Continental Resources, Inc. v. Langved

Filing 8

ORDER by Judge Daniel L. Hovland granting 3 Motion for TRO (MM)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
NORTHWESTERN DIVISION
Continental Resources, Inc.,

)
ORDER GRANTING PLAINTIFF’S
)
MOTION FOR TEMPORARY
Plaintiff,
)
RESTRAINING ORDER
)
vs.
)
)
Case No. 4:15-cv-19
Art Langved,
)
)
Defendant.
)
______________________________________________________________________________
Before the Court is the Plaintiff’s “Motion for Temporary Restraining Order” filed on
February 13, 2015. See Docket No. 3. The Plaintiff, Continental Resources, Inc., seeks a temporary
restraining order pursuant to Rule 65(b) of the Federal Rules of Civil Procedure. Specifically, the
Plaintiff requests an order prohibiting the Defendant from interfering with the Plaintiff’s oil and gas
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 for a temporary restraining order.

I.

BACKGROUND
The Plaintiff, Continental Resources, Inc., (“Continental”), is an Oklahoma corporation with

its principal place of business located in Oklahoma City, Oklahoma. Continental is an oil and gas
exploration company with operations in western North Dakota and elsewhere.
The Defendant, Art Langved, is a North Dakota resident and the surface estate owner of
certain real property ("Subject Property") in Mountrail County, North Dakota, described as follows:
Township 153 North, Range 93 West
Section 15: NE/4NE/4
Langved also owns an interest in the oil and gas underneath the Subject Property.
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Continental alleges it owns a leasehold interest in the oil and gas in and under a two-section
spacing unit described as Sections 15 and 22, Township 153 North, Range 93 West, Mountrail
County, North Dakota ("Spacing Unit"). The lease covering all of Langved’s interest in the oil and
gas in and under the Spacing Unit was signed in 2004. See Docket No. 1-1. The lease was assigned
to Continental in 2013. See Docket No. 1-2. Continental’s leasehold interest in the Subject Property
grants it the exclusive right to conduct drilling and production operations on the Subject Property
and to use as much of the surface estate of the Subject Property as is reasonably necessary to
exercise its leasehold rights. Those rights include the exclusive right to use the land for oil and gas
exploration and production along with rights of way and easements for laying pipelines and related
infrastructure. See Docket No. 1-1.
On or about July 17, 2014, Continental applied for and was granted permits from the North
Dakota Industrial Commission (“Industrial Commission”) to drill three wells on the Spacing Unit
that includes the Subject Property. Thereafter, Continental drilled the three wells (“Margaurite
Wells”) from a surface location within the Subject Property. Continental is currently working on
pipeline and electric utility infrastructure to service those wells. In addition, Continental has plans
to drill six additional wells on or near the Subject Property.
Continental contends Langved has interfered with its leasehold. Langved sought to prevent
Continental from drilling the Margaurite Wells and now seeks to prevent Continental from laying
pipelines and developing other infrastructure that is necessary to produce and market oil and gas
from the wells.
During the summer of 2014 when Continental was preparing to drill the Margaurite Wells,
Langved and/or his agent, Tom Gray ("Gray") constructed or caused to be constructed a shack
within five-hundred feet of the proposed surface location of the Margaurite Wells. Langved then
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contacted the Industrial Commission on July 21, 2014, the same day Continental planned to begin
drilling operations, demanding Continental's drilling operations be halted based on Continental's
allegedly having violated the five hundred-foot setback requirement.
Langved's actions prompted the Industrial Commission to halt Continental's drilling activities
temporarily as it evaluated Langved's claim. On July 22, 2014, the Industrial Commission informed
Continental it could proceed with drilling its wells, concluding the shack was a mere ploy to delay
drilling.
On July 23, 2014, Tom Gray, an individual who owns no interest in the property but has been
acting as an agent of Langved, was acting erratically and at times aggressively toward Continental
employees or contractors at the well site, including using strong language in an attempt to stop
Continental’s drilling operations. Gray’s aggressive behavior nearly caused an accident involving
a pickup truck pulling a forty-foot trailer on a highway near the well site. The pickup was moving
at a speed of approximately 65 miles per hour when Gray pulled onto the highway immediately in
front of the pickup, forcing the driver of the pickup to take evasive action to avoid Gray’s vehicle.
The driver was able to narrowly avoid Gray’s vehicle. After the near accident, Gray drove a vehicle
onto the section line right-of-way that provides access to the Margaurite Wells, blocking access to
the well site. The vehicle remained in place for the remainder of the day on July 23.
In January 2015, Continental's contractor informed Langved that pipelines and electric utility
infrastructure would be installed on the Subject Property to service the Margaurite Wells. Langved
responded that such infrastructure would only be installed "over [his] dead body." See Docket No.
1, ¶ 19.
By letter dated January 19, 2015, Continental notified Langved, in accordance with Chapter
38-11.1 of the North Dakota Century Code, of Continental's intention to install pipelines and electric
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utilities on the Subject Property and offered to compensate him for the damage. See Docket No. 1-3.
After the 20-day statutory waiting period expired, Continental's contractors entered the property on
or about February 9, 2015, and began work on installation of the pipelines and electric utility line.
On February 12, 2015, Langved appeared on the Subject Property and ordered Continental's
contractor to leave. Specifically, Langved informed the workers and safety personnel on site that
“I ought to go to my house and get my rifle and then you guys will leave." See Docket No. 5, ¶ 7.
Langveld also struck a service vehicle and used loud and foul language to berate the contractor’s
employees for disturbing his property without permission. Feeling threatened, the contractor’s
employees left the area.
Continental filed a complaint in this Court on February 12, 2015. See Docket No. 1. The
complaint makes claims for declaratory and injunctive relief under the Declaratory Judgment Act,
28 U.S.C. § 2201. Continental filed a motion for a temporary restraining order along with its
complaint. See Docket No. 3. Continental seeks to restrain and enjoin Langved from interfering
with Continental’s oil and gas development activities on the Subject Property including its right to
install pipelines, electric lines, and other infrastructure that is reasonably necessary to explore for,
produce, and market oil and gas produced by those wells. until further order of the Court. While
Continental anticipates it will be difficult to serve Langved, it has engaged a process server in an
attempt to give notice to Langved of its intention to seek a temporary restraining order. See Docket
No. 6.

II.

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

of Civil Procedure, which provides in relevant part as follows:
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(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
(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). Continental 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
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injunction will inflict on other parties litigant; (3) the probability that movant will succeed on the
merits; and (4) the public interest.” Id.

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 percent 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
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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 Continental has a
likelihood of success on the merits. Continental alleges causes of action against Langved 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 Continental has a strong likelihood of success on both its claims against the
Langved. Based on the limited record before the Court, it appears Continental has a clear legal right
to develop the oil and gas underneath the Subject Property. The oil and gas lease by which
Continental obtained its right to develop the oil and gas underneath the Subject Property was signed
by Langved himself. Under North Dakota law, Continental has the right to move on and use so
much of the surface estate as is reasonably necessary to lay oil, gas, and water pipelines and to
furnish electricity to the Margaurite Wells. Langved, despite owning an interest in the surface of
the Subject Lands, has no right to prevent Continental’s use of the surface for the purpose of
developing the oil and gas leasehold estate. It does not appear Langved has any valid legal basis for
interfering with Continental’s activities on the Subject Property.
As the Court has found a strong likelihood of success on Continental’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 Continental has shown the “success on the
merits” Dataphase factor weighs strongly in favor of the issuance of a temporary restraining order.

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B.

IRREPARABLE HARM

Continental 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 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)).
Continental contends it will suffer irreparable injury if Langved continues to interfere with
their exploration activities. Langved seeks to prevent Continental from exercising the rights he
expressly granted Continental pursuant to the oil and gas lease which Langveld himself signed.
Langved has no legal basis for doing so. If Langved is allowed to prevent Continental from
continuing its drilling operations on the Subject Property, even temporarily, Langved will
wrongfully strip Continental of its contractual and statutory rights. The situation has escalated to
the point where there have been threats of physical harm to Continental’s contractors. Physical harm
would be unlawful and clearly irreparable. See N.D.C.C. § 34-08-07 (permitting courts to restrain
threatened or continued unlawful acts).

The affidavits and supporting documents filed by

Continental demonstrate the threat of irreparable harm is very real. See Docket Nos. 1, 5, and 6.
The Court finds the threat of Langved’s continued interference with Continental’s 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.
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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 Continental 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, Continental 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 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, Continental 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
Continental seeks will harm the Langved in any way. Langved has an interest in the Subject
Property and a right to be compensated for the oil and gas development activities. See N.D.C.C. ch.
38-11.1. Granting a temporary restraining order will not impact Langved’s right to compensation.
The issuance of a temporary restraining order will merely prevent Langved from further delaying
Continental's activities, and will prevent Langved from taking action against Continental's
employees that enter the Subject Property. It is important to remember that Langved freely entered
into the oil and gas lease by which Continental the right to develop the minerals.
If the ex parte temporary restraining order is not granted, Continental will be forced to either
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abandon its planned operations on the Subject Property or continue it activities under threat of
physical violence against its employees and contractors and potential corresponding liability for
Continental. Under either of these scenarios, Continental will be irreparably harmed.
The balance of harms clearly favors Continental. Given the relatively short time period and
the potential for Continental 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.

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. Continental has offered to compensate
Langved for any damage caused to the Subject Property by its activities. In this way, oil and gas
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is developed, and the rights of the surface owner are protected. In addition, it is certainly in the
public interest to protect companies and their employees from physical harm while engaged in
lawful business activities and to prevent unlawful conduct. 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
Continental has met its burden under Rule 65(b) of establishing the necessity of an ex parte
temporary restraining order.

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 the
Defendant, is 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 153 North, Range 93 West
Section 15: NE/4NE/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,
March 4, 2015, at 1:00 p.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
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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. 3), memorandum in support (Docket
No. 4) and the supporting pleadings and affidavits (Docket Nos. 5 and 6), 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 March 4, 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 11:00 a.m., this 18th day of February, 2015.
/s/ Daniel L. Hovland
Daniel L. Hovland, District Judge
United States District Court

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