The U.S. Court of Appeals for the Second Circuit affirmed a district court order enforcing National Labor Relations Board subpoenas against a network of related companies, rejecting multiple jurisdictional challenges in a decision that strengthens federal labor investigators' authority.
The court ruled February 3, 2026, in *National Labor Relations Board v. Universal Smart Contracts, LLC*, upholding the enforcement of four administrative subpoenas duces tecum against Universal Smart Contracts LLC, Party Shuttle Tours LLC, City Info Experts LLC, and Charles Thomas Schmidt. The decision also affirmed an award of attorneys' fees and costs to the NLRB.
The case originated when the NLRB sought to enforce administrative subpoenas in the U.S. District Court for the Southern District of New York. Judge Valerie E. Caproni granted the NLRB's enforcement application and awarded the agency attorneys' fees and costs, prompting the companies and Schmidt to appeal.
On appeal, the defendants challenged multiple aspects of the district court's ruling. They contested the court's subject-matter jurisdiction, personal jurisdiction, and venue determination. The companies also challenged the district court's refusal to transfer the case to the Southern District of Texas and the award of fees and costs to the NLRB.
The Second Circuit panel, consisting of Circuit Judges Sullivan, Bianco, and Robinson, heard oral arguments on January 10, 2025. The appeal was designated as No. 24-149 during the court's August Term 2024.
The district court had concluded that the National Labor Relations Act authorizes nationwide service of process and that the NLRB's inquiry was being conducted in the Southern District of New York. This finding supported both the court's jurisdictional determinations and its venue analysis.
The case demonstrates the broad investigative powers granted to the NLRB under federal labor law. Administrative subpoenas are a key tool for the agency to gather information during investigations of potential unfair labor practices or other violations of the National Labor Relations Act.
The enforcement of administrative subpoenas typically follows a standard legal framework. When a party refuses to comply with an NLRB subpoena, the agency can seek federal court enforcement. Courts generally apply a relatively low standard for enforcement, requiring only that the subpoena be issued for a lawful purpose and seek information reasonably relevant to that purpose.
The involvement of multiple related companies in this case suggests the NLRB may have been investigating potential joint employer relationships or coordinated labor practices across the business network. Universal Smart Contracts, Party Shuttle Tours, and City Info Experts appear to operate in different business sectors, which could indicate complex corporate structures that the NLRB sought to understand through its subpoenas.
Charles Thomas Schmidt's individual involvement as a named respondent suggests he may hold a significant role across the company network or have personal involvement in the matters under investigation. Federal labor law can impose individual liability on corporate officers and agents who participate in unfair labor practices.
The attorneys' fees award represents an important aspect of the decision. Federal courts can award fees to prevailing parties in NLRB enforcement actions, particularly when respondents have acted in bad faith or raised frivolous challenges. The Second Circuit's affirmance of the fee award suggests the panel found the companies' resistance to the subpoenas was not justified.
The jurisdictional challenges raised by the companies reflect common defense strategies in federal administrative enforcement cases. Companies often contest personal jurisdiction when they operate primarily outside the enforcement district, or challenge subject-matter jurisdiction based on technical arguments about the agency's authority.
Venue challenges in NLRB cases typically center on where the agency's investigation is based versus where the companies operate. The district court's finding that the NLRB inquiry was being conducted in the Southern District of New York was sufficient to establish proper venue under federal law.
The companies' unsuccessful attempt to transfer the case to the Southern District of Texas suggests they may have preferred to litigate in Texas, possibly due to more favorable precedent or logistical considerations. However, federal law generally allows NLRB enforcement actions to proceed where the agency chooses to file, subject to basic jurisdictional requirements.
This decision reinforces the NLRB's investigative authority and the courts' willingness to enforce administrative subpoenas when proper procedures are followed. The case may influence how companies respond to future NLRB subpoenas and could encourage more robust enforcement efforts by the agency.
The timing of the decision, coming in early 2026, may reflect broader trends in federal labor enforcement. The case adds to the body of precedent supporting administrative agency investigative powers across multiple federal circuits.
For employers facing NLRB investigations, the decision serves as a reminder that challenging subpoenas on jurisdictional grounds faces significant hurdles. Companies may be better served by cooperating with investigations or negotiating the scope of document production rather than mounting wholesale challenges to agency authority.