The suit claims the Department of Veterans Affairs misused 387 acres of land near the VA Hospital in west Los Angeles that was donated specifically to house veterans in need.
The area where the VA facility is located was donated more than 120 years ago for the sole purpose to house disabled veterans.
In front of the facility on Wednesday the ACLU, flanked by veterans and activists, accused the VA in Washington D.C. and L.A. of failing to provide permanent housing for homeless vets who deal with mental disorders following their tours of duty.
"The 1888 deed specifically said 'you may have this land Veterans Administration upon the condition that you utilize it for a home,'" said Mark Rosenbaum from the ACLU. "And we're seeking to enforce that deed."
"We have joined with the ACLU in this suit," said Carolina Winston-Barrie, whose family donated the land. "Their concern is whole heartedly for the veterans."
According to the VA, there are 107,000 homeless veterans in the U.S. with just over 8,000 in L.A.
Activists described Southern California as the homeless veterans capital of the country.
"This has been going on for years," said veterans activist Robert Shriver. "So I think opinion came together and we said enough of these meetings already. People are dying in the dumpsters, dying in the streets. We have to file a lawsuit."
The west L.A. VA Facility is located in Congressman Henry Waxman's district. Waxman released a statement.
"The president's 2011 budget includes $20 million to be used to renovate the first of three buildings the VA has designated for homeless veterans. I will continue to work to ensure that congress and the VA provide therapeutic housing services to Los Angeles veterans."The VA in L.A. and in Washington D.C. were contacted for comment on the lawsuit but have not responded.