In an unexpected but welcome reversal, the city of Escondido agreed to settle the lawsuit brought against it by a coalition of civil rights organizations challenging a controversial city ordinance that bans renting apartments to undocumented immigrants. The settlement calls for a permanent injunction against enforcement of the ordinance and for a fixed amount of plaintiffs’ attorney fees. A federal judge had already granted a temporary restraining order against the ordinance last month.

Plaintiffs and their attorneys were thrilled by the turn of events. “I’m glad the city came to its senses and settled this case,” said Roy Garrett, a landlord and plaintiff. The lawsuit claimed that the ordinance was illegal and unconstitutional on a number of grounds, including that it was preempted by federal law, which exclusively regulates immigration issues, and that it violated due process and the property and contract rights of both landlords and tenants.

Federal Judge John Houston, in issuing a temporary restraining order blocking the ordinance from being implemented until the case would be heard in March, said the ordinance raised “serious questions” about a number of federal and state issues, and expressed concern about tenants being evicted without due process or a public hearing. The settlement must be approved by Judge Houston.

Coalition attorneys expressed gratitude that the city had agreed not to pursue a costly and likely losing case.

“This is a victory for all Latino residents, who would surely have faced racial profiling caused by this ordinance,” said Melissa Daar, California Policy and Field Director for People For the American Way. “And it is a victory for all residents who care about civil rights and basic fairness. This ordinance wouldn’t have solved any of Escondido’s problems; it would have only created divisions within the community. Now that the ordinance has been rejected, the city council can go back to improving the quality of all life for all Escondido residents.”

David Blair-Loy, legal director for the American Civil Liberties Union of San Diego & Imperial Counties said he hopes that this settlement, in conjunction with other losses for anti-immigrant laws across the country, will caution other cities from attempting to pass similar legislation.

Members of the coalition challenging the ordinance include People for the American Way, the American Civil Liberties Union, the Fair Housing Council of San Diego, the Mexican American Legal Defense and Educational Fund, and three private law firms—Brancart & Brancart, Cooley Godward Kronish LLP, and Rosner & Mansfield, LLP.