The Federal Trade Commission (FTC) uses its subpoena power to investigate a broad range of civil and criminal offenses. Our federal defense lawyers represent companies nationwide in FTC investigations.
The Federal Trade Commission (FTC) is the federal agency tasked with protecting American consumers and promoting competition in the U.S. economy. Within this extremely broad ambit, the FTC investigates companies for a variety of statutory and regulatory violations, including those pertaining to antitrust compliance, unfair trade practices, and consumer fraud. As the agency’s website explains:
“We conduct investigations [and] sue companies . . . that violate the law. . . . We collect complaints about hundreds of issues from data security and deceptive advertising to identity theft and Do Not Call violations, and make them available to law enforcement agencies worldwide. . . .
“By enforcing antitrust laws, the FTC helps ensure that our markets are open and free. The FTC will challenge anticompetitive mergers and business practices that could harm consumers. . . . We monitor business practices, review potential mergers, and challenge them when appropriate to ensure that the market works according to consumer preferences, not illegal practices.”
In order to execute its law enforcement duties, the FTC conducts targeted investigations during which it gathers evidence through both informal and formal means. In formal investigations, the FTC relies on its subpoena power to compel company owners, executives, records custodians, and others to provide testimony, documentation, and recorded communications. The FTC’s subpoena power is substantial, and individuals and companies that fail to comply with an FTC subpoena can face penalties up to and including federal prosecution for criminal contempt.
Federal Defense Counsel for FTC Investigations Nationwide
At the FTC subpoena defense law firm of Oberheiden P.C., we defend companies in FTC investigations nationwide. Our federal defense lawyers are highly experienced in high-stakes federal matters, and several of our lawyers previously handled civil and criminal prosecutions involving antitrust violations, consumer fraud, and other related offenses as prosecutors at the U.S. Department of Justice (DOJ). We also have former investigative agents who assist in crafting our clients’ defense strategies, and who offer unparalleled insights for responding effectively to FTC subpoenas, search warrants, and other investigative demands.
Upon receiving an FTC subpoena, your efforts to respond to the subpoena need to begin immediately. This is true whether the subpoena requests testimony (a subpoena ad testificandum), documents (a subpoena duces tecum), or both. This does not mean responding to the FTC immediately—at this point all communications with the FTC should go through your company’s federal defense counsel—but rather beginning to assess your company’s compliance burden and formulating a plan for complying while also preserving the attorney-client privilege and all other pertinent protections.
What is the Process for Complying with an FTC Subpoena?
When we represent companies during FTC investigations, we take a comprehensive approach that focuses not only on responding to our client’s subpoena in a timely and compliant manner, but also ensuring that the consequences our client faces as a result of the investigation are no greater than necessary. With the potential for both civil and criminal penalties under a multitude of different federal statutes, companies targeted by the FTC face substantial risks, and they must execute defense strategies that are proportional to the risks involved. We have an extensive track record in federal investigations and federal law enforcement litigation, and we rely on our senior attorneys’ and former federal agents’ extensive experience to pursue defense strategies that are designed to protect our clients to the fullest extent possible.
Of course, receiving an FTC subpoena does not necessarily mean that your company is the target of the FTC’s investigation. The FTC routinely subpoenas witnesses as well, and it could be the case that the FTC is simply interested in learning what you know about another company’s alleged unlawful activities. However, even if your company is not currently being targeted, you still need to be careful to ensure that you do not disclose more information than is strictly required, as doing so could potentially cause the FTC to expand the scope of its investigation and target your company based on the information provided.
With all of this in mind, when we represent companies in FTC investigations, our process involves:
- Determining our client’s role in the FTC’s investigation – We will seek to determine whether you (or your company) is being subpoenaed as a potential witness or a possible target, and we will structure our representation accordingly.
- Assessing the allegations that are being targeted – We will seek to determine if the allegations under investigation are civil or criminal in nature, and whether they involve allegations of antitrust violations, conspiracy to commit consumer fraud, or other offenses that could potentially implicate multiple unrelated parties.
- Assessing the subpoena itself – We will review the subpoena to determine the amount of effort that will be required in order to submit a compliant response, and to determine if there are any grounds for challenging the subpoena’s enforceability in whole or in part.
- Developing a subpoena response strategy – Once we have a clear understanding of what the FTC’s subpoena requires, then we can work with appropriate personnel within your company to craft an appropriate response.
- Developing and executing an overall defense strategy – We will use the information we obtain in the preliminary phases of our representation to develop and execute a defense strategy that targets the specific allegations at issue and takes into account your company’s stature in the FTC’s inquiry.
Is it Possible to Challenge an FTC Subpoena?
FTC subpoenas tend to be extraordinarily broad, and in many cases fully complying with an FTC subpoena can present a substantial burden. Additionally, in many cases there will substantive concerns that make fully complying with an FTC subpoena undesirable. Under the FTC’s Rules, “a party may raise objections to a subpoena or a CID by filing a petition to limit or quash.” All such petitions are submitted to the FTC itself, and the FTC has final decision-making authority as to the enforceability of its subpoenas.
Additionally, under 16 C.F.R. Section 2.10, companies must engage legal counsel to confer with FTC staff prior to filing a petition to limit or quash: “Each petition filed . . . shall be accompanied by a signed separate statement representing that counsel for the petitioner has conferred with Commission staff . . . in an effort in good faith to resolve by agreement the issues raised by the petition and has been unable to reach such an agreement.” Section 2.10 also requires that the petition be filed, “within 20 days after service of the Commission compulsory process or, if the return date is less than 20 days after service, prior to the return date,” and this deadline must be met regardless of the amount of time that is spent attempting to confer with FTC personnel.
Under the FTC’s Rules, grounds for seeking to limit or quash a subpoena are limited to:
- The “protected status” of information requested in the subpoena (i.e. protection under the attorney-client privilege or the privilege against self-incrimination);
- Factual objections to the basis for the FTC’s subpoena; and,
- Legal objects to the validity of the FTC’s subpoena, or any part thereof.
What are the Consequences of Failing to Comply with an FTC Subpoena?
If a company or individual fails to comply with a subpoena issued by the FTC, the FTC can seek enforcement of the subpoena in federal district court. Upon review, the court can issue an order compelling compliance. Non-compliance following the issuance of a court order can lead to proceedings for contempt—which can potentially be prosecuted as a criminal offense.
In addition to failing to respond to an FTC subpoena, non-compliance in the form of omitting material information can lead to criminal charges as well. Under 18 U.S.C. Section 1001, knowingly and willfully falsifying or covering up material facts in connection with an FTC subpoena carries statutory fines and up to five years of federal imprisonment. As a practical matter, attempting to conceal information (or giving the appearance of attempting to conceal information) can also create significant additional challenges with respect to overcoming the substantive allegations targeted in the FTC’s investigation.
In order to avoid the risks of non-compliance, upon receiving an FTC subpoena, it is imperative to promptly engage experienced federal defense counsel. At Oberheiden P.C., our defense lawyers can address all pertinent concerns on your (and your company’s) behalf, and we can help ensure that your response to the FTC’s subpoena does not trigger additional unwanted inquiries. To learn more about our experience in FTC investigations and other federal law enforcement matters, contact us for a complimentary initial consultation today.
Speak with a FTC Subpoena Defense Lawyer Today for a Free Consultation
For more information about our FTC subpoena defense law firm’s federal defense practice and how we help companies avoid unnecessary consequences after being served with FTC subpoenas, please contact us to schedule an appointment with one of our senior attorneys. You can reach us by phone 24/7 at 888-680-1745, or tell us how we can reach you and one of our attorneys will respond promptly.