Justia Colorado Supreme Court Opinion Summaries

Oracle was a Delaware corporation headquartered in California, and it is the parent of a worldwide group of affiliated corporations. OJH was a Delaware corporation and a wholly-owned subsidiary of Oracle, existing solely as a holding company. During the period at issue in this matter, OJH held stock in Oracle Japan, and it sold 8.7 million shares of that stock on the Tokyo Stock Exchange, realizing capital gains of approximately $6.4 billion. The tax treatment of these gains was at the center of this dispute. Specifically, the issues this case presented for the Colorado Supreme Court's review were: (1) whether the Colorado Department of Revenue could require Oracle Corporation (“Oracle”) to include its holding company, Oracle Japan Holding, Inc. (“OJH”), in its Colorado combined income tax return for the tax year ending May 31, 2000; and (2) if no, then whether the Department could nevertheless allocate OJH’s gain from the sale of shares that it held in Oracle Corporation Japan (“Oracle Japan”) to Oracle in order to avoid abuse and to clearly reflect income. For the reasons set forth in Department of Revenue v. Agilent Technologies, Inc., 2019 CO __, __ P.3d __, the Colorado Supreme Court concluded the pertinent statutory provisions and regulations did not permit the Department either to require Oracle to include OJH in its combined tax return for the tax year at issue or to allocate OJH’s capital gains income to Oracle. Accordingly, the Supreme Court concluded the district court properly granted summary judgment in Oracle's favor. View "Department of Revenue v. Oracle" on Justia Law

Agilent Technologies, Inc. was a Delaware corporation headquartered in California, and was the parent company of a worldwide family of affiliated corporations. Agilent maintains research and development and manufacturing sites in Colorado and is thus subject to Colorado corporate income tax. World Trade, Inc. is a Delaware corporation and a wholly owned subsidiary of Agilent, and existed solely as a holding company. World Trade earned substantial dividends on its shares in its noted subsidiaries, the tax treatment of dividends gave rise to the dispute before the Colorado Supreme Court. Specifically, the issues reduced to: (1) whether the Colorado Department of Revenue and Michael Hartman, in his official capacity as the Executive Director of the Department, could require Agilent to include its holding company, Agilent Technologies World Trade in its Colorado combined income tax returns for the tax years 2000–07; if not, then whether the Department could nevertheless allocate World Trade’s gross income to Agilent in order to avoid abuse and to clearly reflect income. The Colorado Court determined sections 39-22-303(11)–(12), C.R.S. (2018), did not authorize the Department to require Agilent to include World Trade in its combined tax returns for the tax years at issue because World Trade was not an includable C corporation within the meaning of those provisions. As to the second question, the Court likewise concluded the Department could not allocate World Trade’s income to Agilent under section 39-22-303(6) because: (1) that section has been superseded by section 39-22-303(11) as a vehicle for requiring combined reporting for affiliated C corporations; and (2) even if section 39-22-303(6) could apply, on the undisputed facts presented here, no allocation would be necessary to avoid abuse or clearly reflect income. View "Department of Revenue v. Agilent Technologies" on Justia Law

In 2010, the Colorado General Assembly enacted Senate Bill 10-191 (SB 191), which significantly amended Teacher Employment, Compensation, and Dismissal Act of 1990 (TECDA) provisions concerning teacher contracts and the transfer process. SB191 eliminated the earlier practice of transferring teachers to schools without the consent of the principal of the recipient school. Under SB 191, nonprobationary teachers who were deemed effective during the prior school year and who have not secured a mutual consent placement become members of a “priority hiring pool” for available positions. However, nonprobationary teachers who were unable to secure such a position after the longer of twelve months or two hiring cycles are placed on unpaid leave until they are able to secure an assignment. Defendant-Petitioner School District No. 1 in the City and County of Denver (DPS) sought review of the trial court’s denial of its motion to dismiss Plaintiff-Respondent Rebecca Reeves-Toney’s constitutional challenge to the “mutual consent” provisions of section 22-63-202(2)(c.5) of the TECDA. Reeves-Toney alleged these provisions violated the local control clause of article IX, section 15 of the Colorado Constitution by delegating local school boards’ hiring decisions to principals and other administrators. DPS moved to dismiss Reeves-Toney’s complaint, arguing, among other things, that she lacked standing to bring her claim. The trial court agreed that Reeves-Toney lacked individual standing, but nevertheless concluded that she sufficiently alleged taxpayer standing to challenge section 22-63-202(2)(c.5) and plausibly alleged that the statute was facially unconstitutional. The court thus denied the motion to dismiss. The Colorado Supreme Court determined Reeves-Toney did not allege an injury based on an unlawful expenditure of taxpayer money, thus failing to demonstrate a clear nexus between her status as a taxpayer and the challenged government action. Reeves-Toney therefore lacked taxpayer standing to bring her constitutional challenge to section 22-63-202(2)(c.5). Accordingly, the Court reversed and remanded for the trial court to dismiss Reeves-Toney's complaint. View "In re Reeves-Toney v. School Dist. No. 1 in the City & County of Denver" on Justia Law

A series of appeals concerned a dispute over competing rights to irrigation tail and waste water that collected in a borrow ditch. The Colorado Supreme Court was asked to determine whether a driveway that interrupted the flow of water in the ditch rendered the sections of borrow ditch on either side of the driveway separate sources of water for purposes of the postponement doctrine. S. Cade and Bradley Huffaker and a neighboring landowner, Lee Crowther, filed competing applications for rights to this water. The Huffakers filed their application in 2013; Crowther filed his in 2016. The Huffakers argued that under the postponement doctrine, they were entitled to the senior right in the borrow ditch water because they filed their application first. The water court held that the postponement doctrine did not apply here because it concluded the water rights claimed by the Huffakers and Crowther did not derive from the same source. Therefore, the court held that Crowther’s right to divert water at the culvert was not junior to the Huffakers’ right, even though Crowther’s application was filed two and a half years after the Huffakers’ application. The Huffakers appealed, again contending that the postponement doctrine applied to determine the priority of the applicants’ competing rights to the water in the borrow ditch, and that they were entitled to the senior priority because they filed their application first. They further argued the collection area of their absolute water right began not at the driveway, but farther south (upstream) at the same point as Crowther’s right. The Supreme Court agreed with both contentions and reversed the water court. View "Concerning the Application for Water Rights of S. Cade Huffaker" on Justia Law

Respondents were four Ranch owners who, with notice of the Lake Fork Hunting and Fishing Club’s (the Club) restrictive covenants and bylaws, purchased deeds conferring record title to their respective Ranches. In 2015, the Hinsdale County Assessor conducted valuations of the Respondents’ Ranches and assessed property taxes to their parcels. Respondents protested these valuations and assessments to the Hinsdale County Board of Equalization (the BOE), which denied their petitions. Respondents then appealed the BOE’s determination to the Board of Assessment Appeals (the BAA), arguing that because of the Club’s restrictive covenants and bylaws, the Club was the true owner of those parcels and should have been held responsible for real property taxes. The BAA denied the Respondents’ appeal and affirmed the Assessor’s valuation of the Ranch parcels. The Ranch owners then appealed the BAA’s decision to the court of appeals, which reversed the BAA’s order. Given the extent of the Club’s control over the property, the court of appeals concluded that the Club was the true owner of the parcels for purposes of property taxation and viewed the Ranch owners’ interests as akin to mere licenses to conduct certain activities on the Club’s property. The Colorado Supreme Court reversed, finding Colorado’s property tax scheme reflected the legislative intent to assess property taxes to the record fee owners of real property. “Because Respondents voluntarily agreed to the restrictive covenants and bylaws that facilitate the collective use of their property for recreational purposes, we hold that they cannot rely on these same restrictive covenants and bylaws to avoid property tax liability that flows from their record title ownership.” Accordingly, the court of appeals erred in relying on the Club’s restrictive covenants and bylaws to conclude that the Club is the “owner” of the Ranch parcels and that the Ranch owners hold mere licenses to use Club grounds. The court further erred in holding that the Assessor therefore improperly valued the Respondents’ parcels. View "Hinsdale County v. HDH Partnership" on Justia Law

The question presented by this appeal to the Colorado Supreme Court was a 1909 water rights decree adjudicated an enforceable water right for the Campbell Ditch in nine springs. Yamasaki Ring, LLC, which owned some of the Campbell Ditch’s water rights, asked the Court to answer the question in the affirmative. The Dills and the Pearces, who owned properties where water from the springs had been put to beneficial use since as early as 1903, urged the Court to answer the question in the negative. In two orders issued in 2016, the water court agreed with the Dills/Pearces and determined that the 1909 decree did not adjudicate a water right in the springs’ water because it did not set forth “the necessary information” for adjudication, including an appropriation date, a priority number, or quantification details. Therefore, the water court concluded the Campbell Ditch’s unquantifiable entitlement to “receive and conduct water” from the springs could not be enforced or administered against any adjudicated water rights. The Supreme Court agreed and therefore affirmed the water court’s judgment. View "Concerning the Application for Water Rights of Donald E. Dill, Cathie G. Dill, Jerry R. Pearce, and Frances M. Pearce in Fremont County" on Justia Law

The issue this case presented for the Colorado Supreme Court's review centered on whether a water court had jurisdiction to consider a claim for inverse condemnation alleging a judicial taking of shares in a mutual ditch company. The water court dismissed plaintiff-appellant Sam Allen’s inverse condemnation claim, concluding that his claim was “grounded in ownership and the conveyance of that ownership, not use,” and therefore the claim was not a water matter within the exclusive jurisdiction of the water court. The Supreme Court agreed, and thus affirmed the water court’s dismissal order. View "Allen v. Colorado" on Justia Law

The issue this case presented for the Colorado Supreme Court's review centered on whether the Colorado Oil and Gas Conservation Commission properly declined to engage in rulemaking to consider a rule by Respondents, a group of youth activists who proposed a rule that, among other things, would have precluded the Commission from issuing any permits for drilling oil and gas wells “unless the best available science demonstrates, and an independent, third-party organization confirms, that drilling can occur in a manner that does not cumulatively, with other actions, impair Colorado’s atmosphere, water, wildlife, and land resources, does not adversely impact human health, and does not contribute to climate change.” The Commission declined to engage in rulemaking to consider this proposed rule because, among other things: (1) the rule would have required the Commission to readjust the balance purportedly crafted by the General Assembly under the Act and conditioned new oil and gas drilling on a finding of no cumulative adverse impacts, both of which the Commission believed to be beyond its statutory authority; and (2) the Commission was already working with the Colorado Department of Public Health and Environment (“CDPHE”) to address the concerns to which the rule was directed and other Commission priorities took precedence over the proposed rulemaking at this time. Respondents challenged the Commission’s ruling in the Denver District Court, but that court ultimately upheld the Commission’s decision. Respondents appealed, and, in a split, published decision, a division of the court of appeals reversed the district court’s order. The Supreme Court concluded the Commission properly declined to engage in rulemaking to consider Respondents' proposed rule: (1) deferring to the agency's decision; (2) finding the Commission correctly determined that, under the applicable language of the Act, it could not properly adopt the rule proposed by Respondents; and (3) the Commission reasonably relied on the facts that it was already working with the CDPHE to address the concerns underlying Respondents’ proposed rule and that other Commission priorities took precedence at this time. View "Colorado Oil & Gas Conservation Commission v. Martinez" on Justia Law

Whites Corporation donated a conservation easement (CE), and transferred a portion of the resulting CE tax credit to John and Debra Medved. In 2006, the Medveds filed a return claiming the credit. In 2007, Whites Corporation claimed the credit. In 2011, the Colorado Department of Revenue (the Department) disallowed the credit in its entirety. The Medveds claimed the Department acted too late because their 2006 filing triggered the four-year limitations period within which the Department could invalidate a CE tax credit. The Department disagreed, claiming that Whites Corporation’s 2007 filing triggered the limitations period, and therefore the disallowance stood. The Colorado Supreme Court determined that the plain language of the applicable regulation meant the statute of limitations period began when the CE donor claimed the CE tax credit. This accrual applied to and bound any transferees of the credit. So, the limitations period here began when Whites Corporation filed its tax return in 2007, and the Department’s disallowance occurred before the period expired. The Court reversed the judgment of the court of appeals and remanded for further proceedings. View "Colorado v. Medved" on Justia Law

This case centered on Coors Brewing Company’s application to amend its decreed augmentation plans to authorize the reuse and successive use of return flows from water that Coors diverted out of priority pursuant to those plans. The City of Golden opposed this application, arguing that Coors could not proceed by amendment but had to adjudicate a new water right to reuse or make successive use of the return flows. The water court ruled: (1) any amount of water not beneficially used by Coors for the uses specified in its decreed augmentation plans had to be returned to the stream; (2) Coors’s decreed augmentation plans did not authorize the reuse or successive use of such water; and (3) Coors could not obtain the right to reuse or make successive use of such water by way of amendment to its augmentation plans but could only obtain such rights by adjudicating a new water right. Coors appealed, arguing that the water court erred: (1) by holding that Coors could not proceed by amendment but had to adjudicate a new water right; (2) by concluding that water unconsumed by Coors’s initial use had to be returned to the stream and was subject to appropriation by other water users; and (3) interpreting Coors’s augmentation plan decrees to require permanent dedication of return flows to the stream. The Colorado Supreme Court concluded that in order to obtain the right to reuse and make successive use of the return flows at issue, Coors had to adjudicate a new water right and could not circumvent this requirement by amending its decreed augmentation plans. Furthermore, the Court held that the diversion of native, tributary water under an augmentation plan did not change its character. Accordingly, the general rule, providing that return flows belong to the stream, applied. Finally, the Court concluded the water court correctly construed Coors’s augmentation plans. View "Coors Brewing Co. v. City of Golden" on Justia Law