In 2006, Colorado voters enacted Amendment 41, a constitutional citizen initiative that created the Independent Ethics Commission, a statewide agency tasked with hearing and adjudicating ethics complaints involving public officials in Colorado. In addition to creating the IEC, Amendment 41 contains specific ethics rules, including limitations on gifts that public officials can receive and restrictions on lobbying after officials leave office. Amendment 41 passed by a wide margin — but not without controversy — and was eventually codified in the Colorado Constitution as Article XXIX.
Colorado, however, is a home rule state. This means that local municipalities that wish to can function with a degree of autonomy, establishing some of their own rules and regulations that then supersede those of the state. Recognizing this core principle of Colorado local governance, Article XXIX contains a carve-out provision intended to protect the independence of home rule municipalities that regulate ethical matters involving their own officials and employees. Under the constitutional carve-out, the IEC lacks jurisdiction over any home rule city or county that has “adopted charters, ordinances, or resolutions that address the matters” contained in Article XXIX.
Article XXIX, unfortunately, does not define what it means for a home rule municipality to “address the matters” in Article XXIX. The IEC has taken a narrow view of the carve-out, essentially stating that home rule municipalities must enact laws and rules that nearly mirror the standards laid out in Article XXIX. As described by the first court to consider the issue, “The IEC seeks to engraft the word ‘meaningfully’ before ‘address.’” The IEC codified this interpretation of the home rule carve-out on Dec. 19, 2016, when it issued a position statement setting forth its interpretation of the carve-out. The position statement did not alter the IEC’s position so much as codify it.
Both before and after the issuance of the position statement, the IEC continued to assert jurisdiction over public officials from home rule municipalities. While each factual scenario differed, the IEC routinely claimed that a given home rule municipality had not “addressed the matters” contained in Article XXIX and that, as a result, the IEC could adjudicate ethics complaints against public officials from these home rule municipalities. Indeed, it does not appear that the IEC has ever declined to assert jurisdiction over home rule officials on the basis of Article XXIX’s carve-out provision.
The City of Glendale is a good example, a home rule city with its own set of ethics rules, including a procedure for hearing ethics complaints filed with the City of Glendale against city officials. In fact, following the passage of Amendment 41 in 2006, the City of Glendale enacted specific code provisions to govern the ethical conduct of public officials in the City of Glendale; and in so doing, specifically stated that the City of Glendale’s ethics codes were intended “to supersede Article XXIX of the Colorado Constitution.”
In 2016 and 2017, the IEC received two complaints filed against Mayor Mike Dunafon of Glendale. One of the complaints had previously been investigated and dismissed by the City of Glendale; the second complaint was never filed with the City of Glendale. Dunafon challenged the IEC’s jurisdiction over him, arguing that Article XXIX’s carve-out provision applied because the City of Glendale is a home rule city that has enacted its own ethics rules. The IEC considered the issue of its jurisdiction over Dunafon for two and a half years. On July 11, 2018, the IEC determined that it had jurisdiction over Dunafon to investigate the complaints filed against him, including the allegations that had already been deemed frivolous by the City of Glendale.
Dunafon then filed an appeal of the IEC’s jurisdictional decision in the Denver District Court. After months of briefing, on Jan. 3, the Denver District Court permanently enjoined the IEC from taking any further action and vacated the prior findings of the IEC regarding Dunafon for lack of jurisdiction.
The court concluded that the IEC lacks jurisdiction over the City of Glendale and Dunafon because, by enacting its own comprehensive set of ethics rules, the City of Glendale had “addressed the matters” in Article XXIX, thus triggering the carve-out provision. In the court’s view, “the plain language of [the carve-out] is clear, and allows for a carve-out for a home rule municipality so long as it adopts rules that deal with ethical standards of conduct.” The court likewise concluded that the City of Glendale has in fact “addressed ethical standards of conduct for government employees both in their Code and Charter” such that the carve-out “applies to the City of Glendale, and the IEC lacks jurisdiction over the City of Glendale and Dunafon.”
The court reached its conclusion based on the plain language of Article XXIX of the Colorado Constitution, the intent of the drafters of Amendment 41, and analogous case law. First, the court held that the plain text of Article XXIX, Section 7 of the Colorado Constitution provides that the IEC lacks jurisdiction over any home rule municipality that has enacted its own rules “regulating ethics in government.” According to the court, “put simply, Section 7 provides a carve-out for home rule counties who have passed charters and ordinances regulating ethics in government.”
Second, the court confirmed its interpretation of the constitution’s plain language by reviewing the drafting history of Amendment 41, which eventually became Article XXIX. Specifically, the court reviewed recordings of the Title Setting Board that considered Amendment 41 and agreed with Dunafon that the drafters specifically acknowledged that home rule municipalities could adopt rules more or less strict than those contained in the constitutional amendment, and that under the carve-out provision, those home rule municipalities would not be subject to the IEC’s jurisdiction.
Finally, the court also evaluated an earlier campaign finance case involving the City of Colorado Springs and state campaign finance laws containing a nearly identical carve-out provision.
Under the court’s reasoning, consistent with principles of home rule in Colorado, home rule municipalities retain the flexibility to regulate ethics in government consistent with the unique needs and desires of each home rule municipality. However, because this case presented an issue of first impression, it is not clear whether ethics codes like those enacted by the City of Glendale represent a floor. The court issued an as-applied opinion, holding that the City of Glendale had itself satisfied Section 7’s carve-out such that the IEC lacks jurisdiction over the city and its officials.
Whether other home rule municipalities’ ethics provisions will meet the standard set forth in the carve-out remains to be seen.
On Jan. 14, the IEC voted to appeal the decision, which means that this issue will continue to receive judicial attention, and the Colorado Court of Appeals may ultimately issue an opinion that differs, either in breadth or outcome, from that of the Denver District Court.
— Richard Benenson, shareholder; Douglas Friednash, shareholder; and Joshua Weiss, associate, practice in the Denver office of Brownstein Hyatt Farber Schreck.