Research
Who runs a penalty hearing, and what an appeal can change
One official decides an FDA money-penalty case, with nineteen listed powers and one large limit. The appeal that follows can raise the penalty as easily as lower it, and nobody gets to argue in person.
One official, and a list of what that official may do
An administrative penalty case is run by a presiding officer. The duty is stated in a single sentence at the top of the section.
The officer must "conduct a fair and impartial hearing, avoid delay, maintain order, and assure that a record of the proceeding is made."
Then comes a numbered list of nineteen powers. It includes setting and changing the hearing date, administering oaths, issuing subpoenas, ruling on motions and regulating the scope and timing of discovery.
Several entries are about shaping the case rather than deciding it. The officer may consolidate related proceedings or sever unrelated ones, limit the length of pleadings, and require the parties to attend settlement conferences.
One power stands out. The officer may "Waive, suspend, or modify any rule in this part", but only on finding that no party is prejudiced, that the ends of justice are served, and that the action accords with law.
The limit that decides what arguments are worth making
The same section ends with a boundary that shapes every defense raised in one of these cases.
"The presiding officer does not have the authority to find Federal statutes or regulations invalid."
So an argument that the rule itself is unlawful has nowhere to land at this stage. It has to be preserved and taken elsewhere.
That is worth knowing when reading about a company contesting a penalty. Arguing the facts and arguing the rule are two different projects, and only one of them fits inside this forum.
A case can end without a hearing at all
At any time after a complaint is filed, either side may move for a summary decision on any issue, with or without supporting affidavits.
The officer grants it where the filed material shows "there is no genuine issue as to any material fact" and that the moving party wins as a matter of law.
The opposing side cannot simply deny. A party opposing the motion "may not rest on mere allegations or denials or general descriptions of positions and contentions", and must set out specific facts showing a genuine issue for hearing.
A partial ruling narrows what is left. Where some issues survive, the officer specifies the facts that appear without substantial controversy and orders further proceedings on the rest.
The specified facts then stop being arguable. "The facts specified not to be at issue shall be deemed established."
A partial summary decision cannot normally be appealed on its own. A ruling only reaches the appeal body early if the presiding officer certifies that immediate review is needed to prevent exceptional delay, expense, prejudice to a participant, or substantial harm to the public interest.
Nobody gets a private word with the decision-maker
The ex parte rule is one short section, and it is absolute in its own terms.
The bar reaches every outsider, with one carve-out for employees of the officer's own office. Nobody else may "communicate in any way with the presiding officer on any matter at issue in a case, unless on notice and opportunity for all parties to participate."
There is one carve-out, and it is administrative rather than substantive. The rule does not stop anyone from checking a case's status or "asking routine questions concerning administrative functions or procedures."
That distinction is the whole of it. Asking when a filing is due is fine; saying anything about the merits without the other side present is not.
The prehearing conference, and the option most readers miss
The officer may schedule prehearing conferences, and must schedule at least one if any party asks for it a reasonable time before the hearing.
The agenda is listed. Simplifying issues, amending pleadings, stipulating to the contents and authenticity of documents, limiting the number of witnesses, and setting dates for exchanges and discovery.
Two items on that list can remove the hearing itself. The first is "Whether the parties can agree to submission of the case on a stipulated record".
The second lets a party waive appearance at an oral hearing and submit only documentary evidence and written argument, subject to the other side's objection.
Whatever is agreed or ordered becomes binding. The officer issues an order containing every matter agreed by the parties or ordered at the conference.
How the amount gets decided
The regulation does not set a formula for the penalty. It sets a duty to explain.
The presiding officer and the appeal body "shall evaluate any circumstances that mitigate or aggravate the violation and shall articulate in their opinions the reasons that support the penalties and assessments imposed."
The factors themselves come from outside this part. The decision-makers refer to the factors identified in the statute under which the penalty is assessed.
And the list is not closed. Nothing in the section limits either decision-maker from weighing other factors that mitigate or aggravate a particular offense.
A separate section of the same part states maximum penalty amounts. Those figures are set by that section and are not reproduced here.
What the record is, and who is allowed to read it
The hearing is recorded and transcribed. Witnesses, participants and counsel get thirty days from the transcript becoming available to propose corrections.
That window is narrower than it sounds. "Corrections are permitted only for transcription errors." It is not a chance to improve testimony.
The record itself is the transcript, the exhibits and other admitted evidence, and all papers and requests filed in the proceeding. That is what both the officer and the appeal body decide from.
Access is the part worth knowing. "The administrative record may be inspected and copied (upon payment of a reasonable fee) by anyone unless otherwise ordered by the presiding officer".
The exception is the familiar one. On a party's motion the officer must order otherwise where needed to protect trade secrets or confidential commercial information, personal privacy, or other material the agency would withhold from public disclosure.
Briefs have a page limit, and it can move
Any party may file a posthearing brief. The officer fixes the filing time, filed simultaneously, within sixty days of the parties receiving the transcript or the stipulated record.
Briefs may carry proposed findings of fact and conclusions of law, and the officer may allow responsive briefs.
"No brief may exceed 30 pages", not counting proposed findings and conclusions, and the proposed findings and conclusions have their own thirty-page cap.
Both caps lift only on a prior finding. The officer has to have found that the issues are so complex, or the record so voluminous, that longer filings are justified.
The appeal, and the direction it can move a penalty
Either side may appeal an initial decision, a decision granting summary decision, or a refusal to withdraw a default judgment. The appeal goes to the Commissioner of Food and Drugs or a designated entity, currently the Departmental Appeals Board.
The notice of appeal is due within thirty days, extendable for good cause if the request comes inside that window.
The notice has real content requirements. It "must identify specific exceptions to the initial decision, must support each exception with citations to the record, and must explain the basis for each exception."
Two features surprise people. "There is no right to appear personally before the Commissioner of Food and Drugs or other entity deciding the appeal", so this stage is written argument only.
And the appeal body "will consider only those issues raised before the presiding officer", with one exception: the winning side may make any record-based argument supporting the decision below.
The available outcomes run in both directions. The decision may decline review, affirm with or without opinion, reverse, or "increase, reduce, reverse, or remand any civil money penalty determined by the presiding officer in the initial decision."
New evidence can reopen things. Where a party shows that evidence not presented at the hearing is relevant and material, and that there were reasonable grounds for not producing it, the matter may be remanded.
The two standards, and the errors that do not count
The appeal applies different tests to facts and to law, and the difference is the practical heart of the appeal.
On a disputed issue of fact, the question is "whether the initial decision is supported by substantial evidence on the whole record".
On a disputed issue of law, the question is simply "whether the initial decision is erroneous."
A separate section blunts procedural arguments. No error in admitting or excluding evidence, and no defect in any ruling, order or act, is grounds for disturbing an otherwise appropriate outcome unless refusing to act would be inconsistent with substantial justice.
Put positively, both the officer and the appeal body "will disregard any error or defect in the proceeding that does not affect the substantial rights of the parties."
If the appeal body declines review, the decision below becomes final and binding thirty days after the declination.
What this is useful for, and what it does not settle
Read together, these sections describe a forum that is quick, written, and narrow. Most of it happens on paper, and the record is public unless someone moved to protect part of it.
That last point is the one worth carrying away. A penalty case leaves behind an inspectable record, which is a different and often richer document than any announcement about the case.
It also explains why a company can lose ground by appealing. The appeal body may increase a penalty, and the issues are frozen at whatever was raised below.
One limit on this article. Only part 17 was read. The statutes that authorize these penalties, the practice of the appeal body, and any court decisions reviewing its work were not examined.
Nothing here describes a particular company or a particular case. It describes the procedure that would apply if one existed.
Key takeaways
- A presiding officer runs the case and holds nineteen listed powers, including waiving rules of the part.
- That officer cannot rule a federal statute or regulation invalid.
- Summary decision can end or narrow the case before any hearing takes place.
- Facts specified as not at issue in a partial ruling are deemed established.
- No one may discuss the merits with the officer without notice to all parties.
- The administrative record is inspectable by anyone unless an order protects part of it.
- Briefs are capped at thirty pages unless complexity or record volume was found in advance.
- The appeal is written only, is confined to issues raised below, and may increase the penalty.
Frequently asked questions
Can a company argue that the FDA rule it is charged under is invalid?
Not to the presiding officer. The regulation states plainly that the presiding officer does not have the authority to find Federal statutes or regulations invalid. That kind of challenge has to be preserved for a forum that can hear it. Inside the hearing, the arguments that work are about the facts, the evidence, and the application of the rule as written.
Does the case always reach a hearing?
No. Either side may move for summary decision at any time after the complaint is filed. The officer grants it where the filed material shows there is no genuine issue as to any material fact, and the moving party wins as a matter of law. A partial ruling narrows the case instead of ending it, and the facts specified as not at issue are deemed established. Parties may also agree to submit the case on a stipulated record, or waive an oral hearing and file documents and written argument instead.
Can anyone read the record of one of these cases?
Usually yes. The administrative record may be inspected and copied, on payment of a reasonable fee, by anyone unless the presiding officer orders otherwise. The officer must order otherwise on a party motion where protection is needed for trade secrets or confidential commercial information, for personal privacy, or for other material the agency would withhold from public disclosure. So parts of a record can be closed while the rest stays open.
Can an appeal make a penalty bigger?
Yes. The entity deciding the appeal may decline to review, affirm with or without an opinion, or reverse. It may also increase, reduce, reverse, or remand any civil money penalty determined by the presiding officer in the initial decision. There is no right to appear personally at that stage, and the appeal considers only issues raised before the presiding officer, apart from record-based arguments the winning side makes in support of the decision.
What standard does the appeal apply?
Two different ones. On a disputed issue of fact, the test is whether the initial decision is supported by substantial evidence on the whole record. On a disputed issue of law, the test is whether the initial decision is erroneous. A separate harmless-error section requires both the presiding officer and the appeal body to disregard any error or defect that does not affect the substantial rights of the parties.
Is the transcript correctable if a witness was misquoted?
Only for transcription errors. Witnesses, participants and counsel have thirty days from the transcript becoming available to propose corrections, and the regulation states that corrections are permitted only for transcription errors. The presiding officer promptly orders the justified ones. Transcripts can be obtained after the hearing at a cost not exceeding the actual cost of duplication.
Sources
Each document below is named as it names itself, with the date printed on that document rather than the day it was read.
- Title 21 Code of Federal Regulations section 17.17, Summary decisions, read in full for the standard, the affidavit rule and the deemed-established facts — Electronic Code of Federal Regulations, Office of the Federal Register, July 1995
- Title 21 Code of Federal Regulations section 17.19, Authority of the presiding officer, read in full for the nineteen listed powers and the limit on finding a statute or regulation invalid — Electronic Code of Federal Regulations, Office of the Federal Register, July 1995
- Title 21 Code of Federal Regulations section 17.20, Ex parte contacts, read in full for the prohibition and the administrative-question exception — Electronic Code of Federal Regulations, Office of the Federal Register, July 1995
- Title 21 Code of Federal Regulations section 17.21, Prehearing conferences, read in full for the ten-item agenda, the stipulated record and the waiver of an oral hearing — Electronic Code of Federal Regulations, Office of the Federal Register, July 1995
- Title 21 Code of Federal Regulations section 17.34, Determining the amount of penalties and assessments, read in full for the duty to articulate reasons and the reference to statutory factors — Electronic Code of Federal Regulations, Office of the Federal Register, July 1995
- Title 21 Code of Federal Regulations section 17.41, The administrative record, read in full for the correction window, what the record consists of and public inspection — Electronic Code of Federal Regulations, Office of the Federal Register, July 1995
- Title 21 Code of Federal Regulations section 17.43, Posthearing briefs, read in full for the sixty day filing period and the thirty page caps — Electronic Code of Federal Regulations, Office of the Federal Register, July 1995
- Title 21 Code of Federal Regulations section 17.47, Appeals, read in full for the thirty day notice, the required exceptions, the absence of a personal appearance, the available outcomes and the two standards of review — Electronic Code of Federal Regulations, Office of the Federal Register, February 2006
- Title 21 Code of Federal Regulations section 17.48, Harmless error, read in full — Electronic Code of Federal Regulations, Office of the Federal Register, July 1995