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Landowners United Advocacy Foundation, Inc. v. Brohl

United States District Court, D. Colorado

March 17, 2017

LANDOWNERS UNITED ADVOCACY FOUNDATION, INC., Plaintiff,
v.
BARBARA BROHL, individually and in her official capacity as Executive Director of the Colorado Department of Revenue; MARCIA WATERS, individually and in her official capacity as Director of the Colorado Department of Real Estate; and MARK WESTON, individually and in his official capacity as Commissioner appraiser of the Colorado Conservation Easement Oversight Commission, Defendants.

          ORDER

          PHILIP A. BRIMMER United States District Judge

         This matter is before the Court on Defendants' Motion to Dismiss Second Amended Complaint [Docket No. 40]. The Court has jurisdiction pursuant to 28 U.S.C. § 1331.

         I. BACKGROUND[1]

         This case arises out of claims for income tax credits for conservation easements pursuant to Colo. Rev. Stat. § 39-22-522. In Colorado, a taxpayer is allowed to take a state income tax credit for a qualifying conservation easement created upon real property that is donated to a governmental entity or charitable organization. Colo. Rev. Stat. § 39-22-522(2). A conservation easement is a permanent restriction that runs with the land for the purpose of protecting and preserving the land in a predominantly natural, scenic, or open condition. See Colo. Rev. Stat. §§ 38-30.5-101 et seq. (establishing the purposes and requirements for conservation easements); Kowalchik v. Brohl, 277 P.3d 885, 886 (Colo.App. 2012).

         Under the conservation tax credit program, a landowner eligible for an income tax credit may be an individual, a partnership, a corporation, or any other entity. Colo. Rev. Stat. § 39-22-522(1). A qualifying landowner has the option of assigning to transferees all or any portion of the tax credit generated by any land donation. Colo. Rev. Stat. § 39-22-522(7). The donor landowner, however, may only claim one such tax credit per year. Colo. Rev. Stat. § 39-22-522(6).

         In 2011, the Colorado General Assembly enacted new procedures to resolve disputes under the conservation easement tax credit program. 2011 Colo. Legis. Serv. Ch. 193 (H.B. 11-1300) (West).[2] Under the 2011 procedures, the Colorado Department of Revenue (“DOR”) held previously issued tax credits procedurally invalid or rejected appraisals of the values of previously donated easements. Docket No. 36 at 3, ¶ 5.

         Plaintiff is a Colorado non-profit organization with one of its purposes being to “[p]rotect landowners' rights, the public interests, and sound conservation policies in Colorado.” Docket No. 36 at 5, ¶ 10. “Many” of plaintiff's members have had their conservation easement tax credits challenged under the procedures enacted in 2011. Id., ¶ 11; see also id. at 3, ¶ 6 (“nearly all” plaintiff's members “are affected donors of conservation easements”).

         In its second amended complaint, plaintiff asserts five claims for relief. First, plaintiff brings a claim for violations of the Fourteenth Amendment right to equal protection based on the allegation that “Defendants have applied a different set of rules to some taxpayers than they have to others.” Docket No. 36 at 14, ¶ 44. Second, plaintiff asserts a § 1983 claim for violations of its members' due process rights by defendants in connection with the application of the DOR's adjudication of conservation easement tax credits. Id. at 15-17, ¶¶ 50-57. Third, plaintiff alleges that defendants' actions were a violation of the takings clauses of the Fifth Amendment to the U.S. Constitution and Section Fifteen of the Colorado Constitution. Id. at 17-19, ¶¶ 58-65. Fourth, plaintiff alleges that defendants' actions were a violation of the prohibition on ex post facto laws and laws impairing the obligations of contracts in Section Eleven of the Colorado Constitution. Id. at 19-20, ¶¶ 66-71. Finally, plaintiff brings a claim for declaratory relief prohibiting defendants from enforcing the revised procedures implemented in 2011 with respect to donations made prior to the legislative changes. Id. at 20-21, ¶¶ 72-75.[3]

         On June 23, 2016, defendants filed their motion to dismiss. Docket No. 40. Defendants argue that (1) plaintiff's claims are barred by the Eleventh Amendment, (2) plaintiff lacks standing, (3) plaintiff's claims are barred by the Tax Injunction Act, 28 U.S.C. § 1341, (4) plaintiff's claims are barred by the doctrine of comity, and (5) plaintiff's claims should be dismissed under Rule 12(b)(6) for failure to state a claim. Id.

         II. STANDING

         Plaintiff bears the burden of establishing standing. Colorado Outfitters Ass'n v. Hickenlooper, 823 F.3d 537, 544 (10th Cir. 2016) (citing Raines v. Byrd, 521 U.S. 811, 818 (1997)). To carry this burden, plaintiff must show (1) an injury in fact, (2) a sufficient causal connection between the injury and the conduct complained of, and (3) a likelihood that the injury will be redressed by a favorable decision. Id. at 543; Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). As an organization with members, plaintiff can establish standing either in its own right or on behalf of its members. Sierra Club v. Morton, 405 U.S. 727, 739 (1972).

         A. Plaintiff's Standing in Its Own Right

         Plaintiff first argues that it has standing based on its purpose “to protect landowners who are seeking to lawfully participate in the conservation easement program.” Docket No. 46 at 14 (quoting Docket No. 36 at 5, ¶ 11). Plaintiff additionally claims that it “has a demonstrable interest in protecting the interests of its members and other state citizen property holders considering use of the conservation easement scheme as a way to protect and preserve land in the state.” Id. at 14-15.

         Such interests and purposes do not show injury in fact. “[T]he ‘injury in fact' test requires more than an injury to a cognizable interest. It requires that the party seeking review be himself among the injured.” Sierra Club, 405 U.S. at 734-35; see also Lujan, 504 U.S. at 573-74 (“We have consistently held that a plaintiff raising only a generally available grievance about government-claiming only harm to his and every citizen's interest in proper application of the Constitution and laws, and seeking ...


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