Permits for nonprofit health clinics in downtown Santa Ana not discriminatory

The city of Santa Ana has been cleared of discrimination claims regarding the requirement for non-profit health clinics to get permits to operate in the downtown professional zone, a judge has ruled.

However, U.S. District Judge David O. Carter allowed the plaintiff's counsel to once again amend their complaint.

Carter ruled Monday that the city amended its zoning ordinance had no discriminatory intent and Share Our Selves - an Orange County private health care organization known as SOS - failed to state plausible claims of equal protection violations.

"The city gives the court legitimate reasons for acting as it did. It states that the zoning code has long required CUP [Conditional Use Permit] requirements in the P District for a wide variety of land-uses including those operated by nonprofits like churches and fraternities," Carter wrote in the order.

"Further, the city states that the reason they added CUP requirements for medical offices is to ensure that the location and operation of such facilities are compatible with scale, character and nature of the surrounding property and neighborhoods," Carter added. "Additionally, the city states that non-profits like SOS could impact city revenue because non-profits can be exempt from property taxes, thus generating lower volumes of revenue for the city."

Santa Ana's dismissal motion was successfully argued by the city's general counsel, Sonia R. Carvalho, a Best Best & Krieger LLP partner. She was joined by attorneys at Richards Watson & Gershon.

SOS was represented by lead attorney Edmond M. Connor of Tucker Ellis LLP. He was joined by attorneys at O'Melveny & Myers LLP. Neither of the lead attorneys responded to phone calls or emails regarding Carter's decision by press deadline Tuesday.

In its first amended complaint, which eliminated claims regarding homelessness, SOS claimed Santa Ana abruptly blocked its deal to close escrow on a building that the corporation said was the only one in the city's professional zone that met their outpatient clinical expansion plans. Share Our Selves Corporation v. City of Santa Ana et al., 8:23-cv-00504 (C.D. Cal., filed Mar. 20, 2023).

They claimed the city suddenly adopted an urgency ordinance that, without proper public notice, required non-profits to acquire a conditional use permit for the downtown zone but for-profit businesses were not required to do so.

During a hearing last week, SOS attorney Connor told Carter this ordinance discriminated against an alleged protected class of low-income Hispanic residents and that national origin is a protected class for discrimination claims.

The city argued the ordinance was lawfully implemented and SOS could not prove intentional discrimination against patients based on elements such as race.

Carter raised concerns that the plaintiffs provided him with a "really hard-to-define class," and he would have to apply a rational basis test in his ruling.

"Here, the ordinance only makes a facial distinction between 'For-Profit Entities' and Government-Subsidized Entities in connection with operating medical offices in the P District. ... However, plaintiff contends that the words 'Government-Subsidized' are proxies for low-income immigrant Latinos. They state this is because these types of facilities serve such patients and the two are closely associated," Carter wrote in the order.

"The plaintiff, however, has not come forward with evidence that, even viewed in the light most favorable to them, demonstrates discriminatory intent. ... Plaintiff simply argues that the area near the proposed clinic would predominantly serve those of the Latino community, but this observation does not indicate that the application of the ordinances so exclusively disadvantages the Latino community that they are practically denied equal protections under the law."