DA Not Obliged to Pay for Subpoenaed Documents

DALLAS (CN) - A Texas bank cannot force a district attorney's office to compensate it for producing over 38,000 pages of subpoenaed account records, a Texas appeals court ruled.

Preston State Bank was served with a subpoena in October 2009 asking for documents from two of its account holders. After the Dallas-based bank complied with the request, it asked about reimbursement, only to be told it is not entitled to recover costs for a criminal grand jury subpoena.

Preston sued Collin County District Attorney Greg Willis in 2010, claiming his office's refusal to reimburse it for the documents amounts to an unconstitutional taking of property for public use under both the state and federal constitutions.

According to the trial court, the bank "nobly complied with the grand jury subpoena so as not to delay the prompt and efficient administration of justice and agreed to take its arguments to court to settle."

Texas later intervened in the suit to defend the section of the Texas Finance Code that purportedly exempts the government from reimbursing the production of private records for a government subpoena.

In January 2012, the trial court denied the bank's motion for summary judgment and granted Willis and the state's cross-motion for summary judgment.

A three-judge panel with the 5th District Court of Appeals affirmed the ruling on Tuesday, agreeing that there was no unconstitutional taking.

Writing for the court, Justice David L. Bridges cited the U.S. Supreme Court's ruling in Hurtado v. U.S. in 1973 that said "the Fifth Amendment does not require the government pay for the performance of a public duty it is already owed."

In that case, the court rejected potential witnesses having a right to reimbursement for expenses incurred in testifying.

"The bank concedes the government may subpoena records," Bridges' 16-page opinion stated. "The bank also concedes that it has a duty to comply with the subpoena. The point of contention between the bank and appellees is whether a party must fulfill that duty without compensation. The United States Supreme Court has concluded that it must."

Bridges disagreed with the bank's argument that the extension of Hurtado for document production by federal appellate courts happened before Congress enacted a law in 1978 requiring reimbursement to banks for complying with financial records requests "made by a government authority."

"But the fact that Congress has provided for compensation does not alter the constitutional analysis," the opinion stated. "Whether or not the legislature has chosen to provide reimbursement, there is no constitutional taking."

Bridges ruled for Willis and the state in spite of disagreeing with the trial court's conclusion that a "taking" had taken place, just not an "unreasonable taking."

"But when there is any taking, the bank argues, whether reasonable or unreasonable, the government must pay compensation," he wrote. "Under Hurtado, however, there is no taking. No compensation is required by either the state or the federal Constitution.

Although the trial court erred by concluding that a 'taking' occurred, that error did not cause the rendition of an improper judgment, because the judgment did not require any compensation for the alleged 'taking,'" Bridges wrote.

He also agreed that it was within the trial court's discretion to deny both sides' motions for attorney's fees.

Preston State Bank did not immediately respond to a request for comment Wednesday evening.

Follow @davejourno

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