COLORAD

t)
BUlillAU
I -7 Lasl ,\ Ii Ilcr,ti Ci rc k
C'. (0\)(\ Ct\' \
Ccl1tcnnL\t, CO 0(111:2
'S\\:\~:,~: U!t2J:1 ~h i [;1 ml i11.1.Ll:'Hl,CO m

September 6, 2018

Deat" City Council . . . . .. .

You are receiving this letter because you are a leader in your community and are doing the great work of
holding office in your local government in Colorado.

You may have recently heard of a proposition that will be on the ballot this November, Initiative Petition
108, or Just Compensation for Reduction itl Fair Market Value by Government Law or Regulation.
This effort recently submitted over 208,000 signatures collected from every Colorado Senate District
according to rules set in place by Amendment 71 in 2016. This initiative has been certified for the ballot as
Amendment 74, and has the full backing of the Colorado Farm Bureau. \Xle would like to enlist your
support in this effort to protect farmers, ranchers, businesses and property owners throughout the state.

You may have also heard from some opponents of this measure, specifically the Colorado Municipal League
CC\H J While groups can always disagree on policy matters, we arc clisappointcd that CML ,vould mislead
its members and the public as to the specitlcs of this Amendment. \1(!e ate writing to you today to let you
know exactly what our initiative would accomplish and to address the misconceptions that some, including
CML, have been spreading.

What will Amendment 74 do?

Let's start with the text. \1(!hen dealing with such a large issue as government infringement on private
property, one might expect it to be tIuite lengthy. The text according to the Colorado Secretary of State's
office reads, An amendment to the Colorado constitution requiring the government to award just
compensation to OW1lers ofprivate property wIlen a government law or regulation reduces the L'lir
market value of the property. In essence, it would allow a property owner a more fair takings claim if
their private land is devalued by an action of a government entity.

Don't property owners already have that right?

Yes, they do under Article 2, Sec. 15 of the Colorado Constitution. And courts have affirmed that right. But
the Colorado Supreme Court mlcd in Animas Valley Sand and Gravel Inc. v. BOCC of La Plata and other
cases, that in order to be compensated for a regulatory takings, close to 100% of a property owner's land
would have to have been taken by the government's action. Our initiative allows property owners to claim a
taking on smaller percentages of property value affected by government la,v or regulation to receive just
compensation. The burden of proof remains on the property owner, and must be proved in court.
Would this force local governments and municipalities into bankruptcy?

That is the argument of CJvIL, and it is flat out wrong.

1. To claim a takings would still be, as it has always been, a long and arduous legal process. Takings
litigation involves substantial fact-finding and expert witness testimony regarding devaluation of the
property interest in cJuestion. A property owner can only prevail jf their case is supported by the
facts and expert testimony, which often takes over a year for a court to resolve.
2. In claiming that towns, counties, municipalities, and the state would go bankrupt from the cost of
justly cmnpensating property owners, C]'vrL is admitting that it is common practice for those entities
to take the property of its citizens with no reimbursement!

The real arb'1.lment in favor of this amendment is simple. If a government regulates or enacts law that
reduces the fair market value of private property, then that government should provide just compensation
to the property owner, as proven by the property owner in front of tbe governing body or a court of law,
and in a consistent way with the various limiting principles courts have applied to regulatory takings claims
at both the state and federal level.
There are a number of legal principles that limit the circumstances in which local governments will be liable
for a taking, even if Amendment 74 becomes law. These principles arc discussed in the attached document
by Mark Mathews of Brownstein Hyatt Farber Schreck, LLP, in his response to assertions made by Cl\1L.

We would welcome the opportunity to speak with you directly about how our initiative can help Colorado
and to answer any questions you may bave. Please do not hesitate to contact us. Together, we can help
uphold your duties to voters as elected representatives and staff, AND protect the property rights of all
Coloradans.

Thank you,

Don Shawcroft

President, Colorado FanTl Bureau

2
 Statements from the Colorado Municipal League-

'Tbi,r illitiatille J'eeks to alJlend tbe state cOllstitllt/OIl to illcl/ldej/lSt colllpellJatioll for any governmet1t law or
regulation deemed to redllce the fllir market valLIe ofprivate pmperty. /.f'7bile tbe proposed (ollslilllliollai
tlllJe!1dlllCllt is beil~g supported t!y tbe Colorado Farlll 13/1realfl dOIl't befooled It iNtIS d,,:fted ~YJ and tbe ~fforts to pan it, nlill
colllilllle to be paidfor ~)' certain sectors of tDe oil tmdlPs jlldllJt~J""

• Initiative 108 is in fact the product of the Colorado Farm Bureau which has had language
that supports strengthening regulatory takings protections in its policy book for years.

'Tbl' expelllsiw Imwrage q/tbe illitiative will SiglliftCtll1tb' cost local govertll1lellts (as mil as tbe state), and II/ore iIJ~bortClllt!1'
of decisiolls are made like: ZOlling,' land lISe; liqllOl; IJltlrijllalla, and otberforllls 0/ lice!lJiI~{!,;
)'0111' frlxpa)!et:r, })liJell tlI!Y IlIfI/lbcr
todt et1folwlIeIIl; dfordable bousing initialilies; elll'iml?!IIelltalpmtectioll (espetial!y JIIbeJl mandated IJ)! state ol'ftderal
reg!fltllioll); IIriJClI! rmen!ClI and l'edeJ!elop1lleJ1l;probibitiolls q/llIldesirtlble Ilses J/lcb tlS em adult entelia/llIllent !J/fsilless ill a
!leigbborbood,- rigbt to farlll OIJinallces; !!Iom/oria Oil celiain indmtfia! uses. IJ

• The language used in the Amendment is actually very closely targeted at the precedent set
in Animas Valley Sand and Gravel (see below) and allows courts and the legislature the
flexibility to enact policy specific to Article 2, Sec. 15 as they have done in the past. The
amendment leaves in place the several other limiting principles the court has applied to this
section of the Constitution.

(~)I}Jitchi/~gj!fst cOlltpeJ1Jalioll requirements jiVlJ1 tl ftlki/~g IJlhicb tovers dtllJ1ages (as is mrrel1t!y stmctllred ill Ollr toftstillltiolt) to
lair !/Iarket palm:" (!IIiJCltel!er this lJIeans) could spaJJ!n cotflltles.f (Iud e.x:jJensi/Je /{liJl.fI(its OPIT a !1(yriad of btlsk local land-m/'
decisiOll.r sllch (IS ZOlling 01' tbe .fiting q/lIJ1l11icip{IIjtltilities. "

• Amendment 74 would broaden the range of property owners who may be entitled to
compensation as a result of governmental action by authorizing takings claims even where
less than nearly aU value is lost. However, Amendment 74 does NOT eliminate the other
requirements (see legal citations below) imposed by case law to prove a takings and the
entitlement to compensation. If Amendment 74 becomes law, Colorado courts would
interpret these other requirements strictly to limit the number of successful takings claims
as they have done in the past. The language of Amendment 74 provides for that continued
flexibility thus limiting the impact of the lawsuits CML fears.

"T'be implicatiolls of tbis IIlMSIIre art! sJJ!eepineg a!ld hIVeid Remelllber Jl)ords matter ill tbe Colomdo COlls/illltioll rind mre
sbollid rI/IJJa}s be takell IIJ/}m Clmendillg our state's !lIost sacred I\~(/I doclfJJJI!Ilf. "

• In point of fact, the language in this measure is no more broad than the current language of
Article 2, Sec. 15 (Private property SHALL NOT be taken or damaged for public or private
use without just compensation ... ) It targets the extremely inequitable standard set by the
court requiring almost a complete diminution of value prior to compensation being
required. But it also leaves the other limiting principles in place. The Colorado Farm
3
 and not ~l.(h·ocate for a
maintains this rneasurc ,-,,'ill have. \%lhik
, and
courts ancI tIlt to
rVluch more restrictive ,met
could have been to voters, but the members of Colorado Farm
agree that lhe state's Constitution ~;hol!ld not be taken , and
that allow" for the branches consistent
v,vith both the current broad of Sec. J5 of
Amendment 74.

ellt

(hvncr lVlust Pmve

The Owner Must imerf'-.:rcnce \'Vith Reasonable Invesunent-Backcd

iv1 ust Be the of the Go\'ermnentai Action. Indirect

 There h~ls been concern expressed that Amendment 74 \vould allow landowners to successful!y
pursue takings claims for impacts of regulation on adjacent or nearby properties. For example, if a
municipality zoned neighboring property in a way that diminished the value of owner's land, could
he or she bring a takings claim under 74 to recover that diminished value? The answer is likely 'no.'
Under existing legal principles of eminent domain and takings law, the regulation of land owned by a
third party provides no basis for a nearby or adjoining landowner to assert a claim for compensation
based on the indirect impacts of the regulation on his or her property values. In fact, courts have
held that there is a "necessity of a nexus between the alleged interest and the property actually taken.
Absent this indispensable link, the Government is under no obligation to make just
compensation." United JltJtes Y. 677.50 Atres q(Laf1{/ ill Marioll ct)'.) Kan., 420 F.2d 1136, 1140 (10th
Cir.1970) (finding that a pipeline company was not entitled to compensation for loss of oil caused
by government's condemnation of others' property). See a/.ro Campbell v. United States, 266 U.S. 368,
371 (1924) (government's taking and use of lands of others provided no tight to compensation to
adjoining landowner); E. Tenn. Ntlt. Gas CO. P. 2.93 Atres ill l~ythe Cry., No. 4:02CV00179, 2007 WL
2688414 (W.D. Va. Sept. 13,2007) (plaintiffs not entitled to damages as a result of condemnation of
and subsequent construction of a pipeline on a neighboring property).

Amendment 74 does not change this aspect of existing Jaw, and regulation or condemnation of
nearby properties will not support a takings claim under 74.

4. Governments Retain Authority to Abate Nuisances.

The United States Supreme Court in the case Llltas [I. Jotfth Caro/illa Cot/stat COlmeil, 505 U.S. 1003,
1027 -30 (1992) held that there can be no takings where there is even a total elimination of a
property's value from a governmental prohibition of uses that have historically been considered
nuisances. This was applied in the case of ruth E!1eI;gy) lilt. P. United States, 270 F.3d 1347 (Fed. Cir.
2001), where the federal court rejected ruth's takings claim on the ground that under Tennessee
nuisance law, ruth had no right to mine in a way that was likely to produce acid mine drainage, and
that its property right in the coal1eases, therefore, did not include the right to mine the Sewanee
seam in the way that it wanted to.

5. Governmental Exercise of Police Powers Usually Does Not Support Takings Claims.

Amendment 74 does not change how courts are to evaluate the nature of governmental action in
deciding takings claims, particularly with regard to the exercise of police powers to protect public
health, safety and welfare. In the Appolo Fuel.r case, the Federal Circuit found that the prohibition of
coal mining within lands determined to be unsuitable for mining did not constitute a compensation
take of the plaintiffs' coal leases. The court noted that such a determination constituted the exercise
of police powers to protect drinking water supplies and are "the type of governmental action that
has typically been regarded as not requiring compensation for the burdens it imposes on private
parties who are affected by the regulations." 381 F.3d at 1351 (citing Rith Ene/g)I) 270 F.3d at 1352).

6. Home Rule Authority Is Retained.

Amendment 74 will not affect a municipality'S home rule authority to enact local regulations to
protect its citizens. [t may in some cases warrant compensation that wouldn't be available under
current law, but as discussed above, many impediments still exist to successful takings claims.

7. Class Action Takings Claims Would Still Be Typically Unavailable.

Class action cases are typically not available to pursue takings claims because each takings case
requires an individualized assessment of the impact of the measure on an owner's property rights
and of whether the measure interfered with the owner's reasonable investment-backed expectations.
5
 If there were many owners ,vho were identically situated and whose property were impacted to the
same extent by a governmental regulation, it theoretically would be possible to bring a class action
for a takings, but that would be rare and Amendment 74 docs not change the law on that praetjcc.

8. Takings Claims Presume the Validity Of Regulations and Don't Allow Challenges To Their
Validity.

Under current law, as well as under Amendment 74, an owner who brings a takings claim is
acknowledging that the governmental regulation is lawful, as only valid governmental can result in a
takings. Liugle P. ChelJIrJIl) 544 U.S. 528 (2005). Therefore, 74 would not allow for a challenge to the
lawfulness of governmental regulation or an injunction against its enforcement.