LOS ANGELES — A federal appeals court Thursday overturned a Los Angeles judge's sweeping order forcing local government to offer shelter to every unhoused person on downtown's Skid Row by the middle of next month, and sent the case back to the lower court for further proceedings. 

A panel of the U.S. 9th Circuit Court of Appeals determined that the district court had "abused its discretion" because it did not have authority to issue the preliminary injunction order based on claims not pled in the complaint brought last year by the L.A. Alliance for Human Rights, an association of downtown residents, homeless individuals and property owners seeking to compel the county and city of Los Angeles to find shelter for the thousands of people camping on city sidewalks.

U.S. District Judge David Carter issued the mandatory injunction in April, based on a finding that structural racism -- in  the  form of discriminatory lending, real estate covenants, redlining, freeway construction, exclusionary zoning and unequal access to affordable housing -- is the driving force behind Los Angeles' homelessness crisis and its disproportionate impact on the Black community.

Faulting the county and city for being "unable or unwilling to devise effective solutions" to the crisis, Carter determined the court was compelled to act because worsening public health issues, including the coronavirus pandemic, demanded "immediate, lifesaving action."

While both sides of the lawsuit took no issue with the district court's conclusion about structural racism, "none of the plaintiffs' claims is based on racial discrimination, and the district court's order is largely based on unpled claims and theories," Judge Jacqueline H. Nguyen wrote for the appellate court.

Since LA Alliance failed to put forth evidence to establish standing, Carter "impermissibly resorted to independent research and extra- record evidence," according to the opinion.

"For these reasons, we vacate the preliminary injunction and remand for further proceedings," the panel concluded.

The LA Alliance said it was "pleased to see that the 9th Circuit has identified a pathway to hold the city and county accountable for their failed response" to LA's homelessness crisis.

"The court issued a narrow ruling this morning focused on procedural steps in the case but not the underlying law," according to the coalition. "We are greatly encouraged because the issues identified can be quickly addressed and we look forward to returning to Judge Carter's courtroom in the coming weeks."

Los Angeles City Attorney Mike Feuer applauded the decision, calling it an "important victory" that nonetheless leaves the region still in the grips of the homelessness crisis.

"All officials need to share Judge Carter's intense sense of urgency," Feuer said. "With today's ruling, the ball is now squarely in the court of elected leaders. That means deeper collaboration between the city and county, additional state and federal resources, fundamental improvements in engaging people experiencing homelessness and more — (leading to) real solutions that reduce street homelessness and make our public spaces once again safe and accessible for everyone."

Skip Miller, outside counsel for Los Angeles County, also expressed gratitude for the court's opinion Thursday.

"We are grateful the 9th Circuit has ruled in our favor by vacating the district court's sweeping injunction based on an abuse of judicial discretion," he said. "Nevertheless, the county will continue with its massive efforts to address homeless as it has all along. We appreciate where Judge Carter is coming from and look forward to working with him to find a solution to this lawsuit."

The judge's April mandate was comprehensive, ordering the escrow of $1 billion -- the city's entire homelessness budget -- to ensure the money was not being squandered, offers of shelter or housing to all unhoused individuals in Skid Row within 180 days, starting with single women and unaccompanied children, and numerous audits and reports.

The wholesale clearing of 50-plus blocks on Skid Row would be followed by criminal enforcement of anti-camping and related ordinances, according to filings in Los Angeles federal court.

The city and county immediately requested that the appeals court issue a stay pending appeal.

During arguments before the circuit court in July, the appellants argued that Carter's extraordinary order violates the separation of powers, takes powers away from elected officials and would interfere with local government efforts to deal with the crisis.

Mira Hashmall, arguing for the county, said the injunction does not stand up to legal scrutiny because the plaintiffs cannot demonstrate a particular injury caused by the county. Further, Carter "rewrote the case to be about racial discrimination" when there's "no evidence the county has engaged in any racial discrimination," she said.

"Federal judges are not supposed to wade into political waters such as these," Hashmall said, adding that judges "cannot legislate from the bench."

Deputy City Attorney Michael Walsh said Carter's court had "disregarded the rule of law to impose those policy preferences through a sweeping order, rather than the decisions made by the city's elected officials - - which is judicial overreach of the worst sort."

The shelter order "simply cannot be upheld" without a valid legal theory or proof of a constitutional violation, of which there are none, Walsh argued.

Circuit Judge John Owens asked whether Carter's order might actually be the result, not of overreach but "judicial frustration, where we have a judge who really wants to figure out a solution here and, in his opinion, there's been a dismal, dismal failure by the elected officials in Los Angeles who are supposedly charged with fixing this."

"So what is he supposed to do if he sees this violation going on?" Owens said. "Is he supposed to just sit back and watch Los Angeles continue to disintegrate in this area or should he take some action and make something happen?"

Asked by Owens whether stepping up settlement discussions might be a better way to resolve the case, Walsh said "there's always the possibility."

At the hearing, Nguyen indicated that "at a minimum," the appeals panel probably should send the case back to Carter for further hearings.

Carter scheduled a Dec. 16 status conference to discuss where the case currently stands.

Councilmember Kevin de León, who represents Skid Row as part of Council District 14, said the decision does not change anything for unhoused people "struggling to survive on our streets. They are still victims of a litigation merry-go-round that does nothing to put a roof over their heads."

Regardless of the decision, he added, "I'm committed to working with urgency to move people into clean and safe housing as rapidly as possible."

Councilmember Mark Ridley-Thomas said homelessness is not solved in a courtroom, but on the streets. "Housing is a right, not a privilege," he said.