Tenth Circuit Breathes Life Into TABOR Suit

Panel rules 2-1 that amended group of plaintiffs has standing to challenge tax law

The long-running legal challenge to the Taxpayer Bill of Rights will persist as a result of an appellate ruling last week.


Plaintiffs seeking to undo TABOR have standing to sue, according to a panel majority in the 10th Circuit Court of Appeals. The district court had dismissed a complaint challenging the constitutional amendment in May 2017, finding that the public entity plaintiffs, which include school districts, had Article III standing but lacked political subdivision or prudential standing. In an opinion published July 22, the appellate majority determined that those standing doctrines can’t apply and reversed District Judge Raymond Moore’s ruling.

The 10th Circuit ruling revives the eight-year-old litigation that was initially brought by Democratic state lawmakers against then-Gov. John Hickenlooper. The lawmakers claimed TABOR violates the Colorado Constitution in how it limits their power to tax. The TABOR amendment, approved by voters in 1992, requires tax increases to get voter approval.

The case is “rife with difficult issues,” according to the majority opinion, and Circuit Judge Carolyn McHugh issued a dissent. Still, the Colorado Attorney General’s Office, which had been defending the case, has not yet said whether it will appeal the judgment further. A resolution in Kerr v. Hickenlooper — now Kerr v. Polis — could still be a long way off, according to counsel representing the plaintiffs.

A spokesperson for the Colorado Attorney General’s Office declined to comment on the decision, except to say, “The Attorney General’s office will continue to defend the state constitution.”

“We are all, I think, gratified that the majority accepted our theory on standing,” said David Skaggs, an attorney for the plaintiffs who is a partner at Dentons and a former Democratic congressman from Colorado.

The 10th Circuit last rendered an opinion on the TABOR challenge in June 2016, when it held that the legislators lacked Article III standing to sue because they claimed an “institutional injury,” so the Colorado legislature as a whole would have to bring the claim. But the 10th Circuit also instructed the district court to determine whether any other plaintiffs might have standing.

The plaintiffs then amended their complaint to add various political subdivisions, including public school district boards of education, the Board of County Commissioners of Boulder County and a special district board in Gunnison. The new plaintiffs claimed that TABOR hampered their revenue-raising powers and denied them a republican form of government that is guaranteed by the Colorado Enabling Act.

Judge Raymond Moore found that the newly added political subdivision plaintiffs had Article III standing. They alleged that TABOR injures them by saddling them with costs to campaign to voters on tax-raising measures that they otherwise could have decided themselves. But the elected officials and citizens among the plaintiffs lacked Article III standing as well as prudential standing, according to the May 2017 order.

Prudential standing is a concept courts have applied to bar plaintiffs from suing for “generalized grievances” or as third parties acting outside their “zone of interest.” Moore said the plaintiffs presented insufficient argument to show that the elected officials and citizens were seeking to assert their own rights, “rather than the rights of others.”

The plaintiffs also lacked political subdivision standing, according to the district court, because they didn’t fit 10th Circuit precedent under which political subdivisions have been allowed to sue their creating state. One exception was in City of Hugo v. Nichols, where the political subdivision had standing to sue under a statute that was “directed at protecting political subdivisions.” While the plaintiffs cited the Enabling Act that required the Colorado Constitution to be “republican in form,” Moore interpreted that requirement to exclude political subdivisions, pointing to language that granted that right to “the people of Colorado.”

In the new 10th Circuit decision, the majority disposed of the prudential standing defense, pointing to the Supreme Court’s 2014 case Lexmark International, Inc. v. Static Control Components. In that opinion, the court said it has “clearly held that prudential standing is not a jurisdictional limitation.”

The court noted that political subdivisions, like those among the plaintiffs “generally lack standing to sue their creating state,” according to the majority opinion penned by Senior Judge Stephanie Seymour and joined by Judge Jerome Holmes. But the panel said a court cannot decide whether the plaintiffs have political subdivision standing because that would involve digging into the merits of the case.

“Establishing who was intended to benefit from the Enabling Act’s ‘republican in form’ requirement necessarily begs the question of what a ‘Republican Form of Government’ is,” according to the majority opinion, “which is the issue ultimately to be resolved if any court ever succeeds in reaching the merits of this case.”

Analyzing those heady civics questions would be out of bounds for the court at this early stage in the TABOR litigation, the majority said. “Irrespective of whether or not a republican form of government is eventually found to be guaranteed to these particular plaintiffs, the district court cannot properly reach this issue as a jurisdictional matter.”

In her dissent, Judge Carolyn McHugh agreed with the district court’s reasoning on political subdivision standing, and she called the plaintiffs’ rebuttal of that point “so meager as to constitute waiver.”

McHugh also agreed with the district court that the Enabling Act’s call for a republican form of government isn’t necessarily directed at protecting or providing rights to Colorado’s political subdivisions, and that the 10th Circuit’s cases on political subdivision standing set that bar.

David Skaggs said that beyond the TABOR challenge itself, the 10th Circuit opinion is significant because it confirms that prudential standing “is no longer a viable legal doctrine in the 10th Circuit.”

Skaggs said that once the case delves into the merits, it might also grapple with what the founding fathers meant by the guarantee of a republican form of government. Should the plaintiffs’ case succeed in eliminating TABOR, it might carry implications for provisions in other states’ constitutions that restrict their legislatures’ ability to tax, he added. “We will be making new law in this case.”

To be eight years into the TABOR challenge and only now deciding the standing issue “gives almost a Dickensian dimension to this case,” Skaggs said. Getting to a resolution “is going to take a long time still,” he added, and barring further appeal from the recent decision, a trial could be another 18 months away or longer. 

“We’re just happy to be at this setting now.” 

— Doug Chartier

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