A Hennepin County judge has dismissed a lawsuit that claimed the City of New Hope discriminated against people with disabilities when it shut down two group homes last year.

The lawsuit, filed in January, argued the city violated state law when it revoked the rental licenses of two assisted living facilities. Those facilities served individuals with diagnosed mental health disorders and other disabilities. 

5 INVESTIGATES first reported on the city’s decision to shut down the group homes in December. The revocation forced a dozen people to find new living arrangements and drew criticism from mental health advocates and housing attorneys. State lawmakers also questioned the city’s authority, calling it a “loophole” in the law. 

The lawsuit claimed the city violated the Minnesota Human Rights Act, which prohibits disability discrimination in housing.

In a statement Wednesday, the city called the judge’s decision “factually and legally sound,” saying it provided the court evidence that they attempted to work with the group home to address the safety concerns.

“The judge’s decision supports the conclusion that the City followed the law when acting to meet the needs of its residents,” the statement read in part.

The attorney representing the group home provider was unavailable for comment. 

In 2022, the city began citing residents at the group homes for “disorderly behavior” violations. Records show those violations at one home on Wisconsin Avenue included a drug overdose death, a disturbance where a resident threw a cup at a window and a situation where police were called after a resident made unwelcome comments to a neighbor.

City leaders used those violations to justify the revocation, however, the lawsuit cited comments from one city councilor who openly questioned if group homes should be allowed to operate in the city and said he believed there were “too many” group homes in New Hope.

In her order filed earlier this month, Judge Jamie Anderson wrote the group home provider failed to show “the City’s actions were motivated by discrimination” and agreed that the city had the authority to enforce its ordinance, even though the homes are licensed and regulated by the state’s health department. 

Lawrence McDonough, a nationally recognized housing attorney who reviewed the judge’s order, said he’s concerned that this could lead to more displacement.

“This decision, I think, makes it kind of open season for cities that want to rid themselves of group homes to just do that,” McDonough said.