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Enerplus Resources (USA) Corp. v. Wilkinson

United States Court of Appeals, Eighth Circuit

August 2, 2017

Enerplus Resources (USA) Corporation, a Delaware corporation Plaintiff- Appellee
v.
Wilbur D. Wilkinson Defendant-Appellant Three Affiliated Tribes, Fort Berthold District Court Defendant Reed Alan Soderstrom, agent for Wilber D. Wilkinson Defendant-Appellant Ervin J. Lee, an individual Defendant

          Submitted: May 9, 2017

         Appeal from United States District Court for the District of North Dakota - Bismarck

          Before SMITH, Chief Judge, COLLOTON and KELLY, Circuit Judges.

          SMITH, Chief Judge.

         Enerplus Resources (USA) Corporation ("Enerplus") mistakenly overpaid mineral royalties to Wilbur Wilkinson and demanded a return of the excess funds. In response, Wilkinson sued Enerplus in tribal court. Enerplus then filed suit in federal court, seeking the return of the excess funds and a declaration that the tribal court lacked jurisdiction over the dispute. The district court[1] preliminarily enjoined Wilkinson from proceeding with his case in tribal court. Wilkinson appeals. We affirm.

         I. Background

         Wilbur Wilkinson sued Peak North Dakota, LLC ("Peak North") in tribal court. Subsequently, on October 4, 2010, Peak North and Wilkinson entered into a "Settlement Agreement, Full Mutual Release, Waiver of Claims and Covenant Not to Sue" ("Settlement Agreement"), [2] whereby Peak North agreed to assign Wilkinson an overriding royalty interest (ORRI) in certain oil and gas leases located in North Dakota.[3]

         Pursuant to the Settlement Agreement, Peak North and Wilkinson agreed that "any disputes arising under this Agreement and/or the transactions contemplated herein shall be resolved in the United States District Court for the District of North Dakota Northwest Division and such court shall have exclusive jurisdiction hereunder and no party shall have the right to contest such jurisdiction or venue." The Assigning Documents contained similar clauses, stating that all disputes "shall be resolved in the State Courts of the State of North Dakota or an applicable Federal District Court sitting in North Dakota and such courts shall have exclusive jurisdiction hereunder and neither [party] shall have the right to contest jurisdiction or venue."

         In December 2010, Peak North merged with and into Enerplus, with Enerplus being the surviving entity. Because of an alleged clerical error between August 2014 and October 2015, Enerplus claims it overpaid the ORRI due to Wilkinson by $2, 961, 511.15. Upon discovering the error, Enerplus promptly, but unsuccessfully, sought return of the overpaid funds.

         On February 29, 2016, Wilkinson sued Enerplus in the Fort Berthold Tribal Court, alleging Enerplus breached the Settlement Agreement by underpaying Wilkinson. Specifically, Wilkinson sought "an accounting on the leases, mineral acreage and [ORRI]"; "an order . . . decree[ing] that [Enerplus] has not fully paid its obligation"; and that "title be quieted as to such claim, and that [Enerplus] be forever debarred and enjoined from further asserting the same."

         Enerplus subsequently brought this action in the federal district court, seeking (1) a preliminary injunction prohibiting Wilkinson from prosecuting any lawsuits in tribal court arising from or relating to the Settlement Agreement and prohibiting the tribal court from exercising jurisdiction over Enerplus in Wilkinson's tribal court case, and (2) an order requiring that the overpaid ORRI be deposited into the district court's registry. In response, Wilkinson moved to dismiss, arguing that (1) the Settlement Agreement is void, (2) Enerplus failed to exhaust tribal remedies, (3) the tribal court has jurisdiction, and (4) the requested preliminary injunction should be denied.

         The district court analyzed the factors for granting preliminary injunctive relief set forth in Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109 (8th Cir. 1981) (en banc). In considering these factors, the court found Enerplus has a strong likelihood of success on its claims and noted that "it appears likely Enerplus will prevail on [its] claim[] that the Tribal Court lacks jurisdiction" because "[t]he tribal exhaustion doctrine does not apply when the contracting parties have included a forum selection clause." Further, the court found that Enerplus would suffer irreparable harm without injunctive relief, Wilkinson would suffer no harm by being enjoined from continuing to litigate in the tribal court, and injunctive relief would serve the public interest. After concluding that the Dataphase factors weighed in favor of granting injunctive relief, the court granted Enerplus's motion for preliminary injunctive relief and denied Wilkinson's motion to dismiss. Specifically, the court enjoined Wilkinson from prosecuting any lawsuits arising from or relating to the Settlement Agreement in the tribal court, prohibited the tribal court from exercising jurisdiction over Enerplus in Wilkinson's pending suit, and ordered Wilkinson to transfer the overpaid ORRI into the district court's registry. Wilkinson appeals, arguing that the district court erred in granting the preliminary injunction because it "failed to consider the public interest in Tribal Sovereignty" and "instead gave greater weight to the forum selection clauses alone."[4]

          II. Discussion

         "A district court has broad discretion when ruling on a request for preliminary injunction, and it will be reversed only for clearly erroneous factual determinations, an error of law, or an abuse of its discretion." Richland/Wilkin Joint Powers Auth. v. U.S. Army Corps of Eng'rs, 826 F.3d 1030, 1035 (8th Cir. 2016) (quoting Novus Franchising, Inc. v. Dawson, 725 F.3d 885, 893 (8th Cir. 2013)). In deciding whether to issue a preliminary injunction, the district court should consider "(1) the threat of irreparable harm to the movant; (2) the state of the 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." Dataphase, 640 F.2d at 113. With these factors in mind, "[w]e will not disturb a district court's discretionary decision if such decision remains within the range of choice available to the district court, accounts for ...


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