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Dr. Nick Oberheiden
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Aaron Wiley
Former State &
Federal Prosecutor

S. Amanda Marshall
Former U.S. Attorney

Bill McMurrey
Former DOJ-Trial Attorney

Lynette Byrd
Former Assistant
U.S. Attorney

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What is a Civil Investigative Demand?

Categories: Criminal Law & Process

Civil Investigative Demand

Federal Defense Attorneys Assisting with Civil Investigative Demands

When federal agencies such as the Department of Justice (DOJ), the Federal Trade Commission (FTC), and the Consumer Financial Protection Bureau (CFPB) initiate investigations targeting health care entities and other companies, they have a variety of tools at their disposal. One of these tools is the civil investigative demand – a unique investigative device that allows these agencies to compel disclosure of voluminous record without initiating the judicial process.

If you or someone within your organization has been served with a civil investigative demand, what do you need to know? What do you need to do? Are you under investigation; and, if so, how can you effectively respond to the investigation in order to avoid facing civil or criminal charges?

10 Key Facts about Federal Civil Investigative Demands

These are important questions, and they do not have easy answers. If you are being forced to confront a civil investigative demand, here are 10 key facts you need to know.

1. Receiving a Civil Investigative Demand Might Mean You Are Under Federal Investigation.

Receiving a civil investigative demand might mean that you are being targeted in a federal investigation. Or, it might not. Federal law enforcement authorities can issue civil investigative demands to any individuals or entities that they have reason to believe might have information pertinent to a federal investigation.

Of course, if you have been contacted by a federal agency such as the DOJ, you cannot simply assume that the investigation is focused on another target. You need to find out why you have received the demand, and you need to tailor your responsive action accordingly.

2. The DOJ, FTC, CFPB, and Other Federal Agencies Have Broad Authority to Compel Disclosure of Information Through Civil Investigative Demands.

The DOJ, FTC, CFPB and other federal agencies can seek far more information through a civil investigative demand than they can through judicial means. While companies can have grounds to challenge the breadth of civil investigative demands under certain circumstances (more on this below), oftentimes, companies will have little choice but to comply. A civil investigative demand will commonly include requests for documents, written answers, and oral testimony – and it is not uncommon for large-scale investigations to request several years’ worth of “potentially relevant” documentation.

Due to the breadth of most civil investigative demands, companies need to be clear on what is and isn’t required to be disclosed. This is a task that is often easier than it sounds. While companies generally should not voluntarily disclose more information than is legally required (except on the advice of counsel), failing to fully comply with a civil investigative demand can have severe consequences as well.

3. Strict Timelines Apply, and Failing to Object to a Civil Investigative Demand Can Result in the Waiver of Your Rights.

Once an individual or organization has been properly served with a civil investigative demand, the clock starts ticking. Strict deadlines apply; and, upon receiving a demand, preparing an appropriate response needs to become the recipient’s top priority. For example, if you receive a civil investigative demand from the CFPB, you will need to prepare the relevant personnel to meet with CFPB attorneys within 10 days. And you only have 20 days within which to decide whether to file a petition to modify or set aside the demand. If you fail to raise certain issues during the initial “meet and confer” process, or if you let the 20-day objection deadline pass, you will likely be deemed to have “waived” your right to challenge the civil investigative demand. Extensions are rare, and companies should not expect leniency if they miss a deadline – no matter how onerous the federal government’s demands may be.

4. If You Have Received a Civil Investigative Demand, You Need to Institute a “Legal Hold.”

Upon receiving a civil investigative demand, one of the recipient’s first steps should be to institute a “legal hold.” This is an internal, company-wide effort to preserve any documents (hardcopy or electronic) that could possibly be responsive to the government’s demand. Record custodians should be advised of the types of records that need to be retained, and all employees should be provided with clear instructions not to delete or destroy any records that may need to be disclosed. The legal hold should cover both day-to-day practices (such as deleting emails and files in the course of business) and automatic or regularly-scheduled purges.

5. “Records” Is a Broader Term than Most People (and Companies) Realize.

When most people think of “records” retention, they think of emails, computer files, and records in paper storage. While these certainly make up the bulk of most companies’ records, when it comes to responding to a civil investigative demand, companies may need to pull additional types of records as well. For example, in a CFPB investigation involving consumer financial transactions, a company may be required to provide copies of recorded phone calls (including calls recorded for “quality assurance” purposes), and potentially even social media communications with current or prospective customers.

6. You Will Need to Assemble a Team in Order to Assemble Your Response.

Responding to a civil investigative demand is a task that necessarily requires a team approach. From executives and managers to IT personnel and subject matter experts, different personnel are likely to have different information that is subject to disclosure. Certain personnel (including in-house counsel) may not even be aware that responsive information exists in certain areas. When federal authorities assert that you have failed to fully comply with their demands for information, ignorance is not an excuse. Complying with a civil investigative demand requires a concerted effort with active participation from all relevant personnel.

7. With the Right Approach, You Can Negotiate with Federal Authorities.

As with most legal issues, a negotiated resolution is often the best way to address an overly-burdensome civil investigative demand. With the right approach, you can negotiate with federal authorities – and knowing both (i) what can be negotiated, and (ii) who has the authority to make decisions at the federal level is critical to achieving a positive outcome.

At Oberheiden, P.C., several of our defense lawyers are former federal government attorneys. We can help you understand what options are – and aren’t – on the table, and we can use our past federal government experience to open up a dialogue with the goal of mitigating your disclosure obligations.

8. Challenging a Civil Investigative Demand is Difficult, and May or May Not Be in Your Best Interests.

Due to the broad authority granted to federal agencies to obtain records and information through civil investigative demands, challenging one of these demands can be an uphill battle. Generally speaking, petitions to challenge civil investigative demands must be filed at the agency level (with the agency issuing the demand), and federal courts typically give deference to agency decisionmakers in such administrative matters. The limited grounds for challenging a civil investigative demand include:

  • Undue burden
  • Requesting irrelevant information
  • Requesting information already within the investigating agency’s possession
  • Abuse of the judicial process

Even if you arguably have grounds to challenge a demand, filing a petition may or may not be in your best interest. Instead – as previously stated – pursuing a negotiated resolution often produces the best results with the least animosity. However, it is important not to simply dismiss challenging your civil investigative demand as an impossibility. Like all other issues pertaining to the demand, this is a matter to discuss with your defense team.

9. A Civil Investigative Demand Is Very Different from a Discovery Request in Civil Litigation.

If you are familiar with routine civil litigation, you may see that responding to a civil investigative demand is a very different prospect than responding to discovery requests in civil litigation. In civil litigation, laws, rules, and regulations place substantially greater limits on the information that can be requested, and litigants generally have far more options for challenging one another’s use (or misuse) of the discovery process.

If you have received a civil investigative demand, as in discovery, you will almost certainly have to provide information and records to the agency that issued the demand. When it comes to objecting to a civil investigative demand, the question is generally which part (if any) of the demand to challenge.

10. Hiring Experienced Legal Representation Is Critical to Protecting Yourself During a Federal Investigation.

With all of these considerations in mind, and with the potential consequences of facing a federal investigation, your first step after receiving a civil investigative demand should be to engage experienced legal counsel. At Oberheiden, P.C., we bring decades of federal government experience to protecting our clients, and every engagement starts with a free and confidential case assessment.

Schedule a Free Case Assessment at Oberheiden, P.C.

To speak with our federal law defense team about your civil investigative demand, we encourage you to contact us immediately. You can reach us 24/7 at (888) 519-4897, or send us your contact information and we will be in touch as soon as possible.

Who Will Handle Your Case

When you hire us, you will not work with paralegals or junior lawyers. Each lawyer in our Health Care Practice Group has handled at least one hundred (100) matters in the health care industry. So, when you call, you can expect a lawyer that immediately connects with your concerns and who brings in a wealth of experience and competence.

Bill C. McMurrey

Bill C.
McMURREY

Dr. Nick Oberheiden

Dr. Nick
OBERHEIDEN

Lynette S. Byrd

Lynette S.
BYRD

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