October 22, 2017

Colorado Court of Appeals: Neighbors’ Due Process Rights Not Violated During Rezoning Hearing

The Colorado Court of Appeals issued its opinion in Whitelaw v. Denver City Council on Thursday, April 6, 2017.

C.R.C.P. 106(a)(4) —Rezoning Decision—Due Process—Spot Zoning.

Plaintiffs Whitelaw, III and various neighbors sought judicial review of the rezoning decision of defendant Denver City Council. Cedar Metropolitan LLC applied to rezone a 2.3-acre parcel. To build an “age-targeted” apartment complex on the site, Cedar sought to tear down a blighted church and rezone the parcel from single family home to a zone district that allowed three-story apartment buildings. The neighbors are property owners who live in the neighborhood near the parcel. They challenged the rezoning efforts, asserting it would hurt their property values, create traffic and parking problems, cause hazards to pedestrians, and degrade the character of the surrounding neighborhood. Following an eight-hour hearing, the Council granted the request to change the zoning.

The neighbors challenged the rezoning in district court under C.R.C.P. 106(a)(4). The district court rejected all of their claims. On appeal, the neighbors asserted various claims, principally violation of their right to due process. They made five due process arguments. The court of appeals will affirm a rezoning decision unless the governmental entity exceeded its jurisdiction or abused its discretion, which occurs if the body misapplied the law or no competent evidence supports its decision.

The neighbors first argued that a lobbyist for Cedar communicated before the hearing with Council member Susman, in whose district the parcel lies, through her private email account and by phone. They alleged that the failure to disclose these communications to the public before the hearing deprived them of their due process rights because they did not have notice and an opportunity to rebut the information on which the Council may have impermissibly relied in making its determination. Despite evidence of approximately 50 pages of such emails, the neighbors pointed to no evidence that they had a “substantial prejudicial impact” on the outcome of the proceedings. In fact, Susman voted against the rezoning. The neighbors did not overcome the presumption that the Council members acted with integrity, honesty, and impartiality, and they showed no prejudice from the communications.

Second, the neighbors asserted their due process rights were violated due to the involvement of Cedar’s architect, who was also a member of the City’s Planning Board, in the application process. The Planning Board recommended that the Council approve the rezoning. The architect submitted the application to the Board, but did not attend the Planning Board meeting or vote on the rezoning and thus complied with the Denver Municipal Code. Further, the Planning Board’s recommendation is not appealable because it is not a “final decision” reviewable under C.R.C.P. 106(a)(4). Therefore, the court of appeals did not review this claim.

Third, the neighbors argued that their due process rights were violated because certain Council members’ comments at the public hearing reflected “flawed quasi-judicial decision making” and showed they “relied on irrelevant factors and information outside of the hearing record” in making their decision. The neighbors failed to demonstrate a lack of competent evidence supporting the Council’s decision or that any individual member relied on factual information outside the hearing record or ignored the record in casting their vote. There was competent evidence in the record to support the Council’s decision.

Fourth, the neighbors argued their due process rights were violated because the Council stepped outside of its neutral, quasi-judicial role and supported Cedar by improperly applying the protest petition procedure of the Denver City Charter. The protest procedure provides that if opponents gather signatures from property owners representing 20% or more of the land area within 200 feet of the perimeter of a proposed rezoning, the rezoning must pass the Council by a super-majority (10 members). Opponents gathered 17% of the perimeter zone signatures and the rezoning passed 8 to 4. The neighbors argued that the City improperly applied the protest procedure by including City-owned park land but not allowing a procedure for residents to obtain petition signatures from the City. The court disagreed, finding that the City’s calculation of the 200-foot protest petition area was in accordance with the Denver Charter.

Fifth, the neighbors alleged a due process violation because some Council members received “substantial” political contributions from lobbyists and were therefore biased in the rezoning vote. Evidence of this was not in the record before the Council and therefore was not reviewable by the court.

The neighbors also argued that the rezoning decision must be vacated because, as a matter of law, it did not comply with the City’s zoning ordinance, alleging it was not consistent with the City’s adopted plans; no specific circumstances justified the rezoning; and the rezoning fails to further the public health, safety, and general welfare. The record shows that the Council members engaged in lengthy discussions about the criteria and evidence, including testimony presented by both proponents and opponents at the hearing. The Council did not abuse its discretion in concluding that the proposed zoning was consistent with the City’s adopted plans; the rezoning resulted in uniformity of district regulations and restrictions; the rezoning furthered the public health, safety, and general welfare; circumstances justified the rezoning; and the rezoning was consistent with the description of the applicable neighborhood context and the stated purpose and intent of the proposed Zone District.

Finally, the neighbors argued that the rezoning was impermissible spot zoning because it did not further Denver’s comprehensive plans and was therefore an abuse of discretion. The court disagreed. Here, the rezoning was not out of character with the adjacent area and furthered the City’s adopted plans.

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Proposed Development Plan Need Not Include Outdoor Gathering Space

The Colorado Court of Appeals issued its opinion in Rangeview, LLC v. City of Aurora on Thursday, July 14, 2016.

Rezoning of Property—Site Plan—Standards—Abuse of Discretion.

BFR’s application to rezone its parcel of property (the property) was granted. Rangeview LLC owns Rangeview Estates, which borders the property to the west, and Eades and Sellery each own property in the neighborhoods surrounding the property. Rangeview, Eades, and Sellery (collectively, Rangeview) filed the underlying action against the City of Aurora, claiming that the Aurora City Council exceeded its jurisdiction in granting BFR’s application to rezone the property. The district court affirmed the City Council’s decision.

On appeal, Rangeview argued that City Council abused its discretion by approving the site plan because the plan did not include an outdoor gathering space as mandated by the Aurora Municipal Code’s (Code) sustainable infill redevelopment (SIR) zoning district design standards. The Code defaults to the terms of the SIR handbook, which states that projects “should” provide a public space. Therefore, although a public space is desirable, it is not required. Because City Council’s approval was supported by competent evidence, it did not abuse its discretion.

Rangeview also argued that City Council abused its discretion in rezoning the property to an SIR district when the property does not meet the requirements of an “infill development parcel,” the proportions of which are defined in the Code. Because the Code language’s ordinary meaning does not reference any requirement related to the proportions of developed boundaries, the City Council did not abuse its discretion by approving the rezoning request even though the property would not meet the definition of an “infill development parcel.”

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Colorado Governmental Immunity Act Does Not Apply to Prospective Injury

The Colorado Supreme Court issued its opinion in Open Door Ministries v. Lipschuetz on Monday, May 23, 2016.

Colorado Governmental Immunity Act—Injury—Nature of Action.

The Supreme Court held that the Colorado Governmental Immunity Act (CGIA), CRS §§ 24-10-101 to -120, does not bar claims for prospective relief from a future injury. Open Door Ministries (Open Door) had not suffered an injury by the time it filed its cross-claims against the City and County of Denver. Therefore, Open Door’s cross-claims—which sought prospective relief to prevent a future injury—were not subject to the CGIA. Open Door was not required to comply with the CGIA’s notice provision, and the trial court had jurisdiction over the cross-claims.

Summary provided courtesy of The Colorado Lawyer.

Frederick Skillern: Real Estate Case Law — Zoning and Land Use Control (3)

Editor’s note: This is Part 22 of a series of posts in which Denver-area real estate attorney Frederick Skillern provides summaries of case law pertinent to real estate practitioners (click here for previous posts). These updates originally appeared as materials for the 32nd Annual Real Estate Symposium in July 2014.

By Frederick B. Skillernfrederick-b-skillern

Board of County Commissioners of Teller County v. City of Woodland Park
Colorado Supreme Court, May 20, 2014
2014 CO 35

Municipal Annexation Act of 1965; timely motion for reconsideration with the municipality as condition to judicial review; C.R.S. § 31-12-116.

The Supreme Court, in a direct appeal by Woodland Park under C.A.R. 21, holds that the district court lacked jurisdiction to review Teller County’s petition for judicial review of an annexation by the City of Woodland Park under C.R.S. § 31-12-116. Subsection (2)(a)(II) of the statue requires a party (such as a county in which the property is located) to file a motion for reconsideration with the governing body of the annexing municipality within ten days of the effective date of an annexation ordinance as a precondition for obtaining judicial review of a municipal annexation. The effective date of the ordinance can, and is here, different than the effective date of the annexation. The petition for reconsideration with the City should have been filed by September 16, 2013, but was not filed until September 20, 2013.

 

Town of Dillon v. Yacht Club Condominiums Home Owners Association
Colorado Supreme Court, May 27, 2014
2014 CO 37

Homeowners association; town parking ordinance; “tandem” parking in town right-of-way; police power; due process.

This is a declaratory judgment action brought by a condominium association near the Dillon Marina in Summit County. The small complex was built in the 1960’s, not long after the creation of the Dillon reservoir, and occupies the corner of an intersection of two residential streets (Tenderfoot and Gold). The reservoir lies to the rear. The condominium buildings consist of approximately 64 “available units,” but only 44 parking spaces. The discrepancy is apparently due to the creation of additional “lockoff” units through subdivision of original units over the years. Over the decades, parking became a problem, for neighbors, bicyclists, and the town. The project provides parking for its owners in paved spaces in front of the building, which is parallel to the adjacent streets. In recent years the occupants have adopted the practice of parking “two cars deep,” front to rear, at right angles to the building along both city streets. This created some stress, as cars parked in front of the building might be forced to back out through a “tunnel” of two cars on each side. Moreover, the second row of cars frequently (neighbors might say substantially) encroached on the town “right-of-way,” which is Town property.

The Town sought by ordinance to prohibit the stacked parking procedure, citing the danger and inconvenience to town residents and interference with the town’s new recreational path — a popular bicycle path connecting Dillon with Frisco and Keystone.

Noting that “only one” accident had been reported in the past 40 years, the district court ruled that the parking ordinance was unreasonable, and a violation of procedural due process. Along with this came an award for attorney fees against the Town under 42 U.S.C. § 1985. The court of appeals affirmed, in an unpublished decision, reasoning that the ordinances were not reasonably related to a legitimate governmental interest because they caused the condo owners significant economic harm and there were alternatives available which would have furthered the Town’s interests. The supreme court accepted the case for review, which is interesting for an unpublished, 3-0 decision. The court reverses the lower courts.

The Supreme Court, in a 7-0 decision by Justice Marquez, holds that the Town did not abuse its police power in enacting the two parking ordinances at issue here.

Can a municipality constitutionally exercise its police power to undertake a road improvement project that eliminates parking on the municipality’s street near a condominium? An ordinance comports with due process where it bears a reasonable relationship to a legitimate government interest. The two ordinances here were within the Town’s police power to regulate matters of public health, safety, and welfare, and were a reasonable exercise of that power because the measures are reasonably related to the Town’s objectives of improving traffic safety, improving water drainage, and remedying a missing portion of a recreational bike path.

Importantly, the Court holds that the inquiry turns on the reasonableness of the relationship between the ordinance and the government objectives to be achieved, and not on the burden on the complaining party or the availability of less burdensome alternatives. Accordingly, the Court reversed the court of appeals’ judgment, and remands the case to the court of appeals for further proceedings – the lower court had affirmed the district court’s ruling solely on the police power issue, without considering the district court’s alternative findings that the ordinances were unconstitutionally retrospective.

Frederick B. Skillern, Esq., is a director and shareholder with Montgomery Little & Soran, P.C., practicing in real estate and related litigation and appeals. He serves as an expert witness in cases dealing with real estate, professional responsibility and attorney fees, and acts as a mediator and arbitrator in real estate cases. Before joining Montgomery Little in 2003, Fred was in private practice in Denver for 6 years with Carpenter & Klatskin and for 10 years with Isaacson Rosenbaum. He served as a district judge for Colorado’s Eighteenth Judicial District from 2000 through 2002. Fred is a graduate of Dartmouth College, and received his law degree at the University of Colorado in 1976, in another day and time in which the legal job market was simply awful.

Frederick Skillern: Real Estate Case Law — Zoning and Land Use Control (1)

Editor’s note: This is Part 21 of a series of posts in which Denver-area real estate attorney Frederick Skillern provides summaries of case law pertinent to real estate practitioners (click here for previous posts). These updates originally appeared as materials for the 32nd Annual Real Estate Symposium in July 2014.

By Frederick B. Skillernfrederick-b-skillern

Mountain-Plains Investment Corp. v. Parker Jordan Metropolitan District
Colorado Court of Appeals, August 15, 2013
2013 COA 123

Special districts; Colorado Open Records Act; fee; deposit; attorney-client privilege log.

Mountain-Plains Investment Corporation and others appeal a summary judgment entered in favor of defendant Parker Jordan Metropolitan District (District) in a dispute over an open records act claim. The court holds:

  • The special district did not have to reveal a consultant’s emails (that it no longer retained) to Mountain-Plains’ shareholders, under C.R.S. § 24-72-202(7), because the District did not make or keep the emails and the consultant did not keep them for it.
  • Charging a retrieval fee without having in place a records retention policy, and requiring a deposit to cover the retrieval fee, did not violate the Colorado Open Records Act, C.R.S. §§ 24-72-201, et seq. No policy was required at the time the records were sought, and C.R.S. § 24-72-203 allows a fee.
  • A fee can be charged to segregate privileged material because C.R.S. § 24-72-204(3)(a)(IV) bars inspection of privileged matter.
  • A fee for a privilege log was proper because C.R.S. § 24-72-205(3) allows a fee for creating a record, and the fee did not exceed the log’s cost.

 

Friends of Denver Parks, Inc. v. City and County of Denver
Colorado Court of Appeals, December 26, 2013
2013 COA 177

City park; conveyance of park land; Denver Charter § 2.4.5.

Defendant, the City and County of Denver (City), agreed to transfer a parcel of land (southern parcel) to a school district so that the district could build a school on it. Plaintiffs, an organization called Friends of Denver Parks, Inc. and several other interested parties, tried to file a referendum petition to repeal the ordinance transferring the southern parcel; however, the City’s Clerk and Recorder refused to accept the petition. Plaintiffs then filed a motion for a preliminary injunction to enjoin the City’s transfer of the southern parcel to the school district. The court denied both requests.

On appeal, plaintiffs argued that the trial court erred in denying their requested relief because (1) the City’s conduct over the years had dedicated the southern parcel as a park under the common law; and (2) the City’s charter requires that voters approve the transfer of a “park belonging to the city as of December 31, 1955.” The Court of Appeals disagreed on both counts.

Denver Charter § 2.4.5 sets forth the sole mechanism as of December 31, 1955 for creating parks and transferring parks. The City did not pass an ordinance dedicating the southern parcel as a park pursuant to § 2.4.5 after December 31, 1955. Additionally, the record did not clearly establish that the City, through its unambiguous actions, had demonstrated an unequivocal intent to dedicate the southern parcel as a park on or before December 31, 1955. Therefore, Denver Charter § 3.2.6 authorized the City to sell or transfer it without following the requirements of § 2.4.5, and the trial court did not abuse its discretion when it determined that plaintiffs did not establish a reasonable likelihood of success on the merits of this issue. The order was affirmed.

Frederick B. Skillern, Esq., is a director and shareholder with Montgomery Little & Soran, P.C., practicing in real estate and related litigation and appeals. He serves as an expert witness in cases dealing with real estate, professional responsibility and attorney fees, and acts as a mediator and arbitrator in real estate cases. Before joining Montgomery Little in 2003, Fred was in private practice in Denver for 6 years with Carpenter & Klatskin and for 10 years with Isaacson Rosenbaum. He served as a district judge for Colorado’s Eighteenth Judicial District from 2000 through 2002. Fred is a graduate of Dartmouth College, and received his law degree at the University of Colorado in 1976, in another day and time in which the legal job market was simply awful.

Colorado Court of Appeals: Contractual Covenants in Deed of Trust Not Extinguished in Foreclosure

The Colorado Court of Appeals issued its opinion in Top Rail Ranch Estates, LLC v. Walker and Walker Development Co. v. Top Rail Ranch Estates, LLC on Thursday, January 30, 2014.

Issue of First Impression—Motions for Directed Verdict—Doctrine of Claim Preclusion—Pursuit of Same Claim in Two Actions—Fraud—Economic Loss Rule—CRCP 59(a)(4)—Attorney Fees.

Top Rail Real Estates, LLC (Top Rail) entered into a contract with Walker Development Company to purchase a subdivision of platted residential lots. Top Rail paid $200,000 of the purchase price in cash, and executed a promissory note payable for the balance of $1 million. After Walker Development’s failed attempt to change the zoning to sell a portion of the property to a mining company, Top Rail was unable to sell lots in the subdivision, and it halted construction activities. Top Rail stopped making payments on its loan from the bank, and the bank foreclosed on its deed of trust. The parties sued each other in separate actions, and this appeal followed.

Walker Development argued in the first action that the court erred in granting the motion for directed verdict and dismissing its counterclaim. Regardless of whether the lien imposed by the deed of trust was extinguished by foreclosure of the bank’s senior lien, the contractual covenants in the deed of trust were not extinguished by the foreclosure. Therefore, the trial court erred in directing a verdict against Walker Development on its counterclaim.

Ronald Walker and Walker Development also argued that the trial court erred in denying their motion for directed verdict on the fraud claims asserted by Top Rail and Christopher Jenkins. The economic loss rule applied to bar the fraud claims asserted by Top Rail and Jenkins because the relief sought was the same as that sought for breach of contract and breach of the covenant of good faith and fair dealing.

The Court of Appeals agreed that the trial court erred in its calculation of prejudgment interest. The award should have been based on the $500,000 damages award in the final judgment entered by the trial court, and not on the $567,000 damages awarded by the jury.

Walker Development also contended that the trial court improperly granted summary judgment for Top Rail and Jenkins in the second action, based on its ruling that claim preclusion barred Walker Development’s claims. The doctrine of claim preclusion does not bar claims that were permissive counterclaims in a prior action, where the adjudication of those claims would not result in inconsistent judgments or a deprivation of rights established by the first judgment. Here, allowing Walker Development’s claims to be adjudicated in the second action did not nullify the judgment in the first action or impair any rights established by it, nor did inconsistent judgments result. Accordingly, the trial court erred in granting summary judgment against Walker Development based on claim preclusion.

On cross-appeal from the second action, Top Rail and Jenkins argued that the trial court erred in denying their CRCP 59(a)(4) motion for cancellation of the promissory notes, release of the deed of trust, and release of the notice of lis pendens. The Court disagreed. The trial court did not abuse its discretion in determining that it would be inequitable to require Walker Development to file an additional bond on top of the $1.3 million bond that it had already posted in the first action. The judgment was affirmed in part and reversed in part, and the case was remanded with directions.

Summary and full case available here.

HB 13-1142: Modifying Four Tax Credit Programs Under the Urban and Rural Enterprise Zone Act

On January 18, 2013, Rep. Dickey Hullinghorst and Sen. Rollie Heath introduced HB 13-1142 – Concerning Reforms to the “Urban and Rural Enterprise Zone Act.” This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill:

  • Commencing Jan. 1, 2014, requires the director of the Colorado office of economic development and the Colorado economic development commission (commission) to review the enterprise zone designations at least once every 10 years to ensure that the existing zones continue to meet the statutory criteria to qualify as an enterprise zone.
  • For credits certified on or after Jan. 1, 2014, limits the amount of an income tax credit that may be claimed in an income tax year for qualified investments in an enterprise zone to the sum of the taxpayer’s actual tax liability for the income tax year up to $5,000, plus 50 percent of any portion of the tax liability for the income tax year that exceeds $5,000 up to a maximum of $1 million.
  • Allows a taxpayer to appeal to the commission for a credit in excess of the $1 million limit.
  • Requires the commission to annually post information regarding certified investment tax credits on its web site or the Colorado office of economic development’s web site.
  • Increases the income tax credit for investments made in a qualified job training program in an enterprise zone for income tax years commencing on and after Jan. 1, 2014, from 10 percent of the total investment to 12 percent.
  • Increases the income tax credit for establishing a new business facility in an enterprise zone for income tax years commencing on and after Jan. 1, 2014, from $500 for each new business facility employee to $1,100.
  • Increases the income tax credit for each new business facility employee in an enterprise zone who is insured under a health insurance plan or program provided through his or her employer for income tax years commencing on and after Jan. 1, 2014, from $200 per such employee to $1,000.
  • On Feb. 28, the Finance Committee took testimony and delayed action on the bill to a future date.

    Colorado Court of Appeals: Board of County Commissioners Has Authority to Determine Permitted Uses of Property for Zoning Purposes

    The Colorado Court of Appeals issued its opinion in Giuliani v. Jefferson County Board of County Commissioners on Thursday, November 1, 2012.

    Medical Marijuana—Local Zoning—Summary Judgment—Colorado Constitution, Amendment 20—Mootness—Medical Marijuana Code.

    In this action concerning whether a county may prohibit the operation of a medical marijuana dispensary as a non-permitted use under a local zoning plan, plaintiffs Marc Giuliani and Footprints Health and Wellness, Inc. (collectively, providers) and Christopher Peck and Frank Campbell (collectively, patients) appealed the trial court’s orders partially dismissing their claims and affirming the resolution of the Jefferson County Board of Adjustment (Board). They also appealed the trial court’s summary judgment in favor of defendants, the Jefferson County Board of County Commissioners (BOCC), the Board, and the Jefferson County Division of Planning and Zoning (collectively, County). The appeal was dismissed in part, the judgment was affirmed in part, and the order was affirmed.

    The providers leased a commercial unit in a shopping center in unincorporated Jefferson County in September 2009 for the purpose of operating a medical marijuana dispensary. Believing this use would be compatible with the official development plan (ODP) of the shopping center, as zoned, the providers hired a contractor to perform tenant improvements and obtained various permits from Jefferson County.

    The business opened in late October 2009. Two months later, the zoning administrator issued a zoning violation notice to the providers, stating the operation of a medical marijuana dispensary was not a permitted use in the zone district. The providers appealed to the Board, which affirmed the administrator’s conclusion.

    In May 2010, the providers filed this action, seeking declaratory and injunctive relief and money damages. In March 2011, the patients were permitted to intervene and joined the providers’ claim that the County was preempted by Amendment 20 to the Colorado Constitution from interpreting its zoning regulations so as to impose a de facto ban on medical marijuana dispensaries.

    The trial court granted in part the County’s motion to partially dismiss the complaint and denied the request for a preliminary injunction. It also affirmed the Board’s resolution that the dispensary was not a permitted use. It then granted the County’s motion for summary judgment on all remaining claims.

    Amendment 20, passed in November 2000, permits patients to possess and use medical marijuana without criminal prosecution in certain circumstances. In the 2010 legislative session, the Colorado Medical Marijuana Code (Code) was enacted. Pursuant to authority granted in the Code, the BOCC approved a resolution in July 2010 prohibiting businesses that cultivate, manufacture, or sell marijuana or marijuana products within unincorporated Jefferson County. None of the parties addressed how the Code affected the issues they raised on appeal, and the Court of Appeals therefore requested supplemental briefing to determine whether the claims were moot in light of the Code’s enactment.

    The County asserted that any claims for prospective relief were moot because the Code would prevent the providers from operating the dispensary in unincorporated Jefferson County. The Court agreed.

    The Court held that even if it assumed that Amendment 20 created a constitutional right to distribute marijuana for medical use and to receive in from a provider of one’s choice, such rights are not unfettered. Here, the request for declaratory and injunctive relief would have no practical legal effect because of the County’s July 2010 ban on dispensaries and the Code’s requirement that all existing and new dispensaries operate their businesses in accordance with applicable state or local laws. Thus, even without the ban, the providers would have needed to apply and be approved by a local licensing authority. Such approval cannot be obtained under the ban; therefore, the claims for injunctive and declaratory relief are moot.

    Alternatively, the patients and providers claimed they were “grandfathered” under CRS § 38-1-101. The Court disagreed. The statute limits the broad land-use-planning authority of counties by prohibiting a local government from enacting or enforcing an ordinance, resolution, or regulation in such a way that terminates or eliminates by amortization a nonconforming property use that was lawful at its inception. Here, assuming the statute applies, the dispensary was not lawful in 2009; therefore, there was no basis for it to be lawfully grandfathered.

    The providers argued it was error to dismiss their equitable estoppel claim because the Colorado Governmental Immunity Act (CGIA) does not apply to claims seeking injunctive and declaratory relief. The Court disagreed. Equitable estoppel applies where a plaintiff detrimentally relies on a defendant’s misstatement of fact. It lies in tort. Here, the providers claimed the County led them to reasonably believe a dispensary was a permitted use on their property. Thus, the claim was a tort claim and it was not error to dismiss it under the CGIA (the nature of the damages sought is immaterial).

    The providers also contended it was error to dismiss their money damages claims for the County’s violations of their due process, equal protection, and article XVIII, § 14, rights under the Colorado Constitution. The Court disagreed. The due process clause of the Colorado Constitution does not create an implied cause of action in damages. Equal treatment under the laws in Colorado is a right under the due process clause. The providers thus have no entitlement to money damages for state due process and equal protection claims.

    The providers further argued that the Board impermissibly based its decision on a de facto ban on dispensaries. Because the Board reasonably concluded the dispensary was not a use expressly contemplated by the zoning resolution, the Court found no abuse of discretion. The appeal was dismissed with respect to the patients’ and providers’ claims for declaratory and injunctive relief. In all other respects, the judgment was affirmed.

    Summary and full case available here.

    Tenth Circuit: Defenses Do Not Confer Federal Question Jurisdiction

    The Tenth Circuit Court of Appeals issued its opinion in Firstenberg v. City of Santa Fe on Tuesday, October 9, 2012.

    Arthur Firstenberg allegedly suffers from electromagnetic hypersensitivity (EHS), which requires him to avoid exposure to sources of electromagnetic radiation. One source is cell-phone towers, sometimes called “base stations,” which emit a form of energy known as radiofrequency (RF) radiation. After an AT&T Mobility Services, LLC upgrade to 3G increased the amount of RF radiation coming from its base stations, Firstenberg petitioned for a writ of mandamus in New Mexico state court, naming the City of Santa Fe and AT&T as defendants. AT&T did not apply for or obtain special exceptions from the City prior to initiating the upgrade. Mr. Firstenberg believed this was improper under § 14-3.6(B)(4)(b) of the City’s Land Development Code, which requires the City’s Board of Adjustment to approve an additional special exception if there is a “more intense use” of an existing structure.

    In Firstenberg’s petition, he mentioned Title II of the Americans with Disabilities Act and the Fifth and Fourteenth Amendments of the Constitution under his argument section. He did not mention them in his cause of action or prayer for relief sections. The state court issued a writ of mandamus ordering the City to prohibit the 3G broadcasts unless and until special exceptions were granted or to show cause why it had not done so. AT&T and the City then removed the action to federal district court and each filed a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The district court concluded it had federal question jurisdiction and dismissed both claims, holding that the federal Telecommunications Act of 1996 (TCA) preempted the City’s authority to regulate AT&T’s upgrade.

    Before oral argument in the Tenth Circuit, the court “asked the parties to file supplemental briefs addressing whether Mr. Firstenberg’s complaint was sufficiently ‘well-pleaded’ to satisfy the requirements for federal-question jurisdiction under 28 U.S.C. § 1331.” To arise under federal law, Firstenberg’s complaint  (his petition for mandamus) must have established that federal law created his cause of action or that his right to relief necessarily depended on resolution of a substantial question of federal law. The Tenth Circuit went through the federal laws mentioned in the complaint and held that all those issues were only mentioned as an anticipated defense (the TCA) or as responses to that defense. Because defenses, whether anticipated or asserted, are not enough to confer federal jurisdiction, the court reversed the dismissal and remanded the case to the district court to remand the case to state court.

    Aaron Solomon: Zoning and the Fair Housing Act

    In Cinnamon Hills Youth Crisis Center v. Saint George City (No. 11-4020), the Tenth Circuit addressed the extent to which a city may enforce zoning restrictions in a manner that limits options for programs designed to treat persons with mental and emotional disorders in a residential setting. In this case, Cinnamon Hills sought to use the top floor of a motel it owned to operate a residential facility. The city refused to grant it zoning variances from ordinances prohibiting extended stays in motels and residential uses in areas zoned for commercial use. Cinnamon Hills brought suit under the Fair Housing Act, ADA, and the Rehabilitation Act. These statutes required it to show either intentional discrimination against the disabled, unlawful disparate impact, or a failure to provide a reasonable accommodation.

    In discussing the failure to accommodate issue, the court nicely summed up the standard of a reasonable accommodation: “under the FHA it is sometimes necessary to dispense with formal equality of treatment in order to advance a more substantial equality of opportunity. And that is precisely the point of the reasonable accommodation mandate: to require changes in otherwise neutral policies that preclude the disabled from obtaining ‘the same . . . opportunities that those without disabilities automatically enjoy.”’ But while the FHA requires accommodations necessary to ensure the disabled receive the same housing opportunities as everybody else, it does not require more or better opportunities.”

    Ultimately, the court held that Cinnamon Hills could provide neither direct evidence of discrimination nor sufficient evidence of indirect discrimination. The court further held that there was no evidence of disparate impact or a failure to accommodate. Notably, the court repeatedly avoided reaching the issue of whether a city ordinance requiring all new treatment centers be placed in rural areas was discriminatory as the city did not rely on the statute in this case and the court believed a challenge to its validity was not ripe.

    Aaron Solomon is an associate at Hale Westfall and focuses his practice on both commercial litigation and public policy/appellate law. He contributes to the firm’s Rocky Mountain Appellate Blog, where this post originally appeared on July 5, 2012.

    HB 12-1241: Clarifying Requirements for Enterprise Zone Determination and Setting Five-Year Review of Enterprise Zones

    On February 7, 2012, Rep. Mark Ferrandino and Sen. Rollie Heath introduced HB 12-1241 – Concerning Enterprise Zone Designations. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

    The bill requires any new enterprise zone designation to meet at least 2 of the criteria currently listed in statute, rather than at least one. Additionally, the bill requires the director of the Colorado office of economic development and the Colorado economic development commission to review the enterprise zone designations at least once every 5 years to ensure that the existing zones continue to meet those criteria. As a part of each 5-year review, the director and the commission are required to analyze the annual documentation of efforts required by law. The bill allows the director and the commission to make changes or terminate existing enterprise zone designations based on the review. If it is determined that existing enterprise zone designations need to change or be terminated, the change or termination shall not be undertaken in a high unemployment period. The bill requires any changes or terminations to be reported to the legislative audit committee and the finance committees of the house of representatives and the senate. The bill allows the director and the commission to make recommendations for improved or different criteria to be used for the designation of an enterprise zone. Any recommendations are required to be presented to the legislative audit committee in conjunction with the annual presentation already required by law and reported to the finance committees of the house of representatives and the senate. The bill requires the director of the Colorado economic development commission to notify the state auditor when the review is completed. The state auditor is then required to commence a performance audit of the review undertaken and to submit a report to the governor and general assembly. The bill also requires all enterprise zones to comply with the requirement to submit annual documentation of efforts to improve economic conditions. The bill was given final approval by the House on March 15; it has not been assigned to a committee.

    Since this summary, the bill was introduced in the Senate and assigned to the Finance Committee.

    Summaries of other featured bills can be found here.