Tuesday, May 3, 2016

Two questions for the Colorado Supreme Court's fracking cases: Do land use regulations of fracking survive in Colorado? Should the scope of a state agency's rulemaking govern preemption of local governments?

I just did a radio interview with Bloomberg Law regarding the two Colorado fracking cases that came out yesterday.  A link to the podcast of the live show is here.  

The two cases:

2016 CO 28, 15SC668 - City of Fort Collins v. Colorado Oil and Gas Association
2016 CO 29, 15SC667 - City of Longmont v. Colorado Oil and Gas Association

In addition to my comments on the show, I would note the following:

  1. Land use regulations of fracking appear to survive the decisions.   To my reading, the cases do not preclude local land use zoning regulations of fracking, which is something that is not coming out in the media discussions.  See the Fort Collins case at Slip Op. 12-13.  Rather, what the cases seem to say, collectively, is that a ban--such as that of Longmont--is preempted by state law per a two step test.  First, the court determined that the ban was a matter of mixed state and local concern.  Second, because there was a state interest, then the question of whether the local regulation is valid turns of whether it conflicts with state law.  Under Colorado law, in matters of purely local concern, state laws do not preempt home-rule enactments, but in matters of statewide or mixed concern, state laws supersede any conflicting local regulations, irrespective of the relative dominance of the state interest."  In both cases, the Colorado Supreme Court held that there was neither express nor implied preemption.  The question then was whether there was "operational conflict" preemption, which the court announced as a standard of "whether the effectuation of a local interest would materially impede or destroy a state interest.  In Longmont, they held that a ban did materially impede, and thus was preempted.  However, in the Fort Collins 5-year moratorium, there is a more subtle discussion.  In Fort Collins, they held that the moratorium was preempted under the same standard because it (1) detleteriously affects what is intended to be a state-wide program of regulation and (2) impedes the goals of the Oil and Gas Conservation Act.  Nonetheless, I read Fort Collins to hold that land use regulations are not preempted and, moreover, that shorter moratoria may still be able to meet the standards evinced for preemption in these cases.  What do others think?
  2. Can a Department regulate its way into State preemption?  In evaluating the extent of the State's interest in its operational conflict preemption analysis, almost the entirety of the argument of the court rests not on the statute, but on administratively created regulations.  See Longmont Slip Op. at 23-24.  I find this fascinating when you consider that, under the Court's analysis, the creation of regulations by a state agency is sufficient to evince a state interest, especially when the court does not dig into the history of those regulations.  There's something about that, which feels less-than-satisfying to me.  Again, what do others think?  Should a state agency be able to regulate its way into preemption of local governments?

In any case, the interview also features Charles Warren.  I welcome folks thoughts.



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Stephen - I absolutely agree with your assessment of these cases. Because of the Voss decision, the City of Greeley believes they must allow o&g operations in every zoning classification. But other jurisdictions are more restrictive. A big out is that state statute requires notification to mineral interest owners of any zoning or subdivision activity that might impact their access to mineral rights, so they have the right to protest. I'll be interested to see if Fort Collins' very smart legal team tries to come at this from a different angle, although the play there is very small. We might also revisit this mixed local and state concern issue if someone challenges the construction defect ordinances many local governments are passing. Maybe I'll write a blog post about that sometime soon.

Posted by: Jamie Baker Roskie | May 6, 2016 5:20:24 AM