DISTRICT COURT, CITY AND COUNTY OF DENVER

COLORADO

Address: City and County Building

1437 Bannock Street Denver, CO 80202

Plaintiff: COLORADO MI NING ASSOCIATION,

vs.

Defendants: CHRISTOPHER E. URBINA, in his capacity as Executive Director of the Department of Public Health and Environment for the State of Colorado; THE

COLORADO DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT; THE COLORADO AIR QUALITY CONTROL COMMISSION; and the AIR

POLLUTION CONTROL DIVISI ON, an agency of the

State of Colorado. COURT USE ONLY

Case No. 11CV2044

Courtroom: 215

ORDER

THIS MATTER comes before the Court originally on the filing of a Complaint for Judicial Review on March 16, 2011, challe nging the adoption of certain rules by the Air Quality Control Commission (“the Commission” ). In its Answer Brief filed March 1, 2012, Defendants argued in part that the case ought to be dismissed as moot. The Court

has reviewed all briefs and citations of aut hority submitted on this issue, as well as the Proposed Orders submitted by the parties. The Court held a hearing on May 10, 2012, hearing argument of counsel only on the issue of mootness. In addition, the Court has also reviewed applicable authority and the relevant portions of the Court’s file. The Court is fully advised in the premises.

I. Standard of Review

The Administrative Procedure Act (“APA”) authorizes this Court to set aside an agency action if it is arbitrary or caprici ous, not in accord with the procedures or procedural limitations of the APA or other st atutes, an abuse of di scretion, or otherwise contrary to law. C.R.S. § 24-4-106(7). Ho wever, when issues presented in litigation become moot because of subsequent events , this Court may decline to exercise its jurisdiction to render an opinion on the merits of the dispute. Van Schaack Holdings,

Ltd. v. Fulenwider , 798 P.2d 424, 426-27 (Colo. 1990).2 II. Background

A. Regional Haze

Regional Haze is visibility impairment produced by a multitude of sources over a broad geographic area. The visibility impacts are caused by emissions into the atmosphere of sulfur dioxide, oxides of nitrogen, and particulate matter. See 64 Fed. Reg. 35,714, 35,715 (Jul. 1, 1999).

The federal Environmental Protectio n Agency (“EPA”) has promulgated a Regional Haze Rule requiring states to subm it State Implementation Plans (“SIPs”) to address regional haze. 71 Fed. Reg. 60,612 (O ct. 13, 2006). States were required to submit initial SIPs to EPA by December 17, 2007. 40 C.F.R. § 51.308(b). States must submit revised SIPs to EPA by July 31, 2018, and every ten years thereafter. 40 C.F.R. § 51.308(f). Colorado submitted portions of its initi al SIP to EPA in 2008-09. R. at 8. In 2009, EPA identified deficiencies with the SIP. Colorado was then required to submit a revised SIP, covering the period up to 2018, by January 15, 2011, lest EPA promulgate a Federal Implementation Plan. Id.

A key element of the regional haze program is Best Available Retrofit Technology (“BART”) for existing major fac ilities placed into operation between 1962 and 1977 that have the potential to emit mo re than 250 tons of visibility-reducing pollution a year. 64 Fed. Reg. at 35,737, 35,739. The Regional Haze Rule requires the

SIP to include a list of BART sources and emission limits for each source. Id. If a state demonstrates that alternative measures will achieve greater reasonable progress toward the national visibility improvement goal, a st ate may adopt a BART Alternative. 71 Fed. Reg. at 60,614-15.

B. The Colorado Clean Air – Clean Jobs Act

On April 19, 2010, Governor Ritter signed into law the Clean Air – Clean Jobs Act, HB 10-1365, codified at C.R.S. §§ 40-3.2-201 et seq. (“the Act”). The Act, in part, serves to fulfill the require ments of the Regional Haze Rule. C.R.S. §§ 40-3.2-208(1), 208(2)(a).

The Act required rate-regulated electric utilities to develop emission reduction plans to be submitted for approval by the Colorado Public Utilities Commission (“PUC”). C.R.S. § 40-3.2-204(1). Prior to submission of a plan to the PUC, each utility was required to consult with the Colorado Depa rtment of Public Health and Environment (“CDPHE”). The CDPHE was required to comment on the plan and determine whether the plan was consistent with the current a nd reasonably foreseeable requirements of the federal Clean Air Act (“CAA”). C.R.S. § 40-3.2-204(2)(b)(II). Each emission reduction plan was required to include a schedule th at would result in full implementation of the plan on or before December 31, 2017. C.R.S. § 40-3.2-204(2)(c). The Act required the PUC to enter an order approving, denying, or modifying the plan by December 15, 2010. C.R.S. § 40-3.2-205(2). Upon approval by the PUC, the air quality provisions of the plan were considered by the Commission for inco rporation into Colorado’s Regional Haze SIP. C.R.S. § 40-3.2-208.3 Once approved by the Commission, SIPs must to be submitted to the Legislative Council for review and approval by the Colorado General Assembly pursuant to C.R.S. § 25-7-133. After approval by the General Asse mbly, SIPs are submitted to the EPA for approval as required by C.R.S. § 25-7-133. Once approved by EPA, a SIP becomes

enforceable under federal law.

C. Public Service Emission Reduction Plan

On August 13, 2010, Public Service Comp any of Colorado (“PSCo”) filed its emission reduction plan with the PUC. R. at 3359, 3368. The CDPHE subsequently

informed the PUC of its determination that the plan was consistent with reasonably foreseeable emission reduction requirements. R. at 3411. Ultimately, the PUC issued its order modifying and approving the plan on December 15, 2010. R. at 3356. The air quality elements of that approved plan were presented to the Commission for incorporation into the Regional Haze SIP as a BART Alternative. R. at 7244. The Commission adopted the plan as part of Colorado’s Regional Haze SIP on January 7, 2011, and sent a SIP report to the Legisla tive Council on January 11, 2011, as required by C.R.S. § 25-7-133(1). R. at 6328-503.

D. The SIP

Upon the Commission’s adoption of the Re gional Haze SIP, the SIP was required to be submitted to the Colorado Legislative Council for review and approval by the General Assembly under C.R.S. § 25-7-133(1). Further, in accordance with C.R.S. § 25-7-133(2)(a), any member of the Genera l Assembly was permitted to request that Legislative Council hold a hearing to determ ine whether the SIP change “accomplishe[d] the result intended by enactment of the statut ory provisions” at i ssue. As discussed below, a legislative hearing was requeste d. Legislative Council held the requested hearing on March 25, 2011. At that hearing, many of the issues in this case were presented to the Council members. The Council unanimously voted to send the SIP to the General Assembly for consideration. The bill approving the SIP was signed by Governor Hickenlooper on May 4, 2011.

III. Procedural History of the Case

A. CMA’s Challenge

CMA initiated this suit challenging the Regional Haze Rulemaking on March 16, 2011. In its complaint, CMA alleges the Stat e Defendants “failed to: (1) properly notice the SIP Rulemaking; (2) failed to vacate and renotice the rulema king; (3) failed to conduct a proper visibility analysis of the propos al; (4) failed to dete rmine within the SIP Rulemaking the meaning of the term ‘reasonabl y foreseeable requirements’ of the federal Clean Air Act; (5) included air quality requ irements more stringent than federally required; and (6) failed to address the economic impact of the proposal on energy producing communities of Northwest Colorado.” 1

1 CMA subsequently abandoned this final claim.4 In its prayer for relief, CMA requested this Court undertake the following actions:

A. Declaring that the [Commission’s] failure to vacate the Phase III proceedings of the SIP Rulemaking and renotice Phase III of the Rulemaking upon issuance of the final PUC order on February 3, 2011 violated § 25-7-110(1). B. Declaring that the [Commi ssion’s] failure to engage in formal rulemaking to adopt the standard and criteria for ‘reasonably foreseeable,’ and its application of that standard to determine whether the PSCo Emission Plan meets the ‘reasonably foreseeable’ CAA requirements was arbitrary and capricious and otherwise not in accordance with applicable law. C. Invalidating the PSCo proposed BART Alternative Plan adopted by the [Commission] in Phase III. D. Declaring that the [CDPHE’s] failure to conduct the required visibility anal ysis of the PSCo BART Alternative Plan before considering it for inclusion

in the SIP Rules was arbi trary and capricious and otherwise not in accordance with applicable law. E. Invalidating the Phase III PSCo BART Alternative

Plan included in the SIP Rules because the [CDPHE] and the [Commissi on] failed to comply with §25-7-110.5 (5)(a), by in cluding standards that exceeded the requirements of the CAA. F. Invalidating the Phase III PSCo BART Alternative

Plan included in the SIP Rules because the [CDPHE] and the [Commissi on] failed to prepare

the SIP and conduct Phase III of the SIP Rulemaking in a manner th at addressed the sound economic conditions of the energy producing

communities of Northwest Colorado. G. Invalidating [Commissi on’s] SIP Rulemaking as it relates to Phase III as improper because it is: (1) unsupported by substantial evidence when the

record is consid ered as a whole; (2) not supported by the required fiscal analys is; and is (iii) arbitrary and capricious and not in accordance with the law

and should be set aside. H. Accelerate the proceedings under C.R.C.P. § 106(a)(4)(VIII); and I. Grant such further relief as the Court deems just and

proper.5 After the parties submitted their briefs, the Court ordered oral argument on the issue of mootness, which was raised by the Appellees and intervening parties either directly or by implication in briefs and prior pleadings.

IV. Findings of Fact

Several Colorado state legislators reque sted a hearing on the Regional Haze SIP that is the subject of the instant case. See Defendants’ Reply in Support of Motion to Dismiss, Exhibit A. The legi slators requested that the Legislative Council review the SIP changes to consider whether the notice a nd “reasonably foreseeable” determinations complied with the APA, and whether the SIP changes impermissibly included requirements more stringent than requi red by the federal Clean Air Act. Id.

At the hearing, held on March 25, 2011, th e Legislative Council considered these issues and heard testimony from parties raisi ng the same concerns a bout the SIP that are

at issue in this case. See Defendants’ Reply in Support of Motion to Dismiss, Exhibit B (Staff Summary of Meeting, indi cating the Legislativ e Council “discussed the stringency issue in detail;” took significant testimony on al leged procedural irre gularities, including the sufficiency of notice; discussed whethe r the “reasonably forese eable” requirement necessitated a rulemaking; and received testimony on th e propriety of the BART Alternative).

Upon conclusion of the hearing, the Legi slative Council, by unanimous bipartisan vote, determined the SIP changes were appr opriate and “recommend[ed ] a bill to ratify the changes and additions to the SIP and to postpone the automatic e xpiration of the rules contained in the plan.” Id.

The resulting legislation was HB 11-1291. See Defendants’ Reply in Support of Motion to Dismiss, Exhibit C. The legisl ative declaration of HB 11-1291 states the General Assembly intended that legislation to serve two distinct purposes. First, to postpone the automatic expirati on of the rules contained in the SIP under the Colorado

Administrative Procedure Act. Id. Second, to “approve the a dditions and changes to the [SIP.]” Id. To accomplish these objectives, the le gislation added language to C.R.S. § 25-7-133.5(2), providing as follows:

Approval or rescission of sp ecific revisions to state implementation plan (SIP) after 1996 . (2) Pursuant to section 25-7-133, the following revisions to the state implementation plan (SIP), which were adopted by the air quality control commission on the dates indicated and received by the legislative c ouncil for review, are approved for incorporation into the state implementation plan: (bb)(I) T HE “C OLORADO V ISIBILITY AND R EGIONAL
H AZE S TATE I MPLEMENTATION P LAN FOR THE T WELVE
M ANDATORY C LASS I F EDERAL A REAS IN C OLORADO ,”6 ADOPTED BY THE AIR QUALITY CONTROL COMMISSION ON
J ANUARY 7, 2011. (II) T HE AUTOMATIC EXPIRATION OF THE RULES

CONTAINED IN THE PLAN SPE CIFIED IN SUBPARAGRAPH (I) OF

THIS PARAGRAPH ( BB ) THAT WERE ADOPTED ON J ANUARY 7, 2011, AND THAT ARE THEREFORE SCHEDULED FOR

EXPIRATION ON M AY 15, 2012, IS POSTPONED

, EFFECTIVE
M AY 15, 2011. (S MALL CAPS indicates language added to the statute.)

HB 11-1291 was signed into law by Colora do Governor Hickenlooper on May 4, 2011.

V. Mootness Doctrine

It is well-established Colorado law that “[c]ourts limit their inquiry to the

resolution of actual controve rsies.” Bd. of Dirs. v. Nat’l Union Fire Ins. Co. , 105 P.3d 653, 656 (Colo. 2005). There is a preference to re solve disputes on their merits. Stell v. Boulder County Dep’t of Social Svcs. , 92 P.3d 910, 914 (Colo. 2004). However, Courts may confine their exercise of ju risdiction to cases that presen t a live case or controversy.

Davidson v. Comm. for Gail Schoettler, Inc. , 24 P.3d 621, 623 (Colo. 2001). “Mootness instructs courts not to grant relief that would have no pract ical effect upon an actual and existing controversy.” Stell , 92 P.3d at 914. “A case is moot when the relief sought, if granted, would have no practical legal e ffect.” Archibold v. Pub. Utils. Comm’n , 58 P.3d 1031, 1036 (Colo. 2002). See also Van Schaack Holdings, Ltd. v. Fulenwider , 798 P.2d 424, 426 (Colo. 2004).

A controversy can be rendered moot by s ubsequent legislative action. Taxpayers

for the Animas-La Plata Referendum v. An imas-La Plata Water Conservancy Dist. , 739 F.2d 1472, 1478 (10th Cir. 1984). See also Jones v. Temmer , 57 F.3d 921 (10th Cir. 1995).

VI. Application

The legislature’s passage of HB 11- 1291 has rendered CMA’s case moot. CMA’s prayer for relief seeks two broad categories of relief. First, CMA seeks invalidation of the Commission’s adoption of the Regional Ha ze SIP. Second, CMA seeks a declaration that the Commission’s process for adopti ng the Regional Haze SIP was flawed or otherwise arbitrary and capric ious. Due to the passage of HB 11-1291, neither of the rulings requested of this Court would have any practical effect.

Legislative review of SIPs is contro lled by C.R.S. § 25-7-133. Under that statutory procedure, the Comm ission is required to submit a report to the Legislative Council summarizing any additions or changes to elements of Colorado’s SIP. C.R.S. § 25-7-133(1). After the report is submitted, any member of the General Assembly may request a publicly noticed hear ing to “determine whether th e addition or change to the SIP element accomplishes the results intended by enactment of the statutory provisions under when this SIP element was adopted.” C. R.S. § 25-7-133(2)(a). If a hearing is requested, the SIP revision ma y not take effect for the purpose of any enforcement unless7 expiration of the rules that constitute th e SIP is postponed by the General Assembly acting in the same manner as prescribed by the Colorado Administrative Procedure Act. 2
After the hearing, the Legisl ative Council can recommend introduction of a bill, either approving the SIP changes or altering the SIP to meet legislative intent. 3 C.R.S. § 25-7- 133(2)(a). If no such review is reques ted, the Commission’s approved changes are incorporated into Colorado’s SIP. C.R.S. § 25-7-133(b).

As discussed supra, consistent with C.R.S. § 25-7-133(2)(a), the General Assembly’s Legislative Council held its he aring on March 25, 2011. After the hearing, Legislative Council specifically addre ssed the SIP changes and recommended introduction of a bill, HB 11-1291, approving the SIP changes. Thereafter, in passing HB 11-1291, the General Assembly did two things.

First, it postponed the auto matic expiration of the rules contained in the SIP under

the Colorado Administrative Procedure Act in C.R.S. § 25-7-133.5(2)(bb)(II). This

action does not constitute legislative approval of the rule pursuant to C.R.S. § 24-4-103(c).

However, in its second action, the Gene ral Assembly went on to specifically approve the proposed changes to the Re gional Haze SIP under the C.R.S. § 25-7- 133(2)(a) process. In accordance with that process, review is conducted to “determine whether the addition or change to the SIP element accomplishes the results intended by enactment of the statutory provisions under which this SIP element was adopted.” Id. Moreover, after undertaking this process, the General Assembly specifically and affirmatively approved the changes propos ed by the Commission. C.R.S. § 25-7- 133.5(2) (identifying revisions to the SIP that have been “approved” by the General Assembly). See also Defendants’ Reply in Support of Motion to Dismiss, Exhibit C (identifying the objectiv e of “approv[ing] the additions and changes to the [SIP]” as among the intent of the General Assembly in passing HB 11-1291). This action goes beyond the mere postponement of automatic expi ration of a rule, and reflects the General Assembly’s unique attention to the Clean Air – Clean Jobs Act. 4

2 The APA, in turn, states that “the postpone ment of the expiration of a rule shall not constitute legislative approval of the rule nor be admissible in any court as evidence of legislative intent.” C.R.S. § 24-4-103(c). No similar language is found in C.R.S. § 25-7-

133.

3 The Legislative Council may also decline to recommend introduction of a bill, thereby prohibiting submission of the SIP to EPA. C.R.S. § 25-7-133(2)(a).

4 At oral argument, CMA ch aracterized the legislative action in HB-1291 as a mere procedural step by the General Assembly and the Governor to pass the SIP on to EPA. CMA takes the position that the statute, HB 11-1291, does not represent affirmative approval of the SIP. However, the actions of the legislature and th e plain language of HB 11-1291 demonstrate the General Assembly’s intent to “approve the additions and changes to the [SIP]....” CMA’s argu ment is therefore without merit.8 At the hearing on this matter, CMA was una ble to articulate what practical effect a ruling by this Court would have on the present controversy. 5 Rather, CMA argued that the rules themselves remained in effect, presenting a continuing controversy capable of resolution. However, the relevant inquiry is not whether the challe nged rules remain in force, but rather what practical effect a ruling of this Court would have under the present

circumstances.

The relief sought by CMA in its Complaint is incapable of being practically effectuated by a ruling of this Court b ecause HB 11-1291, as a matter of law, has superseded CMA’s requested relief by appr oving the Commission’s actions. Notably, CMA did not challenge the General Assembly’s adoption of HB 11-1291. See CMA Complaint for Judicial Review.

Even if this Court were to enter an order invalidating the Commission’s approval of the SIP as requested by CMA, the actual ch anges to the SIP would remain in force and effect due to the subsequent approval of the SIP by the General Assembly embodied in HB 11-1291, codified at C.R.S. § 25-7-133.5(2)(bb). See also Taxpayers , 739 F.2d at 1478. As a result, a ruling by this Court would “have no practical legal effect.”

Archibold , 58 P.3d at 1036. This is the black letter definition of mootness. See Van Schaack Holdings, Ltd. , 798 P.2d at 426.

This case is therefore DISMI SSED WITH PREJUDICE as MOOT.

DATED: Wednesday, June 06, 2012.

BY THE COURT:

Christina M. Habas District Court Judge

5 CMA further declined to identify any por tions of its action capable of surviving a finding of mootness through subseq uent legislative validation.