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[38498Federal Register / Vol. 58, No. 135 /
Friday, July 16, 1993 / Rules and Regulations]
DEPARTMENT OF LABOR
Office of the Secretary
29 CFR Part 18
RIN 1290-AA12
Use of Settlement Judges In Proceedings Before the Office of Administrative
Law Judges
AGENCY: Office of the Secretary, Labor.
ACTION: Final rule.
SUMMARY: This final rule permits the appointment of settlement judges
in proceedings before the Office of Administrative Law Judges. The procedure
uses informal conferences to encourage claim settlement without adjudication.
This is a voluntary procedure intended to reduce the costs to parties of filing
and defending complaints and to expedite the resolution of complaints pursuant
to the Administrative Dispute Resolution Act of 1990; Executive Order No. 12778
(Oct. 23, 1991); and the Department of Labor's Alternative Dispute Resolution
Interim Policy.
EFFECTIVE DATE: August 16, 1993.
FOR FURTHER INFORMATION CONTACT: John M. Vittone, Deputy Chief
Administrative Law Judge, Office of Administrative Law Judges. Telephone:
(202)633-0341.
SUPPLEMENTARY INFORMATION: On January 11, 1993, the Department of Labor
published a notice of proposed rulemaking in the Federal Register (58 FR
3822-3823) which set forth proposed settlement judge procedures in furtherance
of its Alternative Dispute Resolution Interim Policy, 57 FR 7292 (1992). This
rule allows use of settlement judges in certain proceedings before the Office of
Administrative Law Judges. It is modeled on Recommendation 88-5 of the
Administrative Conference of the United States, 1 CFR 305.88-5, and the
settlement judge procedures of other agencies. See 18 CFR 385.603 (FERC; 24 CFR
104.620 (HUM 29 CFR 2200.101 (OSHRC); 47 CFR 1.244 (FCC); 48 CFR 6302.30 (DOT).
The procedure supplements rather than supplants settlement techniques
traditionally used by administrative law judges. See, e.g., 29 CFR 18.8
(discussion of negotiation, compromise or settlement of prehearing conferences);
29 CFR 18.9 (deferment of hearing for settlement negotiations by the parties).
The regulation permits appointment of a settlement judge by the Chief
Administrative Law Judge at the request of the parties or the presiding judge.
Any party can veto use of the procedure. The settlement judge will be an
active or retired administrative law judge other than the presiding judge. The
settlement judge will direct settlement negotiations, assess the relative merits
of the case for the parties, and consult with the parties either jointly or
individually. The duration of the procedure is limited because it is meant to
quicken rather than delay dispute resolution, and because an exigent hearing
motivates serious negotiation. The settlement judge is prohibited from
discussing any aspect of the case with the presiding judge. Any statements or
conduct by the parties or the settlement judge at settlement negotiations are
not admissible in later proceedings before the Department.
Settlement judges are not available in Black Lung or Longshore cases. The
Benefits Review Board has found that the Black Lung Benefits Act prohibits
settlements. See Gerzarowski v. LehighValley Anthracite, Inc.,
12 BLR 1-62 (1988); Ladigan v. Central Industries,Inc., 7
BLR 1-192 (1984). Even without the prohibition, settlement judge procedures are
not appropriate where entitlement to be a benefit is an all-ornothing question,
as in Black Lung cases, since a settlement judge could do nothing except
convince one party to concede.
Longshore cases are so often settled informally that neither the Department
nor the public would benefit from a formal settlement judge procedure. The
Iongshore bar is comfortable with techniques used by the Office of
Administrative Law judges for many years, such as early prehearing exchanges,
calendar calls in which settlement possibilities are discussed, and
opportunities for discussion immediately prior to a hearing. See Notice of
Amendment to Interim ADR Policy, 57 FR 28701, 28702-3 (June 26, 1992). See also
Joseph & Gilbert, Breaking the Settlement Ice: The Use of Settlement Judges
in Administrative Proceedings, 2 Administrative L.J. 571, 594-595 (1989/1990)
(indicating that if large numbers of cases are currently settled without the use
of settlement judges, imposing the procedure is not advised).
Written comments regarding the proposed rule were required to be submitted
by February 25, 1993. The following comments were received and evaluated.
Comment: In order to create greater flexibility in the
settlement judge process, the phrase "jointly and/or" should be
substituted for "both jointly and" in proposed paragraph 18.9(e)(1).
Response: This change has been adopted.
Comment: In order to avoid limiting the role of the settlement
judge and permit greater flexibility, the language "may include
facilitating fair and equitable solutions and providing an assessment of the
relative merits of the respective positions of the parties" should be
substituted for "is solely to facilitate fair and equitable solutions and
to provide an assessment of the relative merits of the respective positions of
the parties" in proposed paragraph 18.9(e)(1).
Response: This change has not been adopted. Initially, it is
important to keep the role of the settlement judge well defined. The intent of
the regulation is to allow the settlement judge to negotiate settlements between
the parties in order to avoid litigation. The rule as proposed provides
sufficient flexibility for the settlement judge to negotiate such settlements
without including this language.
Comment: It was suggested that provisions be made for sanctions
against violators of confidentiality provisions.
Response: This change has not been adopted because regulatory
provisions already exist for sanctioning administrative law judges, parties,
attorneys, or other representatives who fail to act with integrity or in an
ethical manner in proceedings before the Office of Administrative Law Judges.
Specifically, Part 18 requires all persons appearing in such proceedings to
comply with a minimal standard of conduct, and the administrative law judge may
exclude any such persons for violations of that standard, see 29 CFR
18.34(g)(3), and may certify certain types of misbehavior to a federal District
Court for appropriate remedies, see 29 CFR 18.29(b). In addition, administrative
law judges acting as settlement judges are subject to sanctions for violation of
their duties in the same degree as if they were acting as the presiding judge.
See 5 U.S.C. 7521; 5 CFR 930.214.
Comment: In order to avoid any negative inference that might
influence a decision on the merits, it was recommended that when no settlement
is reached, the settlement judge should simply advise the presiding judge
without elaboration that no settlement was reached.
Response: This change was adopted in part. The final rule has
been modified to provide that, should the parties fail to reach a settlement,
the parties themselves will report to the presiding judge that no settlement had
been reached, without further elaboration. The parties, rather than the
settlement
[Federal Register / Vol. 58, No. 135 / Friday, July 16, 1993
/ Rules and Regulations 38499]
judge should be responsible for all communications with the presiding judge in
order to preclude any contact between the settlement judge and the presiding
judge regarding the case.
Comment: One commentator questioned whether there was evidence
to support the assumptions that the settlement judge procedure would reduce
litigation costs and expedite dispute resolution and suggested that the future
of the procedure be contingent on periodic program evaluations to determine the
procedure's effectiveness.
Response: There is no direct objective evidence at this time
guaranteeing that this procedure will reduce the parties' litigation costs and
expedite dispute resolution. Although there is evidence that alternative
dispute resolution techniques do generally reduce costs and expedite resolution
of disputes, it should be noted that these are only two goals of alternative
dispute resolution. Another important objective is to enable the parties to
negotiate resolutions that are mutually acceptable, thereby creating greater
satisfaction with the process as a whole.
Although this procedure will be monitored to determine its effectiveness,
review of the effectiveness of a regulation is a matter of management rather
than regulation. Therefore the regulation makes no specific reference to its
review.
Comment: A request was made for the estimated costs of
implementing the settlement judge procedure and the possibility of the need to
appoint new administrative law judges. Would the costs outweigh the benefits?
Response: Presently, there are judges within the Department of
Labor's Office of Administrative Law Judges trained in alternative dispute
resolution. These judges are capable of satisfying any initial requests for
settlement judges. If the requests for settlement judges exceed the office's
present capacity, more judges will be trained at a cost undetermined. There are
no plans to appoint now administrative law judges to meet settlement judge
requests. As there is no objective evidence to predict whether or not the
procedure will be successfull in decreasing the costs of litigation or
expediting the resolution of cases, or even how much use will be made of the
procedure, it has not yet been determined whether the costs will outweigh the
benefits. However, if successful, the reduced costs in litigation and the
earlier resolution of cases should outweigh the costs of implementing and
maintaining the settlement judge procedure. Since the appointment of settlement
judges is at the discretion of the Chief Administrative Law Judge, if
the procedure is not cost effective, it is within that official's powerto limit the use of the procedure.
Comment: A commentator raised concerns that the proper role of
the administrative law judge will become confused since the primary duty of the
settlement judge will be to resolve disputes rather than to interpret law.
Although these two roles are not necessarily inconsistent, in cases involving
important public policy issues, the settlement judge procedure may not be
appropriate. It was suggested that a record be made of at least the factual and
legal basis of any agreements reached since administrative law judges are
responsible for keeping accurate and complete records of administrative dispute
proceedings. This responsibility must be balanced with the confidentiality of
the parties.
Response: Since the appointment of a settlement judge is at the
discretion of the Chief Administrative Law Judge, requests for settlement judge
procedures may be denied where use of a settlement judge does not appear to be
appropriate. However, the regulation has been modified to provide that
settlement judges may terminate settlement judge proceedings if it becomes
apparent that the issues involved are inappropriate for a settlement by means of
this procedure.
The maintenance of detailed records for all settlement judge sessions would
encumber the process and endanger confidentiality. Since confidentiality is
crucial to the integrity of the procedure, such risks to confidentiality could
discourage parties' participation in the procedure. Furthermore, as this
procedure is entirely voluntary, parties cannot be coerced either to use the
settlement judge procedure or to adopt suggestions made by the settlement judge,
and may withdraw from the proceedings at any time without prejudice. For these
reasons, the desirability of a complete and accurate record of all settlement
judge proceedings for review purposes is outweighed by the risks to
confidentiality and the danger of formalizing what is intended to be an informal
procedure.
Comment: Parties should be allowed to participate in the
selection of settlement judges to eliminate factors that may make parties
hesitant to use the procedure.
Response: This suggestion has not been adopted. In other forms
of alternative dispute resolution such as arbitration, where parties are bound
by the decision of the third party, selection of the third party neutral by the
parties is desirable. However, this is not true in settlement judge proceedings
where the neutral makes no binding decision but merely offers the parties an
additional forum for voluntary resolution of their dispute and has no coercive
authority. Participation by the parties in the selection of the settlement
judge could lead to an additional point of controversy between the parties and
could potentially create another layer of bureaucracy. This would defeat the
purpose of the procedure to reduce the costs and expedite adjudication of
claims.
Comment: There was concern that the settlement judges, who are
employees of the Department of Labor, would not be independent in their
evaluation of the controversy but would be biased in favor of the
agency.
Response: Although administrative law judges are employees of the
Department of Labor, they are appointed pursuant to the Administrative Procedure
Act which guarantees independence of administrative law judges by protecting
their tenure and pay, and prohibits the performance of inconsistent duties. 5
U.S.C. 3105, 3344, 5372, 7521. There is nothing to indicate that settlement
judges would be any more disposed to negotiate outcomes that are favorable to
the agency than presiding administrative law judges would be disposed to make or
recommend final decisions that are favorable to the agency.
Comment: It was suggested that disciplinary proceedings against
administrative law judges before the Merit Systems Protection Board be excluded
from the definition of "subsequent administrative proceedings" in
paragraph (e)(4) of the proposal.
Response: The Department of Labor can only ensure that
confidentiality of settlement judge negotiations will be maintained in
Department of Labor administrative proceedings. The Merit Systems Protection
Board is an independent agency and it is contemplated that the confidentiality
provision of the settlement judge rule could not be used as a shield by the
judge in a disciplinary proceeding. To make it clear that confidentiality can
only be ensured in administrative proceedings before the Department of Labor,
paragraph (e)(8) of § 18.9 has been revised.
Comment: There was concern that the procedure would become just
another layer of bureaucracy.
Response: The settlement judge procedure was drafted to expedite
rather than lengthen the resolution of cases. In order to avoid a prolonged
procedure,
[38500Federal Register / Vol. 58, No. 135 / Friday,
July 16, 1993 / Rules and Regulations]
provisions were made to limit the duration of the settlement judge procedure and
to permit termination of the procedure at any time the settlement judge believes
that settlement is unlikely. In addition, discovery is not necessarily
suspended during the course of the procedure, unless a suspension is granted by
the presiding judge, so that in the event the parties fail to reach a
settlement, the case could proceed to a formal hearing without significant
delay. It is hoped that this informal proceeding will eliminate delays that are
sometimes involved in a formal proceeding.
Comment: In order to evaluate the effectiveness of the
procedure, it was suggested that both the Department of Labor and the Office of
Personnel Management or the Merit Systems Protection Board should review the
actions of Settlement Judges.
Response: Informal review of actions by settlement judges will
occur through continued review of settlement programs. A more formal type of
review would require management of records and other types of controls which
would endanger confidentiality and the integrity of the process and could
potentially interfere with the independence of the judges.
Comment: It was suggested that the regulation should provide
whether it is applicable to the deportation and exclusion proceedings under the
Immigration and Nationality Act of 1952, as amended, which are civil in nature.
In addition, it was suggested that the regulation specifically provide for a
delegation of authority to undertake settlement negotiations from the chief
judge to the individual immigration judges. Finally, it was suggested that the
regulation should provide for referral to a settlement judge upon the request of
an alien in a deportation or exclusion proceeding without concurrence of the
Service.
Response: Since the Department of Labor's Office of
Administrative Law Judges does not preside over deportation matters arising
under the Immigration and Nationality Act, these comments are not relevant to
this regulation.
Comment: One commentator questioned the need for the
language contained in paragraph 18.9(e)(1), "A settlement judge is an
active or retired administrative law judge who convenes and presides over
settlement conferences and negotiations, confers with the parties both jointly
and individually, and seeks voluntary resolution of the issues." The
settlement judge does not render a formal judgment or decision but merely
facilitates fair and equitable solutions and provides an assessment of the
relative merits of the respective positions of the parties. To require that the
settlement judges be active or retired administrative law judges is inconsistent
with the philosophy of alternative dispute resolution. There should be broad
discretion in agreeing to the selection of the third party neutral assigned to
case. Also, limiting appointment would not provide a broad base of settlement
judges and would leave parts of the country without the availability of
settlement judges or require extensive travel to conference sites.
Response: The settlement judge rule is only one method of
alternative dispute resolution, and nothing in this rule prohibits parties from
choosing to use other procedures. The settlement judge rule is being offered as
a means of dispute resolution for those cases which have reached the Office of
Administrative Law judges for formal adjudication, presumably because prior
settlement attempts using other methods have been unsuccessful. The regulation
restricts the class of people allowed to become settlement judges to ensure that
settlement judges have the necessary expertise in cases arising before the
Office of Administrative Law judges and as a measure to avoid the costs of
hiring outside mediators. Because the settlement judge procedure applies to
cases in which other offices of the Department of Labor are parties,
participation by employees from these other offices as settlement judges could
potentially create a conflict of interest. The Office of Administrative Law
judges is the only office within the Department which has both the institutional
independence and the expertise in cases arising before this office to ensure the
integrity of the procedure.
Administrative law judges trained in settlement techniques are already
available within the Department of Labor's Office of Administrative Law judges,
which has district offices in ten locations throughout the country. Should the
need for settlement judges increase, additional judges will be trained. Until
that time, judges presently trained in settlement techniques will be assigned to
mediate settlements negotiations in cases where the Chief judge approves the use
of the procedure.
The following technical changes were also made to the regulation. In
citing provisions of the Administrative Dispute Resolution Act of 1990 in the
authority citation, the phrase "5 U.S.C. 581" was corrected to read "5
U.S.C. 571 note". in paragraph 18.9 (e)(2) the word "when" was
substituted for the word "where". In paragraph 18(e)(7) the word "when"
was substituted for the word "where". In paragraph 18(e)(7)(i) "the
settlement judge is scheduled to preside in other proceedings in the same place"
was substituted for "a conference may be scheduled in a place and on a day
that the settlement judge is scheduled to preside in other proceedings."
Procedural Matters
This is not major rule as defined by Executive Order 12291. The Agency
Head has certified that this rule does not have a significant economic impact
upon a substantial number of small entities as defined in the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.). The rule does not contain any
information collection or recordkeeping requirements as defined in the Paperwork
Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
List of Subjects in 19 CFR Part 18
Administrative practice and procedure.
Accordingly, part 18 of title 29 of the Code of Federal Regulations is
amended as follows:
PART 18-RULES OF PRACTICE ANDPROCEDURE FOR ADMINISTRATIVEHEARINGS
BEFORE THE OFFICE OFADMINISTRATIVE LAW JUDGES
1. The authority citation for part 18 is revised to read:
2. Section 18.9 is amended by revising the section heading and adding
new paragraph (e) to read as follows:
§ 18.9 Consent order or settlement; settlement judge procedure.
(e) (1) Settlement judge procedure; purpose. This paragraph
establishes a voluntary process whereby the parties may use a settlement judge
to mediate settlement negotiations. A settlement judge is an active or retired
administrative law judge who convenes and presides over settlement conferences
and negotiations, confers with the parties jointly and/or individually, and
seeks voluntary resolution of issues. Unlike a presiding judge, a settlement
judge does not render a formal judgment or decision in the case; his or her role
is solely to facilitate fair and equitable solutions and to provide an
assessment of the relative merits of the respective positions of the parties.
(2) How initiated. A settlement judge may be appointed by the
Chief Administrative Law judge upon a request by a party or the presiding
[Federal Register / Vol. 58, No. 135 / Friday, July 16, 1993 / Rules
and Regulations 38501]
administrative law judge. The Chief Administrative Law Judge has sole
discretion to decide whether to appoint a settlement judge, except that a
settlement judge shall not be appointed when-
(i) A party objects to referral of the matter to a settlement judge;
(ii) Such appointment is inconsistent with a statute,
executive order, or regulation;
(iii) The proceeding arises pursuant to the Longshore and Harbor
Workers' Compensation Act, 33 U.S.C. 901 at seq., and associated acts such as
the District of Columbia Workmen's Compensation Act, 36 DC Code 501 et seq.; or
(iv) The proceeding arises pursuant to Title IV of the Federal Mine
Safety and Health Act, 30 U.S.C. 901 et seq., also known as the Black Lung
Benefits Act.
(3) Selection of settlement judge. (i) The selection of a
settlement judge is at the sole discretion of the Chief Administrative Law
Judge, provided that the individual selected-
(A) is an active or retired administrative law judge, and
(B) is not the administrative law judge assigned to hear and decide
the case.
(ii) The settlement judge shall not be appointed to hear and decide the
case.
(4) Duration of proceeding. Unless the Chief Administrative
Law Judge directs otherwise, settlement negotiations under this section shall
not exceed thirty days from the date of appointment of the settlement judge,
except that with the consent of the parties, the settlement judge may request an
extension from the Chief Administrative Law Judge. The negotiations will be
terminated immediately if a party unambiguously indicates that it no longer
wishes to participate, or if in the judgment of the settlement judge, further
negotiations would be fruitless or otherwise inappropriate.
(5) General powers of the settlement judge. The settlement
judge has the power to convene settlement conferences; to require that parties,
or representatives of the parties having the authority to settle, participate in
conferences; and to impose other reasonable requirements on the parties to
expedite an amicable resolution of the case, provided that all such powers shall
terminate immediately if negotiations are terminated pursuant to paragraph
(e)(4).
(6) Suspension of discovery. Requests for suspension of
discovery during the settlement negotiations shall be directed to the presiding
administrative law judge who shall have sole discretion in granting or denying
such requests.
(7) Settlement conference. In general the settlement judge
should communicate with the parties by telephone conference call. The
settlement judge may, however, schedule a personal conference with the parties
when:
(i) The settlement judge is scheduled to preside in other proceedings
in a place convenient to all parties and representatives involved;
(ii) The offices of the attorneys or other representatives of the
parties, and the settlement judge, are in the same metropolitan area; or
(iii) The settlement judge, with the concurrence of the Chief
Administrative Law Judge, determines that a personal meeting is necessary for a
resolution of substantial issues, and represents a prudent use of resources.
(8) Confidentiality of settlement discussions. All
discussions between the parties and the settlement judge shall be
off-the-record. No evidence regarding statements or conduct in the proceedings
under this section is admissible in the instant proceeding or any subsequent
administrative proceeding before the Department, except by stipulation of the
parties. Documents disclosed in the settlement process may not be used in
litigation unless obtained through appropriate discovery or subpoena. The
settlement judge shall not discuss any aspect of the case with any
administrative law judge or other person, nor be subpoenaed or called as a
witness in any hearing of the case or any subsequent administrative proceedings
before the Department with respect to any statement or conduct during the
settlement discussions.
(9) Contents of consent order or settlement agreement. Any agreement
disposing of all or part of the proceeding shall be written and signed by a
parties. Such agreement shall conform to the requirements of paragraph (b) of
this section.
(10) Report of the settlement. If a settlement is reached,
the parties shall report to the presiding judge in writing within seven working
days of the termination of negotiations. The report shall include a copy of the
settlement agreement and/or proposed consent order. If a settlement is not
reached, the parties shall report this to the presiding judge without further
elaboration.
(11) Review of agreement by presiding judge. A settlement
agreement arrived at with the help of a settlement judge shall be treated by the
presiding judge as would be any other settlement agreement.
(12) Non-reviewable decisions. Decisions concerning whether a
settlement judge should be appointed, the selection of a particular settlement
judge, or the termination of proceedings under this section, are not subject to
review by Department officials.
Signed at Washington, DC this 7 day of July, 1993.