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New Horizons Rehabilitation, Inc. v. State

United States District Court, S.D. Indiana, New Albany Division

October 27, 2017



          TANYA WALTON PRATT, JUDGE United States District Court

         This matter is before the Court on a Motion for Preliminary Injunction pursuant to Federal Rule of Civil Procedure 65 filed by Plaintiff New Horizons Rehabilitation, Inc. (“New Horizons”). (Filing No. 7.) New Horizons challenges the constitutionality of a zoning determination regarding a single-family dwelling unit that it intends to build and operate. The Defendants are the State of Indiana (“the State”) and the Executive Directory, Indiana Department of Homeland Security in his official capacity (“DHS”). New Horizons alleges the State's zoning determination is in violation of the Equal Protection Clause of the United States Constitution; the Fair Housing Amendments Act, 42 U.S.C. § 3604(f); the Rehabilitation Act, 29 U.S.C. 794; and the American with Disabilities Act, 42 U.S.C. § 12132. New Horizons seeks to preliminarily enjoin DHS from classifying its proposed home as a Class 1 structure and a waiver from the fire suppression system requirement. On October 6, 2017, the Court conducted a hearing on New Horizons' Motion. For the following reasons, the Court grants New Horizons request for a preliminary injunction.

         I. BACKGROUND

         These factual findings rest on a review of the partial record in the administrative proceeding and evidence and argument presented during the preliminary injunction hearing held on October 6, 2017. New Horizons is a non-profit organization that serves the needs of people with intellectual and developmental disabilities in the southeastern counties of Indiana. Among other things, New Horizons provides the following services for its clients: community based employment services through job training, placement and follow-along services, individualized home and community-based services, day program services, respite care, family support, pre-vocational training, and work opportunities. It also provides residential living options, with support, to a number of its clients through six homes that it owns and operates for adults with intellectual and developmental disabilities in three Indiana communities.

         New Horizons plans to open a new supported living home for its disabled clients in Lawrenceburg, Indiana, in an area zoned for single-family residences. The house will be the permanent home for three unrelated adults with intellectual and developmental disabilities. New Horizons staff will be present 24 hours a day to ensure the safety of the residents and offer other support, however they will not live there. The residents live together because their care is paid for by Indiana's Medicaid Waiver which allows them to live outside of institutions. The planned Lawrenceburg home will be operated similar to the six existing supportive living homes, one of which is located in Lawrenceburg. All of the homes are designed to allow residents to live with the greatest level of independence as possible. The residents share expenses, cooking, eating, and activities. They use their Social Security Disability or Social Security Income to pay for their food and other personal expenses. The homes are not intended for transient stays and are designed as permanent housing for residents for as longs as they live. (Filing No. 22-1 at 3.) There are no locks on the interior doors of the homes and the residents live as a family would. The houses are completely indistinguishable from the other single-family houses in the neighborhoods. The planned home will be properly set off from the street and other property and will meet all the other requirements for a single-family residence under the ordinances, rules, and regulations of the City of Lawrenceburg.

         Previously, New Horizons supportive living homes have been treated by building authorities as Class 2 single-family residential structures. In the past, New Horizons worked with local zoning and building authorities in the communities where the homes are located when seeking zoning approval to build and open single family-homes for its residents. New Horizons has a builder in place to construct the planned home and Lawrenceburg city officials agreed to treat New Horizons' planned home in the same manner as other single-family residences. (Filing No. 22-1 at 5.) However, during the process, a Lawrenceburg employee informed New Horizons that the planned home would need to be approved by DHS because it was deemed a commercial building. (Filing No. 22-1 at 6.) New Horizons was later informed that DHS had classified its planned supported living home as a Class 1 structure as opposed to being classified as a Class 2 structure.

         The point of contention between the parties is that New Horizons' Class 1 structure classification means it must have an automatic fire suppression sprinkler system in the home which it estimates would cost at least $9, 800.00. During the course of the proceedings, New Horizons requested a variance, as required, from DHS's Fire Prevention and Building Safety Commission (“the Commission”) to waive the fire suppression system requirement, which the Commission denied giving rise to the failure to accommodate claim. (Filing No. 34 at 11.) The Commission did not grant the variance because it found that New Horizons would not suffer a financial hardship based on a percentage calculation of the cost of the fire suppression system in relation to the total cost of the home.

         The area in which New Horizons plans to build the home is zoned for single-family residences. (Filing No. 22 at 5.) In order to obtain approval for the construction and opening of a Class 1 structure, a design release must be obtained from the Commission. Id. at 7. Class 1 structures also require the payment of filing and processing fees, along with the submission of detailed building plans. Class 2 structures-single or two dwelling unit structures-do not require a fire suppression sprinkler system and do not have the elevated design requirements and payment of fees that Class 1 structures require.

         New Horizons asserts that DHS has subjected their zoning request to build a single-family dwelling unit in Lawrenceburg to elevated requirements in violation of the Equal Protection Clause to the United States Constitution, the Fair Housing Amendments Act (“FHAA”), 42 U.S.C. § 3604(f); the Rehabilitation Act, 29 U.S.C. 794; and the American with Disabilities Act (“ADA”), 42 U.S.C. § 12132. New Horizons filed a Complaint on March 14, 2017, and the Motion for Preliminary Injunction on the basis of the Class 1 designation on March 17, 2017. (Filing No. 1; Filing No. 7.) Soon after the denial of the variance request, New Horizons filed Supplemental briefing in support of its Motion for Preliminary Injunction on July 17, 2017. (Filing No. 34.)


         “A preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 24 (2008). Granting a preliminary injunction is “an exercise of a very far-reaching power, never to be indulged in except in a case clearly demanding it.” Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 389 (7th Cir. 1984) (citation and quotation marks omitted). When a district court considers whether to issue a preliminary injunction, the party seeking the injunctive relief must demonstrate that:

(1) it has a reasonable likelihood of success on the merits of its claim; (2) no adequate remedy at law exists; (3) it will suffer irreparable harm if preliminary injunctive relief is denied; (4) the irreparable harm it will suffer without preliminary injunctive relief outweighs the irreparable harm the nonmoving party will suffer if the preliminary injunction is granted; and (5) the preliminary injunction will not harm the public interest.

Platinum Home Mortg. Corp. v. Platinum Fin. Group, Inc., 149 F.3d 722, 726 (7th Cir. 1998). The greater the likelihood of success, the less harm the moving party needs to show to obtain an injunction, and vice versa. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, Inc., 549 F.3d 1079, 1086 (7th Cir. 2008).


         New Horizons challenges DHS's interpretation of the Indiana statutes in classifying its planned home as a Class 1 structure and asserts two claims. First, New Horizon argues that the variance denial was a failure to accommodate under all three federal statutes (ADA, FHAA, and the Rehabilitation Act). Secondly, it asserts it that DHS's Class 1 determination represents intentional discrimination in violation of the three statutes as well as equal protection.

         Indiana Code § 22-12-1-4 provides that Class 1 structures are structures where any part of the building or structure is intended to be used or occupied by any of the following: (1) the public; (2) three or more tenants; or (3) one or more persons who act as employees of another.

         Indiana Code § 22-12-1-5 provides that a Class 2 structure is a structure where any part of the building or structure is intended to contain only one dwelling unit or two dwelling units unless any part of the building or structure is regularly used as a Class 1 structure.

         Indiana Code § 12-28-4-8 provides:

(a) A residential facility for individuals with a developmental disability:
(1) for not more than eight (8) individuals with a developmental ...

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