Opinion ID: 385703
Heading Depth: 3
Heading Rank: 1

Heading: The Nature of the Document Served

Text: 20 As one of several targets of an FTC investigation which remains in a preliminary phase, SGPM has neither the status of an accused in a criminal action nor the status of a defendant in a civil action. Although as a result of the agency investigation, SGPM may eventually be named a defendant in a civil action, presently it is merely a third-party witness on notice of its potential status as a party defendant. The FTC's subpoena duces tecum and accompanying letter ought not, therefore, be viewed merely as a summons giving notice of a complaint initiating a lawsuit against SGPM. Rather, the FTC's issuance of a subpoena and the district court's enforcement thereof, represent a classic exercise of compulsory process, intended to secure the personal appearance of and production of documents by an otherwise unwilling witness through threat of judicial sanctions for noncompliance. 52 21 The distinction between service of notice and service of compulsory process is a crucial one under principles of both domestic and international law. When an agency serves a party with notice of the pendency of an action, it thereby supplies the recipient with information upon which he may base a decision to act or not. When an agency serves compulsory process upon a third-party witness, regardless of the technique of service employed, it effectively compels that witness to do something and threatens him with sanctions should he choose not to comply. Thus, when the FTC issues and serves a formal complaint upon a respondent, charging him in an adjudicative proceeding with violation of one or more of the statutes it administers, the purpose of service is primarily notice, rather than compulsion. 53 Once the respondent is served with a copy of the complaint and the proposed order, he then has the options of meeting with the Commission's counsel to negotiate a consent order or of proceeding to litigation, the result of which may always be appealed before any cease-and-desist order may issue. Not until the cease-and-desist order becomes final, through affirmance by a court of appeals or the Supreme Court (if taken to that Court by certiorari ), will the coercive power of the courts be directly brought to bear upon the respondent. 54 22 When a witness is served with compulsory process in the form of an investigatory subpoena, however, the consequences of noncompliance are strikingly different. 55 Should the witness fail to produce material responsive to the subpoena, the full enforcement power of the federal courts may immediately be brought to bear upon him. Disobedience is itself both a statutory crime and an occasion for imposition of a money penalty. 56 The Commission may seek a judicial order directing compliance or a finding that the respondent is in contempt of court. 57 Summary proceedings may be begun under Fed.R.Civ.P. 81(a)(3), 58 with a finding of contempt the ultimate penalty. 59 In the event of continued noncompliance, a district court could presumably enforce its order by seizing the noncomplying respondent's assets wherever they might be found and lawfully attached, 60 by holding the officers and agents of the corporation in contempt, or by otherwise exercising its discretion to punish a potential witness' recalcitrance. Unlike service of a summons and complaint upon a named defendant, delivery of the FTC's investigatory subpoena upon a witness carries with it the full array of American judicial power. 23 The distinction between notice and compulsory process, and the implications of that distinction for permissible modes of service, is well illustrated in the context of civil litigation. Federal Rule of Civil Procedure 4, which governs service of process, is primarily concerned with effectuating notice. 61 To that end, the rule provides for a wide range of alternative methods of service, including registered mail, each designed to ensure the receipt of actual notice of the pendency of the action by the defendant. 62 By contrast, Federal Rule 45(c), governing subpoena service, does not permit any form of mail service, nor does it allow service of the subpoena merely by delivery to a witness' dwellingplace. 63 Thus, under the Federal Rules, compulsory process may be served upon an unwilling witness only in person. Even within the United States, and even upon a United States citizen, service by registered U.S. mail is never a valid means of delivering compulsory process, although it may be a valid means of serving a summons and a complaint. 64 24 When the individual being served is not an American on U.S. soil but a foreign subject on foreign soil, the distinction between the service of notice and the service of compulsory process takes on added significance. When process in the form of summons and complaint is served overseas, the informational nature of that process renders the act of service relatively benign. 65 When compulsory process is served, however, the act of service itself constitutes an exercise of one nation's sovereignty within the territory of another sovereign. 66 Such an exercise constitutes a violation of international law. 67 Given its informational nature, service of process from the United States into a foreign country by registered mail may thus be viewed as the least intrusive means of service i. e., the device which minimizes the imposition upon the local authorities caused by official U.S. government action within the boundaries of the local state. 68 Given the compulsory nature of a subpoena, however, subpoena service by direct mail upon a foreign citizen on foreign soil, without warning to the officials of the local state and without initial request for or prior resort to established channels of international judicial assistance, 69 is perhaps maximally intrusive. 70 Not only does it represent a deliberate bypassing of the official authorities of the local state, 71 it allows the full range of judicial sanctions for noncompliance with an agency subpoena to be triggered merely by a foreign citizen's unwillingness to comply with directives contained in an ordinary registered letter. 25 The district court failed to recognize either of these consequences in enforcing the Commission's subpoena. The district court's opinion cited a number of state and federal statutes governing judicial service of process abroad to justify the assertion that no clear congressional authorization is necessary before an agency may employ a particular form of subpoena service abroad. 72 Although it is true that Federal Rule of Civil Procedure 4(i)(1) (D) specifically permits service of process abroad by any form of mail, requiring a signed receipt, 73 that subprovision, when read together with the other four modes of foreign service of process provided in rule 4(i), underlines rather than obviates the need for judicial sensitivity to foreign territorial sovereignty when scrutinizing particular methods of overseas service. 74 Furthermore, the references made in rule 4(i) to alternative official channels for foreign service 75 indicate that the district court erred in construing congressional silence as authorizing regular and unrestrained circumvention of a foreign nation's judicial authorities. 76 In view of the significant sanctions conditionally imposed by the agency's subpoena and the foreign sensibilities aroused by the mode of delivery used here, 77 the district court's finding that Congress intended the FTC to deliver its compulsory processes solely with the aid of foreign postal authorities seems mistaken. 26