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FTC v. O'CONNELL ASSOCS.

July 27, 1993

FEDERAL TRADE COMMISSION, Petitioner,
v.
O'CONNELL ASSOCIATES, INC. and JOHN T. O'CONNELL, Respondents.



The opinion of the court was delivered by: DENIS R. HURLEY

 HURLEY, District Judge

 This enforcement proceeding is brought by the Federal Trade Commission (the "FTC") pursuant to the authority conferred by Section 20 of the Federal Trade Commission Act, 15 U.S.C. § 57b-1 (the "Act"). The FTC seeks an order from the Court requiring the respondents, O'Connell Associates, Inc. and John T. O'Connell, to produce documents specified in two FTC-issued civil investigative demands ("CIDs").

 The CIDs call for evidence relating to an investigation into whether unnamed consumer reporting agencies or others were acting in violation of Section 5 of the Act and of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq. The impetus for this investigation was a complaint filed with the FTC stating that certain individuals may have improperly obtained and/or provided consumer credit reports on, among others, volunteers in Ross Perot's presidential campaign.

 On July 16, 1993, the parties appeared before the Court pursuant to an Order to Show Cause. The Court heard argument on the FTC's petition and reserved decision. For the reasons that follow, the Court grants the petition and orders respondents to comply with the two CIDs.

 BACKGROUND

 In the fall of 1992, the FTC staff received a complaint that respondents John T. O'Connell, a private investigator, and O'Connell Associates, Inc., a corporation engaged in the private investigations business, may have improperly received and disseminated consumer credit history information and consumer reports on several volunteers in the Perot Presidential campaign. Using the authority granted to it by a 1990 resolution, *fn1" the FTC directed two CIDs for documentary materials to respondents. The CIDs required respondents to make documents available for inspection and copying by January 19, 1993.

 In early January, respondents' counsel sought and received certain adjustments to the specifications set forth in the CIDs. In mid-January, respondents' new counsel, Cravath Swaine & Moore, requested that the deadline for filing any petitions to limit or quash the CIDs, under Commission Rule 2.7(d), 16 C.F.R. § 2.7(d), *fn2" be extended to January 25, 1993. The FTC agreed.

 By letter dated January 25, 1993, counsel for respondents submitted responses, objections, and some documentary material to the FTC. The objections were not in the form of a motion to limit or quash the CIDs, as provided in Rule 2.7(d). The FTC then contacted respondents' counsel in regard to various deficiencies in the document production. In response, respondents produced some additional documents.

 On February 9, 1993, the FTC held an investigational hearing at which O'Connell appeared and testified that, inter alia, he was in possession of certain documents that were responsive to the CIDs but which he declined to produce. Following the hearing, the FTC requested further documents. Respondents provided a few additional documents and then asserted that "nothing in the record justifies further inquiries of O'Connell Associates or Mr. O'Connell." Exhibit 12 to d'Entremont Declaration. Thus, respondents had not, as of this date, provided documents in response to all of the specifications set forth in the CIDs.

 By letter dated March 18, 1993, the FTC informed respondents that the CIDs were being referred to the FTC's General Counsel in preparation for enforcement in federal district court. On June 10, 1993, respondents sent the FTC an O'Connell affidavit detailing respondents' compliance with certain of the CID specifications and responding to others. Ultimately, respondents did not comply with a total of twelve specifications.

 DISCUSSION

 I.


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