CALIFORNIA / Top court turns down Wal-Mart -- cities can ban big-box stores / Justices decline to take up appeal of Turlock ordinance

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The California Supreme Court rejected Wal-Mart's appeal Wednesday of a ruling that allows cities and counties in the state to outlaw big-box superstores.

The April 5 ruling by the Court of Appeal in Fresno upheld an ordinance enacted in 2004 by Turlock (Stanislaus County) that was backed by neighborhood supermarkets and labor unions. The court, setting a statewide precedent, said local governments can enact such restrictions to prevent the collapse of local businesses and resulting urban blight.

The state's high court denied review Wednesday without comment.

It was Turlock's second legal victory over Wal-Mart this month. On July 3, a federal judge in Fresno dismissed the company's constitutional challenge to the ordinance, saying the city was not interfering with interstate commerce or discriminating illegally against one type of store.

Rick Jarvis, a lawyer for Turlock, said Wednesday's state court action allows a city to "make its own land-use plans and decide for itself what's good for the community." It will also "make it much more difficult for Wal-Mart to file expensive legal challenges against other jurisdictions that decide to adopt similar ordinances," he said.

Wal-Mart spokesman John Simley said the company was disappointed but believed the effect of the Turlock law would be limited. The appeals court ruling "is narrowly based on facts that are specific to Turlock," he said.

He said Wal-Mart had not yet decided whether to appeal last week's federal court ruling.

The Arkansas-based retail giant has been trying to establish a California network of discount supercenters -- stores that exceed 100,000 square feet and contain full-size grocery stores -- and has encountered resistance.

Wal-Mart estimates that 20 cities and counties in Northern California have passed ordinances seeking to limit or block the stores. San Francisco, Oakland and Martinez have banned them.

A ban on supercenters in unincorporated areas of Contra Costa County was enacted by the Board of Supervisors in 2003 but repealed by voters in 2004. Alameda County supervisors then rescinded a similar ordinance, but adopted a more limited measure this March that requires big-box retailers to describe the effect of new stores on the local economy and give details of employees' pay and benefits.

Turlock has a Wal-Mart store but responded to the company's plans for a supercenter by passing the ordinance in 2004. Without mentioning Wal-Mart, the law prohibits any retail store larger than 100,000 feet that devotes more than 5 percent of its space to nontaxable items such as groceries. The City Council said the purpose was to preserve neighborhood shopping centers.

In its April 5 ruling, the appeals court said the city's motives were legal, even if its action hurt competition.

"While zoning ordinances may not legitimately be used to control economic competition, they may be used to address the urban/suburban decay" that can result from the entry of a large new business, the court said.

The case is Wal-Mart Stores vs. Turlock, S143488.