By Chuck Hatfield
The United States House of Representatives Committee on Oversight and Governmental Reform earlier this month subpoenaed Martin Schkreli. Mr. Schkreli has been saddled with the nickname "pharma bro" after hiking the price on a cancer treatment drug from $13.50 a pill to $750 a pill. Mr. Schkreli appeared before the committee, but refused to answer any questions. Last week the United States Senate Homeland and Governmental Affairs Committee passed a resolution to hold Backpage.com in civil contempt for failing to comply with a Congressional subpoena related to sex trafficking. It would be the first civil contempt deliberations by the Senate in more than 20 years. A lawyer for Backpage said the company "welcomes" the contempt citation and looks forward to a court fight.
According to the United States Supreme Court, legislatures have the power to issue subpoenas and compel testimony. But if you are the recipient of a subpoena – from Congress or a state legislature – you have certain protections.
First, Congress is required to refer a contempt citation to the U.S. Attorney and the courts will review the matter for compliance with due process requirements. State legislatures have various procedures, but regardless of the procedures in place, the United States Supreme Court has made clear that "there is no general authority to expose the private affairs of individuals without justification in terms of the functions of the [legislature]. . . . Investigations conducted solely for the personal aggrandizement of the investigators or to 'punish' those investigated are indefensible." In other words, the legislature is not allowed to simply subpoena whoever and whatever it wants. The Courts will limit legislative subpoena authority. Most courts have ruled that the issue cannot be addressed until the contempt stage, but there is a good argument that a challenge to a legislative subpoena is available as soon as the subpoena is issued.
Further, if you receive a legislative subpoena, the body must specifically inform you of the nature of the legislative inquiry and how the information is relevant to that inquiry. The inquiry must be justified by a "specific legislative need." The courts will require the same level of specificity about the investigation as would be required in a criminal case. The legislative body will have the burden of showing that there is a true and legitimate reason to have the information or testimony they are requesting. Other laws, such as health privacy laws, laws concerning privileged communication, or laws concerning proprietary information may also prohibit disclosure of subpoenaed materials to a public committee.
If you receive a legislative subpoena, treat it like any other subpoena you might receive from a court or administrative agency. Call the legislative counsel or person issuing the subpoena and attempt to negotiate proper compliance while protecting any privacy or commercial interests. If an agreement cannot be reached, object to the subpoena within the time specified. If the legislative body does not honor the objections, court intervention is a real option.
Legislative subpoena authority is not often used, and recent events may further clarify the law in this area. But for now, the courts will uphold legislative authority to compel testimony while holding the legislature to a very strict standard for justifying their request.
For more information about the protections you have with a legislative subpoena, contact Chuck Hatfield or your usual Stinson Leonard Street contact.