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Rehab home tally: $1.5M

Newport Beach has spent more than $1.5 million in legal fees in relation to drug and alcohol rehabilitation homes since 2007, and costs are expected to continue to grow, according to City Atty. David Hunt.

“Conflict is expensive,” he said.

The city is involved in several lawsuits and at least two federal investigations, all stemming from an ordinance it passed in January 2008 that attempts to curb a growing number of sober living homes in the city.

The U.S. Department of Justice and the Department of Housing and Urban developments are investigating Newport Beach after receiving at least seven federal complaints from drug and alcohol recovery homes.


If the Justice Department decides Newport’s rehabilitation home ordinance is discriminatory, it could file its own federal discrimination lawsuit against the city.

“We’re on a path now and we can’t just step off the path; we can only go forward,” said Newport Beach City Manager Dave Kiff. “We have a lot to be thankful for and a lot to protect, too.”

Kiff cited Newport’s gains on the issue over the past two years, including drafting an ordinance that has stood up to legal challenges so far and improving the city’s zoning codes.

The ordinance requires many of the homes to go through a hearing process to obtain use permits to stay open.


At least 13 of the homes have closed in the past year under the new ordinance, according to information from the city.

Several more sober living homes are tied up in the hearing process or expected to close.

The homes are mostly private, for-profit entities.

Newport Beach residents complained to city officials that the homes were generating a steady stream of noise, litter and second-hand cigarette smoke in their neighborhoods.

“The city is doing its best to walk the tightrope between two competing concerns and issues and it takes a good deal of legal costs to deal with that appropriately,” Hunt said.

The city’s legal costs so far include research into the matter; drafting and passing the ordinance; setting up an administrative process for handling use permits; defending the city against lawsuits; code enforcement actions and defending the city against the Department of Housing and Urban Development and Justice Department complaints.

These costs don’t include any of the city’s use of in-house resources or staff man hours.

“The amount of clients we have sleeping in Newport Beach tonight is 24 people, and the city is spending $1.5 million on that,” said Jeff Yates, founder of the Newport Beach-based recovery home Morningside Recovery.


Newport Beach filed a lawsuit against Morningside Recovery in November 2007, claiming the home violated a city moratorium on new sober living homes in the city.

In August, an Orange County Superior Court judge sided with Morningside in the case, but the Newport Beach City Council has said it will appeal the decision.

Newport Beach resident Denys Oberman, leader of the group Concerned Citizens of Newport Beach, believes the city’s mounting legal fees is money that needs to be spent.

Concerned Citizens pushed Newport Beach to adopt its rehabilitation home ordinance and then sued the city and several of the homes to the tune of $250 million when the group felt the ordinance wasn’t strict enough. A federal judge tossed the suit out of court last year.

“The city has a duty to take care of this problem,” Oberman said. “The city vigorously needs to stop these illegal, irresponsible operators that create a risk to residents and they need also to defend the ordinance.”

Many of the sober living homes claim the city’s ordinance discriminates against the federally-protected housing rights of recovering drug addicts and alcoholics.

“This is the price of drafting a discriminatory ordinance,” said attorney Steve Polin, who represents a number of the homes. “The legal fees are only going up from here.”

Two of Polin’s clients, Newport Coast Recovery, and Pacific Shores Recovery, have a federal lawsuit against Newport Beach, alleging the city’s ordinance targets federally protected housing for people with disabilities.


Another Newport Beach-based recovery home operator, Yellowstone Recovery, recently joined the suit.

The city has denied use permits to Newport Coast, Yellowstone and Pacific Shores.

The City Council is slated to hear an appeal in the Newport Coast and Pacific Shores cases later this month.


•?January 2008: Responding to resident complaints about litter, noise and crime, the city adopted an ordinance to curb the spread of drug and alcohol rehabilitation homes in the city. At the time, the city, particularly West Newport, was home to dozens of sober living houses.

•?October 2008: Narconon agreed to leave its West Oceanfront triplex in Newport Beach by February 2010.

•?January: Newport Coast Recovery became the first recovery home in the city to be ordered by the city to shut its doors. The Newport Beach City Council approved an agreement to limit the number of recovering addicts the company Sober Living by the Sea can house in the city. Sober Living is the city’s largest rehabilitation home operator.

•?June: Newport Coast Recovery filed a federal lawsuit against Newport Beach, claiming the city’s ordinance is discriminatory.