The Indiana Supreme Court ruled in favor of Mt. Zion’s Loving Day Care Ministry, reinstating its eligibility to participate in the federal Child and Adult Care Food Program (CACFP). The court found that the Indiana Department of Education (DOE) abused its discretion by terminating the day care's participation without allowing it a fair opportunity to correct its deficiencies. This decision impacts not only Mt. Zion but also sets a precedent for how state agencies handle compliance issues in federally funded programs.

The case, Indiana Department of Education v. Mt. Zion’s Loving Day Care Ministry, was decided on October 26, 2026, and the ruling underscores the importance of providing adequate support and opportunities for correction to organizations serving vulnerable populations. The court's decision highlights the need for state agencies to act fairly and transparently when enforcing compliance with federal regulations.

Mt. Zion’s Loving Day Care Ministry is a church-based nonprofit located in Indianapolis. It has been part of the CACFP since 1999, providing meals to over a hundred children, many of whom come from underserved communities. The day care faced termination from the program after the DOE cited food-labeling issues stemming from a third-party vendor, Sysco. Despite Mt. Zion’s attempts to comply with the requirements, the DOE did not allow further opportunities for corrective action after an initial deficiency was identified.

The dispute began when the DOE conducted a review in 2022, finding that Mt. Zion had serious deficiencies in its food service operations. The DOE had previously given Mt. Zion opportunities to correct issues in 2015 and 2018, which the day care successfully addressed. However, the 2022 review revealed new compliance issues, leading to a proposed termination of Mt. Zion's participation in the CACFP.

After receiving a notice of serious deficiency, Mt. Zion submitted a corrective action plan, explaining that it was struggling to obtain necessary food labels due to COVID-related supply chain issues. The DOE, however, deemed the plan insufficient and proposed termination. Mt. Zion then requested technical assistance but received only a guide that it already possessed. Following an administrative hearing, the DOE’s decision to terminate was upheld by an administrative law judge (ALJ), citing a pattern of repeated noncompliance.

Mt. Zion sought judicial review, and the trial court reversed the ALJ’s decision, stating that the DOE had imposed an arbitrary policy that denied the day care further opportunities for corrective action. The trial court found that the DOE failed to provide adequate technical assistance, which is required under federal law. The DOE appealed this decision, but the Indiana Court of Appeals initially reversed the trial court's ruling, leading to Mt. Zion's petition for transfer to the Indiana Supreme Court.

The Indiana Supreme Court ultimately ruled that the DOE abused its discretion by not allowing Mt. Zion another chance to correct its deficiencies. Justice Goff, who authored the opinion, stated, "The DOE’s blanket policy of rejecting correction proposals by CACFP participants once a deficiency recurs...was arbitrary and capricious." The court concluded that the DOE should have considered Mt. Zion's significant efforts to comply, including hiring a CACFP expert and taking legal action to obtain necessary labels.

The ruling reinstates Mt. Zion’s agreement and eligibility to participate in the CACFP, emphasizing the importance of providing adequate support and opportunities for correction to organizations that serve vulnerable populations. The court's decision reflects a commitment to ensuring that children who rely on these programs continue to receive nutritious meals.

This ruling has broader implications for similar cases involving state agencies and federally funded programs. It reinforces the idea that agencies must act fairly and transparently when enforcing compliance issues, particularly when the well-being of children and vulnerable populations is at stake. The court's decision may encourage other organizations facing similar challenges to pursue their rights and seek judicial review if they believe they have been treated unfairly.

Looking ahead, the Indiana Department of Education may consider appealing the decision, although the court's ruling is a significant setback for the agency. Details were not available in the court filing regarding any potential related cases or further actions from the DOE.