The U.S. Court of Appeals for the Sixth Circuit recently issued its decision in Tree of Life Christian Schools v. City of Upper Arlington, in which it reversed the lower court’s granting of summary judgment in favor of the City as to Tree of Life’s RLUIPA equal terms claim.  RLUIPA’s equal terms provision states: “No government shall impose or implement a land use regulation in a manner that treats a religious assembly or institution on less than equal terms with a nonreligious assembly or institution.”  A major issue with respect to equal terms claims is how to evaluate whether a government has treated a nonreligious assembly or institution better than a religious use.  Some circuits (Third, Seventh, and Eleventh) have adopted different tests to assess equal terms claims.  Other circuits have avoided the issue and have chosen not to adopt a test.  Although the Sixth Circuit stated it was not adopting any of the various tests used by the other circuits, it may have done so unintentionally.

In August 2010, Tree of Life purchased property at 5000 Arlington Centre Boulevard in Upper Arlington, Ohio.  The property, formerly occupied by AOL/Time Warner, is located in the City’s ORC Office and Research District, the purpose of which is: “to allow offices and research facilities that will contribute to the City’s physical pattern of planned, healthy, safe, and attractive neighborhoods.  The ORC district should also provide job opportunities and services to residents and contribute to the City’s economic stability.  Permitted uses in the ORC district are: business and professional offices, research and development, book and periodical publishing, insurance carriers, corporate data centers, survey research firms, outpatient surgery centers, hospitals, and such permitted uses as are set forth or may in the future be set forth in Table 5-C.” (zoning code available here)  The City’s zoning code prohibits schools (public or private, religious included) in the ORC district, but allows them in the remaining 95% of the City.

After Tree of Life purchased the property, it negotiated with the City to open a religious school.  Unable to strike a deal, Tree of Life submitted an application to rezone the property to allow the religious school use.  The City’s zoning ordinance provides that seven criteria “be followed in approving zoning map amendments,” including that “the proposed zoning district classification and use of the land will generally conform with the master plan.”  The master plan regulates uses of land to increase the government’s income-tax revenues, and, for this reason, emphasizes the use of certain non-residential land as office space.  The City denied Tree of Life’s rezone application for failure to comply with this specific criteria.

Tree of Life sued and claimed that, among other things, the City’s denial violated RLUIPA’s equal terms provision.  The District Court granted the City’s motion for summary judgment, but the Sixth Circuit reversed the decision and remanded back to the lower court for further consideration (read our post about the District Court decision here).  The Sixth Circuit reviewed the various equal terms tests utilized by other circuits: (a) the Eleventh Circuit’s plaintiff-friendly test in which any nonreligious assembly or institution can be a valid comparator regardless of whether it is “similarly situated” to the religious use; (b) the Third Circuit’s “regulatory purpose” test, which requires that a comparator be similarly situated; and (c) the Seventh Circuit’s “accepted zoning criteria” test, which also imposes a similarly situated requirement.

Although the Sixth Circuit claimed that it was not adopting any specific test, it notes that “the remaining question is whether these other assemblies or institutions, treated more favorably, are similarly situated,” which suggests rejection of the Eleventh Circuit’s test (emphasis added).  The Sixth Circuit then states that Tree of Life “has pled facts sufficient to allege that at least some of these assemblies or institutions are situated, relative to the government’s regulatory purpose, similarly to [Tree of Life], i.e., they would fail to maximize income-tax revenue.”  This appears to endorse the Third Circuit’s “regulatory purpose” approach.  The Sixth Circuit reversed the lower court’s granting of summary judgment, because Tree of Life’s “allegations create a genuine issue of fact as to whether the government treats more favorably assemblies or institutions similarly situated with respect to maximizing revenue, unless the government can demonstrate that no assemblies or institutions could be similarly situated.” (emphasis in original).

There are two other interesting points about the Sixth Circuit’s decision.  First, citing Kelo v. City of New London, 545 U.S. 469 (2005), the Court says that local governments could ensure compliance with RLUIPA by using eminent domain, because eminent domain “provides local governments with an escape hatch to avoid the most severe applications of RLUIPA’s zoning provisions.” (citation omitted).  According to the Sixth Circuit, “Upper Arlington could force [Tree of Life] to sell the land to the government, and sell the land to a buyer that the government thinks offers superior economic benefits.”  Most courts that have considered the issue have found that eminent domain is not a “land use regulation” that will invoke RLUIPA (recall, RLUIPA applies only to a “land use regulation”).  However, there is some authority that eminent domain could constitute a land use regulation under RLUIPA, see our prior post here.  It remains to be seen whether municipalities may increasingly exercise the power of eminent domain to circumvent RLUIPA compliance.  Politically, the idea may be untenable in most places.  Also, it might be asked if this use of eminent domain is a public purpose if it is principally to avoid RLUIPA liability.  Was consideration given to offering a substantial premium to Tree of Life to voluntarily sell the property to the City?

Second, the Sixth Circuit appears to limit the power of RLUIPA’s “safe harbor” provision to insulate local governments from liability.  RLUIPA’s safe harbor provision provides: “A government may avoid the preemptive force of any provision of this chapter by changing the policy or practice that results in a substantial burden on religious exercise, by retaining the policy or practice and exempting the substantially burdened religious exercise, by providing exemptions from the policy or practice for applications that substantially burden religious exercise, or by any other means that eliminates the substantial burden.”  In the face of equal terms claims, some municipalities have amended zoning codes to attempt to avoid liability (learn more about the safe harbor provision in the article Finding Salvation in Religious Law’s Safe Harbor).  In the case of Tree of Life, the Court states in Footnote 4 of its decision that the City previously allowed daycares in the ORC zoning district but amended the ordinance during the pendency of litigation to exclude daycares (presumably to avoid liability).  The Court, however, ruled that the amendment removing daycares would not remedy the alleged violation, and they should still be considered because “Upper Arlington always could amend the [zoning code] once again to allow daycares in the ORC district.”