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56 N.Y.U. L. Rev. 742 (1981)
Reasonable Relation Reassessed: The Examination of Private Documents by Federal Regulatory Agencies

handle is hein.journals/nylr56 and id is 760 raw text is: REASONABLE RELATION REASSESSED: THE EXAMINATION OF PRIVATE DOCUMENTS BY FEDERAL REGULATORY AGENCIES 'for knowledge itself is power' INTRODUCTION In the attempt to bring complex patterns of social and economic interaction under effective public control, Congress has relied increas- ingly on federal regulatory agencies.2 These agencies can fulfill their statutory missions only if they possess adequate information to deter- mine both when exercise of their substantive powers would be appro- priate and what form that exercise should assume. Without knowl- edge of the actual conditions prevalent in the areas committed to their supervision, agencies can act only capriciously. Of necessity, much of the data needed by regulatory agencies must be obtained from the regulated individuals or companies them- selves. Although such information often is supplied voluntarily,3 diffi- cult legal problems arise when the regulated entity refuses to divulge the requested data. These situations entail collision of important inter- ests: the private entity's proprietary rights in the data4 conflict with the public's interest in effective regulation.5 This Note examines a major aspect of this conflict: the constitutional and statutory limits on the demands of federal regulatory agencies to inspect documents held by private entities.6 I F. Bacon, Religious Meditations, in 7 The Works of Francis Bacon 253 (J. Speddlng, R. Ellis & D. Heath ed. London 1870) (1st ed. London 1597). 2 As long as a generation ago, Justice Jackson observed: The rise of administrative bodies probably has been the most significant legal trend of the last century and perhaps more values today are affected by their decisions than by those of all the courts, review of administrative decisions apart. FTC v. Ruberoid Co., 343 U.S. 470, 487 (1952) (dissenting). There are two types of administrative agencies. Regulatory agencies prescribe and enforce rules legally binding upon private agencies. Nonregulatory agencies dispense benefits under statutory social welfare schemes. See B. Schwartz & H. Wade, Legal Control of Government 26-37 (1972). This Note deals with regulatory agencies only. 3 See B. Schwartz, Administrative Law 87 (1976). 4 See text accompanying notes 74-134 infra. ' See text accompanying notes 37-45 infra. 6 This Note discusses document examination at the investigatory, prelitigation phase only. Examination during litigation would, of course, be governed by normal rules of discovery. For an explanation of differences between document inspections before and during litigation, see United States v. IBM Corp., 83 F.R.D. 97, 100-02 (S.D.N.Y. 1979). 742 Imaged with the Permission of N.Y.U. Law Review

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