Challenging Overly Broad FTC Subpoenas and CIDs
Contents
Challenging Overly Broad FTC Subpoenas and CIDs
The Federal Trade Commission (FTC) has broad authority to investigate potential violations of consumer protection and antitrust laws. This includes the power to issue subpoenas and civil investigative demands (CIDs) to obtain information and documents from companies and individuals. However, recipients can challenge subpoenas or CIDs that are overly broad or unduly burdensome. This article examines strategies for challenging excessive FTC demands for information.
FTC’s Investigative Powers
The FTC relies heavily on subpoenas and CIDs to conduct investigations. Subpoenas are used for antitrust inquiries, while CIDs are used for consumer protection matters [6]. Both allow the FTC to compel the production of documents, written reports, and oral testimony. Failure to fully comply can lead to court enforcement actions and penalties for contempt of court [2].
Recipients of FTC subpoenas or CIDs have the right to challenge demands that are overly broad or unduly burdensome. Common arguments include [3]:
- The subpoena or CID seeks information beyond the scope of the FTC’s investigation
- Compliance would be unreasonably costly or difficult
- The time period or geographic scope is excessive
- Definitions or instructions are vague or ambiguous
Before seeking to quash or modify a subpoena or CID in court, the best practice is to meet and confer with FTC staff to try to resolve disagreements. The FTC typically only seeks judicial enforcement after good faith negotiations fail [2].
Petitioning to Limit or Quash
If informal resolution is unsuccessful, recipients can file a petition to limit or quash the subpoena or CID. This involves submitting a formal request to the FTC and laying out legal arguments for why compliance should not be compelled. Common grounds include [4]:
- The subpoena or CID is overbroad and seeks irrelevant information
- Compliance would be unduly burdensome
- Privileged information is being sought
- The investigation exceeds the FTC’s authority
When assessing petitions to quash, courts weigh the burden on the recipient against the government’s need for the information. Parties seeking to modify or quash an FTC subpoena or CID have the burden of showing that compliance would be unreasonable or oppressive [5].
To improve the chances of success, the petition should be specific about the nature and extent of the burden involved. Supporting affidavits or other evidence is helpful. It also helps to propose a reasonable modification, such as limiting the date range or narrowing document requests.
Strategies for Challenging Overbreadth
One of the most common grounds for challenging an FTC subpoena or CID is that the requests are overbroad and seek irrelevant information. Here are some strategies for making this argument:
- Explain how the definitions or instructions encompass information not pertinent to the investigation
- Identify document requests that are not tailored to issues within the stated scope of the inquiry
- Note where the geographic or time period parameters sweep in unrelated material
- Detail the burden of searching for and producing information of limited probative value
- Propose alternative language to narrow the requests
Pointing out these deficiencies and suggesting fixes can demonstrate overbreadth. However, courts give the FTC leeway, so the subpoena or CID must clearly exceed bounds to be quashed on this basis.
Challenging Undue Burden
Recipients can also argue that complying with the subpoena or CID would impose an undue burden. Considerations include [1]:
- The breadth of information sought
- The time period covered
- The accessibility of records
- The types of analysis required
- The business disruptions compliance would cause
The petition should explain these factors and provide supporting evidence, like affidavits, specific cost estimates, or examples of business impacts. Proposing a reasonable modification, such as additional time, can also help.
Other Defenses
In addition to overbreadth and undue burden, other potential defenses include:
- Privileged information: Subpoenas and CIDs cannot compel the disclosure of information protected by attorney-client privilege or work product doctrine. Recipients can file a petition arguing that certain requests or definitions improperly sweep in privileged material. However, blanket claims of privilege without supporting evidence are disfavored. The petition should identify specific privileged documents and explain why privilege applies [4]. Proactively engaging with FTC staff to clarify scope and work out privilege issues is recommended [5].
- Confidential business information: Recipients can argue that complying would force the disclosure of sensitive confidential business information that could aid competitors. However, this is difficult to establish unless the requests target core trade secrets with no relevance to the investigation [6].
- Outside the statute of limitations: Seeking documents or information from too far in the past can potentially exceed the FTC’s authority. But limits are often tolled or difficult to establish definitively at the investigative stage.
- Lack of jurisdiction: The recipient can argue that the FTC lacks jurisdiction over them or the subject matter. However, the FTC is usually given deference on jurisdictional questions at the pre-complaint phase.
- Unreasonable duplication: If the FTC issues multiple subpoenas or CIDs seeking the same information from different parties, recipients can petition to quash duplicative requests.
- Procedural deficiencies: Failure to follow proper procedures, such as not allowing reasonable time for compliance, may provide grounds for a successful petition.
While these defenses can potentially limit subpoenas and CIDs, the FTC has broad investigative authority. Courts tend to err on the side of allowing the FTC access to information. As a result, quashing demands in their entirety is very difficult. The best approach is usually to narrow the requests rather than rejecting them outright.