State, Department of Finance v. AT&T, Inc.Annotate this Case
The Court of Chancery quashed a subpoena the Department of Finance, acting on behalf of the State Escheator, used to AT&T Inc. in its current form, holding that the State Escheator had the authority to issue the subpoena but that AT&T met its burden to show that the scope of the subpoena was so expansive that enforcement would constitute an abuse.
The Escheat Law authorizes the State Escheator to conduct examinations of companies' books and records to determine whether they had complied with statutory requirements of the Escheat Law, 12 Del. C. 1130-1190. When the Department began examining the books and records of AT&T and AT&T refused to produce two categories of information, the Department issued an administrative subpoena for the missing information. AT&T refused to comply and filed a federal action alleging that the State Escheator and two other state officials took actions that violated federal law and the Constitution. The Department responded by bringing this action to enforce the subpoena. AT&T responded with a motion to modify or quash the subpoena. The Court of Chancery quashed the subpoena in its current form, holding that enforcing the subpoena as written would be an abuse of the court's process.