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028 Order re IBM's Partial Motion to Dismiss Pursuant to CRCP 12(b)(1)Page1 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: International Business Machines Corporation's Partial Motion to Dismiss Pursuant to CRCP 12(b)(1) The motion/proposed order attached hereto: MOOT. Issue Date:9/4/2019 THOMAS FRANCIS MULVAHILL District Court Judge DATE FILED: September 4, 2019 2:44 PM CASE NUMBER: 2019CV30637 DISTRICT COURT, BOULDER COUNTY, COLORADO Boulder County Justice Center 1777 6th Street, Boulder, Colorado 80302 ▲COURT USE ONLY▲ THE CITY OF BOULDER, a Colorado Home Rule City, PETITIONER, v. PUBLIC SERVICE COMPANY OF COLORADO, a Colorado Corporation, d/b/a XCEL ENERGY; MORGAN GUARANTY TRUST COMPANY OF NEW YORK; and PAUL WEISSMAN, in his official capacity as Treasurer of Boulder County, RESPONDENTS. WIDLUND LAW, L.L.C. Douglas S. Widlund, #21042* 7200 South Alton Way, Suite A220 Centennial, CO 80112 Telephone: 303.839.1550 E-mail: doug@butcherwidlund.com WILKINSON BARKER KNAUER LLP Raymond L. Gifford, #21853* Caitlin M. Shields, #41539* 1755 Blake Street, Suite 470 Denver, CO 80202 Telephone: 303.2626.2350 E-mail: rgifford@wbklaw.com cshields@wbklaw.com Attorneys for Cross Petitioner IBM, Corp. *Counsel of Record Case Number: 2019CV30637 Div.: 5 Ctrm: _____ INTERNATIONAL BUSINESS MACHINES CORPORATION’S PARTIAL MOTION TO DISMISS PURSUANT TO C.R.C.P. 12(b)(1) International Business Machines Corporation (“IBM”) submits this Partial Motion to Dismiss pursuant to C.R.C.P. 12(b)(1) (“Motion”), and states as follows: Attachment to Order - 2019CV30637 2 C.R.C.P. 121, SECTION 1-15 CERTIFICATION Undersigned counsel conferred regarding this Motion with counsel for the following parties to this proceeding: (1) Petitioner City of Boulder (“Boulder” or “Petitioner”); (2) Public Service Company of Colorado, d/b/a Xcel Energy (“Public Service”); and (3) the Colorado Public Utilities Commission (“PUC”).1 Public Service does not oppose the Motion; the PUC takes position; and the Petitioner opposes it. INTRODUCTION AND SUMMARY This Motion is similar to the motions to dismiss previously filed in this proceeding by Public Service and by the PUC,2 which demonstrate that Boulder’s July 22, 2019 Amended Petition in Condemnation (“Petition”) is premature. This Motion, however, focuses on specific property interests that Boulder would use to provide electric service to IBM, if Boulder proceeds with its planned municipalization. While IBM’s Cross Petition has not yet been considered by the Court, IBM believes it is appropriate to present this Motion now, in the interest of placing IBM’s specific issues before the Court as soon as possible and in concert with the other motions to dismiss. While IBM agrees with the arguments presented in the Public Service and PUC motions, IBM by this Motion seeks partial dismissal only of that portion of Boulder’s Petition that would take or implicate property interests that Boulder would utilize to provide service to IBM. IBM here is able to reference those implicated property interests only in summary 1 The PUC has not yet been made a party to this proceeding but did file a motion to intervene on August 8, 2019. 2 Public Service filed a Motion to Dismiss First Amended Petition in Condemnation for Lack of Subject Matter Jurisdiction Pursuant to Colo.R.Civ.P. on August 5, 2019 (“Public Service Motion”). The PUC filed a Motion to Dismiss Pursuant to C.R.C.P. 12(b)(1), or in the Alternative Stay Proceeding Pending Final PUC Decision on August 8, 2019 (“PUC Motion”). Attachment to Order - 2019CV30637 3 fashion, given that IBM does not have access to the confidential detailed property descriptions filed with Boulder’s Petition. If this Court grants this Motion it will be appropriate and necessary to further require Boulder to then disclose the specific property interests within the scope of its Petition that would relate to providing service to IBM. IBM therefore includes this required disclosure within the relief its requests by this Motion. For the reasons in both Public Service’s and the PUC’s motions to dismiss, and consistent with Judge LaBuda’s prior determination in Boulder District Court Case No. 14CV30047, any condemnation of any property interests, generally, is premature, until the PUC completes its proceeding determining the appropriate separation of Public Service assets. Further, and more particularly as presented here, and condemnation of any property interests that would be relevant to serving IBM is premature until such time as the PUC has determined that Boulder can provide adequate service to IBM. FACTUAL BACKGROUND In the interest of brevity, IBM does not re-recite the full background facts relating to that ongoing PUC proceeding, which were accurately set forth in the PUC Motion. Instead, IBM focuses on just one issue that remains open in that PUC proceeding: Whether Boulder can provide adequate service to IBM. As the PUC stated in its motion: “The outstanding issues raised by IBM must addressed and resolved prior to any condemnation action.” PUC Motion at 11 (emphasis added). Attachment to Order - 2019CV30637 4 LEGAL STANDARD IBM concurs in the statement of the legal standard governing C.R.C.P. 12(b)(1) motions as set forth in the PUC Motion. Fundamentally, C.R.C.P. 12(b)(1) requires this Court to determine whether it has jurisdiction to hear Boulder’s Petition at this time. Partial dismissal of a portion of Boulder’s Petition is appropriate if the Court lacks jurisdiction to consider those issues. See, e.g., Billington v. Yust, 789 P.2d 196, 197 (Colo. App. 1989) (addressing the dismissal of part of a larger condemnation attempt). ARGUMENT First, while IBM’s Motion here takes a narrow tack and seeks only partial dismissal of Boulder’s Petition, IBM agrees with Public Service and the PUC that Boulder’s purported condemnation of any property interests is premature, pending the conclusion of a PUC proceeding addressing the issue of separation of Public Service assets between Public Service and Boulder. See PUC Proceeding No. 15A-0589E, Application of the City of Boulder, Colorado for Approval of the Proposed Transfer of Assets from Public Service Company of Colorado to the City and Associated Authorizations and Relief (“PUC Transfer Proceeding”). As previously stated by Judge LaBuda, the purpose of the ongoing PUC Transfer Proceeding is to provide “the PUC its constitutional right to investigate and determine how the facilities should be assigned, divided, or jointly used to protect the system’s effectiveness, reliability and safety, as well as any other matter affecting the public interest.” See City of Boulder v. Public Utilities Commission, Case No. 14CV30047, at 12 (Boulder Dist. Ct. Jan. 14, 2015) (“J. LaBuda Jan. 14, 2015 Order”). As Judge LaBuda determined, “it is necessary and Attachment to Order - 2019CV30637 5 appropriate for the PUC to determine how facilities should be assigned, divided, or jointly used to protect the system’s effectiveness, reliability, and safety.” Id. (emphasis added). Judge LaBuda further held this PUC determination “must be made prior to the City’s condemnation of property for utility municipalization.” Id. (emphasis added). Judge LaBuda’s decision is grounded in Colorado law, as the Colorado Constitution and Colorado Supreme Court precedent “provid[e] the [PUC] with the ability to ensure adequate utility service to people and business throughout the state.” City of Fort Morgan v. Public Utilities Commission, 159 P.3d 87, 92 (Colo. 2007) (explaining that the “balance of powers within Colorado’s constitution and statutes relating to public utilities respects municipal utility and governance powers”); see also City of Durango v. Durango Transportation, Inc., 807 P.2d 1152, 1155 (Colo. 1991) (“Article XXV vests ‘all power to regulate’ public utilities in the PUC unless and until the general assembly designates another agency to perform that function.” (quoting COLO. CONST. art. XXV)). Pursuant to the Commission’s Article XXV charge, the legislature has found that “[a] reliable supply of electric power … statewide is of vital importance to the health, safety, and welfare of the people of Colorado.” C.R.S. § 29-20-108; see also C.R.S. § 40-3-101(2) (stating that public utilities shall furnish, provide, and maintain service that is adequate, efficient, just, and reasonable). In the PUC Transfer Proceeding, Boulder has not yet satisfied the Commission’s conditions, obtained Commission approval of assets and real property for transfer, or obtained a Commission finding that Boulder’s proposed separation will protect the system’s safety, effectiveness, and reliability. These are each constitutionally grounded prerequisites to Boulder Attachment to Order - 2019CV30637 6 filing its condemnation proceeding in this Court.3 Boulder’s Petition is further premature specific to any property interests that Boulder would purport to condemn for purposes of serving IBM, because the PUC has not yet determined if Boulder will be able to provide adequate service to IBM. See PUC Motion at 11. As the Colorado Supreme Court determined in City of Fort Morgan v. Public Utilities Commission, while the Commission does not have direct jurisdiction over municipal utility rates, “[s]ubstantial inadequacy of service is a factual question to be determined by the PUC,” as the Commission has authority to ensure that customers of municipal utilities receive adequate service. City of Fort Morgan, 59 P.3d at 92. If the Commission determines that Boulder has failed to demonstrate its ability to adequately serve IBM, then Boulder will not be allowed to provide service to IBM. And if Boulder will not provide electric service to IBM, then Boulder has stated no legitimate public purpose for to take or affect property interests that would be used to provide service to IBM. Boulder has the cart before the horse: “[t]he outstanding [adequate service] issues raised by IBM must addressed and resolved prior to any condemnation action.” PUC Motion at 11. Until such time as those issues are resolved in the PUC Transfer Proceeding, Boulder’s Petition, insofar as it purports to take or impact property interests that would be taken to allow Boulder to serve IBM, is premature. This Court therefore lacks subject matter jurisdiction to consider Boulder’s purported condemnation of any such property interests at this time, and Boulder’s 3 See Application of the City of Boulder, Colorado for Approval of the Proposed Transfer of Assets from Public Service Company of Colorado and Associated Authorizations and Relief, Decision Granting, In Part and With Conditions, and Denying, In Part and With Conditions, Third Supplemental Verified Application, Proceeding No. 15A-0589E, Decision No. C17-0750 (mailed Sept. 14, 2017). Attachment to Order - 2019CV30637 7 Petition should be dismissed as to those property interests that Boulder would use to provide service to IBM. ***** WHEREFORE, IBM respectfully requests this Court partially dismiss Boulder’s Petition for lack of subject matter jurisdiction, specific to those property interests within the scope of Boulder’s Petition that Boulder would use to provide service to IBM. To allow for this partial dismissal, IBM further requests that the Court order Boulder to disclose those property interests within the scope of its Petition that would be taken, or impacted, for the purpose of allowing Boulder to provide service to IBM. Attachment to Order - 2019CV30637 8 Dated this 16th Day of August, 2019. Respectfully submitted, /s/ Douglas S. Widlund Douglas S. Widlund, #21042* 7200 South Alton Way, Suite A220 Centennial, CO 80112 Telephone: 303.839.1550 E-mail: doug@butcherwidlund.com Raymond L. Gifford, #21853* Caitlin M. Shields, #41539* Wilkinson Barker Knauer, LLP 1755 Blake Street, Suite 470 Denver, CO 80202 Telephone: 303.626.2350 Fax: 303.626.2351 E-mail: rgifford@wbklaw.com cshields@wbklaw.com Attorneys for Cross Petitioner IBM, Corp. *Counsel of Record4 , 4 In accordance with C.R.C.P. 121 § 1-26(7), a printable copy of this document with original signature is maintained by Cross Petitioner’s counsel, and will be made available for inspection by other parties or the Court upon request. Attachment to Order - 2019CV30637 CERTIFICATE OF SERVICE I hereby certify that on this 16th Day of August, 2019 a true and correct copy of the foregoing Motion to Dismiss Pursuant to C.R.C.P. 12(b)(1) was electronically filed and served via the Colorado Courts E-filing system (“CCEF”) to the following, in accordance with C.R.C.P. § 1-26(6) and C.R.C.P. § 5(b)(1): Attorneys for Petitioner, City of Boulder: Thomas A. Carr Kathleen E. Haddock Office of the Boulder City Attorney P.O. Box 791 Boulder, CO 80306 carrt@bouldercolorado.gov haddock@bouldercolorado.gov 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 Attorney for Defendant, Paul Weissman, in his Official Capacity as Treasurer of Boulder County Olivia D. Lucas Office of the Boulder County Attorney P.O. Box 471 Boulder, CO 80306 olucas@bouldercounty.com Attorneys for Defendant Public Service Company of Colorado d/b/a Xcel Energy FAEGRE BAKER DANIELS, LLP John R. Sperber Sarah M. Kellner Brandee L. Caswell Matthew Dumont Clark Katharine M. Gray Sean J. Metherell 1144 15th Street, Suite 3400 Denver, Colorado 80202 Attorneys for Intervenor, the Colorado Public Utilities Commission Philip J. Weiser, Attorney General Paul C. Gomez, First Assistant Attorney General Ruth M. Harper, Assistant Attorney General 1300 Broadway, 6th Floor Denver, CO 80203 paul.gomez@coag.gov ruth.harper@coag.gov WIDLUND LAW, L.L.C. /s/ Douglas S. Widlund Douglas S. Widlund Attachment to Order - 2019CV30637