Argument Against Subpoena to Produce Documents
Under Arizona Revised Statutes Annotated ("A.R.S.") section 44-1822 (1994), the Commission "may make such public or private investigations within or outside of this state as the commission deems necessary to determine whether any person has violated or is about to violate any provisions of Chapter 12:
Sales of Securities . . ."; this statute allows the Commission to "investigate and examine . . . the affairs of any person when the commission believes that such person is or may be issuing or dealing in or selling or buying securities."
As part of its investigations, the Commission may "subpoena witnesses . . . and require by subpoena duces tecum or by citation the production of books, papers, contracts, agreements or other documents, records or information . . . which the commission deems relevant or material to the inquiry." A.R.S. 44-1823 (1994).
In light of this statutory authority, courts give the Commission "wide berth" when they review the validity of Commission investigations. Polaris Int'l Metals Corp. v. Arizona Corp. Comm'n, 133 Ariz. 500, 506, 652 P.2d 1023, 1029 (1982).
In fact, "an appropriately empowered agency 'can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not.'" Id. (quoting United States v. Morton Salt Co., 338 U.S. 632, 642-43, 94 L. Ed. 401, 70 S. Ct. 357 (1950)).
In other words, "the Commission must be free without undue interference or delay to conduct an investigation which will adequately develop a factual basis for a determination as to whether particular activities come within the Commission's regulatory authority." SEC v. Brigadoon Scotch Distrib. Co., 480 F.2d 1047, 1052-53 (2nd Cir. 1973).
See also EEOC v. Kloster Cruise Ltd., 939 F.2d 920, 922 (11th Cir. 1991) (court must enforce subpoena if agency makes plausible assertion of jurisdiction and information sought is not plainly incompetent or irrelevant to any lawful purpose of the agency).
However, the Commission may not act unreasonably and may not use its investigatory powers to "harass, intimidate, or defame" a business. Polaris, 133 Ariz. at 507, 652 P.2d at 1030.
Accordingly, a party may resist the Commission's subpoena on grounds that the inquiry is not within its scope of authority, the order is too vague, the subpoena seeks irrelevant information, or the investigation is being used for an improper purpose, such as to harass. People ex rel. Babbitt v. Herndon, 119 Ariz. 454, 456, 581 P.2d 688, 690 (1978).