Opinion ID: 345561
Heading Depth: 2
Heading Rank: 1

Heading: Court Enforcement of Administrative Subpoenas

Text: 230 The Trade Commission and a majority of this court apparently would have us proceed as if there were on appeal here an order of the Trade Commission, entitled to deference as an exercise of that agency's expertise. 231 To the contrary, this is an appeal from orders of the District Court enforcing the Commission's subpoena with some limiting modifications. Accordingly, it is not the views of the Commission staff which must be accorded deference, but the determinations of the District Court which must be upheld unless clearly erroneous or an abuse of discretion. 232 There are limits to the subpoena power of an administrative agency, and the duty and authority to enforce those limits rests in our federal district courts. As the Ninth Circuit has stated, 233 There is no rule requiring a court to act against conscience. The proceeding (judicial enforcement of administrative subpoenas) is equitable in character. Equitable considerations should prevail. There is no power to compel a court to rubberstamp action of an administrative agency simply because the latter demands such action. 31 234 By arguing as if it had been denied the ability to proceed with its investigation, and by arguing that its subpoena must be enforced unless the evidence sought is plainly irrelevant to any purpose within (its) statutory authority . . ., 32 the Trade Commission demonstrates that its real purpose is to strip the federal judiciary of any discretion in subpoena enforcement proceedings. Ironically, the District Court's order here enforces the FTC's subpoena as to the great preponderance of the documents sought, and even specifically preserves the FTC's ability to obtain further documents and information. 33 Consequently, the majority's failure to sustain the District Court in its reasonable limitations of the FTC's subpoena may have exactly the precedential effect desired by the Trade Commission. By stripping the District Court, which has reviewed countless submissions and has held two full days of hearings, of any discretion in enforcing this FTC subpoena, our colleagues have totally undermined the concept of judicial enforcement of administrative subpoenas. 235 The Supreme Court has announced repeatedly the principles which should guide a district court in deciding the lawfulness of investigative subpoenas issued by administrative agencies: 236 The gist of the protection is in the requirement, expressed in terms, that the disclosure sought shall not be unreasonable. . . . 237 (T)he requirement of reasonableness . . . comes down to specification of the documents to be produced adequate, but not excessive, for the purposes of the relevant inquiry. Necessarily, . . . this cannot be reduced to formula; for relevancy and adequacy or excess in the breadth of the subpoena are matters variable in relation to the nature, purposes, and scope of the inquiry. 34 238 It is now settled that, when an administrative agency subpoenas corporate books or records, the Fourth Amendment requires that the subpoena be sufficiently limited in scope, relevant in purpose, and specific in directive so that compliance will not be unreasonably burdensome. 35 239 More specifically, in United States v. Morton Salt Co., in the context of a Trade Commission investigatory proceeding, the Supreme Court wrote, 240 Of course a governmental investigation into corporate matters may be of such a sweeping nature and so unrelated to the matter properly under inquiry as to exceed the investigatory power. . . . But it is sufficient if the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant. 36 241 In addition, the Court has made clear that these issues of . . . relevancy of the materials sought, and breadth of the demand are neither minor nor ministerial matters. 37 They are, instead, matters which require the exercise of sound discretion on the part of a district court and matters which raise questions essentially factual in nature. Accordingly, we, at the appellate level, must defer to the determinations of the District Court unless we find those determinations clearly erroneous or an abuse of discretion. 38 242 In a recent opinion affirming the order of a district court enforcing another Trade Commission subpoena, this court correctly stated the standard of appellate review applicable to a district court's determinations of relevance: 243 A finding by the district court that documents are relevant and necessary to an inquiry by the FTC is essentially factual in nature and cannot be overturned unless the district court's finding is clearly erroneous. 39 244 We point out in Part IV.A., infra, how the majority has ignored and evaded this established standard and any other appellate standard of judicial review. Similarly, in NLRB v. Northern Trust Co., the Seventh Circuit has written, 245 We agree that the courts are not mere rubber stamps and that subpoenas are in the District Court's discretion, but we fail to see how that helps appellants. It seems to us to have the opposite effect, for here the court after a very thorough and careful inquiry granted the Board's request for enforcement. Thus appellants are in the unenviable position of sustaining the great burden of showing an abuse of discretion. They have failed to do so. The facts of the case insofar as the Board knew them at the time of the application and the materiality of the evidence sought were brought out before the trial judge, who concluded that the documents which the Board wanted to be produced were relevant. We are not willing to disturb his holding, because we do not think any abuse of discretion was involved. 40 246 Thus, we are left to decide in the instant case whether the District Court abused its discretion, under the reasonably relevant standard of United States v. Morton Salt Co., by refusing to enforce those portions of the subpoenas that called for documents which did not relate to estimates of proved reserves. In other words, was the District Court's finding that only documents related to proved reserves were reasonably relevant to the FTC's investigation a clearly erroneous finding? We conclude that it was not and that the District Court acted well within the bounds of its discretion.