## Facts

- On October 10, 1991, the Federal Deposit Insurance Corporation (FDIC) was appointed receiver and liquidating agent for New Hampshire Savings Bank.
- On September 18, 1992, the FDIC issued an Order of Investigation to determine: (1) whether valid claims existed against the bank’s former officers and directors; (2) whether they had enough assets to make pursuit of any claims cost-effective; (3) whether the FDIC should seek to avoid asset transfers made by them; and (4) whether the FDIC should seek attachment or similar restraints on their assets.
- On June 3, 1993, the FDIC served identical administrative subpoenas duces tecum on several former officers and directors (including George E. Freese, Jr.), demanding extensive personal financial records for each recipient and members of the recipient’s family for the five years preceding the subpoenas.
- The subpoena recipients objected in writing, arguing the FDIC lacked statutory authority to compel broad personal and family financial records, the requests were not relevant to the stated investigation, and the demands were overly broad and burdensome; they also asserted improper purpose and Fourth Amendment violations.
- By letter dated July 2, 1993, the FDIC rejected the objections and ordered compliance by July 9, 1993.
- The subpoena recipients filed suit on July 12, 1993 seeking a declaration that the subpoenas were invalid; another former director filed a related declaratory-judgment action on July 26, 1993.
- In both actions, the FDIC moved for summary enforcement of the subpoenas and moved to dismiss the complaints.

## Issues

1. Whether the FDIC, acting as receiver for a failed bank, had statutory authority under the Federal Deposit Insurance Act (including 12 U.S.C. §§ 1818(n) and 1821) to compel former officers and directors to produce broad categories of personal and family financial records by administrative subpoena.
2. Whether the subpoenas’ demand for five years of extensive personal and family financial information was sufficiently related to the FDIC’s stated investigative purposes—evaluating potential claims, possible avoidance of transfers, and possible attachment of assets—to warrant enforcement.
3. Whether the subpoenas were unreasonable in breadth or intrusiveness, such that enforcing them would violate Fourth Amendment limits applied to administrative subpoenas.

## Decision

- The court denied the FDIC’s motion for summary enforcement of the administrative subpoenas.
- The court denied the FDIC’s motion to dismiss the plaintiffs’ complaints.
- As a result, the subpoenas were not enforced on the record presented.

## Legal Principles

- A court may enforce an administrative subpoena only when the agency is acting within its lawful authority, pursuing a lawful purpose, seeking material that bears a reasonable relationship to that purpose, and demanding production in a manner that is not unreasonably broad or oppressive.
- Even though an administrative subpoena is not a search warrant, it is subject to Fourth Amendment reasonableness limits; the scope and intrusiveness of the demand must be justified by the needs of the authorized investigation.
- The FDIC has significant investigative power as a bank receiver, including authority to investigate possible claims against former management and to consider remedies related to asset transfers and restraints, but that authority does not automatically justify sweeping asset-mapping of individuals and their families without a concrete, explained connection to the liability-focused investigation.
- Requests aimed mainly at testing collectibility or identifying assets for potential pre-judgment restraints require a clear justification tied to the investigative mandate; broad demands for personal and family financial records over multiple years may be denied when the agency does not show why such breadth is reasonably linked to specific investigative needs.

## Conclusion

Freese v. Federal Deposit Insurance Corp. held that, although the FDIC may investigate potential claims arising from a failed bank and has administrative subpoena power as receiver, the agency did not justify enforcing subpoenas that demanded five years of expansive personal and family financial records from former officers and directors, because the breadth and intrusiveness were not shown to be reasonably related to the stated investigation and raised Fourth Amendment reasonableness concerns.


Freese v. Federal Deposit Insurance Corp., 837 F. Supp. 22 (1993)