Feigin v. Colorado Nat. Bank, N.A., 94SC20

• Citation: 897 P.2d 814
• Decision Date: 12 June 1995
• Docket Number: No. 94SC20,94SC20
• Parties: Philip A. FEIGIN, as Securities Commissioner for the State of Colorado, Petitioner, v. COLORADO NATIONAL BANK, N.A., Respondent.
• Court: Supreme Court of Colorado

Page 814

897 P.2d 814

Philip A. FEIGIN, as Securities Commissioner for the State of Colorado, Petitioner, v. COLORADO NATIONAL BANK, N.A., Respondent.

No. 94SC20.

Supreme Court of Colorado En Banc.

June 12, 1995.

Gale A. Norton, Atty. Gen., Stephen K. ErkenBrack, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., Merrill Shields, Deputy Atty. Gen., Richard Djokic, First Asst. Atty. Gen., Denver, for petitioner.

Gorsuch, Kirgus, L.L.C., Mark C. Hansen, Keith F. Woods, Randall F. Komisarek, Denver, for respondent.

Raymond T. Slaughter, Katherine M. Clark, Denver, for amicus curiae Colo. Dist. Attys. Council.

Justice KIRSHBAUM delivered the Opinion of the Court.

In this case the trial court entered an order directing the petitioner, State of Colorado Securities Commissioner Philip A. Feigin (the commissioner), to reimburse the respondent, Colorado National Bank, N.A. (the bank), for costs incurred by the bank in complying with an administrative subpoena duces tecum issued by the commissioner pursuant to the Colorado Securities Act (the Act). §§ 11-51-101 to -908, 4B C.R.S. (1994 Supp.). The commissioner has appealed that order. ¹ We conclude that under the circumstances the trial court abused its discretion. We therefore reverse the trial court's order and remand the case to that court with directions.

I

On May 24, 1993, the commissioner issued an administrative subpoena duces tecum to the bank pursuant to section 11-51-601(2), 4B C.R.S. (1994 Supp.), of the Act requiring the production of various bank records relating to the business activities of Replen-K, Inc. In response to the subpoena, the bank produced numerous monthly bank statements of Replen-K, Inc. and by telephone conversations and written communications assisted the commissioner in narrowing the scope of the inquiry.

On July 27, 1993, pursuant to the Act, the commissioner issued the administrative subpoena duces tecum underlying this appeal. The subpoena directed the bank to produce, on or before September 1, 1993, all deposit records, wire transfer information, specified miscellaneous debits and related items, and all canceled checks in the amount of $150 or more with respect to Replen-K, Inc. for the period of January 1991 to April 1993.

By letter dated August 11, 1993, the bank requested the commissioner to make an advance payment of $2,360 for anticipated expenses of locating and copying the documents specified in the subpoena. On September 24, 1993, the commissioner filed a Verified Application for Ex Parte Order Enforcing Subpoena Duces Tecum in the trial court, pursuant to section 11-51-601(3), 4B C.R.S. (1994 Supp.), seeking enforcement of the subpoena. That same day the trial court, ex parte, entered an order directing the bank to comply with the terms of the subpoena.

On October 1, 1993, the bank filed a motion for reconsideration of the trial court's enforcement order. The bank did not directly challenge the substance of the order, but did request the trial court to require the commissioner to assume responsibility for payment of expenses incurred by the bank in complying with the subpoena. The bank argued that in view of the fact that section 11-51-601(2) of the Act contains no provisions respecting costs of compliance with administrative subpoenas, the protections afforded to recipients of subpoenas by C.R.C.P. 45(b) in civil litigation must be deemed applicable to enforcement proceedings initiated by the commissioner pursuant to the Act. The commissioner argued in response that in the absence of legislation concerning responsibility for costs associated with the production of information pursuant to administrative subpoenas the commissioner has no authority to pay for expenses of complying with such subpoenas. The commissioner also argued that for purposes of C.R.C.P. 81(a), proceedings to enforce administrative subpoenas filed pursuant to the Act are ancillary proceedings rather than special statutory proceedings and therefore are not subject to the provisions of C.R.C.P. 45(b).

The trial court subsequently issued an order directing the bank to make the requested documents available to the commissioner for reproduction at the commissioner's expense or, alternatively, on the condition that the commissioner reimburse the bank for the bank's reproduction costs. The trial court held that C.R.C.P. 45(b) is applicable to subpoena enforcement proceedings initiated pursuant to the Act.

II

On March 16, 1994, during the pendency of this appeal, the trial court, pursuant to Crim.P. 41, issued a search warrant for the seizure of documents maintained by the bank relating to the business activities of Replen-K, Inc. The warrant authorized the attorney general to seize the documents listed in the administrative subpoena issued on July 27, 1993, as well as other documents. On May 6, 1994, the trial court filed a notice suggesting that the issue raised by this appeal may be moot because the commissioner had in fact received the documents requested in the July 27, 1993, administrative subpoena. ² The commissioner and the bank contend that the issue is not moot and, even if technically moot, should nevertheless be determined. We agree with the parties' position.

A case otherwise moot may nevertheless be adjudicated if the controversy is one capable of repetition but also capable of evading review. Colorado-Ute Elec. Ass'n, Inc. v. Public Utils. Comm'n, 760 P.2d 627, 633 (Colo.1988); Goedecke v. State Dept. of Insts., 198 Colo. 407, 410 n. 5, 603 P.2d 123, 124 n. 5 (1979) (quoting Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973)); Star Journal Publishing Corp. v. County Court, 197 Colo. 234, 236, 591 P.2d 1028, 1029 (1979). Furthermore, a case is not moot where interests of a public nature are asserted under conditions that may be repeated immediately. Page v. Blunt, 126 Colo. 324, 327, 248 P.2d 1074, 1075 (1952).

Initially, we note that neither party to this appeal has complied with the trial court's November 4, 1993, enforcement order. We assume that whatever documents the bank has produced were produced pursuant to the terms of the search warrant. ³ The record does not suggest that the commissioner paid any of the expenses incurred by the bank in reproducing the documents. The enforcement order may well be deemed of no practical effect. However, the commissioner can effectively prevent any appellate court from addressing the issue before us in similar circumstances by obtaining a search warrant pursuant to Crim.P. 41 for the production of materials initially demanded by an administrative subpoena. According to a supplemental record filed by the parties in this case, sixteen administrative subpoenas were issued by the commissioner to the bank and its affiliates in connection with various investigations conducted pursuant to the Act from January 1992 until May 1994; the bank has submitted invoices to the commissioner requesting reimbursement of expenses incurred in complying with those subpoenas totalling approximately $4,900; and the commissioner has refused to pay those costs on the ground that such reimbursement is not authorized by the Act. There is thus a reasonable certainty that these parties will litigate this issue again. The issue is one of considerable public significance and has not been determined by this court. Under these circumstances, we conclude that the issue of the trial court's authority to require the commissioner to pay costs incurred by the bank in complying with the July 27, 1993, administrative subpoena is a question that is capable of repetition but that could avoid judicial review. We will therefore address the issue.

III

A

The commissioner argues that the trial court erred in holding that the provisions of C.R.C.P. 45(b) are applicable to the enforcement proceeding initiated on September 24, 1993, and that the trial court had no authority to impose costs of reproducing the requested documents on the commissioner in this case. We agree with the commissioner's argument that C.R.C.P. 45(b) is not directly applicable to enforcement proceedings filed pursuant to the Act. However, we reject the commissioner's argument that the trial court had no authority in this proceeding to require the commissioner to pay a portion of the reasonable costs of reproducing the requested documents.

C.R.C.P. 45 states in pertinent part as follows:

Rule 45

. Subpoena

(a) For Attendance of Witnesses; Form; Issue. Subpoenas may be issued under Rule 45 only to compel attendance of witnesses, with or without documentary evidence, at a deposition, hearing or trial. Every subpoena shall state the name of the court, and the title of the action, and shall command each person to whom it is directed to attend and give testimony at a time and place therein specified.

(b) For Production of Documentary Evidence. A subpoena may also command the person to whom it is directed to produce the books, papers, documents, or tangible things designated therein; but the court, upon motion made promptly and in any event at or before the time specified in the subpoena for compliance therewith, may: (1) Quash or modify the subpoena if it is unreasonable and oppressive; or (2) condition denial of the motion upon the advancement by the person in whose behalf the subpoena is issued of the reasonable cost of producing the books, papers, documents, or tangible things.

C.R.C.P. 45, 7A C.R.S. (1984). The provisions of C.R.C.P. 45(a) authorize the issuance of subpoenas to compel the attendance of witnesses at depositions, hearings, or at trial. A subpoena issued pursuant to C.R.C.P. 45(a) need not require the person subpoenaed to bring documents to the scheduled event. The provisions of C.R.C.P. 45(b) become relevant only if the subpoena requires a witness to produce documents at a deposition, hearing, or trial.

The administrative subpoena issued by the commissioner on July 27, 1993, was not issued pursuant to C.R.C.P. 45(a), but was...