Lease of Federal Land to Private School Rightly Voided

Friday, December 26, 2025

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Ninth Circuit:

Lease of Federal Land to Private School Rightly Voided

Opinion Says Contract Allowing Academy to Use Property Belonging to Department of Veterans Affairs Violates Law

By Kimber Cooley, associate editor

The Ninth U.S. Circuit Court of Appeals has largely affirmed a judgment entered against a federal agency relating to its use of grounds in West Los Angeles for non-veterans purposes, declaring, in part, that a District Court judge properly voided the agency’s lease with the elite Brentwood School as violative of statute but exceeded his authority in forbidding renegotiation.

At issue is whether a lease granted by the U.S. Department of Veterans Affairs (“VA”), under which the kindergarten-through-12th-grade school built a $15 million athletic facility on 22 acres of the property, violates the West Los Angeles Leasing Act of 2016 which was passed in order to ensure that the agency’s contracts support the goal of creating permanent supportive housing for veterans.

Circuit Judge Ana de Alba authored Tuesday’s opinion, joined in by Circuit Judges Consuelo M. Callahan and Roopali H. Desai, saying that the agreement violates the act because the “the underlying predominant purpose of the lease does not ‘principally benefit veterans.’ ” She wrote:

“The United States Department of Veterans Affairs’…mission is ‘[t]o fulfill President [Lincoln’s] promise to care for those who have served in our nation’s military and for their families, caregivers, and survivors.’ This class action lawsuit…demonstrates just how far the VA has strayed from its mission. There are now scores of unhoused veterans trying to survive in and around the greater Los Angeles area despite the acres of land deeded to the VA for their care. Rather than use the West Los Angeles VA Grounds as President Lincoln intended, the VA has leased the land to third party commercial interests that do little to benefit the veterans.”

Lincoln on March 3, 1865, signed into law a bill to establish a National Soldiers and Sailors Asylum to benefit veterans of the Civil War. The Pacific Branch of the National Home for Disabled Volunteer Soldiers was established in 1887 on 300 acres in what was then the City of Sawtelle, since 1922 a community of Los Angeles, located west of Westwood.

Tuesday’s decision reverses the portion of the judgment that invalidated a similar agreement with UCLA, allowing the university to continue using part of the property for its Jackie Robinson Stadium, at least until the contract expires next year. That usage was approved by Congress, with specific conditions, but the District Court judge questioned the school’s compliance with the legislative mandates.

Class of Homeless Veterans

The litigation arose after a group of unhoused veterans with severe disabilities and mental illnesses filed a putative class action against the U.S. Department of Veterans Affairs in November 2022. The pleading sought to define a class of “[a]ll homeless veterans” with serious mental illness or traumatic brain injury “who reside in Los Angeles County.”

In the operative complaint, they asserted that the agencies violated federal law by entering into various land-use agreements and by failing to provide sufficient supportive housing for the veterans. In May of last year, District Court Judge David O. Carter of the Central District of California granted the plaintiffs’ class-certification motion.

Last summer, he granted summary judgment in the plaintiffs’ favor as to one cause of action and presided over a four-week bench trial as to the remainder of the claims. Judgment was entered against the federal departments, and the VA was ordered to construct “1,800 additional permanent supportive housing units” and “750 temporary” shelters.

On Sept. 6, 2024, Carter issued a “post-trial opinion” declaring the VA’s leases with Brentwood School and other parties to be “void” and enjoining the agency from renegotiating those leases. He invited the non-party leaseholders to post-trial hearings held to discuss how to move forward.

Brentwood School successfully moved to intervene. The school eventually reached a settlement with the plaintiffs, which would allow it to remain on the land while expanding veterans’ access to the athletic facilities and providing for increased rent obligations. Carter approved the agreement over the VA’s objection.

The school later appealed the order voiding its lease, arguing that Carter misinterpreted the Leasing Act.

Leasing Act

De Alba pointed out that §2(b)(2) of the Leasing Act provides that the VA secretary may carry out “[a]ny lease of real property for a term not to exceed 50 years to a third party to provide services that principally benefit veterans and their families.” Interpreting the provision, she wrote:

“Here the question is whether the restrictive clause ‘principally benefit veterans and their families’ modifies ‘lease’’ or ‘services.’…Since here the restrictive clause is not set off by commas, ‘common grammar rules suggest that Congress intentionally tied it to the last antecedent,’…thus modifying ‘services,’ not ‘leases.’ This supports Brentwood’s reading of the statute which would mean that the lessees’ services, not the lease, principally benefit veterans.”

However, she added:

“Adopting Brentwood’s interpretation would potentially allow for leases that…are really ‘ancillary’ to the services provided to the general public or others, which is the case under Brentwood’s current lease. Congress could not have intended to allow land-use agreements that principally benefit nonveterans overall and only provide ancillary services to veterans. Brentwood’s arguments to the contrary are ineffective.”

Saying that “[t]he record shows that Brentwood’s lease violates the Leasing Act because the underlying predominant purpose of the lease does not ‘principally benefit veterans,’ ” she opined:

“Brentwood allows veterans to use its athletic facilities, but Brentwood, not the VA, decides the time and manner veterans are to use them. Not surprisingly, Brentwood allows veterans to use its facilities only when it is more convenient for its students.”

She continued:

“We find that the district court abused its discretion in prohibiting the VA to renegotiate the land-use agreements in question and in ordering the VA to settle with Brentwood. Instead, the right balance for the competing claims of the parties and the effects of the requested relief is that the VA is free to renegotiate the leases if they can be brought into compliance with the Leasing Act. Thus, the land-use agreements are void unless and until renegotiated to comply with the Leasing Act.”

Charitable Trust Claim

De Alba pointed out that the plaintiffs also asserted a charitable trust claim against the VA, asserting that the agency accepted judicially enforceable fiduciary duties arising out of the Leasing Act. She explained:

“[T]he district court ruled…that the VA accepted judicially enforceable fiduciary duties through the Leasing Act….By its terms, the Leasing Act ‘authorize[s] the Secretary of [VA] to enter into certain leases at the [Campus], to make certain improvements to the enhanced-use lease authority of the Department, and for other purposes.’ Further, the…Act…requires that ‘the provision of services to veterans [be] the predominant focus of the activities….’ Contrary to Plaintiffs’ assertion, the aforementioned language does not demonstrate that the United States unambiguously and expressly accepted judicially enforceable trust responsibilities.”

Remarking that the “[p]laintiffs fail to identify provisions in the Leasing Act that include ‘specific rights-creating or duty imposing language,’ ” she opined:

“The district court thus erred in finding that the Leasing Act and its 2021 Amendment imposed judicially enforceable fiduciary duties on the VA. We therefore reverse the district court’s judgment in favor of Plaintiffs on their charitable trust claim.”

Pointing out that “judgment on Plaintiffs’ charitable trust claim was the only basis for which the district court invalidated UCLA’s lease and enjoined UCLA,” she wrote:

“Because we are reversing judgment on Plaintiffs’ charitable trust claim, we dismiss UCLA’s consolidated appeals as moot and vacate any injunctive relief with respect to UCLA’s lease and services.”

Remaining portions of the judgment against the VA were affirmed.

The case is Powers v. Brentwood School, 24-6338.

The Metropolitan News-Enterprise harks to the founding of the Pacific Veteran Enterprise in 1901. Its office was on the VA grounds.