July 17, 2019

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.