Colo. Oil & Gas Conservation Comm'n v. Grand Valley Citizens' Alliance

• Decision Date: 25 June 2012
• Docket Number: No. 10SC532.,10SC532.
• Citation: 2012 CO 52,279 P.3d 646
• Parties: COLORADO OIL AND GAS CONSERVATION COMMISSION; and David Neslin, in his official capacity as Acting Director of the Colorado Oil and Gas Conservation Commission, Petitioners v. GRAND VALLEY CITIZENS' ALLIANCE, Cary Weldon, Ruth Weldon, Wesley Kent, Marcia Kent, and Western Colorado Congress, Respondents.
• Court: Colorado Supreme Court

279 P.3d 646

2012 CO 52

COLORADO OIL AND GAS CONSERVATION COMMISSION; and David Neslin, in his official capacity as Acting Director of the Colorado Oil and Gas Conservation Commission, Petitioners

v.GRAND VALLEY CITIZENS' ALLIANCE, Cary Weldon, Ruth Weldon, Wesley Kent, Marcia Kent, and Western Colorado Congress, Respondents.

No. 10SC532.

Supreme Court of Colorado, En Banc.

June 25, 2012.

John Suthers, Attorney General, Daniel D. Domenico, Solicitor General, Matthew J. Lepore, Assistant Attorney General, Casey A. Shpall, Deputy Attorney General, Denver, Colorado, Attorneys for Petitioners.

Heizer Paul Grueskin LLP, Martha M. Tierney, Denver, Colorado, Law Offices of Luke J. Danielson, Luke Danielson, Dean W. Price, Gunnison, Colorado, Law Office of Paul Zogg, Paul Zogg, Boulder, Colorado, Attorneys for Respondents.

Bruce T. Barker, Weld County Attorney, Greeley, Colorado, Attorney for Amicus Curiae the Board of County Commissioners of Weld County.

Michael K. Grinnan, Yuma County Attorney, Burlington, Colorado, Attorney for Amicus Curiae the Board of County Commissioners of Yuma County.

Beatty & Wozniak, P.C., Kenneth A. Wonstolen, Ruth M. Moore, Denver, Colorado, Attorneys for Amicus Curiae Colorado Oil & Gas Association.

Cassandra L. Coleman, Assistant Garfield County Attorney, Glenwood Springs, Colorado, Attorney for Amicus Curiae the Board of County Commissioners of Garfield County.

David Baumgarten, Gunnison County Attorney, Gunnison, Colorado, Attorney for Amicus Curiae the Board of County Commissioners of Gunnison County.

Michael Freeman, Denver, Colorado, Attorney for Amici Curiae San Luis Valley Citizens Alliance, San Juan Citizens Alliance, and Earthworks Oil and Gas Accountability Project.

Justice EID delivered the Opinion of the Court.

¶ 1 Grand Valley Citizens' Alliance, along with Cary Weldon, Ruth Weldon, Wesley Kent, Marcia Kent, and Western Colorado Congress (collectively, “GVC”) filed a complaint against the Colorado Oil and Gas Conservation Commission and others (the “Commission”) alleging that it was entitled to a hearing on an application for permit to drill (“APD”) pursuant to section 34–60–108(7), C.R.S. (2011), of the Oil and Gas Conservation Act (the “Act”) and section 24–4–105, C.R.S. (2011), of the Colorado Administrative Procedure Act. The trial court dismissed the complaint on the ground that GVC had no standing to request a hearing.

¶ 2 GVC appealed and the court of appeals reversed. See Grand Valley Citizens' Alliance v. Colorado Oil & Gas Conservation Comm'n, –––P.3d ––––, ––––, 2010 WL 2521747, at *6 (Colo.App.2010). The court of appeals reasoned that GVC was entitled to a hearing under subsection 108(7) — which states that on the “filing of a petition concerning any matter within the jurisdiction of the [C]ommission, it shall promptly fix a date for a hearing thereon” — because it had filed a petition on a “matter within the jurisdiction of the [C]ommission.” Id. at –––– – ––––.

¶ 3 We granted certiorari and now reverse. Subsection 108(7)'s reference to a hearing must be read in context with the overall statutory scheme. Subsection 108(2) requires that “[n]o rule, regulation, order, or amendment thereof, shall be made by the [C]ommission without a hearing....” When read in context, subsection 108(7)'s reference to a hearing refers to the hearing required by subsection 108(2), which applies only to rules, regulations, and orders. Because GVC is challenging a permit, not a “rule,” “regulation,” or “order,” it is not entitled to a hearing under subsection 108(7). Permits are expressly governed by section 34–60–106(1)(f), C.R.S. (2011), which gives the Commission broad authority to govern APDs and determine who can request a hearing. In this case, the Commission's rules do not permit a citizens group like GVC to request a hearing for an APD, and instead consider their objection as a complaint. Accordingly, we hold that the Commission properly denied GVC's request for a hearing.

I.

¶ 4 In 1969 the federal government conducted an experiment called Project Rulison in Garfield County, Colorado. During this project, a large nuclear device was detonated 8,400 feet underground in an attempt to free natural gas. Project Rulison did not produce any marketable gas because the liberated gas contained radioactive matter.

¶ 5 After the blast, there was little to no drilling at or near the blast site. In the 1990s, companies sought permission to drill in the area. In 2004, the Commission stated that a hearing would be required for any permit application involving drilling within one-half mile of the blast site.

¶ 6 In 2008, a company applied for permits to drill wells approximately three miles from the blast site. This request did not trigger an automatic hearing because the request did not seek to drill within the restricted one-half mile radius.

¶ 7 GVC petitioned the Commission for a hearing on the APD. GVC's request for a hearing was denied on the ground that the Commission's rules allow only operators, surface owners, and relevant local governments to request a hearing on an application for permit to drill. The acting director of the Commission stated that the request to intervene was treated as a complaint under the Commission's rules and considered as such. GVC then filed this present suit, alleging that they were entitled to a hearing under section 34–60–108(7) and section 24–4–105 of the Colorado Administrative Procedure Act. The district court concluded that GVC had no standing to seek a hearing and dismissed the complaint.

¶ 8 GVC appealed to the court of appeals and the court of appeals reversed, holding that GVC was entitled to a hearing under section 34–60–108(7). See Grand Valley Citizens, ––– P.3d at ––––. We granted certiorari ¹ and now reverse the judgment of the court of appeals.

II.

¶ 9 Section 34–60–108(2) provides that “[n]o rule, regulation, or order, or amendment thereof, shall be made by the [C]ommission without a hearing....” Section 34–60–108(7) states that “[o]n the filing of a petition concerning any matter within the jurisdiction of the [C]ommission, it shall promptly fix a date for a hearing thereon and shall cause notice of the filing of the petition and of the date for the hearing thereon to be given.” The question in this case is whether the Commission was required to hold a hearing as requested by GVC. We hold that it was not.

¶ 10 The court of appeals reasoned, and GVC argues before us, that subsection 108(7) requires a hearing in this case because GVC filed “a petition” concerning “[a] matter” within the Commission's jurisdiction. This reasoning is flawed, however, because it reads the provision in isolation rather than within the overall statutory context.

¶ 11 Subsection 108(2) states that no “ rule, regulation, or order, or amendment thereof, shall be made by the [C]ommission without a hearing ... except as provided in this section.” (Emphasis added). Subsection 108(2) thus requires a hearing only for a “rule, regulation, or order, or amendment thereof.” When read in context, subsection 108(7)'s language requiring the Commission to “promptly fix a date for a hearing” upon the filing of a petition on “any matter” refers to the hearing described in subsection 108(2), that is, a hearing on a “rule, regulation, or order, or amendment thereof.” In other words, subsection 108(7)'s instruction that a “hearing” be “promptly fix[ed]” for “any matter” does not expand the list of subjects for which a hearing is required under subsection 108(2).

¶ 12 If GVC were correct, and subsection 108(7) required a hearing in every instance, subsection 108(2)'s specification of hearings for “rule[s], regulation[s], [and] order[s]” would be rendered meaningless. In addition, various provisions throughout the Act that mandate hearings in compliance with section 34–60–108(7) would be entirely unnecessary. See, e.g.,§ 34–60–106(17)(d), C.R.S. (2011) (requiring a hearing “pursuant to the procedures set forth in section 34–60–108(7)” before a certificate of closure may be issued); § 34–60–121(1), C.R.S. (2011) (allowing penalties to be imposed after a hearing has been held). From these provisions, we conclude that the legislature was familiar with the concept of a hearing and specified instances in which a hearing was required. GVC's reading of the statute as requiring a hearing in all instances is inconsistent with this understanding.

¶ 13 This case involves a “permit” to drill, not a rule, regulation, or order. Accordingly, a hearing was not mandated by subsection 108(7). “Permits” are addressed in another section of the Act, section 34–60–106. Importantly, the term “permit” does not appear in section 34–60–108 at all, but it does appear throughout the Act together with the terms “rules” and “orders.” See, e.g.,§ 34–60–121(1) (“Any operator who violates any provision of this article, any rule or order of the [C]ommission, or any permit ....”); § 34–60–124(4)(a)(III), C.R.S. (2011) (Commission may expend funds to “investigate alleged violations of any provision of this article, any rule or order of the [C]ommission, or any permit”); § 34–60–128(3)(d)(III), C.R.S. (2011) (imposing “rules” regarding habitat stewardship, including minimizing habitat disturbance in “orders or rules” and as “conditions of approval to a permit to drill”). These distinctions show that the legislature intended for permits to be separate from other forms of agency action such as orders and rules. See Robinson v. Colo. State Lottery Div., 179 P.3d 998, 1010 (Colo.2008) (“[T]he use of different terms signals an intenton the part of the General Assembly to afford those terms different meanings.”).

¶ 14 Under section 34–60–106(1)(f), no well drilling “shall be commenced ... without first obtaining a permit from the [C]ommission, under such rules and regulations as may be prescribed by the [C]ommission.” The language of section 34–60–106(1)(f) gives the Commission broad authority to promulgate rules...