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Federal Judge Rules Indiana Discriminated Against Recovery Homes

By: Charlotte Burke • March 12, 2026 • Indianapolis, IN
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(INDIANAPOLIS) - A federal judge has ruled that the State of Indiana unlawfully discriminated against several recovery homes for people overcoming substance abuse.

The decision by the U.S. District Court for the Southern District of Indiana sided with four operators: Place of Grace and Harmony Home in Huntington County, Inspiration Ministries in DeKalb County, and Next Step Recovery Home in Dubois County.

According to the ACLU of Indiana, the state classified the homes as commercial structures rather than residential properties because of the residents living there. That classification forced the operators to meet expensive commercial building standards.

Judge Tanya Walton Pratt ruled the state's decision violated the Americans with Disabilities Act, the Fair Housing Act, and the Rehabilitation Act.

The court ordered Indiana to treat the homes as residential structures, similar to traditional family homes.

The ruling also awarded more than $206,000 in damages to Place of Grace to cover costs tied to the commercial building requirements.

The recovery homes provide a family-style living environment for people recovering from substance abuse, allowing residents to live together while working toward sobriety.