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Tesoro Petroleum Corporation v. State2/15/2002
ing administrative subpoenas for relevance. The In re Sealed Case court explained that courts must "defer to the agency's appraisal of relevancy, which must be accepted so long as it is not 'obviously wrong'" For federal courts, an inquiry must be "reasonably relevant to the general purposes of the agency's investigation." The government agency may define the boundaries of the investigation "quite generally." When an agency claims the information sought is relevant, federal courts "require the party challenging the investigation to bear the burden of demonstrating that the information sought is irrelevant." This deference in establishing relevance is appropriate because " t the investigatory stage, the Commission does not seek information necessary to prove specific charges; it merely has a suspicion that the law is being violated in some way and wants to determine whether or not to file a complaint."
The deferential approach to establishing relevance is sound. It is also supported by our holding in Matanuska Maid that the respondent bears the burden of proving whether a CID is reasonable. We therefore hold that when a trial court reviews a CID under AS 45.50.592, it should examine whether the subpoena is " issued pursuant to lawful authority, relevant to the inquiry for which it is issued and contains adequate specification of the documents to be produced." We adopt the federal courts' deferential reasonable relevance standard to determine whether the subpoena is relevant to the inquiry for which it is issued.
We disagree with Tesoro that the superior court applied a criminal law-based "prosecutorial discretion" standard. We look to the superior court's written decision to ascertain the standard applied. That decision explained: "Given the scope of the Attorney General's authority under the statute, and the deference given to agencies with statutory investigative powers, the Court finds that the CIDs are not unreasonable." This statement reflects the permissive relevance standard outlined above. We conclude that the superior court applied the correct standard of review for a CID.
D. The Superior Court Did Not Abuse Its Discretion by Holding the CID to be Reasonable and Not Oppressive.
1. CID as a whole
Tesoro contends that the superior court erred by failing to modify the CID because the CID, which Tesoro calls "sweeping in scope," contains twenty-five pages, covers broad subject matter, and is "unreasonable and oppressive" under Rule 45(b)(1). Such a demand, argues Tesoro, is insupportable because it is "out of proportion to the end sought."
Because the court applied the correct "deferential reasonable relevance" standard of review, we review the superior court's application of that standard to the facts in the case for an abuse of discretion. Given the superior court's extensive factual and legal inquiry, as well as the substantial modifications it made to the CID, we conclude that the superior court did not abuse its discretion.
In the attorney general's opposition to Tesoro's petition to modify the CID, the State explained the purpose of the investigation:
Why are prices so high when sizeable volumes of gasoline and other petroleum products are refined here in Alaska? Are prices higher due to higher labor or refining costs in Alaska? Are prices higher due to increased transportation costs to Alaska? If gasoline prices are so high, why aren't traditional market forces attracting other companies to Alaska to compete for these abnormally large margins? With such high prices, why has gasoline actually been shipped out of Alaska, instead of being sold to Alaskans for the highest retail price in th
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