[co-author: Stephanie Kozol]

On March 1, Illinois Attorney General Kwame Raoul filed suit against Energy Acquisitions Group LLC (EAG), seeking compliance with a Special Assistant Attorneys General’s (SPAAG) investigative subpoena concerning deceptive business practices of the alternative retail energy supplier industry (ARES). AG Raoul strives to bar EAG from conducting business in the state of Illinois — at the very least until EAG complies with the subpoena.

According to the lawsuit, EAG markets and advertises alternative electrical supply services to consumers since Illinois law permits consumers to purchase energy from alternative providers. Illinois launched an investigation into whether ARES businesses engaged in unlawful practices under the Illinois Consumer Fraud and Deceptive Business Practices Act and issued EAG an investigative subpoena to gather information about the ARES industry. The complaint claimed that EAG’s CEO refused to cooperate with the subpoena because EAG would not “open ourselves up to a lawsuit that we are not involved in” and also contested SPAAG’s authority to conduct the investigation. After lengthy communications between the parties, AG Raoul’s office concluded that EAG failed to comply with the subpoena, forcing the office to use its statutory powers to file a lawsuit to: (1) compel compliance with the subpoena; (2) restrain EAG from conducting business in Illinois; (3) revoke or suspend EAG’s corporate charter; and (4) obligate EAG to pay investigative prosecution costs until EAG complies.

Why It Matters

Since companies frequently receive investigative subpoenas from AGs’ offices, it’s important to remember that these subpoenas (also referred to as a civil investigative demands or CIDs) carry the full force and effect of the law — just like subpoenas in criminal or civil litigations. AG Raoul’s lawsuit against EAG serves to remind all companies that ignoring or refusing to comply with an investigative subpoena can result in drastic consequences, including preventing companies from temporarily or permanently conducting business within the state and paying AGs’ legal fees for compelling compliance with the investigative process. A such, properly negotiating these subpoenas to avoid litigation is paramount to minimizing the risk and burden on companies receiving them.