A federal judge declined to put Los Angeles’ homelessness programs into receivership on Tuesday, even as he concluded that the city failed to adhere to the terms of a three-year-old settlement agreement focused on addressing the humanitarian crisis.
In a 62-page ruling, U.S. Dist. Judge David O. Carter wrote that “this is not the time” to hand over control of the city’s roughly $1 billion in homelessness programs to a court-appointed third party. Such a move, he said, would typically be treated by courts as a last resort — and after “all other less intrusive remedies have been exhausted.”
At the same time, Carter found that the city breached the terms of a settlement agreement with the nonprofit LA Alliance for Human Rights, which calls for the creation of 12,915 homeless beds or other housing opportunities by June 2027. The city failed to provide a plan for achieving that goal, he said, and missed quarterly housing targets established as part of the agreement.
The judge said the city “flouted” its responsibility to provide the court with “accurate and comprehensive data” and disobeyed a court order dealing with its strategy for reducing homeless encampments.
“While the Court does not find at this time that the City has breached the Settlement Agreement as a whole, the City has failed to meet critical internal obligations under the Agreement,” he wrote.
To address those shortcomings, Carter ordered the selection of a third-party monitor to review and verify the data being produced by the city on its homeless housing and encampments goals. Carter also signaled that he would likely order the city to pay the legal fees of both the alliance and homeless advocacy groups that have intervened in the case — LA CAN and the Los Angeles Catholic Worker.
Matthew Umhofer, an attorney with the alliance, hailed the ruling, saying the judge has imposed “significant consequences” on city leaders and would “continue to hold the city’s feet to the fire.”
“It’s just short of a receivership,” Umhofer said. “It’s going to require the city to have its data reviewed by somebody with full access to its data. Because we learned … that the city’s data is deeply flawed and can’t be trusted.”
Lawyers for the city also welcomed the ruling. In a statement, a spokesperson for City Atty. Hydee Feldstein Soto said the judge was correct in rejecting the alliance’s “radical request to appoint an unelected and unaccountable receiver.”
“Over the last three years, the City of Los Angeles has successfully moved thousands of Angelenos off the streets, into housing and services,” the spokesperson said. “Thousands of new housing units have been built, and homelessness is down in L.A. for the first time in years.”
Carter rejected the alliance’s argument that nearly 2,000 hotel and motel rooms used by the city for interim homeless housing should not count toward the city’s settlement obligations. He also declined to find that the city was in breach of a second settlement agreement, known as the “roadmap,” saying that continued debate over that issue would only “redirect resources away from urgently needed housing efforts.”
City leaders retained the law firm Gibson Dunn to fight the push for receivership in Carter’s courtroom. That firm recently argued the Grants Pass case before the Supreme Court, securing a pivotal ruling that upheld laws barring homeless encampments in public spaces.
In the alliance case, the Gibson Dunn team argued that cities need broad latitude to determine the best strategies for addressing homelessness — and that placing the city in receivership would be a huge overreach.
Carter’s decision followed a seven-day hearing on whether to place a receiver in charge of L.A.’s homelessness programs, including tiny home villages, congregate shelters and Mayor Karen Bass’ Inside Safe program, which has moved thousands of people out of encampments and into hotels and motels.
Lawyers with the alliance accused the city of repeatedly breaching its obligations to create new homeless beds and to reduce the number of homeless encampments by 9,800 over four years. They argued that the city’s handling of the crisis is so broken that a third party is needed to manage its homeless programs properly.
The city’s legal team pushed back, saying the city is fully committed to meeting its obligations under the settlement.
The Gibson Dunn team argued that it was the alliance that breached the agreement, by failing to pause it while the city responded to a major emergency — the Palisades fire, which broke out in January.
Carter also heard arguments from Shayla Myers, representing LA CAN and other homeless advocates. She pushed back on the notion that the city should be required to remove a specific number of encampments, which she argued would amount to an illegal quota system that violates the property rights of homeless Angelenos.
In a recent filing, Myers said there is not a “binding provision” in the settlement agreement that requires the removal of 9,800 encampments, a figure negotiated privately two years after the agreement was signed.
The case has been in Carter’s courtroom since 2020, when the alliance sued the city and county, arguing that too little was being done to address the homelessness crisis, particularly in Skid Row, which has the largest unhoused population in Southern California. Over the years that followed, the city entered into two settlement agreements: one with the alliance and the other with Los Angeles County, which provides mental health, healthcare and other social services to the region’s unhoused population.
In 2024, the alliance asked Carter to impose $6.4 million in financial penalties on the city, saying it had failed to create a sufficient number of beds and had obstructed efforts to come up with critical milestones for compliance. The judge responded by bringing on a private firm to assess the city’s homeless programs.
That firm found a lack of adequate financial controls, saying the city’s homeless programs are vulnerable to waste and fraud.
