Our Stories

L.A. Tenants Win Groundbreaking $2.5 Million Settlement in Housing Discrimination Lawsuit

After a two-year legal battle, a judge has approved a groundbreaking settlement in a federal lawsuit, Martinez v. Optimus Properties LLC, which alleged widespread housing discrimination in L.A.’s Koreatown neighborhood. The suit asserted that a Los Angeles based real estate investment firm targeted Spanish-speaking tenants, tenants with mental disabilities, and families with children — blanketing them with unmerited eviction notices, leaving their units in disrepair, and verbally attacking their disabilities and national origin – in a concerted effort to remove them from six apartment buildings in the rapidly gentrifying neighborhood. The complaint alleged that after the defendants illegally pushed out tenants that they deemed undesirable, they would renovate the vacated units in order to rent to younger, English-speaking tenants – a process that they called their “Koreatown strategy.” 

The 13 plaintiffs in the lawsuit included Spanish-speaking Latinos, families with children, adults with mental disabilities – many who were formerly homeless – and two non-profit agencies that work with the tenants to provide independent living support and tenants’ rights advocacy, support, and education.

Public Counsel, Skadden, and other co-counsel settled the lawsuit for a total of $2.5 million in damages for our clients, costs, and attorneys' fees. The settlement terms ensure fair and affordable housing for our clients, who remain in their homes, and for all current and future tenants by:

  • Securing 7 future vacancies for Section 8 Housing Choice Voucher holders
  • Requiring fair housing training for building management
  • Visibly posting the fair housing law in English and in Spanish at each of the subject buildings

While the Fair Housing Act (FHA) is well known as a statute that protects prospective tenants from discrimination during the rental process – the law also protects tenants once they have signed a lease. As landlords look to skirt federal and state housing laws in order to cash-in on increasing demand for housing in rapidly gentrifying neighborhoods, lawyers and community lawyers are wielding the FHA, Unruh and FEHA as tools to keep low-income renters in affordable housing units.

The favorable settlement in Martinez v. Optimus is a trailblazing effort in this strategy to protect both tenants and affordable housing. California affordable housing laws allow a landlord to raise the rent to market value once a tenant has been removed from a affordable housing unit, which means that affordable housing unit is lost. This settlement is significant because it protects existing affordable housing but it also has a novel term that expands the supply of affordable housing by carving out a set aside for seven future vacancies for Housing Choice Voucher (also known as Section 8) Holders.

The defendants will pay the two non-profit plaintiffs, Strategic Actions for a Just Economy (SAJE) and Step Up on Second Street, approximately $208,000 in damages, the thirteen individual plaintiffs a total of approximately $677,000 in damages, approximately $173,000 in litigation costs and a substantial monetary amount for attorneys’ fees.

The Plaintiffs were represented by Public Counsel, the Housing Rights Center, Public Advocates Inc., Skadden, Arps, Slate, Meagher & Flom LLP, and Brancart & Brancart.

Read the joint press release announcing the settlement HERE.

Read the full settlement HERE.

Read the original complaint HERE.