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On August 23, 2018, the California Supreme Court issued a decision in City of Morgan Hill v. Bushey (No. S243042), holding that “the people of a county or city can challenge . . . a zoning ordinance by referendum, at least where the local government has other means available to make the zoning ordinance and general plan consistent.”

In doing so, the Court overturned two long-standing Court of Appeal decisions—deBottari v. City of Norco and City of Irvine v. Irvine Citizens Against Overdevelopment—which held that a referendum against a zoning ordinance that, if rescinded, would create a conflict between a property’s zoning and the general plan, is void ab initio.

In 2014, Morgan Hill amended its general plan to change the land use designation from industrial to commercial for a certain vacant lot within the city. Approximately six months later, the City Council approved a zoning designation change for that same parcel. Voters initiated a referendum against the zoning ordinance only and the City sought to have the referendum removed from the ballot. Although the trial court agreed with the City because, if successful, the referendum would “enact” a zoning ordinance inconsistent with the City’s general plan, the California Court of Appeal reversed.

The Supreme Court, in upholding the Court of Appeal, cited its duty to “‘jealously guard’ the referendum and initiative powers, and to liberally construe those powers.” With regard to general plan and zoning consistency, the state legislature enacted Government Code § 65860, which requires zoning to be consistent with general plans, but in the event of an inconsistency, requires that the inconsistency be rectified “within a reasonable time.” Thus, the Supreme Court framed the operative question in the case as whether the state preempted local power to refer an ordinance aligning zoning with an amended general plan. The Supreme Court ultimately concluded that the state has not preempted such powers as long as there are “other consistent zoning options” or “the local municipality has the power to make the zoning consistent through other means.” The Court first reasoned that a referendum prevents the enactment of legislation, so a referred zoning ordinance may mean that a general plan and zoning ordinance continue to be inconsistent, but the referendum cannot cause an inconsistency. Second, the court found no evidence that the Legislature intended to prevent the referendum of zoning ordinances when it enacted § 65860. Indeed, because the referendum power existed when the Legislature enacted § 65860, the Court presumed that the Legislature added the provision knowing that local referenda may challenge zoning ordinance amendments.

Furthermore, the Court determined there is no clear showing of preemption. In this subject matter, state law does not “mandate[] a certain result with no discretion,” nor does the subject involve an “administrative” task. The Court also placed emphasis on the fact that § 65860 does not dictate the process by which general plans and zoning ordinances must be made consistent, pointing out that § 65860 does not prevent a mayor from vetoing a particular zoning change or members of a city council from voting against such a change.

The Court was also not persuaded by the City’s argument that local electors could refer the general plan change if they disproved of the land use designation. The court reasoned that electors may approve of the general plan amendment, but wish to refer only the zoning amendment.

Based on the above, the Supreme Court expressly “disapprove[d] of the reasoning” in deBottari and Irvine Citizens Against Overdevelopment, because in the Court’s view, those decisions neglected two important considerations: (1) where possible, protect the people’s reserved legislative power and (2) a court’s duty to reconcile statutory provisions with the constitutional right of referendum.

The Supreme Court also determined that it need not resolve whether “reasonable time” under § 65860 could ever limit the ability to bring a referendum. The Court did suggest, however, that under California law, “reasonable time” is fact specific. Ultimately, the Supreme Court sent the case back to the trial court to determine if the specific facts of this case prevent the referendum from advancing (i.e., whether there are any other potential zoning designations for the property to take on and be consistent with the general plan and whether the city had the power to add zoning designations or amend the general plan to be consistent with the existing zoning). Thus, this will not likely be the last word on this case or this legal issue.