Saul Rivkin, who lives near Pennhurst, filed an injunction earlier this week on behalf of area homeowners to block the opening of the haunted house. Rivkin says he's concerned about the traffic and potential for vandalism and crime.
However, on Friday, a judge dismissed the complaint saying Rivkin's attorney had not provided evidence he would suffer "immediate and irreparable harm."
The opening of the haunted house is now on as planned.
In 1977, a judge ruled that patients had been abused, neglected, beaten and sexually assaulted at the 110-acre Pennhurst property. It was closed 10 years later.
Matthew Diehl, a member of the Pennhurst Memorial Preservation, who was in court to support the Rivkins says the real fight was about blocking what they see as exploitation.
"We believe this haunt is disrespectful to the memories of the patients that lived there and the families," Diehl said.
Property owner Richard Chakejian says the attraction does not exploit what happened at Pennhurst.
"My interpretation of what the judge said was that their claim was meritless and baseless and the harm they were trying to demonstrate just doesn't exist," Chakejian said.
Chakejian has developed the haunt with Randy Bates, owner of the Bates Motel and Haunted Hayride in Glen Mills.
The attraction is called the "Pennhurst Asylum". It includes a mock morgue along with lobotomy and shock therapy rooms. It's expected to employ up to 80 workers, and attract 2,500 to 3,000 people daily each paying $25 a ticket.
David Ferleger filed the original suit against Pennhurst in 1974, and is shocked at what he calls at mockery of patients' memories. He spoke with Lisa Thomas-Laury for an Action News special report about Pennhurst and the attraction.