DPC Industries, Inc. v. Western Sugar Cooperative et al

Filing 15

Order DENYING Motion for Temporary Restraining Order #2 , STAYING case pending disposition of the concurrent state court proceeding, and directing the parties to file a joint status report 60 days from the date of this order. Signed by Judge Richard F. Cebull on 2/15/2013. (NOB)

FILED
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
)
)
)
Plaintiff,
)
vs.
)
WESTERN SUGAR COOPERATIVE )
and MONTANA RAIL LINK, INC.,
)
)
)
Defendants.
)
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FEB 15 2013
Clerk, U.S. District Court
District Of Montana
Billings

DPC INDUSTRIES, INC.,

Cause No. CV-13-22-BLG-RFC

ORDER

Before the Court is Plaintiffs Motion for Temporary Restraining Order and
Preliminary Injunction. Defendants Western Sugar cooperative and MRL have
responded. Defendant Western Sugar Cooperative has also filed a Motion to Stay
Pursuant to Colorado River and/or Younger Abstention Doctrines.
STANDARD OF REVIEW
The standard for granting a temporary restraining order ("TRO") is identical
to that for a preliminary injunction. Hawaii County Green Party v. Clinton, 980
F.Supp. 1160, 1163-64 (D.Haw. 1997). "A plaintiff seeking a preliminary
injunction must establish that he is likely to succeed on the merits, that he is likely
to suffer irreparable harm in the absence of preliminary relief, that the balance of
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equities tips in his favor, and that an injunction is in the public interest." Winter v.
Natural Resources Defense Council, Inc.,555 U.S. 7, 129 S.Ct. 365, 374 (2008).
ANALYSIS
Based upon what is before the Court, Plaintiff has not alleged irreparable
harm. Purely monetary injures are not normally considered irreparable. Lyda
Enterprises, 745 F .2d at 1213. The closure of an existing business constitutes a
hardship that is primarily economic in nature. Lyda Enterprises, 745 F.2d at 1211,
1213 and 1216.
In the state action, DPC has alleged counterclaims seeking damages against
MRL and Western Sugar for breach of easement/right of way agreement, breach of
the implied obligation of good faith and fair dealing, and tortious interference with
contract. See Western Sugar Cooperative v. Montana Rail Link, Inc. and DPC
Industries, Inc., Montana Thirteenth Judicial District, Yellowstone County, Cause
No. DV-12-0816. Based upon these claims, it is clear that DPC believes any harm
it suffers is actually compensable with money damages.
Furthermore, Plaintiff has not demonstrated a likelihood of success on the
merits. Plaintiff asserts that the Industrial Track spur line constructed to service
Western Sugar's predecessor was somehow transformed from an Industrial Track
spur line into a "Branch Line" to serve other unidentified rail customers and DPC's

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predecessors beyond the Western Sugar property. This appears to be an effort to
bestow regulatory authority on the Surface Transportation Board ("STB") and this
Court over an Industrial Track spur line over which the STB has no regulatory
authority.
The addition of the very short spur to the existing Industrial Track and/or
spur serving Western Sugar in order to access DPC's facility does not appear to
transform any of the tracks located on Western Sugar's property into an
"extension" or "branch line." See e.g. Missouri, K. & T.R. Co. of Texas v. Texas &
N.O.R. Co., 172 F.2d 768, 770-71 (5th Cir. 1949) ("We see no need to strain to

hold these tracks which are in form and in purpose and effect ordinary industrial
tracks to be 'extensions of the lines of railroads' of these two great carriers ... ").
Accordingly, the STB lacks regulatory authority over BNSF and MRL's transfer of
the ownership of the tracks to Western Sugar.
The Motion for Temporary Restraining Order isDENIED.

COLORADO RIVER AND/OR YOUNGER
ABSTENTION DOCTRINES

DPC, Western Sugar, and MRL are currently litigating issues related to
DPC's use of the track in state court and that matter has been pending since July of
2012. See Western Sugar Cooperative v. Montana Rail Link, Inc. and DPC
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Industries, Inc., Montana Thirteenth Judicial District, Yellowstone County, Cause
No. DV-12-0816.

In Colorado River Water Conservation Dist. v. United States, 424 U.S. 800
(1976), the Supreme Court noted the existence of certain principles governing the
contemporaneous exercise of concurrent jurisdiction by state and federal courts.
"These principles rest on considerations of' [w]ise judicial administration, giving
regard to conservation of judicial resources and comprehensive disposition of
litigation."' Id. (citation omitted).
In Colorado River the Court examined four factors to determine whether
staying proceedings was appropriate: ( 1) whether either court has assumed
jurisdiction over ares; (2) the relative convenience of the forums; (3) the
desirability of avoiding piecemeal litigation; and (4) the order in which the forums
obtained jurisdiction. See 424 U.S. at 818, 96 S.Ct. at 1246-47. In Moses Cone,
the Court articulated two more considerations: (5) whether state or federal law
controls and (6) whether the state proceeding is adequate to protect the parties'
rights. See 460 U.S. at 25-26, 103 S.Ct. at 941-42. "These factors are to be
applied in a pragmatic and flexible way, as part of a balancing process rather than
as a 'mechanical checklist."' American Int'! Underwriters, (Phillipines), Inc. v.

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Continental Ins. Co., 843 F.2d 1253, 1257 (9th Cir.1988) (quoting Moses Cone,

460 U.S. at 16, 103 S.Ct. at 937).
In this case, abstention is warranted. The two actions are substantially
similar and involve identical parties. Both state and federal cases are pending in
Billings, so the convenience of the federal forum is a neutral party. DPC has
sought both money damages and declaratory relief in the state court action and
allowing litigation to proceed in state court will avoid piecemeal litigation. The
state court first assumed jurisdiction over DPC's claims through DPC's assertion
of counterclaims. Both state and federal claims have been asserted in the state
court action, however, because the STB potentially lacks regulatory authority over
the tracks at issue, DPC's claims will be controlled by state law. Based on the
claims and defenses asserted by DPC in the state court action, the state court will
be able to fully adjudicate and protect the parties' rights.
In Younger v. Harris, 401 U.S. 37, 43 (1971), the United States Supreme
Court ruled that "Congress has, subject to few exceptions, manifested a desire to
permit state courts to try state cases free from interference by federal courts." The
Supreme Court has announced a three-prong test to determine whether a federal
district court should abstain from hearing a case where Younger abstention is
invoked. Abstention is required when: "(i) the state proceedings are ongoing; (ii)

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the proceedings implicate important state interests; and (iii) the state proceedings
provide an adequate opportunity to raise federal questions." Fresh lnt'l Corp. v.

Agricultural Labor Relations Bd, 805 F.2d 1353, 1356 (9th Cir.1986) (citing
Middlesex County Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423, 431,
102 S.Ct. 2515, 2520-21, 73 L.Ed.2d 116 (1982)).
In this case, all three elements of the Younger test are satisfied. The state
proceedings are currently ongoing. The state proceedings implicate important state
interests. DPC filed counterclaims in the state court action seeking a declaration
that these matters are subject to the jurisdiction of the STB. Thus, DPC has an
adequate opportunity to raise federal questions.
Considerations of prudent judicial administration, "giving regard to
conservation of judicial resources and comprehensive disposition of litigation,"
requires that this matter be STAYED pending disposition of the concurrent state
court proceeding.
The parties are directed to file a joint status report sixty ( 60) days from the
date of this order.
DATED this 15th day of February, 201

CHARD F. CEBULL
U.S. DISTRICT COURT JUDGE
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