As we have discussed, most consumer protection laws give attorneys general broad authority to perform pre-litigation discovery through investigative subpoenas, often termed “civil investigative demands” (CIDs). Many attorneys general can also require sworn statements and answers to interrogatories pursuant to this statutory authority. Businesses should be aware (and beware) that failure to comply with a CID, in whole or in part, can have serious consequences.

For example, in 2022 the Illinois Attorney General issued a civil subpoena to Energy Acquisitions Group LLC pursuant to the Illinois Consumer Fraud and Deceptive Business Practices Act, in connection with the investigation of deceptive marketing practices in the sale of retail electricity and natural gas supply in Illinois. On March 1, the state filed a complaint against the company, alleging that it has refused to produce documents or other information in response to the subpoena. Pursuant to the Act, the state can and did ask for the court to:

compel the company to obey the subpoena,
enjoin the company from engaging in trade or commerce within Illinois until it obeys the subpoena,
revoke or suspend the company’s certificate of authority to do business in Illinois as a foreign corporation until it obeys the subpoena,
require the company pay all costs of prosecution and investigation of the action, and
provide other relief as justice and equity may require.

Should the court award Illinois its requested relief, the company could face dire consequences for whatever period of time is necessary to come into compliance. Moreover, by setting a non-responsive tone with the AG at the outset of an investigation, the company may face other hurdles from the AG’s office as the investigation continues and eventually is resolved. Businesses should be aware the consumer statutes in many states allow attorneys general to seek this type of relief. Depending on the state, noncompliance could also subject a business to a monetary penalty/fine or contempt of court.

To enforce a CID pursuant to several state consumer laws, courts may grant such other relief as may be required. The multistate investigation of TikTok presents a good example of attorneys general requesting “other” relief. States are investigating to determine whether the company engages in unfair and deceptive business acts and practices through its social media platform. On March 6, the Tennessee Attorney General, as a member of the multistate, filed a motion for an order to compel TikTok to comply with the state’s request for information (RFI - akin to a CID) related to its investigation. TikTok had agreed that Tennessee may share the documents it produces with the other states participating in the investigation. Forty-six attorneys general have asked the court in the Tennessee matter to order TikTok to preserve and produce communications critical to the multistate investigation, filing an amicus brief in support of Tennessee.

In the motion, the state claims TikTok has failed to comply with the RFI. In its prayer for relief, Tennessee requests the court compel TikTok to preserve potentially relevant internal messages, disable any document-deletion features that undermine TikTok’s preservation obligations, make good faith efforts to recover and produce any relevant materials deleted from its internal messaging system since TikTok’s preservation obligations were triggered, and order TikTok to produce a corporate representative for sworn examination on issues related to its internal messaging system. The state has also asked the court to compel TikTok to produce internal messages “in a more appropriate and reasonably useable format.” While Tennessee isn’t asking the court to bar TikTok from doing business in the state until it fully complies with the CID, its requests for relief will no doubt have a large impact on TikTok and its resources if ordered by the court.

The lesson here: take any CID received very seriously and consult legal counsel who can help you with the best strategy to respond. Remember that the AG has broad authority to request information, so many times refusing to respond in a timely manner will only result in increased expenses and court costs in the long run.

State Attorney General Civil Investigative Demands: Take Them Seriously