N. D. Private Investigative & Sec. Bd. v. Tigerswan, LLC

• Decision Date: 22 August 2019
• Docket Number: No. 20180338,20180338
• Citation: 932 N.W.2d 756
• Parties: 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
• Court: North Dakota Supreme Court

932 N.W.2d 756

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

No. 20180338

Supreme Court of North Dakota.

Filed August 22, 2019

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.

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 services. 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 N.D.C.C. § 28-26-01(2). Judgment was entered dismissing the case in its entirety.

II

[¶7] The Board argues the district court erred in dismissing its action against TigerSwan and Reese.

[¶8] This Court’s standard of review for summary judgments is well established:

Summary judgment is a procedural device under N.D.R.Civ.P. 56(c) for promptly resolving a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. The party seeking summary judgment must demonstrate there are no genuine issues of material fact and the case is appropriate for judgment as a matter of law. In deciding whether the district court appropriately granted summary judgment, we view the evidence in the light most favorable to the opposing party, giving that party the benefit of all favorable inferences which can reasonably be drawn from the record. A party opposing a motion for summary judgment cannot simply rely on the pleadings or on unsupported conclusory allegations. Rather, a party opposing a summary judgment motion must present competent admissible evidence by affidavit or other comparable means that raises an issue of material fact and must, if appropriate, draw the court’s attention to relevant evidence in the record raising an issue of material fact. When reasonable persons can reach only one conclusion from the evidence, a question of fact may become a matter of law for the court to decide. A district court’s decision on summary judgment is a question of law that we review de novo on the record.

Heartland State Bank v. Larson , 2019 ND 129, ¶ 7, 927 N.W.2d 407 (quoting Dahms v. Nodak Mutual Ins. Co. , 2018 ND 263, ¶ 6, 920 N.W.2d 293 ).

A

[¶9] The Board is responsible for "regulating persons providing private investigative and security services, including armed security personnel." N.D.C.C. § 43-30-04(1). "A person may not provide private investigative or security services without a license issued by the board." N.D.C.C. § 43-30-05. A "private investigative service" and a "private security service" are broadly defined in N.D.C.C. § 40-30-01(5) and (6) respectively, while specific exemptions are listed in N.D.C.C. §§ 40-30-02, 43-30-02.1, and 43-30-02.2. Sections 43-30-10 and 43-30-10.1, N.D.C.C., specify the methods for dealing with violations of N.D.C.C. ch. 43-30. Section 43-30-10, N.D.C.C., states:

Any person who violates this chapter or rules adopted under this chapter, or any person who provides a private investigative service or private security service without a current license issued by the board, or falsely states or represents that the person has been or is an investigative officer or employed by an investigative or security officer or agency is guilty of a class B misdemeanor. In addition to the criminal penalties provided, the civil remedy of an injunction is available to restrain and enjoin violations of any provisions of this chapter, without proof of actual damages sustained by any person. An injunction does not preclude criminal prosecution and punishment of a violator. The board is not liable for the lost income, costs, or any other expenses that may be incurred by a person against whom an injunction is sought, and the board may not be required to provide security or a bond. The board may seek costs for reimbursement of expenses for obtaining an injunction, including attorney’s fees. In addition to issuing the injunction, the court may impose an administrative fee consistent with section 43-30-10.1 if the person has violated a provision of this chapter.

[¶10] Section 43-40-10.1, N.D.C.C., provides:

1. The board may issue a citation to a person who the board finds probable cause to believe has violated section 43-30-10.

2. A citation must be in writing and describe with particularity the nature of the violation. The citation must also inform the person of the provisions of subsection 5. A separate citation must be issued for each violation.

3. If appropriate, the citation must contain an order of abatement fixing a reasonable time for abatement of the

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