Palm Springs Promenade, LLC v. Dept. of Industrial Relations

INTRODUCTION

Palm Springs (City), a resort city in southern California’s Coachella Valley in the County of Riverside, is a charter city under the state’s Constitution. (Cal. Const., art. XI, § 5.) Pursuant to the “home rule” provision, a city organized under a charter is allowed to govern itself without interference by the legislature on certain matters. (Id., at subd. (a) (Section 5(a)).) One of those subject areas is that a charter city can exempt itself from the Prevailing Wage Law (PWL) (Lab. Code, §§ 1720, subd. (a)(1),

1770)1 and pay workers less than “prevailing wages” on projects deemed “municipal affairs.” In 2002, the City passed such an ordinance. (Palm Springs Mun. Code, § 7.06.030.) Real party in interest Palm Springs Plaza (PSP) purchased an almost vacant mall comprising 13 acres in the City’s downtown tourist area (Subject

Property).2 In 2010, almost 10 years after the purchase, PSP and the City entered into an agreement allowing PSP to renovate the dilapidated shopping center into a new multipurpose development, called Desert Fashion Plaza, which would bring much-needed vitality to the area. Relying on the City’s municipal code, PSP paid employees building the…