Several businesses in Berkeley, California, including a winery and a brewery, are suing the City of Berkeley for its failure to remove homeless encampments near them, which has hurt their profits.

The lawsuit was filed in Alameda County this week by eight businesses, including Covenant Winery, Emily Winston of Boichik Bagels and Fieldwork Brewing against the City of Berkeley.

The plaintiffs allege the case is about the City of Berkeley being required to follow the same nuisance laws private landowners must follow, while also owing an obligation to its citizens to maintain its streets and other public rights of way free from obstructions.

Over the past few years, the businesses claim, the city has allowed homeless encampments to remain on Harrison Street between Fifth, Sixth, Seventh, Eighth and Ninth Streets; along Codornices Creek; and in the Lower Dwight neighborhood.

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The plaintiffs say in the lawsuit they believe the city allowed the encampments when the U.S. Court of Appeals for the Ninth Circuit "erroneously" ruled in two cases, saying a city may not criminalize public camping if there is no alternative space available for the campers to relocate.

While the decisions did not allow or require the city to permit encampments in a way in which it created a public nuisance, the city permitted and invited encampments in Harrison and Lower Dwight, knowing they would be a public nuisance, the plaintiffs allege.

The city also allowed encampments to remain in place despite shelter space being available.

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But in 2024, the U.S. Supreme Court reversed the Ninth Circuit’s decisions and said municipalities are permitted to remove public encampments whether sufficient alternative space is available or not.

The businesses said in the lawsuit they believe the city refuses to act, in part, because it fears litigation by advocates of those living in RVs and those who are homeless.

By filing the lawsuit, the businesses are asking the court to step in and require the city to follow the law and remove the encampments so the neighborhoods will be free of public and private nuisance conditions.

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Fox News Digital has reached out to the city manager and some of the businesses who filed the lawsuit for comment.

The businesses are represented by Gavrilov & Brooks of Sacramento and Arizona-based Tully Bailey LLP. The latter won a case in 2023 that required the city of Phoenix to clear a homeless camp within the city limits.

Ilan Wurman, an attorney from Tully Bailey LLP who is on the Berkeley case, told Fox News Digital the Supreme Court's decision earlier this year that held cities have the authority to remove homeless encampments, does not compel them to do so.

"It has become clear that Berkeley, even though it has shelter to offer, and its offers are routinely refused, does not plan to do anything about the encampments," Wurman said. "Only a public nuisance lawsuit can force the city to do the right thing and clean up the city. This legal theory was deployed successfully in Phoenix, and we are optimistic it will work in Berkeley, too."

FOX 2 in San Francisco spoke with Winston, who said she has tried to work with the city over the years to control the encampment near her business.

"It's tough. It's filthy. There's trash everywhere. The street is frightening to drive down for customers. It's not safe for our customers or our staff," Winston said.

She also told the station she wants the unhoused residents to receive shelter and treatment they need but also called the city out for failing to improve conditions, forcing her to pursue legal action.

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"I was not eager to do this. This was certainly not my idea of a good time. I wish the city would just have cleaned it up anyway," she said.

Homeless encampments are a growing problem across California.

Gov. Gavin Newsom took to the streets of California in August to clean up trash left behind by homeless encampments, threatening municipalities that if they do not clean up encampments, they will lose state funding next year.

"I want to see results," Newsom said at the time. "I don’t want to read about them. I don’t want to see the data. I want to see it."

Homelessness has skyrocketed in the Golden State under Newsom's leadership. According to the 2024 point-in-time count, which provides a snapshot of homelessness on a given night, the number of homeless individuals in California increased to approximately 172,000. This represented an increase from the estimated 131,000 homeless individuals counted in 2018, the year Newsom took office.

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Earlier this year, Newsom's administration blamed counties and cities after a state audit report found his own homelessness task force failed to track how billions of dollars have been spent trying to tackle the crisis in the last five years. 

At the time, a senior spokesperson for the California Interagency Council on Homelessness (CICH), which coordinates homeless programs across the state, told Fox News Digital the audit's findings "highlight the significant progress made in recent years to address homelessness at the state level, including the completion of a statewide assessment of homelessness programs."

Over the past five years, the CICH didn’t consistently track whether the money actually improved the situation, the audit concluded.

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The spokesperson added local governments "are primarily responsible for implementing these programs and collecting data on outcomes that the state can use to evaluate program effectiveness."

Since 2016, California has spent over $25 billion on homelessness. This includes state, local and federal funding allocated toward boosting the state's "housing first" ideology through various programs, which prioritize placing people in housing first before addressing mental illness or substance abuse problems.

Fox News’ Jamie Joseph contributed to this report.