Using External Communications to Combat Civil Investigative Demand Attention

Using External Communications to Combat Civil Investigative Demand Attention

Civil investigative demands (CIDs) can be burdensome for companies, requiring significant time and resources to respond. However, companies under CID investigation have options to push back against unreasonable demands. External communications with regulators and petitioning to limit or quash CIDs are two strategies companies can use.

What are Civil Investigative Demands?

Civil investigative demands allow government agencies like the Federal Trade Commission to compel companies to provide information and documents related to investigations into potential legal violations
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CIDs function similarly to subpoenas. They require companies to respond to interrogatories, provide written reports, produce documents, and submit tangible items relevant to investigations. Failure to comply can result in enforcement action.

Responding to Onerous CID Specifications

While companies are expected to bear some burden responding to CIDs, agencies should not impose undue burdens
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. Companies can push back when CID specifications are unreasonably broad or burdensome.

Petition to Limit or Quash

If specifications seem indefinite or overly burdensome, companies can petition to limit or quash the CID
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. This involves submitting a written legal argument identifying issues with the CID and requesting modifications.
Companies would argue specifications are too burdensome if responding would disrupt normal business operations or require unreasonable effort or expense. Arguments to quash focus on specifications being indefinite or requesting irrelevant information.

Negotiate with Regulators

Another option is trying to negotiate the scope of specifications directly with regulators
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. This involves explaining issues with current specifications and proposing reasonable modifications.
Regulators want to avoid litigation over CID disputes, so may be open to good faith negotiations. However, they ultimately have discretion in determining the appropriate scope.

Leveraging External Communications

In addition to formal petitions and negotiations, external communications can shape how agencies approach CID specifications and enforcement.

Involve Senior Officials

Senior business leaders can communicate directly with senior regulatory officials to voice concerns over a CID’s scope or relevance
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. These external communications should be transparent, with investigative staff included.
High-level communications bring visibility to issues and can motivate agencies to reconsider burdensome demands. However, overreach risks being seen as political interference.

Develop a Communications Strategy

Work with legal counsel and communications professionals to brief media outlets and industry advocates on unreasonable CID specifications
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Control the narrative by proactively communicating how specifications exceed investigatory needs or regulatory authority. This can pressure agencies to scale back demands.

Submit Comment Letters

When agencies request public comments on proposed regulations, submit letters highlighting issues with existing CID practices
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Comments can influence future regulatory changes. Collective action through industry groups also carries more weight.

What Information Should Initial Responses Include?

The initial priority is demonstrating cooperation and transparency. Provide high-level information about organizational structure, data systems, and personnel
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Respond thoroughly to specifications not subject to dispute. For example, provide policies, procedures, org charts, and transaction-level sales data.
If specifications seem unreasonable, seek clarification from agency staff about what information they are truly seeking to obtain. Offer to provide samples while negotiating limitations.
Getting basic information to regulators early builds goodwill. Refusing any compliance without justification appears obstructionist.

Avoiding Missteps When Responding to CIDs

Mishandling responses can worsen regulatory scrutiny. Ensure legal counsel guides decision-making to avoid common mistakes.

Don’t Destroy Documents

Notification provisions prohibit destroying documents after receiving a CID, even in normal course of business
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. Avoid any appearance of concealing relevant information.

Don’t Overuse Keyword Filtering

While keyword searches help filter data for review and production, agencies can compel companies to provide statistically significant samples of excluded non-privileged documents
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Blanket exclusions raise compliance questions. Catalogue and selectively sample excluded materials to demonstrate reasonableness.

Track All Search Efforts

Document every step taken to gather responsive materials, including search tools, terms, and processes
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Transparently log and explain review methodologies. It demonstrates good faith efforts to regulators.

Key Takeaways

Petition to limit or quash unreasonably burdensome CID specifications
Negotiate scopes of information requests with regulatory staff
Communicate externally to bring attention to problematic CIDs
Provide cooperative initial responses focused on high-level information
Avoid destroying documents or over-filtering data productions

Resources

FTC Petition to Limit Abbott Labs CID
Managing Civil Investigative Demands
Leveraging Public Comments in Rulemaking