Attorneys presented oral arguments last week before the Colorado Supreme Court in the Martinez v. Colorado Oil and Gas Conservation Commission (COGCC) climate case that could drastically alter the way the state permits new oil and gas operations.
The hour-long hearing allowed equal time between Colorado’s Solicitor General, who was representing the COGCC, and Julia Olson, an attorney with Our Children’s Trust (OCT), who represented the youth plaintiffs in the case. Also known as the Martinez case, the lawsuit against COGCC is being brought by a group of teenagers—including the lawsuit’s namesake, Xiuhtezcatl Martinez, with OCT sponsoring the plaintiffs and providing litigation assistance.
“The law itself, the act that’s in question, it says that it’s in the public interest to protect the co-equal rights of owners and producers. And the point is that the law very much contemplates that mineral rights are protected property rights and they’re important just like health and safety is important and that’s the point of a balancing test,” explained Christian Corrigan, a staff attorney for Mountain States Legal Foundation.
The lawsuit’s origins began in 2013 when a proposal from Martinez to the COGCC asked for the regulatory body not to issue new permits “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.”
When COGCC denied the proposal in 2014 as outside its scope of authority, a lawsuit was filed. While the District Court sided with COGCC, a 2017 2-1 ruling from the Colorado Court of Appeals favored the plaintiffs.
The issue presented to the Colorado Supreme Court is whether the COGCC was justified in rejecting a proposed regulation that teenager Xiuhtezcatl Martinez presented to the commission in 2013.
“By focusing narrowly on this one phrase in one portion of the Act’s legislative declaration, and reading that ‘phrase[ ] in isolation,’ … the [Court of Appeals] majority failed to develop an accurate ‘picture’ of the General Assembly’s intent,” COGCC’s brief argued.
The regulatory agency defended its interpretation of the legislation, that called on COGCC to conduct a “balancing act” when conducting new oil and gas permitting.
“‘Read … in context and in a manner that gives effect to the statute as a whole,’ … the Act’s language supports the Commission’s understanding that the General Assembly intended a ‘balancing act between the development of the oil and gas resources and the protection of public health, safety, and welfare, including the environment and wildlife resources,’” COGCC added.
Olson and co-counsels Katherine Merlin and James Daniel Leftwich argued that COGCC itself had misinterpreted the authorizing legislation.
“The Colorado Oil and Gas Conservation Commission (“Commission”) is the sole state agency responsible for permitting and regulating Colorado’s oil and gas development and operations, pursuant to the powers delegated to it under the Oil and Gas Conservation Act (“Act”),” the authors argued in their brief. “The Commission, however, relying upon a misinterpretation of its enabling legislation has exceeded its delegated authority by permitting oil and gas development and operations in a manner inconsistent with the protection of public health, safety, and welfare, including the environment and wildlife resources.”
“As a result, the health, safety, and welfare of Coloradans are being gravely impacted by rampant oil and gas development,” the brief continued.
The attorneys representing Martinez argued that COGCC erred in not correctly applying current law, and that her clients aren’t seeking to install a new legal system for oil and gas permitting.
“Youth Respondents do not seek to change the law – the law is clear. Even when the Commission has misinterpreted and misapplied the Act for years, that does not change the law or the Assembly’s intent,” they wrote.
Olson asked that the Colorado Supreme Court affirms the Court of Appeals’ decision.
“It is a novel interpretation of that area of the statute and one that you presume would have been amended by the legislature if the COGCC had been operating under a delusion for a number of years,” Malinda Morain, an attorney at Beatty & Wozniak who specializes in oil and gas litigation, told Western Wire.
She questioned the plaintiffs’ interpretation of COGCC’s mandate in the Act.
“Was the intent of the legislature in enacting the oil and gas Act to only allow development of oil and gas in that zero-impact scenario? Or was it with the understanding that oil and gas may have benefits and burdens to public health, to the environment to the economy, and that the COGCC’s job is to regulate oil and gas within that framework?” Morain asked, “which to me seems like the rational interpretation.”
Corrigan at Mountain States Legal Foundation agreed with Morain’s assessment, telling Western Wire the case really comes down to balance.
“Is our role under the statute a balancing role? Do we consider health and safety in addition to efficient production of oil and gas and energy producers? Do we consider the interests of the environment and the public, do we balance those with energy production? That’s the position we’ve taken, that’s the position that the commission takes is that, we have to factor in all these things,” Corrigan said.
That balancing test would be “drastically changed” if the Court of Appeals’ decision was upheld.
“It’s one of these things where you have to read the statue as a whole, and the question that the justice had is pretty much, ‘isn’t it obvious that there will be some impact on human health even if it’s completely unavoidable and very minor, and the goal of the commission and its duty is to mitigate that impact and balance it with all the interests?’” Corrigan said.
Shifting from a balancing test to one that would require no impacts from new oil and gas permitting for health and safety reasons would be an onerous legal standard, Corrigan argued.
“This zero-cumulative impact standard, at least in my opinion, would nearly be impossible to satisfy. I don’t see how the industry or the commission could get past that threshold if that’s what they adopted,” he said.
The purpose of the COGCC to interpret and make judgments while weighing disparate interests is clear, Corrigan concluded.
“That’s the point of having a commission that’s supposed to weigh all these factors. There’s no magic formula, but that’s why you tell a commission you’ve got to consider all these things—you can consider science, you can consider testimony from experts, you can consider the efficiency, technical feasibility, cost effectiveness, all these different things,” he said. “And that’s the point of the commission’s role as it stands under the law.”
Michael Sandoval also contributed to this report.
