State of Delaware Dept of Finance v. AT&T Inc.

Summary

The Supreme Court of Delaware affirmed the Court of Chancery’s decision to quash an administrative subpoena issued to AT&T, holding that the subpoena-enforcement framework requires a showing of legitimate purpose, potential relevance, lack of agency possession, and compliance with administrative requirements. Although the Department satisfied those requirements and was entitled to a strong presumption of good faith, the Court of Chancery acted within its discretion in seeking further explanations about the subpoena’s breadth and the auditor’s incentives, and in quashing the subpoena when the Department refused to provide them. Because the Court announced new procedures and substantive standards, it remanded to permit the Department to issue a new subpoena and, if necessary, file an amended enforcement complaint.