The city of Newport Beach prevailed in court this week when a judge ruled that the city could terminate its agreement with Morningside Recovery.
Orange County Superior Court Judge Sheila Fell decided the city had the authority when it revoked the recovery center's zoning agreement in July.
"The record before this court makes it very clear that the city did just as it was required to do," according to the decision.
The city said Morningside breached its original zoning agreement because of its multiple violations, including failing to provide information on the number of parolees and probationers at each facility; using the city seal on its website without authorization; and exceeding the maximum number of beds at its facilities, according to court documents.
Smoking, parking and noise disturbances also violated conditions of the rehab center's agreement, the city alleged.
Newport Beach officials also said there were 15 police calls in a seven-month period.
The rehab center vowed to challenge the decision, invoking state and federal legal protections that it says would prevent the city from discriminating against rehab homes.
"It's a long fight, with this round going to the city," Morningside Recovery CEO Mary Helen Beatificato said in a prepared statement. "However, this is not a knockout. There are many more rounds to go."
On the plus side for Morningside, Beatificato said the revoked agreement now means the center no longer faces restrictions placed on it by the initial ordinance that allowed it to operate in the city.
"In light of this [court decision], Morningside is relieved that it will no longer be restricted to the bed caps and operational conditions in the development agreement," she said. "Without the development agreement … Morningside would be free to operate in Newport Beach without limitation."
Newport Beach officials said in a statement that this week's legal victory cleared the way for the city to move forward with its cross-complaint against Morningside. The city is moving forward with abatement measures, and a trial in the city's countersuit is scheduled for Oct. 9.
Morningside's battle with the city of Newport Beach is one of several legal challenges the company faces:
•The California Department of Alcohol and Drug Programs, or ADP, is seeking to permanently revoke Morningside's license. Closing briefs in that case are expected July 6, and a final decision is expected the first week of August, according to ADP spokeswoman Suzi Rupp.
The ADP is seeking to revoke the rehab center's license in part because of alleged improper handling of medication, holding detox services at unlicensed centers, and providing medical services beyond the scope of the license, according to public records.
•A death investigation in April also found that Morningside failed to notify the state about a client's death. Morningside has claimed the man was not in its care when he died.
• The family of a man who died of cardiac arrest in 2011 after being transferred from Morningside is suing the clinic for wrongful death. Brandon Jacques, 20, was bulimic and an alcoholic, and Morningside boasted a dual-diagnosis treatment that could tackle both, the family alleges in court papers.
The family's lawsuit claims Jacques' food intake went unchecked at Morningside, whose staff purportedly did not prevent him from purging his meals. Then, after a little more than two weeks at Morningside, Jacques was moved to another facility in Costa Mesa, where he went into cardiac arrest and eventually died at Hoag Hospital.
Morningside said it couldn't comment on any one client's specific treatment, but said at the time that families are always included in the decision to move a client.