Civil investigative demands (“CIDs”) are powerful tools used by state and federal agencies to gather information that will be used to investigate and prosecute individuals, corporations, physicians, and executives, etc. for violations of the law. The individual or entity who receives the CID could be either a witness or target of the investigation, though targets face a greater risk of significant monetary penalties, exclusion of benefits or privileges, loss of license, inability to work with the government in the future, reputational harm, and more. Hiring a civil investigations defense attorney can help individuals and entities navigate the demands of a CID, respond to its requirements, and reduce any unnecessary exposure liability.
II. What is a Civil Investigative Demand (“CID”)?
A civil investigative demand (“CID”) is a discovery tool relied upon to obtain information relevant to a federal investigation. It functions like a subpoena in that it compels the production of documents, testimony, or other written answers so that the federal agency seeking the information can determine if there was a violation of the law. Specifically, the CID is issued to any person or entity that the agency believes is in possession or control of information material to the relevant investigation.
CIDs are often described as having little protection for defendants; nevertheless, failure to comply with the mandates of a CID can have devastating consequences for the recipient such as contempt charges. CIDs are issued before the agency initiates a formal complaint against the defendant. Absent the presence of privilege or request for judicial narrowing, its requirements must be satisfied. After the litigation process begins, the government can then rely only on the usual discovery techniques.
“Receiving a CID does not necessarily mean that you are under investigation by the issuing federal agency. While federal agencies often issue CIDs to targets of the investigations, they can also be issued to third parties or any other individuals or entities who are likely to have relevant information regarding the subject of the investigation.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.
III. What Items can the CID Compel?
CIDs are invasive orders that can compel a broad range of materials. Examples of items that are compelled include documents, sworn testimony, or interrogatory responses. Examples of documents typically sought include paper files, emails, written correspondences, text messages, voice mails, social media posts, etc.
As can be imagined, these orders are lengthy and time-consuming. The issuing agencies have broad authority to compel disclosure of such information and documents. The disclosure can sometimes span several years and involve hundreds of documents. Despite this, the individual or entity receiving the CID must comply regardless of the expected and actual burden.
IV. What to Do After Receiving A CID
Receiving a CID can be a daunting experience. The demand will typically be asking for the production of multiple documents, testimony, and other forms of information. It is important to remember to stay calm and to keep in mind that receiving a CID does not automatically mean that you are the target of the investigation. It is equally possible that you are only a witness who may possess or be in custody of information that is relevant to the federal agency’s investigation into the actual target.
Nevertheless, compliance with the CID is required. Therefore, the best course of action that can be taken upon the receipt of a CID is to hire an experienced CID defense attorney. An attorney can assess the scope of the CID and determine what the federal agency is requesting. An attorney can also help you plan for the production of the documents or preparation for testimony. The recipient of the CID must adhere to the deadlines. Sometimes, however, the time and effort needed to comply with the orders in the CID are quite extensive. An attorney can gauge the time and effort needed in order for the recipient to meet all requirements by the deadlines.
Further, an attorney will advise the recipient to halt all routine procedures that would destroy documents within the business. This is important because some of these documents may be related to the investigation and further destruction is prohibited. All relevant documents must be preserved and maintained. An attorney can also try to narrow the scope of the CID request. Often, CID requests are overly broad and demand a plethora of information. By working to narrow and further refine the focus of the CID request, the attorney can make the request more manageable for the CID recipient and, overall, more efficient for all parties.
V. Can A CID Be Challenged?
It is possible for a CID to be challenged in very limited circumstances. The CID defense attorneys at Oberheiden, P.C. note that, at the federal level, a CID can be challenged only on four grounds: (1) the CID imposes an undue burden on the recipient based on the scope and nature of the investigation as well as the extent of information requested; (2) the CID demands the production of irrelevant material to the agency’s investigation; (3) the CID seeks production of information for which the federal agency is already in possession; (4) the agency has engaged in abuse of the judicial process.
The purpose of challenging a CID is to narrow the scope and extent of the requested items to make it more manageable and understandable for the recipient as well as make the production more timely and less burdensome for both parties. However, challenging a CID will rarely eliminate the need to comply with its terms altogether.
VI. What Happens After the CID Is Submitted?
After the party fully complies with the document requests, testimony, and other demands of the CID, the next step is to wait. The agency staff will then review the information submitted and determine if further action is warranted. Depending on the extent, nature, and scope of information requested and sent to the federal agency, this review process can take some time.
After the review process is complete, the agency has several courses of action to take. For instance, the staff may decide to close the investigation where the evidence presented does not lead the staff to conclude that further investigation or prosecution is necessary. In other instances, the staff make recommend that one or more parties be charged with violations of federal law. In these latter cases, the agency will typically contact the party about negotiating a settlement. If settlement negotiations cannot be reached, then the agency may file a lawsuit.
Receiving a CID request from a federal agency can be a worrisome time. The scope of the CID is usually very extensive, demanding a mound of documents—electronic and paper—or testimony. The information requested can sometimes span several years. Do not make the mistake of thinking that this request will go away on its own. The consequences of failing to comply with a CID request can be disastrous on your case.
In all cases, an individual or entity that receives a CID should contact a civil investigations defense attorney who is experienced in responding to CID requests and negotiating with federal agencies. An attorney can advise you on what to expect from your document and testimony requests, communicate with federal agencies on your behalf, demand clarification for overly broad or vague requests, and rigorously defend you in settlement negotiations or lawsuits.