Cause of Action Institute Joins Colorado TABOR Case as Legal Counsel

National watchdog has previously filed suits against State Department, EPA

The Cause of Action Institute filed a motion for summary judgment July 16 in a TABOR lawsuit challenging hospital provider charges / LAW WEEK ARCHIVE

Washington, D.C.-based watch-dog organization has jumped into an ongoing Colorado lawsuit filed to challenge hospital provider charges under the Taxpayer Bill of Rights, along with the legitimacy of House Bill 17-267. In its first filing in the case, the Cause of Action Institute, as pro bono legal counsel for the TABOR Foundation, submitted an opening brief on a motion for summary judgment July 16 in Denver District Court.

TABOR Foundation, et al v. Colorado Department of Health Care Policy and Financing, et al alleges Colorado’s legislature violated TABOR in enact-ing a hospital provider charge in 2009 on inpatient and outpatient services in order to receive federal matching funds for its Medicaid program, collected by the Department of HealthCare Policy and Financing, without holding a public vote.

The suit also alleges House Bill 17-267, which in part transferred authority to administer hospital provider charges from the Department of Health Care Policy and Financing by creating the Colorado Healthcare Affordability and Sustainability Enterprise, violates TABOR because it did not substantively change how the charge was levied and the charge was not a fee for service transaction.

The complaint also alleges HB 267violates the state’s single-subject requirement because it contains eight provisions that do not directly relate to the bill’s stated purpose of rural sustainability.

The case’s third claim states when the legislature transferred administration of the hospital provider charge, which collected about $600 million per year, it should have correspondingly reduced the state’s yearly excess revenue cap by $600 million and refunded the excess revenue from the charges to taxpayers.

The suit, filed by the ColoradoUnion of Taxpayers Foundation and individuals Rebecca Sopkin and JamesRankin in addition to the Tabor Foundation names as defendants the Colorado Department of Health Care Policy and Financing and executive director Kim Bimestefer, the Colorado Health Care Affordability and Sustainability Enterprise, the Colorado Department of the Treasury and treasurer Walker Stapleton and the State of Colorado.

The Colorado Hospital Association has also joined the case as a defendant-intervenor.

Bennett Cohen, Gerald Niederman and Sean Gallagher, attorneys a Polsinelli representing the ColoradoHospital Association, declined to comment on pending litigation. The Colorado Attorney General’s Office, which has represented the named state defendants, also declined to comment through a spokesperson.

James Valvo, counsel and senior policy advisor for the Cause of Action Institute, said he believes the judiciary has an independent duty to enforce constitutional provisions.

“There’s been a decent amount of case law built up around TABOR, and the legislature I think is well-aware ofthe legal test that the court is going to use and some of the magic words that the court is looking for,” he said. “And so I think now where we are is the courts really need to look at the sub-stance behind the legislative declarations.” One example of a “magic word, ”Valvo said, is construing a charge as afee rather than a tax.

Valvo said the court is holding open a late-October trial date should the case proceed to that point. He con-firmed the court has not yet ruled on the defendants’ motion to dismiss.Steven said by the end of August, the three rounds of briefing on the summary judgment motion will be completed. A tentative September date has been set for a hearing on the motion, though Steven said summary judgment motions are often ruled on with-out a hearing.


The Cause of Action Institute has been involved in a number of high-profile cases outside Colorado. In a pair of still-pending suits filed in 2017, the group sued the Environmental Protection Agency, claiming the EPA failed to respond to open records requests for records from software able to detect the encrypted messaging app Signalon phones. The Hill reported EPA employees’ use of the app could run afoul of open records laws, depending on the content of the messages.

The organization previously filed suit in federal court in Washington,D.C., against the State Department and the National Archives and Re-cords Administration, naming then-Secretary of State John Kerry and national archivist David Ferriero as defendants. The case alleged the two departments violated the Federal Re-cords Act in their management of re-cords that included Hillary Clinton’s emails sent from a private server. The consolidated suit claimed that in order to comply with the Federal Re-cords Act, the State Department must sue Clinton to compel the release of all work-related emails she possessed.

In January 2016, U.S. District Judge James Boasberg dismissed the case as moot, writing the Obama administration’s coordinated efforts to recoverClinton’s emails “are hardly the actions of a recalcitrant agency head oran uncooperative Archivist. ”

According to a 2016 tax filing by the organization, the Cause of Action Institute “represents itself in first-party litigation and investigations on complex constitutional and administrative law questions arising under the U.S. Constitution, the Freedom ofInformation Act, the Administrative Procedure Act, and government over-sight statutes. It also provides pro bono representation to individual sand small businesses in third party federal litigation and investigations.”

Lee Steven, Cause of Action’s assistant vice president, said the organization is involved in the TABOR organization because “the Cause of Action is interested in restraining the growth of government and work-ing toward greater economic liberty for American taxpayers, whether at the federal level or otherwise. … TheTaxpayer Bill of Rights as an example for other states is, in our view, a good provision, and we’d like to see it actually enforced in Colorado.”

—Julia Cardi

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