ORDER GRANTING DEFENDANTS MOTIONS TO DISMISS AND DENYING PLAINTIFFS MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT
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1 DISTRICT COURT, PUEBLO COUNTY, COLORADO 501 N. Elizabeth Street Pueblo, CO DATE FILED: July 11, :40 PM CASE NUMBER: 2016CV30355 Plaintiffs: TIMOTHY McGETTIGAN and MICHELINE SMITH v. Defendants: GILBERT ORTIZ, CLERK AND RECORDER FOR PUEBLO COUNTY, in his official capacity; BOARD OF COUNTY COMMISSIONERS OF PUEBLO COUNTY; DAN OLDENBURG, a Petition Representative in connection with the Petition; and KENNY GIERHART, a Petition Representative in connection with the Petition. COURT USE ONLY Case Number: 16CV30355 Division: 405 ORDER GRANTING DEFENDANTS MOTIONS TO DISMISS AND DENYING PLAINTIFFS MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT THE COURT, having considered the Defendants Motions to Dismiss under C.R.C.P. 12(b)(1) and 12(b)(5), Plaintiffs Motion for Leave to File Second Amended Complaint, the Defendants Response and Plaintiffs Reply, finds as follows: Background This action arises out of a decision by Pueblo County Clerk and Recorder Gilbert Ortiz to approve the form and proof of an initiative petition seeking to prohibit the operation of retail marijuana establishments within unincorporated Pueblo County pursuant to Article XVIII, Section 16 of the Colorado Constitution ( Amendment 64 ). On April 8, 2016, Defendants Oldenburg and Gierhart ( Petitioners ) filed their petition form with Clerk Ortiz and received approval of the petition and permission to circulate on that same day. Stip. Facts filed June 17, Upon receiving the petition form, which contained written notice of the proposed ordinance, Clerk Ortiz calculated the number equal to five percent of the registered voters in Pueblo County and provided that number to the petitioners. 1
2 Throughout this process, Clerk Ortiz followed the provisions of Article 11, Title 31, C.R.S. as required by C.R.S Those provisions include a default five-percent signature threshold for initiated measures. Plaintiffs Smith and McGettigan filed this action on April 21, 2016, seeking a declaration that a fifteen-percent rather than five-percent signature threshold is applicable here. Plaintiffs legal position was based on Amendment 64, which they argue requires the Petitioners and County Defendants to deviate from Article 11 s default signature threshold. Plaintiffs filed an Amended Complaint as of right on May 5, Soon after Plaintiffs filed suit, the County Defendants and the Petitioners moved to dismiss, and the Plaintiffs moved for a preliminary injunction and speedy determination of their claim for declaratory relief. The Court then set a hearing on all motions for June 20, At the hearing, the parties argued the motions to dismiss and motion for a preliminary injunction and speedy determination of declaratory relief. On June 10, 2016, however, House Bill was signed into law. That law specifically requires all countywide initiatives seeking to prohibit the operation of retail marijuana establishments to apply a fifteen-percent signature threshold. Plaintiffs then sought leave to amend their Amended Complaint to add a new claim relying on House Bill as an independent legal basis for a fifteen-percent threshold requirement. While this Court heard arguments with respect to the new law and the Motion to Amend at the hearing on June 20, 2016, it allowed the parties time to brief the issue. While Plaintiffs contend the new law applies to this initiative proceeding, Defendants argue that it only applies to initiative proceedings commenced after June 10, Petitioners turned in their signed petitions on June 15, 2016, and Clerk Ortiz issued a preliminary statement of sufficiency on June 24, That statement indicates that Plaintiffs collected signatures exceeding five percent of registered county voters, but it is clear that Plaintiffs fell short of fifteen percent. Plaintiffs original claim is that Amendment 64 itself always required a fifteen-percent signature threshold for initiatives seeking to prohibit retail marijuana establishments. The claim they now seek to add is that House Bill independently required Petitioners to submit petitions with signatures of fifteen percent of county voters. If Plaintiffs succeed under either claim, the Petitioners would in all likelihood be precluded from placing their proposed ordinance on the November 2016 ballot. Given the requirements of Amendment 64, their next opportunity would be November The Court now concludes that Plaintiffs Amended Complaint should be dismissed for failure to state a claim for which relief can be granted. It also holds that Plaintiffs proposed new claim would likewise fail as a matter of law, and so denies the motion for leave to amend on futility grounds. 2
3 Standard of Review In considering a motion under C.R.C.P. 12(b)(5) to dismiss for failure to state a claim for which relief can be granted, a court must accept a plaintiff s material allegations as true and construe them in the light most favorable to the plaintiff. BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004). A motion to dismiss should be granted only when a plaintiff s allegations fail to support a claim as a matter of law. Id. However, a court is not required to accept as true legal conclusions couched as factual allegations. Western Innovations, Inc. v. Sonitrol Corp., 187 P.3d 1155 (Colo. App. 2008). Motions for leave to amend complaints are committed to the sound discretion of the trial court. Liscio v. Pinson, 83 P.3d 1149 (Colo. App. 2003). Motions to amend the pleadings should be freely given when justice so requires. The requested amendment in this case was filed promptly by Plaintiffs after House Bill was signed into law. However, denying a motion for leave to amend is proper where the amendment would be futile. Id. A claim for declaratory relief is futile if that claim could not withstand a motion to dismiss. Am. Civil Liberties Union of Colo. v. Whitman, 159 P.3d 707 (Colo. App. 2006). Motions to Dismiss The Defendants motions to dismiss involve a purely legal question: Does Amendment 64 require counties to deviate from the default five-percent signature threshold in Article 11 and apply a fifteen-percent threshold instead? Plaintiffs argue that Amendment 64 forbids counties from applying Article 11 here, pointing specifically to the references to alcohol regulations in Amendment 64 s Purpose and Findings section. This language, they argue, prevents counties from applying Article 11 because at least one initiative requirement is different in the liquor context. It is their position that Clerk Ortiz s decision to apply Article 11, rather than the undefined procedures Amendment 64 implicitly requires, set in motion an invalid initiative process that runs contrary to Amendment 64 and undermines the constitutional rights it creates. The County Defendants, on the other hand, maintain that Amendment 64 and section are clear as written and must be read in harmony. The Court agrees with the County Defendants. In interpreting statutes and constitutional amendments, courts look first to the plain language of the provision and, if the language is clear and unambiguous, should look no further. Daniel v. City of Colo. Springs, 327 P.3d 891(Colo. 2014); Colo. Ethics Watch v. Senate Majority Fund, LLC, 269 P.3d 1248 (Colo. 2012). When a court construes a constitutional amendment, the electorate must be presumed to have known existing law when approving the amendment. Colo. Ethics Watch, 269 P.3d at Where two provisions concern the same subject, courts must read them together to give full effect to each. Moffet v. Life Care Center, 3
4 219 P.3d 1068 (Colo. 2009). The court should find a conflict between them only where one authorizes what the other forbids. Zaner v. City of Brighton, 899 P.2d 263 (Colo. App. 1994). Read in light of these principles of statutory and constitutional construction, Amendment 64 and C.R.S. section mandate that counties follow Article 11 when reviewing initiatives to prohibit retail marijuana establishments. Amendment 64 affirmatively permits citizens to bring a county initiative, but it contains no language requiring specific procedures for bringing one. Colo. Const., Art. XVIII, 16(5)(f) states simply that a county may prohibit the operation of retail marijuana establishments through an initiated... measure. Additionally, C.R.S (2)(a), -104(3), -301(1) does not impose special procedures. The analogies to alcohol in the Purpose and Findings section, which liken marijuana regulation to specific alcohol laws, are silent as to initiative procedures. Colo. Const., Art. XVIII, 16(1). The Court notes that Colorado laws specific to alcohol regulation impose numerous requirements and prohibitions that are not applicable to retail marijuana establishments, and the mention of alcohol regulation in the Purpose and Findings section did not necessarily demonstrate an intent to engraft all alcohol regulations directly into Amendment 64. C.R.S. section resolves the questions the silence on initiative procedures might otherwise pose. It provides: The procedures for placing an issue or question on the ballot by petition of the electors of a county that is pursuant to statute or the state constitution or that a board of county commissioners may refer to a vote of the electors pursuant to statute or the state constitution shall, to the extent no such procedures are prescribed by statute, charter, or the state constitution, follow as nearly as practicable the procedures for municipal initiatives and referred measures under part 1 of article 11 of title 31, C.R.S. The county clerk and recorder shall resolve any questions about the applicability of the procedures in part 1 of article 11 of title 31, C.R.S. Based on the plain language of this section, counties facing initiated measures must follow the road map it lays out unless another law affirmatively requires otherwise. Cacioppo v. Eagle Sch. Dist. Re-50J, 92 P.3d 453 (Colo. 2004) (citing C.R.S. section in school district ballot measure case and noting that it directs counties to apply Article 11). C.R.S. section was in place at the time Amendment 64 was adopted, and the two provisions do not conflict, as neither forbids what the other authorizes. The language in each is clear; Amendment 64 authorizes a countywide initiated measure but prescribes no specific signature threshold, and C.R.S. section imposes a clear default signature threshold for initiatives authorized at the county level. Read together, those provisions require citizens and counties to follow Article 11 when bringing and reviewing an initiated measure to prohibit retail marijuana establishments at the county level. 4
5 Additionally, the statutory provision that Plaintiffs rely upon for the fifteen-percent threshold is not applicable to counties. C.R.S provides that the electors of any municipality or city and county may seek to prohibit the operation of any one or more of the classes of licenses allowed for under the Colorado Liquor Code. Plaintiffs provide no basis as to why this provision applies to counties here. Because the signature threshold in Article 11 applies as a matter of law, even accepting all allegations in the light most favorable to the Plaintiffs, the Amended Complaint must be dismissed for failure to state a claim for which relief can be granted. Motion for Leave to Amend Plaintiffs motion for leave to amend, and the objection thereto, hinges on whether allowing the amendment would be futile. Specifically, the defendants argue that the new claim, if allowed, fails as a matter of law and could not withstand a motion to dismiss. Plaintiffs proposed new claim states that House Bill , which was adopted on June 10, 2016, required Petitioners, who submitted signed petitions on June 15, 2016, to comply with its new fifteen-percent signature threshold. As a preliminary matter, the Court notes that House Bill is not retroactive. All laws are presumed to be prospective. In re Estate of DeWitt, 54 P.3d 849 (Colo. 2004); C.R.S Nothing in the text of House Bill overcomes that presumption. Therefore there is no need to address the parties arguments on retrospectivity. Rather, the sole question here is whether changing the signature requirement after the initiative process has begun but before petitions have been submitted is a retroactive operation. Because changing the signature requirement at this stage would modify the Petitioners pre-existing rights and obligations, the Court holds that House Bill does not apply here. A law is retroactive if it operates on past transactions or on rights and obligations that existed before its effective date. DeWitt, 54 P.3d at 854. If those rights are vested, the retroactive law is impermissibly retrospective. Id. Under the DeWitt framework, therefore, there is a broader, less demanding category of preexisting rights or obligations, within which is the narrower, more protected category of vested rights. In this case the Court only needs to consider whether Petitioners had a pre-existing right to submit petitions with signatures from five, rather than fifteen, percent of county voters. Plaintiffs rely on Perry v. City of Denver to argue that no rights and obligations existed before Petitioners turned in their petitions. That case, however, like City of Greenwood Village v. Petitioners for Proposed City of Centennial, 3 P.3d 427 (Colo. 2000), involved a consideration of vested rights and retrospectivity. Perry v. City of Denver, 59 P. 747, 748 (Colo. 1899) ( law is retrospective, in its legal sense, which takes away or impairs vested rights ). Perry did not 5
6 address the rights that are implicated in DeWitt s first step. Plaintiffs also note that as a factual matter House Bill took effect before the Petitioners turned in their signed petitions. The language in DeWitt, however, recognizes that retroactivity is determined not only by a simple chronology of stand-alone acts, but also by pre-existing rights and obligations. DeWitt, 54 P.3d at 854. That language demonstrates that looking at the dates of steps in an ongoing process or transaction is not enough. While courts have not set out a clear test to distinguish between legally insignificant expectations and expectations that rise to the level of rights and obligations for purposes of retroactivity, they have given some guidance. First, they recognize that the expectations created by procedures and remedies rise to the level of rights implicating retroactivity even if they are not vested rights. Vitetta v. Corrigan, 240 P.3d 322 (Colo. App. 2009) (distinguishing between new remedial rights and vested substantive rights); Abromeit v. Denver Career Service Bd., 140 P.3d 44 (Colo. App. 2005) (reasoning the right to appeal... is procedural and merely addresses a remedy ). Second, the courts and legislature seem to recognize that rights and obligations to procedures attach at the start of legal proceedings. For example, in Vitetta, the Colorado Court of Appeals focused on language applying a statute to pending civil cases to hold that the new statute was intended to apply retroactively. 240 P.3d at The General Assembly recognized the same concept when it clarified that a new law on state applications for surface development in connection with oil and gas activities did not affect applications filed before the new law s effective date. C.R.S (b). Accordingly, expectations in consistent procedures that accrue and are accorded legal significance with the start of proceedings such as civil actions, administrative applications, or initiative processes are rights and obligations for purposes of the first step in the DeWitt test. The right to a five-percent signature threshold accrued when the Petitioners filed notice of their initiated measure and sought approval as to form and before the adoption of House Bill The Petitioners commenced this process on April 8, 2016 by filing the form and proof of petition, which also sufficed as written notice to Pueblo County of the proposed ordinance. Filing written notice of a proposed ordinance with the county clerk sets the number of signatures a petitioner is required to collect. C.R.S (1) (calculation of five percent of registered electors occurs on the date of such notice ). It is also a necessary precondition to the later adoption or referral of the proposed ordinance. Id. Filing the petition form and proof with the clerk ensures approval of the petition within five days if certain statutory requirements are met. C.R.S (1). The clerk s approval of the form then permits the petitioners to begin circulating the petition and guarantees that the clerk will review and verify signatures if the petition is submitted within one hundred eighty days. C.R.S (1) (petitions to be submitted within one hundred eighty days of approval), -106(1) (no circulation permitted until approval), -109(1) (clerk to review timely filed petitions). The clerk s review in turn decides whether the board of county commissioners will be required to adopt or refer the measure. C.R.S (1). 6
7 By filing on April 8, 2016, the co-defendants rights and the Clerk s obligations in connection with the signature threshold were defined as of that day. Because the expectation of collecting five percent governs how the Petitioners should move forward in the initiative process, it rises at the very least to the level of a procedural or remedial right that could only be modified by a retroactive law. Because, however, House Bill does not apply retroactively, it does not alter the signature threshold in this case. Accordingly, Plaintiffs proposed claim in their Second Amended Complaint would fail as a matter of law and so their motion for leave to amend is denied as futile. IT IS THEREFORE ORDERED: 1. Plaintiffs First Claim for Relief and Second Claim for Relief in the Amended Complaint are dismissed. 2. Plaintiffs Motion for Leave to File Second Amended Complaint is denied. 3. Because the Court grants the motions to dismiss, there is no need to reach Plaintiffs Motion for Preliminary Injunction and Speedy Determination of Declaratory Relief. DONE by the Court this 11th day of July, BY THE COURT: Jill Mattoon District Court Judge 7
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