How to Prevent FTC Fishing Expeditions

How to Prevent FTC Fishing Expeditions

Dealing with an FTC investigation can be intimidating. You may feel pressure to hand over more information than is legally required. But it’s important to know your rights and not let the FTC go on a “fishing expedition” for information they have no right to.

Here are some tips on how to prevent FTC overreach during an investigation:

Don’t Volunteer Extra Information

The FTC will often ask very broad, open-ended questions in an effort to get you to reveal more than necessary. You are only legally obligated to provide specific information and documents that the FTC can show are relevant to their investigation. Don’t volunteer anything beyond what is explicitly requested.

Get Legal Representation

Have an experienced attorney deal with the FTC on your behalf. They can review FTC requests to determine what you are required to provide. They can also negotiate with the FTC to limit the scope of their requests.

Claim Legal Privileges

Certain communications and documents may be protected under legal privileges like attorney-client privilege or work product doctrine. Be sure to formally assert these privileges and do not disclose privileged information without consulting your attorney.

Ask for Justifications

Require the FTC to explain why they need each piece of information requested. Ask them to connect each request to specific facts relevant to their investigation. This puts the burden on them to justify each inquiry.

Negotiate the Scope

Your attorney can attempt to negotiate with the FTC to narrow overly broad requests. For example, limiting the time period covered or the types of documents required. Push back on fishing expeditions.

Only Answer What is Asked

Only provide exactly what is asked for, nothing more. Do not elaborate or volunteer tangential information in your responses. Stick to direct answers to their specific questions.

Record Interviews

FTC interviews can feel like interrogations. Protect yourself by recording interviews so there is a record of what was said. This can deter fishing expeditions.

Stay Calm

FTC investigations are stressful but avoid letting emotion cloud your judgment. Stay focused and only provide what you are legally required. Don’t let them rattle you into giving up more than necessary.

Know Your Rights

Educate yourself on the limits of the FTC’s authority. Work with legal counsel to ensure you understand what you can challenge. Don’t assume every FTC demand is valid and enforceable.

Get Support

Talk to others who have gone through FTC investigations before. Learn from their experiences fighting fishing expeditions. See if industry associations can provide resources or guidance.

Push Back When Necessary

If you believe the FTC is overstepping, fight back. File petitions challenging subpoenas or other demands. Refuse to hand over more than is required.

With the right preparation and support, you can get through an FTC investigation without compromising your rights. Don’t let them pressure you into handing over more than the law says you must provide. Protect yourself and your business from fishing expeditions.

Relevant Laws and Legal Precedents

There are several important laws and legal precedents that limit the power of the FTC to go on fishing expeditions:

Federal Trade Commission Act

This law gives the FTC power to investigate corporations for potential antitrust violations or unfair or deceptive trade practices. But it limits inquiries to information “relevant to the investigation.”^[1]

United States v. Morton Salt Co.

This 1950s Supreme Court case established that FTC investigations cannot become “fishing expeditions into private business practices.” There must be a reasonable basis for believing the law has been violated.^[2]

United States v. Construction Products Research

This 1960s case ruled the FTC cannot engage in “rambling, unfocused” investigations. Subpoenas must be specific and reasonably relevant to the investigation.^[3]

Right to Financial Privacy Act

This federal law requires the FTC to provide notice and opportunity for a court challenge before obtaining private financial records from banks.^[4]

Fourth Amendment

The Constitution protects against “unreasonable searches and seizures.” This requires FTC subpoenas to be judicially reviewed for relevance and need.^[5]

Citing these precedents can help block fishing expeditions that lack specificity or exceed FTC authority.

Potential Defenses

If you believe the FTC is overreaching, here are some potential defenses to challenge their demands:

• File a petition to limit or quash a subpoena that lacks specificity or seeks irrelevant material.
• Claim attorney-client privilege or work product protections for communications.
• Argue the request violates Constitutional privacy rights or other statutes.
• Refuse to answer questions unrelated to alleged violations.
• Seek intervention from courts if the FTC ignores reasonable objections.
• Sue for declaratory judgement that the FTC is exceeding its authority.

An experienced attorney can help assert these defenses and appeal any unfavorable rulings. Though the FTC wields significant power, their authority has limits.

Conclusion

FTC fishing expeditions can harm innocent businesses. But companies under investigation also have rights. With proper preparation and legal support, you can cooperate with the FTC while avoiding unnecessary intrusions.

Know your rights, but also consider negotiating with the FTC before making legal challenges. Finding common ground may be easier than battling in court. But when talks fail, don’t hesitate to push back against unreasonable demands.

With the right balance of cooperation and resistance, you can get through an FTC investigation without compromising core freedoms and privileges. Don’t let vague threats or intimidation tactics trick you into giving up more than the law requires.

References

[1] Federal Trade Commission Act, 15 U.S.C. § 46(a)

[2] United States v. Morton Salt Co., 338 U.S. 632 (1950)

[3] United States v. Construction Products Research, Inc., 73 F.3d 464 (2d Cir. 1996)

[4] Right to Financial Privacy Act, 12 U.S.C. §§ 3401-3422

[5] U.S. Const. amend. IV