After two trial judges and the state’s Public Utilities Commission confirmed La Plata County can regulate the physical changes made around a tourist train station, the Colorado Supreme Court heard arguments about whether to uphold the proceedings that have unfolded over the past four years.

“We really wanted the county to get out of our lives, quit telling us when we could run a train, how many passengers we could have,” said attorney Stuart N. Bennett, representing the Durango & Silverton Narrow Gauge Railroad Company.

“Make no mistake,” countered Nathaniel H. Hunt for La Plata County, “we are here today because the railroad refused to comply with the county’s land-use code and, indeed, sought to enjoin the county’s enforcement of the code.”

The issues brought to the Supreme Court largely revolved around whether the county correctly went to the Public Utilities Commission to clarify if the commission had the exclusive responsibility to regulate the railroad’s development at Rockwood Station. Or, could the county exercise its own authority under state law to regulate “extensions, betterments, or additions to buildings, structures, or plant or other equipment,” even if those belonged to a utility — in this case, a railroad.

In La Plata County’s case, the commission agreed it could decide who had authority. Its answer was: the county.

During oral arguments on Wednesday, some members of the court struggled to see any impropriety alleged by the railroad.

“You all filed a lawsuit saying, ‘County, you don’t have jurisdiction here. PUC has jurisdiction.’ Then they said, ‘OK, we’ll file for a declaratory order with the PUC,'” said Justice Richard L. Gabriel, recapping the sequence of events. “I guess the bottom-line question is, why isn’t it appropriate for the PUC to decide the question of its own jurisdiction?”

“Help me understand what the county is supposed to do,” added Chief Justice Monica M. Márquez. “What recourse do they have?”

At the outset of the COVID-19 pandemic, the Durango & Silverton implemented a shorter excursion run that started at Rockwood Station about 10 miles north of Durango. The railroad enlarged a parking lot and driveway, installed portable toilets and upgraded other items onsite.

After complaints persisted, the county issued a violation notice in May 2021 telling the railroad to stop its “new use of the Rockwood Station as a major embarking and disembarking location.” 

The railroad filed suit, seeking a declaration that the county could not regulate its activities through the land-use code. La Plata County, in turn, asked the Public Utilities Commission to answer whether its regulatory authority over the railroad displaced the county’s in this situation.

An administrative law judge concluded the commission could clarify its authority and that the railroad’s changes amounted to “extensions, betterments, or additions” that the county was empowered to regulate. The commission later upheld the decision, noting the county had “a legitimate local interest that cannot be ignored.”

The railroad sought review in Denver District Court on procedural and constitutional grounds, but Chief Judge Christopher J. Baumann agreed last May that the commission correctly exercised its power and did not violate the railroad’s rights in doing so.

Five months later, in the original La Plata County case, District Court Judge Suzanne F. Carlson issued an order once again confirming the county’s legal land-use authority applied.

“The County is clearly not attempting to regulate train operations,” she wrote. “The Court also notes that every other tribunal which has examined the issue has concluded that the Railroad’s activities constitute betterments, additions or extensions.”

At the Supreme Court, the railroad alleged the commission violated its rights by not holding a hearing, and that only a regulated utility could even ask the commission to weigh in in the first place.

“I’m not sure where that says, ‘only the utility can apply,'” responded Gabriel. “That’s not crazy to say a county can do that if there’s a dispute over who has jurisdiction.”

“I would point to this very case as an example where it could be necessary, helpful, appropriate for the commission to be the one to make that decision,” agreed Senior Assistant Attorney General Ruth M. Harper, representing the commission.

Bennett, the railroad’s attorney, also argued that while the commission may have deemed the Rockwood Station changes to be “extensions, betterments, or additions,” the evidence was insufficient to satisfy the other condition — that the changes apply to “buildings, structures, or plant or other equipment.”

“What’s the structure that we’re talking about?” asked Gabriel.

The parking lot, responded Hunt for the county.

“If we disagree with you on that,” said Márquez, “does the county have other recourse, i.e. to enforce its land-use code through the court case?”

Yes, said Hunt, the county could take action against the railroad through the case Carlson heard, which the railroad has since taken to the Court of Appeals.

The case is American Heritage Railways, Inc. et al. v. Colorado Public Utilities Commission.