Costa Mesa had asked the State Supreme Court to hear an appeal of a lower court’s ruling, that effectively halted the city’s plan to outsource a wide range of services. But the decision not to hear the appeal means that the lower court’s opinion will stand as case law, and could entice future general law cities to proceed cautiously on any outsourcing plan.

The Orange County Employees Association, who called the decision a milestone, alluded to that chilling effect.

Costa Mesa Councilman Jim Righeimer, however, said that the decision will simply encourage cities to pursue charters, which would allow cities to circumvent the precedent-setting opinion. It was for the remaining general law cities that Costa Mesa chose to pursue a hearing before the Court.

The Supreme Court’s rejection is the latest legal setback for the City, who undertook an ambitious cost-cutting agenda in 2011. The plan centered on outsourcing a wide range of programs, including street sweeping, jails, and more. However, the OCEA sued the City, claiming that the decision to move forward with outsourcing violated their contract and state law.