[Federal Register Volume 77, Number 112 (Monday, June 11, 2012)]
[Rules and Regulations]
[Pages 34249-34254]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14087]
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DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration
49 CFR Part 386
[Docket No. FMCSA-2003-14794]
Notice of Final Revision to Guidance for the Use of Binding
Arbitration Under the Administrative Dispute Resolution Act of 1996
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice of final revision to guidance.
SUMMARY: Under existing guidance,
FMCSA must use a form of arbitration
known as "Night Baseball" for its civil
penalty forfeiture proceedings in which
the only issues remaining to be resolved
are the amount of the civil penalty owed
and/or the length of time in which to
pay it. On March 21, 2011, FMCSA
proposed to revise the Guidance to
eliminate the "Night Baseball" format,
and to replace it with a format in which
the Arbitrator determines the final civil
penalty and the amount of time in
which to pay it. The Arbitrator would
no longer be bound by the closest
suggested penalty submission of the
parties. The Notice provided the public
with 30 days to comment on the
proposal. The Agency received no
comments and is therefore revising the
Guidance by eliminating the "Night
Baseball" format. The Agency is also
revising the Guidance to incorporate
typographical and other minor changes.
DATES: The revised Guidance is effective
June 11, 2012. It will apply to all cases
in which an order assigning a matter to
binding arbitration is issued from June
11, 2012 forward.
FOR FURTHER INFORMATION CONTACT:
Steven B. Farbman, Adjudications Counsel, Federal Motor Carrier Safety
Administration, 1200 New Jersey
Avenue SE., Washington, DC 20590,
(202) 385-2351. Office hours are from
8:30 a.m. until 5:00 p.m., e.t., Monday
through Friday, except Federal holidays.
If you have questions on viewing the
docket, call Renee V. Wright, Program
Manager, Docket Operations, telephone
202-366-9826.
SUPPLEMENTARY INFORMATION: On March
4, 2004, FMCSA published in the
Federal Register (69 FR 10288) its
Guidance for the use of binding
arbitration as an alternative dispute
resolution technique in Agency civil
penalty forfeiture proceedings in which
the only issues remaining to be resolved
are the amount of the civil penalty owed
and/or the length of time in which to
pay it. Under the Guidance's "Night
Baseball" format, telephonic hearings
were held, during which each party
presented to the Arbitrator evidence
supporting the penalty it considered
appropriate for the case without
divulging its proposed penalty.
Following the hearing, each party
provided the Arbitrator and the
opposing party with a sealed envelope
containing the amount of the total
proposed civil penalty for the case and,
if desired, a proposed payment plan.
Before opening the envelopes, the
Arbitrator issued to the parties an initial
written determination of the total civil
penalty and payment plan. The
Arbitrator then opened the envelopes
and selected the proposed civil penalty
and payment plan that was closer to his
or her determination. The final penalty
amount and payment plan were
distributed to the parties in a final
written decision.
On March 21, 2011, FMCSA
published in the Federal Register its
proposal to eliminate the "Night
Baseball" format from the Guidance (76
FR 15359). Several years of experience
with this format have revealed that final
civil penalties are rarely identical to the
Arbitrator's determination, and
occasionally not close at all. In addition,
the "Night Baseball" format requires
each party to persuade the Arbitrator to
accept the wisdom of its position
without being able to reveal the civil
penalty it is proposing. The Agency
sought comment on a new procedure, in
which the Arbitrator would determine
the amount of the civil penalty
following a hearing. The comment
period has closed, and FMCSA received
no comments. Accordingly, FMCSA is
eliminating "Night Baseball" from all
proceedings assigned for binding
arbitration from this day forward.
Following the presentation of evidence by the parties, the Arbitrator will
determine the amount of the civil
penalty and the payment plan. The
maximum civil penalty will be the
penalty set forth in the Notice of Claim;
there will be a minimum civil penalty
in only those cases in which there is a
statutory minimum.
The Agency is also revising the
Guidance to incorporate typographical
corrections and other minor changes,
changes necessary to resolve
inconsistencies, and changes needed to
describe actual practice. For example,
although the Chief Safety Officer is the
FMCSA Assistant Administrator, the
Agency is changing "Chief Safety
Officer" to "Assistant Administrator"
because that is the term used to describe
the decisionmaker in 49 CFR part 386,
which includes binding arbitration as
one of the options for a Reply to a
Notice of Claim.
The Guidance contains "Questions
and Answers on FMCSA's Use of
Binding Arbitration," set forth as Issues
and Responses. The Responses to Issues
2 and 9 in the 2004 Guidance were
inconsistent with each other. The
Response to Issue 2 said that "[t]he
decision to arbitrate is strictly that of the
parties" and that "arbitration must be a
completely voluntary process." On the
other hand, the Response to Issue 9 said
that if a carrier opted for binding
arbitration, the Field Administrator had
the burden to demonstrate why the
matter should not be so assigned, and
the Chief Safety Officer would decide
whether the matter should be arbitrated.
In In the Matter of New Metro
Trucking Corp., Docket No. FMCSA-
2009-0376, Order on Binding
Arbitration, May 23, 2011, the Assistant
Administrator found that the language
in the Response to Issue 9 trumped the
language in the Response to Issue 2,
thereby limiting the Field
Administrator's discretion in objecting
to binding arbitration. The Assistant
Administrator found that, based on the
Guidance as it was then written, the
Field Administrator could prevent
binding arbitration in only those cases
in which binding arbitration had been
determined to be inappropriate, as
described in the Response to Issue 1:
maximum civil penalty cases issued
pursuant to section 222 of the Motor
Carrier Safety Improvement Act of 1999,
or any cases that deal with an
interpretation of the regulations or with
important policy issues.
Therefore, the Response to Issue 9
effectively removed the voluntariness
set forth in the Response to Issue 2.
Under the Response to Issue 9, the Chief
Safety Officer could assign a matter for
binding arbitration if the Field Administrator did not meet his burden,
even if the Field Administrator did not
wish the matter to be arbitrated.
Accordingly, the Agency is eliminating
the inconsistency, merging both
Responses into Issue 2, and deleting the
previous Issue 9 and its Response.
Under the Guidance that becomes
effective today, the Field
Administrator's objection will not be
limited. To make meaningful the
Response to Issue 2 that the decision to
arbitrate is strictly that of the parties,
the Agency is permitting the Field
Administrator to prevent binding
arbitration by objecting to it for any
reason. This change is consistent with
the Administrative Dispute Resolution
Act of 1996 (ADRA) (Pub. L. 104-320,
110 Stat. 3870, October 19, 1996) (now
codified at 5 U.S.C. 571-584), which
authorizes the use of arbitration
"whenever all parties consent." 5 U.S.C.
575(a)(1).
Finally, the statements in the previous
Responses to Issues 2 and 9, concerning
the issuance of a Notification of
Arbitration, were not accurate. Those
two Responses, which stated that if the
Chief Safety Officer determined that a
case was appropriate for binding
arbitration, he or she would notify the
parties by issuing a Notification of
Arbitration, did not mirror actual
practice. The previous Response to Issue
9 provided that the Notification would
require each party to return the
Notification form indicating agreement
or objection. In actual practice, the Chief
Safety Officer did not issue a
Notification of Arbitration to the parties.
As a result, the Agency is eliminating
the Notification of Arbitration in the
revised Response to Issue 2 to mirror
actual practice. If, in its Reply to a
Notice of Claim, a respondent requests
binding arbitration, the Field
Administrator may consent or object. If
the Field Administrator objects, the
matter will not be referred to binding
arbitration; if the Field Administrator
consents, the Assistant Administrator
will decide whether the case is to be
referred to binding arbitration. The
Assistant Administrator will inform the
parties of his or her decision in an Order
on Binding Arbitration.
Issued on: May 31, 2012.
Anne S. Ferro,
Administrator.
The revised Guidance reads as
follows:
Guidance for the Use of Binding
Arbitration Under the Administrative
Dispute Resolution Act of 1996
Dated: June 11, 2012. Binding Arbitration
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, however, 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. The grounds for appeal from
arbitration awards, pursuant to the
Federal Arbitration Act, 9 U.S.C. § 1-16,
are generally limited to fraud or
misconduct in the proceedings. See
9 U.S.C. § 10.
The process for reaching the final
award will be as follows: Each party
will present evidence 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.
Following the hearing, the arbitrator
will determine, in writing, the total civil
penalty and, if necessary, a payment
plan.
As discussed later in this Guidance,
the civil penalty amount may not be set
lower than the statutory minimum for
any violation, if there is a statutory
minimum, or higher than the amount
proposed in the Notice of Claim.
Because the ADRA requires the parties
to agree on a maximum award, FMCSA
provides that the maximum award be
set at the amount proposed in the Notice
of Claim.
Statutory Considerations for Not Using
Arbitration
The ADRA states that Agencies shall
consider not using any form of
alternative dispute resolution (ADR),
including binding arbitration, if:
- 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;
- 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;
- 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;
- The matter significantly affects
persons or organizations who are not
parties to the proceeding;
- A full public record of the
proceeding is important, and a dispute
resolution proceeding cannot provide
such a record; or
- 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 Assistant
Administrator 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
under the circumstances set forth above.
Other Statutory Considerations
The ADRA includes a number of
provisions relating to arbitration.
FMCSA's use of binding arbitration will
be modeled on these provisions.
Authorization of Arbitration - The decision to arbitrate must be
voluntary on the part of all parties to the
arbitration (See 5 U.S.C. § 575(a)(1).)
- 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).)
- 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).)
- The Field Administrator who offers
to use arbitration has the authority to
enter into a settlement concerning the
matter after the Assistant Administrator
has consented to the use of arbitration.
(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) - The parties to an arbitration are
entitled to participate in selecting an
arbitrator. (See 5 U.S.C. § 577(a).)
- 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 and 577(b).)
Authority of the Arbitrator (5 U.S.C.
§ 578)
- An arbitrator may regulate the
course and conduct of the arbitration
hearing. (See 5 U.S.C. § 578(1).)
- An arbitrator may administer oaths
and affirmations. (See 5 U.S.C. § 578(2).)
- An arbitrator may compel the
attendance of witnesses and the
production of evidence only to the same
extent the agency involved is otherwise
authorized by law to do so. (See 5 U.S.C.
§ 578(3).)
- An arbitrator may make awards.
(See 5 U.S.C. § 578(4).)
Arbitration Proceedings (5 U.S.C. § 579) - 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).)
- 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 shall be
apportioned. (See 5 U.S.C. § 579(b)(1)-
(4).)
- 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).)
- The arbitrator may receive any oral
or documentary evidence. The
arbitrator, however, may exclude any
evidence that is irrelevant, immaterial,
unduly repetitious, or privileged. (See 5
U.S.C. § 579(c)(4).)
- The arbitrator shall interpret and
apply any relevant statutes, regulations,
legal precedents, and policy directives.
(See 5 U.S.C. § 579(c)(5).)
- No party shall have any
unauthorized ex parte communication with the arbitrator relevant to the merits
of the proceeding, unless the parties
agree otherwise. 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 that party for the improper
conduct. (See 5 U.S.C. § 579(d).)
Arbitration Awards - An arbitration award shall include
a brief informal discussion of the factual
and legal bases for the award. Formal
findings of fact and conclusions of law
are not required. (See 5 U.S.C.
§ 580(a)(1).)
- 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).)
- 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 - 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 his or her
powers or so imperfectly executed the
these powers that a mutual, final, and
definitive award was not made. (See
9 U.S.C. § 10(a).)
- 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 if the agency uses arbitration, a
court may vacate the award under
section 10 of title 9, U.S. Code (see
5 U.S.C. § 581(b), if the use of arbitration
or the award is clearly inconsistent with
the factors set forth in section 572 of
title 5.
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 the civil
penalty and/or the length of time
permitted to pay it. FMCSA is generally willing to arbitrate the length of time in
which to pay a civil penalty, but not the
civil penalty amount, in: (1) maximum
civil 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; (2) cases in which
the statutorily mandated minimum
amount has been assessed; or (3) 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
that of the parties. As with any other
form of ADR, arbitration must be a
voluntary process. As a result, if either
party objects for any reason, the matter
will not be referred to binding
arbitration. Even if both parties consent
to binding arbitration, however, the
Assistant Administrator may decline to
refer the amount of the civil penalty to
arbitration if he or she determines that
it is one of the cases set forth in the
Response to Issue 1, above, that FMCSA
will not agree to arbitrate. The Assistant
Administrator will issue an Order on
Binding Arbitration indicating that a
matter will or will not be referred to
binding arbitration.
In accordance with 49 CFR
386.14(b)(3), a respondent may seek
binding arbitration as part of its reply to
a Notice of Claim. The Field
Administrator in the service center in
which the case resides will consent or
object to the request for binding
arbitration. If the Field Administrator
objects, the matter will not be referred
to binding arbitration; if the Field
Administrator consents, the Assistant
Administrator will decide whether the
case will be referred to binding
arbitration. Referral is contingent upon
the respondent's admission of liability
that the violation or violations occurred
as charged.
Issue 3: Who will have authority to
authorize arbitration?
Response: The Assistant
Administrator will decide which cases
are appropriate for ADR. Again, this
class of cases will include only those
that involve a monetary dispute and/or
the time in which to pay a civil penalty,
and do not fall within the category of
cases excluded under Response 1,
above. The Assistant Administrator 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: The 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 a cap on the award
be established?
Response: The maximum arbitration
award will be set at the civil penalty
amount assessed in the Notice of Claim,
or amended Notice of Claim, 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) Civilian 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: How can FMCSA encourage
the efficiency of the arbitration process?
Response: Only single arbitrators
(rather than panels of arbitrators) will
handle these cases. To ensure maximum
efficiency of the arbitration process,
subject to the consent and cooperation
of the carrier, FMCSA will encourage:
- 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.
- The arbitrator to establish
reasonable deadlines for any hearing
and rendering of an award. These
timeframes will be incorporated into the
Arbitration Agreement.
Issue 10: What is the arbitrator's role? Response: Consistent with the ADRA,
the arbitrator will have the authority to:
-
Regulate the course and conduct of
arbitration hearings;
- Administer oaths;
- Compel attendance of witnesses
and production of evidence, to the extent that the agency is authorized to
do so by law;
- 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 11: 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 12: 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 period 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 an
in-person hearing.
Issue 13: 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, Intermodal
Equipment Provider, Broker, Freight
Forwarder, and Hazardous Materials
Proceedings, 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
any 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 14: What should an Arbitration
Agreement include?
Response: The Agreement should
include the following:
- The names of the parties.
- The issues being submitted to
binding arbitration.
- The maximum award that the
arbitrator may direct.
- Any other conditions limiting the
range of possible outcomes, including,
but not limited to, any statutory
minimum for violations, such as the
statutory minimum for violations of the
Hazardous Materials Regulations, as set
forth at 49 U.S.C. § 5123(a).
- 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 ensure that an award is issued no
later than ll days from the date of this
Agreement. The penalty will be due to
FMCSA thirty (30) days after service of
the Arbitration Award by the Arbitrator
unless a payment plan is ordered by the
Arbitrator."
- References to all provisions of the
49 CFR 386 rules regarding discovery
and the conduct of hearings that the
parties may wish to apply to the
arbitration process.
- 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.)
- The date the arbitration will begin.
- The types of remedies available.
- A confidentiality provision
referring to the ADRA and stating that
neither the Arbitration Agreement nor
the arbitration award will be considered
confidential.
- The bases for appeal.
- A statement that the arbitration
hearing is open only to parties, their
representatives, and the arbitrator and
that the hearing is not a public forum.
- A statement that the arbitrator's
decision will be issued in writing, and
will state the factual and legal bases for,
and the amount of, the penalty awarded
by the arbitrator.
- A statement that 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.
- A statement that the arbitration
award is final and has the same force
and effect as any final agency order and
that the failure to pay the determined
award triggers the same Agency
remedies as would the failure to pay a
civil penalty award entered by the
Assistant Administrator.
A Sample Arbitration Agreement is
included in Appendix A.
Issue 15: How will FMCSA pay the
arbitrator?
Response: The ADRA 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). See 5 U.S.C. § 583. In
addition, the ADRA permits selection of
all ADR neutrals, including arbitrators,
to be done non-competitively. See 41
U.S.C. § 253(c)(3). FMCSA and the
carrier must agree on the selection of the
arbitrator.
FMCSA uses three categories of
potential arbitrators: (1) Judges from the
United States Civilian Board of Contract
Appeals (CBCA) 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. If the parties
cannot agree on the no-cost option of
either a CBCA judge or an
Uncompensated Neutral, the parties
must 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 16: Is FMCSA willing to use
"administered arbitration?"
Response: No. Because of the cost
implications, FMCSA will not agree to
"administered arbitration," which is
arbitration administered by an outside
ADR organization.
Issue 17: 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 amount
set forth in the Notice of Claim as the
maximum, to statutory minimums, if
any, and to any other limitations agreed
upon by the parties.
Arbitration awards are not
confidential documents. Awards shall
be entered into the FMCSA docket in
regulations.gov for the case.
Additionally, awards will be posted on
FMCSA's Chief Counsel Web site.
Issue 18: Will FMCSA allow
arbitration on the documents only,
without a hearing?
Response: While the parties to the
arbitration are entitled to be heard, to
present evidence, and to cross-examine
witnesses appearing at a hearing,
FMCSA encourages arbitration on the
documents only without a hearing. This
would have the advantage of saving
time and money, and avoiding
scheduling conflicts. The Arbitration
Agreement, however, should allow the
parties to request a hearing either inperson
or through telephonic, video-conference, or computer-based means.
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 proceeding. The
arbitrator may also conduct, with the
consent of the parties, all or part of a
hearing by telephone, video
conferencing, or computer, so long as
each party has an equal opportunity to
participate.
Issue 19: May an arbitration award be
used as a 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 Assistant Administrator
has found that the carrier has admitted,
violating the regulation(s) as charged in
the Notice of Claim. These violation(s)
may be considered in future
enforcement actions by FMCSA.
Appendix A
Sample 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, the
Hazardous Materials Regulations, and/or the
Federal Motor Carrier Commercial
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 Arbitration 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 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), longdistance
charges, printing and copying,
postage and courier fees. There is no cost if
the parties choose a Civilian Board of
Contract Appeals Judge or an
Uncompensated Neutral as the arbitrator.
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
for each of the individual violations as
follows:
We also agree that the minimum award for
violations will be those set forth in the
statute or regulations.
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 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 will faithfully
observe this Agreement and the applicable
procedural rules and we will abide by any
award rendered by the Arbitrator.
------------------- ("Carrier") will pay to the Field
Administrator the award determined 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 ll days from the date of this Agreement. The
penalty, if any, 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, Intermodal Equipment
Provider, Broker, Freight Forwarder, and
Hazardous Materials Proceedings, 49 CFR
part 386, Carriers may be represented by a
representative of their choice, including nonlawyers.
Representatives and FMCSA
counsel shall be responsive to the direction
provided by the Arbitrator.
We understand that neither party shall
initiate or participate in 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 legal
and factual 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. We understand that there is no appeal
to the Assistant Administrator of the
Arbitrator's award. 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 Assistant
Administrator.
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 be reviewable only
under 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. 2012-14087 Filed 6-8-12; 8:45 am]
BILLING CODE 4910-EX-P
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