The Colorado Public Utilities Commission correctly determined La Plata County had the power to regulate the improvements to a tourist train station, the state Supreme Court ruled on Tuesday in rejecting the arguments of the Durango & Silverton Narrow Gauge Railroad Company.

The issues brought to the Supreme Court largely stemmed from whether the county correctly went to the commission to clarify who had responsibility to regulate the railroad’s development at Rockwood Station. Specifically, 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?

Yes, it could, the commission decided.

“Before this court, the Railroad primarily argues that the changes did not constitute extensions, betterments, or additions to buildings, structures, or plant or other equipment,” wrote Justice Richard L. Gabriel in the May 27 opinion. But because one of the alterations — enlargement of the parking lot — qualified as a change La Plata County could regulate, “we perceive no error in the PUC’s finding.”

The Durango & Silverton’s lawyers did not immediately respond to a request for comment.

“The County is pleased the Colorado Supreme Court affirmed the County’s and the PUC’s interpretation of the law and the applicability of the County’s land use regulations,” said County Attorney Sheryl Rogers in a statement. “The County respects the historical and economic importance of the Train to our community but also believes that adherence to our land use regulations is essential to the health, safety and welfare of the entire community.”

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 in various ways through the procedure employed. It also claimed the ultimate conclusion — that La Plata County could apply its land-use code — was wrong.

“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 railroad, at oral arguments.

“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 Supreme Court decided the Public Utilities Commission appropriately heard and adjudicated the controversy.

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