Agency Power to Investigate

• Pages: 171-173
• Author: Richard J. Pierce, Jr.

171

Chapter 11

AGENCY POWER TO INVESTIGATE

A. Introductory Overview

Agencies typically have extraordinarily broad statutory pow ers

to investigate, including broad powers to require reports, to issue

subpoenas, and to inspect premises. Exercise of those powers is

limited by the Fourth Amendment prohibition on unre asonable

searches and seizures and the Fifth Amendment privilege against

self-incrimination. Until the 1940s, the Supre me Court interpreted

statutes that gave agencies investigative powers narrowly and

interpreted the Fourth and Fifth Amendme nt restrictions on agency

investigative powers bro adly. Beginning in the 1940s, however, and

continuing through the present, courts have interpreted ag ency

statutory grants of investigative powers broadly and have

interpreted the Fourth and Fifth Amendment restrictions on the

exercise of those powers narrowly. As a resul t, agencies can exercise

extremely broad investigative powers today; mo st regulated firms

comply “voluntarily” w ith ag ency reporting re quirements and

subpoenas; and, firms rare ly chal lenge agency ex ercises of

investigative powers in court. When they do, they usually lose. The

following two sections summarize the evolution of this area of law

and its present state in the contexts of agency exercises of the power

to require reports and the subpoena power and the power to inspect

premises and records.

B. Mandatory Reports and the Subpoena Power

Until the 1940s, the Supreme Court interpreted statutory grants

of power to require reports and subpoena power to agencies narrowly

and interpreted Fourth and Fifth Amendment restrictions on the

exercise of those powers broadly. Thus, for instance, in opinions

issued in 1924 and 1936, the Court held that an agency could only

obtain judicial enforcement of a subpoena by demonstrating that it

had probable cause to believe that the subject of the subpoena had

committed a violation of law that was within the agency’s jurisdiction

and that the information sought was relev ant to that violation.

1

The

Court labeled any broader scope attempt to exercise an agency’s

subpoena power as a “fishing expedition” which was a violation of the

Fourth Amendment and “contrary to the first principles of justice.”

1

Jones v. SEC, 298 U.S. 1 (1936); FTC v. American Tobacco Co., 264 U.S. 298

(1924).