Danks v. Colo. Pub. Utils. Comm'n

• Decision Date: 13 June 2022
• Docket Number: 21SA265
• Citation: 2022 CO 26
• Parties: William C. Danks, Petitioner-Appellant v. Colorado Public Utilities Commission and DCP Operating Company, L.P. Respondents-Appellees
• Court: Colorado Supreme Court

2022 CO 26

William C. Danks, Petitioner-Appellant
v.
Colorado Public Utilities Commission and DCP Operating Company, L.P. Respondents-Appellees

No. 21SA265

Supreme Court of Colorado, En Banc

June 13, 2022

Appeal from the District Court District Court, City and County of Denver, Case No. 21CV30211 Honorable A. Bruce Jones, Judge

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Petitioner-Appellant William C. Danks, pro se

Attorneys for Respondent-Appellee Colorado Public Utilities Commission: Philip J. Weiser, Attorney General Erin L. McLauthlin, Senior Assistant Attorney General Jason P. Marquez, Assistant Attorney General Fellow Denver, Colorado

Attorneys for Respondent-Appellee DCP Operating Company, L.P.: Holland & Hart LLP Thorvald A. Nelson Nikolas S. Stoffel

Tina R. Van Bockern Austin W. Jensen Denver, Colorado

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JUSTICE GABRIEL delivered the Opinion of the Court, in which CHIEF JUSTICE BOATRIGHT, JUSTICE MÁRQUEZ, JUSTICE HOOD, JUSTICE HART, JUSTICE SAMOUR, and JUSTICE BERKENKOTTER joined.

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OPINION

GABRIEL, JUSTICE

¶1 William C. Danks appeals the judgment of the district court affirming the Public Utilities Commission's ("PUC's" or "Commission's") decision that a gas-gathering system operated by DCP Operating Company, L.P. ("DCP") does not meet the statutory definition of a public utility and therefore is not subject to the PUC's jurisdiction. We conclude that the PUC regularly pursued its authority in reaching this decision, that the decision was just and reasonable, and that the PUC's conclusions were in accordance with the evidence.

¶2 Accordingly, we affirm the district court's judgment.

I. Facts and Procedural History

¶3 The following facts derive from Danks's operative complaint in this case or appear to be undisputed.

¶4 DCP operates a gas-gathering system in Weld County, Colorado known as the Grand Parkway pipeline. The system collects and delivers raw and unprocessed gas from wells located on private land to processing facilities primarily owned by or operated for DCP. The processing facilities remove impurities from the raw gas and convert it into processed dry gas and natural gas liquids ("NGLs"). Thereafter, two of DCP's marketing affiliates market the DCP-owned processed gas for sale into competitive markets. Buyers who purchase DCP's processed gas receive the product via delivery trucks or inter- and

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intrastate pipelines that channel the product downstream from the processing facilities. DCP does not market or sell any of the raw and unprocessed gas in its gathering system to end-use consumers.

¶5 DCP began operating the first phase of the Grand Parkway project in 2016. DCP also planned to construct two smaller pipelines, the Red Cloud and Lindsey pipelines, that would connect to the Grand Parkway. In 2019, the Weld County Oil and Gas Energy Department sent a letter notifying surrounding property owners of the proposed pipelines.

¶6 Danks, a lawyer and farm owner in Weld County, received this letter and filed a complaint with the PUC, which assigned the matter to an Administrative Law Judge ("ALJ"). In his original complaint, Danks alleged, in pertinent part, that DCP had "fail[ed] to get a Certificate of Public Convenience and Necessity [("CPCN")] from the Colorado Public Utilities Commission before it began building its 62 mile pipeline project in Weld County which it calls the 'Grand Parkway.'" Nor, Danks further alleged, did DCP obtain a CPCN for its proposed Red Cloud and Lindsey pipelines.

¶7 DCP moved to dismiss Danks's complaint, asserting that (1) he lacked standing to pursue his claims because he did not allege an injury connected to DCP's gas-gathering activities and (2) DCP was not supplying the public when it

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gathered raw gas for processing and therefore DCP was not a public utility and its gas-gathering activities did not fall within the PUC's jurisdiction.

¶8 Danks filed a response to DCP's motion to dismiss and attempted to file an amended complaint that, in pertinent part, would have (1) clarified that his original complaint included DCP's processing facilities and (2) addressed DCP's arguments regarding standing. DCP moved to strike Danks's proposed amended complaint, alleging that he had not complied with the applicable PUC Rules of Practice and Procedure, which required that he obtain leave of the PUC to amend or supplement an original complaint.

¶9 The ALJ agreed with DCP and denied Danks's attempt to amend his complaint. In so ruling, the ALJ noted that "the manner in which . . . Danks attempted to amend the Complaint makes it difficult to identify and assess the claims in this proceeding" and "the Amendment does more to obfuscate than to clarify or supplement the claims asserted." Nevertheless, the ALJ outlined the specific requirements for properly amending a complaint and informed Danks that he could seek leave to amend his complaint provided that he complied with those requirements.

¶10 Danks then filed a motion seeking leave to amend his complaint, to which he attached an updated version of the amended complaint that he had previously attempted to file. In the amended complaint, Danks alleged that standing

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principles did not apply to complaints made to the PUC. Alternatively, he argued that he had standing to bring his claims because his "right to property has been damaged by DCP's Grand Parkway project." Specifically, Danks alleged that he was injured when DCP placed four different pipelines (three of which were no longer in operation at the time of the amended complaint) on his farmland and engaged in other activities that had diminished the fair market value of his property.

¶11 Although the ALJ noted that Danks had "fail[ed] to provide any cause to amend the Complaint," she nonetheless granted Danks's motion and accepted the amended complaint "in the interests of moving the matter forward to a full and final resolution."

¶12 Thereafter, Danks filed a second motion to amend his complaint. DCP opposed this motion and moved to dismiss Danks's amended complaint. Danks responded by filing a combined motion for summary judgment and brief in opposition to DCP's motion to dismiss, and that same day, he filed a third motion to amend his complaint, along with a proposed third amended complaint.

¶13 Concerned about the moving target that Danks's complaint had become, the ALJ denied Danks's second and third motions for leave to amend, concluding that Danks had failed to show good cause to amend his complaint further and that allowing him to do so "would unreasonably delay the forward progress of this

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proceeding, unnecessarily increase the costs of litigation, and reward Mr. Danks's voluntary decision not to include the proposed amendments in the Amended Complaint." The ALJ further ruled that Danks's motion for summary judgment was "exceedingly premature" because he had filed that motion before the ALJ had ruled on his second and third motions to amend. The ALJ thus denied Danks's summary judgment motion.

¶14 The ALJ subsequently issued a decision recommending that Danks's amended complaint be dismissed. In so ruling, the ALJ reasoned that Danks had alleged property damage, land use or siting issues, and other tortious conduct but that none of these had any connection with a CPCN proceeding. Accordingly, the ALJ concluded that the amended complaint should be dismissed for lack of standing. The ALJ did not reach the question of whether, because DCP is not a public utility, the PUC lacked jurisdiction.

¶15 Danks then filed a motion for reconsideration, challenging the ALJ's determination that he lacked standing to bring his claims before the PUC and asserting that he was entitled to an evidentiary hearing regarding the true operation of DCP in the Grand Parkway project and whether this operation was a public utility.

¶16 The PUC construed Danks's motion as asserting exceptions to the ALJ's recommended decision, and the PUC granted in part and denied in part Danks's

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exceptions. As pertinent here, the PUC agreed with the ALJ that "many of the concerns raised in [Danks's] complaint are not redressable by this Commission." Moreover, the PUC found that Danks's arguments were "not compelling grounds to move this matter to an evidentiary hearing."

¶17 The PUC went on, however, to opine that "the interests of justice" compelled it to review the record to determine whether DCP was unlawfully engaged in public utility operations. Then, accepting the facts alleged in Danks's amended complaint as true, the PUC concluded that up to the processing plant, DCP was not a public utility supplying natural gas to the public.

¶18 To support this determination, the PUC began by explaining that under section 40-1-103(1)(a)(I), C.R.S. (2021), for an entity to be a regulated pipeline utility, the entity had to be a pipeline or gas corporation operating for the purpose of supplying the public for domestic, mechanical, or public uses. Here, although Danks claimed that DCP had failed to obtain a CPCN before building the Grand Parkway, Red Cloud, and Lindsey pipelines, his amended complaint specifically alleged that DCP did not market the raw gas that it gathers in its Colorado gas-gathering system and that the Grand Parkway pipeline was to serve as a gathering line for the natural gas produced upstream of the processing plant. In light of these allegations as to the operations at issue, the PUC concluded that DCP was not a public utility.

¶19 The PUC was not persuaded otherwise by Danks's effort to define the Grand Parkway pipeline to include the processing plants. In the PUC's view, Danks's

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factual allegations belied such an assertion, and the fact that the Grand Parkway connected to a processing plant did not mean that it and the Red Cloud and Lindsey pipelines transported gas that the public could use. The PUC thus found "no grounds in the facts alleged in Mr. Danks' pleadings to find that DCP is a regulated...