Opinion ID: 1986349
Heading Depth: 2
Heading Rank: 1

Heading: The substantial-compliance argument.

Text: The district court found PCH had substantially complied with the subpoena and further that complete compliance would be extremely burdensome. The attorney general argues that there is no express authority for applying a substantial-compliance standard. PCH concedes there is no such express authority, but it argues that a court may modify a subpoena to accomplish the same purpose. It argues the court has the authority to modify a subpoena if the demand is unduly burdensome, citing FTC v. Texaco, Inc., 555 F.2d 862, 881 (D.C.Cir.1977). We reject the argument that substantial compliance excuses PCH from furnishing all of the information requested. PCH must show that production of the information it seeks to exclude would be unduly burdensome. To adopt PCH's argument that it is excused from producing all of the information requested by producing some of it would allow it, rather than the attorney general, to determine the scope of the discovery. The key is whether production of the omitted information would be unduly burdensome. See Berg v. Des Moines Gen. Hosp. Co., 456 N.W.2d 173, 177 (Iowa 1990) ([B]urdensomeness may, upon a proper showing, be a basis for limiting discovery.); see also Texaco, 555 F.2d at 882 ([C]ourts have refused to modify investigative subpoenas unless compliance threatens to unduly disrupt or seriously hinder normal operations of a business.). B. Burdensomeness. Resolution of the discovery issue in this case boils down to whether full compliance with the attorney general's subpoena would be unduly burdensome to PCH. We have discussed burdensomeness in the context of garden-variety discovery and concluded: In determining whether the discovery is unduly burdensome or expensive, the court may take into account the needs of the case, the amount in controversy, limitations on the parties' resources, and the importance of the issues at stake in the litigation. A certain amount of inconvenience inheres in discovery and must be tolerated by the parties. Nonetheless, where the nature and complexity of the inquiry show compliance with the discovery request would require an unreasonable amount of time and an unreasonable expenditure of money, a protective order is appropriate. Berg, 456 N.W.2d at 177 (quoting Iowa R. Civ. P. 121(c)(3)) (citations omitted). In this consumer fraud case, as to which the legislature has granted plenary investigative powers to the attorney general, we believe the requirements for showing undue burden should be at least this high. As a federal court has said, [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. The burden of showing that the request is unreasonable is on the subpoenaed party. Further, that burden is not easily met where, as here, the agency inquiry is pursuant to a lawful purpose and the requested documents are relevant to that purpose. Broadness alone is not sufficient justification to refuse enforcement of a subpoena. 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 (citations omitted); accord FTC v. Invention Submission Corp., 965 F.2d 1086, 1090 (D.C.Cir.1992) (quoting Texaco ); EEOC v. Maryland Cup Corp., 785 F.2d 471, 477 (4th Cir.1986) (The party subject to the subpoena must show that producing the documents would seriously disrupt its normal business operations.); Attorney General v. Bodimetric Profiles, 404 Mass. 152, 533 N.E.2d 1364, 1367-68 (1989) (Documentary demands exceed reasonable limits only when they seriously interfere with the functioning of the investigated party by placing excessive burdens on manpower or requiring removal of critical records ... even when such a demand imposes considerable expense and burden on the investigated party. (citations omitted)). Here, the district court found the cost of compliance would be just under $10,000 in addition to approximately $13,000 already spent in providing information. In light of the 1900 Iowans who have spent $1000 or more on PCH merchandise, or a total Iowa income for PCH exceeding $1.9 million, it is clearly not an undue burden in terms of expense to require compliance. PCH also contends the process of obtaining the additional information would divert its management and staff from other essential business and delay the normal company operations. However, it has not been specific as to why with respect to the 1900 customers in question this presents a significant problem when PCH has already furnished information on many more customers using the same procedures to gather the information. Its claim that providing the subpoenaed information on its relatively few high-dollar customers would subject it to an undue burden is simply not persuasive. The attorney general wants information on these customers spending over $1000 to assess the success of PCH's remedial programs aimed at preventing elderly people from spending excessively on products they do not need, and probably will not use, in order to enhance their chances of winning the sweepstakes. We believe PCH has, as a matter of law, failed to carry its burden of showing that compliance with this subpoena would threaten[ ] to unduly disrupt or seriously hinder normal operations of [its] business. Texaco, 555 F.2d at 882. In short, PCH has failed to show that the information is not relevant or production of it is unduly burdensome. See Roadway Express, 397 N.W.2d at 510. The district court abused its discretion in concluding otherwise.