The First District Court of Appeal has overturned the Hayward City Council's decision to adopt a proposed ballot initiative reaffirming open-space designations within the city and subjecting future open-space zone changes to a vote. The court concluded that because the signature-gathering effort was legally flawed, the council did not have the right to adopt the initiative as a city ordinance. The decision - a reversal of the trial judge's ruling - is a victory for Mervyn's, the retail chain, which has been seeking to redesignate several of its properties from open space to industrial use. However, the court also reversed the trial judge's award of attorney fees to Mervyn's under the private attorney general doctrine, saying that such a fee award was not necessary to motivate the company to litigate. The complicated history of the Mervyn's properties began in 1990, when a citywide open space plan was adopted that designated the city's baylands and hills - including several properties owned by Mervyn's - for parks and open space. Hayward voters passed an initiative requiring voter approval to redesigate one of those properties - an old golf course - from open space to any other use. That initiative was rejected by the courts, but local citizens never mounted a broader initiative campaign. In 1996 a citizen group called Save Open Space gathered signatures for an initiative that would re-affirm the 1990 open space plan and subject all future open-space zoning changes to a vote. On November 12, 1996, Mervyn's sent a letter to Hayward protesting the designation of its land as open space and requesting that a land-use change on its property from open space to industrial. Three days later, SOS filed its signatures petitions with the city. On December 3, while the signatures were pending, the Hayward City Council redesignated the Mervyn's property to industrial. On December 30, the city clerk certified the number of signatures as sufficient, thus forcing the City Council to either place the measure on the ballot or adopt it. The council scheduled a meeting on the initiative for February 11, 1997. Four days prior to the meeting, Mervyn's went to court seeking a stay or temporary restraining order, but these were denied. At the February 11 meeting, the Hayward City Council adopted the initiative petition as a city ordinance, effectively reversing the land-use designation on the Mervyn's property and subjecting future changes to a vote. As Mervyn's legal case moved forward, Alameda County Superior Court Judge Mark Eaton ruled in favor of the city, but found one section of the initiative - establishing its precedence over other city ordinances - invalid. Eaton also awarded some $7,000 in attorney fees to Meryvn's for its success in defeating the one provision. On appeal, the Second District overturned Eaton and concluded that the initiative did not comply with Election Code §9201, which states that any initiative must include the text of the measure being proposed. The appellate court found that Save Open Space should have attached 17 pages of the city's general plan which are referred to in the initiative text. "Governmental land use decisions can be challenged by initiative or referendum," the court wrote. "In either case, it is imperative that persons evaluating whether to sign the petition be advised which laws are being challenged and which will remain the same. Only inclusion of the existing general plan will accomplish such purpose." Thus, the court concluded, the Hayward City Council did not have the right to adopt the initiative. On the attorneys' fees, the Second District concluded that Mervyn's did not qualify for them under the private attorney general doctrine because the company had expressed its intent to pursue the litigation in any event. The case was decided in December but published in January after, among other things, an impassioned plea to do so from Sherman Lewis, a Cal State Hayward political science professor and head of SOS. In a letter to the court, Lewis said the initiative process reveals "the fragility of citizen action" and said: "Your decision in Mervyn's v. Reyes makes such action more difficult." He asked that the opinion be published so that other citizen groups would be forewarned of the courts' "willingness ... to second-guess citizen initiatives." The Case: Mervyn's v. Reyes, No. A078208, 99 Daily Journal D.A.R. 365 (issued December 10, 1998, published January 11, 1999). The Lawyers: For Mervyn's: Arthur Fred Coon, Miller Starr & Regalia, (925) 935-9400. For City of Hayward: Michael John O'Toole, City Attorney, (510) 583-4455. For Sherman Lewis: Stuart Flashman, (510) 652-5373.