Opinion
MC 04-0028 (ARR) (MDG).
May 19, 2004
REPORT RECOMMENDATION
The National Labor Relations Board ("the Board") brings this application ("Board Appl.") seeking enforcement of investigative deposition subpoenas issued to officers and/or members of Local 3, International Brotherhood of Electrical Workers, AFL-CIO ("the Union"). The Honorable Allyne R. Ross has referred this application to me for decision.
As a preliminary matter, I note that a motion to enforce an administrative subpoena must be addressed by a magistrate judge on a report and recommendation basis. See NLRB v. Fraizer, 966 F.2d 812, 917-18 (3d Cir. 1992) (NLRB subpoeana); U.S. v. Mueller, 930 F.2d 10, 12 (8th Cir. 1991) (IRS summons);Aluminum Co. of America v. U.S.E.P.A., 663 F.2d 499, 501-02 (4th Cir. 1981); U.S. v. Wisnowski, 580 F.2d 149, 150 (5th Cir. 1978) (IRS summons); see also U.S. v. Construction Prods. Research, Inc., 73 F.3d 464, 469 (2d Cir. 1996) (unlike discovery subpoenas, an order enforcing an adminsitrative investigative subpoeana is final and appealable).
BACKGROUND
The following facts are undisputed by the parties.
On September 30, 1982, the Board issued a Decision and Order finding that the Union had violated § 8(b)(4)(I) and (ii)(B) of the National Labor Relations Act by inducing and encouraging a work stoppage at a jobsite and by restraining and coercing neutral employers at another jobsite, for the purpose of involving neutral employees in the Union's primary dispute with General Dynamics Communications Company. See Board Appl., Exh. 1. The Board's order prohibited the Union from any further secondary boycott activity. See id. On June 17, 1983, the Second Circuit issued an order enforcing the Board's Decision and Order. See id., Exh. 2.
On July 17, 1996, the Second Circuit entered a Consent Order against the Union prohibiting the Union from violating the June 17, 1983 order and engaging in secondary boycott activity. See id., Exh. 3.
On or about April 22, 2003 and April 29, 2003, R. Gunzer Incorporated d/b/a Gunzer Electric and Hertz Corporation filed charges with the Board alleging that the Union had engaged in unlawful secondary boycott activities by picketing at or near the Hertz facility located at JFK airport. See id., Exhs. 4, 5. The Union allegedly tried to force Mac-K Construction and Hertz Corporation, and their employees, to stop doing business with R. Gunzer Inc. unless Gunzer recognized and signed a collective bargaining agreement with the Union. See id.
On May 14, 2003, the Board's regional office issued an administrative complaint against Local 3 seeking injunctive relief. Affidavit of Polly Misra dated February 6, 2004 in Support of Application of the NLRB for a Summary Order (attached as Exh. 7 to the Board Appl.) ("Misra Aff.") at ¶ 7. The following day, the Board filed with this Court a petition for preliminary injunctive relief. See Blyer v. Local Union No. 3, CV 03-2469 (the "Boycott Action"). On June 2, 2003, the Honorable Raymond J. Dearie issued a preliminary injunction enjoining and restraining the Union from engaging in unlawful secondary boycott activities. Board Appl., Exh. 6; Boycott Action, ct. doc. 7.
The Board's regional office also referred the matter to the Board's Contempt Litigation and Compliance Branch ("CLCB") to determine whether there was clear and convincing evidence that the Union violated the June 17, 1983 Judgment and the July 17, 1996 Consent Order and whether contempt proceedings should be initiated in the Second Circuit. Misra Aff. at ¶ 8. On July 7, 2003, the Board's regional office postponed indefinitely its administrative hearing pending investigation by the CLCB. See id.; Board Appl., Exh. 8.
On or about July 15, 2003, the CLCB issued an investigative subpoena to the Union requesting answers to interrogatories and the production of documents. Misra Aff. at ¶ 9. The Union, without objection, responded to the subpoena and identified respondents as persons with knowledge of the incidents being investigated by the CLCB. See id.
On or about December 12, 2003, the CLCB issued investigative subpoenas requiring respondents to appear for depositions which were served on respondent's counsel by certified mail. See id. at ¶ 10; Board Appl., Exh. 9. By letter dated December 20, 2003, respondents' counsel advised the CLCB that respondents refused to comply with the subpoenas absent judicial enforcement. Misra Aff. at ¶ 11; Board Appl., Exh. 10. However, respondents took no action to quash the subpoenas. Misra Aff. at ¶ 12.
DISCUSSION
Under 29 U.S.C. § 161(1), the Board is authorized to issue subpoenas requiring testimony or the production of evidence relating to "any matter under investigation or in question."Brooklyn Manor Corp. v. NLRB, No. 99 MC 117, 1999 WL 1011935, at *2 (E.D.N.Y. Sept. 22, 1999); 29 U.S.C. § 161(1). This subpoena power enables the Board to "get information from those who best can give it and who are most interested in not doing so." United States v. Morton Salt Co., 338 U.S. 632, 642, 70 S. Ct. 357 (1950); Brooklyn Manor, 1999 WL 1011935, at *2. The Board's investigative powers have been equated with that of a grand jury which may "investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not." Morton Salt, 338 U.S. at 642-43; In re McVane, 44 F.3d 1127, 1135 (2d Cir. 1995).
When the subject of a subpoena refuses to comply, the Board may apply for a court order requiring that person "to appear before the Board, its member, agent, or agency, there to produce evidence . . . or to give testimony touching the matter under investigation or in question." 29 U.S.C. § 161(2). However, "[t]he court's role in a proceeding to enforce an administrative subpoena is `extremely limited.'" RNR Enterprises, Inc. v. SEC, 122 F.3d 93, 97 (2d Cir. 1997); In re McVane, 44 F.3d at 1135. The Board's subpoena must be enforced if it furthers a legitimate statutory purpose, if the information sought is reasonably relevant to that purpose, if the information sought is not already within the Commissioner's possession, and if the Board has observed the proper statutory procedures. See United States v. Stuart, 489 U.S. 353, 359, 109 S. Ct. 1183 (1989);Morton Salt, 338 U.S. at 652 ("it is sufficient if the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant");RNR Enterprises, 122 F.3d at 96; FEC v. Larouche Campaign, 817 F.2d 233, 234 (2d Cir. 1987) (administrative subpoena must be enforced "so long as it is for a proper purpose, the information sought is relevant to that purpose, and the statutory procedures are observed"). "An affidavit from a governmental official is sufficient to establish a prima facie showing that these requirements have been met." RNR Enterprises, 122 F.3d at 97;In re McVane, 44 F.3d at 1136.
A court's authority to review a subpoena's relevance is limited to determining whether the evidence sought "touches a matter under investigation." Sandsend Fin. Consultants Ltd. v. Federal Home Loan Bank Bd., 878 F.2d 875, 882 (5th Cir. 1989); Brooklyn Manor, 1999 WL 1011935, at *2; see also NLRB v. Frederick Cowan Co., Inc., 522 F.2d 26 (2d Cir. 1975) ("Since the evidence sought here did touch upon the matter in question and was not incompetent or irrelevant, the district court judge was not justified in refusing to enforce the subpoena"). Courts must "defer to the agency's appraisal of relevancy, which must be accepted so long as it is not obviously wrong." RNR Enterprises, 122 F.3d at 97; In re McVane, 44 F.3d at 1135.
The party seeking to quash a Board subpoena has the burden of demonstrating "that the subpoena is `unreasonable' or was issued in bad faith or for an `improper purpose,' or that compliance would be `unnecessarily burdensome.'" RNR Enterprises, 122 F.3d at 97 (quoting SEC v. Brigadoon Scotch Distrib. Co., 480 F.2d 1047, 1053 (2d Cir. 1973)); see In re McVane, 44 F.3d at 1135; Brooklyn Manor, 1999 WL 1011935, at *3. "That burden is `not easily met where . . . the agency inquiry is pursuant to a lawful purpose and the requested documents are relevant to that purpose.'" Brooklyn Manor, 1999 WL 1011935, at *3 (quoting FTC v. Texaco, 555 F.2d 862, 882 (D.C. Cir. 1997)).
The Board contends that respondents have waived their objections to the subpoenas because respondents did not exhaust the administrative remedies provided in section 161(1) and the corresponding regulations. These applicable regulations require that a person seeking to revoke or quash a subpoena must file a petition with the Board within five days of receipt of the subpoena. See 29 C.F.R. § 102.31(b). In fact, the subpoenas at issue contained the warning that "[p]etitions to revoke must be received within five days of your having received the subpoena" and that "[f]ailure to follow these regulations may result in the loss of any ability to raise such objections in Court." See Board Appl., Exh. 9. Rather than filing a petition to quash, respondents, through counsel, advised by letter dated December 20, 2004 that they would not appear.
Having failed to exhaust their administrative remedies, respondents have waived any objections to the subpoenas other than on constitutional grounds or a claim that exhaustion would cause irreparable harm. See Maurice v. NLRB, 691 F.2d 182, 183 (4th Cir. 1982); EEOC v. Cuzzens of Georgia, Inc., 608 F.2d 1062, 1064 (5th Cir. 1979); NLRB v. McDermott, 300 B.R. 40, 46 (D. Colo. 2003); EEOC v. City of Milwaukee, 54 F. Supp.2d 885, 891 (E.D. Wisc. 1999) (tardy objections to EEOC subpoenas precluded City defendant from raising any defenses to subpoenas); EEOC v. County of Hennepin, 623 F.Supp. 29, 31-32 (D. Minn. 1985); see also Frederick Cowan Co., 522 F.2d at 28 (district court erred in reviewing findings of ALJ because respondent failed to exhaust administrative remedies). Thus, respondents are precluded from challenging the subpoenas in this Court.
Respondents argue that they should be excused from the exhaustion requirement because petitioning the Board to revoke the subpoenas would have been futile. The only authority respondents cite in support of this argument is Judge Butzner's dissenting opinion in Maurice v. NLRB, which even if good authority, is distinguishable. In dissenting, Judge Butzner reasoned that petitioning the Board would have been futile because the Board lacked jurisdiction to determine whether the subpoena violated the Attorney General's guidelines on issuing subpoenas to newspaper reporters, an issue not implicated here. 691 F.2d at 183-84. In contrast, there is no evidence that a petition to quash or modify the Board's subpoenas, in this case, would have been futile had respondents followed the proper procedure. In fact, the governing statute and regulations specify that the Board should rule on the enforcability of subpoenas.See 29 U.S.C. § 161(1); 29 C.F.R. § 102.31(b). This Court cannot predict what would have happened if respondents had pursued their administrative remedies by filing a petition with the Board. See EEOC v. Deb Shops, No. 94 C 5985, 1995 WL 579541, at *3 (N.D. Ill. Sept. 29, 1995). Thus, respondents' failure to exhaust is not excused by futility.
Even assuming that respondents are not precluded from challenging the subpoenas in this Court, respondents have no meritorious defense. Respondents contend that the Board has failed to follow the proper statutory procedures because it is improper for the Board to issue investigative subpoenas after it has filed a complaint. According to respondents, "the Board's issuance of a Complaint concludes the investigatory stage of an Unfair Labor Practice proceeding." Respondents' Memorandum of Law in Opposition ("Resp. Opp.") at 5.
However, it is well settled that the commencement of civil proceedings does not terminate an administrative agency's investigative authority nor moot its administrative subpoena.See In re McVane, 44 F.3d at 1141; RTC v. Walde, 18 F.3d 943, 949-50 (D.C. Cir. 1994); Linde Thompson Langworty Kohn Van Dyke v. RTC, 5 F.3d 1508, 1518 (D.C. Cir. 1993); United States v. Frowein, 727 F.2d 227, 231-32 (2d Cir. 1984). Given that the commencement of an actual lawsuit does not terminate the Board's investigative authority, the issuance of an administrative complaint cannot affect the Board's ability to issue an administrative subpoena.
Similarly, respondents argue that the Board is improperly issuing subpoenas to seek discovery for use in the administrative action. See Resp.'s Opp. at 3. However, to the extent information is wrongfully obtained through an investigative subpoena and used in a subsequent proceeding, "the subpoenaed party remains free to challenge the use of that information in the appeal from that proceeding." Office of Thrift Supervision v. Dobbs, 931 F.2d 956, 959 (D.C. Cir. 1991) (emphasis in original); see Walde, 18 F.3d at 950; Linde Thompson, 5 F.3d at 1518 n. 8. Thus, any concerns that enforcement of the subpoenas would result in improper discovery in the administrative proceeding should be addressed in that proceeding.
Respondents further argue that the deposition subpoenas are unlikely to produce additional information, pointing to the fact that respondent Joseph Bechtold testified at the preliminary injunction hearing and was subject to cross-examination by the Board. Resp. Opp. at 2, 4. However, the Board presented the affidavit of trial attorney Polly Misra stating that the Board does not possess the information sought by the investigative subpoenas. Misra Aff. at ¶ 13. Respondents' assertion that the Board has the information because of Mr. Bechtold's prior hearing testimony is not sufficient to rebut the prima facie showing in the Misra Aff.
In any event, the June 2, 2003 preliminary injunction hearing concerned the Union's alleged conduct in attempting to engage in an unlawful secondary boycott and picketing pending the Board's determination of the charges. Mr. Bechtold's testimony apparently was limited by Judge Dearie solely to the events that occurred on May 7, 2003. See Board's Reply Memorandum of Law, Exh. 11. Therefore, the Board is entitled to depose Mr. Bechtold since its contempt investigation concerns issues besides the May 7, 2003 events. In light of this, respondents' argument that Mr. Bechtold's subpoena is abusive because he has already testified is meritless. See Resp. Opp. at 4.
Finally, respondents have failed to present any reason why the subpoenas served on other officials of the Union should not be enforced.
CONCLUSION
For the foregoing reasons, I recommend that the Board's application for the enforcement of investigative subpoenas be granted.
Copies of this report and recommendation have been sent by telecopier to the parties. Objections to the Report and Recommendation must be filed with the Clerk of Court, with a copy to the undersigned, by June 3, 2004. Failure to file objections within the time specified waives the right to appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b).
SO ORDERED.