Arnel Development Co. v. City of Costa Mesa, Supreme Court of California (1980)

Facts: Arnel Development Co owned 50 acres of undeveloped land; 8.5 acres were zoned for low density residential and the remainder were designated medium density residential. In November of 1976, the city approved the plaintiff's plan of development for the property consisting of 127 single family residences covering 23 acres and 539 apartment units on similar acreage. The city subsequently rezoned the property as PDR-LD (planned development residential - low density) and PDR-MD (planned development residential - medium density). On July 18, 1977, the city approved the development itself and a tentative tract map.

Shortly thereafter, the North Costa Mesa HOA circulated an initiative petition to rezone the Arnel property (and two adjacent undeveloped properties) to single family residential (R-1); at the municipal election of March 7, 1978, the voters approved the initiative by a narrow majority.

Arnel filed suit for mandate, injunctive relief and declaratory relief. The company owning one of the adjacent undeveloped parcels (South Coast Plaza) affected by the initiative filed suit for declaratory relief.

Procedure: The trial court upheld the validity of the initiative. The Court of Appeal reversed, holding that the rezoning of specific, relatively small parcels of private property is adjudicatory (is this the same as quasi-judicial?) and therefore not allowable by initiative.

Issue: Is the rezoning of specific, relatively small parcels of privately owned property adjudicatory in nature, with the requisite due process hearing, or is it a legislative act and therefore allowable by initiative?

Holding: The rezoning is legislative and therefore the validity of the initiative is upheld.

Rationale: California and federal precedent alike agree that amending a zoning ordinance is the same as enacting a new zoning ordinance, and therefore legislative. The opinion notes that the plaintiffs still have other avenues for relief open; they may seek administrative relief from the zoning. Also they may seek judicial invalidation of zoning on the grounds that it is arbitrary and unreasonable, or that it is bears no reasonable relationship to the regional welfare, or that it is unnecessarily injurious.

Note that the court only finds the initiative to be valid; because the appellants presented numerous other issues for injunctive and declaratory relief which were not addressed by the Court of Appeal, the cause was transferred back to the Court of Appeal to address those issues.

Additional Notes: The opinion is focused on which actions are legislative versus which are adjudicatory; the plaintiff claims that the small-scale nature of the zoning amendment (both in terms of acreage and the small number of landowners affected) means that this amendment is adjudicatory. Aside from precedent, the opinion notes that to embark on a case-by-case determination of adjudicatory versus legislative would be tremendously expensive in terms of administrative costs. Further, landowners rights are protected sufficiently via the relief options noted above.

Fully half the opinion is actually a dissenting opinion, and I personally find the dissent compelling. The arguments being:
  • "I find it wholly anomalous that, had appellants voluntarily sought a zoning variance or use permit for their own property, a due process hearing would have been required to permit an airing of the pros and cons of such an 'adjudicative' mater. Yet, under the majority's analysis when third parties, by an initiative, effect for the owner an involuntary change of use against the owner's will such notice and hearing is denied the owners, the very parties most directly affected."
  • The Costa Mesa initiative contained no general statement of land development policy; it prescribed no criteria of broad, general application to all city property within a particular zone or district. The argument that it targeted three specific parcels and three specific property owners and so it was therefore a variance is just.
  • One could reasonably define adjudicative (as opposed to legislative) actions: "governmental action may be deemed adjudicative for due process purposes if it requires consideration of facts peculiar to the individual case, and, affecting the relatively few, involves the exercise of discretionary judgement and the careful balancing of conflicting interests."
  • The initiative process is poorly suited to provide due process for these kinds of adjudicative changes; "the kind of public debate on the merits of a proposed zoning measure afforded by the election process, including the limited opportunity for the submission of written arguments to the voters, cannot be equated with a dispassionate study, evaluation and report upon the proposal by a staff of planning experts, notice and hearing before the planning commission, written recommendation by the planning commission with reasons for its recommendation, and notice and hearing before the legislative body." Further, money wins elections, and also a legislative body can make more subtle changes and create innovative solutions; an initiative is a pass/no pass situation.