PART 26—HEARING PROCEDURES Authority: 42 U.S.C. 3535(d). Source: 73 FR 76833, Dec. 17, 2008, unless otherwise noted. Subpart A—Hearings Before Hearing Officers § 26.1 Purpose and scope. This part sets forth rules of procedure in certain proceedings of the Department of Housing and Urban Development presided over by a hearing officer. These rules of procedure apply to administrative sanction hearings pursuant to 2 CFR part 2424 and to hearings with respect to determinations by the Multifamily Participation Review Committee pursuant to 24 CFR part 200, subpart H, to the extent that these regulations are not inconsistent and unless these regulations provide otherwise. They also apply in any other case where a hearing is required by statute or regulation, to the extent that rules adopted under such statute or regulation are not inconsistent. Hearing Officer § 26.2 Hearing officer, powers, and duties. (a) Hearing officer. (b) Time and place of hearing. (c) Powers of hearing officers. (1) To administer oaths and affirmations; (2) To cause subpoenas to be issued as authorized by law; (3) To rule upon offers of proof and receive evidence; (4) To order or limit discovery as the interests of justice may require; (5) To regulate the course of the hearing and the conduct of the parties and their counsel; (6) To hold conferences for the settlement or simplification of the issues by consent of the parties; (7) To consider and rule upon all procedural and other motions appropriate in adjudicative proceedings; (8) To take notice of any material fact not appearing in evidence in the record that is properly a matter of judicial notice; (9) To make and file determinations; and (10) To exercise such other authority as is necessary to carry out the responsibilities of the hearing officer under subpart A of this part. [73 FR 76833, Dec. 17, 2008, as amended at 87 FR 8196, Feb. 14, 2022] § 26.3 Ex parte (a) Definition. (b) Prohibition of ex parte communications. (1) The purpose and content of the communication have been disclosed in advance or simultaneously to all parties; or (2) The communication is a request for information concerning the status of the case. (c) Procedure after receipt of ex parte communication. § 26.4 Sanctions. (a) The hearing officer may sanction a person, including any party or representative, for failing to comply with an order, rule, or procedure governing the proceeding; failing to prosecute or defend an action; or engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing. (b) Any sanction, including, but not limited to, those listed in paragraphs (c), (d), and (e) of this section, shall reasonably relate to the severity and nature of the failure or misconduct. (c) If a party refuses or fails to comply with an order of the hearing officer, including an order compelling discovery, the hearing officer may enter any appropriate order necessary to the disposition of the hearing including a determination against the noncomplying party, including but not limited to, the following: (1) Draw an inference in favor of the requesting party with regard to the information sought; (2) In the case of requests for admission, regard each matter about which an admission is requested to be admitted; (3) Prohibit the party failing to comply with the order from introducing evidence concerning, or otherwise relying upon, testimony relating to the information sought; or (4) Strike any part of the pleadings or other submissions of the party failing to comply with the order. (d) If a party fails to prosecute or defend an action brought under subpart A of this part, the hearing officer may dismiss the action or may issue an initial decision against the non-prosecuting or defending party. (e) The hearing officer may refuse to consider any motion, request, response, brief, or other document that is not filed in a timely fashion. § 26.5 Disqualification of hearing officer. (a) When a hearing officer believes there is a basis for disqualification in a particular proceeding, the hearing officer shall withdraw by notice on the record and shall notify the Secretary and the official initiating the action under appeal. (b) Whenever any party believes that the hearing officer should be disqualified from presiding in a particular proceeding, the party may file a motion with the hearing officer requesting the hearing officer to withdraw from presiding over the proceedings. This motion shall be supported by affidavits setting forth the alleged grounds for disqualification. (c) Upon the filing of a motion and affidavit, the hearing officer shall proceed no further in the case until the matter of disqualification is resolved. (d) If the hearing officer does not withdraw, a written statement of his or her reasons shall be incorporated in the record and the hearing shall proceed, unless the decision is appealed in accordance with the procedures set forth in § 26.27. Representation of the Parties § 26.6 Department representative. In each case heard before a hearing officer under this part, the Department shall be represented by attorneys from the Office of General Counsel. § 26.7 Respondent's representative. The party against whom the administrative action is taken may be represented at hearing, as follows: (a) Individuals may appear on their own behalf; (b) A member of a partnership or joint venture may appear on behalf of the partnership or joint venture; (c) A bona fide officer may appear on behalf of a corporation or association upon a showing of adequate authorization; (d) An attorney who files a notice of appearance with the hearing officer may represent any party. For purposes of this paragraph, an attorney is defined as a member of the bar of a federal court or of the highest court of any state or territory of the United States; or (e) An individual not included within paragraphs (a) through (d) of this section may represent the respondent upon an adequate showing, as determined by the hearing officer, that the individual possesses the legal, technical, or other qualifications necessary to advise and assist in the presentation of the case. § 26.8 Standards of practice. Attorneys shall conform to the standards of professional and ethical conduct required of practitioners in the courts of the United States and by the bars of which the attorneys are members. Any attorney may be prohibited by the hearing officer from representing a party if the attorney is not qualified under § 26.7 or if such action is necessary to maintain order in or the integrity of the pending proceeding. Pleadings and Motions § 26.9 Form and filing requirements. (a) Filing. (1) Requests for hearings shall be filed with the Office of General Counsel's Docket Clerk, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. The OGC Docket Clerk shall assign the docket number and forward the case to HUD's Office of Hearings and Appeals. (2) All other pleadings, submissions, and documents should be filed directly with the appropriate hearing officer. (3) Filing may be made by first class mail, delivery, facsimile transmission, or electronic means; however, the hearing officer may place reasonable limits on filing by facsimile or electronic means. Duplicate copies are not required unless so ordered by the hearing officer. A document is considered timely filed if postmarked on or before the date due or delivered to the appropriate person by the date due. (b) Title. (c) Form. [73 FR 76833, Dec. 17, 2008, as amended at 87 FR 8196, Feb. 14, 2022] § 26.10 Service. (a) Method of Service. (b) Proof of Service. § 26.11 Time computation. (a) Generally. (b) Entry of orders. (c) Service by mail. (d) Extensions of time periods. § 26.12 Notice of administrative action. In every case, there shall be a notice of administrative action. The notice shall be in writing and inform the party of the nature of that administrative action. The notice shall state the reasons for the proposed or imposed action, except where general terms are permitted by 2 CFR part 2424, and shall inform the party of any right to a hearing to challenge the administrative action, and the manner and time in which to request such hearing. A supplemental notice may be issued in the discretion of the initiating official to add to or modify the reasons for the action. § 26.13 Complaint. (a) Respondent. (b) Grounds. (c) Notice of administrative action as complaint. (d) Timing. § 26.14 Answer. (a) Respondent shall file an answer within 30 days of receipt of the complaint, unless otherwise specified in this title or ordered by the hearing officer. (b) The answer shall: (1) Respond specifically to each factual allegation contained in the complaint; (2) Specifically plead any affirmative defense; and (3) Set forth any mitigating factors or extenuating circumstances. (c) A general denial shall not be permitted. Allegations are admitted when not specifically denied in respondent's answer. § 26.15 Amendments and supplemental pleadings. (a) Amendments. (2) By leave: Upon conditions as are necessary to avoid prejudicing the public interest and the rights of the parties, the hearing officer may allow amendments to pleadings upon motion of any party. (3) Conformance to evidence: When issues not raised by the pleadings, but reasonably within the scope of the proceeding initiated by the complaint, are tried by express or implied consent to the parties, they shall be treated in all respects as if they had been raised in the pleadings, and amendments of the pleadings necessary to make them conform to the evidence shall be allowed at any time. (b) Supplemental pleadings. § 26.16 Motions. (a) Motions. (b) Content. (c) Responses to motions. (d) Motions for extensions of time. (e) Oral argument. (f) Motions for summary judgment. (2) Objections in the consideration of summary judgment motions or answers thereto based upon a failure to strictly comply with the provisions of Rule 56 of the Federal Rules of Civil Procedure may, at the discretion of the hearing officer, be overruled. (g) Motions for dismissal. Discovery § 26.17 Prehearing conference. (a) Prehearing conference. (1) Simplification and clarification of the issues; (2) Stipulations and admissions of fact and of the contents and authenticity of documents; (3) The disclosure of the names of witnesses; (4) Matters of which official notice will be taken; (5) Other matters as may aid in the orderly disposition of the proceeding, including disclosure of the documents or other physical exhibits that will be introduced into evidence in the course of the proceeding. (b) Recordation of prehearing conference. (c) Order on prehearing conference. § 26.18 Discovery. (a) General. (1) Requests for production of documents as set forth in § 26.19; (2) Depositions as set forth in § 26.20; (3) Written interrogatories as set forth in § 26.21; and (4) Requests for admissions as set forth in § 26.22. (b) Supplementation of responses. (c) Requesting an order. (1) Request an order compelling a response with respect to any objection to or other failure to respond to the discovery requested or any part thereof, or any failure to respond as specifically requested, or (2) Request a protective order limiting the scope, methods, time and place for discovery, and provisions for protecting privileged information or documents. (d) Limitations. (2) Orders compelling discovery shall be issued only where such discovery will not compel the disclosure of privileged information, unduly delay the hearing, or result in prejudice to the public interest or the rights of the parties, and upon a showing of good cause. (3) Protective orders may be issued by a hearing officer if the hearing officer determines such an order is necessary to protect a party or other person from annoyance, embarrassment, oppression, or undue burden or expense because: (i) The discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (ii) The party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or (iii) The burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues. (4) A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the hearing officer may nonetheless order discovery from such sources if the requesting party shows good cause or, when the party's refusal to provide the information sought is solely due to undue expense, if the party seeking the discovery agrees to bear the expense associated with the request. (e) Refusal to honor discovery order. § 26.19 Request for production of documents. (a) Request to produce. (b) Procedure. (c) Response to request to produce. (d) Form of production. (1) A party who produces documents for inspection shall produce them as they are kept in the usual course of business or shall organize and label them to correspond with the categories in the request; (2) If a request does not specify the format or forms for producing electronically stored information, a responding party must produce the information in a form or forms in which it is ordinarily maintained or in a form or forms that are reasonably usable; and (3) A party need not produce the same electronically stored information in more than one form. § 26.20 Depositions. (a) Taking oral deposition. (b) Testifying on oral deposition. (c) Objections. (d) Submission to deponent. (e) Certification and filing. (f) Deposition as evidence. (g) Payment of fees. § 26.21 Written interrogatories. (a) Service of interrogatories. (b) Response to interrogatories. (c) Option to produce business records. § 26.22 Requests for admissions. (a) Any party may serve upon any other party a written request for the admission of the genuineness of any relevant documents described in the request or of the truth of any relevant matters of fact. Copies of documents shall be delivered with the request unless copies have already been furnished. Each requested admission shall be considered admitted, unless within 30 days after service of the request, or within such other time as the parties may agree, or the hearing officer determines, the party from whom the admission is sought serves upon the party making the request either: (1) A statement that: (i) Denies specifically the relevant matters for which an admission is requested, or sets forth in detail the reasons why the party can neither truthfully admit nor deny them; (ii) Fairly meets the substance of the requested admission and, when good faith requires that a party qualify an answer or deny only a part of the matter of which an admission is requested, specifies as much of it as is true and qualifies or denies the remainder; and (iii) Does not assert lack of information or knowledge as a reason for failure to admit or deny, unless the party states that the party has made reasonable inquiry, and that the information known or readily obtainable by the party is insufficient to enable the party to admit or deny; or (2) Written objections to a requested admission that: (i) State the grounds for the objection; and (ii) Object to a requested admission, if necessary, either in whole or in part, on the basis of privilege or relevance. (b) Responses to the request for admission on matters to which objections have been made may be deferred until the objection is ruled upon, but if written objections are made only to a part of a request, a response to the remainder of the request shall be provided. (c) Any matter admitted under this rule is conclusively established unless the hearing officer, on motion, permits withdrawal or amendment of the admission. Admissions obtained pursuant to this procedure may be used in evidence only for the purposes of the pending action. The use of obtained admissions as evidence is permitted to the same extent and subject to the same objections as other evidence. Hearings § 26.23 Public nature and timing of hearings; transcripts. (a) Public hearings. (b) Conduct of hearing. (c) Transcripts. § 26.24 Rules of evidence. (a) Evidence. (b) Testimony under oath or affirmation. (c) Objections. (d) Authenticity of documents. (e) Stipulations. (f) Official notice. (g) Burden of proof. § 26.25 Hearing officer's determination and order. (a) Scope of review. (b) Closing of hearing. (c) Briefs. (d) Bench decisions. (e) Time period for issuance of decision. (f) Finality of determination. Secretarial Review § 26.26 Review of determination of hearing officers. (a) Except in matters arising under 2 CFR part 2424, any party may file with the Secretary an appeal within 30 days after the date that the hearing officer issues a determination or order. The Secretary or designee may extend the 30-day period, in the Secretary's sole discretion, for good cause. (b) Brief in support of appeal. (c) Briefs in opposition. (d) Service. (e) Forwarding of the record. (f) Time extensions. (g) Personal appearance. (h) Interlocutory rulings. (i) Objection not raised before hearing officer. (j) Evidence in the record. (k) Ex parte communications. (l) Determination. (m) Written determination. § 26.27 Interlocutory rulings. (a) Interlocutory rulings by the hearing officer. (1) It involves an important issue of law or policy as to which there is substantial ground for difference of opinion; and (2) An immediate appeal from the order may materially advance the ultimate termination of the litigation. (b) Petition for review. (c) Secretarial review. (d) Continuation of hearing. Subpart B—Hearings Pursuant to the Administrative Procedure Act § 26.28 Purpose and scope. Unless otherwise specified in this title, the rules in this subpart B of this part apply to hearings that HUD is required by statute to conduct pursuant to the Administrative Procedure Act (5 U.S.C. 554 et seq. § 26.29 Definitions. The following definitions apply to subpart B of this part: Complaint Docket Clerk Respondent, Response [73 FR 76833, Dec. 17, 2008, as amended at 87 FR 8197, Feb. 14, 2022] § 26.30 Service and filing. (a) Filing. (b) Service. § 26.31 Time computations. (a) General. (b) Entry of orders. (c) Service by mail. Administrative Law Judge § 26.32 Powers and duties of the Administrative Law Judge (ALJ). The ALJ shall conduct a fair and impartial hearing, avoid delay, maintain order, and ensure that a record of the proceeding is made. The ALJ is authorized to: (a) Set and change the date, time, and place of the hearing upon reasonable notice to the parties; (b) Continue or recess the hearing, in whole or in part, for a reasonable period of time; (c) Hold conferences to identify or simplify the issues, or to consider other matters that may aid in the expeditious disposition of the proceeding; (d) Administer oaths and affirmations; (e) Issue subpoenas requiring the attendance of witnesses and the production of documents at depositions or at hearings; (f) Rule on motions and other procedural matters; (g) Regulate the scope and timing of discovery; (h) Regulate the course of the hearing and the conduct of representatives and parties; (i) Examine witnesses; (j) Receive, rule on, exclude, or limit evidence; (k) Upon motion of a party, take official notice of facts; (l) Upon motion of a party, decide cases, in whole or in part, by summary judgment where there is no disputed issue of material fact; (m) Conduct any conference, argument, or hearing on motions in person or by telephone; (n) Upon motion, except where mandated by statute, extend the time within which any act required by these rules must be performed where necessary to avoid prejudicing the public interest or the rights of the parties, or upon showing of good cause; and (o) Exercise such other authority as is necessary to carry out the responsibilities of the ALJ under subpart B of this part. § 26.33 Ex parte communications. No party or person (except employees of the ALJ's office) shall communicate in any way with the ALJ on any matter at issue in a case, unless on notice and opportunity for all parties to participate. This provision does not prohibit a person or party from inquiring about the status of a case or asking routine questions concerning administrative functions or procedures. § 26.34 Sanctions. (a) The ALJ may sanction a person, including any party or representative, for failing to comply with an order, rule, or procedure governing the proceeding; failing to prosecute or defend an action; or engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing. (b) Any sanction, including, but not limited to, those listed in paragraphs (c), (d), and (e) of this section, shall reasonably relate to the severity and nature of the failure or misconduct. (c) When a party fails to comply with an order, including an order compelling discovery, the ALJ may impose an appropriate sanction for such noncompliance, including, but not limited to, the following: (1) Drawing an inference in favor of the requesting party with regard to the information sought; (2) In the case of requests for admission, deeming any matter about which an admission is requested to be admitted; (3) Prohibiting the party failing to comply with the order from introducing evidence concerning, or otherwise relying upon, testimony relating to the information sought; or (4) Striking any part of the pleadings or other submissions of the party failing to comply with the order. (d) If a party fails to prosecute or defend an action brought under subpart B of this part, the ALJ may dismiss the action or may issue a decision against the non-prosecuting or defending party. Such decision of the ALJ shall constitute final agency action and shall not be appealable to the Secretary under § 26.52 of this part. (e) The ALJ may refuse to consider any motion, request, response, brief, or other document that is not filed in a timely fashion. § 26.35 Disqualification of ALJ. (a) An ALJ in a particular case may disqualify himself or herself. (b) A party may file with the ALJ a motion for the ALJ's disqualification. The motion shall be accompanied by an affidavit alleging the grounds for disqualification. (c) Upon the filing of a motion and affidavit, the ALJ shall proceed no further in the case until the matter of disqualification is resolved. (d) If the ALJ does not withdraw from the proceedings, a written statement of his or her reasons for electing not to withdraw shall be incorporated into the record and the hearing shall proceed. Parties § 26.36 Parties to the hearing. (a) General. (b) Rights of parties. (1) Be accompanied, represented, and advised by a representative; (2) Participate in any conference held by the ALJ; (3) Conduct discovery; (4) Agree to stipulations of fact or law, which shall be made part of the record; (5) Present evidence relevant to the issues at the hearing; (6) Present and cross-examine witnesses; (7) Present oral arguments at the hearing as permitted by the ALJ; and (8) Submit written briefs and proposed findings of fact and conclusions of law after the hearing, as permitted by the ALJ. § 26.37 Separation of functions. No officer, employee, or agent of the Federal Government engaged in the performance of investigative, conciliatory, or prosecutorial functions in connection with the proceeding shall, in that proceeding or any factually related proceeding under subpart B of this part, participate or advise in the decision of the Administrative Law Judge, except as a witness or counsel during the proceeding, or in its appellate review. Prehearing Procedures § 26.38 Commencement of action. Proceedings under subpart B of this part shall commence with the Government's filing of a complaint, as that term is defined in § 26.29, with the Docket Clerk. The respondent's response to the complaint shall be timely filed with the Docket Clerk and served upon the Government in accordance with the procedures set forth in the complaint. If the respondent fails to submit a response to the Docket Clerk, then the Government may file a motion for a default judgment in accordance with § 26.41. § 26.39 Prehearing conferences. (a) The ALJ may schedule prehearing conferences as appropriate. (b) Upon the motion of any party or sua sponte (c) The ALJ may consider the following at a prehearing conference: (1) Simplification of the issues; (2) Stipulations of fact and of the authenticity, accuracy, and admissibility of documents; (3) Submission of the case on briefs in lieu of an oral hearing; (4) Limitation of the number of witnesses; (5) The exchange of witness lists and of proposed exhibits; (6) Discovery; (7) The time and place for the hearing; and (8) Such other matters as may tend to expedite the fair and just disposition of the proceedings. § 26.40 Motions. (a) General. (b) Response to motions. (c) Motions for extensions. (d) Right to reply. (e) Oral Argument. (f) Motions for summary judgment. (2) Objections in the consideration of summary judgment motions or answers thereto based upon a failure to strictly comply with the provisions of Rule 56 of the Federal Rules of Civil Procedure may, at the discretion of the ALJ, be overruled. (g) Motions for dismissal. § 26.41 Default. (a) General. (b) Default order. (c) Effect of default. Discovery § 26.42 Discovery. (a) General. (b) Discovery in Program Fraud Civil Remedies Actions. (2) With the exception of the limited discovery permitted under paragraph (b)(1) of this section, unless agreed to by the parties, discovery shall be available only as ordered by the ALJ. The ALJ shall order only that discovery that he or she determines is necessary for the expeditious, fair, and reasonable consideration of the issues, is not unduly costly or burdensome, and will not unduly delay the proceeding. Discovery of privileged information shall not be permitted. The request for approval sent to the Attorney General from the General Counsel or designee, as described in 31 U.S.C. § 3803(a)(2), is not discoverable under any circumstances. The ALJ may grant discovery subject to a protective order under § 26.44. (c) Authorized discovery. (1) Requests for production of documents. (ii) The request shall set forth, either by individual item or by category, the items to be inspected, and describe each with reasonable particularity. The request shall specify a reasonable time, place, and manner of making the inspection and performing the related acts. The request may specify the form or forms in which electronically stored information is to be produced. (iii) The party upon whom the request is served shall serve a written response within 20 days after the service of the request. A shorter or longer time may be directed by the ALJ or, in the absence of such an order, agreed to in a written document by the parties, which shall be submitted to the ALJ in a timely manner. The response shall state, with respect to each item or category, whether inspection and related activities will be permitted as requested. If there are any objections to any requests, including objections to the requested form or forms for producing electronically stored information, the response shall state the reasons for such objections. If objection is made to part of an item or category, the part shall be specified and inspection permitted of the remaining parts. If objection is made to the requested format for producing electronically stored information—or if no format was specified in the request—the responding party must state the format it intends to use. The party submitting the request may move for an order under paragraph (e) of this section with respect to any objection to or other failure to respond to the request or any part thereof, or any failure to permit inspection as requested. (iv) Unless the parties otherwise agree, or the ALJ otherwise orders: (A) A party who produces documents for inspection shall produce them as they are kept in the usual course of business or shall organize and label them to correspond with the categories in the request; (B) If a request does not specify the form or forms for producing electronically stored information, a responding party must produce the information in a format in which it is ordinarily maintained or in a format that is reasonably usable; and (C) A party need not produce the same electronically stored information in more than one form. (2) Requests for admissions. (i) A statement, which: (A) Denies specifically the relevant matters for which an admission is requested, or sets forth in detail the reasons why the party can neither truthfully admit nor deny them; (B) Fairly meets the substance of the requested admission, and when good faith requires that a party qualify an answer or deny only a part of the matter of which an admission is requested, the party specifies as much of it as is true and qualifies or denies the remainder; and (C) Does not assert lack of information or knowledge as a reason for failure to admit or deny, unless the party states that the party has made reasonable inquiry, and that the information known or readily obtainable by the party is insufficient to enable the party to admit or deny; or (ii) Written objections to a requested admission, which state the grounds for the objection and which object to a requested admission, if necessary, either in whole or in part, on the basis of privilege or relevance. Responses to the request for admission on matters to which objections have been made may be deferred until each objection is ruled upon, but if written objections are made only to a part of a request, a response to the remainder of the request shall be provided. (iii) Any matter admitted under this rule is conclusively established unless the ALJ, on motion, permits withdrawal or amendment of the admission. Admissions obtained pursuant to this procedure may be used in evidence only for the purposes of the pending action. The use of obtained admissions as evidence is permitted to the same extent and subject to the same objections as other evidence. (3) Written interrogatories Service of written interrogatories. (ii) Response to interrogatories. (iii) Option to produce business records. (4) Depositions. (ii) Each person testifying on oral deposition shall be placed under oath by the person before whom the deposition is taken. The deponent may be examined and cross-examined. The questions and the answers, together with all objections made, shall be recorded by the person before whom the deposition is to be taken or under that person's direction. (iii) Objections. (iv) Submission to deponent. (v) Certification and filing. (vi) Deposition as evidence. (vii) Payment of fees. (d) Supplementation of responses. (e) Motions to compel. (2) The motion shall describe the information sought, cite the opposing party's objection, and provide arguments supporting the motion. (3) The opposing party may file a response to the motion, including a request for a protective order in accordance with § 26.44. (4) Orders compelling discovery shall be issued only where such discovery will not compel the disclosure of privileged information, unduly delay the hearing, or result in prejudice to the public interest or the rights of the parties, and upon a showing of good cause. (5) A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the ALJ may nonetheless order discovery from such sources if the requesting party shows good cause or, when the party's refusal to provide the information sought is solely due to undue expense, the party seeking the discovery agrees to bear the expense associated with the request. (f) Refusal to honor discovery order. § 26.43 Subpoenas. (a) General. (b) Time of request. (c) Content. (d) Service and fees. (e) Motion to quash. § 26.44 Protective orders. (a) A party, a prospective witness, or a deponent may file a motion for a protective order with respect to discovery sought by an opposing party or with respect to the hearing, seeking to limit the availability or disclosure of evidence. (b) Protective orders may be issued by an ALJ if the ALJ determines such an order is necessary to protect a party or other person from annoyance, embarrassment, oppression, or undue burden or expense because: (1) The discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (2) The party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or (3) The burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues. Hearings § 26.45 General. (a) Time of hearing. (b) Location of hearing. (c) Notice of hearing. (d) Exceptions for Program Fraud Civil Remedies Act matters. (e) Burden and standard of proof. (f) Public hearings. § 26.46 Witnesses. (a) Except as provided in paragraph (b) of this section, testimony at the hearing shall be given orally by witnesses under oath or affirmation. (b) At the discretion of the ALJ, testimony may be admitted in the form of a written statement or deposition. In order to be admissible, any written statement must be provided to all other parties along with the last known address of the witness, in a manner that allows sufficient time for other parties to subpoena the witness for cross-examination at the hearing. § 26.47 Evidence. The ALJ shall admit any relevant oral or documentary evidence that is not privileged. Unless otherwise provided for in this part, the Federal Rules of Evidence shall provide guidance to the ALJ's evidentiary ruling, but shall not be binding. Parties may object to clearly irrelevant material, but technical and hearsay objections to testimony as used in a court of law will not be sustained. The ALJ may, however, exclude evidence if its probative value is substantially outweighed by confusion of the issues, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence. § 26.48 Posthearing briefs. Posthearing briefs shall be filed only upon order by the ALJ. § 26.49 The record. The hearing will be recorded and transcribed by a reporter designated by the Department under the supervision of the ALJ. The parties and the public, at their own expense, may obtain copies of transcripts from the reporter. A copy of the transcript shall be made available at cost to the parties upon request. The transcript of testimony, exhibits, and other evidence admitted at the hearing and all papers and requests filed in the proceeding constitute the record for the decision by the ALJ and the Secretary or designee. § 26.50 Initial decision. (a) The ALJ shall issue an initial decision based only on the record, which shall contain findings of fact, conclusions of law, and the relief granted. The ALJ's initial decision shall not become effective unless it becomes or is incorporated into final agency action in accordance with § 26.50(c) or § 26.52(l). (b) The ALJ shall serve the initial decision on all parties within 60 days after either the close of the record or the expiration of time permitted for submission of posthearing briefs, whichever is later. The ALJ may extend the 60-day period for serving the initial decision in writing for good cause. The initial decision shall inform the parties that, if provided for and consistent with Departmental regulations, any party may request, in writing, Secretarial review of the determination within 30 days after the ALJ issues the initial decision, in accordance with § 26.52 of this part. The determination shall include the mailing address, facsimile number, and electronic submission information to which the request for Secretarial review should be sent. A request for Secretarial review may be made by mail, delivery, facsimile, or electronic submission. (c) If no appeal is timely filed with the Secretary or designee, the initial decision shall become the final agency action. § 26.51 Interlocutory rulings. (a) Interlocutory rulings by the ALJ. (1) It involves an important issue of law or policy as to which there is substantial ground for difference of opinion; and (2) An immediate appeal from the order may materially advance the ultimate termination of the litigation. (b) Petition for review. (c) Secretarial review. (d) Continuation of hearing. § 26.52 Appeal to the Secretary. (a) General. (b) Brief in support of appeal. (c) Briefs in opposition. (d) Extensions and additional briefs. (e) Forwarding of the record. (f) Personal appearance. (g) ALJ decisions upon failure to prosecute or defend. (h) Objections not raised before ALJ. (i) Evidence considered. (j) Ex parte communications. (k) Relief. (l) Decision Generally. (2) Exception for cases brought under the Program Fraud Civil Remedies Act. § 26.53 Exhaustion of administrative remedies. In order to fulfill the requirement of exhausting administrative remedies, a party must seek Secretarial review under § 26.52 prior to seeking judicial review of any initial decision issued under subpart B of this part. § 26.54 Judicial review. Judicial review shall be available in accordance with applicable statutory procedures and the procedures of the appropriate federal court. § 26.55 Collection of civil penalties and assessments. Collection of civil penalties and assessments shall be in accordance with applicable statutory provisions. § 26.56 Right to administrative offset. The amount of any penalty or assessment that has become final under § 26.50 or § 26.52, or for which a judgment has been entered after action under § 26.54 or § 26.55, or agreed upon in a compromise or settlement among the parties, may be collected by administrative offset under 31 U.S.C. 3716 or other applicable law. In Program Fraud Civil Remedies Act matters, an administrative offset may not be collected against a refund of an overpayment of federal taxes then or later owing by the United States to the Respondent.