United States District Court, D. Minnesota
Gerald W. Von Korff, RINKE NOONAN, for plaintiff.
Carol Lee Draper, UNITED STATES DEPARTMENT OF JUSTICE, Friedrich A. P. Siekert, Assistant United States Attorney, UNITED STATES ATTORNEY'S OFFICE, for defendants.
Robert E. Cattanach and Michael R. Drysdale, DORSEY & WHITNEY LLP, for intervenor defendant.
Jill S. Nguyen, Assistant Attorney General, MINNESOTA ATTORNEY GENERAL'S OFFICE, for amicus curiae Minnesota Department of Natural Resources.
Matthew A. Sagsveen, Assistant Attorney General, NORTH DAKOTA ATTORNEY GENERAL'S OFFICE, for amicus curiae State of North Dakota.
MEMORANDUM OPINION AND ORDER
JOHN R. TUNHEIM, District Judge.
In a May 13, 2015 Order, the Court granted plaintiff Richland/Wilkin Joint Powers Authority's ("JPA") motion for a preliminary injunction. Before the Court are the parties' briefs regarding the proper security amount in this case; the State of Minnesota's motion for leave to participate as amicus curiae with respect to the security issue; and defendant Fargo-Moorhead Flood Diversion Board of Authority's ("Authority") motion to stay the injunction pending appeal. Because the security requirement is generally waived in public interest environmental litigation, the Court will waive the requirement. Additionally, because the Authority has not met its burden under the four factors the Court must consider when deciding whether to stay an injunction pending appeal, the Court will deny the Authority's motion to stay.
Federal Rule of Civil Procedure 65(c) states that the Court "may issue a preliminary injunction... 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." Because the Authority requested an additional opportunity to make arguments with respect to the security ("security" or "bond") issue, the Court temporarily waived the security in its prior Order to give the parties time to brief the issue in detail. Richland/Wilkin Joint Powers Auth. v. U.S. Army Corps of Eng'rs, No. 13-2262, 2015 WL 2251481, at 24 n. 14 (D. Minn. May 13, 2015) ( Richland/Wilkin II ).
"The amount of the bond rests within the sound discretion of the trial court and will not be disturbed on appeal in the absence of an abuse of that discretion." Stockslager v. Carroll Elec. Co-op Corp., 528 F.2d 949, 951 (8th Cir. 1976). Despite this significant discretion, the Eighth Circuit "will reverse [a district court's] order if it abuses that discretion due to some improper purpose, or otherwise fails to require an adequate bond or to make the necessary findings in support of its determinations." Hill v. Xyquad, Inc., 939 F.2d 627, 632 (8th Cir. 1991).
The Authority seeks a bond in this case of at least $2, 458, 000. (Authority Mem. of Law in Supp. of Inj. Bond ("Authority Bond Mem.") at 7-8, May 20, 2015, Docket No. 212.) This amount stems from estimates of construction delay costs for the 2015 season, the potential loss of the 2016 construction season, and a reduction in property values in the City of Oxbow. (Decl. of Bruce Spiller Regarding Prelim. Inj. Costs ¶¶ 3-8, May 20, 2015, Docket No. 215.) In an amicus brief, the State of Minnesota ("Minnesota") argues, however, that no bond or simply a nominal bond should be required, because this case is similar to cases arising under the National Environmental Policy Act ("NEPA"), in which the bond requirement has been waived. The JPA argues that no bond should be required pursuant to a state statute, Minnesota Statute § 574.18.
Overall, there are few exceptions to Rule 65(c)'s bond requirement. Frank's GMC Truck Ctr., Inc. v. Gen. Motors Corp., 847 F.2d 100, 103 (3d Cir. 1988) ("While there are exceptions, the instances in which a bond may not be required are so rare that the requirement is almost mandatory."). Indeed, there are few examples in this circuit of courts waiving the bond requirement. See Curtis 1000, Inc. v. Youngblade, 878 F.Supp. 1224, 1278 (N.D. Iowa 1995) ("Almost without exception, however, courts in this circuit have required a bond before issuing a preliminary injunction."); Masterman ex rel. Coakley v. Goodno, No. 03-2939, 2003 WL 22283375, at *1 (D. Minn. Sept. 25, 2003). Courts in this district have waived the bond requirement in cases in which the defendant did not object to requiring no bond, Fantasysrus 2, L.L.C. v. City of East Grand Forks, 881 F.Supp.2d 1024, 1033 (D. Minn. 2012), and in which the defendant had not shown that any damages would result from the wrongful issuance of an injunction, Bukaka, Inc. v. Cnty. of Benton, 852 F.Supp. 807, 813 (D. Minn. 1993). As the Authority correctly points out, this case is different than either Fantasysrus 2 or Bukaka, because the Authority does seek a bond and has put forth evidence of damages that it will incur if the injunction was issued wrongly.
Irrespective of these general trends in the Eighth Circuit, however, Minnesota in its amicus brief correctly points out that a so-called "NEPA exception" exists to the bond requirement. In cases asserting federal NEPA claims, courts "have usually not required a bond at all or a nominal bond of one dollar." NEPA Law & Litig. § 4.53; 11A Fed. Prac. & Proc. Civ. § 2954 (3d ed.) ("Another instance in which there may be a conflict between the amount of security that defendant feels is adequate and the amount that plaintiff can afford arises in what might be called public interest' litigation."). Courts have adopted this "NEPA exception" due to "the important public interest in the enforcement of NEPA, the congressional policy that private organizations are to cooperate in its enforcement, and the deterrence to litigation that would result if substantial bonds were required." NEPA Law & Litig. § 4.53 (footnotes omitted).
One oft-cited example of this trend is Davis v. Mineta, 302 F.3d 1104 (10th Cir. 2002). In that case, the Tenth Circuit reversed a district court's decision not to grant a preliminary injunction under NEPA, enjoining construction of a highway project. Id. at 1109-10, 1126. In doing so, the court left to the district court the decision on whether to require a bond, but noted that "[o]rdinarily, where a party is seeking to vindicate the public interest served by NEPA, a minimal bond amount should be considered." Id. at 1126. The court noted that the case did not involve a public-interest environmental organization the typical plaintiff in a NEPA case in which the bond requirement is waived but nevertheless recommended against requiring a large bond. Id. The court in Natural Resources Defense Council v. Morton, 337 F.Supp. 167, 168-69 (D.D.C. 1971), reached a similar conclusion in a case involving an injunction that halted an offshore gas and oil lease sale. The court set bond at $100, even though the defendant federal agency asked for a bond of at least $750, 000, and possibly $2.5 million. Id .; see also Landwatch v. Connaughton, 905 F.Supp.2d 1192, 1198 (D. Or. 2012) ("It is well established that in public interest environmental cases the plaintiff need not post bonds because of the potential chilling effect on litigation to protect the environment and the public interest. Federal courts have consistently waived the bond requirement in public interest environmental litigation, or required only a nominal bond."); San Luis Valley Ecosystem Council v. U.S. Fish & Wildlife Serv., 657 F.Supp.2d 1233, 1247-48 (D. Colo. 2009) ("I conclude that the declarations establish that the imposition of substantial security would impede Plaintiff's access to judicial review and therefore will not require a bond."); League of Wilderness Defenders-Blue Mountain Biodiversity Project v. Forsgren, 184 F.Supp.2d 1058, 1071 (D. Or. 2002) ("The bond in this public interest litigation is ...