§ 1-614. Civil investigative demand. - North Carolina Statutes

§ 1‑614.  Civilinvestigative demand.

(a)        A civilinvestigative demand is an administrative subpoena. Whenever the AttorneyGeneral has reason to believe that a person has information or is inpossession, custody, or control of any document or other object relevant to aninvestigation or that would lead to the discovery of relevant information in aninvestigation of a violation of G.S. 1‑607, the Attorney General mayissue in writing and cause to be served upon the person, before bringing orintervening or making an election in an action under G.S. 1‑608 or otherfalse claims law, a civil investigative demand requiring the person to produceany documents or objects for their inspection and copying.

(b)        The civilinvestigative demand shall comply with all of the following:

(1)        Be served upon theperson in the manner required for service of process in civil actions and maybe served by the Attorney General or investigator assigned to the NorthCarolina Department of Justice.

(2)        Describe the natureof the conduct constituting the violation under investigation.

(3)        Describe the classor classes of any documents or objects to be produced with sufficientdefiniteness to permit them to be fairly identified.

(4)        Prescribe areasonable date and time at which the person shall produce any document orobject.

(5)        Advise the personthat objections to or reasons for not complying with the demand may be filedwith the Attorney General on or before that date and time.

(6)        Designate a personto whom any document or object shall be produced.

(7)        Contain a copy ofsubsections (b) and (c) of this section.

(c)        The date withinwhich any document or object must be produced shall be more than 30 days afterthe civil investigative demand has been served upon the person.

(d)        A civil investigativedemand may include an express demand for any product of discovery. A product ofdiscovery includes the original or duplicate of any deposition, interrogatory,document, thing, examination, or admission, that is obtained by any method ofdiscovery in any judicial or administrative proceeding of an adversarialnature, and any digest, compilation, and index of any product of discovery.Whenever a civil investigative demand is an express demand for any product ofdiscovery, a copy of the demand shall be served on the person from whom thediscovery was obtained, and the Attorney General shall notify the person towhom the demand is issued of the date on which the copy was served. A demandfor a product of discovery shall not be returned or returnable until 30 daysafter a copy of the demand has been served on the person from whom thediscovery was obtained. Within 30 days after service of the demand, the personfrom whom the discovery was obtained or the person on whom the demand wasserved will serve on the Attorney General a copy of any protective order thatprevents or restrains disclosure of the product of discovery to the AttorneyGeneral. The Attorney General may petition the court that issued the protectiveorder to modify the order to allow compliance with the demand. Disclosure ofany product of discovery pursuant to any express demand does not constitute awaiver of any right or privilege that the person making the disclosure may beentitled to invoke to resist discovery of trial preparation materials.

(e)        The production ofdocuments and objects in response to a civil investigative demand served underthis section shall be made under a sworn certificate by the person to whom thedemand is directed, or in the case of a person other than a natural person, aperson having knowledge of the facts and circumstances relating to theproduction and authorized to act on behalf of the person. The certificate shallstate that all of the documentary material required by the demand and in thepossession, custody, or control of the person to whom the demand is directedhas been produced and made available. Upon written agreement between the personserved with the civil investigative demand and the Attorney General, the personmay substitute copies for originals of all or any part of the documentsrequested.

(f)         If a personobjects to or otherwise fails to comply with a civil investigative demandserved upon the person under subsection (a) of this section, the AttorneyGeneral may file an action in superior court for an order to enforce thedemand. Venue for the action to enforce the demand shall be in either WakeCounty or the county in which the person resides, is found, or transactsbusiness. Notice of a hearing on the action to enforce the demand and a copy ofthe action shall be served upon the person in the same manner as prescribed inthe Rules of Civil Procedure. If the court finds that the demand is proper,that there is reasonable cause to believe that there may have been a violationof G.S. 1‑607, and that the information sought or document or objectdemanded is relevant to the violation, the court shall order the person tocomply with the demand, subject to modifications the court may prescribe.

(g)        If the person failsto comply with an order entered pursuant to subsection (f) of this section, thecourt may do any of the following:

(1)        Adjudge the personto be in contempt of court.

(2)        Grant injunctiverelief against the person to whom the demand is issued to restrain the conductwhich is the subject of the investigation.

(3)        Grant any otherrelief as the court may deem proper.

(h)        A petition for anorder of the court to modify or set aside a civil investigative demand issuedunder this section may be filed by any person who has received a civilinvestigative demand or in the case of an express demand for any product ofdiscovery, the person on whom the discovery was obtained. The petition may befiled in superior court in either Wake County or the county in which the personresides, is found, or transacts business, or, in the case of a petition tomodify an express demand for any product of discovery, the petition shall befiled in the court in which the proceeding was pending when the product ofdiscovery was obtained. Any petition under this subsection must be filed within30 days after the date of service of the civil investigative demand or beforethe return date specified in the demand, whichever date is earlier, or within alonger period as may be prescribed in writing by the investigator identified inthe demand. The petition shall specify each ground upon which the petitionerrelies in seeking relief and may be based upon any failure to comply with theprovisions of this section or upon any constitutional or other legal right orprivilege of the person. During the pendency of the petition in the court, thecourt may stay, as it deems proper, the running of the time allowed forcompliance with the demand, in whole or in part, except that the person filingthe petition shall comply with any portions of the demand not sought to bemodified or set aside.

(i)         Any documents andobjects produced pursuant to this section may be used in connection with anycivil action brought under G.S. 1‑608 and for any use that is consistentwith the law, and the regulations and policies of the Attorney General,including use in connection with internal Attorney General memoranda andreports; communications between the Attorney General and a federal, State, orlocal governmental agency, or a contractor of a federal, State, or localgovernmental agency, undertaken in furtherance of an Attorney Generalinvestigation or prosecution of a case; interviews of any qui tam relator orother witness; oral examinations; depositions; preparation for and response tocivil discovery requests; introduction into the record of a case or proceedingapplications, motions, memoranda, and briefs submitted to a court or othertribunal; and communications with government investigators, auditors,consultants and experts, the counsel of other parties, arbitrators andmediators, concerning an investigation, case, or proceeding. Any documents andobjects obtained by the Attorney General under this section may be shared withany qui tam relator if the Attorney General determines it is necessary as partof any false claims act investigation. Before using or sharing documents andobjects obtained by the Attorney General under this section with any person,the Attorney General may require that the person agree to an order of the courtprotecting the documents or objects, or any information contained in thedocuments or objects, from disclosure by that person. In the case of documentsor objects the producing party has designated as a trade secret or otherconfidential research, development, or commercial information, the AttorneyGeneral shall either (i) require that the person with whom documents or objectsare shared be prohibited from disclosing the documents or objects, or anyinformation contained in the documents or objects, or (ii) petition the courtfor an order directing the producing party to either appear and support thedesignation or withdraw the designation.

(j)         The AttorneyGeneral may designate an employee of the North Carolina Department of Justiceto serve as a custodian of documents and objects.

(k)        Except as otherwiseprovided in this section, no documents or objects, or copies thereof, while inthe possession of the North Carolina Department of Justice, shall be availablefor examination by any person other than an employee of the North Carolina Departmentof Justice. The prohibition in the preceding sentence on the availability ofdocuments or objects shall not apply if consent is given by the person whoproduced the documents or objects, or, in the case of any product of discoveryproduced pursuant to an express demand, consent is given by the person fromwhom the discovery was obtained, or prevent disclosure to any other federal orState agency for use by that agency in furtherance of its statutoryresponsibilities upon application made by the Attorney General to the superiorcourt showing substantial need for the use of the documents or objects by anyagency in furtherance of its statutory responsibilities.

(l)         While in thepossession of the custodian and under reasonable terms and conditions as theAttorney General shall prescribe, documents or objects shall be available forexamination by the person who produced the documents or objects, or by arepresentative of that person authorized by that person to examine thedocuments or objects.

(m)       If any documents orobjects have been produced by any person in the course of any investigationpursuant to a civil investigative demand under this section, and any case orproceeding before any court arising out of the investigation, or any proceedingbefore any agency involving the documents or objects, has been completed, or nocase or proceeding in which the documents or objects may be used has beencommenced within a reasonable time after completion of the investigation, thecustodian shall, upon written request of the person who produced the documentsor objects, return to the person any documents or objects that have not passedinto the control of any court or agency.

(n)        The North CarolinaRules of Civil Procedure shall apply to this section to the extent that therules are not inconsistent with the provisions of this section.  (2009‑554, s. 1.)