County gets day in court

Colorado Supreme Court accepts petition against ExxonMobil

RBC — As has been his habit every Monday morning, Malcolm Murray, the attorney representing Rio Blanco County in its dispute with ExxonMobil, logged on to the Colorado Supreme Court Web site, to see what new cases the court had accepted.
And last Monday, he saw Rio Blanco County’s petition was on the list.
After months of waiting, Murray finally had his answer.
“You betcha,” Murray said, when asked if he was excited about the news. “Absolutely.”
The first thing he did was make a phone call.
“I immediately called Debbie (Morlan) and told her the good news,” Murray said.
Morlan, Rio Blanco County’s use tax administrator, shared Murray’s excitement.
“We got the good news first thing (last) Monday morning,” Morlan said. “To me, it just kind of validates what we’ve been doing.”
At issue is whether the county has correctly applied its use tax. The outcome of the case — the Denver District Court and Colorado Court of Appeals both ruled in favor of ExxonMobil — could have far-reaching effects, Morlan said.
“It could involve anybody who has a use tax, not only other counties, but municipalities,” Morlan said.
The pending legal case has left Morlan and the county’s use tax in a sort of holding pattern.
“I’ve been in kind of a weird position,” Morlan said. “I’ve tried to go on as business as usual, but I’ve kind of not been as aggressive. I’ve been riding the fence for a long time.”
Morlan said the county collected about $4.5 million in use tax in 2008.
“That’s a non-audited figure, but it’s somewhere around that,” Morlan said. “And that includes all construction and building use tax, not motor vehicle use tax, and that includes just the unincorporated county. It doesn’t include either of the towns’ construction and building tax.”
The next step in the legal process, Murray said, is the county will file an opening brief within 40 days, or April 13.
“But we may ask for an extension, primarily because we have asked the Colorado Counties Inc., as well as the Colorado Municipal League, to join us in an amicus brief, supporting our position, and they both have agreed to do that,” Murray said. “We want to make sure they have enough time to prepare their briefs.”
After the county files its opening brief, ExxonMobil will have 30 days to file an answer brief, Murray said.
“Then we have another 15 days to file a reply to their answer,” he said.
Then both sides will wait for oral arguments.
“I would suspect it would be four or five months (after briefings are completed),” Murray said. “They (the court) will probably advise us in three months, after the briefings, as to the date (of oral arguments).
“Given the caseload of the supreme court these days, we’re probably looking at October or November, that’s my guess,” Murray said.
During oral arguments, each side will have 30 minutes to make its case, including answering questions from the justices.
“It’s been my experience that they (the justices) will have read and analyzed the briefs and be familiar with the record beforehand,” Murray said. “You can expect a substantial amount of the time will be spent on answering questions.”
Murray said the county could expect to have the court’s decision about 60 days after oral arguments.
“We should have a decision by the end of the year,” he said.
Throughout the appeal process, Murray remained confident the supreme court would take on the use tax case.
“The statistics are that they select one out of about 14 (cases),” Murray said. “I’ve had a number of cases before the supreme court, so I have some sense of what they like and don’t like. This is a case that has all of the features that the supreme court likes to see in a case that they take.”
The use tax dispute fits in with the types of cases the supreme court tends to take on, Murray said.
“It has all of the features the supreme court historically likes. It’s a matter of public policy that affects a lot of people or governments around the state,” Murray said. “This really is an interpretation of a state statute and has application to every county or city that has a use tax.
“There’s a lot of money at stake,” Murray added. “It’s an important public policy issue for Rio Blanco County, and it’s really driven by statutory interpretation. While we might argue with some of the trial courts’ factual findings, for the most part, we don’t. Pipelines are pipelines. The equipment out there, we have pictures of. We all agree what it is. It’s the application of the statutes we’re talking about.”