When Zoning Becomes Discrimination: Dunwoody, Georgia, Sued Over Blocking Recovery Facilities

The intersection of land use law and behavioral health care is once again in the spotlight. On August 22, 2025, North Atlanta Recovery Place LLC and Southern Live Oak Wellness Academy LLC filed a federal lawsuit alleging that the City of Dunwoody, Georgia, has manipulated its zoning ordinances to deliberately block residential treatment facilities and recovery homes from operating within city limits (Law360).

The Allegations

According to the complaint, Dunwoody has engaged in a years-long campaign to restrict recovery facilities:

• Targeted Ordinances: In July 2024, the city passed a zoning law prohibiting new “recovery communities” from locating within one mile of another recovery facility or within 2,000 feet of a school. Plaintiffs argue these restrictions were crafted to squeeze out substance use disorder and mental health homes specifically.

• License Denials: Plaintiffs purchased a property previously used by Manna House as an eating disorder recovery home, but the city refused to let them continue operating there. Instead, officials told them they must apply for a special land use permit (SLUP)—a costly, drawn-out process that requires public hearings and nearly impossible evidentiary standards.

• “Rigged” Process: The plaintiffs allege that Dunwoody designed the SLUP process to guarantee denials, citing requirements such as detailed affiliation evidence, transition-out protocols, and accreditations that few providers could reasonably meet.

Legal Claims

The lawsuit argues Dunwoody’s actions violate:

• The Fair Housing Act (FHA): By isolating people in recovery and preventing group residential treatment, the ordinance allegedly fosters the very discrimination the FHA was designed to prevent.

• The Americans with Disabilities Act (ADA): By making residency and treatment unavailable based on disability status, the city is accused of illegal discrimination.

• State & Federal Law: Plaintiffs assert the city has arbitrarily applied municipal codes to suppress lawful operations.

The recovery providers are seeking:

• A declaration that the zoning ordinance is unlawful;

• An order blocking Dunwoody from interfering with their operations;

• $5 million in compensatory damages and $3 million in punitive damages, plus attorneys’ fees.

Why This Matters

Cases like this highlight the tension between local zoning powers and federal protections for people with disabilities in recovery. While cities often frame zoning restrictions as community planning or public safety, federal courts have repeatedly recognized that overly restrictive ordinances can amount to discrimination.

For behavioral health and recovery providers, this lawsuit serves as a reminder that:

• Zoning can be a hidden barrier to care—and one that may require litigation to overcome.

• Federal protections under the FHA and ADA are powerful tools when municipalities enact discriminatory ordinances.

• Providers must document efforts and denials carefully to preserve claims of arbitrary and discriminatory treatment.

Bottom Line

The Dunwoody case underscores how legal advocacy is often necessary to challenge discriminatory zoning that undermines access to behavioral health and addiction treatment. At Lynne Legal, we help providers navigate the complex intersection of healthcare law, municipal codes, and federal protections—ensuring that zoning is used as a tool for community planning, not discrimination.