Martinez v. Colorado Oil and Gas Conservation Commission

COLORADO COURT OF APPEALS 2017COA37
Court of Appeals No. 16CA0564
City and County of Denver District Court No. 14CV32637
Honorable J. Eric Elliff, Judge
Xiuhtezcatl Martinez, Itzcuahtli Roske-Martinez, Sonora Brinkley, Aerielle
Deering, Trinity Carter, and Emma Bray, minors appearing by and through
their legal guardians Tamara Roske, Bindi Brinkley, Eleni Deering, Jasmine
Jones, Robin Ruston, and Diana Bray,
Plaintiffs-Appellants,
v.
Colorado Oil and Gas Conservation Commission,
Defendant-Appellee,
and
American Petroleum Institute and Colorado Petroleum Association,
Intervenors-Appellees.
JUDGMENT REVERSED AND CASE
REMANDED WITH DIRECTIONS
Division V
Opinion by JUDGE FOX
Vogt*, J., concurs
Booras, J., dissents
Announced March 23, 2017
Colorado Environmental Law, LTD., Katherine Marlin, Boulder, Colorado;
Minddrive Legal Services, LLC, James Daniel Leftwich, Boulder, Colorado; Wild
Earth Advocates, Julia Olson, Eugene, Oregon; for Plaintiffs-Appellants
Cynthia H. Coffman, Attorney General, Jake Matter, Senior Assistant Attorney
General, Brittany K. Beckstead, Assistant Attorney General, Denver, Colorado,
for Defendant-Appellee
Ryley Carlock & Applewhite, Richard C. Kaufman, Julie A. Rosen, Matthew K.
Tieslau, Denver, Colorado, for Intervenors-Appellees
Western Environmental Law Center, Kyle Tisdel, Taos, New Mexico, for Amici
Curiae Colorado Chapter Global Catholic Climate Movement, 350 Colorado,
Eco-Justice Ministries, Denver Catholic Network and Global Climate
Movement, The Rocky Mountain Peace and Justice Center, Wall of Women
Colorado, Colorado People’s Alliance, Citizens for a Healthy Fort Collins,
Transition Fort Collins, The Fort Collins Sustainability Group, Citizens for a
Healthy Community, Be the Change, The Colorado Coalition for a Livable
Climate, Clean Energy Action, The Climate Culture Collaborative, Co-Op
Members Alliance, The Community for Sustainable Energy, Eco Elders, Vibrant
Planet, EnergyShouldBe.org, Frack Free Colorado, Lakewood Renewable
Energy Lakewood, North Metro Neighbors for Safe Energy, and Protect Our
Loveland
Cynthia H. Coffman, Attorney General, Claybourne F. Clarke, Senior Assistant
Attorney General, Laura Terlisner Mehew, Benjamin Saver, Assistant Attorneys
General, Denver, Colorado, for Amicus Curiae Colorado Department of Public
Health and Environment
Kevin Lynch, Timothy Estep, Denver, Colorado, for Amici Curiae Our Health,
Our Future, Our Longmont; Sierra Club; Earthworks; and Food & Water Watch
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2016.
¶1 Through their legal guardians, Xiuhtezcatl Martinez, Itzcuahtli
Roske-Martinez, Sonora Brinkley, Aerielle Deering, Trinity Carter,
and Emma Bray (collectively Petitioners), who reside and recreate in
Colorado, appeal the district court’s order and final judgment
affirming a decision of the Colorado Oil and Gas Conservation
Commission (the Commission) denying Petitioners’ rulemaking
petition. The American Petroleum Institute and the Colorado
Petroleum Association (collectively Intervenors) intervened in the
district court and filed an appellate brief supporting the district
court’s order. Additionally, on appeal, twenty-nine agencies and
interest groups join as amici curiae, collectively filing three amici
briefs.1
1The Colorado Department of Public Health and Environment filed
an amicus brief in support of the Commission. Colorado Chapter
Global Catholic Climate Movement, 350 Colorado, Eco-Justice
Ministries, Denver Catholic Network and Global Climate Movement,
The Rocky Mountain Peace and Justice Center, Wall of Women
Colorado, Colorado People’s Alliance, Citizens for a Healthy Fort
Collins, Transition Fort Collins, The Fort Collins Sustainability
Group, Citizens for a Healthy Community, Be the Change, The
Colorado Coalition for a Livable Climate, Clean Energy Action, The
Climate Culture Collaborative, Co-Op Members Alliance, The
Community for Sustainable Energy, Eco Elders, Vibrant Planet,
EnergyShouldBe.org, Frack Free Colorado, Lakewood Renewable
Energy Lakewood, North Metro Neighbors for Safe Energy, and
1
¶2 This appeal concerns the scope of authority and obligation
delegated to the Commission by the General Assembly in the Oil
and Gas Conservation Act (the Act), §§ 34-60-101 to -130, C.R.S.
2016, to regulate oil and gas production in the interests of public
health and safety. The district court affirmed the Commission’s
order after concluding that the Commission lacked authority to
consider a proposed rule that would require it to readjust the Act’s
balance between the development of oil and gas resources and
protection of public health, safety, and welfare. Because we agree
with Petitioners that this conclusion was erroneous, we reverse the
judgment of the district court and the decision of the Commission
and remand to the district court to return the case to the
Commission for further proceedings consistent with this opinion.
I. Background
¶3 Hydraulic fracturing (fracking) is a modern process used to
stimulate oil and gas production from an existing well by injecting
water mixed with other chemicals and materials which cause, and
Protect Our Loveland joined and filed an amici brief in support of
Petitioners. Our Health, Our Future, Our Longmont; Sierra Club;
Earthworks; and Food & Water Watch joined and filed a separate
amici brief in support of Petitioners.
2
hold open, fractures in a well bore allowing oil and gas to flow to the
well bore via the newly created fractures. City of Longmont v. Colo.
Oil & Gas Ass’n, 2016 CO 29, ¶ 1.
¶4 The Commission is charged with generally regulating oil and
gas resource production in Colorado. See § 34-60-105, C.R.S.
2016; § 34-60-106, C.R.S. 2016.
¶5 On November 15, 2013, Petitioners filed a petition for
rulemaking pursuant to the Commission’s Rule 529(b). See Dep’t of
Nat. Res. Reg. 529, 2 Code Colo. Regs. 404-1. Petitioners proposed
a rule requesting that the Commission
not issue any permits for the drilling of a well
for oil and gas unless the best available
science demonstrates, and an independent,
third party organization confirms, that drilling
can occur in a manner that does not
cumulatively, with other actions, impair
Colorado’s atmosphere, water, wildlife, and
land resources, does not adversely impact
human health and does not contribute to
climate change.
¶6 The Commission solicited and received written stakeholder
comments and held a hearing, on April 28, 2014, where parties
favoring and opposing the proposed rule testified.
3
¶7 The Commission ultimately denied the petition, concluding
that (1) the proposed rule mandated action that was beyond the
limited statutory authority delegated by the General Assembly in
the Act; (2) review by a third party — as Petitioners requested —
contradicted the Commission’s nondelegable duty to promulgate
rules under section 34-60-106(11)(a)(II) and is contrary to the Act;
and (3) the public trust doctrine, which Petitioners relied on to
support their request, has been expressly rejected in Colorado.2
¶8 The Commission also concluded that “the Commission and the
Colorado Department of Public Health and the Environment
(CDPHE) are currently addressing many of the Petitioners’ concerns
through more gradual changes in regulation within their relative
2 In 2016, in City of Longmont v. Colorado Oil and Gas Association,
2016 CO 29, the Colorado Supreme Court rejected the adoption of
the public trust doctrine in Colorado in its more general rejection of
a local moratorium on fracking which the court concluded was
preempted by state law. Id. at ¶ 62. Petitioners initially urged the
Commission to adopt the public trust doctrine in their petition for
rulemaking but do not reassert their public trust doctrine argument
on appeal, nor do they contest the Commission’s conclusion as it
narrowly relates to the public trust doctrine in Colorado. We
therefore need not address the arguments of the Commission and
Intervenors that Petitioners’ justifications for the proposed rule,
under the public trust doctrine, were not valid. See Giuliani v.
Jefferson Cty. Bd. of Cty. Comm’rs, 2012 COA 190, ¶ 52 (claim
raised in complaint but not further litigated was abandoned).
4
jurisdictions.” In reaching its conclusions, the Commission largely
relied on a memo from the Colorado Attorney General’s Office which
advised that the Commission lacked jurisdiction to adopt the
proposed rule as written, and that there is no statutory basis to
withhold drilling permits pending the Petitioners’ proposed impact
reviews.3
¶9 On July 3, 2014, Petitioners appealed the Commission’s
decision to the district court pursuant to the State Administrative
Procedure Act, § 24-4-106, C.R.S. 2016. The parties filed briefs and
Petitioners requested oral argument.
¶ 10 The district court, ruling on the briefs, applied the two-part
test from Chevron, U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984), and concluded that the Act’s language is
clear and unambiguous and requires a balance between the
development of oil and gas resources and protecting public health,
safety, and welfare. The district court further concluded that the
Commission did not act arbitrarily or capriciously in relying on the
advice of the Attorney General’s Office, and that it rationally decided
3 By relying on the memo, the Commission waived any attorney-
client privilege in the memo.
5
to deny the petition after considering input from stakeholders on
both sides of the fracking issue. Thus, the district court affirmed
the Commission.
II. The Commission’s Duty Under the Act
¶ 11 Petitioners contend that the district court and the Commission
erred in interpreting the Act. We agree.
A. Preservation and Standard of Review
¶ 12 The parties agree that Petitioners preserved their argument for
appeal.
¶ 13 We may overturn an administrative agency’s determination
only if we conclude that the agency (1) acted arbitrarily or
capriciously; (2) made a determination that is not supported by the
record; (3) erroneously interpreted the law; or (4) exceeded its
constitutional or statutory authority. Sapp v. El Paso Cty. Dep’t of
Human Servs., 181 P.3d 1179, 1182 (Colo. App. 2008). The district
court exercises no factfinding authority in its review of an agency
decision and is in the same position as this court, so we engage in
the same type of record review as did the district court. Id.¶ 14 We review statutory construction de novo. Archuletta v. Indus.
Claim Appeals Office, 2016 COA 66, ¶ 11. While we defer to an
6
agency’s policy determinations in rulemaking proceedings, that
deference does not extend to “questions of law such as the extent to
which rules and regulations are supported by statutory authority.”
Simpson v. Cotton Creek Circles, LLC, 181 P.3d 252, 261 (Colo.
2008). Under Chevron, the first step in reviewing an agency’s
interpretation of a statute involves using traditional tools of
statutory construction to determine whether the language of the
statute is clear and whether the legislature has spoken directly to
the question at issue. 467 U.S. at 842-43. We begin interpreting a
statute by looking to the plain and ordinary meaning of the
language. Robinson v. Legro, 2014 CO 40, ¶ 14. We “read and
consider the statutory scheme as a whole to give consistent,
harmonious and sensible effect to all its parts.” Id. (citation
omitted). We presume the legislature intended the entire statute to
be effective and avoid constructions that would render any part
meaningless. Id. “When we interpret a comprehensive legislative
scheme, we must give meaning to all portions thereof and construe
the statutory provisions to further the legislative intent.” Droste v.
Bd. of Cty. Comm’rs, 159 P.3d 601, 605 (Colo. 2007). If the
7
statutory intent is plain and unambiguous, our inquiry ends there.
See Chevron, 467 U.S. at 842-43.
B. Law
¶ 15 The Commission is a creature of state statute and has only the
powers conferred on it by the Act. Chase v. Colo. Oil & Gas
Conservation Comm’n, 2012 COA 94, ¶ 26. The Act grants the
Commission broad jurisdiction and empowers it to “make and
enforce rules, regulations, and orders” and “to do whatever may
reasonably be necessary” to carry out the provisions of the Act. Id.(quoting § 34-60-105(1)). Pursuant to the Act, the Commission is
authorized to regulate “the drilling, producing, and plugging of wells
and all other operations for the production of oil and gas.”
§ 34-60-106(2)(a).
¶ 16 Significantly here, the General Assembly declares that it is in
the public interest to
[f]oster the responsible, balanced development,
production, and utilization of the natural
resources of oil and gas in the state of
Colorado in a manner consistent with
protection of public health, safety, and welfare,
including protection of the environment and
wildlife resources.
§ 34-60-102(1)(a)(I), C.R.S. 2016 (emphasis added).
8
C. Analysis
¶ 17 The Commission interpreted section 34-60-102(1)(a)(I) as
requiring a balance between oil and gas production and public
health, safety, and welfare. The Commission concluded that
Petitioners’ suggested interpretation would “have required the
Commission to readjust the balance crafted by the General
Assembly under the Act, and is therefore beyond the Commission’s
limited grant of statutory authority.”
¶ 18 Petitioners argue that the Commission’s interpretation renders
the phrase “in a manner consistent with protection of public health,
safety, and welfare” in section 34-60-102(1)(a)(I) superfluous.
Petitioners further contend that the balance sought by the General
Assembly in section 34-60-102(1)(a)(I) applies to the development,
production, and utilization of oil and gas resources, which must be
authorized in a balanced manner — meaning without causing waste
— and subject to adequate consideration of public health, safety,
and environmental and wildlife impacts. Petitioners maintain that
the Commission incorrectly interpreted the plain language of
section 34-60-102(1)(a)(I) and, in doing so, erred in denying their
petition for rulemaking.
9
¶ 19 We agree with Petitioners, the Commission, and the district
court that the language of section 34-60-102(1)(a)(I) is clear and
unambiguous, but we conclude that it unambiguously supports a
conclusion different from that reached by the Commission and the
district court. The Act clearly states that fostering “responsible,
balanced development, production, and utilization of the natural
resources” is in the public interest. § 34-60-102(1)(a)(I). Then, the
Act qualifies itself by adding the key phrase “in a manner consistent
with” the protection of public health and other related concerns.
Id.; see also City of Jefferson City v. Cingular Wireless, LLC, 531
F.3d 595, 611 (8th Cir. 2008) (the fact that parties disagree about
what a statute means does not itself create ambiguity).
¶ 20 Contrary to the Commission’s conclusion, the use, in section
34-60-102(1)(a)(I), of the term “balanced” relates to and modifies
“development, production, and utilization.” As used in the plain
text, “balanced” is an adjective which modifies the nouns
“development, production, and utilization.” See § 34-60-102(1)(a)(I);
see also Double D Manor, Inc. v. Evergreen Meadows Homeowners’
Ass’n, 773 P.2d 1046, 1048 (Colo. 1989) (an adjective modifies a
noun that follows it). The remaining provisions in section
10
34-60-102(1)(a)(I) are not affected by the term “balanced.”4 Instead,
the statutory language provides that fostering balanced
development is in the public interest when that balanced
development is completed “in a manner consistent with” public
health, safety, and environmental and wildlife impacts.
§ 34-60-102(1)(a)(I); see also Gerrity Oil & Gas Corp. v. Magness,
946 P.2d 913, 925 (Colo. 1997) (recognizing that the Act’s purposes
are “to encourage the production of oil and gas in a manner that
protects public health and safety and prevents waste”).
¶ 21 Critical here is the proper interpretation of the phrase “in a
manner consistent with.” We agree with Petitioners that “in a
manner consistent with” does not indicate a balancing test but
rather a condition that must be fulfilled. This interpretation is
supported by similar interpretations from our supreme court as well
4 This is demonstrated by the historical importance of the General
Assembly qualifying “development, production, and utilization” with
the adjective “balanced.” As further explained below, in our
discussion of the Act’s legislative evolution, the General Assembly
sought balanced development, production, and utilization to curb
unnecessary waste and to preserve the correlative rights of other
potential users of natural resources such as oil and gas.
11
as the commonly understood use of the phrase as evidenced by its
general use in statutes and judicial opinions.
¶ 22 The Colorado Supreme Court, when asked to interpret certain
provisions of the Local Government Land Use Control Enabling Act
of 1974, § 29-20-102, C.R.S. 2016, explicitly and clearly interpreted
the phrase “in a manner consistent with” as meaning “subject to.”
See Droste, 159 P.3d at 606. There, the court interpreted the
statutory phrase “in a manner consistent with constitutional rights”
as meaning “subject to the constitutional rights of the property
owner[.]” Id. This interpretation supports our conclusion that the
language of the Act does not create a balancing test weighing safety
and public health interests against development of oil and gas
resources, but rather, the Act indicates that fostering balanced,
nonwasteful development is in the public interest when that
development is completed subject to the protection of public health,
safety, and welfare, including protection of the environment and
wildlife resources. See § 34-60-102(1)(a)(I).
¶ 23 Interpreting the phrase “in a manner consistent with” as
a balancing test disregards the plain meaning of the phrase. The
phrase denotes more than a mere balancing. Cases in Colorado are
12
replete with instances where the phrase is used to denote “subject
to” rather than “balanced with.” See, e.g., People v. Baez-Lopez,
2014 CO 26, ¶ 28 (“[W]e conclude that the recordings were
physically sealed and preserved in a manner consistent with section
16-15-102(8)(a).”); In re Great Outdoors Colo. Tr. Fund, 913 P.2d
533, 539 (Colo. 1996) (“In enacting legislation, the General
Assembly is authorized to resolve ambiguities in constitutional
amendments in a manner consistent with the terms and underlying
purposes of the constitutional provisions.”); Stan Clauson Assocs.,
Inc. v. Coleman Bros. Constr., LLC, 2013 COA 7, ¶ 10 (“Professional
standards of care reflect the policy that members of professions
must do their work not just reasonably well, but rather ‘in a
manner consistent with members of the profession in good
standing.’” (quoting Command Commc’ns, Inc. v. Fritz Cos., 36 P.3d
182, 189 (Colo. App. 2001))).
¶ 24 The phrase is often used in the dispositional language of
opinions from this court and other appellate courts. Divisions of
this court, when remanding a case to a district court for further
proceedings, often use language similar to “the case is remanded for
proceedings in a manner consistent with this opinion.” See
13
Vashone-Caruso v. Suthers, 29 P.3d 339, 345 (Colo. App. 2001); 1st
Am. Sav. Bank v. Boulder Cty. Bd. of Comm’rs, 888 P.2d 360, 363
(Colo. App. 1994). The intention of the phrase “in a manner
consistent with” in these settings is not to instruct a court on
remand to take action in a manner “balanced with” the opinion
from the appellate court, but instead instructs that the court on
remand must take action subject to the appellate opinion.
¶ 25 As used in the Act, the phrase qualifies the preceding
provision, promoting the development of oil and gas. See
§ 34-60-102(1)(a)(I). We therefore conclude that the Commission
erred in interpreting section 34-60-102(1)(a)(I) as requiring a
balance between development and public health, safety, and
welfare. The plain meaning of the statutory language indicates that
fostering balanced, nonwasteful development is in the public
interest when that development is completed subject to the
protection of public health, safety, and welfare. See
14
§ 34-60-102(1)(a)(I); see also Gerrity Oil & Gas Corp., 946 P.2d at
925.5
¶ 26 Our interpretation also gives meaning to all of the words in the
statute, whereas the Commission’s interpretation effectively
disregarded the phrase “in a manner consistent with.” See Legro,
¶ 14 (we avoid statutory constructions that would render any part
of a statute meaningless).
¶ 27 We disagree with the Commission and its amici that other
sections of the Act support a contrary interpretation. The
Commission argues that the language of section 34-60-106(2)(d) —
stating that the Commission has the authority to regulate “[o]il and
5 Moreover, the Colorado Revised Statutes contain many examples
of instances where the General Assembly has articulated clear
intent that a balancing test be employed, and such language is not
contained in the Act. See, e.g., § 24-91-101(2), C.R.S. 2016
(“[T]here is a substantial statewide interest in ensuring that the
policy underlying the efficient expenditure of public moneys is
balanced with the policy of fostering a healthy and viable
construction industry.”); § 6-1-902(1)(c), C.R.S. 2016 (“Individuals’
privacy rights and commercial freedom of speech should be
balanced in a way that accommodates both the privacy of
individuals and legitimate telemarketing practices[.]”). Had the
General Assembly intended for a balancing test to be applied in
section 34-60-102(1)(a)(I), C.R.S. 2016, it would have explicitly said
so. See Showpiece Homes Corp. v. Assurance Co. of Am., 38 P.3d
47, 57 (Colo. 2001).
15
gas operations so as to prevent and mitigate significant adverse
environmental impacts . . . to the extent necessary to protect public
health, safety, and welfare . . . taking into consideration
cost-effectiveness and technical feasibility[]” — demonstrates that
the Act calls for the balance that the Commission read into the
language of section 34-60-102. However, section 34-60-106(2)(d)
supports the conclusion that the Commission has authority to
promulgate rules regulating oil and gas development in the interest
of protecting public health, safety, and welfare. See § 34-60-
106(2)(d). The General Assembly’s use of the phrase “to the extent
necessary to protect public health, safety, and welfare,” when
describing the purpose of regulation, evidences a similar intent to
elevate the importance of public health, safety, and welfare above a
mere balancing — the same as what the General Assembly wrote
into section 34-60-102.6 Section 34-60-106(2)(d) in no way
conflicts with our interpretation of section 34-60-102.
6 The statutory language “to the extent necessary” evidences the
General Assembly’s intent to create a mandatory condition rather
than a factor in a general balancing inquiry. See, e.g., Calderon v.
Am. Family Mut. Ins. Co., 2016 CO 72, ¶ 53 (insurance statutes
intended that benefit be provided “to the extent necessary” for full
16
¶ 28 Our conclusion is further supported by the evolution of the
General Assembly’s regulation of the oil and gas industry in
Colorado and its numerous alterations to the language of the Act.
Originally, the Act contained no qualifying language regarding
responsible, balanced development, or the protection of public
health and the environment. See Ch. 208, sec. 10, § 100-6-22,
1955 Colo. Sess. Laws 657. For decades, the Act read: “It is hereby
declared to be in the public interest to foster, encourage and
promote the development, production and utilization of the natural
resources of oil and gas in the state of Colorado[.]” Id.¶ 29 In 1994 the General Assembly added the language “in a
manner consistent with protection of public health, safety, and
welfare[.]” Ch. 317, sec. 2, § 34-60-102, 1994 Colo. Sess. Laws
1978. Then, in 2007, the General Assembly completed the Act as it
reads today by amending and adding language so that the statute
read: “It is declared to be in the public interest to foster . . .
compensation) (citing Kral v. Am. Hardware Mut. Ins. Co., 784 P.2d
759, 765 (Colo. 1989)); People in Interest of G.S., 820 P.2d 1178,
1180 (Colo. App. 1991) (a guardian ad litem has the affirmative
duty to participate in proceedings “to the extent necessary” to
represent the child).
17
responsible, balanced [resource] development[.]” Ch. 320, sec. 1,
§ 34-60-102, 2007 Colo. Sess. Laws 1357.
¶ 30 These amendments reflect the General Assembly’s general
movement away from unfettered oil and gas production and
incorporation of public health, safety, and welfare as a check on
that development. This understanding supports our conclusion
that the Act was not intended to require that a balancing test be
applied when agencies charged with carrying out and enforcing the
intent behind the Act, like the Commission, make decisions on
regulation, including a decision denying a petition for a proposed
rule. Rather, the clear language of the Act — supported by the Act’s
legislative evolution and the Commission’s own enforcement criteria
— mandates that the development of oil and gas in Colorado be
regulated subject to the protection of public health, safety, and
welfare, including protection of the environment and wildlife
resources. See Oil & Gas Conservation Comm’n, Colorado Oil and
Gas Conservation Commission Enforcement Guidance and Penalty
Policy 1 (Jan. 2015), https://perma.cc/39RU-99MF (“In Colorado
. . . the development of . . . natural resources must be consistent
with protection of public health, safety, and welfare, including the
18
environment and wildlife resources, at all times[.]”); see also § 34-
60-106(2)(d).
¶ 31 Because we conclude that the district court and the
Commission erroneously interpreted the Act, we reverse. Nixon v.
City & Cty. of Denver, 2014 COA 172, ¶ 12 (an agency abuses its
discretion when it erroneously interprets the law). The record
indicates that the Commission based its denial of the petition for
rulemaking primarily on its determination that it lacked authority
to implement Petitioners’ proposed rule. The administrative record
does not contain sufficient findings of fact for us to affirm the
Commission’s decision on alternative grounds — such as the
Commission’s statement that “there are other Commission priorities
that must take precedence over the proposed rulemaking at this
time,” or the Commission’s reference to the proposed rule’s
impermissible delegation of Commission duties to a third party (an
issue not addressed by the district court or briefed on appeal to this
court). See Chase, ¶ 59 (remand proper when record contains
insufficient basis for agency conclusions).
¶ 32 Our decision does not address the merits of whether the
Commission should adopt Petitioners’ proposed rule. Our review is
19
limited to the Commission’s rejection of Petitioners’ proposed rule
based on the Commission’s determination that such action would
exceed its statutory authority under the Act — which is legally
incorrect. See, e.g., United States v. Allegheny-Ludlum Steel Corp.,
406 U.S. 742, 749 (1972) (Courts do not “inquire into the wisdom of
the regulations” that a commission promulgates but, instead,
inquire into “the soundness of the reasoning by which [a]
[c]ommission reaches its conclusions.”).
¶ 33 The Commission argues that under Massachusetts v.
Environmental Protection Agency, 549 U.S. 497, 527-28 (2007),
judicial review of denials of rulemaking petitions is limited and
deferential. True, but a denial of a rulemaking petition remains
properly the subject of judicial review. See id.; Am. Horse Prot.
Ass’n, Inc. v. Lyng, 812 F.2d 1, 4 (D.C. Cir. 1987) (agency refusals
to institute rulemaking proceedings are subject to judicial review).
Unlike in Massachusetts v. Environmental Protection Agency, where
the Supreme Court concluded, on the merits, that the
Environmental Protection Agency’s refusal to promulgate a
proposed rule was an abuse of discretion, 549 U.S. at 528, 534, our
decision does not reach the merits of whether the Commission
20
abused its discretion in refusing to promulgate Petitioners’
proposed rule. Instead, our decision only addresses the
Commission’s interpretation of its authority under the Act as a part
of its denial of the petition for rulemaking, which we conclude is
incorrect. See Allegheny-Ludlum, 406 U.S. at 749.
III. Constitutional Contentions
¶ 34 Petitioners contend that the Commission’s interpretation of
the Act is an unconstitutional infringement of Petitioners’ natural
rights to enjoy their lives and liberties, protect their property, and
obtain their safety and happiness. Colo. Const. art. II, § 3.
¶ 35 Because we conclude that the Commission erred in its
interpretation of the Act and reverse, we need not address
Petitioners’ constitutional arguments. See City of Florence v.
Pepper, 145 P.3d 654, 660 (Colo. 2006) (“Where possible, we avoid a
constitutional analysis in favor of a statutory resolution.”); Club
Matrix, LLC v. Nassi, 284 P.3d 93, 99 (Colo. App. 2011) (we need not
address additional arguments rendered moot by our ultimate
disposition).
21
IV. Conclusion
¶ 36 The Commission’s order denying Petitioners’ petition for
rulemaking and the district court’s order on appeal are reversed,
and the case is remanded to the district court to return it to the
Commission for further proceedings consistent with this opinion.
JUDGE VOGT concurs.
JUDGE BOORAS dissents.
22
JUDGE BOORAS, dissenting.
¶ 37 I disagree with the majority’s interpretation of the phrase “in a
manner consistent with” and its reliance on a legislative declaration
to find a mandatory duty. Therefore, I respectfully dissent from the
majority’s conclusion that the statutory scheme of the Oil and Gas
Conservation Act (the Act), §§ 34-60-101 to -130, C.R.S. 2016,
requires protection of public health, safety, and welfare as a
determinative factor, instead of requiring balancing between those
considerations and oil and gas production.
¶ 38 The Colorado Oil and Gas Commission (the Commission)
discerns that its role under the Act is to balance oil and gas
development with other public interests. “Courts may only
disregard an agency’s interpretation of a statute it is charged with
enforcing when that interpretation is inconsistent with the clear
language of the statute or the agency has exceeded the scope of the
statute.” Huber v. Kenna, 205 P.3d 1158, 1164 (Colo. 2009) (citing
Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837,
844 (1984)).
¶ 39 The majority concludes that the Commission’s interpretation
of the Act is inconsistent with the clear language of the Act, in
23
particular section 34-60-102(1)(a)(I), C.R.S. 2016, which provides
that it is in the public interest to:
Foster the responsible, balanced development,
production, and utilization of the natural
resources of oil and gas in the state of
Colorado in a manner consistent with
protection of public health, safety, and welfare,
including protection of the environment and
wildlife resources.
¶ 40 In order to reach this conclusion, the majority examines the
use of the phrase “in a manner consistent with” in a number of
unrelated contexts, largely relying on remand language from
opinions, and surmises that it does not indicate “balancing,” but
rather “a condition that must be fulfilled” or “subject to.” But
Webster’s Third New International Dictionary defines “consistent
with” as “to be consistent, harmonious, or in accordance,” and
“consistently” as “compatibly,” “congruously,” “in harmony with,”
and “in a persistent or even manner.”1 Webster’s Third New
International Dictionary Unabridged 484 (2002). Contrary to the
majority’s supposition, these definitions signify a balancing process.
1 The use of a dictionary is appropriate to interpret undefined
statutory terms. Bontrager v. La Plata Elec. Ass’n Inc., 68 P.3d 555,
559 (Colo. App. 2003) (citing 2A Norman J. Singer, Sutherland on
Statutory Construction § 47.27 (6th ed. 2000)).
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¶ 41 Significantly, the language on which the majority primarily
relies to support its view that protection of public health, safety,
and welfare is a mandatory precondition is located in the legislative
declaration to the Act. Even when codified, a legislative declaration
is primarily “an explicit or formal statement or announcement
about the legislation” that “indicates the problem the General
Assembly is trying to address.” Lester v. Career Bldg. Acad., 2014
COA 88, ¶ 27 (citation omitted). Generally, a legislative declaration
is used only to interpret a statute that is ambiguous; it cannot
override the language of a statute. See § 2-4-203(1)(g), C.R.S. 2016
(identifying the legislative declaration or purpose as an aid in
construing ambiguous statutes); People in Interest of T.B., 2016
COA 151M, ¶¶ 41, 42, as modified on denial of reh’g (Dec. 29, 2016)
(noting that courts generally do not consider a legislative
declaration where a statute is unambiguous and that a legislative
declaration cannot override a statute’s language); see also People v.
Ennea, 665 P.2d 1026, 1029 (Colo. 1983) (rejecting the defendant’s
attempt to add an element to the sexual exploitation of a child
statute based on language in the legislative declaration).
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¶ 42 The actual authority of the Commission to regulate oil and gas
is set out in section 34-60-106(2)(d), C.R.S. 2016:
The commission has the authority to regulate
. . . [o]il and gas operations so as to prevent
and mitigate significant adverse environmental
impacts on any air, water, soil, or biological
resource resulting from oil and gas operations
to the extent necessary to protect public
health, safety, and welfare, including
protection of the environment and wildlife
resources, taking into consideration cost-
effectiveness and technical feasibility.
(Emphasis added.)
¶ 43 The majority concludes that this section also supports its
view, construing the use of “to the extent necessary” as evidencing
“a similar intent to elevate the importance of public health, safety,
and welfare above a mere balancing.” However, the statute, read as
a whole, directs the Commission to “prevent and mitigate significant
adverse environmental impacts,” and also to take into consideration
“cost-effectiveness and technical feasibility.” There would be no
reason to consider cost-effectiveness and technical feasibility if
protection of the public health, safety, and welfare was, by itself, a
determinative consideration.
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¶ 44 Because the Commission is required by statute to regulate oil
and gas operations by balancing the relevant considerations, the
Commission properly denied Petitioners’ petition for rulemaking,
which would have required the Commission to view public health
and environmental considerations as being determinative. The
majority characterizes this denial as a “refusal to engage in the
rulemaking process.” The majority may be focusing on the use of
the word “jurisdiction” in the Commission’s order.2 However, a
careful reading of the order reveals that the Commission deemed
the proposed rulemaking to be outside its statutory authority, not
outside of its jurisdiction.
¶ 45 Even Petitioners conceded in the district court that the
Commission “did not claim that it doesn’t have the jurisdiction to
promulgate a rule,” but rather that it did not have the authority
under the statute to promulgate the rule Petitioners were requesting
2 The Commission’s order primarily used the word “authority.”
However, the order used the word “jurisdiction” referring to a memo
that had been prepared by the Colorado Attorney General’s office
regarding the Colorado Department of Public Health and
Environment’s expertise in air quality. See People v. Sherrod, 204
P.3d 466, 470 (Colo. 2009) (noting that there is sometimes
“analytical confusion” between the terms “authority” and
“jurisdiction”).
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— to view health and environmental concerns as overriding.
Indeed, as discussed above, the Commission’s interpretation that
the statute requires a balancing of interests is correct.
¶ 46 The Commission has consistently recognized its duty to
balance health and environmental concerns with the promotion of
oil and gas development. Our supreme court noted in City of Fort
Collins v. Colorado Oil & Gas Association, 2016 CO 28, ¶ 29, that,
consistent with its legislative authorization, “the Commission has
promulgated an exhaustive set of rules and regulations ‘to prevent
waste and to conserve oil and gas in the State of Colorado while
protecting public health, safety, and welfare.’ Dep’t of Nat. Res.
Reg. 201, 2 [Code Colo.] Regs. 404–1 (2015).”
¶ 47 For these reasons, I would affirm the district court’s order
upholding the Commission’s order denying Petitioners’ petition for
rulemaking. In concluding that the district court order should be
affirmed, I would also reject the Petitioners’ constitutional
arguments based on the public trust doctrine and that the
Commission’s interpretation of the Act is an unconstitutional
infringement of Petitioners’ natural rights to enjoy their lives and
liberties, protect their property, and obtain their safety and
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happiness. The Colorado Supreme Court declined to apply the
public trust doctrine in City of Longmont v. Colorado Oil & Gas
Association, 2016 CO 29, ¶ 62.
29