FTC, Subpoenas & Civil Investigative Demands

FTC

Subpoenas

Civil Investigative Demands (CIDs)

Scope and Timeframe

Meet-and-Confer Session

FTC’s Rules of Practice

Petitions to Limit Subpoenas and CIDs

Petitions to Quash subpoenas and CIDs

By Burke Kappler, Attorney, FTC Office of General Counsel
March 6, 2019

Republication

https://www.ftc.gov/news-events/blogs/competition-matters/2019/03/ftc-takes-its-subpoenas-cids-seriously-you-should-too?utm_source=govdelivery

The FTC’s ability to obtain information through subpoenas and civil investigative demands (CIDs) is critical to the task of investigating potential law violations.

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.

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.

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.

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 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 an enforcement proceeding.

Republic of Argentina v. NML Capital, Ltd., Docket 12-842

Immunity: of a foreign state, postjudgment immunity, discovery: after petitioner, Republic of Argentina, defaulted on its external debt, respondent, NML Capital, Ltd. (NML), one of Argentina’s bondhold­ers, prevailed in 11 debt-collection actions that it brought against Ar­gentina in the Southern District of New York. In aid of executing the judgments, NML sought discovery of Argentina’s property, serving subpoenas on two nonparty banks for records relating to Argentina’s global financial transactions.

Held: No provision in the FSIA (Foreign Sovereign Immunities Act of 1976)  immunizes a foreign-sovereign judg­ment debtor from postjudgment discovery of information concerning its extraterritorial assets.

This Court assumes without deciding that, in the ordinary case, a district court would have the discretion under Federal Rule of Civil Procedure 69(a)(2) to permit discovery of third-party information bearing on a judgment debtor’s extraterritorial assets.

The FSIA replaced an executive-driven, factor-intensive, loosely common-law-based immunity regime with “a comprehensive frame­work for resolving any claim of sovereign immunity.” Republic of Austria v. Altmann, 541 U. S. 677, 699. Henceforth, any sort of im­munity defense made by a foreign sovereign in an American court must stand or fall on the Act’s text. The Act confers on foreign states two kinds of immunity. The first, jurisdictional immunity (28 U. S. C. §1604), was waived here. The second, execution immunity, generally shields “property in the United States of a foreign state” from attachment, arrest, and execution. §§1609, 1610. See also §1611(a), (b)(1), (b)(2). The Act has no third provision forbidding or limiting discovery in aid of execution of a foreign-sovereign judgment debtor’s assets. Far from containing the “plain statement” necessary to preclude application of federal discovery rules, Société Nationale Industrielle Aérospatiale v. United States Dist. Court for Southern Dist. of Iowa, 482 U. S. 522, 539, the Act says not a word about postjudgment discovery in aid of execution.

Argentina’s arguments are unavailing. Even if Argentina were correct that §1609 execution immunity implies coextensive discovery ­in-aid-of-execution immunity, the latter would not shield from dis­covery a foreign sovereign’s extraterritorial assets, since the text of §1609 immunizes only foreign-state property “in the United States.” The prospect that NML’s general request for information about Ar­gentina’s worldwide assets may turn up information about property that Argentina regards as immune does not mean that NML cannot pursue discovery of it (U.S.S.Ct., 16.06.2014, Republic of Argentina v. NML Capital, Ltd., Docket 12-842, J. Scalia).

Immunité d’un état étranger, de manière générale et après jugement condamnatoire en particulier, au stade de l’exécution forcée du jugement : un détenteur de bons du trésor d’un état étranger obtient gain de cause au fond devant un Tribunal fédéral de district de l’état de New York. Comme aide à l’exécution des jugements, le créancier dépose une requête en discovery portant sur les biens de l’état défaillant, en faisant délivrer des ordres de production, à des banques tierces, de dossiers liés aux transactions financières globales de l’état étranger.

La Cour juge qu’aucune disposition de la loi fédérale de 1976 sur l’immunité des états étrangers ne prohibe un créancier qui a obtenu gain de cause au fond de déposer une requête en discovery, portant sur des biens situés hors du territoire des Etats-Unis, dans le cadre de l’exécution du jugement condamnatoire rendu en défaveur de l’état étranger.

La Cour assume, sans toutefois en juger, que dans un cas ordinaire, une cour de district fédérale peut autoriser, de manière discrétionnaire, en application de la Règle 69(a)(2) de procédure civile fédérale, en exécution d’un jugement, la discovery d’informations en mains de tiers portant sur les biens du débiteur, biens situés hors du territoire des Etats-Unis.

La loi de 1976 précitée constitue un cadre compréhensif et exhaustif pour résoudre toutes les défenses basées sur l’invocation de l’immunité. Il se substitue à la Common law antérieure régissant cette matière. La loi confère aux états étrangers deux types d’immunité. En l’espèce, l’état étranger a renoncé à se prévaloir de la première, l’immunité de juridiction. La seconde, l’immunité d’exécution, protège de toutes formes de saisie la propriété de l’état étranger sur sol des Etats-Unis. La loi ne contient pas de troisième disposition interdisant ou limitant la discovery portant sur des biens et intervenant dans l’exécution d’un jugement perdu par un état étranger.