Metropolitan News-Enterprise


Monday, September 23, 2013


Page 1


Panel Revives Challenge to City’s Restrictions on Group Homes




The Ninth U.S. Circuit Court of Appeals Friday reinstated a lawsuit challenging a Newport Beach ordinance restricting where group homes for drug addicts and alcoholics may be located.

Overturning U.S. District Court Judge James V. Selna’s summary judgment ruling in favor of the city, the appellate panel said Selna “erred in disregarding the evidence that the City’s sole objective in enacting and enforcing its Ordinance was to discriminate against persons deemed to be disabled under state and federal housing discrimination laws.”

Judge Stephen Reinhardt said, in his opinion for the court, that residents and operators of the homes do not have to identify similarly situated individuals who received better treatment than they did, but are entitled to a trial based on “direct or circumstantial evidence that the defendant has acted with a discriminatory purpose and has caused harm to members of a protected class.”

The city, whose officials argued that residential programs had become so numerous as to threaten the safety and character of its neighborhoods, enacted the ordinance in 2008, after having previously enacted a series of moratoria.

It did so in the face of warnings by its own counsel that it would face possible litigation over claims of discrimination, as well as an opinion by then-Attorney General Jerry Brown that it would violate a state law requiring that recovery and treatment facilities serving six or fewer residents be treated as residential uses for zoning purposes. Brown also warned that state law does not permit cities to exclude state-licensed residential treatment facilities.

Highly Restrictive

The ordinance prohibits new group homes in most residential areas, requires existing group homes in those areas to obtain permits, and requires those seeking to establish group homes in the areas in which they are still permitted to obtain permits as well.

Reinhardt called the permit process “burdensome” and “onerous.” The ordinance applies both to state-licensed residences at which treatment is offered and to “sober living” homes, which offer no treatment and do not require a state license.

The plaintiffs say the ordinance violates the Equal Protection Clause, because it does not restrict property owners in residential areas from using their property for other short-term purposes with potential negative impacts, such as by renting them to tourists. They presented evidence that the city had considered regulating such uses under the ordinance, but backed down in the face of protests by property owners.

The plaintiffs also contend that the ordinance violates the federal Fair Housing Act, the state Fair Employment and Housing Act, and the Americans with Disabilities Act, and Reinhardt said they made a prima facie showing that violating those laws was “the city’s sole objective in enacting and enforcing its ordinances.”

The panel also overturned the district judge’s ruling that the group home owners—who claim they lost substantial business and incurred unnecessary expenses as a result of the city’s discriminatory practices—failed to raise triable issues as to damages.

‘Decline in Business’

Reinhardt cited evidence that the plaintiffs “experienced a significant decline in business after the Ordinance’s enactment, that the publicity surrounding the Ordinance greatly reduced referrals, and that current and prospective residents expressed concern about whether the group home Plaintiffs would close.” They may also be entitled to recover money they spent presenting their unsuccessful permit applications to the city and advertising the fact that they were still operating.

Chief Judge Alex Kozinski and Judge  Sidney R. Thomas joined in the opinion.

The case was argued on appeal by Elizabeth Brancart of Brancart & Brancart for the plaintiffs, T. Peter Pierce of Richards Watson & Gershon, P.C. for the city and Teresa Kwong of the Department of Justice, Civil Rights Division, for the federal government as amicus in support of the plaintiffs.

Amicus briefs were also authored by Chris M. Amantea and Alexandrea H. Young of Hunton & Williams LLP for four civil rights groups supporting the plaintiffs and by Kira L. Klatchko and Jeffrey V. Dunn, Best Best & Krieger LLP for the League of California Cities, supporting Newport Beach. 

The case is Pacific Shores Properties, LLC v. City of Newport Beach, 11-55460.


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