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048 COB Reply Brief - Appeal COLORADO COURT OF APPEALS 2 East 14th Avenue Denver, CO 80203 720-625-5150 Appeal from: DISTRICT COURT, BOULDER COUNTY, COLORADO The Honorable Thomas F. Mulvahill Case No. 2019-CV-030637, Division 5 Appellant: CITY OF BOULDER, a Colorado Home Rule City, Appellees: PUBLIC SERVICE CO. OF COLORADO, a Colorado Corporation, d/b/a XCEL ENERGY; MORGAN GUARANTY TRUST COMPANY OF NEW YORK; and PAUL WEISSMANN, in his official capacity as Treasurer of Boulder County. Attorneys for Appellant: Donald M. Ostrander, No. 12458 Richard F. Rodriguez, No. 25105 Hamre, Rodriguez, Ostrander & Dingess, P.C. 3600 S. Yosemite Street, Suite 500 Denver, Colorado 80237 Phone Number: 303.779.0200 Fax Number: 303.779.3662 Email: mail@hrodlaw.com Co-Attorneys for Appellant: Thomas A. Carr, No. 42170 Kathleen E. Haddock, No. 16011 Office of the Boulder City Attorney P.O. Box 791 Boulder, Colorado 80306 Phone Number: 303.441.3020 Fax Number: 303.441.3859 Email: carrt@bouldercolorado.gov haddockk@bouldercolorado.gov COURT USE ONLY Court of Appeals Case Number: 2019 CA 1940 REPLY BRIEF ii CERTIFICATE OF COMPLIANCE I hereby certify that this brief complies with all requirements of C.A.R. 28 or C.A.R. 28.1, and C.A.R. 32, including all formatting requirements set forth in these rules. Specifically, the undersigned certifies that: The brief complies with the applicable word limits set forth in C.A.R. 28(g) or C.A.R. 28.1(g).  It contains 5,377 words (principal brief does not exceed 9,500 words; reply brief does not exceed 5,700 words). I acknowledge that my brief may be stricken if it fails to comply with any of the requirements of C.A.R. 28 or 28.1, and C.A.R. 32. HAMRE, RODRIGUEZ, OSTRANDER & DINGESS, P.C. S/ RICHARD F. RODRIGUEZ’S DULY SIGNED PHYSICAL COPY OF THIS DOCUMENT IS ON FILE AT THE OFFICE OF HAMRE, RODRIGUEZ, OSTRANDER & DINGESS, P.C. PURSUANT TO CRCP RULE 121, SECTION 1-26(9) By: iii TABLE OF CONTENTS TABLE OF AUTHORITIES ........................................................................... v-vi SUMMARY OF REPLY ................................................................................. 1 ARGUMENT ................................................................................................... 2 I. Xcel’s issue preclusion analysis and statement as to the record of prior proceedings is flawed .................................................................... 2 A. Standard of review and preservation of the issue ....................... 2 B. Xcel confuses and misapplies the “actually litigated” or “necessarily adjudicated” tests .................................................... 3 C. Xcel’s tortured reading of certain prior decisions fails to undercut Boulder’s position ........................................................ 7 D. Xcel misinterprets the import and effect of Judge LaBuda’s explicit statements that muni cipally owned utilities are not subject to PUC jurisdiction ......................................................... 10 II. The PUC’s constitutional power is delimited by Boulder’s constitutional power............................................................................... 11 A. Standard of review and preservation of issues ............................ 11 B. The Court should not defer to the PUC’s determination when deciding the issues on appeal ...................................................... 13 C. Xcel misinterprets Article XXV of the Colorado Constitution .. 15 D. Southern Railway and Xcel’s other cases are inapplicable......... 18 E. Xcel’s attempts to distinguish Miller and Shaklee fail too ......... 20 III. Xcel failed to effectively rebut Boulder’s arguments it had satisfied the 2017 PUC Decision’s three conditions ............................................ 21 A. Standard of review and preservation of the issue ....................... 21 B. Xcel misreads the 2017 PUC Decision as to satisfaction of the 22 iv three conditions ........................................................................... IV. Boulder identified sufficient disputed facts to warrant an evidentiary hearing ................................................................................................... 26 A. Standard of review and preservation of the issue ....................... 26 B. The District Court had to resolve Boulder’s disputed facts at a hearing before granting Xcel’s motion to dismiss ...................... 26 ATTORNEY FEES .......................................................................................... 27 CONCLUSION ................................................................................................ 27 v TABLE OF AUTHORITIES Cases Bd. of County Comm’rs, etc. v. PUC, 157 P.3d 1083 (Colo. 2007) .......................13 Bear Creek Dev. Corp. v. Dyer, 790 P.2d 897 (Colo. App. 1990) ..........................27 Bebo Constr. Co. v. Mattox & O’Brien, P.C., 990 P.2d 78 (Colo. 1997) ................. 4 Berra v. Springer & Steinberg, 251 P.3d 567 (Colo. App. 2010) .............................. 2 Bly v. Story, 241 P.3d 529 (Colo. 2010) ............................................................ 19, 20 Bristol Bay Prods, LLC v. Lampack, 312 P.3d 1155 (Colo. 2013) ........................... 3 City and County of Denver v. PUC, 507 P.2d 871 (Colo. 1973) ..................... 16, 17 City of Craig v. PUC, 656 P.2d 1313 (Colo. 1983) .................................................16 City of Fort Morgan v. Colo. Pub Utils. Comm’n, 159 P.3d 87 (Colo. 2007) ................................................................... 12, 16, 24 Colo. State Bd. of Land Comm’rs v. Dist. Ct., 430 P.2d 617 (Colo. 1967) ............11 Colorado & S. Ry v. Dist. Ct. in and for the Tenth Jud. Dist., 493 P.2d 657 (Colo. 1972) ........................................................... 11, 18, 19, 20 Curry v. Zag Built LLC, 433 P.3d 125 (Colo. App. 2018) ........................................ 2 Dempsey v. Romer, 825 P.2d 44 (Colo. 1992) ........................................................15 Gessler v. Colo. Common Cause, 327 P.3d 232 (Colo. 2014) ...................................24 vi Grain Dealers Mut. Ins. Co. v. Farmers Alliance Mut. Ins. Co., 42 Fed. App. 219, 220 (10th Cir. 2002) .........................................................14 Integrated Network Servs., Inc. v. PUC, 875 P.2d 1373 (Colo. 1994) ...................13 Ledroit Law v. Kim, 360 P.3d 247 (Colo. App. 2015) .............................................. 2 Miller v. Public Service Co. of Colorado, 272 P.2d 283 (Colo. 1954) ......... 12, 20, 21 Mountain States Tel. & Tel. Co. v. PUC, 763 P.2d 1020 (Colo. 1988) ..................17 O’Neill v. Simpson, 958 P.2d 1121 (Colo. 1998) ..................................................... 6 People v. Melendez, 102 P.3d 315 (Colo. 2004) ....................................................... 2 Public Service Company v. Shaklee, 784 P.2d 314 (Colo. 1989) ........ 11, 12, 20, 21 PUC v. Grand Valley Rural Power Lines, Inc., 447 P.2d 27 (Colo. 1968) ................24 Thornton v. Farmer’s Reservoir & Irrigation Co., 575 P.2d 382 (Colo. 1978) 11, 12 U.S. West Comm’n Inc. v. City of Longmont, 948 P.2d 509 (Colo. 1997) ............17 Van Wyk v. Public Serv. Co., 27 P.3d 377 (Colo. 2001) ................................. 13, 14 Constitutional Provisions Colo. Const. Art. XX § 1 ..........................................................................................12 Colo. Const. Art. XX § 6 ..........................................................................................12 Colo. Const. Art. XXV.......................................................................... 15, 17, 18, 22 1 SUMMARY OF REPLY The question for the Court is whether the issue before the District Court was identical to the issue before and addressed by Judge LaBuda in her review of PUC proceedings related to Boulder’s municipalization efforts. Xcel argues Judge LaBuda and the PUC considered similar issues and, therefore, issue preclusion should apply. Issue preclusion does not apply simply because prior litigation involved similar issues, it applies only when the prior litigation involved identical issues. The District Court erred in adopting Xcel’s errors. Xcel argues the PUC’s constitutional rights trump Boulder’s constitutional rights, but the Supreme Court has held the PUC’s rights must give way to Boulder’s constitutional rights in the context of a municipally owned utility.1 The District Court disregarded Boulder’s constitutional rights to decide when and how much property it needs for its utility project. Finally, the District Court needed to resolve disputed facts before it could grant Xcel’s motion to dismiss. Rather than hold the required and requested hearing, the District Court simply granted Xcel’s motion less than 24 hours after it was ripe, based entirely on Xcel’s flawed legal reasoning and arguments. The Court should reverse. 1 Despite being given notice and an opportunity to appear, the PUC chose not to participate in this appeal. 2 ARGUMENT I. Xcel’s issue preclusion analysis and statement as to the record of prior proceedings is flawed. A. Standard of review and preservation of the issue. Xcel concedes issue preclusion is a question of law that the Court reviews de novo. (Answer Brief at 13.) Xcel argues Boulder has failed to preserve its challenge. Xcel’s argument fails. There is no “talismanic language” required for a party to preserve an issue for appeal. People v. Melendez, 102 P.3d 315, 322 (Colo. 2004). An issue is preserved if it is presented in sum and substance to the trial court. Berra v. Springer & Steinberg, 251 P.3d 567, 570 (Colo. App. 2010). A party does not have to cite the particular law upon which relies, it merely has to raise the issue with the trial court. See Curry v. Zag Built LLC, 433 P.3d 125, 135 (Colo. App. 2018). This is true even if the issue is raised only briefly and in a conclusory fashion. See Ledroit Law v. Kim, 360 P.3d 247, 254 (Colo. App. 2015). In response to Xcel’s motion to dismiss, Boulder argued issue preclusion did not apply, cited the governing law on issue preclusion, which Xcel does not dispute, and then argued its position applying the law to the facts. CF, p. 919-922. Whether issue preclusion applies was an issue presented to, considered, and ruled upon by the District Court. Boulder preserved the issue for appeal. 3 B. Xcel confuses and misapplies the “actually litigated” or “necessarily adjudicated” tests. The identity or non-identity of issues turns on the elements that the claimant must establish to prove his or her substantive claim or defense. Bristol Bay Prods, LLC v. Lampack, 312 P.3d 1155, 1159 (Colo. 2013). “Changes in facts essential to a judgment will render [issue preclusion] inapplicable to a subsequent action raising the same issue.” Id. at 1160. The claim and issues raised in the First Condemnation Action (i.e. whether Boulder was required to seek PUC approval prior to condemnation where Boulder sought to operate a utility that included serving customers outside of the city) were not the same claims and issues raised in the Second Condemnation Action (i.e. whether Boulder was required to seek PUC approval prior to condemnation where Boulder sought to operate a utility serving customers inside the city only). Tellingly, Xcel nowhere disputes the essential change in facts between the two actions or addresses how Judge LaBuda found the specific factual context critical to her decision and analysis. Xcel nowhere shows when “by an appropriate pleading” the issue whether PUC approval is necessary prior to condemnation where Boulder operates a municipal utility to serve customers only within city limits was ever presented to Judge LaBuda (or the PUC, for that matter), which is the “actually litigated” test. 4 Bebo Constr. Co. v. Mattox & O’Brien, P.C., 990 P.2d 78, 84-86 (Colo. 1997). It was not. For an issue to be “necessarily adjudicated,” a determination on that issue must be necessary to the judgment. Id. at 84-86. Judge LaBuda and the PUC never made a determination that Boulder needed PUC approval to operate a municipal utility to solely serve customers within city limits. Xcel argues the “district court adjudicated the issue because it was extensively raised in Boulder’s PUC Review Petition, see supra 7 -8, and then extensively litigated by the parties.” (Answer Brief at 23.) This circular argument goes to whether an issue was “actually litigated,” not to whether an issue was “necessarily adjudicated.” Xcel is unable to point to any specific text of any specific pleading where the parties presented the above issue to Judge LaBuda (or the PUC, for that matter) in any prior proceeding. Xcel refers the Court to two pages of the record. (Answer Brief at 23.) Nothing in Xcel’s cited pages shows the issue before the District Court on Xcel’s motion to dismiss was previously litigated and decided. Xcel refers two paragraphs on one page of the PUC Appeal Decision (CF p.488) that Xcel alleges “summarize[es] the parties’ positions.” Nothing in the cited paragraphs indicates the parties litigated and the PUC decided its approval 5 was required before Boulder could condemn to operate a municipal utility to serve customers solely within city limits. Xcel refers to another page of the PUC Appeal Decision (CF p. 499) that includes an excerpt of part of the court’s analysis that described Xcel’ position. Xcel’s quote specifically refers to Boulder’s assertion “as it relates to customers located outside of the City,” not Boulder’s arguments before the District Court that related to customers within city limits only. In the same page Xcel cites to support its argument, Judge LaBuda explicitly recognized she was not addressing the scenario Boulder later presented to the District Court: It is clear that the PUC does not have jurisdiction to exercise its authority under Article XXV when a municipality operates a utility solely within its boundaries under Article XX. However, municipal utilities servicing areas outside of the boundaries of the municipality are subject to the jurisdiction of the PUC. CF p.499-500 (citations omitted). Thus, the record fails to show the parties “extensively raised” and “extensively litigated” and Judge LaBuda or the PUC previously decided whether Boulder must obtain the PUC’s approval prior to condemnation to acquire assets necessary to operate a municipal utility within city limits only. 6 Relying on O’Neill v. Simpson, 958 P.2d 1121 (Colo. 1998), Xcel next argues the PUC’s isolated statement that “[c]ommission approval proceedings over regulated property is a condition precedent to a condemnation action over the subject property” is a “jurisdictional ruling” subject to issue preclusion. (Answer Brief at 15.) Not so. In O’Neill, a party attempted to undo matters related to certain decreed water rights deemed abandoned by a prior water court. The party claimed the prior water court lacked subject matter jurisdiction to determine the water rights had been abandoned. O’Neill, 958 P.2d at 1122. The Supreme Court barred re-litigation of the water court’s original jurisdiction because there was no manifest abuse of authority by the water court. Id. at 1123. Boulder does not challenge Judge LaBuda’s sub ject matter jurisdiction in any prior action before her. Boulder challenges the very issue Judge LaBuda identified was not before her - whether the PUC has constitutional jurisdiction over Boulder’s attempt to condemn property to operate a municipal utility solely to serve customers within city limits. O’Neill does not address the PUC’s or any other governmental body’s decisions, or their jurisdiction, or say such rulings have preclusive effect. It addresses only whether and when a party may attack a prior court’s subject matter jurisdiction. Thus, O’Neill is inapplicable. 7 In sum, Xcel fails to compare the claims and issues in the two condemnation actions. Additionally, Xcel confuses the pertinent issue preclusion tests. The Second Condemnation Action is not barred by any prior “jurisdictional ruling.” C. Xcel’s tortured reading of certain prior decisions fails to undercut Boulder’s position. Unable to show the issue before the District Court was “actually litigated” and “necessarily adjudicated” previously, Xcel next cobbles together isolated excerpts of the PUC Appeal Decision and prior PUC decisions to argue issue preclusion applies. Xcel block-quotes several excerpts but the excerpts read in context actually support Boulder’s position. Xcel’s first excerpt quotes Judge LaBuda’s identification of Xcel’s contention that Boulder “cannot appropriate the Public Service customers in unincorporated Boulder County” and the second excerpt quotes Judge LaBuda’s statement that “it is necessary for the PUC to determine which entity will be providing service outside of the City…” (CF p.492.) The excerpts refer to the core factual distinction between the two cases at issue -- Boulder’s then attempt to serve extraterritorial customers. This was not the scenario before the District Court. Thus, the first two excerpts fail to support Xcel’s arguments. 8 Xcel’s third excerpt quotes Judge LaBuda addressing Boulder’s arguments about its right to condemn extraterritorial property. Xcel omits from the excerpt language that shows the statement was made to address Boulder’s argument that “it has a constitutional right to condemn facilities in unincorporated Boulder County for its utility municipalization.”2 Thus, read in context, Judge LaBuda was addressing Boulder’s argument it had the right to condemn assets to serve customers outside of the city. Perhaps the best evidence that Judge LaBuda considered essential facts different than the District Court was the following excerpt: The Court finds the number of customers outside the city limits is neither dispositive nor persuasive for the arguments presented by the City or the PUC; what matters is the fact that Boulder seeks to include non-resident customers in its service area. Service to non-resident customers thus invokes the PUC jurisdiction and regulation. CF p.490 (emphasis added); see also CF p.489 (“The Court must interpret the application of these constitutional rights under the facts of this case.”). Xcel next cites several isolated excerpts from a 2013 PUC decision and a 2013 PUC order on the decision after re-argument, rehearing, and reconsideration. It is difficult to see how earlier proceedings before the PUC can explain what was 2 Xcel omits this quote using an ellipsis. 9 before Judge LaBuda. In any event, the excerpts read in context also support Boulder’ position. Xcel’s first two excerpts are two separate paragraphs on two separate pages of a 36 paragraph and 15-page decision. (Answer Brief at 17.) The statements were made in the then context where Boulder sought to condemn to serve customers outside of Boulder’s city limits, as noted expressly in Xcel’s excerpts and other portions of the decision that Xcel omits. See, e.g., CF, p.513 ¶ 30; CF, p.511 ¶ 26; and CF, p.511 ¶ 27. Finally, Xcel isolates an excerpt from one paragraph from the 28 paragraph and 13-page rehearing decision. The PUC makes no reference to its function or duty when a city operates a municipal utility solely within city limits. The PUC made no such reference because at the time of its decision Boulder intended to condemn to serve customers outside city limits, as explicitly referenced in other portions of the decision that Xcel ignores. See, e.g., CF 523, ¶ 15; and CF p.518, ¶ 3. Judge LaBuda repeatedly emphasized the service to customers outside-the- city context. See CF p.486 (“In May 2013, Public Service filed a Petition with the PUC requesting declaratory rulings about Boulder’s stated intention to obtain extraterritorial customers through condemnation of its CPCN and condemnation of 10 the facilities that serve those customers”) and CF p.487 (noting the PUC’s decision stating that “Boulder’s plans to condemn Public Service’ CPCN to serve unincorporated Boulder County do not affect the Commission’s authority…”).3 Judge LaBuda and the PUC never decided whether Boulder must obtain the PUC’s approval prior to condemnation where Boulder operates a municipal utility entirely within city limits. Thus, the District Court erred when it dismissed the Second Condemnation Action on issue preclusion grounds. D. Xcel misinterprets the import and effect of Judge LaBuda’s explicit statements that municipally owned utilities are not subject to PUC jurisdiction. Xcel notes that Judge LaBuda wrote “the PUC does not have jurisdiction … when a municipality operates a utility solely within its boundaries…” and concedes that “[t]hese hypothetical issues were not before the PUC or the Court.” (Answer Brief at 20.) That is Boulder’s precise argument here – the issue of the PUC’s jurisdiction over a municipally owned utility operating within city limits only was not an issue before the PUC or Judge LaBuda. 3 Xcel claims Judge LaBuda did not find persuasive Boulder’s later decision to not serve customers outside of city limits. Boulder’s decision was made well after Judge LaBuda issued the PUC Appeal Decision. Thus, Boulder’s decision not to serve out of city customers was not before Judge LaBuda so she could not have found it persuasive or unpersuasive. 11 Boulder quoted Judge LaBuda to show she explicitly said she was not considering the present fact pattern. That is the Court’s primary concern here – whether the facts and issues before Judge LaBuda were the same facts and issues before the District Court. While Xcel would like to ignore the above-quoted language, the Court cannot. II. The PUC’s constitutional power is delimited by Boulder’s constitutional power. A. Standard of review and preservation of issues. Xcel agrees de novo review of the constitutional issues applies. (Answer Brief at 31.) Xcel argues that Boulder failed to preserve any constitutional issues. Again, not so. Xcel admits it relied extensively upon Colorado & S. Ry v. Dist. Ct. in and for the Tenth Jud. Dist., 493 P.2d 657 (Colo. 1972) (“Southern Railway”) in its motion to dismiss. Xcel also relied on Public Service Company v. Shaklee, 784 P.2d 314 (Colo. 1989), Thornton v. Farmer’s Reservoir & Irrigation Co., 575 P.2d 382 (Colo. 1978), and Colo. State Bd. of Land Comm’rs v. Dist. Ct., 430 P.2d 617 (Colo. 1967). CF p.466-477. The cases support Boulder’s position that no PUC prior approval is required and that a condemnor’s determination of necessity is not reviewable by a judiciary absent fraud or bad faith. All of them were relied upon 12 by the District Court as it adopted all of Xcel’s legal reasoning and arguments as its own. Boulder argued the District Court “should deny Xcel’s motion to dismiss because there is no basis for the Court to take the extraordinary step of denying a home rule city the ability to exercise its constitutional right to eminent domain based on the equitable doctrine of issue preclusion.” CF p.908-909. Boulder argued there is “an unbroken line of precedent and the very language of the Constitution makes clear the Commission lacks the authority to regulate municipal utilities.” CF p.909 (citing City of Fort Morgan v. Colo. Pub Utils. Comm’n, 159 P.3d 87 (Colo. 2007)). Boulder further argued a “home rule city has a constitutional right to file a petition for eminent domain.” CF p.918-919 (citing Thornton, supra and sections 1 and 6 of Article XX of the Colorado Constitution). Finally, Boulder argued condemnation could proceed in parallel with any further PUC proceedings. CF p.923 (citing Miller v. Public Service Co. of Colorado, 272 P.2d 283 (Colo. 1954) and Shaklee, supra. In reply, Xcel attempted to distinguish Miller and Shaklee and Boulder’s constitutional arguments. CF p.1187-1202. Thus, whether Boulder’s constitutional rights trump the PUC’s constitutional rights was an issue presented to the District Court and one it considered and ruled upon. Thus, the constitutional issues were preserved. 13 B. The Court should not defer to the PUC’s determinations when deciding the issues on appeal. Relying upon Bd. of County Comm’rs, etc. v. PUC, 157 P.3d 1083, 1088 (Colo. 2007), Integrated Network Servs., Inc. v. PUC, 875 P.2d 1373, 1377 (Colo. 1994), and Van Wyk v. Public Serv. Co., 27 P.3d 377, 384 (Colo. 2001), Xcel argues the Court should defer to the PUC’s expertise in utility matters. Xcel misreads and misapplies the cases. In Bd. of County Comm’rs, the Supreme Court said it “may” defer to the PUC’s determination only of “its own enabling statute and regulations the agency has promulgated.” Bd. of County Comm’rs, 157 P.3d at 1088. It said deference is inappropriate where the PUC’s interpretation would defeat the General Assembly’s intent or is contrary to the plain meaning of the statute. Id. at 1089. It further said where an interpretation is not one that involves the use of technical expertise, courts do not owe a high degree of deference. Id. Xcel ignores all of these other portions of the decision. Integrated Network Servs., Inc. involved a PUC ratemaking decision, a legislative function involving considerable expertise. Integrated, 875 P.2d at 1373. The Court made its deference statements as it performed a limited review as to whether the PUC’s statutory decision was supported by substantial evidence. Id. 14 Van Wyk involved a trespass, nuisance, and inverse condemnation case against the PUC. The Supreme Court found the owner was not seeking to relitigate factual matters before the PUC. Rather the owner demanded an adjudication of its property rights, which the PUC did not address, and had no authority to address. Van Wyk, 27 P.3d at 384 (allowing owner’s claims to proceed). Similarly, Boulder contests legal principles concerning the PUC’s ability to dictate whether and when Boulder may condemn certain property rights. The PUC is entitled to no deference on these issues.4 By selecting single phrases in cases favorable to its cause, and omitting phrases militating against its interest, Xcel has committed the common fallacy known as vicious abstraction. Grain Dealers Mut. Ins. Co. v. Farmers Alliance Mut. Ins. Co., 42 Fed. App. 219, 220 (10th Cir. 2002). This occurs whenever an argument is stated as authority and a relevant and damaging portion of that authority is intentionally or accidentally omitted. Id. The Court should reject Xcel’s fallacy and rule the PUC’s determinations are entitled to no deference in this appeal. 4 As the Supreme Court held, the “PUC does not have, and was never given, any authority to adjudicate property rights.” Van Wyk, 27 P.3d at 385. 15 C. Xcel misinterprets Article XXV of the Colorado Constitution. While Article XXV of the Colorado Constitution provides the PUC has “all power to regulate the facilities, services, and rates and charges therefor…,” it also provides: Nothing herein shall affect the power of municipalities to exercise reasonable police and licensing powers, nor their power to grant franchises; and provided, further, that nothing herein shall be construed to apply to municipally owned utilities. Art. XXV of the Colorado Constitution (emphasis added). Article XXV conveys a clear and definite meaning involving no absurdity or internal contradiction. Dempsey v. Romer, 825 P.2d 44, 51 (Colo. 1992). Thus, any construction of its language must give full effect to its meaning. Id. Xcel argues Article XXV applies only where a municipality either currently operates a municipal utility or creates one on its own and separate from an existing utility provider. But nothing in Article XXV’s language supports Xcel’s interpretation. Article XXV says “nothing herein shall be construed to apply to municipally owned utilities.” To adopt Xcel’s arguments, the Court would have to construe Article XXV in a way that it does apply to municipally owned utilities. This, the Court, cannot do. 16 Xcel argues the Supreme Court “has recognized the PUC’s authority even within city limits when matters within its jurisdiction are implicated” and cites cases cited in the Opening Brief. (Answer Brief at 36-37.) The cases support Boulder’s position. Xcel first cites City of Fort Morgan. Unlike that case, this case does not involve the PUC’s attempt to authorize a private utility provider to provide service to Boulder’s residents or whether Boulder refuses to provide service to residents. Boulder fully intends to provide service to all its residents; that is the purpose of its municipalization effort. Xcel next cites City of Craig v. PUC, 656 P.2d 1313, 1317 (Colo. 1983). While the Supreme Court said the PUC’s interest trumped the city’s interest, it was in the context of a railroad crossing by a private condemnor. Again, this case does not involve the PUC’s right to regulate municipal owned utilities exercising their constitutional home-rule authority. Xcel next cites City and County of Denver v. PUC, 507 P.2d 871, 875 (Colo. 1973). The Supreme Court said “[i]f Denver determines to operate its mass transit system outside of the territorial boundaries of Denver, it is subject to the jurisdiction of the PUC,” as contrasted from the scenario where a city intends to operate solely within city limits. Denver, 507 P.2d at 875 (the “nothing herein” 17 clause of Article XXV means “there is no intention to give the General Assembly authority to regulate a municipally owned utility within the corporate limits of the municipality.”). As such, Denver expressly supports Boulder’s position. Finally, Xcel cites Mountain States Tel. & Tel. Co. v. PUC, 763 P.2d 1020, 1026 (Colo. 1988) but that case involved a PUC decision that concerned a private company’s efforts to transfer a directory publishing business. It has nothing to do with a municipality’s home rule power to condemn for a municipal utility. Among the cases Xcel cited from the Opening Brief, the one glaring omission is U.S. West Comm’n Inc. v. City of Longmont, 948 P.2d 509, 520 (Colo. 1997). In U.S. West, the Supreme Court explained Article XXV’s “nothing herein” language delimits the PUC’s constitutional authority as it applies to a home rule city’s constitutional authority. U.S.West, 948 P.2d at 520. Article XXV’s “nothing herein” language also refers to the city’s power to operate municipally owned utilities. If, as US West holds, the PUC has delimited constitutional authority to regulate the city’s police power, it logically and naturally follows the PUC has delimited constitutional authority to regulate a municipally owned utility exercising its constitutional authority. In sum, it is Xcel that asks the Court to overturn decades of Supreme Court precedent. Those decades of binding precedent establish that nothing in Article 18 XXV gives the PUC authority to regulate a municipally owned utility operating within city limits.5 D. Southern Railway and Xcel’s other cases are inapplicable. Citing several cases, Xcel makes the extraordinary statement that “Supreme Court has explained, in no uncertain terms, that when the PUC has jurisdiction over the property at issue, a condemnation court lacks jurisdiction to proceed.” (Answer Brief at 33.) The Supreme Court has never divested home rule cities the power of eminent domain. Southern Railway did not involve a home rule city, or its municipal utility, or any constitutional issues. Rather, it involved a railroad company’s attempted condemnation and certain competing statutes. The Supreme Court simply did not address the facts or constitutional issues presented here. Southern Railway also is unhelpful because the Supreme Court’s primary rationale for its decision is no longer sound or applicable here. The Supreme Court explained: 5 Xcel ignored Boulder’s argument the PUC’s constitutional power is also delimited by a condemnor’s determination of necessity. Accordingly, the Court should deem that Xcel has confessed Boulder’s arguments and rule that Boulder alone has the right to determine the property it may condemn for purposes of operating its municipal utility. 19 Another facet compelling our conclusion that the commission must act prior to court action is demonstrated by the rule requiring the complaint in eminent domain describe the property to be condemned. No decree granting immediate possession could be entered without a designation and determination of the property involved. Likewise, the amount of the deposit could not be determined absent some showing of the property value likely to be assessed as just compensation for the taking. Any other construction of these two statutes would present the classic ‘cart before the horse situation.’ Southern Railway, 493 P.2d at 657. Applying the above rationale, the Supreme Court concluded the “particular point of crossing is absolutely essential to framing a material allegation – the legal description of the property sought to be acquired – in the action.” Id. at 659. More recently, the Supreme Court held a condemnation action should not be dismissed due to an alleged inadequate or uncertain property description. Bly v. Story, 241 P.3d 529, 532 (Colo. 2010). In Bly, the Supreme Court held the requirement to include a “description of the property” to be condemned means only the petition “must include a general description of the property to be condemned.” Id. at 535. The Supreme Court further explained even if there was uncertainty as to the property being condemned, “[c]ondemnor’s subsequent production of a metes and bounds description cured any uncertainty.” Id. “Ultimately, the description of the 20 location of the easement was sufficient for the trial court to enter its order of condemnation, which included the legal description of the easement.” Id. Boulder provided a general description of the property it sought to condemn from Xcel. To the extent there is any uncertainty in that description, either due to Xcel’s confusion or because the PUC may in parallel or later proceedings alter the property Boulder seeks to condemn, Boulder could later cure that uncertainty.6 But in no case is any alleged uncertainty in Boulder’s property description grounds for dismissal. Furthermore, Boulder did not seek and will not seek immediate possession of Xcel’s property in the Second Condemnation Action, as Xcel knows. Thus, the “cart before the horse” concerns expressed by the Supreme Court in Southern Railway are not present here. E. Xcel’s attempts to distinguish Miller and Shaklee fail too. Xcel argues that Southern Railway distinguished Miller. But, as noted above Southern Railway is distinguishable, whereas Miller is not. And, contrary to Xcel’s arguments, which fail to reference any actual text of either case, Miller and Shaklee 6 As noted in the Opening Brief, the eminent domain statutes contemplate liberal pleading amendments. Amendments to revise legal descriptions or the property sought to be acquired occur frequently. 21 did not turn out the way they did because “the real estate subject to the taking was not property over which the PUC had jurisdiction.” (Answer Brief at 36.) In Miller and Shaklee, the Supreme Court held the utility company could proceed with condemnation because obtaining a certificate of public convenience from the PUC was “not necessary for purposes of condemnation as it relates solely to the question of use after the property has been acquired by condemnation.” Miller, 272 P.2d at 285; Shaklee, 784 P.2d at 316. Similarly, Boulder may condemn without first obtaining the PUC’s approval as the PUC’s authority is meant to ensure Xcel’s remaining system is safe, effective, and reliable system, which logically relates “solely to the question of [Xcel’s remaining system’s use] after the property has been acquired by condemnation.” Thus, Miller and Shaklee are on point and severely undercut Xcel’s arguments. III. Xcel failed to effectively rebut Boulder’s arguments it had satisfied the 2017 PUC Decision’s three conditions. A. Standard of review and preservation of the issue. Xcel agrees this issue is reviewed de novo. (Answer Brief at 13.) Xcel disputes Boulder preserved the issue. (Id.) Again, Xcel is wrong. Xcel admits Boulder argued to the District Court that Boulder had satisfied the three conditions. (Answer Brief at 26 at n.11.) Nevertheless, Xcel suggests 22 this was insufficient to preserve the issue because “[the argument] was never supported or developed.” Boulder argued the 2017 PUC Decision itself satisfied the conditions of the First Dismissal Order. CF p.915. Boulder also argued the PUC’s three conditions “contemplated a later proceeding after condemnation but before Boulder began operations” and explained how the later proceeding would require further activities by Boulder and Xcel (i.e. the PUC imposed conditions subsequent to its decision.) Id. at pp.915-16. Boulder raised the months of negotiations between Boulder and Xcel and Xcel’s abrupt change of position. Id. at p.917. Finally, Boulder raised the effect of Xcel and the PUC’s delay and constitutional abrogation of Boulder’s rights. Id. at p.921-22.7 Boulder preserved the issue. B. Xcel misreads the 2017 PUC Decision as to satisfaction of the three conditions. Xcel argues the PUC “only conditionally approved outside-substation assets for potential transfer if other conditions were met.” (Answer Brief at 26.) Once again, Xcel is wrong. 7 Xcel argues because Article XXV occurred after the home rule constitutional provision it supersedes Boulder’s power to condemn. As shown above, Article XXV delimits the PUC’s constitutional power with respect to a city’s home rule power. 23 Xcel’s first cited paragraph deals with the PUC’s disapproval of transfer of substation assets. CF, p.973-974, ¶ 128. That does not implicate the timing or finality of the PUC’s approval of transfer of non-substation assets, which consists of the substantial majority of assets Boulder sought to condemn in the Second Condemnation Action.8 The second cited paragraph merely sets forth the three conditions. CF, p.1018 ¶ 2. The PUC’s “final approval” was needed for the actual transfer of assets, not for the PUC to make any further determinations whether Xcel’s remaining system was safe, effective, and reliable. The 2017 PUC Decision made the safe, effective, and reliable decision when it explicitly stated its decision “satisfies the requirements” stemming from the PUC Appeal Decision. CF, p.934 ¶ 4 (“Namely, our decision determines – to the extent necessary at this time, how [Xcel’s] facilities should be assigned, divided, or jointly used to protect [Xcel’s] electric distribution system’s effectiveness, reliability, and safety.”); see also CF. p. 988 ¶ 144 (“The record in this Proceeding supports the conclusion that Public Service can provide safe and reliable service to its customers during separation and after the Cut-Over Date upon the transfer of assets outside the substations.”). Xcel nowhere addresses this language in the 2017 PUC Decision or its effect. 8 As to assets within substations, the PUC contemplated that would be sorted out in the OATT process through separate FERC proceedings. See, e.g., CF p. 935 ¶ 2. 24 Xcel next relies upon arguments the PUC’s attorneys made in the PUC’s motion to dismiss. The District Court never considered the PUC’s arguments as the District Court deemed the PUC’s motion and a related motion to intervene moot as result of its dismissal. According to Xcel, however, the Court should defer to the PUC’s view of the 2017 PUC Appeal Decision under PUC v. Grand Valley Rural Power Lines, Inc., 447 P.2d 27, 28 (Colo. 1968). This argument fails for several reasons. Grand Valley Rural Power Lines deals with the PUC itself interpreting its own decision, not the PUC’s litigation attorney’s advocacy related to the decision. Grand Valley Rural Power, 447 P.2d 27, 28 (Colo. 1968). Additionally, the court noted the general rule of deference would not apply if the PUC’s interpretation was clearly erroneous. Id. More importantly, courts do not defer to an agency’s interpretation that is contrary to the constitution, statute, or is otherwise legally erroneous. See, e.g., City of Fort Morgan, supra (“But we are not bound by an agency’s conclusions of law . . . [d]eference would be inappropriate if it were to defeat a constitutional provision . . .”); Gessler v. Colo. Common Cause, 327 P.3d 232, 235 (Colo. 2014) (“Such deference is not warranted where, as here, the agency’s interpretation is contrary to constitutional and statutory law”). 25 Xcel contends Boulder’s action was premature because “the PUC had not yet issued a ruling determining whether the conditions had been satisfied.” (Answer Brief at 27.) The 2017 PUC Decision says only that Boulder shall file certain agreements and correct certain errors and omissions “[t]o secure final approval of the designation of assets for transfer.” CF pp.1018-1019 ¶ 2. Boulder timely filed the necessary documents. Thus, Boulder plainly satisfied the three conditions and nothing more was required to secure the PUC’s final approval of the designation of assets for transfer. Whether Boulder requested the PUC make a final decision on its approval for transfer, requested a status conference, or urged the PUC to issue a final decision, is legally irrelevant. Boulder’s request that the PUC issue a final approval was a request for the PUC to simply comply with its own decision – to issue a final approval for the transfer of assets that it said would be secured upon Boulder’s filing of certain documents.9 9 Xcel argues because the Cost Agreement said it had no effect unless and until the PUC approved it, this shows the conditions were not met. Even if true, the parties’ agreement to delay the effect of the Cost Agreement until the PUC approved it does not alter the 2017 PUC Decision’s plain language as to satisfaction of the three conditions. 26 In sum, to the extent Boulder had to satisfy the 2017 PUC Decision’s three conditions prior to filing the Second Condemnation Action, the Court should deem them satisfied. IV. Boulder identified sufficient disputed facts to warrant an evidentiary hearing. A. Standard of review and preservation of the issue. Xcel agrees de novo review applies and that Boulder preserved the issue. (Answer Brief at 39.) B. The District Court had to resolve Boulder’s disputed facts at a hearing before granting Xcel’s motion to dismiss. Xcel concedes Boulder requested an evidentiary hearing to address the status of the separation, the nature of the separation, the plan for substations, and the ongoing proceedings before the PUC. (Answer Brief at 39.) Xcel does not argue there was a lack of factual dispute on the above matters. Rather, Xcel argues “these were all issues to be addressed in the PUC proceeding, prior to condemnation.” (Answer Brief at 39.) The question is whether the issues were relevant to the motion the District Court had to decide. As shown in the Opening Brief, the above-facts were relevant to whether Boulder satisfied the 2017 PUC Decision’s three conditions. Accordingly, the District Court erred by failing to hold an evidentiary hearing. The Court should reverse. 27 ATTORNEY FEES Because the Court should reverse, Xcel is not entitled to an award of reasonable attorney fees. Bear Creek Dev. Corp. v. Dyer, 790 P.2d 897, 900 (Colo. App. 1990) (“Since the dismissal of the [eminent domain] action is being reversed, attorney fees are not appropriate.”). Thus, Boulder opposes Xcel’s attorney fee request. CONCLUSION For the above reasons, and for the reasons in the Opening Brief, Boulder respectfully requests the Court reverse the District Court’s Order that dismissed the case. 28 Respectfully submitted this 7th day of April, 2020. HAMRE, RODRIGUEZ, OSTRANDER & DINGESS, P.C. S/ RICHARD F. RODRIGUEZ’S DULY SIGNED PHYSICAL COPY OF THIS DOCUMENT IS ON FILE AT THE OFFICE OF HAMRE, RODRIGUEZ, OSTRANDER & DINGESS, P.C. PURSUANT TO CRCP RULE 121, SECTION 1-26(9) By: Donald M. Ostrander, No. 12458 Richard F. Rodriguez, No. 25105 ATTORNEYS FOR APPELLANT OFFICE OF THE BOULDER CITY ATTORNEY Thomas A. Carr, No. 42170 Kathleen E. Haddock, No. 16011 CO-ATTORNEYS FOR APPELLANT 29 CERTIFICATE OF SERVICE I hereby certify that on this 7th day of April 2020, a true and correct copy of the foregoing REPLY BRIEF was sent via Colorado Courts E-Filing or placed in the United States mail, first class, postage prepaid, and properly addressed to the following: John R. Sperber Brandee L. Caswell Sarah M. Kellner Katie M. Gray Matthew D. Clark FAEGRE DRINKER BIDDLE & REATH, LLP 1144 Fifteenth Street, Suite 3400 Denver, CO 80202 Jack.sperber@faegredrinker.com brandee.caswell@faegredrinker.com sarah.kellner@faegredrinker.com Katharine.gray@faegredrinker.com matthew.clark@faegredrinker.com Attorneys for Public Service Company of Colorado (Sent via Colorado Courts E-Filing) MORGAN GUARANTY TRUST COMPANY OF NEW YORK Registered Agent: CT Corporation 4400 Easton Commons Columbus, OH 43219 (Sent via US Mail) Olivia D. Lucas Boulder County Attorney’s Office P.O. Box 471 Boulder, CO 80306 olucas@bouldercounty.org Respondent Paul Weissmann, in His Official Capacity as Treasurer of Boulder County (Sent via Colorado Courts E- Filing) Clerk of the Court of Appeals Ralph L. Carr Judicial Center 2 East 14th Avenue Denver, CO 80203 (Sent via Colorado Courts E-Filing) HAMRE, RODRIGUEZ, OSTRANDER & DINGESS, P.C. s/ Lori A. Argo By: