LA Alliance for Human Rights v City of LA: Judge Carter Rules Against Receivership

I. INTRODUCTION 

This case stands at the intersection of law and life—where the limits of judicial power confront the urgency of human suffering. 

For decades, the homelessness crisis in Los Angeles has been shaped by indifference, avoidance, and bureaucratic inertia. From Skid Row to suburban storefronts, the suffering is no longer isolated. It has become a defining feature of the City’s daily life. With nearly seven unhoused individuals dying each day, what once passed as a policy debate has become a moral reckoning. Communities bear the weight of it—businesses, schools, families, first responders— all impacted by a crisis that touches every corner of Los Angeles.  

The agreements now before the Court represent a collective attempt to move beyond paralysis towards progress. Yet even these agreements reveal a deeper truth: that progress has been halting, fractured, and often too slow to meet the scale of suffering on the streets.  

Plaintiffs in this case ask the Court to declare the system irreparably broken. They argue that only the imposition of a receivership can meet this moment. But the Court is not a policymaker. It cannot be. Its role is narrower, but no less vital: to uphold the promises made to the public, to enforce the agreements signed, and to ensure transparency and accountability in their execution. 

In 2021, the Court warned that it could not idly bear witness to preventable deaths. That warning still echoes. But it must now be read alongside the Supreme Court’s caution in City of Grants Pass, Oregon v. Johnson, 603 U.S. 520 (2024), that federal courts cannot substitute their judgment for the democratic will of a community grappling with complex and deeply human questions. 603 U.S. 520 (2024). As that Court recognized: “Homelessness is complex.” Id. at 524. Its causes are many and so too must be its solutions. 

But that complexity cannot serve as an excuse. Flexibility in how the City meets its obligations does not mean those obligations can be ignored. The Court cannot fix the system. But it can be sure the City is held to what it promised to repair.  

This case is not a referendum on homelessness policy. It is a test of integrity, governmental accountability and whether, in the face of death and despair, the law can still serve life. 

…

C. Remedy for Breaches The City breached the LA Alliance Settlement Agreement in four ways. The City failed to provide a plan for how it intends to create 12,915 shelter or housing solutions. For years, the City consistently missed its shelter and housing creation milestones. The City also improperly reported encampment reductions and disobeyed the Court’s order on encampment reductions. Finally, the City flouted its reporting responsibilities by failing to substantiate its reporting and failing to provide accurate and comprehensive data when requested by the Court, Special Master Martinez, the Parties, and A&M.  

To remedy the City’s failures, each Party recommends a different solution. Special Master Martinez recommends an independent fiduciary monitor to track and oversee spending, manage contracting, and perform other oversight tasks. Ex. 93, at 25-27. The Plaintiffs demand a receivership and/or some combination of the following: 

 (i) extension of Alliance and/or Roadmap Agreements for a minimum period of two years to ensure compliance and oversight; (ii) Appointment of Compliance and/or Fiduciary Monitor at the City’s expense with full, immediate, and unfettered access to City and LAHSA data; (iii) Forensic Financial Audit; (iv) Forensic Data Quality Audit with mandate to adhere to recommendations; (v) orders to create a Skid Row plan, including immediate housing and sheltering of women, children, and families and ultimately extending to every unsheltered resident; (vi) City-funded investigation and report on data manipulation allegations; and (vii) an award of attorneys’ fees both incurred in this matter to enforce the settlement agreement and prospectively for efforts related to the City’s compliance with the Agreements.

 Plaintiffs’ Brief at 25. The Intervenors, on the other hand, advocate for “more robust incremental monitoring and verification.” Intervenors’ Brief at 28. 

1. Reaffirming LA Alliance Settlement Obligations

The interim breaches of the LA Alliance Settlement Agreement committed by the City necessitate course correction now in order to avoid an overall breach of the Agreement in 2027.

To facilitate compliance and greater oversight, the City is ordered to do the following as previously detailed in each section above: 

 • Provide the Parties and the Court with an updated “bed plan” for how it intends to meet its obligation to create 12,915 shelter or housing solutions by October 3, 202511

 • Provide the Parties and the Court with updated bed creation milestones consistent with the updated bed plan by October 3, 2025 

• Beginning in the quarterly status report slated for October 2025, the City shall include an explanation for each unit that already physically existed prior to the Settlement Agreement of how the City “created” that unit, meaning contributed to bringing that unit into existence as a shelter or housing solution for people experiencing homelessness as opposed to its prior use 

• Meet and confer with Plaintiffs on selecting a third-party Monitor by August 22, 2025, and select this Monitor by September 12, 2025, subject to the Court’s approval 

• Attend in-person court hearings after the submission of each quarterly status report starting with the October 2025 quarterly report on November 12, 2025 

• Report encampment reduction data consistent with the Court’s definition beginning in the October 2025 quarterly report and provide accompanying data on shelter or housing offers to the Monitor 

Notably, each of the above requirements are actions that the City was already under an obligation to do. Failure to comply with these orders may result in sanctions. 

2. Attorney’s Fees for Plaintiffs and Intervenors 

The City’s refusal to provide updated plans, meet its milestones, correct its encampment reduction numbers, and verify its reporting has unnecessarily and unfairly wasted the resources of the Parties and the Court. By consistently refusing to provide explanations and verification of its reporting, the City has forced Plaintiffs into the position of investigating and monitoring the numbers reported. Special Master Martinez and A&M were appointed and paid to undertake that role, but the City has stalled and blocked them too from achieving meaningful review. The City blames its complex administrative structure and the added layer of LAHSA bureaucracy for its failures instead of complying and providing the required data. Days of the evidentiary hearing could have been avoided if the City had simply substantiated its own reports. The City refused to do so even during the seven-day hearing. Obfuscation and delay cannot be tolerated.

Federal courts possess certain “inherent powers,” not conferred by rule or statute, “to manage their own affairs so as to achieve the orderly and expeditious disposition of cases.” Link v. Wabash R. Co., 370 U.S. 626, 630-31 (1962). This authority includes the ability to “fashion an appropriate sanction for conduct that abuses the judicial process.” Chambers v. NASCO, Inc., 501 U.S. 32, 44-45 (1991). An assessment of attorney’s fees is a “less severe sanction” that is “undoubtedly within a court’s inherent power as well.” Id. (citing Hutto v. Finney, 437 U.S. 678, 689, n.14 (1978)). This narrowly defined power can be exercised in certain circumstances. Id. (citation omitted). One such circumstance is assessing attorney’s fees as a sanction for the “willful disobedience of a court order.” Id. (citing Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 259 (1975)). Another circumstance is awarding attorney’s fees when a party has “acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” Id. at 45-46 (citation omitted). In this last instance, if a Court finds “that fraud has been practiced upon it, or that the very temple of justice has been defiled,” it may assess attorney’s fees against the responsible party.” Id. at 46 (citation omitted). This circumstance also extends to when a party “shows bad faith by delaying or disrupting the litigation or by hampering enforcement of a court order.” Id. 

The Supreme Court has made clear that such a sanction has to be compensatory in nature rather than punitive. Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. 101, 102 (2017) (citing Mine Workers v. Bagwell, 512 U.S. 821, 826-30 (1994)); see also Lake v. Gates, 130 F.4th 1054, 1059 (9th Cir. 2025) (applying Goodyear when reviewing a district court’s sanctions). Simply, this means the fee award can only redress the wronged party for losses sustained, it may not impose an additional amount as punishment for the sanctioned party’s misbehavior. Id. at 108 (citation omitted). Thus, this Court must track the compensation to the wrong and the loss resulting from that wrong. Id. A compensatory sanction must be “calibrated to the damages caused by the bad-faith acts on which it is based.” Id. (citations and quotations omitted). This kind of causal connection is appropriately framed as a but-for test where the complaining party may recover “only the portion of his fees that he would not have paid for but the misconduct.” Id. at 109 (citation omitted). 

Unlike the Special Master and A&M, Plaintiffs are not paid to monitor the City’s compliance. Plaintiffs have diligently and persistently raised important issues to the Court’s attention. As a sanction for the City’s noncompliance, including disobeying the Court’s order on encampment reductions, Plaintiffs’ efforts should be compensated. Based on Intervenors’ active role in the evidentiary hearing and briefing, the Court will require that the City pay attorney’s fees to both Plaintiffs and Intervenors if Plaintiffs and Intervenors are able to show how they have been harmed by the City’s conduct and the resulting losses to them under the law. Under similar circumstances, the City previously agreed to pay Plaintiffs’ fees and costs on the verge of the Court’s finding of bad faith and sanctions. See Tr., 17, March 8, 2024 (Dkt. 684); Joint Stipulation to Resolve Plaintiffs’ Motion for Order Re: Settlement Agreement Compliance and Sanctions (Dkt. 713). 

Plaintiffs and Intervenors may submit motions for attorney’s fees by July 25, 2025, at 5 p.m. The City’s opposition is due by 5 p.m. on August 15, 2025, and Plaintiffs’ and Intervenors’ replies are due by 5 p.m. on August 29, 2025. 

3. Receivership  

Appointment of a receiver over state or local government functions by a federal court is an extreme and “invasive equitable remedy” only available in limited situations. Melendres v. Skinner, 113 F.4th 1126, 1136 (9th Cir. 2024). Receivership is typically the last resort after all other less intrusive remedies have been exhausted. Before imposing a receivership, federal courts have favored a gradual approach incrementally ramping up compliance measures such as monthly status conferences, sanctions, appointment of a special master or monitor, and issuing general consent orders. See Dixon v. Barry, 967 F. Supp. 535, 554 (D.D.C. 1997); see also Plata v. Schwarzenegger, No. C01-1351 TEH, 2005 WL 2932253, at *26 (N.D. Cal. Oct. 3, 2005). Only then, if “nothing short of receivership” can remedy constitutional violations, courts turn to receivership. Plata, 2005 WL 2932253, at *23. 

Weighing all of the options, this is not the time for a receivership over the City’s homelessness response system. Although democracies can be inefficient and even wasteful, only the voters of Los Angeles have the power to elect representatives to solve these problems. Public pressure has recently led the City and the County to begin to make structural reforms to the homelessness system including withdrawing funding from LAHSA and forming new agencies. Plaintiffs speculate that these impending, massive changes will not make a difference; but, the people and their elected officials have the right to try.  

The Supreme Court recently summarized this principle:

Homelessness is complex. Its causes are many. So may be the public policy responses required to address it. … Almost 200 years ago, a visitor to this country remarked upon the ‘extreme skill with which the inhabitants of the United States succeed in proposing a common object to the exertions of a great many men, and in getting them voluntarily to pursue it.’ 2 A. de Tocqueville, Democracy in America 129 (H. Reeve transl. 1961). If the multitude of amicus briefs before us proves one thing, it is that the American people are still at it. Through their voluntary associations and charities, their elected representatives and appointed officials, their police officers and mental health professionals, they display that same energy and skill today in their efforts to address the complexities of the homelessness challenge facing the most vulnerable among us. 

Yes, people will disagree over which policy responses are best; they may experiment with one set of approaches only to find later another set works better; they may find certain responses more appropriate for some communities than others. But in our democracy, that is their right. Nor can a handful of federal judges begin to ‘match’ the collective wisdom the American people possess in deciding ‘how best to handle’ a pressing social question like homelessness. 

City of Grants Pass, Oregon v. Johnson, 603 U.S. 520, 560 (2024). 

The multitude of solutions available to handle the homelessness crisis in Los Angeles and the Court’s deference to voters and policymakers does not, however, excuse noncompliance by the City. Flexibility with how to meet its obligations does not mean the obligations are optional. The Court takes the City’s commitments seriously and will not permit noncompliance. The City voluntarily agreed to resolve claims and issues in this matter through a promise to create new housing and shelter solutions for those languishing on its streets. Nearly seven unhoused community members die each day in the County of Los Angeles. These deaths are preventable and represent a moral failure by all of us. The City’s Settlement Agreement that this Court oversees is only one response, as the Supreme Court put it, to this complex problem. The Settlement Agreement is a critical step, nonetheless. 

D. Conclusion 

Every day, the people of Los Angeles wake up to the sight of human suffering in every part of the City—people sleeping on sidewalks, searching for safety, shelter, or just a place to use the bathroom. And every day, those living on the streets wake to another morning of uncertainty, exposed to danger, stripped of privacy, dignity, and hope.  

Unhoused individuals hear about programs and promises. They hear that hundreds of millions are being spent, that homelessness is being addressed, that success is being claimed. Yet many still cannot find a bed, a bathroom, or a hot meal. Their lived reality does not match the headlines. 

Angelenos, too, are asked to believe. They vote to tax themselves in hopes of helping their suffering neighbors. They give willingly because they want change. But every day, they see less money in their pockets for groceries and more suffering on the streets. This gap between sacrifice and visible results erodes public trust and deepens collective grief. 

People turn to the Court, hoping it holds the solutions—that the law can bend to save lives. But if solving homelessness were as simple as issuing a ruling, it would have been solved long ago. So the Court must focus on what it can control: the promises made, and whether they are being kept. The agreements in this litigation were meant to be a turning point in this crisis. Yet a review of the record reveals missed milestones, neglected obligations, and a troubling lack of oversight. That neglect carries real consequences, borne most heavily by those with the least, by the people whose lives depend on those promises being fulfilled. 

The remedies here are not punishment. They are progress. The Court institutes a monitor to oversee compliance and ask the hard questions on behalf of Angelenos. It mandates quarterly, in-court hearings, beginning November 12, 2025, and continuing as needed, to ensure these commitments are honored. The Court wants the City to succeed. Because when the system fails, people die. And when it works—even slowly—lives are saved.