UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS: Lina M. Khan, Chair 

Rebecca Kelly Slaughter

Alvaro M. Bedoya 

)

In the Matter of ) 

)

Civil Investigative Demand Issued to ) 

Retail Services & Systems, Inc. ) 

File No. 211-0155 

REDACTED PUBLIC 

d/b/a/ Total Wine & More ) VERSION 

) 

) 

ORDER DENYING PETITION TO LIMIT CIVIL INVESTIGATIVE DEMAND

By BEDOYA, Commissioner: 

Retail Services & Systems, Inc., d/b/a Total Wine & More (“TWM”) petitions the 

Commission to limit the Civil Investigative Demand (“CID”) issued on February 23, 2023. The 

CID was issued in connection with the Commission’s investigation into whether a U.S. 

distributor of wine and spirits, Southern Glazer’s Wine and Spirits, LLC (“Southern”), or its 

affiliates have engaged in unfair methods of competition in violation of Section 5 of the Federal 

Trade Commission Act or engaged in discriminatory practices in violation of the RobinsonPatman Act. TWM is a retailer that purchases wine and spirits from Southern. See Petition App. 

A (CID) at 1.

TWM contends that two definitions in the CID are overly broad so that the CID seeks 

materials and information that are not relevant to the investigation and imposes an unreasonable 

burden and expense on TWM. Consequently, TWM asks “the Commission, as a threshold 

matter, [to] limit the definitions of ‘Distributor’ and ‘Relevant Products’ to Southern and the 

wines and spirits that Southern sells to TWM.” Petition at 5. Similarly, TWM asks the 

Commission to limit particular specifications that seek confidential and proprietary data and 

information to business involving Southern. TWM also asks the Commission to limit data 

specifications and specifications seeking “all documents” regarding particular issues to reduce 

the burden on TWM. Finally, TWM also asks the Commission to narrow the five-year timeframe 

for materials. 

For the reasons stated below, the Commission denies the petition. 
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I. BACKGROUND

The production, distribution, and sale of wine and spirits in the United States occur

within a three-tier system created by the 21st Amendment and the Federal Alcohol 

Administration Act of 1935. Despite differences among state regulations for the distribution and 

sale of alcohol, the three-tier structure exists in every state. Wine and spirits are transferred from 

suppliers in the first tier to distributors in the second tier, and later transferred to retailers in the 

third tier. Suppliers include wine and spirit brand owners, manufacturers, and importers. 

Distributors purchase wine and spirits for wholesale and provide logistics and distribution 

services. Retailers sell wine and spirits to consumers for on-premises consumption (e.g., a bar or 

restaurant) or off-premises consumption (e.g., a liquor or grocery store). 

Southern is a distributor in the second tier. TWM is a retailer in the third tier and 

purchases wine and spirits from Southern. 

As described in the CID, Commission staff are investigating “[w]hether Southern 

Glazer’s Wine and Spirits, LLC or its affiliates have: (1) engaged in unfair methods of 

competition in violation of Section 5 of the Federal Trade Commission Act . . . through . . . 

conduct, including exclusive dealing, tying, and related conduct; and/or (2) engaged in 

discriminatory practices in violation of the Robinson-Patman Act[.]” Petition App. A (CID) at 1.

As part of the investigation, the Commission issued the CID to TWM on February 23, 2023. 

Consistent with Commission Rule 2.7(k), which requires a CID recipient to meet and 

confer with Commission staff “to discuss compliance and to address and attempt to resolve all 

issues” regarding the CID, there have been numerous communications between TWM and FTC 

staff regarding TWM’s response to the CID. See Petition App. D (Statement of Counsel Under 

16 C.F.R. §2.10(a)(2)).

On February 24, FTC staff sent an electronic courtesy copy of the CID to TWM’s 

General Counsel, Mr. Shaffer. Following an exchange of email, on March 13, TWM’s General 

Counsel, Mr. Shaffer, spoke with FTC staff. Id. at ¶ 4.b. On March 15, Mr. Weissman informed 

FTC Staff that TWM retained his firm as outside counsel, and following that notification, FTC 

staff extended the CID return date and the deadline to petition to limit or quash the CID to March 

25. Staff also identified priority specifications for prompt responses from TWM. Id. at ¶¶ 4.c,

4.d. On March 22, FTC staff and counsel for TWM discussed TWM’s response to the priority

specifications. Id. at ¶ 4.e. Two days later on March 24, FTC staff again extended the CID return

date and the deadline to petition to limit or quash the CID to April 7, asking TWM to propose a

comprehensive production plan and to produce material during the extension period. Id. at ¶ 4.f.

On March 30, FTC staff requested information from TWM before the next meet-andconfer discussion about TWM’s plans for production. Id. at ¶ 4.g. On April 3, TWM provided a 

letter summarizing TWM’s objections to the CID and provided limited material to respond to the 

priority specifications. Id. at ¶ 4.h, Petition App. B. On April 4, TWM and FTC staff held a 

series of extended discussions regarding the CID. Petition App. D at ¶ i. Also on April 4, FTC 

staff told TWM that the deadline for filing a petition to quash the CID would not be extended. 

On April 5, FTC staff sent a letter memorializing the April 4 discussions, which also stated that 
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TWM had not yet provided a comprehensive production plan and explained that on-going 

negotiations about the CID did not provide good cause to extend the petition deadline. Petition 

App. C. On April 7, TWM filed its Petition to Limit Civil Investigative Demand. 

II. ANALYSIS

Compulsory process such as a CID is proper if the inquiry is within the authority of the

agency, the demand is not too indefinite, and the information sought is reasonably relevant to the 

inquiry. United States v. Morton Salt Co., 338 U.S. 632, 652 (1950); FTC v. Invention 

Submission Corp., 965 F.2d 1086, 1089 (D.C. Cir. 1992); FTC v. Texaco, Inc., 555 F.2d 862, 

874 (D.C. Cir. 1977). 

A. Relevance

In the context of an administrative CID, “relevance” is defined broadly and with 

deference to an administrative agency’s determination. FTC v. Church & Dwight Co., Inc., 665 

F.3d 1312, 1315-16 (D.C. Cir. 2011); FTC v. Ken Roberts Co., 276 F.3d 583, 586 (D.C. Cir.

2001). An administrative agency is to be accorded “extreme breadth” when conducting an

investigation. Linde Thomsen Langworthy Kohn & Van Dyke, P.C. v. RTC, 5 F.3d 1508, 1517

(D.C. Cir. 1993). As the D.C. Circuit has stated, the standard for judging relevance in an

administrative investigation is broader and “more relaxed” than in an adjudicatory proceeding.

Invention Submission Corp., 965 F.2d at 1090. The Commission’s compulsory process need not

be limited to information necessary to prove a specific charge; it can demand any documents or

information “relevant to the investigation – the boundary of which may be defined quite

generally” by the Commission. Id. The material sought need only be “reasonably relevant” to the

agency investigation and an agency explanation that the information is relevant will be upheld

where the agency’s explanation was “not ‘obviously wrong,’” Texaco, 555 F.2d at 876, 877 n.32.

See FTC v. Church & Dwight Co., Inc., 747 F. Supp.2d 3, 5-7 (D.D.C. 2010) (agency

compulsory process upheld where agency’s explanation of relevance was “not ‘obviously

wrong’”), aff’d, 665 F.3d 1312 (D.C. Cir. 2011); FTC v. Carter, 636 F.2d, 781, 788 (D.C. Cir.

1980).

1. The CID’s Definitions of Distributor and Relevant Products

TWM contends that two definitions in the CID are overly broad so that the CID seeks 

materials and information that are not relevant to the investigation. TWM explains that the CID 

defines “Distributor” to mean any distributor of any wine or spirit product and “Relevant 

Products” to mean any wine or spirit TWM has purchased or sold. TWM argues that, because the 

subject of the investigation is whether Southern has violated Section 5 of the FTC Act or the 

Robinson Patman Act, “TWM’s business activity unrelated to Southern has no relevance to an 

administrative investigation into Southern.” Petition at 3. Consequently, TWM petitions “the 

Commission, as a threshold matter, [to] limit the definitions of ‘Distributor’ and ‘Relevant 

Products’ to Southern and the wines and spirits that Southern sells to TWM.” Petition at 5. 

Implicit in TWM’s argument is an assumption that what constitutes relevance for 

purposes of the investigation is bounded by information establishing a prima facie case for a 
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Robinson-Patman Act violation by Southern based on discriminatory wholesale prices or 

services for retailers. TWM’s narrow view of relevance to the Commission’s investigation is 

unjustified. In fact, on its face, the CID states that the investigation is not limited to possible

violations of the Robinson-Patman Act; it states that the investigation also extends to whether

Southern has “engaged in unfair methods of competition in violation of Section 5 of the Federal 

Trade Commission Act . . . through unfair, deceptive, anticompetitive, collusive, coercive, 

predatory, exploitive, or exclusionary conduct, including exclusive dealing, tying, and related 

conduct[.]” CID at 1. 

Even if we accept TWM’s representation that FTC staff told TWM that “the CID

concerns only the Robinson-Patman Act aspects of [the] investigation of Southern,” information 

and materials regarding TWM’s business with distributors other than Southern are relevant to the 

Commission’s investigation. As courts have explained, the information demands in a CID need 

not be limited to the information necessary to prove a specific charge; instead, it can call for any

documents or information relevant “to the investigation,” whose boundaries may be broadly 

defined by the Commission. FTC v. Invention Submission Corp., 965 F.2d 1086, 1090 (D.C. Cir. 

1992). Here, the Commission’s investigation must consider more than the facts to allege a prima 

facie case of a Robinson-Patman Act violation; among other things, it will also assess the merits

of possible defenses under the Robinson-Patman Act, such as a good-faith attempt to meet an

equally low price of a competitor, or to match the services or facilities furnished by a competitor.

See U.S.C. § 13(b); Falls City Indus. v. Vanco Beverage, 460 U.S. 428, 439 (1983) (vacating 

lower courts’ rejection of meeting competition defense and criticizing lower courts’ lack of

findings regarding competitors’ prices and the information available to the seller about those

prices).

Thus, contrary to TWM’s contention, the information demands in the CID arising from 

applying the definitions of “Distributor” and “Relevant Products” beyond Southern and products 

sold by non-Southern distributors is well within the scope of the Commission’s investigation. 

These information demands are not “of such a sweeping nature and so unrelated to the matter 

properly under inquiry as to exceed the investigatory power” of the FTC. Morton Salt, 338 U.S. 

at 652. 

2. Specifications 8 and 12 – 15

TWM also challenges the relevance of numerous specifications in the CID. For

Specification 8, TWM argues that, because it is a retailer and not a distributor, the requested

information about TWM has no bearing on the market in question, which is the wholesale 

distribution of wines and spirits. Petition at 14. For Specifications 12 – 15, TWM argues that 

“the data and information sought . . . has nothing to do with Southern.” 

Again, TWM’s view of relevance misses the significance of the information to the 

Commission’s investigation. For each of the specifications, the information is germane to an 

element of a Robinson-Patman Act violation or potential defense. Consequently, we do not limit 

these specifications in the CID. 
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Specification 8 seeks consolidated, company-wide financial information for TWM, such 

as operating and net income.

1 TWM’s argument that this information is not relevant to the 

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market in question misapprehends the subject of the Commission’s investigation under the FTC 

Act and Robinson-Patman Act. As described by the CID, the subject of investigation is 

Southern’s conduct. See Petition Exh. A at 1 (CID). Assessing Southern’s conduct under the 

Robinson-Patman Act requires examination of both the wholesale market where Southern 

operates and the retailers to whom Southern sells. That is, in a secondary line price 

discrimination case, the possible injury is to competition at the retail level, between favored and 

disfavored customers. Consequently, the information regarding TWM and the retail market is 

relevant to the investigation. The consolidated financial information sought by Specification 8 is

relevant to examine the purpose, context, and effect of any discriminatory conduct. 

Specification 12 seeks TWM documents about competition at the retail level. TWM

objects to the Specification on the ground that the information “has nothing to do with 

Southern.” Again, the effect of possible discriminatory conduct by Southern occurs at the retail

level. Information about competition at the retail level is relevant to the investigation.

Specification 13 seeks documents provided to TWM’s board and executive leaders 

regarding strategies for both the purchase of wine and spirits from distributors and their sale to 

consumers. Here again, the information is relevant to the investigation. Strategic planning 

documents are relevant to understand the operation of distribution and retail markets and TWM’s

relationship with Southern and other distributors. Planning documents are likely to provide 

information regarding the types of distribution services, marketing services, and promotional 

programs that are provided and efforts to obtain particular – perhaps discriminatory – terms with

distributors. Moreover, planning documents may inform the investigation about the downstream 

effect of distributor conduct, including diverted sales and competitive injury. 

Specification 14 seeks data and information about facilities where TWM stores the 

products it purchases. Specification 15 seeks internal documents about TWM’s inventory 

strategies. The information sought by these specifications is relevant to the Robinson-Patman

Act’s requirement that sales be “in commerce,” such that at least one of the compared

transactions cross a state line. See Gulf Oil Corp. v. Copp Paving Co., Inc., 419 U.S. 195 (1974).

The information also is relevant to assess a potential functional discount defense asserting that 

price differentials reflect distribution functions assumed by particular retailers. See Texaco v. 

Hasbrouk, 496 U.S. 543, 562 (1990).

3. Materials and Information from 2018 and 2019

1 TWM suggests, but does not expressly argue, that the information sought by this 

Specification should be limited because it seeks “confidential, sensitive, and proprietary data.” 

Petition at 5. As a general rule, the Commission is prohibited from disclosing any documents and 

information obtained through compulsory process, including proprietary business and sensitive 

customer information. See 15 U.S.C §§ 46(f), 57b-2; 16 C.F.R. § 4.10(a). Thus, the mere fact 

that a subpoena or CID requires production of confidential or sensitive business information is 

no basis for noncompliance. See FTC v. Dresser Industries, Inc., No. 77-44, 1977 WL 1394, at 

*5 (D.D.C. Apr. 26, 1977) (citing cases).
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TWM argues that Specifications 3, 12-13, and 15-16 should be limited in time frame to 

no more than three years, asserting that information from an earlier period is not relevant. 

Petition at 16. TWM explains that, if the FTC were to seek an injunction against Southern, the 

Commission would need to challenge current conduct – and it contends that “[h]istorical 

information . . . before January 2020 . . . does not reflect Southern’s current business practices 

and has substantially less probative value than more recent information[.]” Id. We disagree that 

information before January 2020 sought by the CID is not relevant to the investigation and we do 

not limit the time frame identified in Instruction I.1.

First, TWM does not actually claim that the requested information is not relevant; TWM 

claims only that the information regarding the earlier period is less probative. Second, 

information sought in a CID need only be relevant to the investigation; it is not required to be the 

basis for a subsequent lawsuit. See Westside Ford v. FTC, 206 F.2d 627, 632 (9th Cir. 1953) 

(“The standards of materiality or relevancy are far less rigid in an ex parte inquiry to determine 

the existence of violations of a statute, than those applied in a trial or adversary proceedings.” 

(quoting Hagan v. Porter, 156 F.2d 362, 365 (9th Cir. 1946); FTC v. Gibson Prods. Of San 

Antonio, Inc., 569 F.2d 900, 908 (5th Cir. 1978) (“We hold that, as long as the material is 

reasonably relevant to the alleged violations, it can be discovered by subpoena, regardless of 

whether it concerns current or past conduct.”). Third, a longer time period is more likely to 

enable data analysis to reduce noise and distortion and a longer time period increases the 

likelihood that data or information will reflect natural experiments of infrequent events, such as 

the entry or exit of rival firms. 

B. Claims of Overly Broad Specifications and Undue Burden of Compliance

In the course of contesting the Commission’s requests for information about nonSouthern distributors and products not purchased from Southern, TWM asserts that the 

definitions of “Distributor” and “Relevant Product” unduly increase TWM’s burden to comply 

with the CID. TWM then asks the definitions be limited to address an undue burden. TWM also 

asks that the scope of particular specifications be limited to specific Southern products to reduce 

the burden. Petition at 15. In addition, TWM contends that specifications that ask TWM to 

produce “all documents” are “overbroad and unreasonably burdensome.” Petition at 5, 9, 15-16. 

“[B]roadness alone is not sufficient justification to refuse enforcement of a subpoena so 

long as the material sought is relevant.” Adams v. FTC, 296 F.2d 861, 867 (8th Cir. 1961). 

Similarly, as the D.C. Circuit has noted, “[s]ome burden on subpoenaed parties is to be expected 

and is necessary in furtherance of the agency’s legitimate inquiry and the public interest.” 

Texaco, 555 F.2d at 882; FTC v. Shaffner, 626 F.2d, 38 (7th Cir. 1980) (“Needless to say, any 

subpoena places a burden on the person to whom it is directed. Time must be taken from normal 

activities and resources must be committed to gathering the information necessary to comply. 

Nevertheless, the presumption is that compliance should be enforced to further the agency’s 

legitimate inquiry into matters of public interest.”). “Thus, courts have refused to modify 

investigative subpoenas unless compliance threatens to unduly disrupt or seriously hinder normal 

operations of a business.” Texaco, 555 F.2d at 882. For such a showing, the CID recipient bears 

the burden of showing that the CID imposes an undue burden. See FTC v. Standard American, 
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Inc., 306 F.2d 231, 235 (3d Cir. 1962) (appellants have the burden to show unreasonableness of

the Commission’s demand and make a record to show the “measure of their grievance rather

than [asking the court] to assume it.”) (citing Oklahoma Press Publ’g Co. v. Walling, 327 U.S. 

186, 217-18 (1946)). 

1. Data Specifications

In connection with its relevance challenge to the CID’s definitions, TWM argues that the 

resulting burdens for production are extensive and disproportionate to the needs of the 

investigation. In particular, TWM points to the burden associated with complying with 

Specification 10, which seeks product-level data about sales of wine and spirit products TWM 

purchased from distributors. Petition at 11-13. TWM’s petition explains that TWM purchased 

more than 18,000 products from Southern and that producing weekly sales data for a small 

sample of products took TWM employees hundreds of hours to pull, review, and validate. 

Petition at 12. That the data may be voluminous and include many rows of data, standing alone, 

is insufficient to establish undue burden. See Texaco, 555 F.2d at 882 (observing that “the 

breadth complained of is in large part attributable to the magnitude of the producers’ business 

operations” and rejecting claim of undue burden.). 

In addition, TWM’s claims fail to reflect the results of negotiations with FTC staff; 

during a series of discussions on April 4, staff offered to defer the production of data in eight 

states where TWM does not purchase from Southern, defer production of data for products not 

distributed by Southern, and defer production of weekly data in favor of monthly data. See

Petition App. C (April 5, 2023 letter from Altumash Mufti to Stephen Weissman) at 2; Petition at 

12 n.4, 13 n.6. Also, staff explained that the Specification asked only for data as it is kept in the

ordinary course and that TWM’s internal quality checks on the data to be produced were

unnecessary. See Petition App. C at 2. When, on April 4, staff did not extend the deadline for 

filing a petition to limit or quash the CID, TWM withdrew from discussions regarding these 

offers and filed the instant Petition on April 7. Although there was no final agreement on the 

proposed deferred productions at the time TWM filed its Petition, the offers to defer production 

of data sought by Specification 10 substantially reduce the burden, and likely would result in a

compliance obligation for this Specification that mimics TWM’s proposed limitation on the 

definition of Relevant Products: that is, limits the production to include only those products sold 

by Southern.

2

To support its claims of an undue burden that would “unduly disrupt or seriously hinder” 

its normal business operations, TWM provides the Declaration of Thomas Kooser, TWM’s Chief 

2 TWM misplaces its reliance on arguments that deferring production may lead to 

unreasonable burdens in the future. Petition at 13 n.6. The reasonableness of a burden is 

evaluated with reference to whether where compliance would disrupt normal business 

operations

it is not at all evident that any future productions – if 

demanded – would compete for resources with the identified initiatives. TWM has provided no 

basis to assess any claimed burden on future business operations. 
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Technology Officer

Yet, as already discussed, FTC staff 

proposed relief for Specification 10 to address burden. Staff’s position that data be provided as it 

is kept in the ordinary course and staff’s clarification that the FTC did not demand TWM’s 

internal quality check, see Petition App. C (April 5, 2023, letter from Altumash Mufti to Stephen

Weissman) at 2 (discussing Specification 10), likely mitigate the burden associated with the

other data specifications. Consequently, we find that the data specifications in the CID do not 

impose an undue burden on TWM. 

2. Specifications seeking “all documents”

TWM fails to show that Specifications 3, 12-13, and 15-16 that seek “all documents” 

impose an undue burden. Mr. Kooser’s Declaration addresses only the burden of complying with 

Specifications asking for data. Mr. Kooser’s Declaration does not address Specifications seeking 

documents. See Petition App. D (Declaration of Thomas Kooser). Consequently, TWM provides 

only conclusory statements in its Petition, which is insufficient to demonstrate an undue burden 

or evidence that compliance threatens to unduly disrupt or seriously hinder normal operations of 

a business.” See Texaco, 555 F.2d at 882. 

Further, FTC staff “have repeatedly stated [they] are prepared to address burdens

associated with requests for ‘all documents’ with custodian and search term proposals, but Total 

Wine has not provided any.” Petition App. C (April 5, 2023, letter from Altumash Mufti to

Stephen Weissman) at 4. And TWM states that it wishes “to discuss with Staff the nature and 

scope of searches of the Company’s files in response to specifications requiring production of 

‘all documents related to’ a broad range of topics, including the appropriateness of word searches 

of certain custodians’ files.” Petition at 15. We encourage FTC staff and TWM to continue 

discussions to resolve the burdens associated with these specifications.
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III. CONCLUSION

For the foregoing reasons, IT IS HEREBY ORDERED THAT Retail Services &

System, Inc.’s Petition to Limit Civil Investigative Demand be, and hereby is, DENIED. 

IT IS FURTHER ORDERED THAT Retail Services & System, Inc. shall comply in 

full with the Commission’s Civil Investigative Demand no later than June 16, 2023, or at such 

other date as the Commission staff may determine.

By the Commission. 

April J. Tabor 

Secretary

SEAL:

ISSUED: May 19, 2023