Responding to an Inv ...

Responding to an Investigative Subpoena Duces Tecum: Important First Steps for the Corporate Client

January 31, 2023 | by Jim Letten

For those of us in the practice who are former (in some cases previously career) prosecutors, we sometimes have to fight the inclination to take for granted some basic – and even critical – steps which companies must take upon receiving that grand jury or OIG subpoena for the production of records. They’re all relatively simple and logical—but not necessarily obvious.

First, regarding companies’ responses to SDTs issued by investigations bodies, I find myself compelled to share some of those previously referenced observations and suggestions, born of some 30 years of experience within the US Department of Justice, which are in my humble opinion, important if not altogether essential.

The critical question for most companies is never whether your company will be served with a subpoena duces tecum (as opposed to witness testimony)—but when and under what circumstances will it take place.

Consistent with the laws of corporate/legal physics: There are (virtually) no subpoenas duces tecum (SDTs) served upon companies which are hyper-focused or narrow, requiring little search effort, time, or extensive privilege screening.

In my experience, (save for rare exceptions) they tend to be massive in scope, carefully drafted to ensure (understandably) that nothing relevant escapes production which might be probative in an investigation. That is, the vast majority of SDTs (especially federal), served on companies, are extremely broad, normally requiring the production to the government of literally every type of document, invoice, business record, piece of correspondence (both traditional hardcopy and electronic of all kinds), and data relating in any way to a specific subject company, transaction, series of transactions or events—very often over covering long periods of time.  

This opening rule of thumb may appear unnecessarily logical—but in my experience is unfortunately not the case:

  • Immediately (not in a day or week) upon receiving any subpoena, and especially a subpoena duces tecum or summons for records from either state or federal authorities, the recipient in a company needs to notify without delay in-house counsel or, in the absence thereof, outside counsel and provide the document to them.

Every SDT has a return date specifying the deadline by which the subpoenaed records must be turned over to the investigating department or agency. Most often, these are grand jury subpoenas which, on their face, require the company to turn over records to a sitting grand jury.

If you’re fortunate, the SDT has attached to it a detailed instruction protocol, along with an authentication form to be filled out and executed by an authorized custodian of records for the company which will presumptively allow your client to produce internal records to the investigating agency (generally electronically) without having to actually appear before the grand jury for authentication purposes. Any delay in providing the SDT to your counsel in order to enable them to analyze it and communicate with the issuing government office, can be at best counterproductive and earn your company representative a trip to the grand jury.

Therefore, immediately upon providing the SDT to your legal counsel, they will need your cooperation in setting up a thorough, accurate briefing to you of all relevant facts known about the transaction(s), company or individuals who are referenced or appear to be the subject of the SDT. In the event that the SDT was not preceded by a visit from government investigators seeking to conduct interviews with company personnel (which is often the case, even where the company receiving the SDT is not a subject or target of the investigation), you and your legal counsel will need to determine to the extent possible whether the company or any individuals in it are the subject(s) or target(s) of any criminal or regulatory investigation.

The next step is one in which legal counsel with prior criminal prosecution experience will more often than not do without delay: Make voice contact with either the Assistant US Attorney, state prosecutor or investigator who is has issued the subpoena or is who is identified as the point of contact to receive the subpoenaed records. This will help determine immediately the status of the company receiving the subpoena (e. g., target or subject), and just as importantly, will permit your counsel to do a couple of things which are extremely important to your company’s welfare and its ability to comply with the subpoena without calls, difficulties, or negative results:

  • Personally confirm receipt of the subpoena and advise investigator/prosecutor that the client company has immediately begun taking steps to ensure no destruction or alteration of documents and has begun the process of collecting appropriate data for turnover;
  • Advise the issuing agency that because of the extraordinary breadth of the subpoena, and to permit the company to efficiently and thoroughly retrieve the records sought, and simultaneously to produce as quickly as possible the relevant records which the government is actually looking for—you are requesting an extension of the production deadline, thereby allowing the company to effect “rolling” or tiered production of records in stages as they are gathered and prepared for disclosure;
  • Ask the prosecutor/investigator to provide any indication of the records, communications, or types of data he/she is particularly interested in…in order to assist the company in swiftly mining and producing data which is helpful to the government. It’s worth noting that even though most SDTs are, as we discussed, extremely broad—more often than not resulting in sometimes hundreds of thousands of documents and pieces of data)— a huge dump of information and data on the government can make its work more difficult.  Therefore, establishing a rapport with the prosecutor/investigator (in those instances in which your company is not a subject or target of an investigation) and establishing a productive, compliant, cooperative dynamic with the government — can in most cases earn reciprocal courtesies from the government which will benefit your client.

Prior to the actual turnover of any documents or records which may contain privileged communications, such records must be immediately identified, segregated and screened for privilege protection, and prior to turnover, cleared with counsel and scrupulously compartmentalized and committed to a privilege log.

Thereafter, your legal counsel should additionally ensure that any contact with any employees or officers of the company needs to be made through legal counsel, who will in turn assist in making witnesses available.

As part of the early discussion between legal counsel and the issuing government agency, (even if the method of document production is set forth in the subpoena or an attachment), your legal counsel should discuss the preferred, practical means of document turnover—particularly in instances in which any protected or sensitive information (e.g., PII, medical, IP, research, trade secrets, national security, HIPPA or other) is stored and transmitted, in order to ensure its security and protection during the transmission process. We have seen this methodology run the entire spectrum from emailing links and attachments with which are password-protected, to hand delivery of hard records directly to investigators, to delivery of password-protected/encrypted thumb drives, etc.

These observations and suggestions barely scratch the surface of critical considerations which are absolutely necessary as fundamental procedures to implement at the moment a company receives a subpoena duces tecum of any kind. As stated, swift and timely attention and response can prevent unnecessary and potentially careless record loss and destruction, as well as permit your legal counsel to forge a practical, workable protocol for the search and production of records which will not overburden the company. It can additionally help you and the client company to learn additional information—either directly or by deduction through reasoning via the government’s providing details about what they’re looking for—which can measurably assist the company to understand the nature and scope of the investigation more clearly.

Just as importantly, swift action and immediate contact with the government by counsel can ensure that the investigating government office sees the company as a good corporate citizen, which can in some cases yield such benefits as securing interest, assistance and cooperation of the government in helping the company seek and achieve restitution in the event of the company’s victimization; and can further ensure that the government sees the company in a favorable light.

This can be especially important in those cases involving Inspector General (OIG) audits and investigations. While prosecutors have the power to charge criminal offenses, they are universally precluded from issuing any reports—critical or otherwise—about their discoveries and findings in the course of criminal investigations. Not so with an Inspector General. An Inspector General’s office can in certain instances issue a public report which can be very critical of transactions, contracts, projects and companies themselves—as well as their intended entities of interest, those being actual governmental subdivisions, departments, agencies and individuals. Through legal counsel’s swift response and cooperation, resulting in an OIG investigation or audit relying on your client’s (and your) complete and timely production of records and evidence in response to subpoenas; coupled with a cooperative attitude displayed through counsel; you can profoundly affect how your company is not only viewed but also how it is treated in such reports—potentially affecting the company’s reputation, viability and ability to do business in the public arena.