Anaheim must face harassment, search claims over homeless shelter

The city of Anaheim must face most claims in a lawsuit by former homeless shelter residents alleging sexual harassment, invasive searches and retaliation at the now-closed La Mesa shelter, under a tentative ruling by Orange County Superior Court Judge David A. Hoffer that found triable issues over the city's liability for the private contractor that operated the facility.

The tentative ruling, expected to be finalized Friday, denied the city's motion for summary judgment and granted only part of its alternative motion for summary adjudication, allowing discrimination, invasion of privacy, sexual battery, retaliation and negligence claims to proceed to trial. Utzman v. County of Orange, 30-2020-01174005, (O.C. Super. Ct. filed Dec. 10, 2020)

Kirkland & Ellis Los Angeles partner Sharre S. Lotfollahi, counsel for the plaintiffs, was unavailable for comment.

The residents allege that security and transportation policies at the La Mesa shelter -- which the city built and contracted with Illumination Foundation to operate -- subjected them to sexual harassment, caused them to lose jobs and exposed them to retaliation for reporting misconduct. The security plan required searches upon entry, while the transportation policy barred residents from arriving or leaving on foot or by bicycle.

The court rejected the city's argument that the security policy did not violate the Fair Employment and Housing Act, finding the plaintiffs were not challenging the policy itself but its implementation by Illumination Foundation and a subcontractor. The city argued the disparate-impact claim failed without statistical evidence, but the court found no authority imposing such a requirement and credited the plaintiffs' experts. One expert, Wendy Still, opined that "Invasive pat searches are particularly harmful to women with histories of abuse." Another, Joseph W. Doherty, opined that "the policymaking process with regard to public safety around the homeless shelters was based on stereotypes and anecdotal accounts, not empirical evidence."

On the invasion of privacy claim, the city argued the residents consented to searches as a condition of entry. The court found triable issues as to whether the consent was voluntary, whether the conduct was "highly offensive to a reasonable person" and whether the intrusion was reasonable, noting the plaintiffs' argument that they were compelled to accept the rules to obtain shelter, "a government benefit and an economic necessity."

The court also rejected the city's claim of governmental immunity. Citing Government Code sections 818.2, 820.2 and 815.2, the court held that immunity applies to discretionary, quasi-legislative policy decisions, not operational implementation. Because the plaintiffs challenge how the security policy was carried out rather than the policy itself, the immunity defense did not apply.

On vicarious liability, the court found triable issues as to whether an agency relationship existed among the city, Illumination Foundation and the subcontractor under Government Code section 815.4. The court noted that agency is a fact-based inquiry and found evidence that the city supplied the workplace and required the contractor to implement the security plan the city outlined. The city's reliance on employment-law cases did not resolve the agency issue.

The court also rejected the city's effort to dismiss the first three claims brought by plaintiff Cyndi Utzman for failure to exhaust administrative remedies, holding that housing discrimination plaintiffs are not subject to an exhaustion requirement under Government Code section 12989.1(b).

The retaliation claims also survived. The city argued that disciplinary write-ups had no material effect on the plaintiffs' residency, relying on the employment-law standard requiring that an adverse action materially affect the terms of employment. The court found the city cited no authority extending that standard to housing claims and noted that Utzman's discharge one month after she complained could support an inference of causation based on temporal proximity.

The court dismissed four claims. It granted adjudication on the breach of implied warranty of habitability claim because the residents identified no lease and cited no authority establishing that their compliance contracts with Illumination Foundation functioned as leases.

The court dismissed the due process, equal protection and unlawful expenditure of public funds claims as moot. Those claims sought declaratory and injunctive relief tied to the transportation "lock-in/shut-out" policy, but La Mesa has closed, no other city shelter uses the policy and the city has no plans to operate another shelter. The court held it was not bound by its earlier ruling overruling a demurrer on mootness because the summary judgment motion required the court to weigh the evidence. The court found the possibility of recurrence "too remote" and observed that any reinstated policy "could easily be challenged in court, if necessary by restraining order or injunction."

The negligence claim will proceed. The court found the city owed mandatory duties under Civil Code section 1941 and county and city code provisions establishing toilet and shower ratios at emergency shelters, triggering liability under Government Code section 815.6.

The court ordered the city to give notice of the ruling.