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City of Longmont Colorado v. Colorado Oil and Gas Association

Supreme Court of Colorado, En Banc

May 2, 2016

City of Longmont Colorado; Food and Water Watch; Sierra Club; Earthworks; and Our Health, Our Future, Our Longmont, Petitioners
v.
Colorado Oil and Gas Association, Colorado Oil and Gas Conservation Commission, and Top Operating Company, Respondents

C.A.R. 50 Certiorari to the Colorado Court of Appeals

Court of Appeals Case No. 14CA1759 Boulder County District Court Case No. 13CV63 Honorable D.D. Mallard, Judge

Attorneys for Petitioner City of Longmont Colorado: Eugene Mei, City Attorney Daniel E. Kramer, Assistant City Attorney Teresa Taylor Tate, Assistant City Attorney Longmont, Colorado Phillip D. Barber Denver, Colorado

Attorneys for Petitioners Food and Water Watch; Sierra Club; Earthworks; and Our Health, Our Future, Our Longmont: University of Denver Environmental Law Clinic Kevin Lynch Brad Bartlett Denver, Colorado

Attorney for Petitioners Sierra Club and Earthworks: Eric Huber Boulder, Colorado

Attorneys for Respondent Colorado Oil and Gas Association: Brownstein Hyatt Farber Schreck, LLP Mark Mathews Wayne F. Forman Denver, Colorado Beatty & Wozniak, P.C. Karen L. Spaulding Denver, Colorado

Attorneys for Respondent Colorado Oil and Gas Conservation Commission: Cynthia H. Coffman, Attorney General Michael Francisco, Assistant Solicitor General Jake Matter, Assistant Attorney General Julie Murphy, Assistant Attorney General Denver, Colorado

Attorneys for Respondent Top Operating Company: Zarlengo & Kimmell, PC Thomas J. Kimmell Denver, Colorado

Attorneys for Amicus Curiae the Board of County Commissioners of the County of Boulder, State of Colorado: Goldman, Robbins & Nicholson, P.C. Jeffery P. Robbins Durango, Colorado

Attorneys for Amicus Curiae City of Boulder: Office of the City Attorney Thomas A. Carr Boulder, Colorado

Attorneys for Amici Curiae Colorado Concern, Denver Metro Chamber of Commerce, Colorado Competitive Council, Colorado Motor Carriers Association, and Colorado Farm Bureau: Brownstein Hyatt Farber Schreck, LLP Jason R. Dunn Denver, Colorado

Attorneys for Amicus Curiae Colorado Municipal League: Colorado Municipal League Geoffrey T. Wilson Denver, Colorado

Attorneys for Amicus Curiae Mountain States Legal Foundation: Mountain States Legal Foundation Steven J. Lechner Jaimie Cavanaugh Lakewood, Colorado

GABRIEL JUSTICE

¶1 Hydraulic fracturing, commonly known as fracking, is a process used to stimulate oil and gas production from an existing well. See Patrick H. Martin & Bruce M. Kramer, The Law of Oil and Gas 14–15 (9th ed. 2011). Viscous fluid containing a proppant such as sand is injected into the well at high pressure, causing fractures that emanate from the well bore. Id. at 15. The pressure is then released, allowing the fluid to return to the well. Id. The proppant, however, remains in the fractures, preventing them from closing. Id. When the fluid is drained, the cracks allow oil and gas to flow to the wellbore. Coastal Oil & Gas Corp. v. Garza Energy Tr., 268 S.W.3d 1, 7 (Tex. 2008). First used commercially in 1949, the process is now common worldwide. Id.

¶2 As the briefing in this case shows, the virtues and vices of fracking are hotly contested. Proponents tout the economic advantages of extracting previously inaccessible oil, gas, and other hydrocarbons, while opponents warn of health risks and damage to the environment. We fully respect these competing views and do not question the sincerity and good faith beliefs of any of the parties now before us. This case, however, does not require us to weigh in on these differences of opinion, much less to try to resolve them. Rather, we must confront a far narrower, albeit no less significant, legal question, namely, whether the City of Longmont's bans on fracking and the storage and disposal of fracking waste within its city limits are preempted by state law.

¶3 Applying well-established preemption principles, we conclude that an operational conflict exists between Longmont's fracking bans and applicable state law. Accordingly, we hold that Article XVI is preempted by state law and, therefore, is invalid and unenforceable. We thus affirm the district court's order enjoining Longmont from enforcing Article XVI and remand this case for further proceedings consistent with this opinion.

I. Facts and Procedural History

¶4 In the fall of 2012, the residents of Longmont, a home-rule municipality, voted to add Article XVI to Longmont's home-rule charter. Article XVI provides: It shall hereby be the policy of the City of Longmont that it is prohibited to use hydraulic fracturing to extract oil, gas, or other hydrocarbons within the City of Longmont. In addition, within the City of Longmont, it is prohibited to store in open pits or dispose of solid or liquid wastes created in connection with the hydraulic fracturing process, including but not limited to flowback or produced wastewater and brine.

¶5 Later that year, the Colorado Oil and Gas Association (the Association), an industry organization, sued Longmont, seeking a declaratory judgment invalidating, and a permanent injunction enjoining Longmont from enforcing, Article XVI. The district court allowed Our Health, Our Future, Our Longmont; the Sierra Club; Food & Water Watch; and Earthworks (collectively, the citizen intervenors) to intervene as defendants in support of Article XVI. In addition, TOP Operating Company, a local oil and gas company, and the Colorado Oil and Gas Conservation Commission (the Commission), the state agency tasked with administering the provisions of the Oil and Gas Conservation Act, §§ 34-60-101 to -130, C.R.S. (2015), see § 34-60-104.5(2)(a), C.R.S. (2015), joined the lawsuit as plaintiffs.

¶6 Subsequently, the three plaintiffs-the Association, TOP, and the Commission- moved for summary judgment. In a lengthy and thorough written order, the district court granted these motions, ruling that the Oil and Gas Conservation Act preempted Longmont's bans on fracking and the storage and disposal of fracking waste. The court observed that a state statute may preempt a local regulation in one of three ways: expressly, impliedly, or because of an operational conflict. Although the court "recognize[d] the possibility that implied preemption may apply, " it ultimately based its conclusion on what it determined as a matter of law to be an "obvious and patent on its face" operational conflict between state law and Article XVI. The court thus granted the plaintiffs' requests for a declaratory judgment and an order enjoining Longmont from enforcing Article XVI. The court, however, stayed its order, pending appeal. Consequently, although declared invalid, Article XVI has remained in force throughout these proceedings.

¶7 Longmont and the citizen intervenors appealed the district court's order to the Colorado Court of Appeals, and a number of interested parties filed amicus curiae briefs. Before hearing oral argument, however, a division of the court of appeals requested a transfer of this case to this court pursuant to section 13-4-109, C.R.S. (2015), and C.A.R. 50. We accepted the transfer, and Longmont and the citizen intervenors now argue that (1) the district court erred in its preemption analysis and (2) the inalienable rights provision of the Colorado Constitution trumps any preemption analysis and requires us to conclude that Article XVI supersedes state law. After discussing the applicable standard of review, we address each of these contentions in turn.

II. Standard of Review

¶8 The Colorado Rules of Civil Procedure allow a district court to enter summary judgment before trial when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." C.R.C.P. 56(c). In determining whether summary judgment is proper, a district court grants the nonmoving party the benefit of all favorable inferences that may reasonably be drawn from the undisputed facts and resolves all doubts against the moving party. Bebo Constr. Co. v. Mattox & O'Brien, P.C., 990 P.2d 78, 83 (Colo. 1999). In responding to a properly supported summary judgment motion, however, the nonmoving party may not rest on its mere allegations or denials of the opposing party's pleadings but must provide specific facts demonstrating a genuine issue for trial. C.R.C.P. 56(e).

¶9 In reviewing a summary judgment order, an appellate court applies the same standard as the district court. Churchey v. Adolph Coors Co., 759 P.2d 1336, 1340 (Colo. 1988). Thus, our task on review is to determine whether a genuine issue of material fact existed and whether the district court correctly applied the law when it invalidated Article XVI. In doing so, we review the district court's legal conclusions de novo. See Webb v. City of Black Hawk, 2013 CO 9, ¶ 16, 295 P.3d 480, 486; see also Bd. of Cty. Comm'rs v. Colo. Oil & Gas Conservation Comm'n, 81 P.3d 1119, 1124 (Colo.App. 2003) (noting that the validity of a rule adopted by the Commission presents a question of law subject to de novo review).

¶10 We reject the citizen intervenors' argument that the plaintiffs must establish beyond a reasonable doubt that Article XVI is preempted. The question of preemption is a matter of law requiring us "to establish a priority between potentially conflicting laws enacted by various levels of government." Bd. of Cty. Comm'rs v. Bowen/Edwards Assocs., Inc., 830 P.2d 1045, 1055 (Colo. 1992). In this context, we perceive no basis for imposing a "beyond a reasonable doubt" standard on a party asserting preemption. Cf. Blue Sky Entm't, Inc. v. Town of Gardiner, 711 F.Supp. 678, 697 n.19 (N.D.N.Y. 1989) (describing as "absurd" the application of the reasonable doubt standard to a question of law such as whether a town law was preempted by federal law); United Air Lines, Inc. v. City & Cty. of Denver, 973 P.2d 647, 655–59 (Colo.App. 1998) (Briggs, J., specially concurring) (questioning the propriety of applying a "beyond a reasonable doubt" standard in the context of a challenge to the constitutionality of a municipal ordinance), aff'd, 992 P.2d 41 (Colo. 2000).

III. Preemption

ΒΆ11 We begin our analysis by acknowledging the confusion that some of our prior preemption cases have engendered, and we address what we perceive to be the cause of that confusion. We then proceed to discuss the power of home-rule cities like Longmont to regulate in matters of local concern, matters of statewide concern, and matters of mixed state and local concern. After considering which of these categories Article XVI falls into, we outline ...


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