The Civil Investigative Demand
“Justice’s Aggressive Investigative Tool”
by Sean Weiss, Partner & VP of Compliance
Prior to any litigation by the Department of Justice (DOJ), a Civil Investigative Demand (CID) will be sent to the party(s) of interest that allows for an investigation of potential allegations of False Claims Act (FCA) liability. These investigative tools should never be taken lightly because they are broad in scope, extremely invasive, expensive, and usually very time consuming.
The most difficult aspect of receiving a CID is that one has little recourse to challenge the scope of appropriateness since there is little published guidance or case law to provide direction. The authorization of a CID is granted to the Attorney General or his/her designee under 31 U.S.C. § 3733. The issuance of a CID is done prior to the commencement of a civil FCA proceeding when there is reason for the DOJ to believe that the person(s) or entity may be in possession, custody or control of any documentation or materials relevant to an investigation. The entire premise of the CID is to allow the government to determine whether enough evidence exists to warrant the expense of filing the claim(s) and, in addition, to prevent the potential defendant(s) from being dragged into court unnecessarily.
A CID does a few things. It may compel:
- the production of documents;
- written responses to interrogatories; and
- sworn oral testimony related to the documents or information requested.
Since the authority was granted to all U.S. Attorneys, the rate of issuing CIDs has greatly increased and the burden on responding is substantial. The difficult thing with a CID is the party(s) may be forced to produce massive amounts of information even prior to the government agreeing to sit down and discuss the scope of their investigation. In other words, this is a one-way tool with little wriggle room on the part of the potential defendant. One thing to keep in mind is that once the government has filed their complaint, the issuance of a CID is not permitted. There have been a couple of cases that dealt with CIDs being issued either after the compliant was filed or after a court dismissed a case and then the government went back and issued a CID to try and compel the release of additional information. In one of the cases, the courts ruled that the government violated 31 U.S.C. § 3733 thus putting an end to the case. In the other matter, the court was forced to answer multiple questions in order to arrive at their decision, which ultimately forced the parties to the table to negotiate the parameters of the CID.
Some tips on dealing with a CID:
- Recognize the government has been given broad powers to investigate;
- You will be compelled to produce records which are or can be considered responsive to the CID so preserve everything you can;
- Determine who is the target of the investigation to ensure proper counsel is retained;
- Do not delay responding to a CID and definitely do not respond without counsels’ guidance;
- Do not respond in a vacuum to a CID. Pick up the phone and speak to the investigator(s) or attorney(s) that issued the CID and are conducting the investigation;
- As SGT. Friday (Dragnet for those of you old enough to remember the show) said, “just the facts…”. Do not provide more than what was requested unless it is at the recommendation or under the guidance of counsel. However, do not withhold critical information or attempt to obstruct the investigation.
As always, I like to provide samples of the items I write about so here is an application for order to show cause and for summary enforcement of civil investigative demand: https://projects.scpr.org/longreads/selling-the-spine/docs/doj_investigation.pdf
If your organization receives a CID, you need to understand that they are not carved in stone and do allow for negotiation regarding the scope of information required to be produced. Make sure you are not offering wholesale concessions or blanket refusals to compromise, which could compromise your case going forward. Pick your battles carefully and remember, it’s about winning the war. Recognizing this at the outset is the best way to equip yourself to weather the storm!
What to do next…
- If you need help with an audit appeal or regulatory compliance concern, contact us at (800) 635-4040 or via email at email@example.com.
- Read more about our: Total Compliance Solution
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