People ex rel. Babbitt v. Herndon
In People ex rel. Babbitt v. Herndon, 119 Ariz. 454, 455-56, 581 P.2d 688, 689-90 (1978) the Attorney General had requested books and records from a retailer to determine whether the retainer had engaged in a violation of the Consumer Fraud Act.
To make such requests, however, the Act required the Attorney General to have reasonable cause to believe that the subject being investigated "has engaged in, or is engaging in, or is about to engage in" a violation of the Act. Id. at 455, 581 P.2d at 689.
Herndon refused to comply with the Attorney General's request for information, and sought discovery to ascertain on what basis the Attorney General believed he violated the Act.
In rejecting Herndon's right to discovery in this context, the supreme court nevertheless observed that Herndon was able to contest the validity of the request for information on various grounds.
One such ground was specified by the statute itself. As the Herndon court noted, "the requirement that the Attorney General have reasonable cause to believe there has been a violation of the Act is an additional substantive limitation on his power to engage in pre-complaint discovery, inserted by the Legislature to prevent the abuses or excesses which might result from unlimited powers of investigation." Id. at 456, 581 P.2d at 690.
Thus, it was the Attorney General's obligation to establish to the court's satisfaction a reasonable basis for believing that Herndon either violated or would violate the Act prior to obtaining enforcement of the Attorney General's request.
"The only effective method of protecting an investigated party against these possible abuses is to require the Attorney General, if challenged on that ground, to make some showing at the enforcement hearing that there is reasonable cause to believe that there has been a violation of the act." Id.