* Pursuant to Local Rule 47.5, the court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in Local Rule 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 96-40174

(Summary Calendar)

INTERNATIONAL BANK OF 

COMMERCE-BROWNSVILLE,

Plaintiff-Appellant, 

versus

RE: GRAND JURY 76-77, 

ET AL., 

Defendants, 

INTERNATIONAL ENERGY 

DEVELOPMENT CORPORATION, 

Defendant-Appellee. 

Appeal from the United States District Court

for the Southern District of Texas

(B-95-MC-32)

April 18, 1997

Before HIGGINBOTHAM, WIENER and BENAVIDES, Circuit Judges. 

PER CURIAM:*

In this appeal from the district court’s denial of the motion

of Plaintiff-Appellant International Bank of Commerce-Brownsville
2

(“the Bank”) for disclosure of grand jury materials, we are asked

to overturn the ruling of the district court for its purported

abuse of discretion. Concluding that the district court did not

abuse its discretion in determining that (1) the grand jury

materials sought by the Bank are covered by the secrecy rule

regarding disclosure of such materials, (2) any potential relevance

of the grand jury materials in the state court proceedings for

which they are sought does not outweigh the policy concerns

embodied in the secrecy rule, and (3) the Bank did not bear its

burden of showing a particularized need for the disclosure of the

grand jury materials in this case, we affirm. 

I

FACTS AND PROCEEDINGS

After Defendant-Appellee International Energy Development

Corporation (“IEDC”) sued the Bank in state court on grounds of

lender liability, the matter was referred to arbitration under an

agreement between IEDC and the Bank. Such proceedings were

conducted under the Commercial Rules of the American Arbitration

Association (“AAA”). After IEDC and the Bank each struck five

potential arbitrators from the list of 15 furnished by the AAA, the

parties selected three arbitrators from among the remaining five.

The three thus selected constituted the panel that heard the

subject lender liability case in which the Bank asserted defenses

that it was furnished false information by IEDC in its loan

application. In a unanimous decision the panel awarded some
3

$3,800,000 to IEDC, which it then sought to enforce in state court.

Not surprisingly, the Bank scrambled to find all possible grounds

for vacating the panel’s award. The asserted ground that produces

the instant litigation is the Bank’s contention that one of the

three arbitrators (who shall remain nameless and is hereafter

referred to as “the Arbitrator”) would never have been allowed to

serve if he had disclosed —— as he should have, insists the Bank ——

that some 20 years earlier he had been investigated (but not

indicted) by a federal grand jury in connection with his own

dealings with financial institutions. 

According to the Bank, the Arbitrator’s prior involvement with

the grand jury implicated his purported making of false statements

and filing of false reports with several financial institutions in

connection with his own loan applications. The Bank argues that if

these facts had been known prior to the instant arbitration, they

would have disqualified the Arbitrator from service on the panel.

In support of its motion before the district court for disclosure

of materials from the grand jury that investigated the Arbitrator,

the Bank asserts that the materials would show the Arbitrator’s

potential bias and partiality and would thereby avoid injustice in

the arbitration award in the state court proceedings in which IEDC

is seeking to enforce that award. 

Despite the unavailability to date of the grand jury

materials, the Bank’s own investigation has produced the following

information: The Arbitrator was investigated by a federal grand
4

jury in the middle 1970's regarding the Arbitrator’s financial

disclosure statements to other banks, which statements were

purportedly false or inaccurate; the Arbitrator appeared before the

grand jury and testified for approximately one and one-half days;

although the Arbitrator does not recall the particular questions

put to him by the grand jury, he does recall being asked by an

attorney from the Public Integrity Section, Criminal Division,

United States Department of Justice, to resign from the federal

position held by the Arbitrator at the time, which request prompted

the Arbitrator to assemble his colleagues and discuss the matter;

a 1993 law review article had addressed the allegations that had

been made against the Arbitrator, as had a 1980 magazine article

and a 1978 article in a major newspaper. Most of the Bank’s

information was derived from its own December 11, 1995, deposition

of the Arbitrator. 

The district court conducted a hearing on November 30, 1995,

after which supplemental briefing was requested. Following

completion of that briefing, a magistrate judge conducted a hearing

on December 14, 1995. After being reviewed and approved by the

district court, an order denying the Bank’s emergency petition was

entered by the magistrate judge. In that order the court found

that the Bank had failed to demonstrate that the grand jury

material it was seeking was necessary to avoid possible injustice

in another judicial proceeding, i.e., the Bank failed to show a

“particularized need for disclosure. Relying on Douglas Oil Co. V.
 

1 441 U.S. 211, 222 (1979). 

 

2 995 F.2d 56, 59 (5th Cir. 1993). 

5

Petrol Stops Northwest1 and United States v. Miramontez2 to reach

this conclusion, the court emphasized the sufficiency of the

evidence already garnered by the Bank to support its contention in

the state court as well as the likelihood that the results of

arbitration would not have differed, given that it was a unanimous

decision of a three-person panel. The court also found inapposite

the Bank’s purported reliance on the rules of the Federal

Arbitration Act (FAA) and the guidelines of the AAA, concluding

that they are inapplicable to situations, such as the one now

before us, in which there are no allegations that would support a

conclusion that a conflict of interest existed between any

arbitrator and one or more of the parties to the arbitration. 

The Bank’s motion for reconsideration was denied by the

district court in January 1996. In so doing, the court concluded

that: 

“[i]t is apparent to this Court that virtually all of the

matters [the Bank] seeks to obtain by production of the

grand jury records have already been divulged. The state

court should be able to make a decision as to whether or

not the arbitrator’s failure to disclose that he had

testified before a grand jury in a matter involving the

arbitrator’s banking relationships tainted the

arbitration process to the extent that the award of the

arbitration panel should be vacated.” 

The Bank timely filed its notice of appeal to this court one week

before the state court rejected the Bank’s motion to vacate the
 

3 Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. at 223;

United States v. Miramontez, 995 F.2d at 59. 

 

4 In Re: Grand Jury Investigation, 610 F.2d 202, 216-17 (5th

Cir. 1980). 

 

5 Fed. R. Crim. P. 6(e)(3)(C)(1). 

 

6 United States v. Proctor & Gamble Co., 356 US. 677, 682-83

(1958). 

6

arbitration award. To the best of our knowledge, the Bank’s state

court appeal from that rejection is still pending. 

II

ANALYSIS

A. Standard of Review

We review the district court’s denial of the request to

disclose grand jury material for abuse of discretion.3 

B. Particular Need for Disclosure

Although Federal Rule of Criminal Procedure 6(e) protects all

aspects of grand jury proceedings from disclosure,4 subsection

(3)(C)(i) of that Rule empowers the court to make an exception to

the rule of secrecy in connection with a judicial proceeding.5 The

test for granting such an exception requires the proponent of the

disclosure to demonstrate a “particularized need” for the

information.6 To meet this standard the proponent must demonstrate

that “the material [sought] is needed to void a possible injustice

in another judicial proceeding, that the need for disclosure is

grater than the need for continued secrecy and that [the] request
 

7 Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. at 222;

United States v. Miramontez, 995 F.2d at 59. 

 

8 9 U.S.C. 1 et seq. 

7

is structured to cover only material so needed.”7 We are satisfied

that the district court’s analysis leading to its conclusion that

the Bank had failed to meet its burden under the foregoing test in

no way constituted an abuse of discretion. 

Like the district court, we acknowledge that the state court

must determine whether the Arbitrator’s failure to disclose his

involvement in the grand jury investigation in the 1970's violated

the arbitration agreement between the Bank and IEDC, which in turn

depends at least in part on whether such non-disclosure violated

the AAA rules and thus the FAA.8 To the extent the Bank would

contend that such non-disclosure is per se evidence of partiality

requiring that the arbitration award be vacated, its argument is

unavailing: The Bank’s cites no authority for that position and we

are aware of none. Thus the district court does not automatically

abuse its discretion by concluding that the Bank had failed to show

“particularized need” for obtaining the grand jury records sought.

The Bank never even speculates, much less alleges, that the

Arbitrator had a personal interest in the results of the issues

under arbitration or that he had any personal, financial, social,

civic, political, or other relationship whatsoever with either

party to the arbitration. Yet it is precisely that type of
 

9 See Commonwealth Coating Corp. v. Continental Casualty Co.,

393 U.S. 145; cf. Schmitz v. Zilveti, 20 F.2d 1043, 1049 (9th Cir.

1994); Morelite Constr. Corp. v. New York City Dist. Council

Carpenters Benefits Funds, 748 F.2d 79 (2nd Cir. 1984). 

 

10 See, e.g., Morelite Constr. Corp., 748 F.2d at 81;

Teamsters Local Union 657 v. Stanley Structures, Inc., 745 F.2d

903, 906 (5th Cir. 1984). 

 

11 See e.g., Remmy v. PaineWebber, Inc., 32 F.3d 143, 147048

(4th Cir. 1994). Cert. denied, 115 S.Ct. 903 (1995). 

8

information that must be disclosed under the FAA and AAA rules.9

Moreover, given the background of the presumption disfavoring

judicial review of arbitration awards,10 an arbitrator’s failure to

disclose his experience in matters similar to those being

arbitrated is not a sufficient basis on which to vacate an

arbitration award.11 It follows that in this regard the district

court did not abuse its discretion in determining that the Bank had

failed in its burden of demonstrating that the grand jury materials

sought were needed to avoid a possible injustice in the arbitration

award. 

C. Balancing Need for Grand Jury Materials Against Policy

Concerns. 

Even if the Bank had met its burden of demonstrating a need

for the materials sought to avoid an injustice, the district court

would not have abused its discretion by finding, as it did here,

that on balance such need did not outweigh the need for continued

grand jury secrecy, even some 20 years after the grand jury in

question had completed its work without indicting the Arbitrator.

In this regard, the Supreme Court’s pronouncement in Proctor &
 

12 Proctor & Gamble, 356 U.S. at 682. 

 

13 See Douglas Oil, 441 U.S. at 219. 

9

Gamble is instructive: 

The grand jury as a public institution serving the

community might suffer if those testifying today knew

that the secrecy of their testimony would be lifted

tomorrow. This indispensable secrecy of grand jury

proceedings . . . must not be broken except where there

is a compelling necessity. There are instances when that

need will outweigh the countervailing policy. But they

must be shown with particularity.12

The presumption of maintaining secrecy is heightened in those

instances in which the target of the grand jury is never indicted,13

and the information sought is largely available from other sources.

When the balancing conducted by the district court is viewed in

light of all the facts and circumstances, we cannot say that the

court abused its discretion in finding that the policy embodied in

the rule of secrecy outweighed any conceivable need demonstrated by

the Bank. After all, the state court can be —— and presumably has

been —— made aware of the grand jury investigation, the purpose

thereof, the Arbitrator’s acknowledgment that the investigation

involved his dealings with the financial institutions, that he was

asked to resign his federal position, and that his financial

records and dealings were at issue. In addition to the deposition

of the Arbitrator and the affidavit of the Bank’s counsel, such

information is revealed by the law review article and other

published reports. 

III
10

CONCLUSION

For the reasons set forth above, we conclude that the district

court’s refusal to grant the Bank’s request for any or all of the

grand jury materials it sought did not constitute an abuse of

discretion. The rulings of the district court are, in all

respects, 

AFFIRMED.