According to the lawsuit, Taylor city officials had refused to allow the facility to house more than six residents at a time because of zoning laws. The residential facility in question was in a single family area of the city. Zoning requirements in single family areas limited the number of persons living together to six. When the owners of the facility asked that their property be rezoned to allow 12 residents, Taylor officials said no.
Both Smith and Lee Associates, the owners and operators of the adult foster care facility, and the US Department of Justice filed separate federal lawsuits against the city. Both lawsuits claimed that rezoning the property to allow more residents would have been a reasonable accommodation under the Fair Housing Acts disability provisions. Taylor settled the Justice Department suit by agreeing to allow up to nine residents at the facility. Smith and Lee Associates continued its lawsuit.
Court says rezoning can be viewed as reasonable accommodation under the Fair Housing Act
In December 1996, following prolonged legal proceedings, the Sixth Circuit court issued a ruling on behalf of the plaintiffs, agreeing that the city of Taylor had failed to make a reasonable accommodation for the disabled residents at the facility. The court also held that the city must allow up to nine residents in residential adult care facilities even if those facilities are located in single family zones.
Following the Sixth Circuits ruling, the city of Taylor agreed to settle with Smith and Lee Associates. The cash settlement included money for lost profits, damages, attorneys fees, legal costs, and interest. Taylor officials also agreed to in injunction prohibiting it from interfering with the operations of adult foster care facilities in single family neighborhoods so long as they had nine or fewer residents.