The Colorado Supreme Court has upheld a municipal ordinance charging a $0.20 "waste reduction fee" for paper grocery bags and prohibiting disposable plastic bags, ruling the charge is part of a regulatory program of waste management and not a tax. Colo. Union of Taxpayers Found. v. City of Aspen, No. 16SC377 (Colo., entered May 21, 2018). After two members of the plaintiff advocacy group paid the bag charge in Aspen, the group sued the city and members of the city council alleging the charge was a tax subject to voter approval under the state's Taxpayer Bill of Rights. The trial court and the Colorado Court of Appeals ruled in the city’s favor. The court noted that grocers are permitted to retain a portion of the $0.20 charge to provide information to customers, train staff and improve collection and administration, while the remainder is submitted to the city on a form separate…
Tag Archives Colorado
A vintner has filed a lawsuit alleging Colorado's “wine development fee,” charged to wholesalers, is an unconstitutional excise tax. Vineland Corp. v. Colorado, No. 18-30199 (Colo. D.C., filed April 24, 2018). Since 1990, Colorado has imposed a 10-year renewable excise tax of one cent per liter on all vinous liquors sold in the state. In 1992, the state passed the Taxpayers Bill of Rights (TABOR), which mandated advance voter approval for extension of expiring taxes; in 1997, the legislature amended the 1990 act, renaming the excise tax a “wine development fee.” The plaintiff seeks declaratory judgment that the fee is “an impermissible attempt to extend an expiring tax without voter approval, and that this attempt to rename an excise tax surcharge [] without such voter approval is a violation of TABOR.” Further, the plaintiff seeks injunctive relief, attorney’s fees and a refund of all fees paid in the past four fiscal…
A federal court has dismissed with prejudice a data-breach suit filed by a group of credit unions against Noodles & Co., holding that the restaurant had no independent duty of care to the unions distinct from its contractual agreements with MasterCard and Visa. SELCO Cmty. Credit Union v. Noodles & Co., No. 16-2247 (D. Colo., order entered July 21, 2017). The plaintiffs, four credit unions whose cardholders’ information was compromised by the data breach, sued for negligence, negligence per se and declaratory relief, claiming they lost revenue due to decrease in card usage after the breach was publicized and incurred costs related to canceling and reissuing cards, responding to cardholder inquiries and monitoring accounts. The court held that economic loss rules in both Colorado and the unions’ home states barred recovery in tort for purely financial losses caused by negligence. Further, the court found, no independent duty exceptions to those…
A Colorado federal court has dismissed a shareholder derivative action against Chipotle alleging the company’s officers and directors of food-safety oversight failed to take action to prevent outbreaks of foodborne illness. Gubricky v. Ells, No. 16-2011 (D. Colo., order entered June 7, 2017). The plaintiff claimed the defendants had failed to implement and enforce effective food-safety procedures, monitor compliance with food-safety laws or commit necessary resources to store audits and risk assessment after a series of foodborne illness outbreaks. The complaint further alleged that the board failed to take action or offer sick employees paid leave until 2015, seven years after the outbreaks began. In a shareholder derivative suit, plaintiffs must plead “with particularity” why demanding the corporate board to take corrective action would be futile, the court said, but the plaintiff failed to plead facts specific to each director establishing a “substantial likelihood of personal liability.” The plaintiff must…
Texas chain Torchy’s Tacos, which uses the tagline “Damn Good Tacos” in its restaurants and merchandising, has filed suit against Colorado restaurant Dam Good Tacos for trademark infringement, claiming consumer confusion. Success Foods Mgmt. Group, LLC v. Dam Good Systems, LLC, No. 170842 (D. Colo., filed April 5, 2017). Asserting that it registered the “Damn Good Tacos” trademark in 2008, Torchy’s alleges federal trademark infringement, unfair competition, and violation of the Colorado Consumer Protection Act, and it seeks injunctive relief, damages and destruction of Dam Good Tacos’ infringing URLs, email addresses and all packaging, promotional and advertising materials. Issue 631
Four cities and one county have reportedly passed taxes on sugar-sweetened beverages (SSBs), joining Berkeley, California, and Philadelphia, Pennsylvania, in adopting measures purportedly designed to curb sugary-drink consumption. According to media sources, voters in Boulder, Colorado, passed a 2-cent-per-ounce excise tax on SSB distributors, while those in San Francisco, Oakland and Albany, California, passed a 1-cent-per-ounce levy on distributors. In Cook County, Illinois, the board of commissioners also voted in favor of a 1-cent-per-ounce SSB tax. “The tide has turned on this issue, and momentum has swung in our favor,” said Howard Wolfson, senior advisor to former New York City Mayor Michael Bloomberg. “I am confident in the months ahead more municipalities will seek to implement soda taxes to help their citizens, and we will be willing to help them as they do.” See The New York Times, November 9, 2016; Crain’s Chicago Business, November 10, 2016. Issue 622
Healthy Boulder Kids has submitted to the city of Boulder, Colorado, a draft initiative that would impose on distributors a 2-cent per ounce excise tax on beverages that contain at least 5 grams of sweeteners per 12 fluid ounces. Pending review and approval by the city clerk, the public health coalition would then have until June 28, 2016, to collect the requisite number of signatures to get the measure on the November ballot. Revenue from the proposed tax would reportedly be directed to health and nutrition programs aimed especially at low-income residents of the Boulder community. See Boulder Daily Camera, April 21, 2016. Issue 601
A Colorado state court has approved the settlements of several wrongful death and personal injury suits against 14 defendants—including Jensen Farms—stemming from the sale of cantaloupe tainted with Listeria that killed 33 people in 2011. Exley v. Jensen Farms, No. 2011-1891 (Colo. D.C., Arapahoe Cty., order entered March 5, 2015). The court dismissed 24 of 26 cases pursuant to the settlement agreement reached in February 2015, remanded one case to a Texas court and left the dismissal of the last case to a probate court because it regards a minor. The settlement terms are confidential, but according to plaintiffs’ attorney Bill Marler, the medical expenses total more than $12 million. Details about the criminal charges against the brothers who own Jensen Farms appear in Issue 500 of this Update. See Minneapolis Star Tribune, March 11, 2015. Issue 558
A federal court in Maryland has allowed the personal representative of the estate of a man who died in 2011 during a nationwide Listeria outbreak linked to a Colorado cantaloupe farm to sue the company responsible for auditing the cantaloupe producer’s processing facilities, finding that it owed him a duty of care. Wells Lloyd v. Frontera Produce, Ltd., No. 13-2232 (D. Md., order entered September 24, 2014). An Oklahoma court refused to allow claims against the auditor in December 2013, finding that the plaintiff, who was sickened during the Listeria outbreak, could not show that the auditor owed him a duty under Oklahoma law. Details about that ruling appear in Issue 509 of this Update. In contrast, the Maryland court found that the food safety auditor owed a duty to the decedent, because its allegedly negligent audit of the facility—finding that it complied with applicable standards of care for food processing—met…
Chipotle Mexican Grill investors have filed a motion for final approval of a derivative-action settlement in a lawsuit accusing the restaurant chain’s executives of breaching fiduciary duties by failing to comply with employee work authorization requirements. Mohammed v. Ells, No. 12-1831 (D. Colo., motion filed July 31, 2014). The case stems from a U.S. Immigration and Customs Enforcement (ICE) investigation of the company that led to the firing of 450 Minnesota employees and 50 Washington, D.C., workers for lack of U.S. work authorization. In July 2012, Chipotle investors accused the company’s executives of breaching their fiduciary duties in several lawsuits that were later merged. After “intense, arm’s-length negotiations by experienced counsel,” the parties reached a settlement that earned preliminary court approval in April 2014. Under the settlement’s terms, Chipotle will provide twice-yearly reports to its audit committee, which oversees the company’s hiring requirement compliance. In arguing for settlement approval, the…
