Case background

The beginning of the Martinez v. COGCC case dates back to November 15, 2013, when petitioners Xiuhtezcatl Martinez, Itzcuahtli Roske-Martinez, Sonora Brinkley, Aerielle Deering, Trinity Carter, and Emma Bray, minors appearing by and through their legal guardians Tamara Roske, Bindi Brinkley, Eleni Deering, Jasmine Jones, Robin Ruston, and Diana Bray, petitioned the Colorado Oil and Gas Conservation Commission (COGCC) to impose a rulemaking that would essentially prohibit permitting of oil & gas activity in the state unless the COGCC could assure zero environmental or climate impact from the activity.

The Martinez petition to the COGCC was recapped on April 22, 2014 in a memorandum to the COGCC commissioners from then COGCC Director Matthew Lepore. The COGCC rejected the petitioners’ proposed rulemaking on the grounds that the commission was already fulfilling its mandate as prescribed by Colorado law—the Oil and Gas Conservation Act.

At that point, Martinez et al took the COGCC to court. The lower court ruling favored the Colorado Oil & Gas Conservation Commission, confirming that the commission did not have to comply with the Martinez petition for a rulemaking.

The effect was that COGCC would continue permitting and regulating oil and gas in Colorado the way it always has—by balancing the fostering of responsible oil and gas development with safeguarding the public health, safety and welfare.

The Martinez petitioners and their attorneys appealed the lower court decision, taking their case to the Colorado appeals court. They argued that the COGCC had a separate duty to protect health, safety and welfare and environment, rather than providing a balance of the commission’s two mandates.

Two of the three appellate court judges agreed with the interpretation and overturned the lower court in a two-to-one decision.

COGCC takes the case to the Colorado Supreme Court – opening briefs were presented April 2

The Colorado Oil and Gas Conservation Commission voted to take the ruling to the Colorado Supreme Court. Colorado Attorney General Cynthia Coffman officially petitioned the high court to review the appeals court reversal of the lower court.

Opening briefs were presented to the state’s high court April 2, 2018.

The question the Colorado Supreme Court will review

Page 13 of the COGCC’s opening brief presents the question up for review by the Colorado Supreme Court:

“Whether the Court of Appeals erred in determining that the Colorado Oil and Gas Conservation Commission misinterpreted § 34-60-102(1)(a)(I), C.R.S., as requiring a balance between oil and gas development and public health, safety, and welfare.”

What to consider

Nearly 70 years ago, Colorado’s General Assembly passed the Oil and Gas Conservation Act, designating the Commission as regulator of oil and gas operations in Colorado. The act initially directed the Commission to pursue a narrow set of policies, the COGCC wrote in its opening brief.

Since then, the General Assembly has adjusted the Commission’s powers and duties through a number of statutory amendments, several of which expanded the range of policies the Commission is required to consider in its regulatory activities.

Two of the Act’s significant amendments came in 1994 and 2007. The Commission implemented those amendments through extensive rulemakings, based on an interpretation of the Act that requires a balance among various policy considerations.

The Commission said it has never interpreted the Act, including its recent amendments, to allow the pursuit of some of the General Assembly’s stated policies without considering the rest. In other words, the COGCC has always considered a broad range of policies and does not cherry-pick which ones it follows.

The 1994 Amendments

When the 1994 amendments were enacted, the Act’s legislative declaration stated, “it is … in the public interest to foster, encourage, and promote the development” of oil and gas resources. Senate Bill 94-177 added new language to the declaration: “in a manner consistent with protection of public health, safety, and welfare.”

Revisions to the Act’s substantive provisions explained how the commission was to pursue this revised policy goal, the COGCC wrote. The General Assembly authorized the Commission to “regulate oil and gas operations so as to prevent and mitigate significant adverse environmental impacts … taking into consideration cost-effectiveness and technical feasibility.”

What the petitioner(s) and respondents consider “significant, cost-effective and technically feasible” will be argued before the bench and theoretically decided by seven justices–with one major caveat: Chief Justice Nancy E. Rice is set to retire in June 2018.

The 2007 Amendments summarized

House Bill 07-1298 required the Commission to collaborate with the Parks and Wildlife Commission regarding decision-making and permitting to implement “reasonably practical best management practices… to conserve wildlife resources,” and to promulgate new rules to address impacts to wildlife.

House Bill 07-1341, meanwhile, changed the Commission’s membership to:

  • (1) include as voting members the executive directors of the Department of Natural Resources and the Colorado Department of Public Health and Environment (CDPHE)
  • (2) ensure that the Commission would include members with expertise in environmental or wildlife protection, soil conservation and agriculture

The COGCC said that neither of the 2007 bills altered the 1994 language requiring the Commission to account for “cost-effectiveness and technical feasibility” in its health, safety, environmental and wildlife regulations.

Our Children’s Trust – “the Request”

In November 2013, the respondents, a group of youth activists working with an organization called Our Children’s Trust, submitted to the Commission a “Request for Adoption of a Rule” (referred to as “the Request”).

The Request was part of the “Atmospheric Trust Litigation,” a nationwide effort organized by Our Children’s Trust. At the time, the effort had spawned rulemaking petitions in 38 states, all of which were rejected.

The number of petitions has grown. To date, Our Children’s Trust appears to have submitted at least 46 requests for rulemaking with state agencies, 44 of which have been denied, one of which was withdrawn and one of which remains pending, according to information published on the website

Why were petitions in other states denied?

State agencies typically deny Our Children’s Trust rulemaking petitions—often in short summary orders—as being contrary to state law or because the petitions fail to account for existing state regulations, the COGCC wrote.

Two examples are as follows:

  • Letter from Illinois EPA: “The Illinois EPA does not possess the requisite legal authority… and therefore cannot formally act on your request at this time.”
  • Rhode Island Department of Environmental Management’s answer to the petition: “The agency promulgated 48 different sets of regulations that govern the use of the state’s air resources… The Petitioner declares the state’s air resource to be a public trust resource. However, there is no statute in Rhode Island that supports such a suggestion.”

After an extensive public comment process, the COGCC declined to initiate rulemaking in response to the Request

The Commission conducted a thorough review of the Request, accepted extensive written comments, and, on April 28, 2014, held a public hearing. The result was a nearly 1,200-page administrative record. Based on this record, the commission, in a written order unanimously declined to initiate a rulemaking proceeding in response to the Request.

First, the Commission concluded that “conditioning new oil and gas drilling on a finding of no cumulative adverse impacts” would be “beyond the Commission’s limited statutory authority,” because the commission is not authorized to “readjust the [policy] balance crafted by the General Assembly.”

Second, the commission concluded that its rulemaking authority is “a non-delegable duty” and it would therefore be “contrary to the Act” to assign that duty to a third-party organization, as the Request urged.

Finally, the Commission concluded that “the public trust doctrine does not provide a basis… to initiate the proposed rulemaking.”

In addition to these legal concerns, the commission set forth other, independent reasons for denying the Request. Citing the many legislative and regulatory efforts in Colorado to address “climate change issues, statewide emissions, and reduction proposals,” the COGCC concluded that “it and other state agencies are currently addressing many of the concerns raised in the [Request].”

One example would be the February 2014 rule by the Colorado Air Quality Control Commission. The rule resulted in the elimination of approximately 60,000-113,000 tons of methane emissions, and more than 92,000 tons of volatile organic compound emissions each year from oil and gas operations, according to the COGCC brief.

Summary of the COGCC’s argument

The COGCC summarized its argument on page 36 of its opening brief. Relevant excerpts are quoted:

“Under well-established rules of statutory interpretation, the Act unambiguously supports the Commission’s Order and confirms the Commission’s longstanding regulatory approach…”

“The Act must be read as a whole,” the COGCC argued, “and each of its provisions must be given effect… Considered in its entirety, the Act requires the Commission to balance a number of different policy goals, including fostering the responsible and efficient development of Colorado’s oil and gas resources.”

The last paragraphs of the summary direct the high court to affirm the COGCC’s Order based-on the following:

  • First, the Request was based on the public trust doctrine. But that doctrine has been rejected in Colorado and therefore cannot form the basis for a Commission rulemaking.
  • Second, the nearly 1,200-page administrative record demonstrates that the environmental concerns raised in the Request are being addressed by a coordinated, cross-agency effort and that the Commission is diligently pursing its regulatory mission. Denying the Request was therefore well within the Commission’s discretion.

Oil & Gas 360® spoke briefly via email with Haynes and Boone attorney Robert Thibault about the opening briefs in the Martinez case.  Thibault is counsel in the Energy Practice Group in the Denver office of Haynes and Boone.

“The briefs uniformly focus – as they should before the Supreme Court – on the strength of the position that the Court of Appeals misapplied the ordinary and controlling doctrines and rules for interpreting statutes to the underlying Act,” Thibault said.

“Interestingly – and somewhat ironically in light of the scrutiny the Chevron doctrine is receiving in the national political whirlwind – virtually all of the opening briefs also relied upon the Chevron doctrine, to varying degrees, whereby the COGCC as administrative agency had and properly exercised wide latitude to interpret the Act on its own.”

The Chevron doctrine

Regarding the “Chevron doctrine,” which resulted from a 1984 case that went before the U.S. Supreme Court, the Center for Effective Government offers the following insight:

“The 1984 Supreme Court decision in Chevron U.S.A., Inc v. NRDC, 467 U.S. 837 established rules for judicial review of agency interpretations of statutes. An agency’s rulemaking authority is derived through statute. Therefore, when an agency rulemaking is challenged in court, an agency’s interpretation of their statutory authority is central to determining the legitimacy of the regulation.

“The Chevron decision created a two part test to determine regulatory authority. First, the court must determine whether Congress spoke directly to the question at issue. If so, then the court defers to the statute. If Congress did not address the issue in question in the statute itself, then the court must determine if the agency’s response to the statute is based on a “permissible” interpretation of the statute. If so, then the court must defer to the agency.

“The Chevron case applies only to agency interpretations made in notice-and-comment rulemakings. (See Mead Doctrine).”

What’s next?

According to Thibault, CRA Rule 31 gives an appellee 35 days to file the appellee’s answer brief, which would be on or about May 7. Oil & Gas 360® will follow the Martinez case and publish updates as the case progresses.

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