Articles Posted in Colorado Supreme Court

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In 2011, OXY USA Inc. (“Oxy”), made a mistake that caused it to overpay its property taxes on oil and gas produced from leaseholds. Oxy failed to deduct certain costs it was entitled to deduct. By the time it realized the mistake, the protest period had expired. The company nonetheless contended it was entitled to abatement and refund of the overpayment pursuant to section 39-10-114(1)(a)(I)(A), C.R.S. (2017). The county board of commissioners maintained that the abatement-and-refund provision did not apply because Oxy was the sole source of the error. Relying on Colorado Supreme Court precedent, the court of appeals held that Oxy couldn't receive abatement and refund for overpayment due to its own mistake. The Supreme Court held section 39-10-114(1)(a)(I)(A) gave taxpayers the right to seek abatement and refund for erroneously or illegally levied taxes resulting from overvaluation caused solely by taxpayer mistake. Therefore, Oxy was entitled to abatement and refund for its overpayment of taxes in the tax year at issue in this appeal. View "OXY USA Inc. v. Mesa County Board of Commissioners" on Justia Law

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The Colorado Supreme Court concluded that the statutory scheme property taxation of oil and gas leaseholds authorized the retroactive tax assessment in this case. Petitioner Kinder Morgan CO2 Company, L.P., operated oil and gas leaseholds in Montezuma County, Colorado. In 2009, the assessor for Montezuma County issued a corrective tax assessment on these leaseholds for the previous tax year, retroactively assessing over $2 million in property taxes, after an auditor concluded that Kinder Morgan underreported the value of gas produced at the leaseholds. Kinder Morgan appealed, arguing the assessor lacked authority to retroactively assess these taxes because Colorado law did not authorize a retroactive assessment when an operator has correctly reported the volume of oil and gas sold but has underreported the selling price at the wellhead. In affirming the court of appeals in this matter, the Supreme Court further concluded that the Board of Assessment Appeals did not err in determining that Kinder Morgan underreported the selling price by claiming excess transportation deductions, given Kinder Morgan’s relationship to the owner of the pipeline through which the gas was transported. View "Kinder Morgan CO2 Co., L.P. v. Montezuma Cty. Bd. of Comm'rs" on Justia Law

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This case centered on a contract dispute between Clean Energy Collective LLC (CEC) and two defendants, Borrego Solar Systems, Inc. (Borrego) and 1115 Solar Development, LLC (1115 Solar). CEC was a Colorado limited liability company; Borrego was a California corporation headquartered in San Diego, and 1115 Solar was a Delaware limited liability company with its principal place of business in California. Borrego was 1115 Solar’s parent company and owned the latter in its entirety. CEC’s claims against Borrego and 1115 Solar arose from an asset purchase agreement (“APA”) to construct several solar photovoltaic projects. The APA specified that CEC would pay defendants to construct three power-generation projects in Massachusetts and allowed for additional projects pursuant to separate contracts governed by the APA’s terms. After the parties were unable to resolve disagreements regarding pricing and payments for projects subject to the APA (all of which were to be completed outside Colorado) CEC sued the defendants in Colorado, asserting claims for breach of contract and breach of warranty. The issue presented for the Supreme Court's review was whether the trial court erred in concluding Borrego was subject to general personal jurisdiction in Colorado. Because the trial court did not assess whether Borrego was essentially at home in Colorado, the Court concluded it did not fully apply the test announced in "Magill v. Ford Motor Co.," (379 P.3d 1033), and therefore erred in exercising general personal jurisdiction over Borrego. Applying the complete test itself, the Court concluded Borrego was not subject to general jurisdiction in Colorado. View "In re Clean Energy Collective LLC v. Borrego Solar Sys., Inc." on Justia Law

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At issue in this case was whether Colorado had jurisdiction to award benefits for out-of-state work-related injuries and to impose a statutorily penalty on an employer under 8-41-204, C.R.S. (2016), when the employer was not a citizen of Colorado, and had no offices or operations in Colorado, only that the employer hired a Colorado citizen within the state. The Supreme Court held that on the facts presented here, Colorado lacked personal jurisdiction over the employer. View "Youngquist v. Miner" on Justia Law

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The citizens of home-rule City of Longmont voted in favor of a moratorium on hydraulic fracturing and the storage of its waste products within city limits. Thereafter, 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. "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. Longmont and the citizen intervenors argued on appeal to the Supreme Court that: (1) the district court erred in its preemption analysis; and (2) the inalienable rights provision of the Colorado Constitution trumped any preemption analysis and required the Supreme Court to conclude that ArticleXVI superseded state law. Finding no reversible error, the Supreme Court affirmed the district court's judgment. View "City of Longmont v. Colo. Oil and Gas Ass'n" on Justia Law

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The citizens of home-rule city Fort Collins voted in favor of a moratorium on hydraulic fracturing and the storage of its waste products within city limits. The Colorado Oil and Gas Association (the Association), an industry organization, sued Fort Collins and requested: (1) a declaratory judgment declaring that the Oil and Gas Conservation Act, and the rules and regulations promulgated pursuant thereto, preempted Fort Collins’s fracking moratorium; and (2) a permanent injunction enjoining the enforcement of the moratorium. The Association subsequently moved for summary judgment on its declaratory judgment claim, and Fort Collins filed a cross-motion for summary judgment, asking the district court to find that the moratorium was not preempted by state law. The Supreme Court concluded that "fracking is a matter of mixed state and local concern," Fort Collins’s fracking moratorium was subject to preemption by state law. Furthermore, the Court concluded that Fort Collins’s five-year moratorium on fracking and the storage of fracking waste operationally conflicted with the effectuation of state law. Accordingly, the Court held that the moratorium was preempted by state law and was, therefore, invalid and unenforceable. The district court’s order was affirmed, and the matter remanded for further proceedings. View "City of Fort Collins v. Colo. Oil and Gas Ass'n" on Justia Law

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The issue this case presented for the Supreme Court's review centered on whether 39-29-105(1)(a) permitted a deduction for the “cost of capital” associated with natural gas transportation and processing facilities. In general terms, the cost of capital was defined as the amount of money that an investor could have earned on a different investment of similar risk. In this case, the cost of capital was the amount of money that BP America Production Company’s (“BP”) predecessors could have earned had they invested in other ventures rather than in building transportation and processing facilities. BP claimed it could deduct the cost of capital because it was a cost associated with transportation and processing activity. Respondent Colorado Department of Revenue argued that the cost of capital was not a deductible cost because it was not an actual cost. The court of appeals held that the cost of capital as not a deductible cost under the statute. BP appealed, and the Colorado Supreme Court reversed, holding that the plain language of section 39-29-102(3)(a) authorized a deduction for any transportation, manufacturing, and processing costs and that the cost of capital was a deductible cost that resulted from investment in transportation and processing facilities. The appellate court was reversed and the case remanded back to the district court for further proceedings. View "BP Am. v. Colo. Dept. of Revenue" on Justia Law

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Grand Valley Citizens' Alliance filed a complaint alleging that it was entitled to a hearing on an application for permit to drill pursuant to section 34-60-108(7), C.R.S. (2011), of the Oil and Gas Conservation Act. The district court dismissed the complaint. The court of appeals reversed the district court, holding that under subsection 108(7), Grand Valley Citizens were entitled to a hearing because it had a filed a petition on a matter within the jurisdiction of the Commission. After its review, the Supreme Court reversed the court of appeals judgment, holding that section 34-60-108(7) requires a hearing only for rules, regulations, and orders. Permits are governed by section 34-60-106(1)(f), which grants the Oil and Gas Commission broad authority to promulgate rules governing the permitting process, including the authority to determine who may request a hearing. View "Colorado Oil & Gas Conservation Commission" on Justia Law

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With the approval of the Public Utilities Commission (PUC), in 2005 the Public Service Company of Colorado (Xcel) began constructing a coal-fired electric power unit known as "Comanche 3." When Xcel sought to recover a portion of its construction costs nearly four years later in a rate proceeding, Petitioner Leslie Glustrom intervened. Petitioner sought to introduce testimony that Xcel acted improperly and, consequently, should not recover its costs. The PUC excluded most of her testimony, a ruling that Petitioner challenged. Petitioner separately challenged the depreciation rate and the possibility that Comanche 3 might not be "used and useful" at the time rates went into effect. The PUC denied her challenges, and the district court affirmed. Upon review, the Supreme Court held that the PUC did not abuse its discretion when it struck substantial portions of Petitioner's testimony pursuant to the Colorado Rules of Evidence. Further, the depreciation rate approved by the PUC was established pursuant to law and in accordance with the evidence. Lastly, the PUC was free to exercise its discretion in departing from a strict application of the "used and useful" principle. Petitioner failed to meet her burden in showing why such a departure here would result in a rate that is unjust and unreasonable in its consequences. View "Glustrom v. Colorado Public Utilities Commission" on Justia Law

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The issue before the Supreme Court was whether section 38-5-105 C.R.S. (2011) granted condemnation authority to a company for the construction of a petroleum pipeline. Upon review, the Court concluded that the General Assembly did not grant expressly or implication, the power of eminent domain to companies for the construction of pipelines conveying petroleum. Therefore, section 38-5-105 did not grant that authority to Respondent Sinclair Transportation Company for its proposed pipeline project. The Court reversed the court of appeals' opinion that upheld the trial court's order granting Sinclair immediate possession of the property belonging to Petitioners Ivar and Donna Larson and Lauren and Kay Sandberg. View "Larson v. Sinclair Transp. Co." on Justia Law