101 Procedures for review by the Secretary.
Sec. 2570.90 Scope of rules.
The rules of practice set forth in this subpart are applicable to
``502(c)(5) civil penalty proceedings'' (as defined in 2570.91(n))
under section 502(c)(5) of the Employee Retirement Income Security Act
of 1974. The rules of procedure for administrative hearings published
by the Department's Office of Administrative Law Judges in subpart A of
29 CFR part 18 will apply to matters arising under ERISA section
502(c)(5) except as described by this section. These proceedings shall
be conducted as expeditiously as possible, and the parties shall make
every effort to avoid delay at each stage of the proceedings.
Sec. 2570.91 Definitions.
For 502(c)(5) civil penalty proceedings, this section shall apply
in lieu of the definitions in Sec. 18.2 of this title.
(a) Adjudicatory proceeding means a judicial-type proceeding before
an administrative law judge leading to the formulation of a final
order;
(b) Administrative law judge means an administrative law judge
appointed pursuant to the provisions of 5 U.S.C. 3105;
(c) Answer means a written statement that is supported by reference
to specific circumstances or facts surrounding the notice of
determination issued pursuant to 29 CFR 2560.502c-5(g);
(d) Commencement of proceeding is the filing of an answer by the
respondent;
(e) Consent agreement means any written document containing a
specified proposed remedy or other relief acceptable to the Department
and consenting parties;
[[Page 17509]]
(f) ERISA means the Employee Retirement Income Security Act of
1974, as amended;
(g) Final order means the final decision or action of the
Department of Labor concerning the assessment of a civil penalty under
ERISA section 502(c)(5) against a particular party. Such final order
may result from a decision of an administrative law judge or the
Secretary, the failure of a party to file a statement of reasonable
cause described in 29 CFR 2560.502c-5(e) within the prescribed time
limits, or the failure of a party to invoke the procedures for hearings
or appeals under this title within the prescribed time limits. Such a
final order shall constitute final agency action within the meaning of
5 U.S.C. 704;
(h) Hearing means that part of a proceeding which involves the
submission of evidence, either by oral presentation or written
submission, to the administrative law judge;
(i) Order means the whole or any part of a final procedural or
substantive disposition of a matter under ERISA section 502(c)(5);
(j) Party includes a person or agency named or admitted as a party
to a proceeding;
(k) Person includes an individual, partnership, corporation,
employee benefit plan, association, exchange, or other entity or
organization;
(l) Petition means a written request, made by a person or party,
for some affirmative action;
(m) Pleading means the notice as defined in 29 CFR 2560.502c-5(g),
the answer to the notice, any supplement or amendment thereto, and any
reply that may be permitted to any answer, supplement or amendment;
(n) 502(c)(5) civil penalty proceeding means an adjudicatory
proceeding relating to the assessment of a civil penalty provided for
in section 502(c)(5) of ERISA;
(o) Respondent means the party against whom the Department is
seeking to assess a civil sanction under ERISA section 502(c)(5);
(p) Secretary means the Secretary of Labor and includes, pursuant
to any delegation of authority by the Secretary, any assistant
secretary (including the Assistant Secretary for Employee Benefits
Security), administrator, commissioner, appellate body, board, or other
official of the Department of Labor; and
(q) Solicitor means the Solicitor of Labor or his or her delegate.
Sec. 2570.92 Service: Copies of documents and pleadings.
For 502(c)(5) penalty proceedings, this section shall apply in lieu
of 29 CFR 18.3.
(a) In general. Copies of all documents shall be served on all
parties of record. All documents should clearly designate the docket
number, if any, and short title of all matters. All documents to be
filed shall be delivered or mailed to the Chief Docket Clerk, Office of
Administrative Law Judges (OALJ), 800 K Street, NW., Suite 400,
Washington, DC 20001-8002, or to the OALJ Regional Office to which the
proceeding may have been transferred for hearing. Each document filed
shall be clear and legible.
(b) By parties. All motions, petitions, pleadings, briefs, or other
documents shall be filed with the Office of Administrative Law Judges
with a copy, including any attachments, to all other parties of record.
When a party is represented by an attorney, service shall be made upon
the attorney. Service of any document upon any party may be made by
personal delivery or by mailing a copy to the last known address. The
Department shall be served by delivery to the Associate Solicitor, Plan
Benefits Security Division, ERISA Section 502(c)(5) Proceeding, P.O.
Box 1914, Washington, DC 20013. The person serving the document shall
certify to the manner and date of service.
(c) By the Office of Administrative Law Judges. Service of orders,
decisions and all other documents shall be made by regular mail to the
last known address.
(d) Form of pleadings--(1) Every pleading shall contain information
indicating the name of the Employee Benefits Security Administration
(EBSA) as the agency under which the proceeding is instituted, the
title of the proceeding, the docket number (if any) assigned by the
Office of Administrative Law Judges and a designation of the type of
pleading or paper (e.g., notice, motion to dismiss, etc.). The pleading
or paper shall be signed and shall contain the address and telephone
number of the party or person representing the party. Although there
are no formal specifications for documents, they should be typewritten
when possible on standard size 8\1/2\ x 11 inch paper.
(2) Illegible documents, whether handwritten, typewritten,
photocopies, or otherwise, will not be accepted. Papers may be
reproduced by any duplicating process provided all copies are clear and
legible.
Sec. 2570.93 Parties, how designated.
For 502(c)(5) civil penalty proceedings, this section shall apply
in lieu of 29 CFR 18.10.
(a) The term party wherever used in this subpart shall include any
natural person, corporation, employee benefit plan, association, firm,
partnership, trustee, receiver, agency, public or private organization,
or government agency. A party against whom a civil penalty is sought
shall be designated as ``respondent.'' The Department shall be
designated as the ``complainant.''
(b) Other persons or organizations shall be permitted to
participate as parties only if the administrative law judge finds that
the final decision could directly and adversely affect them or the
class they represent, that they may contribute materially to the
disposition of the proceedings and their interest is not adequately
represented by existing parties, and that in the discretion of the
administrative law judge the participation of such persons or
organizations would be appropriate.
(c) A person or organization not named as a respondent wishing to
participate as a party under this section shall submit a petition to
the administrative law judge within fifteen (15) days after the person
or organization has knowledge of or should have known about the
proceeding. The petition shall be filed with the administrative law
judge and served on each person or organization who has been made a
party at the time of filing. Such petition shall concisely state:
(1) Petitioner's interest in the proceeding;
(2) How his or her participation as a party will contribute
materially to the disposition of the proceeding;
(3) Who will appear for petitioner;
(4) The issues on which petitioner wishes to participate; and
(5) Whether petitioner intends to present witnesses.
(d) Objections to the petition may be filed by a party within
fifteen (15) days of the filing of the petition. If objections to the
petition are filed, the administrative law judge shall then determine
whether petitioners have the requisite interest to be a party in the
proceedings, as defined in paragraph (b) of this section, and shall
permit or deny participation accordingly. Where petitions to
participate as parties are made by individuals or groups with common
interests, the administrative law judge may request all such
petitioners to designate a single representative, or he or she may
recognize one or more of such petitioners. The administrative law judge
shall give each such petitioner as
[[Page 17510]]
well as the parties, written notice of the decision on his or her
petition. For each petition granted, the administrative law judge shall
provide a brief statement of the basis of the decision. If the petition
is denied, he or she shall briefly state the grounds for denial and
shall then treat the petition as a request for participation as amicus
curiae.
Sec. 2570.94 Consequences of default.
For 502(c)(5) civil penalty proceedings, this section shall apply
in lieu of 29 CFR 18.5(a) and (b). Failure of the respondent to file an
answer to the notice of determination described in 29 CFR 2560.502c-
5(g) within the 30 day period provided by 29 CFR 2560.502c-5(h) shall
be deemed to constitute a waiver of his or her right to appear and
contest the allegations of the notice of determination, and such
failure shall be deemed to be an admission of the facts as alleged in
the notice for purposes of any proceeding involving the assessment of a
civil penalty under section 502(c)(5) of the Act. Such notice shall
then become a final order of the Secretary, within the meaning of Sec.
2570.91(g), forty-five (45) days from the date of the service of the
notice.
Sec. 2570.95 Consent order or settlement.
For 502(c)(5) civil penalty proceedings, the following shall apply
in lieu of 29 CFR 18.9.
(a) In general. At any time after the commencement of a proceeding,
but at least five (5) days prior to the date set for hearing, the
parties jointly may move to defer the hearing for a reasonable time to
permit negotiation of a settlement or an agreement containing findings
and an order disposing of the whole or any part of the proceeding. The
allowance of such deferment and the duration thereof shall be in the
discretion of the administrative law judge, after consideration of such
factors as the nature of the proceeding, the requirements of the public
interest, the representations of the parties and the probability of
reaching an agreement which will result in a just disposition of the
issues involved.
(b) Content. Any agreement containing consent findings and an order
disposing of a proceeding or any part thereof shall also provide:
(1) That the order shall have the same force and effect as an order
made after full hearing;
(2) That the entire record on which any order may be based shall
consist solely of the notice and the agreement;
(3) A waiver of any further procedural steps before the
administrative law judge;
(4) A waiver of any right to challenge or contest the validity of
the order and decision entered into in accordance with the agreement;
and
(5) That the order and decision of the administrative law judge
shall be final agency action.
(c) Submission. On or before the expiration of the time granted for
negotiations, but, in any case, at least five (5) days prior to the
date set for hearing, the parties or their authorized representative or
their counsel may:
(1) Submit the proposed agreement containing consent findings and
an order to the administrative law judge;
(2) Notify the administrative law judge that the parties have
reached a full settlement and have agreed to dismissal of the action
subject to compliance with the terms of the settlement; or
(3) Inform the administrative law judge that agreement cannot be
reached.
(d) Disposition. In the event that a settlement agreement
containing consent findings and an order is submitted within the time
allowed therefor, the administrative law judge shall issue a decision
incorporating such findings and agreement within thirty (30) days of
receipt of such document. The decision of the administrative law judge
shall incorporate all of the findings, terms, and conditions of the
settlement agreement and consent order of the parties. Such decision
shall become a final agency action within the meaning of 5 U.S.C. 704.
(e) Settlement without consent of all parties. In cases in which
some, but not all, of the parties to a proceeding submit a consent
agreement to the administrative law judge, the following procedure
shall apply:
(1) If all of the parties have not consented to the proposed
settlement submitted to the administrative law judge, then such non-
consenting parties must receive notice, and a copy, of the proposed
settlement at the time it is submitted to the administrative law judge;
(2) Any non-consenting party shall have fifteen (15) days to file
any objections to the proposed settlement with the administrative law
judge and all other parties;
(3) If any party submits an objection to the proposed settlement,
the administrative law judge shall decide within thirty (30) days after
receipt of such objections whether to sign or reject the proposed
settlement. Where the record lacks substantial evidence upon which to
base a decision or there is a genuine issue of material fact, then the
administrative law judge may establish procedures for the purpose of
receiving additional evidence upon which a decision on the contested
issues may reasonably be based;
(4) If there are no objections to the proposed settlement, or if
the administrative law judge decides to sign the proposed settlement
after reviewing any such objections, the administrative law judge shall
incorporate the consent agreement into a decision meeting the
requirements of paragraph (d) of this section.
Sec. 2570.96 Scope of discovery.
For 502(c)(5) civil penalty proceedings, this section shall apply
in lieu of 29 CFR 18.14.
(a) A party may file a motion to conduct discovery with the
administrative law judge. The motion for discovery shall be granted by
the administrative law judge only upon a showing of good cause. In
order to establish ``good cause'' for the purposes of this section, a
party must show that the discovery requested relates to a genuine issue
as to a material fact that is relevant to the proceeding. The order of
the administrative law judge shall expressly limit the scope and terms
of discovery to that for which ``good cause'' has been shown, as
provided in this paragraph.
(b) A party may obtain discovery of documents and tangible things
otherwise discoverable under paragraph (a) of this section and prepared
in anticipation of or for the hearing by or for another party's
representative (including his or her attorney, consultant, surety,
indemnitor, insurer, or agent) only upon showing that the party seeking
discovery has substantial need of the materials or information in the
preparation of his or her case and that he or she is unable without
undue hardship to obtain the substantial equivalent of the materials or
information by other means. In ordering discovery of such materials
when the required showing has been made, the administrative law judge
shall protect against disclosure of the mental impressions,
conclusions, opinions, or legal theories of an attorney or other
representative of a party concerning the proceeding.
Sec. 2570.97 Summary decision.
For 502(c)(5) civil penalty proceedings, this section shall apply
in lieu of 29 CFR 18.41.
(a) No genuine issue of material fact.
(1) Where no issue of material fact is found to have been raised,
the administrative law judge may issue a decision which, in the absence
of an appeal pursuant to Sec. Sec. 2570.99 through 2570.101, shall
become a final order.
[[Page 17511]]
(2) A decision made under this paragraph shall include a statement
of:
(i) Findings of fact and conclusions of law, and the reasons
therefore, on all issues presented; and
(ii) Any terms and conditions of the rule or order.
(3) A copy of any decision under this paragraph shall be served on
each party.
(b) Hearings on issues of fact. Where a genuine question of
material fact is raised, the administrative law judge shall, and in any
other case may, set the case for an evidentiary hearing.
Sec. 2570.98 Decision of the administrative law judge.
For 502(c)(5) civil penalty proceedings, this section shall apply
in lieu of 29 CFR 18.57.
(a) Proposed findings of fact, conclusions, and order. Within
twenty (20) days of the filing of the transcript of the testimony or
such additional time as the administrative law judge may allow, each
party may file with the administrative law judge, subject to the
judge's discretion, proposed findings of fact, conclusions of law, and
an order together with a supporting brief expressing the reasons for
such proposals. Such proposals and briefs shall be served on all
parties, and shall refer to all portions of the record and to all
authorities relied upon in support of each proposal.
(b) Decision of the administrative law judge. Within a reasonable
time after the time allowed for the filing of the proposed findings of
fact, conclusions of law, and order, or within thirty (30) days after
receipt of an agreement containing consent findings and an order
disposing of the disputed matter in whole, the administrative law judge
shall make his or her decision. The decision of the administrative law
judge shall include findings of fact and conclusions of law with
reasons therefor upon each material issue of fact or law presented on
the record. The decision of the administrative law judge shall be based
upon the whole record. In a contested case in which the Department and
the Respondent have presented their positions to the administrative law
judge pursuant to the procedures for 502(c)(5) civil penalty
proceedings as set forth in this subpart, the penalty (if any) which
may be included in the decision of the administrative law judge shall
be limited to the penalty expressly provided for in section 502(c)(5)
of ERISA. It shall be supported by reliable and probative evidence. The
decision of the administrative law judge shall become a final agency
action within the meaning of 5 U.S.C. 704 unless an appeal is made
pursuant to the procedures set forth in Sec. Sec. 2570.99 through
2570.101.
Sec. 2570.99 Review by the Secretary.
(a) The Secretary may review a decision of an administrative law
judge. Such a review may occur only when a party files a notice of
appeal from a decision of an administrative law judge within twenty
(20) days of the issuance of such decision. In all other cases, the
decision of the administrative law judge shall become final agency
action within the meaning of 5 U.S.C. 704.
(b) A notice of appeal to the Secretary shall state with
specificity the issue(s) in the decision of the administrative law
judge on which the party is seeking review. Such notice of appeal must
be served on all parties of record.
(c) Upon receipt of a notice of appeal, the Secretary shall request
the Chief Administrative Law Judge to submit to him or her a copy of
the entire record before the administrative law judge.
Sec. 2570.100 Scope of review.
The review of the Secretary shall not be a de novo proceeding but
rather a review of the record established before the administrative law
judge. There shall be no opportunity for oral argument.
Sec. 2570.101 Procedures for review by the Secretary.
(a) Upon receipt of the notice of appeal, the Secretary shall
establish a briefing schedule which shall be served on all parties of
record. Upon motion of one or more of the parties, the Secretary may,
in his or her discretion, permit the submission of reply briefs.
(b) The Secretary shall issue a decision as promptly as possible
after receipt of the briefs of the parties. The Secretary may affirm,
modify, or set aside, in whole or in part, the decision on appeal and
shall issue a statement of reasons and bases for the action(s) taken.
Such decision by the Secretary shall be final agency action within the
meaning of 5 U.S.C. 704.
Signed at Washington DC, this 31st day of March, 2003.
Ann L. Combs,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
[FR Doc. 03-8117 Filed 4-7-03; 8:45 am]
BILLING CODE 4510-29-P
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