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Tulips Invs., LLC v. State ex rel. Suthers

Supreme Court of Colorado, En Banc

January 12, 2015

Tulips Investments, LLC, Petitioner
v.
State of Colorado ex rel. John W. Suthers, Attorney General for the State of Colorado; and Julie Anne Meade, Administrator, Uniform Consumer Credit Code, Respondents

Page 1127

Certiorari to the Court of Appeals. Court of Appeals Case No. 11CA2367.

SYLLABUS

The supreme court holds that, in enacting the Uniform Consumer Credit Code (the " UCCC" ), § § 5-1-101 et seq., C.R.S. (2014), the General Assembly conferred administrative subpoena issuance authority upon the UCCC Administrator and authorized trial courts, under section 5-6-106, C.R.S. (2014), to enforce such a subpoena against a nonresident who is alleged to have violated the UCCC and has refused to obey a subpoena. In so holding, the supreme court distinguishes its decisions in Solliday v. District Court, 135 Colo. 489, 313 P.2d 1000 (1957), and Colorado Mills, LLC v. SunOpta Grains & Foods Inc., 269 P.3d 731, 2012 CO 4. Those cases addressed a limitation under C.R.C.P. 45 restricting service of a subpoena in civil actions to areas located within the State. C.R.C.P. 45 is inapplicable to administrative subpoena enforcement proceedings under the UCCC, which applies equally to residents and nonresidents suspected of conduct violating its provisions. Accordingly, the supreme court affirms the judgment of the court of appeals.

Attorneys for Petitioner: Jones & Keller, P.C., Edward T. Lyons, Jr., Denver, Colorado.

Attorneys for Respondents: John W. Suthers, Attorney General, Paul Chessin, Senior Assistant Attorney General, Denver, Colorado.

Attorneys for Amicus Curiae Colorado Department of Regulatory Agencies: John W. Suthers, Attorney General, Russell B. Klein, First Assistant Attorney General, Denver, Colorado.

Attorneys for Amici Curiae State of Wyoming and Thirty-five Other States: Peter K. Michael, Wyoming State Attorney General, Travis J. Kirchhefer, Senior Assistant Attorney General, Cheyenne, Wyoming.

OPINION

Page 1128

HOBBS, JUSTICE.

[¶1] At issue in this case is judicial enforcement of an administrative investigatory subpoena for documents of a corporation located outside of Colorado that is suspected of conducting business within Colorado in violation of its two leading consumer protection statutes.[1] Tulips Investments, LLC (" Tulips" ) is

Page 1129

a Delaware corporation the State of Colorado contends is conducting a loan business within the State of Colorado in violation of the Uniform Consumer Credit Code (the " UCCC" or the " Code" ), § § 5-1-101 et seq., C.R.S. (2014), and the Colorado Consumer Protection Act (the " CCPA" ), § § 6-1-101 et seq., C.R.S. (2014). UCCC section 5-6-106(1), C.R.S. (2014), authorizes the Code's Administrator to investigate alleged violations of that statute and issue subpoenas in aid of the State's investigation. Likewise, CCPA section 6-1-107(1), C.R.S. (2014), and section 6-1-108(1), C.R.S. (2014), authorize Colorado's Attorney General to investigate alleged violations of that statute and issue subpoenas in aid of the State's investigation.

[¶2] Through these statutorily authorized officers, the State issued an investigatory subpoena requesting various documents from Tulips. When Tulips failed to produce the documents, the State sought and obtained a trial court order enforcing the administrative subpoena under UCCC section 5-6-106(3) and CCPA section 6-1-109(1). Through a Delaware deputy sheriff, the State served upon Tulips' registered agent in Delaware both the administrative subpoena and the trial court's order enforcing it. When Tulips ignored the trial court's enforcement order, the State pursued a contempt citation against Tulips for failure to comply, also served by a Delaware deputy sheriff. Tulips responded by filing a C.R.C.P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. The trial court granted this motion, citing our decision in Solliday v. District Court, 135 Colo. 489, 313 P.2d 1000 (1957), for " general subpoena enforcement principles" preventing the court and the government from exercising subpoena authority beyond Colorado's boundaries.

[¶3] The State appealed. The court of appeals conducted a statutory construction analysis. It concluded that the UCCC authorized the State to issue the investigatory subpoena, and the trial court had authority to enforce it. Having made this conclusion, the court of appeals found it unnecessary to analyze the CCPA subpoena issue. We agree. We hold that the trial court has subject matter jurisdiction in this administrative subpoena enforcement action. In enacting the UCCC, the General Assembly conferred administrative subpoena issuance authority upon the UCCC Administrator and authorized the trial court to enforce such a subpoena against a nonresident who is alleged to have violated the Code and has refused to obey a subpoena. In so holding, we distinguish our decisions in Solliday and Colorado Mills, LLC v. SunOpta Grains & Foods Inc., 269 P.3d 731, 2012 CO 4. Both of those cases addressed a limitation under C.R.C.P. 45 restricting service of a subpoena in civil actions to areas located within the State. Neither case involved the special statutory procedure the General Assembly enacted under the UCCC for issuance of administrative investigatory subpoenas and trial court enforcement of them. This statute applies equally to resident and nonresident persons suspected of conduct violating its provisions.[2] Accordingly, we affirm the court of appeals' judgment setting aside the trial court's C.R.C.P. 12(b)(1) order of dismissal.

I.

[¶4] In December 2009, the Administrator of the UCCC (the " Administrator" ) received a complaint from an elderly Colorado couple alleging that Tulips, doing business under the name Cash Banc, made them a car loan of $1,640.50 over the Internet at a high interest rate (365% per annum). The couple also alleged that Tulips automatically debited money from their checking account every two weeks, causing their account to be overdrawn. Based on this complaint, the Administrator concluded that Tulips was likely violating the UCCC by making loans to Colorado consumers without being licensed under the statute.

[¶5] On January 21, 2010, the Administrator sent Tulips a cease-and-desist advisory regarding

Page 1130

its allegedly unlicensed lending activity. As part of its investigation, the Administrator also directed Tulips to provide a complete list of all loans it made to Colorado consumers. Tulips did not comply. Instead, Tulips responded that Colorado law was inapplicable to it--a Delaware corporation with no offices or agents in Colorado--and that the State of Colorado had no jurisdiction over it. The Administrator again requested the information in a letter dated June 23, 2010. Once more, Tulips declined to provide the requested information.

[¶6] Based upon the consumer complaint, additional information obtained by the Administrator, and Tulips' responses to the information requests, the Administrator found reasonable cause to believe Tulips had made loans without being licensed under the statute and charged excessive finance charges in violation of the UCCC. Similarly, Colorado's Attorney General concluded that, by making supervised loans without the required governmental license, Tulips had engaged in deceptive trade practices in Colorado in violation of the CCPA.

[¶7] On September 22, 2010, through a Delaware deputy sheriff, the State served upon Tulips' registered agent in Delaware a subpoena ordering the company to produce various documents relating to the State's investigation. When Tulips failed to comply with the subpoena, the State applied for and obtained an ex parte order from the trial court to enforce the subpoena. On October 28, 2010, through a Delaware deputy sheriff, the State served the enforcement order on Tulips' registered agent in Delaware. When Tulips again failed to comply, the State initiated contempt proceedings against it. On May 6, 2011, through a Delaware deputy sheriff, the State served the contempt citation on Tulips' registered agent in Delaware. ...


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