This post was authored by Matthew Loeser, Esq,
Plaintiff New Horizons Rehabilitation, Inc. was an Indiana not-for-profit corporation that assisted persons who have intellectual and developmental disabilities in the southeastern Indiana counties of Ripley, Dearborn, Ohio, Franklin, Decatur, and Switzerland. No more than four adults were allowed to live in a home full time, and they were assisted by New Horizons staff. Before a resident moved into a New Horizon home, a contractor hired by the Bureau of Developmental Disabilities was required to complete an inspection check list to make sure the overall environmental conditions were satisfactory. In 2013, New Horizons was donated an unimproved piece of real estate in Lawrenceburg, Indiana, on the condition that it would build a supported living home for adults with intellectual and developmental disabilities on the property. While New Horizons was attempting to negotiate with Lawrenceburg, its Executive Director, Marie Dausch, was informed that the planned home had to be approved by DHS because it was deemed to be a commercial building.
In January 2017, New Horizons settled its lawsuit with the city of Lawrenceburg. Pursuant to that agreement, Lawrenceburg would treat the proposed New Horizons home the same way it would treat any single-family dwelling for zoning purposes. In February 2017, Executive Director of the Indiana Department of Homeland Security (“DHS”) informed Lawrenceburg officials that the planned home was a Class 1 structure that had to be submitted to DHS for review and release. New Horizons applied for a variance from the Fire Prevention and Building Safety Commission (“Commission”) so that it would not be required to install a commercial fire suppression system – as required in Class 1 structures – in the proposed home. The Commission denied the request to obtain a variance because the cost of the fire-suppression system would have to be over 10% of total building costs, and here the cost was about 5% of total building costs. Following that denial New Horizons makes claims under the Rehabilitation Act, 29 U.S.C. § 794; the Fair Housing Amendments Act, 42 U.S.C. § 3604(f); and the Americans with Disabilities Act, 42 U.S.C. §12132.
The court first noted that the FHAA requires accommodation if such accommodation is reasonable, and is necessary to afford a handicapped person the equal opportunity to use and enjoy a dwelling. New Horizons contended that “DHS denied a reasonable accommodation here by denying the variance request that would have allowed the home to open without a commercial fire suppression system.” The court found that at the heart of this claim was whether or not New Horizons’ residents should be forced to shoulder the cost of a sprinkler system when they would not have to bear that cost if they were able to continue living with their families. The court found this was tantamount to telling a disabled person that he or she should go live in an apartment building or long-term care facility because the law makes that easier on them, was the very discrimination New Horizons complained of. Moreover, the court reasoned the FHAA would be toothless if a defendant could avoid liability by pointing to the other housing options a plaintiff had in different types of housing or different areas of the city. Accordingly, the court granted New Horizons’ Motion for Summary Judgment as to its reasonable accommodation claim under the ADA, FHAA, and Rehabilitation Act.
The court next analyzed the disparate treatment claims under the ADA, FHAA, and Rehabilitation Act, which involved “a showing of intentional discrimination, provable via either direct or circumstantial evidence.” New Horizons claimed that the “commercial or non-commercial” distinction between Class 1 and Class 2 structures was “both illusory and in violation of the above statutes.” Specifically, family homes with three or more foster children are Class 2 structures, but New Horizons’ proposed supported living facility for three intellectually or developmentally disabled adults was treated as a Class 1 structure. The court found that without being held to a strict definition of the word “tenant,” DHS would be able to treat foster children differently from adults with intellectual and developmental disabilities and offer no basis for the distinction other than the arbitrary declaration that New Horizons’ clients were tenants, but foster children were not. As such, court granted New Horizons’ Motion for Summary Judgment as to its claim of disparate treatment under the ADA, FHAA, and Rehabilitation Act.
New Horizons further claimed there was no rational basis supporting Indiana’s zoning laws as applied to its clients. The court found that the rational basis of “safety” that Defendants offered for the zoning scheme was sufficient to defeat an Equal Protection challenge. Although New Horizons presented a compelling argument that its residents were better-prepared than the average family for safety hazards such as fires, it failed to show that there was any rational reason for code. Accordingly, New Horizons’ Motion for Summary Judgment was denied as to its Equal Protection claim, and Defendant’s Cross-Motion for Summary Judgment was granted. For the aforementioned reasons, the court granted New Horizons’ motion for a permanent injunction, and DHS was permanently enjoined from enforcing the requirements of a Class 1 structure on New Horizons’ Lawrenceburg, Indiana home indefinitely.
Lastly, while the Defendants argued they could not be liable for damages because they had sovereign immunity under the Eleventh Amendment against New Horizons’ ADA and FHAA claims, the court found Defendants would still owe damages under the Rehabilitation Act. Specifically, the court noted that Congress expressly made its intent clear that a state is not immune for a violation of Section 504 of the Rehabilitation Act of 1973 if a state program receives federal funding. Additionally, New Horizons contended that it was not a for-profit corporation, and any money damages it received would directly benefit its clients, who were aggrieved by the State’s failure to grant a variance in New Horizons’ favor. the Court therefored awards damages in favor of New Horizons in the amount of $30,400.00.
New Horizons Rehabilitation, Inc. v State of Indiana, 2019 WL 3253706 (SD IN 7/19/2019)
LAW OF THE LAND 
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