Grand Valley Citizens' Alliance v. Colorado Oil & Gas Conservation Commission

298 P.3d 961, 176 Oil & Gas Rep. 669, 2010 WL 2521747, 2010 Colo. App. LEXIS 847
CourtColorado Court of Appeals
DecidedJune 24, 2010
DocketNo. 09CA1195
StatusPublished
Cited by1 cases

This text of 298 P.3d 961 (Grand Valley Citizens' Alliance v. Colorado Oil & Gas Conservation Commission) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grand Valley Citizens' Alliance v. Colorado Oil & Gas Conservation Commission, 298 P.3d 961, 176 Oil & Gas Rep. 669, 2010 WL 2521747, 2010 Colo. App. LEXIS 847 (Colo. Ct. App. 2010).

Opinion

Opinion by

Judge CONNELLY.

Were plaintiffs, who challenged EnCana Oil & Gas (USA), Inc.’s applications to drill natural gas wells near a former nuclear blast site, entitled to a hearing before the Colorado Oil and Gas Conservation Commission? We answer yes.

First, we hold that plaintiffs have standing to sue because their alleged injuries — both procedural (denial of a hearing) and substantive (risk of harm to land they own and use) — are legally cognizable. Then, we construe Colorado’s Oil and Gas Conservation Act (Act), §§ 34-60-101 to -129, C.R.S.2009, and Administrative Procedure Act (state APA), §§ 24-4-101 to -108, C.R.S.2009. We hold that plaintiffs are statutorily entitled to a hearing on their challenges to EnCana’s applications for drilling permits. Accordingly, we reverse a district court order dismissing plaintiffs’ complaint and remand for further proceedings.

I. Background

Plaintiffs are two organizations and four individuals. At this stage of the case, we accept the truth of factual allegations in their dismissed complaint. See Medina v. State, 35 P.3d 443, 452-53 (Colo.2001); Colorado General Assembly v. Lamm, 700 P.2d 508, 516 (Colo.1985).

Plaintiffs collectively own, reside on, and use land in Garfield County, near Rulison. This western Colorado area was the site of a 1969 federal agency experiment dubbed Project Rulison. That project, involving detonation of a large nuclear device 8,400 feet below ground, was designed to explore whether nuclear explosives could stimulate natural gas production.

Project Rulison produced nothing marketable: the liberated gas contained radioactive matter. And the nuclear detonation left subsurface toxic and radioactive contaminants that persist today.

The three decades after the explosion saw little or no drilling near the blast site. In the late 1990s, however, companies began seeking permission to drill in the area. In 2004, the Commission ruled that a hearing would be required for any permit application involving drilling within half a mile of the 1969 blast site.

In 2008, EnCana applied for permits to drill wells less than three miles from the blast site. Because the proposed wells were beyond the half-mile radius, a hearing was not automatic.

Plaintiffs petitioned the Commission for intervention and a hearing on EnCana’s applications. The Commission’s rules do not include plaintiffs among those entitled to seek a hearing on such permit applications. See Rule 503.b(7), 2 Code Colo. Regs. 404-1 (as amended effective 2009) (allowing such hearings to be requested by operator, surface owner, relevant local government, or state environmental agencies).

The Commission’s Acting Director denied plaintiffs’ hearing requests and approved En-Cana’s permit applications. He wrote that “our rules do not permit” plaintiffs to request a hearing, but that he had treated their objections as a written complaint. See Rule 303.m, 2 Code Colo. Regs. 404-1 (as amended effective 2009) (allowing Director to withhold approval of permit application “based on information supplied in a written complaint submitted by any party with standing”). He concluded that plaintiffs had not met their burden for him to withhold approval under that rule.

[964]*964Plaintiffs then filed this suit. Their complaint alleged that they were statutorily entitled to a hearing on the permit applications. The relief they requested included a declaration to that effect and an order invalidating the permits issued without a hearing. EnCa-na moved to dismiss the complaint under C.R.C.P. 12(b)(1) for lack of standing and C.R.C.P. 12(b)(5) for failure to state a claim. The Commission moved to dismiss only under the latter rule.

The district court granted EnCana’s motion and dismissed the case for lack of subject matter jurisdiction and failure to state a claim. It ruled that plaintiffs had failed to establish “injury in fact” to a “legally protected interest.” In so ruling, the court examined the Act and the state APA. It concluded that neither law entitled plaintiffs to the requested hearing.

II. Standard of Review

We must decide whether plaintiffs had standing and whether they stated a valid claim. We review these issues, including matters of statutory construction, de novo. See Lobato v. State, 218 P.3d 358, 367 (Colo.2009); Barber v. Ritter, 196 P.3d 238, 245 (Colo.2008); Ainscough v. Owens, 90 P.3d 851, 856-57 (Colo.2004).

III. Plaintiffs’ Standing

A. Overview

Standing “is a threshold issue that must be satisfied in order to decide [this] ease on the merits.” Ainscough, 90 P.3d at 855. While Colorado lacks the explicit “case or controversy” requirement of Article III of the federal constitution, Conrad v. City & County of Denver, 656 P.2d 662, 669 (Colo.1982), our standing doctrine has separation of power roots in Colorado Constitution Articles III and VI. Ainscough, 90 P.3d at 855-56. Even so, Colorado “does not require” as much as federal eases require. City of Greenwood Village v. Petitioners for Proposed City of Centennial, 3 P.3d 427, 437 n. 8 (Colo.2000). Accordingly, “the test in Colorado has traditionally been relatively easy to satisfy.” Ainscough, 90 P.3d at 856.

Colorado imposes two requirements for standing: “[f]irst, the plaintiff must have suffered an injury-in-fact, and second, this harm must have been to a legally protected interest.” Ainscough, 90 P.3d at 855. The first requirement is constitutionally rooted; the second is prudential. HealthONE v. Rodriguez, 50 P.3d 879, 892 (Colo.2002).

B. The Legal Sufficiency of Plaintiffs’ Alleged Injuries

The denial of plaintiffs’ claimed statutory right to a hearing to contest a permit application was a cognizable injury. Standing can be based on “intangible [injuries], such as aesthetic harm or the deprivation of civil liberties.” Barber, 196 P.3d at 246; see, e.g., Nicholl v. E-470 Public Highway Authority, 896 P.2d 859, 866 (Colo.1995) (“even where no direct economic harm is implicated, a citizen has standing to pursue his or her interest in ensuring that governmental units conform to the state constitution”). And such injuries “may exist solely by virtue of statutes creating legal rights.” Cloverleaf Kennel Club, Inc. v. Colorado Racing Comm’n, 620 P.2d 1051, 1058 (Colo.1980) (internal quotations omitted).

Plaintiffs also alleged that the proposed drilling would threaten substantive injury to land they owned, resided on, and used. The Supreme Court and Colorado courts have recognized that the risk of environmental injuries to places used by a plaintiff can establish standing. See, e.g., Friends of Earth, Inc. v.

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298 P.3d 961, 176 Oil & Gas Rep. 669, 2010 WL 2521747, 2010 Colo. App. LEXIS 847, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grand-valley-citizens-alliance-v-colorado-oil-gas-conservation-coloctapp-2010.