Costa Mesa prevails in sober-living operators’ lawsuit challenging city regulations

An eight-person jury returned a unanimous verdict in favor of the city of Costa Mesa on Friday, wrapping up a month-long trial in federal court and a four-year legal battle over a claim by sober-living home operators that a city ordinance unfairly discriminates against people recovering from drug and/or alcohol addiction.

The decision could have a sweeping impact on cities that impose regulations on group homes.

“The jury told us that it was fair and not discriminatory to put in place protections,” said Jennifer Keller, a lawyer the city contracted in March to defend Costa Mesa against lawsuits from sober-living operators.

“On every single cause of action, Costa Mesa did nothing wrong,” Keller said.

However, the plaintiffs — Yellowstone Recovery, Sober Living Network and Lynn House — will appeal the decision to the 9th Circuit Court of Appeals, according to attorney Isaac Zfaty.

“To be sure, this is a battle over civil rights,” Zfaty said.

The case was tried in a Santa Ana courtroom before U.S. District Judge James Selna.

The plaintiffs, all of which operate group homes in Costa Mesa, argued that Ordinance No. 14-13 blocks organizations from providing adequate housing for recovering addicts, who are considered disabled and protected by the Americans with Disabilities Act and federal fair-housing laws.

“Just let us keep doing what we’ve been doing for 25 years,” Zfaty said in closing arguments Thursday.

The ordinance, adopted in October 2014, regulates group homes in the city’s single-family residential zones and requires sober-living homes to apply for permits to operate in those neighborhoods. It caps the number of residents in a group home at six and prohibits sober-living homes from being within 650 feet of one another. It also regulates sober-living staff, or house managers, saying they cannot have records of violent felonies or drug, arson or sexual offenses in the past seven to 10 years.

Yellowstone Recovery, which has had a presence in Costa Mesa dating to 1988, sued the city in November 2014.

Yellowstone’s lawyers argued that sober-living homes shouldn’t be classified any differently than other residential households. They called attempts to cap bed numbers, monitor parolees and determine who can work as house managers as excessive oversight.

“We are not a hospital, we are not treatment, we are just housing where disabled people live,” attorney Christopher Brancart said in closing arguments.

But the city’s lawyers portrayed Costa Mesa as accommodating and working in the best interest of group homes’ residents as well as the wider community.

Keller said in her closing argument Thursday that the city “had formerly lovely, tranquil neighborhoods and they were suddenly under siege” by “hoards” of people moving into sober-living homes, which she described as places with “bunk beds in every room” where residents are “packed in like sardines.”

She said such homes triggered neighbors’ complaints about noise and needles and that some nearby residents had been motivated to leave the area.

Friday’s verdict “sends a strong message,” said Costa Mesa Mayor Katrina Foley, who added that the city would “not be bullied over.”

The fight came at a steep price. The city accumulated more than $1.8 million in legal fees and other costs through September. The final figure will be determined in January, Foley said.

“The City Council decided that the city of Costa Mesa would not be extorted,” Keller said. “Usually cities get scared and fold. It’s courageous to be willing to spend that amount of money to get this far. But somebody had to stand up.”

Keller said the verdict “will have a phenomenal impact all across California.” Had the lawsuit prevailed in its argument, as she put it, that “any regulation of any kind was a violation of the Americans with Disabilities Act and Fair Housing Act,” Costa Mesa and any other city trying to regulate group homes could be exposed to lawsuits, Keller said.

Zfaty said the plaintiffs “are obviously disappointed with the verdict today,” but added that “like every civil-rights battle that has been fought throughout the history of humankind, there are setbacks.”

“During the course of this litigation, even the city of Costa Mesa acknowledged that the plaintiffs in this case have been reputable operators and forces for good,” he said. “Our clients’ mission will continue and we will hold out hope, in spite of today’s outcome, [that] the city of Costa Mesa will demonstrate sympathy toward those battling alcoholism and drug addiction and will alter its course.”

julia.sclafani@latimes.com