Kerr v. Polis

20 F.4th 686

Andy KERR, Colorado State Representative; Norma V. Anderson; Jane M. Barnes, member Jefferson County Board of Education; Elaine Gantz Berman, member State Board of Education; Alexander E. Bracken; William K. Bregar, member Pueblo District 70 Board of Education; Bob Briggs, Westminster City Councilman; Bruce W. Broderius, member Weld County District 6 Board of Education; Trudy B. Brown; John C. Buechner, Ph.D., Lafayette City Councilman; Stephen A. Burkholder; Richard L. Byyny, M.D. ; Lois Court, Colorado State Representative; Theresa L. Crater; Robin CrossaN, member Steamboat Springs RE-2 Board of Education; Richard E. Ferdinandsen; Stephanie Garcia, member Pueblo City Board of Education; Kristi Hargrove; Dickey Lee Hullinghorst, Colorado State Representative; Nancy Jackson, Arapahoe County Commissioner; Claire Levy, Colorado State Representative; Margaret Markert, Aurora City Councilwoman, aka Molly Markert ; Megan J. Masten; Michael Merrifield; Marcella L. Morrison, aka Marcy L. Morrison; John P. Morse, Colorado State Senator; Pat Noonan ; Ben Pearlman, Boulder County Commissioner; Wallace Pulliam; Frank Weddig, Arapahoe County Commissioner; Paul Weissmann; Joseph W. White; Cheyenne Wells RE-5 School District Board of Education; Susan Lontine; Denver County Public Schools Board of Education; K. C. Becker; Board of County Commissioners of Boulder County; Boulder Valley School District RE-2 Board of Education; Gunnison County Metropolitan Recreation District ; Leslie Herod; Pueblo City District 60 Board of Education; Christopher J. Hansen ; Gunnison Watershed RE-IJ School District Board of Education; Colorado Springs District 11 Board of Education; Poudre School District Board of Education; Pueblo County School District 70 Board of Education; William G. Kaufman, Plaintiffs - Appellants,

v.Jared POLIS, Governor of Colorado in his official capacity, Defendant - Appellee.

Colorado Association of School Executives; Colorado Association of School Boards; The Colorado Union of Taxpayers Foundation; Mountain States Legal Foundation, Amici Curiae.

No. 17-1192

United States Court of Appeals, Tenth Circuit.

FILED December 13, 2021

Sarah M. Mercer (David E. Skaggs, Dentons US LLP, Denver Colorado, Mark P. Johnson, Dentons US LLP, Kansas City, Missouri, Herebert L. Fenster, Covington & Burling, Washington, D.C., Michael F. Feeley, Carrie E. Johnson, and John A. Herrick, Brownstein Hyatt Farber Schreck LLP, Denver Colorado, with her on the supplemental brief), Brownstein Hyatt Farber Schreck LLP, Denver, Colorado, for Appellants.

Michael Kotlarczyk, Assistant Attorney General (Philip J. Weiser, Attorney General, Eric R. Olson, Solicitor General, Megan Paris Rundlet, Assistant Solicitor General, Stephanie Lindquist Scoville and Kathleen Spalding, Senior Assistant Attorneys General, Melody Joy Fields and Shelby A. Krantz, Assistant Attorney General Fellows, with him on the supplemental briefs), Colorado Department of Law, Denver, Colorado, for Appellee.

Before TYMKOVICH, Chief Judge, BRISCOE, HARTZ, HOLMES, BACHARACH, PHILLIPS, McHUGH, MORITZ, and EID, Circuit Judges.

TYMKOVICH, Chief Judge.¹

Popular knowledge about the American legal system is that everyone can have his or her day in court. But a decade after various Plaintiffs challenged Colorado's Taxpayer's Bill of Rights (TABOR), we have yet to determine who, if anyone, can have that day in this case.

In their complaint, first filed in 2011 and most recently amended in 2016, the Plaintiffs—who include school districts and other political subdivisions—allege that TABOR's requirement of voter approval for tax increases deprives them of a Republican Form of Government protected by the United States Constitution and Colorado's statehood Enabling Act. According to the Plaintiffs, TABOR's constraints and voter-involvement in tax and spending policy effectively deprive them and the people of the State of Colorado of a truly representative government.

The Governor responded by bringing a motion to dismiss the claims for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). He argued that the Plaintiffs lacked standing to sue the State of Colorado under the Republican Form of Government Clause—also known as the Guarantee Clause, see U.S. Const. art. IV, § 4 —because political subdivisions cannot sue their parent state.

Applying this circuit's precedent, the district court reviewed the complaint to determine whether the various school districts and other political subdivisions had "political subdivision standing." Based on this doctrine, the court dismissed the complaint for lack of subject-matter jurisdiction. It concluded that neither the Guarantee Clause nor the Enabling Act authorized the political subdivisions to sue the state. A panel of this court rejected that conclusion, finding that the Plaintiffs met our requirements for political subdivision standing.

We affirm the district court's dismissal of the Plaintiffs' claims without prejudice. We disagree with the district court's reasoning on standing and therefore it erred in dismissing the claims under Rule 12(b)(1). Nevertheless, it is appropriate to convert the Governor's Rule 12(b)(1) motion to a motion to dismiss under Rule 12(b)(6). In doing so, we depart from our previous cases in which we treated the limits on actions political subdivisions can bring against their parent states as a threshold inquiry about the court's subject-matter jurisdiction. Instead, we conclude these limits are part of a merits inquiry that addresses whether any constitutional or statutory provisions allow political subdivisions to bring a cause of action against their parent state. The Plaintiffs have not identified any provision in the Constitution or the Enabling Act authorizing Colorado's political subdivisions to challenge TABOR. Thus, the Plaintiffs have failed to state a claim on which relief can be granted.

A majority of this en banc panel agrees that we should affirm the disposition based on Plaintiff's failure to state a claim. Thus, the dismissal below is affirmed.

I. Background

A. Factual Background

After ten years of litigation, this case is stuck in neutral. Despite carving a well-worn path from the district court, to this court, to the Supreme Court, and back, we have yet to finally decide whether any of the Plaintiffs are entitled to have the merits of their claims considered. A brief background of this litigation history provides helpful context for the scope of our decision today and why the day has come to affirm the dismissal of the complaint.

TABOR—codified at Article X, Section 20 of the Colorado Constitution —was adopted by voter initiative in 1992. TABOR codifies various rules that place the taxing power directly in the hands of the people, limiting the power of the state and its political subdivisions to raise revenue. Under TABOR, government entities must obtain voter approval for "any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property class, or extension of an expiring tax, or a tax policy change directly causing a net tax revenue gain to any district." Colo. Const. art. X, § 20, cl. 4(a). TABOR also places limits on the state's year-to-year spending, id. at cl. 7(a), and the use of excess revenue by the state and its political subdivisions, id. at cl. 7(d). Because it was passed as a constitutional amendment, TABOR can be revoked or amended only by voter approval. Id. at art. XIX, § 2 ("[A]mendments shall be submitted to the registered electors of the state for their approval or rejection, and such as are approved by a majority of those voting thereon ... shall become part of this constitution."). Though numerous efforts have been made to repeal TABOR since its enactment, it has proved remarkably durable. As recently as November 2020 voters have rejected efforts to significantly overhaul or repeal TABOR.

B. Procedural Background

In 2011, the Plaintiffs—who include individual state legislators, educators, and various school districts and other political subdivisions—brought suit against then-Governor John Hickenlooper, seeking injunctive and declaratory relief from TABOR. They claimed that TABOR violates the guarantee of a "Republican Form of Government" found in Article IV, Section 4 of the United States Constitution. According to the Plaintiffs, TABOR also violates a similar guarantee found in Colorado's Enabling Act. See 18 Stat. 474, § 4 (declaring that the state's "constitution shall be republican in form"). They argue that under the Supremacy Clause, the Enabling Act—as federal law—should trump any conflicting state law. See U.S. Const. art. VI, cl. 2 ("This Constitution, and the Laws of the United States which shall be made in Pursuance thereof ... shall be the supreme Law of the Land.").

The Governor moved to dismiss the complaint, arguing the Plaintiffs lacked standing. The district court disagreed with the Governor, concluding that the individual state legislators had standing to challenge TABOR. The Governor appealed that decision to this court, which affirmed the district court. See Kerr v. Hickenlooper (Kerr I ), 744 F.3d 1156 (10th Cir. 2014), vacated, 576 U.S. 1079, 135 S.Ct. 2927, 192 L.Ed.2d 956 (2015). The Governor then appealed to the Supreme Court, which vacated the Kerr I panel's decision and remanded back to this court for consideration of legislative standing in light of Arizona State Legislature v. Arizona Independent Redistricting Commission , 576 U.S. 787, 135 S.Ct. 2652, 192 L.Ed.2d 704 (2015). See Hickenlooper v. Kerr , 576 U.S. 1079, 135 S.Ct. 2927, 192 L.Ed.2d 956 (2015). On remand, this court applied Arizona and concluded that "individual legislators may not support standing by alleging only an institutional injury." Kerr v. Hickenlooper (Kerr II ), 824 F.3d 1207, 1214 (10th Cir. 2016). Because this was the sole injury the individual legislators had alleged, the Kerr II panel revers...