Posted by: Patricia Salkin | March 16, 2020

Fed. Dist, Court in IL Denies City’s Motion for Summary Judgement in FHA, ADA, and Rehabilitation Act Case

This post was authored by Matthew Loescher, Esq.

In 2014, three men with severe mental and physical disabilities moved into a single-family dwelling in a residential neighborhood in Springfield, Illinois. Plaintiff Individual Advocacy Group, Inc. (“IAG”) delivered in-home support services to the residents of this dwelling since it opened in 2014. IAG is a non-profit organization with the mission of providing personal services to persons with disabilities which enable those persons to live in community settings. The owners of the dwelling, Christine and Robyn Hovey, did so through a corporation they formed and owned. The Plaintiffs filed this case under the Fair Housing Act, 42 U.S.C. §§ 3601 et seq., and its implementing regulations (“FHA”); Title II of the Americans with Disabilities Act, 42 U.S.C. § 12131 et seq. and its implementing regulations (“ADA”); and Section 504 of the Rehabilitation Act, 29 U.S.C. § 794, following Defendant City of Springfield’s refusal to grant a zoning permit to allow the group home to remain open.

The City alleges IAG’s claim of lost profits should have been barred as speculative. Specifically, the City argued that IAG’s speculation as to the future of its business in Springfield was not supported by the income statements from existing group homes. Moreover, two new group homes opened in Springfield since the beginning of this litigation had negative net revenue. Accordingly, the City contended that IAG’s projections for lost revenue failed to approach even a minimally reasonable degree of certainty, particularly in their first two years of operation. In response, IAG argued it had presented evidence in support of its claim that its business was directly affected by the City’s illegal actions. The more homes IAG was able to operate in a particular region, the more profit they would be able to generate by spreading fixed costs, such as a nurse for the region. Taking all reasonable inferences in favor of non-movant IAG, the court found the evidence offered by IAG about its plans and business model as well as the testimony about the effects of the zoning ordinance was sufficient to create a factual dispute regarding the issue of lost profits. Accordingly, the court denied the motion on this issue.

The City contends that its denial of a CPU to the Noble home, because it was within 600 feet of another group home, had no bearing or impact on IAG’s other existing homes. Dr. Bennett testified for the plaintiff’s that more groups were not opened because the discriminatory zoning was still in effect and she did not want to subject potential residents to what occurred to their locations on Pinehurst Street and at 2328 Noble. Dr. Bennett further testified that each of the new group homes only housed two people due to IAG’s concern that placing an additional two individuals in the home could run afoul of the zoning ordinance if another CILA was within 600 feet of the group home. Based on the foregoing, the court found a jury could determine that IAG would have opened additional group homes and/or placed more individuals in existing group homes but for the discriminatory zoning ordinances. Accordingly, the court denied the City’s motion for summary judgment.

The City next argued that although it admitted that its zoning ordinance violated the FHA, ADA and Rehabilitation Act, the Plaintiffs failed to establish standing as “aggrieved persons” under 42 U.S.C. § 3613. The court rejected the City’s argument, finding IAG was an aggrieved party because the discriminatory ordinance interfered with its ability to operate the group home and was still bound by the ordinance and, therefore, risked facing zoning actions. Accordingly, IAG’s ability to open additional homes and accrue more revenue was affected by the continued existence of the ordinance. Moreover, because the individual Plaintiffs were parties who were injured by the City’s admittedly discriminatory housing practices, they qualified as “aggrieved persons” under the FHA. Accordingly, IAG’s motion for summary judgement was granted.

Valencia v City of Springfield, IL, 2020 WL 1265421(CD IL 3/16/2020)

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