Chosen Consulting LLC et al v. Town Council of Highland, Indiana et al

Filing 141

OPINION AND ORDER: Defendants' Motion for Summary Judgment 125 is GRANTED. Plaintiff's Motion for Leave to File Third Amended Complaint 138 is DENIED. The Clerk is DIRECTED to close the case. Signed by Judge Philip P Simon on 8/28/2024. (ash)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
CHOSEN CONSULTING, LLC, d/b/a
CHOSEN HEALTHCARE, et al.,
Plaintiffs,
v.
TOWN COUNCIL OF HIGHLAND,
INDIANA, et al.,
Defendants.

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Cause No. 2:20-CV-246-PPS

OPINION AND ORDER
Back in the 1970s, a property in Highland, Indiana was the site of Highland
Nursing and Rehabilitation Center. It historically operated as a nursing home under the
local zoning code, providing medical treatment to patients pursuant to a dual
certification as a nursing facility and a skilled nursing facility. In 2019, Chosen
Consulting, LLC elected to transition the property to primarily serve patients suffering
from addiction-related physical or mental ailments, including substance abuse
disorders.1 As part of this process, the company gave up the facility’s dual certification.
To open its doors as a drug treatment facility, Chosen must obtain a new certification as
a sub-acute facility from the Indiana Family and Social Services Administration (FSSA).
Chosen has been unable to obtain the necessary certification for the property,
and it blames this state of affairs on the Town of Highland. The dispute boils down to
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As explained in my prior Opinion and Order on Defendants’ motion for judgment on the
pleadings [DE 72], Plaintiffs Chosen Consulting, LLC, Chosen Highland, LLC, Hickory House Recovery,
LLC, Highland Recovery LLC, and Indiana ATC JV LLC are a set of related corporate entities. For
simplicity’s sake, I will refer to them collectively as “Chosen,” unless context requires otherwise.

this: Chosen has cleared all the bureaucratic hurdles with the FSSA except one. To get
the final certification it seeks from FSSA, Chosen must obtain a letter from Highland
reflecting that its use of the property is in compliance with local zoning laws; but
Highland refuses to provide such a letter. Chosen says this is due to Highland’s distaste
for substance abusers.
Several years ago, when this case was initially filed, Chosen asserted two legal
claims. Count II was a declaratory judgment action seeking a declaration that the
property complies with local zoning laws. [DE 38 at 9–11.] I dismissed this claim
without prejudice, finding that Chosen had not exhausted its remedies to obtain a final
decision from Highland’s local zoning authorities as to whether its new proposed use of
the property fell within the scope of its prior designation as a “legal nonconforming
use.” [DE 72 at 11–17.] I explained that before seeking a review of the local zoning
process in federal court, Chosen first needed to obtain a final determination from the
local powers that be. Count I asserted a claim of unlawful discrimination in violation of
Title II of the Americans with Disabilities Act (ADA) and Section 504 of the
Rehabilitation Act. [DE 38 at 6–9.] This claim was allowed to proceed to discovery. The
gist of the claim is that Highland intentionally engaged in an unfair zoning approval
process to mask its unlawful discrimination against people with disabilities (substance
abusers).
Highland now seeks summary judgment on Count I, citing three grounds: first,
Chosen lacks standing to seek damages for lost profits under Title II of the ADA and the

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Rehabilitation Act; second, Chosen failed to exhaust its remedies under state law prior to
filing suit, as required to obtain injunctive relief; and third, Chosen fails to identify any
evidence that Highland officials acted with discriminatory intent in the course of the
zoning approval process. [DE 125; see DE 126; DE 127; DE 130; DE 131; DE 132; DE 133;
DE 136; DE 137.] After the parties had fully briefed Defendants’ motion for summary
judgment, Chosen filed a motion requesting leave to amend its complaint to assert new
claims under 42 U.S.C. § 1983. Defendants have filed an objection to this motion, which
is also ready for disposition. [DE 138; see DE 139; DE 140.]
I’ll start with the summary judgment motion [DE 125], which will be granted
because binding Seventh Circuit authority mandates dismissal. As for Chosen’s motion
for leave to amend its complaint [DE 138], it will be denied because it comes way too
late.
I.

Motion for Summary Judgment
A.

Undisputed Facts

As the following factual summary lays bare, the crux of this dispute concerns the
proper application of zoning law – a task ordinarily assigned to local government
officials, at least in the first instance. The property at issue is located in Highland,
Indiana. In September 1971, an ordinance authorized a conditional use of the property
for “National Nursing Home, Inc., its successors and assigns, for the erection, operation,
and maintenance of a nursing home.” [DE 125-3 at 2–3 (Ordinance No. 645); DE 137 at
1.] Under the Town’s zoning code in place at that time, the property was located in a

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“Class ‘A-1’ Residence District” – so this “conditional use” (or “special use permit,” as
Highland sometimes refers to it) was necessary for the property to lawfully operate in
that zoning district. [See DE 125-3 at 2.]
In April 2019, Chosen acquired the property. [DE 133 at 2 (noting that prior to
acquiring it, Chosen had managed the property for the preceding five years).] Chosen’s
goal is to operate the facility as a “dual-certified nursing facility and skilled nursing
facility to focus on providing continued services as (a) a sub-acute facility pursuant to
Ind. Code § 12-22-2 and (b) a Nursing Home pursuant to Section 18.05.250 of the
Highland Municipal Code.” See id. at 4. As part of this transition, Chosen gave up the
facility’s dual certification. To re-open as a drug treatment facility, it must obtain a new
certification as a sub-acute facility from Indiana’s Family and Social Services
Administration (FSSA). As noted above, Chosen has cleared all of the administrative
hurdles from the FSSA, save one: FSSA requires Chosen to obtain a letter from
Highland’s zoning authorities stating that its proposed use of the property satisfies
local zoning requirements. Id. at 4–5.
That gets us to the present zoning dispute. The parties agree that at some point
during the intervening fifty years, the Highland Municipal Code and the Town’s
associated zoning map were amended and the property was re-designated into a “R1A” residential district. [DE 133 at 3; DE 125-2 at 2 (Highland Zoning Map).] Highland
asserts that the amendment of its zoning code and zoning map, resulting in a R-1A

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designation of the property, “effectively removed the nursing home’s special use permit
and converted the use of the property into a legal non-conforming use.” [DE 133 at 3.]
Chosen tells me it’s not so simple. From its perspective, the zoning code provides
that when “a use is classified as a use variance . . . and exists as a conditional or
permitted use at the date of adoption of the ordinance codified in this title, it shall be,
without further action of the town council, the zoning administrator or the board of
zoning appeals, a legal use.” Id. (citing DE 56-1 at 18 (Highland Municipal Code
§ 18.05.060(L)). Moreover, Chosen notes that Ordinance No. 645 did not define the term
“nursing home.”2 [DE 125-3 at 2–3.] The current version of the zoning code defines
“nursing home” broadly to include “an institution where infirm persons or the aged or
children reside, where in-patient physician and nursing care may be provided to persons
suffering from physical or mental ailments, where daily out-patient physician and nursing
care may be provided, and where administrative and staff offices and living quarters
operating as an integral part of such institution may be provided.” [DE 56-1 at 39
(Highland Municipal Code § 18.05.250(I)) (emphasis added).]
In sum, from Chosen’s perspective, the property continued to operate as a legal
nonconforming use in the new R-1A district — notwithstanding the fact that, in the
interim, Highland amended its zoning code and Chosen voluntarily gave up the
facility’s dual certification while converting its use to a drug treatment facility. The

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It’s unclear whether the phrase was defined in the zoning code in place in September 1971,
when the conditional use was originally permitted. The parties did not submit any evidence one way or
the other.

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upshot is that Chosen does not believe its new proposed use requires any further
approval from the Town’s zoning authorities.
On July 9, 2019, Melissa Durkin, a business executive with an entity affiliated
with Chosen, met with Ken Mika (Highland’s Building Commissioner and Zoning
Administrator) and Mark Herak (a Town Councilman) and followed up with an email
entitled “Highland Nursing and Rehab Follow-up.” [DE 63-1 at 6.] This is the first
indication that Town officials were aware of Chosen’s planned transition of the facility.
The parties agree that in the fall of 2019, Chosen’s representatives requested a letter
from Highland affirming that Chosen’s proposed use of the property conformed with
what it contended was the property’s “existing legal nonconforming use” under
Ordinance No. 645. [DE 137 at 3; DE 133 at 5; see DE 125-1 at 6, ¶¶ 25–28.]
In November 2019, several new members were elected to Highland’s Town
Council, and John Reed became the Town attorney. [DEE 133 at 8.] Reed has submitted
an affidavit, in which he declares that he prepared a “draft” letter to Jim Wieser, one of
Chosen’s representatives, via email on May 11, 2020. [DE 125-7.] Importantly, the cover
email stated that the letter was “only a draft” and Reed did “not have approval to
officially send it to [Chosen] so that [the company] may rely upon it.” Id. at 5. Reed
invited Wieser to give him his “thoughts” on the draft. Id. The letter states that the
property is located in a residential district. It continues by noting that the “former
Highland Nursing Home was not qualified to operate in the R-1 zoning district” but
“was permitted as a legal non-conforming use,” citing to the two previously cited

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provisions in Highland’s zoning code. Id. at 7. Reed’s letter concludes by stating that the
“proposed use as a residential addiction treatment facility is permitted as a legal nonconforming use.” Id. at 8. At his deposition, Reed confirmed that this opinion was based
on “review[ing] the current zoning code at that time to check and verify the current
definition of rest home, nursing home, et cetera.” [DE 125-5 at 3–7.]
No final letter was ever issued. On June 5, 2020, Durkin followed up with
Councilman Herak via email, asking for a call to confirm “where we are in the process.”
[DE 63-1 at 6; see DE 137 at 3–4.] On June 5, 2020, Herak emailed Durkin, stating that he
had “no knowledge of where the process is, as there is nothing happening.” He added
that the town attorney (Reed) had indicated “he didn’t think it was a protected class”
and, for purposes of the zoning code, “ a drug rehab doesn’t fall under nursing care.”
Herak said he would “leave it to the lawyers.” [DE 63-1 at 5.]
Later in the same email thread, Herak confirmed that the Town Council had
considered Chosen’s request for a letter approving the proposed use. According to
Herak, Mark Schocke, the President of the Town Council, was “1 of 3 new board
members who are against the project.” Id. This was notable, because it meant a majority
of the Town Council members were opposed to the proposed use of the facility and
issuance of a zoning approval letter. Herak further recalled that Schocke had
“commented on” Chosen’s request, to the effect “that someone had reached out to him
and with [t]he school where his wife [t]eaches a block down.” Based on this, Schocke
was apparently “opposed to the idea.” Whatever “agreement [Chosen] thought [it]

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had,” Herak relayed, Schocke had “brow beated the town attorney and he’s changed his
opinion.” Id. at 4–5. Herak reiterated a few days later that he believed Schocke’s wife
was opposed to the proposed drug treatment center because she teaches at a nearby
school, and Herak “assume[d] they think that drug addicts will be sent there, able to
leave at will, sign out themselves, walk the neighborhood,” endangering students and
neighbors. Id. at 3.
At his deposition, Herak confirmed that he recalled that Schocke had
“commented” on Chosen’s request for a zoning approval letter. While Herak did not
recall what Schocke said specifically, he remembered that the comment “involved the
proximity of Chosen’s facility to his wife’s school,” as reflected in his emails with
Durkin. [DE 130-1 at 3–5.] Herak testified that he did not recall that the Town Council
“had a meeting regarding this letter” and that Chosen had been previously advised by
Mika “that they needed to go get a use variance.” [DE 131-1 at 3–4.] In sum, Herak
testified that after Durkin followed up in June 2020, he told her that he was unaware of
a zoning approval letter being issued. When it came up, he involved the Town attorney;
and the Town Council later discussed the matter in an executive session – a privileged
discussion that remained shielded from the public record. Id. at 5.
Unable to obtain its requested zoning approval letter, Chosen filed this lawsuit
seeking a declaration that the property is properly zoned and asserting that the Town’s
actions violate federal prohibitions on discrimination against disabled persons (i.e., the
substance abusers Chosen intends to treat on the property). As prefaced, I previously

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dismissed the declaratory relief action, finding that—despite its artful
pleading—Chosen was required to first pursue its request for zoning approval through
Highland’s Board of Zoning Appeals (BZA), and then exhaust its remedies to seek
judicial review of any final determination of the BZA in state court, prior to seeking a
declaratory judgment on the zoning issue in federal court. [DE 72 at 14–15.] However, I
found that the complaint adequately pled facts supporting a plausible inference that
Highland officials intentionally engaged in an unfair zoning approval process to mask
unlawful discrimination against substance abusers, and thus permitted Chosen’s
discrimination claim to proceed to discovery. With this dense record set forth, I’ll now
turn to the substance of Highland’s arguments for summary judgment.
B.

Discussion

Let’s start, as usual, with the standards that govern my decision making. Rule 56
of the Federal Rules of Civil Procedure provides that “[t]he court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A
motion for summary judgment has been described as the time in a lawsuit to “put up or
shut up.” Grant v. Trustees of Indiana University, 870 F.3d 562, 568 (7th Cir. 2017). If it is
clear that a plaintiff will be unable to satisfy the legal requirements necessary to
establish his or her case, summary judgment is not only appropriate, but mandated. See
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Ziliak v. AstraZeneca LP, 324 F.3d 518, 520
(7th Cir. 2003). When the non-moving party fails to establish “the existence of an

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element essential to that party’s case, and on which that party will bear the burden of
proof at trial,” Rule 56(c) mandates entry of summary judgment against that party
because “a complete failure of proof concerning an essential element of the nonmoving
party's case necessarily renders all other facts immaterial.” Massey v. Johnson, 457 F.3d
711, 716 (7th Cir. 2006) (quoting Celotex, 477 U.S. at 322–23). A genuine dispute of
material fact exists when “the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986).
Under Title II of the ADA, no disabled individual, “by reason of such disability,”
may be “excluded from participation in or be denied the benefit of the services,
programs, or activities of a public entity,” or “subjected to discrimination” by a public
entity. 42 U.S.C. § 12132. See generally 42 U.S.C. § 12131–134; Tennessee v. Lane, 541 U.S.
509, 516–17 (2004). A violation of Title II requires a showing that the plaintiff (1) is a
“qualified individual with a disability”; (2) was excluded from participation in or
denied the benefits of the services, programs, or activities of a public entity, or was
otherwise discriminated against by any such entity; and that (3) the discrimination was
a result of the plaintiff’s disability. Wagoner v. Lemmon, 778 F.3d 586, 592 (7th Cir. 2015).
The same is true for claims brought under Section 504 of the Rehabilitation Act. See
generally 29 U.S.C. § 794 et seq. The first question is whether the administration of zoning
laws may qualify as an “activity or service” for purposes of Title II of the ADA. Several
courts have answered that question yes, and I will therefore proceed under that

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assumption. See Valencia v. City of Springfield, 883 F.3d 959, 967 (7th Cir. 2018) (affirming
that Fair Housing Amendment Act of 1988, Title II of ADA, and Rehabilitation Act
“apply to municipal zoning decisions”) (citing Wis. Cmty. Servs., Inc. v. City of
Milwaukee, 465 F.3d 737, 752 n.12 (7th Cir. 2006) (en banc)).
With Count II (the declaratory judgment count) having been previously
dismissed [DE 72 at 14–15], Highland now turns its attention to Count I, Chosen’s
discrimination claim under the ADA and Rehabilitation Act. In Count I, Chosen seeks
both an injunction and damages in the form of lost profits. [See DE 38 at 8–9.]
Highland’s first argument for dismissal focuses on standing for the damages claim.3 The
second component of Count I—the request for an injunction—is challenged on the
ground that Chosen failed to exhaust its remedies through the BZA. I will take up each
argument in turn below.
1.

Lost Profit Damages

Under very similar circumstances to those presented in this case, the Seventh
Circuit has held that Title II of the ADA and Section 504 of the Rehabilitation Act do not
provide organizations like Chosen standing to recover damages in the form of lost
profits. Discovery House, Inc. v. Consol. City of Indianapolis, 319 F.3d 277, 280–81 (7th Cir.
2003). Highland says that Discovery House forecloses Chosen’s damages claim, while
Chosen responds that other circuits have rejected Discovery House’s seemingly narrow

3

Of course, it is well established that “a plaintiff must demonstrate standing separately for each
form of relief sought.” Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167,
185 (2000).

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view of standing under Title II of the ADA and Rehabilitation Act. But what other
circuits have to say on the issue is neither here nor there in the face of spot-on authority
from this circuit. In this case, faithful application of Seventh Circuit precedent requires
dismissal of Chosen’s claim for damages in the form of lost profits.
Just like this case, Discovery House involved a for-profit corporation operating
drug addiction rehab programs. The company attempted to open a methadone clinic
and was initially told by local officials that it could open a facility at its preferred site,
consistent with local zoning regulations. That decision was later challenged by those
opposed to the facility. Eventually, the local BZA determined that the facility was not a
permitted use in the district. As Discovery House appealed that decision in the state
courts, it filed a separate lawsuit claiming that the BZA and City violated its rights
under the ADA, Rehabilitation Act, and the Constitution’s equal protection clause. That
case was removed to federal court and a jury trial was held. Discovery House was
ultimately awarded over a million dollars in lost profit damages – spanning from the
period of time between the BZA’s denial of a zoning permit and a state court decision
that overturned the BZA’s decision. Id. at 278–79.
On appeal, the Seventh Circuit homed in on the issue of whether Discovery
House, as a for-profit entity that lacked direct standing to sue, had associational
standing under Title II to pursue damages “which perhaps indirectly will benefit its
clients, but which primarily [are] designed to benefit its for-profit business.” Id. at 280.
The court considered the statutory text of Title II’s enforcement provision, 42 U.S.C.

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§ 12133, noting that the “remedies, procedures, and rights” available under Title II of
the ADA are those set forth in Section 505 of the Rehabilitation Act. Section 505 (29
U.S.C. § 794a), in turn, refers to remedies for employment discrimination codified in Title
VI of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.) – which clearly did not
apply to the for-profit company before the court. See 319 F.3d at 280. In sum, the court
reasoned that “[l]ooking . . . to the nature of the relief sought and the statutes under
which standing is asserted, we see no way that either the ADA or the RA contemplates a
recovery for lost profits for a business like that of the Discovery House,” and the remedies
permitted under Title II of the ADA and RA must “at the very least, be those which
directly benefit the disabled.” Id. at 280–81 (emphasis added). Consequently, Discovery
House’s claim was dismissed because it did “not have standing to seek lost profits”
pursuant to Title II of the ADA and Section 504 of the RA. Id. at 281.
Notwithstanding this strong language in support of its position, Highland finds
a way to gild the lily a bit in its briefing. They tell me that the Seventh Circuit in
Discovery House distinguished between Title I and Title III of the ADA, which they say
“explicitly provide protection for entities and individuals with known relationships to
qualified individuals with disabilities,” and Title II of the ADA, which does not. [DE 127
at 6; see DE 136 at 7.] I find no such analysis in the Discovery House opinion. Highland
again claims in its reply brief that “Congress made a decision to provide for a right of
associational standing under Titles I and III but not Title II,” but they cite no authority in

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support of this important proposition. [DE 136 at 7.] Without much help from the
parties, let’s examine the merits of the argument.
Title I of the ADA governs employment and prohibits “discrimination against a
qualified individual on the basis of disability” in hiring, firing, and promotions, as well
as “other terms, conditions, and privileges of employment.” 42 U.S.C. § 12111 et seq.
Section 12112(b)(4) makes it unlawful to deny employment opportunities to a “qualified
individual because of the known disability of an individual with whom the qualified
individual is known to have a relationship or association.” Shifting gears, Title III
covers various enumerated categories of privately funded programs, such as places of
lodging, recreation, sales, education, and entertainment, and expressly bars
associational discrimination. 42 U.S.C. § 12182 et seq. It specifically prohibits
“discrimination-by-association,” making it unlawful to “deny” equal services “to an
individual or entity because of the known disability of an individual with whom the
individual or entity is known to have a relationship or association.” Access Living of
Metro. Chicago v. Uber Techs., Inc., 958 F.3d 604, 610 (7th Cir. 2020) (“[A]n entity denied
equal services because of its association with someone who has a disability experiences
direct harm—is ‘subjected to’ discrimination—and therefore can invoke § 12188(a)(1) to
enforce the substantive prohibition embodied in § 12182(b)(1)(E).”) (citing 42 U.S.C.
§§ 12182(b)(1)(E), 12188(a)(1)). Title II does not contain similar “relationship or
association” language, in contrast to Title I and Title III.

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For its part, Chosen does not dispute that the damages it seeks in this case come
in the form of lost profits during the period it has been unable to open the Highland
property for its new proposed use. [See DE 132 at 23–25.] Instead, the company urges
me to essentially ignore Discovery House and find that it has standing to pursue its
damages claim based on out-of-circuit authorities rejecting the case as improperly
decided.4 But Chosen fails to engage with the apparent distinction between the scope of
associational standing under Title I and Title III of the ADA, on one hand, and Title II,
on the other. And its reliance on non-binding out-of-circuit case law, in the face of
binding precedent from the circuit, is (of course) unavailing. Until the circuit revisits
Discovery House, I am bound to faithfully apply it. A plain reading of the case indicates
that it contemplates the precise situation before me: a for-profit company seeks to
obtain money damages that only indirectly benefit the disabled individuals to whom it
provides services and that more directly benefit its bottom line.
Chosen makes a last-ditch argument that any damages it obtains “will be
quarantined and used primarily to benefit the individuals who will be served” at its

4

As noted above, other courts around the country have come to different conclusions than the
court in Discovery House. See Addiction Specialists, Inc. v. Twp. of Hampton, 411 F.3d 399, 406 (3d Cir. 2005),
abrogated on other grounds by Sprint Commc’ns, Inc. v. Jacobs, 571 U.S. 69, 77 (2013). See also McCullum v.
Orlando Reg'l Healthcare Sys., Inc., 768 F.3d 1135, 1142 (11th Cir. 2014); A Helping Hand, LLC v. Baltimore
Cnty., MD, 515 F.3d 356, 364 (4th Cir. 2008). These cases suggest that Discovery House applies too high a
standard in assessing the standing of entities like Chosen to seek lost profit damages under the ADA and
RA. For example, the Third Circuit in Addiction Specialists found that the Seventh Circuit’s analysis
“ignores that the protections of the ADA and RA have been extended to shield entities themselves from
discrimination,” and that the broad remedial purposes underlying the ADA and RA do not limit relief to
“qualified individuals with disabilities.” The court thus determined that the proprietors of a proposed
methadone clinic have standing to seek relief both on their own behalf and on behalf of their clients under
the ADA and Rehabilitation Act. 411 F.3d at 405–08 (emphasis added). It does not appear that the Seventh
Circuit has revisited the issue since Discovery House.

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Highland facility [DE 132 at 24 (citing DE 130-3 at 3, ¶ 5)]. Again, this argument
reinforces my view that the monetary damages Chosen seeks in this case are based on
the profits it claims to have lost in the period it has been unable to open the Highland
facility for its proposed use. Chosen does not dispute that its damages are based on its
lost profits. More to the point, this creative but unworkable promise cannot carry the
day. For starters, federal courts are courts of limited jurisdiction; it is well established
that parties may not confer subject matter jurisdiction by agreement. DeBartolo v.
Healthsouth Corp., 569 F.3d 736, 740 (7th Cir. 2009). Moreover, a promise not to keep
certain profits separate and used only for the services of Chosen’s Highland facility
ignores the reality that cash is fungible. That consideration appears to have been
squarely on the court’s mind in Discovery House, as the panel repeatedly emphasized the
for-profit nature of the entity seeking to obtain damages that only indirectly benefitted
the individuals to whom it provided methadone treatment.
In sum, pursuant to Discovery House, Chosen does not have standing to pursue a
damages claim under Title II of the ADA and Section 504 of the Rehabilitation Act.
Accordingly, this aspect of Count I will be dismissed.
2.

Injunctive Relief

As noted above, Chosen also seeks an injunction allowing it to open the
Highland facility for its proposed use, notwithstanding the Town’s zoning concerns. As
a threshold matter, Chosen does not dispute that it never sought re-zoning of the
property (or a use variance or exception) as it attempted to transition the property from

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a dual-certified nursing home to a sub-acute drug treatment facility. [DE 133 at 5.]
While Highland has supplied evidence that the proposed use of the property as a subacute facility would require a use variance [see DE 125-6 at 7–9, 15–18], Chosen takes the
position that whether a use variance (or any other “final decision” from the BZA) was
required prior to filing the present lawsuit is a “determinative legal question” and not
an issue of material fact. [DE 133 at 5]. Chosen is correct that this presents a question of
law for me to decide at summary judgment.
That said, I disagree with the substance of Chosen’s position – i.e., that it did not
need to further pursue its request for zoning approval to the BZA and (if necessary)
appeal any final decision entered by the BZA to the state courts, prior to seeking an
injunction in federal court. In my prior Opinion and Order dismissing Chosen’s
declaratory relief action [DE 72 at 14–15], I noted that the Highland Municipal Code
provides that a “nonconforming use . . . shall not be changed to another use unless the
resultant use meets a use which is first permitted in the current zoning classification.”
[DE 56-1 at 257.] Under Highland Municipal Code § 18.115.040(D)(2), the BZA retains
“exclusive jurisdiction for” any “[u]se variances” and provides a “favorable or
unfavorable recommendation to [the] town council.” Id. at 270. Thus, if a use variance
was required for Chosen’s proposed use, it failed to pursue the proper process with the
BZA. (Again, it is undisputed that Chosen never petitioned the BZA as it attempted to
transition the use of its facility.)

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Further, if a use variance was not necessary to transition the property’s use, as
Chosen has repeatedly argued, I explained that the result would be no different.
Highland Municipal Code § 18.115.040(D)(3) grants the BZA authority over “any other
appeals authorized by statute.” That’s quite broad. Under state law, it includes appeals
taken from an “order, requirement, decision, or determination made by an administrative
board or other body except a plan commission in relation to the enforcement of [a] zoning
ordinance.” Ind. Code § 36-7-4-918.1(2) (emphasis added). The Town Council’s refusal to
issue Chosen’s requested zoning approval letter clearly constitutes a “determination
made by an administrative board or other body,” which would be subject to appeal
before the Highland Board of Zoning Appeals, at least in the first instance.
In other words, all roads to the relief Chosen seeks in the form of a federal court
injunction would lead back to the BZA. Yet, for reason I do not understand, Chosen
never pursued relief through the BZA. And even if Chosen had done so, this was
merely the first step in the process. Any “final decision” the BZA reached—whether on
a request for a use, exception, or variance, or following “any other appeal[] authorized
by statute”—would be subject to judicial review under Indiana law. See Ind. Code § 367-4-1016.
In River Park, Inc. v. City of Highland Park, 23 F.3d 164 (7th Cir. 1994), the circuit
reiterated an “oft-repeated” message: “Federal courts are not boards of zoning
appeals.” Id. at 165. Affirming the dismissal of a complaint for damages under § 1983
based on a municipality’s intentional foot-dragging on a company’s zoning

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applications, the court in River Park expressed a healthy dose of skepticism for parties
who seek federal court review of local zoning decisions. The panel’s decision in
particular emphasized how local zoning processes often “use political methods to
decide, so that the only procedural rules at stake are those local law provides,” and
reaffirmed that “these rules must be vindicated in local courts” before a party seeks
relief in federal court. See id. at 167. Indeed, the decision went so far as to state that
federal courts should “not cooperat[e]” with litigants who “omit[] the steps necessary to
obtain review in state court and hope for the best in a second-chance forum,” and that
such litigants “who neglect or disdain their state remedies” in the zoning context “are
out of court, period.” Id. at 165 (emphasis added).
Highland, relying on these “strong words” in River Park, urges me to find that
Chosen’s failure to pursue available remedies through the BZA and, if necessary, the
Indiana courts bars it from seeking injunctive relief in this federal forum. Chosen’s
response is tri-fold: (1) Title II of the ADA does not include a statutory exhaustion
requirement; (2) lower courts in the Seventh Circuit have not imposed an exhaustion
requirement in the absence of settled circuit authority; and (3) even if exhaustion of
local and state law remedies was required, an equitable exception would apply in this
case because its appeals “would be futile.”
Although reasonable minds could disagree, I find that Defendants get the better
of the argument. To hold otherwise would ignore that this dispute arises in the context
of a disagreement over local zoning rules. As the court in River Park emphasized (quite

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rightly), zoning is a quintessentially local process. And it’s an area of the law where
disputes are often driven by local politics – forces that federal courts have no occasion
to wade into, unless and until a party has pursued its available remedies under state
law.
That is not to suggest Highland’s argument is a slam dunk. As I’ve
acknowledged in other cases, most courts to consider the issue “have generally
concluded that Title II does not have an exhaustion requirement.” Canfield v. Isaacs, 523
F. Supp. 2d 885, 888 (N.D. Ind. 2007). It does not appear that the issue has been
addressed by the Seventh Circuit. In the absence of settled circuit authority, several
lower courts have concluded that a plaintiff need not exhaust administrative remedies
to sue under Title II of the ADA. See Staats v. Cnty. of Sawyer, 220 F.3d 511, 518 (7th Cir.
2000) (noting that while the Seventh Circuit had not decided the issue, some lower
courts have concluded that Title II does not require exhaustion of administrative
remedies) (citing Petersen v. Univ. of Wis. Bd. of Regents, 818 F.Supp. 1276 (W.D. Wis.
1993)). But, on closer review, this line of argument is simply a red herring.
Consider this: River Park dealt with § 1983 claims. Judges have from time to time
invented various doctrines to manage the mass of litigation brought under § 1983; but
they have not imposed “a comprehensive administrative-exhaustion requirement” to
bring such claims. See Perez v. Wisconsin Dep’t of Corr., 182 F.3d 532. 534 (7th Cir. 1999).
While a comprehensive exhaustion requirement does not appear in the text of § 1983
and courts have not grafted one onto the statute, River Park affirmed dismissal of the

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claims precisely because the appellant failed to take steps necessary to obtain review of
its zoning dispute in state court before filing suit in federal court. Call it exhaustion, call
it something else, the result is the same: a plaintiff who fails to pursue available
remedies under state law, in the context of zoning, is “out of [federal] court, period.” See
23 F.3d at 165 (emphasis added).
What’s more, River Park provides a clear rationale for requiring a plaintiff to seek
review in state court before allowing him to turn a federal court into a “board[] of
zoning appeals.” This rationale applies narrowly to disputes involving quintessentially
local zoning rules and regulations. By contrast, the cases Chosen has cited all reiterate
that Title II of the ADA lacks an exhaustion requirement outside the zoning context.
Stripped to its core, Chosen’s argument is tantamount to suggesting that, while River
Park has logical force in this context, I should ignore it in favor of far less analogous
matters that happened to involve Title II claims. This didactic approach is just not
persuasive.
Chosen’s backup argument is that an equitable exception should apply because
remedies available through the BZA (and by extension judicial review of any final
decision entered by the BZA in the Indiana courts) “would be futile.” [DE 132 at 12.]
The undisputed facts in the record reflect that no later than June 2020, Chosen’s
representatives were made aware that its request for a zoning approval letter had been
rejected. Or, at the very least, Chosen understood that (1) the Town Council had been
made aware of its request for a zoning approval letter, (2) a majority of the Town

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Council opposed its issuance, and (3) the Town Council would not be providing Chosen
with a “final” version of the draft letter Reed had previously circulated. After this
apparent rejection, Chosen suggests that an appeal of the Town Council’s determination
not to issue the zoning approval letter or a petition for a use variance—again, either of
which would fall under the BZA’s jurisdiction—would have been “futile.” That is
simply too much to stomach, given that over the better part of four years Chosen has
not even attempted to initiate the process. To be candid about it, this position strikes me
as little more than the logical extension of Chosen’s strategy: doubling down on the
argument that no use variance (or other appeal to the BZA) was required in the first
instance.
I therefore decline to find an equitable exception to the commonsense rule that,
prior to pursuing injunctive relief in connection with a local zoning process, Chosen
was first required to exhaust its available remedies under local and state law. Because in
this case Chosen undisputedly failed to do so, it may not seek to shortcut the process by
obtaining a zoning injunction in federal court.
II.

Motion for Leave to Amend
As the parties were briefing Defendants’ motion for summary judgment, a

related lawsuit was reassigned to me. [DE 26, Chosen Consulting, LLC, et al. v. Town
Council of Highland, et al., Cause No. 2:24-CV-003-PPS-JEM.] I was surprised to learn that
back in January 2024, Chosen had filed suit against the same set of defendants (plus

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Mark Schocke, albeit based entirely on actions he took in his capacity as a member of
the Town Council).
In other words, some four years after filing this case, Chosen had taken another
whack at the same defendants based on essentially the same nucleus of operative facts –
now styling the action as asserting deprivations of its Fourteenth Amendment rights to
equal protection and procedural due process under 42 U.S.C. § 1983. Clearly, something
was amiss. In an Opinion and Order entered May 20, 2024, I dismissed Chosen’s § 1983
claims under the rule against “claim splitting,” which “prohibits a plaintiff from
prosecuting its case piecemeal and requires that all claims arising out of a single wrong
be presented in one action.” Chosen Consulting LLC v. Town Council of Highland, Indiana,
2024 WL 2292042, at *4 (N.D. Ind. May 20, 2024) (quoting Elmhurst Lincon-Mercury, Inc.
Emps. 401(k) Profit Sharing Plan & Tr. v. Mears, 215 F. Supp. 3d 659, 665 (N.D. Ill. 2016)).
About two months after its new lawsuit was dismissed, on July 12, 2024, Chosen
filed a request to amend its complaint in this case. [DE 138.] This would be Chosen’s
third amended complaint; and its motion was filed well past the deadline to seek leave
to amend the pleadings. [DE 32 (setting December 21, 2020 deadline for Plaintiffs to
seek leave to amend pleadings).] Defendants predictably objected to the amendment
and the motion is now ripe for my ruling. [DE 139; DE 140.] The proposed amendment
parallels the claims in Chosen’s 2024 lawsuit. In short, Plaintiffs now seek to assert that
Defendants violated their Fourteenth Amendment rights to equal protection and

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procedural due process by ‘officially’ denying their requests to access the property for
use as a certified sub-acute facility, in violation of 42 U.S.C. § 1983. [DE 138-1 at 11–14.]
Rule 15(a)(2) provides that courts should “freely give leave [to amend] when
justice so requires.” Fed. R. Civ. P. 15(a)(2). However, this does not mean that leave to
amend should be granted as a matter of course. Airborne Beepers & Video, Inc. v. AT & T
Mobility LLC, 499 F.3d 663, 666 (7th Cir. 2007). Rather, a court may deny leave to amend
if there is “an apparent or declared reason for doing so, such as ‘undue delay, bad faith
or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment or futility of amendment.’” J.P. Morgan Chase Bank, N.A. v.
Drywall Serv. & Supply Co., 265 F.R.D. 341, 346 (N.D. Ind. 2010) (quoting Liu v. T & H
Machine, 191 F.3d 790, 794 (7th Cir. 1999)). In assessing whether to grant a request for
leave to amend, courts may also “consider the burden that granting to leave to amend
would place on the judicial system.” Id. See also Perrian v. O’Grady, 958 F.2d 192, 195 (7th
Cir. 1992) (“Because substantive amendments shortly before trial serve to defeat the
public's interest in speedy resolution of legal disputes, [a] district court judge is entitled,
in such circumstances, to refuse to allow a plaintiff's amendment.”).
I am further guided by the notion that “[t]o amend a pleading after the
expiration of the trial court’s Scheduling Order deadline to amend pleadings, the
moving party must show ‘good cause.’” Trustmark Ins. Co. v. Gen. & Cologne Life Re of
Am., 424 F.3d 542, 553 (7th Cir. 2005) (quoting Fed. R. Civ. P. 16(b)). This “good cause”

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standard “primarily considers the diligence of the party seeking amendment.” Id.
(internal quotation omitted). Plaintiffs tell me that good cause exists to permit another
round of amendment long after the expiration of the court-imposed deadline to seek
leave to amend the pleadings because they “did not become aware of new facts
sufficient to support their claims” under § 1983 “until taking depositions in January
2023.” [DE 140 at 2.] This characterization of events simply does not withstand scrutiny.
As I previously noted in evaluating the identical claims asserted in its separate
lawsuit, Chosen obviously knew all along that it was dealing with state actors operating
under color of law. Chosen’s argument that it had no way of knowing that Highland
officials made an official determination not to issue its requested zoning approval letter,
and/or that this decision by Highland officials was undertaken under color of law, was
a little hard to swallow. Chosen’s original complaint in this case alleged that the
company was informed that “at least one member of the Town Council affirmatively
opposed issuance of the letter” and that this opposition “caused the member to halt
further consideration by the Town Council of the requested letter.” [DE 1, ¶ 28 (emphasis
added).] Chosen’s amended complaints made the same claim and further alleged that
Defendants made an “unjustified, unlawful, and belated decision to oppose [Chosen’s]
lawful use of the Property as a sub-acute facility,” Chosen had been “denied access to
the Property for a lawful and proper use,” and this “denial has prevented [Chosen]
from providing much-needed services in the Town of Highland.” [DE 22; DE 38.]

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What’s more, when Chosen apparently learned of a basis to assert its new claims,
in January of this year, it did not seek leave to amend. Having opposed Highland’s
request to amend their answer nearly a year earlier [DE 88; DE 92], Chosen in all
likelihood would have faced an uphill battle in persuading the court to grant leave to
amend. So, evidently, Chosen made a strategic decision and filed a new lawsuit. After
that new lawsuit was dismissed, Plaintiffs did not seek leave to amend in this case until
nearly two months had passed. All of this reinforces my conclusion that Chosen’s request
to amend its complaint for a third time is not supported by good cause and should be
denied.
ACCORDINGLY:
Defendants’ Motion for Summary Judgment [DE 125] is GRANTED. Plaintiffs’
Motion for Leave to File Third Amended Complaint [DE 138] is DENIED. The Clerk is
DIRECTED to close the case.
SO ORDERED.
ENTERED: August 28, 2024.
/s/ Philip P. Simon
PHILIP P. SIMON, JUDGE
UNITED STATES DISTRICT COURT

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