FEATURE ARTICLE

July 2007

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Local Governments’ Regulatory Authority Boosted by California Supreme Court Decision Affirming Right to Regulate to Protect Economic Development

On June 7, 2007, the California Supreme Court stepped into the big box retail fray, giving a boost to local governments to regulate land uses and retail activity to protect economic development within their jurisdictions. The Court in Hernandez v. City of Hanford,___Cal.4th___, Case No. S143287 (5th Dist. June 7, 2006), reversed the Fifth District Court of Appeal and held that the City of Hanford’s zoning ordinance, which prohibited the sale of furniture in a “Planned Commercial” (PC) district with a limited exception for large department stores, was valid. The Court ruled that although the ordinance was partly intended to regulate economic competition, the ordinance was nonetheless valid because it was adopted to support the legitimate public purposes of protecting and preserving the economic viability of the city’s downtown commercial district and of attracting and retaining large department stores critical to the economic health of the PC district. The Court further held that the city’s disparate treatment of large department stores and smaller retail stores within the PC district did not violate state or federal equal protection laws.