Vanderbilt Law Review

First Page



The backbone of an administrative agency's effectiveness is the ability to investigate rapidly the activities of entities within the agency's jurisdiction., An agency's ability to carry out its investigative functions depends upon enforcement of the agency's administrative subpoenas. Courts have not always looked favorably upon broad agency subpoena power. The implementation of the New Deal and the exigencies of World War II created a need for increased administrative oversight of national affairs. Courts began to recognize the usefulness of proactive administrative government. Concurrent supreme court decisions reflected this philosophical change by adopting highly deferential views of administrative subpoena enforcement. This deference has governed administrative subpoena enforcement for over fifty years.

Recent decisions, however, have signaled a move away from the deferential view of administrative subpoena power. In response to the savings and loan crisis of the late 1980s Congress passed the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). Administrative agencies charged with enforcing FIRREA routinely subpoena the personal financial records of directors and officers of failed savings and loan associations. Attempts to enforce these subpoenas have proven difficult. Judicial resistance to this use of the subpoena power rests on two grounds. First, courts have drawn a distinction between corporate and personal financial records. This distinction underlies the holding that fourth amendment privacy concerns require agencies to demonstrate some suspicion of wrongdoing in order to subpoena personal financial records. Second, courts have prohibited or curtailed use of the subpoena power to determine the cost-effectiveness of bringing an enforcement action."

Part II of this Note describes the development of broad agency subpoena power and the recent decisions restricting that power. Part III analyzes the validity of a distinction between personal and corporate financial records in the context of administrative subpoena enforcement. It also discusses the impact of such a distinction on administrative agencies' ability to carry out their regulatory missions effectively. Part IV focuses on the use of administrative subpoena power to determine the cost-effectiveness of enforcement actions. This Part particularly emphasizes the tension between restrictions on this use of the subpoena power and the judicial deference typically granted to agency discretion in setting a regulatory agenda. Part V concludes that the restrictions placed on administrative agencies' power to subpoena personal financial records in recent decisions are unwarranted and threaten the effective and efficient functioning of administrative agencies.