Landowners United Advocacy Foundation, Inc. v. Hartman

          ORDER

          PHILIP A. BRIMMER, CHIEF JUDGE

         This matter is before the Court on Defendants' Motion to Dismiss Third Amended Complaint [Docket No. 72]. 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. The background of this statutory scheme and of this case is explained in the Court's order on defendants' motion to dismiss plaintiff's second amended complaint. Docket No. 54 at 1-2. Plaintiff is an advocacy organization that claims the Colorado Department of Revenue and the Colorado Conservation Easement Oversight Commission unlawfully administered the conservation easement tax credit program in violation of its members' rights under the United States Constitution. Docket No. 67 at 5-6, ¶¶ 10-11.

         After the Court dismissed plaintiff's second amended complaint on March 17, 2017, plaintiff filed a motion to amend the complaint. Docket No. 56. On February 28, 2018, the Court granted in part and denied in part plaintiff's motion to amend the complaint. Docket No. 66. The Court concluded that plaintiff had demonstrated organizational standing to sue on behalf of its aggrieved members. Id. at 5. On March 12, 2018, plaintiff filed its Third Amended Complaint. Docket No. 67. Plaintiff asserts four causes of action: (1) deprivation of equal protection under 42 U.S.C. § 1983; (2) violation of due process under 42 U.S.C. § 1983; (3) violation of the Takings Clause of the Fifth Amendment to the United States Constitution; and (4) a request for declaratory relief. Id. at 15-22. Plaintiff seeks prospective injunctive relief as well as declaratory relief. Id.

         In their motion to dismiss, defendants argue that: (1) defendants Marcia Waters, Mark Weston, and Peter Ericson are immune from suit under the Eleventh Amendment; (2) plaintiff's claims are barred by the Tax Injunction Act, 28 U.S.C. § 1341; (3) plaintiff's claims are barred by the comity doctrine; and (4) plaintiff fails to state a claim for which relief can be granted. Docket No. 72.

         On May 29, 2018, Colorado Governor John W. Hickenlooper signed into law House Bill 18-1291. Docket No. 90-1. The bill repeals the Division of Real Estate's statutory authority to oversee the conservation easement tax credit program and vests that authority in a new Division of Conservation. Id. The bill also abolishes the nine- member conservation easement commission that previously existed within the Division of Real Estate. Id. On September 28, 2018, defendants filed a notice of supplemental authority, arguing that the claims against Waters, Weston, and Ericson are moot due to the enactment of H.B. 18-1291. Docket No. 90.

         II. ANALYSIS

         A. Mootness

         Waters, Weston, and Ericson argue that the claims against them in their official capacities are now moot due to the enactment of H.B. 18-1291. Docket No. 90.

         A case is moot when the issues presented are no longer “live.” Powell v. McCormack, 395 U.S. 486, 496 (1969). A court lacks jurisdiction to consider any case that has “lost its character as a present, live controversy.” Hall v. Beals, 396 U.S. 45, 48 (1969). Because the exercise of judicial power under Article III of the Constitution depends on the existence of a live controversy, mootness is a jurisdictional issue. Lewis v. Cont'l Bank Corp., 494 U.S. 472, 477 (1990). “The hallmark of a moot case or controversy is that the relief sought can no longer be given or is no longer needed.” U.Sch. Dist. No. 259, Sedgwick Cty., Kan. v. Disability Rights Center of Kan., 491 F.3d 1143, 1150 (10th Cir. 2007) (quotations omitted).

         Based upon the enactment of H.B. 18-1291, the Court finds that the claims against Waters, Weston, and Ericson are moot in that a live controversy no longer exists. H.B. 18-1291 repeals the Division of Real Estate's statutory authority to oversee the conservation easement tax credit program and vests that authority in a new Division of Conservation. See Docket No. 90-1. Accordingly Waters, Weston, and Ericson, whose connection to the conservation easement tax credit program arose from their official roles within the Division of Real Estate, no longer have any official duties related to the conservation easement tax credit program.^[2] The Court could not enter prospective injunctive and declaratory relief against those defendants that would “have some effect in the real world.” See U.Sch. Dist. No. 259, 491 F.3d at 1147. Thus, the Court must dismiss the claims without prejudice for lack of subject matter jurisdiction against Waters, Weston, and Ericson in their official capacities.^[3]

         B. Tax Injunction Act

         Defendants argue that plaintiff's claim is barred by the Tax Injunction Act ...