A federal judge refused to let Los Angeles homeless programs be included in their recipients on Tuesday, despite concludes that the city was unable to comply with the terms of a three-year-old settlement agreement that focused on dealing with the humanitarian crisis.
In the 62-page ruling, the US dist. “This isn’t time,” Judge David O. Carter wrote that he would hand over the city’s roughly $1 billion homeless program control to a third party appointed to the court. Such moves are usually treated as a last resort by the courts, he said.
At the same time, Carter found that by June 2027 the city had violated the terms of the settlement agreement with the nonprofit LA Alliance seeking to create 12,915 homeless beds or other housing opportunities. The city did not provide a plan to achieve that goal.
The judge said the city “fluxed” responsibility for providing “accurate and comprehensive data” to the court and failed to comply with a court order addressing strategies to reduce homeless encampments.
“At this time, the court has not found the city breaching the entire settlement agreement, but the city has failed to fulfill its material internal obligations under the contract,” he wrote.
To address these shortcomings, Carter ordered the choice of third-party monitors to review and verify the data being generated by the city on homeless housing and camp goals. Carter also indicated that he is likely to order the city to pay legal fees for both the alliance and the advocacy group for the homelessness and the Los Angeles Catholic workers who intervened in the case.
Alliance lawyer Matthew Umhofer welcomed the ruling, saying the judge had imposed “significant consequences” on city leaders and “continue to keep the city’s feet at fire.”
“That’s just a part of the receivership,” Umhofer said. “The city will require the city to review the data by anyone with full access to the data. Because we learned… we learned that the city’s data is deeply flawed and unreliable.”
Karen Richardson, spokesman for City Atty. Hydee Feldstein Soto said the judge made the right decision by rejecting the alliance’s “radical demands to appoint unelected receivers who are not elected and unexplained.”
“In the past three years, the city of Los Angeles has moved thousands of Angelenos from the streets to homes and services,” Richardson said in a statement. “Thousands of new housing units have been built, and the homeless are down in LA for the first time in years.”
Carter rejected the alliance’s argument that the nearly 2,000 hotel and motel rooms used by the city for interim homeless housing should not count towards the city’s settlement obligations. He also refused to discover that the city is in violation of the Second Settlement Agreement, known as the “roadmap,” and said that ongoing discussion on the issue “will merely redirect resources from urgently needed housing efforts.”
City leaders held law firm Gibson Dunn to fight Carter’s acceptance push in court. The company recently argued in the grant pass case before the Supreme Court, securing a pivotal ruling that it upheld the law except for homeless encampments in public spaces.
In the case of the Alliance, the Gibson Dan team argued that cities need extensive latitudes to determine the best strategies to deal with homelessness.
Carter’s decision has moved thousands of people to camps, hotels and motels following a seven-day hearing that includes a small home village, assembly shelter and a safe program that includes Mayor Karen Bass.
The alliance’s lawyers accused the city of repeatedly violating its obligation to create new homeless beds and reduce the number of homeless camps by 9,800 over four years. They argued that the handling of the city’s crisis is so broken that a third party is needed to properly manage homeless programs.
The city’s legal team retreated, saying the city is completely committed to meeting its obligations under the settlement.
Gibson Dunn’s team argued that it was the alliance that violated the alliance by not suspending it while the city responded to a major emergency.
Carter also heard the discussion from Shayla Myers, who represents LA Can and other homeless advocates. She pushed back the notion that the city should be needed to remove a certain number of camps. She allegedly represented an illegal allocation system that violated the property rights of homeless Angelenos.
In a recent filing, Myers said there are no “binding provisions” in the settlement agreement, which requires the removal of 9,800 camps.
The incident has been taking place in Carter’s court since 2020 when the Alliance sued cities and counties, claiming it is too much to deal with the homeless crisis, especially in the largest-populated skid row in Southern California. Over the years that followed, the city signed two settlement agreements. One is the Alliance and the other is Los Angeles County, providing mental health, health care and other social services to the local population.
In 2024, the alliance asked Carter to impose a $6.4 million financial penalty on the city, saying it failed to create enough beds, preventing efforts to come up with important milestones for compliance. The judge responded by bringing in private businesses to assess the city’s homelessness program.
The company found a lack of proper financial management, stating that the city’s homeless program is vulnerable to waste and fraud.
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