After more than five years of RLUIPA litigation in federal courts, the City of San Leandro in California and the International Church of the Foursquare Gospel (ICFG) reached a settlement agreement.
San Leandro had denied the churchs rezoning and conditional use permit applications for industrial land that ICFG had purchased to be the site of a new church campus to accommodate its growing congregation. The City had allowed religious facilities in residential zones and then added an overlay zone greatly expanding the potential sites for religious institutions in San Leandro. This case proves that litigation may still arise even when a municipality is proactive and seemingly supportive of religious institutions.
According to the City of San Leandros press release, the settlement includes the following terms:
- The City admits no liability and ICFG dismisses all claims against the City in return for a $2.3 million payment;
- The City preserves its general plan and zoning provisions while ICFG may continue in its efforts to find a new, properly-zoned site;
- ICFG cannot sue the City under RLUIPA if it denies development of a church on a site outside of the Citys current Assembly Use (AU) Overlay District or Residential Zones where assembly uses are permitted.
To read the rest of the Citys Press Release, Click Here.
In 2006, ICFG purchased a 46,000 square-foot building in an industrial zone and deleted a contractual provision in its purchase and sale agreement allowing the church to terminate the agreement if the City did not approve the re-zoning request.
Located on Catalina Street, the Catalina Property is within the West San Leandro Focus Area as outlined in the Citys General Plan to attract high technological industrial users.Adjacent to several manufacturing plants and in the vicinity of numerous other industrial uses, it is also within 500 feet of eight businesses operating under a hazardous materials business plan.
ICFG claimed that not being able to use the Catalina Property would impede its pursuit of its core tenets which it describes as joyous, united worship of God; local and global evangelism to lead people in faith in Christ; instruction; and works of compassion, justice, and human aid because the current church site limits the numbers of attendees who can assemble all at the same time in the same space.
According to ICFG, the Catalina Property could accommodate up to 1,100 people in the sanctuary and another 500 people in other activities, such as Sunday school.Further, the Catalina Property would provide substantial space for parking and a larger kitchen facility.Of note, ICFG never filed an application for such a project but rather proposed three services with 500 attendees.Accordingly, the parking and other development standards were never evaluated for compliance to determine if this project would comply with the code.Meanwhile, the City undertook a city-wide zoning study and ultimately adopted a new AU Overlay District. This district allows churches and other assembly uses to locate, with a conditional use permit, on 196 parcels in the Citys industrial and commercial zones where they had not previously been allowed. The City applied eight objective planning criteria to all properties zoned for commercial and industrial use to determine which properties would fall in the AU District.Based on those criteria, the City determined that the Catalina Property should not be included in the new zone.
Thereafter, ICFG submitted an application to rezone the Catalina Property to be included in the AU Overlay District.In May 2007, the City denied ICFGs application because it found that the Catalina Property did not meet two of the objective criteria to determine which properties are suitable for the new zone.ICFG also submitted an application to conditionally permit assembly use at the Catalina Property as an entertainment activity under the existing zoning code.The City also denied this application.
ICFG sued the City, alleging that the Citys denial of the rezoning and conditional use permit applications violated RLUIPAs substantial burden, equal terms, and total exclusion provisions, in addition to various constitutional claims.The Church sought more than $20 million in damages, with upwards of $14 million attributed to alleged lost contributions representing lost revenues from prospective church members.
Stage 1: Federal District Court
In December 2008, the federal district court granted the Citys motion for summary judgment. Specifically, the Court concluded that the Citys denial of ICFGs applications did not substantially burden ICFGs religious exercise of its religion since other properties were available. Further, the City had a compelling governmental interest in preserving the industrial land for high tech users.
ICFGs equal terms argument failed because the Citys zoning code was neutral towards religious activity; the Citys actions were based on legitimate public policy concerns for which it need not have a compelling interest.
ICFGs total exclusion claim also failed because the court found that 54.6 percent of the land in San Leandro is available for assembly use.(Click Here to read the Federal District Court 2008 decision).
Stage 2: Ninth Circuit Court of Appeals
The United States Court of Appeals for the Ninth Circuit reversed the trial court.
First, it found that summary judgment should not have been granted to the City on ICFGs claim of substantial burden. Even though the City provided through neutral, generally applicable standards numerous opportunities for large and busy houses of worship to locate throughout the City, including nearly 200 additional sites totaling 200 acres under the AU Overlay District.The Court also found the legislative act of a zone change to be an individualized assessment.
The City argued that just because suitable properties are not available for sale on the market does not mean that the denial of the Churchs desired site imposes a substantial burden because RLUIPA does not insulate religious institutions from the harsh realit[ies] of the marketplace [that] sometimes dictate that certain facilities are not available to those who desire them.(Ninth Circuit Decision at 5308).
ICFGs claims under RLUIPAs equal terms were not ruled upon in this decision but left open for future litigation.(Ninth Circuit decision at footnote 1)(Click Here to read the Ninth Circuit Decision).
Stage 3: Petition to the U.S. Supreme Court
The City then petitioned the United States Supreme Court for a writ of certiorari. The City argued that there is a split among the federal courts regarding
1. Whether cost or inconvenience are sufficient to constitute a substantial burden
2. The interpretation of individualized assessment
3. Whether neutral, generally applicable planning principles can constitute a compelling governmental interest.
(Click Here to read the full brief).
An amicus curiae brief, written by lawyers at Robinson & Cole LLP, was filed on behalf of the California Chapter of the American Planning Association elaborating on the Citys third point that there is a split among the courts whether maintaining the integrity of a comprehensive zoning scheme may constitute a compelling governmental interest.
The Supreme Court, which has yet to hear a RLUIPA land use case, denied the Citys petition.
Stage 4: Return to Federal District Court
On remand to the Federal District Court, the City again moved for summary judgment. This time, the City argued that ICFG was not entitled to damages under RLUIPAs substantial burden provision because the damages were self-inflicted and speculative.
While the trial court concluded that damages may be recoverable under RLUIPAs substantial burden provision, it found that ICFGs claim for lost profitsbased on hypothetical new church members was simply too speculative to entitle it to monetary damages. With this decision, ICFGs potential damages were drastically reduced (by $10-14 million).
Shortly after the trial courts decision, the City and ICFG agreed to settle.The Citys Press Release describes the backdrop for the discussions:
“The City and ICFG/Faith Fellowship Church, each facing the escalating cost of a lengthy and complex trial, extended appeals, and an unsettled and still evolving RLUIPA law, were ordered by Judge Hamilton to a settlement conference. Under the guidance of U.S. Magistrate Judge Corley the parties successfully resolved the matter, contingent upon City Council approval. Without admitting liability, the City Council approved the payment of $2.3 million to resolve and release all claims by ICFG against the City.”
This case demonstrates that even municipalities that go above and beyond accommodating assembly uses, including religious uses, are still susceptible to grueling and costly federal litigation under RLUIPA.Sometimes, it may be better to settle while you are in a favorable position, as in this case, rather than taking your chances in court, where there continues to be a lack of clear precedent and guidance on many of RLUIPAs provisions and terms.