Heartland v. CDPHE
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Opinion
23CA0993 Heartland v CDPHE 05-22-2025
COLORADO COURT OF APPEALS
Court of Appeals No. 23CA0993 City and County of Denver District Court No. 17CV32604 Honorable Jill D. Dorancy, Judge
Heartland Biogas, LLC,
Plaintiff-Appellant,
v.
Colorado Department of Public Health and Environment and Weld County Board of County Commissioners,
Defendants-Appellees.
JUDGMENT AFFIRMED
Division II Opinion by JUDGE JOHNSON Fox and Schock, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced May 22, 2025
Holland & Hart LLP, Stephen G. Masciocchi, Jessica J. Smith, Denver, Colorado, for Plaintiff-Appellant
Philip J. Weiser, Attorney General, Fredrick C. Haines, Senior Litigation Counsel & Assistant Solicitor General, Allison R. Ailer, Senior Assistant Attorney General, Joseph G. Michaels, Assistant Solicitor General, Denver, Colorado, for Defendant-Appellee Colorado Department of Public Health and Environment
Hall & Evans, L.L.C., Mathew J. Hegarty, Alexandria L. Bell, Denver, Colorado, for Defendant-Appellee Weld County Board of County Commissioners ¶1 Plaintiff, Heartland Biogas, LLC (Heartland), appeals the
district court’s judgment finding in favor of defendants, Colorado
Department of Public Health and Environment (CDPHE) and Weld
County Board of County Commissioners (BOCC). Heartland sued
CDPHE and BOCC contending that both entities took without just
compensation its Certificate of Designation (Designation), and by
extension, its Use by Special Review Permit 1704 (Permit 1704), as
well as its Certificate of Registration 9931 (Registration 9931),1
causing Heartland to close its facility so that those entities also took
without just compensation Heartland’s property interest in its land
improvements.
¶2 Although Heartland requested a jury trial, CDPHE and BOCC
asked the court to hold a bench trial because Heartland’s remaining
claims at the time of trial concerned regulatory takings. The court
agreed. Also before trial, CDPHE and BOCC disclosed new
witnesses to testify at trial, and the court allowed those witnesses to
1 The parties used a variety of acronyms to refer to various terms.
To avoid an opinion of alphabet soup, we may use different abbreviations.
1 testify even though Heartland argued that the disclosures were
untimely.
¶3 Following a multiple-day bench trial, the district court issued
a lengthy order finding that (1) Heartland did not have a
designation; (2) CDPHE’s and BOCC’s actions were not regulatory
takings per se or takings under the factual inquiry in Palazzolo v.
Rhode Island, 533 U.S. 606 (2001); and (3) BOCC validly exercised
its police power by indefinitely suspending Permit 1704.
¶4 On appeal, Heartland contends that the district court erred
because (1) Heartland was entitled to a jury trial; (2) Heartland had
a designation and, thus, a protected property interest; (3) CDPHE’s
and BOCC’s actions forcing Heartland’s facility to close constituted
regulatory takings; (4) BOCC’s exercise of its police power had no
bearing on Heartland’s takings claims, and regardless, the BOCC
invalidly exercised its police power by shutting down the facility;
and (5) the court abused its discretion by allowing some of the late-
disclosed witnesses to testify at trial. We affirm.
I. Background
¶5 In 2009, Shelton Land and Cattle, Ltd. (Shelton) owned
property in Weld County and leased it to Heartland Renewable
2 Energy, LLC (Heartland Renewable), which has no relationship to
Heartland. In April 2009, Heartland Renewable applied for a
designation with CDPHE and BOCC to operate a solid waste
disposal site and facility on the property. Heartland Renewable
hired AGProfessionals, LLC, an engineering development company
(consulting firm), to assist with the regulatory process. As part of
its application, Heartland Renewable, through its consulting firm,
submitted a proposed Engineering, Design, and Operations Plan
(the 2010 EDOP) to CDPHE for that agency’s review. The 2010
EDOP governs operation of the facility.
¶6 Heartland Renewable’s facility proposed to use manure and
food waste — also referred to as substrates — to create three
products: renewable natural gas (through an anaerobic digestion
process),2 compost (from the facility’s digested solids), and liquid
soil amendment or LSA (from the facility’s effluent, which is the
2 “Anaerobic digestion is a process through which bacteria break
down organic matter — such as animal manure, wastewater biosolids, and food wastes — in the absence of oxygen.” Lambland, Inc. v. Heartland Biogas, LLC, No. 22-1184, 2023 WL 8276140, at *1 n.1 (10th Cir. Nov. 30, 2023) (unpublished opinion) (quoting U.S. Env’t Prot. Agency, How Does Anaerobic Digestion Work?, https://perma.cc/T3ZZ-XFUM).
3 liquid portion of the digestate and, thus, is also referred to as
digestate liquor). CDPHE approved the 2010 EDOP, authorizing the
facility to convert the substrates into renewable natural gas.
¶7 Following CDPHE’s approval, BOCC issued a resolution on
July 21, 2010 (2010 Resolution), approving Permit 1704, a
document that also included Heartland Renewable and Shelton’s
Designation and identified forty-two development standards, which
were site-specific conditions that the facility agreed to abide by to
protect the health and welfare of the community. The 2010
Resolution stated, “Noncompliance with any of the foregoing
development standards may be reason for revocation of [Permit
1704] by [BOCC].”
¶8 In November 2012, the consulting firm began discussions with
CDPHE regarding the permit for processing compost and LSA.
Fertilizer (i.e., compost or LSA, the latter being a conditioner to help
improve the condition of the soil) is regulated by the Colorado
Department of Agriculture (CDA). The regulated entity must submit
a label to CDA if the entity seeks to distribute a fertilizer made from
solid waste. Once the CDA approves the label, it issues a
registration that allows the company to distribute the product.
4 Although Heartland intended to use the facility for compost, it never
applied to CDA for a registration of its “digested solids.”
¶9 Part of the parties’ dispute revolves around whether the LSA is
regulated exclusively by the CDA or whether CDPHE shares in the
review process. In January 2013, the consulting firm’s internal
emails indicated that, to obtain CDPHE’s approval of an updated
EDOP, Heartland Renewable would need to obtain a “beneficial use
determination” (BUD) from CDPHE before the facility distributed
LSA for any land application. But in March 2013, CDPHE, Weld
County, and representatives from AGEnergy USA, LLC (AGEnergy)
— a consulting business associated with Heartland Renewable —
had a meeting about regulating the LSA. AGEnergy representatives
left the meeting believing that if Heartland Renewable obtained a
registration from CDA for the LSA, no BUD from CDPHE would be
required.
¶ 10 On June 6, 2013, CDA issued to Heartland Renewable
Registration 9931 for its LSA, which authorized the facility to
distribute its LSA as a soil amendment until June 30, 2014.
Heartland Renewable submitted an updated EDOP (2013 EDOP) to
5 CDPHE, which indicated the facility’s intended production of
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23CA0993 Heartland v CDPHE 05-22-2025
COLORADO COURT OF APPEALS
Court of Appeals No. 23CA0993 City and County of Denver District Court No. 17CV32604 Honorable Jill D. Dorancy, Judge
Heartland Biogas, LLC,
Plaintiff-Appellant,
v.
Colorado Department of Public Health and Environment and Weld County Board of County Commissioners,
Defendants-Appellees.
JUDGMENT AFFIRMED
Division II Opinion by JUDGE JOHNSON Fox and Schock, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced May 22, 2025
Holland & Hart LLP, Stephen G. Masciocchi, Jessica J. Smith, Denver, Colorado, for Plaintiff-Appellant
Philip J. Weiser, Attorney General, Fredrick C. Haines, Senior Litigation Counsel & Assistant Solicitor General, Allison R. Ailer, Senior Assistant Attorney General, Joseph G. Michaels, Assistant Solicitor General, Denver, Colorado, for Defendant-Appellee Colorado Department of Public Health and Environment
Hall & Evans, L.L.C., Mathew J. Hegarty, Alexandria L. Bell, Denver, Colorado, for Defendant-Appellee Weld County Board of County Commissioners ¶1 Plaintiff, Heartland Biogas, LLC (Heartland), appeals the
district court’s judgment finding in favor of defendants, Colorado
Department of Public Health and Environment (CDPHE) and Weld
County Board of County Commissioners (BOCC). Heartland sued
CDPHE and BOCC contending that both entities took without just
compensation its Certificate of Designation (Designation), and by
extension, its Use by Special Review Permit 1704 (Permit 1704), as
well as its Certificate of Registration 9931 (Registration 9931),1
causing Heartland to close its facility so that those entities also took
without just compensation Heartland’s property interest in its land
improvements.
¶2 Although Heartland requested a jury trial, CDPHE and BOCC
asked the court to hold a bench trial because Heartland’s remaining
claims at the time of trial concerned regulatory takings. The court
agreed. Also before trial, CDPHE and BOCC disclosed new
witnesses to testify at trial, and the court allowed those witnesses to
1 The parties used a variety of acronyms to refer to various terms.
To avoid an opinion of alphabet soup, we may use different abbreviations.
1 testify even though Heartland argued that the disclosures were
untimely.
¶3 Following a multiple-day bench trial, the district court issued
a lengthy order finding that (1) Heartland did not have a
designation; (2) CDPHE’s and BOCC’s actions were not regulatory
takings per se or takings under the factual inquiry in Palazzolo v.
Rhode Island, 533 U.S. 606 (2001); and (3) BOCC validly exercised
its police power by indefinitely suspending Permit 1704.
¶4 On appeal, Heartland contends that the district court erred
because (1) Heartland was entitled to a jury trial; (2) Heartland had
a designation and, thus, a protected property interest; (3) CDPHE’s
and BOCC’s actions forcing Heartland’s facility to close constituted
regulatory takings; (4) BOCC’s exercise of its police power had no
bearing on Heartland’s takings claims, and regardless, the BOCC
invalidly exercised its police power by shutting down the facility;
and (5) the court abused its discretion by allowing some of the late-
disclosed witnesses to testify at trial. We affirm.
I. Background
¶5 In 2009, Shelton Land and Cattle, Ltd. (Shelton) owned
property in Weld County and leased it to Heartland Renewable
2 Energy, LLC (Heartland Renewable), which has no relationship to
Heartland. In April 2009, Heartland Renewable applied for a
designation with CDPHE and BOCC to operate a solid waste
disposal site and facility on the property. Heartland Renewable
hired AGProfessionals, LLC, an engineering development company
(consulting firm), to assist with the regulatory process. As part of
its application, Heartland Renewable, through its consulting firm,
submitted a proposed Engineering, Design, and Operations Plan
(the 2010 EDOP) to CDPHE for that agency’s review. The 2010
EDOP governs operation of the facility.
¶6 Heartland Renewable’s facility proposed to use manure and
food waste — also referred to as substrates — to create three
products: renewable natural gas (through an anaerobic digestion
process),2 compost (from the facility’s digested solids), and liquid
soil amendment or LSA (from the facility’s effluent, which is the
2 “Anaerobic digestion is a process through which bacteria break
down organic matter — such as animal manure, wastewater biosolids, and food wastes — in the absence of oxygen.” Lambland, Inc. v. Heartland Biogas, LLC, No. 22-1184, 2023 WL 8276140, at *1 n.1 (10th Cir. Nov. 30, 2023) (unpublished opinion) (quoting U.S. Env’t Prot. Agency, How Does Anaerobic Digestion Work?, https://perma.cc/T3ZZ-XFUM).
3 liquid portion of the digestate and, thus, is also referred to as
digestate liquor). CDPHE approved the 2010 EDOP, authorizing the
facility to convert the substrates into renewable natural gas.
¶7 Following CDPHE’s approval, BOCC issued a resolution on
July 21, 2010 (2010 Resolution), approving Permit 1704, a
document that also included Heartland Renewable and Shelton’s
Designation and identified forty-two development standards, which
were site-specific conditions that the facility agreed to abide by to
protect the health and welfare of the community. The 2010
Resolution stated, “Noncompliance with any of the foregoing
development standards may be reason for revocation of [Permit
1704] by [BOCC].”
¶8 In November 2012, the consulting firm began discussions with
CDPHE regarding the permit for processing compost and LSA.
Fertilizer (i.e., compost or LSA, the latter being a conditioner to help
improve the condition of the soil) is regulated by the Colorado
Department of Agriculture (CDA). The regulated entity must submit
a label to CDA if the entity seeks to distribute a fertilizer made from
solid waste. Once the CDA approves the label, it issues a
registration that allows the company to distribute the product.
4 Although Heartland intended to use the facility for compost, it never
applied to CDA for a registration of its “digested solids.”
¶9 Part of the parties’ dispute revolves around whether the LSA is
regulated exclusively by the CDA or whether CDPHE shares in the
review process. In January 2013, the consulting firm’s internal
emails indicated that, to obtain CDPHE’s approval of an updated
EDOP, Heartland Renewable would need to obtain a “beneficial use
determination” (BUD) from CDPHE before the facility distributed
LSA for any land application. But in March 2013, CDPHE, Weld
County, and representatives from AGEnergy USA, LLC (AGEnergy)
— a consulting business associated with Heartland Renewable —
had a meeting about regulating the LSA. AGEnergy representatives
left the meeting believing that if Heartland Renewable obtained a
registration from CDA for the LSA, no BUD from CDPHE would be
required.
¶ 10 On June 6, 2013, CDA issued to Heartland Renewable
Registration 9931 for its LSA, which authorized the facility to
distribute its LSA as a soil amendment until June 30, 2014.
Heartland Renewable submitted an updated EDOP (2013 EDOP) to
5 CDPHE, which indicated the facility’s intended production of
another output — the LSA.
¶ 11 Beginning in June 2013, EDF Renewables, Inc. — the parent
company to Heartland (parent company) — began due diligence to
investigate purchase of the facility from Heartland Renewable. In
August 2013, Heartland acquired the facility. Heartland notified
BOCC and CDPHE of the transfer of ownership; specifically,
Heartland sent to CDPHE an updated EDOP in October 2013
requesting that the facility’s name be updated from Heartland
Renewable to Heartland. Heartland continued to use the consulting
firm and hired legal counsel to assist Heartland in navigating the
various laws and regulations pertaining to operating the facility.
¶ 12 From August 2013 to November 2016, Heartland never applied
for a designation when it became the operator of the facility.
Heartland had been told by its parent company — which based its
information on advice from legal counsel — that Heartland
Renewable’s Designation ran with the land and, thus, the
Designation transferred to Heartland when it acquired the facility.
Heartland purchased the facility believing it did not need to apply to
CDPHE for a BUD for its LSA, while CDPHE continued to assert
6 that if the LSA was to have land application, Heartland would need
a BUD.
¶ 13 Beginning in September 2016, BOCC held the first of three
show cause hearings to address over a hundred county residents’
odor complaints about Heartland’s facility. In October 2016,
CDPHE contacted Weld County employees, expressing concerns
with Heartland’s Designation. At this point, CDPHE reached out to
the Colorado Attorney General’s Office, counsel for CDPHE, to
investigate the status of Heartland’s Designation.
¶ 14 Also in September 2016, CDPHE sent an email to Heartland
indicating that Heartland could not distribute its LSA to farmers
until it received a BUD from CDPHE. In December 2016, BOCC
adopted CDPHE’s position and informed Heartland to stop
distribution of its LSA until “proper approval is granted.”
¶ 15 On November 8, 2016, First Assistant Attorney General David
Kreutzer (Kreutzer) sent a letter to BOCC detailing the facility’s
Designation history (Kreutzer letter). The Kreutzer letter asserted
that Heartland did not have a designation. It acknowledged that
Heartland had notified CDPHE that the facility had transferred
ownership and the agency had not let Heartland know at that time
7 that it needed to apply for its own designation. But it also indicated
that CDPHE would “encourage Heartland . . . to apply for a
[designation] soon” and the agency would review any updated EDOP
to ensure that the facility’s “financial assurance [was] in order.”
¶ 16 Following the Kreutzer letter, on November 14, 2016, BOCC
held its second show cause hearing in which it heard from
approximately two hundred additional county residents concerning
odor complaints. BOCC also learned of the Kreutzer letter and
continued the hearing until December 2016.
¶ 17 On December 19, 2016, BOCC held its third show cause
hearing. Having determined that Heartland had not applied for a
designation and was noncompliant with eight development
standards, BOCC suspended Heartland’s Permit 1704 until the
entity obtained approval for a designation from CDPHE and
complied with the development standards. BOCC followed its oral
ruling by issuing a resolution on December 28, 2016 that
indefinitely suspended Heartland’s Permit 1704 until it obtained a
designation.
¶ 18 In January 2017 and thereafter, Weld County and CDPHE
continued to encourage Heartland to apply for a designation in its
8 own name but Heartland never did. Instead, Heartland shut down
the facility at the end of January 2017. In July 2017, Heartland
sued CDPHE and BOCC.3 In late June 2020, Heartland sold the
facility to Rockland Capital for $2 million.
II. Standard of Review
¶ 19 We review a district court’s judgment following a bench trial as
a mixed question of fact and law. State Farm Mut. Auto. Ins. Co. v.
Johnson, 2017 CO 68, ¶ 12; Fear v. GEICO Cas. Co., 2023 COA 31,
¶ 15, aff’d on other grounds, 2024 CO 77. We review the district
court’s factual findings for clear error and will only reverse them if
there is no support in the record. Levine v. Katz, 192 P.3d 1008,
1012 (Colo. App. 2006). We review the district court’s legal
conclusions de novo. Mintz v. Accident & Inj. Med. Specialists, PC,
284 P.3d 62, 65 (Colo. App. 2010), aff’d, 2012 CO 50.
¶ 20 We review the district court’s interpretation of constitutional
provisions, statutes, and administrative regulations de novo.
Cisneros v. Elder, 2022 CO 13M, ¶ 21 (statutes); Gomez v. JP
Trucking, Inc., 2022 CO 21, ¶ 27 (administrative regulations); Colo.
3 Initially Heartland sued CDPHE and CDA. Later, CDA was dismissed and BOCC was added.
9 Dep’t of State v. Unite for Colo., 2024 COA 31, ¶ 26 (constitutional
provisions) (cert. granted Nov. 25, 2024).
¶ 21 We interpret constitutional provisions and administrative
regulations by employing the same rules of statutory construction
as we do for statutes. Unite for Colo., ¶ 26 (constitutional
provisions); Brennan v. Broadmoor Hotel, Inc., 2023 COA 53, ¶ 14
(administrative regulations). Our goal is to give effect to the General
Assembly’s intent. Parker Water & Sanitation Dist. v. Rein, 2024 CO
71M, ¶ 42. We read the statute as a whole, giving harmonious and
sensible effects to all parts, and we presume the General Assembly
intended the entire statute to be effective. Id. If the statute is plain
and unambiguous on its face, we look no further. Town of Vail v.
Vill. Inn Plaza-Phase V Condo. Ass’n, 2021 COA 108, ¶ 11.
¶ 22 Although we are not bound by an agency’s interpretation of
the statute it enforces or its administrative regulations, we will defer
to it if reasonable. Colo. Stormwater Council v. Water Quality Control
Div. of the Colo. Dep’t of Pub. Health & Env’t, 2023 COA 11, ¶ 38.
10 III. Applicable Law
¶ 23 To provide a framework, we will set forth the applicable law for
takings claims and then address CDPHE’s regulation of solid waste
facilities, which it concurrently shares with BOCC.
A. Applicable Law on Regulatory Takings Claims
¶ 24 Article II, section 15 of the Colorado Constitution provides that
“[p]rivate property shall not be taken or damaged, for public or
private use, without just compensation.” “While a landowner is not
entitled to the most beneficial use of his or her land, extensive
regulatory interference warrants compensation.” Animas Valley
Sand & Gravel, Inc. v. Bd. of Cnty. Comm’rs, 38 P.3d 59, 63 (Colo.
2001) (citation omitted). A “taking can be effected by a legal
interference with the physical use, possession, enjoyment, or
disposition of property, or by acts which translate to an exercise of
dominion and control by a governmental entity.” City of Northglenn
v. Grynberg, 846 P.2d 175, 182 (Colo. 1993).
¶ 25 A regulatory taking may be established if “the regulation
imposes a ‘very high’ level of interference.” Forest View Co. v. Town
of Monument, 2020 CO 52, ¶ 22 (quoting Animas Valley Sand &
Gravel, 38 P.3d at 65); see also Rodgers v. Bd. of Cnty. Comm’rs,
11 2013 COA 61, ¶ 18 (A regulatory taking occurs “when a government
deprives a private property owner of the use of land through
application of its laws or regulations.”), rev’d on other grounds, 2015
CO 56. Under the test announced by the U.S. Supreme Court in
Palazzolo, a landowner may prove such a claim “by showing either a
per se taking or a taking under a fact-specific inquiry.” Rodgers, ¶
18; see also Animas Valley Sand & Gravel, 38 P.3d at 65 (adopting
the Palazzolo test).
¶ 26 A per se taking is “with certain qualifications . . . a regulation
which ‘denies all economically beneficial or productive use of land,’”
and which will require compensation under the Takings Clause.
Murr v. Wisconsin, 582 U.S. 383, 393 (2017) (quoting Palazzolo, 533
U.S. at 617).
¶ 27 Absent a per se taking, a property owner may still prove a
regulatory taking under a fact-specific inquiry. Under that inquiry,
a taking occurs if the property “retains more than a de minimis
value but, when its diminished economic value is considered in
connection with other factors, the property effectively has been
taken from its owner.” Rodgers, ¶ 20 (quoting Animas Valley Sand
& Gravel, 38 P.3d at 66). Under this analysis, courts look at
12 scenarios in which “a regulation impedes the use of property
without depriving the owner of all economically beneficial use,” by
considering ‘“a complex [set] of factors,’ including (1) the economic
impact of the regulation on the claimant; (2) the extent to which the
regulation has interfered with distinct investment-backed
expectations; and (3) the character of the governmental action.”
Murr, 582 U.S. at 393 (quoting Palazzolo, 533 U.S. at 617); see
also Town of Dillon v. Yacht Club Condos. Home Owners Ass’n, 2014
CO 37, ¶ 44 (Whether a regulation constitutes a regulatory taking
“focuses on the ‘magnitude of the burden a particular regulation
imposes on private property rights.’” (quoting Lingle v. Chevron
U.S.A. Inc., 544 U.S. 528, 542 (2005))).
¶ 28 Before a court even addresses whether a taking has occurred,
it must first determine whether the individual or entity has a vested
property interest at the time of the alleged taking. See Asmussen v.
United States, 2013 CO 54, ¶ 2; see also Kobobel v. State, Dep’t of
Nat. Res., 249 P.3d 1127, 1134 (Colo. 2011) (plaintiffs had no
protected property interest in the “unfettered use of the water in
their wells,” so the state could not have “taken” their property, and
their takings claims were properly dismissed); Classen v. City &
13 Cnty. of Denver, 30 P.3d 710, 713 (Colo. App. 2000) (holding that
plaintiff property owners had no protected property interest in the
navigable airspace, so there was no compensable physical taking).
¶ 29 A vested property interest may be created by the Colorado or
Federal Constitutions, but such interests may also “be created and
their dimensions defined by other sources such as contracts or
state statutes or rules.” Anderson v. Colo. State Dep’t of Pers., 756
P.2d 969, 976 (Colo. 1988); see also Dove Valley Bus. Park Assocs.,
Ltd. v. Bd. of Cnty. Comm’rs, 945 P.2d 395, 401 (Colo. 1997)
(“Property interests ‘are defined by existing rules or understandings
that stem from an independent source such as state law.’” (quoting
Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161
(1980))); JJR 1, LLC v. Mt. Crested Butte, 160 P.3d 365, 369 (Colo.
App. 2007) (a protected property interest is not limited to tangible
physical property, but also includes a legitimate claim of
entitlement to other circumscribed benefits, which may be derived
from state or municipal legislative enactment).
14 B. Applicable Law Regarding CDPHE and BOCC’s Authority over Solid Waste Facilities
¶ 30 CDPHE is authorized under the Solid Wastes Disposal Sites
and Facilities Act (the Act) to regulate and oversee solid waste
facilities and sites. See §§ 30-20-100.5 to -124, C.R.S. 2024. Any
person or entity owning or operating a solid waste facility “shall first
obtain a certificate of designation from the governing body having
jurisdiction over the area in which such site and facility is located.”
§ 30-20-102(1), C.R.S. 2024. A “[g]overning body having
jurisdiction” is defined as “the board of county commissioners if a
site and facility is located in any unincorporated portion of a county
and means the governing body of the appropriate municipality if a
site and facility is located within an incorporated area.” § 30-20-
101(2.5), C.R.S. 2024.
¶ 31 The person or entity applying for a designation must first
submit an application with the BOCC, and then the application
shall be “referred to [CDPHE] for review and for recommendation as
to approval or disapproval.” § 30-20-103(1), C.R.S. 2024. CDPHE’s
technical review of the application is based on criteria “by the solid
and hazardous waste commission, the water quality control
15 commission, and the air quality control commission.” Id. CDPHE’s
approval of the application is necessary before BOCC may issue the
designation. § 30-20-105(1), C.R.S. 2024. Once issued, the
“certificate shall be displayed in a prominent place at the site and
facility.” Id.
¶ 32 In addition to the designation, a solid waste facility must also
obtain a permit from the BOCC. Besides a permit being necessary
under the Act, Weld County deemed the solid waste facility to be in
an agricultural zone and required a permit “to ensure that [the
facility was] established and operated in a manner that is
compatible with existing and planned land USES in the
NEIGHBORHOOD” and “to protect and promote the health, safety,
convenience and general welfare of the present and future residents
of the COUNTY.” Weld County Zoning Ordinance § 23-2-200(A).
Applicants must comply with the factors identified in the Act, see
§ 30-20-104, C.R.S. 2024, and Weld County Zoning Ordinance
sections 23-1-10, 23-2-200, and 23-2-290.
IV. Jury Trial
¶ 33 Heartland contends that it was entitled to a jury trial for its
regulatory taking claims against CDPHE and BOCC because (1)
16 regulatory takings are different than other takings claims and, thus,
should be decided by a jury; and (2) C.R.C.P. 38 entitles it to a jury
trial as its claims are more legal than equitable. Resolution of the
first issue is dispositive, so we need not address the second.
¶ 34 Heartland requested a jury trial in its initial complaint, which
included two claims for promissory estoppel. As a result, the
parties assumed the case would be tried to a jury. But by the
operative third amended complaint, Heartland’s remaining claims
were limited to regulatory takings claims against CDPHE and
BOCC.
¶ 35 After the district court denied motions for summary judgment,
BOCC and CDPHE requested that the district court decide the
initial question of whether a taking had occurred. If the court
determined liability against defendants, they then agreed that
damages would be decided by a jury. The court agreed and
concluded that the “law is clear that the determination of whether a
taking occurred is a question of law to be decided by the court.”
Article II, section 15 of the Colorado Constitution provides that
[s]uch compensation shall be ascertained by a board of commissioners . . . or by a jury, when required by the owner of the property . . . ; and
17 whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question.
CDPHE and BOCC rely on the constitution’s plain language to
support their assertion that whether a taking occurred is
determined by the courts. But the constitution’s language does not
state this proposition as plainly as they claim. For two other
reasons, we agree that whether a regulatory taking has occurred is
a question reserved for the court’s determination.
¶ 36 First, Colorado courts treat the initial question of whether a
taking has occurred as one decided by the court. Kobobel, 249 P.3d
at 1133 (citing Animas Valley Sand & Gravel, 38 P.3d at 63).
Heartland tries to distinguish this case law as limited to eminent
domain proceedings, which they argue are different from non-
eminent domain regulatory takings. But a closer reading of the
case law suggests otherwise. To place the case law in context,
however, we first address the three types of takings claims: (1)
eminent domain proceedings; (2) inverse condemnation actions; and
(3) regulatory taking claims. See State, Dep’t of Health v. Mill, 809
P.2d 434, 437-38, 440-441 (Colo. 1991) (Mill I).
18 ¶ 37 Colorado eminent domain proceedings are governed by
statute. See §§ 38-1-101 to -107, C.R.S. 2024. Thus, “the General
Assembly must confer [the power of eminent domain] expressly or
by clear implication; ‘it can never be implied from doubtful
language.’” Sos v. Roaring Fork Transp. Auth., 2017 COA 142, ¶ 16
(citations omitted). The eminent domain statute provides that “[a]ll
questions and issues, except the amount of compensation, shall be
determined by the court unless all parties interested in the action
stipulate and agree that the compensation may be so ascertained by
the court.” § 38-1-101(2)(a).
¶ 38 Inverse condemnation proceedings involve a property owner
bringing a claim “when state action has the effect of substantially
depriving the property owner of the use and enjoyment of the
property, but the State has not formally brought condemnation
proceedings.” Kobobel, 249 P.3d at 1133. Eminent domain and
inverse condemnation proceedings are conducted in the same
manner. See Grynberg, 846 P.2d at 178 (“Because an inverse
condemnation action is based on the ‘takings’ clause of our
constitution, it is to be tried as if it were an eminent domain
proceeding.”). A plaintiff may only bring an inverse condemnation
19 proceeding against a state entity who has the power of eminent
domain at the time of the taking. Mill I, 809 P.2d at 437.
¶ 39 Regulatory takings are distinct from eminent domain and
inverse condemnation proceedings because they allow a plaintiff to
sue even when the state entity does not possess the power of
eminent domain. Id. at 440. A regulatory taking claim exists
because “[l]imiting a property owner to an inverse condemnation
action against an agency that does not have the power of eminent
domain would enable the State to take property without paying
compensation, in violation of the United States and Colorado
Constitutions.” Id.
¶ 40 A “central dynamic” of regulatory takings jurisprudence is its
“flexibility” by allowing “ad hoc, factual inquiries, designed to allow
careful examination and weighing of all the relevant
circumstances.” Murr, 582 U.S. at 393-94 (quoting Tahoe-Sierra
Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 322
(2002)). Although “[r]egulatory takings are difficult to define,” Mill I,
809 P.2d at 440, “[t]he determination of whether a regulation goes
‘too far’ . . . is essentially an ‘ad hoc, factual’ inquiry.” Animas
Valley Sand & Gravel, 38 P.3d at 65 (citation omitted)
20 ¶ 41 In State, Department of Health v. Mill, 887 P.2d 993 (Colo.
1994) (Mill II), the supreme court instructed courts on the factors to
consider to determine whether a taking had occurred. In that case,
the court reviewed both regulatory takings and eminent domain
claims brought by the operator of a uranium milling operation
against the Colorado Department of Health. The supreme court
explained that courts should look at several factors that later
became associated with Palazzolo, including “the character of the
governmental action, its economic impact, and its interference with
reasonable investment-backed expectations.” Mill II, 887 P.2d at
999 (quoting Golden Pac. Bancorp v. United States, 15 F.3d 1066,
1072 (Fed. Cir. 1994)). These factors all relate to determining
whether the diminution in a landowner’s property is a regulatory
taking.
¶ 42 In Animas Valley Sand & Gravel, 38 P.3d at 65, the supreme
court analyzed the two-tiered Palazzolo inquiry. The court said that
“[i]f a landowner fails to meet its burden of proving a per se taking,
it can still prove a taking under a fact-specific inquiry.” Id. When
discussing the regulations at issue and their effect on the
economically beneficial uses of the property at issue, the court
21 articulated the necessary fact-specific inquiry that should be
undertaken, stating, “[t]he trial court must determine to what degree
the current restrictions on [landowner’s] property are attributable to
the plan rather than to the accumulated state and federal
regulations of the past several decades,” and “the trial court must
then quantify the resulting diminution in value, if any, of the
property.” Id. at 66 (emphasis added).
¶ 43 As part of the second portion of the inquiry, Animas Valley
Sand & Gravel recognized the ad hoc inquiry that must be
undertaken by the district court, noting, “[e]ach case must be
decided on its own facts.” Id. at 67. It further indicated that “if [the
landowner] is to prevail, it must show that it falls into the rare
category of a landowner whose land has a value slightly greater
than de minimis but, nonetheless, given the totality of the
circumstances, has had its land taken by a government regulation.”
Id.
¶ 44 And there are numerous Colorado regulatory takings cases in
which the court determined the takings question. For example,
Kobobel holds expressly that the taking question is one for the
court. 249 P.3d at 1133 (the plaintiff-well owners alleged that “the
22 State’s cease and desist orders amounted to a regulatory taking of
their properties because” it deprived them “of their vested rights to
use the water in their wells and thereby precluded any economically
beneficial use of their land”); see also Krupp v. Breckenridge
Sanitation Dist., 19 P.3d 687, 695 (Colo. 2001) (plaintiff-landowner
brought an action under C.R.C.P. 106(a)(4) alleging that the special
district’s assessment was an unconstitutional taking of their
property and the court applied the codified regulatory taking
provision for discretionary and adjudicatory land use decisions
under section 29-20-203(1), C.R.S. 2000); Rodgers, ¶¶ 18, 22
(affirming a district court’s order that “no regulatory taking had
occurred because the County’s regulations served a legitimate
purpose, the regulations were reasonably applied to plaintiffs, and
that application did not deny them an economically viable use of
their property”).
¶ 45 Heartland has not cited, nor are we aware of, any Colorado
case holding that a regulatory taking must be decided by a jury
instead of the court.
¶ 46 Second, Heartland’s contention that eminent domain
proceedings are not generally fact-intensive inquiries so as to be
23 decided by the court is undermined by Carousel Farms Metropolitan
District v. Woodcrest Homes, Inc., 2019 CO 51, ¶¶ 17-18. That case
dealt with eminent domain proceedings brought by a district
against a developer. Id. at ¶¶ 8-9. The supreme court concluded
that takings claims are reviewed as “mixed questions of law and
fact” with a district court’s findings of fact reviewed for clear error
and its legal conclusions reviewed de novo. Id. at ¶¶ 17-18. Given
that there may be disputed issues of fact in an eminent domain
proceeding as well, it makes no sense for a regulatory takings claim
to be treated differently; indeed, the court is able to resolve any
factual disputes for a regulatory taking as it does in an eminent
domain proceeding.
¶ 47 And Heartland’s reliance on City of Monterey v. Del Monte
Dunes at Monterey, Ltd., 526 U.S. 687, 721 (1999), to support that
a regulatory takings claim is subject to a jury trial is misplaced. Del
Monte Dunes said that “the issue whether a landowner has been
deprived of all economically viable use of his property is a
predominantly factual question,” and “in actions at law otherwise
within the purview of the Seventh Amendment, this question is for
the jury.” Id. at 720-21 (emphasis added). But the Seventh
24 Amendment does not apply to cases in state court. See id. at 719.
And in Colorado, there is no constitutional right to a jury trial in a
civil action. Mason v. Farm Credit of S. Colo., 2018 CO 46, ¶ 9.
Thus, the supreme court’s federal constitutional holding in Del
Monte Dunes has no bearing on whether the existence of a
regulatory taking is for the court or the jury under state law.
¶ 48 We also disagree that CDPHE and BOCC acted inconsistently
by litigating the case as if liability and damages would be tried
before a jury. When CDPHE asked for a bench trial on the takings
issue near the eve of trial, the court asked the government why it
had not raised this issue earlier. CDPHE said it assumed Heartland
would ask the court for an evidentiary hearing on the liability issue
because the initial inquiry is a question of law. To support its
position, CDPHE provided jury instructions related only to damages
for just compensation and not for liability. We acknowledge that
CDPHE and BOCC should have stated their positions on this matter
sooner with the court. But given the constitutional provision and
the resulting case law, the court’s ruling was correct.
¶ 49 Thus, we conclude the district court did not err by deciding
whether CDPHE’s and BOCC’s actions constituted a taking.
25 V. Heartland’s Takings Claims
¶ 50 Heartland contends that CDPHE’s and BOCC’s actions forced
it to shut down its facility and amounted to regulatory taking of its
(1) Designation and Permit 1704; (2) Registration 9931; and (3)
property improvements. These takings claims presuppose that
Heartland had a protected property interest. But we agree with the
district court that Heartland did not have a protected property
interest because it lacked its own designation.4
A. Heartland’s Designation
¶ 51 Heartland contends that it had a protected property interest in
a designation because (1) when Heartland purchased the facility,
4 A license or permit is generally not considered “property” for
purposes of the Takings Clause, as it is considered a privilege that the government may, at its discretion, take away. See, e.g., Fed. Lands Legal Consortium v. United States, 195 F.3d 1190, 1197 (10th Cir. 1999). But we review the district court’s property interest analysis on the merits because whether the government improperly denied the existence of a valid license or permit that was issued to an entity is distinct from whether the government lawfully suspended or revoked the license. But given our disposition that Heartland lacked a protected property interest, we need not review the district court’s determinations that CDPHE’s and BOCC’s actions did not constitute takings per se or takings under the fact- specific inquiry. See Fasing v. LaFond, 944 P.2d 608, 612 (Colo. App. 1997) (an appellate court may affirm a district court’s judgment on a “narrower basis”).
26 Heartland Renewable’s Designation ran with the land; (2) Heartland
Renewable’s Designation was transferred to Heartland pursuant to
a now-repealed CDPHE regulation, Rule 1.8.4(D), 6 Code Colo.
Regs. 1007-2 (effective until July 14, 2018) (Rule 1.8.4); or (3)
defendants were equitably estopped from denying Heartland had a
designation. We reject all three arguments.
1. The Designation Did Not Run with the Land
¶ 52 In evaluating whether Heartland Renewable’s Designation ran
with the land, the district court reasoned that the Act and case law
supported that a designation is non-transferable; Heartland’s
employees knew the process for a designation had two parts;
Heartland was provided with the opportunity to apply for a
designation but never did; and Heartland was granted, at most, a
privilege if it had its own designation. We conclude the district
court’s analysis is correct for four reasons.
¶ 53 First, as the district court decided, City & County of Denver v.
Eggert, 647 P.2d 216, 221-22 (Colo. 1982), is controlling that such
a designation is non-transferable from property owner to property
owner without prior approval. In that case, the city and its private
contractor did not apply for a new designation on grounds they
27 believed the facility at issue was covered by the city’s existing
designation. Id. at 221. The court held that the facility could
operate under the city’s designation “if pursuant to contract with
Denver and in compliance with the Solid Wastes Act.” Id. at 226.
¶ 54 But for the contractual relationship between the city and the
new operator, the court held that section 30-20-104(1)(c) “implies
that a new certificate is required when there is a change of operator,
because the [county] Commissioners could not consider the ability
of the operator to manage the site absent an application for a new
certificate.” Id. at 226. This is because the county commissioners
and CDPHE must consider whether the applicant can “comply with
the health standards and operating procedures” of the state and
local government. Id. (quoting § 30-20-104(1)(c)). Eggert further
reasoned that the “Solid Wastes Act is in the nature of a licensing
statute which requires the operator of a waste disposal facility to
obtain a certificate” and that, “normally, a certificate to operate a
particular site and facility is personal and nontransferable without
prior approval.” Id.
¶ 55 Heartland did not contract with Heartland Renewable to share
operations; instead Heartland became the new owner and operator,
28 so Eggert’s rule is directly on point. In addition, the language of
section 30-20-104(1)(c) has not changed since Eggert. We are
bound by supreme court precedent, see In re Estate of Ramstetter,
2016 COA 81, ¶ 40, and see no reason why the supreme court
would depart from its interpretation of the Act.
¶ 56 And Heartland’s reliance on Board of County Commissioners v.
Colorado Department of Public Health & Environment, 218 P.3d 336,
338 (Colo. 2009), and Town of Lyons v. Bashor, 867 P.2d 159, 160-
61 (Colo. App. 1993), does not advance its position.
¶ 57 In County Commissioners, 218 P.3d at 338, the supreme court
determined that a county had standing to sue CDPHE when the
regulated entity had not first applied for a designation under the
Act, yet CDPHE had already issued to the regulated entity a license
and permit under the Low-Level Radioactive Waste Act and the
Hazardous Waste Siting Act. The case cites section 30-20-102(1) of
the Act by noting that “[a] [designation] is a land use and zoning
device by which a county selects sites for waste disposal.” Id. at
n.1. But this footnote says nothing about the designation “running
with the land.” And even assuming the footnote could be read in
that way, the supreme court could not decide whether the
29 designation ran with the land because the central dispute in the
case was that the regulated entity had not applied for a designation.
Therefore, the footnote is at most dicta and the case is inapposite.
¶ 58 Lyons, 867 P.2d at 160, is likewise not applicable. There, the
supreme court held that the town could bring an action to enjoin a
current or future zoning violation. But the court held that the town
could not enjoin the sale of the parcel at issue because, although
the lot contained two residences, the property was a prior
nonconforming use before the town adopted its zoning ordinances.
The supreme court held that “the property’s exemption from the
Town’s zoning regulations as a prior nonconforming use runs with
the land.” Id. No one has argued that Heartland’s facility
constituted a “nonconforming use,” or that Permit 1704 constituted
a nonconforming use exempt from BOCC’s regulation.
¶ 59 Second, while there was testimony supporting that BOCC told
Heartland it had a designation, the record supports that Heartland
failed to take steps that could have clarified issues. As relied on by
Heartland, it is true that Permit 1704 included the forty-three
development standards, of which Heartland says that standard
thirty references a facility’s requirement to comply with the
30 designation. And there was testimony that Weld County believed
that the Designation transferred with the land. The district court,
however, concluded with record support that “[Permit 1704] and the
[Designation] are two separate permits with two distinct purposes.”
See also Lambland, Inc. v. Heartland Biogas, LLC, No. 22-1184,
2023 WL 8276140, at *5 n.5 (10th Cir. Nov. 30, 2023) (unpublished
opinion) (determining “[Permit 1704] and [the Designation] are two
separate permits with two distinct purposes”).
¶ 60 And the court noted that Heartland was aware a designation
and permit were two separate requirements. The court concluded
that despite BOCC’s confusion (and to some extent CDPHE’s) as to
whether Heartland had its own designation, “the duty and
responsibility was on Heartland to ensure it had all applicable
permits to own and operate a solid waste site and facility.”
¶ 61 The record supports the court’s legal conclusions. The fact
that Heartland hired attorney Mave Gasaway (Gasaway) to
determine Heartland’s regulatory requirements demonstrates that it
understood that it had the obligation to comply with the law.
Gasaway confirmed that she did not conduct legal research before
advising Heartland that the Designation ran with the land,
31 specifically admitting that she had read neither the Act nor Eggert.
If she had conducted legal research, any misunderstanding or
miscommunication would likely have been clarified. For example,
Gasaway did not ask CDPHE about Heartland Renewable’s
Designation or other legal requirements under the Act.
¶ 62 Additionally, Tom Haren (Haren) — owner of the consulting
firm — acknowledged that BOCC cannot issue a designation unless
CDPHE approves the EDOP. He said, “[T]he County would approve
[the permit], but the County cannot approve a [designation] or a
solid waste site without CDPHE approving it first.” Haren also
acknowledged that he heard Gasaway’s testimony and she agreed
that the Designation and Permit 1704 are “separate permits.” And
he testified that he did not ask any Weld County employees whether
Heartland Renewable’s Designation transferred to Heartland.
¶ 63 Third, Haren’s testimony confirms that BOCC cannot control
the designation process. The Act is unequivocal that BOCC may
not issue a designation without approval from CDPHE. Indeed,
section 30-20-105(1) directs that BOCC “shall not issue a certificate
of designation if the department has recommended disapproval
pursuant to section 30-20-103.” We read the word “shall” as
32 mandatory, so BOCC’s issuance of Permit 1704 is not controlling.
See Colo. Real Est. Comm’n v. Vizzi, 2019 COA 33, ¶ 27 (absent a
clear indication from the General Assembly, courts interpret the
word “shall” to be mandatory, not discretionary).
¶ 64 Finally, Heartland argued that while it did not need to apply
for a new designation because Heartland Renewable’s Designation
ran with the land, any new application was futile because it might
not have been approved by the regulators. The court rejected this
contention, stating, “Heartland’s argument that their application
would not have been authorized falls flat because it was the same
regulators requesting the new application.”
¶ 65 The record supports that CDPHE and BOCC encouraged
Heartland to apply for a designation and that neither government
entity was actively trying to shut down Heartland. Indeed, the fact
that CDPHE and BOCC were asking Heartland to apply for its own
designation supports that its predecessor’s Designation did not run
with the land. Heartland employees acknowledge that those entities
encouraged them to submit an application. Specifically, the
Kreutzer letter said, “[CDPHE] will encourage Heartland Biogas LLC
to apply for a [designation] soon.” And Ralph Daley — vice-
33 president of Heartland’s parent company and the lead development
officer for the facility — was asked, “Isn’t it true that David Kreutzer
encouraged Heartland to apply for its own [Designation]?” He
responded, “The letter did suggest that.”
¶ 66 Instead, Heartland took the position that it did not need to
apply for a designation because it already had one. When asked
why Heartland did not apply for one, Alfred Kurzenhauser — head
of the Heartland facility and of other bioenergy projects for the
parent company — responded, “Well, we — first of all, we didn’t
believe our [Designation] was invalid. We thought it was valid, and
we were advised it was valid.” Jason Thomas — the facility’s plant
manager — also testified that the company did not apply for a
designation because, “Heartland, in its original purchase of the
facility, didn’t need to because it had a [Designation].”
¶ 67 Even if Heartland disagreed with the government entities’
positions, the record does not support that applying for a
designation would have been futile. The court said, “Testimony was
provided that another solid waste facility was also directed to apply
for a new [designation] by Weld County employees which it
34 promptly did.” That other facility received its designation about
four months after application.
¶ 68 More significantly, though, testimony from Joe Schieffelin —
program manager for CDPHE’s solid waste and materials division —
confirmed that the agency viewed Heartland’s lack of a designation
as a “technical administrative violation,” it did not intend to treat
Heartland with a “heavy hand,” it intended to “expedite” the EDOP
approval process so that BOCC could issue a new designation, and
it had no intention to force Heartland to “stop” its operations.
2. CDPHE’s Rule 1.8.4(D) Did Not Permit the Transfer
¶ 69 Heartland contends that Rule 1.8.4(D) authorized the
Designation to transfer to a new owner because Heartland provided
financial assurances to CDPHE and BOCC.
¶ 70 When in effect, Rule 1.8.4(D) provided, “A certificate of
designation may not be transferred to a new owner or operator
unless, as part of the process, the assignment or transfer of the
financial instrument(s) or alternate financial assurance has been
reviewed and approved by the Department and the governing body
having jurisdiction.”
35 ¶ 71 CDPHE testified that the rule is now repealed because it was
determined to be inconsistent with section 30-20-104(1)(c) and
Eggert. See Colo. Consumer Health Initiative v. Colo. Bd. of Health,
240 P.3d 525, 528 (Colo. App. 2010) (An administrative regulation
“may not modify or contravene an existing statute, and any rule
that is inconsistent with or contrary to a statute is void.”).
¶ 72 Regardless, Heartland raised this argument in related
litigation and it was rejected. A purchaser of Heartland’s product
sued Heartland in federal district court on grounds that Heartland
failed to have a designation. In upholding the district court’s
determination that Heartland Renewable’s Designation did not
transfer to Heartland, the Tenth Circuit said, “Rule 1.8.4(D) does
not purport to outline the universe of requirements for transferring
a [designation].” Lambland, Inc., 2023 WL 8276140, at *4. The
court reasoned, “Rather, read in context, Rule 1.8.4(D) is part of a
subsection of rules on ‘Financial Assurance Criteria’ and, by its
terms, Rule 1.8.4(D) speaks only to ‘part of the process’ of transfer
to a new owner or operator.” Id. Regardless of any preclusive effect
of the Tenth Circuit’s holding, we find it persuasive and a
reasonable interpretation of the limited nature of the now-repealed
36 provision of Rule 1.8.4(D). In other words, to the extent Heartland
complied with Rule 1.8.4(D), that compliance did not in itself
transfer Heartland Renewable’s Designation to Heartland.
3. Equitable Estoppel
¶ 73 Finally, Heartland contends defendants were equitably
estopped from denying Heartland has a designation.
¶ 74 Equitable estoppel is a factual question that we review for
clear error. In re Marriage of Kann, 2017 COA 94, ¶ 62.
¶ 75 There are three elements of an equitable estoppel claim as it
relates to the party estopped:
• “[c]onduct which amounts to a false representation or
concealment of material facts, or, at least, which is
calculated to convey the impression that the facts are
otherwise than, and inconsistent with, those which the
party subsequently attempts to assert,” City of Thornton
v. Bijou Irrigation Co., 926 P.2d 1, 76 (Colo. 1996)
(quoting Aubert v. Town of Fruita, 559 P.2d 232, 234
(Colo. 1977));
37 • “intention, or at least expectation, that such conduct
shall be acted upon by the other party, id. (quoting
Aubert, 559 P.2d at 234); and
• “knowledge, actual or constructive, of the real facts,” id.
(quoting Aubert, 559 P.2d at 234).
¶ 76 As the party claiming estoppel, the individual or entity must
prove (1) lack of knowledge and of the means of knowledge of the
truth as to the facts in question; (2) reliance upon the conduct of
the party estopped; and (3) action based thereon of such a
character as to change his position prejudicially. Id. “[F]ailure to
establish any one of the elements of estoppel bars such a claim.”
¶ 77 On the merits, Heartland’s equitable estoppel claim fails
because it did not demonstrate that CDPHE or BOCC
misrepresented facts to it, much less that the government entities
knew those facts to be false at the time any statements were made.
Moreover, “[a]s a general rule, those who deal with the Government
are expected to know the law and may not rely on the conduct of
government agents contrary to the law.” Dep’t of Transp. v. First
Place, LLC, 148 P.3d 261, 267 (Colo. App. 2006) (quoting Emery
38 Mining Corp. v. Sec’y of Lab., 744 F.2d 1411, 1416 (10th Cir. 1984)).
The district court determined that Heartland was responsible for
knowing the laws and regulations related to owning and operating a
solid waste facility. And Heartland could have clarified any
misunderstanding with further steps taken by its legal counsel or
consulting firm.
¶ 78 But Heartland’s equitable estoppel claim fails on a more
fundamental basis as well. Heartland is estopped from raising such
a claim based on the position it took in a previous appeal in this
case. In that appeal, Heartland asserted that its regulatory takings
claims were not a tort, nor could such claims lie in tort and,
therefore, the court had improperly dismissed them because they
were not barred by the Colorado Governmental Immunity Act
(CGIA). See Heartland Biogas, LLC v. Colo. Dep’t of Pub. Health &
Env’t, (Colo. App. No. 19CA0860, Sept. 3, 2020) (not published
pursuant to C.A.R. 35(e)).
¶ 79 The CGIA provides that a “public entity is immune from
liability in all claims for injury that lie in tort or could lie in tort.”
§ 24-10-106(1), C.R.S. 2024. But “[e]quitable estoppel, because it is
based on the misrepresentation of facts, is fundamentally a tort
39 theory. The CGIA is applicable to such claims.” Berg v. State Bd. of
Agric., 919 P.2d 254, 259 (Colo. 1996) (citations omitted).
Heartland cannot now rely on the doctrine of equitable estoppel, as
it would be inconsistent with the position it previously took.
¶ 80 Although the court did not address the CGIA as a basis to
deny Heartland’s equitable estoppel claim, “we may affirm the trial
court’s ruling based on any grounds that are supported by the
record.” Rush Creek Sols., Inc. v. Ute Mountain Ute Tribe, 107 P.3d
402, 406 (Colo. App. 2004).
B. Registration 9931
¶ 81 The court concluded that Heartland needed a BUD from
CDPHE before it could distribute its compost or LSA for land
application. Heartland contends that this conclusion was error
because the court (1) made inconsistent findings by saying that
CDA had exclusive jurisdiction over fertilizer on one hand, and
determining that Heartland needed to obtain a BUD from CDPHE
on the other; and (2) failed to determine whether CDPHE’s actions
constituted a taking of its Registration 9931.
¶ 82 It is true that the district court made findings that CDA had
“exclusive regulatory authority over the liquid digestate,” but it also
40 concluded that, by a preponderance of the evidence, “CDPHE and
CDA are the technical experts in determining whether a compost
(solids) or effluent (liquids) can be suitable for off-site land
application/distribution.” This, however, is not reversible error
given the court was weighing the evidence and resolving conflicting
evidence.
¶ 83 The court said that based on the testimony of Haren and
David Snapp (Snapp) — CDPHE’s lead person at the relevant time
to handle BUDs — a BUD was required prior to land application of
the LSA as well as the solid compost. The court did not specifically
make findings that these witnesses were credible, but we conclude
that a credibility determination is implicit in the court’s ruling.
Indeed, there was conflicting evidence about the March 2013
meeting as to whether CDPHE ceded all authority to CDA for
regulation of Heartland Renewable’s compost and LSA or whether
CDPHE deferred making a determination as to how those products
might be regulated once the facility was operational. In this regard,
because there was conflicting evidence, the trier of fact had to weigh
the evidence and make credibility determinations to come to its
findings. See People in Interest of A.M. v. T.M., 2021 CO 14, ¶ 15.
41 Even if this meeting occurred before Heartland acquired ownership,
the record supports that CDPHE told Heartland that it needed a
BUD for its LSA.
¶ 84 Snapp explained his takeaway from the March 2013 meeting
and his following interactions with Heartland through 2013:
• He attended the March 2013 meeting even though he was not
listed on the agenda, as a coworker came by asking him to join
at the last minute because BUDs were to be discussed.
• The portion of the facility dealing with the liquid digestate was
not yet operational so CDPHE would not have made a
determination to relinquish regulatory oversight solely to CDA
until it had more information about the product.
• The 2013 EDOP included a placeholder for Heartland and
AGEnergy to later seek a BUD for the LSA and compost so that
CDPHE would approve it.
• CDPHE was concerned with the over-application of the LSA
because of its liquid form and because it might contaminate
groundwater, which were different concerns not generally
present with other composting products.
42 • Even if other sections of CDPHE were responsible for review of
certain regulatory acts by the facility’s operations (e.g., the
Water Quality and Control Division), Snapp handled all
CDPHE BUD determinations.
• Snapp distinctly remembered telling Heartland Renewable that
“they would need to either get a discharge permit or a [BUD].”
• From January 2013 to September 2016, Snapp testified that
CDPHE told Heartland or its consultants eight or nine times
that it had to obtain a BUD before land application of its
effluent.
• Snapp explained the “dual track” regulation of LSA between
CDPHE and CDA, saying, “[CDPHE] regulate[s] everything that
goes in and out of a solid waste facility, and CDA regulates
products.”
• After receiving additional information and test samples from
Heartland, CDPHE conditionally approved a BUD for
Heartland’s LSA in January 2017.
Because there is record support that CDA and CDPHE regulate
different aspects of LSA and CDPHE repeatedly told Heartland it
would need a BUD regardless of Registration 9931, the district
43 court’s findings are not clearly erroneous. Levine, 192 P.3d at
1012.
¶ 85 And based on the court’s determination that only CDA has
authority to revoke or suspend Registration 9931, and a CDA
representative testified that no regulatory action was taken against
Heartland’s Registration 9931, CDPHE or BOCC could not have
“taken” that property interest. It is true that BOCC ordered
Heartland to stop distributing its LSA until it complied with
CDPHE’s BUD process. But the record supports that once CDPHE
received the requested information from Heartland, Snapp provided
conditional approval within a day. Therefore, implicit in the court’s
findings, CDPHE’s or BOCC’s actions did not constitute a regulatory
taking of Registration 9931 because (1) Heartland was not in
compliance with CDPHE regulations; (2) BOCC simply followed
CDPHE’s regulations; (3) Heartland admitted to putting chlorine in
the ponds that stored the digestate liquid (one of CDPHE’s
concerns); and (4) CDPHE ultimately provided BUD approval once
Heartland provided the “lab data from a representative sample of
the LSA to show suitability for intended beneficial uses and an
ongoing sampling plan to be land applied.” See In re Marriage of
44 Nelson, 2012 COA 205, ¶ 41 (although the district court made no
express findings that retroactive application of its ruling would not
create financial hardship for husband, district court’s other findings
support the “apparent conclusion”); Foster v. Phillips, 6 P.3d 791,
796 (Colo. App. 1999) (although it is a better practice for a district
court to make express findings, they may be implicit in the court’s
ruling).
C. Heartland’s Land and Property Improvements
¶ 86 Heartland contends that the court completely ignored its
undisputed protected property interest in its land and property
improvements. Although not specifically addressed by the court, we
conclude the court’s judgment implicitly rejected this claim. Rush
Creek Sols., 107 P.3d at 406.
¶ 87 The district court’s order said that Animas Sand & Gravel
directed that the “appropriate focus of a takings inquiry” involves
“the property rights as an aggregate,” meaning that “where an
owner possesses a full ‘bundle’ of property rights, the destruction of
one ‘strand’ of the bundle is not a taking, because the aggregate
must be viewed in its entirety.” Animas Valley Sand & Gravel, 38
P.3d at 68 (quoting Andrus v. Allard, 444 U.S. 51, 65-66 (1979)).
45 ¶ 88 Because Heartland is not entitled to the “most beneficial use
of” its land, see id. at 63, we cannot say the court committed
reversible error. Heartland does not allege that it could not, before
it sold the facility, use the land for another commercially viable
purpose; it had, as discussed above, the opportunity to apply for its
own designation; and it could have used the facility to manufacture
compost (digested solids) while it worked to comply with the
applicable regulations for its LSA.
VI. BOCC Police Powers
¶ 89 Heartland contends that the district court’s findings that
BOCC properly exercised its police powers lacks evidentiary
support. It contends that (1) BOCC and CDPHE did not give it
sufficient time to apply for a designation; (2) because Heartland was
not in violation of local odor ordinances, the record lacks
evidentiary support for the valid exercise of BOCC’s police power; (3)
even if BOCC’s use of its police power was reasonable, its actions
could still constitute a regulatory taking; and (4) the district court
erred by allowing additional witnesses to testify for CDPHE and
BOCC when Heartland did not have time to conduct discovery.
46 ¶ 90 Because Heartland lacked a protected property interest in a
designation, there was no regulatory taking regardless of whether
BOCC validly exercised its police power. And because Heartland
did not raise a separate due process challenge against CDPHE or
BOCC, we need not review Heartland’s additional contentions. See
Fasing v. LaFond, 944 P.2d 608, 612 (Colo. App. 1997).
VII. Conclusion
¶ 91 We affirm the district court’s judgment.
JUDGE FOX and JUDGE SCHOCK concur.
Related
Cite This Page — Counsel Stack
Heartland v. CDPHE, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heartland-v-cdphe-coloctapp-2025.