|
|
|
|
|
[Federal Register: March 4, 2004 (Volume 69, Number 43)]
[Notices]
[Page 10288-10294]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04mr04-101]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
[Docket No. FMCSA-2003-14794]
Guidance for the Use of Binding Arbitration Under the
Administrative Dispute Resolution Act of 1996
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Guidance.
-----------------------------------------------------------------------
SUMMARY: The Federal Motor Carrier Safety Administration (FMCSA), a
modal administration within the U.S. Department of Transportation
(DOT), announces the availability of its Guidance for the use of
binding arbitration in civil penalty forfeiture proceedings in which
the only issues remaining to be resolved are the amount of the civil
penalty owed and the length of time in which to pay it. FMCSA will not
agree to arbitrate maximum civil penalty cases issued pursuant to
section 222 of the Motor Carrier Safety Improvement Act of 1999, or any
cases that require interpretation of the regulations or analysis of
important policy issues. The Guidance is located on the Internet at
http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://dms.dot.gov,
under docket number FMCSA-2003-14794.
EFFECTIVE DATE: The Guidance becomes effective immediately upon
publication in the Federal Register.
FOR FURTHER INFORMATION CONTACT: Steven B. Farbman, (202) 385-2351,
Federal Motor Carrier Safety Administration, Adjudications Counsel, 400
7th Street, SW., Washington, DC 20590. Office hours are from 9 a.m. to
5:30 p.m. e.s.t., Monday through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION: On March 31, 2003, FMCSA published a notice
in the Federal Register (68 FR 15549) announcing the issuance for
public comment of its proposed Guidance for the use of binding
arbitration as an alternative dispute resolution technique in civil
penalty forfeiture proceedings in which the only issues remaining to be
resolved are the amount of the civil penalty owed and the length of
time in which to pay it. In response to a petition from the parties, or
as a result of the Chief Safety Officer's independent review of case
pleadings, the Chief Safety Officer will determine if a case is
appropriate for arbitration and notify the parties in writing that the
case will be referred to arbitration with the consent of both parties.
A detailed explanation of the notification and consent process is
provided in the Questions and Answers portion of the Guidance. Maximum
civil penalty cases issued pursuant to section 222 of the Motor Carrier
Safety Improvement Act of 1999 and cases requiring interpretation of
the regulations or analysis of important policy issues will not be
selected for binding arbitration. FMCSA will modify or terminate the
use of binding arbitration if there is reason to believe that
continuation of this process will be inconsistent with the goals and
objectives of the Federal Motor Carrier Safety Regulations or Hazardous
Materials Regulations.
FMCSA's Guidance, developed pursuant to the Administrative Dispute
Resolution Act (ADRA) of 1996 (Pub. L. 104-320, 110 Stat. 3870 (October
19, 1996) (now codified at 5 U.S.C. 571-583)), had been published in
full on the
[[Page 10289]]
Internet. As was stated in the Federal Register notice published on
March 31, 2003, FMCSA had submitted the Guidance to the Attorney
General for consultation and received his concurrence in accordance
with section 575 of the ADRA. The notice called for public comments to
be received by U.S. DOT Dockets on or before May 30, 2003.
To date, no comments have been received by FMCSA on this proposal.
FMCSA, nevertheless, is making a change to the Guidance. The Guidance
stated that each party would present evidence supporting the penalty it
considers appropriate for each violation and the case as a whole. It
further stated that each party would present to the Arbitrator and the
opposing party a sealed envelope containing the amount of its proposed
penalty for each violation as well as a total penalty for the case. The
Arbitrator, in turn, would determine the appropriate civil penalty for
each violation as well as the total civil penalty for the case.
(Emphasis added.) Upon further review, the Agency has concluded that
having a civil penalty determination made for each violation as well as
for the entire case could lead to unwarranted results. Under this
scenario, it would be possible for the Arbitrator to select one party's
proposed civil penalty for several of the violations, but select the
other party's total civil penalty as being closest to his or her own
figure. This will lead to confusion, and the Agency's goal of a more
efficient and effective resolution of the large volume of adjudication
cases before FMCSA's Chief Safety Officer may be jeopardized.
Accordingly, the parties will present evidence and a proposed civil
penalty only for the case as a whole. The Arbitrator, in turn, will
determine the civil penalty for the entire case and select the proposal
that is closer to his or her determination. FMCSA has also added
language to clarify that the Arbitrator will make a payment plan
determination if the carrier has requested one. The Attorney General
has approved the Agency's arbitration concept and does not require that
these changes be submitted for his concurrence.
FMCSA's issuance of this Guidance satisfies the requirements
regarding binding arbitration specified by section 575 of the ADRA of
1996, and addresses use of binding arbitration in a manner consistent
with FMCSA's dispute resolution process and its procedural rules of
practice at 49 CFR part 386. The Guidance may be located on the
Internet at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.dms.dot.gov,
under docket number 2003-14794.
Issued on: February 17, 2004.
Annette M. Sandberg,
Administrator.
Guidance for the Use of Binding Arbitration Under the Administrative
Dispute Resolution Act of 1996
Dated: February 6, 2004.
Summary
The primary mission of the U.S. Department of Transportation's
Federal Motor Carrier Safety Administration (FMCSA) is to prevent
commercial motor vehicle-related fatalities and injuries. FMCSA
contributes to reducing crashes and ensuring commercial motor vehicle
safety through its enforcement of safety regulations, including the
assessment of civil penalties.
Because of the large volume of cases before FMCSA's Chief Safety
Officer for adjudication, the FMCSA has begun to explore whether
alternative dispute resolution might lead to a more efficient and
effective enforcement program. This Guidance for the Use of Binding
Arbitration is being proposed to expand the options for adjudication
available to motor carriers, brokers, shippers, freight forwarders, and
other individuals or entities engaged in the use of commercial motor
vehicles in interstate transportation (hereafter referred to
collectively as ``carriers''). Rather than submit to the Chief Safety
Officer cases that only involve a question of the amount of civil
penalty or terms of payment, carriers may elect to enter into binding
arbitration.
This Guidance explains arbitration and addresses critical issues
relating to the use of binding arbitration. This Guidance provides that
the use of binding arbitration is entirely voluntary. FMCSA believes
that, in many cases, the use of binding arbitration can provide
significant benefits for the agency and the carriers and that this
Guidance would provide FMCSA with another tool to help achieve its goal
of effective, efficient, and fair resolution of civil penalty
enforcement cases. This program may be terminated, modified, or
permanently adopted as part of the FMCSA's enforcement program in the
discretion of the Chief Safety Officer (CSO).
This Guidance is being issued after consultation with the Attorney
General, pursuant to 5 U.S.C. 575(c).
Background
Alternative Dispute Resolution
Alternative Dispute Resolution (ADR) describes a variety of
problem-solving processes available to parties who are ready, willing
and able to try them in lieu of litigation or other adversarial
proceedings to resolve disagreements. ADR gives parties an opportunity
to talk with each other directly under the guidance of a dispute
resolution professional. ADR processes are generally designed to reduce
costs, avoid the delays of judicial proceedings, protect the privacy of
the parties, and increase the level of compliance by involving
decisionmakers in the process.
In 1990, President George H.W. Bush signed into law the
Administrative Dispute Resolution Act of 1990.\1\ The Act defines
``alternative means of dispute resolution'' to include any procedure
that is used to resolve issues in controversy, including mediation,
facilitation, conciliation, fact-finding, mini-trials, use of an
ombuds, and arbitration. The use of ADR processes was intended to be
and is voluntary (``if the parties agree to such proceeding'' \2\), and
it is used in place of traditional adjudication or other formal
processes. Among other things, the Act required agencies to adopt an
ADR policy and provide ADR training. These procedural requirements have
resulted in the increased use of ADR within the Federal government.
---------------------------------------------------------------------------
\1\ Pub. L. 101-552, 104 Stat. 2736 (codified at 5 U.S.C. 571).
\2\ ``An agency may use a dispute resolution proceeding for the
resolution of an issue in controversy that relates to an
administrative program, if the partis agree to such proceeding.''
Id. at Sec. 572(a).
---------------------------------------------------------------------------
The 1990 Act expressly authorized the use of arbitration among
several ADR techniques available to federal agencies for purposes of
dispute resolution, but specifically permitted agency heads to ``opt
out'' of arbitration awards:
(c) The head of any agency that is a party to an arbitration
proceeding conducted under this subchapter is authorized to terminate
the arbitration proceeding or vacate any award issued pursuant to the
proceeding before the award becomes final by serving on all other
parties a written notice to that effect, in which case the award shall
be null and void.
The Administrative Dispute Resolution Act of 1996 \3\ was enacted
because of the sunset of the 1990 Act. The primary purpose of this new
statute was to reauthorize the 1990 Act. In addition, it enhanced
confidentiality protections, simplified the process for acquiring
neutrals by addressing the development of procedures for obtaining
neutral third parties as mediators on an expedited basis, and
[[Page 10290]]
authorized fully binding arbitration. The ``opt out'' feature of the
1990 Act--which rendered federal agency arbitrations less than
``binding''--was eliminated. The 1996 Act specifically permits federal
agencies to use ``binding arbitration'' to resolve ``issues in
controversy.'' In addition, the 1996 Act requires that agencies issue
guidance as a prerequisite to agencies' use of binding arbitration, in
consultation with the Attorney General. 5 U.S.C. 575(c).
---------------------------------------------------------------------------
\3\ Pub. L. 104-320, 110 Stat. 3870 (codified at 5 U.S.C. 571).
---------------------------------------------------------------------------
In August 2000, the Federal ADR Council under the leadership of the
Attorney General approved and endorsed a publication entitled
``Developing Guidance for Binding Arbitration: A Handbook for Federal
Agencies (the ``Handbook''). The Handbook was created to assist
agencies in developing policy for the use of binding arbitration.
In June 2002, Secretary of Transportation Norman Y. Mineta
announced a Statement of Policy on ADR. The Department of
Transportation is committed to advancing its national transportation
goals through ADR. The Department is using ADR in a variety of areas
including workplace issues, issuance of regulations, contract and grant
award and administration, litigation brought by or against the
Department, and other interactions with the public and the regulated
community. Because of the volume of cases awaiting a decision of its
Chief Safety Officer, FMCSA has begun to explore whether ADR may lead
to a more efficient and effective enforcement program.
FMCSA's Enforcement Program
The civil penalty enforcement process begins with a compliance
review that is conducted by an FMCSA Safety Investigator or by State
enforcement personnel pursuant to the Federal Motor Carrier Safety
Assistance Program. (Both hereafter referred to as ``SI''). After
conducting a review of a carrier's operations, the SI discusses the
review with carrier management personnel. The SI reports on the
violations discovered, makes recommendations about corrective action
and future compliance, and provides the motor carrier with a proposed
safety rating (satisfactory, conditional, or unsatisfactory).
FMCSA's State Director or Division Administrator ultimately reviews
the case presented by the SI and decides whether the violations
documented during the CR warrant a civil penalty enforcement action. If
so, the agency issues a Notice of Claim (NOC) to the carrier. The NOC
notifies the carrier of the violations discovered during the CR,
asserts a claim for the civil penalty applicable to each violation and
the case in total, and informs the carrier how to respond to the NOC.
A carrier may respond to the NOC by paying the civil penalty,
requesting a hearing before an Administrative Law Judge, or requesting
the CSO to consider the merits of the case on the written record. As
part of its reply, the carrier may request an opportunity for
settlement discussion. If the carrier ignores the NOC or does not
timely reply, the Field Administrator may advise the carrier that it
has defaulted, that the NOC has become the final agency order, and that
the carrier owes the civil penalty asserted in the NOC.
The Service Center Enforcement Team is led by an Enforcement
Program Manager who negotiates with the carrier over the amount of the
civil penalty and the terms for payment. To allow the parties an
opportunity to resolve the matters without resorting to formal
proceedings, the CSO encourages negotiation of the civil penalty and
the terms of payment, especially where there is evidence that the
carrier has undertaken corrective action prior to issuance of the NOC.
See, e.g., In the Matter of Four Star Transport, Inc., Docket No. FMCSA
2000-7070-6, March 9, 2001 and In the Matter of AGG Enterprises, Inc.,
Docket No. FMCSA-2001-8689-3, December 17, 2001.
When the agency and the carrier cannot agree that a violation
occurred or agree to the amount of the civil penalty, agency attorneys
will file before the CSO a Motion for Final Order, which is the
equivalent of a motion for summary judgment. The carrier typically
responds to the motion and, based on the submission of the parties, the
CSO issues the final agency decision addressing the violations and, if
appropriate, assessing the civil penalty.
Pursuant to 49 U.S.C. 521(b)(2)(D), the amount of the civil penalty
for violations of the Federal Motor Carrier Safety Regulations shall
take into effect ``the nature, circumstances, extent, and gravity of
the violation committed and, with respect to the violator, the degree
of culpability, history of prior offenses, ability to pay, effect on
ability to continue to do business, and such other matters as justice
and public safety may require. In each case, the assessment shall be
calculated to induce further compliance.'' The amount of the civil
penalty for violations of the Hazardous Materials Regulations shall
take into account the factors listed at 49 U.S.C. 5123(c), which are
nearly identical to those listed in 49 U.S.C. 521(b)(2)(D).
Binding Arbitration
Binding arbitration is the dispute resolution process most like
adjudication. In binding arbitration, the parties agree to use a
mutually selected decisionmaker to hear their dispute and resolve it by
rendering a decision or award that is binding on the parties. Like
litigation, binding arbitration is an adversarial, adjudicative process
designed to resolve the specific issues submitted by the parties.
Binding arbitration differs significantly from litigation in that it
does not require conformity with the legal rules of evidence, and the
proceeding is conducted in a private rather than a public forum.
Binding arbitration awards typically are enforceable by courts, absent
defects in the arbitration procedure. Appeal from arbitration awards,
pursuant to the Federal Arbitration Act, 9 U.S.C. 10, is generally
limited to fraud or misconduct in the proceedings.
FMCSA will use a form of arbitration referred to as ``Night
Baseball.'' Under this format, the Arbitrator will determine the
appropriate civil penalty without knowledge of the parties' proposals.
The actual award will be the party's figure that is closer to the
Arbitrator's determination. The process for reaching the final award
will be as follows: Each party will present evidence supporting the
penalty it considers appropriate for the case as a whole. Evidence will
be presented in accordance with the procedures established by the
parties within the Arbitration Agreement. No evidence shall be offered
or accepted concerning whether the violation(s) occurred because the
parties concede the violations as a condition of arbitration. Neither
written submissions nor oral argument will contain any reference to the
amount of the civil penalty proposed by the party. At a time specified
by the Arbitrator, each party will present to the Arbitrator and to the
opposing party a sealed envelope containing the amount of its total
proposed civil penalty for the case and, if necessary, a proposed
payment plan supported by the evidence. Before opening the envelopes,
the Arbitrator will determine the total civil penalty and, if
necessary, a payment plan. His determination will be provided in
writing to the parties. The Arbitrator will then open the envelopes and
select the civil penalty and payment plan closer to the Arbitrator's
determinations. The actual award will be the party's figure and payment
plan that is closer to the Arbitrator's determination. It is possible
for the Arbitrator to select the
[[Page 10291]]
civil penalty proposed by one party and the payment plan proposed by
the other party.
As discussed later in this guidance, the civil penalty amount
proposed by the parties may not be set lower than the statutory minimum
for any violation nor higher then the amount assessed in the NOC.
Because the 1996 Act requires the parties to agree on a maximum award,
FMCSA proposes that the maximum award be set at the amount assessed in
the NOC.
Statutory Considerations for Not Using Arbitration
The 1996 Act states that agencies should not consider using any
form of ADR, including binding arbitration, if:
(1) A definitive or authoritative resolution of the matter is
required for precedential value, and such a proceeding is not likely to
be accepted generally as an authoritative precedent;
(2) The matter involves or may bear upon significant questions of
Government policy that require additional procedures before a final
resolution may be made, and such a proceeding would not likely serve to
develop a recommended policy for the agency;
(3) Maintaining established policies is of special importance, so
that variations among individual decisions are not increased and such a
proceeding would not likely reach consistent results among individual
decisions;
(4) The matter significantly affects persons or organizations who
are not parties to the proceeding;
(5) A full public record of the proceeding is important, and a
dispute resolution proceeding cannot provide such a record; or
(6) The agency must maintain continuing jurisdiction over the
matter with authority to alter the disposition of the matter in the
light of changed circumstances, and a dispute resolution proceeding
would interfere with the agency's fulfilling that requirement.
See 5 U.S.C. 572(b).
Accordingly, unless the Chief Safety Officer determines that the
use of binding arbitration will be in the best interests of the
government, a case will not be submitted to binding arbitration.
Other Statutory Considerations
The 1996 Act includes a number of provisions relating to
arbitration. FMCSA's use of binding arbitration will be modeled on
these provisions.
Authorization of Arbitration
1. The decision to arbitrate must be voluntary on the part of all
parties to the arbitration. (See 5 U.S.C. 575(a)(1)).
2. An agreement to arbitrate must be in writing. It must set forth
the subject matter submitted to the arbitrator, and must specify the
maximum award that may be granted by the arbitrator. (See 5 U.S.C.
575(a)(2)).
3. FMCSA shall not require anyone to consent to arbitration as a
condition of entering into a contract or obtaining any other benefit.
(See 5 U.S.C. 575(a)(3)).
4. The Field Administrator who offers to use arbitration has the
authority to enter into a settlement concerning the matter after
consent to the use of arbitration by the Chief Safety Officer. (See 5
U.S.C. 575(b)(1) and (2)).
Enforcement of Arbitration Agreements (5 U.S.C. 576).
Arbitration agreements are enforceable pursuant to 9 U.S.C 4.
Arbitrators (5 U.S.C. 577)
1. The parties to an arbitration are entitled to participate in
selecting an arbitrator. (See 5 U.S.C. 577(a)).
2. An arbitrator shall not have an official financial or personal
conflict of interest with respect to the issue in controversy, unless
that interest is fully disclosed in writing and all parties agree that
he/she may serve as the arbitrator. (See 5 U.S.C. 573, 577(b)).
Authority of the Arbitrator (5 U.S.C. 578)
1. An arbitrator may regulate the course and conduct of the
arbitration hearing. (See 5 U.S.C. 578(1)).
2. An arbitrator may administer oaths and affirmations. (See 5
U.S.C. 578(2)).
3. An arbitrator may compel the attendance of witnesses and the
production of documents only to the same extent the agency involved is
otherwise authorized by law to do so. (See 5 U.S.C. 578(3)).
4. An arbitrator may make awards. (See 5 U.S.C. 578(4)).
Arbitration Proceedings (5 U.S.C. 579)
1. The arbitrator shall set the time and place for the arbitration
hearing and shall notify the parties of same at least five days before
the hearing is to take place. (See 5 U.S.C. 579(a)
2. Parties are entitled to a record of the arbitration hearing. Any
party wishing a record shall: (1) Make the arrangements for it; (2)
notify the arbitrator and other parties that a record is being
prepared; (3) supply copies to the arbitrator and the other parties;
and (4) pay all costs, unless the parties have agreed to share the
costs or the arbitrator determines that the costs should be
apportioned. (See 5 U.S.C. 579(b)(1)-(4)).
3. At any arbitration hearing, parties are entitled to be heard, to
present evidence, and to cross-examine witnesses. The arbitrator may,
with the consent of the parties, conduct the hearing by telephone,
television, computer or other electronic means, if each party has the
opportunity to participate. (See 5 U.S.C. 579(c)(1) and (2)).
4. The arbitrator may receive any oral or documentary evidence that
is not irrelevant, immaterial, unduly repetitious, or privileged. (See
5 U.S.C. 579(4)).
5. The arbitrator shall interpret and apply any relevant statutes,
regulations, legal precedents and policy directives. (See 5 U.S.C.
579(5)).
6. No party shall have any unauthorized ex parte communication with
the arbitrator relevant to the merits of the proceeding, unless the
parties agree. If a party violates this provision, the arbitrator shall
ensure that a memorandum of the communication is included in the
record, and that an opportunity for rebuttal is allowed. The arbitrator
may require the party who engages in an unauthorized ex parte
communication to show cause why the issue in controversy should not be
resolved against it for the improper conduct. (See 5 U.S.C. 579(d)).
Arbitration Awards
1. An arbitration award shall include a brief informal discussion
of the factual and legal bases for the award. Formal findings of fact
and law are not required. (See 5 U.S.C. 580(a)(1)).
2. A final award is binding on the parties and may be enforced
pursuant to 9 U.S.C. 9-13. (See 5 U.S.C. 580(c)).
3. An arbitration award may not serve as an estoppel in any other
proceeding and may not be used as precedent in any factually unrelated
proceeding. (See 5 U.S.C. 580(d)).
Judicial Review (5 U.S.C. 581)
1. Any action for review of an arbitration award must be made
pursuant to sections 9 through 13 of title 9, U.S. Code. (See 5 U.S.C.
581(a)). A court may vacate an award where the award was procured by
corruption, fraud, or undue means; where there was arbitrator
partiality, corruption, misconduct or misbehavior; or where an
arbitrator has exceeded or imperfectly executed the arbitrator's
powers.
2. A decision by an agency to use or not to use arbitration shall
be committed to the discretion of the agency and shall not be subject
to judicial review, except that arbitration shall only be subject to
judicial review under section 10(c) of title 9, U.S. Code. (See 5
U.S.C. 581(b)).
[[Page 10292]]
Questions and Answers on FMCSA's Use of Binding Arbitration
Issue 1: For what types of cases will FMCSA be willing to use
binding arbitration?
Response: FMCSA is generally willing to use binding arbitration for
the resolution of cases in which the only questions are the amount of,
and the length of time permitted to pay, the civil penalty. FMCSA will
not agree to arbitrate maximum penalty cases issued pursuant to section
222 of the Motor Carrier Safety Improvement Act of 1999, Pub. L. 106-
159, 113 Stat. 1748 (December 9, 1999), 49 U.S.C. 521 note, or any
cases that deal with an interpretation of the regulations or with
important policy issues.
Issue 2: How and by whom will the decision to arbitrate be made?
Response: The decision to arbitrate is strictly that of the
parties. As with any other form of ADR, arbitration must be a
completely voluntary process. Either party may petition the Chief
Safety Officer for a determination that the case be set for binding
arbitration and that the Chief Safety Officer issue a Notification of
Arbitration.
Issue 3: Who will have authority to authorize arbitration?
Response: The Chief Safety Officer will decide which cases are
appropriate for ADR. Again, this class of cases will include only those
that involve solely a monetary dispute and that do not concern FMCSA
policy or procedure. The Chief Safety Officer has the discretion to
delegate this authority to the FMCSA Adjudications Counsel.
Issue 4: Who has the authority to enter into settlement for FMCSA?
May this authority be delegated?
Response: A Field Administrator has the authority to settle a case
for FMCSA. This authority may be delegated to the Enforcement Program
Manager.
Issue 5: How will the cap on the award be established?
Response: The maximum arbitration award will be set at the civil
penalty amount assessed in the NOC, or amended NOC, if one is issued.
Issue 6: Is there a limitation on the length of time for a payment
plan, if the Arbitrator orders a payment plan?
Response: The maximum period that the Arbitrator may permit for a
payment plan is 60 months from the date of the issuance of the Award.
Issue 7: Who will negotiate the rules and selection of the
arbitrator?
Response: The parties must mutually agree upon the arbitrator and
will have several options from which to choose, including: (1)
Department of Transportation Board of Contract Appeals Judges or
representatives from other government agencies who have been trained in
arbitration; (2) Uncompensated Neutrals from local communities; and (3)
Compensated Neutrals from outside the government, whose costs are to be
shared by agreement of the parties. For FMCSA, the decision regarding
selection of the arbitrator will be that of the Field Administrator.
The parties will establish the procedural rules that will govern any
binding arbitration, with input from the selected arbitrator, and
include the rules in the Arbitration Agreement.
Issue 8: Who will draft the Arbitration Agreement?
Response: The parties will draft the Arbitration Agreement, with
substantive input from the selected arbitrator. A sample Arbitration
Agreement is included in Appendix A.
Issue 9: What will the process be for entering into arbitration?
Response: Once the Chief Safety Officer has determined that a case
is appropriate for arbitration, he/she will notify the parties to the
dispute by issuing a Notification of Arbitration, in writing,
indicating that that the case may be referred to arbitration. The
Notification will require the parties to indicate agreement or their
objection to submitting the case to arbitration. The Notification will
require that each party return (serve) the Notification form--with
their choice so noted--within 15 days of the date on the Chief Safety
Officer's Notification. If the carrier opts for arbitration, the matter
will be so assigned unless the Field Administrator or his/her designee
submits on the Notification form argument against arbitration. The
burden will be upon the Field Administrator to demonstrate that the
case involves a question of regulatory interpretation and/or an
important policy issue unsuitable for arbitration. After the Chief
Safety Officer considers the Field Administrator's argument and renders
a decision, that decision is final.
Issue 10: How can FMCSA encourage the efficiency of the arbitration
process?
Response: Only single arbitrators (rather than panels of
arbitrators) will handle these cases. To assure maximum efficiency of
the arbitration process, subject to the consent and cooperation of the
carrier, FMCSA will encourage:
A. The resolution of the controversy by means of document review or
by arbitration via telephone conference in appropriate cases, with the
consent of the carrier.
B. The arbitrator to establish reasonable deadlines for any hearing
and rendering of an award. These timeframes shall be incorporated into
the Arbitration Agreement.
Issue 11: What is the arbitrator's role?
Response: Consistent with the ADRA, the arbitrator will have the
authority to:
[sbull] Regulate the course and conduct of arbitration hearings;
[sbull] Administer oaths;
[sbull] Compel attendance of witnesses and production of evidence,
to the extent that the agency is authorized to do so by law;
[sbull] Issue awards.
The parties, as part of their Arbitration Agreement, may include
any specific additional powers they wish the arbitrator to have and
provide the arbitrator broad discretion in terms of efficient case
management.
Issue 12: Will FMCSA permit the use of a panel of arbitrators in
some circumstances?
Response: Because of the costs of a panel of arbitrators and the
lack of complexity in these cases, FMCSA will not agree to a panel of
arbitrators.
Issue 13: What selection criteria will be considered in choosing an
arbitrator?
Response: The primary criteria for selecting an arbitrator will be:
(1) Overall reputation of the arbitrator in terms of competence,
integrity, and impartiality; (2) availability of the arbitrator during
the periods most convenient for the parties; (3) relative cost; (4) the
absence of any actual or potential conflict of interest; and (5)
geographic proximity of the proposed arbitrator to the parties and to
witnesses if the Arbitration Agreement calls for a hearing.
Issue 14: Will FMCSA agree to allow non-attorneys to represent a
party, or for a party to appear pro se at the arbitration?
Response: Yes. The Rules of Practice for Motor Carrier, Broker,
Freight Forwarder, and Hazardous Materials Proceeding, 49 CFR part 386,
are designed to be readily accessible to small business enterprises and
other entities. Carriers often respond to notices of claim without
assistance of counsel. Before approving any Arbitration Agreement
entered into by an unrepresented carrier, the Arbitrator shall require
such carrier to execute a statement acknowledging the risks and
limitations inherent in any arbitration.
Issue 15: What should an Arbitration Agreement include?
Response: The Agreement should include the following:
1. The names of the parties.
2. The issues being submitted to binding arbitration.
3. The maximum award that the arbitrator may direct.
4. Any other conditions limiting the range of possible outcomes,
including
[[Page 10293]]
but not limited to, the statutory minimum for violations of the
Hazardous Materials Regulations as set forth at 49 U.S.C. 5123(a).
5. The scope of the arbitration. This will limit time and cost and
give the arbitrator power to be a ``case manager.'' A sample case
management provision might read:
``The Arbitrator is expected to assume control of the process and
to schedule all events as expeditiously as possible, to insure that an
award is issued no later than -- days from the date of this Agreement.
The penalty will be due to FMCSA thirty days after service of the
Arbitration Award by the Arbitrator unless a payment plan is ordered by
the Arbitrator.''
6. References to all provisions of the 49 CFR part 386 rules
regarding discovery and the conduct of hearings that the parties may
wish to apply to the arbitration process.
7. The name of the arbitrator, the amount of compensation (if any)
and how it will be paid. (Note: No Agreement shall provide for deposits
in an escrow account to pay for expenses of the proceeding in advance
of expenses being incurred.)
8. The date when the arbitration will commence.
9. The types of remedies available.
10. A confidentiality provision referring to the 1996 Act and
stating that neither the Arbitration Agreement nor the arbitration
award will be considered confidential.
11. The bases for appeal.
12. The arbitration hearing is open only to the parties, their
representatives and the arbitrator. The hearing is not a public forum.
13. The Arbitrator's decision will be issued in writing, and will
state the factual and legal bases and amount of the penalty awarded by
the Arbitrator.
14. The carrier will have thirty (30) days from the date of service
of the award to pay the amount awarded unless the Arbitrator orders a
payment plan.
15. The arbitration award is final and has the same force and
effect as any final agency order. Thus, failure to pay the determined
award triggers the same Agency remedies, as would the failure to pay a
civil penalty award entered by the Chief Safety Officer.
A Sample Arbitration Agreement is included in Appendix A.
Issue 16: How will FMCSA pay the arbitrator(s)?
Response: The 1996 Act allows an agency to use, with or without
reimbursement, the services and facilities of other Federal agencies,
State, local and tribal governments, public and private organizations
and agencies, and individuals, with the consent of such agencies,
organizations, and individuals, and without regard to the provisions of
31 U.S.C. 1342 (regarding the acceptance of voluntary services). In
addition, the 1996 Act permits selection of all ADR neutrals, including
arbitrators, to be done non-competitively. FMCSA and the carrier must
agree on the selection of the arbitrator.
FMCSA is considering three categories of potential arbitrators: (1)
Department of Transportation Board of Contract Appeals Judges or
representatives from other government agencies who have been trained in
arbitration; (2) Uncompensated Neutrals from local communities; and (3)
Compensated Neutrals from outside the government, whose costs are to be
shared by agreement of the parties. To limit costs, FMCSA is
considering using Board of Contract Appeals Judges and Uncompensated
Neutrals from local communities to serve as arbitrators. If the parties
cannot agree on this no-cost option, the parties will agree in advance
to share any arbitrator fees and costs, the costs of any transcripts,
or other costs, all of which will be paid after the award is issued.
FMCSA will not escrow funds or pay in advance for any such costs.
Issue 17: Is FMCSA willing to use ``administered arbitration''?
Response: No. Because of the cost implications, FMCSA will not
agree to administered arbitration, arbitration administered by an
outside ADR organization.
Issue 18: What must the arbitration award include?
Response: The arbitration award need not be in the form of formal
findings of fact and conclusions of law, but must be in writing and at
least provide in summary form the monetary amount of the award, if any,
and the factual and legal basis for the arbitrator's decision. The
award will be subject to the ``cap'' and any other limitations agreed
upon by the parties.
Arbitration awards are not confidential documents. Awards shall be
entered into the FMCSA docket for the case. Additionally, awards may be
posted on the FMCSA Web site and/or published in the Federal Register.
Issue 19: Will FMCSA allow arbitration on the documents only,
without a hearing, or a telephonic hearing? If so, in what
circumstances?
Response: While the parties to the arbitration are entitled to be
heard, to present evidence, and to cross-examine witnesses appearing at
a hearing, due to the nature of these cases, FMCSA encourages
arbitration on the documents only without a hearing, or a telephonic
hearing. This has the advantage of saving time, money, and avoiding
scheduling conflicts. The Arbitration Agreement should allow the
parties to request a hearing. The Arbitration Agreement should also
allow the arbitrator discretion to call for an in-person hearing should
the arbitrator determine that credibility may be a factor in the
outcome of the award.
The arbitrator may also conduct, with the consent of the parties,
all or part of a hearing by telephone, video conferencing, or computer
as long as each party has an equal opportunity to participate.
Issue 20: May an arbitration award be used as precedent in any
other proceeding?
Response: No, the arbitration award may not be used as precedent
consistent with 5 U.S.C. 580(d). Nonetheless, by entering into
Arbitration, the carrier has admitted, or the Chief Safety Officer has
found, that FMCSA has an appropriate and defined factual basis for the
violations, and that the violations may be considered in future
enforcement action(s) by FMCSA.
Appendix A
Agreement to Submit to Binding Arbitration
Section One--Parties and Controversy
The Federal Motor Carrier Safety Administration and --------
(''Carrier'') (collectively the ``Parties'') voluntarily agree to
submit the following controversy arising from violations of the
Federal Motor Carrier Safety Regulations to binding arbitration:
(briefly describe the controversy).
Section Two--Assignment of Arbitrator
We agree upon--------as the Arbitrator.
Section Three--Issues of Arbitration
We agree that the Arbitrator shall be limited to the following
issues of fact and law: (set forth each issue with specificity,
including the question of whether a payment plan is appropriate).
Section Four--Costs of Arbitration
We agree to pay the Arbitrator a fee of $------(``the fee'') for
the services as an arbitrator. The Fee is based on the issues
specified in Section Three above.
We agree to reimburse the Arbitrator for all reasonable out-of-
pocket expenses that the Arbitrator may incur for the arbitration.
These expenses include but are not limited to: travel, lodging, and
meals (consistent with Federal per diem standards), long distance
charges, printing and copying, postage and courier fees.
Section Five--Minimum and Maximum Award
We agree that the maximum award shall be (the amount demanded in
the Notice of Claim). This amount is a total of the penalties
[[Page 10294]]
for each of the individual violations as follows:
We also agree that the minimum award for violation of Hazardous
Materials Regulations shall be no less than $250 per violation as
set forth at 49 U.S.C. 5123(a).
Section Six--Management of the Proceeding
We further agree that the arbitration proceeding will be
conducted in accordance with procedures established in 49 CFR part
386 for discovery and hearings. Additional rules and procedures for
the arbitration may be negotiated and agreed upon by the Arbitrator
and the Parties at any time during the arbitration process.
We further agree that we shall faithfully observe this agreement
and the applicable procedural rules and that we will abide by and
perform any award rendered by the arbitrator.
We agree that the Arbitrator will assume control of the process
and will schedule all events as expeditiously as possible, to ensure
that an award is issued no later than---- days from the date of this
Agreement. The penalty will be due to FMCSA 30 days after service of
the Arbitration Award by the Arbitrator unless the Arbitrator orders
a payment plan.
Consistent with the Rules of Practice for Motor Carrier, Broker,
Freight Forwarder, and Hazardous Materials Proceedings, 49 CFR part
386, Carriers may be represented by a representative of their choice
including non-lawyers. Representatives and FMCSA counsel shall be
responsive to the direction provided by the Arbitrator.
We understand that neither party shall initiate or participate
in an ex parte communication with the arbitrator relevant to the
merits of the proceeding, unless the parties agree. If a party or
its representative engages in an unauthorized ex parte
communication, the arbitrator may resolve the case against the
offending party. Before taking that action, however, the arbitrator
must allow the offending party to show cause why the issue in
controversy should not be resolved against it for improper conduct.
Section Seven--Arbitrator's Award
We agree that the Arbitrator's decision will be issued in
writing and will state the factual and legal bases and amount of the
penalty awarded by the Arbitrator. We further agree that the
arbitration award is final and has the same force and effect as any
final agency order. Thus, failure to pay the determined award
triggers the same Agency remedies, as would the failure to pay a
civil penalty award entered by the Chief Safety Officer.
Section Eight--Confidentiality of the Proceeding
We agree that the arbitration proceeding is not a public forum
and will be restricted to the Parties, their representatives, and
the Arbitrator. We acknowledge and agree that 5 U.S.C. 574 controls
the confidentiality of the proceeding, and that neither the
Arbitration Agreement nor the arbitration award may be considered
confidential.
Section Nine--Judicial Review
The award shall only be reviewable under the provisions of 5
U.S.C. 581 and 9 U.S.C. 9-13.
Section Ten--Governing Law
This agreement is entered into consistent with 5 U.S.C. 571 et
seq., and we agree that Federal law shall govern this Arbitration.
The arbitrator shall apply relevant statutory and regulatory
requirements, legal precedents, and policy directives.
[FR Doc. 04-4784 Filed 3-3-04; 8:45 am]
|
|
|
|
