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Court overstepped in setting licensees’ recordkeeping requirement

A district court acted improperly when it vacated a discipline decision by the state’s private investigator board after incorrectly determining that licensed investigators in Louisiana are not required to maintain client files for longer than three years, the Court of Appeal of Louisiana ruled February 17.

(Frank v. Louisiana State Board of Private Investigators)

In October 2008, Frank was hired to find the identity of an 18-year-old client’s biological mother. In January 2009, Frank met with the client and informed him that he had made progress but the client would need an additional retainer in order to continue his search. The client declined.

Tragically, in 2012, the young client committed suicide. Afterwards, the client’s father informed Frank that he wanted to resume the investigation, but Frank informed the father that he typically destroyed client files after three years and that he probably no longer had the file. Frank asked for $5,000 plus a new retainer fee in order to restart the investigation.

The father, unhappy with the prospect of paying a large amount of money on top of the $2,500 already paid to Frank by his son, filed a complaint with the  state’s private investigator board, which moved to discipline Frank on the grounds that he had misled a client and acted unprofessionally.

Following the hearings, the board concluded that Frank did, in fact, have the file when the client requested it, and thus had failed to produce the file to his client, an act the board classified as deceptive and unprofessional. The board revoked Frank’s license and ordered him to pay $22,000 in fines, fees, and restitution.

Frank appealed, and a state district court reversed the board’s decision after finding that Frank was only required to keep his client records for a period of three years. Because more than three years had passed between the time the initial action in the case was discontinued and the time that the client had requested the file, Frank had no obligation to produce it. The board appealed that decision and the case went up to the Court of Appeal.

The board argued in its appeal that no provision of law supported the district court’s finding that investigators are required to keep client files for a mandatory period of only three years. The Court of Appeals agreed. While board regulations mandate that an investigator maintain copies of contracts for services for a period of three years, no law or regulation governs the retention of client files. By ruling in favor of Frank, the district court impermissibly created a three-year prescriptive period that would effectively limit the liability of professional investigators.

The Court of Appeals then took the unusual step of conducting a complete de novo review of the case and—noting that the district court failed to review the “ample evidence” supporting the board’s finding that Frank had violated numerous statutes and regulations—moved to affirm the board’s order on its own.

The court cited Frank’s lack of credibility in his testimony and his “appalling” record-keeping practices, noting that Frank was unable to provide even basic details about his investigative practices in the case at hand, insisting that he would need to view the file, which he claimed to no longer have.

Noting the strength of the board case, Judge John Pettigrew wrote that “the transcript [of the board’s proceedings] as a whole fully supports a finding by the board that Frank’s conduct and behavior in conducting the investigation at issue and communicating with his clients was violative of at least one (incompetence) if not several other standards imposed upon him by law.”