A federal appeals court has issued a complex ruling in a landmark class action lawsuit brought by unhoused veterans against the Department of Veterans Affairs (VA) and the Department of Housing and Urban Development (HUD), largely affirming the lower court’s findings that the VA has failed to honor its commitment to house disabled veterans on the West Los Angeles VA Grounds.
The case, spearheaded by named plaintiffs including Jeffrey Powers and the National Veterans Foundation, centered on the VA’s decades-long failure to use its prime Los Angeles real estate—land originally deeded in 1888 specifically for veteran housing—to shelter veterans with severe disabilities and mental illnesses (SMI or TBI).
The Ninth Circuit Court of Appeals affirmed major victories for the veterans regarding discrimination claims under the Rehabilitation Act but reversed key elements related to a charitable trust claim and vacated some of the district court’s broad remedial orders against the VA and HUD.
Rehabilitation Act Claims Upheld: Meaningful Access and Discrimination
The core of the veterans’ success lies in the affirmation of their claims under Section 504 of the Rehabilitation Act. The appellate panel agreed with the district court that the VA’s lack of supportive housing denies these vulnerable veterans “meaningful access” to the specialized healthcare services concentrated at the West Los Angeles Medical Center.
The court also upheld the finding that the VA’s policy of contracting with housing developers who impose Area Median Income (AMI) limitations—which often count disability benefits as income—is facially discriminatory. The panel noted that this practice effectively prices out the most severely disabled veterans, who receive higher compensation.
Furthermore, the court affirmed the district court’s ruling on the *Olmstead* claim, finding that the VA’s failure to provide benefits in the “most integrated setting appropriate” places these veterans at a “serious risk of institutionalization,” such as repeated hospitalizations or incarceration.
The Ninth Circuit also confirmed the district court was within its rights to certify the class, rejecting the VA’s argument that the veterans’ individual circumstances negated the commonality required for a class action.
HUD Cleared of Liability
While the VA remains on the hook for the discrimination findings, the court reversed judgment against HUD on the meaningful access, *Olmstead*, and AMI claims. The panel reasoned that the first two claims relate to healthcare benefits administered solely by the VA. Regarding the AMI claim, the court noted that HUD recently announced a policy change excluding service-connected disability benefits from income calculations, rendering that specific claim against HUD moot.
Charitable Trust Claim Reversal Voids Some Lease Invalidation
A significant reversal involved the veterans’ claim that the 1888 Deed created a judicially enforceable charitable trust, leading the district court to void leases held by UCLA, Brentwood School, and Bridgeland Resources, LLC.
The Ninth Circuit found that while the veterans had “special interest standing” to bring the claim—given the VA’s long history of mismanagement, including selling off land and leasing parcels below market value—the *Leasing Act of 2016* did not impose *judicially enforceable* fiduciary duties on the VA. Citing precedent, the court emphasized that the U.S. government’s trust obligations must be established by explicit statute, not implied by common law principles that mirror trust duties.
Because the invalidation of UCLA’s lease was based *only* on this reversed charitable trust theory, the court dismissed UCLA’s appeal as moot and vacated any injunctions against them. Similarly, parts of the judgments voiding the leases of Brentwood School and Bridgeland Resources, LLC, that relied solely on the charitable trust theory were vacated.
Leasing Act Violations Confirmed for Brentwood and Bridgeland
Despite overturning the charitable trust basis for voiding the leases, the Ninth Circuit upheld the district court’s finding that the agreements with Brentwood School and Bridgeland violated the *West Los Angeles Leasing Act* and the Administrative Procedures Act (APA).
The Leasing Act mandates that leases must “principally benefit veterans.” The panel agreed that Brentwood School’s lease, which primarily benefits its private, high-tuition students, failed this test. The court noted that the limited access provided to veterans (e.g., early morning pool time) was “de minimis” compared to the school’s usage.
Similarly, Bridgeland Resources, LLC’s license to slant-drill for oil underneath the campus was found to violate the Leasing Act because the primary benefit was revenue generation for private parties, with only a small royalty going to a veterans’ charity.
Scope of Injunctive Relief Narrowed
The court affirmed the necessity of remedial housing construction, agreeing the VA must build approximately 1,800 permanent and 750 temporary supportive housing units to resolve the discrimination found under the Rehabilitation Act. The VA failed to show this massive undertaking would fundamentally alter its services or pose an undue financial burden, given its budget and the high cost of homelessness.
However, the appellate court found the district court abused its discretion in fashioning relief for the APA violations. While voiding the unlawful leases with Brentwood and Bridgeland was correct, the district court overstepped by prohibiting the VA from renegotiating them and, in Brentwood’s case, ordering a specific settlement. The Ninth Circuit ruled that this intruded impermissibly into the VA’s management authority. The remedy must be tailored to the injury: the leases are void unless and until the VA can renegotiate them in full compliance with the Leasing Act.
Finally, the order broadly enjoining Bridgeland from all slant-drilling activity was vacated, as this went beyond remedying the specific harm to the veterans.
The case is remanded to the district court to enter a judgment consistent with the Ninth Circuit’s opinion, focusing the remedy on ensuring veterans gain meaningful access to housing and healthcare, while respecting the VA’s authority to manage its land use under the Leasing Act.