August 22, 2019

Colorado Supreme Court: Oil and Gas Commission Properly Declined to Adopt Proposed Rule

The Colorado Supreme Court issued its opinion in Colorado Oil and Gas Conservation Commission v. Martinez on Monday, January 14, 2019.

Administrative Law and Procedure—Mines and Minerals.

This case required the court to decide whether, in accordance with the Colorado Oil and Gas Conservation Act (the Act), C.R.S. § 34-60-102(1)(a)(I), the Colorado Oil and Gas Conservation Commission (the Commission) properly declined to engage in rulemaking to consider a rule proposed by respondents.

Respondents proposed a rule that, among other things, would have precluded the Commission from issuing any permits for the drilling of an oil and gas well “unless the best available science demonstrates, and an independent, third-party organization confirms, that drilling can occur in a manner that does not cumulatively, with other actions, impair Colorado’s atmosphere, water, wildlife, and land resources, does not adversely impact human health, and does not contribute to climate change.”

After soliciting and receiving public comment and allowing interested parties to be heard, the Commission declined to engage in rulemaking to consider this proposed rule because, among other things, (1) the rule would have required the Commission to readjust the balance purportedly crafted by the General Assembly under the Act and conditioned new oil and gas drilling on a finding of no cumulative adverse impacts, both of which the Commission believed to be beyond its statutory authority, and (2) the Commission was already working with the Colorado Department of Public Health and Environment (CDPHE) to address the concerns to which the rule was directed and other Commission priorities took precedence over the proposed rulemaking at this time. The Denver District Court upheld the Commission’s decision, but in a split, published decision, a division of the court of appeals reversed the district court’s order in Martinez v. Colorado Oil and Gas Conservation Commission, 2017 COA 37, __ P.3d __.

The supreme court reversed the division’s judgment and concluded that the Commission properly declined to engage in rulemaking to consider respondents’ proposed rule. The court reached this conclusion for three primary reasons. First, a court’s review of an administrative agency’s decision as to whether to engage in rulemaking is limited and highly deferential. Second, the Commission correctly determined that, under the applicable language of the Act, it could not properly adopt the rule proposed by respondents. Specifically, as the Commission recognized, the pertinent provisions do not allow it to condition all new oil and gas development on a finding of no cumulative adverse impacts to public health and the environment. Rather, the provisions make clear that the Commission is required (1) to foster the development of oil and gas resources, protecting and enforcing the rights of owners and producers, and (2) in doing so, to prevent and mitigate significant adverse environmental impacts to the extent necessary to protect public health, safety, and welfare, but only after taking into consideration cost-effectiveness and technical feasibility. Finally, in declining to engage in rulemaking, the Commission reasonably relied on the facts that it was already working with the CDPHE to address the concerns underlying respondents’ proposed rule and that other Commission priorities took precedence at this time.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Multiple Consolidated Petitions to Review FCC Rulemaking Order Denied

The Tenth Circuit Court of Appeals issued its opinion in In re FCC: 11-161 on Friday, May 23, 2014.

In late 2011, the Federal Communications Commission (FCC or Commission) issued a Report and Order and Further Notice of Proposed Rulemaking (Order) comprehensively reforming and modernizing its universal service and intercarrier compensation systems. Petitioners, each of whom were parties to the FCC’s rulemaking proceeding below, filed petitions for judicial review of the FCC’s Order. The Judicial Panel on Multidistrict Litigation consolidated the petitions in this court.

In the Joint Universal Service Fund Principal Brief, Additional Universal Service Fund Issues Principal Brief, Wireless Carrier Universal Service Fund Principal Brief, and Tribal Carriers Principal Brief, petitioners assert a host of challenges to the portions of the Order revising how universal service funds are to be allocated to and employed by recipients. After carefully considering those claims, [the Tenth Circuit finds] them either unpersuasive or barred from judicial review. Consequently, [the Tenth Circuit denies] the petitions to the extent they are based upon those claims.

Full case available here.

Colorado Supreme Court: Secretary of State Exceeded Rulemaking Authority by Making Rule to Nullify Votes for Elected Official

The Colorado Supreme Court issued its opinion in Hanlen v. Gessler on Monday, April 7, 2014.

Election Law—Rulemaking Authority—Emergency Election Rules—School District Director Elections.

The Supreme Court considered whether the Colorado Secretary of State acted in excess of his rulemaking authority in promulgating Rule 10.7.5. The rule, which was promulgated as a temporary or emergency rule, permits designated election officials to determine, after ballots have been printed, that an individual appearing on the ballot is “not qualified for office,” and directs that votes cast for that individual are “invalid and must not be counted.”

The Court held that the rule is void. As a rule of general applicability, the rule conflicts with CRS § 1-4-1002(2.5)(a). It also contravenes the election code by permitting a designated election official to usurp the courts’ express authority to determine issues regarding a candidate’s eligibility that arise following certification to the ballot. Accordingly, the Court affirmed the judgment of the trial court on different grounds, and did not reach the question of whether the rule conflicts with CRS § 22-31-129, regarding school district director vacancies.

Summary and full case available here.

Colorado Court of Appeals: Secretary of State Lacked Authority to Promulgate Campaign Finance Rules

The Colorado Court of Appeals issued its opinion in Colorado Ethics Watch v. Gessler on Thursday, December 12, 2013.

Campaign and Political Finance Amendment—Fair Campaign Practices Act—Administrative Authority—Ambiguous.

Defendant, in his official capacity as Colorado Secretary of State (Secretary), appealed the district court’s judgment invalidating several of his campaign finance rules. Plaintiffs Colorado Ethics Watch and Colorado Common Cause (collectively, Ethics Watch) cross-appealed. The judgment was affirmed in part and reversed in part.

Although the district court respected the Secretary’s “pragmatism” in attempting to harmonize Colorado campaign finance laws with judicial decisions through his rulemaking, the court determined that the Secretary lacked the authority to do so. Its judgment invalidated a number of the Secretary’s new rules, including Rules 1.12, 1.18, 7.2, 1.10, and 18.1.8, because they contradicted the Campaign and Political Finance Amendment (Amendment) and the Fair Campaign Practices Act (FCPA). The district court upheld the validity of the new Rule 1.7, finding that it was sufficiently similar to the rule preceding it, thus entitling it to deference.

On appeal, the Secretary contended that the district court erred in invaliding the rules because they fill gaps in the Amendment and FCPA and the court should defer to his rulemaking authority. The Court of Appeals disagreed. Rule 1.12 is arbitrary, capricious, or manifestly contrary to CRS § 1-45-103(12)(b) because the definition of “major purpose” therein is ambiguous. Rule 1.18.2 is invalid because the provisions of Colo. Const. art. XXVIII, § 2(12)(a) are clear and unambiguous, there is no gap for the Secretary to fill, and the Secretary did not have the authority to add a “major purpose” requirement. Rules 7.2 and 1.10 are invalid because they contradict the clear and unambiguous language of CRS § 1-45-103(14.5). Rule 18.1.8 is invalid because it does not fill a gap and, therefore, is manifestly contrary to Colo. Const. art. XXVIII.

On cross-appeal, Ethics Watch contended that the district court erred in not invalidating Rule 1.7 because this rule contravenes the clear and unambiguous definition of “electioneering communication” found in Colo. Const. art. XXVIII, § 2(7)(a). The Court agreed. Rule 1.7 is invalid because the constitutional provisions are clear and unambiguous, leaving no gap for the Secretary to fill. Therefore, the Secretary exceeded his authority to “administer and enforce” the law. The judgment was affirmed as to Rules 1.12, 1.18, 7.2, 1.10, and 18.1.8, but reversed as to Rule 1.7.

Summary and full case available here.

Colorado Supreme Court: Water Court’s Invalidation of State Engineer Rule Based on Tribal Rule Reversed

The Colorado Supreme Court issued its opinion in Pawnee Well Users, Inc. v. Wolfe on Monday, November 25, 2013.

Ground Water Regulation—Administrative Law and Procedure—Rules, Regulations, and Other Policymaking—Judicial Review of Administrative Proceedings.

The Supreme Court held that the water court erred in invalidating a basin-specific rule of the final Produced Nontributary Ground Water Rules (Final Rules) known as the Fruitland Rule, based on a stipulated agreement between the State Engineer and the Southern Ute Indian Tribe. Another Final Rule—known as the Tribal Rule—states: “These Rules and regulations shall not be construed to establish the jurisdiction of either the State of Colorado or the Southern Ute Indian Tribe over nontributary ground water within the boundaries of the Southern Ute Indian Reservation.”

The Tribal Rule does not and cannot divest the State Engineer of his authority to promulgate the Final Rules governing water extracted during oil and gas production throughout the state, including nontributary groundwater. By passing HB 1303, the General Assembly authorized the State Engineer to adopt rules to assist with the administration of nontributary ground water extracted in the course of coalbed methane production and other oil and gas development in Colorado, thus authorizing the State Engineer to promulgate the Fruitland Rule. Because administrative agencies powers and duties as given by the legislature, the State Engineer cannot establish or disestablish his own jurisdiction.

Further, because the Fruitland Rule was issued pursuant to the authority granted in HB 1303—authority that was not divested by the Tribal Rule—it follows that the water court erred in labeling the Fruitland Rule an “advisory” rule and requiring the State Engineer to obtain a judicial determination that he had authority to administer nontributary ground water within the Southern Ute Indian Tribe’s Reservation’s boundaries. The Court therefore reversed the water court’s order and remanded the case for further proceedings.

Summary and full case available here.