Eighth Circuit Finds It Unnecessary “To Acknowledge A Settlement Privilege”

Eighth Circuit notes open issue on whether a “settlement privilege” may be recognized under FRE 501; while the circuit concludes that it was unnecessary to resolve the issue now, at least one other circuit has recognized the privilege, in Government of Ghana v. ProEnergy Services, LLC, 677 F.3d 340 (8th Cir. May 1, 2012) (No. 11-2714)

We have noted that some courts have considered whether to recognize a settlement privilege. See, e.g., Federal Circuit Examines Evolution Of The Privilege To Promote Settlement. The Eighth Circuit recently noted this issue but declined to address it.

The case involved a dispute over a contract to refurbish a 125 megawatt power barge by the Government of Ghana. The government sought relevant documents and filed an application under 28 U.S.C. § 1782, establishing a procedure to seek evidence for use in a foreign tribunal. The district court granted the application and ordered production by Missouri companies (ProEnergy Services, LLC). The companies provided some but not all documents based on a settlement of a lawsuit. The district court did not compel further production. The Government of Ghana appealed, contending that the district court “declined to compel production because the documents were entitled to a ‘settlement privilege.’" Ghana, 677 F.3d at 344 n.3.

On appeal, the Eighth Circuit noted that it had “not had occasion to consider whether a settlement privilege exists within this circuit.” Ghana, 677 F.3d at 344 n.3. In reviewing the record, the circuit concluded that “the district court offered no analysis regarding a settlement privilege.” Consequently, the circuit decided it did not need to address this issue.

However, the circuit noted two other cases on the settlement privilege:

  • Sixth Circuit: Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976, 980 (6th Cir. 2003) (“Viewed "in the light of reason and experience," we believe a settlement privilege serves a sufficiently important public interest, and therefore should be recognized.”)
  • D.C. Circuit: In re Subpoena Duces Tecum Issued to Commodity Futures Trading Commission, 439 F.3d 740, 754–55 (D.C. Cir. 2006) (settlement privilege not considered based on a record that “lacked a sufficient factual context within which to evaluate” whether the requirements could be met to recognize a privilege under Jaffee v. Redmond, 518 U.S. 1, 8 (1996) (a privilege may be recognized under “common law principles . . . in the light of reason and experience”))

Previously, the Seventh Circuit has declined to recognize a settlement privilege in In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106, 1124 n.20 (7th Cir. 1979) (declining to recognize a settlement privilege).

While the recognition of a settlement privilege remains an open issue in the Eighth Circuit, it is worth watching how this issue will progress in other circuits.

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