• May 7, 2012

In the experience of Minnesota Litigator, what is very often called the “broad scope” of discovery in U.S. civil litigation is truly broad.  In fact, it is overwhelmingly and unbelievably broad in the view of litigants from outside the United States who get a taste of our judicial system.  (It is possible that this different sense of the breadth of discovery is the origin of some real messes that foreign litigants sometimes get into in U.S. courts.)

Except, apparently, when it is narrow. Then it is narrow.

The 8th Circuit decision in Government of Ghana v. ProEnergy came up in the context of a  dispute about a barge repair that somehow ended up being a barge demolition.

The Government of Ghana contracted with a company called Balkan Energy to refurbish a Ghanaian barge.   (This was not patching a hole in a dinghy.  We are talking about a multi-million dollar several decade-long project considered critically important to the country of Ghana.)  Balkan in turn contracted with ProEnergy for work on the barge project.

Apparently, the project was a disaster.  Ghana sued Balkan in international arbitration.  Balkan sued ProEnergy in U.S. district court.  Balkan’s positions in the two suits appear to have been inconsistent, at least in the opinion of Ghana.  So Ghana sought Balkan’s documents in connection with Balkan’s fight with ProEnergy pursuant to 28 U.S. Code, Section 1782.  Balkan (and ProEnergy) resisted.  ProEnergy (and Balkan) eventually agreed to produce some documents but not Balkan’s settlement agreement with ProEnergy.

As wide and broad as discovery is in U.S. litigation, the U.S. Court of Appeals held, the appellate court’s review of trial court decisions (in this case, denying Ghana access to the Balkan/ProEnergy settlement agreement) is “narrow and deferential.”

Even assuming documents that indicate the distribution of liability between Balkan and ProEnergy are relevant to the foreign litigation, we are not convinced the district court committed reversible error by limiting discovery. ‘If a party can demonstrate a gross abuse of discretion by the trial court (bearing in mind that in the discovery arena the trial judge’s discretion is particularly broad), then the complaining party must also demonstrate prejudice.’

The Court of Appeals suggested that Ghana failed to demonstrate prejudice because it failed to demonstrate why it could not get the settlement agreement from Balkan in the context of the international arbitration.  Therefore, Ghana failed to show the required “prejudice” to reverse the district court’s order denying Ghana access to the Balkan/ProEnergy settlement.

The Court recognized that there was no requirement that Ghana exhaust the possibility of getting the settlement agreement through the arbitration tribunal before seeking it as it did from ProEnergy in a U.S. Court first but, the Court held, the fact that the avenue might exist was sufficient to defer to the trial court’s refusal to order production.

One might imagine the frustration of a foreign litigant who feels like the U.S. legal system is a hugely oppressive and overbroad system of adjudication unless and until the foreign litigant seeks the benefits of that broad scope.  Then, it might seem that, for the foreign litigant, the clear sailing on the open sea of U.S. discovery runs into inexplicably narrow straits.

Leave a Reply

Your email address will not be published. Required fields are marked *