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MCLAUGHLIN v. BENDERSKY

January 26, 1989

ANN McLAUGHLIN, Secretary of the United States Department of Labor, Petitioner,
v.
ALEX BENDERSKY, D.D.S., and BENDERSKY PROFESSIONAL CORPORATION, Respondents



The opinion of the court was delivered by: DUFF

 BRIAN BARNETT DUFF, UNITED STATES DISTRICT JUDGE

 Petitioner Ann McLaughlin, in her capacity as Secretary of the United States Department of Labor ("the Department"), brings this action against respondents Alan Bendersky and the Bendersky Professional Corporation (BPC). *fn1" She seeks to compel respondents to comply with a subpoena duces tecum issued to them by the Associate Director of Enforcement of the Pension and Welfare Benefits Administration ("the PWBA") pursuant to an investigation the PWBA is conducting under the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq. Respondents, in turn, want the subpoena quashed and the petition to compel denied.

 BACKGROUND

 According to the petition and attached exhibits, in May 1983 BPC entered into a contract with the Hotel Employees and Restaurant Employees International Union Welfare Fund ("the Fund"), in which it agreed to provide dental services to the Fund pursuant to a specified rate schedule. *fn2" The PWBA has apparently been involved in an ongoing investigation into the affairs of the Fund for quite some time, and now wants to examine the records of BPC.

 After respondents declined to voluntarily comply with an initial request for all of their business documents and records, the PWBA served them with a subpoena ordering them to produce these materials. Respondents partially complied with the subpoena, providing the PWBA with numerous business documents and records relating to BPC's transactions with the Fund and its beneficiaries. They refused, however, to allow the materials to be copied or otherwise transcribed, and also refused to produce " all annual or other regular financial statements (audited or unaudited) and supporting documents and workpapers."

 Petitioner then filed this action, seeking an order to show cause why the respondents would not comply. Respondents then moved to quash the subpoena on the grounds that the materials they had not produced were irrelevant to any legitimate investigation. They argued that the subpoena did not relate to BPC's contract and transactions with the Fund and thus could not provide evidence of an ERISA violation.

 Petitioner subsequently filed an amended petition narrowing the scope of its demands to "only those of respondents' business records or parts thereof (describe in the attachment to each subpoena) that relate to respondents' activities in generating services provided to the [the Fund] identified in [the subpoena]." More specifically, the amended petition sought from the respondents their business records relating to one or more of the following subjects:

 
b. any transaction involving any respondent and [the Fund];
 
d. goods or services or both used by any respondent in generating services provided to [the Fund];
 
e. any respondent's transactions (including payment of compensation or fees), relating to any respondent's services provided to [the Fund], with respondents' present or former employees, agents, or contractors who performed work relating to those services;
 
f. transactions relating to any agreement between any respondent and John Dolan relating to services provided to [the Fund];
 
g. transactions involving any respondent's receipt of credit used, whether directly or indirectly, in ...

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