PLACE OF GRACE, INC. v. STATE OF INDIANA et al

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
PLACE OF GRACE, INC., 	)
)
Plaintiff, 	)
)
v. 	) 	No. 1:24-cv-01272-TWP-MKK
)
EXECUTIVE DIRECTOR, INDIANA
DEPARTMENT OF HOMELAND SECURITY in
his official capacity,
)
)
)
INDIANA DEPARTMENT OF HOMELAND
SECURITY,
)
)
THE MEMBERS OF THE FIRE PREVENTION
AND BUILDING SAFETY COMMISSION,
)
)
)
Defendants. 	)
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
AND MOTION TO RECONSIDER
This matter is before the Court on cross-motions for summary judgment filed pursuant to
Federal Rule of Civil Procedure 56 by Plaintiff Place of Grace, Inc. ("Place of Grace" or "Plaintiff")
(Filing No. 87) and Defendants the Indiana Department of Homeland Security ("DHS"), DHS's
Executive Director, and the Members of the Fire Prevention and Building Safety Commission (the
"Commission") (collectively, "Defendants") (Filing No. 90). Also before the Court is Plaintiff's
Motion to Reconsider (Filing No. 99). Plaintiff alleges that Defendants have unlawfully classified
its group recovery homes as Class 1 structures under Indiana's building laws and refused to grant
variances from Class 1 requirements, in violation of the Fair Housing Amendments Act, 42 U.S.C.
§ 3604(f); the Americans with Disabilities Act, 42 U.S.C. § 12132; and the Rehabilitation Act, 29
U.S.C. § 794. For the reasons explained below, the Court grants Plaintiff's Motion for Summary
Judgment, denies Defendants' Cross-Motion, grants Plaintiff a permanent injunction and
monetary damages, and denies as moot Plaintiff's Motion to Reconsider.
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I. 	BACKGROUND
A. 	Preliminary Issues
The Court will begin by addressing two preliminary issues raised by Plaintiff: Defendants'
compliance with Local Rule 56-1; and the admissibility of Justin Guedel's Declaration.
1. 	Compliance with Local Rule 56-1
Plaintiff claims that Defendants' Opening Brief1 fails to comply with Local Rule 56-1(a)
and (b), so Plaintiff's material facts should be deemed as admitted without controversy (Filing No.
98 at 10–11). Local Rule 56-1 provides that a movant's summary judgment brief "must include a
section labeled 'Statement of Material Facts Not in Dispute' containing the facts: (1) that are
potentially determinative of the motion; and (2) as to which the movant contends there is no
genuine issue"; and that the non-movant's response "must include a section labeled 'Statement of
Material Facts in Dispute' that identifies the potentially determinative facts and factual disputes
that the party contends demonstrate a dispute of fact precluding summary judgment." S.D. Ind.
L.R. 56-1(a)–(b) (emphases added).
Defendants' Opening Brief fails to include either a "Statement of Material Facts Not in
Dispute" (as to its Cross-Motion) or "Statement of Material Facts in Dispute" (as to Plaintiff's
Motion). Instead, Defendants include a "Relevant Facts" section (Filing No. 92). Defendants argue
that the required "Material Facts" sections "do[] not make sense" for cross-motions, and that a
"simpler title, 'Relevant Facts'" is appropriate (Filing No. 105 at 25). Defendants also argue that
they complied with Local Rule 56-1(e) by supporting their "Relevant Facts" with citations to
evidence, but Defendants' compliance with Rule 56-1(e) is not at issue.
1 The parties filed combined briefs on their cross-motions. For ease of reference, the Court refers to each party's first
brief as its "Opening Brief," and each party's second brief as its "Reply."
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Defendants are wrong to assume that they may ignore a Local Rule whenever they believe
it "does not make sense." And their failure to adhere to Local Rule 56-1 has made briefing in this
case more confusing, not less. The lack of a "Material Facts in Dispute" section makes it more
difficult for the Court to discern which of Plaintiff's material facts, if any, are disputed by
Defendants. And the inclusion of all "Relevant Facts" leaves Plaintiff to guess which facts
Defendants contend are material. Defendants argue that their Reply clarifies that all "Relevant
Facts" are material, but Plaintiff could not have known that when preparing its Reply, and it does
not excuse Defendants' noncompliance with the Local Rules (Filing No. 105 at 25).
Fortunately, Defendants' noncompliance with Local Rule 56-1 has no effect on the Court's
summary judgment analysis, since the parties dispute very few, if any, facts. The parties instead
focus on the materiality of undisputed facts. To the extent Defendants' Opening Brief does not
dispute Plaintiff's material facts, the Court deems those material facts as admitted without
controversy. Plaintiff does not ask the Court to strike Defendants' "Relevant Facts" or ignore
Defendants' evidence, so to the extent Defendants' "Relevant Facts" are not legal conclusions or
argument, are supported by admissible evidence, and are not disputed by Plaintiff's Reply, the
Court will consider those facts to be undisputed. All undisputed facts material to the Court's
decision are included in this Order.
2. 	Admissibility of Justin Guedel's Declaration
Defendants designate the Declaration of Justin Guedel ("Mr. Guedel"), General Counsel
for DHS (Filing No. 91-1 ¶ 2). A substantial portion of Mr. Guedel's Declaration consists of
assertions about fire risks, including, for example:
. . . . Residential structures intended to be occupied as Class 1 structures, in general,
carry a higher set of risks . . . than those occupied as Class 2 structures. . . .
The reason Class 1 structures as a general principle carry a higher set of risks . . . is
that the more occupants there are in a structure who have the legal right to occupy
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the structure or part of it interpedently of other occupants, the less control an
occupant has to implement safeguards to protect against the risk of fire and other
hazards which begs for a greater state regulation. . . . .
[G]roup living arrangements . . . present a higher fire safety risk for all occupants
in the group structure. . . .
Single family homes, including foster homes in a single dwelling unit structure . . .
do not . . . pose the same risk of fire to members of the household as do group living
operations organized in the same manner as the Plaintiffs' operations—even if they
contain many occupants. . . .
Multi-tenant residential group living arrangements . . . pose different building and
fire safety concerns than the average single family or foster home because, in many
cases, employees of the group home use and even occupy the structures. . . .
(Filing No. 91-1 ¶¶ 6–16).
Plaintiff argues that Mr. Guedel is not an expert in fire safety or fire risks, and his opinions
on factors that increase or decrease fire risks are inadmissible expert opinions (Filing No. 98 at
26–27). Defendants concede that Mr. Guedel is not an expert but argue that Mr. Guedel's assertions
are admissible lay testimony, as Mr. Guedel's Declaration merely "explains the defendants'
reasoning underlying their enforcement of state law." (Filing No. 105 at 26–27).
Mr. Guedel may testify as to Defendants' proffered reason for applying State building laws
as they do (because Defendants believe that group homes present greater fire risks than other
single-family homes). However, Mr. Guedel may not testify as to whether that proffered reason is
in fact true. His assertions and opinions on what factors or conditions increase fire risks or inhibit
fire safety are not based on Mr. Guedel's personal knowledge, and he is not an expert on fire safety
or fire risks. Those portions of Mr. Guedel's Declaration are inadmissible expert testimony, and the
Court will not consider them. The Court will also not consider any legal conclusions or arguments
in Mr. Guedel's Declaration, as they are not admissible evidence (Filing No. 91-1 ¶¶ 5, 14, 20–22).
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B. 	Federal Antidiscrimination Statutes
Plaintiff brings claims under the Fair Housing Amendments Act ("FHAA"), the Americans
with Disabilities Act ("ADA"), and the Rehabilitation Act. The Fair Housing Act prohibits housing
discrimination on the basis of race, color, religion, or national origin. The FHAA extends
protections to persons with disabilities. The current Fair Housing Act makes it unlawful "[t]o
discriminate in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any buyer
or renter because of a handicap." 42 U.S.C. § 3604(f)(1). Title II of the ADA provides that "no
qualified individual with a disability shall, by reason of such disability, be excluded from
participation in or be denied the benefits of the services, programs, or activities of a public entity,
or be subjected to discrimination by any such entity." Id. § 12132. And under the Rehabilitation
Act, "[n]o otherwise qualified individual with a disability . . . shall, solely by reason of her or his
disability, be excluded from the participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving Federal financial assistance." 29 U.S.C.
§ 794(a). The Court need not conduct a separate analysis for claims brought under the FHAA,
ADA, and Rehabilitation Act because "the same analysis generally applies under all three statutes."
Valencia v. City of Springfield, 883 F.3d 959, 967 (7th Cir. 2018).
C. 	Indiana Building Laws
Indiana law divides structures into two classes: Class 1 and Class 2. Class 1 is the more
commercial of the two classes and includes office buildings and apartments. Class 2 structures are
often residential structures, like a single-family home.
A Class 2 structure is defined as a "townhouse or a building or structure" intended to
contain one or two dwelling units "unless any part of the building or structure is regularly used as
a Class 1 structure." Ind. Code § 22-12-1-5. A Class 1 structure is defined as:
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(1) A building or structure that is intended to be or is occupied or otherwise used in
any part by any of the following:
(A) The public.
(B) Three (3) or more tenants.
(C) One (1) or more persons who act as the employees of another.
Ind. Code § 22-12-1-4(a). The Indiana Code does not define "tenant" for purposes of § 22-12-1-4.
Class 1 and Class 2 structures differ not just in how they are defined, but also in how they
are regulated. The structures are governed by separate sections of the Indiana Administrative Code
and are subject to different requirements (Filing No. 87-1 at 12:24–14:12, 17:14–18; Filing No.
87-2 at 11:23–13:10).2 Class 1 structures are generally subject to heightened construction standards
and elevated design requirements, including sprinkler systems (Filing No. 87-2 at 14:12–17:23).
Class 2 structures are not, and cannot be, required to install sprinklers. Id. at 17:24–18:1; Ind. Code
§ 22-13-2-3.5 (prohibiting state and local laws requiring sprinkler systems in Class 2 structures).
Any time a Class 1 structure is built, or alterations are made, a construction design release
must be pre-approved by DHS (Filing No. 87-1 at 18:22–19:25; Filing No. 87-2 at 9:10–25). This
process entails paying a fee and submitting architectural plans (Filing No. 87-1 at 21:13–22:22;
Filing No. 87-3). If a Class 1 structure is built, or if construction is begun, without a pre-approved
design release, then the person who engages in the construction and the person with control over
the structure commit a Class C infraction. Each day of the violation is a new infraction, and the
penalty for each infraction is $500.00. Ind. Code § 22-15-1-1, § 22-14-3-7, and § 34-28-5-4(c).
If a Class 2 structure is converted to a Class 1 structure through a change in use, it generally
must satisfy all Class 1 requirements, including a sprinkler system (Filing No. 87-2 at 11:7–17,
21:11–14). There are two processes for potentially obtaining an exception to these requirements,
2 For all citations to deposition transcripts, the Court refers to deposition page numbers and not ECF page numbers.
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though only one is available to Plaintiff because of how DHS classifies the Homes. Id. at 22:11–
23:12, 73:4–10. In the available process, design professionals will examine a structure and assign
"points" for safety features. If a structure scores enough points, the sprinkler requirement (or other
safety feature) may be eliminated. However, a structure might need to be modified to earn enough
"points." Id. at 21:19–22:17, 23:13–20.
Class 1 structures are subject to inspection and code enforcement actions by DHS. Id. at
10:23–11:6. If DHS inspects a structure and finds that it fails to comply with Class 1 requirements,
DHS may levy fines or seek the closure of the structure. Id. at 18:22; Ind. Code § 22-12-7-7.
A variance can be granted for any Class 1 or Class 2 requirements, but there is no variance
to change a structure's classification (Filing No. 87-2 at 27:11–17). Variance applications, and an
application fee, must be submitted to DHS. Id. at 33:22–34:19; Ind Code § 22-13-2-11. DHS has
the exclusive right to either rule on a variance application or refer it to the Commission. 675 Ind.
Admin. Code 12-5-5.3. The Commission may rule on a variance request only if DHS refers it to
the Commission (Filing No. 87-2 at 29:7–32:8).
The Commission adopts state-wide building and fire safety laws that are enforced by DHS
and local agencies. The Commission itself has no enforcement authority. Id. at 24:2–15, 26:3–7,
p. 122; Filing No. 87-16 at 8:11–19); Ind. Code §§ 22-12-2-2, -2.5-3, and -2.5-4. The Commission
is legally distinct from DHS, but all of its staff and facilities are provided by DHS (Filing No. 87-
2 at 26:10–16); Ind. Code § 22-12-2-7. When a variance request is referred, DHS staff will prepare
digital notes for the Commission, and DHS staff may make presentations to the Commission about
the request (Filing No. 87-2 at 32:20–33:21).
D. 	Defendants' Application of Building Laws
A few years ago, this Court addressed DHS's classification of group homes for persons
with disabilities. In New Horizons Rehabilitation, Inc. v. State, 400 F. Supp. 3d 751 (S.D. Ind.
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2019) ("New Horizons"), the plaintiff, New Horizons, operated group homes for adults with
intellectual and developmental disabilities. Id. at 755. New Horizons had planned to build a new
group home, but DHS classified the proposed home as a Class 1 structure that would need a
sprinkler system. New Horizons requested a variance from the sprinkler requirement, which was
denied. In July 2019, the Court issued its summary judgment decision finding that Defendants'
classification of the home as a Class 1 structure violated the FHAA, ADA, and Rehabilitation Act.
In New Horizons, DHS asserted that under Indiana Code § 22-12-1-4, New Horizons'
residents would each be individual "tenants," but foster children would not be. DHS did not explain
the reason for this distinction. The Court held, in part, that "[w]ithout being held to a strict
definition of the word 'tenant,'" DHS was able to arbitrarily treat adults with disabilities as
individual tenants but not foster children, resulting in disparate treatment. Id. at 767–68. The Court
permanently enjoined DHS from treating the group home as a Class 1 structure. Id. at 770.
Less than a year after the New Horizons decision, DHS issued a public notice (the "DHS
Notice") to "clarify when supportive living facilities (facilities that provide staff to its residents to
assist with daily living activities) are considered Class 1 or Class 2 Structures." (Filing No. 87-1
at p. 145). The DHS Notice includes a definition of "tenant" for purposes of § 22-12-1-4:
A tenant is someone, or some group that either: (1) has possession of a unique
portion of a structure; or (2) occupies a structure on unique or independent terms
from other occupants. The overarching concern is whether the person or persons
occupying, or intending to occupy, the structure or portion of the structure, are
doing so independently or as a single occupant.
Id. The definition's key terms and phrases, including "possession," "unique portion," and "unique
or independent terms," are not defined in the DHS Notice.
The next month, the State Building Commissioner (a DHS appointee) issued a written
interpretation to explain when short-term rentals, specifically AirBnBs, are Class 1 or 2 structures.
The purpose of this interpretation was "to avoid any one-dwelling-unit structure from being open
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to as many occupants or tenants as a operator desire [sic]." (Filing No. 87-2 at 45:7–15). The
interpretation explains that an AirBnB rented out to one group under one agreement, regardless of
the group's size, would have one "tenant" and be a Class 2 structure, but a home rented to three
people at three separate times would have three "tenants" and be a Class 1 structure (Filing No.
87-1 at 39:16–40:6, 146–47).
During Rule 30(b)(6) depositions, DHS elaborated on how it decides whether a group of
individuals is one or multiple "tenants." DHS's designee, Mr. Guedel, at first explained that the
definition "is geared towards if there's a structure that is broken up into . . . separate locations . . .
where one occupant only can occupy one quadrant of the structure. . . . [I]f it was broken up that
way, then you'd have as many tenants as spaces." Id. at 30:22–31:9. But where an occupant lives
in a structure is not determinative—if several recovery home residents share a bedroom, they are
still separate tenants; and if each child in a nuclear family has a separate bedroom, all of the
children are still one tenant. Id. at 37:25–38:15, 62:21–25.
According to Mr. Guedel, DHS determines whether an occupant is a distinct "tenant" based
on whether all occupants enter into one agreement to occupy a structure, or whether each occupant
enters into his or her own agreement (regardless of whether the terms of each agreement are the
same). The agreement can be formal or informal and involve any type of consideration, including
an occupant's promise to abide by behavioral conditions. Id. at 58:21–59:18.
So a home rented to a "group of college kids . . . for the same duration" would be rented to
one "tenant," while a home rented to students where each student has a different lease term would
have as many "tenants" as students. Id. at 31:16–24, 37:16–24. Similarly, if a group of twenty
unrelated adults rented a home through AirBnB, the number of "tenants" would depend on whether
the group rented the home as one group, or as twenty individuals. In short, according to DHS,
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individual occupants are distinct "tenants" if they have "no control over who their other co-tenants
were," and their occupancy agreements are not tied to other occupants' agreements. Id. at 39:16–
40:6, 41:21–42:14, 64:1–10, 65:24–66:6, 82:23–83:5.
Based on the above rationale, DHS asserts that a nuclear family home could theoretically
have several "tenants," assuming each member of a nuclear family enters into a separate occupancy
agreement with the home's operator. And a recovery home could theoretically have only one
"tenant," if all occupants enter into a single occupancy agreement. Id. at 49:16–50:13. However,
DHS is not aware of any nuclear family home that is classified as Class 1, nor any group recovery
home with more than two occupants that is classified as Class 2, other than the New Horizons
home, which is treated as Class 2 pursuant to court order (Filing No. 87-1 at 48:20–49:7; Filing
No. 87-2 at 53:25–54:15).
What about adult children, or foster children, who enter and leave a parent's home
independent of their siblings? Are those children individual "tenants"? If parents were to allow
their adult children to move in or out "as they please," DHS would still classify the family home
as a Class 2 structure because the adult children would have no lease or tenancy agreement, have
"no possessory interest of that home," and because DHS would consider them to be "guests" or
"invitees" of the parents (Filing No. 87-1 at 47:20–48:19; Filing No. 87-2 at 57:2–15, 59:19:–
60:5). Foster children—like recovery home residents—may enter and leave homes at different
times pursuant to separate agreements (involving payment) between the State and the home's
owner (Filing No. 87-2 at 60:14–25). But according to DHS, foster children are not separate
"tenants" because DHS considers a "custody arrangement" to be distinct from a "tenancy
arrangement," and the foster children "would just become a guest or a dependent of the tenant."
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Id. at 61:1–17, 87:21–88:8. The fact that foster parents owe legal duties to foster children is also
material to DHS. Id. at 88:9–18.
E. 	Place of Grace
1. 	The Program and the Residents
Place of Grace is a non-profit organization whose purpose is to provide faith-based
residential recovery services to persons suffering from substance-abuse disorders (Filing No. 87-
10 ¶ 3). Place of Grace operates four group homes in Huntington, Indiana, three of which are at
issue: one home on Guilford Street (the "Guilford Street Home"), which is leased by Place of Grace
and began operating in 2017; and two homes on Superior Street (the "Superior Street Homes")
(collectively, the "Homes"), which Place of Grace constructed and opened in 2024. Id. ¶¶ 5–6.
To be eligible for Place of Grace's recovery program, participants must suffer from
substance abuse disorders. Id. ¶ 7. The Homes' residents (the "Residents") are all women who
suffer with these disorders. They come to Place of Grace from a variety of places, including jails
or prisons and short-term inpatient programs, among other referral sources. Id. ¶ 8. At the time
Residents enter the program, their substance abuse disorders are not controlled, and they suffer
from substantial limitations in many life activities, including caring for themselves, performing
manual tasks, learning, reading, concentrating, thinking, working, and communicating with others.
Id. ¶ 10. Throughout the program, Residents learn how to appropriately care for themselves,
interact with others, perform ordinary tasks, and live successful sober lives. Id. ¶ 11. All Residents
complete a written application and undergo a personal interview and background check before
being admitted to Place of Grace's program. Id. ¶ 8.
The program has four phases (the fourth is a "transitional" phase), followed by a "graduate"
phase. Id. ¶ 13. Women in the first three phases reside in the Guilford Street Home, and women in
the fourth/transitional phase and graduate phase reside in one of the Superior Street Homes. In
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each phase, Residents have individualized treatment plans and receive individual and group
treatment designed to assist with substance abuse disorders. Id. ¶ 15. The treatments include
programming provided by staff on substance abuse, employment readiness, peer counseling, life
skills, and recovery. Id. ¶ 16. Residents also participate in Narcotics Anonymous, Alcoholics
Anonymous, or Celebrate Recovery meetings, religious programming, and, if needed, mental
health counseling from local mental health centers. Id. ¶¶ 17–18. Residents in the "graduate" phase
still receive treatment and are not "recovered." Id. at ¶ 14; (Filing No. 87-15 at 9:17–10:15).
Residents all agree in writing to various program requirements and expectations, including
a ban on the use of drugs or alcohol, a ban on using candles and incense in the Homes, and a curfew
(Filing No. 87-10 ¶ 22, pp. 20–32; Filing No. 87-15 at 22:19–21). Residents at all phases, including
the graduate phase, are frequently screened for drugs and alcohol (Filing No. 87-10 ¶ 12).
Residents may smoke cigarettes only in a designated, paved outdoor are, and may not smoke in
the Home. Id. at pp. 20, 25. Residents may not leave the Homes freely. They are provided passes
to leave for increasing durations as they progress through the program. Id. ¶ 20. Residents are
subject to drug and alcohol screening upon their return from using a pass. Id. ¶ 21.
Residents are expected to obtain a job by the second phase and maintain that employment.
Id. ¶ 24. Residents agree to pay a weekly fee ($50.00 for the first three phases, $100.00 for the
transitional phase, and $125.00 for the graduate phase). Id. ¶ 23. Although Place of Grace has the
authority to remove Residents from the Homes for non-payment of the fee, it never has. Id. ¶ 25.
2. 	The Homes and Variance Requests
a. 	The Guilford Street Home
The Guilford Street Home houses women in the first three phases of the program, which
take at least four to six months, or longer, depending on a Resident's progress and needs. Id. ¶ 27.
The Guilford Street Home is certified as recovery residences by the Indiana Family and Social
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Services Administration's Division of Mental Health and Addiction ("Division of Mental Health").
It can house up to nine Residents, plus a live-in house manager who remains in the Home to
provide supporting living services designed to assist the Residents in their use and enjoyment of
the Home for residential purposes. Id. ¶ 30. The Guilford Street Home has smoke detectors, exit
signs, fire extinguishers, and maps showing fire exits. Id. ¶ 34.
The Guilford Street Home has three bedrooms, which are shared. Id. ¶ 32. Residents do not
have exclusive possession of any portion of the Home, but they have a dresser, nightstand, and
closet space for personal possessions. Id. ¶ 33. Although Residents of the Guilford Street Home
receive formal programming, the key to their treatment is living as a family and supporting each
other in achieving recovery. Id. ¶¶ 37–38; (Filing No. 87-11 at 8:21–9:4, 12:24–13:5). Residents
are responsible for the day-to-day operation of the Guilford Street Home, and they manage the
Home communally as a family. They eat most meals together and share the responsibility for
preparing meals, although they are permitted to use the kitchen to prepare their own meals (Filing
No. 87-10 ¶¶ 35–36; Filing No. 91-7 at 77:14–78:3).
In 2022, the Huntington fire marshal informed the Executive Director of Place of Grace,
Brittany Renkenberger ("Ms. Renkenberger"), that the Guilford Street Home (when used as a
recovery home) is a Class 1 structure, and it could not operate without a sprinkler system or a
variance (Filing No. 87-10 ¶ 39). Place of Grace therefore submitted a variance application to DHS
stating that it could not afford the sprinkler system. Id. ¶¶ 41, p. 44.
DHS referred the variance application to the Commission. Ms. Renkenberger appeared
before the Commission to discuss the application, but the Commission did not then rule on it.
Instead, the Commission directed Ms. Renkenberger to obtain another estimate for the sprinkler
system. Id. ¶ 43. Ms. Renkenberger received an estimate of $32,000.00 and returned to meet with
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the Commission the next month. Id. ¶ 44. According to the minutes for the meeting, the State Fire
Marshal (a DHS employee) indicated that Place of Grace "should be in compliance with the
commercial 	code, 	which 	requires 	a 	sprinkler 	system." 	Id. 	¶ 45, 	p. 50. The 	Commission
conditionally granted the variance until December 31, 2024, to allow Place of Grace to install a
sprinkler system on or before that date. Id. ¶ 46, p. 52. The Commission has since stayed this
deadline pending entry of final judgment in this action (Filing No. 53).
b. 	The Superior Street Homes
The Superior Street Homes were built by Place of Grace and opened in 2024 (Filing No.
87-10 ¶ 6). They were designed as identical four-bedroom, single-family residences in a residential
neighborhood. Id. ¶ 47. Initially, Place of Grace planned for the Homes to be built by Habitat for
Humanity of Greater Fort Wayne ("Habitat for Humanity"), which would have cost $164,000.00
for both Homes (Filing No. 87-12 ¶¶ 10–11). Habitat for Humanity only builds Class 2 structures,
and it had planned to build the Superior Street Homes as such. Id. ¶¶8–9.
Before construction began, the Huntington Building Commissioner informed Habitat for
Humanity that DHS would consider the planned Homes to be Class 1 structures if they housed
three or more occupants recovering from substance abuse, even though the Homes would be Class
2 structures if nuclear families3 lived in them. Id. ¶ 12; (Filing No. 87-2 at 70:1–71:1).
Generally, if the Building Commissioner believes that a structure will be a Class 1 structure,
he will not issue a building permit unless and until a construction design release is approved by
DHS (Filing No. 87-13 ¶ 5). If he is uncertain whether a structure is Class 1 or Class 2, he may
consult with DHS's Plan Review Section. Id. ¶ 7. The Building Commissioner believed that Place
of Grace planned to build only one home on Superior Street, and he emailed DHS's Plan Review
3 During Mr. Guedel's depositions, "nuclear family" meant parents and their children (Filing No. 87-1 at 37:25–38:6).
This Court uses "nuclear family" in the same way in this Order.
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Section about the one home. Id. ¶¶ 8–10. A member of the Plan Review Section responded that the
home would be a Class 1 structure, even though it would be a Class 2 structure if it were being
occupied by a couple with minor children. Id. ¶¶ 11–12.
Habitat for Humanity did not have the capacity to build a Class 1 structure, so it informed
Place of Grace that it could not build the Superior Street Homes (Filing No. 87-12 ¶¶ 13–14). As
a result, the Superior Street Homes were built by a commercial builder, Woodmark Homes, which
in turn hired an architect (Filing No. 87-10 ¶ 50). Woodmark Homes charged Place of Grace
$267,436.89 and $266,759.22 for the Superior Street Homes, respectively. Id. ¶ 51. The architect's
design releases were submitted to DHS and approved, and the Superior Street Homes were built
with sprinkler systems. Id. ¶ 52; (Filing No. 87-14 at 8:18–20, 9:25–10:1, 51:6–15, pp. 101–94).
Place of Grace had raised enough money to pay the entirety of Habitat for Humanity's construction
costs, but Place of Grace was not able to pay all of Woodmark Homes' costs, so it secured a
mortgage to pay for the Superior Street Homes (Filing No. 87-10 ¶¶ 53–54).
The Superior Street Homes are set up to allow Residents to support themselves as a family
while they recover from substance abuse disorders, and this type of living environment is essential
to their recovery. Id. ¶ 77. Residents live as a family, sharing meals, responsibility, and life. Id.
¶ 79. The Superior Street Homes do not have a live-in manager, but they are regularly visited by
Place of Grace staff who assist with programming and provide other services. Id. ¶ 78. The
Superior Street Homes are controlled in large part by the Residents, who are responsible for the
day-to-day operation of the Homes. Id. ¶ 80.
As noted above, one of the Superior Street Homes is for Residents in the fourth/transitional
phase of Place of Grace's program (the "Transitional Home"), and the other is for Residents in the
graduate phase (the "Graduate Home"). Residents may remain in the Transitional Home for a
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minimum of eight weeks and in the Graduate Home for six to eighteen months. Id. ¶ 60. Each
Home houses up to four women. Id. Residents have their own bedrooms, but they do not have
exclusive possession of any part of the Homes. Id. ¶¶ 61–62. Place of Grace staff may enter their
bedrooms at any time. Id.
In the Transitional Home, Residents meet with Place of Grace's recovery coach, participate
in mutual-aid group meetings and house meetings in the Transitional Home, and return to the
Guilford Street Home at least three times a week for group sessions. Id. ¶¶ 66–67. They remain
actively involved in the daily running of and responsibility for the Transitional Home, with staff
providing supportive living services. Id. ¶ 69. Residents have greater freedom in the Transitional
Home than in the Guilford Street Home, but they are still subject to drug and alcohol screens.
Transitional Residents have not yet developed the skills and incorporated the treatment such that
they can live independently without the risk of relapse. Id. ¶¶ 70–71.
To be approved to live in the Graduate Home, Residents must have successfully completed
the earlier phases of Place of Grace's program, but they must still need ongoing assistance and be
unable to live safely on their own without a serious risk of relapse. Id. ¶¶ 72, 77. Residents of the
Graduate Home are considered sober but not recovered. They are still working on their recovery
and work with staff to sustain their sobriety and prevent relapse. Id. ¶ 73; (Filing No. 87-15 at
12:21–22). Graduate Residents can leave the Home at any time but still receive and need
supportive services (Filing No. 87-15 at 12:11–13:8). They are also still subject to drug and alcohol
screens (Filing No. 87-10 ¶¶ 73–75, 79). They meet with a recovery coach, participate in house
meetings at the Home, and attend at least one mutual-aid group meeting per week away from the
Home. Residents continue to share meals, chores, and responsibilities for the Graduate Home, and
they help and support each other to continue their sobriety and prevent relapse. Id. ¶¶ 77–78. Place
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of Grace staff are in the Graduate Home multiple times a week to provide supporting living
services to support the Residents' use and enjoyment of the Graduate Home. Id. ¶ 79. Graduate
Residents also mentor Guilford Street Residents, which benefits both groups of women. Id. ¶81.
F. 	Procedural History
Several related actions have been filed in this Court challenging DHS's classification of
group recovery homes as Class 1 structures. Four actions have proceeded to summary judgment:
Inspiration Ministries, Inc. v. State of Indiana, No. 1:23-cv-2027; Next Step Recovery Home, Inc.
v. State of Indiana, No. 1:24-cv-353; Harmony Home of Huntington, Inc. v. Indiana Department
of Homeland Security, No. 1:24-cv-1228; and Place of Grace, Inc. v. State of Indiana, No. 1:24-
cv-1272. In November 2024, the Court entered a preliminary injunction in Next Step, enjoining
the State and DHS from classifying the plaintiff's group home as a Class 1 structure and ordering
that the home be treated as a Class 2 structure. 755 F. Supp. 3d 1077, 1095 (S.D. Ind. 2024).
The parties in the four related cases conducted consolidated discovery and filed cross-
motions for summary judgment with identical, consolidated briefs. The plaintiffs in Harmony
Home and Place of Grace have also moved for reconsideration of the Court's dismissal of the
plaintiffs' failure to accommodate claims against DHS in those cases. Defendants have not filed a
response to the motions for reconsideration, and the deadline to do so has passed. As such, all
pending motions in the related cases are ripe for the Court's review.
II. 	LEGAL STANDARD
The purpose of summary judgment is to "pierce the pleadings and to assess the proof in
order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986). Federal Rule of Civil Procedure 56 provides that summary
judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is no genuine issue as to any material
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fact and that the moving party is entitled to a judgment as a matter of law." Hemsworth v.
Quotesmith.com, Inc., 476 F.3d 487, 489–90 (7th Cir. 2007). In ruling on a motion for summary
judgment, the court reviews "the record in the light most favorable to the nonmoving party and
draw[s] all reasonable inferences in that party's favor." Zerante v. DeLuca, 555 F.3d 582, 584 (7th
Cir. 2009). "However, inferences that are supported by only speculation or conjecture will not
defeat a summary judgment motion." Dorsey v. Morgan Stanley, 507 F.3d 624, 627 (7th Cir. 2007)
(citation and quotation marks omitted). Additionally, "[a] party who bears the burden of proof on
a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific
factual allegations, that there is a genuine issue of material fact that requires trial." Hemsworth,
476 F.3d at 490 (citation omitted). "The opposing party cannot meet this burden with conclusory
statements or speculation, but only with appropriate citations to relevant admissible evidence."
Sink v. Knox Cnty. Hosp., 900 F. Supp. 1065, 1072 (S.D. Ind. 1995) (citations omitted).
"In much the same way that a court is not required to scour the record in search of evidence
to defeat a motion for summary judgment, nor is it permitted to conduct a paper trial on the merits
of [the] claim." Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001) (citations and quotation
marks omitted). "[N]either the mere existence of some alleged factual dispute between the parties
nor the existence of some metaphysical doubt as to the material facts is sufficient to defeat a motion
for summary judgment." Chiaramonte v. Fashion Bed Grp., Inc., 129 F.3d 391, 395 (7th Cir. 1997)
(citations and quotation marks omitted).
These same standards apply even when each side files a motion for summary judgment.
The existence of cross-motions for summary judgment does not imply that there are no genuine
issues of material fact. R.J. Corman Derailment Servs., LLC v. Int'l Union of Operating Eng'rs,
335 F.3d 643, 647 (7th Cir. 2003). The process of taking the facts in the light most favorable to
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the non-moving party, first for one side and then for the other, may reveal that neither side has
enough to prevail without a trial. Id. at 648. "With cross-motions, [the court's] review of the record
requires that [the court] construe all inferences in favor of the party against whom the motion under
consideration is made." O'Regan v. Arb. Forums, Inc., 246 F.3d 975, 983 (7th Cir. 2001) (citation
and quotation marks omitted).
III. 	DISCUSSION
"A plaintiff may prove a violation of the FHA, ADA, or Rehabilitation Act by showing:
(1) disparate 	treatment; 	(2) disparate 	impact; 	or 	(3) a 	refusal 	to 	make 	a 	reasonable
accommodation." Valencia, 883 F.3d at 967. "For each respective theory, the same analysis
generally applies under all three statutes." Id. Plaintiff alleges that Defendants violated these
statutes by intentionally discriminating against its Residents, constituting disparate treatment, and
by failing to grant a variance from the Class 1 sprinkler system requirement, constituting a failure
to accommodate (Filing No. 88 at 44).
Defendants' Opening Brief begins with four "foundational" arguments and then argues that
there was no disparate treatment because Defendants treat the Homes the same as other group
living arrangements, that Plaintiff's requested accommodation is not reasonable or necessary, and
that specific affirmative defenses bar Plaintiff's claims. The Court will first address Defendants'
"foundational" arguments, then Plaintiff's claims in turn, followed by Defendants' affirmative
defenses, and then Plaintiff's requested relief.
A. 	Defendants' Initial Arguments
At the outset of their argument, Defendants make four contentions. The first contention—
that Defendants enforce fire safety laws to protect the public from fire risks—is immaterial because
Plaintiff need not show an impermissible intent to prove disparate treatment or a failure to
accommodate. See Washington v. Ind. High Sch. Athletic Ass'n, Inc., 181 F.3d 840, 846 (7th Cir.
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1999). The second contention—that Defendants "enforce fire safety laws indiscriminately"—is not
a "foundational matter." It is instead an argument in opposition to Plaintiff's disparate treatment
claim and will be considered as such. The third contention—that this case does not concern zoning
rules—takes issue with the Court's use of the phrase "zoning laws," rather than "building laws," in
prior orders in this and related cases (Filing No. 92 at 29). The Court recognizes that this case does
not involve zoning laws, but there is nothing to suggest that the use of the phrase "zoning laws"
caused any genuine confusion, so the Court will not address this contention further.
The fourth contention—that the Homes are in fact Class 1 structures under Indiana Code
§ 22-12-1-4—is neither "foundational" nor material. It is undisputed that Defendants classify the
Homes as Class 1 structures, and the primary issue is whether that classification is discriminatory.
Whether the Homes are in fact Class 1 structures is therefore not dispositive of whether the
classification is discriminatory. By way of example, if Defendants explicitly defined "tenant" under
§ 22-12-1-4 as "a person recovering from a substance abuse disorder," then the Homes would in
fact be Class 1 structures. Whether the resulting classification is discriminatory is a separate
question. To be sure, in New Horizons, the plaintiff did not argue, and the Court did not hold, that
the group homes were not Class 1 structures; the Court held that Defendants' classification of the
group homes (right or wrong) was discriminatory. New Horizons, 400 F. Supp. 3d at 768.
Defendants' new proffered reasons for classifying the Homes as Class 1 structures may be
relevant in determining whether Defendants' classification of the Homes is justified. The Court
will therefore address those new reasons in its analysis of Plaintiff's disparate treatment claims.
B. 	Disparate Treatment
Disparate treatment under the FHAA, ADA, and Rehabilitation Act "involves a showing
of intentional discrimination, provable via either direct or circumstantial evidence." Nikolich v.
Vill. of Arlington Heights, 870 F. Supp. 2d 556, 562 (N.D. Ill. 2012); see Tyler v. Runyon, 70 F.3d
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458, 467 (7th Cir. 1995) (Rehabilitation Act); Kormoczy v. Sec'y., U.S. Dep't of Hous. & Urban
Dev., 53 F.3d 821, 823 (7th Cir. 1995) (Fair Housing Act); Smith v. Hous. Auth. of S. Bend, 867 F.
Supp. 2d 1004, 1016 (N.D. Ind. 2012) (ADA). A plaintiff "need not prove an impermissible intent."
Washington, 181 F.3d at 846; see Alexander v. Choate, 469 U.S. 287, 296 (1985) (explaining that
the Rehabilitation Act prevents discrimination resulting not only from "invidious animus," but also
from "thoughtlessness," "indifference," or "benign neglect"). A technically neutral classification
cannot be used "as a proxy to evade the prohibition of intentional discrimination." McWright v.
Alexander, 982 F.2d 222, 228 (7th Cir. 1992); see New Horizons, 400 F. Supp. 3d at 768.
Plaintiff argues that Defendants are continuing to use Indiana's facially neutral building
laws as a proxy for discrimination, as shown by Defendants' treatment of the Homes compared to
similarly-situated foster homes and nuclear family homes4 without justification. Defendants
respond that other group living arrangements, not foster or nuclear homes, are the proper
comparators, 	and 	because 	Defendants 	treat 	the 	Homes 	the 	same 	as 	other 	group 	living
arrangements, there is no evidence of discrimination.
1. 	Similarly-Situated Comparator
"[T]he similarly-situated inquiry is flexible, common-sense, and factual." Coleman v.
Donahoe, 667 F.3d 835, 841 (7th Cir. 2012). Comparators "must be directly comparable to the
plaintiff in all material respects, but they need not be identical in every conceivable way." Id. at
846 (citation modified). "There must be 'enough common factors . . . to allow for a meaningful
comparison in order to divine whether intentional discrimination was at play.'" Id. at 847 (quoting
Barricks v. Eli Lilly & Co., 481 F.3d 556, 560 (7th Cir. 2007); see Humphries v. CBOCS West, Inc.,
4 Defendants argue that Plaintiff has an "unbounded" definition of "family," so any comparison to a "family" is
unhelpful (Filing No. 92 at 47–50). But Plaintiff does not compare the Homes to any and all "family" homes. Plaintiff
compares the Homes to only foster homes and nuclear family homes (meaning parents and their children), and
Defendants know that (see Filing No. 92 at 38–46). Plaintiff's general definition of a "family" is immaterial.
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474 F.3d 387, 405 (7th Cir. 2007), aff'd 553 U.S. 442 (2008) ("[E]ssentially, are there enough
common features between the individuals to allow a meaningful comparison?"); Crawford v. Ind.
Harbor Belt R.R. Co., 461 F.3d 844, 846 (7th Cir. 2006) (identifying the issue as whether "members
of the comparison group are sufficiently comparable to [the plaintiff] to suggest that [the plaintiff]
was singled out for worse treatment"). As long as the distinctions between the Plaintiff and its
proposed comparators are "not so significant that they render the comparison effectively useless,
the similarly-situated requirement is satisfied." Id. at 846–47 (describing the similarly-situated
standard as "flexible" with no "magic formula," and cautioning that the inquiry "should not devolve
into a mechanical, 'one-to-one mapping between employees"). "Whether a comparator is similarly
situated is 'usually a question for the fact-finder,'" and dismissal of a disparate treatment claim on
summary judgment is appropriate "only when 'no reasonable fact-finder could find that plaintiffs
have met their burden on the issue.'" Coleman, 667 F.3d at 846–47 (quoting Srail v. Vill. of Lisle,
588 F.3d 940, 945 (7th Cir. 2009)).
This Court has twice before found that foster homes are proper comparators for group
homes for disabled persons like the Plaintiff's Homes. In New Horizons, the Court held that "[t]he
different classification for homes with three foster children and homes with three disabled adults
constitutes disparate treatment." 400 F. Supp. 3d at 768. And in Next Step, the Court even more
plainly found that "[t]he Home's residents and foster children are 'similarly situated' under Indiana's
[building] laws because they live in single-family homes and use those homes in the same ways."
755 F. Supp. 3d at 1088. The Court reaches the same conclusion here.
There are ample, material similarities between the Homes and foster homes or nuclear
family homes. DHS explains that Indiana's building laws are intended to "regulate[] different
occupancy types" and "are set up just to apply certain safety provisions based on how the structure
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is being occupied," so how Residents occupy the Homes is material (Filing No. 87-1 at 25:1–6).
Like a foster family or nuclear family, the Residents spend quality time together, eat meals
together, and share common areas. Like children in a foster or nuclear family, the Residents do not
have exclusive possession of any area of the Homes. They share bedrooms, and they cannot control
when staff or co-occupants (like parents or siblings) enter their rooms. Residents are also not
allowed in certain rooms in the Homes, just as parents may bar their children from the parents'
bedroom, a home office, a basement, or even a cabinet containing medicines or cleaning supplies.
Residents have chores and must follow house rules. They need permission to leave the Homes and
can have those privileges revoked if they do not behave, like being grounded. Residents are also
similarly situated to foster children in the reason they live together—because they cannot live
independently. See Oconomowoc Residential Programs v. City of Milwaukee, 300 F.3d 775, 784
(7th Cir. 2002) ("Often, a community-based residential facility provides the only means by which
disabled persons can live in a residential neighborhood, either because they need more supportive
services, for financial reasons, or both."). These unmistakable similarities are all material, as they
relate to how Residents use and occupy the Homes.
Defendants assert that the Homes are materially distinguishable from foster homes and
nuclear family homes in two ways: the legal duties owed to occupants; and the "manner and use"
of the homes (Filing No. 92 at 39–46). The Court will address how each factor does not distinguish
the Homes from the comparator homes and, in any event, why these distinctions are not material.
First, Defendants identify several legal duties owed by foster parents to foster children, and
by parents in a nuclear family to their minor children, which Plaintiff does not owe to Residents
(Filing No. 92 at 39–43). As Plaintiff notes, though, this difference does not distinguish the Homes
from nuclear family homes with adult children (Filing No. 98 at 26; see Filing No. 92 at 41
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("Obviously, [when] residents are adults, . . . the children and foster laws cited above do not apply
. . . .")). To the extent these legal duties distinguish the Homes from foster homes and nuclear
family homes with minor children, the distinction is not material. Defendants tie this distinction to
fire risks, arguing that "[t]he higher duties and harsher penalties parents face mean that parents in
single-family homes have greater incentive to ensure the members of the family are safe from fire
than do the Plaintiffs who do not face similar liability for any negligence that results in fire." Id. at
43. However, Defendants' position that legal duties to minors are what incentivize homeowners to
prevent fire hazards is purely argumentative, and the similarly-situated analysis is based in fact.
Coleman, 667 F.3d at 841. There is no evidence that the Homes pose greater fire risks than foster
homes or nuclear family homes. What is more, the undisputed fact that Plaintiff has voluntarily
installed and imposed several fire safety measures that are not required in foster homes or nuclear
family homes strongly cuts against Defendants' argument.
Defendants imply that the absence of certain legal duties is why Plaintiff "tolerates"
Residents smoking and grilling in designated outdoor areas and cooking meals on their own. But
these fire risks are not unique to the Homes. Many parents smoke in or outside their homes, and
they often allow older children to grill and cook on their own. In sum, the difference in legal duties
owed to minor children compared to Residents is not material and does not allow for "a meaningful
comparison" between Plaintiff's Homes and foster homes or nuclear family homes. Id. at 847.
Second, Defendants cite ways in which the Residents' "manner and use" of the Homes
differs from the use of a foster home or nuclear family home. Defendants first note that Residents
do not move in and out of the Homes together, and that each Resident enters a Home "on
independent and separate bases from each other" (i.e., pursuant to individual agreements with
Plaintiff, rather than one agreement for all Residents). These factors distinguish the Residents from
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a nuclear family with minor children, but not from a nuclear family with adult children or a foster
family, where children enter and leave the homes at separate times, independently of their siblings.
This factor is also immaterial because the Residents' staggered occupancy does not affect how they
occupy the Homes once they are living there.
Defendants next point to the Homes' "conditions of occupancy." (Filing No. 92 at 44).
According 	to 	Defendants, 	the 	fact 	that 	Residents 	must 	comply 	with 	Plaintiff's 	program
requirements to remain in the Homes distinguishes them from a nuclear or foster family. But a
child's occupancy in both a foster home and a nuclear home can be, and often is, conditional. A
child's occupancy in a foster home is conditioned on payments by the State. Defendants argue that
the Residents' payments are "rent" under Indiana landlord-tenant laws, and foster payments are
not, but even assuming that the program fees are "rent"—which the Court does not now decide—
Defendants fail to explain how this distinction is material. The Court finds that it is not material.
Both payments serve the same purpose—the benefit of the homes' occupants—and the payments'
different legal classifications do not affect how the occupants use the homes. See Coleman, 667
F.3d at 841 ("[T]he similarly-situated inquiry is . . . factual.").
As to nuclear families, Defendants do not dispute that parents could condition their adult
child's occupancy in the family home on doing chores, keeping a job, or paying rent, among other
conditions.5 Yet Defendants do not consider adult children to be individual "tenants" because they
"consider adult children living in a family home to be the invitees, the guests, of the parents."
(Filing No. 92 at 45). Defendants do not explain why adult children, but not Residents, would be
5 Denny Ceizyk, Two-Thirds of Millennials and Gen Zers Who Moved Back Home During the Pandemic Still Live
There, LendingTree (August 30, 2022) ("Only 1 in 10 parents wouldn't set any rules for adult children living at home.
Most parents would add financial strings to an adult-at-home occupancy," including rent, steady employment, and
assistance with chores and household expenses), https://www.lendingtree.com/home/mortgage/living-with-parents-
survey/#:~:text=58%25%20that%20expect%20their%20kids,adult%20child%20strained%20their%20relationship.;
see also Amanda Jackson, A judge sides with parents and rules their 30-year-old son must move out, CNN (May 23,
2018, at 5:44 PM ET), https://www.cnn.com/2018/05/22/us/judge-rules-son-must-move-out-new-york-trnd
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"invitees" and thus not individual "tenants." The designated evidence shows that Residents have
no greater "possessory interest" in the Homes than adult children do in their parents' homes—
neither group owns or has an exclusive right to use any portion of the homes, and both groups may
use the homes only as permitted by the parents/Plaintiff, subject to the parents'/Plaintiff's
conditions. Defendants' position that adult children are not "tenants" because they are "invitees" is
conclusory and misguided. Just like Defendants' position on foster children in New Horizons, their
position on adult children "essentially admit[s] what [Plaintiff] alleges"—that DHS treats . . .
disabled persons differently from others without any justification. 400 F. Supp. 3d at 767–68.
In a footnote, Defendants assert that if a nuclear family were to "organize[] itself such that
more than two adult children take possession of a portion of the family home as unique tenants,"
then Defendants would classify the nuclear family home as a Class 1 structure. This assurance
rings hollow for several reasons. First, it is circular; Defendants state that they would consider
adult children to be unique tenants only if they entered the home "as unique tenants." Id. Second,
it conflicts with Defendants' position that adult children, as "invitees" of their parents, never "take
possession" of the family home. Third, DHS admits that it is not aware of any such nuclear family
home. (Filing No. 87-1 at 48:20–49:7; Filing No. 87-2 at 53:25–54:15); cf. Pyke v. Cuomo, 258
F.3d 107, 109 (2d Cir. 2001) (finding disparate treatment even though "[i]t would be difficult, if
not impossible, to find other individuals whose situation is similar"). And fourth, Defendants'
classification 	of 	the 	Homes 	is 	not 	lawful 	simply 	because 	Defendants 	are 	willing 	to
"overdiscriminate" against certain similarly situated nuclear families. Pacific Shores Properties,
LLC v. City of Newport Beach, 730 F.3d 1142, 1159–60 (9th Cir. 2013), cert. denied, 574 U.S. 974
(2014) (stating that a defendant cannot immunize itself from discrimination claims by identifying
a comparator not in the protected group).
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The Court also addresses Defendants' proffered comparators—group living facilities for
unrelated 	individuals, 	including 	fraternity 	houses, 	bed 	and 	breakfasts, 	homeless 	shelters,
residential group homes for youth, maternity homes for at-risk mothers, and group homes for the
developmentally disabled6—which DHS treats as Class 1 structures (Filing No. 92 at 52). As an
initial matter, the Court notes that even if these group living facilities were also proper
comparators, DHS's treatment of them as Class 1 structures is not dispositive. The United States
Supreme Court has repeatedly held that discriminatory laws are not lawful simply because they
happen to apply to groups outside the protected class at issue.
The principle that overdiscrimination is prohibited undergirds all of constitutional
and statutory anti-discrimination law, although it often goes unsaid precisely
because it is so foundational. Discriminatory laws, policies, or actions will often
have negative effects (whether intended or not) on individuals who do not belong
to the disfavored group. This does not, however, change the fact that such laws,
policies, or actions are discriminatory when they are undertaken for the purpose of
harming protected individuals.
Pacific Shores Props., 730 F.3d at 1160 (citing cases); see Hunter v. Underwood, 471 U.S. 222,
222 (1985) ("That [the statute] may have been adopted to discriminate against poor whites as well
as against blacks would not render nugatory the purpose to discriminate against blacks . . . .");
McWright, 982 F.2d at 228 (reversing dismissal of disability discrimination claims at pleadings
stage; "Even if the DOE's apparent policy disadvantages all adoptive mothers (including
reproductively normal ones), the 'fit' may be sufficient, for the underlying attitude might still be a
negative one aimed at those incapable of bearing children."); cf. Adbu-Brisson v. Delta Air Lines,
Inc., 239 F.3d 456, 468 (2d Cir. 2001) (rejecting "the grotesque scenario where an employer can
6 It is unclear why Defendants try to analogize their treatment of Plaintiff's recovery Homes to "group homes for the
developmentally disabled," seeing as New Horizons held that Defendants' treatment of a group home for the
developmentally disabled was discriminatory. 400 F. Supp. 3d at 769.
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effectively immunize itself from suit if it is so thorough in its discrimination that all similarly
situated employees are victimized").
With that background in mind, the Court discusses whether other group living homes are
comparable to Plaintiff's Homes. Defendants cite two cases in which courts found that group living
homes and addiction recovery homes are similarly situated: Courage to Change Ranches Holding
Co. v. El Paso County, 73 F.4th 1175 (10th Cir. 2023); and Ohio House, LLC v. City of Costa Mesa,
135 F.4th 645 (9th Cir. 2025). However, neither case adopted Defendants' position, which is that
group living homes for unrelated persons are the only or best comparator for recovery homes. To
the contrary, in Courage to Change, foster family homes were one of the comparators. 73 F.4th at
1181, 1195. Courage to Change and Ohio House also challenged statutory language that is
substantially different than the Indiana building laws being challenged here.
Defendants also cite a statement from the United States Department of Justice and
Department of Housing and Urban Development, which explains that a law that treats a group of
unrelated persons without disabilities better than a similar group of persons with disabilities
violates the Fair Housing Act (Filing No. 92 at 51). This example likewise does not limit proper
comparators to group living homes for unrelated persons. To the contrary, in at least one federal
lawsuit, the Department of Justice argued that group recovery homes may be similarly situated to
nuclear families for purposes of showing discrimination. See Statement of Interest of the United
States of America at 14, Lawrence Cnty. Recovery, LLC v. Vill. of Coal Grove, Ohio, No. 1:24-cv-
452 (S.D. Ohio. Dec. 6, 2014), Dkt. 13.
Defendants argue that residents of other group living arrangements are similarly situated
to the Residents because "they are unrelated," are owed "lesser legal duties" than children in a
foster or nuclear family, and because they all enter and leave their homes independent of their co-
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occupants (Filing No. 92 at 52).7 For the reasons explained above, these factors are not material to
the similarly-situated analysis. Defendants next argue that group living arrangements and the
Homes are comparable because all of the structures are classified as "Residential Group R"
structures under the Indiana Building Code. Id. at 52. Defendants' application of building laws to
the Homes, in a lawsuit alleging that Defendants' application of building laws discriminates against
the Homes, does not convince the Court that group living arrangements are proper comparators.
See Courage to Change, 73 F.4th at 1195 (rejecting argument that a state statute justified
discrepancies in defendant-county's code provision).
In addition to concluding that Defendants have failed to identify material similarities
between the Homes and other group living arrangements, the Court reiterates that these types of
groups are dissimilar in several notable ways. Some groups, like fraternity members, "choose to
live together by virtue of what they have in common with other people." New Horizons, 400 F.
Supp. 3d at 766. Bed-and-breakfast patrons are even more dissimilar because the bed-and-
breakfast is not their primary residence, and they choose to stay there for leisure. These group
living arrangements do not entail "family" activities and responsibilities, like chores, group meal
preparation, group meals, and relaxation time. Next Step, 755 F. Supp. 3d at 1088. Defendants
correctly note that some group living arrangements offer some of these communal activities, but
none of them encourage all of them. Another important distinction is that in a bed-and-breakfast
7 Defendants do not offer any other information about their proffered comparators—like the ages of the homes'
occupants, fee arrangements, conditions for occupancy, or occupants' specific possessory interest in the structure (or
any parts of it)—despite arguing that this information as material when comparing the Homes to foster homes or
nuclear family homes. Without more information, some of these comparators "only raise more questions" about how
DHS applies Indiana's building laws. 755 F. Supp. 3d at 1078. In a fraternity, for example, the group typically chooses
its members, and the members enter and leave the fraternity house as one group at the beginning and end of each
school year. This situation squarely fits DHS's description of a single "tenant," yet Defendants seems to categorically
classify fraternities as Class 1 structures.
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or transitional house for the homeless, occupants often pay to have exclusive possession of a
portion of the structure. Residents do not have the same interest in any part of the Homes.
Based on the undisputed facts, relevant law, and analogous caselaw, the Court finds that
the relevant comparators for the Plaintiff's Homes are nuclear family homes and foster homes.
Defendants do not dispute that they treat the Homes differently than nuclear family homes or foster
homes, so Plaintiff has established a prima facie case of intentional discrimination.
2. 	Justification and Pretext
Defendants' primary justification for classifying the Homes, but not foster or nuclear family
homes, as Class 1 structures is fire safety. The Court recognizes the importance of protecting the
public from fires, but Defendants' concerns about increased fire risks at the Homes are unfounded.
There is simply no evidence supporting Defendants' assertion that fire risks are increased whenever
an occupant enters a home independently of other occupants, regardless of whether all occupants
must abide by the same rules while in the home and regardless of the fire safety measures actually
in the home. Even a "common sense understanding . . . that the more occupants are in a structure,
the greater the risk of fire becomes" does not justify Defendants' conduct. DHS admits that it does
not apply or enforce fire safety laws based on the number of occupants in a structure (see, e.g.,
Filing No. 87-1 at 62:8–12 ("If they chose to operate where they're opening it up to just one group,
then the number of occupants wouldn't matter.")).
Aside from a lack of justification, DHS's flexible yet targeted definition of "tenant"
suggests discrimination. In New Horizons, the Court found that DHS was able to discriminate
against a group home for adults with disabilities because it was not held to a "strict definition" of
"tenant" under § 22-12-1-4. Less than a year later, DHS created a definition of "tenant," but not a
strict one. The definition is comprised of undefined terms and phrases, the meaning and application
of which has changed over time. At the preliminary injunction stage in Next Step, for example,
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Defendants claimed that a foster home's classification would be a case-by-case determination, but
a foster home would likely be a Class 2 structure because the home would have a "primary" or
"nuclear" tenant (the foster parents), and the foster children's presence would not be "regular"
enough to convert the structure to Class 1. (Filing No. 87-1 at 44:11–45:2); Next Step, 755 F. Supp.
3d at 1089–90 (S.D. Ind. 2024). Defense counsel assured the Court that a single, long-term tenant
was "the key" to determining whether occupants are one or separate tenants. However, Defendants
have since abandoned this rationale.
Defendants' interpretation of its definition is now more refined: an occupant is an individual
"tenant" if he or she enters into a formal or informal agreement with the home's owner/operator,
independent of other occupants. Not coincidentally, this is the only way in which residential group
recovery homes can operate. See McWright, 982 F.2d at 228; Pacific Shores Props., 730 F.3d at
1160 n.23 ("In a case of proxy discrimination the defendant discriminates against individuals on
the basis of criteria that are almost exclusively indicators of membership in the disfavored group.").
So in residential neighborhoods, DHS's definition of "tenant" always applies to group homes for
persons with disabilities. DHS's definition also ensures that other common types of group homes
in residential neighborhoods—nuclear family homes, foster family homes, college rentals, and
AirBnBs—do not have more than one "tenant" except in rare, hypothetical cases. Additional
assumptions by Defendants—that adult children are "invitees" of their parents, and foster homes
are "custody arrangements" instead of "tenancies"—ensures that only group homes for disabled
persons have their presence in residential neighborhoods conditioned on Class 1 requirements.
In sum, despite adopting a facially neutral definition of tenant, "Defendants remain able to
treat people with disabilities differently from similarly situated people without disabilities without
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any basis for that distinction." Next Step, 755 F. Supp. 3d at 1091. Just as in New Horizons,
Indiana's building laws are being used as a proxy for discrimination.
Defendants offer two new neutral reasons for classifying the Homes as Class 1 structures:
the Residents are each a "tenant" as that term is defined in the dictionary8 and under Indiana's
landlord-tenant laws (Title 32 of the Indiana Code); and the Homes are occupied or used by "the
employees of another" under Indiana Code § 22-12-1-4(a)(1)(C). However, it is undisputed that
Defendants did not adopt, and do not use, either of those definitions for purposes of § 22-12-1-4.
(Filing No. 92 at 31 ("[B]ecause it is not defined in the Administrative Code, the word 'tenant'
could have a more expansive definition for purposes of the Class 1 versus Class 2 distinction than
what the landlord-tenant statutes, or the dictionaries allow.")). Nor did Defendants classify the
Homes as Class 1 structures based on the presence of employees under § 22-12-1-4(a)(1)(C). In
fact, at the time DHS classified the Homes, it had not "formed an opinion whether . . . (a)(1)(c) is
applicable with employees and any services that they're providing." Even after this lawsuit was
filed, DHS continued to treat the Homes as Class 2 structures with respect to subsection (a)(1)(c)
(Filing No. 87-1 at 27:8–28:6, 60:4–61:16; Filing No. 87-2 at 40:18–24).
The Homes' classifications were based solely on the number of "tenants." (Filing No. 87-1
at 27:8–28:6, 59:16–24, 75:25–76:17, 78:3–7; Filing No. 87-2 at 54:21–55:18 ("The number of
tenants is what is making it Class 1 and how the operator is offering tenancy to the structure.")).
Defendants' new proffered reasons are therefore pretextual. Emmel v. Coca-Cola Bottling Co. of
Chicago, 95 F.3d 627, 634 (7th Cir. 1996) ("When a plausible reason was in fact not the reason, it
8 Defendants note that in Next Step, the Court "guided the parties to the common dictionary definition of 'tenant.'"
(Filing No. 92 at 30). However, the Court merely cited the dictionary definition of "tenant" to demonstrate how much
Defendants' definition of "tenant" conflicted with the term's "common definition." 755 F. Supp. 3d at 1087.
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is pretextual."); see O'Neal v. City of New Albany, 293 F. 3d 998, 1005–06 (7th Cir. 2002). The
Court therefore need not, and does not, address whether either argument has merit.
Based on the undisputed material facts, even when construed in favor of Defendants, no
reasonable jury could find that Defendants are applying Indiana's building laws indiscriminately.
Defendants' definition of "tenant" is designed and interpreted to impose Class 1 building
requirements on the Homes, but not similarly situated single-family residences, and there is no
justification for this different treatment. Defendants have engaged in intentional discrimination,
and Plaintiff is entitled to summary judgment on its disparate treatment claims.
C. 	Failure to Accommodate
Plaintiff also asserts failure to accommodate claims. Failure to accommodate is one way in
which Plaintiff can prove a violation of the FHAA, ADA, and Rehabilitation. See Valencia, 883
F.3d at 976. Plaintiff has already established violations of these statutes by showing disparate
treatment, and on that basis, Plaintiff is entitled to an injunction relieving the Homes from Class 1
building requirements that are not imposed on Class 2 structures. The Court therefore need not,
and does not, reach Plaintiff's failure to accommodate claims or related requests for equitable relief
(Filing No. 88 at 49, 56 (stating that if the Court finds intentional discrimination, "there is no need
to go further"; seeking equitable relief as to failure to accommodate only "as necessary")).
Plaintiff's failure to accommodate claims can be dismissed without prejudice, and Plaintiff's
Motion to Reconsider is denied as moot.
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D. 	Defendants' Affirmative Defenses
1. 	Disability Status of Superior Street Graduate Home Residents
Defendants argue that the Residents of the Superior Street Graduate Home9 are not
substantially limited in any major life activity, so Plaintiff is not entitled to damages related to the
Home's construction (Filing No. 92 at 64–65). This argument is unavailing for two reasons.
First, assuming arguendo that the Graduate Home Residents are not substantially impaired
in major life activity while living in the Graduate Home, they have "a record of such an
impairment." 42 U.S.C. § 12102(1)(B); (Filing No. 98 at 23; Filing No. 87-10 ¶¶ 72–73, 77; Filing
No. 87-15 at 12:21–22). The Graduate Home Residents therefore have a "disability" and are
entitled to the protections of the FHAA, ADA, and Rehabilitation Act.
Second, based on the undisputed material facts, the Residents of the Graduate Home do
have a qualifying impairment while living in the Graduate Home. Defendants argue that "the very
fact of having graduated" from Place of Grace's program "proves that they are no longer limited
in a major life activity by reason of their disability." (Filing No. 92 at 66 (emphasis in original)).
But as Defendants note, "a case-by-case evaluation is necessary" in determining whether
recovering addicts are disabled. Id. at 65 (quoting Oxford House, Inc. v. City of Baton Rouge, 932
F. Supp. 2d 684, 688–89 (M.D. La. 2013)). It would be improper to assume that a recovering addict
is not disabled because she is called a "graduate" of a recovery program. An evaluation of Place of
Grace's program, graduates, and Graduate Home is needed.
The undisputed evidence shows that Residents of the Graduate Home are sober but not yet
recovered. They still need and receive ongoing assistance, and they are unable to live safely on
9 Defendants argue that Plaintiff cannot recover damages for the construction of either Superior Street Home (Filing
No. 92 at 64), but their arguments relate only to graduates of Place of Grace's program. Graduates live in the Superior
Street Graduate Home, not the Superior Street Transitional Home, and Defendants do not dispute that Residents in the
program's fourth/transitional phase are disabled. The Court therefore refers only to the Graduate Home.
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their own without a serious risk of relapse (Filing No. 87-10 ¶¶ 72–73, 77; Filing No. 87-15 at
10:17–19). On Reply, Defendants contend that a "risk of relapse" is not enough to establish that
Residents are disabled because if that were the case, then every "recovered addict [would be]
always and forever 'disabled' under the federal discrimination statutes . . . even if he has the ability
to care for himself independently." (Filing No. 105 at 22). This argument is misplaced because the
Graduate Home Residents are not "recovered," and they are not yet able to care for themselves
independently. See Reg'l Econ. Cmty. Action Program, Inc. v. City of Middletown ("RECAP"), 294
F.3d 35, 46 (2d Cir. 2002) (holding that recovery homes limited to "persons who are unable to
maintain abstinence and continued recovery in an available independent living situation" are
protected by disability statutes); (Filing No. 92 at 65 (citing analysis in RECAP as "instructive")).
Defendants cite two specific pieces of evidence to support their position that the Graduate
Home Residents are not disabled. First, Defendants cite a statement by Place of Grace's Executive
Director that the Graduate Home "would not be considered a recovery home" and would instead
be "a safe, supportive, and sober living environment for women in need of housing after
graduation." (Filing No. 91-26 at 13). There is no evidence that recovering addicts in need of a
"safe, supportive, and sober living environment" are not disabled, and the undisputed evidence
regarding the admission requirements for the Graduate Home and services needed and received by
Residents shows that the Residents of the Graduate Homes are disabled.
Defendants next rely on two excerpts from the deposition of a then-Resident of the
Graduate Home:
Q. 	Do you have any limitation on any major life activity?
A. 	No.
* * *
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Q. 	And was that true when you moved into . . . the graduate home on Superior
Street?
A. 	When I moved into the graduate home, I was considered in transition, so
until I graduated, yet, I did have limits. I just had to have permission when I needed
to go somewhere.
Q. 	And that was until you graduated?
A. 	Yes.
(Filing No. 87-15 at 29:3–7, 29:24–30:10). At first glance, this evidence supports Defendants'
position. But a closer inspection of the Resident's testimony confirms its immateriality.
To start, whether an activity constitutes a "major life activity" is a question of law for the
Court to decide. See Lawson v. CSX Transp., Inc., 245 F.3d 916, 923 (7th Cir. 2001) (citing
Bragdon v. Abbott, 524 U.S. 624, 631 (1998) (stating that courts "determine whether [an activity]
constitutes a major life activity under the ADA"); see Doebele v. Sprint/United Mgmt. Co., 342
F.3d 1117, 1129 (10th Cir. 2003). The phrase "major life activity" was not defined for the
Resident,10 so the cited testimony constitutes inadmissible legal conclusions (Filing No. 98 at 23).
The admissible portions of the Resident's deposition show that she was substantially
limited in a major life activity by reason of her disability. The Resident (who was deposed one
week before leaving Place of Grace's program and moving into her own apartment) explained that
she could not have moved into an apartment of her own any sooner because she needed to continue
working on and improving on skills related to coping with trauma that could cause relapse, gaining
"confidence that [she] can move forward," and staying sober. (Filing No. 87-15 at 25:4–6, 25:21–
27:7); see RECAP, 294 F.3d at 47 (holding that persons who cannot remain abstinent while living
10 The Resident explained that she had "limits" while living in the Superior Street Transition Home because she "had
to have permission when [she] needed to go somewhere," indicating that she understood the question to ask whether
she was limited by Place of Grace in her authority to do certain things, rather than limited by her addiction in her
ability to do certain things. Regardless, there is no evidence of what the Resident understood these questions to mean,
and her blanket assertions that she was not "limited in a major life activity" is not admissible evidence.
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independently have protected disability status). She stated that when she first moved into the
Graduate Home, she could not have moved out and lived independently without the risk of relapse,
and Place of Grace provided support until she could (Filing No. 87-15 at 38:23–39:24).
Place of Grace offers additional evidence that the Residents of the Graduate Home receive
"continued support related to rent, budgeting, and forming routines" to help prepare them to find
and maintain housing and employment without a risk of relapse. 42 U.S.C. § 12102(2)(A) (stating
that major life activities include, but are not limited to, "caring for oneself" and "working").
Defendants argue that "need[ing] help with basic life skills" is "unrelated to disability status," but
that is not true (Filing No. 105 at 22). "Major life activities" include many basic life skills, 42
U.S.C. § 12102(2)(A), and several courts have held that persons who need help learning to do
those skills without relapsing are disabled. See RECAP, 294 F.3d 35; Oxford House, Inc. v.
Browning, 266 F. Supp. 3d 896, 910–11 (M.D. La. 2017) (stating that maintaining "steady
employment and housing" and retaining "adequate finances" to support oneself are all "major life
activities"); Oxford House, Inc. v. City of Baton Rouge, 932 F. Supp. 2d at 689 (finding that
plaintiffs were substantially limited in major life activities by reason of their addiction because
they would "be on the street" without assistance from recovery home).
Defendants have failed to create a genuine issue for trial as to whether Residents of the
Superior Street Graduate Home are "disabled."
2. 	Waiver and Failure to Mitigate Damages
Defendants next argue that Plaintiff waived its right to damages and failed to mitigate its
damages by building the Superior Street Homes as Class 1 structures without first challenging the
Homes' classification or applying for variances which, if granted, might have reduced Plaintiff's
construction costs (Filing No. 92 at 67–73).
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Waiver is the voluntary and intentional relinquishment of a known right. Smylie v. State,
823 N.E.2d 679, 688 n.13 (Ind. 2005). A valid waiver involves the "knowledge of the existence of
the right and the intention to relinquish it." In re Est. of Highfill, 839 N.E.2d 218, 222 (Ind. Ct.
App. 2005) (citation modified). Waiver may be either express or implied, but it requires an
affirmative act. City of Crown Point v. Misty Woods Props., LLC, 864 N.E.2d 1069, 1079 (Ind. Ct.
App. 2007). Mere silence, acquiescence, or inactivity will not constitute waiver unless there is a
duty to speak. See Old Plank Trail Cmty. Bank, N.A. v. Mattcon Gen. Contractors, Inc., 137 N.E.3d
308, 311 (Ind. Ct. App. 2019).
Plaintiff did not waive its claims. It is undisputed that DHS classifies the Superior Street
Homes as Class 1 structures and that there is no variance that would change a structure's
classification (Filing No. 98 at 59; Filing No. 105 at 22). The fact that Plaintiff built the Superior
Street Homes as Class 1 structures, pursuant to DHS's classification, does not evidence an
intentional waiver of a claim that the classification is discriminatory. And because no variance
could have changed the Superior Street Homes' classification, it would have been futile for Plaintiff
to request such a variance. Plaintiff did not waive its right to damages by failing to challenge the
classification or seek variances before building the Superior Street Homes. See Old Plank Trail
Cmty. Bank, 137 N.E.3d at 311. Whether Plaintiff could have lessened its damages by requesting
variances from certain Class 1 requirements speaks to an alleged failure to mitigate damages.
To succeed on a failure to mitigate defense under Indiana law, Defendants must prove that
Plaintiff did not exercise reasonable care in mitigating its post-injury damages, and that this failure
to exercise reasonable care caused Plaintiff to suffer harm beyond that attributable to Defendants'
conduct. See Humphrey v. Tuck, 151 N.E.3d 1203, 1208 (Ind. 2020). The Seventh Circuit has not
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yet decided whether this affirmative defense is available for the types of claims Plaintiff asserts,
but assuming that the defense does apply, it is unsuccessful in this case.
The Seventh Circuit has discussed a failure to mitigate defense as applied to claims for
backpay under the ADA. Stragapede v. City of Evanston, 865 F.3d 861 (7th Cir. 2017). There, the
Seventh Circuit declined to relieve an employer of its duty to prove that there was "a reasonable
likelihood that the [employee] might have found comparable work by exercising reasonable
diligence." Id. at 869 (alteration in original). The Indiana Supreme Court has likewise confirmed
that "[t]he defendant bears the burden to prove that the plaintiff has not used reasonable diligence
to mitigate damages." Willis v. Westerfield, 839 N.E.2d 1179, 1187 (Ind. 2006). "The defendant's
burden includes proof . . . that the plaintiff's unreasonable post-injury conduct has increased the
plaintiff's harm, and if so, by how much." Id.
Here, Defendants argue that Plaintiff failed to mitigate its damages by opting not to
challenge the Class 1 classification or request variances before building the Superior Street Homes
(Filing No. 92 at 72). But Defendants offer no evidence whatsoever that those actions would have
had a reasonable likelihood of reducing Plaintiff's costs. It is undisputed that DHS did, and still
does, consider the Superior Street Homes to be Class 1 structures, so challenging the classification
would have been futile. Defendants likewise offer no evidence that any variances would have been
granted, or evidence of how much money any variances, if granted, would have saved Plaintiff.
Defendants therefore fail to carry their burden of proof of showing that Plaintiff acted unreasonably
and by how much Plaintiff's own unreasonable conduct increased its damages. Defendants' failure
to mitigate defense, even if applicable to Plaintiff's claims, is speculative and therefore fails.
3. 	Standing and Ripeness
DHS argues, as it did in its Motion to Dismiss, that Plaintiff lacks standing to assert
disparate treatment claims against DHS because DHS has not taken any enforcement action against
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Plaintiff, and that any claims arising from future enforcement are not ripe (Filing No. 92 at 79).11
DHS acknowledges that the Court rejected this argument in its Order on Defendants' Partial Motion
to Dismiss (Filing No. 89) but "requests that the Court reconsider its conclusion." (Filing No. 92
at 79).
DHS's embedded motion for reconsideration does not comply with the Court's Local Rules,
which provide that "[a] motion must not be contained within a brief, response, or reply to a
previously filed motion, unless ordered by the court." S.D. Ind. L.R. 7-1(a). DHS's noncompliance
with the Local Rules is grounds for denial of its motion, but the motion also fails on its merits.
Motions for reconsideration "serve a limited function: to correct manifest errors of law or
fact or to present newly discovered evidence." Publishers Res., Inc. v. Walker–Davis Publ'ns, Inc.,
762 F.2d 557, 561 (7th Cir.1985). A motion to reconsider is appropriate when the court "has
patently misunderstood a party, or has made a decision outside the adversarial issues presented to
the Court by the parties, or has made an error not of reasoning but of apprehension." Bank of
Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir.1990) (citation omitted).
A party seeking reconsideration cannot rehash previously rejected arguments or argue matters that
could have been heard during the pendency of the previous motion. Caisse Nationale de Credit
Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1270 (7th Cir.1996).
DHS's request for reconsideration does not point to any manifest error of law or new
evidence. Instead, it rehashes the same arguments DHS raised in its Motion for Partial Dismissal.
DHS 	has 	not 	shown 	that 	reconsideration 	is 	appropriate. 	DHS's 	embedded 	request 	for
reconsideration is therefore denied. And to the extent DHS is not only seeking reconsideration but
11 DHS does not raise this argument as to Plaintiff's claim for monetary damages (Filing No. 92 at 79).
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also summary judgment for lack of standing and ripeness, that request is denied for the same
reasons explained in the Order on Defendants' Partial Motion to Dismiss (Filing No. 93).
E. 	Requested Relief
1. 	Permanent Injunctive Relief for Guilford Street Home
Having 	prevailed 	on 	its 	disparate 	treatment 	claims 	under 	the 	FHAA, ADA, 	and
Rehabilitation Act, Plaintiff need only satisfy the other elements required for a permanent
injunction: irreparable injury for which there is no adequate remedy at law, the balance of harms
tips in favor of Plaintiff, and the public interest would not be disserved by granting the injunction.
Indiana Protection and Advocacy Servs. Comm'n v. Comm'r, Ind. Dep't of Correction, 2012 WL
6738517, at *24 (S.D. Ind. Dec. 31, 2012). Plaintiff meets each of these elements.
The Court has previously explained that although this case "practically involves the costs
associated with Class 1 building requirements, 'embedded therein' are harms arising from unequal
opportunity and access to housing, which have no adequate remedy at law." Next Step, 755 F. Supp.
3d at 1094 (quoting New Horizons, No. 17-cv-49, 2017 WL 4865912, at *8 (S.D. Ind. Oct. 27,
2017)). Several courts have held that irreparable harm presumptively flows from violations of
statutes guaranteeing fair housing. See, e.g., Gresham v. Windrush Partners, Ltd., 730 F.2d. 1417,
1423 (11th Cir. 1983); Silver Sage Partners, Ltd. v. City of Desert Hot Springs, 251 F.3d 814, 827
(9th Cir. 2001). Absent an injunction, Plaintiffs would also face fines and the potential closure of
the Guilford Street Home, thwarting Plaintiff's mission and depriving Residents of housing and
services. These harms are irreparable with no adequate remedy at law. See, e.g., Step By Step, Inc.
v. City of Ogdensburg, 176 F. Supp. 3d 112, 134 (N.D.N.Y. 2016); Stewart B. McKinney Found.,
Inc. v. Town Plan & Zoning Comm'n of Town of Fairfield, 790 F. Supp. 1197, 1208 (D. Conn.
1992).
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The balance of harms also favors a permanent injunction because an injunction would only
relieve the Guilford Street Home of Class 1 building requirements that are not imposed on Class
2 structures (Filing No. 88 at 54). As in New Horizons, Plaintiff "is not attempting to circumvent
all public safety laws, only those that do not apply equally to its proposed home and the homes of
other families who are not disabled." New Horizons, 400 F. Supp. 3d at 764 (emphasis in original).
Defendants insist that the Guilford Street Home poses heightened fire risks, but, again, there is no
evidence substantiating this fear, and the "fire risky" behaviors that worry Defendants—cooking
in the kitchen and smoking outside—are typical activities for any residential home. The undisputed
evidence shows that the Guilford Street Home actually exceeds fire safety standards for Class 2
structures through the use of fire extinguishers, fire drills, and prohibitions on smoking indoors.
The number of Residents in the Guilford Street Home also does not tip the balance of harms in
Defendants' favor. The Guilford Street Home does not house an unreasonable number of Residents
considering the Home's size and layout. Defendants have not identified any safety concerns or
other harm that would weigh against an injunction that permits the Guilford Street Home to only
comply with Class 2 requirements. The balance of harms weighs in favor of a permanent
injunction.
Plaintiff lastly argues that the public interest would be served by requiring Defendants to
comply with federal fair housing laws (Filing No. 88 at 55). The Court agrees. The public's interest
in eliminating discriminatory housing practices outweighs its interest in imposing stricter building
requirements on the Guilford Street Home. The Court appreciates the seriousness of fire risks and
the importance of fire safety laws in protecting the public from fires. However, there is no evidence
that the Guilford Street Home poses a greater fire risk than other similarly situated Class 2
structures, so the public's interest in preventing and mitigating house fires would not be served by
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imposing additional building requirements on the Guilford Street Home. See Next Step, 755 F.
Supp. 3d at 1095 ("[Plaintiff] only asks that it be required to adhere to the same building
requirements imposed on a similarly situated home for non-disabled people."). The public interest
would be served by Plaintiff's requested injunction.
Accordingly, the Court grants Plaintiff's request for a permanent injunction requiring DHS
to treat the Guilford Street Home as a Class 2 structure.
2. 	Monetary Damages for Superior Street Homes
Plaintiff also requests monetary damages under the Rehabilitation Act in the amount of
$206,232.11, which represents the difference between the costs of having Woodmark Homes build
the Superior Street Homes as Class 1 structures ($534,232.11) and the cost of having Habitat for
Humanity build them as Class 2 structures ($320,000.00) (Filing No. 88). Plaintiff is a non-profit
corporation, and any money damages received will directly benefit its program and residents
(Filing No. 87-10 ¶ 57).
Damages are appropriate under the Rehabilitation Act where a plaintiff shows "intentional
discrimination." Lacy v. Cook County, 897 F.3d 847, 862–63 (7th Cir. 2018). "A plaintiff can
establish intentional discrimination . . . by showing deliberate indifference, . . . requiring both
(1) knowledge that a harm to a federally protected right is substantially likely, and (2) a failure to
act upon that likelihood." Id. Plaintiff argues that in light of the Court's decision in New Horizons,
which awarded the plaintiff damages, "DHS certainly had knowledge that it was violating the
Rehabilitation Act and it failed to change its behavior." (Filing No. 88 at 55). The Court agrees.
Damages are appropriate.
Defendants argue that Plaintiff is not entitled to damages due to waiver and failure to
mitigate, but they do not dispute the measure or amount of damages. Having held that Defendants'
defenses fail, the Court concludes that there is no genuine dispute as to the amount of Plaintiff's
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damages (Filing No. 105 at 23). The Court therefore grants Plaintiff's request for $206,232.11,
plus post-judgment interest, in damages under the Rehabilitation Act.
IV. 	CONCLUSION
For the reasons explained above, the Court GRANTS Plaintiff's Motion for Summary
Judgment (Filing No. 87) and DENIES Defendants' Cross-Motion for Summary Judgment (Filing
No. 90). Summary judgment is granted in favor of Plaintiff, and denied in favor of Defendants,
on Plaintiff's disparate treatment claims against DHS. Plaintiff's failure to accommodate claims are
dismissed without prejudice. Plaintiff's Motion to Reconsider (Filing No. 99) is denied as moot.
The Court DECLARES that DHS engaged in intentional discrimination in violation of the
FHAA, ADA, and Rehabilitation Act by deeming the Homes to be Class 1 structures. The Court
ENTERS A PERMANENT INJUNCTION enjoining DHS from treating Plaintiff's Guilford
Street Home as a Class 1 structure and ordering DHS to treat the Guilford Street Home as a Class
2 structure. The Court also AWARDS Plaintiff damages in the amount of $206,232.11.
The trial dates are VACATED, and final judgment and a Rule 65(d) permanent injunction
will issue under separate order.
SO ORDERED.
Date: 	3/10/2026
Distribution:
Alexander Robert Carlisle
OFFICE OF THE ATTORNEY GENERAL
Alexander.Carlisle@atg.in.gov
Kenneth J. Falk
ACLU OF INDIANA
kfalk@aclu-in.org
Allison Mauk
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Office of Indiana Attorney General
allison.mauk@atg.in.gov
Katherine A Meltzer
Office of Indiana Attorney General
katherine.meltzer@atg.in.gov
Stevie J. Pactor
ACLU OF INDIANA
spactor@aclu-in.org
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