The opinion of the court was delivered by: Bua, District Judge.
Respondents,*fn1 Amalgamated Insurance Agency Services, Inc., Federal
Computer Systems, Inc., Southwest Insurance Agency of Illinois, Inc.,
American and Overseas, Inc., Health Plan Consultants, Inc., Union
Insurance Agency of Illinois, Dental Health Inc., Magna Charta
Investments, Inc., Dover Insurance Agency, Ltd., Conference Insurance
Consultants, and Federal Services Co. have moved pursuant to Rule 59,
Fed.R.Civ.P.,*fn2 for the entry of an order granting a new trial. The
court previously granted the respondents' motion for a stay of its order
enforcing the subpoenas and the petitioner has moved to dissolve that
stay. The court has been presented with memoranda in support of and in
opposition to the pending motions, has heard lengthy oral argument on the
motions, and has considered additional exhibits submitted at oral
argument, as well as the additional memoranda of the parties relating to
Securities and Exchange Commission v. McGoff, 647 F.2d 185 (D.C.Cir.
1981). This court finds no reason to vacate the order granting
enforcement or continue the stay in this case pending appeal.
A motion for a new trial is addressed to the discretion of the trial
court. Schybinger v. Interlake Steamship Company, 273 F.2d 307, 812 (7th
Cir. 1952). There are three grounds for granting new trials in
court-tried actions under Rule 59(a)(2); (1) manifest error of law; (2)
manifest error of fact; and (3) newly discovered evidence. Brown v.
Wright, 588 F.2d 708, 710 (9th Cir. 1978); 6A Moore's Federal Practice
¶ 59.07 at 59-94.
A new trial in a court action will not lie merely to
relitigate old matters, nor will a new trial normally
be granted to enable the movant to present his case
under a different theory than he adopted at the former
6A Moore's Federal Practice ¶ 59.07 at 59-93. See also Evans, Inc.
v. Tiffany & Co., 416 F. Supp. 224, 244 (N.D.Ill. 1976).
The respondents first claim that "the court erred in finding, contrary
to United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112
(1964) and United States v. Lenon, 579 F.2d 420 (7th Cir. 1978), that at
the hearing on enforcement, the respondents had the initial burden of
going forward with the evidence, and that the Department of Labor was not
required to make a prima facie showing that it is conducting an
investigation pursuant to a legitimate purpose, and that the subpoenaed
documents are relevant to the investigation." Motion for a New Trial and
Other Relief, p. 2, ¶ 1.
In United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.2d.2d 112
(1964), the Supreme Court stated that in order to obtain enforcement of
an investigative subpoena issued pursuant to 26 U.S.C. § 7602 (a),
the Internal Revenue Service must
show that the investigation will be conducted pursuant
to a legitimate purpose, that the inquiry may be
relevant to the purpose, that the information sought
is not already within the Commissioner's possession,
and that the administrative steps required by the Code
have been followed.
Id. at 57-58, 85 S.Ct. at 255. Once this prima facie showing has been
made, the burden rests on the respondent to show why the subpoena should
not be enforced. It is clear that in this Circuit, the government's prima
facie showing may be made by way of affidavits. Once the government makes
its prima facie showing, it is entitled to the issuance of a rule to show
cause why the subpoenas should not be enforced. It is then left to the
respondent to show compelling reasons why the subpoenas should not be
enforced or should be enforced only in a modified form. See United States
v. Moll, 602 F.2d 134, 138 (7th Cir. 1979); United States v. Lenon,
579 F.2d 420, 421-422 (7th Cir. 1978).
The respondents again maintain that the government's affidavits, filed
in support of the issuance of the rule to show cause in this case, failed
to make a prima facie showing of enforceability. They have contended that
there is no way that this court could determine whether the materials
subpoenaed were "relevant to a legitimate investigation." This court
disagrees. The question presented is whether materials "may be relevant
to the purpose" of the investigation. Powell does not require a showing
that the documents sought are directly related to a specific area of
inquiry. The Powell standard incorporates a standard of relevance akin to
the standard of discovery in civil actions. Cf. Rule 26, Fed.R.Civ.P.
The respondents cite In re Grand Jury Proceedings [In re Schofield],
486 F.2d 85 (3d Cir. 1973), for the proposition that "DOL must explain
how each item in the subpoena is reasonably calculated to lead to
information that may be relevant to its investigation." Respondents'
Memorandum in Support of their Motion for Rehearing and Other Relief, p.
10. In that case, a grand jury subpoena was served on Mrs. Schofield
requiring her to appear before the grand jury and allow handwriting
exemplars and a "mug shot" to be taken. When she refused to comply, the
government filed a motion to compel reciting simply that she had been
served with a subpoena and that she had "no right or privilege under the
fourth or fifth amendment to refuse to comply . . ." Id. at 87. Although
this statement was found insufficient to justify enforcement, Schofield
that the government be required to make some
preliminary showing by affidavit that each item is at
least relevant to an investigation being conducted by
the grand jury and properly within its jurisdiction
and is not sought primarily for another purpose.
This court believes that the DOL affidavits filed in this case suffice
for this preliminary showing. Under oath in this case two DOL agents
stated that DOL is investigating the operation of Central States,
Southeast and Southwest Areas Health and Welfare Fund for the purpose of
determining whether the fund business was being conducted in conformity
with the requirements of ERISA. To require a more specific recital of the
purposes for which this investigation is being conducted in order to
determine whether the materials sought by the subpoena may be relevant to
the investigation would, in practical effect, force the DOL to reveal its
investigative plan. Nothing in the Constitution, ERISA, or the case law
requires that DOL investigators afford respondents the specific right of
apprisal which they demand, see Hannah v. Larche, 363 U.S. 420, 80 S.Ct.
1502, 4 L.Ed.2d 1307 (1960), or limit the areas of investigation to
specific ERISA violations.
In addition, the respondents again rely on Civil Aeronautics Board v.
United Airlines, 542 F.2d 394 (7th Cir. 1976). In that case, the Seventh
Circuit required disclosure of the specific purpose of the
investigation. This court failed to discuss United Airlines in its
previous opinion because that case does not appear to be relevant to the
issues raised by a challenge to enforcement of a subpoena duces tecum.
United Airlines involved a warrantless search of all records located on
the premises of United's corporate office. It seems apparent that the
holding in that case rested on the fact that the statute purported to
authorize a warrantless search of premises. No such intrusion is present
in this case. All that the subpoena asks for in this case is production
of certain categories of documents if they exist. It is left to the
responsible officials of the respondents to determine whether these
documents exist and to produce those requested at DOL's office. This
court believes that the distinction between on site administrative
searches which require warrant procedures and/or probable cause to
justify them, see e. g. Marshall v. Barlow's, Inc., 436 U.S. 307, 98
S.Ct. 1816, 56 L.Ed.2d 305 (1978); Camara v. Municipal Court, 387 U.S. 523,
87 S.Ct. 1727, 18 L.Ed.2d 930 (1967); See v. City of Seattle, 387 U.S. 541,
87 S.Ct. 1737, 18 L.Ed.2d 943 (1967), and subpoena enforcement
proceedings which require neither warrant procedures nor a finding of
probable cause in the usual sense, see e. g. United States v. Morton Salt
Co., 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401 (1950), is well established
in the law. Therefore, the court does not believe that United Airlines is
controlling precedent in this case. United Airlines has no applicability
to the enforcement of a subpoena which merely seeks an ...