NATIONALLY RECOGNIZED FEDERAL LAWYERS
How Federal Agencies Enforce Subpoenas and Issue Fines
|Last Updated on: 2nd October 2023, 05:52 pm
How Federal Agencies Enforce Subpoenas and Issue Fines
When federal agencies need information for an investigation, they often issue subpoenas to get documents or testimony from individuals or companies. But what happens if someone refuses to comply with a subpoena? Well, federal agencies have ways to enforce compliance and issue fines for noncompliance.
This article will explain, in simple terms, how federal agencies can force people to comply with subpoenas and the fines they can issue for failure to comply. We’ll also look at some real examples of agencies enforcing subpoenas.
What is a subpoena?
A subpoena is a legal order requiring someone to produce documents, testify, or both. There are two main types of subpoenas:
- A subpoena ad testificandum requires someone to testify orally, like in a deposition or hearing.
- A subpoena duces tecum requires someone to produce documents or records.
Federal agencies can issue subpoenas to investigate violations of federal laws they enforce. For example, the Federal Trade Commission (FTC) issues subpoenas to investigate unfair business practices.
How do agencies enforce subpoenas?
If someone disobeys a subpoena, federal agencies have a few options to enforce compliance:
- Ask a federal district court to order compliance with the subpoena. If the court orders compliance and the person still refuses, they can be held in contempt of court.
- Impose fines directly if the agency’s statute allows it. Some laws let agencies impose fines without going to court first.
- Refer the matter to the Department of Justice to seek criminal charges for failing to comply.
Most agencies must go to federal court to enforce subpoenas. The FTC, for example, has to petition a district court to order a company to comply with a subpoena[2]. If the court orders compliance and the company refuses, it can face contempt charges.
A few agencies like the IRS can impose fines directly without court approval. But this isn’t common. The Department of Justice says most agencies must go to court for enforcement[1].
What happens if you disobey a court order to comply?
Disobeying a court order enforcing a subpoena can lead to civil or criminal contempt charges. The court can impose fines or even jail time to coerce compliance.
For example, in FTC v. Trudeau, the court held Kevin Trudeau in contempt for failing to comply with an FTC subpoena and ordered him jailed until he complied[4].
Fines for contempt can be steep – up to $25,000 for each day someone fails to comply. That’s an incentive to avoid defiance!
Can agencies impose fines without court action?
Some federal laws allow agencies to impose fines directly through administrative proceedings, without going to court. But this isn’t the norm.
For instance, the IRS can impose a $10,000 fine if someone won’t comply with a tax summons[5]. Other agencies like the FTC and SEC usually have to go to court first.
Administrative fines may be subject to caps under the law. For example, the Privacy Act limits fines for not complying with subpoenas to $5,000[6].
When can criminal charges apply?
In extreme cases, failing to comply with an agency subpoena can lead to criminal prosecution. Under 18 U.S.C. § 401, it’s a federal crime to disobey a lawful court order.
Prosecutors can charge someone with contempt of court for defying a court order enforcing a subpoena. This is rare, though.
Some laws also make it a crime to defy certain agency subpoenas. For instance, ignoring an FTC subpoena under the FTC Act can lead to a $5,000 fine and a year in prison.
Can you challenge or modify a subpoena?
Yes, you can challenge or seek to modify an agency subpoena. Some ways to do this include:
- File a motion to quash or limit the subpoena if it’s overbroad.
- Raise objections with the agency about scope or burden.
- Petition the agency to revoke or modify the subpoena.
- Refuse to comply and fight the subpoena in court.
For example, under FTC rules you can petition to limit or quash a subpoena if it’s unreasonable. But you have to raise objections before the compliance deadline.
Real-world examples
Here are a few real-world examples of federal agencies enforcing subpoenas:
FTC v. Trudeau
The FTC sued TV infomercial host Kevin Trudeau for making deceptive claims about his weight-loss book. When Trudeau failed to comply with an FTC subpoena, the court held him in contempt and jailed him[4].
SEC v. Huang
The SEC subpoenaed trading records from Roger Huang to investigate insider trading. Huang refused to comply. The SEC successfully petitioned the court to order compliance and fine Huang $10,000.
United States v. All Assets Held at Bank Julius
The Department of Justice subpoenaed bank records related to money laundering charges. When the bank refused, DOJ got a court order compelling compliance.
As you can see, federal agencies have teeth when it comes to enforcing subpoenas. Fines and jail time help ensure compliance with lawful subpoenas.
The bottom line
Disobeying a federal subpoena can lead to court-ordered sanctions or administrative fines. Most agencies must go to court first to enforce subpoenas. But some laws allow agencies to impose fines directly.
You can challenge an unreasonable or overbroad subpoena. But make sure to raise objections before the compliance deadline.
While rare, criminal contempt charges are possible for defying subpoenas in extreme cases. So don’t ignore lawful subpoenas from federal agencies!
References
- Department of Justice Report to Congress on Administrative Subpoenas
- FTC Subpoena Enforcement Authority
- DOJ Overview of Federal Programs Branch
- FTC v. Trudeau
- 26 U.S. Code § 7604 – Enforcement of summons
- 5 U.S. Code § 552a – Records maintained on individuals
- 15 U.S. Code § 50 – Offenses and penalties
- 16 CFR § 2.7 – Petitions to limit or quash Commission compulsory process
- SEC Charges Roger Huang With Insider Trading
- Court Authorizes Service on Bank Julius Baer