LA and homelessness advocates seek delay in sanctions hearing

Lawyers for the City of Los Angeles and a homelessness advocacy group in a dispute over the city's breach of a nearly 2-year-old homeless shelter agreement urged a federal judge Monday to delay an order for sanctions until disagreements regarding the scope of a forensic audit on the city's homeless expenditures were resolved.

During a hearing on March 7, U.S. District Judge David O. Carter indicated he found that for the past 14 months, the city "misled" the L.A. Alliance for Human Rights, represented by Elizabeth A. Mitchell of Umhofer Mitchell & King LLP, over promises of contracting plans from the city's housing department that were not fulfilled by specific deadlines pursuant to a settlement.

In 2020, the coalition sued the city on claims its leaders weren't doing enough to address the homelessness crisis and declutter street encampments. The parties settled in 2022 and the city agreed to build space for some 5,000 shelter beds and reduce encampments by specific district-by-district deadlines. However, Mitchell said the city has not been fulfilling those requirements. L.A. Alliance for Human Rights et al., v. City of Los Angeles et al., 2:20-cv-02291 (C.D. Cal., Mar. 10, 2020).

The coalition requested that Carter impose a $6.4 million penalty on the city, represented by Scott D. Marcus, chief of the city attorney's civil litigation branch. However, during a hearing Monday, Mitchell asked Carter to wait two more weeks to issue an order because both parties are still uncertain about the sufficiency of the stipulated facts.

"I think a more productive way to move forward would be for us to supplement the record with more sufficient stipulated facts, and we can have two weeks and cross the sanctions issue. That should give us sufficient time to hammer out an agreement on the audit or at least identify the areas where we disagree. ... Then we can submit that to the court for resolution," Mitchell said.

Marcus echoed Mitchell's suggestion and added, "The only issue is the breadth of the audit. The city was very focused ... on the service providers and [the Los Angeles Homeless Services Authority]. What is the city getting for the money that it is paying? That's the scope of the audit that the city was proposing. The alliance wants it to be a little bit broader," Marcus said.

Carter granted the parties' request and scheduled a sanctions hearing for April 4. However, he urged the coalition and city to expedite the audit process so that it doesn't linger.

"I don't want to come back to the scope in two weeks. We are in continuous session until we get the scope," Carter said.

Carter also said he was still debating the sanctions issue. "I'm worried about the sanctions. ... If the court was to impose sanctions and impose the $6.4 million the alliance is requesting, that's taking money from the homeless when we need that money on the front side."

However, addressing the plaintiffs' counsel, he said, "You need to be compensated for this time. ... And what I'm debating is if you're going to submit that issue to me, whether the two of you will reach compromise on that, because my findings concerning whether you were misled, or whether this was bad faith, is critical to that for this reason."

At Carter's request, Los Angeles Mayor Karen Bass was also at the Monday hearing. She committed to the judge, on behalf of the city, to resolve the audit issue "within two weeks on an ongoing forward basis."

Carter again addressed both sides' counsel: "If you two are going to delay the sanctions, but you can't reach some agreement in the future going forward, then you've put me in a box of calling witnesses, which I don't think any of us quite frankly want to do. ... I hope we don't have to go there, frankly. I've got to have a record and the court will protect itself on appeal."