The FTC Takes Its Subpoenas and CIDs Seriously – and You Should, Too

The FTC’s ability to obtain information through subpoenas and civil investigative demands (CIDs) is critical to the task of investigating potential law violations. The FTC uses this authority deliberately and responsibly, avoiding unnecessary burdens on businesses and individuals and consistent with our obligations to enforce the law. These...

The FTC’s ability to obtain information through subpoenas and civil investigative demands (CIDs) is critical to the task of investigating potential law violations. The FTC uses this authority deliberately and responsibly, avoiding unnecessary burdens on businesses and individuals and consistent with our obligations to enforce the law.

These requests are legally enforceable demands, and recipients of subpoenas or CIDs need to take their obligation to comply seriously. We expect all companies and individuals who receive compulsory process to respond completely and in a timely manner, or to disclose quickly and candidly any obstacles to full compliance. We routinely work with recipients to narrow or defer requests, and generally, we have found that parties cooperate. But not everyone sees the benefits of cooperation, which can often result in delay.

Cooperating with staff

FTC staff are always willing to work with parties and their counsel to determine the scope of the agency’s subpoena or CID and a timeframe for compliance. In fact, the FTC’s Rules of Practice require parties to meet and confer with FTC staff to identify any issues, problems, or concerns that might affect a party’s ability to comply. As provided in the FTC’s Rules of Practice, based on what we learn from the meet-and-confer session, FTC staff may agree in writing to limit some of the requests or to extend the deadline for compliance. The Rules contemplate some flexibility for staff to modify certain obligations in the demand and the opportunity to meet and confer is an important part of the process. FTC staff expects all subpoena and CID recipients to use this process if they have concerns about their ability to comply in full and on time.

What to expect if you don’t comply

Not everyone wants to cooperate upon receiving a subpoena or CID. When that happens, the FTC’s Office of General Counsel may get involved in order to obtain judicial enforcement of the Commission’s process.

The FTC typically seeks to compel compliance only after the subpoena or CID recipient fails to meet its obligations after allowing a reasonable extension and where cooperation has broken down. In just the last three years, the Commission has filed 12 federal court actions against process recipients that failed to comply fully with the agency’s subpoenas and CIDs. In the 11 actions that have been resolved to date (see list below), either the court enforced the subpoena or CID or we settled with the party after they complied with the requests.

In each of these cases, the respondent either didn’t respond at all, responded with less than full cooperation, or ignored deadlines set by the Commission and its staff. When behavior like this impairs an investigation, the agency has no choice but to seek judicial enforcement.

In the same vein, the Commission expects recipients to comply with Commission orders adjudicating petitions to limit or quash subpoenas and CIDs. If a recipient fails to comply with such an order, the Commission will now direct the Office of General Counsel to commence enforcement proceedings within 30 days of the established deadline. Subpoena and CID recipients should thus comply promptly with such orders or risk enforcement proceeding

Here are a few tips to avoid becoming the next case on OGC’s enforcement action list:

  1. Respond promptly to FTC staff upon receipt of a subpoena or CID.
  2. Take advantage of meet-and-confer opportunities and be forthcoming about any concerns that you have about your ability to comply on time and in full. In meetings or calls, bring people who have knowledge and information about the required documents and information and the efforts necessary to produce them. Provide specific and concrete information – not just guesses.
  3. If you run into problems meeting deadlines, call staff immediately. Keep them apprised so they can work with you. Stay in contact. Don’t let deadlines pass without explanation.
  4. Understand that the FTC and its staff need to move investigations forward expeditiously. Unsupported requests for extended delays may not be granted.
  5. Abide by Commission orders promptly. If you have filed a petition to limit or quash a CID or subpoena and the Commission has ordered some form of compliance, you must do so or risk a potential enforcement action within 30 days of the Commission’s deadline.

Bear in mind that there are many other factors that affect the timing and course of an FTC investigation. Delaying compliance with a CID or subpoena in hopes that you won’t have to comply at all rarely works, and most often results in follow up from the OGC.


Recent enforcement actions

FTC v. Tracers Info. Specialists, Inc., Case No. 8:16-MC-18TGW) (M.D. Fla. filed Feb. 12, 2016) (enforcing CID)

FTC v. General LLC, et al., Case No. 3:16-cv-00136-LRH-VPC (D. Nev. filed Mar. 9, 2016) (enforcing CIDs)

FTC v. AFR Financial LLC, Case No. 3:16-mc-45-J-34JRK (M.D. Fla. filed July 29, 2016) (enforcing CIDs)

FTC v. Lexium Int’l, LLC, et al., Case No. 2:16-mc-00026-JES-CM (M.D. Fla. filed Sept. 16, 2016) (enforcing CIDs)

FTC v. IT Media, Inc., Case No. 2:16-cv-09483 (C.D. Cal. filed Dec. 22, 2016) (enforcing CIDs)

FTC v. Infante, Case No. 4:17-mc-00008-CAB (N.D. Ohio filed Feb. 7, 2017) (settled upon compliance)

FTC v. Humana, Inc., Case No. 1:17-mc-01465-ESH (D.D.C. filed June 19, 2017) (settled upon compliance)

FTC v. Redwood Scientific Technologies, Inc., Case No. 2:17-cv-07921-SJO-PLA (C.D. Cal. filed Oct. 30, 2017) (enforcing CID)

FTC v. Donor Relations, LLC, et al., Case No. 2:18-cv-00183-GMN-CWH (D. Nev. filed Feb. 1, 2018) (enforcing CIDs)

FTC v. Bartoli, Case No. 6:18-mc-00027-PGB-GJK (M.D. Fla. Apr. 16, 2018) (enforcing CID)

FTC v. Fully Accountable, LLC, Case No. 5:18-mc-00054-SL (N.D. Ohio filed June 8, 2018) (enforcing CID)

FTC v. Swain, et al., Case No. 2:18mc20 (E.D. Va. July 19, 2018) (settled upon compliance)

Source: www.ftc.gov