696 F.2d 678 (9th Cir. 1983), 81-3562, Donovan v. National Bank of Alaska

Docket Nº:81-3562.
Citation:696 F.2d 678
Party Name:Raymond J. DONOVAN, Secretary of the United States Department of Labor, Plaintiff-Appellant, v. NATIONAL BANK OF ALASKA, Defendant-Appellee.
Case Date:January 10, 1983
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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696 F.2d 678 (9th Cir. 1983)

Raymond J. DONOVAN, Secretary of the United States

Department of Labor, Plaintiff-Appellant,


NATIONAL BANK OF ALASKA, Defendant-Appellee.

No. 81-3562.

United States Court of Appeals, Ninth Circuit

January 10, 1983

        Argued and Submitted April 9, 1982.

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[Copyrighted Material Omitted]

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        Sherwin Kaplan, Washington, D.C., for plaintiff-appellant.

        Eugene J. Metzger, Washington, D.C., for defendant-appellee; Charles Dunnagan, Jermain, Dunnagan & Owens, Anchorage, Alaska, Merzger, Shadyac & Schwarz, Washington, D.C., on brief.

        Appeal from the United States District Court for the District of Alaska.

        Before HUG, SKOPIL, and FLETCHER, Circuit Judges.

        FLETCHER, Circuit Judge:

        The sole issue raised in this case is whether the Secretary of the United States Department of Labor is entitled to enforcement of a subpoena requesting information pertaining to the bank's ERISA accounts. The district court quashed the subpoena and dismissed the action. We note jurisdiction under 28 U.S.C. Sec. 1291 (1976) and reverse.



        The United States Department of Labor is conducting an investigation of the National Bank of Alaska to determine whether any individual is violating or has violated any provision of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Sec. 1001 et seq. (1976). In the course of its investigation, an administrative subpoena duces tecum was served on the bank.

        The subpoena has two parts. The first part requires the bank to produce general information, e.g., the names of all employee benefit plans whose assets are held by the bank along with the name and address of the plan sponsor and the total amount of plan assets held. The subpoena then goes on to state that upon receipt of the above information, the Department of Labor will select 25 plans for more thorough examination. With respect to these 25 plans, the subpoena requires the following:

[A]ll documents maintained by the bank relating to transactions or dealings with, for or on behalf of the employee benefit plans selected, including but not limited to: any correspondence; memorandum;

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notes; agreements; drafts of agreements; contracts; draft minutes or records of telephone conversations; meetings or conferences; books; diaries; logs; calendar notations; financial statements; balance sheets; computer printouts; ledgers and journals and supporting documents; bank statements, cancelled checks, check stubs; deposit slips, remittance records of all checks deposited or cashed and amounts withdrawn through other banks and agencies; loan, real estate, and credit files; bills; books of account; [etc.]

        After the bank refused to comply with the subpoena, this action was filed.

        The trial court entered an order dismissing the Secretary's petition for enforcement of the subpoena and granting the bank's motion to quash. The only reason stated in the trial court's decision was that "the Secretary of Labor has not authorized the investigation as to which the subpoena dated January 23, 1981 was issued." The Secretary appeals from that order, seeking both reversal and an order directing the district court, on remand, to issue an order enforcing the subpoena in its entirety.



  1. Does the Secretary of Labor have authority to delegate his investigative powers?

            In quashing the subpoena, the district court apparently relied solely on the ground that Secretary Donovan did not personally sign the subpoena or authorize the investigation. The Bank contends that this ruling should be sustained on appeal for any one of three reasons. We disagree.

            The Bank's first argument on this issue rests primarily on two Supreme Court cases: Cudahy Packing Co. v. Holland, 315 U.S. 357, 62 S.Ct. 651, 86 L.Ed. 895 (1942) and United States v. Giordano, 416 U.S. 505, 94 S.Ct. 1820, 40 L.Ed.2d 341 (1974). Neither of these decisions, which stand for the proposition that courts will not assume authority on the part of the head of a federal agency to subdelegate in the face of clear legislative prohibitions against such delegations, provides a basis for quashing the subpoena in this case.

            In Fleming v. Mohawk Wrecking & Lumber Co., 331 U.S. 111, 67 S.Ct. 1129, 91 L.Ed. 1375 (1947), the Supreme Court retreated from the broad language in Cudahy by confining that case to its facts, including the fact that the legislative history of the statute involved in Cudahy indicated that a specific provision granting authority to delegate had been removed in conference. The erosion of Cudahy, commenced in Fleming, was completed by the Reorganization Act of 1949, ch. 226, Sec. 2 et seq., 63 Stat. 203 (current version at 5 U.S.C. Sec. 901 et seq. (1976)), and the various reorganization plans prepared and promulgated thereunder. The Act explicitly authorizes the President to issue reorganization plans that provide for "the authorization of an officer to delegate any of his functions." 5 U.S.C. Sec. 903(a)(5). Pursuant to the Act, President Truman promulgated Reorganization Plan No. 6 of 1950, which in pertinent part states:

    The Secretary of Labor may from time to time make such provisions as he shall deem appropriate authorizing the performance by any other officer, or by any agency or employee, of the Department of Labor of any function of the Secretary....

            Reorg. Plan No. 6 of 1950, Sec. 2, 15 Fed.Reg. 3174 (1950), reprinted in 5 U.S.C.A. app. at 234 (1975)...

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