2020 COA 156
Colo. Ct. App.2020Background
- Colorado enacted a Hospital Provider Fee (HPF) program and later the Healthcare Affordability and Sustainability Fee (HASF) administered by CHASE; hospitals pay fees, the state obtains federal Medicaid matching funds, then distributes funds back to hospitals.
- Plaintiffs: TABOR Foundation, Colorado Union of Taxpayers Foundation, and two individual members (Rebecca Sopkin and James Rankin) challenged the statutes under TABOR and on other constitutional grounds (single-subject, unlawful enterprise, excess revenue cap).
- District court declined defendants’ standing motion, reached the merits, rejected plaintiffs’ claims, and entered dismissal.
- On appeal, the Court of Appeals held none of the plaintiffs had standing: (1) individual plaintiffs lacked taxpayer standing because there was no nexus between their tax dollars and the programs; (2) individuals lacked individual standing because alleged economic injury (higher hospital bills) was speculative; (3) foundations lacked associational standing because no members with standing were identified.
- Because lack of standing deprives the court of jurisdiction, the appellate court affirmed dismissal, reversed the district court’s standing rulings, and vacated the portions of the district court’s order deciding the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Taxpayer standing under Colorado law to challenge HPF/HASF as unlawful taxes/TABOR violations | Plaintiffs: TABOR citizen-suit and prior Colorado precedent permit taxpayers to challenge unconstitutional expenditures/fees; amounts at issue are substantial | Defendants: No taxpayer funds were used; hospitals, not taxpayers, fund the programs so plaintiffs lack the required nexus | Held: No taxpayer standing — plaintiffs failed to show a clear nexus between their tax dollars and the challenged programs (taxes were paid by hospitals and matched by federal funds) |
| Individual standing (economic injury from allegedly higher hospital bills) | Plaintiffs: HPF caused hospitals to incur net losses and hospitals passed costs on to patients, increasing plaintiffs’ bills | Defendants: No evidence of pass-through; hospitals have multiple ways to absorb/allocate costs; alleged injury is speculative and indirect | Held: No individual standing — claimed economic injury was speculative and too indirect to establish concrete adverseness |
| Associational standing for foundations to sue on members’ behalf | Foundations: have members and purport to challenge statutes on members’ behalf | Defendants: Foundations cannot claim members’ standing if no individual member has standing | Held: No associational standing — foundations failed step-one (no identified members with standing) |
Key Cases Cited
- Barber v. Ritter, 196 P.3d 238 (Colorado Supreme Court) (Colorado taxpayers may seek to enjoin unlawful expenditure; standing requires nexus)
- Nicholl v. E-470 Public Highway Authority, 896 P.2d 859 (Colorado Supreme Court) (taxpayer standing to enjoin unlawful expenditures)
- Arizona Christian Sch. Tuition Org. v. Winn, 563 U.S. 125 (U.S. Supreme Court) (federal courts generally deny standing based solely on taxpayer status)
- Wimberly v. Ettenberg, 570 P.2d 535 (Colorado Supreme Court) (indirect, incidental pecuniary injury insufficient for individual standing)
- Cotter Corp. v. American Empire Surplus Lines Ins. Co., 90 P.3d 814 (Colorado Supreme Court) (summary judgment standards)
- Trinity Broadcasting of Denver, Inc. v. City of Westminster, 848 P.2d 916 (Colorado Supreme Court) (jurisdictional fact-finding uses different standards than summary judgment)
- Dodge v. Department of Social Services, 600 P.2d 70 (Colorado Supreme Court) (taxpayer standing precedent)
- Conrad v. City & County of Denver, 656 P.2d 662 (Colorado Supreme Court) (taxpayer interest in constitutional use of tax dollars)