The Unconstitutionality of the Exxon Subpoena

What is the power of an attorney general to pry into private papers? Earlier this month, New York Attorney General Eric Schneiderman issued a subpoena to Exxon, demanding that the company turn over many of its records, so that he could investigate it for fraudulent statements about the climate. Many Americans cheered. The subpoena, however, comes with constitutional dangers.

The exact content of the subpoena is not yet known. It appears, however, to have come from Attorney General Schneiderman rather than from a grand jury, and if this is true, it is problematic.

 

I.

Federal and state constitutional law traditionally left government no power to demand testimony, papers, or other information, except under the authority of a judge or a legislative committee. In the absence of a legislative investigation, and prior to a court case, the government could demand information only by getting a warrant signed by a judge based on probable cause or by asking a court overseeing a grand jury to issue a subpoena.

The only opportunity for the executive to demand information was thus through the judiciary. Nor was this an accident. As recognized in the 18th century disputes over warrants, executive demands for papers might be useful, but they were too dangerous to be tolerated. Over the past century, however, the law has changed. Now, a government administrator or even an attorney general can simply demand information by issuing a subpoena under his own signature.

This executive power to pry has a semblance of legitimacy in the use of subpoenas signed by mere parties to secure discovery in civil litigation. When discovery developed in late 19th and early 20th century America, some states, for the sake of convenience, allowed such subpoenas to be signed not by judges, but by clerks, and then even by parties.

In this way, the subpoena power drifted out of the hands of judges. But the convenience of allowing subpoenas to be signed by parties in civil litigation, where the claim for the information is a right secured by law to private persons, is hardly a justification for the government—indeed a state’s most prominent prosecutor—to have a power, largely at his discretion, and outside of any case, to demand information.

The reality is that government has acquired a largely discretionary power to demand information. Whereas the power to investigate with the force of law was once confined to legislative committees and courts, it now belongs to administrators and attorneys general acting on their own.

II.

Accentuating the danger and the constitutional problem is that prosecutorial demands for information before trial evade the criminal process and its constitutional protections. The attorney general and other prosecutors, being executive officers entrusted with the enforcement of the criminal law, ordinarily cannot by themselves force anyone to disclose information. Although, as noted, they can seek warrants and subpoenas by working through the judiciary, they cannot on their own oblige criminal defendants or potential criminal defendants to testify or turn over records. Attorneys general, however, can evade judges and grand juries by simply issuing their own subpoenas.

By way of excuse, attorneys general claim to be acting merely in a civil rather than a criminal capacity. To be sure, attorneys general mostly seek civil remedies, and they thereby can side-step the burdens of the criminal process, such as proving a case beyond a reasonable doubt. They always, however, retain their central power to bring criminal prosecutions—as New York’s attorney general is quick to say. Schneiderman boasts of his “unique statewide criminal jurisdiction” over financial crimes, and his subpoena to Exxon potentially could result in a criminal prosecution.

Even if the consequences were merely civil, the claim that the subpoena is civil in character is neither persuasive nor reassuring, for civil subpoenas come only after a case has begun and thus are subject to ongoing, regular judicial supervision, including judicial protective orders to narrow their scope. An attorney general’s subpoena, in contrast, precedes any charges and thus does not come in judicially supervised court proceedings.

Another excuse is that administrative agencies have gradually acquired a subpoena power, and  prosecutors are not doing more than the agencies do. The subpoena power of administrative agencies, however, is fraught with dangers, and even though it has long been upheld as constitutional, it is a poor justification for the very different practice of allowing prosecutors to issue subpoenas. An attorney general nowadays possesses both the discretion to demand information and the power to initiate criminal charges. His subpoena is thus even more worrisome than a subpoena from an administrative agency.

Judges are the traditional guardians of the subpoena power, and allowing prosecutors to displace them is like asking the fox to guard the hen house.

III.

The consequences for privacy and the polity are disturbing. The laws authorizing attorneys general to subpoena information tend to be very open-ended. Under New York’s Martin Act, the state’s attorney general can subpoena information whenever he considers it relevant to an investigation of what he considers a material misrepresentation by a corporation. Even more loosely, under the state’s Executive Law, he can subpoena information “[w]henever in his judgment the public interest requires it” and the Governor approves. The attorney general thus becomes an inquisitor who can render any person, corporate or individual, an open book for government inspection.

An attorney general’s concern about fraud or the “public interest” is no justification for allowing him to rifle through private papers. When he thereby extracts the basis for a criminal prosecution, he evades the grand jury process. When he thereby lays the groundwork for a civil enforcement proceeding, he evades the due process of law, for there ordinarily is no discovery for a plaintiff until he commences a civil action. Even worse, when a prosecutor uses a subpoena to get a remunerative settlement, it is akin to extortion—this being the most complete end run around the courts.

But that is not all, for attorneys general use settlements to regulate in ways that the legislature did not. Dissatisfied with enacted regulations, attorneys general employ their subpoenas to impose restrictions in settlement that failed to pass muster in the political process. The unlawful intrusion into private papers thus evades the constitutional paths for both adjudication and lawmaking.

No less than individuals, corporations need the freedom to explore ideas and test them in private when deciding what they will say in public. Of course, when investigated by a grand jury under the supervision of a court, or when charged in a civil action in court for actual concrete harms, corporations must disclose many of their private papers. But until then, they need their privacy as much as individuals do. If they cannot consider and reconsider difficult scientific questions in private, they may abandon many of their scientific inquiries, with high costs for the public.

IV.

Most sobering of all are the implications for freedom of speech and political dissent. An attorney general is apt to demand information only when the target violates what a majority in his state considers the boundaries of law or justice. But that is a central part of the constitutional danger. The discretionary executive power to extract private information will tend to be used only when it is apt to satisfy the demos.

Of course Exxon is not Socrates, and its empirical research is a far cry from his elenctic inquiry. Nonetheless, there are parallels, for the prosecutorial subpoena to Exxon appeals to populist anxieties. In refusing to join the crowd—in refusing to accept its climate beliefs—Exxon has questioned the gods of the city, and for this it now is being forced to answer.

The difficulty is that conclusions about climate change, on either side of the question, are often difficult to distinguish from political opinion. Although the truth about the climate may lie in complex empirical data, such data is always open to dispute, and the climate has become a highly contested political controversy. The attorney general’s subpoena therefore looks disturbingly like harassment for dissenting scientific and political opinion.

An even deeper problem is that the scientific method is not about establishing truth, but about testing hypotheses to discern error. This mode of inquiry—an essential foundation of modern life—will be eroded if institutions face denunciation, even prosecution, for failing to declare their allegiance to populist interpretations of complex research.

The attorney general’s understanding of the climate may be true, but for purposes of science, what is far more important than truth is the freedom to dispute it, and if his subpoena persuades corporations to diminish their attempts to test and question the truth, he will have chilled scientific and political dissent and instituted a sort of Lysenkoism.

In justification, the attorney general claims to be investigating fraud. This, however, actually confirms the assault on freedom of speech, for under the Martin Act, fraud is defined in a manner that does not require proof of scienter (intent), reliance, or harm. The remaining elements are merely misrepresentation of a material fact and falsity, even if by omission. Such an open definition of fraud is dangerous as applied to things like the climate controversy, for it is apt to become a means of criminalizing scientific or political speech. (As Walter Olson put it, “Show me the denier . . . and I will find you the crime.”) The government cannot constitutionally be in the business of investigating Americans for espousing scientific falsehoods or truths, let alone political ones, and if the government can take aim at fraud without having to prove concrete harms, there is little stopping it from using subpoenas and prosecutions to suppress constitutionally protected speech.

Even where the attorney general does not go so far, a statute such as the Martin Act, which treats false speech as fraud without proof of harm, must be considered dangerously overbroad and overreaching. When a statute allows an executive officer to turn institutions inside out, without going through the courts, on the basis of standards as open-ended as the “public interest” or fraud without harm, he acquires a license to pry that, as shown by the Exxon subpoena, threatens to expose dissenting scientific and political belief and thereby punish it.

Whatever the truth about the climate, and whatever Exxon has done or not done, an attorney general should not have the power to subpoena records. Prosecutors should go to the courts for subpoenas. When the courts allow prosecutors to circumvent the courts, they are inviting profoundly dangerous constitutional violations.

Philip Hamburger

Philip Hamburger is the Maurice and Hilda Friedman Professor of Law at Columbia Law School. He is a scholar of constitutional law and its history, and his publications include Separation of Church and State (Harvard 2002), Law and Judicial Duty (Harvard 2008), Is Administrative Law Unlawful? (Chicago 2014), and numerous articles. Before coming to Columbia, he was the John P. Wilson Professor at the University of Chicago Law School. He also has taught at George Washington University Law School, Northwestern Law School, University of Virginia Law School, and the University of Connecticut Law School.

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Comments

  1. Ron Johnson says

    Excellent post. I would only note that administrative subpoenas are not backed up with enforcement powers and therefore are less worrisome.

    • gabe says

      “..administrative subpoenas are not backed up with enforcement powers…”

      Is that quite correct? – or did you mean that they are not backed by *criminal* enforcement powers?

  2. libertarian jerry says

    The Constitution,even though it is a dead letter,does not apply in this instance. Corporations are a creature of the state. They are an entity that is created out of thin air by the state to allow the corporation to function in a way of limited liability. In essence a license to do things that would be criminal as far as the common law was concerned. Corporations can sign contracts,buy entities,sell them off,distribute the assets,don’t pay the vendor and then declare bankruptcy. They can,in most cases,escape prosecution unless the corporate management has been proven to have acted in a preconceived criminal way. Having the status of a corporation created by the state also allows the state to demand a certain conformity to supplying information to the regulatory state that legally allows that same corporation to exist. In the end a corporation is not a “person” but an artificial entity created by the state. Under this status Constitutional protections are either irrelevant or of a limited application.

    • gabe says

      Jerry:

      A little harsh here on corporations, I would think – as would this fellow from National Affairs who has posted a rather nice and informative essay on the value of corporations and their “personhood.”

      Let us be careful to not be too scornful of corporate personhood as we may fimnd in the end that the protections afforded corporate persons are the very same that are afforded us and indeed may be just as easily abused or restricted for us if they are so restricted for corporate persons.

      Then again, corporations are made up of persons!!!!!

    • R Richard Schweizter says

      L J:

      As memory serves, the various subpoena power statutes I encountered were **not** limited to corporations or business organizations.

      In the strategy of quashing it has been useful to note that in the case of “Public Interest” business, such as Insurance, banking and trusts, etc., the statutes for those businesses contain provisions for unlimited examination and perjury secured disclosures, etc.

      So, if there is “intent” growing out of the “legislative creation” it would be in the statutes of that creation.

  3. Scott Amorian says

    Nice article!

    “Most sobering of all are the implications for freedom of speech and political dissent. An attorney general is apt to demand information only when the target violates what a majority in his state considers the boundaries of law or justice. But that is a central part of the constitutional danger. The discretionary executive power to extract private information will tend to be used only when it is apt to satisfy the demos.”

    The original (Madisonian) Constitution was meant to protect against populist tyranny. But since the time of Jefferson popular rule has grown in power. The question of the day is whether Jeffersonian populism will be allowed to continue; or will we (and can we) put the genie back into the bottle. Until that happens you can safely plan on more brilliant discussions about the inevitable (and predictable) results of populist rule and more weak quick-fixes to try to hold back its tide. Great fodder for commentary blogs. Not so great for the subjects of the growing tyranny of the ever-confused demos.

    It is good to know that many in the scholarly community recognize and speak to the source of the problem. But how does one ask for a louder volume?

  4. R Richard Schweizter says

    What we are observing in this instance is not simply something that is “unconstitutional, but something far more exemplary of the perversion of our legal system *and* of its function in our social order.

    Repeating:

    “. . . over something more than the past 500 years, a (if not-the) predominant function of “our” legal systems has been the identification, delineation, reconciliation (including enforcement) of obligations recognized and accepted within the social orders extant over those periods of time.

    “That general statement must also take into account the “drift” away from that predominant function, including a shifting predominance of functions which has occurred in our own immediate society over the past century and certainly accelerated since my late entry, at 28, to the bar in 1952.”

    We are observing some of the effects of movements in a society that desires a legal system to serve as a means to ends, rather than to evaluate means in the context of relationships and circumstances. The perversion of the system has changed the functions of lawyers – and prosecutors.

    Subpoenae of the forms here cited were once instrumentalities (means, if you will) of the former functions of the legal system. They now become disparate means to ends “on their own:” further devaluing the legal system and its processes.

    What is to be done (short of return to the Roman cures of assassinations)? Probably the creation of some form of balancing (or mitigating) “power,” It will be slow in coming.

  5. says

    It will be interesting to watch, especially if Exxon could turn the tables on the NY AG during the process, and put the tenets of faith of the Climate Change Cult on trial.

    This is another example of how those who see their gods on a video screen – or in their mirror – can skirt the Establishment Clause to access state power for the purposes of jamming their faith and morality down our throats.

    • Dan says

      That reminds me of a quote by C.S. Lewis – “The very idea of freedom presupposes some objective moral law which overarches rulers and ruled alike. Subjectivism about values is eternally incompatible with democracy. We and our rulers are of one kind only so long as we are subject to one law. But if there is no Law of Nature, the ethos of any society is the creation of its rulers, educators and conditioners; and every creator stands above and outside his own creation.”

  6. Bluejay says

    The premise is flawed. Global warming is a scam and a hoax so the investigation has no legitimacy.

    Why doesn’t the NY Attorney General do his real job?

  7. Donald Campbell says

    ‘Climate Change’ is Climate Science. In Science, nothing is ‘fraudulent’, if it is backed up by verifiable data and sound reasoning. The problem is, that the ‘settled science’ of climate change is nothing but fraud. Why has the Mann vs. Stein lawsuit dragged on so long. The ‘discovery’ phase would be fascinating for shining light on roaches.
    Exxon is spending their own corporate money to fund research to debunk questionable findings. This is called science. Apparently Attorney Generals can’t understand the math.

    • gabe says

      ” Apparently Attorney Generals can’t understand the math.”

      Oh, but they do – at least two forms of math – electoral math and the mathematics of imposing substantial fines upon the miscreant doubters of *settled science.*

  8. TBlakely says

    Thought crimes must be punished regardless of the Constitution. Anyone who disagrees with such investigations are part of the problem. Every right thinking person knows that, correct?

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