Barber v. Ritter, No. 05CA0752.

Docket NºNo. 05CA0752.
Citation170 P.3d 763
Case DateMarch 22, 2007
CourtCourt of Appeals of Colorado
170 P.3d 763
Douglas H. BARBER; Heggem-Lundquist Paint Company, a Colorado corporation; and Rick Kerber, d/b/a Kerber's Oil Company, Plaintiffs-Appellants,
v.
Bill RITTER, Jr., as Governor of the State of Colorado, and Cary Kennedy, as Treasurer of the State of Colorado, Defendants-Appellees.
No. 05CA0752.
Colorado Court of Appeals, Div. II.
March 22, 2007.
Certiorari Granted November 13, 2007.

[170 P.3d 765]

Head & Associates, P.C., John F. Head, Denver, Colorado, for Plaintiffs-Appellants.

John W. Suthers, Attorney General, Maurice G. Knaizer, Deputy Attorney General, Monica Máarquez, Assistant Attorney General,

[170 P.3d 766]

Denver, Colorado, for Defendants-Appellees.

Larry W. Berkowitz, Brad D. Bailey, Littleton, Colorado, Amici Curiae for City of Littleton.

Opinion by Judge ROTHENBERG.


In this case involving the Taxpayer's Bill of Rights (TABOR), Colo. Const. art. X, § 20, and Colo. Const. art. XI, §§ 3-4, plaintiffs, Douglas H. Barber, Rick Kerber, and Heggem-Lundquist Paint Company (collectively, the Taxpayers), appeal the trial court's order dismissing their general claims and Heggem-Lundquist's individual claims, and the summary judgment in favor of defendants, former Governor Bill Owens and former State Treasurer Mike Coffman (the state defendants). After the notice of appeal was filed, a notice of substitution was filed pursuant to C.A.R. 43(c)(1), reflecting that Bill Ritter, Jr. has succeeded Bill Owens as Governor and Cary Kennedy has succeeded Mike Coffman as Treasurer, and the caption was changed accordingly. We affirm in part, reverse in part, and remand with directions.

The primary issue here is this: May the legislature transfer to the general fund cash funds that were collected by the state and designated by statute for specific purposes, or do such transfers violate TABOR and Colo. Const. art. XI, §§ 3-4? With limited exceptions described below, we hold that the legislative acts at issue here which authorized such transfers do not violate TABOR or Colo. Const. art. XI, §§ 3-4.

I. Background

Between 2001 and 2004, during an economic downturn in Colorado, the General Assembly enacted a series of acts that were signed by the governor to address general fund revenue shortfalls. These acts directed the state treasurer to transfer to the state's general fund over $442 million from thirty-one cash funds, which had been established by the General Assembly for specific purposes.

The Taxpayers filed this action in August 2004, asserting that (1) the transfers of these cash funds represented a "new tax" or a "tax policy change causing a net tax revenue gain" and occurred without voter approval in violation of TABOR; (2) some of the funds were "public trusts," and therefore, the state as trustee had an obligation to repay the money it had transferred; and (3) the transfers created an unconstitutional "debt" in violation of Colo. Const. art. XI, §§ 3-4. The Taxpayers sought a declaratory judgment invalidating these acts and an order requiring the legislature to return the money to the funds.

Apart from their general assertions based on their status as Colorado taxpayers, Barber, Kerber, and Heggem-Lundquist also asserted individual claims alleging that transfers from the real estate recovery fund, the petroleum storage tank fund, the major medical fund, the subsequent injury fund, and the workers' compensation cash funds, caused them economic injury.

The state defendants admit they took drastic measures, including these cash transfers, to enhance revenues to balance the state budget as required by Colo. Const. art. X, § 16. However, they maintain that the transfers were properly made and did not violate the Colorado Constitution. They point out that the General Assembly has enacted similar legislation at least twice in the past when the state faced fiscal shortfalls. In 1983, the legislature transferred money from the lottery fund, the severance tax trust fund, and sales taxes designated for the highway users tax trust fund, see 1983 Colo. Sess. Laws, ch. 438, § 6 at 1519; and in 1987, it transferred money from the water conservation board construction fund and the severance tax trust fund to prevent shortages in the general fund. See 1987 Colo. Sess. Laws, ch. 199, §§ 2 & 3 at 1108.

The parties filed cross-motions for summary judgment, and after considering the parties' submissions, the trial court dismissed the Taxpayers' general claims, concluding they lacked standing to raise them. The court concluded Barber had standing to contest the constitutionality of the transfer from the real estate recovery fund, and Kerber had standing to challenge the constitutionality of the transfer from the petroleum storage tank fund. However, the court dismissed Heggem-Lundquist's specific claims challenging

170 P.3d 767

the transfer from the major medical fund, the subsequent injury fund, and the workers' compensation fund, concluding it failed to show economic injury and therefore lacked standing to bring those claims.

After dismissing most of the Taxpayers' claims for lack of standing, the trial court nevertheless addressed the merits and concluded that the transfers did not violate the Colorado Constitution, and that even if the transfers were improper, the court lacked authority to grant the relief sought by the Taxpayers.

II. Moot Claims

Initially, we conclude some of the Taxpayers' claims are moot. A case is moot when a judgment, if rendered, would have no practical legal effect upon an existing controversy. Campbell v. Meyer, 883 P.2d 617 (Colo.App.1994).

We will not consider and rule on the merits of an appeal when the issues presented to the trial court have become moot due to subsequent events. Campbell v. Meyer, supra. "The duty of this court, as of every other judicial tribunal, is to decide actual controversies by a judgment which can be carried into effect, and not ... to declare principles or rules of law which cannot affect the matter in issue before it." Barnes v. Dist. Court, 199 Colo. 310, 312, 607 P.2d 1008, 1009 (1980) (quoting People v. Dist. Court, 78 Colo. 526, 530, 242 P. 997, 998 (1925)).

Barber is a real estate broker licensed by the Colorado Division of Real Estate. He alleged that he was injured by the transfer of funds from the real estate recovery fund to the general fund, and requested an order directing repayment of funds into the real estate recovery fund. However, it is undisputed that the real estate recovery fund and the surcharge imposed on real estate licenses have been abolished, there is no fund in existence to which to return transferred monies, and there is no longer an existing controversy regarding this claim. See Colo. Sess. Laws 2005, ch. 177, § 12-61-301 at 622.

Kerber does business as Kerber's Oil Company. He buys fuel from a large oil company and delivers it in bulk to consumers. He pays an environmental response surcharge on every tank of fuel he purchases, which surcharge goes to the petroleum storage tank fund. See §§ 8-20-206.5, 8-20.5-103(1)(d), C.R.S.2006 (providing funding for the remediation of contamination caused by leaking petroleum storage tanks). The amount of the surcharge paid by Kerber and others depends on the balance in the fund.

Kerber alleged that he was injured by the transfer of money from that fund to the general fund, and he requested an order requiring repayment to the petroleum storage tank fund. However, it is undisputed that the funds taken from the petroleum storage tank fund have been repaid. See §§ 8-20.5-103(2)(b)(II), 24-75-217, C.R.S. 2006. Hence, there is no existing controversy for us to decide as to this claim.

We therefore address whether the Taxpayers and Heggem-Lundquist have standing to challenge the transfers of the remaining twenty-nine cash funds.

III. Standing

The Taxpayers contend the trial court erred in concluding they lacked standing to challenge, as unconstitutional, the transfers of the cash funds because they did not directly pay into those funds. We agree.

Standing is a question of law we review de novo. Corsentino v. Cordova, 4 P.3d 1082 (Colo.2000). To establish standing to sue, the plaintiff must show (1) an injury in fact (2) to a legally protected interest. Wimberly v. Ettenberg, 194 Colo. 163, 570 P.2d 535 (1977).

There are at least three distinct forms of standing: taxpayer standing, individual standing, and organizational standing. See Women's Emergency Network v. Bush, 323 F.3d 937, 943 (11th Cir.2003) (citing Doremus v. Bd. of Educ., 342 U.S. 429, 434, 72 S.Ct. 394, 397, 96 L.Ed. 475 (1952); Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992); Brotman v. E. Lake Creek Ranch, L.L.P., 31 P.3d 886 (Colo.2001)(court concluded plaintiff lacked standing to bring the action (1) as an

170 P.3d 768

adjacent landowner, (2) as a taxpayer, or (3) as the beneficiary of a federal trust, and discussed the different requirements for each type of standing)).

The Colorado Supreme Court has construed the law to provide "broad taxpayer standing in the trial and appellate courts." Ainscough v. Owens, 90 P.3d 851, 856 (Colo.2004); see Conrad v. City & County of Denver, 656 P.2d 662, 668 (Colo.1982).

A. Injury in Fact

"The `injury-in-fact' requirement is dictated by the need to assure that an actual controversy exists so the matter is a proper one for judicial resolution." Conrad, supra, 656 P.2d at 668 (concluding taxpayer had standing to challenge the constitutionality of the use of public funds to display nativity scene on the steps of the city and county building).

"To determine whether there is an injury-in-fact, we accept as true the allegations set forth in the complaint." Ainscough, supra, 90 P.3d at 857 (citing Dunlap v. Colo. Springs Cablevision, Inc., 829 P.2d 1286, 1289 (Colo.1992)).

The alleged injury may be tangible, like an economic loss or physical harm, or it may be intangible, like the government's violation of legally...

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5 practice notes
  • Lobato v. State, No. 06CA0733.
    • United States
    • Colorado Court of Appeals of Colorado
    • January 24, 2008
    ...is conferred when "a plaintiff argues that a governmental action that harms [the plaintiff] is unconstitutional"); Barber v. Ritter, 170 P.3d 763, 768 (Colo.App.2007) (cert. granted Nov. 13, 2007) ("In cases involving a taxpayer's standing, general allegations of injury are 2. Legally Prote......
  • Barber v. Ritter, No. 07SC373.
    • United States
    • Colorado Supreme Court of Colorado
    • November 3, 2008
    ...article X, section 20 of the Colorado Constitution ("Amendment 1"),1 we review the court of appeals' opinion in Barber v. Ritter, 170 P.3d 763 (Colo.App. 2007).2 In that opinion, the court of appeals held that Petitioners/Cross-Respondents Douglas Barber, Heggem-Lunquist Paint Company, and ......
  • Colorado Min. v. Board of County Com'Rs, No. 05CA1996.
    • United States
    • Colorado Court of Appeals of Colorado
    • March 22, 2007
    ...have concluded that whatever the extent of the residual county zoning authority over mining, it does not extend to prohibiting a class of 170 P.3d 763 mining, here gold mining, by regulating the use of toxic Next, with respect to express preemption, the express preemption provision of the M......
  • Comcast v. Express Concrete, Inc., No. 05CA2450.
    • United States
    • Colorado Court of Appeals of Colorado
    • December 27, 2007
    ...rule on the merits of an appeal when the issues presented to the trial court have become moot due to subsequent events. Barber v. Ritter, 170 P.3d 763 (Colo. App.2007). "`The duty of this court, as of every other judicial tribunal, is to decide actual controversies by a judgment which can b......
  • Request a trial to view additional results
5 cases
  • Lobato v. State, No. 06CA0733.
    • United States
    • Colorado Court of Appeals of Colorado
    • January 24, 2008
    ...is conferred when "a plaintiff argues that a governmental action that harms [the plaintiff] is unconstitutional"); Barber v. Ritter, 170 P.3d 763, 768 (Colo.App.2007) (cert. granted Nov. 13, 2007) ("In cases involving a taxpayer's standing, general allegations of injury are 2. Legally Prote......
  • Barber v. Ritter, No. 07SC373.
    • United States
    • Colorado Supreme Court of Colorado
    • November 3, 2008
    ...article X, section 20 of the Colorado Constitution ("Amendment 1"),1 we review the court of appeals' opinion in Barber v. Ritter, 170 P.3d 763 (Colo.App. 2007).2 In that opinion, the court of appeals held that Petitioners/Cross-Respondents Douglas Barber, Heggem-Lunquist Paint Company, and ......
  • Colorado Min. v. Board of County Com'Rs, No. 05CA1996.
    • United States
    • Colorado Court of Appeals of Colorado
    • March 22, 2007
    ...have concluded that whatever the extent of the residual county zoning authority over mining, it does not extend to prohibiting a class of 170 P.3d 763 mining, here gold mining, by regulating the use of toxic Next, with respect to express preemption, the express preemption provision of the M......
  • Comcast v. Express Concrete, Inc., No. 05CA2450.
    • United States
    • Colorado Court of Appeals of Colorado
    • December 27, 2007
    ...rule on the merits of an appeal when the issues presented to the trial court have become moot due to subsequent events. Barber v. Ritter, 170 P.3d 763 (Colo. App.2007). "`The duty of this court, as of every other judicial tribunal, is to decide actual controversies by a judgment which can b......
  • Request a trial to view additional results

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