State of Idaho v. Coeur d' Alene Tribe
Filing
71
MEMORANDUM DECISION AND ORDER. IT IS ORDERED that Defendant's Motion to Increase Security 49 is DENIED. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
STATE OF IDAHO, a sovereign State of
the United States
Case No. 2:14-cv-00170-BLW
MEMORANDUM DECISION AND
ORDER
Plaintiff,
v.
COEUR D’ALENE TRIBE, a federally
recognized Indian tribe
Defendant.
INTRODUCTION
Before the Court is Defendant’s Motion to Increase Security. Dkt. 49. Earlier, this
Court granted an injunction in Plaintiff’s favor, and ordered Plaintiff to post security in
the amount of $20,000. See Dkt. 40. Defendant seeks to have the security increased to
$200,000 per month. For the reasons set forth below, the Court will deny the motion.
BACKGROUND
In early May 2014, the Coeur d’Alene Tribe began conducting Texas Hold’em
tournaments at the Coeur d’Alene Casino. Shortly thereafter, the State of Idaho brought
this action seeking to enjoin the Tribe from holding these tournaments, claiming that
MEMORANDUM DECISION AND ORDER - 1
poker is a prohibited form of gambling in Idaho, and that the Tribe violated the parties’
Class III Gaming Compact by conducting the tournaments.
On September 5, 2014, the Court issued a Preliminary Injunction, enjoining the
Tribe from holding Texas Hold’em tournaments, and ordering the State to post a security
in the amount of $20,000. September 5, 2014 Order, Dkt. 40. The Court stated that the
amount of the security could be increased, if necessary, based upon an appropriately filed
motion by the Tribe supporting such an increase. Id. at 24. The Tribe responded with the
pending motion.
LEGAL STANDARD
Federal Rule of Civil Procedure 65(c) provides:
The court may issue a preliminary injunction or a temporary restraining
order only if the movant gives security in an amount that the court
considers proper to pay the costs and damages sustained by any party found
to have been wrongfully enjoined or restrained.
The security requirement serves two purposes: 1) assuring the enjoined party that it
readily collect damages from the funds posted in the event that it was wrongfully
enjoined, and 2) providing the plaintiff with notice of the maximum extent of its potential
liability since the amount of the security is the limit of the damages the defendant can
obtain for a wrongful injunction. Continuum Co. Inc. v. Incepts, 873 F.2d 801, 803 (5th
Cir. 1989); see also Washington Capitols Basketball Club, Inc. v. Barry, 304 F. Supp.
1193, 1203 (N.D. Cal. 1969), aff’d, 419 F.2d 472 (9th Cir. 1969).
Determining the amount of the security is left largely to the discretion of the court.
Conn. General Life Ins. Co. v. New Images of Beverly Hills, 321 F.3d 878, 882 (9th Cir.
MEMORANDUM DECISION AND ORDER - 2
2003). Because the amount of the security limits the recoverable damages for a party
found to be wrongfully enjoined, the court should consider the potential incidental and
consequential costs as well as the losses the party will suffer due to the injunction. 11A
Fed. Prac. & Proc. Civ. § 2954 (3d ed.). The court may also consider the likelihood of
success on the merits. California ex rel. Van De Kamp v. Tahoe Reg. Planning Agency,
766 F.2d 1319, 1326 (9th Cir. 1985) (“the likelihood of success on the merits, as found
by the district court, tips in favor of a minimal bond or no bond at all”).
The party seeking the bond has an obligation to present evidence that a bond is
needed, so that the court is afforded an opportunity to exercise its discretion in setting the
amount of the bond. Conn. General Life Ins. Co., 321 F.3d at 883. The Court “is not
required to order security in respect of claimed economic damages that are no more than
speculative.” AB Electrolux v. Bermil Indus. Corp., 481 F.Supp.2d 325, 337 (S.D.N.Y.
2007); Washington Capitols Basketball Club, 304 F.Supp. at 1203 (rejecting security
requested where the projected loss was highly speculative and unsupported by any factual
showing).
ANALYSIS
Here, the Tribe seeks a substantial increase to the security ordered by the Court,
from a flat $20,000 to $200,000 per month. In support of this increase, the Tribe offered a
declaration from the Chief Executive Officer of the Coeur d’Alene Casino & Resort
stating that the casino expends $175,000 a month to pay 49 employees hired as a direct
result of the Texas Hold’em tournaments. Matheson Dec. ¶ 12. The Tribe argues that it
MEMORANDUM DECISION AND ORDER - 3
may be forced to terminate these employees as a direct result of the injunction. Id. at ¶ 10.
Additionally, the Tribe argues that proceeds from the Texas Hold’em tournaments had
been used to support important tribal assistance programs, and that these the injunction
will also affect revenues to other gaming operations, hotel occupancy, and retail sales. Id.
at ¶¶ 6-7.
The Court is not persuaded. The Tribe’s employment costs for Texas Hold’em
tournaments is not the relevant consideration in calculating the security amount, as these
costs are not losses the Tribe will suffer due to the injunction. The real issue is how the
injunction would affect the Tribe’s revenue, and any incidental costs that flow directly
from being wrongfully enjoined. See Sanofi-Synthelabo v. Apotex, 470 F.3d 1368, 1385
(Fed. Cir. 2006) (“the court based its determination on evidence presented before the
court that concerned [defendant’s] potential lost profits, lost market share and associated
costs of relaunch in the event of wrongful enjoinment”). The Tribe has given the Court no
information on projected lost profits resulting from the injunction or any evidence of the
profits generated from past Texas Hold’em tournaments. At most, the Tribe has provided
conclusory statements that the Tribe benefited from the tournaments with overall
increased revenues.
Without some factual basis, the Court cannot assume that, if not enjoined, the
Texas Hold’em tournaments would have generated the revenue needed to cover the
$175,000 in monthly employment expenses it claims. The Court does not believe it
would be proper to require the State to post a bond to pay the salaries of employees
MEMORANDUM DECISION AND ORDER - 4
regardless of whether they will be temporarily laid off or moved to alternate employment,
especially with no evidence that this revenue would have been generated in absence of
the injunction.
The Court recognizes the importance of setting a security limit that would
compensate the tribe for its losses were it found to be wrongfully enjoined. However,
without evidence of those losses, any increase to the security would be based merely on
the Court’s speculation. Based on the record before it, the Court finds the current $20,000
security to be proper.
ORDER
IT IS ORDERED that Defendant’s Motion to Increase Security (Dkt. 49) is
DENIED.
DATED: December 17, 2014
_________________________
B. Lynn Winmill
Chief Judge
United States District Court
MEMORANDUM DECISION AND ORDER - 5
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?