by Jeremiah Barry

The United States Supreme Court recently issued an opinion in the case of Nelson v. Colorado, holding that Colorado’s statute for awarding compensation to certain exonerated persons is unconstitutional because it violates due process under the Fourteenth Amendment to the U.S. Constitution. But in reviewing the case carefully, it appears that, while the statute is unconstitutional with regard to the procedure for refunding costs, fees, and restitution paid by defendants whose convictions are later vacated or reversed, the statute is arguably constitutional with regard to providing compensation to these persons for the time during which they were incarcerated.

In 2013, the General Assembly passed House Bill 13-1230, which created the statutes that the courts refer to as the Exoneration Act.  Basically, the act says that, if a person is convicted of a crime and serves part of his or her prison sentence, and the person’s conviction is later overturned or vacated and the person is released, the person may be eligible for compensation from the state—$70,000 per year or more—for the number of years he or she was in prison and more for time spent on parole. But to get the compensation, the person must file a new civil action against the state claiming that he or she is entitled to compensation and prove by clear and convincing evidence that he or she was actually innocent of the crime. The act specifically says that “compensation” includes a refund of any costs, fees, or restitution paid.

Shannon Nelson was originally convicted of five counts of sexual assault, sentenced to the department of corrections, and ordered to pay $8,192.50 in restitution and costs. While incarcerated, she had $702.10 withheld from her inmate account as payment toward these restitution and costs. However, her conviction was subsequently reversed on appeal, and, on retrial, she was acquitted of all charges. Nelson moved the trial court for a refund of the money that was withheld while she was incarcerated. The trial court held that it had no authority to order a refund and denied the motion. Nelson did not bring a separate civil action for compensation under the Exoneration Act.

After Nelson appealed the trial court’s ruling, the Colorado Court of Appeals found that, because the payments were not related to a valid conviction, the state did not have the authority to collect Nelson’s money and ordered the state to issue a refund. The state appealed that ruling.

The Colorado Supreme Court granted certiorari and held that, without statutory authorization, a trial court lacks the authority to order the state to refund money collected from a defendant who is later acquitted. The Court ruled that the only way a defendant can receive a refund of costs, fees, and restitution is to file a civil suit for compensation under the Exoneration Act. Since Nelson did not do that, the Court denied her claim for a refund of costs, fees, and restitution.

Nelson appealed the Colorado Supreme Court’s ruling to the U.S. Supreme Court. On April 19, 2017, the Court found that the act does not meet the requirements of due process under the Fourteenth Amendment with regard to a refund of costs, fees, and restitution. The Court held that, once Nelson’s conviction was reversed on appeal, and especially after she was acquitted, she was presumed innocent. Colorado cannot require her prove her innocence in order to receive a refund of costs, fees, and restitution paid. Requiring her to prove her innocence by clear and convincing evidence creates an unacceptable risk of erroneous deprivation of property. The Court remanded the case, and Colorado must repay the amount of costs, fees, and restitution that Nelson paid.

While this case was pending before the U.S. Supreme Court, the General Assembly enacted House Bill 17-1071, which establishes a new procedure for a defendant whose conviction is overturned to petition for a refund of any costs, fees, and restitution that he or she paid. Under this new process, the defendant is not required to prove innocence.

The U.S. Supreme Court’s decision in Nelson v. Colorado does not mean that the entire Exoneration Act passed in 2013 is unconstitutional; the Court ruled on the constitutionality of the statute only with regard to a refund of costs, fees, and restitution. It did not consider whether Colorado can constitutionally require a person to prove his or her innocence in order to receive compensation for time spent in prison.  The difference lies in the word “property.”

When a person pays costs, fees, and restitution, the person is obviously giving his or her property—money—to the state. To get that property back, the Supreme Court has said the person should not have to prove innocence because once the conviction is overturned, the person is presumed to be innocent.

But the state is not constitutionally required to compensate a person who is wrongfully convicted for the time that the person spends in prison; compensation is not a person’s property that the state cannot take away without due process. A person’s conviction may be vacated or overturned for a number of reasons, not just because the person was actually innocent. So, if the state makes a policy decision to compensate persons who are wrongfully committed, it can, presumably, require the person to prove his or her innocence in order to receive the compensation.

With the passage of H.B.17-1071 to recover a refund of costs, fees, and restitution, it appears the Exoneration Act remains constitutional.

By Jennifer Gilroy and Abby Chestnut[1]

Here is a civically inspired thought for you: As a citizen of the United States, you own the law. The law is not subject to copyright protection, so it finds its home in the public domain. However, questions may arise about whether the original works, such as case annotations and editor’s notes, that often accompany the law when it is published are subject to copyright protection or are also owned by the people.

The U.S. Constitution charges Congress with promoting the “progress of science and useful arts” by developing copyright law, and Congress has done so by allowing original, individual expressions that have a “modicum of creativity” to receive copyright protection. If like most people, you’re unsure of what a “modicum” is, a synonym is “shred”. The laws passed by a legislative body, as representatives of the people, are not creative, individual expressions that are entitled to be protected by copyright.  However, as a general rule, a “modicum of creativity” is an extraordinarily low standard and, therefore, copyright protection attaches to most original works.

And herein lies the rub with copyright and statute publication. While the text of the law itself is not copyrightable, most parts of the federal and state codes are accompanied by “ancillary works” such as editor’s notes, source notes, and, most substantively, annotations that summarize appellate court cases interpreting the statutes. These ancillary publications may, in fact, possess a “modicum of creativity” and, depending on how they are written and published, may be copyrightable.

Even when material is subject to a valid copyright, someone may use that material if it is a “fair use” under the law. Courts will consider four factors to determine whether a use was, in fact, “fair” and not an infringement on the copyright:

1. The purpose and character of the use—it’s more likely to be a “fair use” if it is being used for a nonprofit educational purpose rather than a commercial purpose or if the use is a “transformative” work that adds something new with a further purpose or different character, like a parody;
2. The nature of the copyrighted work—it’s more likely to be a “fair use” if it is factual material rather than a creative work;
3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. The effect of the use on the value of or potential market for the copyrighted work.

If the ancillary works accompanying the statutes are copyrighted and later reproduced when people copy and use the annotated statutes without permission, there is an issue as to whether that use would be “fair.”

Colorado has neatly side-stepped this sticky issue.  Consistent with court findings and scholarly opinions, the Colorado General Assembly views the Colorado Revised Statutes—including their arrangement, headnotes, and numbering systems—as part of the public domain and does not attempt to copyright them. However, Colorado law authorizes the Committee on Legal Services, or its designee, to copyright—not the statutes—but the original publications and editorial work that accompany the Colorado Revised Statutes. (See section 2-5-115, Colorado Revised Statutes) Unlike most states, the Colorado legislature’s nonpartisan staff in the Office of Legislative Legal Services drafts the ancillary publications related to the statutes, including source (history) notes, editor’s notes, cross references, various indices, and case annotations, all of which are published together with the statutes, both in print and online.

Pursuant to its statutory authority, the Committee on Legal Services historically registered a copyright in these publications. But in 2016 the Committee suspended the practice, citing to the fact that, unlike other states where editorial work and case annotations are the product of a work-for-hire private contractor, in Colorado the publications are a product of state-paid legislative staff and are made freely available on the Colorado General Assembly’s public access website.  The Colorado General Assembly, through its Committee on Legal Services, contracts with LexisNexis to format, bind, and distribute the Colorado Revised Statutes books. But to ensure broad public access to the state’s laws, the Committee’s publications contract with LexisNexis also requires LexisNexis to host a fully annotated version of the Colorado Revised Statutes in searchable format on the internet without cost to the state or the public. This invaluable resource is directly accessible by the public through the legislature’s website.

In hosting this online resource, LexisNexis provides a website that is searchable and offers several value-added features useful to the legal researcher. And while certain terms and conditions on the site are designed to protect its technology, services, software, graphics, logo, and value-added design features, LexisNexis does not claim a copyright in the law itself or in the additional ancillary publications described in this article.

However, not all states prepare and publish their statutory code in the same way Colorado does; in fact, many do not. For example, Georgia contracts with LexisNexis to publish its Official Code of Georgia Annotated (O.C.G.A.) and to perform certain editorial work and write the accompanying annotations. LexisNexis registers a copyright in the code’s annotations, which Georgia then holds. While the state makes the statutes themselves publicly available online, it makes the official code with annotations available only for sale.

In 2013, an entity purchased Georgia’s official code, scanned it, and posted it in its entirety online. Georgia subsequently sued the entity in the United States District Court for infringement of its copyright. Georgia agreed that the text of Georgia’s law itself belongs to the public. But Georgia argued that the copyright in the original, creative works accompanying the statutes (such as the annotations) are protected by a valid copyright and that copying and distributing the entire annotated code online does not constitute a fair use under copyright law. The defendant argued that the annotations do not possess the “modicum of creativity” necessary for a valid copyright, and even if they do, the use was fair.

Just this month, the court issued its ruling on motions for summary judgment in the case of Code Revision Commission v. Public.resource.org, Inc.  In denying the defendant’s motion and granting Georgia’s motion for partial summary judgment, the court observed that the selection, writing, editing, and creativity of the annotations requires skill, evaluative analysis, and a tremendous amount of work. The court, therefore, determined that these efforts confirm that the annotations are original works entitled to broad copyright protection. The court further found that the defendant had failed to meet its burden of proving that posting a verbatim replication of the O.C.G.A. online was a fair use.

The challenge in Georgia was not the first case of this type and will probably not be the last. While we can say with certainty that the text of the law itself is not copyrightable, the issues surrounding the copyrighting of materials that accompany the law may continue to find their way to court. For now, however, Colorado will not be caught in the thicket of these thorny copyright issues.

[1] Abby Chestnut is a third-year law student at George Mason School of Law who has permanently relocated to Denver where she is completing her studies at the University of Denver Sturm College of Law.  Mrs. Chestnut is participating in an internship this semester at the Office of Legislative Legal Services.  She anticipates receiving her juris doctor degree in May.

by Julie Pelegrin

Since 1975, the federal “Individuals with Disabilities Education Act” (IDEA) has required states to provide a “free appropriate public education,” or FAPE, to each child with a disability. People are reasonably clear—though not completely—on what “free,” “public,” and “education” mean. But the courts have struggled with what “appropriate” means. Last week, the U.S. Supreme Court, in deciding the case of Endrew F. v. Douglas Cty. School Dist. RE-1, handed down the latest interpretation: The educational services and supports a child receives must be “reasonably calculated to enable a child to make progress appropriate in light of the child’s circumstances.”

So, how did the Court arrive at this particular standard? And what difference is it likely to make for public schools and children with disabilities going forward?

The last time the U.S. Supreme Court considered what Congress meant when it required a FAPE for each child with a disability was in 1982. The case of Board of Ed. of Hendrick Hudson Central School Dist., Westchester Cty. v. Rowley centered on first grader Amy Rowley, who had a hearing impairment. Her individualized education plan (IEP) called for her to be fully integrated into the regular classroom and to spend time with a special tutor and a speech therapist. Amy’s teacher used a wireless device that transmitted to an FM hearing aid that Amy wore. Amy made excellent academic progress under these arrangements, better than many of the children who were not hearing impaired, but she didn’t fully understand everything going on in the classroom. Her parents sued the state claiming that her IEP should require the school to provide a sign language interpreter, giving Amy educational opportunities that were equal to those enjoyed by her non-hearing-impaired peers.

That was the first case in which the Court had to interpret the level of education that children with disabilities are entitled to under IDEA. The Court rejected Amy’s parents’ argument that she was entitled to services that would give her opportunities equal to those of children who did not have a disability. But it also rejected the state’s argument that a FAPE was merely aspirational and that IDEA did not create any substantive right to an education.

Instead, the Court held that IDEA guarantees a substantively adequate program of education to all children with disabilities. This guarantee is satisfied if a student’s IEP requires educational services and supports that “are reasonably calculated to enable the child to receive educational benefits.” In the case of a child who is fully integrated into a regular classroom, like Amy, “educational benefits” means the child receives passing grades and is advancing from grade level to grade level. Since Amy was earning good grades and moving from grade to grade, the Court found that she was receiving a FAPE and her IEP was sufficient; she was not entitled to a sign language interpreter.

However, the Court refused to establish a single test for determining the adequacy of education benefits for all children with disabilities. The severity and types of disabilities cover such a broad spectrum that adequacy could vary widely from child to child. In applying the Rowley standard over the last 35 years, the courts have generally said that an educational benefit is adequate if it confers “some educational benefit” on the child.

This standard led Endrew F. and his parents to the U.S. Supreme Court. Endrew—referred to as Drew in the case—was diagnosed with autism when he was two years old. His parents enrolled him in Douglas County Schools (DCS), where he received an IEP. The educational services and supports that he received under the IEP enabled him to make some progress. He progressed from kindergarten to fourth grade but was still exhibiting disruptive behaviors that inhibited his ability to access learning in the classroom. Drew’s IEP had not changed significantly over the years, and in April 2010 when his parents received his proposed IEP for fifth grade, they decided to pull him out of DCS and enroll him in a private school for children with autism—Firefly Autism House.

At Firefly, Drew received a new behavioral intervention plan and higher academic goals, and Drew made good progress for six months. When DCS suggested a new IEP to Drew’s parents in November 2010, they decided it looked too much like the old IEP and sued the school district. They claimed DCS was not providing a FAPE for Drew and therefore, under IDEA, they were entitled to reimbursement for the cost of tuition at Firefly.

The administrative law judge, the federal district court judge, and the Tenth Circuit Court of Appeals judges all applied the Rowley standard and sided with DCS. While Drew may not have made a lot of progress academically or behaviorally at DCS, he had made some progress. The Tenth Circuit specifically found that the law required only that he make “merely more than de minimis” progress— which means more than a negligible amount of progress. Under this standard, DCS was meeting the requirements of IDEA with Drew’s IEP, and Drew and his parents were not entitled to more services.

The U.S. Supreme Court disagreed—unanimously. Specifically, they disagreed with the Tenth Circuit’s interpretation of the Rowley case. The Court reminded the Tenth Circuit that in Rowley they refused to set a standard for what constitutes educational benefits. A child’s IEP must focus on the individual child and his or her unique needs and be designed to enable the child to make educational progress. A child with disabilities is still not entitled to services that will guarantee to the child educational opportunities that are equal to those of his or her peers without disabilities. But the child’s educational program must be “appropriately ambitious in light of his circumstances” and afford “every child…the chance to meet challenging objectives.”

So that’s the new standard: A child’s IEP must be reasonably designed to enable the child to make progress “appropriate in light of the child’s circumstances.” The Court recognized that this is a standard, not a formula, but it is “markedly more demanding” than the “merely more than de minimis” progress standard that the Tenth Circuit applied. As a standard it is still open to interpretation, and the courts are supposed to give deference to school district experts in deciding what level of progress is appropriate for a child.

It remains to be seen whether Drew’s parents will be reimbursed for the tuition they paid to Firefly for their son’s education. The Tenth Circuit will have to determine whether the services in the IEP provided by DCS would have enabled Drew to make progress that was appropriate to his circumstances. While Drew made significant progress with certain services at Firefly, the court could conclude that the services offered by DCS would have been sufficient for “appropriate” progress.

And it remains to be seen whether the new standard will result in real changes in the services that schools provide to children with disabilities. The Court’s decision does not answer the question of whether a school must provide the highest, most expensive services to enable a student to make the most progress or whether less expensive services that result in good progress are sufficient. There is a great deal of room to debate how much progress is appropriate in light of a child’s circumstances— almost as much room as existed when deciding whether a child received an educational benefit.

by Brita Darling

Will the decision in a dispute concerning rubber playground surfaces in Missouri affect where students go to school in Douglas County, Colorado?

The United States Supreme Court will hear oral arguments in Trinity Lutheran Church of Columbia Inc., v. Pauley, No. 15-577, on April 19, 2017. While the Supreme Court has declined to hear many religion cases in the recent past, it agreed to hear this case before Justice Scalia’s death.

Like many churches, Trinity Lutheran runs a preschool on church grounds and, like any good preschool, it has a playground. After school hours and on weekends, children from the surrounding community use the playground. In 2012, Trinity Lutheran learned about the State of Missouri Playground Scrap Tire Surface Material Grant Program—we’ll just call it the grant program—which provides grants to certain nonprofit organizations to purchase rubber pour-in-place playground surfaces made from recycled tires. The purpose of the grant program is to make playgrounds safer, while at the same time reducing the amount of used tires in landfills and illegal dump sites in Missouri. A fee on new tires funds the program.

Hoping to replace its playground’s pea gravel surface, Trinity Lutheran submitted a grant application to the Missouri Department of Natural Resources (DNR) and was identified as a strong candidate for a grant based upon neutral grant program criteria. However, instead of receiving a grant, Trinity Lutheran received a letter from the DNR informing it that the department was unable to provide direct financial assistance to churches pursuant to Article I, Section 7 of the Missouri Constitution. Missouri’s Constitution states that “no money shall ever be taken from the public treasury, directly or indirectly, in aid of any church, sect, or denomination of religion… .” If this language prohibiting direct or indirect aid to churches sounds familiar, it should. Colorado’s Constitution includes nearly identical language.[1]  Both Missouri’s and Colorado’s constitutional provisions are referred to as “Blaine Amendments,” after U.S. Representative James Blaine, who proposed a failed amendment to the U.S. Constitution in 1875 that included similar language. Most states that entered the Union after 1850 have Blaine Amendment provisions in their state constitutions. Many historians believe that the purpose of the Blaine Amendments was to prohibit funding to sectarian schools, reflecting the anti-Catholic sentiment of the times. These provisions are also referred to as “super-Establishment Clause” provisions because courts have interpreted them to permit stronger prohibitions on government aid to churches than are required by the federal Establishment Clause in the First Amendment to the U.S. Constitution, which prohibits Congress from making a law concerning the establishment of a religion.

Some people argue, however, that application of the Blaine Amendments in some cases actually violates another clause of the First Amendment of the U.S. Constitution—the Free Exercise clause—which prohibits any laws prohibiting the free exercise of religion.

Trinity Lutheran sued in the U.S. District Court in Missouri, claiming that the DNR’s decision to deny a program grant to the church preschool violated the Free Exercise, Free Speech, Equal Protection, and Establishment Clauses of the First and Fourteenth Amendments to the U. S. Constitution, as well as violating Article I, Section 7 of the Missouri Constitution.  Trinity Lutheran’s lawsuit does not seek a ruling that Missouri’s Blaine Amendment is unconstitutional on its face, but only as applied to the church to prohibit its participation in the grant program.

The district court dismissed Trinity Lutheran’s complaint in its entirety, reasoning that the grant program involved a direct payment to a sectarian institution that raised “antiestablishment” concerns. The Eighth Circuit Court of Appeals agreed with the district court, furthering a split among the federal and state courts that have dealt with similar cases, with the First and Fifth Circuits and the Colorado Supreme Court on one side and the Seventh and Tenth Circuits on the other. The split involves whether state establishment clause provisions, like Blaine Amendments, can justify the exclusion of religious groups from generally available government programs.

The resolution of the split among the courts seems to hinge upon the correct interpretation of the United States Supreme Court’s decision in Locke v. Davey, 540 U.S. 712 (2004). In Locke, the Supreme Court held that the State of Washington could deny an otherwise neutral scholarship to a student who was pursuing a devotional theology degree. Critical to the Supreme Court’s holding was that the scholarship would be used to fund the devotional training of clergy, an area where the state’s antiestablishment concerns are historically high. The Supreme Court held that denying funding for theology degrees fell within the “play in the joints” between what the Establishment Clause allows and what the Free Exercise Clause requires.

So, how much “play in the joints” is there?  The question the Supreme Court has agreed to resolve in Trinity Lutheran is “whether the exclusion of churches from an otherwise neutral and secular aid program violates the Free Exercise and Equal Protection Clauses when the state has no valid Establishment Clause concern.” Unlike the facts in Locke, where the state refused to pay to train clergy, in this case, no one can argue that providing safe playground surfaces promotes any religious purpose whatsoever. Further, Missouri’s intention to improve child safety and reduce waste tires in landfills is fully realized by awarding a grant to Trinity Lutheran in addition to nonreligious preschools. Trinity Lutheran argues that while Locke involved the historical establishment clause concern of the state funding the training of clergy, Locke does not permit the categorical exclusion of religious groups from generally available secular benefits, like the safer playground surfaces at issue here, or other secular services, such as fire or police protection.

So what does this Missouri playground case have to do with where children attend school in Douglas County, Colorado? We’ll see. In 2015, the Colorado Supreme Court decided Taxpayers for Public Education v. Douglas County School District, 2015 CO 50. As explained in a previous LegiSource article, the court held that the Douglas County School District’s Choice Scholarship Program could not award scholarships directly to students who then enroll in private religious schools. The Douglas County School District has filed for writ of certiorari to the United States Supreme Court[2] and, although briefing on the writ concluded at the beginning of this year, the Supreme Court has not yet decided whether to hear the case. Colorado’s Blaine Amendment and the correct interpretation of Locke are pivotal issues in the Colorado case, however, and commentators believe that the Supreme Court could use Trinity Lutheran as its vehicle to announce a decision that will have a conclusive effect on the Colorado case, as well. To that end, Douglas County, the State of Colorado, and many others interested in the Douglas County decision, have filed amicus briefs to ensure that its arguments are before the Supreme Court during its deliberations in Trinity Lutheran.

The Trinity Lutheran case is scheduled for oral argument before the Supreme Court on April 19. Court watchers are waiting to see if Supreme Court nominee, Neil Gorsuch, is confirmed in time for the April sitting. If not, this case could end on a 4-4 tie vote, which would leave standing the decision of the Eighth Circuit Court of Appeals.

[1] Article IX, Section 7. Aid to private schools, churches, sectarian purpose, forbidden.  Neither the general assembly, nor any county, city, town, township, school district or other public corporation, shall ever make any appropriation, or pay from any public fund or moneys whatever, anything in aid of any church or sectarian society, or for any sectarian purpose, or to help support or sustain any school, academy, seminary, college, university or other literary or scientific institution, controlled by any church or sectarian denomination whatsoever; nor shall any grant or donation of land, money or other personal property, ever be made by the state, or any such public corporation to any church, or for any sectarian purpose. [Emphases added]

[2] Douglas Cnty. School Dist. v. Taxpayers for Public Education, No. 15-777 (Cert. filed Oct. 28, 2015).

by Esther van Mourik

When you buy a present for your friend at a store in Colorado, the retailer collects the sales tax on that purchase and remits that amount to the Colorado Department of Revenue. If you buy the same item online from a retailer that does not have a brick and mortar store in the state, you are personally responsible for paying the same amount of tax (now called a use tax instead of a sales tax) to the Department of Revenue. Generally speaking this is because of the United States Supreme Court’s interpretation of the United States Constitution: To protect interstate commerce, a state can’t require retailers that don’t have a brick and mortar presence in the state to collect sales tax on its behalf. Instead, the responsibility for getting the tax money to the state falls to individual purchasers.

Because many people aren’t aware of the responsibility to pay the use tax, Colorado is missing out on a lot of tax revenue. And because the economy is rapidly changing so that more people are buying presents (and other “tangible personal property”) online from retailers without brick and mortar stores in the state, the lost revenue effect is even greater. Estimates indicate that the state’s annual lost revenue due to online sales exceeds $150 million.

In 2010, the General Assembly passed House Bill 10-1193, the so-called “Amazon law,” a reporting requirements statute that compels retailers who are not collecting sales tax to report a number of things to both the Department of Revenue and their Colorado customers. The law was immediately challenged in court and has been in litigation for the past six years. A state court also enjoined the enforcement of the new law while it was being litigated in federal court.

On February 22, 2016, the 10th Circuit Court of Appeals issued an opinion upholding the constitutionality of House Bill 10-1193. On Friday, December 9, 2016, the United States Supreme Court declined to hear an appeal of the Court of Appeals decision. By declining to hear the appeal, the Supreme Court effectively affirmed the constitutionality of the law. This means that the Department of Revenue can start enforcing the requirements in House Bill 10-1193. Many news agencies have reported on this decision. You can read some of those articles here, here, here, and here.

House Bill 10-1193 requires retailers who do not collect Colorado sales tax to do three things:

1. Notify Colorado purchasers that sales or use tax is due on certain purchases made from the retailer and that Colorado requires the purchaser to file a sales or use tax return;
2. Send notice to all Colorado purchasers by January 31 of each year showing certain information that the Department of Revenue will require by rule, including the total amount the purchaser paid for Colorado purchases in the previous calendar year. The notice must include, if available, the purchase dates, the purchase amounts, and the category of each purchase, including, if the retailer knows, whether the purchase is exempt or not exempt from taxation. This notice must also state that Colorado requires the purchaser to file a sales or use tax return and pay the sales or use taxes on certain Colorado purchases that the purchaser made from the retailer.
3. File an annual statement with the Department of Revenue by March 1 of each year for each Colorado purchaser that shows the total amount the purchaser paid for Colorado purchases in the last calendar year.

If the retailers who do not collect Colorado sales tax fail to do the three things listed above, those retailers are subject to fines for each failure. The Department of Revenue is trying to determine when the law will take effect. Hampering that decision is the fact that the state court injunction is still in place and must be vacated before the Department of Revenue can enforce the law. Many articles in the media that discussed House Bill 10-1193 appeared to argue that the law was intended to compel retailers who do not collect sales tax to voluntarily start collecting. While that intention is not clearly established in the law, it remains to be seen how retailers will respond when the law takes effect.

There are efforts by other states, particularly in South Dakota, to require retailers that do not collect tax on internet sales to start collecting. Legislation of this type is a direct challenge to the United States Supreme Court’s constitutional interpretation that states cannot require out-of-state retailers to collect sales tax. So while the United States Supreme Court’s decision not to hear the Colorado case represents movement on this issue of online sales taxation, many questions remain to be answered. Stay tuned!

by Julie Pelegrin

Earlier this summer, the United States Supreme Court issued its opinion in Fisher v. University of Texas at Austin, holding that the admissions policy at the University of Texas at Austin (UT) is constitutional. The issue? The admissions policy includes race among the many factors that the UT considers in its holistic review of applicants.

But wait – isn’t it illegal for an institution of higher education to base admission decisions on an applicant’s race? Isn’t that discrimination? Prohibited by the equal protection clause in the Fourteenth Amendment? While it is discrimination of a sort, according to the U.S. Supreme Court, it isn’t unconstitutional.

Why?

Strict Scrutiny Test
The first thing to know is how a court decides whether a law or a government policy violates the equal protection clause. If a law applies differently to a group of persons based on their race, the law creates a suspect class. For this type of discrimination to be lawful, the government must demonstrate that treating people differently because of their race will accomplish a compelling state interest. And it must show that its consideration of race is narrowly tailored to accomplish this compelling state interest. This is called a “strict scrutiny” test.

So the first question is: What is UT’s interest in having a race-conscious admissions policy, and is it compelling?

It’s helpful to know how UT considers race in admissions. UT’s admissions policy is a unique hybrid. By Texas statute, 75% of the student positions for each freshman class at UT are automatically filled by students who graduated within the top ten percent of their high school classes. For the remaining 25%, UT uses a “holistic review” admissions process based on an applicant’s academic index (AI) – a combination of the candidate’s SAT score and high school GPA – and an applicant’s personal achievement index (PAI). The PAI consists of points assigned based on the applicant’s essay, leadership and work experience, extracurricular activities, community service, and other “special characteristics,” one of which can be race or ethnicity. An admissions officer combines an applicant’s AI index and PAI index and, if the applicant’s combined index is higher than a set cut-off score, the applicant receives an admissions offer. So race is really considered as a factor of a factor.

Compelling State Interest: Diversity Within the Student Body
UT claims it has a compelling interest in giving its students the educational benefits that come from learning in a diverse student body. In earlier cases, the U.S. Supreme Court has found that diversity in the student body may be a compelling state interest. Justice Powell in the Regents of the University of California v. Bakke decision said that, while using a quota system to admit a certain number of students of a certain race is unconstitutional, some consideration of race for the purpose of achieving a diverse student body could be constitutional.

Then in 2003, in Grutter v. Bollinger, Justice O’Connor, writing for the Court, confirmed that the University of Michigan Law School had a compelling interest in attaining a diverse student body and deferred to the Law School’s claim that a diverse student body is essential to achieving its educational mission. In recognizing the importance of diversity, the Court didn’t mean just racial and ethnic diversity. The level of diversity that justifies a compelling state interest must include a wide range of qualifications and characteristics; race or ethnicity should be only one element of diversity.

In the Fisher case, Justice Kennedy, speaking for the majority of the Court, found that UT met the standard for proving a compelling interest by articulating a clear goal that the institution expects to achieve in obtaining student diversity: An educational environment that fosters cross-racial understanding, provides enlightened discussion and learning, and prepares students to function as leaders in a diverse workforce and society. UT conducted a study that showed that its previous admissions policy, which did not include consideration of race, did not achieve a level of student body diversity that was sufficient to meet the goal.

Race Consideration Narrowly Tailored to Achieving Student Body Diversity
After finding a compelling state interest, the next question is whether the way in which UT considers race is narrowly tailored to achieve student body diversity. UT had to show that its consideration of race in admissions was designed to and did increase diversity without having extraneous effects such as unduly burdening a non-favored race.

The Court found that UT’s use of race in admissions is narrowly tailored to achieving student body diversity because it is effective – after UT started using the race-conscious admissions policy, enrollment of African-American students and Hispanic students increased by 94% and 54% respectively. But, race actually made a difference in only a small number of admissions, so the plan was also narrowly tailored. Also, UT had tried other race-neutral means of achieving student body diversity that had not been successful.

The Court also held that, to ensure that UT’s race-conscious admissions policy continues to be narrowly tailored, UT must continually study the data on admissions and student-body demographics to ensure effectiveness. And UT must discontinue considering race in student admissions as soon as it is no longer needed to achieve diversity in the student body.

Colorado’s Perspective
While it is constitutional to consider race to achieve a diverse student body, many states have passed laws that prohibit any consideration of race in higher education admissions. In 2008, Colorado voters rejected Amendment 46, which would have amended the state constitution to prevent the government from giving any preferential treatment to a person on the basis of race, including in the context of higher education admissions.

At this time, it appears the University of Colorado is the only public institution of higher education in Colorado that considers an applicant’s race in making admissions decisions. The University of Colorado uses a holistic review process similar to that used by UT, which includes limited consideration of race to achieve a diverse student body.

by Jery Payne

In the 1990s, dentists in North Carolina started whitening teeth. And they made lots of money. But in the early 2000s, other people started whitening teeth. And they charged a lot less.

North Carolina’s dentists began to complain about the competition. Soon the board of dentistry got involved. Eight out of ten members of the board of dentistry were dentists. And although the statute did not specifically say that whitening teeth is dentistry, the board decided to it would go “forth to do battle.” The board issued over 40 cease-and-desist letters. These letters warned that whitening teeth is the practice of dentistry and practicing dentistry without a license is a crime.

The letters worked. In North Carolina, soon only dentists were whitening teeth.

But there was a problem: The Federal Sherman Act prohibits “every contract, combination, or conspiracy in restraint of trade”. It is well-settled law that trade is restrained by forcing your competitors out of the market so you can charge more. And the members of the board had agreed to force these folks out of the market, so there was a combination or conspiracy. The board’s letters appear to violate the act.

Now I bet that some of you are thinking, “So what?” The board acted under the color of law. After all, don’t all laws regulating professions restrain trade? If nothing else, these laws stop unqualified people from competing with qualified people. Do all the laws that regulate professions violate this act? What gives?

Yes, technically, laws that regulate professions restrain trade. And although the act of passing a state law doesn’t violate the Sherman Act, the actions of people are a different matter. People can’t violate federal law merely because the state has a law allowing it. So there is a potential conflict between the actions taken under state programs and federal law. And this, as you can imagine, is a bit of a problem for business regulation in a federal system of government. So the U.S. Supreme Court has created the state-action exception.

If a regulatory program falls under the state-action exception, then the program and any incidental restraint of trade by the program do not violate the Sherman Act. But this raises the question of how “state action” is defined. To the degree that a regulatory program looks like a legitimate exercise of state power to protect the common good, the courts will defer to the state. But if it looks like the state has merely blessed a restraint in trade, the courts won’t defer to the state.

An example can be found in California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc. In this case, California passed a law creating a framework for its wine companies to fix prices. The United States Supreme Court ruled that a state can’t pass a law excepting its citizens from federal law.

In this case, the court set down a two-part test to decide whether a “state action” qualifies as an exception to the Sherman Act: “[F]irst, the State has articulated a clear policy to allow the anticompetitive conduct, and second, the State provides active supervision of the anticompetitive conduct.”

The heart of this test is two basic questions: The first asks who set the policy. Is the policy the act of a sovereign? Or is it the act of people who would be tempted to restrain trade? The second asks who enforces the policy. Is the policy enforced by state officials? Or is it enforced by people who would be tempted to restrain trade?

The court explained: “Limits on state-action immunity are most essential when the State seeks to delegate its regulatory power to active market participants, for established ethical standards may blend with private anticompetitive motives in a way difficult even for market participants to discern.”

Returning to North Carolina, a statute did not actually declare whitening teeth to be the practice of dentistry. And it was pretty convenient that eight out of the ten members of the board of dentistry are dentists. So when the U.S. Supreme Court decided this issue, in North Carolina Board of Dental Examiners v. Federal Trade Commission, what do you think was the outcome?

You would be right if you said that the cease-and-desist letters violated the Sherman Act.

Although the reasoning of the decision follows the reasoning of prior decisions, this is the first time the Court has ruled that the actions of a state regulatory board violate the Sherman Act. Boards that include market participants are common in professional regulatory programs. Some states are concerned that many of their boards are affected by the ruling.

If so, a state board should be careful to stay within the bounds of its statutory authority. And a state should make sure that each board with market participants is actively supervised by a governmental agency. The Court didn’t give very specific advice about what kind of supervision is needed. It did say that supervision should ensure that “a private party’s anticompetitive conduct promotes state policy, rather than merely the party’s individual interests.”

Although the decision has caused some concern for the states, one point to remember is that the Court didn’t strike down the whole program; it merely stopped the dental board from issuing cease-and-desist letters. Under the ruling, the board is still regulating dentistry.

by Michael Dohr

Because of a recent U.S. Supreme Court decision, 48 inmates serving life sentences without the possibility of parole in the Colorado Department of Corrections are now eligible for resentencing hearings. But their new right to a resentencing hearing doesn’t guarantee them a different sentence.

From 1990 to 2006, Colorado imposed a mandatory life sentence without parole on a juvenile convicted of a class 1 felony. In 2012, in the case of Miller v. Alabama, the U.S. Supreme Court ruled that a mandatory sentence of life without parole for a juvenile is unconstitutional because it violates the 8th Amendment prohibition against cruel and unusual punishment.

Since Colorado’s mandatory life sentence without parole for a juvenile was held unconstitutional, you may assume that all of those persons serving that sentence would be entitled to resentencing. But when the U.S. Supreme Court announces a criminal case, it does not automatically mean that each person in the same circumstances as the defendant in the Supreme Court case gets the benefit of the decision. In fact, usually only those defendants whose cases are still on direct appeal from their conviction get the benefit of the decision.

In the criminal justice system, there are two types of appeals: Direct appeals and collateral or post-conviction appeals. A direct appeal occurs when the defendant appeals his or her conviction directly to the next highest court, challenging the grounds of the conviction based on an alleged error that occurred before or during the trial. The process of direct appeal is completed once the Colorado Supreme Court – or the U.S. Supreme court if there’s a federal issue involved – rules on, or refuses to consider, the appeal. After a defendant’s direct appeals are completed, the defendant’s conviction is final.

After the conviction is final, a defendant may file a collateral appeal claiming there is a fundamental issue, such as ineffective assistance of counsel, that was not addressed on direct review. The defendant may also bring a collateral appeal claiming there is newly discovered evidence of the defendant’s innocence that the court should consider.

This distinction between direct appeals and collateral appeals is significant in this case because there are 48 inmates in the Colorado Department of Corrections who are serving mandatory life sentences without the possibility of parole and whose direct appeals are completed.

The legal issue that determines whether a defendant whose direct appeal is completed receives the benefit of the Supreme Court’s decision is whether the issue decided in the case is a substantive issue of criminal law or a procedural issue of criminal law. If the issue is substantive, then a defendant who has completed the direct appeal process also gets the benefit of the decision in the case. But if the issue is procedural, it only applies to those defendants whose cases are still on direct appeal. The vast majority of the cases involve procedural issues of criminal law and therefore do not apply to defendants whose direct appeals are completed.

In June of 2015, the Colorado Supreme Court held in People v. Tate that the Miller decision involved a procedural issue, not a substantive one, and, as such, does not apply to a defendant who has completed his or her direct appeal. Colorado’s decision was in the minority of state courts that considered the question. But, it was not the final word on the issue for Colorado defendants because the U.S. Supreme heard a case this term to address the Miller question.

In January 2016, the U.S. Supreme Court held in Montgomery v. Louisiana that Miller is substantive. The Court found that Miller involved a substantive criminal issue because the decision addressed criminal sentencing. Specifically, the Court found that the Miller decision prohibited a certain category of punishment for a class of defendants because of their status. The prohibited category of punishment is a mandatory life sentence without the possibility of parole, and it is prohibited because of the defendants’ status as juveniles.

So, the 48 inmates in Colorado whose direct appeals are finished are now eligible for resentencing hearings. The Supreme Court acknowledged that it may be a burden on state courts to hold hearings for all of the inmates who are now eligible for resentencing under the Miller decision. The Court suggested that states could choose to parole the inmates rather than hold resentencing hearings.

But it’s important to note that a resentencing hearing for one of these defendants doesn’t automatically result in a different sentence. The operative term in the Miller holding is “mandatory;” mandatory sentences to life without the possibility of parole are unconstitutional for juveniles. At a resentencing hearing, a court could review the evidence and arguments presented at the trial and conclude that the defendant deserves a sentence to life without the possibility of parole. In this situation, the court may affirm the defendant’s original sentence. So, while the Montgomery decision grants the defendants the right to a hearing on their sentences, it does not guarantee them a change in their sentences.

by Jessica Wigent

In a recent webcast presented by the Council of State Governments, Lisa Soronen, executive director of the State and Local Legal Center, and Paul Clement, a former U.S. Solicitor General, discussed federalism, how it guides our complex judicial system, and how courts’ decisions impact state governments. It’s a useful review as we come to the close of 2015 and look ahead to court cases in the coming year.

Federalism, from the Latin root foedus, or “formal agreement or covenant,” is a system of government where authority is allocated between national and state governments— and for our purposes here, state and federal courts.

Alexander Hamilton, “the ten dollar founding father without a father,” as he is described in the celebrated Broadway play named for him, summed up the usefulness of our system, calling it “a double security to the people,” because if our rights “are invaded by either [our state or federal government], [we] can make use of the other as the instrument of redress.”

So how does this intricate balance of power work?

The federal courts:

• Answer constitutional questions (Was a fundamental liberty at stake in the gay marriage debate? The Supreme Court said yes in Obergefell v. Hodges)
• Handle interstate tussles (The Supreme Court is currently deciding whether to hear Oklahoma’s and Nebraska’s lawsuit against Colorado over recreational marijuana)
• Step in when Congress passes a law some say is murky (What did Congress really mean to say about subsidies and federal and state health exchanges in the Affordable Care Act? The Supreme Court answered this question in King v. Burwell)
• Hear cases where the United States is suing or being sued (Remember when then-President Richard Nixon tried to tell the New York Times and the Washington Post they couldn’t publish the then-classified Pentagon Papers? In New York Times Co. v. United States, the Supreme Court said the First Amendment protected the paper’s right to publish the documents detailing the country’s involvement in Vietnam)

And the state courts? Well, they decide (almost all of) the rest—from traffic tickets to whether awarding state-funded tuition scholarships to students who attend sectarian schools violates the Colorado Constitution. (Whether the latter violates the First Amendment of the U.S. Constitution is an issue the federal courts would have to decide.)

The structures of the federal and state courts are fairly similar:

So we’ve got the levels down; we know which cases end up in which court. Now, how do cases get decided?

Again, both state and federal courts work similarly. As Soronen explained, the courts use a hierarchy of laws when making their decisions. First, they look to the (federal and/or state) constitution, then to statutes passed by the Congress/legislature, then to rules and regulations created by administrative agencies (like the I.R.S. or the Colorado Department of Education), and, finally, they look to case law and common law.

The law develops through the expansion of case law—as courts answer more and more questions and make rulings on certain issues, they have more and more references to turn to and follow when considering their decisions. This is called applying precedent—or stare decisis, meaning Let it Stand!—and it is (usually) the guiding principle of our judicial system, aiding both we the people and the courts in many ways:

• It’s efficient
• It’s fair
• It gives the system predictability
• It’s a check on arbitrary behavior

So when does precedent apply? Lest you think we forgot the title of this post (we are supposed to be talking about federalism after all) the precedent of a state court applies just to that state’s courts. If the Colorado Supreme Court says it tastes like chicken, so do the Colorado Court of Appeals and the county and district courts. But whatever it tastes like in California or New Jersey or Texas doesn’t affect what it tastes like in Colorado. In the federal system, the same hierarchy applies within the districts and circuits, except that, when the U.S. Supreme Court says it tastes like chicken, every court in our fair land—state and federal— says it does too.

Soronen explained that state courts are not bound by interpretations of federal law made by the federal district courts or federal courts of appeals, even in the same state! And this means? Judges in state courts throughout Colorado aren’t bound by rulings made by a judge from the U.S. District Court, District of Colorado or the Tenth Circuit Court of Appeals. This can get confusing fun (States interpret state and federal law! Federal courts can’t tell state courts what to do!) and is a product of the philosophical compromise of our Founding Fathers that led to our federalist system of government.

We Coloradans would do well to understand how federalism and the courts work, so we can better understand why TABOR has been challenged in both state and federal courts, why our friendly state neighbors to the east and southeast are suing us over marijuana in federal and not state court, and why, at least for now, our school voucher cases have only been heard in state court.

At the Constitutional Convention in 1787, Delaware Delegate John Dickinson famously said: “Let our government be like that of the solar system. Let the general government be like the sun and the states the planets, repelled yet attracted, and the whole moving regularly and harmoniously in several orbits.” What we ended up with is more complicated than what he envisioned, but it’s a system, and it’s ours.