July 17, 2019

Colorado Court of Appeals: Petitioners in Proximity of Proposed Drilling Site Have Standing to Request Permit Hearings

The Colorado Court of Appeals issued its opinion in Grand Valley Citizens’ Alliance v. Colorado Oil and Gas Conservation Commission on June 25, 2010.

Standing—Entitlement to an Administrative Hearing.

Plaintiffs appealed a district court order dismissing their claim for a hearing before the Colorado Oil and Gas Conservation Commission (Commission). The order was reversed.

Plaintiffs are two organizations and four individuals. They collectively own, reside on, and use land in Garfield County, near Rulison. This area was the site of a 1969 federal agency experiment dubbed Project Rulison. The project involved detonation of a large nuclear device 8,400 feet below ground to determine whether the explosion could stimulate natural gas production. Nothing marketable was produced; however, the liberated gas contained radioactive matter, and subsurface toxic and radioactive contaminants are still present.

In the late 1990s, companies began seeking to drill in the area. In 2004, the Commission ruled that a hearing would be required for any permit application involving drilling within a half mile of the blast site. In 2008, EnCana Oil & Gas (EnCana) applied for permits to drill wells less than three miles from the blast site. Because the proposed wells were beyond the half-mile radius, a hearing was not automatic. Plaintiffs petitioned the Commission for intervention and a hearing on EnCana’s applications. The Commission Director denied the hearing requests and approved the permit applications. Plaintiffs sued, alleging they were statutorily entitled to a hearing. The district court granted EnCana’s motion to dismiss for lack of subject matter jurisdiction and failure to state a claim. The Court of Appeals reversed, holding plaintiffs had standing and are entitled to a hearing.

Colorado has a relatively lenient standing test: (1) the plaintiff must have suffered an injury-in-fact; and (2) this harm must have been to a legally protected interest. The Court held that the denial of plaintiffs’ claimed statutory right to a hearing to contest the permit application was a cognizable injury (procedural in nature). In addition, the allegation that the proposed drilling would threaten substantive injury to land they owned, resided on, and used, also conferred standing (substantive in nature).

Plaintiffs’ claimed right to a hearing is provided in CRS § 34-60-108(7), which mandates a hearing on the filing of a petition requesting one concerning any matter within the jurisdiction of the Commission. The Court held this language clearly entitled plaintiffs’ to a hearing.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 25, 2010, can be found here.

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