On August 23, 2018, the California Supreme Court expanded the voters’ right to referendum in City of Morgan Hill v. Bushey, et al., S243042.

Asit Panwala argued on behalf of the Morgan Hill Hotel Coalition that voters may challenge a zoning ordinance by referendum even if the ordinance would bring the zoning into compliance with a recently amended general plan. To watch the webcast, click here.

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The Supreme Court held voters have the power to challenge a zoning ordinance even if a successful referendum would temporarily leave in place a zoning ordinance that does not comply with the general plan. The Court found that the people may exercise their Constitutional right to referendum when there are other means to make the zoning ordinance and general plan consistent.  The City and developer had argued that consistency requirement of Government Code § 65860 pre-empted the People’s right to referendum, and that it should be removed from the ballot. The Supreme Court concluded that if there are other zoning districts, or if new zoning districts could be created that would comply with the general plan if voters rejected the proposed measure, then the City must hold the referendum.

On April 1, 2015, the City of Morgan Hill sought to change the zoning for a parcel from “light-industrial” to “general commercial” after a recent general plan amendment that changed the parcel to commercial from industrial.  The Hotel Coalition opposed it, but the City Council approved it by a 3-2 vote.  On May 1, 2015, the Hotel Coalition submitted more than 4,000 signatures on a petition for referendum, requiring the City to repeal the ordinance or place it on the ballot.  The City did neither.  The Hotel Coalition sued, and the City placed the measure on the ballot, only to file an action to remove it.

On March 29, 2016, the trial court ordered the referendum removed from the ballot while relying on deBottari v. City of Norco (1985) 171 Cal.App.3d 1204.   Panwala successfully obtained a stay through a writ of supersedeas to prevent the developer (River Park Hospitality) from building.

Panwala persuaded the Sixth District Court of Appeal to reverse the trial court’s decision in City of Morgan Hill v. Bushey (2017) 12 Cal.App.5th 34.  The appellate court concluded that there were other commercial zoning districts available, and ordered the City to hold a referendum. Subsequently, the California Supreme Court granted review.

Although the City contested that the existence of other commercial zoning districts that do not permit hotel use, the Supreme Court expanded the rule farther than the Sixth District.  In its opinion, the Court found that if the City had any means by which it could remedy the inconsistency, the referendum must be held.  For example, the City could create new commercial zoning districts that do not permit hotel use.  The Supreme Court even suggested that City may wish to consider re-amending the general plan if no other zoning district existed or could be created, but left that as a question to be answered another day.

Panwala’s advocacy means that the City’s attempt to create instant wealth for a single developer has been thwarted until the voters have a chance to weigh in.  The Law Office of Asit Panwala was assisted by the Law Office of J. Randall Toch in this matter.  Asit is particularly thankful to the Hotel Coalition, and his wife.