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Institute v. High Performance Transportation Enterprise

United States District Court, D. Colorado

October 7, 2014

DRIVE SUNSHINE INSTITUTE, and CLIFF SMEDLEY, Plaintiffs,
v.
HIGH PERFORMANCE TRANSPORTATION ENTERPRISE, MICHAEL CHEROUTES, ESQ., in his capacity as Director of HPTE and as an individual, TIM GAGEN, in his capacity as Chair of the HPTE Board of Directors and as an individual, KATHY GILLILAND, in her capacity as Vice-Chair (and at times Acting Chair) of the HPTE Board of Directors and as an individual, DOUG ADEN, HPTE Board Member, as an individual, BRENDA SMITH, HPTE Board Member, as an individual, DON MARISTICA, HPTE Board Member, as an individual, GARY REIFF, ESQ., HPTE Board Member, as an individual, TREY ROGERS, ESQ., HPTE Board Member, as an individual, JANE HICKEY, in her capacity as Secretary of the HPTE Board and as an individual, JOHN SUTHERS, ESQ., in his capacity as Colorado State Attorney General and as an individual, KATHRYN E. YOUNG, ESQ., in her capacity as First Assistant Attorney General and counsel for HPTE and as an individual, JOHN DOE 1, ESQ., in his capacity within the Colorado Solicitor General's Office and as an individual, JORDAN CHASE, ESQ., in his capacity as Assistant Attorney General and counsel for HPTE and as an individual, KUTAK ROCK LLP, in its capacity as counsel for HPTE and as an individual, MICHAEL THOMAS, ESQ., as counsel for HPTE and as an individual, THOMAS WEIHE, ESQ., as counsel for HPTE and as an individual, HOGAN LOVELLS U.S. LLP, in its capacity as counsel for HPTC and as an individual, MIKE MATHEOU, ESQ., as counsel for HPTE and as an individual, DAVID SCOTT, ESQ., as counsel for HPTE and as an individual, COLORADO TRANSPORTATION COMMISSION, COLORADO DEPARTMENT OF TRANSPORTATION, AMY FORD, in her capacity as HPTE Communications Director and as an individual, GOLDMAN, SACHS & CO., BANK OF NEW YORK MELLON TRUST COMPANY, N.A., FITCH RATINGS, INC., and PLENARY ROADS DENVER LLC, Defendants.

ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION

ROBERT E. BLACKBURN, District Judge.

This matter is before me on the Verified Motion for Temporary Restraining Order and Preliminary Injunction [#26][1] filed September 17, 2014. In a previous order [#66], I denied the motion to the extent the plaintiffs sought a temporary restraining order. Addressing the request for a preliminary injunction, the defendants against whom a preliminary injunction is sought filed a response [#42], and the plaintiffs filed a reply [#49]. I deny the motion for preliminary injunction.[2]

I. JURISDICTION

I have jurisdiction over this case under 28 U.S.C. § 1331 (federal question) and § 1367 (supplemental).

II. BACKGROUND

The complaint [#4] and the motion for preliminary injunction [#26] describe the operation of defendant High-Performance Transportation Enterprise (HPTE) and related entities. According to the complaint, the HPTE is a government owned business within the Colorado Department of Transportation. HPTE is a key entity managing a project for the expansion of U.S. Highway 36 between Denver and Boulder, Colorado. According to the allegations in the motion for preliminary injunction, HPTE has repeatedly violated Colorado statutes, such as the Colorado Open Records Act (CORA), part 2 of article 72 of title 24, C.R.S., the Colorado Open Meetings Law, part 4 of article 6 of title 24, C.R.S., the Colorado State Administrative Procedure Act (APA), part 4 of article 4 of title 24, C.R.S., and a provision of the Constitution of the State of Colorado known as TABOR. COLO. CONST., Art. X, § 20. In addition, the plaintiffs allege that the actions of the defendants are violating the rights of the plaintiffs under the First Amendment and the Due Process Clause of the Constitution of the United States and of the Constitution of the State of Colorado.

On June 27, 2013, the HPTE purportedly entered into a fifty-year concession agreement with defendant Plenary Roads Denver LLC (Plenary). Apparently, the concession agreement permits Plenary to build and complete the project and to take control of managed lanes in the U.S. 36 expansion project. In the view of the plaintiffs, the HPTE improperly embedded public policy changes in the concession agreement without complying with the CORA, the Open Meetings Law, the APA, and TABOR. According to the plaintiffs, the approval of the concession agreement is void ab initio because the HPTE did not comply with the requirements of Colorado law before approving the agreement. The plaintiffs contend the HPTE planned to ratify an amended and restated concession agreement at a meeting scheduled for September 17, 2014. Defendant Michael Cheroutes reports in his affidavit that the HPTE tabled consideration of the proposed amendments at the September 2014 HPTE board meeting. Response [#42], Exhibit A (Cheroutes Affidavit), ¶ 19. The HPTE board expects to discuss the amendments at its regular October 2014 meeting. Id. According to the plaintiffs, the HPTE again has not complied with the requirements of Colorado law with regard to the proposed amended and restated concession agreement. Thus, the plaintiffs contend, HTPE may not validly approve the amended and restated agreement.

Although not entirely clear, it appears that the September 17, 2014, meeting was the impetus for the filing of the motion for temporary restraining order and preliminary injunction on the morning of September 17, 2014.[3] In the view of the plaintiffs, the

HPTE seeks to rush forward the arguable effective date of the Amended and Restated Concession Agreement in order to counter Plaintiffs' stated intention to seek a preliminary injunction of JPTE violations of the law - the sooner that HPTE can justify turning over control of the U.S. 36 Expansion Project to Plenary, the sooner JPTE and the other Defendants can attempt to argue that the public is not entitled to enjoin the project or Pleanry's rights thereunder because doing so would disrupt the status quo.

Motion [#26], p. 21.

In their motion, the plaintiffs seek the entry of a preliminary injunction against some, but not all, of the named defendants. The plaintiffs seek a preliminary injunction which provides more than 20 discrete forms of relief. Motion [#26], pp. 120-123. For example, plaintiffs seek an order enjoining the implementation and enforcement of all rules made or announced by the HPTE without compliance with the APA. However, the plaintiffs do not specify which rules they seek to have enjoined. They seek an order prohibiting the adoption of any new rules by HPTE unless the procedures used are in full compliance with the APA, the CORA, the Open Meetings Law, and federal and state constitutional provisions. The plaintiffs seek an order enjoining the ratification of the amended and restated concession agreement and the implementation of myriad terms allegedly included in the amended and restated concession agreement. Among the many policies the plaintiffs seek to have enjoined is "the implementation of snow and ice removal and mitigation policies which would permit preferential service to be rendered for express lanes compared to general lanes of traffic." Motion [#26], p. 121, ¶ 5.e. The plaintiffs also seek an order enjoining what the plaintiffs see as the rule-making aspects of the concession agreement including, inter alia, enjoining future toll increases initiated by Plenary if those increases are not without full compliance with the APA, the CORA, the Open Meetings Law, and federal and state constitutional provisions. Id., p. 120.

III. STANDARD OF REVIEW

I begin by rehearsing the familiar. A preliminary injunction constitutes extraordinary relief. A party seeking a preliminary injunction must show (1) a substantial likelihood that the movant eventually will prevail on the merits; (2) that the movant will suffer irreparable injury unless the injunction issues; (3) that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) that the injunction, if issued, would not be adverse to the public interest. Lundgrin v. Claytor, 619 F.2d 61, 63 (10th Cir. 1980).

When the moving party has established that the three harm factors tip decidedly in favor of the movant, the probability of success requirement is somewhat relaxed, and the movant need only show questions going to the merits so serious, substantial, difficult, and doubtful as to make them a fair ground for litigation. Nova Health Systems v. Edmondson 460 F.3d 1295, 1298 n. 6 (10th Cir. 2006). On the other hand, some types of temporary restraining orders or preliminary injunctions ...


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