The opinion of the court was delivered by
This is аn appeal by the defendant, The Coca Cola Company (Coke), from an order of the Shawnee County District Court compelling compliance with interrogatories and a subpoena duces tecum issued by the Director of Revenue in connection with a hearing on an assessment of additional income tax liability. The procedural history of this matter is as follows.
The Department of Revenue conducted an audit, which resulted in an assessment
of
additional income tax
against Coca
Cola. This additional assessment was based on the Department’s conclusion that income from certain foreign subsidiaries should be taxable because of a unitary relationship between Coke and the subsidiaries. See the Uniform Division of Income for Tax Purposеs Act, K.S.A. 79-3271
et seq.
The taxpayer timely petitioned the director for a hearing on this assessment. K.S.A. 79-3226. A hearing was held on April 19,1983, at which time one witness testified on behalf of the taxpayer. The matter was
On Aрril 9, 1986, the Court of Appeals, by an unpublished order, dismissed the appeal as interlocutory. Coke petitioned this court for review. Finding that the sole issue before the district court, which it decided, was the enforcement of the subpoena and interrogatories issued by the director, and that the appeal was not interlocutory but from a final order, we granted review, vacated the Court of Appeals’ order of dismissal, and reinstated the appeal. See
Kansas Commission on Civil Rights v. Sears, Roebuck & Co.,
We turn now to thе issues raised by Coke in this appeal. It first contends that the interrogatories and subpoena were “untimely.” It contends that the Department’s power to issue inter
Coke contends that the Department’s power to issue subpoenas and interrogatories is the same as that of a trial court, and that such power ceases at the commencement of trial. There is no statutory bar to the issuance of subpoenas during trial. Such practice is commonplace, and we have been cited to no authority to the contrary. As to interrogatories, their issuance is usually governed in civil trials by a cut-off date for discovery, but no such cut-off date is shown to have been fixed in this proceeding.
K.S.A. 79-3233 describes the director’s powers and authorizes the director to issue subpoenas and interrogаtories “to the same extent and subject to the same limitations as would apply if the subpoena or interrogatories were issued or served in aid of a civil action in the district court.” The use of interrogatories in civil proceedings is gоverned by K.S.A. 60-233, which permits their service on a defendant “with or after service of process upon that party.” K.S.A. 60-233 does not expressly forbid the use of interrogatories after trial has begun, nor does any case law interpreting that section. Likewise, K.S.A. 60-226(d), governing sequence and time of discovery, does not prohibit discovery after the onset of trial. K.S.A. 1985 Supp. 60-245 governs the issuance of subpoenas in civil litigation and does not expressly limit their use to the time prior to trial.
The administrative regulations are quite broad. K.A.R. 92-12-65 authorizes the director to issue subpoenas and interrogatories at “any time before or after an assessment has been made.” The trial court, in upholding the authority of the director to issue subpoenas and interrogatories in this case, relied upon
Yellow Freight System, Inc., v. Kansas Commission on Civil Rights,
“The investigative аnd reporting duties assigned to the commission, when considered in the light of the statute’s general purposes, lead us to the conclusion that the legislature did not intend to limit the exercise of the commission’s investigatory powers to the preliminаry stages of the complaint procedure outlined in K.S.A. 1971 Supp. 44-1005. The commission must be free to investigate, which necessarily implies the use of its subpoena authority, if it is to carry out and give meaning to all the investigatory and reporting duties assigned it in K.S.A. 1971 Supp. 44-1004.”214 Kan. at 124 .
“[T]he director’s duty to ascertain the correctness of tax returns and effect compliance with the state’s tax law requires liberal construction of the Director’s investigative powers, including the power to issue subpoenas and interrogatories. For this reason, the Director’s power was not foreclosed by setting the matter for hearing, and the subpoena and interrogatories in question were timely.”
The director should be free to issue subpoenas and interrogatories within the bounds of reasonable discretion. There was no abuse of discretion here.
Next, Coke raises a due process issue. It claims that it would be denied due process if it is forced to comply because it would be denied reasonable opportunity to know the issues and the evidence relied upon by the department. The only reference to the record before the department is that contained within appellee’s brief, and that shоws clearly that counsel for Coke is well aware of the issues. The hearing is not over, and if the information the director is requesting is offered in the record, Coke will have an opportunity to explain that evidence or offer other еvidence if it desires to do so.
The essential elements of due process are notice and a meaningful opportunity to be heard and to defend in an orderly proceeding adapted to the nature of the case.
Barnes v. Kansas Dept. of Revenue,
Coke next contends that the trial court erred in finding that the material sought by the subpoena duces tecum and the interrogatories was relevant to the issue before the administrative hearing tribunal — i.e., whether there was a unitary relationship between Coke and the foreign subsidiaries, or whether the foreign subsidiaries were separate and discrete enterprises. The documents and information sought by the subpoena and the interrogatories appear to have a definite bearing on that issue. Coke argues that the information sought includes Coke’s secret ingredient in its various products. The Department is seeking information as to the dissemination of that information throughout the foreign subsidiaries, not the secret chemical formulae. We find that the trial court did not err in finding that the informаtion sought is reasonably related to and relevant to the issue.
Finally, Coke contends that the interrogatories and subpoena duces tecum are unreasonably burdensome and oppressive. That issue was not raised initially by Coke in the district court. In its initial memorandum to counsel, upholding the interrogatories and the subpoena, the trial court, in discussing relevancy, said:
“The subpoena and interrogatories are definite, and facially appear to have some bearing on the relationship between Coke and its subsidiaries. Accordingly, absent a showing that the subpoena and interrogatories are unreasonable or oppressive, they are proper and the order compelling compliаnce is sustained.” (Emphasis supplied.)
Coke then filed a motion for reconsideration in which it alleged that the requests of the subpoena and interrogatories are unreasonable and oppressive. In ruling on this motion, the trial court said:
“Dеfendant now claims that the interrogatories and subpoena are oppressive and unreasonable, therefore defendant should not be required to comply. Under today’s liberal discovery principles a party objecting tо discovery must carry a heavy burden of showing why discovery should be denied. Blankenship v. Hearst Corp.,519 F.2d 418 (1975). Whether good cause exists to deny discovery or issue protective orders must be based upon factual data, not unsupported contentions and conclusions. Apco Oil Corp. v. Certified Transportation, Inc.,46 F.R.D. 428 (1969). Defendant has failed to carry the burden of showing good cause since no factual data has been presented to the Court. Defendant simply makes little more than general blanket allegations that the interrogatories and subpoеna are broad and unreasonable. Discovery requests are not objectionable simply because they are facially broad. By its very nature, discovery is burdensome to some extent, but without more of a showing by defendant, the Court will not rеverse its order compelling compliance.”
Coke now asks that the matter be remanded to the trial court so that it may make a determination on the issues of unreasonableness and oppression. The trial court has alreаdy made that determination. We have carefully reviewed the record, and conclude that the trial court did not err in finding that the requests were neither unreasonable nor oppressive.
The judgment of the Court of Appeals is reversed and the judgment of the district court is affirmed.