This case spells out a lot of really interesting search and seizure stuff, and it's a short decision. I'd recommend reading the original.
Tate was passed out in a parked car with the engine running. An officer found him, and parked the patrol car behind Tate's car. Since there were other cars parked in front of and to the sides of Tate's car, he was effectively boxed in an unable to leave. Also, he couldn't leave because he was unconscious.
The officer found that Tate smelled strongly of alcohol, had urine stained pants, and had quite the collection of empty beer cans in the passenger seat. He woke Tate up, and eventually arrested him for DUI. The trial court suppressed all the evidence in this case, because it held that Tate was seized from the moment that the officer parked behind him, and that at that point there was no reasonable suspicion. The people filed an interlocutory appeal (which they won), Tate appealed the people's appeal, and now the Supreme Court has spoken.
The Court relied heavily on the US Supreme Court's case Brendlin v. California. The Court explained that a person is seized when an officer, by means of physical force or show of authority, intentionally terminates or restrains his freedom of movement. And where an officer makes a seizure by show of authority, the person is only seized if they submit to the seizure (so if you try to pull someone over and they just keep going, they haven't been seized as far as the Fourth Amendment is concerned). In cases where an officers actions don't make his intent to seize someone obvious, or where a person's submission to authority takes the form of "passive acquiescence" the legal test is whether a reasonable person would have felt free to leave, or (if they wouldn't want to leave for reasons that had nothing to do with the police) whether a reasonable person would have felt free to disregard the officer's request or otherwise terminate the encounter.
Going back to the Brendlin case, the US Supreme Court ruled that where a car has been stopped, it's not just the driver who has been seized. The passengers have been seized because they would reasonably perceive the officer's show of authority as being partially directed at them. This next part is really important. The court noted that when a cop makes a traffic stop, sometimes other drivers will be delayed because the road is being blocked by the traffic stop. Those people have not been seized even though their freedom of movement has been restrained because they would not perceive the officer's show of authority as being directed at them.
So in order for a person to be seized, they would have to be aware that their freedom is being restrained. Even if an officer does limit someone's freedom of movement, if the person is somehow not aware that the officer is restraining them then they have not been seized. And that's exactly what happened in this case.
The Colorado Supreme Court held that because Tate was passed out and blissfully unaware that the cop had prevented him from leaving, he was not seized. By the time he was awake (and therefore aware of his new limitations and therefore seized), the cop had already developed reasonable suspicion (perhaps even probable cause) by way of noticing the beer cans, the smell, and the wet spot on the front of Tate's pants. The suppression of the evidence was reveresed, and the case was sent back to the lower court for further proceedings.