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Rubalcava v. Martinez

Court of Appeal of California, Second District
Dec 27, 2007
158 Cal.App.4th 563 (Cal. Ct. App. 2007)


No. B199993.

December 27, 2007.

Superior Court of Los Angeles County, No. BS107624, David P. Yaffee, Judge.

Rockard J. Delgadillo, City Attorney, Valerie L. Flores and Harit U. Trivedi, Deputy City Attorneys, for Defendants and Appellants.

Davis, Cowell Bowe, Richard G. McCracken, Andrew Kahn and Paul More for Real Party in Interest and Appellant.

Bell, McAndrews Hiltachk, Thomas W. Hiltachk, Brian T Hildreth and Paul T. Gough for Plaintiffs and Respondents.


Respondents sought mandamus and injunctive relief against appellant City Council of Los Angeles (City Council) and other parties, contending that the City Council improperly approved an ordinance essentially similar to one that the City Council had repealed following respondents' successful campaign to institute a referendum on it. The trial court granted respondents' petition. We reverse.


On November 22, 2006, the City Council adopted ordinance No. 178082, entitled "Hotel Worker Living Wage Ordinance" (Wage Ordinance). The ordinance set minimum wage standards that exceeded California's minimum wage requirements for certain hotel workers employed within the Gateway to Los Angeles (Century Corridor) Property Business Improvement District (PBID), which abuts Los Angeles International Airport. Under the ordinance, hotels within the PBID that contained 50 or more guest rooms were obliged to pay at least $9.39 per hour to workers who received health benefits, and at least $10.64 per hour to workers who did not receive health benefits.

The text of the Wage Ordinance (No. 178082) is contained in appendix A.

The Wage Ordinance was opposed by respondents — who are a group of hotel operators within the PBID and individual taxpayers — and other parties, including the Los Angeles Chamber of Commerce (Chamber of Commerce). Whereas respondents objected to the imposition of special minimum wage requirements on a relatively small number of hotels, the Chamber of Commerce's primary concern was that similar requirements would eventually be imposed on other businesses. On December 29, 2006, respondents submitted a referendum petition against the Wage Ordinance containing 103,000 signatures. On January 10, 2007, appellant Frank Martinez, the city clerk of the City of Los Angeles, certified that the petition satisfied the requirements of the Los Angeles City Charter. This certification obliged the City Council to submit the Wage Ordinance to a popular vote or repeal it. Throughout the remainder of January 2007, members of the City Council and other city officials met with opponents of the ordinance and other interested parties in an effort to devise a new ordinance that would resolve the opposition to the Wage Ordinance.

Respondents are Dominick Rubalcava, Dorena Knepper, Teri Bialosky, Joseph Czyzyk, Sunstone OP Properties L.L.C. (doing business as Courtyard by Marriott — LAX/Century Blvd.), BA LAX L.L.C. (doing business as Embassy Suites Hotel LAX North), Fortuna Enterprises, L.P. (doing business as Los Angeles Airport Hilton), HST Lessee LAX L.P. (doing business as The Westin Los Angeles Hotel), LAX Airport Hospitality, L.L.C. (doing business as Holiday Inn LAX), LQ Management, L.L.C. (doing business as La Quinta Inn Suites, LAX), and LAX Hospitality L.P. (doing business as Radisson Hotel LAX).

On January 31, 2007, the City Council repealed the Wage Ordinance. On February 21, 2007, it approved ordinance No. 178432, entitled "Airport Hospitality Enhancement Zone Ordinance" (Zone Ordinance). The ordinance designated the area bounded by the PBID as a hospitality enhancement zone, and committed the City of Los Angeles (City) to make a number of improvements within the zone. The City declared that it would perform $1 million in street improvements, conduct a $50,000 study into ways of attracting new businesses, and create a program that would train 120 workers per year for positions in hotels and restaurants; in addition, it promised to investigate a reduction in business taxes, the creation of a new recycling and waste diversion program, and the construction of a convention center and remote hotel check-in facilities.

The text of the Zone Ordinance (No. 178432) is contained in appendix B.

The Zone Ordinance also set minimum wage requirements for hotel workers identical to those found in the Wage Ordinance, but mandated their implementation by phases, and delayed full implementation until January 1, 2008. In addition, the Zone Ordinance permitted a hotel to avoid the wage requirements if it showed that the requirements were significantly burdensome or that its workers had agreed in a collective bargaining agreement to waive the requirements. The ordinance contained a commitment from the City that it would not impose wage requirements on other businesses absent further study.

On February 28, 2007, respondents filed their petition for mandamus and injunctive relief against the City Council, Frank Martinez, in his official capacity as city clerk of the City of Los Angeles, and Rockard J. Delgadillo, in his official capacity as City Attorney of the City of Los Angeles. The petition contended that the City Council's conduct in connection with the Zone Ordinance contravened their rights regarding referenda and initiatives under the California Constitution. It also sought an injunction to prevent Martinez from giving effect to the Zone Ordinance by publishing it. On February 28, 2007, Judge Dzintra Janavs issued an alternative writ of mandate and order to show cause, and directed Martinez to refrain from publishing the zone ordinance. Judge Janavs subsequently permitted appellant Unite Here Local 11 (Local 11) to intervene in the action. After Local 11 exercised a peremptory challenge to Judge Janavs, the action was transferred to Judge David Yaffe. Following a hearing on May 2, 2007, Judge Yaffe granted the petition, and judgment was entered on May 31, 2007. This appeal followed.

Under the City's charter, an ordinance takes effect 31 days from its publication, absent qualifications not relevant here. (L.A. Charter, § 252.)


Appellants contend that the trial court erred in granting the petition. We agree.

A. Governing Principles

The key issues before us concern whether the City Council properly approved the Zone Ordinance after repealing the Wage Ordinance in the face of respondents' certified referendum petition. "The referendum is the means by which the electorate is entitled, as a power reserved by it under our state Constitution, to approve or reject measures passed by a legislative body. (Cal. Const., art. II, §§ 9, subd. (a), 11 art. IV, § 1. . . .)" ( Empire Waste Management v. Town of Windsor (1998) 67 Cal.App.4th 714, 717-718 [ 79 Cal.Rptr.2d 262], citation omitted.) Under the referendum provisions of the California Constitution, the electors may approve or reject statutes "except urgency statutes, statutes calling elections, and statutes providing for tax levies or appropriations for usual current expenses of the State." (Cal. Const., art. II, § 9, subd. (a); see Cal. Const., former art. IV, § 1.) As characterized by our Supreme Court in Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 591 [ 135 Cal.Rptr. 41, 557 P.2d 473] ( Associated Home Builders): "The amendment of the California Constitution in 1911 to provide for the initiative and referendum signifies one of the outstanding achievements of the progressive movement of the early 1900's.[fn. omitted.] Drafted in light of the theory that all power of government ultimately resides in the people, the amendment speaks of the initiative and referendum, not as a right granted the people, but as a power reserved by them."

Shortly after the 1911 amendment, the court in In re Stratham (1920) 45 Cal.App. 436 [ 187 P. 986] ( Stratham) concluded that "when an ordinance which has been suspended by a referendum has been repealed by [a municipal] council, the council cannot enact another ordinance in all essential features like the repealed ordinance. . . . The council may, however, deal further with the subject matter of the suspended ordinance, by enacting an ordinance essentially different from the ordinance protested against, avoiding, perhaps, the objections made to the first ordinance. If this be done, not in bad faith, and not with intent to evade the effect of the referendum petition, the second ordinance should not be held invalid for this cause. [Citations.]" ( Id. at pp. 439-440.) Subsequently, several courts have followed or endorsed this rule. (See Assembly v. Deukmejian (1982) 30 Cal.3d 638, 678 [ 180 Cal.Rptr. 297, 639 P.2d 939] (Assembly); Gilbert v. Ashley (1949) 93 Cal.App.2d 414, 415 [ 209 P.2d 50] (Gilbert); Martin v. Smith (1959) 176 Cal.App.2d 115, 118 [ 1 Cal.Rptr. 307] (Martin); Reagan v. City of Sausalito (1962) 210 Cal.App.2d 618, 629-630 [ 26 Cal.Rptr. 775] (Reagan); Lindelli v. Town of San Anselmo (2003) 111 Cal.App.4th 1099, 1110 [ 4 Cal.Rptr.3d 453] ( Lindelli).) Here, appellants contend that the City Council is not subject to the rule first articulated in Stratham, and alternatively, that the trial court incorrectly determined that the Zone Ordinance was "in all essential features like" the Wage Ordinance. ( Stratham, supra, 45 Cal.App. at p. 439.) As we elaborate below, these contentions present questions regarding the interpretation of the California Constitution and municipal ordinances that we resolve de novo. (See Lindelli, supra, 111 Cal.App.4th at p. 1104.)

B. Applicability of the Stratham Rule

Appellants contend that the Stratham rule does not govern the City Council's actions because the City is a charter city. They argue that the California Constitution does not impose the Stratham rule on charter cities, that charter cities fall outside the scope of Elections Code section 9241, which subjects so-called "general law" cities to the rule, and that the City's charter itself does not authorize the rule.

In our view, the California Constitution subjects the City Council to the Stratham rule. In Associated Home Builders, our Supreme Court stated: "Declaring it 'the duty of the courts to jealously guard this right of the people' [citation], the courts have described the initiative and referendum as articulating 'one of the most precious rights of our democratic process.' [Citation.] '[I]t has long been our judicial policy to apply a liberal construction to this power wherever it is challenged in order that the right be not improperly annulled. If doubts can reasonably be resolved in favor of the use of this reserve power, courts will preserve it.' [Citations.]" ( Associated Home Builders, supra, 18 Cal.3d at p. 591.) In light of these principles, as explained below, we conclude that the Constitution imposes the Stratham rule on charter cities, notwithstanding the absence of an express provision addressing this matter. (See Cal. Const., former art. IV, § 1; Cal. Const., art. II, §§ 8-11, art. IV, § 1.)

A charter city "is constitutionally entitled to exercise exclusive authority over all matters deemed to be 'municipal affairs.' (Cal. Const., art. XI, § 5.)" ( DeVita v. County of Napa (1995) 9 Cal.4th 763, 783 [ 38 Cal.Rptr.2d 699, 889 P.2d 1019].) The City of Los Angeles became a charter city prior to the 1911 amendment to the Constitution reserving the right of initiative and referendum to electors. (See Davies v. City of Los Angeles (1890) 86 Cal. 37, 39-40 [ 24 P. 771].) Although the 1911 amendment provided that the right was "self-executing," it authorized the Legislature to establish procedures for the exercise of the right, but exempted charter cities from the operation of any such statutes. ( Ibid.) (Cal. Const., former art. IV, § 1.) Revisions to the 1911 amendment have not altered the substance of these provisions. (See Associated Home Builders, supra, 18 Cal.3d at p. 595 fn. 12; Rossi v. Brown (1995) 9 Cal.4th 688, 698, fn. 4 [ 38 Cal.Rptr.2d 363, 889 P.2d 557]; Midway Orchards v. County of Butte (1990) 220 Cal.App.3d 765, 776-779 [ 269 Cal.Rptr. 796]; Cal. Const., art. II, § 11, subd. (a).)

Under these provisions, charter cities cannot deny their citizens the referendum powers reserved in the California Constitution, although charters may properly reserve broader referendum powers to voters. "'"The constitutional reservation goes to the full extent expressed by its language. If the charter differs from the constitution in any respect it does not thereby diminish the powers reserved by the constitution. On the other hand, if the powers reserved by the charter exceed those reserved in the constitution the effect of the charter would be to give to the people the additional powers there described." [Citations.] In other words, as between the provisions of the Constitution and the provisions of a city charter, those which reserve the greater or more extensive referendum power in the people will govern.'" ( Rossi v. Brown, supra, 9 Cal.4th at p. 698, quoting Hunt v. Mayor Council of Riverside (1948) 31 Cal.2d 619, 622-623 [ 191 P.2d 426].) Accordingly, "[c]harter cities may provide for the exercise of the power of referendum in any manner that does not impinge on the basic right of referendum expressed in the Constitution." ( Browne v. Russell (1994) 27 Cal.App.4th 1116, 1126 [ 33 Cal.Rptr.2d 29].)

The key issue, therefore, is whether the state Constitution impliedly subjects charter cities to the Stratham rule. Our research discloses that the rule was applied twice in published decisions before the Legislature enacted any statutes bearing on the rule. The first application of the rule involved the City of Los Angeles. In Stratham, the City Council enacted an ordinance in September 1919 barring taxicabs and related businesses from soliciting customers at railroad depots. ( Stratham, supra, 45 Cal.App. at pp. 437-438.) Faced with a successful referendum petition challenging the ordinance, the City Council repealed it. ( Ibid.) In November 1919, the City Council approved a second ordinance dealing with the same subject matter, which it characterized as an emergency measure. ( Ibid.) An individual charged with a misdemeanor under the second ordinance filed a writ of habeas corpus, contending that the City Council had identified the ordinance as an emergency measure in bad faith to avoid the operation of the referendum petition. ( Ibid.) In denying the petition, the court in Stratham declined to disturb the City Council's declaration of an emergency. ( Id. at pp. 439-441.) Moreover, pointing only to out-of-state case authority, the court applied the rule in question and concluded that the ordinances were substantially different. ( Id. at pp. 439-440.)

The second application of the Stratham rule occurred in Gilbert, in which the court again did not examine the rule's constitutional basis. ( Gilbert, supra, 93 Cal.App.2d at pp. 414-415.) There, the Escondido City Council enacted a business license ordinance in June 1947 that was defeated in a referendum election held in April 1948. ( Ibid.) In December 1948, the city council enacted a similar ordinance which nonetheless provided — unlike the first ordinance — that the funds collected constituted a tax levy for the city's current expenses. ( Ibid.) The court in Gilbert rejected a challenge to the second ordinance, reasoning that its status as a tax levy exempted it from the referendum provisions of the California Constitution. ( 93 Cal.App.2d at p. 415.) In addition, the court concluded that the two ordinances were sufficiently different to avoid the operation of the Stratham rule. ( Gilbert, at pp. 415-416.)

Shortly after Gilbert, the Legislature enacted the predecessor of Elections Code section 9241. (Elec. Code, former § 1772, added by Stats. 1949, ch. 194, § 1, p. 426.) Elections Code section 9241, like its predecessor, applies to "general law" cities. (See Elec. Code, § 9247; Elec. Code, former § 1777, added by Stats. 1939, ch. 26, pp. 49, 98.) The provision, as adopted in 1949 and in its current form, states that a qualified referendum petition stays an ordinance pending a vote on the referendum, and that if the legislative body of a city repeals the ordinance in the face of the petition, the "ordinance shall not again be enacted . . . for a period of one year after the date of its repeal." (Elec. Code, § 9241; see id., former § 1772.) Since 1949, appellate courts have looked to Stratham and its progeny in applying this provision. ( Martin, supra, 116 Cal.App.2d at pp. 118-119; Reagan, supra, 210 Cal.App.2d at pp. 629-631; Lindelli, supra, 111 Cal.App.4th at pp. 1108-1112.)

"The powers of a general law city include '"only those powers expressly conferred upon it by the Legislature, together with such powers as are 'necessarily incident to those expressly granted or essential to the declared object and purposes of the municipal corporation.'"'" ( G. L. Mezzetta, Inc. v. City of American Canyon (2000) 78 Cal.App.4th 1087, 1092 [ 93 Cal.Rptr.2d 292], quoting Martin v. Superior Court (1991) 234 Cal.App.3d 1765, 1768 [ 286 Cal.Rptr. 513].)

In Assembly, our Supreme Court invoked the Stratham rule in a context outside the scope of Elections Code section 9241. There, the court confronted challenges to referendum petitions that sought to have election district reapportionment statutes enacted by the Legislature submitted to the voters for their approval. ( Assembly, supra, 30 Cal.3d at pp. 644-645.) After determining that the petitions were valid, the court clarified the consequences for the Legislature if the statutes were rejected through the referenda: "Since its inception, the right of the people to express their collective will through the power of the referendum has been vigilantly protected by the courts. Thus, it has been held that legislative bodies cannot nullify this power by voting to enact a law identical to a recently rejected referendum measure. (See Gilbert[, supra,] 93 Cal.App.2d 414, 415-4-16 . . .; [ Stratham, supra,] 45 Cal.App. [at pp.] 439-440. . . .) Unless the new measure is 'essentially different' from the rejected provision and is enacted 'not in bad faith, and not with intent to evade the effect of the referendum petition,' it is invalid. [Citations.] Should the referenda here be rejected in the primary election, the Legislature will be governed by these rules in fashioning new reapportionment plans for the remainder of this decade." ( Assembly, supra, 30 Cal.3d at p. 678.)

In view of this authority, the Stratham rule must be regarded as an implied element of the constitutional provisions reserving the referendum power. Because these provisions are self-enacting, the courts may properly devise procedures necessary to protect the power when the appropriate legislative body fails to establish such procedures. (See Midway Orchards v. County of Butte, supra, 220 Cal.App.3d at pp. 778-779.) Here, the Stratham rule was applied to the City prior to the enactment of the predecessor of Elections Code section 9241. Moreover, in Assembly, the court relied on Stratham in concluding that the Legislature "cannot nullify" the referendum power by enacting legislation essentially similar to that rejected in a referendum, notwithstanding the absence of a constitutional provision expressly addressing such conduct. ( Assembly, supra, 30 Cal.3d at p. 678.) Although Assembly did not present the issue raised here, its rationale implies that the City Council may not adopt an ordinance in contravention of the Stratham rule; to conclude otherwise would permit the nullification of the referendum power. Absent the Stratham rule, the legislative bodies of charter cities would be free to wear down opponents of ordinances, who necessarily incur the costs of collecting signatures for referendum petitions. Under the judicial policy favoring a liberal construction of the referendum power, we conclude that the City Council is subject to the rule.

On this matter, the California Constitution provides only that the filing of a referendum petition stays the pertinent legislation pending the voters' opportunity to approve or reject it. (Cal. Const., art. II, § 10, subd. (a); see Lindelli, supra, 111 Cal.App.4th at p. 1109.)

Pointing to Lawing v. Faull (1964) 227 Cal.App.2d 23 [ 38 Cal.Rptr. 417] ( Lowing), appellants contend that charter cities are exempt from the Stratham rule unless they incorporate it into their charters. There, a charter city imposed the requirement in its charter that referendum petitions would be certified only if signed by 20 percent of the voters. ( Lawing, supra, at pp. 25-26.) Pointing to the judicial policy favoring the liberal construction of the referendum power, proponents of a petition challenged the requirement on the ground that it contravened former article IV, section 1, of the California Constitution, which provided that "[u]ntil provided by law," no legislative body could require more than 10 percent of the electors sign a petition. ( Lowing, supra, at pp. 26-30.) The court rejected this contention, concluding that the phrase, "[u]ntil provided by law," expressly permitted charter cities to deviate from the requirement. ( Id. at pp. 27, 36.) Here, unlike Lowing, nothing in the California Constitution expressly authorizes the City to exempt itself from the Stratham rule.

Appellants also contend that the discussion of the Stratham rule in Assembly is dictum, and thus does not constitute authority on the issue before us. We disagree. Our Supreme Court's dicta, though not binding upon us, command our serious respect. ( Bunch v. Coachella Valley Water Dist. (1989) 214 Cal.App.3d 203, 212 [ 262 Cal.Rptr. 513]; People v. Jackson (1979) 95 Cal.App.3d 397, 402 [ 157 Cal.Rptr. 154].) Because the Assembly dictum represents our Supreme Court's fullest analysis of the Stratham rule, we therefore follow it. ( Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 287 [ 41 Cal.Rptr.2d 220, 895 P.2d 56].)

Appellants suggest that the Stratham rule is not needed to protect the referendum power because the electors, if dissatisfied with the City Council's conduct, are free to amend the City's charter to incorporate the rule or to vote against members of the City Council who seek reelection. In our view, the court in Assembly impliedly rejected the notion that this avenue of expressing dissatisfaction is sufficient to preserve the referendum power, given that the voters in statewide elections are also free to amend the Constitution and discharge members of the Legislature.

Finally, appellants contend that the Stratham rule is inapplicable to charter cities because unlike Elections Code section 9241, the rule does not specify the period of time a charter city is prohibited from adopting the second ordinance after withdrawing the first ordinance. It is unnecessary for us to address this contention, insofar as it seeks full clarification of the pertinent time period. Because the interval between the adoption of the Wage Ordinance and the Zone Ordinance is essentially equal to the analogous interval in Stratham, the situation before us falls squarely under that case. ( Stratham, supra, 45 Cal.App. at pp. 437-438.)

C. Analysis of the Ordinances

The remaining issue concerns the application of the Stratham rule to the Wage and Zone Ordinances. Under the Stratham rule, "[t]he determination whether subsequent legislation is essentially the same begins with a comparison of the terms of the legislation challenged by referendum and the subsequent legislation, focusing on the features that gave rise to popular objection." ( Lindelli, supra, 111 Cal.App.4th at p. 1111.) We may consult the record as a whole to identify the "popular" objections to the Wage Ordinance. (See ibid.) Upon making this identification, we look to the language of the Wage and Zone Ordinances to determine whether they are "essentially different," and whether the City Council enacted the Zone Ordinance "not in bad faith, and not with intent to evade" the referendum petition ( Stratham, supra, 45 Cal.App. at pp. 439-440). (See Gilbert, supra, 93 Cal.App.2d at p. 416; Reagan, supra, 210 Cal.App.2d at p. 631.) Moreover, "every presumption is in favor of [the] validity" of the Zone Ordinance. ( Gilbert, supra, 93 Cal.App.2d at p. 416; accord, Reagan, supra, 210 Cal.App.2d at p. 631.)

Generally, the courts have indicated that absent special circumstances — for example, ambiguity in the ordinances — the existence of material differences and the absence of bad faith are assessed solely by reference to the language of the ordinances. (See Gilbert, supra, 93 Cal.App.2d at p. 416; Martin, supra, 176 Cal.App.2d at pp. 120-121.) We see no special circumstances here, and thus do not examine the extrinsic evidence to resolve these issues.
Appellants and respondents submitted considerable evidence bearing on these issues. The trial court sustained appellants' objections to respondents' evidence, concluding that its inquiry was limited to an examination of the language of the ordinances. Respondents do not challenge this ruling on appeal.
Before the trial court, appellants argued that the City Council incorporated certain elements in the Zone Ordinance in a good faith effort to address objections to the Wage Ordinance, and that it adopted the Zone Ordinance after receiving assurances that it would not be opposed. The trial court concluded that appellants' showing did not establish that respondents' conduct prior to the approval of the Zone Ordinance estopped them from challenging it. On appeal, appellants argue that the trial court was obliged to examine their evidence to determine whether the City Council acted in good faith in approving the Zone Ordinance. For the reasons explained above, we disagree.

In Stratham, the first ordinance enacted by the City Council prohibited taxicabs and other entities from soliciting patrons near railroad depots and within defined areas of the city, absent consent from the affected railroads and businesses, but exempted carriers who solicited passengers in certain ways from the scope of the prohibition. (See Stratham, supra, 45 Cal.App. at pp. 438-439.) The second ordinance approved by the City Council expanded the areas covered by the prohibition to encompass the solicitation of passengers on boats and other common carriers; it eliminated the exemption for certain forms of solicitation; and it added new prohibitions against the solicitation of "patronage upon any public street in a loud, noisy, boisterous manner," along with other forms of interference with individuals and their baggage. The ordinance also contained a declaration that absent the measure, "the general public, but especially the traveling public . . . arriving in the City . . . by rail and otherwise, will be greatly annoyed, inconvenienced and harassed and their comfort, safety, welfare and health endangered. . . ." The court in Stratham held that "the two ordinances differ[ed] from each other, not merely in phraseology, but in substance relating to items of importance," and that nothing in the second ordinance suggested bad faith. ( Id. at p. 440.)

At appellants' request, we have taken judicial notice of the ordinances at issue in Stratham, which are part of the record in that case, but were not described in detail in the opinion. (See Stratham, supra, 45 Cal.App. at p. 440.) We may properly examine the ordinances to inform our understanding of the decision in Stratham. (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 946, p. 989.)

In Gilbert, the second ordinance, like the first, imposed a business license assessment, but unlike its predecessor, contained a declaration that it constituted a tax levy for the usual current expenses; moreover, it differed from the first ordinance because it imposed a dissimilar tax rate, dealt with a new tax year, and contained novel exemption and enforcement provisions. ( Gilbert, supra, 93 Cal.App.2d at p. 415.) The court concluded that it was unlike the first ordinance "in all its essential features and provisions," and lacked any trace of bad faith. ( Id. at pp. 415-46.)

Again, in Reagan, the City Council of Sausalito enacted two ordinances committing it to buy waterfront property from a nonprofit private corporation and then lease a portion of the property to the corporation, which planned to allow recreational activities on it. ( Reagan, supra, 210 Cal.App.2d at p. 630.) Faced with a referendum petition challenging the ordinances, the city council repealed them and enacted a third ordinance authorizing the use of city revenues to purchase the property for use as a public recreation area. ( Ibid.) Because the third ordinance lacked any reference to a lease involving the corporation, the court in Reagan concluded that it was essentially different from the first two ordinances, and displayed no evidence of bad faith. ( Ibid.)

In contrast with Stratham, Gilbert, and Reagan, the court reached a contrary conclusion in Martin. There, the City of Sausalito owned waterfront property subject to a lease. ( Martin, supra, 176 Cal.App.2d at pp. 116-117.) In April 1959, the City Council of Sausalito adopted an ordinance permitting a sublease of the property until 2007. ( Ibid.) After a referendum petition concerning the ordinance was presented to the city council, it repealed the ordinance and approved a second ordinance identical to the first, except that it terminated the sublease in 2002, changed the rental fee of the lease, and included another parcel of land in the lease. ( Id. at p. 120.) The court held that the ordinances were "essentially the same" under the Stratham rule, reasoning that the new features in the second ordinance did not address the objectionable aspects of the first ordinance, which it identified as the character of the sublease. ( Martin, at pp. 120-121.) The court stated: "No one will contend that the voters signing the referendum petition were doing so because of the extra five-year period in the terms of the leases. Undoubtedly the voters were concerned with the fundamental principle of the resolutions, namely, the leasing of city property for the commercial purposes specified in the resolutions. That principle was identical in [the resolutions]." ( Id. at p. 120.)

Similarly, in Lindelli, the town council of San Anselmo passed an ordinance awarding a five-year contract to a waste management company. ( Lindelli, supra, 111 Cal.App.4th at pp. 1102-1103, 1111.) Confronted with a certified referendum petition challenging the ordinance, the town council set the vote on the referendum for the earliest permissible election date and awarded a one-year interim contract to the waste management company prior to the election. ( Lindelli, supra, 111 Cal.App.4th at p. 1103.) Applying the Stratham rule, the court concluded that the interim contract contravened the stay provisions of Elections Code section 9241 because the two contracts differed only in the length of their terms. ( Lindelli, supra, at pp. 1113-1114.)

We conclude that the ordinances before us are as distinct as those at issue in Stratham, Gilbert, and Reagan. Although the referendum petition circulated by respondents does not recite specific objections to the Wage Ordinance, the record contains undisputed evidence establishing that the ordinance was subject to two challenges: respondents objected to the economic burden imposed by the Wage Ordinance because it mandated higher minimum wage requirements on hotels near the Los Angeles International Airport, whereas the Chamber of Commerce objected to the prospect that similar requirements would be imposed elsewhere.

The Zone Ordinance contains substantive provisions that address the economic burdens of the wage requirements and the potential for their imposition outside the PBID. To offset the effects of higher minimum wage requirements on the affected hotels, the Zone Ordinance creates an "Airport Hospitality Enhancement Zone" entitled to various guaranteed economic benefits and enhancements. The City commits to spend $1 million on street improvements in the airport hotel corridor; it grants $50,000 for a market analysis to attract businesses to the zone; and it commits to implement and fund a five-year job training program for hotel and restaurant workers. Moreover, the Zone Ordinance requires the City to complete a series of studies addressing the construction of a conference center, a reduction in business taxes and remote airport check-in facilities, while working with interested businesses to promptly develop a joint recycling and waste diversion program.

In addition, the Zone Ordinance mitigates the direct impact of the wage requirements by mandating their implementation in phases, delaying full implementation, and providing exemptions for hotels that find the requirement excessively burdensome. The ordinance also commits the City to conduct a study of the effects of the promised enhancements and the wage requirements, and mandates suspension of the wage requirements of the Zone Ordinance if the study is not completed within a specified period. To alleviate concerns that similar requirements will be imposed elsewhere, the Zone Ordinance prohibits the imposition of such measures outside the zone unless the affected area receives benefits comparable to those provided to the airport hotels by the Zone Ordinance. Moreover, the Zone Ordinance prohibits the imposition of any such ordinance absent careful study of its effects on the region and industry affected, followed by public hearings.

In our view, the new features in the Zone Ordinance, on their face, render it "essentially different" from the Wage Ordinance ( Stratham, supra, 45 Cal.App. at pp. 439-440). Unlike the analogous ordinances in Martin and Lindelli, which did not address the objectionable features of the initial ordinances, the Zone Ordinance contains provisions that confront the "popular" objections to the Wage Ordinance and attempt to address them. Because nothing in the Zone Ordinance betrays bad faith, the City Council did not contravene the Stratham rule in approving it.

In reaching the contrary conclusion, the trial court acknowledged the commitments undertaken by the City in the Zone Ordinance, but determined that they were "to a great extent illusory," and thus "[were] not sufficient to materially change" the aspects of the Wage Ordinance to which the voters objected. These determinations are not supported by the terms of the ordinances, which mark the boundary of judicial review. By its language, the Zone Ordinance is different from the Wage Ordinance in tangible, concrete and significant ways. It is undisputed that the City Council attempted to address the challenges to the Wage Ordinance, and it is undisputed that the Zone Ordinance contains a variety of enhancements — including guaranteed financial commitments exceeding $1 million — as well as measures to mitigate the financial impact of wage requirements on the affected hotels. The question is not whether the Zone Ordinance wholly alleviates the concerns of those who opposed the Wage Ordinance, but whether it addresses them. (See Stratham, supra, 45 Cal.App. at p. 440.) Any attempt to assess the ultimate efficacy of such measures exceeds the scope of judicial review.

The trial court also concluded that the City Council had acted in bad faith in approving the Zone Ordinance because it was not materially different from the Wage Ordinance. For the reasons explained above, we also reject this determination.

Respondents contend that when, as here, the second ordinance contains provisions that are essentially identical to the provisions of the first ordinance that triggered opposition, the second ordinance is necessarily invalid under the Stratham test, despite the addition of new provisions. We disagree. Stratham itself establishes that two ordinances containing similar provisions may nonetheless be essentially different when the second ordinance adds new provisions on matters of substance. There, the second ordinance reaffirmed in essentially similar terms the prohibition on the solicitation of patronage found in the first ordinance, and added new provisions that actually broadened the scope of the prohibition, together with a declaration by the City Council regarding the gravity of the matter addressed by the second ordinance. ( Stratham, supra, 45 Cal.App. at p. 440.) The court held that the second ordinance differed from the first "in substance relating to items of importance." ( Ibid.)

In an apparent effort to distinguish Stratham, respondents contend that in that case the first ordinance, unlike the second, was discriminatory, and that this purported difference was central to the court's determination that the two ordinances were essentially dissimilar. They thus suggest that because the Wage and Zone Ordinances affect the same class of hotels, they are materially alike. Respondents misread Stratham. The court's sole reference to the potentially discriminatory nature of the ordinances occurs in its discussion of an unrelated issue, namely, whether the second ordinance was "unconstitutional and discriminatory" because it barred only carriers who lacked written consent from soliciting patronage. ( Stratham, supra, 45 Cal.App. at pp. 438-441.) The court concluded that "the terms of the ordinance do not create any unlawful discrimination between persons who have, and others who have not, written consent. . . ." ( Id. at p. 440.) Because the two ordinances contained essentially similar provisions regarding consent, the court in Stratham could not have determined that they were different on this basis.

We conclude that the provisions of the Zone Ordinance, taken as a whole, place it squarely within the Stratham court's characterization of a proper second ordinance: the provisions of the Zone Ordinance, on their face, are substantial, relate to items of importance, and aim at "avoiding, perhaps, the objections made to the first ordinance." ( Stratham, supra, 45 Cal.App. at p. 440.) The provisions of the Zone Ordinance directly address the objections to the Wage Ordinance by providing guaranteed tangible economic benefits to the hotels that mitigate the financial burden of the wage requirements, while limiting imposition of such requirements in other areas of the City. Accordingly, the trial court erred in granting the writ petition.

In view of this conclusion, it is unnecessary for us to address appellants' contention that Judge Janavs improperly enjoined appellant Frank Martinez from publishing the zone ordinance.


The judgment is reversed. The matter is remanded to the trial court with directions to vacate the orders enjoining appellant Frank Martinez from publishing the zone ordinance and granting the petition for writ of mandate, and to enter a new order denying the petition for writ of mandate. Appellants are awarded their costs on appeal.

Willhite, Acting P. J., and Suzukawa, J., concurred.

Respondents' petition for review by the Supreme Court was denied April 9, 2008, S160679.


















Summaries of

Rubalcava v. Martinez

Court of Appeal of California, Second District
Dec 27, 2007
158 Cal.App.4th 563 (Cal. Ct. App. 2007)
Case details for

Rubalcava v. Martinez

Case Details

Full title:DOMINICK RUBALCAVA et al., Plaintiffs and Respondents, v. FRANK MARTINEZ…

Court:Court of Appeal of California, Second District

Date published: Dec 27, 2007


158 Cal.App.4th 563 (Cal. Ct. App. 2007)
70 Cal. Rptr. 3d 225

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