Global Geophysical Services, Inc. v. Kuster et al

Filing 16

ORDER by Judge Daniel L. Hovland granting 14 Motion to Amend/Correct; granting 14 Motion for TRO (MM)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
NORTHWESTERN DIVISION
Global Geophysical Services, Inc.,

)
AMENDED ORDER GRANTING
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PLAINTIFF’S MOTION FOR
Plaintiff,
)
TEMPORARY RESTRAINING ORDER
)
vs.
)
)
Case No. 4:15-cv-16
Louis M. Kuster,
)
)
Defendant.
)
______________________________________________________________________________
Before the Court is the Plaintiff’s “Motion to Amend/Correct Order on Motion for TRO”
filed on February 10, 2015. See Docket No. 14. On February 10, 2015, the Court issued a
temporary restraining order pursuant to Rule 65(b) of the Federal Rules of Civil Procedure. Shortly
after the Court issued its temporary restraining order, the Plaintiff, Global Geophysical Services,
Inc., filed an amended complaint correcting the caption and the name of the Defendant landowner.
The Plaintiff seeks an amended the temporary restraining order reflecting these changes and which
prohibits the Defendant from interfering with the Plaintiff’s geophysical exploration activities on
certain real property the Defendant owns in Mountrail County, North Dakota. For the reasons set
forth below, the Court grants the Plaintiff’s motion.

I.

BACKGROUND
The Plaintiff, Global Geophysical Services, Inc. (“Global”), is a Delaware corporation

organized under the laws of the State of Delaware with its principal place of business located in
Missouri City, Texas. Global is engaged in the business of conducting geophysical exploration
operations throughout North Dakota and elsewhere. Global is authorized to do business as a foreign
corporation in the State of North Dakota.

The Defendant, Louis M. Kuster (“Kuster”), is a resident of the State of North Dakota and
the surface estate owner of certain real property ("Subject Property") in Mountrail County, North
Dakota, described as follows:
Township 157 North, Range 91 West
Section 13: S1/2SW1/4
Section 24: NW1/4NW1/4, El/2NW1/4
Section 25: NEl/4, El/2NW1/4, Nl/2SE1/4
Kuster does not own any mineral rights in the Subject Property.
Global alleges it was retained by EOG Resources, Inc. (“EOG”) to conduct geophysical
operations on an area approximately 174 square miles in size located in Burke and Mountrail
Counties, North Dakota, referred to as the “Sidonia 3D Project.” The Subject Property is located
within the Sidonia 3D Project. EOG, along with other individuals, hold an interest in the oil and gas
leasehold estate granting them the right to conduct geophysical exploration operations on the Subject
Property. EOG and others holding interests in and to the oil and gas leasehold estates have entered
into an agreement with Global for geophysical operations to be conducted on the Subject Property.
Global commenced geophysical operations on the Sidonia 3D Project on December 8, 2014. Global
has already conducted geophysical operations on approximately 83,200 acres, or 130 square miles,
of the Sidonia 3D Project. The purpose of geophysical exploration is to gather data from below
the surface of the earth so the same can be processed and analyzed for use in oil and gas exploration
activities. Global has obtained a “geophysical exploration permit” from the North Dakota Industrial
Commission to conduct geophysical exploration on the Subject Property. See Docket No. 8-1.
By letter dated December 17, 2014, Global gave notice to Kuster that it would be
commencing geophysical exploration activities on the Subject Property. See Docket No. 8-2. The
notice contained an offer of $4,955.70 as compensation to the Kusters for the use of the Subject

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Property. Kuster did not respond to the notice.
On or about January 7, 2015, the Subject Property was surveyed, flagged, and receivers put
in place for geophysical exploration. Global contends that on February 4, 2015, a Global crew
attempting to enter the Subject Property encountered an individual who identified himself as the
landowner and instructed the Global crew to vacate the property. See Docket No. 8. Global further
contends that between February 5, 2015 and February 9, 2015, Kuster physically removed receivers
from the Subject Property necessary for the geophysical operations to occur. See Docket No. 9.
Global filed a complaint in this Court on February 6, 2015. See Docket No. 1. The
complaint makes claims for declaratory and injunctive relief. Global filed a motion for a temporary
restraining order along with its complaint. See Docket No. 3. Global seeks to restrain and enjoin
Kuster from interfering with Global’s geophysical exploration activities on the Subject Property
until further order of the Court. Despite difficulties in serving Kuster with the original Notice of
Geophysical Operations, Global is attempting to give notice to Kuster of its intention to seek a
temporary restraining order. See Docket No. 6.

II.

STANDARD OF REVIEW
Global seeks a temporary restraining order pursuant to Rule 65(b) of the Federal Rules of

Civil Procedure, which provides in relevant part as follows:
(b) Temporary Restraining Order.
(1) Issuing Without Notice. The court may issue a temporary restraining order without
written or oral notice to the adverse party or its attorney only if:
(A) specific facts in an affidavit or a verified complaint clearly show that immediate
and irreparable injury, loss, or damage will result to the movant before the adverse
party can be heard in opposition; and

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(B) the movant’s attorney certifies in writing any efforts made to give notice and the
reasons why it should not be required.
Fed. R. Civ. P. 65(b). Global seeks a temporary restraining order without first giving notice to the
Defendant.
The United States Supreme Court has recognized that in some limited situations, a court may
properly issue ex parte orders of brief duration and limited scope to preserve the status quo pending
a hearing. Granny Goose Foods, Inc. v. Teamsters, 415 U.S. 423, 438-39 (1974); Carroll v. Princess
Anne, 393 U.S. 175, 180 (1968). The limited nature of ex parte remedies
reflect[s] the fact that our entire jurisprudence runs counter to the notion of court action
taken before reasonable notice and an opportunity to be heard has been granted both
sides of a dispute. Ex parte temporary restraining orders are no doubt necessary in
certain circumstances, cf. Carroll v. President and Comm’rs of Princess Anne, 393 U.S.
175, 180 . . . (1968), but under federal law they should be restricted to serving their
underlying purpose of preserving the status quo and preventing irreparable harm just
so long as is necessary to hold a hearing, and no longer.
Granny Goose Foods, 415 U.S. at 438-39 (emphasis in original).
Rule 65(b) directs the court to look to the specific facts shown by an affidavit to determine
whether immediate and irreparable injury, loss, or damage will result to the applicant. In addition,
it is well-established the court is required to consider the factors set forth in Dataphase Systems,
Inc., v. C L Systems, Inc., 640 F.2d 109, 114 (8th Cir. 1981) in determining whether a temporary
restraining order should be granted. The Dataphase factors include “(1) the threat of irreparable
harm to the movant; (2) the state of balance between this harm and the injury that granting the
injunction will inflict on other parties litigant; (3) the probability that movant will succeed on the
merits; and (4) the public interest.” Id.

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III.

LEGAL DISCUSSION
It is well-established that the movant has the burden of establishing the necessity of a

temporary restraining order. Baker Elec. Coop., Inc. v. Chaske, 28 F.3d 1466, 1472 (8th Cir. 1994);
Modern Computer Sys., Inc. v. Modern Banking Sys., Inc., 871 F.2d 734, 737 (8th Cir. 1989). “No
single factor is dispositive; in each case all of the factors must be considered to determine whether
on balance they weigh towards granting the injunction.” Baker Elec. Coop., Inc., 28 F.3d at 1472
(quoting Calvin Klein Cosmetics Corp. v. Lenox Labs., Inc., 815 F.2d 500, 503 (8th Cir. 1987)).

A.

PROBABILITY OF SUCCESS ON THE MERITS

When evaluating a movant’s “likelihood of success on the merits,” the court should “flexibly
weigh the case’s particular circumstances to determine ‘whether the balance of equities so favors
the movant that justice requires the court to intervene to preserve the status quo until the merits are
determined.’” Calvin Klein Cosmetics Corp., 815 F.2d at 503 (quoting Dataphase, 640 F.2d at 113).
At this preliminary stage, the Court need not decide whether the party seeking the temporary
restraining order will ultimately prevail. PCTV Gold, Inc. v. SpeedNet, LLC, 508 F.3d 1137, 1143
(8th Cir. 2007). Although a temporary restraining order cannot be issued if the movant has no
chance on the merits, “the Eighth Circuit has rejected a requirement as to a ‘party seeking
preliminary relief prove a greater than fifty per cent likelihood that he will prevail on the merits.’”
Id. (quoting Dataphase, 640 F.2d at 113). The Eighth Circuit has also held that of the four factors
to be considered by the district court in considering preliminary injunctive relief, the likelihood of
success on the merits is “most significant.” S & M Constructors, Inc. v. Foley Co., 959 F.2d 97, 98
(8th Cir. 1992).
The Court must consider the substantive claims in determining whether Global has a
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likelihood of success on the merits. Global alleges causes of action against Kuster for declaratory
and injunctive relief. See Docket No. 1. A likelihood of success on the merits of even one claim
can be sufficient to satisfy the “likelihood of success” Dataphase factor. See Nokota Horse
Conservancy, Inc. v. Bernhardt, 666 F. Supp. 2d 1073, 1078-80 (D.N.D. 2009).
The Court finds Global has a strong likelihood of success on both its claims against Kuster.
Based on the limited record before the Court, it appears Global has obtained the proper permits for
its activities, and parties who have engaged Global have the clear legal right to develop the minerals
underneath the Subject Property. It does not appear Kuster has any valid legal basis for interfering
with Global’s activities on the Subject Property. The harm suffered by Global is clear as
geophysical exploration activities are very expensive, and an incomplete survey of the Sidonia 3D
Project will have a detrimental impact on mineral owners throughout the project area.
As the Court has found a strong likelihood of success on Global’s claims, no further analysis
is necessary at this point. See Nokota Horse Conservancy, 666 F. Supp. 2d at 1078-80 (finding
sufficient likelihood of success on the merits of one claim, without a need to undertake extensive
review of other claims). The Court finds Global has shown the “success on the merits” Dataphase
factor weighs strongly in favor of the issuance of a temporary restraining order.

B.

IRREPARABLE HARM

Global must establish there is a threat of irreparable harm if injunctive relief is not granted,
and that such harm is not compensable by an award of money damages. Doe v. LaDue, 514 F. Supp.
2d 1131, 1135 (D. Minn. 2007) (citing Northland Ins. Co. v. Blaylock, 115 F. Supp. 2d 1108, 1116
(D. Minn. 2000)). “The ‘mere possibility’ that harm may occur before a trial on the merits is not
enough.” Johnson v. Bd. of Police Comm’rs, 351 F. Supp. 2d 929, 945 (E. D. Mo. 2004). The party
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that seeks a temporary restraining order must show that a significant risk of harm exists. Doe, 514
F. Supp. 2d at 1135 (citing Johnson, 351 F. Supp. 2d at 945). The absence of such a showing is
sufficient grounds to deny injunctive relief. Id. (citing Gelco v. Coniston Partners, 811 F.2d 414,
420 (8th Cir. 1987)).
Global contends it will suffer irreparable injury if Kuster continues to interfere with their
exploration activities. Continued interference would strip Global of its legal rights under the permit
issued by the North Dakota Industrial Commission. If the survey cannot be completed, the mineral
owners will be impacted and drilling operations will be significantly delayed and potentially
prevented altogether. In addition, the Global permit is only valid for one year. Geophysical
exploration activities are expensive and delays occasioned by Kuster’s interference only increase
those costs. The affidavits and supporting documents filed by Global demonstrate the threat of
irreparable harm is very real. See Docket No. 8, p. 4.
The Court finds the threat of Kuster’s continued interference with Global’s exploration
activities is real and poses a significant threat of irreparable harm. Further, the Eighth Circuit has
explained that a district court can presume irreparable harm if the movant is likely to succeed on the
merits. Calvin Klein Cosmetics Corp., 815 F.2d at 505 (citing Black Hills Jewelry Mfg. Co. v. Gold
Rush, Inc., 633 F.2d 746, 753 (8th Cir. 1980)). As Global has demonstrated the threat of irreparable
harm, the Court finds this Dataphase factor weighs in favor of the issuance of a temporary
restraining order.

C.

BALANCE OF HARMS

As outlined above, Global has demonstrated the threat of irreparable harm. The balance of
harm factor requires consideration of the balance between the harm to the movant and the injury the
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injunction’s issuance would inflict on other interested parties. Pottgen v. Mo. State High Sch.
Activities Ass’n, 40 F.3d 926, 929 (8th Cir. 1994). While the irreparable harm factor focuses on the
harm or potential harm to the plaintiff, the balance of harm factor analysis examines the harm to all
parties to the dispute and other interested parties, including the public. Dataphase, 640 F.2d at 114;
Glenwood Bridge, Inc. v. City of Minneapolis, 940 F.2d 367, 372 (8th Cir. 1991).
At this early stage, Global has clearly demonstrated a strong likelihood of success on the
merits and a real threat of irreparable harm. It does not appear the temporary restraining order
Global seeks will harm Kuster in any way. Kuster has an interest in the surface of the Subject
Property, and a right to be compensated for the exploration activities. See N.D.C.C. ch. 38-11.1.
Granting a temporary restraining order will not impact Kuster’s right to compensation. The issuance
of a temporary restraining order, or further injunction, will merely prevent Kuster from unduly
delaying Global's activities any more than they already have, and will prevent Kuster from taking
action against Global's employees that enter the Subject Property.
If the ex parte temporary restraining order is not granted, Global will be forced to either
abandon its planned operations on the Subject Property, which would render the efforts on the
Sidonia 3D Project incomplete, or suffer a lengthy and costly delay in exercising its rights under the
permit obtained from the North Dakota Industrial Commission. Under either of these scenarios,
Global will be irreparably harmed.
The balance of harms clearly favors Global. Given the relatively short time period and the
potential for Global to suffer lengthy and costly delays resulting in significant harm, the Court finds
the “balance of harm” Dataphase factor weighs in favor of issuance of an ex parte temporary
restraining order.

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D.

PUBLIC INTEREST

The final Dataphase factor, which involves consideration of public policy, also favors the
issuance of a temporary restraining order. The North Dakota legislature has specifically declared
that the development and production of oil and gas is in the public interest. N.D.C.C. § 38-08-01
(stating it is "in the public interest to foster, to encourage, and to promote the development,
production, and utilization of natural resources of oil and gas in the state"). The legislature has also
found the rights of surface estate owners "should be justly compensated" for the use of their property
occasioned by oil and gas development. See N.D.C.C. § 38-11.1-01.
Granting a temporary restraining order comports with both of these public interests. Public
policy, as clearly stated in North Dakota law, favors the development of oil and gas resources. In
furtherance of this policy, North Dakota law provides the mineral estate is dominant and the surface
estate servient. Hunt Oil Co. v. Kerbaugh, 283 N.W.2d 131, 135 (N.D. 1979). While public policy
favors compensation for owners of the surface estate, it does not permit surface estate owners to
interfere with the development of the mineral estate. Global has offered to compensate Kuster for
any damage caused to their property by Global's activities. In this way, oil and gas is developed,
and the rights of the surface owner are protected. Therefore, at this preliminary stage, the Court
finds this Dataphase factor weighs in favor of the issuance of a temporary restraining order.
After a careful review of the entire record and the Dataphase factors, the Court finds Global
has met its burden under Rule 65(b) of establishing the necessity of an ex parte temporary
restraining order.

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IV.

CONCLUSION
The Court has carefully reviewed the entire record and the Dataphase factors and finds the

Plaintiff has met its burden under Rule 65(b) of establishing the necessity of an ex parte temporary
restraining order. The Court GRANTS the motion for a temporary restraining order (Docket No.
3). As a result, the Defendant and any person or entities acting in concert with or on behalf of
Defendant, are TEMPORARILY RESTRAINED AND ENJOINED from interfering in any way
with the Plaintiff and its contractors' access to and use of, the following real property, located in
Mountrail County, North Dakota, for geophysical operations:
Township 157 North, Range 91 West
Section 13: Sl/2SW1/4
Section 24: NW1/4NW1/4, El/2NW1/4
Section 25:
NEl/4, El/2NW1/4, Nl/2SE1/4
In addition, the Court ORDERS the following:
1)

A hearing will be held in Courtroom One of the U.S. District Court for the
District of North Dakota, in Bismarck, North Dakota, on Wednesday,
February 25, 2015, at 9:00 a.m. to determine whether a preliminary
injunction should be issued.

2)

At the hearing, the Plaintiff shall be prepared to show cause why a
preliminary injunction should be issued. If the Plaintiff fails to do so, “the
court must dissolve the [restraining] order.” Fed.R.Civ.P. 65(b)(3).

3)

At the hearing, the Defendant shall be prepared to show cause why he should
not be preliminarily enjoined during the pendency of this action.

4)

At any time, the Defendant may file a motion to dissolve or modify this
temporary restraining order in accordance with Rule 65(b)(4) of the Federal
Rules of Civil Procedure. The Defendant may also contact the U.S. District
Court to modify the time or date of the scheduled hearing.

5)

The temporary restraining order will not become effective until the Plaintiff
serves the order on the Defendant. The Plaintiff shall arrange for the
immediate service of this order together with the Plaintiff’s motion for a
temporary restraining order (Docket No. 14), memorandum in support
(Docket No. 15) and the supporting pleadings and affidavits (Docket Nos. 5,
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6, 7, 8, and 9), and shall promptly file proof of service with the Court.
6)

No bond shall be required to be posted by the Plaintiff before the temporary
restraining order is effective.

7)

In accordance with Rules 65(b)(2), this order expires in 14 days or on or
before February 25th, 2015, at the same hour of this Order, unless the Court,
for good cause, extends the order “for a like period or the adverse party
consents to a longer extension.”

IT IS SO ORDERED.
Dated at 9:00 a.m., this 11th day of February, 2015.
/s/ Daniel L. Hovland
Daniel L. Hovland, District Judge
United States District Court

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