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North Dakota Private Investigative and Security Board v. TigerSwan, LLC

Supreme Court of North Dakota

August 22, 2019

North Dakota Private Investigative and Security Board, Plaintiff, Appellant and Cross-Appellee
v.
TigerSwan, LLC and James L. Patrick Reese, Defendants, Appellees, and Cross-Appellants

          Appeal from the District Court of Burleigh County, South Central Judicial District, the Honorable John W. Grmstemer, Judge.

          Monte L. Rogneby (argued) and Justin J. Hagel (appeared), Special Assistant Attorneys General, Bismarck, ND, for plaintiff, appellant and cross-appellee.

          Lynn M. Boughey, Mandan, ND, for defendants, appellees and cross-appellants.

          OPINION

          VANDEWALLE, CHIEF JUSTICE.

         [¶1] The North Dakota Private Investigative and Security Board appealed, and TigerSwan, LLC and James Reese cross-appealed, from a judgment dismissing the Board's request for an injunction under N.D.C.C. § 43-30-10 prohibiting TigerSwan and Reese from providing private investigative and security services without a license. TigerSwan and Reese also appeal from an order denying their motion for sanctions and attorney fees. Because the district court did not abuse its discretion in denying the injunction or the motion for sanctions and attorney fees, we affirm the judgment and order.

         I

         [¶2] Reese is the majority interest owner in TigerSwan, which is a limited liability company organized under North Carolina law. TigerSwan is registered as a foreign limited liability company in North Dakota and has listed its business on the Secretary of State's website as providing "security services" and "management consulting." During the protests over construction of the Dakota Access Pipeline, TigerSwan provided services to Energy Transfer Partners. On September 23, 2016, the Board wrote a letter to TigerSwan informing it that "you may be conducting security services without a proper license" and requested a response. TigerSwan denied providing private security services and "submitted a packet to become a licensed private security firm within the state of North Dakota should such services, which are not present at the time, be required from TigerSwan." The Board denied Reese and TigerSwan's application to become licensed private security providers in North Dakota.

         [¶3] In June 2017 the Board brought this action against TigerSwan and Reese. Count one alleged that TigerSwan and Reese were illegally providing security semces. Count two alleged that they were illegally providing private investigative services. Count three sought an injunction prohibiting them from further violating N.D.C.C. ch. 43-30 and an award of expenses and administrative fees. TigerSwan and Reese filed separate answers denying the allegations. Shortly after the action was commenced, TigerSwan removed all of its employees from North Dakota.

         [¶4] After unsuccessful settlement negotiations, TigerSwan and Reese brought a motion to dismiss Reese from the action, a motion for summary judgment dismissing counts one and two of the complaint, a motion for summary judgment to dismiss the request for injunctive relief in count three of the complaint, and a motion in limine to limit or exclude evidence at trial. The district court denied the motion to dismiss Reese from the action, concluding the complaint adequately stated a claim for relief against him. The court denied the motion in limine, concluding the motion was premature. The court also denied the motion to dismiss counts one and two, concluding there were genuine issues of material fact that must be resolved at trial. However, the court granted the motion for summary judgment on count three requesting injunctive relief and dismissed the count without prejudice, reasoning:

Here, TigerSwan argues its employees left North Dakota on or before June 23, 2017. Doc. ID #67 (Exhibit 6). The Board alleges that TigerSwan's assertions should not preclude the Board from seeking an injunction to prevent TigerSwan from returning to North Dakota and resuming the alleged illegal activity. The Board has failed to present evidence to support its position that TigerSwan is currently in North Dakota or may return to North Dakota in the immediate future. Furthermore, the Board has failed to show that this conduct would produce injury to the Board.

         [¶5] TigerSwan and Reese then renewed their motion to dismiss counts one and two and the Board's claim for administrative fees for providing services without a license. The district court granted the motion to dismiss the Board's remaining claims, explaining:

Sections 43-30-10 and 43-30-10.1 expressly differentiate between and provides different procedures for civil, criminal, and administrative remedies. The statute does, however, provide a narrow exception in which civil and administrative remedies overlap. The plain language of the statute states, “[i]n addition to issuing the injunction, the court may impose an administrative fee." N.D.C.C. § 43-30-10.
This Court interprets the statute to mean that if an injunction is issued, then the Court may also impose administrative fees. In other words, the issuing of an injunction is a prerequisite to the district court's ability to impose administrative fees. This interpretation is supported both by the plain language of the statute and by the principle of judicial economy.
Here, this Court has dismissed the Board's claim for injunctive relief (Count III). Therefore, there are no civil or criminal claims before the Court. As a result, there is nothing left of the Complaint that is within the purview of the district court. It would be improper for this Court to impose itself on an otherwise regulatory function. As such, this matter must be dismissed in favor of administrative action.

         [¶6] The district court denied the Board's motion for reconsideration. The court also denied Reese and TigerSwan's motion for attorney fees under N.D.R.Civ.P. 11 and N.D.C.C. § 28-26-01 and the Board's motion to strike that motion and award it attorney fees under ...


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