Civil Investigative Demands (CIDs) have long been a powerful tool in the government arsenal to investigate civil wrongdoing. The power to issue a CID is derived from statute. Both federal and state agencies with statutory authority to issue CIDs can and do use them to seek a broad array of information in furtherance of an investigation. Agencies have historically enjoyed wide ranging freedom in exercising their discovery power through CIDs, and courts have generally shown agencies broad deference in how they use this power. For example, agencies generally can use CIDs to investigate simple suspicions that the law is being violated, do not need concrete proof of a violation to issue a CID, and can use CIDs to seek information from third-parties who might have relevant information to the inquiry, even when their activities do not directly fall under the mandate of the agency. Two recent circuit cases demonstrate that this powerful tool does have limits, and provide instruction on how recipients of a CID can assess their options regarding compliance with the often broad requests contained in a CID.

On Sept. 6, 2018, the Fifth Circuit refused to enforce a CID in CFPB v. Source for Public Data, LP, 2018 WL 4258966 (5th Cir. 2018) (CFPB v. Public Data). The decision was in line with the D.C. Circuit’s April 21, 2017 opinion which similarly refused to enforce a CID in CFPB v. Accrediting Council for Independent Colleges and Schools, 854 F.3d 683 (D.C. Circ. 2017) (CFPB v. ACICS). Both decisions illustrate that the government’s failure strictly to follow the notification requirements contained in the statutory schemes authorizing the issuance of CIDs can provide a basis for successfully challenging a CID.

‘CFPB v. Public Data’