NCPA - National Center for Policy Analysis

Businesses Confronted by Waves of Costly Subpoenas

January 13, 2003

States are not the only institutions worrying about unfunded mandates. Law enforcement agencies across the land are swamping businesses with subpoenas demanding copies of their records.

Under existing law, the costs of digging out those records, copying and delivering them must be borne by the unfortunate companies -- and the costs can be huge. The records involved can range from Visa chits to printouts of phone calls to checks a bank customer has written.

  • The U.S. Telecom Association reports one of its members spends $3.7 million yearly to comply with law enforcement subpoenas and subpoena-like demands.
  • One wireless carrier received a subpoena in 2001 demanding customer records for over 50 pages of phone numbers -- and the subpoena had to be answered in five days.
  • One telephone company received a subpoena from the Drug Enforcement Administration demanding all published and unlisted phone numbers and customer names in its service area.

No business is exempt from the subpoena power of government. Police agencies are demanding client information from airlines, car rental companies, credit card companies, universities, hospitals, Internet services and even bookstores.

The federal government has made its position clear in court papers: Despite any costs, despite any risk of lawsuits, despite any conscientious objections, "the Executive Branch of government has inherent power to require the assistance of citizens in carrying out its law enforcement duties," according to the Department of Justice.

If companies had to be reimbursed for their time and trouble, and if those reimbursements were to come out of the budgets of the agencies involved, it is safe to say there would be fewer such subpoenas.

Source: Timothy Lynch, "The Paper Chase," Cato Institute/Forbes, January 20, 2003.

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