Mr. Bacon is a member of the firm’s litigation department. He has represented individuals and companies in a range of complex civil litigation disputes, including in the fields of natural resources, real estate, eminent domain, employment, trade secret, and all types of contractual issues. Before joining the firm, Mr. Bacon clerked for the Honorabl...e Chief Justice Nancy Rice at the Colorado Supreme Court, interned for the Jackson, Wyoming Town Attorney, and practiced with a Denver litigation firm. More

Proposed Public Land Sale Falls to Public Opposition

On February 1, 2017, Representative Jason Chaffetz (UT-R) announced that he would pull a bill proposing to sell more than 3 million acres of public land.  It was easy to lose track of this sea-change proposal amidst the flurry of activity at the advent of the Trump administration, but the bill’s goal - as well as its failure - is noteworthy despite the fact that it is unlikely to become law.

Focusing first on the proposal, Mr. Chaffetz, a Republican Representative from Utah and chair of the House Oversight Committee, memorialized the argument held by some, especially in the West, that the federal government owns too much land, to the detriment of states.  In his home state of Utah, the legislature is seeking the “return” of federal lands to the state.  See http://publiclands.utah.gov/current-projects/transfer-of-public-lands-act.  Debate over federal property ownership has existed since the country’s inception, but recently the debate came to a head with Cliven Bundy and other groups claiming ownership over federally leased land.  States like Utah also challenged the extent and alleged burden of federal lands within their borders, while conservatives like Mr. Chaffetz aimed to turn that public sentiment into law.  House Republicans recently changed their internal rules to generally facilitate selling public land, and Mr. Chaffetz offered H.R. 621, which would sell 3.3 million acres of Bureau of Land Management lands spread across ten western states, and H.R. 622, which would transfer federal agencies’ policing power to local law enforcement. See http://chaffetz.house.gov/news/documentsingle.aspx?DocumentID=788.

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The November Ballot Can Still Affect the Energy Industry

For those interested in Colorado’s energy economy, ballot initiatives concerning oil and gas regulation have rightly taken center stage. (See [4/27/16 blog post]). As of today, however, none of those public initiatives appear destined for the ballot this November.  The Colorado Secretary of State found that proponents of the two measures did not collect the requisite number of signatures to make the ballot. Though proponents turned in slightly more than the nearly 100,000 necessary signatures, the Secretary of State must conduct a random sampling of the signatures to assure that those signing are registered voters and the signatures authentic.  The Secretary concluded that both submitted measures lacked enough valid signatures, so they would not appear on the ballot (unless proponents successfully challenge the ruling).

But despite the fact that there will be no explicit challenge to the industry, another initiative could also significantly though indirectly affect regulation of the energy industry via initiative going forward. Initiative 96 would “raise the bar” - to quote the group promoting the measure - that must be cleared to amend the Colorado Constitution through the public initiative process.  If adopted by Colorado voters in November, it would become far more difficult for public initiatives and referendums, including those concerning energy regulation, to supplant or bypass the decisions of the General Assembly and, in this case, the Colorado Oil and Gas Conservation Commission.

Specifically, Initiative 96 targets the public constitutional amendment process in two ways.  First, it bolsters the signature requirements by requiring at least 2% of the total ballot signatures come from each of the state’s 35 senate districts.  This component appears to target the increasingly common practice of (often paid) signature collectors standing outside major events like games and concerts in metropolitan areas to generate signatures quickly and easily.  Proponents of the measure allege that such strategies leave rural districts with little input into the public ballot process.  Second, a constitutional amendment would require a 55% majority, not the 50% currently required.

Of course, these procedural changes would make it more difficult for the public to directly regulate the energy industry and, in turn, the state’s economy. As Governor Hickenlooper stated, Initiative 96 “is going to ensure that our constitution is not held captive by the whims of the day.”  Therefore, although it appears that the November 2016 ballot will not directly threaten radical change to the energy industry, the outcome of the election will still have a long-term impact on energy production and regulation in Colorado.

For some background on the use and management of the initiative process see “Citizen Initiatives: Power to the People or More of the Same?”, Rebecca W. Watson & Jennifer Cadena. http://goo.gl/z1zKSv

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Electronic Communication in Modern Litigation

It goes without saying that use of electronically stored information constitutes a fundamental component of any modern, successful company, but state and federal courts have only recently adjusted their rules of discovery to reflect that. For example, the federal courts recently revised their Rule 37, which concerns sanctions for failing to preserve or produce documents relevant to a claim or defense. Previously, Federal Rule 37(e) permitted sanctions for a party’s failure to preserve electronic information only in “exceptional circumstances.” Now, Rule 37(e) places an affirmative duty on parties to take “reasonable steps to preserve” electronic information, and that duty begins the moment litigation is anticipated, not merely commenced. State courts often follow the federal judiciary’s example—whether by expressly revising their rules in accordance or simply as an example to guide decisions when their rules are silent on an issue (as Colorado’s rule is)—so these changes are significant regardless of forum.

For businesses and individuals, the added focus on electronic information both increases a party’s discovery obligations but also protects against destruction of evidence, thereby ensuring that litigation proceeds fairly and reaches a just result in light of all the facts. Gone are the days where “routine” or “automatic” system maintenance could destroy large swatches of evidence adverse to a party. In practice, a party could easily defend against its opposition’s requests for electronic information by hiding behind a wall of technological jargon designed to excuse (or confuse) the issue entirely. The old rule placed the burden on the requesting party to prove “exceptional circumstances”—an almost impossible standard to meet without smoking-gun evidence, especially in light of judges’ reluctance to wade into the “new world” of technology.

The revised rule, however, essentially flips the burden to rest on the party unable to produce electronic evidence. Now, it must explain what “reasonable steps” it put in place to preserve this information from the moment litigation was anticipated. Given the amorphous meaning of “anticipated,” companies now must be very careful not only to begin preserving electronic information once a dispute is foreseen, but they must also disable automatic system maintenance and inform employees about routine procedures that could delete or affect such information. In light of these rule changes, electronic discovery now takes a much larger role in any case, but it is a role commensurate with the already widespread use of technology in the modern, successful company

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Preliminary Considerations in Condemnation Actions

In condemnation actions in Colorado, the condemning party must take great care to satisfy legal prerequisites prior to initiating suit and, in most cases, moving for immediate possession of the subject property. By statute, immediate possession will only be granted upon a showing that: 1) a public agency with condemnation power has properly determined that it is necessary to acquire the landowner’s property; 2) the property is being acquired for a public use; 3) immediate possession is necessary; 4) the parties have failed to agree upon compensation; and 5) the probable market value of the property to allow the court to set the amount to be deposited with the Court as security the ultimate payment of compensation. C.R.S. §§ 38-1-105(6)(a) and 38-1-109. Good faith negotiation between the condemning entity and the landowner is also mandatory prior to an exercise of the power of eminent domain. C.R.S. § 38-1-102. In addition to these statutory requirements, fundamental constitutional rights to notice and due process also constrain any attempt to condemn and take possession of private land.

While these constitutional and statutory considerations have been in place for some time, Colorado courts are applying them with renewed vigor recently. One essential lesson from this increased attention on foundational legal prerequisites is the importance of the language within the documents describing the rights to be acquired. Whether a deed in fee simple or the varied access and utility easements frequently condemned, these legal documents must be carefully drafted to provide appropriate notice to the landowner of the rights being subjected to the power of eminent domain. Not only does this satisfy the constitutional guarantee of due process, but it also benefits the parties and the court. Without a clear definition of such rights, neither the property owner nor the condemning agency can accurately determine the value to be paid for these rights or their impact on any remaining property. Properly delineating the rights being acquired can save significant expense and frustration for the condemning entity, which will be paying just compensation for the property taken. Conversely, the landowner whose property rights will be impacted by the taking will have certainty and security in their property going forward, not to mention a much smoother, shorter, and less costly trial process. Thus, when fulfilling the statutory prerequisite mandating good-faith negation between the parties prior to commencement of a condemnation suit, both the condemning entity and the landowner should discuss and work collaboratively to craft specific title language for any condemnation.

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Changes in Colorado’s Rules of Civil Procedure Aimed at Frontloading Litigation to Decrease Costs

After testing new rules in a select number of Colorado districts over the past few years, on July 1, 2015, the Colorado Supreme Court adopted new rules intended to significantly change civil litigation, especially the discovery process. This initial stage of a lawsuit – depositions, document requests and production, and interrogatories – is costly in client time and legal fees. Responding to complaints about those escalating costs, the new rules focus on setting discovery parameters early in a case to proportionally reflect the monetary claim and controversy at issue. Above all, the rules seek to restrict discovery of documents or issues merely tangential to the real source of the dispute or, more cynically, to move past “scorched earth” litigation tactics. The Court hopes to do so by rewriting the case management process, abandoning default or presumptive orders in favor of open communication between counsel and the court to reach an order tailored to the specific needs of each individual case. Judges will also play a stronger role in managing the discovery process.

The new discovery rule (CRCP 16(b)) now requires parties to meet in person or by telephone to reach a proposed case management order that details the claims, defenses, description of the case, settlement efforts, amount in controversy, proportional discovery limits, discovery timing, expert witness considerations, treatment of electronic information, and all deadlines in advance of a firm trial date. Where agreement cannot be achieved, both parties must present their respective positions in advance of the mandatory court conference, which must occur 49 days after the case is at issue. The rule—like other similar rule new changes beyond the scope of this post—requires the court to “actively oversee” the process.

Of course, adverse parties will continue to have different views of what their case requires, and it is facile to expect agreement on case parameters before an in-depth investigation into the dispute has commenced. To this end, the success of the new rules will hinge on whether or not judges actively oversee and are willing to involve themselves in the discovery phase of cases on their dockets. Often, this is not a question of the bench’s desire to administer justice, but rather the practical requirements of managing caseloads that may leave little time for a judge to decide discovery disputes. Only time will tell if the rule’s new demands on the bench to routinely oversee discovery can and will be implemented.

To this end, the new rules afford counsel the opportunity to further clients’ goals by always endeavoring to keep good, open lines of communication with opposing counsel. Indeed, under the prior rules where the bench rarely involved itself in discovery unless absolutely necessary, conceding a small point rarely returned any benefit to the conciliatory party, removing any incentive to self-regulate the process and resulting in relatively unrestrained discovery where both sides “wanted it all.” Now, because the rules require the court to “actively oversee” the discovery process, if the opposition is unwilling to reciprocate and concede anything, the court will likely recognize which party is causing the friction and respond accordingly. Thus, under the new regime, it should be easier to establish trust and candor with the court, which could yield substantive benefits for a party in addition to saving money. Though discovery will always be contentious as each side will have a different view of the case and its requirements, Colorado’s new rules present a real opportunity to reach the merits more quickly and inexpensively.

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