Federal judge denies Bangstad motion for preliminary injunction

A federal judge has denied Minocqua Brewing Company (MBC) owner Kirk Bangstad’s motion for a preliminary injunction that would have given his business immediate access across town land without the town’s permission.

Federal district judge James Peterson denied Bangstad’s bid for immediate injunctive relief while his lawsuit proceeds against the town, which alleges breach of contract and claims of constitutional violations related to a separate lawsuit.

Specifically, in that separate lawsuit — which is now consolidated with this one — Bangstad has accused the town of, among other things, political retaliation and a violation of his constitutional rights in recommending that Oneida County deny MBC permit applications that were pending with the county. The county denied the applications twice.

However, after Oneida County ultimately granted Bangstad’s third try for a conditional use permit (CUP) for a beer garden, the town entered negotiations with Bangstad to sign a license agreement that would allow him to cross town-owned land known as the “porkchop,” which sits between the MBC property and Highway 51.

The license agreement would provide Bangstad with additional access to the business. 

In this lawsuit, Bangstad claims the town, after those negotiations, wouldn’t sign the license agreement unless he agreed to drop the separate lawsuit. He has refused to do so, and claims breach of contract and a violation of his First Amendment rights.

Bangstad wanted the preliminary injunction while the lawsuit plods along because he said he would suffer irreparable harm without immediate relief, but Peterson ruled that Bangstad failed to convince the court. 

However, Peterson cautioned that his decision did not mean Bangstad would not ultimately prevail, cautioning that the parties should not construe the denial of the injunction as a reflection of the court’s view of the merits of the case.

In deciding the injunction, Peterson said both sides had made providing even a basic overview of the undisputed facts more difficult than usual because they furnished the court with so few documented facts. 

The town of Minocqua offered none at all, actually, and Peterson said Bangstad’s submission of facts was incoherent.

“Plaintiffs’ proposed findings of facts are mostly attempts to make argumentative points rather than providing a coherent narrative,” Peterson wrote. “And many of the facts they did propose are not supported by citations to the record.”

Still, Peterson continued, the decision did not turn on any specific contested fact. 

The factual background

The now consolidated case centers around town-owned property known as the porkchop that lies between MBC, where Bangstad wants to open a beer garden, and Highway 51.

The court noted that Bangstad’s bid for a conditional use permit for the beer garden was twice denied by Oneida County, in November 2022 and in May 2023, with the town of Minocqua recommending denial both times.

“Plaintiffs ultimately constructed a driveway across the porkchop without the town’s permission,” the judge wrote. “Plaintiffs say that they did that because they ‘believed that the town intended to use the two revocable license agreements to further unconstitutionally retaliate against’ them. The town later blocked access to the driveway with landscaping rocks, which are still in place.”

The town maintains it placed the rocks to mark the boundary between MBC and town property and to prevent vehicles from damaging the porkchop and creating safety hazards, the decision states. After the two CUPs were denied, Bangstad sued the town and some of its board members for alleged violations of the First Amendment, the Due Process Clause, and the Equal Protection Clause.

“Among other things, plaintiffs alleged that defendants’ recommendations to deny the permit applications related to the porkchop were retaliation for Bangstad’s ‘progressive political activities,’ which included ‘publicly espous[ing] left-wing viewpoints, plaster[ing] his building with signs for Democratic political candidates, openly criticiz[ing] the town’s response to the Covid-19 pandemic, and r[unning] for public office as a Democrat,’” the judge wrote.

That case is pending.

In October 2023, the judge recounted, the county approved Bangstad’s conditional use permit for the beer garden. Peterson observed that Bangstad did not explain what the town’s position on that application was and neither side explained why county officials changed their minds.

In any event, the decision continued, the county required all permit conditions to be met before the beer garden could open, and one of the conditions was to “enter into an agreement with the town of Minocqua permitting access across” the porkchop.

“In January 2024, the town proposed a revocable license agreement that would give plaintiffs the right to construct and use a driveway that crosses the porkchop in exchange for putting up signs, maintaining the driveway, and maintaining insurance, among other things,” the judge wrote. “In an email to defendants’ counsel, plaintiffs’ counsel wrote that the proposed agreement ‘looks good’ and that ‘we are ready to sign’ once the agreement incorporates ‘a notice to [plaintiffs’ counsel] at this email address.’” 

In response, the town appeared to add a condition: “The town believes that if this agreement is entered into . . . the lawsuit should be dismissed.”

In a follow-up email, Peterson noted, the town attorney wrote that the town hoped for “a clean slate” but added that “I am not sure I can convince them to sign it if a federal lawsuit is still hanging over their head.” 

Two days later, Peterson continued, Bangstad’s attorney, Frederick Melms, relayed that Bangstad had signed the agreement, and that “a dismissal is certainly not out of the question,” but he did not agree to any such dismissal as a condition of getting the license. 

The town still hasn’t signed the license.

A bit fuzzy

In his decision, Peterson observed that Bangstad has alleged “a long-running campaign by defendants to retaliate against plaintiffs for Bangstad’s political views and speech,” but that the request for an injunction was more narrowly focused on the more recent decision by the town declining to sign the license for Bangstad to use the parcel known as the porkchop after Bangstad refused to dismiss the pending lawsuit against the town.

While the complaint asserts claims for both breach of contract and violations of the First Amendment, Peterson wrote, the motion for a preliminary injunction is based on the First Amendment claim only.

“As for the relief plaintiffs are seeking, the motion itself seeks broad and somewhat vague relief in the form of ‘ordering defendants to end their retaliatory conduct against plaintiffs and conform their unconstitutional conduct to the requirements of First Amendment to the Constitution of the United States,’” the judge wrote. “But in their complaint and brief plaintiffs seek more targeted relief in the form of an order requiring defendants to grant plaintiffs access to the porkchop.”

In considering the case, Peterson stressed that a preliminary injunction is an extraordinary remedy intended to preserve the status quo until the merits of a case are resolved, and that a plaintiff seeking an injunction must make two threshold showings: a likelihood of success on the merits and irreparable harm.

“These are independent requirements, so if a plaintiff fails to show irreparable harm, the court may deny an injunction on that ground alone, without considering the plaintiff’s likelihood of success,” the judge wrote.

That was the case here, Peterson observed, adding that a possibility of harm is not enough, it must be shown that irreparable harm is likely. Bangstad did little to show any likely irreparable harm, Peterson declared.

“Plaintiffs say little about irreparable harm in their brief and proposed findings of fact,” he wrote. 

As an initial matter, Peterson continued, Bangstad and MBC characterize their motion as one seeking to simply preserve the status quo and prevent further harm. 

“That’s incorrect,” he wrote. “The relief plaintiffs are seeking requires giving plaintiffs the right to use land owned by the town. Plaintiffs point to no evidence that the town had previously granted plaintiffs permission to use its land.”

To show irreparable harm, Peterson continued, Bangstad and MBC relied primarily on case law that “[t]he loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury.”

But the case they cited, Elrod v. Burns, did not help Bangstad and MBC because they didn’t identify any First Amendment freedoms they had lost, Peterson stated. 

“For example, plaintiffs do not identify any way that defendants are censoring their speech or preventing them from engaging in any expressive activity,” he wrote. “Even in the absence of a direct prohibition on a First Amendment right, plaintiffs may show irreparable harm with evidence that defendants’ conduct deterred them from engaging in protected conduct. But plaintiffs point to no such deterrence or even potential deterrence in this case.”

For example, Peterson continued, Bangstad and MBC do not allege that the town has limited their speech or their litigation activities or that they have any intention to limit constitutionally protected conduct in the future. 

“To the contrary, plaintiffs say that Bangstad has ‘refused to allow the rights he holds so dearly as an American to be violated and [he] fought back’ against defendants with more speech,” Peterson observed.

Oh what a rocky road

Peterson next turned to what he called another type of potential harm suggested by plaintiffs’ requested injunction — lack of access to his parking lot — and mentioned Bangstad’s insistence in his brief that “any injunction would be little more than an order to the town to move a few landscaping rocks” that are blocking the driveway to Highway 51.

“But plaintiffs do not explain what harm those landscaping rocks are causing him,” Peterson wrote. “It is undisputed that cars can reach plaintiffs’ property using the driveway on Front Street. Plaintiffs do not allege that the Front Street entrance is obstructed, hidden, or inconvenient, and they do not explain why they need two separate entrances for cars.”

Then, too, Peterson rejected Bangstad’s claim that he “will lose $300,00[0] in revenue” if the court does not grant the injunction. 

“That allegation was not included in plaintiffs’ proposed findings of fact as required by the court’s procedures,” he wrote. “Even in their brief, plaintiffs provide no context for the allegation.”

In his declaration, Peterson states, Bangstad says that he will lose “nearly $300,000 in revenue” if he is unable to open a beer garden for the summer of 2024, a statement the judge says appears to be related to Bangstad’s request for an injunction ordering the town “to enter into the revocable license agreement they offered plaintiffs on January 12, 2024.” 

“One of the conditions of plaintiffs’ permit to build a beer garden is to first ‘enter into an agreement with the town of Minocqua permitting access across’ the porkchop,” the judge wrote. “The court understands plaintiffs to be saying that they need the license from defendants to build the beer garden, so withholding the license will prevent plaintiffs from making more money than they otherwise could.”

But Peterson said there were three problems with that argument. 

“First, plaintiffs have been seeking permission to build a beer garden on the porkchop since 2022, and they allege that each of defendants’ refusals since then to grant such permission was the result of First Amendment retaliation,” he wrote. “So plaintiffs were in the same position before the summer of 2023 as they are now, but they did not seek preliminary injunctive relief then, and they did not seek preliminary injunctive relief when they filed their first lawsuit later in 2023.”

That lengthy delay undermines their assertion that they will suffer irreparable harm if they can’t build a beer garden before this summer, Peterson stated. 

“Second, plaintiffs do not dispute defendants’ assertion that permission from the town to use part of the porkchop as another driveway is just one of several other conditions of the permit that plaintiffs must satisfy before they may use the porkchop as a beer garden,” he wrote. “For example, defendants point to requirements to construct a curb on plaintiffs’ side of the porkchop to prevent vehicles from driving over it, create parking spaces, put up signs for traffic flow, and comply with the Americans with Disabilities Act.”

So even if the court were to grant plaintiffs’ request for an injunction, it would not mean that plaintiffs could build a beer garden, Peterson observed. 

“In their reply brief, plaintiffs do not dispute that they must fulfill these other requirements, but they say that there is no reason for plaintiffs to begin to fulfill any of the other conditions of their [permit] unless they secure access to U.S. highway 51, because they won’t be able to build their beer garden and enjoy the returns on their investments,” the decision stated. “The court understands plaintiffs to be saying that they do not want to risk spending more money on complying with other permit conditions until they know whether defendants will grant the license.”

No matter if that is a reasonable decision or not, Peterson wrote, it means that acquiring the license is only one step toward building a beer garden, and Bangstad provided no evidence regarding whether they could fulfill the other conditions in time for the summer season.

Most important, though, Peterson found, the $300,000 Bangstad says he will lose does not qualify as irreparable harm because it could be remedied with a damages judgment. Peterson cited a previous holding that a party seeking a preliminary injunction must demonstrate, among other things, that traditional legal remedies, such as money damages, would be inadequate.

“Plaintiffs do not even attempt to explain why money damages would be inadequate to remedy any harm that they may suffer before the merits are decided in this case,” he wrote.

Denied, but …

So Peterson denied the motion for an injunction but stressed that his decision had nothing to do with the merits of the case, and he further cited correspondence that could potentially bolster Bangstad’s argument.

“Plaintiffs submitted emails from defendants’ counsel suggesting that the town was ready to give plaintiffs a license to use the porkchop, but it withheld the license because plaintiffs would not agree to dismiss [the other federal lawsuit],” Peterson wrote. “Although it was defendants who proposed the licensing agreement, defense counsel wrote that ‘the Town believes that if this agreement is entered into, . . . the lawsuit should be dismissed,’ and that the town might not sign the agreement ‘if a federal lawsuit is hanging over [its] head.’” 

What’s more, Peterson continued, the town identified no reason they declined to sign the agreement other than Bangstad’s refusal to dismiss the case, and the town also argued that the counsel’s emails were part of settlement negotiations and were thus inadmissible under Federal rules of evidence.

That was wrong, Peterson observed, because the specific rule does not require the exclusion of evidence regarding the settlement of a claim different from the one litigated. 

“As applied to this case, that exception to the rule means that exclusion is not required ‘when the claim is based upon some wrong that was committed in the course of the settlement discussions’ because the new wrong creates a new claim,” Peterson observed. 

“Even assuming that the emails were part of settlement negotiations, the negotiations were for plaintiffs’ claim that defendants were retaliating against him for his political speech; the new claim based on the emails is that defendants are retaliating against him for maintaining a lawsuit. The claims are related, but distinct,” Peterson added.

Finally, Peterson opined, the general rule is that the government may not withhold a benefit or privilege because of a plaintiff’s litigation activities.

Still, Peterson wrote, he could not grant the injunction because there was no showing of likely irreparable harm, though he cautioned the town it needed to be prepared to counter Bangstad’s arguments.

“But regardless of whether plaintiffs are likely to succeed on the merits, the court cannot grant preliminary injunctive relief in the absence of any showing of irreparable harm,” he wrote. “If this case reaches the summary judgment stage, defendants will have to be prepared to explain why they proposed an agreement only to withhold it after plaintiffs refused to dismiss [the other lawsuit].”