The Regents of the University of California (Regents) own and operate UCSF, a medical complex, research center, and professional school in San Francisco, with an educational mission. In 2014, the Regents approved a development plan for UCSF that included plans to update several campuses and construct a new hospital at the Parnassus Heights campus (Parnassus). In 2021, the Regents decided to move forward with a different plan and instead construct a larger hospital at Parnassus (the New Hospital). The New Hospital would increase the campus’s hospital capacity and allow UCSF to better meet community needs.
In March 2023, the Parnassus Neighborhood Coalition (the Coalition) sued the Regents and asked the trial court to stop construction on the New Hospital. The Coalition argued that the New Hospital’s size violated the City’s property and zoning regulations. The Regents argued that they are a state entity and are thus immune from complying with local building and zoning regulations when engaging in governmental activity.
The Regents filed a demurrer, asking the trial court to dismiss the case. The trial court disagreed. The trial court held that the issue of whether the Regents were immune from local regulation depended on whether the proposed construction constituted a governmental activity or a proprietary activity. The trial court found this was a question of fact that could not be resolved on a demurrer.
The Regents petitioned for a writ of mandate to the court of appeal. They asked the court of appeal to vacate the trial court’s overruling of their demurrer. The court of appeal agreed and concluded that the Regents were immune from San Francisco’s city planning code.
The court of appeal explained that the California state constitution established the Regents as a “public trust … with full powers of organization and government.” The state constitution provides the Regents with autonomy in self-governances. The Regents are thus immune from local regulation when operating in their governmental capacity, unless the state expressly waives that immunity through statute or the state constitution.
The Coalition conceded that UCSF provides clinical services and argued that the construction of a smaller hospital would be sufficient to advance the Regents’ educational mission. They argued that the New Hospital was larger than necessary to advance UCSF’s educational mission, and that the larger size was to produce greater revenue. The court of appeals held that the fact that the New Hospital may increase UCSF’s revenue did not undermine the Regents’ state sovereignty. It advanced UCSF’s educational mission, even if the clinical services provided by the New Hospital extended beyond those strictly necessary to satisfy this mission.
The court of appeal vacated the trial court’s order overruling the Regents’ demurrer and ordered the trial court to enter a new order sustaining the demurrer.
Regents of University of California v. Superior Court (2024) 102 Cal.App.5th 852 [322 Cal.Rptr.3d 114].