Wal-Mart Stores, Inc. v. City of Turlock

• Decision Date: 13 March 2007
• Docket Number: No. 1:04-CV-05278 OWW DLB.,1:04-CV-05278 OWW DLB.
• Citation: 483 F.Supp.2d 1023
• Court: U.S. District Court — Eastern District of California
• Parties: WAL-MART STORES, INC., et al., Plaintiffs, v. CITY OF TURLOCK, et al., Defendants.

Page 1023

483 F.Supp.2d 1023

WAL-MART STORES, INC., et al., Plaintiffs, v. CITY OF TURLOCK, et al., Defendants.

No. 1:04-CV-05278 OWW DLB.

United States District Court, E.D. California.

March 13, 2007.

Michael J. Coffino, Alison Hersey Mijares, Ann Marie Heimberger, Steefel, Levitt & Weiss, A Professional Corporation, San Francisco, CA, John P. Kinsey, Sagaser, Jones & Hahesy, Fresno, CA, for Plaintiffs.

Benjamin Peters Fay, Rick W. Jarvis, Jarvis, Fay & Doporto LLP, Oakland, CA, for Defendants.

ORDER RE: DEFENDANTS' MOTION FOR ATTORNEY'S FEES (Doc. 224)

WANGER, District Judge.

I. INTRODUCTION

Prevailing Defendants, the City of Turlock and the Turlock City Council (collectively, "the City" or "Turlock"), move for an award of attorney's fees under 42 U.S.C. § 1988. Plaintiffs, Wal-Mart Stores, Inc. and Wal-Mart Real Estate Business Trust (collectively, "Wal-Mart"), oppose the motion.

II. BACKGROUND

The factual background of this case has been discussed at length in several previous decisions. For the purposes of this motion, only a brief summary of facts, most of which where undisputed throughout the litigation, is necessary.

Wal-Mart alleged that its representatives originally began negotiations with the City in December 2002 to establish a Wal-Mart Supercenter in Turlock; that these negotiations appeared likely to succeed as late as July 2003, when Wal-Mart purchased the real property for the prospective Supercenter; and that, at about that time, local grocery store owners learned of Wal-Mart's plans, and began lobbying the Council to exclude Wal-Mart from Turlock in order to protect themselves from Wal-Mart's competition.

On December 16, 2003, and January 13, 2004, the Turlock City Council adopted Ordinance Nos. 1015-CS and 1016 (the "Ordinance"). The Ordinance amended the City's Zoning Code and Northwest Triangle Specific Plan, and was codified in Sections 9-1-202 and 9-3-302 of the Turlock Municipal Code. The Ordinance created three new categories of commercial retail land uses: "Discount Stores," "Discount Clubs," and "Discount Superstores." "Discount Stores" are:

stores with off-street parking that usually offer a variety of customer services, centralized cashing, and a wide range of products. ["Discount Stores"] usually maintain long store hours seven (7) days a week. The stores are often the only ones on the site, but they can also be found in mutual operation with a related or unrelated garden center or service station. Discount stores are also sometimes found as separate parcels within a retail complex with their own dedicated parking.

A "Discount Club" is:

a discount store or warehouse where shoppers pay a membership fee in order to take advantage of discounted prices on a wide variety of items such as food, clothing, tires, and appliances; many items are sold in large quantities or bulk.

A "Discount Superstore" is:

a store that is similar to a "Discount Store" ... with the exception that [it] also contain[s] a full-service grocery department under the same roof that shares entrances and exits with the discount store area. Such retail stores exceed 100,000 square feet of gross floor area and devote at least five percent (5%) of the total sales floor area to the sale of nontaxable merchandise. ...These stores usually offer a variety of customer services, centralized cashing, and a wide range of products. They typically maintain long store hours seven (7) days a week. The stores are often the only ones on the site, but they can also be found in mutual operation with a related or unrelated garden center or service station. Discount superstores are also sometimes found as separate parcels within a retail complex with their own dedicated parking.

In Turlock, discount stores and discount clubs are permitted conditional uses in the C-C, C-H, and C-T commercial zones. Discount superstores are not permitted uses, conditional or otherwise, in any City zone. The Ordinance prohibits Plaintiffs from siting a Wal-Mart Supercenter (a "Discount Superstore") in Turlock.

The Ordinance's Preamble makes the following findings:

• WHEREAS, the [City] General Plan (including, but not limited to, policies 2.4-a, 2.4-g, 2.4-h, 2.4-j, 2.4-k) establishes locational requirements for the [regional and neighborhood] retail centers: encouraging a number of neighborhood centers equally dispersed throughout the [C]ity while encouraging a concentration of regional shopping centers along the Highway 99/Countryside Drive corridor; and

• WHEREAS, General Plan policies promote and encourage vital neighborhood commercial districts that are evenly distributed throughout the city so that residents are able to meet their basic daily shopping needs at neighborhood shopping centers; and

* * *

• WHEREAS, given the changes in the retail sector and the evolution toward ever-bigger stores, it is necessary that the zoning ordinance be amended to regulate larger retail establishments appropriately and to afford them adequate review; and

• WHEREAS, the [City] zoning ordinance (Title 9 of the [City] Municipal Code) has not kept pace with the evolution of the retail sector and fails to adequately distinguish the size, scale and scope of various retail activities;

* * * • WHEREAS, the establishment of discount superstores in Turlock is likely to negatively impact the vitality and economic viability of the [C]ity's neighborhood commercial centers by drawing sales away from traditional supermarkets located in these centers; and

• WHEREAS, industry and academic studies indicate discount superstores rarely add any retail services currently not provided within a community, and that the majority of sales growth at a discount supercenter comes from a direct shift of dollars from existing retailers within a community, primarily from grocery stores; and

• WHEREAS, discount superstores compete directly with existing grocery stores that anchor neighborhood-serving commercial centers; and

• WHEREAS, smaller stores within a neighborhood center rely upon the foot traffic generated by the grocery store for their existence and in neighborhood centers where the grocery store closes, vacancy rates typically increase and deterioration takes place in the remaining center; and

• WHEREAS, discount superstores adversely affect the viability of small-scale, pedestrian-friendly neighborhood commercial areas, contributing to the blight in these areas; and

* * *

• WHEREAS, the [Ordinance's proposed zoning changes] are intended to preserve the [C]ity's existing neighborhood-serving shopping centers that are centrally located within the community ...; and

• WHEREAS, the [C]ity's current distribution of neighborhood shopping centers provides convenient shopping and employment in close proximity to most residential neighborhoods in Turlock, consistent with the Turlock General Plan; and

• WHEREAS, this distribution of shopping and employment creates a land-use pattern that reduces the need for vehicle trips and encourages walking and biking for shopping, services, and employment.

On January 26, 2005, Doucet & Associates, Inc., an engineering firm, filed with the City on Wal-Mart's behalf a document entitled "an application for entitlements for a Wal-Mart Supercenter proposed for development in Turlock." On April 15, 2005, Wal-Mart filed with the City a revised application. By letter dated May 9, 2005, City Planning Manager Michael I. Cooke rejected the revised application because the operation of a Discount Superstore is barred by the Ordinance.

On February 11, 2004, Wal-Mart filed this lawsuit in federal court alleging that City's expressions of concern for air quality, traffic flows, and urban blight are pretextual, and that the City's true motive is to protect local retailers from competition in violation of the Commerce Clause and Equal Protection Clauses of both the United States and California Constitutions. Wal-Mart also argued the Ordinance is void for vagueness under the United States Constitution's Due Process Clauses.¹

The City did not file any challenges to the pleadings. In late November 2004 Wal-Mart filed a motion to compel Save Mart Supermarkets, a non-party, to produce certain discovery concerning the Commerce Clause claims. (Doc. 12.) Magistrate Judge Dennis L. Beck granted the motion and ordered Save Mart to provide information and documents concerning communications between Save Mart, the City, and other third parties relating to the Ordinance. (Doc. 30 at 6; Doc. 80 at 5.) Save Mart moved for reconsideration. (Doc. 25, filed Feb. 25, 2005.) The request for reconsideration was denied by the district court on June 1, 2005. (Doc. 80.) Among other things, the district court reasoned:

Save Mart's contention that the Ordinance in no way implicates the Commerce Clause is mistaken. As the magistrate judge noted, state legislation may constitute economic protectionism on the basis of discriminatory purpose or effect. See Bacchus Imps., 468 U.S. at 270, 104 S.Ct. 3049. Save Mart has not shown that Wal-Mart's claim that the Ordinance is discriminatory in effect is frivolous or meritless.

(Doc. 80 a 27 (emphasis added).)²

On March 29, 2005, the City moved for summary judgment. (Doc. 50.) The City supplemented its motion on October 11, 2005. (Doc. 152.) Wal-Mart filed opposition on November 2, 2005 (Doc. 155) and the city replied on December 12, 2005 (Doc. 190). Oral argument on the motion was heard February 6, 2006 (Doc. 203), at which time the court granted the parties leave to file supplemental briefs concerning the issues of ripeness and exhaustion of administrative remedies in connection with the equal protection claim. (Doc. 204. at 1.) Wal-Mart filed a supplemental brief on February 21, 2006 (Doc. 204), and the City filed a supplement on February 27, 2006 (Doc. 207).³ On July 3, 2006, the district court granted the City's motion for summary judgment in its entirety. (Doc. 219.)

On August 23, 2006, the City filed the instant ...