The Doctrine of Preemption and Regulating Oil and Gas Development
| Publication year | 2009 |
| Pages | 47 |
2009, October, Pg. 47. The Doctrine of Preemption and Regulating Oil and Gas Development
October 2009
Vol. 38, No. 10 [Page 47]
About the Author
Debra S. Kalish is an Assistant City Attorney for the city of Boulder. She is the chair of the Colorado Municipal League's Attorney Section and president of the Metro City Attorney's Association. Gerald E. Dahl is a member of the Denver firm of Murray Dahl Kuechenmeister & Renaud LLP. He serves as Town Attorney for Silverthorne and Timnath and City Attorney for Wheat Ridge. He also maintains a statewide practice in local government law. Christopher Price is an associate with Murray Dahl Kuechenmeister & Renaud LLP. He is a municipal prosecutor in three Colorado municipalities.
This article provides an overview of the doctrine of preemption at the federal and state levels, with an emphasis on case law regarding the regulation of oil and gas development in Colorado. It also discusses state and local regulation of lands owned by the federal government.
In 2007, as oil and gas development in Colorado was dramatically increasing, the Colorado General Assembly adopted new oil and gas laws that provided for increased protection of the environment and wildlife resources.(fn1) The Colorado Oil and Gas Conservation Commission (COGCC), a division of the Colorado Department of Natural Resources, was charged with developing rules consistent with these new laws. These new rules, which were adopted by COGCC at the end of 2008 and became effective in May 2009, were intended to foster the responsible and balanced development of oil and gas resources.(fn2)
Some of the amendments to the new rules covered areas that local governments(fn3) typically have addressed through their land use regulations. Consquently, counties such as Weld and Grand, and towns such as Rifle and Telluride, were left having to sort through the new legislation and regulations to determine whether they could still regulate anything related to oil and gas development.
When the Colorado General Assembly adopts legislation in a particular area, the issue becomes whether local governments can adopt new regulations or enforce their current regulations if they differ from the state law. This article examines the doctrine of preemption at the federal and state levels, focusing in particular on the development of case law regarding the regulation of oil and gas development in Colorado. It also briefly discusses the degree to which lands owned by the federal government are subject to state and local regulation. Although this article focuses on oil and gas regulation, the discussion of federal and state preemption law is applicable to a wide range of regulated matters.
The Doctrine of Preemption
Under certain circumstances, discussed more fully below, federal law is said to preempt-or trump-state law. State law likewise can preempt local regulations. As expressed by the Colorado Supreme Court, "[t]he purpose of the preemption doctrine is to establish a priority between potentially conflicting laws enacted by various levels of government."(fn4) When there is a conflict of laws at the federal, state, and local levels, the preemption doctrine provides guidance for determining which laws are enforceable.
Federal Preemption
Article IV of the U.S. Constitution provides that the U.S. Constitution is the supreme law of the land, along with the federal laws enacted pursuant to constitutional authority.(fn5) Federal law may preempt state law in a variety of circumstances:
1) when the U.S. Congress expresses clear intent to preempt state law;
2) when there is outright or actual conflict between federal and state law;
3) when compliance with both federal and state law is physically impossible;
4) when there is an implicit barrier within federal law to state regulation in a particular area;
5) when federal legislation is so comprehensive as to occupy the entire field of regulation; or
6) when state law stands as an obstacle to the accomplishment and execution of the full objectives of Congress.(fn6)
State Preemption of Statutory Local Government Regulations
In Colorado, the analysis performed by state courts in resolving conflicts between state and local law reflects the analysis used in federal preemption cases.(fn7) Preemption generally is divided into three categories: express, implied, and operational. Express preemption occurs when "the express language of the statute may indicate state preemption of all local authority over the subject matter."(fn8) Implied preemption is inferred "if the state statute impliedly evinces a legislative intent to completely occupy a given field by reason of a dominant state interest."(fn9) Finally, a local law may be wholly or partially preempted "where its operational effect would conflict with the application of the state statute."(fn10)
The Colorado Supreme Court has explained that "[e]xpress and implied preemption are 'primarily matters of statutory interpretation.'"(fn11) In contrast, operational conflicts, which arise when a local interest is implemented in a way that "materially impedes or destroys a state interest,"(fn12) "must be resolved on an ad-hoc basis under a fully developed evidentiary record."(fn13) Accordingly, a record of conflict generally must be established at the trial court level for an appellate court to find operational conflict.
For example, when the Colorado Department of Transportation alleged that certain land use regulations adopted by the city of Idaho Springs were operationally preempted by Title 43 of the Colorado Revised Statutes (which governs part of the state's transportation system), the Court refused to make such a determination without a record on the issue:
We cannot determine whether the city has enacted . . . a regulation [that would impair CDOT's ability to accomplish its duties] because CDOT has not developed a record on this issue. "Any determination that there exists an operational conflict between the county regulations and the state statute or regulatory scheme . . . must be resolved on an ad-hoc basis under a fully developed evidentiary record."(fn14)
Preemption of Home Rule Municipality Regulations
Although statutory municipalities and counties enjoy only "those powers that are expressly granted to them by the Colorado Constitution or by the General Assembly,"(fn15) the powers of home rule municipalities are much broader. If a home rule city or town(fn16) has enacted the local regulation that conflicts with state law, a different preemption analysis is conducted.
Article XX of the Colorado Constitution was amended in 1912 to add a new § 6 that vests all Colorado cities and towns with a population of at least 2,000 inhabitants with the power to adopt a home rule charter that "shall be its organic law and extend to all its local and municipal matters."(fn17) This amendment was intended to give municipalities the power to...
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