UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
AMERICAN TANK TRANSPORT,
INCORPORATED,
Plaintiff-Appellant,
v. No. 95-1303
FIRST PEOPLE'S COMMUNITY FEDERAL
CREDIT UNION; PAUL C. HERRING,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
John R. Hargrove, Senior District Judge.
(CA-94-459-HAR)
Argued: February 1, 1996
Decided: May 20, 1996
Before WILKINSON, Chief Judge, HAMILTON, Circuit Judge,
and STAMP, Chief United States District Judge for the Northern
District of West Virginia, sitting by designation.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Ransom J. Davis, DANEKER, McINTIRE & DAVIS,
P.C., Baltimore, Maryland, for Appellant. James Patrick Ulwick,
KRAMON & GRAHAM, P.A., Baltimore, Maryland, for Appellee
Herring; Francis Joseph Nealon, BALLARD, SPAHR, ANDREWS &
INGERSOLL, Washington, D.C., for Appellee Credit Union. ON
BRIEF: Constantine G. Panagopoulos, Jeffrey W. Larroca, BAL-
LARD, SPAHR, ANDREWS & INGERSOLL, Washington, D.C., for
Appellee Credit Union.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
American Tank Transport, Inc. ("ATT") seeks review of the district
court's order granting summary judgment in favor of Paul C. Herring
("Herring") and dismissing ATT's claims against First People's Com-
munity Federal Credit Union ("First People's). On appeal, ATT
alleges that because the district court refused to consider transcripts
of witness testimony taken before a state grand jury as part of the evi-
dence presented in opposition to Herring's summary judgment
motion, because discovery in this action was not reasonably complete,
and because there were numerous issues of material fact to be
resolved by a jury, the district court improperly granted summary
judgment in favor of Herring. Further, ATT alleges that the district
court erred when it granted the dismissal of ATT's claims against
First People's pursuant to the Colorado River doctrine of abstention.
Colorado River Water Conservation Dist. v. United States, 424 U.S.
800 (1975). Because we find no error in the district court's well-
reasoned opinion, we affirm.
I
ATT carried casualty insurance through an insurance agency
known as Holzshu-Welch & Associates, Inc. ("Holzshu-Welch"). In
the spring of 1991, it was discovered that Holzshu-Welch employees,
including the vice president of Holzshu-Welch, Donald Helmick, and
an employee of ATT, Donald Hagermann, were operating a scheme
2
to defraud ATT of its insurance premiums. As part of this scheme,
Donald Helmick fraudulently handled and misappropriated casualty
insurance premium money paid by ATT to Holzshu-Welch. Helmick
perpetrated this fraud by engaging in a variety of improper transac-
tions at First People's, the credit union at which Holzshu-Welch held
numerous business accounts. These transactions included fraudulently
splitting deposits of the monthly premium payments made by ATT
and forging endorsements on checks drawn to the order of various
insurance clients of Holzshu-Welch and then depositing the checks
into Helmick's personal account at First People's. ATT alleges that
Herring, First Peoples president, knew of the fraud, acquiesced in it
and cooperated with Helmick in continuing the fraudulent scheme.
A number of criminal and civil actions were instituted as a result
of the fraudulent activities of Helmick, Hagermann and Holzshu-
Welch. First, the State of Maryland brought criminal charges against
Helmick and Hagermann on various counts of fraud and theft. Helm-
ick and Hagermann pleaded guilty to those counts in the Circuit Court
of Allegany County, Maryland in September 1991 and January 1992,
respectively. In April 1993, a second criminal indictment was
returned in the State of Maryland against Herring and two other First
People's employees, charging them with numerous counts of conspir-
acy, theft and breach of fiduciary duty. The Circuit Court of Allegany
County held that the grand jury proceedings from which evidence
against Herring and his codefendants was obtained were illegal and,
accordingly, that the evidence obtained from the improper proceed-
ings could not be used in the State's case against them. Subsequently,
the state attorney dismissed the case against Herring and the other
named defendants for lack of evidence.
In December 1991, ATT filed a civil suit against First People's in
the Circuit Court of Allegany County alleging conversion, construc-
tive fraud, breach of the Maryland Uniform Fiduciary Act, and civil
conspiracy and seeking an accounting from First People's. Although
subject to a stay pending the outcome of this case, ATT's action
against First People's is still pending before the Allegany County Cir-
cuit Court.
In March 1993, ATT filed a civil action in the United States Dis-
trict Court for the District of Maryland against Holzshu-Welch, the
3
owners and officers of Holzshu-Welch, affiliated companies, Donald
Helmick and Donald Hagermann. In February 1994, ATT moved to
amend its complaint in the pending federal action to add First Peo-
ple's and Herring as defendants. The district court denied ATT's
motion, noting that ATT had brought suit against First People's in the
Circuit Court for Allegany County based upon the same set of facts
and allegations contained in the federal suit. Simultaneously, ATT
filed this action against Herring and First People's alleging against
First People's constructive fraud, a breach of the Maryland Uniform
Fiduciary Act, negligence, and a violation of the Racketeer Influenced
and Corrupt Organization Act, 18 U.S.C. §§ 1961-1968 ("RICO"),
and alleging against Herring, constructive fraud, negligence, conver-
sion, civil conspiracy, and a RICO violation.
In this action, Herring filed a motion to dismiss or, in the alterna-
tive, for summary judgment, alleging that ATT had failed to show any
evidence of Herring's knowing involvement in Helmick's and
Holzshu-Welch's scheme to defraud. Additionally, First People's
filed a motion to dismiss, requesting that the district court abstain
from exercising federal jurisdiction over First People's based upon
the Colorado River abstention doctrine. Colorado River Water Con-
servation District v. United States, 424 U.S. 800 (1975).
ATT filed a response in opposition to both motions. To support its
position that Herring was knowingly involved in the scheme to
defraud, ATT relied upon a number of transcripts of grand jury wit-
ness testimony obtained from the previously dismissed state criminal
action against Herring. These transcripts were released to ATT
through a motion filed by the State Attorney General and granted by
the Allegany County Circuit Court.
When Herring discovered that ATT was relying on the grand jury
transcripts, Herring objected to the use of the transcripts because they
were allegedly obtained by ATT in violation of the Maryland Rules
of Criminal Procedure. Specifically, Herring argued that the state
court released the grand jury transcripts in violation of Maryland Rule
of Criminal Procedure 4-642(c) which requires that a court notify the
parties to a judicial proceeding when the prosecution petitions the
court for the release of grand jury materials. Md. R. Crim. Pro. 4-642.
Herring asked the district court to find that the transcripts were inad-
4
missible in the federal action and advised the district court and ATT
that he would seek an order from the state court to recall the release
of the grand jury transcripts.
Herring then filed a motion before the Allegany County Circuit
Court asking it to reconsider its decision to release the grand jury
materials which had been used by ATT in its response to Herring's
motion for summary judgment. While ATT did not respond to this
motion in the state court, the motion was opposed by the State Attor-
ney General. In December 1994, the Circuit Court of Allegany
County granted Herring's motion for reconsideration and recalled the
grand jury materials. As part of the order recalling the grand jury
materials, the Circuit Court ordered that "persons with knowledge of
information contained in such grand jury materials are prohibited
from further disclosure thereof . . . ." (Order, State of Maryland v.
Paul C. Herring, No. 3775 Crim. Trials, Cir. Ct. Allegany Co., Md.,
Judge J. Frederick Sharer, Dec. 6, 1994.)
Approximately one month after the entry of the state court's order,
the federal district court granted Herring's motion for summary judg-
ment. The district court noted that no additional discovery was needed
in this action because substantially identical suits involving virtually
identical parties were pending in both the state and the federal court
and that ATT had conducted extensive discovery in the concurrent
federal suit and had previously had ample opportunity to conduct dis-
covery in the state suit.1 In accordance with the state court's order
_________________________________________________________________
1 The district court found that ATT's challenge to summary judgment
on the basis that there was a need for more discovery was, in effect, a
Fed. R. Civ. P. 56(f) objection. Fed. R. Civ. P. 56(f) permits a court to
deny summary judgment or order a continuance in a case where the party
opposing the motion sets forth by affidavit the reasons why that party is
unable to present facts essential to justify its opposition. The district
court found, however, that an affidavit is not necessary to lodge an effec-
tive Rule 56(f) objection, citing our unpublished opinion of Phillips v.
General Motors Corp., 911 F.2d 724, 1990 WL 117981, *6 (4th Cir.
Aug. 16, 1990.)
While we agree that ATT's argument in opposition to summary judg-
ment on inadequate discovery grounds was without merit, we find that
ATT's Rule 56(f) challenge must also fail on procedural grounds because
ATT failed to provide the district court with a Rule 56(f) affidavit.
Nguyen v. CNA Corp., 44 F.3d 234, 242 (4th Cir. 1995) (holding that an
affidavit is necessary to a Rule 56(f) objection).
5
recalling the grand jury transcripts, the district court did not consider
the transcripts in its decision.2 Further, consistent with its decision
that no additional discovery was needed, the district court granted
summary judgment without allowing the parties to conduct any addi-
tional discovery on matters addressed by the grand jury transcripts.
Further, the district court granted First People's motion to dismiss,
invoking the Colorado River doctrine of abstention. The district court
found that abstention was proper because the pending state court
action between ATT and First People's was sufficiently parallel with
the federal action, abstention would avoid piecemeal litigation
between the parties, the state action was pending for more than two
years before the filing of the federal action, the state action had prog-
ressed substantially further than the federal action and ATT appeared
to have filed the federal action to subvert the effect of adverse rulings
in the state action.3
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2 In a footnote, the district court stated that
Almost all of the evidence that ATT presents in opposition to
summary judgment consists of transcripts of the Grand Jury tes-
timonies of the tellers at First People's. Herring specifically
objected to the use of these Grand Jury transcripts based on their
improper release. The Allegany County Circuit Court has now
held that these transcripts were in fact improperly released to
ATT, and has ordered counsel to return them. Based on this rul-
ing, it appears that the Grand Jury transcripts were not properly
before this Court. Therefore, the Court will decline to consider
them in resolving the pending motion.
(Memorandum Opinion, American Tank Transport, Inc. v. First People's
Community Federal Credit Union, Civ. Action No. HAR94-459 (D. Md.
Jan. 11, 1995) p. 8.)
3 We find that the district court properly applied the Colorado River
doctrine of abstention. However, the doctrine itself bears repeating.
Under exceptional circumstances, a district may abstain from adjudicat-
ing a controversy before it "for reasons of wise judicial administration."
Colorado River, 424 U.S. at 817-18. When a party urges abstention, the
district court must first determine whether the state and federal proceed-
ings are parallel. New Beckley Mining Corp. v. International Union
United Mine Workers of Am., 946 F.2d 1072, 1073 (4th Cir. 1991).
"Suits are parallel if substantially the same parties litigate substantially
the same issues in different forms." Id. Once the court determines if the
6
II
We have carefully considered the briefs and oral argument of the
parties and those portions of the record pertinent to the various argu-
ments. Having done so, we find no reversible error in the opinion and
decision of the district court. However, we find that the district
court's decision to exclude the recalled grand jury materials from its
consideration of the evidence submitted upon the summary judgment
motion4 poses an important comity question that merits further discus-
sion.
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proceedings in state court and federal court are parallel, the Court must
consider those factors set forth in Colorado River, supra, and Moses H.
Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983), to
determine if the circumstances are such that it is proper for the court to
abstain. "The factors to be considered include the following: (a) the
assumption by either court of jurisdiction over property; (b) the inconve-
nience of the federal forum; (c) the desire to avoid piecemeal litigation;
(d) the order in which the courts obtained jurisdiction; and (e) the source
of applicable law." New Beckley Mining Corp. , 946 F.2d at 1073-74, cit-
ing Moses H. Cone, 460 U.S. at 15-16, 23; Colorado River, 424 U.S. at
818. An appellate court reviews the district court's decision to surrender
jurisdiction under the Colorado River doctrine of abstention for abuse of
discretion. New Beckley Mining Corp., 946 F.2d at 1074.
4 Evidentiary rulings in the context of a summary judgment motion are
reviewed for abuse of discretion. See Supermarket of Marlington, Inc. v.
Meadow Gold Dairies, Inc., 71 F.3d 119, 126 (4th Cir. 1995) (holding
that a court reviews evidentiary rules in summary judgment settings for
abuse of discretion); see also Hal Roach Studios, Inc. v. Richard Feiner
& Co, Inc., 896 F.2d 1542, 1552 (9th Cir. 1989) (reviewing a challenge
to an affidavit under abuse of discretion standard). We find no abuse of
discretion in the district court's decision to exclude the recalled grand
jury transcripts from the evidence considered by the district court in
deciding Herring's summary judgment motion.
7
With regard to questions of comity5 and the duty of a federal court
to honor state court rulings, courts have noted that"[p]rinciples of
comity suggest that a federal court give full recognition to a state
court's adjudication of state law issues." Weir by and through Weir
v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 586 F. Supp. 63, 65
(S.D. Fla. 1984), citing Colorado River, 424 U.S. at 818. Further, it
has been held that "considerations of comity and federalism argue for
the federal courts' avoiding whenever possible getting involved in
delicate issues concerning the internal structure of state government."
United Beverage Co. of South Bend, Inc. v. Indiana Alcoholic Bever-
age Comm'n, 760 F.2d 155, 160 (7th Cir. 1985).
Additionally, other courts have indicated the importance of defer-
ring, whenever possible, to state court decisions on matters related to
its own procedural issues. "[A] strong policy of comity between state
and federal sovereignties impels federal courts to recognize [a state
rule] where this can be accomplished at no substantial cost to federal
substantive and procedural policy." Lora v. Board of Educ., 74 F.R.D.
565, 576 (E.D.N.Y. 1977) (citations omitted). Additionally, the Sev-
enth Circuit has recognized that "principles of comity dictate that [a
federal court] carefully consider the integral role [that] secrecy plays
. . . in the [ ] grand jury system [before disclosing grand jury materi-
als]." Socialist Workers Party v. Grubisic , 619 F.2d 641, 643 (7th Cir.
1980).
_________________________________________________________________
5 The Supreme Court has defined"comity" as
a proper respect for state functions, a recognition of the fact that
the entire country is made up of a Union of separate govern-
ments, and a continuance of the belief that the National Govern-
ment will fare best if the States and their institutions are left free
to perform their separate functions in their separate ways . . . .
[T]he concept . . . represent[s] . . . a system in which there is sen-
sitivity to the legitimate interests of both State and National Gov-
ernments and in which the National Government, anxious though
it may be to vindicate and protect federal rights and federal inter-
ests, always endeavors to do so in ways that will not unduly
interfere with legitimate activities of the States.
Younger v. Harris, 401 U.S. 37, 44 (1971).
8
With regard to our own opinions on the comity question posed by
the disclosure of state grand jury materials, we have previously stated
that "[courts] are bound by principles of comity to accord state grand
jury proceedings at least a qualified privilege." United States v. Silva,
745 F.2d 840, 845 (4th Cir. 1984), cert. denied , 470 U.S. 1031
(1985). In Silva, a criminal defendant challenged a district court's
decision not to disclose to the defendant the state grand jury transcript
of testimony of a prosecution witness for the purpose of impeaching
the witness. The state attorney appeared voluntarily before the district
court and requested that the district court examine the grand jury tran-
scripts in camera to determine whether any inconsistencies existed
between the witness' in-court testimony and her grand jury testimony
before the court ruled upon the defendant's request. Id. at 844-45. The
court held that the inconsistencies were not significant enough to
merit disclosure of the sensitive grand jury transcripts, and we found
that the district court did not err in refusing to disclose the grand jury
testimony. Id. at 844-46. In a footnote, however, we recognized that
a potential issue raised by the facts in Silva was whether the district
court could, absent the state's voluntary compliance, order the state
to disclose the grand jury materials in question. While we did not
decide the issue, we remarked that "`[g]enerally, only the court that
has jurisdiction over the grand jury has authority to direct disclosure
. . . .'" Id. at 845, citing United States v. Penrod, 609 F.2d 1092, 1097
n.8 (4th Cir. 1979), cert. denied, 446 U.S. 917 (1980).
Other courts, however, have addressed the question of whether a
federal court has the power to release grand jury materials. For exam-
ple, in Resolution Trust Corp. v. Castellett, 156 F.R.D. 89 (D.N.J.
1994), aff'd, 1994 WL 411809 (D.N.J. Aug. 2, 1994), the District
Court for the District of New Jersey held that a federal district court
must give full faith and credit to a state court's decision to deny an
application to unseal grand jury documents and could not, as a matter
of comity, use its subpoena enforcement powers to effectively reverse
a state court's final ruling. Id. at 89. In Resolution Trust Corp., the
defendants in the federal action had also been the subject of a grand
jury investigation in the State of New York. In a situation similar to
this case, the New York District Attorney voluntarily dismissed the
state indictment against the defendants after the New York State
Supreme Court ruled that the state lacked sufficient evidence to prose-
cute the case. Id. Subsequently, the plaintiff in the federal action filed
9
a motion in state court to gain access to all exhibits and evidence sub-
mitted to the grand jury in the state criminal matter. Id. The state
court denied the plaintiff's application, finding that the plaintiff had
failed to show a compelling and particularized need for the grand jury
materials. Id. at 91. Subsequently, the plaintiff petitioned the federal
court to use its subpoena power to compel the disclosure of the state
court records. The issue before the district court in Resolution Trust
Corp. was whether the district court could ignore the state court's
decision to deny the motion to release and otherwise order the unseal-
ing of the grand jury records for use in the federal action.
In its analysis of the cases addressing this issue, the district court
in Resolution Trust Corp. reviewed a case from the Tenth Circuit,
Woodard v. Tynan ("Tynan I"), 757 F.2d 1085 (10th Cir. 1985),
modified, 776 F.2d 250 (10th Cir. 1985) (" Tynan II"). Tynan I
involved a federal Medicaid fraud action in which the Attorney Gen-
eral sought an order from the district court to compel the defendants
to consent to the release of business records in a pending state crimi-
nal prosecution that had been ordered sealed by the state court follow-
ing the defendants' successful motion to suppress the use of the
records. Tynan I, 757 F.2d at 1086. The district court denied the
Attorney General's motion. Id. The Tenth Circuit reversed the district
court, stating that the district court had the power to order the release
of the state court records and concluding that a state court could not
preclude a federal court's access to grand jury materials if a federal
court determined that disclosure was essential to the case before it. Id.
at 1090. Further, the Tenth Circuit held that in a case where a state
court has otherwise failed to release the materials, a federal district
court could order the state court to transmit the materials to it for an
in camera review. Id.
In Judge McWilliams' dissent in Tynan I, he discussed the impor-
tance of comity to the relationship between state and federal courts:
[t]he result reached by the majority opinion points toward an
unwarranted intrusion by the federal judiciary into a state
court proceeding . . . [F]or the federal district court to com-
pel the defendants in the instant case to go into state court
and consent to a release of the records would be an unwar-
ranted intrusion by the federal judiciary into a state court
10
proceeding . . . [A] state court protective order is entitled to
the respect of the federal courts. State court judgments are
entitled to such "full faith and credit in every court within
the United States . . . as they have by law and usage in the
courts of such state." . . . As stated by the U.S. Supreme
Court, "[t]he federal courts . . . have . . . consistently
accorded preclusive effect to issues decided by state courts,
noting that such a practice promote[s] the comity between
state and federal courts that has been recognized as a ball
work of the federal system" . . . [T]he decision[ ] of the . . .
trial court . . . holding that the records are grand jury mate-
rials entitled to secrecy, should be respected by the federal
courts.
Tynan I, 757 F.2d 1091-93. (McWilliams, C.J., dissenting).
In Tynan II, the Tenth Circuit granted a rehearing en banc "because
[the] case appeared to raise important questions under the supremacy
and full faith and credit clauses of the United States Constitution."
Tynan II, 776 F.2d at 251. The Tenth Circuit noted that "[i]t is estab-
lished doctrine . . . that federal courts should avoid `unseemly conflict
between two sovereignties, the unnecessary impairment of state func-
tions, and the premature determination of constitutional questions.'"
Id., citing Martin v. Creasy, 360 U.S. 219 (1959). However, the Tenth
Circuit never reached the comity question raised by its decision in
Tynan I because the court believed that "the problems inherent in the
[Tynan] case [could] be resolved by a course of action that [did] not
require [the court] to decide whether federal courts have the power to
order a state court to release documents it has placed under seal." Id.
In addition to considering the Tenth Circuit's opinions in Tynan I
and Tynan II, the court in Resolution Trust Corp., supra, further
reviewed two additional district court cases that examine the issue of
comity in relation to the power of a federal court to compel the disclo-
sure of state grand jury transcripts. First, the court examined Shell v.
Wall, 760 F. Supp. 545 (W.D.N.C. 1991). In Shell, the parties who
were subject to a state court grand jury report filed a motion before
the federal district court to compel the state to make a limited disclo-
sure of the grand jury transcripts. Id. at 546. In denying the parties'
request, the district court revealed that it had concerns about comity
11
questions raised by such an order: "Defendants have basically
requested that this court act as a state appeals court and reverse an
order by the [lower state] court . . . . [T]he intrusion into what is a
statutorily defined part of the state court . . .[is] deeply offensive to
the notion of federalism, and one that should be avoided if at all pos-
sible." Id.
Second, the Resolution Trust Corp. court reviewed Stump v. Gates,
777 F. Supp. 796 (D. Colo. 1991), where the district court held that
it was proper for the court to order the disclosure of state grand jury
materials under the three-step test set forth in Douglas Oil Corp. v.
Petrol Stops Northwest, 441 U.S. 211, 222 (1979).6 Although Stump
involved facts similar to those in Shell where a federal court was
asked to order a state court to release grand jury materials, the court
found that Stump was easily distinguishable from Shell where such an
act was improper. In Stump, the federal district court noted the state
court had voluntarily given the federal court the grand jury materials
for an in camera review and had indicated its willingness to provide
the federal court with the grand jury transcripts should the federal
court have found it necessary, whereas in Shell , there was no volun-
tary relinquishment of the records. Id. at 801. As such, the Stump
court recognized that because of the willingness of the state court to
release the materials, the Stump case did"not raise the sensitive com-
ity issue of whether federal courts have authority to order state courts
to disclose grand jury records . . . ." Id.
_________________________________________________________________
6 It is important to note that our discussion of the comity questions
intertwined with this case in no way addresses or questions the propriety
of the Supreme Court's three-party test enunciated in Douglas Oil Corp.
for deciding whether disclosure of grand jury transcripts is warranted.
See Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 222 (1979)
(Parties seeking grand jury transcripts must make a particularized show-
ing that (1) the material they seek is needed to avoid a possible injustice
in another judicial proceeding, (2) that the need for disclosure is greater
than the need for continued secrecy, and (3) that their request is struc-
tured to cover only the material needed.).
We do not reach the Douglas Oil test in this case because we find that
the issue here is not whether the materials could be properly disclosed,
but whether the district court could consider the transcripts as evidence
after the state court found that their disclosure was improper.
12
After its examination of the above cases, the Resolution Trust
Corp. court found that because the state court had not considered
itself bound by the federal court's decision and had not voluntarily
agreed to provide the materials for review, the court was required to
confront the comity question. Id. at 95. The court rejected the notion
that it could compel the state, in derogation of its own order, to
release the grand jury materials: "By requesting this Court to file an
order requiring the state court to disclose the requested materials, the
movant essentially asks this Court to act as a state appellate court. As
discussed in Shell, such a request is `deeply offensive to the notion
of federalism.'" Id. Accordingly, the court denied the motion to
enforce a subpoena duces tecum on the State Attorney General. Id.
We find that the opinions in Resolution Trust Corp., Shell, Tynan
II and in Judge McWilliams' dissent in Tynan I, are particularly
instructive in guiding our decision in this case. Although this case
does not present a situation in which a federal court compelled a state
court to release grand jury materials, but rather involves a federal
court's decision to honor a state court order recalling such materials
after their release, the comity issue raised by this situation is essen-
tially identical to that raised in the above mentioned cases and should
be resolved in the same manner. We find that the facts in this case are
such that it was proper, and probably necessary, for the district court
to have acknowledged and honored the state courts ruling recalling
the grand jury materials. First, the state court ruled upon the applica-
tion of its own criminal rules governing the release of grand jury
materials. Federal courts have indicated that state court rulings on
their own procedural matters are due a significant amount of defer-
ence. Further, from the moment the state court issued its recall order,
it clearly indicated its unwillingness to voluntarily allow any use of
the grand jury materials. In similar situations in Resolution Trust
Corp. and Shell, those courts held that the court could not compel the
release of grand jury materials absent the state's voluntarily compli-
ance.
Additionally, by asking the district court to ignore the state court's
recall order, ATT essentially asked the district court to act as a state
appellate court and overturn the state courts ruling. We agree with the
opinions in Resolution Trust Corp. and Shell that it would be
improper for a federal court to act as a state appellate court and over-
13
rule a state court decision concerning state criminal procedures. In
this case, if the district court had considered the grand jury materials
after the recall order, it would have impermissibly intruded into the
province of the state appellate courts to review questions concerning
state procedural matters. Finally, our commentary in Silva where we
noted that, generally, only the court with jurisdiction over the grand
jury has the authority to compel disclosure, provides additional sup-
port for our opinion that the district court properly abstained from
considering the recalled materials because it did not have jurisdiction
over the state grand jury.7
Accordingly, we find that, on the facts of this case, the district
court's decision to respect the state court's recall order and thereby
exclude the grand jury transcripts from the consideration of the evi-
dence upon the summary judgment motion was in accordance with
our basic principles of comity and federalism.
AFFIRMED
_________________________________________________________________
7 ATT argues that the grand jury materials should have been considered
by the district court although they had been recalled because ATT relied
on them to support its opposition to the summary judgment motion and
was not given the opportunity to provide the court other evidence to sup-
port its argument. In response to this argument, we note that "[g]rand
jury testimony is not a substitute for proper discovery and should not be
used as a panacea for improper, inadequate and untimely discovery."
Lucas v. Turner, 725 F.2d 1095, 1106 (7th Cir. 1984).
14