Organization, General Procedures, Rules of Practice for Adjudicative Proceedings

FEDERAL TRADE COMMISSION

16 CFR Parts 0, 1, and 3

Organization, General Procedures, Rules of Practice for

Adjudicative Proceedings

AGENCY: Federal Trade Commission (FTC).

ACTION: Final rule.

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SUMMARY: The Commission is revising its Rules of Practice to

incorporate statutory requirements of the Small Business Regulatory

Enforcement Fairness Act concerning congressional review of certain

agency rules and publication of small entity guides for certain rules.

The revised rules also reflect statutory amendments to the Equal

Access to Justice Act as well as technical and interpretive

nonsubstantive changes to the rules governing claims under the Act.

EFFECTIVE DATES: These amendments are effective July 6, 1998.

FOR FURTHER INFORMATION CONTACT: Sandra M. Vidas, Attorney, (202) 326-

2456, Office of the General Counsel, FTC, Sixth Street & Pennsylvania

Avenue, N.W., Washington, D.C. 20580.

SUPPLEMENTARY INFORMATION: The Commission is amending Parts 0, 1, and 3

of its existing Rules of Practice to reflect the statutory provisions

of the Small Business Regulatory Enforcement Fairness Act (SBREFA),

Pub. L. 104-121, 110 Stat. 857 (1996) as that Act amends the

Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., the

Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, and the Equal

Access to Justice Act (EAJA), 5 U.S.C. 504.

The Commission is amending Part 1 by adding a new Subpart M

reflecting SBREFA's requirements concerning the submission of

information to Congress and the Comptroller General when the agency

issues or amends a rule or industry guide, or formally adopts an

interpretation or policy statement that constitutes a rule within the

meaning of 5 U.S.C. 804(3). The amendments also reflect SBREFA's

statutory requirements with respect to publication of small entity

compliance guides, and add references to the RFA and Paperwork

Reduction Act, (PRA), 44 U.S.C. 3501-3520, where appropriate.

The Commission is revising its rules governing EAJA claims to

reflect statutory amendments and to clarify certain provisions of the

Commission's existing EAJA rules. These clarifying amendments provide,

inter alia, additional information concerning filing time limits,

procedures, and allowable expenses to assist persons eligible to file

claims under the EAJA. The Commission is also amending Sec. 0.5 of its

rules, ``Laws authorizing monetary claims,'' to include a reference to

the EAJA and a new telephone contact number in the Office of the

General Counsel.

The Commission has determined that these rule amendments relate to

agency practice or are interpretive in nature. Accordingly, they are

not subject to the notice and comment requirements of the APA, 5 U.S.C.

553(b)(A), or to the RFA, 5 U.S.C. 601-612.

The submissions required by the amended rules with respect to

claims under the EAJA, 5 U.S.C. 504, do not likely constitute ``the

collection of information'' as that term is defined by the PRA.

Submission of a claim for fees occurs in connection with an

administrative proceeding with respect to a specific party and is

therefore exempt from PRA coverage. 5 CFR 1320.4(a)(2). In the event

that an EAJA claim is subject to the requirements of the PRA, the

Commission has previously received clearance for Part 3, Subpart I, of

the Rules of Practice, which specifies, inter alia, the documentation

necessary to support an application for reimbursement under the EAJA,

See 16 CFR 3.81-3.83 (OMB

[[Page 36340]]

Control Number 3084-0047, expiration date Sept. 30, 1998).

List of Subjects

16 CFR Part 0

Organization and functions (Government agencies).

16 CFR Part 1

Administrative practice and procedure.

16 CFR Part 3

Administrative practice and procedure.

For the reasons set forth in the preamble, the Federal Trade

Commission amends Title 16, Chapter 1, Subchapter A, of the Code of

Federal Regulations as follows:

PART 0--ORGANIZATION

1. The authority for part 0 continues to read as follows:

Authority: See 6(g), 38 Stat. 721 (15 U.S.C. 46); 80 Stat. 383

as amended (5 U.S.C. 552).

2. Section 0.5 is revised to read as follows:

Sec. 0.5 Laws authorizing monetary claims.

The Commission is authorized to entertain monetary claims against

it under three statutes. The Federal Tort Claims Act (28 U.S.C. 2671-

2680) provides that the United States will be liable for injury or loss

of property or personal injury or death caused by the negligent or

wrongful acts or omissions of its employees acting within the scope of

their employment or office. The Military Personnel and Civilian

Employees Claims Act of 1964 (31 U.S.C. 3701, 3721) authorizes the

Commission to compensate employees' claims for damage to or loss of

personal property incident to their service. The Equal Access to

Justice Act (5 U.S.C. 504 and 28 U.S.C. 2412) provides that an eligible

prevailing party other than the United States will be awarded fees and

expenses incurred in connection with any adversary adjudicative and

court proceeding, unless the adjudicative officer finds that the agency

was substantially justified or that special circumstances make an award

unjust. In addition, eligible parties, including certain small

businesses, will be awarded fees and expenses incurred in defending

against an agency demand that is substantially in excess of the final

decision of the adjudicative officer and is unreasonable when compared

with such decision under the facts and circumstances of the case,

unless the adjudicative officer finds that the party has committed a

willful violation of law or otherwise acted in bad faith, or special

circumstances make an award unjust. Questions may be addressed to the

Office of the General Counsel, (202) 326-2462.

PART 1--GENERAL PROCEDURES

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

Authority: Sec. 6, 38 Stat. 721 (15 U.S.C. 46), unless otherwise

noted.

Subpart B--Rules and Rulemaking Under Section 18(a)(1)(B) of the

FTC Act

2. The authority for Subpart B is revised to read as follows:

Authority: 15 U.S.C. 46; 15 U.S.C. 57a; 5 U.S.C. 552; sec.

212(a), Pub. L. 104-121, 110 Stat. 857 (5 U.S.C. 601 note).

3. Section 1.11(b)(4) is revised to read as follows:

Sec. 1.11 Commencement of a rulemaking proceeding.

* * * * *

(b) * * *

(4) The information required by the Regulatory Flexibility Act, 5

U.S.C. 601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520,

if applicable.

4. In Sec. 1.14 paragraph (a)(2)(vi) is revised and paragraph

(a)(3) is added to read as follows:

Sec. 1.14 Promulgation.

(a) * * *

(2) * * *

(vi) The information required by the Regulatory Flexibility Act, 5

U.S.C. 601-612, and the Paperwork Reduction Act, 44 U.S.C. 3501-3520,

if applicable.

(3) Small entity compliance guide. For each rule for which the

Commission must prepare a final regulatory flexibility analysis, the

Commission will publish one or more guides to assist small entities in

complying with the rule. Such guides will be designated as ``small

entity compliance guides.''

* * * * *

Subpart C--Rules Promulgated Under Authority Other Than Section

18(a)(1)(B) of the FTC Act

1. The authority for Subpart C is added to read as follows:

Authority: 15 U.S.C. 46; 5 U.S.C. 552; Sec. 212(a), Pub. L. 104-

121, 110 Stat. 857 (5 U.S.C. 601 note).

2. Section 1.26 is amended by adding 3 sentences to the end of

paragraph (d) to read as follows:

Sec. 1.26 Procedure.

* * * * *

(d) Promulgation of rules or orders. * * * The Federal Register

publication will contain the information required by the Paperwork

Reduction Act, 44 U.S.C. 3501-3520, and the Regulatory Flexibility Act,

5 U.S.C. 601-612, if applicable. For each rule for which the Commission

must prepare a final regulatory flexibility analysis, the Commission

will publish one or more guides to assist small entities in complying

with the rule. Such guides will be designated as ``small entity

compliance guides.''

* * * * *

3. Subpart M, consisting of Sec. 1.99, is added to read as follows:

Subpart M--Submissions Under the Small Business Regulatory

Enforcement Fairness Act

Authority: 5 U.S.C. 801-804.

Sec. 1.99 Submission of rules, guides, interpretations, and policy

statements to Congress and the Comptroller General.

Whenever the Commission issues or substantively amends a rule or

industry guide or formally adopts an interpretation or policy statement

that constitutes a ``rule'' within the meaning of 5 U.S.C. 804(3), a

copy of the final rule, guide, interpretation or statement, together

with a concise description, the proposed effective date, and a

statement of whether the rule, guide, interpretation or statement is a

``major rule'' within the meaning of 5 U.S.C. 804(2), will be

transmitted to each House of Congress and to the Comptroller General.

The material transmitted to the Comptroller General will also include

any additional relevant information required by 5 U.S.C. 801(a)(1)(B).

This provision generally applies to rules issued or substantively

amended pursuant to Secs. 1.14(c), 1.15(a), 1.19, or 1.26(d); industry

guides issued pursuant to Sec. 1.6; interpretations and policy

statements formally adopted by the Commission; and any rule of agency

organization, practice or procedure that substantially affects the

rights or obligations of non-agency parties.

PART 3--RULES OF PRACTICE FOR ADJUDICATIVE PROCEEDINGS

1. The authority for part 3 continues to read as follows:

Authority: Section 6, 38 Stat. 721 (15 U.S.C. 46), unless

otherwise noted.

2. Subpart I is revised to read as follows:

[[Page 36341]]

Subpart I--Recovery of Awards Under the Equal Access to Justice Act in

Commission Proceedings

3.81 General provisions.

3.82 Information required from applicants.

3.83 Procedures for considering applicants.

Authority: 5 U.S.C. 504 and 5 U.S.C. 553(b).

Subpart I--Recovery of Awards Under the Equal Access to Justice Act

in Commission Proceedings

Sec. 3.81 General provisions.

(a.) Purpose of these rules. The Equal Access to Justice Act, 5

U.S.C. 504 (called ``the Act'' in this subpart), provides for the award

of attorney fees and other expenses to eligible individuals and

entities who are parties to adversary adjudicative proceedings under

part 3 of this title. The rules in this subpart describe the parties

eligible for awards, how to apply for awards, and the procedures and

standards that the Commission will use to make them.

(1.) When an eligible party will receive an award. An eligible

party will receive an award when:

(i) It prevails in the adjudicative proceeding, unless the

Commission's position in the proceeding was substantially justified or

special circumstances make an award unjust. Whether or not the position

of the agency was substantially justified will be determined on the

basis of the administrative record as a whole that is made in the

adversary proceeding for which fees and other expenses are sought; or

(ii) The agency's demand is substantially in excess of the decision

of the adjudicative officer, and is unreasonable when compared with

that decision, under all the facts and circumstances of the case.

``Demand'' means the express final demand made by the agency prior to

initiation of the adversary adjudication, but does not include a

recitation by the agency of the statutory penalty in the administrative

complaint or elsewhere when accompanied by an express demand for a

lesser amount.

(b.) When the Act applies. (1) Section 504(a)(1) of the Act applies

to any adversarial adjudicative proceeding pending before the

Commission at any time after October 1, 1981. This includes proceedings

begun before October 1, 1981, if final Commission action has not been

taken before that date.

(2) Section 504(a)(4) applies to any adversarial adjudicative

proceeding pending before the Commission at any time on or after March

29, 1996.

(c) Proceedings covered. (1) The Act applies to all adjudicative

proceedings under part 3 of the rules of practice as defined in

Sec. 3.2, except hearings relating to the promulgation, amendment, or

repeal of rules under the Fair Packaging and Labeling Act.

(2) [Reserved]

(d) Eligibility of applicants. (1) To be eligible for an award of

attorney fees and other expenses under the Act, the applicant must be a

party to the adjudicative proceeding in which it seeks an award. The

term ``party'' is defined in 5 U.S.C. 551(3). The applicant must show

that it meets all conditions of eligibility set out in this subpart.

(2) The types of eligible applicants are as follows:

(i) An individual with a net worth of not more than $2 million;

(ii) the sole owner of an unincorporated business who has a net

worth of not more than $7 million, including both personal and business

interests, and not more than 500 employees;

(iii) A charitable or other tax-exempt organization described in

section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3))

with not more than 500 employees;

(iv) A cooperative association as defined in section 15(a) of the

Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500

employees;

(v) Any other partnership, corporation, association, unit of local

government, or organization with a net worth of not more than $7

million and not more than 500 employees; and

(vi) For purposes of receiving an award for fees and expenses for

defending against an excessive Commission demand, any small entity, as

that term is defined under 5 U.S.C. 601.

(3) Eligibility of a party shall be determined as of the date the

proceeding was initiated.

(4) An applicant who owns an unincorporated business will be

considered as an ``individual'' rather than a ``sole owner of an

unincorporated business'' if the issues on which the applicant prevails

are related primarily to personal interests rather than to business

interests.

(5) The employees of an applicant include all persons who regularly

perform services for remuneration for the applicant, under the

applicant's direction and control. Part-time employees shall be

included on a proportional basis.

(6) The net worth and number of employees of the applicant and all

of its affiliates shall be aggregated to determine eligibility. Any

individual, corporation or other entity that directly or indirectly

controls or owns a majority of the voting shares or other interest of

the applicant, or any corporation or other entity of which the

applicant directly or indirectly owns or controls a majority of the

voting shares or other interest, will be considered an affiliate for

purposes of this part, unless the Administrative Law Judge determines

that such treatment would be unjust and contrary to the purposes of the

Act in light of the actual relationship between the affiliated

entities. In addition, the Administrative Law Judge may determine that

financial relationships of the applicant other than those described in

this paragraph constitute special circumstances that would make an

award unjust.

(7) An applicant that participates in a proceeding primarily on

behalf of one or more other persons or entities that would be

ineligible is not itself eligible for an award.

(e) Standards for awards--(1) For a prevailing party:

(i) A prevailing applicant will receive an award for fees and

expenses incurred after initiation of the adversary adjudication in

connection with the entire adversary adjudication, or on a substantive

portion of the adversary adjudication that is sufficiently significant

and discrete to merit treatment as a separate unit unless the position

of the agency was substantially justified. The burden of proof that an

award should not be made to an eligible prevailing applicant is on

complaint counsel, which may avoid an award by showing that its

position had a reasonable basis in law and fact.

(ii) An award to prevailing party will be reduced or denied if the

applicant has unduly or unreasonably protracted the proceeding or if

special circumstances make an award unjust.

(2) For a party defending against an excessive demand:

(i) An eligible applicant will receive an award for fees and

expenses incurred after initiation of the adversary adjudication

related to defending against the excessive portion of a Commission

demand that is substantially in excess of the decision of the

adjudicative officer and is unreasonable when compared with that

decision under all the facts and circumstances of the case.

(ii) An award will be denied if the applicant has committed a

willful violation of law or otherwise acted in bad faith or if special

circumstances make an award unjust.

[[Page 36342]]

(f) Allowable fees and expenses. (1) Awards will be based on rates

customarily charged by persons engaged in the business of acting as

attorneys, agents and expert witnesses, even if the services were made

available without charge or at a reduced rate to the applicant.

(2) No award for the fee of an attorney or agent under these rules

may exceed the hourly rate specified in 5 U.S.C. 504(b)(1)(A). No award

to compensate an expert witness may exceed the highest rate at which

the Commission paid expert witnesses for similar services at the time

the fees were incurred. The appropriate rate may be obtained from the

Office of the Executive Director. However, an award may also include

the reasonable expenses of the attorney, agent, or witness as a

separate item, if the attorney, agent or witness ordinarily charges

clients separately for such expenses.

(3) In determining the reasonableness of the fee sought for an

attorney, agent or expert witness, the Administrative Law Judge shall

consider the following:

(i) If the attorney, agent or witness is in private practice, his

or her customary fee for similar services, or, if an employee of the

applicant, the fully allocated cost of the services;

(ii) The prevailing rate for similar services in the community in

which the attorney, agent or witness ordinarily performs services;

(iii) The time actually spent in the representation of the

applicant;

(iv) The time reasonably spent in light of the difficulty or

complexity of the issues in the proceeding; and

(v) Such other factors as may bear on the value of the services

provided.

(4) The reasonable cost of any study, analysis, engineering report,

test, project or similar matter prepared on behalf of a party may be

awarded, to the extent that the charge for the service does not exceed

the prevailing rate for similar services, and the study or other matter

was necessary for preparation of the applicant's case.

(5) Any award of fees or expenses under the Act is limited to fees

and expenses incurred after initiation of the adversary adjudication

and, with respect to excessive demands, the fees and expenses incurred

in defending against the excessive portion of the demand.

(g) Rulemaking on maximum rates for attorney fees. If warranted by

an increase in the cost of living or by special circumstances (such as

limited availability of attorneys qualified to handle certain types of

proceedings), the Commission may, upon its own initiative or on

petition of any interested person or group, adopt regulations providing

that attorney fees may be awarded at a rate higher than the rate

specified in 5 U.S.C. 504(b)(1)(A) per hour in some or all the types of

proceedings covered by this part. Rulemaking under this provision will

be in accordance with Rules of Practice Part 1, Subpart C of this

chapter.

Sec. 3.82 Information required from applicants.

(a) Contents of application. An application for an award of fees

and expenses under the Act shall contain the following:

(1) Identify of the applicant and the proceeding for which the

award is sought;

(2) A showing that the applicant has prevailed; or, if the

applicant has not prevailed, a showing that the Commission's demand was

the final demand before initiation of the adversary adjudication and

that it was substantially in excess of the decision of the adjudicative

officer and was unreasonable when compared with that decision;

(3) Identification of the Commission position(s) that applicant

alleges was (were) not substantially justified; or, identification of

the Commission's demand that is alleged to be excessive and

unreasonable and an explanation as to why the demand was excessive and

unreasonable;

(4) A brief description of the type and purpose of the organization

or business (unless the applicant is an individual);

(5) A statement of how the applicant meets the criteria of

Sec. 3.81(d);

(6) The amount of fees and expenses incurred after the initiation

of the adjudicative proceeding or, in the case of a claim for defending

against an excessive demand, the amount of fees and expenses incurred

after the initiation of the adjudicative proceeding attributable to the

excessive portion of the demand;

(7) Any other matters the applicant wishes the Commission to

consider in determining whether and in what amount an award should be

made; and

(8) A written verification under oath or under penalty or perjury

that the information provided is true and correct accompanied by the

signature of the applicant or an authorized officer or attorney.

(b) Net worth exhibit. (1) Each applicant except a qualified tax-

exempt organization or cooperative association must provide with its

application a detailed exhibit showing the net worth of the application

and any affiliates (as defined in Sec. 3.81(d)(6)) when the proceeding

was initiated. The exhibit may be in any form convenient to the

applicant that provides full disclosure of the applicant's and its

affiliates' assets and liabilities and is sufficient to determine

whether the applicant qualifies under the standards in this part. The

Administrative Law Judge may require an applicant to file additional

information to determine its eligibility for an award.

(2) Ordinarily, the net worth exhibit will be included in the

public record of the proceeding. However, if an applicant objects to

public disclosure of information in any portion of the exhibit and

believes there are legal grounds for withholding it from disclosure,

the applicant may submit that portion of the exhibit directly to the

Administrative Law Judge in a sealed envelope labeled ``Confidential

Financial Information,'' accompanied by a motion to withhold the

information from public disclosure. The motion shall describe the

information sought to be withheld and explain, in detail, why it falls

within one or more of the specific exemptions from mandatory disclosure

under the Freedom of Information Act, 5 U.S.C. 552(b) (1) through (9),

why public disclosure of the information would adversely affect the

applicant, and why disclosure is not required in the public interest.

The material in question shall be served on complaint counsel but need

not be served on any other party to the proceeding. If the

Administrative Law Judge finds that the information should not be

withheld from disclosure, it shall be placed in the public record of

the proceeding. Otherwise, any request to inspect or copy the exhibit

shall be disposed of in accordance with Sec. 4.11.

(c) Documentation of fees and expenses. The application shall be

accompanied by full documentation of the fees and expenses incurred

after initiation of the adversary adjudication, including the cost of

any study, analysis, engineering report, test, project or similar

matter, for which an award is sought. With respect to a claim for fees

and expenses involving an excessive demand, the application shall be

accompanied by full documentation of the fees and expenses incurred

after initiation of the adversary adjudication, including the cost of

any study, analysis, engineering report, test, project or similar

matter, for which an award is sought attributable to the portion of the

demand alleged to be excessive and unreasonable. A separate itemized

statement shall be submitted for each professional firm or individual

whose services are covered by the application, showing the hours spent

in connection

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with the proceeding by each individual, a description of the specific

services performed, the rate at which each fee has been computed, any

expenses for which reimbursement is sought, the total amount claimed,

and the total amount paid or payable by the applicant or by any other

person or entity for the services provided. The Administrative Law

Judge may require the applicant to provide vouchers, receipts, or other

substantiation for any expenses claimed.

(d) When an application may be filed--(1) For a prevailing party.

(i) An application may be filed not later than 30 days after the

Commission has issued an order or otherwise taken action that results

in final disposition of the proceeding.

(ii) If review or reconsideration is sought or taken of a decision

as to which an applicant believes it has prevailed, proceedings for the

award of fees shall be stayed pending final disposition of the

underlying controversy.

(2) For a party defending against an excessive demand:

(i) An application may be filed not later than 30 days after the

Commission has issued an order or otherwise taken action that results

in final disposition of the proceeding.

(ii) If review or reconsideration is sought or taken of a decision

as to which an applicant believes the agency's demand was excessive and

unreasonable, proceedings for the award of fees and expenses shall be

stayed pending final disposition of the underlying controversy.

(3) For purposes of this subpart, ``final disposition'' means the

later of--

(i) The date that the initial decision of the Administrative Law

Judge becomes the decision of the Commission pursuant to Sec. 3.51(a);

(ii) The date that the Commission issues an order disposing of any

petitions for reconsideration of the Commission's final order in the

proceeding; or

(iii) The date that the Commission issues a final order or any

other final resolution of a proceeding, such as a consent agreement,

settlement or voluntary dismissal, which is not subject to a petition

for reconsideration.

Sec. 3.83 Procedures for considering applicants.

(a) Filing and service of documents. Any application for an award

or other pleading or document related to an application shall be filed

and served on all parties as specified in Secs. 4.2 and 4.4(b) of this

chapter, except as provided in Sec. 3.82(b)(2) for confidential

financial information. The date the Office of the Secretary of the

Commission receives the application is deemed the date of filing.

(b) Answer to application. (1) Within 30 days after service of an

application, complaint counsel may file an answer to the application.

Unless complaint counsel requests an extension of time for filing or

files a statement of intent to negotiate under paragraph (b)(2) of this

section, failure to file an answer within the 30-day period may be

treated as a consent to the award requested.

(2) If complaint counsel and the applicant believe that the issues

in the fee application can be settled, they may jointly file a

statement of their intent to negotiate a settlement. The filing of this

statement shall extend the time for filing an answer for an additional

30 days, and further extensions may be granted by the Administrative

Law Judge upon request by complaint counsel and the applicant.

(3) The answer shall explain in detail any objections to the award

requested and identify the facts relied on in support of complaint

counsel's position. If the answer is based on any alleged facts not

already in the record of the proceeding, complaint counsel shall

include with the answer either supporting affidavits or a request for

further proceedings under paragraph (f) of this section.

(c) Reply. Within 15 days after service of an answer, the applicant

may file a reply. If the reply is based on any alleged facts not

already in the record of the proceeding, the applicant shall include

with the reply either supporting affidavits or a request for further

proceedings under paragraph (f) of this section.

(d) Comments by other parties. Any party to a proceeding other than

the applicant and complaint counsel may file comments on an application

within 30 days after it is served or on an answer within 15 days after

it is served. A commenting party may not participate further in

proceedings on the application unless the Administrative Law Judge

determines that the public interest requires such participation in

order to permit full exploration of matters in the comments.

(e) Settlement. The applicant and complaint counsel may agree on a

proposed settlement of the award before final action on the

application. A proposed award settlement entered into in connection

with a consent agreement covering the underlying proceeding will be

considered in accordance with Sec. 3.25. The Commission may request

findings of fact or recommendations on the award settlement from the

Administrative Law Judge. A proposed award settlement entered into

after the underlying proceeding has been concluded will be considered

and may be approved or disapproved by the Administrative Law Judge

subject to Commission review under paragraph (h) of this section. If an

applicant and complaint counsel agree on a proposed settlement of an

award before an application has been filed, the application shall be

filed with the proposed settlement.

(f) Further proceedings. (1) Ordinarily, the determination of an

award will be made on the basis of the written record. However, on

request of either the applicant or complaint counsel, or on his or her

own initiative, the Administrative Law Judge may order further

proceedings, such as an informal conference, oral argument, additional

written submissions or an evidentiary hearing. Such further proceedings

shall be held only when necessary for full and fair resolution of the

issues arising from the application, and shall be conducted as promptly

as possible.

(2) A request that the Administrative Law Judge order further

proceedings under this section shall specifically identify the

information sought or the disputed issues and shall explain why the

additional proceedings are necessary to resolve the issues.

(g) Decision. The Administrative Law Judge shall issue an initial

decision on the application within 30 days after closing proceedings on

the application.

(1) For a decision involving a prevailing party: The decision shall

include written findings and conclusions on the applicant's eligibility

and status as a prevailing party, and an explanation of the reasons for

any difference between the amount requested and the amount awarded. The

decision shall also include, if at issue, findings on whether the

agency's position was substantially justified, whether the applicant

unduly protracted the proceedings, or whether special circumstances

make an award unjust.

(2) For a decision involving an excessive agency demand: The

decision shall include written findings and conclusions on the

applicant's eligibility and an explanation of the reasons why the

agency's demand was or was not determined to be substantially in excess

of the decision of the adjudicative officer and was or was not

unreasonable when compared with that decision. That decision shall be

based upon all the facts and circumstances of the case. The decision

shall also include, if at issue, findings on whether the applicant has

committed a willful violation of law or otherwise

[[Page 36344]]

acted in bad faith, or whether special circumstances make an award

unjust.

(h) Agency review. Either the applicant or complaint counsel may

seek review of the initial decision on the fee application by filing a

notice of appeal under Sec. 3.52(a), or the Commission may decide to

review the decision on its own initiative, in accordance with

Sec. 3.53. If neither the applicant nor complaint counsel seeks review

and the Commission does not take review on its own initiative, the

initial decision on the application shall become a final decision of

the Commission 30 days after it is issued. Whether to review a decision

is a matter within the discretion of the Commission. If review is

taken, the Commission will issue a final decision on the application or

remand the application to the Administrative Law Judge for further

proceedings.

(i) Judicial review. Judicial review of final Commission decisions

on awards may be sought as provided in 5 U.S.C. 503(c)(2).

(j) Payment of award. An applicant seeking payment of an award

shall submit to the Secretary of the Commission a copy of the

Commission's final decision granting the award, accompanied by a

statement that the applicant will not seek review of the decision in

the United States courts. The agency will pay the amount awarded to the

applicant within 60 days, unless judicial review of the award or of the

underlying decision of the adjudicative proceeding has been sought by

the applicant or any party to the proceeding.

By direction of the Commission.

Benjamin I. Berman,

Acting Secretary.

[FR Doc. 98-17803 Filed 7-2-98; 8:45 am]

BILLING CODE 6750-01-M