I’m Gary Nissenbaum.

Welcome to another edition of Laying Down the Nissen-law, a podcast in which we seek to do a deep dive into the pressing issues confronting businesses, both large and small, that seek to protect themselves from legal pitfalls.

Please keep in mind that this podcast is not a substitute for legal advice. Consult an attorney for any specific situations that require representation.

And now…on to the Nissen-law…

What to Do When You’re Served with An Administrative Subpoena

You were just served with an administrative subpoena. What do you do? Well, the first thing you do is you determine what agency served you with a subpoena. Generally speaking, if you look at the first page, and you look at the top, you will see that there is an actual agency that is issuing that subpoena. Remember, it is not a court. This is not a judicial subpoena. It is not something that you see on TV, where someone’s involved in a criminal or civil trial and they just were served with a subpoena by a process server or sheriff or things like that.

This is different. This is where there’s a document that you have in your hand that has the name of an agency that is normally doing one of two things: first, it’s investigating you, your business, or someone else, and you or your business was involved in the facts that were being investigated; or there’s a hearing going on. Remember, this hearing is not in a court of law. This is a hearing before an agency.

An Administrative Subpoena Is Not the Same as a Judicial Subpoena

It is called an administrative law hearing. So now you have this document in your hand. You’ve never seen anything like it before. You didn’t even know that these agencies issued subpoenas. What do you do? Well, there are some questions that we’re normally asked when our clients receive these subpoenas and I want to go through those questions and give you some level of direction on—not so much what the answer is in your particular instance, because everything is different, but what issues are presented and what questions you should be asking.

So let’s start with the first one that we get all the time, which is, is an administrative subpoena from an administrative agency as enforceable, having the same legal effect, as a subpoena issued in a lawsuit? That’s an interesting question. The difference in enforceability is actually not as great as you would think. One would assume what this means is that if an administrative agency is serving a subpoena—this means an agency from, let’s say on a state level, the governor’s agency that enforces motor vehicle laws or enforces agricultural laws or enforces workplace rules or enforces tax laws.

“Is an administrative subpoena from an administrative agency as enforceable… as a subpoena issued in a lawsuit?”

On the federal level, it might be an agency such as the Environmental Protection Agency or it might be an agency that relates to social security and healthcare. Basically, any of the agencies of the executive branch of government. The question is, if you don’t comply with that subpoena, what do they do to you? Well, what they can do is they usually have their own enforcement mechanisms to compel compliance, which quite quickly move into the judicial arena by virtue of opening up a docket number and actually perhaps, if the state law provides for this, if the federal law provides for this, enforcing the agency subpoena through a lawsuit.

So the idea that because it’s just an executive agency serving you with this subpoena, it’s not going to have the same force and effect, doesn’t really work well because it kind of ends up having that force and effect through the back door because they can use—normally—a judicial enforcement mechanism to make sure that you’re compliant. Second question is, what does an administrative agency investigation look like and what are they asking you for?

What to Expect in an Administrative Agency Investigation

Well, that’s a legitimate point, which is, what is this thing all about and what’s the point of it in the prehearing investigatory stage? Well, first of all, it is likely that that administrative subpoena will involve the production of documents. In this day and age, production of documents also means digital documents such as email, such as texts, that sort of thing. So it’s not just documents in the sense of paper anymore.

In addition, you are being compelled to provide testimony in most cases. So how do you put those two things together? Well, you could have a situation in which you are being compelled to appear and testify about the documents that you are also being compelled to produce. The question is, are you now testifying in a hearing? The answer’s no, because this is prehearing. You are testifying under oath in a deposition, or something that may not be called a deposition but essentially would be the same thing. Meaning, a statement before there’s an actual hearing in which your testimony is being taken down in a transcript. It is under oath and essentially, you are bound to be telling the truth and the documents that you’re producing, you must produce in a complete manner, subject to legal limitations and objections and that sort of thing.

Next question. Let’s say this is a subpoena for an administrative hearing. What do I expect in an administrative hearing? And the answer is, most of these administrative hearings have the feel of a trial. They are not in a courthouse, they are generally on the grounds of the administrative agency or some other space that they’ve rented out for this purpose. But they have the feel of a trial. There’s a hearing officer. Usually, they’re called an administrative law judge, and they may or may not be a lawyer, but they understand the regulations and usually the rules of evidence are a guide, even though they may not be completely enforceable, and they’re hearing testimony, making rulings, and then ultimately making decisions.

Normally, there are two sides. There’s the investigator, the one who is, in a sense, prosecuting the case or presenting the case; and then there’s the person who’s defending himself or herself and they usually can have a lawyer there for them to help them, as well. So there normally is testimony, there’s normally documents being produced, there might be exhibits that are being used, pictures, maps, surveys, all sorts of things to explain what went on and for the administrative law judge to make a ruling. But again, the feel of this feels very much like a trial situation in a court of law, even though it is an administrative hearing.

“There might be a conflict of interest.”

Next question. If the person who is investigating me works for the same agency that is going to be hearing the case against me, isn’t there a conflict of interest? That’s a good question. And the answer to that is twofold. Number one, yeah. There might be a conflict of interest. And it might be that you can make the case that information was shared between the investigator and the hearing officer or the administrative law judge that should not have been shared, that the administrative law judge did not have these zones of demarcation so that they were shut off from the investigation until it was presented to them in a hearing… all sorts of things like that.

Even the layout of their offices, where one might be sharing a filing system with the other, or sharing an administrative assistant with the other… there are all sorts of arguments—legal arguments—that can be made about that. Now having said that, the level of due process that is necessary for an executive agency is usually less than that that would be expected for a court of law. Definitely on the federal level, usually on the state level, and the question there is, even though it’s a lesser standard of due process, there is still a level of due process that has to be complied with.

Was it complied with? They may give you a defense. The second thing is that, remember that although this is not a criminal trial, that we’re not talking about a prosecutor who is seeking to find that someone—or prove—that someone actually committed a crime, nevertheless, the testimony under oath could lead to that. So you could have a situation in which you’re testifying under oath in an administrative hearing about something that has nothing to do with the criminal law, but something that you say, something you testify to could conceivably inculpate you in a crime. Or at least begin a criminal investigation. And so you have to be ready to assert your Fifth Amendment privilege against self-incrimination, even though you’re testifying in an administrative hearing and there’s no prosecutor involved and no criminal case has been opened.

Testimony in an Administrative Hearing Can Be Used Against You in a Criminal Proceeding

In other words, you need to preserve your constitutional rights just in case anything you’re testifying about could be used against you to initiate a criminal proceeding. Where is the line? What is it that you can testify to with reasonable certainty that you’re not going to end up inculpating yourself in a crime? And the answer is, that is why you need an attorney to be with you. Because things that might seem innocuous may not be. And it’s important that you have someone who understands these principles guiding you as to when you may want to assert your Fifth Amendment privilege.

And the thing that I also want to stress, which is another question we’re asked a lot is, is it unusual for businesses to be given these administrative subpoenas and be involved in administrative investigations and hearings and should I feel that I can handle it on my own? And the answer to that is, it really depends on what the facts are, what the investigation is about, and where this is all headed. What I can tell you is that what the investigation seems to be about may very well not be what it’s about, that the idea that the investigator is telling you, “Don’t worry. We’re just looking at this one thing. It has nothing to do with you. You’re not the target.”

While that may be accurate at the time it’s being said, a month later, as this unfolds, it may no longer be accurate. So the point is, that you need to have, I guess we’d call it a healthy skepticism about whether you really can control this process, understand where the agency is going sufficiently so that you know that you’re not going to end up as the target of the investigation. What you need to do is, you need to be sure that you are careful not to assume that you know where that investigation is going.

And on that basis, you need to shy away from the idea that because you’re someone who’s always in control in your business dealings and you’re used to sort of being the boss and understanding what’s going on in your business that you have that level of certainty and control with this agency investigation. You have to assume that what’s going to be a problem is what you don’t know. Or what’s going to blindside you.

An example would be that the executive agency investigator may tell you, “Oh, you’re not the target here. Don’t worry. There’s no issue involving you. I just need some information and some documents.” All of that may be true at the time they say it. A month later, as that investigation unfolds, it may no longer be accurate. And you’re already committed. You’ve already produced the documents without objection. You’ve already given the statements without objection.

And now what do you do? So the best advice I can give you is to obtain legal advice at the earliest possible point—before anything is set in stone, before any statements are given, and before anything is produced. That way you can have more of an understanding of the ramifications of what you’re doing and this healthy skepticism can be protective because it can be turned into a legal defense that will guide and winnow down that production and those statements.

This is Gary Nissenbaum. You have been listening to Laying Down the Nissen-law. Thank you.

Legal disclaimer: The information contained in this podcast does not constitute legal advice, nor a legal opinion. It should not be relied upon in any specific situation. The reader is urged to consult an attorney of their choosing with respect to any legal question they may have.