What Is a Civil Investigative Demand

A civil investigative demand (CID) is a tool, like a subpoena, that the government uses to obtain documents and information to investigate potential violations of the False Claims Act.

The False Claims Act expressly authorizes the government to use civil investigative demands in False Claims Act investigations and describes the process the government must follow, 31 U.S.C. § 3733. Through a CID, the government can require any person or entity to:

• Produce documents
• Answer written interrogatories
• Give oral testimony

The United States may investigate potential violations of the False Claims Act on its own initiative or after the filing of a qui tam complaint, as we’ve discussed in other posts. CIDs are used only during the government’s pre-litigation investigation: the government may issue a CID only before filing a complaint in a government initiated action or before electing to intervene in a qui tam action. Once the government begins litigating against a defendant, discovery proceeds under the Federal Rules of Civil Procedure.

Parties receiving a civil investigative demand often will not know why the demand has been issued: although the False Claims Act requires the CID to “state the nature of the conduct” being investigated, the descriptions the government provides are usually highly generalized. Neither will parties receiving CIDs know whether the CID has been issued because the government is investigating a sealed qui tam complaint that has been filed against them. That said, experienced counsel can often glean from the face of the requests the issues in which the government is interested.

Parties receiving a CID can challenge the CID in federal district court by petitioning to modify or set aside the CID. Such petitions are rare, however, given the broad authority the government is granted under the False Claims Act to obtain “any documentary material or information relevant” to a False Claims Act investigation. In a previous post, we analyzed judicial opinions that address challenges to CIDs and discussed strategies that parties objecting to CIDs have employed.

Documents and information produced in response to a CID are generally kept confidential and used only by the government for its investigation. However, section 3733 provides that the government may share information produced in response to a CID with a qui tam relator if the government “determine[s] it is necessary.”

As we have covered in a previous post, the rate at which CIDs have been issued has multiplied in recent years, at the same time as CIDs have become broader and more invasive. Given the government’s continued focus on investigating and policing False Claims Act violations, this trend is only likely to continue.

How to Respond to a Civil Investigative Demand

Individuals or entities receiving a CID would be well advised to consult experienced False Claims Act counsel. The first steps in responding to a CID often include the following:

• Meet with counsel to develop a response plan
• Identify relevant data sources and document custodians
• Implement a legal hold to preserve potentially relevant documents
• Negotiate with the government about the scope and timing of any response
• Conduct any necessary substantive internal investigation