Judge rejects LA County's settlement proposal in homelessness lawsuit

For the second time in five months, a federal judge Thursday refused to approve a proposed settlement agreement between Los Angeles County and a coalition of businesses and residents claiming government response to the area's homelessness crisis has been historically lax.

The lawsuit filed three years ago by the LA Alliance for Human Rights against both the county and city of Los Angeles now appears to be headed for trial with the county as the lone defendant.

In a court order, US District Judge David Carter denied the parties' proposed stipulation, lifted the stay and reinstated proceedings with a scheduling conference set for May 9.

The ruling came a day after county officials announced they had reached a new deal to resolve the case.

The judge rejected the county's promise to commit an additional $850.5 million to fund beds, services, outreach efforts and interim housing. That money would be on top of $293 million the county had previously committed in hopes of providing 6,700 new beds.

The offer would include 1,000 new mental health and substance-abuse beds for the homeless -- up from 300 in the original proposed resolution -- along with 450 housing subsidies for those at risk of falling into homelessness.

County officials said Wednesday that their proposal would increase the number of county outreach teams, spread out among all 15 Los Angeles City Council districts, and also provide medical and social services for the more than 13,000 beds the city has agreed to provide as part of its separate settlement with the LA Alliance.

But Carter again balked at the number of beds that would be created by the agreement and said greater accountability and oversight was needed.

Mira Hashmall, an outside attorney representing the county, said in a statement the county was "deeply disappointed" by Carter's denial.

"The court has no authority to reject a settlement that was fairly negotiated -- and in this case renegotiated -- in good faith between the respective parties," she said. "The court's decision today will keep the county and plaintiffs tied up in needless and costly litigation instead of allowing them to move forward with a historic settlement to provide another $850.5 million for new programs and services to people experiencing homelessness."

Daniel Conway, a spokesman for the LA Alliance, said the judge's ruling "was not surprising" although progress has been made in what the county was willing to agree to.

"There were five times more beds (in the rejected proposal) than in the fall," Conway said. "That being said, the judge has been very clear about what he wanted to see -- monitoring and a dramatic increase in mental health beds. We are pleased we were able to make progress, but the county's offer fell short of what the judge wanted to see."

Carter has been criticized for his rulings in the case, which some have called unreasonable. Two years ago, he ordered the city and county to house every homeless person living on Skid Row within 180 days and ordered that $1 billion in government funds be frozen in an escrow account. The Ninth Circuit struck that ruling down.

Carter approved the city's settlement with the LA Alliance last June, but he said during a hearing in January that the county's pledge to provide 300 additional beds for homeless people with mental health or substance use disorders "fell short." The judge also appeared irked at the proposal's lack of a judicial oversight requirement. Without the court's ability to closely monitor the settlement, the proposal is "absolutely worthless," Carter said previously.

"You can't put a tuxedo on a pig," the judge said from the bench in January.

That sent county attorneys back to the drawing board, leading to the revamped settlement proposal unveiled Wednesday -- and rejected Thursday.

In its March 2020 lawsuit, the LA Alliance accused the city and county of failing to do enough to address the crisis. The city's settlement with the coalition was announced in April of last year, but the county waited until September to announce its preliminary agreement with the coalition of Los Angeles business owners and sheltered and unsheltered residents.

In November, Carter declined to approve the county's part of the settlement, suggesting that more work needed to be done to have a stronger impact on homelessness in the region.

In January, the judge said the LA Alliance's lawsuit came about after "decades of inaction" resulted in "a spiraling crisis on our streets." As a result of attempts to settle, the "antagonism" that "apparently goes back decades" between local governments has dissipated, Carter said.

Carter in January urged the county to increase its proposed number of mental health and substance abuse beds, noting that 40% of the homeless population suffers from such issues.

According to the most recent homeless count by the Los Angeles Homeless Services Authority, there are 69,144 unhoused people living in Los Angeles County, 41,980 of them within the city.