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025 Order re PSCo Motion for Case Management Conference and to Set HearingPage1 of1 COURT,DISTRICT COUNTY, COLORADOBOULDER Court Address: 1777 Sixth Street P.O. Box 4249, Boulder, CO, 80306-4249 Petitioner(s)THE CITY OF BOULDER v. Respondent(s)PUBLIC SERVICE COMPANY OF COLORADO et al. COURT USE ONLY Case Number:2019CV30637 Division:5 Courtroom: Order: Motion for Case Management Conference and to Set Hearing Pursuant to C.R.S. 38-1-105 to Consider Objections to the Petition The motion/proposed order attached hereto: MOOT. Issue Date:9/4/2019 THOMAS FRANCIS MULVAHILL District Court Judge DATE FILED: September 4, 2019 2:41 PM CASE NUMBER: 2019CV30637 DISTRICT COURT, BOULDER COUNTY, COLORADO Court Address: 1777 6TH Street, Boulder Colorado 80302 303-441-3750 _________________________________________________ Petitioner: THE CITY OF BOULDER, a Colorado Home Rule City, v. Respondents: PUBLIC SERVICE COMPANY 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 Respondent, Public Service Company of Colorado John R. Sperber, Atty. Reg. No. 22073 Brandee L. Caswell, Atty. Reg. No. 30706 Sarah M. Kellner, Atty. Reg. No. 38111 Katie M. Gray, Atty. Reg. No. 42331 FAEGRE BAKER DANIELS LLP 1144 Fifteenth Street, Suite 3400 Denver, Colorado 80202 Telephone: (303) 607-3500 Fax: (303) 607-3600 Email: jack.sperber@FaegreBD.com brandee.caswell@FaegreBD.com katie.gray@FaegreBD.com COURT USE ONLY __________________________ Case Number: 19 CV 30637 Division: 5 MOTION FOR CASE MANAGEMENT CONFERENCE AND TO SET HEARING PURSUANT TO C.R.S. § 38-1-105 TO CONSIDER OBJECTIONS TO THE PETITION Respondent, Public Service Company of Colorado (“PSCo”) through its counsel, Faegre Baker Daniels LLP, submits this Motion for Case Management Conference and to Set a Hearing, Pursuant to C.R.S. § 38-1-105, to Consider PSCo’s Objections to the Petition in Condemnation Attachment to Order - 2019CV30637 2 (“Petition”) filed by the City of Boulder (the “City”). This Motion is being filed in the alternative and is only necessary if the Court denies PSCo’s Motion to Dismiss filed August 5, 2109. Because the Motion to Dismiss relates to the Court’s subject matter jurisdiction to proceed at all, it must be considered and ruled upon as a threshold matter first. See Motion to Dismiss at 10. In support of this Motion, PSCo states as follows: CERTIFICATION Pursuant to C.R.C.P. 121, § 1-15(8), undersigned counsel for PSCo certifies that she conferred with counsel for the City regarding the relief requested in this Motion. The City opposes this Motion. INTRODUCTION This is a condemnation action that is extraordinary in its scope and complexity. By the City’s own allegations, a 1,597-page spreadsheet is required to identify the electric distribution facilities the City seeks to acquire from PSCo. Petition ¶ 24(A). That spreadsheet does not even include the real property interests affected by the condemnation, which are the subject of material dispute. See id. ¶ 24(B). Nor does the 1,597-page spreadsheet include any interests within PSCo’s substations, which are subject to separate agreements between PSCo and the City that require approval from the Public Utilities Commission (“PUC”). See id. ¶¶ 24(C); 35. The City’s proposed condemnation would also impact numerous property interests omitted from the Petition entirely, as detailed in the answer and cross-petition submitted by PSCo. This action is complex not only because of the amount and type of property interests at stake, but also due to external factors. As detailed in PSCo’s Motion to Dismiss for Lack of Subject Matter Jurisdiction (“Motion to Dismiss”), the parties have been involved in PUC proceedings Attachment to Order - 2019CV30637 3 concerning the proposed acquisition for many years, and the PUC has ongoing exclusive jurisdiction over the matter. The City’s charter and ordinances also preclude the City from acquiring PSCo’s system unless certain circumstances exist at the end of these proceedings. For these and many other reasons identified in PSCo’s Answer, Affirmative Defenses, and Cross- Petition filed August 5, 2109, PSCo challenges the Petition and contends that the City has failed to meet numerous condemnation prerequisites that it bears the burden of proving before this case can move forward. Based on Colorado statutes and case law, the proper procedure for dealing with PSCo’s objections is as follows: 1. The Court must consider and rule on subject matter jurisdiction first. a. The existence of subject matter jurisdiction is a “threshold issue” for the Court. See Stell v. Boulder Cnty. Dep’t of Soc. Servs., 92 P.3d 910, 914 (Colo. 2004); People In Interest of P.K., 411 P.3d 963, 968 (Colo. App. 2015) (“[A] lack of jurisdiction deprives the court of all authority to act—it is a quintessential threshold matter.”); In re Support of E.K., 410 P.3d 480, 482 (Colo. App. 2013) (“The court’s authority must be properly invoked before it can act ….”); People v. Widhalm, 991 P.2d 291, 293 (Colo. App. 1999) (“A court must always have jurisdiction to act. Thus, any action taken by a court when it lacks jurisdiction is a nullity.”). b. The Motion to Dismiss is based on the requirement – already imposed by a Boulder County District Court judge – that the City obtain certain PUC approvals as a precondition to condemnation. The City has not done so. Attachment to Order - 2019CV30637 4 c. Ruling on PSCo’s Motion to Dismiss does not require the court to hear evidence or hold any kind of hearing. 2. If the Court denies PSCo’s Motion to Dismiss, the next step is to schedule an evidentiary hearing on PSCo’s other objections to this condemnation action. a. Simultaneously with filing its Motion to Dismiss, PSCo filed an Answer and Cross-Petition to preserve its other defenses to the condemnation. The purpose of filing these pleadings now is to refute any potential argument that PSCo has waived its defenses or failed to adequately respond to the Petition. b. The defenses in PSCo’s Answer are based on a lack of legal authority for the condemnation, a lack of public purpose and necessity, the failure to conduct good faith negotiations, the failure to adequately describe the property to be taken, the unlawful delegation of condemnation decisions, and other fatal defects in the Petition. Unlike the Motion to Dismiss, these objections require a hearing to determine whether the City may move forward with condemning PSCo’s property. c. Colorado law entitles PSCo to such a hearing. The court “shall hear” the parties’ “proofs and allegations” concerning the regularity of the proceedings. C.R.S. § 38-1-105; see also id. § 38-1-109. d. PSCo therefore requests, only after considering and if the Court denies PSCo’s Motion to Dismiss, that a case management conference be set in order to schedule a hearing date and address any discovery that is necessary for PSCo Attachment to Order - 2019CV30637 5 and any other respondents to present and challenge the “proofs and allegations” concerning the regularity of the proceedings. 3. If the Court permits the City to proceed with the condemnation after a hearing on PSCo’s objections, the valuation phase of the case begins. a. At this point, the parties prepare for a trial before a jury or commission to determine just compensation for the City’s acquisition. b. The hearing on the property owner’s objections must occur before steps are taken to determine just compensation. See Williams v. Bd. of Comm’rs, 111 P. 71, 74 (Colo. 1910). The issue for hearing is whether the City has authority to proceed with the condemnation, which the Court must resolve before the case can proceed to the valuation phase. See Kaschke v. Camfield, 102 P. 1061, 1063 (Colo. 1909). If the City is not properly exercising its condemnation authority, “there will be no damage, hence no occasion for a jury [or commission]” to determine just compensation. Id. at 1062. Therefore, PSCo respectfully requests that if the Court denies PSCo’s Motion to Dismiss, it also enters the attached proposed order (1) establishing that there will be an evidentiary hearing on PSCo’s objections to the Petition before the case proceeds to the determination of just compensation; (2) providing for a case management conference to schedule such a hearing; and (3) providing that the case management order will address any discovery needed by PSCo so that it can present relevant evidence at the hearing and test the City’s allegation s against the facts. Attachment to Order - 2019CV30637 6 LEGAL STANDARDS “The constitutional protection against the taking of private property by government without due process imposes on the condemning governmental entity a requirement of strict compliance with and interpretation of the pertinent condemnation statutes.” Platte River Power Auth. v. Nelson, 775 P.2d 82, 83 (Colo App. 1989). And “while eminent domain statutes are strictly construed against the government, they must be liberally construed in favor of property owners.” Id. at 83. Colorado’s eminent domain statutes expressly provide that the court will hear evidence and rule on a property owner’s objections to a petition in condemnation. Under C.R.S. § 38-1-105, “[t]he court shall hear proofs and allegations of all parties interested touching the regularity of the proceedings and shall rule upon all objections thereto” (emphasis added). A related section, C.R.S. § 38-1-109, states that “at the hearing provided for in section 38-1-105, the court shall hear and dispose of all objections that may be raised touching the legal sufficiency of the petition . . .” (emphasis added). ARGUMENT PSCo is entitled to a hearing on its objections to the petition before the case proceeds to the valuation phase. A condemnation case is a “special proceeding; differing widely in its purposes from those of the ordinary civil action, and governed by dissimilar rules of pleading and practice.” Denver & N.O.R. Co. v. Lamborn, 8 P. 582, 584 (Colo. 1885). One of the many unique aspects of a condemnation case is that it proceeds in two phases so the owner of property subject to government acquisition has an opportunity to challenge whether the government is proceeding according to law. Attachment to Order - 2019CV30637 7 A. Condemnation Cases Proceed in Two Distinct Phases. “The eminent domain act contemplates that all material questions or issues raised by the answer should be tried, settled, and determined in limine – that is, before steps are taken to ascertain the compensation and damages . . . .” Williams, 111 P. at 74. This passage from Williams describes the first phase of a condemnation case, where the court decides whether the condemnor has authority to use the power of eminent domain. The Colorado Supreme Court also discussed the two phases of an eminent domain case in Union Pacific Railroad Co. v. Colorado Postal Telegraph Cable Co., 69 P. 564, 565-66 (Colo. 1902). The court held that “[i]f, for any reason, the petitioner in condemnation proceedings is not entitled to exercise the right of eminent domain, or take a particular tract, these questions should be determined by the court in limine. If adverse to the petitioner, that is the end of the proceeding.” Id. Thus, the first phase of an eminent domain action determines whether the condemnor has authority to go forward at all. The second phase of an eminent domain action is the valuation phase, where a jury or commission determines the amount of just compensation owed for the property being acquired. See Sinclair Transp. Co. v. Sandberg, 228 P.3d 198, 208 (Colo. App. 2009), rev’d on other grounds by Larson v. Sinclair Transp. Co., 284 P.3d 42 (Colo. 2012) (“At the valuation stage of a condemnation case, the landowner may testify to his or her own opinion estimating his or her land’s value.”). Although courts often make the decision on authority to condemn at an immediate possession hearing, a property owner is also entitled to request a hearing on the issue. See Pine Martin Mining Co. v. Empire Zinc Co., 11 P.2d 221 (Colo. 1932). In Pine Martin, the property owners moved to set for hearing the issue whether the mining company had the right to condemn. Attachment to Order - 2019CV30637 8 Id. at 223. The mining company argued that the trial court had no authority to try the issue of the right to condemn because the application for such hearing was untimely. Id. The Colorado Supreme Court held that “[t]he application, having been made before the calling of a jury to assess damages, was in apt time.” Id. Here, PSCo is requesting a hearing long before any steps will be taken to determine compensation. PSCo is entitled to a Phase 1 hearing on its objections to legal authority for the condemnation, public purpose and necessity, the failure to conduct good faith negotiations, the failure to adequately describe the property to be taken, the unlawful delegation of condemnation decisions, and other fatal defects in the Petition. B. A Case Management Conference is Necessary for Phase 1. A case management conference is essential to help the Court and the parties prepare for the Phase 1 hearing. The parties to eminent domain cases often prepare case management orders that are tailored to these special proceedings. For example, these orders often address the exchange of appraisal reports. We have also stipulated to case management orders that dictate how Phase 1 of the case will proceed. This procedure is appropriate here. In addition to setting the guidelines for briefing and exchange of exhibits, the case management order should address discovery. PSCo will need to conduct limited discovery to investigate and support its objections to the Petition. The Colorado Supreme C ourt recently explained that questions of authority to condemn “present mixed questions of law and fact,” with some aspects of objections to condemnation authority “demand[ing] proof.” Carousel Farms Metro. Dist. v. Woodcrest Homes, Inc., 2019 CO 51, ¶¶ 17, 20. Colorado’s eminent domain statutes also provide for the parties to present evidence relevant to the property owner’s objections Attachment to Order - 2019CV30637 9 to the Petition. C.R.S. § 38-1-105(1) (“[t]he court shall hear proofs and allegations of all parties interested” regarding the property owner’s objections) (emphasis added). Discovery is necessary for PSCo to determine whether the City is properly exercising the power of eminent domain. Under similar circumstances, in State ex rel. Rantz v. Sweeney, 901 S.W.2d 289, 293 (Mo. Ct. App. 1995), the court held that the landowners were entitled to reasonable discovery “directed solely to the issue of the condemning authority’s right to condemn the property it seeks.” The court reasoned that if the landowners could not secure sufficient evidence to fairly present the controversy to the trial court, they could not develop a full and meaningful record upon which the court could rule on their challenges to the condemnation. Id. at 292; see also City of Wentzville v. Dodson, 133 S.W.3d 543, 545 (Mo. Ct. App. 2004) (reversing an order of condemnation where the trial court denied a landowner’s motion to conduct limited discovery on the issues of public purpose and necessity). The attached proposed order provides that if the Court denies PSCo’s Motion to Dismiss, the parties will submit a case management order and set an initial case management conference to handle the procedure for Phase 1. The case management order should address briefing deadlines, discovery, exchange of exhibits before the hearing, and other procedural issues. At the case management conference, the Court and the parties will resolve any issues in dispute and set the hearing on PSCo’s remaining objections to the Petition. All of this will occur before the valuation stage of the case, as contemplated by the statutes and case law cited above. WHEREFORE, PSCo respectfully requests that the Court grant this Motion and enter the attached proposed order providing for a case management conference and a hearing on PSCo’s objections to the Petition. Attachment to Order - 2019CV30637 10 Respectfully submitted this 7th day of August, 2019. FAEGRE BAKER DANIELS LLP /s/ Sarah M. Kellner John R. Sperber, Atty. Reg. No. 22073 Brandee L. Caswell, Atty. Reg. No. 30706 Sarah M. Kellner, Atty. Reg. No. 38111 Katie M. Gray, Atty. Reg. No. 42331 Attorneys for Respondent Public Service Company of Colorado Attachment to Order - 2019CV30637 11 CERTIFICATE OF SERVICE The undersigned certifies that on this 7th day of August, 2019, a copy of the foregoing MOTION FOR CASE MANAGEMENT CONFERENCE AND TO SET HEARING PURSUANT TO C.R.S. § 38-1-105 TO CONSIDER OBJECTIONS TO THE PETITION was served on the following by the methods listed below: Attorneys for Petitioner, City of Boulder: Office of the Boulder City Attorney Thomas A. Carr Kathleen E. Haddock P.O. Box 791 Boulder, CO 80306 carrt@bouldercolorado.gov haddockk@bouldercolorado.gov ( ) First Class Mail ( ) Hand Delivery ( ) Overnight Delivery (X ) CCES ( ) E-Mail Hamre, Rodriguez, Ostrander & Dingess, PC Donald M. Ostrander Richard F. Rodriguez 3600 S. Yosemite Street, Suite 500 Denver, CO 80237 dostrander@hrodlaw.com rrodriguez@hrodlaw.com ( ) First Class Mail ( ) Hand Delivery ( ) Personal Service ( ) Overnight Delivery (X ) CCES ( ) E-Mail Attorney for Defendant, Paul Weissmann, in his official capacity as Treasurer of Boulder County Olivia D. Lucas Boulder County Attorney P.O. Box 471 Boulder, CO 80306 olucas@bouldercounty.org ( ) First Class Mail ( ) Hand Delivery ( ) Overnight Delivery (X ) CCES ( ) E-Mail /s/Lisa Riggenbach Legal Administrative Assistant Attachment to Order - 2019CV30637