Pacific Shores Properties, Yellowstone Recovery and Newport Coast Recovery sued Newport Beach in 2009. They contested the city's 2008 ordinance that requires rehab home operators to undergo an extensive public review process, get permits and follow other rules.
"The city has always said that we can protect the fair housing rights of persons in recovery and keep the single-family nature of our residential neighborhoods," Mayor Mike Henn said in a statement. "I am heartened that someone as well-respected and well-reasoned as Judge Selna agrees with our approach."
The city's ordinance was designed to limit the proliferation of the homes, which neighbors typically despise. It was constrained by the Federal Fair Housing Act of 1988, which prevents discrimination against people who are in a "protected class."
Recovering drug addicts and alcoholics, courts have found, fall into this classification, as they are considered "disabled" by their addictions.
The rehab operators agreed to drop their remaining claims in Selna's court, Polin said, to avoid a bench trial and so they could appeal the largest issues to the 9th Circuit.
Opening briefs for the appeal are due in August.