(a) When the ALJ receives the complaint and the answer, the ALJ will promptly serve a notice of hearing upon the defendant and the authority's representative in the same manner as the complaint. The ALJ must serve the notice of oral hearing within six years of the date on which the claim or statement was made.

(b) The hearing is a formal proceeding conducted by the ALJ during which a defendant will have the opportunity to cross-examine witnesses, present testimony, and dispute liability.

(c) The notice of hearing must include:

(1) The tentative date, time, and place of the hearing;

(2) The legal authority and jurisdiction under which the hearing is being held;

(3) The matters of fact and law to be asserted;

(4) A description of the procedures for the conduct of the hearing;

(5) The name, address, and telephone number of the defendant's representative and the representative for the authority; and

(6) Such other matters as the ALJ deems appropriate.

(a) The ALJ shall hold the hearing:

(1) In any judicial district of the United States in which the defendant resides or transacts business;

(2) In any judicial district of the United States in which a claim or statement in issue was made; or

(3) In such other place as the parties and the ALJ may agree upon.

(b) Each party shall have the opportunity to present arguments with respect to the location of the hearing.

(c) The ALJ shall decide the time and the place of the hearing.

(a) The parties to the hearing shall be the defendant and the authority.

(b) Except where the authority head designates another representative, the NEH General Counsel (or designee) shall represent the authority.

(c) Each party has the right to:

(1) Be represented by a representative;

(2) Request a pre-hearing conference and participate in any conference held by the ALJ;

(3) Conduct discovery;

(4) Agree to stipulations of fact or law which will be made a part of the record;

(5) Present evidence relevant to the issues at the hearing;

(6) Present and cross-examine witnesses;

(7) Present arguments at the hearing as permitted by the ALJ; and

(8) Submit written briefs and proposed findings of fact and conclusions of law after the hearing, as permitted by the ALJ.

(a) The investigating official, the reviewing official, and any employee or agent of the authority who takes part in investigating, preparing, or presenting a particular case may not, in such case or a factually related case:

(1) Participate in the hearing as the ALJ;

(2) Participate or advise in the authority head's review of the initial decision; or

(3) Make the collection of penalties and assessment.

(b) The ALJ must not be responsible to or subject to the supervision or direction of the investigating official or the reviewing official.

(a) An ALJ serves as the presiding officer at all hearings. The Office of Personnel Management selects the ALJ.

(b) The ALJ must conduct a fair and impartial hearing, avoid delay, maintain order, and assure that a record of the proceeding is made.

(c) The ALJ has the authority to—

(1) Set and change the date, time, and place of the hearing upon reasonable notice to the parties;

(2) Continue or recess the hearing, in whole or in part, for a reasonable period of time;

(3) Hold conferences to identify or simplify the issues or to consider other matters that may aid in the expeditious disposition of the proceeding;

(4) Administer oaths and affirmations;

(5) Issue subpoenas requiring witness attendance and the production of documents at depositions or at hearings;

(6) Rule on motions and other procedural matters;

(7) Regulate the scope and timing of discovery;

(8) Regulate the course of the hearing and the conduct of representatives and parties;

(9) Examine witnesses;

(10) Receive, rule on, exclude, or limit evidence;

(11) Upon motion of a party, take official notice of facts;

(12) Upon motion of a party, decide cases, in whole or in part, by summary judgment when there is no disputed issue of material fact;

(13) Conduct any conference, argument or hearing on motions in person or by telephone; and

(14) Exercise such other authority as is necessary to carry out the responsibilities of the ALJ under this part.

(d) The ALJ does not have the authority to find Federal statutes or regulations invalid.

(a) A reviewing official or an ALJ may disqualify himself or herself at any time.

(b) Upon any party's motion, the reviewing official or ALJ may be disqualified as follows:

(1) The party must support the motion by an affidavit containing specific facts establishing that personal bias or other reason for disqualification exists, including the time and circumstances of the party's discovery of such facts;

(2) The party must file the motion promptly after discovery of the grounds for disqualification or the objection will be deemed waived; and

(3) The party, or representative of record, must certify in writing that such party makes the motion in good faith.

(c) Once a party has filed a motion to disqualify, the ALJ will halt the proceedings until he or she resolves the disqualification matter. If the ALJ disqualifies the reviewing official, the ALJ will dismiss the complaint without prejudice. If the ALJ disqualifies himself or herself, the authority will promptly reassign the case to another ALJ.

(a) Once the ALJ issues a hearing notice pursuant to § 1174.12, and upon written request to the reviewing official, the defendant may:

(1) Review any relevant and material documents, transcripts, records, and other materials that relate to the allegations set out in the complaint and upon which the investigating official based his or her findings and conclusions, unless such documents are subject to a privilege under Federal law, and obtain copies of such documents upon payment of duplication fees; and

(2) Obtain a copy of all exculpatory information in the reviewing official's or investigating official's possession that relates to the allegations in the complaint, even if it appears in a document that would otherwise be privileged. If the document would otherwise be privileged, the other party only must disclose the portion containing exculpatory information.

(b) The notice that the reviewing official sends to the Attorney General, as described in § 1174.5(b), is not discoverable under any circumstances.

(c) If the reviewing official does not respond to the defendant's request within twenty days, the defendant may file with the ALJ a motion to compel disclosure of the documents, subject to the provisions of this section. The defendant may only file such a motion with the ALJ after filing an answer pursuant to § 1174.9.

(a) Parties may conduct the following types of discovery:

(1) Requests for production of documents for inspection and copying;

(2) Requests for admissions of authenticity of any relevant document or of the truth of any relevant fact;

(3) Written interrogatories; and

(4) Depositions.

(b) For the purpose of this section, the term “documents” includes information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence. Nothing contained herein shall be interpreted to require the creation of a document.

(c) Unless the parties mutually agree to discovery, a party may conduct discovery only as ordered by the ALJ. The ALJ shall regulate the timing of discovery.

(d) Each party shall bear its own discovery costs.

(a) Any party seeking discovery may file a motion with the ALJ together with a copy of the requested discovery, or in the case of depositions, a summary of the scope of the proposed deposition.

(b) Within ten days of service, a party may file an opposition to the motion and/or a motion for protective order as provided in § 1174.24.

(c) The ALJ may grant a motion for discovery only if he or she finds that the discovery sought—

(1) Is necessary for the expeditious, fair, and reasonable consideration of the issues;

(2) Is not unduly costly or burdensome;

(3) Will not unduly delay the proceeding; and

(4) Does not seek privileged information.

(d) The burden of showing that the ALJ should allow discovery is on the party seeking discovery.

(e) The ALJ may grant discovery subject to a protective order under § 1174.24.

(a) If the ALJ grants a motion for deposition, the ALJ shall issue a subpoena for the deponent, which may require the deponent to produce documents. The subpoena shall specify the time and place at which the deposition will take place.

(b) The party seeking to depose shall serve the subpoena in the manner prescribed by § 1174.8.

(c) The deponent may file with the ALJ a motion to quash the subpoena or a motion for a protective order within ten days of service.

(d) The party seeking to depose shall provide for the taking of a verbatim transcript of the deposition, which it shall make available to all other parties for inspection and copying.

(a) As ordered by the ALJ, the parties must exchange witness lists and copies of proposed hearing exhibits, including copies of any written statements or transcripts of deposition testimony that each party intends to offer in lieu of live testimony.

(b) If a party objects, the ALJ will not admit into evidence the testimony of any witness whose name does not appear on the witness list or any exhibit not provided to an opposing party in advance, unless the ALJ finds good cause for the omission or concludes that there is no prejudice to the objecting party.

(c) Unless a party objects within the time set by the ALJ, documents exchanged in accordance with this section are deemed to be authentic for the purpose of admissibility at the hearing.

(a) A party wishing to procure the appearance and testimony of any individual at the hearing may request that the ALJ issue a subpoena.

(b) A subpoena requiring the attendance and testimony of an individual may also require the individual to produce documents at the hearing.

(c) A party seeking a subpoena shall file a written request no less than fifteen days before the hearing date unless otherwise allowed by the ALJ for good cause shown. Such request shall specify any documents to be produced, designate the witness, and describe the witness' address and location with sufficient particularity to permit the witness to be found.

(d) The subpoena shall specify the time and place at which the witness is to appear and any documents the witness is to produce.

(e) The party seeking the subpoena shall serve it in the same manner prescribed in § 1174.8. The party seeking the subpoena may serve the subpoena on a party, or upon an individual under the control of a party, by first class mail.

(f) The party requesting a subpoena shall pay the subpoenaed witness' fees and mileage in the amounts that would be payable to a witness in a proceeding in United States District Court. A check for witness fees and mileage shall accompany the subpoena when it is served, except that when the authority issues a subpoena, a check for witness fees and mileage need not accompany the subpoena.

(g) A party, or the individual to whom the subpoena is directed, may file with the ALJ a motion to quash the subpoena within ten days after service, or on or before the time specified in the subpoena for compliance if it is less than ten days after service.

(a) A party, prospective witness, or deponent may file a motion for a protective order that seeks to limit the availability or disclosure of evidence with respect to discovery sought by an opposing party or with respect to the hearing.

(b) In issuing a protective order, the ALJ may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following:

(1) That the parties shall not have discovery;

(2) That the parties shall have discovery only on specified terms and conditions;

(3) That the parties shall have discovery only through a method of discovery other than requested;

(4) That the parties shall not inquire into certain matters, or that the parties shall limit the scope of discovery to certain matters;

(5) That the parties shall conduct discovery with no one present except persons designated by the ALJ;

(6) That the parties shall seal the contents of the discovery;

(7) That a sealed deposition shall be opened only by order of the ALJ;

(8) That a trade secret or other confidential research, development, commercial information, or facts pertaining to any criminal investigation, proceeding, or other administrative investigation shall not be disclosed or shall be disclosed only in a designated way; or

(9) That the parties shall simultaneously file specified documents or information enclosed in sealed envelopes to be opened as the ALJ directs.

(a) Documents filed with the ALJ must include an original and two copies. Every document filed in the proceeding must contain a title (e.g., motion to quash subpoena), a caption setting forth the title of the action, and the case number assigned by the ALJ. Every document must be signed by the person on whose behalf the paper was filed, or by his or her representative.

(b) Documents are considered filed when they are mailed. The mailing date may be established by a certificate from the party or its representative, or by proof that the document was sent by certified or registered mail.

(c) A party filing a document with the ALJ must, at the time of filing, serve a copy of such document on every other party. When a party is represented by a representative, the party's representative must be served in lieu of the party.

(d) A certificate from the individual serving the document constitutes proof of service. The certificate must set forth the manner in which the document was served.

(e) Service upon any party of any document other than the complaint must be made by delivering a copy or by placing a copy in the United States mail, postage prepaid and addressed to the party's last known address.

(f) If a party consents in writing, documents may be sent electronically. In this instance, service is complete upon transmission unless the serving party receives electronic notification that transmission of the communication was not completed.

(a) In computing any period of time under this part or in an order issued under it, the time begins with the day following the act, event, or default, and includes the last day of the period, unless it is a Saturday, Sunday, or legal holiday that is observed by the Federal government, in which event it includes the next business day.

(b) When the period of time allowed is less than seven days, intermediate Saturdays, Sundays, and legal holidays that are observed by the Federal government are excluded from the computation.

(c) Where a document has been served or issued by placing it in the mail, an additional five days will be added to the time permitted for any response.

(a) The ALJ conducts a hearing in order to determine whether a defendant is liable for a civil penalty, assessment, or both and, if so, the appropriate amount of the penalty and/or assessment.

(b) The hearing will be recorded and transcribed. The transcript of testimony, exhibits and other evidence admitted at the hearing, and all papers and requests filed in the proceeding, constitute the record for the ALJ's and the authority head's decisions.

(c) The hearing will be open to the public unless otherwise ordered by the ALJ for good cause shown.

(d) The authority must prove a defendant's liability and any aggravating factors by a preponderance of the evidence.

(e) A defendant must prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.

(a) The ALJ shall determine the admissibility of evidence.

(b) Except as provided in this part, the ALJ shall not be bound by the Federal Rules of Evidence, but the ALJ may apply the Federal Rules of Evidence where he or she deems appropriate.

(c) The ALJ shall exclude irrelevant and immaterial evidence.

(d) The ALJ may exclude evidence, although relevant, if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or by considerations of undue delay or needless presentation of cumulative evidence.

(e) The ALJ shall exclude evidence, although relevant, if it is privileged under Federal law.

(f) Evidence concerning compromise or settlement offers shall be inadmissible to the extent provided in Rule 408 of the Federal Rules of Evidence.

(g) The ALJ shall permit the parties to introduce rebuttal witnesses and evidence.

(h) All documents and other evidence taken for the record must be open to examination by all parties unless the ALJ orders otherwise.

(a) Except as provided in paragraph (b) of this section, testimony at the hearing shall be given orally by witnesses under oath or affirmation.

(b) At the ALJ's discretion, the ALJ may admit testimony in the form of a written statement or deposition. The party offering such a statement must provide it to all other parties along with the last known address of the witness, in a manner which allows sufficient time for other parties to subpoena the witness for cross-examination at the hearing. The parties shall exchange deposition transcripts and prior written statements of witnesses proposed to testify at the hearing as provided in § 1174.22.

(c) The ALJ shall exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence.

(d) The ALJ shall permit the parties to conduct such cross-examination as may be required for a full and true disclosure of the facts.

(e) Upon any party's motion, the ALJ shall order witnesses excluded from the hearing room so that they cannot hear the testimony of other witnesses. This rule does not authorize exclusion of—

(1) A party who is an individual;

(2) In the case of a party that is not an individual, the party's officer or employee appearing for the entity pro se or designated by the party's representative; or

(3) An individual whose presence a party shows to be essential to the presentation of its case, including an individual employed by the Government or engaged in assisting the Government's representative.

A party may not communicate with the ALJ ex parte unless the other party consents to such a communication taking place. This does not prohibit a party from inquiring about the status of a case or asking routine questions concerning administrative functions or procedures.

(a) The ALJ may sanction a person, including any party or representative, for failing to comply with an order, or for engaging in other misconduct that interferes with the speedy, orderly, and fair conduct of a hearing.

(b) Any such sanction shall reasonably relate to the severity and nature of the misconduct.

(c) When a party fails to comply with an order, including an order for taking a deposition, producing evidence within the party's control, or responding to a request for admission, the ALJ may:

(1) Draw an inference in favor of the requesting party with regard to the information sought;

(2) In the case of requests for admission, deem each matter for which an admission is requested to be admitted;

(3) Prohibit the party failing to comply with such order from introducing evidence concerning, or otherwise relying upon testimony relating to, the information sought; and

(4) Strike any part of the pleadings or other submissions filed by the party failing to comply with such a request.

(d) The ALJ may refuse to consider any motion, request, response, brief or other document which is not filed in a timely fashion.

(e) If a party fails to prosecute or defend an action under this part that is commenced by service of a hearing notice, the ALJ may dismiss the action or may issue an initial decision imposing penalties and assessments.

Any party may file a post-hearing brief. Such briefs are not required, however, unless ordered by the ALJ. The ALJ must fix the time for filing such briefs, not to exceed 60 days from the date the parties receive the transcript of the hearing or, if applicable, the stipulated record. Such briefs may be accompanied by proposed findings of fact and conclusions of law. The ALJ may permit the parties to file reply briefs.