Ghana v. ProEnergy Servs., LLC, 677 F.3d 340 (8th Cir. 2012)

The Government of Ghana sought discovery from Defendant ProEnergy Servs. (“ProEnergy”) in assistance of a foreign arbitration between Ghana and Defendant Balkan Energy Co. (“Balkan”).  The district court granted Ghana’s application for discovery, but denied its motion to compel production of a settlement agreement concluded between the Defendants.  The Eighth Circuit upheld the ruling, holding that it was not an abuse of discretion to refuse to compel production of non-privileged documents where the movant had not shown such production was necessary to discover relevant information.

Ghana and Defendant Balkan engaged in a contract for construction of a power barge, and Balkan subsequently engaged Defendant ProEnergy as a subcontractor.  After completion of the barge was delayed and ultimately unsuccessful, Balkan commenced an arbitration in The Hague, arguing that Ghana failed to properly connect the barge to the national power grid and failed to pay contracted fees.  Ghana initiated a lawsuit in the Ghanaian High Court of Justice, arguing that Balkan failed to recommission the barge within the contracted time frame and damaged the barge such that it never become operational.  At the same time, Balkan brought an action against Defendant ProEnergy in the United States, blaming it for the project failures.  That action settled. 

In the Western District of Missouri, Ghana made an application for discovery against ProEnergy, which was not a party to either foreign action, under 28 U.S.C. § 1782, seeking all documents from the litigation between Balkan and ProEnergy.  The Court granted the application and ProEnergy produced certain documents, but refused to produce documents relating to the final settlement agreement.  Ghana moved to compel production of those documents.  The district court denied the motion, and Ghana appealed.

The Eighth Circuit first noted that it reviewed the decision of the district court for an abuse of discretion.  It then noted that while the discovery allowed by § 1782 is broad, it was not a “standard” as to what discovery an applicant is entitled to, but is rather a “threshold” as to what discovery a district court may compel.  It then noted that the manner in which § 1782 discovery proceeds is determined by normal federal discovery rules.

The court then examined the request for the settlement documents under these standards.  It noted that while generally, “any unprivileged matter that is relevant to a party’s claim or defense is generally discoverable … appellate review of a district court’s rulings is both narrow and deferential.”  The court further found that Ghana could not show that the settlement documents would reveal information not already produced, nor that it could not get the document directly from Balkan through the foreign actions.  Finally, Ghana could not make the necessary showing that it had been prejudiced by the district court’s order.  Accordingly, the court found that the district court had not abused its discretion by refusing to compel discovery of the settlement documents.