Mt. Emmons Min. Co. v. Town of Crested Butte

• Citation: 690 P.2d 231
• Decision Date: 05 November 1984
• Docket Number: No. 82SA256,82SA256
• Parties: MT. EMMONS MINING COMPANY, a Delaware corporation, and AMAX Inc., a New York corporation, Plaintiffs-Appellees, v. TOWN OF CRESTED BUTTE; Director of Public Works of the Town of Crested Butte; Larry Adams, Director of Public Works of the Town of Crested Butte; Town Manager of the Town of Crested Butte; Harold J. Stalf, Town Manager of the Town of Crested Butte, Respondents-Appellants.
• Court: Supreme Court of Colorado

Page 231

690 P.2d 231

MT. EMMONS MINING COMPANY, a Delaware corporation, and AMAX

Inc., a New York corporation, Plaintiffs-Appellees, v. TOWN OF CRESTED BUTTE; Director of Public Works of the Town

of Crested Butte; Larry Adams, Director of Public Works of

the Town of Crested Butte; Town Manager of the Town of

Crested Butte; Harold J. Stalf, Town Manager of the Town of

Crested Butte, Respondents-Appellants.

No. 82SA256.

Supreme Court of Colorado,

En Banc.

Nov. 5, 1984.

Gorsuch, Kirgis, Campbell, Walker & Grover, Leonard M. Campbell, Stanley G. Harvey, Denver, Bratton & Zimmerman, L. Richard Bratton, Gunnison, Popham, Haik, Schnobrich, Kaufman & Doty, Ltd., Raymond A. Haik, R. Daniel Scheid, Minneapolis, Minn., A. Walter Wise, Golden, for plaintiffs-appellees.

Ronald J. Landeck, Moscow, Idaho, Rodney B. Proffitt, Crested Butte, for defendants-appellants.

Gerald E. Dahl, Frisco, for amicus curiae, Northwest Colorado Council of Governments.

Tami A. Tanoue, Denver, for amicus curiae, Colorado Mun. League.

QUINN, Justice.

The Town of Crested Butte and various town officials (collectively Crested Butte) appeal from an adverse summary judgment declaring the town's Watershed District Permit Ordinance invalid and permanently enjoining its enforcement against Mount Emmons Mining Company and AMAX, Inc. (collectively AMAX). The District Court of Gunnison County held that the ordinance, which required a company such as AMAX to obtain a permit from the town council before undertaking new activities in the town's watershed district, unconstitutionally conflicted with several state and federal statutes and was irreconcilable with the state constitutional right to appropriate water. Because there are both factual questions and mixed questions of law and fact that must be resolved before AMAX's constitutional claims can be appropriately resolved, we reverse the summary judgment and remand the case to the district court for further proceedings.

I.

On July 21, 1980, Crested Butte, a home rule municipality, enacted Ordinance No. 5, Series 1980, which amended Chapter 15 of the Crested Butte Municipal Code by adding Article 15-3. The ordinance established a "watershed district" encompassing 13,000 acres in the Coal Creek and Wild Creek drainage basins west of the town and established procedures and standards for Watershed District Permits in connection with various activities within the district. ¹ It was the enactment of this ordinance that prompted AMAX, which conducts extensive mining activities on lands within the watershed district, to seek declaratory and injunctive relief with respect to the applicability of the ordinance to its ongoing operations.

The ordinance is expressly premised on the authority granted to home rule cities by section 31-15-707(1)(b), 12 C.R.S. (1977), to maintain and protect a town's water works from injury by extending its jurisdiction over the territory occupied by its water works and "over the stream or source from which the water is taken for five miles above the point from which it is taken and to enact all ordinances and regulations necessary to carry the power conferred in this paragraph (b) into effect." ² The watershed district created by the ordinance lies outside the corporate boundaries of Crested Butte and includes, in addition to the properties of AMAX, the properties of many other landholders and lands within the Gunnison National Forest.

Article 15-3(D)(2) of the ordinance makes it unlawful to cause injury to the town's waterworks. Although the ordinance prohibits any person ³ from engaging in a variety of activities, including surface and subsurface mining, without first obtaining a Watershed District Permit, Crested Butte Municipal Code Article 15-3(D)(1) (1980), ⁴ it makes an exception for activity in progress. Article 15-3(H) expressly states that "[t]he lawful use of any building, structure or land existing at the time of the enactment of this Article may be continued even though it does not conform to the requirements of this Article," and that ordinary repairs and maintenance are allowed, but that "[a]ny change, expansion, alteration or enlargement of [an] existing lawful use shall be subject to all requirements of this Article."

Article 15-3(E)(1)(f) requires a permit applicant to pay a fee "sufficient to cover the costs of publication, hearing, processing, administration, inspection and enforcement of such requested permit." The minimum fee is ten dollars, but the town has the right to charge an additional fee sufficient to cover the town's costs prior to the issuance or denial of any permit. Id. The permit application must be accompanied by a detailed description of the proposed land use, identifying any activity that could cause a foreseeable risk of pollution to the town water supply, together with a description of the measures which the applicant will employ to obviate these risks. Crested Butte Municipal Code, Article 15-3(E)(1)(b) and (d) (1980).

Within sixty days after an application is filed, the Director of Public Works is required to submit an analysis of the project to the town council. Crested Butte Municipal Code Article 15-3(E)(2)(a) (1980). ⁵ If the director concludes that the proposed activity does not present a foreseeable risk of pollution to the town's water supply, ⁶ he is authorized to classify the activity as posing only a "minor impact." Crested Butte Municipal Code Article 15-3(E)(2)(c) (1980). The town council must then conduct a hearing and render a decision approving or denying the permit within 45 days. Id. If the project is not classified as posing only a "minor impact," the ordinance requires the town council, after a hearing, to render a decision on the issuance of a permit within six months. Crested Butte Municipal Code Article 15-3(E)(3) (1980). ⁷ The permit applicant has the burden of proving that the proposed activity "does not present or create a foreseeable risk of pollution" to the town's water supply, waterworks, or to "any water sources tributary thereto for five miles above any point from which water is diverted for use" by the town. Crested Butte Municipal Code Article 15-3(E)(4) (1980). The ordinance authorizes the town council to prescribe any conditions in a permit that it may deem necessary to effectuate "the intent of this Watershed District." Crested Butte Municipal Code Article 15-3(E)(5) (1980). A person desiring to challenge the town council's decision on a permit application is required to file an appeal within thirty days in the District Court of Gunnison County. Crested Butte Municipal Code Article 15-3(J) (1980).

Violation of any provision of the ordinance is punishable by a fine not to exceed $300 for each offense, and a willful and wanton violation is also punishable by imprisonment not to exceed 90 days. Crested Butte Municipal Code Article 15-3(I)(1) (1980). Each day on which a violation occurs is deemed a separate offense. Id.

After the ordinance was enacted, AMAX, without consulting town officials about the applicability of the ordinance to its activities and without seeking a Watershed District Permit, filed on August 19, 1980, a complaint in the district court for declaratory and injunctive relief against Crested Butte and various town officials. AMAX claimed that beginning in 1974 it acquired a large tract of land on the south side of Mount Emmons, where it believed a large deposit of molybdenum was located, and also procured rights to various mining claims throughout the Watershed District; that AMAX had stabilized its tailing ponds at the Keystone Mine, the principal site of its activities, that it had also commenced construction of a water treatment plant and a heavy metal treatment plant, and that it had performed extensive excavation and drilling incident to its mining operations; that it would be required in the near future to perform various activities prohibited by the ordinance unless a permit were to be first obtained; and that these activities included the gathering of data for an environmental impact study conducted by the United States Forest Service, assessment and other work in connection with mining claims and other property rights, reclamation and sampling activities necessitated by Colorado law, and various activities in compliance with bond obligations applicable to its mining operations.

AMAX asserted that the ordinance was invalid for the following reasons: it conflicted with and was preempted by the Colorado Water Quality Control Act, §§ 25-8-101 to -703, 11 C.R.S. (1982 & 1983 Supp.), and the Colorado Mined Land Reclamation Act, §§ 34-32-101 to -125, 14 C.R.S. (1984); it unlawfully impaired AMAX's right to appropriate water and thus violated article XVI, sections 5 and 6 of the Colorado Constitution; it resulted in a taking of property without just compensation; ⁸ it violated due process of law because it failed to provide adequate standards for the issuance of a permit, failed to give adequate notice of the permit requirements, and conferred unlimited discretion on the town council to withhold or condition a permit; ⁹ it exceeded the jurisdiction of the town as a home rule community; and it prohibited AMAX's activities on lands within the Gunnison National Forest, which activities were authorized by a special use permit from the United States Forest Service, in violation of the federal preemption doctrine.

Crested Butte answered the complaint by denying that any of AMAX's activities are or have been prohibited by the ordinance. It also asserted that the ordinance does not encompass the same activities regulated by the Colorado Water Quality Control Act, that the Colorado Mined Land Reclamation Act specifically permits land use regulations, that the ordinance does not impair AMAX's right to appropriate water under Colorado law, that the purpose of the ordinance is not to regulate activities of the federal government on federal lands, and that the ordinance was adopted...