In City of Dana Point v. New Method Wellness, Inc. (2019) 2019 Cal.App.LEXIS 868, the Court of Appeal held that the operation of a drug treatment facility was a nuisance per se because it was not allowed by the city’s zoning code and did not meet the prerequisites to fall within an exception allowed by the Health and Safety Code for drug abuse treatment facilities.
Background
The City of Dana Point (“City”) zoning code did not allow drug treatment programs as a permitted use in the residential zone. NMW Beds owned three properties in a residential zone and on a different company’s website, New Method Wellness, Inc. (New Method), the properties were advertised as patient housing for New Method’s drug treatment program. Based on these facts, the City sought an injunction alleging that the use was a nuisance per se.
NMW Beds and New Method denied that the properties were part of the drug treatment program run by New Method. The trial court found NMW Beds and New Method were owned by the same individuals, had the same leadership, and the New Method website advertised its services as taking place on the properties. The trial court concluded that the three properties were part of New Method’s operation, the use was in violation of the zoning code and not subject to an exception, and thus constituted a nuisance per se and could be enjoined.
Holding
The Court of Appeal affirmed the trial court’s holding and held that, pursuant to Government Code section 38771, the City was empowered to declare what activities constitute a nuisance. Here, the City did so by establishing “any use [in a residential zone] not expressly allowed is prohibited.” Nowhere in the City’s zoning code was the operation of a drug treatment facility permitted in a residential zone. Thus, the Court found that its focus was whether the properties were being used as drug treatment facilities in accordance with the Health and Safety Code, because if they were, those facilities would be preempted by the zoning code.
It was undisputed that New Method ran a drug treatment facility so the Court focused on New Method’s connection to the three properties. The Court found that New Method’s contention that it did not own the properties—that NME Beds did—was meritless. Under the “single enterprise doctrine” the companies were indistinguishable – they operated under the same brand, same ownership, same policies, and same administration. This, paired with the facts that New Method advertised the properties as part of its facilities and provided staff, property rules, and transportation at the properties, made it such that the Court found that New Method’s drug treatment program was operating at the properties. It was immaterial that there was a physical division between the New Method main facility and the properties.
The Court outlined that Health and Safety Code section 11834.23 preempts local ordinances that limit drug treatment facilities in certain circumstances but requires that such a facility be licensed and serve six or fewer people. Here, there was no evidence that the properties met either requirement so they could not be operating as an exception to the City’s zoning code.
Finally, the Court roundly dismissed New Method’s claims that the properties were group housing and that the issues were related to the Americans with Disabilities Act or Fair Housing Act. The Court concluded that a party “cannot acquire property in a residential zone, violate pre-existing valid ordinances, and then complain that the enforcement of those ordinances denied its property rights.”
Key Take Away
Cities may enforce a nuisance per se action against parties whose property use is defined in the zoning code as a nuisance, as long as not exempted.
Questions
If you have any questions regarding this Legal Alert, please contact the following attorneys from our office, or the attorney with whom you typically consult.
Mona Ebrahimi
mebrahimi@kmtg.com | 916.321.4597
Olivia Clark
oclark@kmtg.com | 916.321.4290