These activities suggest that the odds that a company will be faced with a subpoena, audit, or search warrant are increasing. The purpose of this Guide is to highlight some of the issues you should consider in the initial stages of any governmental inquiry or enforcement action.

SUBPOENAS

A subpoena is an order directing a person to appear and to testify at a given time and place. A subpoena duces tecum requires you to bring certain documents and things with you. Subpoenas may be issued by a court, by a grand jury, by a lawyer representing a party in a civil or criminal case, or by government agencies.

All subpoenas have the authority of either a court or a statute behind them and carry the threat of punishment, fines and imprisonment for noncompliance. Nevertheless, compliance with a subpoena may not be required if the recipient convinces a court or an administrative authority that the subpoena's terms are unreasonable or oppressive. Note, however, that until formal steps are taken to limit the subpoena, compliance is technically required. Subpoenas typically provide recipients with a few days to a few weeks' notice. This notice period allows the recipient time to gather the requested information or to prepare to give testimony.

Several regulatory agencies also have the authority to subpoena information, documents, reports, records, and accounts of companies who contract with the government or otherwise participate in federal programs. Failure to comply with an administrative subpoena may result in sanctions including exclusion or debarment from such programs.

Subpoena checklist.
Each subpoena is issued in a unique factual context. The particular circumstances should be considered and reviewed with counsel to ensure an appropriate strategy is developed.

In the event you are served with a subpoena, consider the following steps:

1. Determine exactly when the subpoena was received, by whom, when the document production is required, and what efforts will be necessary to comply with the subpoena.

2. Identify the court, agency or other entity who has issued the subpoena.

3. Call your attorney and provide the following information:

a. when the subpoena was served;
b. the law enforcement or regulatory agencies involved;
c. the scope of the information requested by the subpoena;
d. the return date or time for responding to the subpoena;
e. the level of effort required to comply with the subpoena and any ambiguities created by the language of the document.

4. Determine if the subpoena is part of a broader investigation and, if so, after discussion with counsel:

a. advise employees that they may be contacted by investigators either on or off the work site, and that the employees have the right either to talk or not to talk, to consult with an attorney before answering questions, and to have counsel present during the interview.
b. advise employees that if they choose to submit to an interview, it is critical that they tell the truth.
c. advise employees not to discuss the subpoena or any related events with members of the press.

5. Determine whether it is appropriate to conduct an internal investigation.

AUDITS

Companies may be audited by a number of state and federal regulatory agencies. For example, the Internal Revenue Service, the Department of Defense, Department of Ecology and Health Care Financing Administration all may have the right to inspect and/or audit entities who meet specified contracting or participation criteria.

Some of these audits are routine, others may provide the foundation for an administrative investigation or criminal prosecution. Government agencies today are much more likely to share audit results with all potentially interested regulators. This increases the risk and suggests that companies should treat audit requests much like subpoenas. Counsel should be consulted and the checklist for subpoenas set forth above should be at least reviewed, if not followed, when responding to an audit. In addition, providers should be careful not to disclose information protected by the attorney-client privilege or work product doctrine to government auditors. Such disclosure can result in a waiver of the privilege.


SEARCH WARRANTS

A search warrant is a written court order entitling law enforcement officers to search a defined premises. There are formal requirements for a valid warrant:

(a) it must be signed by or on behalf of a judge or magistrate with jurisdiction over the premises to be searched;
(b) it must be directed to a named law enforcement officer and must command him or her to search the specified premises;
(c) it must describe the material to be seized.

Unlike a subpoena, a search warrant typically does not provide the recipient with advance notice. It gives the law enforcement officers the benefit of surprise and consequently creates a much more volatile situation. In addition to search warrants issued by a court, several administrative agencies have the power to inspect the records of government contractors or participants in government programs.

Search Warrant Checklist
In general, the use of a search warrant indicates that the government views the investigation as extremely serious. Counsel should be consulted at the earliest opportunity to ensure that informed decisions are made. In the event you are served with a search warrant, consider the following steps:

1. Find the person in charge of executing the warrant and ask to see his/her identification.

2. Ask for a copy of the warrant and read it carefully. Also ask for a copy of any affidavit submitted to a court or other body to obtain the warrant.

3. Call your attorney and provide the following information:

a. The time the warrant was served;
b. The law enforcement and regulatory agencies involved;
c. The areas to be searched; and
d. The types of evidence to be seized.

4. Be business-like and courteous but do not volunteer information before consulting with counsel.

5. Consider sending all non-essential employees home until the search is completed.

6. Designate one employee to deal with the agents executing the search warrant and to take notes during the search. Advise this employee that the notes are to be taken in anticipation of litigation, addressed to counsel, and kept confidential. Ensure that the employee chosen is diplomatic and understands the necessity of avoiding any appearance of interfering with the authorities.

7. Closely monitor the search, but do not interfere with it.

8. If the persons executing the warrant seize privileged documents, advise them that the documents are privileged and request that such documents be sealed in an envelope and segregated from the other items seized until counsel can take steps to seek their return.

9. Take careful notes of the type and location of the evidence seized, including any documents, computer records, physical items, photographs, videotapes, and audio recordings.

10. Advise employees not to interfere with the search.

11. Advise employees that the persons executing the warrant may ask them questions. Employees should not be instructed not to speak with government investigators. They can, however, be told what their rights are -- they have the right to talk or not to talk, they can consult with counsel before deciding whether to talk, and they can have counsel present at any interview if they choose. Again, if employees choose to talk, they should be reminded of the importance of being truthful.

12. Obtain a detailed receipt for all of the evidence seized.

13. Ask for the opportunity to copy all documents or other records seized.

14. Advise employees not to discuss the search warrant or any related events with the press.

CONCLUSION

This Guide is intended to highlight some of the issues to consider when responding to official demands for information. It cannot be overemphasized, however, that the individual circumstances of each situation must be assessed to determine the appropriate strategy. Consequently, it is wise to involve counsel in the process as early as possible. That stated, not all audits lead to investigations; nor does the receipt of a subpoena necessarily suggest ruinous litigation. A cautious yet practical approach to subpoenas, audits, and search warrants should be followed.