IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 08-10642

MONTE HASIE; HASIE FINANCIAL GROUP,

Plaintiffs–Appellants,

v.

OFFICE OF THE COMPTROLLER OF THE CURRENCY OF THE UNITED

STATES,

Defendant–Appellee.

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 5:07-CV-208

Before BENAVIDES, OWEN, and HAYNES, Circuit Judges.

PRISCILLA OWEN, Circuit Judge:

The Office of the Comptroller of the Currency (OCC) denied Monte Hasie’s

request for disclosure of suspicious activity reports (SARs) for use in civil

litigation. Hasie challenged that decision in district court, and the district court

granted summary judgment in favor of the OCC. We affirm.

I

Following an investigation by the United States Attorney’s Office (USAO),

Hasie and other individuals were indicted on numerous counts of conspiracy,

money laundering, bank fraud, and making false statements to a bank. During

discovery in that criminal case, the USAO produced numerous boxes of

United States Court of Appeals

Fifth Circuit

F I L E D

February 9, 2011

Lyle W. Cayce

Clerk

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No. 08-10642

documents and allowed all defendants and their counsel to copy the materials.

These documents included certain SARs filed by State National Bank (State

National) with the OCC and the drafts and notes used in preparation of the

SARs. The USAO did not seek a protective order for these documents, nor did

it seek return of the documents upon conclusion of the criminal trial. However,

there is no evidence in the administrative record before us that any of the

documents disclosed by the USAO to the defendants in the criminal proceedings

were entered into evidence, although one of Hasie’s co-defendants did identify

on his exhibit list at least five SARs pertaining to Dan Nelson.

The district court in the criminal case rendered a judgment

notwithstanding the jury’s guilty verdict, acquitting Hasie on all twenty-two

counts. Hasie then filed suit in a Texas state court against State National,

asserting claims of malicious prosecution, abuse of legal process, negligence,

intentional infliction of emotional distress, and tortious interference with

business relations. Hasie alleged that State National actively sought his

criminal prosecution despite its possession of information demonstrating Hasie’s

innocence, asserting that the bank was driven by an “ulterior motive.”

During discovery in the state-court litigation of these civil claims, Hasie

produced documents disclosed by the USAO in the criminal case, including the

SARs State National transmitted to the OCC. Upon production of these

documents, State National filed a motion to compel Hasie to return the SARs

and SAR-related materials and notified the OCC. Both the OCC and the

Financial Crimes Enforcement Network (FinCEN) concluded that the OCC did

not waive its nondisclosure rights notwithstanding the prior disclosure by the

USAO and that Hasie’s use of the information would be contrary to the Bank

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Secrecy Act (BSA) and strong public policies in favor of maintaining the secrecy

1

of the SARs.

The OCC then wrote Hasie’s counsel (1) asserting that the documents were

covered by the BSA, (2) threatening criminal charges if Hasie did not relinquish

the documents to the OCC immediately, and (3) stating that Hasie must file an

administrative request to gain lawful access to the documents. The OCC also

asserted in that communication that SARs and SAR-related documents fall

within the definition of non-public OCC information in 12 C.F.R. § 4.32(b); are

confidential and privileged; “[are] the property of the Comptroller,” as provided

in 12 C.F.R. § 4.32(b)(2); and that the OCC had a right to control the subsequent

use and dissemination of this information pursuant to 12 C.F.R. § 4.37(d) that

was not waived by Hasie’s possession of the SARs as a result of the criminal

proceedings.

Hasie returned the documents at issue to the OCC, and the Texas state

court stayed the civil litigation pending resolution of whether Hasie was entitled

to obtain the SARs from the OCC. Meanwhile, Hasie submitted a written

request for limited disclosure of documents, including the previously disclosed

SARs, pursuant to the OCC’s Touhy regulations. The OCC denied Hasie’s

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request for the SARs, concluding that Hasie’s “showing of relevance is negated

completely by the statutory safe harbor [31 U.S.C. § 5318(g)(3)] accorded a bank

that files a SAR,” Hasie’s need for the requested information did not outweigh

the public interest in maintaining its confidentiality, public policy considerations

supported prohibiting disclosure in this case, and the OCC had not waived

privileges attached to the SARs.

 31 U.S.C. § 5311 et seq.

1

See United States ex rel. Touhy v. Ragen, 340 U.S. 462, 468 (1951) (approving federal 2

agencies’ use of regulations to govern administrative requests for production of agency

documents and testimony); 12 C.F.R. § 4.31 et seq.

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Hasie sought review of the OCC’s decision in the district court. On the

parties’ cross-motions for summary judgment, the district court granted the

OCC’s motion. Hasie timely appealed. Hasie also moved this court to unseal the

administrative record.

II

Judicial review of the OCC’s decisions is governed by the Administrative

Procedure Act (APA). Under the APA, “the reviewing court [decides] all

3

relevant questions of law.” Agency actions, findings, and conclusions, however,

4

may be set aside only if they are arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law. The scope of review under this standard

5

is narrow, and a court is not to substitute its judgment for that of the agency.

6

“Nevertheless, the agency must examine the relevant data and articulate a

satisfactory explanation for its action including a ‘rational connection between

the facts found and the choice made.’” We review the district court’s grant and

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denial of summary judgment de novo.

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III

We first note that amendments to some of the regulations at issue became

effective January 3, 2011, and as of that date, disclosure by the OCC of SARs or

information that would reveal the existence of a SAR is addressed specifically

in 12 C.F.R. § 21.11(k). None of these amendments were in effect when the

events at issue transpired. Accordingly, all references in this opinion to the Code

 5 U.S.C. § 706. 3

 Id.

4

 Id. 5

Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).

6

Id. (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).

7

 James v. Tex. Collin Cnty., 535 F.3d 365, 373 (5th Cir. 2008).

8

4

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of Federal Regulations will be to the regulations that governed prior to January

3, 2011.

Hasie argues that the SARs and related documents are not “non-public”

information within the meaning of 12 C.F.R. § 4.32(b)(1) because the USAO

produced them to Hasie and the other defendants in the criminal prosecution

without a protective order or restrictions on their use or dissemination.

Relatedly, Haise asserts that the government waived any privilege regarding

these documents when the USAO produced them in the criminal proceedings. 

The OCC’s regulations define “non-public information” as “information

that the OCC is not required to release under the [Freedom of Information Act]

(5 U.S.C. § 552) or that the OCC has not yet published or made available

pursuant to 12 U.S.C. § 1818(u) and includes . . . (vii) A Suspicious Activity

Report filed by . . . a national bank.” A SAR falls within this definition. A

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SAR’s release cannot be required under the Freedom of Information Act, and the

OCC’s disclosure of information to the USAO that prosecuted Hasie was not

pursuant to 12 U.S.C. § 1818(u). The SARs are “non-public information.”

The gravamen of Hasie’s argument is that the USAO’s production of SARs

to him and the other defendants in his criminal prosecution waived their

classification as non-public information. We first examine the OCC’s release of

the disputed information to the USAO.

The OCC’s regulations permit the Comptroller to disclose non-public

information to “certain other government agencies of the United States and

foreign governments, [and] state agencies with authority to investigate

violations of criminal law . . . for their use, when necessary, in the performance

of their official duties.” That subsection further provides that “[a]ll non-public

10

 12 C.F.R. § 4.32(b) (2010). 

9

 12 C.F.R. § 4.37(c). 

10

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OCC information made available pursuant to this paragraph is OCC property,

and the OCC may condition its use on appropriate confidentiality protections,

including the mechanisms identified in § 4.37.” The OCC’s disclosure to the

USAO was authorized by this regulation. Because the regulation provides that

the OCC “may” condition use of non-public on appropriate confidentiality

protections, we construe this regulation to permit but not require the OCC to

employ confidentiality protections when disclosing non-public information to law

enforcement agencies. The OCC’s failure to do so does not automatically render

non-public information discoverable by private litigants.

The paragraph succeeding subsection 4.37(c) in the regulations confirms

this construction. It reflects that the OCC does not intend to waive its rights

11

by providing non-public information to those investigating potential criminal

violations:

(d) Intention of OCC not to waive rights. The possession by any of

the entities or individuals described in paragraph[] . . . (c) of this

section of non-public OCC information does not constitute a waiver

by the OCC of its right to control, or impose limitations on, the

subsequent use and dissemination of the information.

12

The confidentiality mechanisms available to the OCC include “entry of a

protective order by the court or administrative tribunal presiding in the

particular case or, in non-adversarial matters, on a written agreement of

confidentiality.” There is no indication in the record that a court case was

13

pending when the OCC produced non-public information to the USAO. The OCC

did not, however, obtain a written agreement with the USAO. But here again,

we do not think this stripped the information of its non-public status. The

 12 C.F.R. § 4.37(d).

11

Id.

12

 12 C.F.R. § 4.38(a). 13

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regulations provide that the OCC may condition its release of non-public

information on a protective order or confidentiality agreement. The regulations

14

do not require the OCC to employ any of these procedures, although it would

appear that in many cases, including those similar to the present case, that

would be a prudent practice.

The question remains whether the USAO’s production of non-public

information to Hasie and the other criminal defendants rendered the

information public. We conclude that it did not. The governing regulations

appear to contemplate that the OCC retains the “right to control, or impose

limitations on, the subsequent use and dissemination of the information” after it

provides non-public information to law enforcement entities such as the USAO.

15

The dissemination of the non-public information by the USAO was also

limited in scope. The information was produced as part of discovery in a

criminal case to the criminal defendants. It was not broadcast to the public or

made generally available. There is no indication that the SARs were to be used

for anything other than the purposes of the criminal litigation. Moreover, there

is no indication that the OCC was aware that the information at issue was

produced by the USAO to Hasie and the other defendants, much less that Hasie

continued to possess the SARs after the conclusion of the criminal litigation.

The OCC asserted its control over dissemination and use of the SARs at the first

available opportunity. Under these circumstances, we cannot say that the OCC’s

conclusion that its control over the SARs was not waived was “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law.”

Id.

14

 12 C.F.R. § 4.37(d) (emphasis added).

15

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IV

Hasie contends that the OCC abused its discretion in denying his request

for the SARs because (1) the OCC pre-determined that his request would be

denied, (2) the factors set forth in 12 C.F.R. § 4.33 all weigh in favor of granting

his reqest, (3) the OCC should not have considered the BSA’s safe harbor

provision, and (4) the OCC failed to individualize the assessment of Hasie’s

administrative request.

A

A claim of bias based on pre-determination carries with it a high burden

of persuasion. To prevail, Hasie must “overcome a presumption of honesty and

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integrity in those serving as adjudicators” and must “convince that, under a

realistic appraisal of psychological tendencies and human weakness, conferring

investigative and adjudicative powers on the same individuals poses such a risk

of actual bias or prejudgment that the practice must be forbidden if the

guarantee of due process is to be adequately implemented.”

17

Hasie points to OCC communications with State National and Hasie’s

counsel. Hasie claims that these communications establish that, months prior

to his request and without knowledge of the relevant facts, the OCC had already

concluded that the SARs would not be disclosed. While these communications

do express the OCC’s belief that the protections and public policy considerations

regarding SARs continued to apply despite the prior disclosure, they do not

establish that the OCC had pre-determined the merits of any future requests for

disclosure.

See Withrow v. Larking, 421 U.S. 35, 47 (1975); Baran v. Port of Beaumont

16

Navigation Dist., 57 F.3d 436, 446 (5th Cir. 1995) (“The contention that a tribunal is

unconstitutionally biased because it has prejudged the facts of a particular dispute carries a

more difficult burden of persuasion than a claim based on actual bias.”).

Withrow, 421 U.S. at 47. 17

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B

Hasie asserts that the OCC gave dispositive effect to the BSA’s safe harbor

provision for banks that prepare SARs in assessing the relevance of the

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documents requested by Hasie and that the OCC should not have considered the

safe harbor’s liability shield for banks as a factor in the Touhy analysis.

Under the Touhy regulations, a requestor must show, among other things,

that (1) the information is relevant to the purpose for which it is sought,

(2) other evidence reasonably suited to the requestor’s needs is not available

from another source, and (3) the need for the information outweighs the public

interest considerations in maintaining the confidentiality of the OCC

information. The OCC may deny a request based on the failure by a requestor

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to make any one of these showings.

20

We conclude that the OCC’s findings regarding the balance between

Hasie’s interests and the public policy considerations were not arbitrary,

capricious, or an abuse of discretion, and therefore we do not consider the

requirement in 12 C.F.R. § 4.33(a)(3)(iii)(A) “that the information is relevant to

the purpose for which it is sought.” The OCC concluded that disclosing the SARs

 31 U.S.C. § 5318(g)(3)(A). That subsection provides: 18

Any financial institution that makes a voluntary disclosure of any

possible violation of law or regulation to a government agency or makes a

disclosure pursuant to this subsection or any other authority, and any director,

officer, employee, or agent of such institution who makes, or requires another

to make any such disclosure, shall not be liable to any person under any law or

regulation of the United States, any constitution, law, or regulation of any State

or political subdivision of any State, or under any contract or other legally

enforceable agreement (including any arbitration agreement), for such

disclosure or for any failure to provide notice of such disclosure to the person

who is the subject of such disclosure or any other person identified in the

disclosure.

See 12 C.F.R. § 4.33(a)(3)(iii); BizCapital Bus. & Indus. Dev. Corp. v. Comptroller of 19

the Currency of the U.S., 467 F.3d 871, 872 n.2 (5th Cir. 2006).

 12 C.F.R. § 4.35(a)(1)-(2).

20

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to aid a private litigant in proving a case against a bank “may adversely affect

timely, appropriate and candid reporting by institutions. If institutions believe

that information in a SAR can be used for purposes unrelated to law

enforcement purposes, they will have an incentive to adjust the nature of their

reporting to respond to the risks they perceive from the other uses.” The OCC

21

then listed several examples of such possible adjustments, including the

possibility that an institution might “delay or forego filing a SAR” if it believed

that private litigants would be able to use a SAR in litigation against it.

22

The OCC also considered Hasie’s need for the SARs in its suit against

State National. The OCC concluded that other sources of evidence were

available to Hasie, and that “[u]nder the circumstances, when the strong public

23

policy interest in maintaining the confidentiality of SARs is considered, I

conclude the public interest is paramount.” Hasie has not demonstrated “that

24

other evidence reasonably suited to the requestor’s needs is not available from

any other source.” The OCC was not arbitrary or capricious and did not abuse

25

its discretion in assessing the strength of Hasie’s showing or balancing public

policy considerations.

 Appellant’s R. Excerpts Tab 4, at 3. 21

 Id.

22

Id. at 2 (“It is also apparent that you could, through the testimony of bank employees,

23

gather evidence on any improper animus on the bank’s part toward Mr. Hasie, apart from the

preparation and filing of any SARs. Beyond this, you are entitled to discover the bank’s

records created in the ordinary course of business, and we understand that the bank has

produced or made available 15 boxes of documents.”).

Id. at 2-3. 24

 12 C.F.R. § 4.33(a)(3)(iii)(B).

25

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C

An administrative agency abuses its discretion if it reaches its decision

“procedurally without a full, good faith, individualized consideration.” A review

26

of the OCC’s decision reflects that Hasie’s request received a good faith,

individualized assessment. The OCC demonstrated that it knew the particular

facts pertaining to Hasie’s request and utilized those facts in its analysis of the

balance between Hasie’s need and the public interest. The OCC acknowledged

in its brief in this court that “when a requestor can convincingly show a strong

need, such as where no evidence suitable to his needs is available, the weight

accorded the public policy considerations may be offset.” The OCC’s decision to

deny Hasie’s request reflects that the need in Hasie’s particular case did not

offset public policy considerations.

V

Finally, Hasie moves to have the administrative record unsealed. The

OCC does not oppose this motion to unseal except with respect to one sentence

in the record, which it asks permission to redact. We agree that the sentence at

issue may reference confidential material under the BSA. Therefore, we grant

Hasie’s motion to unseal provided that the OCC is given the opportunity to

redact the sentence at issue before the record is unsealed.

* * *

The district court’s grant of summary judgment in favor of the OCC is

AFFIRMED. Hasie’s motion to unseal the record is GRANTED.

Sierra Club v. Morton, 510 F.2d 813, 829 (5th Cir. 1975).

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