Municipalities Matter

Municipalities Matter

Municipalities Matter

Municipalities Matter: Getting the Facts Right

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Municipalities Matter

Getting the Facts Right

By Sam Mamet, CML executive director, and Geoff Wilson, CML general counsel 

Dragnet“Just the facts, ma’am…. just the facts,” Sgt. Joe Friday would always invoke on the 1950s TV series “Dragnet." 

In the spirit of Sgt. Joe Friday, we want to present just the facts on two very important decisions that recently came forward from the Colorado Supreme Court. They have been subject to extensive social media chatter, which is generally long on spin and not much else. 

The unanimous decisions written by newly appointed Justice Richard Gabriel held that two citizen-initiated ordinances, one banning and one imposing a lengthy moratorium on hydraulic fracturing (“fracking”), were preempted by state law. Fracking refers to a process utilizing high-pressure injection, generally over a mile underground, to extract crude oil from shale, and has been a source of political controversy in some quarters in recent years. The court considered a ban initiated by Longmont voters and a five-year moratorium initiated by Fort Collins voters.

In narrowly focused decisions, the court held that both ordinances were preempted because of “operational conflict” with the application of the state’s Oil and Gas Conservation Act (the court treated Fort Collins’ five-year moratorium as amounting to a ban). 

The court first took the opportunity to clarify its jurisprudence concerning determination of home rule jurisdiction, on the one hand, and preemption in the event of conflict, on the other. The court then applied a fairly conventional analysis to the facts before it. 

After treating the extensive state regulations concerning fracking as indicating the state’s interest in uniformity of regulation, the court applied additional familiar criteria, such as the extraterritorial impact of the local fracking bans and the traditional locus of regulation, to conclude that the regulation of fracking by a home rule municipality is a matter of “mixed state and local concern.” As to matters so classified, the court explained that “a home-rule city is similar to a statutory county or town because in both cases, the validity of the local enactment turns on whether it conflicts with or is preempted by state law.” This has been a standard analysis for a long period of time. 

Turning to the preemption portion of its opinion, the court again applied a familiar analysis. As the General Assembly has never expressly preempted local authority in the oil and gas area, the industry and the state argued for invalidation of the municipal fracking ordinances based on “implied preemption,” a broad and categorical form of preemption. Adoption by the court of such rationale could mean elimination of existing municipal authority over a wide variety of oil and gas operations, potentially well beyond simply hydraulic fracturing. 

Needless to say, we were not happy with this argument, particularly as put forward by the state, who we view more as a partner with local government interests. This is why CML maintains such an active “friend of the court” or amicus curiae presence in our state courts. The statewide implications of a case are as equally important as decisions of a state regulatory body or the General Assembly. We maintain an amicus committee of prominent municipal attorneys to help guide the League in terms of what briefs ought to be filed on behalf of all cities and towns. 

Accordingly, the entire focus of CML’s brief was to urge the court not to invoke implied preemption in making its decision. We were thus pleased that the court soundly rejected reliance on implied preemption and declined to water down that standard to facilitate its application in this case. Additionally, in this portion of its opinion, the court specifically rejected the related (and oft-made) argument that local governments are categorically preempted from regulating “technical” matters relating to oil and gas production. Indeed, after citing legislative history provided by CML, the court declared that, rather than intending implied preemption, “the General Assembly has recognized the propriety of local land use ordinances that relate to oil and gas development.” An ordinance not expressly or impliedly preempted may still be preempted by “operational conflict” with a state interest. 

In what may be the most significant part of these opinions, the court clarified that determinations of such conflict will not involve an “on the ground” examination of the facts, but rather a facial comparison of the regulations at issue: 

[W]e will analyze an operational conflict by considering whether the effectuation of a local interest would materially impede or destroy a state interest, recognizing that a local ordinance that authorizes what state law forbids or forbids what state law authorizes will necessarily satisfy this standard ... [S]uch an analysis requires us to assess the interplay between state and regulatory schemes. In virtually all cases, this analysis will involve a facial evaluation of the respective statutory and regulatory schemes, not a factual inquiry as to the effect of these schemes “on the ground.” 

Citing the fact that the operational effect of both ordinances was to materially impede the effectuation of the evident state interest in the uniform regulation of hydraulic fracturing, as well as prevent operators that comply with all the state rules from utilizing fracking, the court held the ordinances preempted. 

The full effect of the court’s recasting of the operational conflict test remains to be seen. It is worth noting that both of the ordinances at issue in these cases involved the local government actually “forbidding” something; not addressed in this decision are regulations that do not amount to an outright prohibition of state-regulated activities. 

In this regard, the court, elsewhere in its opinion, reaffirmed an earlier holding rejecting so-called “same subject” preemption, declaring that “a legislative intent to preempt local control over certain activities cannot be inferred ... merely from the enactment of a state statute addressing certain aspects of those activities.” 

On the political front, these two court decisions now focus attention toward statewide ballot measures. Indeed, several such proposals are surfacing, and the industry is building a war chest to defeat them. How they will fare in the court of public opinion is anyone’s guess at this early juncture. Which if any of these measures will actually reach the fall ballot for a statewide vote will not be known until August when the Secretary of State certifies ballot measures. The League itself will address them after that if they indeed qualify. 

In the meantime, we think Sgt. Joe Friday would be pleased. You now know the facts as it relates to the legal aspects of these opinions. When it comes to local control, that is a matter of political discourse. When it comes to home rule, that is a matter entirely of constitutional law interpretation in Colorado.