OC Lawyer — April 2016
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Rumble In The Riviera
Rick Mcneil, Colin Higgins, And Leslie Barron

In recent years, Southern California beachside cities between Malibu and San Clemente have earned the moniker “The Rehab Riviera” due to the proliferation of drug and alcohol addiction treatment centers and sober living houses concentrated in these communities. While as a society, and as a legal community, we undoubtedly are beyond debating whether drug or alcohol addiction are legitimate medical conditions deserving quality diagnosis and care, we seemingly are not beyond debating where drug and alcohol addiction treatment facilities and sober living houses can (or should) be sited.

At its core, this debate reflects the historical distinction land use laws have drawn between the siting of single-family residential land uses and other types of uses, such as those commonly present in commercial zones or industrial zones.

In this case, however, operators of sober living houses ardently contend that these uses are— or at least should be—treated as akin to single-family residences, despite the potential for such operations to exhibit the attributes of commercial businesses.

Treatment Facilities Versus Sober Living Houses In Orange County

Certain treatment and recovery facilities are specifically allowed by state law to be sited in residential zones under limited circumstances.

To qualify for this zoning exemption, treatment or recovery centers must be licensed, must offer services such as detoxification, counseling, recovery planning, and individual and group therapy for individuals recovering from drug or alcohol addiction, and must serve no more than six patients. Cal. Health & Safety Code § 11834.23(b) (“For the purpose of all local ordinances, an alcoholism or drug abuse recovery or treatment facility that serves six or fewer persons shall not be included in the definition of a boarding house [or] rooming house . . . Or similar term that implies that the alcoholism or drug abuse recovery home is a business run for profit or differs in any other way from a single-fam-ily residence . . . ”); see also Cal. Health & Safety Code § 11834.23(e) (“No conditional use permit, zoning variance, or other zoning clearance shall be required of any alcoholism or drug abuse recovery or treatment facility that serves six or fewer persons that is not required of a single-family residence in the same zone.”).

According to the California Department of Health Care Services’ (DHCS) published list of Licensed Residential Facilities and/or Certified Alcohol and Drug Programs, there are currently 279 licensed treatment facilities in Orange County.

By contrast, sober living houses do not provide treatment services. Rather, sober living houses (as described by the Ninth Circuit), are group homes “in which recovering alcoholics and drug users live communally and mutually support each other’s recovery.” Pac. Shores Props., LLC v. City o f Newport Beach, 730 F.3d 1142, 1147 (9th Cir. 2013); see also Douglas L. Polcin & Diane Henderson, A Clean and Sober Place to Live: Philosophy, Structure, and Purported Therapeutic Factors in Sober Living Houses, 40 J. Psychoactive Drugs (2008), http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2556949/.

The number of sober living homes in Orange County is at least in the hundreds. The Orange County Register estimated in 2014 that there were at least 76 sober living homes in Costa Mesa and that there had been at least 73 sober living homes in Newport Beach before that city unsuccessfully enacted legislation attempting to curtail the establishment and operation of such facilities. Nicole Shine & Scott Martindale, Sober-Living Homes Find Few Welcome Mats, Orange County Register, Mar. 30, 2014, http://www.Ocregister.com/articles/homes-607590-soberliving. html. Take Action San Clemente, a grassroots citizen’s group formed to address potential deleterious impacts of sober living houses on residential neighborhoods in that city, published a map showing the number and location of sober living homes in San Clemente, which at current count stands at 85. About Us, Take Action San Clemente, h ttp://www.takea ctionsanc lemente.com/ about (last visited Feb. 4, 2016). And it is anecdotally known that there are a number of sober living homes in Laguna Beach, Aliso Viejo, Mission Viejo, Laguna Hills, Dana Point, and Laguna Niguel.

Proponents of locating sober living homes in residential neighborhoods contend that reintegrating treatment patients into mainstream society furthers an important recovery goal. They also offer the rationale that locating drug and alcohol treatment facilities in attractive settings (often with attractive amenities) significantly enhances a patient’s chances of a successful recovery. These proponents also cite to legislative intent that mandates that “each county and city shall permit and encourage the development of suflfcient numbers and types of alcoholism or drug abuse recovery or treatment facilities.” Cal. Health & Safety Code § 11834.20.

Detractors of locating sober living houses in residential neighborhoods, including in common interest developments governed by covenants, conditions, and restrictions (CC&Rs), often cite personal experiences of overcrowding, excessive and late-night noise, vulgar language, excessive cigarette smoking, invasion of privacy and lewd conduct, increased litter, increased vandalism, and problematic traffic and parking issues.

Overcrowding in particular is frequently cited not only as a catalyst for many of the other problems cited by neighbors, but also as an integral component of the economic model driving the profitability of the lucrative sober living house industry. It has been observed that sober living houses not uncommonly are occupied by a dozen or more residents within a four-or-five-bedroom house.

Inasmuch as sober living house operators often charge based on the number of beds occupied, this number of occupants has the potential to generate positive cash flow in excess of rental or mortgage payments, property taxes, and other property maintenance and ownership costs encumbering the home.

As a result, there are a number of cases that either are currently pending or that only recently were concluded in Orange County Superior Court, the United States District Court for the Central District of California (Santa Ana), and the Ninth Circuit Court of Appeals involving where (and/or under what conditions) sober living houses may be operated in residential zones in Orange County.

In fact, in some respects, Orange County could be viewed as ground zero for lawsuits challenging the operation and siting of treatment and sober living facilities.

State Laws Governing Sober Living Houses In Residential Neighborhoods

As noted above, no state statute permits the siting of sober living homes in residential neighborhoods.

Residential facilities housing recovering alcoholics and addicts that are ancillary to, and operated by, licensed facilities also may be exempt from local land use laws under certain circumstances. See 9 Cal. Code Regs. § 10508.

However, the extent to which even this regulation may or may not authorize what could be characterized as a sober living home in a residential zone was a central issue in a case brought in Los Angeles County Superior Court involving the well-known Passages Malibu treatment facility. City o f Malibu v. Kent, No. BS154185 (Super. Ct. Cal. Aug. 4, 2015). The court dismissed this case on demurrer on August 4, 2015, however, a notice of appeal by the Department of Health Care Services and interested parties associated with the treatment center was filed on September 28, 2015.

Local Laws Governing Sober Living Houses in Residential Neighborhoods

Because state law generally does not authorize the siting of sober living houses in residential neighborhoods, many sober living house operators have relied on constitutional or other federal or state laws—especially laws prohibiting discrimination against the disabled— to claim a lawful basis upon which to locate such facilities in residential neighborhoods.

Consequently, several municipalities have attempted to regulate sober living houses, in many cases seeking in good faith to strike an appropriate balance between promoting recovery and preserving the family-like quality of residential neighborhoods. These efforts have often times led to protracted and expensive litigation.

For example, as has been widely publicized, last year, the City of Newport Beach settled lawsuits with Pacific Shores Properties, Newport Coast Recovery, and Yellowstone Women’s First Step House for a total of $5.25 million. The City spent at least another $4 million in legal fees according to the Orange County Register. Megan Nicolai, Newport Beach Settles Legal Battle Over Sober-Living Homes, Orange County Register, July 15, 2015, http://www.ocregister.com/articles/city- 671919-group-court.html.

The lawsuits originated in a challenge by three treatment facilities of an ordinance the City adopted to address issues associated with the increasing number of sober living homes and treatment facilities in the City. That case, Pacific Shores Props., LLC v. City o f Newport Beach, 730 F. 3d 1142 (9th Cir. 2013), involved a City of Newport Beach ordinance regulating the homes by, among other things, implementing quiet hours and designating specific parking and smoking areas.

The treatment centers, which suffered a decline in revenues based on the City’s enforcement of its ordinance, alleged violations of the federal Fair Housing Act (FHA), the federal Americans with Disabilities Act (ADA), the California Fair Employment and Housing Act (FEHA), and the Equal Protection Clauses of the federal and state constitutions.

These arguments were based on the fact that, in some cases, recovering alcoholics and addicts may be eligible for treatment as a federally protected class. Where this is the case, governmental zoning practices that discriminate against disabled individuals can constitute FHA (and related) violations. See Bay Area Addiction Research & Treatment, Inc. v. City o f Antioch, 179 F.3d 725, 737 (9th Cir.1999) .

In the United States District Court for the Central District of California, the Honorable James V. Selna granted summary judgment in favor of the City of Newport Beach on the federal discrimination claims. However, the Ninth Circuit reversed the district court, finding that issues of fact precluded summary judgment on plaintiffs’ discrimination claims. The City’s petition for a writ of certiorari to the Supreme Court was denied on November 3, 2014.

Central to the Ninth Circuit’s decision were a number of statements made by City of Newport Beach officials leading the Ninth Circuit to conclude that:

[T]he City’s purpose in enacting the Ordinance was to exclude group homes from most residential districts and to bring about the closure of existing group homes in those areas. The evidence also shows that the Ordinance regulated other types of group residential arrangements primarily for the purpose of maintaining a veneer of neutrality.

Pac. Shores Props., LLC v. City o f Newport Beach, 730 F.3d at 1147.

The Ninth Circuit further explained that the City’s actions in that particular case demonstrated discriminatory intent, noting that:

The City created a task force to locate group homes, undertake surveillance of them, and enforce the zoning code strictly against them. After the Ordinance was enacted, every nonconforming group home in the City that did not apply for a use permit was served with an abatement notice within three days of the 90-day use permit application deadline, whereas no abatement notices were sent to any other entities engaged in a nonconforming use until the [p]laintiffs pointed out those entities during the litigation. Id. At 1162.

Treatment centers operating in Costa Mesa filed a similar federal lawsuit challenging an ordinance enacted by the City of Costa Mesa in November 2014 as violating the FHA, ADA, and equal protection clauses. The Costa Mesa Ordinance, Ordinance No. 14-13, limited the number of residents in sober living homes to six residents and required that sober living homes be spaced at least 650 feet apart from one another, among other things. The ordinance also required that the facilities obtain a special operating permit.

The case also was assigned to Judge Selna, who dismissed the complaint after finding the ordinance was not discriminatory but, rather, helped preserve the residential character of the neighborhoods, a legitimate city interest. Judge Selna noted the regulation of sober living house “occupancy, operation, concentration, and employment preserve[s] the residential characteristics of the neighborhood and ensure[s] that the residential recovery environments desired by many remain truly residential in nature.” He found the ordinance “contemplate [d] and guard[ed] against the unfettered proliferation of [sober living homes] in residential neighborhoods, which could destroy the comfortable living environments that contribute to recovery.” Solid Landings Behavioral Health, Inc. v. City of Costa Mesa, SACV 14-1383 JVS (JCGx), Civil Minutes (Jan. 23, 2015). Judge Selna subsequently granted the City’s motion to dismiss the plaintiffs’ first amended complaint (which restated the discrimination claims) and denied as moot the plaintiffs’ motion for a preliminary injunction enjoining the enforcement of Ordinance No. 14-13.

While Judge Selna’s decision was viewed by many as striking an appropriate balance between the promotion of recovery and the preservation of the character of residential neighborhoods, the status of that case remains uncertain. In early December 2015, the Ninth Circuit Court of Appeal issued an injunction (without any opinion) enjoining the City’s enforcement of Ordinance 14-13 pending further appeal to the Ninth Circuit. Solid Landings Behavioral Health, Inc. v. City o f Costa Mesa, Order No. 15-55779 (Dec. 9, 2015).

Similar moratoria have been enacted by the City of San Clemente and are under consideration by other Orange County cities. In response to increased complaints by San Clemente residents including excessive noise, vulgar language, harmful secondhand smoke, and parking and traffic problems, among other concerns, the San Clemente City Council adopted Urgency Ordinance Nos. 1602 and 1603 on July 7, 2015, placing a temporary moratorium on any new sober living homes or treatment facilities in residential and commercial zones in the City.

The City also commenced several nuisance and municipal code violation actions against a number of treatment centers and sober living houses. The recovery community responded to select San Clemente legal actions directed toward treatment and recovery centers and related facilities in much the same fashion as it had to the Newport Beach and Costa Mesa ordinances—by filing a lawsuit on October 7, 2015 in federal court against the City alleging discrimination under the FHA, the ADA, the FEHA, and the Equal Protection Clause. Dual Diagnosis Treatment Ctr., Inc.v. City o f San Clemente, SACV 15-01611 CJC (JCGx) (C.D. Cal. 2015). This case is assigned to Judge Cormac Carney and is currently pending.

Private Lawsuits Seeking to Enjoin Sober Living Houses in Residential Neighborhoods

To date, the sober living house cases decided by Orange County state or federal courts principally have involved challenges to municipal ordinances based on discrimination claims. However, at least one case is pending that also involves private property claims commenced by adjacent or nearby homeowners. For example, in Hurwitz et al. V. Sobertec, LLC. , et al., Orange County Superior Court Case No. 30-2015-00790256-CU-PO-CJC (filed May 28, 2015), neighbors living near a sober living home located in the Talega development in San Clemente commenced an action for nuisance, trespass, breach of contract, and infliction of emotional distress based on daily disturbances such as exposure to excessive cigarette smoking, exposure to vulgar, violent, and drug-and-sex-related language by individuals residing at the home, excessive noise at all hours of the day and night, increased vandalism, invasion of privacy, and lewd conduct.

While private homeowner cases obviously share some similarities with cases challenging municipal ordinances restricting sober living house siting or operations, there are important differences as well. For one thing, and although cities certainly can assert public nuisance claims, a private homeowner can perhaps more easily and more readily establish a claim for private nuisance or trespass. These claims are not subject to the same constitutional or statutory defenses involved in the municipal cases since, obviously, nuisance is based on conduct, not status.

Moreover, in many communities in Orange County, private homeowners are permitted to assert breach of contract claims based on violations of the CC&Rs, another remedy not necessarily readily or directly available to municipalities. CC&Rs applicable to residential tracts universally prohibit the operation of commercial businesses and only permit single-family residential uses.

CC&R claims differ qualitatively from traditional zoning laws because, even though CC&Rs may affect land use, their origin is in contract, not tort or governmental regulation subject to specific constitutional requirements. To be sure, the enforcement of CC&Rs by state or federal courts also is potentially subject to constitutional principles (most certainly, for example, where CC&R covenants or restrictions are facially discriminatory, see,e. g., Shelley v. Kraemer, 334 U. S. 1 (1948)), however, the nature and scope of these requirements in a private homeowner setting can differ in not immaterial respects from constitutional limitations applicable to municipal zoning ordinances.

One issue that almost certainly will be litigated in the private homeowner cases is whether sober living houses in communities with CC&Rs constitute commercial businesses that are being operated in contravention of the CC&Rs or, conversely, whether they are eligible for treatment as single-family residences. This issue, in turn, likely will raise questions regarding the interpersonal relationships of those occupying the sober living house, since City o f Santa Barbara v. Adamson, 27 Cal. 3d 123 (1980) and its progeny recognize a constitutional right of privacy and association that may be applicable to certain types of alternative living arrangements that bear the attributes of traditional family living.

However, at least under what appear to be the currently prevailing operating conditions associated with many sober living houses, it surely will be vigorously contended by nearby neighbors (as well as by homeowner’s associations (HOAs), municipalities, and other interested parties) that sober living houses are in essence boarding or rooming houses that are not entitled to special constitutional treatment under the Adamson line of cases. See, e.g., City of Chula Vista v. Pagard, 115 Cal. App. 3d 785 (1981) (finding that although the ordinance adopted by the City of Chula Vista was not sufficiently tailored to address the concerns raised by Adamson, the City could enact an appropriately drawn ordinance to prevent overcrowding, minimize parking and traff c congestion, and to alleviate other concerns).

Conclusion

In the short term, what can and should be done to allow sober living houses to serve their legitimate purposes without altering the residential character of the neighborhoods is likely to be the subject of continued, if not increased, litigation. This, in part, is a likely result of the setbacks that municipalities have experienced in the City of Newport Beach and Costa Mesa cases, which may have had a chilling effect on enforcement efforts by other cities—even those taken in good faith and with a measured approach—to regulate sober living houses. In the short term, there may also be increased activity in the arena of private party and HOA enforcement.

In the long term, a legislative solution may be necessary to permit those in recovery to reenter society—in a responsible and respectful manner—while preserving the residential neighborhood character of those areas, some of which, at least, have had less than optimum experiences with sober living houses.

One such effort that ultimately was not successful was sponsored in 2014 by then- Assembly Member Allan Mansoor (AB 2335) . AB 2335 would have expressly authorized sober living houses meeting certain criteria to be protected by the California Health and Safety Code sections authorizing treatment and recovery facilities. One such criterion was that the sober living establishment house six or fewer residents. Although this provision was consistent with existing laws applicable to treatment and recovery facilities, it was noted at the time that the resident number limitation had the potential to negatively impact the profitability of sober living houses, as noted above, and thus lacked suffcient support within the recovery community.

Rick McNeil is a partner at Snell & Wilmer LLP, who practices land use, environmental, and business litigation. He can be reached at rmcneil@swlaw.com. Colin H iggins and Leslie Barron are litigation associates at Snell & Wilmer.

ON TOPIC

Orange County could be viewed as ground zero for lawsuits challenging the operation and siting of treatment and sober living facilities.

BY THE NUMBERS

The Orange County Register estimated in 2014 that there were at least 76 sober living homes in Costa Mesa and that there had been at least 73 sober living homes in Newport Beach.

[W]e seemingly are not beyond debating where drug and alcohol addiction treatment facilities and sober living houses can (or should) be sited.

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