Energy Transfer Judgment
Energy Transfer Judgment
Energy Transfer Judgment
FILED
IN THE OFFICE OF THE
CLERK OF SUPREME COURT
APRIL 28, 2022
STATE OF NORTH DAKOTA
2022 ND 84
No. 20220036
Appeal from the District Court of Burleigh County, South Central Judicial
District, the Honorable Cynthia M. Feland, Judge.
AFFIRMED.
Courtney R. Titus, Bismarck, ND, for defendant and appellee North Dakota
Private Investigative and Security Board.
Lynn M. Boughey, Mandan, ND, for defendant and appellee Tigerswan, LLC.
McEvers, Justice.
[¶3] Energy Transfer commenced this action after its unsuccessful attempt to
intervene in the administrative proceeding. Energy Transfer alleged the
Board produced “certain” documents in response to an open records request.
Energy Transfer requested an injunction requiring the Board and TigerSwan
to “keep confidential and not produce to any third party the documents that
are the subject of this complaint” and requiring the Board and TigerSwan to
1
return the documents. Energy Transfer also brought claims for conversion and
immediate delivery of the documents against the Board and a claim for breach
of contract against TigerSwan. The district court granted a temporary
restraining order requiring the documents be kept confidential.
[¶4] First Look Institute commenced a separate suit against the Board
requesting a declaration that the Board violated various laws when it denied
First Look’s open record request concerning the disputed documents. See First
Look Media Works, Inc. v. N.D. Investigative Review and Sec. Bd., Case No. 08-
2020-CV-3093. First Look sought an order requiring the Board to release all
of the documents “not subject to independent exemptions determined on a
document-by-document basis.” The district court consolidated First Look’s
case with Energy Transfer’s case.
[¶6] Energy Transfer appealed and filed a motion in this Court to stay the
district court’s partial judgment pending this appeal. Energy Transfer’s
motion was temporarily granted and the stay remains in place pending appeal.
First Look has filed a motion to strike documents not in the record.
2
II
[¶7] Although the parties have not raised the district court’s N.D.R.Civ.P.
54(b) certification as an issue, we must ensure we have jurisdiction when an
interlocutory appeal is taken and that the requirements of Rule 54(b) have
been met. PLS Servs., LLC v. Valueplus Consulting, LLC, 2021 ND 99, ¶ 7,
960 N.W.2d 780. “‘Only judgments and decrees which constitute a final
judgment of the rights of the parties to the action and orders enumerated by
statute are appealable.’” Eubanks v. Fisketjon, 2021 ND 124, ¶ 4, 962 N.W.2d
427 (quoting Brummund v. Brummund, 2008 ND 224, ¶ 5, 758 N.W.2d 735).
We lack jurisdiction if there is no statutory basis for an appeal. Dellinger v.
Wolf, 2020 ND 112, ¶ 5, 943 N.W.2d 772. We apply the following analysis when
determining whether an interlocutory order is appealable:
First, the order appealed from must meet one of the statutory
criteria of appealability set forth in NDCC § 28-27-02. If it does
not, our inquiry need go no further and the appeal must be
dismissed. If it does, then Rule 54(b), NDRCivP, must be complied
with. If it is not, we are without jurisdiction.
Id. at ¶ 8 (quoting Ziegler v. Meadowbrook Ins. Grp., Inc., 2009 ND 192, ¶ 11,
774 N.W.2d 782). The partial judgment in this case dismisses three of Energy
Transfer’s claims on the merits. Thus there is a statutory basis for the appeal
under N.D.C.C. § 28-27-02. The first prong of our test is satisfied. We must
now determine whether the district court complied with N.D.R.Civ.P. 54(b).
[¶8] “‘A Rule 54(b) certification should not be routinely granted and is
reserved for cases involving unusual circumstances where failure to allow an
immediate appeal would create a demonstrated prejudice or hardship.’” PLS
Servs., 2021 ND 99, ¶ 9 (quoting Citizens State Bank-Midwest v. Symington,
2010 ND 56, ¶9, 780 N.W.2d 676). Rule 54(b), N.D.R.Civ.P., provides:
3
adjudicates fewer than all the claims or the rights and liabilities of
fewer than all the parties does not end the action as to any of the
claims or parties and may be revised at any time before the entry
of a judgment adjudicating all the claims and all the parties’ rights
and liabilities.
City of West Fargo v. McAllister, 2021 ND 136, ¶ 8, 962 N.W.2d 591 (quoting
Capps v. Weflen, 2013 ND 16, ¶ 8, 826 N.W.2d 605). We review a decision to
grant N.D.R.Civ.P. 54(b) certification for an abuse of discretion. McAllister, at
¶ 6. “A court abuses its discretion when it acts in an arbitrary, unreasonable,
or unconscionable manner, when its decision is not the product of a rational
mental process leading to a reasoned determination, or when it misinterprets
or misapplies the law.” Id.
4
[¶9] There are three remaining claims among these two consolidated cases.
The first is a breach of contract claim between Energy Transfer and TigerSwan
in the lead case. The remaining two claims are between First Look and the
Board in the consolidated case. The district court found the contract claim in
the lead case presents a “completely separate issue” that will not moot the
questions answered in its partial summary judgment order or require the
issues be addressed again in a subsequent appeal. The court also determined
judicial economy favored finality certification because, as to the lead case, the
court’s order provides final resolution of the issues concerning the Board and
First Look.
[¶10] The court did not analyze the Rule 54(b) factors as applied to the two
claims still pending between First Look and the Board in the consolidated case,
which are for declaratory relief and a writ of mandamus. First Look
specifically requested a declaration that the Board violated the law when it
denied its open records request based on N.D.C.C. § 44-04-18.12, which
exempts from disclosure certain records acquired by the office of the attorney
general. First Look’s second claim requested a writ of mandamus ordering the
Board to release the documents that are not subject to independent
exemptions. Although First Look moved for summary judgment on these
claims, the district court denied First Look’s motion as premature concluding
issues as to those claims were beyond the scope of what the court identified as
ripe for disposition in its scheduling order.
[¶11] We are satisfied the district court did not improvidently grant Rule 54(b)
certification. We agree with the district court’s analysis as to the contract
claim remaining in lead case. As to the consolidated case, the judgment on
appeal answers the threshold question of whether the documents are
government records. The court’s affirmative holding on that question narrows
the issues in the consolidated case to the exceptions for disclosure. There is no
risk of mootness or repetitive review because the question of whether a specific
exception applies is independent from the issue of whether the documents
constitute records at all. Were final certification of this partial judgment not
granted, a holding on appeal that the documents are not records would moot
the litigation in the companion case. The court’s final certification favors
5
judicial economy, minimizes litigation expense, and facilitates orderly
disposition of the claims. We conclude the district court did not abuse its
discretion when it granted N.D.R.Civ.P. 54(b) certification.
III
[¶12] Energy Transfer argues the district court erred when it granted
summary judgment categorically determining the documents constitute
records. Energy Transfer also asserts there are genuine issues of material fact
precluding summary judgment, and the court should have allowed Energy
Transfer to conduct additional discovery.
Simmons v. Cudd Pressure Control, Inc., 2022 ND 20, ¶ 8, 969 N.W.2d 442
(quoting RTS Shearing, LLC v. BNI Coal, Ltd., 2021 ND 170, ¶ 11, 965 N.W.2d
40).
6
A
[¶14] Energy Transfer challenges the district court’s determination that the
disputed documents constitute records. Energy Transfer asserts information
must be relevant to public business and used by a public entity to be considered
a government record. Energy Transfer argues the Board has not demonstrated
it “used—i.e., reviewed or relied upon—the documents in connection with
public business.”
[¶15] Under N.D. Const. art. XI, § 6, the records of public entities must
generally be open and accessible to the public:
Various statutory provisions carry out this mandate. See N.D.C.C. ch. 54-46
(providing for the management and retention of records); N.D.C.C. § 44-04-18
(providing for public access to records). For purposes of the Chapter 54-46
document retention laws, the term “record” is defined as material “made or
received pursuant to law or in connection with the transaction of official
business,” not including various library and museum items. N.D.C.C. § 54-46-
02(2). For purpose of the Chapter 44-04 open records laws, “record” is defined
as:
N.D.C.C. § 44-04-17.1(16).
7
[¶16] Energy Transfer claims that for material to constitute a government
record “an agency must show the requisite connection to public business and/or
that it reviewed, used, and relied upon the documents.” Energy Transfer
claims that merely receiving a document during an investigation does not
satisfy the “for use” requirement in N.D.C.C. § 44-04-17.1(16).
Motisi v. Hebron Pub. Sch. Dist., 2021 ND 229, ¶ 11, 968 N.W.2d 191 (quoting
Wilkens v. Westby, 2019 ND 186, ¶ 6, 931 N.W.2d 229).
8
[¶19] Energy Transfer cited public record cases from other jurisdictions that it
claims support a different result. Energy Transfer also relies on federal cases
applying the Freedom of Information Act. We find no persuasive guidance in
those cases. FOIA does not provide a definition for the term “record.” See
Project on Predatory Lending of the Legal Servs. Ctr. of the Harvard Law Sch.
v. United States Dep’t of Justice, 325 F.Supp.3d 638, 648 (W.D. Pa. 2018).
Rather, FOIA necessitates courts weigh various factors that have been
articulated different ways to determine whether material falls within the FOIA
disclosure requirements. See id. at 649 (“some courts adhere to a strict four-
factor test requiring all factors to be met, others balance and weigh the four-
factors, and others use a totality of the circumstances approach”); see also
Judicial Watch, Inc. v. Fed. Hous. Fin. Agency, 646 F.3d 924, 926-27 (D.C. Cir.
2011) (describing a four-factor test); Reich v. United States Dep’t of Energy, 784
F.Supp.2d 15, 21 (D. Mass. 2011) (same). Unlike courts deciding FOIA claims,
we are bound by the definition of “record” under N.D.C.C. § 44-04-17.1(16).
[¶20] Energy Transfer argues a case where the term “public record” was
defined in a manner similar to N.D.C.C. § 44-04-17.1(16) is persuasive. In
National Collegiate Athletic Association v. Associated Press, a law defined
“public record” as material “made or received pursuant to law or ordinance in
connection with the transaction of official business.” 18 So.3d 1201, 1207 (Fla.
Dist. Ct. App. 2009). Lawyers for a public agency obtained information from
the NCAA on a website by using a password the NCAA gave them. Id. at 1205.
A Florida appellate court held the information constituted a public record
noting the information was examined and used for an official state purpose.
Id. at 1204. However, the Florida statute at issue did not contain the word
“use” or “used”. Id. at 1206-07. The issue was whether the information was
received by a government agent, and the court held it was. Id. (the term
“received” applies when “a public agent examines a document residing on a
remote computer”). Any discussion concerning use of the record in question
was dicta.
9
B
all matters that relate or may foreseeably relate in any way to:
a. The performance of the public entity’s governmental
functions, including any matter over which the public
entity has supervision, control, jurisdiction, or
advisory power; or
b. The public entity’s use of public funds.
N.D.C.C. § 44-04-17.1(12).
[¶23] There is no dispute the Board obtained the documents through discovery
during administrative proceedings concerning TigerSwan’s provision of private
investigative and security services in North Dakota. Energy Transfer asserts
the documents were not responsive to the Board’s discovery request, are not
relevant to the administrative proceedings, and therefore were not received for
use in connection with official or public business. We disagree. The Board is
an administrative agency tasked with enforcing the licensing and regulation
of private investigative and security services in North Dakota. See N.D.C.C. §
43-30-04. Bringing an administrative action against TigerSwan for operating
without the requisite licensure and investigating TigerSwan’s dealings is
squarely within the Board’s purview. Gathering information is a step in the
decision making process and is considered public business. See N.D. Op. Att’y
Gen. No. O-02 at 2 (Feb. 6, 2012). The definition of “public business” includes
“all matters” that relate to the Board’s governmental functions. N.D.C.C. § 44-
10
04-17.1(12). Because it is undisputed the Board received the documents
through discovery procedures in an administrative proceeding that the Board
had authority to conduct, we conclude the documents are records as defined by
N.D.C.C. §§ 44-04-17.1(16) and 54-46-02(2). Absent an exception, the
documents must be maintained and kept open to the public pursuant to
N.D.C.C. ch. 44-04 and 54-46. The district court did not decide whether any
exceptions apply, and nor do we in this appeal.
[¶24] Energy Transfer asserts there are factual disputes that preclude the
district court’s award of partial summary judgment. Energy Transfer claims
more discovery is necessary regarding the State’s practices concerning
protective orders and returning privileged documents. Energy Transfer
asserts the district court should have granted additional time to conduct
discovery under N.D.R.Civ.P. 56(f) on these issues.
11
44-04 and 54-46. Energy Transfer’s declaration also was not accompanied by
a motion. See Hayden v. Medcenter One, Inc., 2013 ND 46, ¶ 8, 828 N.W.2d
775 (“The proper method for a party to seek additional time for discovery is to
make a motion under N.D.R.Civ.P. 56(f)”); see also N.D.R.Civ.P. 7(b)(1) (“A
request for a court order must be made by motion”). Because Energy Transfer
has not adequately explained how the information it seeks would preclude the
district court’s award of partial summary judgment, we hold the district court
did not err when it did not grant additional time to conduct discovery.
IV
[¶28] TigerSwan argues on appeal that it “should receive the benefit of the
promise of confidentiality made by the Board’s counsel.” We note TigerSwan
has not addressed N.D.C.C. § 44-04-18.10(3), which expressly prohibits public
entities from entering into agreements prohibiting the disclosure of the
substance of an open record. Nonetheless, we lack jurisdiction to decide the
issue. TigerSwan has not perfected an appeal of the court’s denial of its motion.
“When an appellee fails to properly file and perfect a cross-appeal on an issue
‘we have no jurisdiction to consider [that] question.’” Hovet v. Hebron Pub. Sch.
Dist., 419 N.W.2d 189, 193 (N.D. 1988) (quoting Kolling v. Goodyear Tire &
Rubber Co., 272 N.W.2d 54, 59 (N.D. 1978)). See also Ehlen v. Melvin, 2012
ND 246, ¶ 19, 823 N.W.2d 780 (“a cross-appeal is necessary if the appellee
seeks a more favorable result on appeal than it received in the district court”).
12
has not requested we rely on the extra-record evidence while determining the
merits of this appeal, and even if it had, we would not. See Discover Bank v.
Bolinske, 2020 ND 228, ¶ 6, 950 N.W.2d 417 (“It is well established that this
Court may not consider items outside the record.”); see also State v. Horn, 2014
ND 230, ¶ 15, 857 N.W.2d 77 (“This Court will not consider documents not in
the certified record.”). Because the temporary stay remained in effect during
the pendency of this appeal and is now lifted, First Look’s motion is moot.
VI
[¶30] We have considered the remaining issues and arguments raised by the
parties and conclude they are either without merit or unnecessary to our
decision.
VII
[¶31] We conclude the district court did not err when it granted N.D.R.Civ.P.
54(b) certification, and we hold the documents in this case are subject to
N.D.C.C. ch. 44-04 and 54-46. The partial summary judgment is affirmed. The
stay pending appeal is lifted.
13