STATE BOARD OF VEHICLE MANUFACTURERS, DEALERS AND SALESPERSONS [49 PA. CODE CH. 19] Protest Proceedings [35 Pa.B. 2408] The State Board of Vehicle Manufacturers, Dealers and Salespersons (Board) proposes to amend § 19.3 (relating to applicability of general rules) and to add §§ 19.31--19.38 (relating to protest proceedings) to read as set forth in Annex A.
Effective Date
The proposed rulemaking will be effective upon final-form publication in the Pennsylvania Bulletin.
Statutory Authority
The proposed rulemaking is authorized under sections 4(a)(9), 8, 11, 13 and 27 of the Board of Vehicles Act (act) (63 P. S. §§ 818.4(a)(9), 818.8, 818.11, 818.13 and 818.27).
Background and Need for the Amendment
The act authorizes a dealer holding a franchise with a manufacturer or distributor to file a protest with the Board of the manufacturer/distributor's termination of the dealer's franchise under section 13 of the act, the establishment or relocation of a franchise for the same line-make within the dealer's relevant market area under section 27 of the act or any alleged violation of the act by the manufacturer/distributor under section 8(d) of the act. Section 8(b) of the act requires the Board to follow 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure) (GRAPP) in conducting hearings and existing § 19.3 incorporates the GRAPP into all proceedings before the Board. Because the GRAPP cannot completely set forth all procedures that are appropriate for the Board to follow in protest matters, the orderly administration of justice requires that the Board set forth rules of procedure. Currently, the Board's protest counsel issues an order setting forth procedures in each protest matter that is filed with the Board. The adoption of regulations regarding protest proceedings will provide uniform rules of procedure and give needed guidance to affected dealers and their representatives who anticipate filing protests with the Board and to manufacturers, distributors and their representatives.
Description of the Proposed Amendments
Under current practice, because of the strict time limitation in adjudicating protest matters under section 8(a) of the act, all papers are filed with the Board's protest counsel. By contrast, all papers in all other matters that the Board adjudicates are filed with the prothonotary for the Department of State. Because the parties generally waive that time limitation until a date certain to permit timely adjudication by the Board, the Board has found that any time saved by filing papers in a protest matter with protest counsel is negligible. Therefore, to be consistent and to provide for greater assurance of the integrity of filed papers, proposed § 19.31 (relating to filing of papers) would require that all papers to be filed in a protest matter be filed with the prothonotary and that a copy be served upon the Board's protest counsel.
Because a protest by definition is a complaint by a dealer about an action taken by the manufacturer/distributor, proposed § 19.32 (relating to initiation of a protest) would require the dealer to append to its protest petition a copy of any notice of the manufacturer's/distributor's action and to serve a copy of the protest on the representative of the manufacturer/distributor who provided that notice. In general and in the absence of an entry of appearance by counsel, the Board will serve its order for stay and mediation under section 11(a)(3) of the act upon the person who provided the notice and upon whom the protesting dealer served a copy of the protest.
In matters protesting the establishment or relocation of a franchise, the dealer who is to be awarded the franchise or relocate generally has an interest in the outcome of that protest that would qualify that dealer for intervenor status. Proposed § 19.33 (relating to intervention) would permit that dealer to intervene upon the filing of a notice of intervention. All other parties seeking to intervene will have to continue to follow the procedures of the GRAPP in 1 Pa. Code §§ 35.27--35.32 (relating to intervention).
Section 11(a) of the act requires a dealer to demand mediation prior to bringing a protest matter, except for dealers of motorcycles, and the Board must stay proceedings in a protest matter for the parties to engage in mediation. Because the majority of protest matters are resolved during mediation, the Board has not required a manufacturer/distributor to answer the protest during mediation. Instead, unless mediation is not required, the Board has waited until it is notified by the parties that mediation has been unsuccessful before issuing a scheduling order. Proposed § 19.34 (relating to time for adjudication) would continue this practice, with the Board setting the scheduling order so that it will be able to issue its adjudication within the time limitations of section 8 of the act. The parties may waive these time limitations, and the Board will treat a waiver as a request for a continuance. Proposed § 19.34 will also require a party requesting a continuance or extension of time to file a waiver of the time limitations sufficient to permit the Board to adjudicate the matter consistent with the requested extension. Because the time limitations are for the benefit of the manufacturer/distributor, the Board cannot grant a request for extension of time or continuance for which the manufacturer does not sign the waiver, but the Board may grant a request for which the protesting dealer does not sign the waiver.
Additionally, while the parties engage in mediation, there is no need for the respondent to file an answer to the protest. Under proposed § 19.35 (relating to subsequent pleadings), the Board's scheduling order will direct the respondent, and an intervenor on behalf of the respondent, when to file an answer. The protestant, and an intervenor on behalf of the protestant, may reply to the new matter within 10 days of service of the answer.
Because protest matters are quite complex and involve many documents and expert witnesses, in every case to be heard the Board will schedule a prehearing conference and require the parties to file prehearing statements. Proposed § 19.36 (relating to prehearing statements) would set forth the requirements for prehearing statements, including statements of facts and relevant law, as well as identification of all anticipated witnesses, including a report and curriculum vitae of any expert witness who is to testify, and copies of all anticipated exhibits. A party will be permitted to supplement its prehearing statement any time prior to the prehearing conference, but may not present any documentary exhibit or the testimony of any witness not listed in its prehearing statement, as supplemented, except upon good cause shown. Additionally, a party that failed to timely file a prehearing statement in accordance with § 19.36 would be subject to sanctions. These sanctions may include preclusion from offering evidence that should have been presented in the prehearing statement.
Proposed § 19.37 (relating to prehearing conference) would follow the current practice of conducting the prehearing conference by telephone initiated by protest counsel. Additionally, because a prehearing conference is a legal proceeding under the direction of protest counsel without members of the Board present, proposed § 19.37 would confirm that protest counsel has all authority of a presiding officer at a prehearing conference under 1 Pa. Code § 35.114 (relating to authority of presiding officer at conference).
Finally, proposed § 19.38 (relating to posthearing briefs) would require posthearing briefs to conform to the requirements of the GRAPP in 1 Pa. Code § 35.192 (relating to content and form of briefs). Because the Board must reproduce for all its members for their review the entire transcript and all exhibits, as well as the briefs, § 19.38 would prohibit posthearing briefs from including copies of the transcript or exhibits. Consistent with the GRAPP in 1 Pa. Code § 35.191 (relating to proceedings in which briefs are to be filed), the general practice of the Board has been to require the simultaneous filing of posthearing briefs, and § 19.38 would permit parties to file a reply brief within 7 days of the filing of an opposing party's posthearing brief.
Public Input
The Board solicited input from and provided an exposure draft of this proposed rulemaking to industry organizations, including those involved in prior protest matters before the Board. In addition, the Board considered the impact the regulations would have on the regulated community and on public health, safety and welfare. The Board finds that the proposal addresses a compelling public interest as described in this preamble.
Fiscal Impact and Paperwork Requirements
The proposed rulemaking will have no adverse fiscal impact on the Commonwealth or its political subdivisions. The proposed rulemaking will impose no additional paperwork requirements upon the Commonwealth, political subdivisions or the private sector.
Sunset Date
The Board continuously monitors the cost effectiveness of its regulations. Therefore, no sunset date has been assigned.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on March 29, 2005, the Board submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the Senate Consumer Protection and Professional Licensure Committee and the House Professional Licensure Committee. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Board, the General Assembly and the Governor of comments, recommendations or objections raised.
Public Comment
Interested persons are invited to submit written comments, suggestions or objections regarding this proposed rulemaking to Teresa Woodall, Administrator, State Board of Vehicle Manufacturers, Dealers and Salespersons, P. O. Box 2649, Harrisburg, PA 17105-2649 within 30 days following publication of this proposed rulemaking in the Pennsylvania Bulletin. Reference No. 16A-608 (protest proceedings), when submitting comments.
EDWIN K. GALBREATH, Jr.,
ChairpersonFiscal Note: 16A-608. No fiscal impact; (8) recommends adoption.
Annex A TITLE 49. PROFESSIONAL AND VOCATIONAL STANDARDS PART I. DEPARTMENT OF STATE Subpart A. PROFESSIONAL AND OCCUPATIONAL AFFAIRS CHAPTER 19. STATE BOARD OF VEHICLE MANUFACTURERS, DEALERS AND SALESPERSONS GENERAL PROVISIONS § 19.3. Applicability of general rules.
Under 1 Pa. Code § 31.1 (relating to scope of part), 1 Pa. Code Part II (relating to general rules of administrative practice and procedure) (general rules), is applicable to the activities of and proceedings before the Board. Sections 19.31--19.38 (relating to protest proceedings) supplement the general rules.
PROTEST PROCEEDINGS § 19.31. Filing of papers.
(a) Place of filing. Every pleading and other paper in a protest matter shall be filed with the prothonotary for the Department of State at One Penn Center, 2601 North Third Street, P. O. Box 2649, Harrisburg, PA 17105-2649.
(b) Copies. An original and one copy of each paper shall be filed with the prothonotary. A copy of each paper shall be served on each party to the protest. An additional copy of each paper shall be served on the Board's counsel for protest matters (protest counsel) at One Penn Center, 2601 North Third Street, P. O. Box 2649, Harrisburg, Pennsylvania 17105-2649.
§ 19.32. Initiation of a protest.
(a) Protest petition. The protest must be in petition form and set forth in numbered paragraphs the material facts sufficient to justify relief to the protestant, in accordance with 1 Pa. Code § 35.17 (relating to petitions generally).
(1) The protest shall have appended to it a copy of any demand for mediation required by section 11(a) of the act (63 P. S. § 818.11(a)).
(2) A protest filed under section 8(d) of the act (63 P. S. § 818.8(d)) shall have appended to it a copy of any notice of the action that is being protested.
(3) A protest filed under section 13 of the act (63 P. S. § 818.13) shall have appended to it a copy of any notice of intent to terminate a franchise.
(4) A protest filed under section 27 of the act (63 P. S. § 818.27) shall have appended to it a copy of any notice of establishment or relocation of a franchise.
(b) Service of the protest. A copy of the protest shall be served on the representative of the manufacturer or distributor (respondent) who provided any notice, as set forth in subsection (a), of the action that is being protested. If notice was not provided, a copy of the protest shall be served on a managerial representative of the respondent whose responsibilities include the subject of the protest.
§ 19.33. Intervention.
(a) Intervention as of right. In any protest matter filed under section 27 of the act (63 P. S. § 818.27), the existing dealer who seeks to relocate a franchise or the additional dealer to whom the respondent seeks to award a franchise may intervene on behalf of the respondent upon the filing of a notice of intervention setting forth its right to intervene under this subsection. Any party intervening as of right on behalf of the respondent under this subsection shall file an answer to the protest contemporaneously with the filing of the notice of intervention or as directed in the scheduling order, whichever is later.
(b) Intervention by permission. Any other person seeking to intervene shall petition to intervene in accordance with 1 Pa. Code §§ 35.27--35.32 (relating to intervention).
§ 19.34. Time for adjudication.
(a) Scheduling order. Upon receipt from one or more parties of notice that mediation required by section 11(a) of the act (63 P. S. § 818.11(a)) was not successful, protest counsel will prepare and issue a scheduling order. The scheduling order will set forth the dates by which the answer, requests for subpoenas, prehearing statements and posthearing briefs shall be filed, as well as the date and time for the prehearing conference and the location and beginning date and time of the hearing. The dates will be determined to permit the Board to issue its adjudication in compliance with the time requirements of section 8 of the act (63 P. S. § 818.8).
(b) Waiver. The parties may waive the time for adjudicating a protest matter in section 8 of the act (63 P. S. § 818.8). A waiver must be in writing, specifying the time period that is to be waived, and signed on behalf of all parties joining in the waiver. Unless otherwise specified in the filing, the Board will treat the filing of any waiver as a request for a continuance through that time period and will issue an amended scheduling order accordingly.
(c) Extension of time. Any request for an extension of time or continuance that would delay the filing of posthearing briefs shall be accompanied by a waiver through the second monthly meeting of the Board following the date posthearing briefs are to be filed as if the request were to be granted. The Board may grant a request for extension of time or continuance for which the protestant, or an intervenor on behalf of the protestant, does not also sign the waiver.
§ 19.35. Subsequent pleadings.
(a) Answer. The respondent, and any intervenor on behalf of the respondent, may not file an answer to a protest until directed to do so by a scheduling order issued by the Board. An answer must either admit or deny each numbered paragraph of the protest, in accordance with 1 Pa. Code § 35.35 (relating to answers to complaints and petitions), and may contain averments of new matter.
(b) Reply to new matter. The protestant, and any intervenor on behalf of the protestant, may reply within 10 days to an answer that sets forth new matter.
§ 19.36. Prehearing statements.
(a) Filing of prehearing statement. Each party to a protest shall file a prehearing statement in accordance with the scheduling order.
(b) Content of prehearing statement. A prehearing statement must contain:
(1) A concise statement of the facts that will be offered by oral or documentary evidence at the hearing and a statement of any unusual questions of evidence anticipated with respect to the proof of such facts.
(2) A statement of any questions of law anticipated with respect to the issues in the case. The questions shall be presented with a statement of authority supporting the position taken.
(3) The names and addresses of all persons who may be called as witnesses. The identification of a witness does not create any obligation to call the witness or to procure the witness's attendance at the hearing.
(4) The report and curriculum vitae of any expert whose opinion will be offered into evidence at the time of hearing. The report must include the findings and conclusions of the expert.
(5) A list of all exhibits and copies of the exhibits that a participant intends to use at the hearing.
(6) An estimate of the length of time that will be required to present the party's case in chief.
(c) Sanctions. Failure to file a prehearing statement as required by this section and within the time specified in the scheduling order may subject a party to sanctions, including being precluded from presenting evidence.
(d) Supplement. A party may supplement its prehearing statement at any time prior to the prehearing conference. A party may not present any documentary evidence or the testimony of any witness not listed in its prehearing statement, as supplemented, except upon good cause shown.
§ 19.37. Prehearing conference.
(a) Prehearing conference. A representative of each party to a protest shall participate in a prehearing conference under 1 Pa. Code § 35.111 (relating to conferences to adjust, settle or expedite proceedings) as directed by the scheduling order. Unless otherwise ordered by the Board, the prehearing conference will be telephonic and will be initiated by protest counsel.
(b) Authority of protest counsel. In connection with the prehearing conference, protest counsel shall have all authority of a presiding officer under 1 Pa. Code § 35.114 (relating to authority of presiding officer at conference).
§ 19.38. Posthearing briefs.
(a) Posthearing briefs. Posthearing briefs must conform to 1 Pa. Code § 35.192 (relating to content and form of briefs), except that a brief may not have appended to it any copy of an exhibit or any notes of testimony.
(b) Reply briefs. A party may file a reply brief no later than 7 days after an opposing party's filing of a posthearing brief.
[Pa.B. Doc. No. 05-768. Filed for public inspection April 22, 2005, 9:00 a.m.]
