Opinion ID: 2362254
Heading Depth: 3
Heading Rank: 2

Heading: Administrative Subpoenas and Due Process Protections

Text: The summons in this case was issued by the Department of Revenue under the authority of T.C.A. §§ 67-1-1301, 67-1-1302, 67-1-1437, and Tenn.Admin.Comp. 1320-2-1-.40 and -.41. The Tax Enforcement Procedures Act, T.C.A. § 67-1-1401, et seq., specifically provides in T.C.A. § 67-1-1437: Obtaining evidence.  (a) EXAMINATION OF BOOKS AND WITNESSES. For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any amount under the provisions of this or any other title, the commissioner or his delegate is authorized: (1) To examine any books, papers, records, or other data which may be relevant or material to such inquiry; (2) To summon the person liable for tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the commissioner or his delegate may deem proper, to appear before the commissioner or his delegate at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and (3) To take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry. (b) SUMMONS. (1) SERVICE. A summons issued hereunder shall be served by the commissioner or his delegate by an attested copy delivered in hand to the person to whom it is directed or left at his last and usual place of abode; and the certificate of service signed by the person serving the summons shall be evidence of the facts it states on the hearing of an application for the enforcement of the summons. When the summons requires the production of books, papers, records, or other data, it shall be sufficient if such books, papers, records, or other data are described with reasonable certainty. (2) TIME AND PLACE. The time and place of examination shall be such as may be fixed by the commissioner or his delegate and as are reasonable under the circumstances. In no event shall the time be less than ten (10) days to appear to testify, or to produce books, papers, records, or other data. The chancery court for the district in which such person resides or is found shall have jurisdiction by appropriate process to compel such attendance, testimony, or production of books, papers, records, or other data. (3) ENFORCEMENT. Whenever any person summoned hereunder neglects or refuses to obey such summons, or to produce books, papers, records, or other data, or to give testimony, as required, the commissioner or his delegate may apply to the judge of the chancery court for the division within which the person so summoned resides or is found for an attachment against him as for a contempt. It shall be the duty of the chancellor to hear the application, and, if satisfactory proof is made, to issue an attachment, directed to some proper officer, for the arrest of such person, and upon his being brought before him to proceed to a hearing of the case; and upon such hearing the chancellor shall have power to make such as he shall deem proper, not inconsistent with the law for the punishment of contempts, to enforce obedience to the requirements of the summons and to punish such person for his default or disobedience. This type of process is generally recognized as an administrative or investigatory subpoena. It is issued to compile information necessary to determine compliance with the law consistent with the Executive Department's constitutional duty to take care that the laws be faithfully executed. Art. III, § 10, Tennessee Constitution. Such investigative process may be, and has often been, authorized by the Legislature. See , e.g., T.C.A. §§ 3-3-108; 4-5-311; 4-21-309; 48-2-118. This Court has previously held that legislative authorization of civil investigative process does not exceed Constitutional limitations as a general rule. See State ex rel. Shriver v. Leech, supra . In that case, we recognized that the purpose of an investigatory proceeding `is to discover and produce evidence not to prove a pending charge or complaint, but upon which to make one if, in the [agency's] judgment, the facts thus discovered should justify doing so.' Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 201, 66 S.Ct. 494, 501 [90 L.Ed. 614] (1946). Id., at 457. While we have found no constitutional defect with the type of process issued by the Commissioner under Article VI, § 12, we now address the validity and sufficiency of the summons and consider the right to judicial review of the kind of process issued in this case. This issue determines whether Respondents may be held in contempt for refusing to respond to the summons before the scope and validity of the summons had been tested in court. As a preliminary matter, considering that a Special Agent issued the summons as the Commissioner's delegate, although we restricted the authority of the Attorney General and Reporter to delegate the power to issue investigative subpoenas under T.C.A. §§ 8-6-401, et seq., in State ex rel. Shriver v. Leech, supra , we observed that the power granted by the ... statute is of a quasi-judicial nature which should not be delegated absent express [legislative] authority to do so. 612 S.W.2d at 456. T.C.A. § 67-1-1437 expressly authorizes the Commissioner or his delegate to issue investigative summons, unlike T.C.A. § 8-6-401, which limits this authority solely to the Attorney General and Reporter. Nevertheless, the authority to issue civil investigative process is not left uncircumscribed, as this type of process carries limited coercive effect and does not authorize an immediate intrusion into a protected zone of privacy, but authorizes the taking of testimony and the production of documents at a time subsequent to service... . Id., at 458. Moreover, as we further stated in State ex rel Shriver v. Leech, supra , quoting See v. City of Seattle, 387 U.S. 541, 542-543, 87 S.Ct. 1737, 1738-1739, 18 L.Ed.2d 943 (1967): `[W]hen an administrative agency subpoenas corporate books and 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.... In addition, while the demand to inspect may be issued by the agency, in the form of an administrative subpoena, it may not be made and enforced by the inspector in the field, and the subpoenaed party may obtain judicial review of the reasonableness of the demand prior to suffering penalties for refusing to comply.' Id., at 458. Thus, Art. I, § 7, of the Tennessee Constitution as well as these due process requirements will deter unreasonable civil investigative demands or subpoenas from being arbitrarily issued by the Executive Department. Nor are we convinced that constitutional limitations, such as those imposed by Art. I, §§ 7, 8, or 14, of the Tennessee Constitution, are wholly unimplicated in every case in which civil administrative or investigatory process is issued. In this case, we note that the State intimated at the hearing that criminal charges could flow from this investigation. The Constitution prohibits general searches and, with great particularity, limits the powers of the government when engaging in criminal investigations. Civil process cannot be substituted for the more rigorous constitutional requirements of criminal procedure. While we expressly reserve judgment on this issue, as the Supreme Court of the United States observed in United States v. LaSalle National Bank, 437 U.S. 298, 317, 98 S.Ct. 2357, 2367-2368, 57 L.Ed.2d 221 (1978), civil investigative authority will not permit the government to expand its criminal discovery powers.