Colorado Supreme Court Opinions for June 27

Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.

In the Interest of My. K.M. and Ma. K.M. v. V.K.L. and T.A.M.

The Colorado Supreme Court unanimously reversed en banc a judgment that upholds a juvenile court’s decision that held the Denver Department of Human Services made great efforts to help a mother with rehabilitation, but was unsuccessful, leading to the mother losing her parental rights. 

This case focused on what efforts were made under the Indian Child Welfare Act to help a parent completing a treatment plan ordered by a court. Previously, a division of the Colorado Court of Appeals reversed the termination of the mother’s parental rights with two Native American children. The appeals court made this ruling saying the Denver Department of Human Services did not do its part under the ICWA to help the mother complete her treatment program. 

The appeals court continued, saying human services did not offer proper job training or employment assistance to the mother. During all of this, however, the mother had disappeared for many months, while also struggling to remain sober. The appeals court had affirmed the termination of the father’s rights and he did not seek certiorari review.

The Colorado Supreme Court looked at what “active efforts” means and whether DHS did its part in helping the mother. That court said active efforts means going to a greater standard of engagement which should be offered by DHS with Native families. 

The Supreme Court ruled that DHS did engage in “active efforts” to help the mother with services. Under the ICWA, agencies like DHS need to satisfy requirements including remedial services and rehabilitation programs. The statue, however, does not define what active efforts are. Federal regulations say these efforts must include items such as being affirmative, timely, active and thorough. 

The Supreme Court concluded there isn’t always a one-size-fits-all approach for every situation and the circumstances surrounding a case should be taken into account. The Supreme Court continued, saying the juvenile court correctly prioritized the mother getting treatment. Further, at oral arguments, the record showed the mother got services related to employment training, including how to do a job interview, while the family’s support team was willing to set up daycare options so both parents could work full time. The DHS also helped the mother with rent payments.

The court concluded the DHS met its burden under the ICWA, reversing the appeals court decision regarding the mother’s rights and remanded the case to the court of appeals to address the mother’s other contentions.

Chan v. HEI Resources Inc.

In this case, the Colorado Supreme Court en banc unanimously reversed in part and affirmed in part a previous decision that focused on how courts should evaluate whether a general partnership is an investment contract when considering the Colorado Securities Act.

Usually, general partnerships are not investment contracts due to the fact that general partners direct and control a venture. Under some circumstances, a general partnership can be an investment contract once in operation.

The court adopted the general framework of Williamson v. Tucker from the Fifth Circuit Court of Appeals in 1981 which assesses whether a general partnership is an investment contract. 

“Reversing the division below, the court concludes that the CSA does not allow for a ‘strong presumption’ that general partnership interests are not securities – or for any presumption or burden beyond that necessarily created by the plaintiff’s burden of proof,” wrote Justice Melissa Hart.

The Supreme Court further surmised a court looking into whether general partners lack an ability to direct the venture may find their general knowledge of business is enough to exercise their own partnership powers. It also concluded that if general partners are not able to serve as a replacement for the manager, it doesn’t necessarily mean the partnership is an investment contract. Furthermore, a venture’s economic realities can be part of the Williamson framework.

The Supreme Court then reversed the Colorado Court of Appeals decision on the question that asks whether courts should apply the “strong presumption,” and it remanded the case to a trial court for more findings.

The case focused on HEI Resources and the Heartland Development Corporation, which operated eight joint ventures from 2004 through 2008, related to gas and oil drilling. Investors were solicited through cold calling. Those who invested became a party to an agreement organized as a general partnership. The investors signed an agreement that they are general partners, but the management would fall on HEDC. HEI and HEDC didn’t register their ventures as securities and they didn’t file an exemption from registration. 

Fine v. Ward and Mendyk and Title Board

The Colorado Supreme Court unanimously reversed en banc a title board’s actions involving the sale of alcohol and the single-subject requirement.

The court considered whether three proposed initiatives violate the Colorado Constitution’s single-subject requirement and whether the Title Board had the jurisdiction to set the titles for them. The court ruled wine sales at grocery stores and the home delivery of alcohol by third parties like Uber Eats, are not necessarily connected, thus they violate the single-subject requirement. Since that’s the case, the Supreme Court said the Title Board did not have jurisdiction to set titles over them.

Article V of the state’s constitution allows the people to vote on a subject, but that initiative cannot contain more than one subject. If it contains more than one, then a title should not be set and the initiative should not be submitted to the people for a vote.

The Supreme Court said that the initiatives violate the single-subject requirement for two reasons. The initiatives would first expand food retailers’ authority, giving licensed beer sellers the ability to sell wine. Secondly, the initiatives would also allow for third-party providers to deliver alcohol from retailers to consumers. The Supreme Court further surmised these subjects are too distinct to fall under the single subject requirement.

“We therefore conclude that the Title Board lacked jurisdiction over these Initiatives for setting titles, and we reverse its actions doing so,” wrote Justice Melissa Hart.

The People of Colorado v. Smith

The Colorado Supreme Court en banc unanimously affirmed a lower court’s ruling suppressing the evidence of illegal narcotics after police discovered them during a search of a vehicle.

The defense previously argued the police didn’t have probable cause to conduct the search, thus the evidence should be suppressed, which a trial court agreed with. The Supreme Court agreed with the lower court in the suppression of evidence saying the police were acting on a hunch and not probable cause.

In 2020, a Colorado State trooper saw a Chevy Tahoe with plates from out of state. After learning the car was a rental, he had a hunch it was involved in illegal narcotics and pulled the vehicle over after observing it stay in the left lane for a while without passing other cars.

The driver said she and the passengers (one of them being the defendant Lamonte Smith) were driving from Los Angeles to Maryland, but the trooper said the story wasn’t adding up. The trooper then said he was not going to give the driver a ticket, but he did suspect them of smuggling contraband. A search of the car was then refused and the passengers’ story also didn’t match the driver’s according to authorities. A dog sniffed around the vehicle and that didn’t result in an alert, yet authorities searched the vehicle and found a kilo of cocaine and some fentanyl.

The Supreme Court ruled the district’s order was correct and the search was not reasonable due to it being based only on the hunches from the officer. The case was remanded for further proceedings consistent with the opinion.

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