Energy Transfer LP v. N.D. Private Investigative & Sec. Bd.

Decision Date28 April 2022
Docket Number20210244
Citation973 N.W.2d 394
Parties ENERGY TRANSFER LP and Dakota Access LLC, Plaintiffs and Appellants v. NORTH DAKOTA PRIVATE INVESTIGATIVE AND SECURITY BOARD, Defendant and Appellee and TigerSwan, LLC, Defendant
CourtNorth Dakota Supreme Court

Jennifer S. Recine (argued), New York, N.Y., and Randall J. Bakke (on brief) and Shawn A. Grinolds (appeared), Bismarck, N.D., for plaintiffs and appellants.

Courtney R. Titus, Assistant Attorney General, Bismarck, N.D., for defendant and appellee.

Jack McDonald and Timothy Q. Purdon, Bismarck, N.D., for amici curiae North Dakota Newspaper Association, HPR, LLC, and First Look Institute, Inc.

Tufte, Justice.

[¶1] Energy Transfer LP and Dakota Access LLC (together "Energy Transfer") appeal from a district court's order and judgment affirming the North Dakota Private Investigative and Security Board's ("Board") order denying Energy Transfer's petition to intervene in an administrative action against TigerSwan, LLC. Energy Transfer argues that the district court erred by concluding it lacked standing to appeal the Board's decision denying its petition to intervene and that the Board erred in denying its petition to intervene. We reverse the court order concluding Energy Transfer lacked standing to appeal the Board's order, and we reverse the Board's order denying intervention and remand to the Board for further proceedings.

I

[¶2] TigerSwan contracted with Energy Transfer to provide services related to construction of the Dakota Access Pipeline. The Board commenced administrative proceedings against TigerSwan, alleging it provided investigative and security services in North Dakota without a license. In June of 2020, the Board compelled TigerSwan to produce approximately 16,000 documents in response to a discovery request. Upon learning of the document disclosure, Energy Transfer contacted the Board, asserting the documents are privileged and confidential, or are otherwise irrelevant to the administrative action.

[¶3] On September 15, 2020, while Energy Transfer was attempting to resolve its claims to the documents, the Board executed a settlement agreement with TigerSwan. Energy Transfer filed a petition to intervene on September 29, seeking to compel return of the documents and to obtain a protective order. Because the documents at issue were produced in electronic form and cannot be returned in the same sense as a physical copy, we consider the request to "return" the documents as a request to compel destruction of all copies in the Board's possession. The Administrative Law Judge ("ALJ") sent the petition to the Board, indicating a notice of settlement and stating she would take no further action unless requested. On October 12, the Board held a virtual meeting to consider Energy Transfer's petition. At this meeting the Board denied Energy Transfer's petition and closed the administrative action. The Board issued a written order denying the petition on October 30, holding that intervention was not proper because it would "impair the orderly conduct of the proceedings" because "a settlement had already been reached and the case was effectively closed." The Board also found that even if it would have allowed intervention, it could not address or consider the relief sought by Energy Transfer because the documents are subject to open records laws. Energy Transfer appealed the Board's order to the district court.

[¶4] The district court dismissed the appeal, concluding Energy Transfer lacked standing to appeal the Board's order because it was not a party under the Administrative Agencies Practice Act ("AAPA"). The court concluded in the alternative that the Board's decision was in accordance with the law because Energy Transfer intervened too late and the Board could not lawfully address the relief sought in the petition given the existence of the open records and record retention laws. Energy Transfer appealed the court's order and judgment to this Court.

[¶5] Energy Transfer commenced a separate action against the Board and TigerSwan after its unsuccessful attempt to intervene in the administrative proceeding. Energy Transfer brought claims for conversion, claim and delivery, and breach of contract and also sought an injunction to require the Board and TigerSwan to keep the disputed documents confidential and not to be produced to any third party. The court dismissed Energy Transfer's claims for conversion, claim and delivery, and breach of contract and denied Energy Transfer's request for an injunction, holding the produced documents constitute records for purposes of the N.D.C.C. ch. 44-04 open records laws and the N.D.C.C. ch. 54-46 document retention laws. That action is the subject of the appeal in Energy Transfer LP v. North Dakota Private Investigative & Security Board (Docket No. 20220036; Dist. Ct. Case No. 08-2020-CV-02788).

II

[¶6] Energy Transfer argues the district court erred in dismissing its appeal for lack of standing. "Standing is a question of law, which is reviewed de novo on appeal." Minn-Kota Ag Prods., Inc. v. N.D. Pub. Serv. Comm'n , 2020 ND 12, ¶ 10, 938 N.W.2d 118.

[¶7] Under N.D.C.C. § 28-32-42, any party to an administrative proceeding has standing to appeal the agency's decision. A party is defined as "each person named or admitted as a party or properly seeking and entitled as of right to be admitted as a party." N.D.C.C. § 28-32-01(9).

[¶8] The parties articulate different standards a court should use in determining whether a party has standing to appeal an order denying intervention in the administrative context. The Board argues the court applied the proper three-part test established in Bank of Rhame , 231 N.W.2d 801, 807-08 (N.D. 1975), in determining Energy Transfer was not a "party" to the proceeding who had standing to appeal the Board's order. In Bank of Rhame we stated, " ‘any person who is directly interested in the proceedings before an administrative agency who may be factually aggrieved by the decision of the agency, and who participates in the proceeding before such agency’ is a party and has standing to appeal from the decision of the agency." Minn-Kota Ag Prods., Inc. , 2020 ND 12, ¶ 13, 938 N.W.2d 118 (quoting Bank of Rhame , 231 N.W.2d at 808 ). Using these three factors, the court determined Energy Transfer could not meet this test to establish it had standing to appeal the Board's order denying intervention. Energy Transfer, on the other hand, argues the court erred in applying the Bank of Rhame test because this test is only "appropriate to assess a movant's standing to appeal the merits of a substantive agency decision [and] it is not applicable to judicial review of an order denying a petition to intervene. " Energy Transfer contends that our case law has not applied the Bank of Rhame test in evaluating standing to appeal an order denying a petition to intervene because "[t]o require that a would-be intervenor—who is not a "party"—be a "party" to have standing to appeal would deny persons denied intervention the right to appeal such order." Instead, Energy Transfer urges this Court to follow what it describes as the "well-established rule across the country that persons denied intervention have standing to appeal that denial, independent of whether they would have standing to appeal on the merits. "

[¶9] This Court has discussed standing in an appeal involving an order denying intervention in the administrative context on only one occasion. In Minn-Kota , the appellant appealed both the agency's decision and the ALJ's order denying its petition to intervene. 2020 ND 12, ¶ 1, 938 N.W.2d 118. We applied the Bank of Rhame test to determine whether the appellant had standing to appeal the merits of the Public Service Commission's decision. Id. at ¶¶ 11 –14. Because we concluded Minn-Kota had standing to appeal the merits under the Bank of Rhame test, we did not discuss whether standing may be more easily satisfied when a failed intervenor appeals only an order denying intervention. Id. at ¶¶ 14, 39–47.

[¶10] A review of our case law demonstrates that the Bank of Rhame test is used only to assess a movant's standing to appeal the merits of an agency's decision, not from a denial of intervention. See, e.g., In re Juran & Moody, Inc. , 2000 ND 136, ¶¶ 17–20, 613 N.W.2d 503 (applying the Bank of Rhame test to analyze whether appellant had standing to appeal an ALJ's final order of dismissal determining no securities registration laws were violated); Shark v. U.S. West Commc'ns, Inc. , 545 N.W.2d 194, 196–200 (N.D. 1996) (applying the Bank of Rhame test to analyze whether appellant had standing to appeal a PSC decision approving the sale of the exchanges and transfers of certificates of public convenience and necessity); Cass Cty. Elec. Co-op., Inc. v. Northern States Power Co. , 518 N.W.2d 216, 219 (N.D. 1994) (applying the Bank of Rhame test to analyze whether appellant had standing to appeal a PSC decision finding the flexible tariffs to be valid); Washburn Pub. Sch. Dist. No. 4 v. State Bd. of Pub. Sch. Educ., 338 N.W.2d 664, 666–68 (N.D. 1983) (applying the Bank of Rhame test to analyze whether appellant had standing to appeal the State Board of Public School Education's decision denying annexation). Likewise, when we review an appeal from persons denied intervention outside of the AAPA, we do not impose a standing requirement on the failed intervenor, but instead simply review the denial of intervention. E.g., Manning v. Jaeger , 2021 ND 162, 964 N.W.2d 522 ; Public Serv. Comm'n v. Grand Forks Bean Co., Inc. , 2017 ND 201, 900 N.W.2d 255 ; Brigham Oil & Gas, L.P. v. Lario Oil & Gas Co. , 2011 ND 154, 801 N.W.2d 677 ; Wyatt v. R.D. Werner Co., Inc. , 524 N.W.2d 579 (N.D. 1994). Judicial review of an order denying intervention is "immediately appealable" because "[a]n order denying a non-party's motion to intervene effectively concludes the proceedings for intervention and prevents the movant from becoming a party to...

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  • Energy Transfer LP v. N.D. Private Investigative & Sec. Bd.
    • United States
    • North Dakota Supreme Court
    • April 28, 2022
    ...in Energy Transfer LP v. North Dakota Private Investigative & Security Board (Docket No. 20210244, Dist. Ct. Case No. 08-2020-cv-03049) 973 N.W.2d 394.[¶3] Energy Transfer commenced this action after its unsuccessful attempt to intervene in the administrative proceeding. Energy Transfer all......

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