SOUTH LAKE TAHOE, Calif. – The City of South Lake Tahoe and opposing South Lake Tahoe Property Owners Group are scheduled back in El Dorado Superior Court for a Status Conference Friday afternoon, Dec. 29. This is the trial court where legal proceedings started five years ago.

The appeals court sent the matter back to trial court this fall on one of the four issues the homeowner group claimed in the appeal, the qualified vacation home rental permits. These permits gives permanent residents an exception to rent their properties for up to 30 days per year in residential zones, where the measure otherwise bans short term home rentals.

The appellate court primarily agreed with the homeowner group’s claim on the issue that Measure T’s resident exception unconstitutionally discriminates against nonresident homeowners saying, “It is not necessary to look beyond Measure T’s text to determine the ordinance discriminates against interstate commerce where the text expressly distinguishes between residential homeowners who reside in their South Lake Tahoe homes and all other residential property owners, including out-of-state owners.”

The court says the measure makes this discrimination on its face and goes against the dormant Commerce Clause. The dormant Commerce Clause was not initially identified in the homeowner group’s claims by name, but the court accepted it since it was argued on its merits before that.

As cited in the court’s opinion, the dormant Commerce Clause prohibits a state from enacting laws that discriminate against or unduly burden interstate commerce.

However, the appeals court points out one exception to the clause when the violating regulation “‘advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.'”

The court says neither parties addressed this element of the clause violation and sent it back to trial court for both to make their case on the element.

Favorable court rulings on this issue has Attorney Pierce feeling confident about the homeowner group’s prospects in trial court, “I don’t think the city is going to have much of an argument that they can discriminate in a way that Measure T does.”

He says in all fairness to the city, “It wasn’t the City Council that passed this, it was some folks who wanted to discriminate in favor of locals because they were locals, put it on ballot and worded it the way they did. I just don’t think that is going to fly at this point.”  

Attorney Pierce explains the city was regulating short term rentals rather tightly and says a lot of people thought is should be given a chance to work, “I’m hoping that’s the way it will go.”

As for whether the resident exception does further a local need that cannot be addressed by other nondiscriminatory means, City Attorney Heather Stroud says, it’s a factual issue based on particular circumstances in South Lake Tahoe, and doesn’t know how much can be relied on from cases in other states.

Attorney Stroud feels the city has good arguments they can make, but says, “I’ve learned a long time ago to never guess what a court’s going to do.”

Whether the resident homeowner exception is severable from the remainder of Measure T, allowing the rest of the measure to remain intact, is another issue the appellate court sent to the trial court to determine. 

Pierce says it’s likely the trial court may decide the entire measure is unconstitutional due to the razor thin majority that passed it. He contends the court can’t assume any provision was not important to electors.

He also states in his Status Conference Statement that the ballot arguments in favor of Measure T say “that it ‘is NOT a BAN on Vacation Rentals’ and that it would ‘provide income to resident property owners who can short-term rent their homes for 30 days each year,'” and believes on those grounds, the voters intended to allow permanent residents to rent their homes and an initiative that excluded that provision would not have passed.

However, Stroud says case law pertaining to severability does not support that conclusion. Measure T has a severability clause, the City Attorney says, “It seems likely that voters would have adopted Measure T even if the disputed provisions regarding qualified vacation home rentals were to be deleted.”

The appellate court did rule in the City of South Lake Tahoe’s favor on all other issues brought up by the homeowners group by affirming the trial court’s decisions on these claims.

Those were claims that Measure T:

• unconstitutionally interferes with vested property rights
• exceeds the initiative power in violation of land use authority vested in the Tahoe Regional Planning Agency
• violates rights of privacy and equal protection by restricting occupancy

Friday’s status conference is primarily procedural. It’s possible the court will set a trial date and other case management dates for the remanded dormant Commerce Clause issue.