Board is disallowed injunction and costs in case against unlicensed private security provider

The Supreme Court of North Dakota, in an August decision, upheld a lower court's denial of injunctive relief and legal costs to the state's Private Investigative and Security Board, holding that the board had provided insufficient evidence that an unlicensed practitioner who had since left the state intended to return and continue his unlicensed activity.

(North Dakota Private Investigative and Security Board v. TigerSwan)

The subject of the case, Patrick Reese, owns TigerSwan, a security consulting firm that worked for Energy Transfer Partners, the company that was constructing the Dakota Access Pipeline during the recent protests by Native American and environmental advocacy grounds surrounding that construction.

Reese and TigerSwan are not licensed to provide private security services in the state, and thus the board brought unlicensed practice charges against him in June of 2017.

The board sought, among other things, an injunction against Reese and his company’s continued operation in the state. In response, Reese applied for licensure in the state, but when that application was rejected, he fought the board’s action while simultaneously removing all his employees from the state.

A state district court dismissed a motion by the board for injunctive relief on the grounds that, since the company had left the state and with no indication that it would return, the motion was moot. It further dismissed a board motion for administrative fees, on the basis that such fees must be accompanied by an injunction, which the court had denied for mootness. The case was then dis-missed. The board appealed, and the case reached the Supreme Court of North Dakota, which issued a decision upholding the district court August 22.

Chief Justice Gerald VandeWalle, writing for the court, agreed with the district court that the board had not provided sufficient evidence that Reese intended to return to North Dakota to again provide security services, rejecting as insufficient the board’s argument that Reese’s failed attempt to apply for licensure indicated his possible intent to continue operating in the state.

A possible important factor leading to this failure by the board was that it had not actually finished discovery in the case by the time of the trial court’s decision; the lower court had denied the board’s motion for additional time for discovery, a decision the Supreme Court did not disturb. The justices also rejected the board’s argument that it need not prove a future intent to operate in the state in order to obtain an injunction against a previous bad actor.

State caselaw, Justice VandeWalle wrote, “may support a court’s ability to issue an injunction based solely on prior illegal activities…[but does not] require that a court do so”; so the lower court was within its authority to deny the injunction.

Despite the district court’s rejection of the board’s case, it did show some sympathy for its substantive claims. The justices rejected Reese’s cross-claim for attorney fees, noting “that the Board’s claims were not frivolous.”