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Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.

Date: 09-10-2001

Case Style: Brotman v. East Lake Creek Ranch, L.L.P.

Case Number: 99SC713

Judge: Bender

Court: Supreme Court of Colorado

Plaintiff's Attorney: John W. Dunn of Dunn & Abpalnalp, P.C., Vail, Colorado and Robert S. Slosky and Gregory Smith of Fairfield and Woods, P.C., Denver, Colorado

Defendant's Attorney: Donald M. Ostrander and James Birch of Duncan, Ostrander & Dingess, P.C., Denver, Colorado for Robert Brotman.

Ken Salazar, Attorney General, D. Edgar Hamrick, Assistant Attorney General, Natural Resources and Environment Section, Denver Colorado for the State Board of Land Commissioners and State of Colorado

Description: In this appeal, we hold that because the Colorado Enabling Act imposes a trust on the state of Colorado to manage the school lands given to Colorado for the benefit of Colorado’s public schools, and not for the benefit of taxpayers at large, the East Lake Creek Ranch does not have standing to enjoin a Land Board transaction as a trust beneficiary, as a taxpayer, or as an adjacent land owner.

The Ranch sued to enjoin the operation of an agreement between the Petitioners State Board of Land Commissioners (Land Board or Board) and Robert Brotman in which Brotman would gain title to school land managed by the Land Board. The trial court found that the Ranch had derivative taxpayer standing and granted a preliminary injunction. The court of appeals determined that the Ranch had direct taxpayer standing and standing as a trust beneficiary and affirmed.

In Andrus v. Utah, 446 U.S. 500, 520-24 (1980) (Powell, J. dissenting), Justice Powell summarized the history of congressional grants in state enabling acts of land for school use. Each of the 13 States forming the Union had sovereign authority over the lands within its borders. This land provided those states with a tax base for the support of education and other governmental functions. Id. at 522. On the other hand, in 1802, settlers in what is now Ohio, sought statehood within a portion of the Northwest Territory and encountered a different situation: large portions of the proposed state belonged to the federal government. Id. Thus, unless the federal government waived its immunity from taxation, the new state would not have an adequate tax base. In order to place Ohio on an equal footing with the original states, Congress enacted a compromise that “set a pattern followed in the admission of virtually every other state.” Id. “As consideration for each new State’s pledge not to tax federal lands, Congress granted the State a fixed proportion of the lands within its borders for the support of public education.” Id. at 523. To ensure that each new state would receive a random cross-section of public land, the federal government granted certain numbered “sections” of land within each “township.” Id.

In Colorado’s case, Congress provided in the 1875 Colorado Enabling Act that, should the inhabitants of the Territory of Colorado pass a state constitution and form a state, the federal government would grant, among other things, two sections in each township to the new state “for the support of the common schools.” 18 Stat. 474 (1875); Enabling Act § 7, 1 C.R.S. (2000) at 27. The Enabling Act allowed the state to sell these lands, but only at a public sale and for no less than $2.50 per acre, and mandated that the proceeds from such sales be put in a permanent school fund, the interest from which the state must spend in support of the common schools. Enabling Act § 14, 1 C.R.S. at 28.

In 1876, Colorado’s leaders convened a constitutional convention and approved our constitution. The Colorado constitution established a State Board of Land Commissioners to manage the lands granted to the new state in the Enabling Act. Colo. Const. art. IX, §§ 9, 10.

The Land Board currently manages approximately three million surface acres and four million mineral acres in the state, direct income from which generated more than $22 million for schools in fiscal year 1999-2000. Colorado Land Board 2000 Annual Report, available at http://trustlands.state.co.us/2000%20Annual%20Report/colorado_land_board_2000_annual_.htm. In addition, interest from the permanent school fund generated approximately $20 million. Id. Our constitution requires that the income generated from the Land Board’s management of school lands and the permanent school fund be distinct from and in addition to revenue appropriated for public education. See Colo. Const. art IX, § 3. Thus, the $42 million generated by the school lands in fiscal year 1999- 2000 is distinct from and in addition to the approximately $5 billion in revenue appropriated for public education that same year.

* * *

Click the case caption above for the full text of the Court's opinion.

Outcome: Reversed

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: E-mail suggested corrections, comments and/or corrections to: Kent Morlan


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