The state’s highest court Aug. 23 reached a decision in a Morgan Hill case that questions a 30-plus-year-old interpretation of zoning law in California.
The California Supreme Court decision affirms the right of citizens to challenge government actions through ballot referendums—specifically, the actions of a city or a developer that tell property owners how they can use their land.
The potential landmark decision in the City of Morgan Hill vs. Bushey forces the city back to the drawing board on a 2015 effort to rezone a property north of town where a developer wanted to build a hotel. The city may either hold a ballot referendum or rezone the site using some other classification that doesn’t allow a hotel.
Remaining legal questions about the ultimate use for that property—a 3.39-acre site near the corner of Madrone Parkway and Lightpost Way—could get kicked back to the trial courts, Morgan Hill City Attorney Don Larkin said.
“What is clear is that the voters have the right to referend zoning ordinances, even where a successful referendum will result in zoning that is inconsistent with the General Plan,” Larkin said. “While this is a significant change in the law, we respect the court’s thoughtful reasoning in reaching this result.”
Attorneys for the city, developer River Park Hospitality and the Morgan Hill Hotel Coalition argued their competing cases before the state’s six Supreme Court justices May 30. On Aug. 23, the judges unanimously decided in favor of arguments posed by the hotel coalition, that the people’s right to referendums outweighs the city’s legal requirement to keep its zoning ordinances consistent with the General Plan.
“The city and River Park essentially urge us (in previous arguments to different courts) to find that the policies underlying general plans are of such great importance that they require us to eliminate the right to referendum,” the Aug. 23 Supreme Court opinion reads. “That would not be harmonization, but victory of General Plans over the referendum right. Such a result would be contrary to our approach to statutory interpretation, and our liberal construction of the people’s reserved power of referendum.”
The legal battle started when the Morgan Hill City Council in March 2015 rezoned the Lightpost Way property from industrial to general commercial. River Park Hospitality requested the rezoning, and planned to build a 149-room hotel on the site.
The council later rejected a petition—filed by the Morgan Hill Hotel Coalition and signed by more than 4,000 voters—to repeal the new zoning or put the question on a ballot in a general election.
In January 2016, the coalition sued the city for violating the state elections code by rejecting the certified, voter-initiated petition. The coalition of local hotel owners had been arguing to the council at the time that another new hotel would harm the existing market.
In February 2016, then-interim City Attorney Gary Baum revisited the council’s original rejection of the petition. He recommended the council approve a ballot measure asking the voters if they wanted the River Park property to retain its original industrial zoning, but at the same time challenge the measure in court by filing litigation against Santa Clara County Registrar of Voters Shannon Bushey.
Santa Clara County Superior Court sided with the city in a March 2016 ruling.
The hotel coalition appealed that decision, which was overturned in the coalition’s favor May 30, 2017, by the California Sixth Appellate District Court.
That brought the case to the state’s Supreme Court. The Aug. 23 opinion is a tentative ruling that won’t be certified for another 30 days.
Throughout the case, city officials have argued that if the council had approved the River Park zoning referendum and the voters decided to keep the property zoned industrial, that would create an illegal inconsistency between the zoning ordinance (industrial) and the city’s general plan (commercial). The city, like many municipalities before it, cited a case from 1985, deBottari vs. the City of Norco, to support this argument.
The Supreme Court justices, however, “disapprove(d) of the reasoning” in the deBottari decision. The Aug. 23 opinion says it is legally OK for the result of a referendum to create a temporary inconsistency between the two documents, as long as the city moves to correct the lapse within a “reasonable” period. Specifically, the city could eliminate the inconsistency by rezoning the property to a more appropriate classification, creating a new land use zone that jibes with the general plan, or even amend the general plan to make it consistent with the people’s preferred zoning, the justices’ opinion explains.
Attorneys for the hotel coalition have argued that the city could rezone the Lightpost Way to any one of 12 commercial zones contained in Morgan Hill’s zoning ordinance, even if the selected zone does not allow hotel use.
The Aug. 23 Supreme Court decision leaves it to the lower trial courts to settle whether the application of one of these zones would be satisfactory and consistent with the city’s General Plan.
Attorneys for the hotel coalition said the Supreme Court’s opinion on the Morgan Hill case is a victory for the voters of California. Attorney Randall Toch thinks it is a “remote possibility” that the lower courts will agree that the city has no other zoning options or dismiss the suggestion that the city could create a new commercial zoning classification.
“In the course of the (Aug. 23) opinion, the Supreme Court methodically rejects virtually every argument that the city and the developer made to the court in their unsuccessful attempt to deny the people their Constitutional right to vote on the proposed law,” Toch said in an email.
