United States v. Valentine
2:25-mc-50250
E.D. Mich.Mar 17, 2025Background
- The U.S. government sought tax return information from the Michigan Department of Treasury concerning Charise Valentine and related individuals/corporations as part of a controlled substances investigation.
- The government used an administrative subpoena under 21 U.S.C. § 876 to request the records.
- Michigan's Department of Treasury did not challenge the subpoena’s validity but argued it could not comply under Michigan law without a court order.
- Valentine challenged the use of an administrative subpoena, arguing a judicially-approved subpoena was necessary under Federal Rule of Criminal Procedure 17.
- The U.S. government moved to compel Michigan to release the records, asserting that federal law preempts state restrictions in these circumstances.
- The court had to consider whether the federal statute preempts Michigan’s law requiring a judicial order for disclosure of tax information.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal law allows the use of an administrative subpoena for state tax records in a criminal investigation | Federal law permits it under § 876 | A judicial order is required under state law | Federal law preempts state court order requirement |
| Whether Michigan’s judicial order requirement is preempted by 21 U.S.C. § 876 | Federal preemption applies | State law requires a judicial order | State law is preempted; § 876 controls |
| Use of administrative (vs. judicial) subpoena | Administrative subpoena is proper in this context | Rule 17 judicial subpoena required | Administrative subpoena is proper under § 876 |
| Whether Michigan must comply and release the records | Yes, upon compelled order | No, not without a court order | Michigan must comply and release records |
Key Cases Cited
- United States v. Phibbs, 999 F.2d 1053 (6th Cir. 1993) (administrative subpoenas under 21 U.S.C. § 876 are distinct from judicial subpoenas and may be used to gather evidence for criminal investigations)
- Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88 (1992) (federal preemption occurs where state law stands as a barrier to congressional objectives)
- Gonzales v. Raich, 545 U.S. 1 (2005) (Congress's authority to regulate and enforce controlled substances laws overrides conflicting state laws)