Table of
Contents
Subpart A: General Information and Preliminary
Consideration of Pleadings
12.1 Scope and applicability of rules of practice relating
to reparations.
12.2 Definitions.
12.3 Business address; hours.
12.4 Suspension, amendment, revocation and waiver of
rules.
12.5 Computation of time.
12.6 Extensions of time; adjournments; postponements.
12.7 Ex parte communications in reparation proceedings.
12.8 Separation of functions.
12.9 Practice before the Commission.
12.10 Service.
12.11 Formalities of filing of documents with the
Proceedings Clerk.
12.12 Signature.
12.13 Complaint; election of procedure.
12.14 Withdrawal of complaint.
12.15 Notification of complaint.
12.16 Response to complaint.
12.17 Satisfaction of complaint.
12.18 Answer; election of procedure.
12.19 Counterclaim.
12.20 Response to counterclaim; reply; election of
procedure.
12.21 Voluntary dismissal.
12.22 Default proceedings.
12.23 Setting aside of default.
12.24 Parallel proceedings.
12.25 Filing fees.
12.26 Commencement of a reparation proceeding.
12.27 Termination of consideration of pleadings.
Subpart B: Discovery
12.30 Methods of discovery.
12.31 Production of documents and tangible items.
12.32 Depositions on written interrogatories.
12.33 Admissions.
12.34 Discovery by a decisionmaking official.
12.35 Consequences of a party's failure to comply with a
discovery order.
12.36 Subpoenas to compel discovery.
Subpart C: Rules Applicable to Voluntary Decisional
Proceedings
12.100 Scope and applicability of rules.
12.101 Functions and responsibilities of the Judgment
Officer.
12.102 Disqualification of Judgment Officer.
12.103 Filing of documents; subscription; service.
12.104 Amendments to pleadings; motions.
12.105 Submission of proof only in documentary or tangible
form.
12.106 Final decision and order.
Subpart D: Rules Applicable to Summary Decisional
Proceedings
12.200 Scope and applicability of rules.
12.201 Functions and responsibilities of the Judgment
Officer.
12.202 Disqualification of Judgment Officer.
12.203 Filing of documents; subscription; service.
12.204 Amended and supplemental pleadings.
12.205 Motions.
12.206 Predecision conferences.
12.207 Summary disposition.
12.208 Submissions of proof.
12.209 Oral testimony.
12.210 Initial decision.
Subpart E: Rules Applicable to Formal Decisional
Proceedings
12.300 Scope and applicability of rules.
12.301 -- 12.302 [Reserved]
12.303 Predecision conferences.
12.304 Functions and responsibilities of the Administrative
Law Judge.
12.305 Disqualification of Administrative Law Judge.
12.306 Filing of documents; subscription; service.
12.307 Amended and supplemental pleadings.
12.308 Motions.
12.309 Interlocutory review by the Commission.
12.310 Summary disposition.
12.311 Disposition of proceeding or issues without oral
hearing.
12.312 Oral hearing.
12.313 Subpoenas for attendance at an oral hearing.
12.314 Initial decision.
12.315 Consequences of overstating damages claims not in
excess of $30,000.
Subpart F: Commission Review of Decisions
12.400 Scope and applicability of rules.
12.401 Appeal to the Commission.
12.402 Appeal of disposition of less than all claims or
parties in a proceeding.
12.403 Commission review on its own motion.
12.404 The record of proceedings.
12.405 Leave to adduce additional evidence.
12.406 Final decision of the Commission.
12.407 Satisfaction of reparation award; enforcement;
sanctions.
12.408 Delegation of authority to the Deputy General
Counsel for Opinions.
RULES RELATING TO REPARATIONS
PROCEEDINGS
Authority: 7 U.S.C. 4a(j), 12a(5), 18(b) (1982), unless
otherwise noted.
Source: 49 F.R. 6602, Feb. 22, 1984, effective Apr. 23,
1984, unless otherwise noted; amended May 14, 1992, 57 F.R.
20633, effective June 15, 1992; Mar. 1, 1994, 59 F.R. 9631,
effective May 2, 1994.
Subpart A: General Information and
Preliminary Consideration of Pleadings
12.1 Scope and applicability of rules of practice relating
to reparations.
(a) Part 12 Reparation Rules. These rules of practice are
applicable to reparation applications filed pursuant to
section 14 of the Commodity Exchange Act, as amended, 7 U.S.C.
section 18. The rules in this Part shall be construed
liberally so as to secure the just, speedy and inexpensive
determination of the issues presented with full protection for
the rights of all parties.
(b) Other rules of practice. Unless specifically made
applicable, other Rules of Practice promulgated under the
Commodity Exchange Act, as amended, shall not apply to
reparation matters.
(c) Applicability of these Part 12 Reparation Rules. These
rules shall apply in their entirety to all reparation
complaints and matters relating thereto.
12.2 Definitions.
For purposes of this part:
Act means the Commodity Exchange Act, as amended, 7 U.S.C.
1, et seq.;
Administrative Law Judge means an administrative law judge
appointed pursuant to the provisions of 5 U.S.C. 3105;
Commission means the Commodity Futures Trading
Commission;
Commission decisional employee means an employee or
employees of the Commission who are or may reasonably be
expected to be involved in the decisionmaking process in any
proceeding, including, but not limited to: A Judgment Officer;
members of the personal staffs of the Commissioners, but not
the Commissioners themselves; members of the staffs of the
Administrative Law Judges, but not an Administrative Law
Judge; members of the staffs of the Judgment Officers; members
of the Office of the General Counsel; members of the staff of
the Office of Proceedings; and other Commission employees who
may be assigned to hear or to participate in the decision of a
particular matter.
Complainant means a person who, individually or jointly
with others, has applied to the Commission for a reparation
award pursuant to section 14(a) of the Act, but shall not
include a cross claimant or any other type of third party
claimant. The term "complainant" under these rules applies
equally to two or more persons who have applied jointly for a
reparation award;
Complaint means any document which constitutes an
application for a reparation award pursuant to section 14(a)
of the Act, regardless of whether it is denominated as
such;
Counterclaim means an application for a reparation award by
a respondent against a complainant which satisfies the
requirements of 12.9. A counterclaim does not mean a cross
claim or other type of third party claim;
Director of the Office of Proceedings means an employee of
the Commission who serves as the administrative head of that
Office, with responsibility and authority to assure that these
part 12 Reparation Rules are administered in a manner which
will effectuate the purposes of section 14(b) of the Act. The
Director is authorized to convene meetings of all personnel in
the Office of Proceedings, including Administrative Law Judges
and their personally assigned law clerks. The Director shall
have the authority to delegate his duties to administer12.15,
12.24, 12.26 and 12.27, and, shall have the authority to
assign and, if necessary, reassign the duties of, and set
reasonable standards for performance for, all personnel in the
Office, including the Judgment Officers, but not including
Administrative Law Judges and their personally assigned law
clerks;
Ex parte communication means an oral or written
communication not on the public record with respect to which
reasonable prior notice to all parties is not given, but does
not include:
(1) A discussion, after consent has been obtained from all
of the named parties, between a party and a Judgment Officer
or Administrative Law Judge, or the staffs of the foregoing,
pertaining solely to the possibility of settling the case
without the need for a decision;
(2) Requests for status reports, including questions
relating to service of the complaint, and the registration
status of any persons, on any matter or proceeding covered by
these rules; or
(3) Requests made to the Office of Proceedings or the
Office of the General Counsel for interpretation of these
rules.
Formal decisional procedure means, where the amount of
total damages claimed exceeds $30,000, exclusive of interest
and costs, a procedure elected by the complainant or a
respondent where the parties may be granted an oral hearing. A
formal decisional proceeding is governed by subpart E;
Hearing means that part of a proceeding which involves the
submission of proof, either by oral presentation or written
submission;
Interested person means any party, and includes any person
or agency permitted limited participation or to state views in
a reparation proceeding, or other person who might be
adversely affected or aggrieved by the outcome of a proceeding
(including the officers, agents, employees, associates,
affiliates, attorneys, accountants or other representatives of
such persons), and any other person having a direct or
indirect pecuniary or other interest in the outcome of a
proceeding;
Judgment Officer means an employee of the Commission who is
authorized to conduct the proceeding and render a decision in
a summary decisional proceeding or a voluntary decisional
proceeding. In appropriate circumstances, the functions of a
Judgment Officer may be performed by an Administrative Law
Judge;
Office of the General Counsel refers to the members of the
Commission's staff who provide assistance to the Commission in
its direct review of any proceeding conducted pursuant to
these rules;
Office of Proceedings means that Office within the
Commission comprised of the Administrative Law Judges,
Judgment Officers, the Director of that Office, the
Proceedings Clerk, and members of the staffs of the foregoing,
which administers these part 12 Reparation Rules, other than
the rules authorizing direct review by the Commission;
Order means the whole or any part of a final procedural or
substantive disposition of a reparation proceeding by the
Commission, an Administrative Law Judge, a Judgment Officer,
or the Proceedings Clerk;
Party means a complainant, respondent or any other person
or agency named or admitted as a party in a reparation
matter;
Person means any individual, association, partnership,
corporation or trust;
Pleading means the complaint, the answer to the complaint,
any supplement or amendment thereto, and any reply to the
foregoing;
Proceeding means a case in which the pleadings have been
forwarded and in which a procedure has been commenced pursuant
to12.26;
Proceedings Clerk means that member of the Commission's
staff in the Office of Proceedings who shall maintain the
Commission's reparation docket, assign reparation cases to an
appropriate decisionmaking official, and act as custodian of
the records of proceedings;
Punitive damages means damages awarded (no more than two
times the amount of actual damages) in the case of any action
arising from a willful and intentional violation in the
execution of an order on the floor of a contract market. An
order does not have to be actually executed to render a
violation subject to punitive damages. As a prerequisite to an
award of punitive damages, a complainant must claim actual and
punitive damages, prove actual damages, and demonstrate that
punitive damages are appropriate.
Registrant means any person who--
(1) Was registered under the Act at the time of the alleged
violation;
(2) Is subject to reparation proceedings by virtue of
section 4m of the Commodity Exchange Act, regardless of
whether such person was ever registered under the Act; or
(3) Is otherwise subject to reparation proceedings under
the Act;
Reparation award means the amount of monetary damages a
party may be ordered to pay;
Respondent means any person or persons against whom a
complainant seeks a reparation award pursuant to section 14(a)
of the Act;
Summary decisional procedure means, where the amount of
total damages claimed does not exceed $30,000, exclusive of
interest and costs, a procedure elected by the complainant or
the respondent wherein an oral hearing need not be held and
proof in support of each party's case may be supplied in the
form and manner prescribed by12.208. A summary decisional
proceeding is governed by subpart D;
Voluntary decisional procedure means, regardless of the
amount of damages claimed, a procedure in which the
complainant and the respondent have chosen voluntarily to
submit their claims and counterclaims, allowable under these
rules, for an expeditious resolution by a Judgment Officer. By
electing the voluntary decisional procedure, parties agree
that a decision issued by a Judgment Officer shall be without
accompanying findings of fact and shall be final without right
of Commission review or judicial review. A voluntary
decisional proceeding is governed by subpart C of these
rules.
[Amended May 14, 1992, 57 F.R. 20633,
effective June 15, 1992; Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.3 Business address; hours.
The principal office of the Commission is located at 1155
21st Street, N.W., Washington D.C. 20581. It is open each day,
except Saturdays, Sundays, and legal public holidays, from
8:15 a.m. until at least 4:45 p.m., eastern standard time or
eastern daylight savings time, whichever is currently in
effect in Washington, D.C.
12.4 Suspension, amendment, revocation and waiver of
rules.
(a) Suspension or change of rules. These rules may, from
time to time, be suspended, amended or revoked in whole or in
part. Notice of such action will be published in the Federal
Register.
(b) Commission waiver of procedures. In the interest of
expediting decision or to prevent undue hardship on any party
or for other good cause the Commission may order the adoption
of expedited procedures, may waive any rule in this Part in a
particular case, and may order proceedings in accordance with
its direction upon a determination that no party will be
prejudiced thereby, and that the ends of justice will be
served. Reasonable notice shall be given to all parties of any
action taken pursuant to this provision.
12.5 Computation of time.
(a) In general. In computing any period of time prescribed
by these rules or allowed by the Commission, the Director of
the Office of Proceedings, a Judgment Officer, or an
Administrative Law Judge, the day of the act, event, or
default from which the designated period of time begins to run
is not to be included. The last day of the period so computed
is to be included unless it is a Saturday, a Sunday, or a
legal holiday, in which event the period runs until the end of
the next day which is not a Saturday, a Sunday or a legal
holiday.
Intermediate Saturdays, Sundays, and legal holidays shall
be excluded from the computation only when the period of time
prescribed or allowed is less than seven (7) days.
(b) Date of service of orders. In computing any period of
time involving the date of service of an order, the date of
service shall be the date the order is served by the
Proceedings Clerk, which, unless otherwise indicated, shall be
the date stamped on the order by the Proceedings Clerk.
[Amended May 14, 1992, 57 F.R. 20633,
effective June 15, 1992.]
12.6 Extensions of time; adjournments; postponements.
(a) In general. Except as otherwise provided by law or by
these rules, for good cause shown, the Commission, or a
Judgment Officer, Administrative Law Judge, or the Director of
the Office of Proceedings, before whom a matter is then
pending, on their own motion or the motion of a party, may at
any time extend or shorten the time limit prescribed by the
rules for filing any document. In any instance in which a time
limit is not prescribed for an action to be taken concerning
any matter, the Commission or one of the other officials
mentioned above may set a time limit for that action.
(b) Motions for extension of time. Absent extraordinary
circumstances, in any instance in which a time limit that has
been prescribed for an action to be taken concerning any
matter exceeds seven days from the date of the order
establishing the time limit, requests for extension of time
shall be filed at least five (5) days prior to the expiration
of the time limit and shall explain why an extension of time
is necessary.
[Amended May 14, 1992, 57 F.R. 20633,
effective June 15, 1992; Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.7 Ex parte communications in reparation proceedings.
(a) Prohibitions against ex parte communications.
(1) No interested person outside the Commission shall make
or knowingly cause to be made to any Commissioner,
Administrative Law Judge, or Commission decisional employee an
ex parte communication relevant to the merits of a
proceeding.
(2) No Commissioner, Administrative Law Judge, or
Commission decisional employee shall make or knowingly cause
to be made to any interested person outside the Commission an
ex parte communication relevant to the merits of a
proceeding.
(b) Procedures for handling ex parte communications. A
Commissioner, Administrative Law Judge or Commission
decisional employee who receives, or who makes or knowingly
causes to, be made, an ex parte communication prohibited by
paragraph (a) of this section shall
(1) Place on the public record of the proceeding--
(i) All such written communications;
(ii) Memoranda stating the substance of all such oral
communications; and
(iii) All written responses, and memoranda stating the
substance of all oral responses, to the materials described in
paragraphs (b)(1)(i) and (1)(ii) of this section; and
(2) Promptly give written notice of such communication and
responses thereto to all parties to the proceedings to which
the communication or responses relate.
(c) Sanctions.
(1) Upon receipt of an ex parte communication knowingly
made or knowingly caused to be made by a party in violation of
the prohibition contained in paragraph (a)(1) of this section,
the Commission, Administrative Law Judge, or Judgment Officer
may, to the extent consistent with the interests of justice
and the policy of the Act, require the party to show cause why
his claim or interest in the proceeding should not be
dismissed, denied, disregarded, or otherwise adversely
affected on account of such violation.
(2) Any attorney or accountant who knowingly makes or
knowingly causes to be made, or who knowingly solicits or
knowingly causes the solicitation of, an ex parte
communication which violates the prohibitions contained in
paragraph (a) of this section may be deemed to have engaged in
unprofessional conduct of the type proscribed by 17 CFR
14.8(c).
(3) Any Commissioner, Administrative Law Judge, or
Commission decisional employee who knowingly makes or
knowingly causes to be made, or who knowingly solicits or
knowingly causes the solicitation of, an ex parte
communication which violates the prohibitions contained in
paragraph (a) of this section may be deemed to have engaged in
conduct of the type proscribed by 5 CFR 2635.101(b).
(d) Applicability of prohibitions and sanctions against ex
parte communications.
(1) The prohibitions of this section against ex parte
communications shall apply:
(i) To any person who has actual knowledge that a
proceeding has been or will be commenced by order of the
Commission; and
(ii) To all persons after public notice has been given that
a proceeding has been or will be commenced by order of the
Commission.
(2) The prohibitions of this section shall remain in effect
until a final order has been entered in the proceeding which
is no longer subject to review by the Commission or to
appellate review by a court.
[Amended Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.8 Separation of functions.
(a) A Judgment Officer or Administrative Law Judge will not
be responsible to or subject to the supervision or direction
of any officer, employee, or agent of the Commission engaged
in the performance of investigative or prosecutorial functions
for the Commission.
(b) No officer, employee, or agent of the Federal
Government engaged in the performance of investigative or
prosecutorial functions in connection with any proceeding
shall, in that proceeding or a factually related proceeding,
participate or advise in the decision of a Judgment Officer or
Administrative Law Judge, except as a witness in the
proceeding, without the express written consent of the parties
to the proceeding. This provision shall not apply to the
Commissioners.
[Amended May 14, 1992, 57 F.R. 20633,
effective June 15, 1992.]
12.9 Practice before the Commission.
(a) Practice.--
(1) By non-attorneys. An individual may appear pro se (on
his own behalf); a general partner may represent the
partnership; a bona fide officer of a corporation, trust or
association may represent the corporation, trust or
association.
(2) By attorneys. An attorney-at-law who is admitted to
practice before the highest Court in any State or territory,
or of the District of Columbia, who has not been suspended or
disbarred from appearance and practice before the Commission
in accordance with provisions of Part 14 of this Chapter may
represent parties as an attorney in proceedings before the
Commission.
(b) Debarment of counsel or representative during the
course of a proceeding.
(1) Whenever, while a proceeding is pending before him, a
Judgment Officer or an Administrative Law Judge finds that a
person acting as counsel or representative for any party to
the proceeding is guilty of contemptuous conduct, such
official may order that such person be precluded from further
acting as counsel or representative in the proceeding. An
immediate appeal to the Commission may be taken from any such
order, pursuant to the provisions of
12.309, but the proceeding shall not be delayed or
suspended pending disposition of the appeal; Provided, that
the official may suspend the proceedings for a reasonable time
for the purpose of enabling the party to obtain other counsel
or representative.
(2) Whenever the Judgment Officer or Administrative Law
Judge has issued an order precluding a person from further
acting as counsel or representative in a proceeding, such
official, within a reasonable time thereafter, shall submit to
the Commission a report of the facts and circumstances
surrounding the issuance of the order and shall recommend what
action the Commission should take respecting the appearance of
such person as counsel or representative in other proceedings
before the Commission.
(c) Withdrawal of representation. Withdrawal from
representation of a party shall be only by leave of the
decisionmaking official (or the Commission) before whom the
proceeding is then pending. Such leave to withdraw may be
conditioned on the attorney's (or representative's) submission
of an affidavit averring that the party represented has actual
knowledge of the withdrawal, and such affidavit shall include
the name and address of a successor counsel (or
representative) or a statement that the represented party has
determined to proceed pro se, in which case, the statement
shall include the address where that party can thereafter be
served.
12.10 Service.
(a) General requirements.--
(1) When service is required; number of copies. One copy of
all motions, petitions or applications made in the course of a
proceeding (unless made orally during a hearing), all proposed
findings and conclusions (to the extent permitted by these
rules, all notices of appeal, all briefs, and letters to the
Commission, an employee thereof, or an Administrative Law
Judge, shall be served by a party upon all other parties to
the proceeding. This rule does not apply to a complaint filed
pursuant to12.13 of these rules, which shall only be filed
with the Commission.
(2) Filing with the Proceedings Clerk, proof of service.
All documents which are required to be served upon a party
shall be filed concurrently with the Proceedings Clerk, and
shall meet the requirements as to form prescribed by12.11 and
12.12 of these rules. Unless otherwise provided in these rules
a document shall be filed by delivering it in person or by
mailing it, by first-class mail, post-paid, addressed to:
Proceedings Clerk, Office of Proceedings, Commodity Futures
Trading Commission, 1155 21st Street, N.W., Washington, D.C.
20581. To be timely filed a document must be delivered, or
mailed, by first-class mail, to the Proceedings Clerk within
the time prescribed for filing. Proof of filing shall be made
by attaching to the document for filing an affidavit
certifying that the attached document was deposited in the
mail, with first-class postage prepaid, addressed to the
Proceedings Clerk, Office of Proceedings, 1155 21st Street,
N.W., Washington, D.C. 20581, on the date specified in the
affidavit. Proof of service of a document shall be made by
filing with the Proceedings Clerk, simultaneously with the
filing of the required document, an affidavit of service
executed by any person 18 years of age or older or a
certificate of service executed by an attorney-at-law
qualified to practice before the Commission. The proof of
service shall identify the persons served, state that service
has been made, set forth the date of service, and recite the
manner of service.
(3) Service of orders and decisions. A copy of all notices,
rulings, opinions, and orders of the Proceedings Clerk, the
Director of the Office of Proceedings, a Judgment Officer,
Administrative Law Judge, the Deputy General Counsel for
Opinions or the Commission shall be served by the Proceedings
Clerk on each of the parties.
(b) How service is made. Service shall be made either by
personal service or by first-class mail. Service shall be
complete at the time of personal service or upon deposit in
the mails of a properly addressed and post-paid document.
Where service is effected by mail, the time within which the
person served may respond thereto shall be increased by five
(5) days. For the purposes of this Rule, service of any
document by the Proceedings Clerk upon the Commission shall be
regarded as service by mail.
(c) Designation of person to receive service. The first
document filed in a proceeding by or on behalf of any party
shall state on the first page thereof the name and post office
address of the person who is authorized to receive service for
him of all documents filed in the proceeding. Thereafter,
service of documents shall be made upon the person authorized
unless service on a different authorized person or on the
party himself is ordered by a Judgment Officer, Administrative
Law Judge or the Commission, or unless the person authorized
is changed by the party upon due notice to all other parties.
Parties shall file and serve notification of any changes in
the information provided pursuant to this subparagraph as soon
as practicable after the change occurs.
[Amended May 14, 1992, 57 F.R. 20633,
effective June 15, 1992; Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.11 Formalities of filing of documents with the
Proceedings Clerk.
(a) Number of copies. Unless otherwise specifically
provided, an original and one conformed copy of all documents
shall be filed with the Proceedings Clerk.
(b) Title page. All documents filed with the Proceedings
Clerk must include at the head thereof, or on a title page,
the name of the Commission, the title of the proceeding, the
docket number (if one has yet been assigned by the Proceedings
Clerk), the subject of the particular document and the name of
the person on whose behalf the document is being filed. In the
complaint the title of the proceeding shall include the names
of all the complainants and respondents, but in documents
subsequently filed it is sufficient to state the name of the
first complainant and first respondent named in the
complaint.
(c) Paper, spacing, type. All documents filed under the
Reparation Rules shall be typewritten, mimeographed, printed,
or, if a party is not represented by counsel, in plainly
legible handwriting; shall be on one grade of good white paper
no less than 8 or more than 81/2 inches
wide and no less than 101/2 or more than
111/2 inches long; and shall be bound on
the top only. They shall be double-spaced, except for long
quotations (3 or more lines) and footnotes which should be
single-spaced.
(d) Signature. The original copy of all papers must be
signed in ink by the person filing the same or by his duly
authorized agent or attorney.
(e) Length and form of briefs. All briefs filed with the
Proceedings Clerk containing more than 10 pages shall include
an index and a table of cases and other authorities cited. The
date of each brief shall appear on its front cover or title
page and on its signature page. No brief shall exceed 35 pages
in length, except with the permission of the Commission, or
the Judgment Officer or Administrative Law Judge, before whom
the matter is then pending.
12.12 Signature.
(a) By whom. All documents filed with the Commission shall
be signed personally:
(1) By the person or persons on whose behalf they are
tendered for filing;
(2) By a general partner, officer or director of a
partnership, corporation, association, or other legal entity;
or
(3) By an attorney-at-law having authority with respect
thereto. The Proceedings Clerk may require appropriate
evidence of the authority of a person subscribing a document
on behalf of another person.
(b) Effect. The signature on any document of any person
acting either for himself or as attorney or agent for another
constitutes certification by him that:
(1) He has read the document subscribed and knows the
contents thereof;
(2) If executed in any representative capacity, it was done
with full power and authority to do so;
(3) To the best of his knowledge, information, and belief,
every statement contained in the document is true and not
misleading; and
(4) The document is not being interposed for delay.
12.13 Complaint; election of procedure.
(a) In general. Any person complaining of a violation of
any provision of the Act or a rule, regulation or order of the
Commission thereunder by any person who is a registrant (as
defined in12.2) may, at any time within two years after the
cause of action accrues, apply to the Commission for a
reparation award by filing a written complaint which satisfies
the requirements of this rule.
(b) Form of complaint. The form of each complaint filed
under paragraph (a) of this section shall meet the following
requirements:--
(1) Content. Each complaint shall include:
(i) The name, residence address, and telephone number
(during business hours) of the complainant;
(ii) The name, address, and telephone number, if known, of
each person alleged in the complaint to have violated the Act
or any rule, regulation or order thereunder;
(iii) If known, the specific provisions of the Act, rule,
regulation, or order claimed to have been violated;
(iv) A complete description of complainant's case,
including, but not limited to:
(A) A description of all relevant facts concerning each and
every act or omission which it is claimed constitutes a
violation of the Act; and
(B) A description of all facts which show or tend to show
the manner in which it is claimed that the complainant was
injured by the alleged violations;
(v) The amount of damages the complainant claims to have
suffered and the method by which those damages have been
computed, the amount of punitive damages (no more than two
times the amount of such actual damages) the complainant
claims, if any, and how complainant plans to demonstrate that
punitive damages are appropriate;
(vi) A statement indicating whether an arbitration
proceeding or civil court litigation, based on the same set of
facts set forth and involving any party named as a respondent
in the complaint, has been instituted, and whether such a
proceeding has reached a final disposition or is presently
pending;
(vii) A statement indicating whether any of the respondents
is the subject of receivership or bankruptcy proceedings that
are presently pending;
(viii) An election of a decisional procedure pursuant to
subpart C, D, or E. (A procedure pursuant to subpart D may be
elected only if the total amount of damages claimed, exclusive
of interest and costs, does not exceed $30,000. A procedure
pursuant to subpart E may be elected only if the total amount
claimed as damages, exclusive of interest and costs, exceeds
$30,000); and
(ix) A filing fee in the amount prescribed by12.25 of these
rules shall be submitted with the complaint at the time of its
filing.
(2) Subscription and verification of the complaint. Each
complaint shall be signed personally by an individual
complainant or by a duly authorized officer or agent of a
complainant who is not a natural person. His signature shall
be given under oath or affirmation under penalty of law
attesting either that be knows the facts set forth in the
complaint to be true, or that he believes the facts set forth
to be true, in which event the information upon which he
formed that belief shall be set forth with particularity.
(3) Time and place of filing of complaint. A complaint
shall be filed by delivering a copy thereof, in proper form,
to the Commission at its principal offices in Washington,
D.C., addressed to the Office of Proceedings, attention of the
Proceedings Clerk. The complaint may be filed in person,
during norma] business hours, or by certified mail, or
registered mail with return receipt requested. If filing is by
mail, it shall be addressed to the Proceedings Clerk, Office
of Proceedings, Commodity Futures Trading Commission, 1155
21st Street, N.W., Washington, D.C. 20581. The complaint shall
not be served on any person or party named therein. Upon the
filing of the complaint and the appropriate filing fee, the
Proceedings Clerk shall assign a docket number to the matter
and shall maintain the official docket.
(4) Bond required if complainant is nonresident; filing
date of nonresident's complaint.
(i) If a complaint in reparations is filed by a nonresident
of the United States, the complaint shall not be considered
duly filed in proper form unless it is accompanied by:
(A) A bond in double the amount of the claim either with a
surety company approved by the Treasury Department of the
United States or two personal sureties, each of whom shall be
a citizen of the United States and shall qualify as
financially responsible for the entire amount of the bond,
which bond shall run to the respondent and be conditioned upon
the payment of costs (including reasonable attorney's fees,
for the respondent if the respondent shall prevail) and any
reparation award that may be issued by the Commission against
the complainant on any counterclaim asserted by respondent;
or
(B) A written request that the bond requirement be waived
in accordance with section 14(c) of the Commodity Exchange
Act, accompanied by sufficient proof that the country of which
the complainant is a resident permits the filing of a
complaint by a resident of the United States against a citizen
of that country without the furnishing of a bond.
(ii) The provisions of paragraphs (b)(4)(i)(A) or
(b)(4)(i)(B) of this section must be satisfied within two
years after the complainant's cause of action accrues.
(iii) When mailed from a foreign country, a nonresident's
complaint shall be deemed filed on the date that it is
received in proper form by the Commission's Proceedings Clerk,
not on the date of mailing from the country of origin.
[Amended Oct. 6, 1986, 51 F.R. 35506,
effective Oct. 6, 1986; Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.14 Withdrawal of complaint.
At any time prior to service of notification to the
complainant pursuant to12.15(a) of the Director of the Office
of Proceedings' determination to forward the complaint to a
registrant, complainant may file a written notice of
withdrawal of the complaint which shall terminate the
Commission's consideration of the complaint without prejudice
to complainant's right to re-file a reparations complaint
based upon the same set of facts within two years after the
cause of action accrues. If the complainant has previously
filed a notice of withdrawal of a complaint based upon the
same set of facts, the notice of withdrawal of complaint shall
terminate the case with prejudice to complainant's rights to
re-file a complaint in reparations based on the same set of
facts, but such termination shall be regarded by the
Commission as without prejudice to complainant's right to seek
redress in such alternative forums as may be available for
adjudication of his claims.
12.15 Notification of complaint.
(a) Forwarding of complaint to registrant. If, in the
opinion of the Director of the Office of Proceedings, the
facts set forth in a complaint warrant such action as to any
of the registrants, a copy of the complaint, together with any
attachments thereto, shall be forwarded by serving by
registered mail or certified mail and such registrant named
therein at an address previously designated with the
Commission by the registrant for receipt of reparation
complaints, as provided in Commission Regulation3.30, 17 CFR
3.30, or, if no such designation has been filed with the
Commission, at such address as will accomplish actual notice
to the respondent. Should the Director determine to forward
the complaint, the complainant shall be notified of this
determination at the time the complaint is forwarded.
(b) Determination not to forward complaint. The Director
may, in his discretion, refuse to forward a complaint as to a
particular respondent if it appears that the matters alleged
therein are not cognizable in reparations, or that grounds
exist pursuant to12.24(c) or (d) for refusing to forward the
complaint. If the Director of the Office of Proceedings should
determine not to forward the complaint to all registrants
named in the complaint in accordance with this Section, no
proceeding shall be held thereon and the complainant shall be
notified to that effect. If the Director determines to forward
the complaint as to less than all of the registrants, the
complainant shall be so notified. A termination of the
complaint as to any registrant shall be regarded by the
Commission as without prejudice to the right of the
complainant to seek such alternative forms of relief as may be
available.
12.16 Response to complaint.
Within 25 days after the complaint has been served by the
Office of Proceedings on the registrant, or within such
additional time (not to exceed 10 days absent extraordinary
circumstances) as the Director of the Office of Proceedings,
or his/her delegee may grant, for good cause shown, each
registrant shall either--
(a) Satisfy the complaint in accordance with12.17 of these
rules; or
(b) Answer the complaint in the manner prescribed by12.18
of these rules.
[Amended Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.17 Satisfaction of complaint.
A respondent may satisfy the complaint (a) by paying to the
complainant either the amount to which the complainant claims
to be entitled as set forth in the complaint or such other
amount as the complainant will accept in satisfaction of his
claim; and (b) by submitting to the Commission notice of
satisfaction and withdrawal of the complaint, duly executed by
the complainant and the respondent.
12.18 Answer; election of procedure.
An answer filed pursuant to12.16 of these rules shall meet
the following requirements--
(a) Content--Each answer shall contain--
(1) The full name, current address and telephone number
(during business hours) of each respondent on whose behalf the
answer is filed;
(2) A complete description of each registrant's case,
including but not limited to, a precise and detailed statement
of the facts which constitute each registrant's ground for
defense;
(3) Admissions, if any, as to the registrant's liability
for the amount (or any portion thereof) claimed as
damages;
(4) A statement indicating whether the registrant is (and
if the answer is filed on behalf of two or more registrants,
which if any of them are) in receivership or subject to
bankruptcy proceedings;
(5) A statement indicating whether an arbitration or civil
court litigation, based on the same set of facts set forth in
the complaint (involving any or all of the parties named
therein), is pending;
(6) A counterclaim which the registrant wishes to pursue
under12.19 of these rules;
(7) An election of an alternative decisional procedure
pursuant to subparts C, D, or E of these rules. (A proceeding
pursuant to subpart D may be elected only if the amount of
actual damages claimed in the complaint or as counterclaims,
exclusive of interest, costs, and punitive damages, does not
exceed $30,000. A procedure pursuant to subpart E may be
elected only if the amount of actual damages claimed in the
complaint or as counterclaims, exclusive of interest, costs,
and punitive damages exceeds $30,000); and
(8) If appropriate, a filing fee in the amount prescribed
by12.25 shall be submitted with an answer at the time of its
filing.
(b) Motion for reconsideration of determination to forward
the complaint. An answer may include a motion for
reconsideration of the determination to forward the complaint,
specifying the grounds therefor, which the Director of the
Office of Proceedings, in his discretion, may grant by
terminating the case pursuant to12.27, or deny by forwarding
the pleadings and matters of record for an elected decisional
proceeding pursuant to12.26. The inclusion in an answer of a
motion for reconsideration shall not preclude a respondent, if
the motion is denied, from moving for dismissal at a later
stage of the proceeding for the same reasons cited in a motion
for reconsideration pursuant to this paragraph.
(c) Subscription and verification of the answer. An answer
shall be signed personally by each registrant on behalf of
whom it is filed or by a duly authorized officer or agent of
any such registrant who is not a natural person. Each
registrant's signature shall be given under oath, or by
affirmation under penalty of law, attesting that he has read
the answer; that to the best of his knowledge all of the
statements in the answer, the counterclaim (if any), and the
materials required by these rules to be appended thereto, are
accurate and true, and that the answer (and counterclaim, if
any) has not been interposed for delay.
(d) Affidavit of service. The registrant shall file, with
his answer an affidavit showing that he has served a true copy
of the answer upon the complainant, either personally or by
first-class mail addressed to the complainant at the address
set forth in the complaint.
(e) Time and place of filing an answer. An answer shall be
filed by mailing or delivering a copy thereof, in proper form,
to the Commission at its principal office in Washington, D.C.,
addressed to the Office of Proceedings, Attention of the
Proceedings Clerk. The answer may be filed in person, during
normal business hours, or by certified mail, or registered
mail with return receipt requested. If filing is by mail, it
shall be addressed to the Proceedings Clerk, Office of
Proceedings, Commodity Futures Trading Commission, 1155 21st
Street N.W., Washington, D.C. 20581.
[Amended Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.19 Counterclaim.
A registrant may, at the time of filing an answer to a
complaint, set forth as a counterclaim: (a) Facts alleging a
violation and a request for a reparation award that would be a
proper subject for a complaint under12.13 of these rules; or
(b) any claim which at the time the complaint is served the
registrant has against the complainant if it arises out of the
transaction or occurrence or series of transactions or
occurrences set forth in the complaint.
12.20 Response to counterclaim; reply; election of
procedure.
(a) Response to counterclaim. If an answer asserts a
counterclaim, the complainant shall, within thirty (30) days
after service upon him of the answer by the respondent: (1)
Satisfy the counterclaim as if it were a complaint, in the
manner prescribed by12.17 of these rules; or (2) file a reply
to the counterclaim with the Commission.
(b) Form and content of reply. Should the complainant,
under this paragraph, elect to file a reply to a counterclaim,
the reply shall be strictly confined to the matters alleged in
the counterclaim and shall conform to the form and content and
other requirements set forth in Section 12.18 of these
rules.
(c) Election of decisional procedure. If neither the
complainant nor the respondent, in the complaint or answer
respectively, has previously made an election of the summary
decisional procedure or the formal decisional procedure, the
complainant may make such an election in his reply.
12.21 Voluntary dismissal.
(a) At any time after the Director of the Office of
Proceedings has served notification to the parties pursuant
to12.15 of these rules of his determination to forward the
complaint to the respondent for a response, either the
complainant or the respondent may obtain dismissal of the
complaint (or the proceeding, if one has commenced) by filing
a stipulation of dismissal, duly executed by all of the
complainants and each respondent against whom the complaint
has been forwarded (or added as a party in the course of a
proceeding); provided however, that if the stipulation is
filed after any respondent has filed an answer, the terms of
the stipulation shall include a dismissal of any counterclaims
in the answer.
(b) A dismissal of a complaint pursuant to this paragraph
shall be with prejudice to complainant's right to re-file a
claim in reparations based upon the same set of facts as
alleged in the dismissed complaint. Unless otherwise stated in
the stipulation, a dismissal ordered pursuant to this
paragraph shall be regarded by the Commission as without
prejudice to the parties' right to seek redress in such
alternative forums as may be available for adjudication of
their claims.
(c) Upon receiving a written stipulation of dismissal which
satisfies the requirements of this rule, the official before
whom the matter or proceeding is pending shall issue an order
of dismissal, and serve a copy thereof upon each of the
parties.
(d) This rule shall be applicable at all stages of a
reparation proceeding.
12.22 Default proceedings.
(a) Institution of a default proceeding. Failure timely to
respond to a complaint or a counterclaim, as required by12.16
and 12.20 of these rules, or, if applicable, to pay a filing
fee required by12.25(b) or (c), shall be treated as an
admission of the allegations of the complaint or counterclaim
by the nonresponding party, shall constitute a waiver by such
party of any decisional procedure afforded by these Rules on
the facts set forth in the complaint or counterclaim, and
shall result in the institution of a default proceeding.
(b) Default procedure. Upon a party's failure to respond
timely to a complaint or counterclaim as prescribed in12.16
and 12.20 of these rules, or timely to comply with12.25(b) or
(c), the Director of the Office of Proceedings shall forward
the pleadings, and other materials then of record, to a
Judgment Officer or Administrative Law Judge who may
thereafter enter findings and conclusions concerning the
questions of violations and damages and, if warranted, enter a
reparation award against the non-responding party. If the
facts which are treated as admitted are considered
insufficient to support a violation or the amount of
reparations sought, the Judgment Officer or Administrative Law
Judge may order production of supplementary evidence from the
party not in default and may enter a default order and an
award based thereon.
(c) Finality. A default order issued pursuant to this rule,
or pursuant to any other provisions of these Part 12
Reparation Rules, shall become the final decision and order of
the Commission thirty (30) days after service thereof, unless
the order is set aside pursuant to12.23(a) of these rules, or
unless the Commission takes review of such order on its own
motion on or before the thirtieth day.
[Amended May 14, 1992, 57 F.R. 20633,
effective June 15, 1992.]
12.23 Setting aside of default.
(a) Default order not final. In order to prevent injustice
or for good cause shown, and on such conditions as may be
appropriate, a non-final default order (including any award
therein) may be set aside by the official who issued the
order:
(1) Procedure for setting aside non-final default order.
Any party or person who is the subject of a default order
issued pursuant to these rules may, at any time before the
order becomes final pursuant to12.22(c), file and serve a
motion to set aside the default, which shall set forth reasons
why the act or omission for which the party was defaulted was
not willful, why there is a reasonable likelihood of success
for the party's claim or defense if heard on the merits, and
why no prejudice will be sustained by other parties if the
default is set aside. A motion to set aside a default order
filed pursuant to this subparagraph shall be decided, in the
first instance, by the official who issued the default
order.
(2) Review. A denial of a motion to set aside a non-final
default order by the official who issued the order shall be
treated as an initial decision, which may be appealed to the
Commission in accordance with the requirements of12.401 of
these rules. A grant of a motion to set aside a non-final
default order may be appealed only in accordance with the
requirements of12.309 of these rules.
(b) Default order final. A default order that has become
final pursuant to12.22(c) shall not be set aside except upon a
motion filed and served by the defaulted party showing that he
should be relieved from the default order because of fraud
perpetrated on a decisionmaking official or the Commission,
mistake, excusable neglect, or because the order is void for
want of jurisdiction. Such a motion shall also show that, if
the default order were set aside, there would be a reasonable
likelihood of success for his claim or defense on the merits
and that no party would be prejudiced thereby. Motions to set
aside a final default order for fraud, mistake, or excusable
neglect shall be filed within one year after the order was
issued. All motions to set aside default orders shall be
decided, in the first instance, by the official who issued the
order. A denial of a motion to set aside a default order that
has become final shall be treated as an initial decision,
which may be appealed to the Commission in accordance with the
requirements of12.401 of these rules. A grant of a motion to
set aside a final default order shall be treated as a
non-final order which may be appealed only in accordance with
the requirements of Section 12.309 of these rules.
12.24 Parallel proceedings.
(a) Definition. For purposes of this section, a parallel
proceeding shall include--
(1) An arbitration proceeding or civil court proceeding,
involving one or more of the respondents as a party, which is
pending at the time the reparation complaint is filed and
involves claims or counterclaims that are based on the same
set of facts which serve as a basis for all of the claims in
the reparations complaint, and which either:
(i) Was commenced at the instance of the complainant in
reparations; or
(ii) Involves counterclaims by the complainant in
reparations alleging violations of the Commodity Exchange Act,
or any regulation or order issued thereunder; or
(iii) Is governed by a compulsory counterclaim rule of
federal court procedure which required the complainant in
reparations to assert all of his claims (including those based
on alleged violations of the Commodity Exchange Act, and any
regulation or order issued thereunder) as counterclaims in
that proceeding;
(2) The appointment by a court of a receivership over the
assets, property or proceeds of a respondent named in a
reparation complaint where the responsibility of the
receivership includes the resolution of claims made by
customers; or
(3) A petition filed under any chapter of the Bankruptcy
Code, 11 U.S.C. 101 et seq., as amended, commenced pursuant to
11 U.S.C. 301 or 302 by a respondent in a reparation
proceeding, or the issuance by a bankruptcy court of an order
for relief after the filing against a respondent in a
reparation proceeding of an involuntary petition in bankruptcy
pursuant to 11 U.S.C. 303.
(b) Notice: At the time a complaint in reparations is filed
pursuant to these rules, or at any time thereafter, any party,
receiver or trustee, or counsel to any of the foregoing with
knowledge of a parallel proceeding shall promptly notify the
Commission, by first-class mail addressed to the Office of
Proceedings, attention of the Proceedings Clerk, and serve
notice on all other parties, including the receiver or
trustee. The notice shall include the following
information:
(1) The caption of the parallel proceeding;
(2) The name of the court or the arbitration tribunal
(including address and phone number, if known);
(3) The docket number or numbers;
(4) The date the parallel proceeding was filed (and the
current status if known); and
(5) If a proceeding in bankruptcy or receivership is
pending, the date of the appointment and name and address of
the receiver or trustee.
A copy of any relevant complaint, petition or order shall
be attached to the notice.
(c) Effect of pending arbitration or civil court
litigation.
(1) The Director of the Office of Proceedings shall refuse
to institute an elected decisional procedure concerning a
reparation complaint filed under this Part in which there is a
parallel proceeding described in paragraph (a)(1) of this
section and shall return the complaint to the complaining
person. The effective date of the Director's termination of
the complaint without prejudice shall be fifteen (15) days
from the date of service of notice of the action taken
pursuant to this subparagraph.
(2) If notice of a parallel proceeding described in
paragraph (a)(1) of this section is received before the
initial decision is filed (or before a final decision
under12.106 of the rules is entered), a proceeding in which a
decisional procedure has been commenced shall be dismissed,
without prejudice. The effective date of the order of
dismissal shall be fifteen (15) days from the date of service
of the order by the Proceedings Clerk.
(d) Effect of receivership or bankruptcy proceedings.
(1) The Director of the Office of Proceedings shall refuse
to institute an elected decisional procedure as to a
respondent in any reparation complaint filed pursuant to this
part who is the subject of a parallel proceeding described in
paragraph (a)(2) or (a)(3) of this section, and shall notify
all parties, including the receiver or trustee, that as to
that respondent a reparation proceeding shall not be
instituted. The effective date of the Director's action shall
be fifteen (15) days from the date of service of the notice
thereof.
(2) A proceeding in which an elected decisional procedure
has been commenced shall be ordered dismissed, without
prejudice, as to any respondent who becomes the subject of a
parallel proceeding described in paragraph (a)(2) or (a)(3) of
this section if notice pursuant to subsection (b) of this
section is received before the filing of an initial decision
(or before a final decision is issued pursuant to12.106) as to
that respondent. The Proceedings Clerk shall notify all
parties, including the receiver or trustee, of the order. The
effective date of the order shall be fifteen (15) days from
the date of the service of the order by the Proceedings
Clerk.
(e) Exceptions. At the time notice of a parallel proceeding
is filed pursuant to paragraph (b) of this section, or any
time thereafter, any party, or the receiver or trustee, may
file and serve upon other parties a statement in support of or
in opposition to any action taken or to be taken pursuant to
paragraph (c) or (d) of this section. This statement shall be
addressed to the Office of Proceedings, attention of the
Proceedings Clerk. Upon receipt of any such statement, the
Proceedings Clerk shall immediately forward the statement to
the official with responsibility over the case. The notice and
the statements filed by the parties shall be reviewed by that
official who, on or before the effective date of action taken
pursuant to paragraphs (c)(l), (c)(2), (d)(l), and (d)(2), of
this section, may take such actions as, in his opinion, are
necessary to ensure that the parties to the matter or
proceedings are not unduly prejudiced.
(f) No right of appeal to the Commission. Any action taken,
or order issued, pursuant to paragraphs (c)(l), (c)(2),
(d)(l), or (d)(2), of this section that has become effective
shall be deemed a final order which is not subject to appeal
pursuant to Subpart F of these rules.
12.25 Filing fees.
(a) Fees payable upon filing a complaint.
(1) A complainant who, in the complaint, has elected the
voluntary decisional procedure shall, at the time of filing
the complaint, pay a filing fee of $50.00.
(2) A complainant who, in the complaint wherein the amount
of damages claimed does not exceed $30,000, exclusive of
interest and costs, has not elected the voluntary decisional
procedure shall, at the time of filing the complaint, pay a
filing fee of $125.00.
(3) A complainant who, in the complaint wherein the amount
of damages claimed exceeds $30,000, exclusive of interest and
costs, has not elected the voluntary decisional procedure
shall, at the time of filing the complaint, pay a filing fee
of $250.00.
(b) Fees payable upon filing an answer.
(1) If a complainant, in the complaint, has elected the
voluntary decisional procedure, a respondent who, in his
answer, elects the summary decisional procedure (available
only where the amount of damages claimed in the complaint or
as counterclaims does not exceed $30,000) shall, at the time
of filing the answer, pay a filing fee of $75.00.
(2) If a complainant, in the complaint, has elected the
voluntary decisional procedure, a respondent who, in his
answer, elects the formal decisional procedure (available only
where the amount of damages claimed in the complaint or as
counterclaims exceeds $30,000) shall, at the time of filing
the answer, pay a filing fee of $200.00.
(c) Fees payable upon filing a reply. In any case in which
a counterclaim has been made, unless a complainant in the
complaint, or the respondent in an answer, has elected the
summary decisional procedure or the formal decisional
procedure a complainant, who in his reply elects either of
these procedures, shall, at the time of filing the reply, pay
a filing fee of $75.00 or $200.00, respectively, depending
whether the procedure elected by complainant is pursuant to
Subparts D or E.
[Amended Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.26 Commencement of a reparation proceeding.
(a) Commencement of voluntary decisional proceeding. Where
complainant and respondent in the complaint and answer have
elected the voluntary decisional procedure pursuant to Subpart
C of these Rules and the complainant has paid the filing fee
required by12.25 of these rules, the Director of the Office of
Proceedings shall, if in his opinion the facts warrant taking
such action, forward the pleadings and all materials of record
to the Proceedings Clerk for a proceeding to be conducted in
accordance with Subpart C of these rules. The Proceedings
Clerk shall forthwith notify the parties of such action. Such
notification shall be accompanied by an order issued by the
Proceedings Clerk requiring the parties to complete all
discovery, as provided in Subpart B of these Rules, within 50
days thereafter. A voluntary decisional proceeding commences
upon service of such notification and order. As soon as
practicable after service of such notification, the
Proceedings Clerk shall assign the case to a Judgment Officer
for a final decision.
(b) Commencement of summary decisional proceeding. Where
the amount claimed as damages, exclusive of interest and
costs, in the complaint or in counterclaim does not exceed
$30,000, and either a complainant or a respondent in the
complaint, answer, or reply, has elected the summary
decisional procedure pursuant to Subpart D of these rules, and
has paid the filing fee required by12.25, the Director of the
Office of Proceedings shall, if in his opinion the facts
warrant taking such action, forward the pleadings and all
materials of record to the Proceedings Clerk for a proceeding
to be conducted in accordance with Subpart D of these rules.
The Proceedings Clerk shall forthwith notify the parties of
such action. Such notification shall be accompanied by an
order issued by the Proceedings Clerk requiring the parties to
complete all discovery, as provided in Subpart B of these
rules, within 50 days thereafter. A summary decisional
proceeding commences upon service of such notification. As
soon as practicable after service of such notification, the
Proceedings Clerk shall assign the case to a Judgment Officer
for disposition.
(c) Commencement of formal decisional proceeding. Where the
amount claimed as damages in the complaint or as counterclaims
exceeds $30,000, exclusive of interest and costs, and either a
complainant or a respondent in the complaint, answer or reply,
has elected the formal decisional procedure pursuant to
Subpart E of these rules, and has paid the filing fee required
by12.25, the Director of the Office of Proceedings shall, if
in his opinion the facts warrant taking such action, forward
the pleadings and the materials of record to the Proceedings
Clerk for a proceeding to be conducted in accordance with
Subpart E of these rules. The Proceedings Clerk shall
forthwith notify the parties of such action. Such notification
shall be accompanied by an order issued by the Proceedings
Clerk requiring the parties to complete all discovery, as
provided in Subpart B, within 50 days thereafter. A formal
decisional proceeding commences upon service of such
notification and order. As soon as practicable after service
of such notification, the Proceedings Clerk shall assign the
case to an Administrative Law Judge for disposition.
[Amended Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.27 Termination of consideration of pleadings.
If the Director of the Office of Proceedings should
determine not to proceed in a manner set forth in12.26 (a),
(b), or (c), consideration of the complaint and the answer
(and reply, if any) shall terminate, and no proceeding shall
be held on the allegations in any such pleadings. Such
termination shall be regarded by the Commission as without
prejudice to the right of the parties to seek such alternative
forms of relief as may be available to them. If the
consideration of the pleadings should be terminated, the
Proceedings Clerk shall immediately notify the parties to that
effect by registered or certified mail. A determination by the
Director not to proceed in the manner set forth in12.26 (a),
(b), or (c) of these rules is not subject to appeal pursuant
to Subpart F of these rules.
Subpart B: Discovery
12.30 Methods of discovery.
(a) In general. Parties may obtain discovery by the
following methods in accordance with the procedures and
limitations set forth in the section indicated:
(1) Production of documents or other items ( 12.31);
(2) Deposition on written interrogatories ( 12.32);
(3) Admissions ( 12.33).
(b) Scope of discovery. The scope of discovery is as
follows:
(1) Relevancy. Except as provided below, discovery may be
obtained regarding any matter not privileged, which is
relevant to the subject matter in the pending proceeding,
including the existence, description, nature, custody,
condition and location of any books, documents, or other
tangible items, and the identity and location of persons
having knowledge of any discoverable matters. Tax returns and
personal bank account records shall not be discoverable,
except upon motion by the party seeking discovery showing the
need for disclosure of information contained therein, and that
the same information could not be obtained through other
means.
(2) Protective orders. Upon motion by a party or the person
from whom discovery is sought, filed within twenty days after
the objectionable discovery notice or request is served, and
for good cause shown, the official presiding over discovery
may issue any order to protect a party or person from
annoyance, embarrassment, oppression, or undue burden or
expense, or to prevent the raising of issues untimely or
inappropriate to the proceeding, or the inappropriate
disclosure of trade secrets or sensitive commercial or
financial information. Relief through a protective order may
include one or more of the following:
(i) That discovery not be had;
(ii) That discovery may be had only on specified terms and
conditions;
(iii) That certain matters not be inquired into, or that
the scope of the discovery be limited to certain matters;
(iv) That a trade secret or other confidential commercial
information not be disclosed or be disclosed only in a
designated way; and
(v) That the parties simultaneously file specified
documents or information in sealed envelopes to be opened only
as directed by the decisionmaking official.
(3) Motions for order compelling discovery. It shall be the
duty of a party to obtain an order compelling discovery from
another party if the latter party fails to comply with a
discovery notice, by filing a motion therefor within twenty
days after the time allowed by these rules for compliance with
the notice has expired.
(c) Sanctions for abuse of discovery. If an Administrative
Law Judge or a Judgement Officer finds that any party, without
substantial justification, has necessitated the filing of a
motion for a protective order or for an order compelling
discovery, or any other discovery-related motions, that party
shall, if the motion is granted, be ordered to pay, at the
termination of the proceeding, the reasonable expenses of the
moving party incurred in filing the motion, unless the
decisionmaking official finds that circumstances exist which
would make an award of such expenses unjust. If a
decisionmaking official finds that any party, without
substantial justification, has filed a motion for a protective
order or for an order compelling discovery, or any
discovery-related motions, that party shall, if the motion is
denied, be ordered to pay, at the termination of the
proceeding, the reasonable expenses of an adverse party
incurred in opposing the motion, unless the decisionmaker
finds that circumstances exist which would make an award of
such expenses unjust.
(d) Time limit. Absent an extension of time, all discovery
notices or requests shall be served within 30 days (and all
discovery shall be completed within 50 days) after the
notification and the order required by12.26(a), (b), or (c)
has been served on the parties. Upon motion by a party and for
good cause shown, the time allowed for discovery may be
enlarged for one additional period not to exceed thirty (30)
days.
[Amended Mar. 1, 1994, 59 F.R. 9631, effective
May 2, 1994.]
12.31 Production of documents and tangible items.
(a) By a party. Any party, within the time allowed
in12.30(d) and subject to the limitations in12.30(a), may
serve on any other party, a notice to produce copies of
specifically designated categories of documents, papers,
books, accounts, letters, photographs, objects, or tangible
things which are in the party's possession, custody or
control. A copy of the notice shall be served on all other
parties to the proceeding. All documents requested in the
notice to produce shall be served on the party seeking the
discovery within twenty (20) days after service of the notice
to produce.
(b) By a non-party. Any party may, by filing an appropriate
motion showing the need for the materials and an application
for a subpoena in accordance with the procedure prescribed
in12.313 and within the time prescribed by12.30(d) of these
rules, seek leave to serve upon a non-party a notice to
produce copies of any specifically designated categories of
materials as are described in paragraph (a) of this section.
After an appropriate order and subpoena has been issued, such
party may serve upon a non-party a notice to produce such
materials. All materials requested in the notice to produce,
and, if applicable, a detailed explanation of why any of the
specified materials cannot be produced, shall be served on the
party seeking discovery within such time (not to exceed thirty
(30) days) as the subpoena shall specify. Enforcement of the
order and subpoena may be sought in accordance with12.313.
12.32 Depositions on written interrogatories.
(a) Notice. Any party, within the time prescribed
by12.30(d), may serve on any other party or any officer or
agent of a party a notice of the taking of a deposition on
written interrogatories.
(b) Number. The number of written interrogatories served
upon any one party shall not exceed thirty. For the purpose of
this rule, each subinterrogatory or divisible part of an
interrogatory shall be regarded as one interrogatory. Leave to
serve additional interrogatories shall not be granted absent
extraordinary circumstances.
(c) Reply.
(1) Each interrogatory served shall be answered by the
party served or if the party is a corporation, partnership,
association, or government agency, by any officer or agent
thereof selected by the responding party.
(2) Each interrogatory shall be answered separately and
fully in writing, unless objected to, in which event the
reasons for objection shall be stated in lieu of an answer.
For the purposes of this rule, an evasive or incomplete answer
shall be treated as a failure to answer. The answers are to be
signed and verified by the person making them. The person upon
whom a notice to take a deposition on written interrogatories
has been served shall serve a copy of the answers and
objections within twenty (20) days after service of the
interrogatories.
(d) Deposition of a non-party. The deposition on written
interrogatories of a non-party may be taken only within the
time prescribed by12.30(d), and only pursuant to an order
entered and subpoena issued in accordance with the provisions
of12.313 of these rules; provided, however, that the
deposition on written interrogatories of a Commission member
or employee may only be taken upon a showing that the
Commission member or employee has personal knowledge of the
matters sought to be discovered (i.e., not obtained pursuant
to a Commission investigation), that the information sought to
be discovered is material and that the information sought to
be discovered is not available from other sources.
(e) Filing of depositions on written interrogatories in a
voluntary or summary decisional proceeding. In proceedings
commenced pursuant to Sections 12.26(a) and (b) of these
rules, copies of all depositions on written interrogatories
shall be filed by the party on whose behalf the discovery was
obtained.
12.33 Admissions.
(a) Request for admissions. Any party may, within the time
permitted by12.30(d) of these rules, serve upon any other
party a written request for admissions of the truth of any
matters set forth in the request that relate to statements or
opinions of fact or of the application of law to fact,
including the genuineness of any document described in the
request. Copies of documents shall be served with the request
unless they have been or are otherwise furnished or made
available for inspection and copying. A copy of the request
shall be filed with the Proceedings Clerk.
(b) Reply. Each matter of which an admission is requested
shall be separately set forth. The matter is admitted unless
within twenty (20) days after service of the request, the
party upon whom the request is directed files and serves upon
the party requesting the admission a verified written answer
or objection to the matter. If objection is made, the reasons
therefor shall be stated. The answer shall specifically deny
the matter or set forth in detail the reasons why the
answering party cannot truthfully admit or deny the matter. A
denial shall fairly meet the substance of the requested
admission and when good faith requires that a party qualify
his answer and deny only a part of the matter of which an
admission is requested, he shall specify so much of it as is
true and qualify or deny the remainder. An answering party may
not give a lack of information or knowledge as a reason for
failure to admit or deny unless he states that he has made
reasonable inquiry and that the information known or
reasonably available to him is insufficient to enable him to
admit or deny. A party who considers that a matter of which an
admission has been requested presents a genuine issue for
trial may not, on that ground alone, object to the request; he
may deny the matter or set forth reasons why he cannot admit
or deny it.
(c) Determining sufficiency of answers or objections. The
party who has requested the admissions may move to determine
the sufficiency of the answers or objections. Unless the
objecting party sustains his burden of showing that the
objection is justified, the official presiding over discovery
shall order that an answer be served. If such official
determines that an answer does not comply with the
requirements of this rule, he may order either that the matter
is admitted or that an amended answer be served.
(d) Effect of admission. Any matter admitted under this
rule is conclusively established and may be used as proof
against the party who made the admission. However, the
discovery or decisionmaking official may permit withdrawal or
amendment when the presentation of the merits of the
proceeding will be
served thereby and the party who obtains the admission
fails to satisfy such official that withdrawal or amendments
will prejudice him in maintaining his action or defense on the
merits.
12.34 Discovery by a decisionmaking official.
(a) Applicability. The provisions of this rule apply only
to summary decisional proceedings and formal decisional
proceedings commenced pursuant to12.26 (b) and (c). This rule
does not apply to a voluntary decisional proceeding commenced
pursuant to12.26(a). For the purposes of this rule, the term
"decisionmaking official" shall mean a Judgment Officer or
Administrative Law Judge assigned to render a decision in the
proceeding.
(b) Production of documents and tangible things.
(1) Order for production. A decisionmaking official may,
upon his own motion, order a party or non-party to produce
copies of specifically designated documents, papers, books,
accounts, or tangible things (or categories of any of the
foregoing) which are in the possession, custody or control of
the party, non-party or agent thereof, against whom the order
is directed. Except as provided in paragraph (b)(2) of this
section, a party or non-party ordered to produce documents or
any of the above items under this rule shall file and serve
the documents and items listed in the order within twenty (20)
days from the date of service of the order, or within such
period of time as the decisionmaking official may direct. The
decisionmaking official may issue subpoenas to compel the
production by parties or non-parties of such documents and
tangible things as are described in this section.
(2) Trade secrets, commercially sensitive or confidential
information. If any party or person against whom an order to
produce has been directed acting in good faith has reason to
believe that any documents or other tangible thing ordered to
be produced contains a trade secret, or commercially sensitive
or other confidential information, the party or person may, in
lieu of serving any such document, in accordance with
paragraph (b)(1) of this section, file and serve a written
request for confidential treatment of such documents. Any such
request for confidential treatment shall be accompanied by a
verified statement identifying with particularity the
information on those documents considered to be trade secrets,
commercially sensitive or confidential information, with
reasons therefor, and indicating which portions, if any, of
those documents may be served on other parties without
disclosure of such information. Upon considering a request for
confidential treatment in accordance with this subsection, the
decisionmaking official may, if he finds that the information
identified in the request warrants confidential treatment and
is not probative of any material fact in controversy, make
copies of the documents produced, delete such information from
the copies, and serve the copies as modified upon the other
parties, with or without an appropriate protective order
limiting dissemination to the parties and their counsel, if
any.
(3) Inability to produce. Any party or person who cannot
produce documents or other tangible things called for in an
order for production, because those documents or things are
not in his possession, custody or control, shall file and
serve within the time provided in paragraph (b)(l) of this
section a verified statement identifying the documents which
cannot be produced and setting forth with particularity the
reasons for non-production.
(c) Order for written testimony. The decisionmaking
official may, upon his own motion, order a party or non-party
witness to submit verified statements or written responses to
interrogatories, or both, as to all relevant matters within
the party's personal knowledge which are required in response
to the order. A party or person ordered to file affidavits
and/or verified written responses to interrogatories shall
file and serve the documents within such period of time as the
decisionmaking official may direct. The official may issue
subpoenas to compel the filing by parties or non-parties of
such verified statements and written responses as are
described in this subsection.
12.35 Consequences of a party's failure to comply with a
discovery order.
If a party fails to comply with an order compelling
discovery, or an order issued pursuant to12.34, the official
assigned to render the decision in the case may, upon motion
by a party or on his own motion, take such action in regard
thereto as is just, including but not limited to the
following:
(a) Infer that the documents or things not produced would
have been adverse to the party;
(b) Rule that for the purposes of the proceeding the
information in or contents of the documents or things not
produced be taken as established adversely to the party;
(c) Rule that the party may not be heard to object to
introduction and use of secondary evidence to show what the
withheld documents or other evidence would have shown;
(d) Rule that a pleading, or part of a pleading, or a
motion or other submission by the party, to which the order
for production related, be stricken;
(e) Dismiss the entire proceeding with prejudice to matters
alleged in the complaint, but without prejudice to
counterclaims; and
(f) Issue a default order and render a decision against the
party, whose rights shall thereafter be determined by12.22 and
12.23 of these rules.
12.36 Subpoenas to compel discovery.
An application for a subpoena requiring a party or
non-party to comply with a discovery order issued pursuant
to12.31 and 12.32, may be made, in writing, by any party
without notice to other parties, and may be filed
simultaneously with the motion for the discovery order. The
standards for issuance or denial of such an application, the
service requirement, and the method for enforcing such
subpoenas shall be determined by the provisions of12.313 of
these rules.
Subpart C: Rules Applicable to Voluntary
Decisional Proceedings
12.100 Scope and applicability of rules.
(a) In general. The rules set forth in this subpart are
applicable only to proceedings forwarded pursuant to12.26(a)
of the Reparation Rules. The rules of Subpart B permitting
discovery are applicable in a voluntary decisional proceeding.
Unless specifically made applicable, the rules prescribed in
Subparts D, E, and F shall not apply in a voluntary decisional
proceeding.
(b) Waiver by electing the voluntary decisional procedure.
By electing the voluntary decisional procedure, parties waive
the opportunity for an oral bearing and whatever rights they
may have otherwise had: to receive a written statement of the
findings of fact upon which the final decision is based; to
prejudgment interest in connection with a reparation award; to
appeal to the Commission the final decision; and to appeal the
final decision to a United States Court of Appeals pursuant to
Section 14(e) of the Commodity Exchange Act, 7 U.S.C.
18(e).
12.101 Functions and responsibilities of the Judgment
Officer.
The Judgment Officer shall be responsible for the fair and
orderly conduct of the proceeding and shall have the
authority:
(a) To rule upon discovery-related motions, and to issue
orders pertaining to discovery;
(b) To take such action pursuant to12.35 as is appropriate
if a party fails to comply with a discovery order;
(c) To issue subpoenas pursuant to12.36 of these rules;
(d) To issue orders of default for good cause shown against
any party who fails to participate in the proceeding, or to
comply with any provisions of these rules;
(e) To receive submissions of proof;
(f) Make the final decision in accordance with12.106 of
these rules; and
(g) Issue such orders as are necessary and appropriate to
effectuate the orderly conduct of the proceeding.
12.102 Disqualification of Judgment Officer.
(a) At his own request. A Judgment Officer may withdraw
from a voluntary decisional proceeding when he considers
himself to be disqualified on the grounds of personal bias,
conflict of interest, or similar bases. In such event be shall
immediately notify the Commission and each of the parties of
his withdrawal and of his basis for such action.
(b) Upon the request of a party. Any party may request a
Judgment Officer to disqualify himself on the grounds of
personal bias, conflict of interest, or similar bases.
Interlocutory review of an adverse ruling by the Judgment
Officer may be sought without certification of the matter by
the Judgment Officer only in accordance with the procedures
set forth in12.309 of the Reparation Rules.
12.103 Filing of documents; subscription; service.
Except as otherwise specifically provided in these rules,
all documents filed in a voluntary decisional proceeding,
including (but not limited to) amended or supplemental
pleadings, motions, discovery requests and responses thereto,
and submissions of proof, shall meet the requirements of12.11
and 12.12 of the Reparation Rules as to form, and shall be
filed and served in accordance with12.10 of the Reparation
Rules.
12.104 Amendments to pleadings; motions.
(a) Amendments and supplemental pleadings. At any time
prior to the issuance of the final decision, the parties may,
by unanimous express written consent, amend or supplement the
pleadings. Supplemental pleadings may set forth transactions
or occurrences or events which have happened since the date of
the pleadings to be amended or supplemented, and which are
relevant to any of the issues involved.
(b) Motions. Except as specifically permitted by rule in
this Subpart, motions, other than discovery-related motions
and motions relating to procedural orders, shall be
prohibited. Motions for procedural orders, including motions
for extension of time, may be acted upon at any time.
12.105 Submission of proof only in documentary or tangible
form.
Proof in support of the complaint and in support of the
respondent's answer (including counterclaims, if any), and any
reply thereto, may be found in those verified documents, in
verified statements of non-party witnesses, in other verified
statements of fact, and in other documents and tangible
evidence. No oral testimony by, or examination of, the parties
or their witnesses shall be permitted.
12.106 Final decision and order.
(a) When a final decision is required. After all
submissions of proof have been received, the Judgment Officer
shall make the final decision. Upon its issuance, the final
decision shall forthwith be filed with the Proceedings Clerk,
and immediately served on the parties. The Proceedings Clerk
shall also serve a notice, to accompany the final decision, of
the effect of a failure by a party ordered to pay a reparation
award to file the documents required by12.407(c) of these
rules.
(b) Content of final decision. The final decision shall
contain:
(1) A briefly stated conclusion, not accompanied by
findings of fact, as to whether the respondent violated any
provision of the Act, Commission' | 
