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Statute Helps Resolve Document Production Issues
By: John E. Burrus, Esq.

C.R.S. §16-3-301.1 was passed in the 2002-2003 legislative session and will have an impact on banks and other financial institutions whose customers are involved in criminal investigations. Prior to the passage of this statute, the only tool which sheriffs, police departments and other investigators had to compel production of documents in connection with a criminal investigation was a search warrant. These agencies had no subpoena powers and unless the investigation was being pursued by a grand jury or a state agency with subpoena powers, the available investigative procedures were often unsatisfactory. A search warrant does not specify particular documents to be produced but merely permits a law enforcement official to search premises. This search warrant power was sometimes abused by certain officials who have threatened to shut down entirely the premises to be searched (including banks) unless the owner of the premises cooperated in delivering documents being sought. This often placed banks in a difficult position, particularly after passage of Regulation P pertaining to customer privacy rights. If the bank voluntarily turned over records, then there was at least some issue as to whether this violated the privacy regulations and the bank's own privacy policy unless the possibility of this type of voluntary surrender of information was revealed to customers in the privacy policy, in which case the customers may have had the right to "opt out" from such disclosures. On the other hand, if the bank refused to turn over the documents, the law enforcement officer had the legal right to search the premises himself and even to take possession of such objects as computer terminals which might contain the information. An additional problem existed with respect to institutions whose records were stored electronically at an offsite facility, particularly when the storage facility was located in another state outside the jurisdiction of the court issuing the search warrant.

The new statute helps to resolve these difficult issues. It permits a court to issue an order for the production of records "in the actual or constructive control" of a business entity provided certain grounds and criteria are met. These grounds and criteria are the following:

• The records being sought must be within certain categories, one of which is that the records "would be material evidence in a subsequent criminal prosecution in this state, another state or federal court". This is the category that most orders of this type directed to bank records would usually fall within.

• The order can be issued only on receipt by the court of an affidavit (usually by the investigating officer) setting forth various facts identifying the records sought and the grounds upon which they are sought.

• If sufficient grounds are shown, the order is issued and must identify or describe the entity which is believed to have possession or control of the records, identify or describe the records, state the grounds or probable cause for issuance, and state the names of the persons whose affidavits or testimony have been taken in support of the order.

The order is then served on the business entity believed to have the records during normal business hours within 10 days after the date of the order. It is served in the same manner as other legal process. The entity served with the order has 30 days to deliver the records or copies of the records. The records must be accompanied by a notarized statement that they represent complete and accurate copies of all records identified in the order in the possession or control of the entity. If certain records are not produced, they must be identified. The affidavit must be signed by the "records custodian or an officer or director of the business entity, who shall attest to the truth of the statement to the best of that person's knowledge, information and belief".

In lieu of producing the records, the bank may file a motion stating reasons why the order cannot be complied with. A request for extension of time may also be filed and a hearing thereon held within 10 days unless the investigator seeking the documents agrees to production at a later time.

The records may be produced in any form or format convenient for the business entity which may be accessed by the investigator. The person being investigated may be ordered to pay the costs of production. An entity complying with the statute is given immunity against claims relating to the production of the records.

In general this new statute seems to provide a more definitive and orderly process for a bank's production of records needed in criminal investigations and should help remove many of the uncertainties which existed under the prior practice.

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