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The Ralph L. Carr Colorado Judicial Center is seen on Tuesday, July 20, 2021, in Denver. (Olivia Sun, The Colorado Sun)

The Colorado Supreme Court on Tuesday allowed a $100 million lawsuit against the state’s health department to move forward in a case involving an odoriferous biogas plant in Weld County after the high court declined to hear the state’s appeal.

Last year, a split panel of judges from the Colorado Court of Appeals affirmed a Denver District Court ruling that sovereign immunity does not block the company’s lawsuit.

The Colorado Department of Public Health and Environment asked the Colorado Supreme Court to take up the case and consider whether the Colorado Governmental Immunity Act, which blocks many lawsuits against the government in the state, would bar the lawsuit, but the court declined to hear the appeal.

The company, Heartland Biogas, operated a plant in Weld County that turned manure, food waste and other organic matter into natural gas, along with a liquid that results from the process and is sold as fertilizer to farmers. Heartland bought the plant from another company in 2013 and invested $102 million in machinery and changes to it.

After complaints about the smell, Weld County determined the company didn’t have proper approval to sell the liquid fertilizer, which regulators view as wastewater. The plant’s previous owner had approval, but a CDPHE attorney concluded that it could not transfer to Heartland when the facility sold.

Heartland, which is owned by EDF Renewables, alleges that state regulators had assured them that they could sell the liquid fertilizer from the biogas facility southeast of LaSalle, but CDPHE says they only said Heartland could sell the liquid if the company got the proper approval.

The company says its storage ponds that hold the liquid eventually filled up, forcing the closure of the plant and the loss of millions of dollars. Heartland sued Weld County and the state in federal court, though it eventually dropped the lawsuit and filed a new claim in Denver District Court.

The company argues that regulatory actions taken by Weld County and the state amounted to a government taking without just compensation in violation of the state constitution.

Though two appellate judges from the Colorado Court of Appeals sided with the company last year and determined the lawsuit was grounded in the state constitution, and not barred by sovereign immunity, Judge David Richman disagreed.

Richman wrote that, “although Heartland alleges that CDPHE’s exercise of ‘regulatory authority’ deprived it of valuable property, that is not what the documents and undisputed evidence reveals.”

The state supreme court’s refusal to hear the appeal means Heartland can move ahead with its lawsuit against CDPHE in Denver District Court.

Daniel Ducassi is a former Colorado Sun staff writer.