County District Court No. 15CV31189 Honorable Christopher C.
Silverstein & Pomerantz LLP, Neil I. Pomerantz, Mark E.
Medina, Michelle Bush, Denver, Colorado, for
Williamson and Hayashi, LLC, David S. Williamson, Mathew M.
Munch, Boulder, Colorado, for Defendants-Appellees.
Cynthia H. Coffman, Attorney General, Stephanie Scoville,
Assistant Attorney General, Jeremy Hueth, Special Assistant
Attorney General, Denver, Colorado, for Amici Curiae Colorado
Higher Education Institutions.
JUDGMENT REVERSED AND CASE REMANDED WITH
1 Sodexo America, LLC (Sodexo) provides food services and
food to the Colorado School of Mines (Mines) pursuant to a
contract with Mines. Mines, in turn, contracts with its
students to provide them food (the food obtained, prepared,
and served by Sodexo) through different types of meal plans.
The City of Golden (the City) taxes Sodexo for students'
use of the meal plans. This, Sodexo maintains, violates the
Colorado Constitution and the Golden Municipal Code (2015)
(Code or GMC).
2 The district court disagreed with Sodexo and granted
summary judgment for the City on Sodexo's challenges to
the City's assessment and denial of refunds, leading to
this appeal. Departing from the decision of another division
of this court in City of Golden v. Aramark Educational
Services, LLC, 2013 COA 45, involving a similar
arrangement, we hold that, under the relevant contract and
pursuant to the plain language of the Code, no sales occur
between Sodexo and Mines' students with meal plans.
Instead, Sodexo sells meal plan meals to Mines at wholesale.
And since the Code expressly exempts wholesale sales from
taxation, the City's assessment is invalid. We therefore
reverse the district court's summary judgment and remand
the case for entry of judgment in Sodexo's favor.
3 The contract between Sodexo and Mines requires Sodexo to
"provide food services for [Mines] students, faculty,
staff, employees and invited guests." It defines food
services as "[t]he preparation, service and sale of
food, beverages, and select goods, merchandise and other
items to be agreed upon by [Mines] and Sodexo . . .,
including catering, concessions, retail and meal plans."
But the contract also says that the food and other tangible
items Sodexo provides are deemed Mines' property alone;
Sodexo is essentially Mines' go-between for that food.
4 Sodexo provides food services by operating and staffing all
of the dining facilities on Mines' campus, both
traditional residential dining facilities and
"branded" dining facilities, including the Slate
Cafe, Diggers' Den Food Court, Subway, and Einstein Bros.
Bagels. A student buying a meal plan from Mines (pursuant to
a contract with Mines, as explained below) can redeem her
meal plan meals at any of these facilities. The facilities
aren't advertised to the public and are used primarily by
Mines' students and staff. On rare occasion, members of
the public buy food from the facilities using cash or a
5 Sodexo's contract with Mines sets the prices Mines pays
Sodexo for each meal that a student redeems pursuant to a
meal plan the student has purchased from Mines. It also
stipulates that any increase or decrease in these prices
requires Mines' prior approval.
6 Mines requires every student living in a residence hall to
select a meal plan from among several options; students
living off-campus may purchase meal plans. Each meal plan
includes a certain number of weekly meals and a sum of
"Munch Money, " a declining balance of
points/dollars that can be used at any retail food location
on campus. At the end of each semester, students lose any
unused balance of meals and Munch Money. These terms are
memorialized in contracts that Mines enters into with its
students; Sodexo doesn't enter into any food purchase
contracts with Mines' students.
7 The students' contracts describe the available meal
plan options and how much they cost. Mines alone determines
prices and terms, without Sodexo's approval, and charges
the cost of the meal plans to the students' Mines
accounts. Only Mines can charge and collect amounts owed for
8 Students redeem meal plan meals and Munch Money using
"BlasterCards" provided by Mines. Mines
electronically syncs each student's BlasterCard with the
meal plan the student has purchased from Mines. So each time
a student "swipes" her BlasterCard on a card reader
at a dining facility, Mines' software automatically
deducts a meal (or Munch Money) from the student's
9 Periodically, Mines reports the number of meals used under
each of its meal plans to Sodexo. Sodexo then invoices Mines
based on the report. The per meal prices Mines pays Sodexo
per their contract are significantly less than the prices
Mines charges students under the meal plans.
10 The Code says the City may levy a three percent sales tax
on the "purchase price" of "all sales of
tangible personal property and services, " including
food, unless expressly exempted. GMC § 3.03.010. Sodexo
collects and remits sales tax on campus food purchases made
with cash, check, or credit card. But the City has also
assessed Sodexo sales tax on transactions whereby students
swipe their BlasterCards in exchange for meal plan meals in
the dining facilities. (Paradoxically, however, the City
assesses the tax based on the prices Mines pays Sodexo, not
on the prices students pay Mines.) As noted, Sodexo's
challenges to this assessment have thus far failed.
11 Sodexo contends that the City can't tax it for meals
purchased by Mines' students under the students'
contracts with Mines because (1) doing so interferes with
Mines' constitutional authority to exercise
"exclusive control and direction" of its funds and
appropriations; (2) doing so unconstitutionally taxes
Mines' students' acquisition of education furnished
by the State; (3) Sodexo's sales of food to Mines under
their contract are excluded from taxation under the Code as
direct sales to Mines in its governmental capacity only; and
(4) Sodexo does not sell food to students at retail, but
instead sells food to Mines at wholesale, and the Code
expressly exempts wholesale sales from taxation. Because we
conclude that Sodexo doesn't sell food to students at
retail, and that the Code's wholesale exemption applies
to the sales Sodexo makes to Mines, we don't address
Sodexo's first three contentions.
Standard of Review and Applicable Law
12 We review an order granting summary judgment de novo.
Hamon Contractors, Inc. v. Carter & Burgess,
Inc., 229 P.3d 282, 290 (Colo.App. 2009). We similarly
review the interpretation of a municipal ordinance. See
Friends of Denver Parks, Inc. v. City & Cty. of
Denver, 2013 COA 177, ¶ 45; Leggett &
Platt, Inc. v. Ostrom, 251 P.3d 1135, ...