[Title 17 CFR 148]
[Code of Federal Regulations (annual edition) - April 1, 2003 Edition]
[Title 17 - COMMODITY AND SECURITIES EXCHANGES]
[Chapter I - COMMODITY FUTURES TRADING COMMISSION]
[Part 148 - IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN COVERED ADJUDICATORY PROCEEDINGS BEFORE THE COMMISSION]
[From the U.S. Government Printing Office]


17COMMODITY AND SECURITIES EXCHANGES12003-04-012003-04-01falseIMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN COVERED ADJUDICATORY PROCEEDINGS BEFORE THE COMMISSION148PART 148COMMODITY AND SECURITIES EXCHANGESCOMMODITY FUTURES TRADING COMMISSION
PART 148--IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN COVERED ADJUDICATORY PROCEEDINGS BEFORE THE COMMISSION--Table of Contents




                      Subpart A--General Provisions

Sec.
148.1  Purpose of these rules.
148.2  When the Act applies.
148.3  Proceedings covered.
148.4  Eligibility of applicants.
148.5  Standards for awards.
148.6  Allowable fees and expenses.
148.7  Rulemaking on maximum rates for attorney fees.
148.8  Awards against other agencies.

             Subpart B--Information Required from Applicants

148.11  Contents of application.
148.12  Net worth exhibit.
148.13  Documentation of fees and expenses.
148.14  When an application may be filed.

           Subpart C--Procedures for Considering Applications

148.21  Filing and service of documents.
148.22  Answer to application.
148.23  Reply.
148.24  Comments by other parties.
148.25  Settlement.
148.26  Further proceedings.
148.27  Decision.
148.28  Appeal to the Commission.
148.29  Judicial review.
148.30  Payment of award.

    Authority: Equal Access to Justice Act, 5 U.S.C. 504(c)(1) and secs. 
2(a)(11) and 8a(5) of the Commodity Exchange Act, 7 U.S.C. 4a(j) and 
12a(5), unless otherwise noted.

    Source: 46 FR 57671, Nov. 25, 1981, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 148.1  Purpose of these rules.

    The Equal Access to Justice Act, 5 U.S.C. 504 (called ``the Act'' in 
this part), provides for the award of attorney fees and other expenses 
to eligible individuals and entities who are prevailing private parties 
in adjudicatory proceedings before the Commission. An eligible party may 
receive an award when it prevails over the Commission, unless the 
Commission's position was substantially justified or special 
circumstances make an award unjust. The rules in this part describe the 
parties eligible for awards and the proceedings that are covered. They 
also explain how to apply for awards, and the procedures and standards 
that the Commission will use to make them.

[51 FR 18880, May 23, 1986]



Sec. 148.2  When the Act applies.

    The Act applies to any covered adjudicatory proceeding pending 
before the Commission on or after October 1, 1981. This includes 
proceedings begun before October 1, 1981, if final Commission action has 
not been taken before that date. Awards may be sought for fees and other 
expenses incurred before October 1, 1981, in any such covered 
proceeding.

[51 FR 18880, May 23, 1986]



Sec. 148.3  Proceedings covered.

    (a) The Act applies to adjudicatory proceedings conducted by the 
Commission. These are adjudications under 5 U.S.C. 554 in which the 
position of the Commission or any other agency of the United States, or 
any component of an agency, is presented by an attorney or other 
representative who enters an appearance and participates in the 
proceeding. Reparation proceedings under section 14 of the Commodity 
Exchange Act, 7 U.S.C. 18, Commission review of exchange disciplinary 
and access denial actions under section 8c of the Commodity Exchange 
Act, 7 U.S.C. 12c, and registered futures association disciplinary and 
membership denial actions under section 17 of the Commodity Exchange 
Act, 7 U.S.C. 21, are not covered by the Act. Proceedings brought to 
determine whether or not to grant or renew registrations pursuant to 
sections 8a or 17(o), of the Commodity Exchange Act, 7 U.S.C. 8, 12a and 
21(o), or contract market designations pursuant to section 6(a) of the 
Commodity Exchange Act, 7 U.S.C. 8 (a), are excluded,

[[Page 530]]

but proceedings brought to suspend or revoke registrations or contract 
market designations are covered if they are otherwise adjudicatory 
proceedings. For the Commission, the types of proceedings generally 
covered are adjudicatory proceedings as defined in Sec. 10.2(b) of this 
chapter; part 14 proceedings, if they involve a hearing, are also 
covered.
    (b) The Commission's decision not to identify a type of proceeding 
as an adversary adjudication shall not preclude the filing of an 
application by a party who believes the proceeding is covered by the 
Act; whether the proceeding is covered will then be an issue for 
resolution in the proceedings on the application.
    (c) If a proceeding includes both matters covered by the Act and 
matters specifically excluded from coverage, any award made will include 
only fees and expenses related to covered issues.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18880, May 23, 1986; 59 
FR 5528, Feb. 7, 1994]



Sec. 148.4  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses 
under the Act, the applicant must be a party to the adjudicatory 
proceeding for which it seeks an award. The term ``party'' is defined in 
5 U.S.C. 551(3). The applicant must show that it meets all conditions of 
eligibility set out in this subpart and in subpart B.
    (b) The types of eligible applicants are as follows:
    (1) An individual with a net worth of not more than $2 million;
    (2) The sole owner of an unincorporated business who has a net worth 
of not more than $7 million, including both personal and business 
interests, and not more that 500 employees;
    (3) A charitable or other tax-exempt organization described in 
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) 
with not more than 500 employees;
    (4) A cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act (12 U.S.C. 1141j(a)) with not more than 500 
employees; and
    (5) Any other partnership, corporation, association, unit of local 
government, or public or private organization with a net worth of not 
more than $7 million and not more than 500 employees.
    (c) For the purpose of eligibility, the net worth and number of 
employees of an applicant shall be determined as of the date the 
adjudicatory proceeding was initiated.
    (d) An applicant who owns an unincorporated business will be 
considered as an ``individual'' rather than a ``sole owner of an 
unincorporated business'' if the issues on which the applicant prevails 
are related primarily to personal interests rather than to business 
interests.
    (e) The employees of an applicant include all persons who regularly 
perform services for compensation for the applicant, under the 
applicant's direction and control. The term ``employee'' also embraces 
all the agents of an applicant, by whatever title or label they may be 
known, for whose acts or omissions the applicant may be held liable 
under the Commodity Exchange Act. See 7 U.S.C. 4. Part-time employees 
shall be included on a proportional basis.
    (f) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. Any 
individual, corporation or other entity that directly or indirectly 
controls or owns a majority of the voting shares or other interest of 
the applicant, or any corporation or other entity of which the applicant 
directly or indirectly owns or controls a majority of the voting shares 
or other interest, will be considered an affiliate for purposes of this 
part, unless the Presiding Officer determines that such treatment would 
be unjust and contrary to the purposes of the Act in light of the actual 
relationship between the affiliated entities. In addition, the Presiding 
Officer may determine that financial relationships of the applicant 
other than those described in this paragraph constitute special 
circumstances that would make an award unjust.
    (g) An applicant that participates in a proceeding on behalf of one 
or more other persons or entitles that would be

[[Page 531]]

ineligible is not itself eligible for an award.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18880, May 23, 1986]



Sec. 148.5  Standards for awards.

    (a) A prevailing applicant may receive an award for fees and 
expenses incurred in connection with an adjudicatory proceeding, or in a 
significant and discrete substantive portion of the proceeding, unless 
the position of the Commission was substantially justified. The position 
of the Commission includes, in addition to the position taken by the 
Commission in the adversary adjudication, the action or failure to act 
by the Commission upon which the adversary adjudication is based. The 
burden of proof that an award should not be made to an eligible 
prevailing applicant is on the Commission.
    (b) An award will be reduced or denied if the applicant has unduly 
or unreasonably protracted the adjudicatory proceeding or if special 
circumstances make the award sought unjust.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18880, May 23, 1986]



Sec. 148.6  Allowable fees and expenses.

    (a) Awards will be based on rates customarily charged by persons 
engaged in the business of acting as attorneys, agents and expert 
witnesses, even if the services were made available without charge or at 
a reduced rate to the applicant.
    (b) No award for the fee of an attorney or agent under these rules 
may exceed $75 per hour. No award to compensate an expert witness may 
exceed the maximum daily rate prescribed for GS-18 under section 5332 of 
title 5 of the U.S. Code. However, an award may also include the 
reasonable expenses of the attorney, agent, or witnesss as a separate 
item, if the attorney, agent or witness ordinarily charges clients 
separately for such expenses.
    (c) In determining the reasonableness of the fee sought for an 
attorney, agent or expert witness, the Presiding Officer shall consider 
the following:
    (1) If the attorney, agent or witness is in private practice, his or 
her customary fee for similar services, or, if an employee of the 
applicant, the fully allocated cost of the services;
    (2) The prevailing rate for similar services in the community in 
which the attorney, agent or witness ordinarily performs services;
    (3) The time actually spent in the representation of the applicant;
    (4) The time reasonably spent in light of the difficulty or 
complexity of the issues in the adjudicatory proceeding; and
    (5) Such other factors as may bear on the value of the services 
provided.
    (d) The reasonable cost of any study, analysis, test, project or 
similar matter prepared on behalf of a party may be awarded, to the 
extent that the charge for the service does not exceed the prevailing 
rate for similar services, and the study or other matter was necessary 
for preparation of the applicant's case.



Sec. 148.7  Rulemaking on maximum rates for attorney fees.

    (a) If warranted by an increase in the cost of living or by special 
circumstances (such as limited availability of attorneys qualified to 
handle certain types of proceedings), the Commission may adopt 
regulations providing that attorney fees may be awarded at a rate higher 
than $75 per hour in some or all of the types of proceedings covered by 
this part. The Commission will conduct any rulemaking proceedings for 
this purpose under the informal rulemaking procedures of the 
Administrative Procedure Act, 5 U.S.C. 553.
    (b) Any person may file with the Commission a petition for 
rulemaking to increase the maximum rate for attorney fees, in accordance 
with Sec. 13.2 of this chapter.



Sec. 148.8  Awards against other agencies.

    If an applicant is entitled to an award because it prevails over 
another agency of the United States that participates in an adjudicatory 
proceeding before the Commission and takes a postion that is not 
substantially justified, the award or an appropriate portion of the 
award shall be made against that agency.

[[Page 532]]



             Subpart B--Information Required from Applicants



Sec. 148.11  Contents of application.

    (a) An application for an award of fees and expenses under the Act 
shall identify the applicant and the adjudicatory proceeding for which 
an award is sought. The application shall show that the applicant has 
prevailed and identify the position of the Commission or other agency 
that the applicant alleges was not substantially justified. Unless the 
applicant is an individual, the application shall also state the number 
of employees of the applicant and describe briefly the type and purpose 
of its organization or business.
    (b) The application shall also include a statement that the 
applicant's net worth does not exceed $2 million (if an individual) or 
$7 million (for all other applicants, including their affiliates). 
However, an applicant may omit this statement if:
    (1) It attaches a copy of a ruling by the Internal Revenue Service 
that it qualifies as an organization described in section 501(c)(3) of 
the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a 
tax-exempt organization not required to obtain a ruling from the 
Internal Revenue Service on its exempt status, a statement that 
describes the basis for the applicant's belief that it qualifies under 
such section; or
    (2) It states that it is a cooperative association as defined in 
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)).
    (c) The application shall state the amount of fees and expenses for 
which an award is sought.
    (d) The application may also include any other matters that the 
applicant wishes the Commission to consider in determining whether and 
in what amount an award should be made.
    (e) The application shall be signed by the applicant or an 
authorized officer or attorney of the applicant. It shall also contain 
or be accompanied by a written verification under oath or under penalty 
of perjury that the information provided in the application is true and 
correct.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18880, May 23, 1986]



Sec. 148.12  Net worth exhibit.

    (a) Each applicant except a qualified tax-exempt organization or 
cooperative association must provide with its application a detailed 
exhibit showing the net worth of the applicant and any affiliates (as 
defined in Sec. 148.4(f) of this part) when the adjudicatory proceeding 
was initiated. The exhibit may be in any form convenient to the 
applicant that provides full disclosure of the applicant's and its 
affiliates' assets and liabilities and is sufficient to determine 
whether the applicant qualifies under the standards in this part. The 
Presiding Officer may require an applicant to file additional 
information to determine its eligibility for an award.
    (b) Ordinarily, the net worth exhibit will be included in the public 
record of the adjudicatory proceeding. However, an applicant that 
objects to public disclosure of information in any portion of the 
exhibit and believes there are legal grounds for withholding it from 
disclosure may submit that portion of the exhibit directly to the 
Presiding Officer in a sealed envelope labeled ``Confidential Financial 
Information,'' accompanied by a motion to withhold the information from 
public disclosure. The motion shall describe the information sought to 
be withheld and explain, in detail, why it falls within one or more of 
the specific exemptions from mandatory disclosure under the Freedom of 
Information Act, 5 U.S.C. 552(b)(1)-(9), why public disclosure of the 
information would adversely affect the applicant, and why disclosure is 
not required in the public interest. The material in question shall be 
served on counsel representing the Commission or other agency against 
which the applicant seeks an award, but need not be served on any other 
party to the adjudicatory proceeding. If the Presiding Officer finds 
that the information should not be withheld from disclosure, it shall be 
placed in the public record of the adjudicatory proceeding. Otherwise, 
any request to inspect or copy the exhibit shall be disposed of in 
accordance with the Commission's established procedures under the 
Freedom of Information Act as provided in part 145 of this chapter. For 
that purpose, the applicant shall file a copy of its motion

[[Page 533]]

with the Commission's Freedom of Information Act Compliance Staff in the 
Office of the Secretariat, Washington, DC.



Sec. 148.13  Documentation of fees and expenses.

    The application shall be accompanied by full documentation of the 
fees and expenses, including the cost of any study, analysis, test, 
project or similar matter, for which an award is sought. A separate 
itemized statement shall be submitted for each professional firm or 
individual whose services are covered by the application, showing the 
hours spent in connection with the proceeding by each individual, a 
description of the specific services performed, the rate at which each 
fee has been computed, any expenses for which reimbursement is sought, 
the total amount claimed, and the total amount paid or payable by the 
applicant or by any other person or entity for the services provided. 
The Presiding Officer may require the applicant to provide vouchers, 
receipts, or other substantiation for any expenses claimed.



Sec. 148.14  When an application may be filed.

    (a) An application may be filed whenever the applicant has prevailed 
in the adjudicatory proceeding or in a significant and discrete 
substantive portion of the proceeding, subject to the separate hearing 
procedure pursuant to Sec. 10.63(b) of this chapter, but in no case 
later than 30 days after the Commission's final disposition of the 
adjudicatory proceeding.
    (b) If review or reconsideration is sought or taken of a decision as 
to which an applicant believes it has prevailed, proceedings for the 
award of fees shall be stayed pending final disposition of the 
underlying controversy.
    (c) For purposes of this rule, final disposition means the later of
    (1) The date on which an initial decision by the Presiding Officer 
becomes final pursuant to Sec. 10.84 of this chapter;
    (2) Issuance of an order disposing of any petitions for 
reconsideration of the Commission's final order in the proceeding 
pursuant to Sec. 10.106 of the Rules of Practice;
    (3) If no petition for reconsideration is filed, the last date on 
which such a petition could have been filed pursuant to Sec. 10.106 of 
the Rules of Practice; or
    (4) Issuance of a final Commission order or any other final 
resolution of a proceeding, such as a settlement or voluntary dismissal, 
which is not subject to a petition for reconsideration.



           Subpart C--Procedures for Considering Applications



Sec. 148.21  Filing and service of documents.

    Any application for an award or other pleading or document related 
to an application shall be filed and served on all parties to the 
adjudicatory proceeding, except as provided in Sec. 148.12(b) for 
confidential financial information.



Sec. 148.22  Answer to application.

    (a) Within 30 days after service of an application, counsel 
representing the Commission or other agency against which an award is 
sought may file an answer to the application. Unless counsel for the 
Commission or for another relevant agency requests an extension of time 
for filing or files a statement of intent to negotiate under paragraph 
(b) of this section, failure to file an answer within the 30-day period 
may be treated as a consent to the award requested.
    (b) If counsel for the Commission or for another relevant agency and 
the applicant believe that the issues in the fee application can be 
settled, they may jointly file a statement of their intent to negotiate 
a settlement. The filing of this statement shall extend the time for 
filing an answer for an additional 30 days, and further extensions may 
be granted by the Presiding Officer upon request by counsel for the 
Commission or for another relevant agency and the applicant.
    (c) Any answer shall explain in detail any objections to the award 
requested and identify the facts relied on in support of the position of 
counsel for the Commission or for another relevant agency. If the answer 
is based on any alleged facts not already in the record of the 
adjudicatory proceeding, counsel for the Commission or for another 
relevant agency shall include with the answer either supporting 
affidavits or a

[[Page 534]]

request for further proceedings under Sec. 148.26 of this part.



Sec. 148.23  Reply.

    Within 15 days after service of an answer, the applicant may file a 
reply. If the reply is based on any alleged facts not already in the 
record of the adjudicatory proceeding, the applicant shall include with 
the reply either supporting affidavits or a request for further 
proceedings under Sec. 148.26 of this part.



Sec. 148.24  Comments by other parties.

    Any party to an adjudicatory proceeding other than the applicant and 
counsel for the Commission or for another relevant agency may file 
comments on an application within 30 days after it is served or on an 
answer within 15 days after it is served. A commenting party may not 
participate further in proceedings on the application unless the 
Presiding Officer determines that the public interest requires such 
participation in order to permit full exploration of matters raised in 
the comments.



Sec. 148.25  Settlement.

    The applicant may propose settlement of the award to the Commission 
before final action on the application, either in connection with a 
settlement of the adjudicatory proceeding, or after the adjudicatory 
proceeding has been concluded, in either case in accordance with 
Sec. 10.108 of this chapter. If a prevailing party offers a proposed 
settlement of an award before an application has been filed, the 
application shall be filed with the proposed settlement.



Sec. 148.26  Further proceedings.

    (a) Ordinarily, the determination of an award will be made on the 
basis of the written record. However, on request of either the applicant 
or counsel for the Commission or for another relevant agency, or on his 
or her own initiative, the Presiding Officer may order further 
proceedings, such as an informal conference, oral argument, additional 
written submissions or an evidentiary hearing. Such further proceedings 
shall be held only when necessary for full and fair resolution of the 
issues arising from the application, and shall be conducted as promptly 
as possible. Whether or not the position of the Commission was 
substantially justified shall be determined on the basis of the 
administrative record, as a whole, which is made in the adversary 
adjudication for which fees and other expenses are sought. No discovery 
and/or evidentiary proceedings shall be permitted into the question of 
whether the agency's position was substantially justified.
    (b) A request that the Presiding Officer order further proceedings 
under this section shall specifically identify the information sought or 
the disputed issues and shall explain why additional proceedings are 
necessary to resolve the issues.

[46 FR 57671, Nov. 25, 1981, as amended at 51 FR 18881, May 23, 1986]



Sec. 148.27  Decision.

    The Presiding Officer shall issue an initial decision on the 
application in accordance with the provisions of Sec. 10.84 of this 
chapter. The decision shall include written findings and conclusions on 
the applicant's eligibility and status as a prevailing party, and an 
explanation of the reasons for any difference between the amount 
requested and the amount awarded. The decision shall also include, if at 
issue, findings on whether the Commission's position was substantially 
justified, whether the applicant unduly or unreasonably protracted the 
adjudicatory proceedings, or whether special circumstances make an award 
unjust. If the applicant has sought an award against more than one 
agency, the decision shall allocate responsibility for payment of any 
award made among the agencies, and shall explain the reasons for the 
allocation made.



Sec. 148.28  Appeal to the Commission.

    (a) Either the applicant or counsel for the Commission or for 
another relevant agency may appeal the initial decision on the fee 
application by complying with the requirements of this section. An 
appealing party shall serve upon opposing parties and shall file with 
the Proceedings Clerk a notice of appeal within fifteen (15) days after

[[Page 535]]

service of the initial decision. The notice need consist only of a brief 
statement indicating the filing party's intent to appeal the initial 
decision, and shall include the date upon which the initial decision was 
rendered, the name of the proceeding, and the docket number of the 
proceeding. The failure of a party timely to file and serve a notice of 
appeal in accordance with this paragraph, or to perfect the appeal in 
accordance with paragraph (b) of this section, shall constitute a 
voluntary waiver of any objection to the initial decision, and of all 
further administrative or judicial review under these rules and the 
Equal Access to Justice Act.
    (b) An appeal shall be perfected by the appealing party by timely 
filing with the Proceedings Clerk an appeal brief which meets the 
requirements of paragraphs (b) and (d) of this section. An original and 
one copy of the appeal brief shall be filed within thirty (30) days 
after filing of the notice of appeal. By motion of the appealing party, 
the Commission may, for good cause shown, extend the time for filing the 
appeal brief. If the appeal brief is not filed within the time 
prescribed in this subparagraph, the Commission may, upon its own motion 
or upon motion by a party, dismiss the appeal, in which event the 
initial decision shall become the final decision and order of the 
Commission, effective upon service of the order of dismissal.
    (c) The opposing party may, within thirty (30) days after service of 
the appeal brief, file an original and one copy of an answering brief, 
and serve one copy thereof, unless the time limit is extended by the 
Commission upon motion of the party and for good cause shown.
    (d) Parties filing an appeal brief or answering brief shall meet the 
requirements of Sec. 10.12 of this chapter as to form. The content of 
briefs shall satisfy the requirements of Sec. 10.102(d) of this chapter, 
except that any party, with leave of the Commission, may file an 
informal document in lieu of a brief. No brief shall exceed thirty-five 
(35) pages in length without advance leave of the Commission.
    (e) On review, the Commission may, in its discretion, consider sua 
sponte any issues arising from the record and may base its determination 
thereon, or limit the issues to those presented in the statement of 
issues in the briefs, treating those issues not raised as waived.

[51 FR 18881, May 23, 1986]



Sec. 148.29  Judicial review.

    Judicial review of final Commission decisions on awards may be 
sought as provided in 5 U.S.C. 504(c)(2).



Sec. 148.30  Payment of award.

    An applicant seeking payment of an award from the Commission shall 
submit to the Executive Director of the Commission, Three Lafayette 
Centre, 1155 21st Street, NW., Washington, DC 20581, a copy of the 
Commission's final decision granting the award, accompanied by a 
statement that the applicant will not seek review of the decision in the 
United States courts. At the same time, the applicant shall provide a 
copy of his submissions to counsel for the Commission. The Commission 
will, within 60 days of receipt of the applicant's submissions, forward 
to the United States Department of the Treasury a Standard Form 1166, 
``Voucher and Schedule of Payments,'' so as to have the Treasury 
Department issue a check in the amount awarded in the Commission's 
decision, unless judicial review of the award or of the underlying 
decision in the adjudicatory proceeding has been sought by the applicant 
or any other party to the adjudicatory proceeding.

[46 FR 57671, Nov. 25, 1981, as amended at 60 FR 49336, Sept. 25, 1995]