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CO2 Committee, Inc. v. Montezuma County.

2021 COA 36. No. 19CA1798. Oil and Gas—Taxes—Due Process—Standing.

March 18, 2021

Plaintiff CO2 Committee, Inc. (CO2) is a nonprofit corporation whose members include nonoperating fractional interest owners in the McElmo Dome Unit (the Unit), an oil and gas unit, who pay real property taxes in Montezuma County (County). After an audit, the County retroactively increased the assessed value of the taxable real property in the Unit for tax year 2008. During the audit and subsequent proceedings contesting the assessment initiated by the Unit’s operator Kinder Morgan, the County communicated only with Kinder Morgan. The County did not provide individual notice to any other fractional interest owner, and no other fractional interest owner participated in the proceedings initiated by Kinder Morgan, which resulted in increased tax liability. Kinder Morgan billed the nonoperating fractional interest owners, including CO2, for their proportionate shares of the increased taxes.

CO2 unsuccessfully objected to the assessment with the County assessor, the board of equalization, and the County commissioners. CO2 then filed a complaint in district court alleging that the County violated its members’ due process rights by failing to provide each member individual notice of and an opportunity to challenge the retroactive assessment. The district court dismissed the case for lack of standing.

On appeal, CO2 contended that the district court erred by dismissing its complaint for lack of standing. Here, CO2 sufficiently alleged that its members suffered an injury in fact based on the denial of their due process rights and economic loss. Further, the injury was to a legally protected interest, because each nonoperating fractional interest owner who pays taxes is entitled to the rights afforded to property owners, persons, or taxpayers under the review, audit, protest, abatement, and appeal procedures. Accordingly, CO2’s members have standing to sue in their own right. However, the district court did not determine whether CO2 met the criteria for organizational standing, which is required for it to bring the asserted claims on behalf of its members.

The order dismissing the complaint for lack of standing was reversed and the case was remanded for further proceedings consistent with this opinion.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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