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Federal Register / Vol. 86, No. 233 / Wednesday, December 8, 2021 / Proposed Rules
jspears on DSK121TN23PROD with PROPOSALS3

judgment mill. The proposed rule accordingly does not include such provisions.
Commenters also urged the Office to adopt regulations ensuring that the claimants submissions are carefully scrutinized, that service was effective,32
and that the CCB considers any applicable defenses.33 Others opposed a regulation allowing claimants to move for a default determination, rather than providing the CCB with exclusive authority to initiate default proceedings.34 The Office appreciates these comments and has endeavored to establish a multistep process designed to make default less likely through the use of built-in safeguards encouraging respondents to engage in the process, while also considering the interests of claimants.
The Office, as allowed but not required under section 1506u, has proposed a notice system with extra safeguards to avoid defaults where possible. Under the proposed rule, where there has been a missed deadline or requirement, the CCB, following a partys request or on its own initiative, may issue a notice, which will be delivered by mail and to known email addresses for the respondent or counterclaim respondent, explaining that failure to participate may result in the CCB entering a default determination against that party. This notice will explain the meaning and consequences of a default determination and provide the respondent with thirty days from the notice to cure the missed deadline or requirement. If the respondent has not re-engaged by curing the missed deadline or otherwise responding to the notice within fifteen days into the thirty-day window, the CCB will send a second notice to the respondent that re-attaches the first notice and reminds the respondent that it must cure the missed deadline or requirement by the thirty-day deadline.
If the respondent cures the missed deadline or requirement within the thirty-day window, the proceeding will 32 Motion Picture Assn, Recording Indus. Assn of Am. & Software and Info. Assn of Am. MPA, RIAA & SIIA Initial NOI Comments at 16; Ryan Fountain Initial NOI Comments at 2.
33 Engine Initial NOI Comments at 9.
34 Copyright Alliance, Am. Photographic Artists, Am. Socy for Collective Rights Licensing, Am.
Socy of Media Photographers, The Authors Guild, CreativeFuture, Digital Media Licensing Assn, Graphic Artists Guild, Indep. Book Pubs. Assn, Music Creators N. Am., Natl Music Council of the United States, Natl Press Photographers Assn, N.
Am. Nature Photography Assn, Prof. Photographers of Am., Recording Academy, Screen Actors GuildAm. Fed. of Television and Radio Artists, Socy of Composers & Lyricists, Songwriters Guild of Am. &
Songwriters of N. Am. Copyright Alliance, et al.
Reply NOI Comments at 1617.

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resume and the CCB will issue a revised scheduling order, if necessary. If the respondent fails to cure the missed deadline but otherwise responds with an indication of an intent to re-engage in the proceeding, the CCB will consider the response and may either provide the respondent with additional time to cure the missed deadline, or may proceed with the default process, to avoid, for instance, a respondent continually taking extensions on deadlines without permission and only acting when defaults are issued. If the respondent fails to cure the missed deadline or requirement within the thirty-day window and does not otherwise request and receive additional time to cure the missed deadline, the CCB may proceed with the default process by requiring the claimant to submit evidence in support of a default determination. Such evidence shall take the form of the direct written testimony that the claimant ordinarily would put forward prior to a determination on the merits, and the CCB may request additional evidence that the claimant has within its possession. The CCB will then consider such evidence, taking into account any meritorious defenses that the respondent may have had, and determine whether the evidence is sufficient to support a finding in favor of the claimant. If so, the CCB will determine the appropriate relief and damages, if any, and prepare a proposed default determination that includes the CCBs finding in favor of the claimant, the damages awarded, if any, and the dismissal of any counterclaims asserted by the respondent. The CCB will provide written notice to the respondent of the default determination and its legal significance, and attach the proposed default determination and provide the respondent with thirty days from the notice to respond.
If the respondent responds to this default determination notice by providing evidence in opposition, the CCB will review the respondents submissions and may request additional information, including written testimony. If the respondent indicates an intent to re-engage in the proceeding, but does not submit timely evidence, the CCB will have the discretion to either grant additional time to submit evidence or proceed with issuing the default determination. The claimant will have an opportunity to respond to any submissions from the respondent, and the CCB, in its discretion, may elect to hold a hearing. After considering any additional evidence or other information provided by the parties, the CCB will either maintain or amend its
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proposed determination. As the CCB
will then have considered evidence from both parties, the resulting final determination will not be classified as a default determination. The effect of this classification is that the resulting final determination may not be challenged as a default determination in a federal district court pursuant to 17 U.S.C.
1508c. The respondent may, however, seek reconsideration as outlined in 17
U.S.C. 1506w and the accompanying regulations in part 230 of title 37.
If the respondent fails to respond to the notice of pending default determination, the CCB will issue the determination as a final determination.
The respondent may challenge the default determination in federal court within ninety days of its issuance or, provided that it has not yet initiated proceedings in federal court, may submit a request to the CCB that the default determination be vacated. The claimant will have an opportunity to respond to this request, and both parties will follow the general procedures for reconsideration requests with respect to their submissions. The CCB may then vacate the default determination if it finds that vacating the determination is in the interests of justice.
The statute does not speak to the disposition of a proceeding where the claimants evidence is insufficient to support a finding in its favor. Under the proposed rule, if the CCB determines that the claimants evidence is insufficient, it will dismiss the proceeding without prejudice. The Office believes that this approach is appropriate given that the claimant may have been unable to sufficiently gather supporting evidence through discovery due to the default of the respondent. A
dismissal with prejudice thus could unfairly penalize a claimant and reward a defaulting respondent.
While the statute is generally designed to be lenient and to avoid defaults, in order to avoid abuse of the system, the proposed rule permits the CCB, in its discretion, to proceed with the default process without issuing the two notices described above, and to move forward with requiring the claimant to submit evidence in support of a default determination if a respondent misses a third deadline in a proceeding without good cause. This provision is aimed at encouraging timely participation and preventing respondents from repeatedly using the default provisions as a backdoor extension for deadlines. The Office appreciates any comments concerning whether such a provision is advisable, and whether there are any other
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