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RLUIPA, Substantial Burdens and Hardships.

Written by Daniel P. Dalton on August 8, 2016 Category: RLUIPA, Substantial Burden
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In Andon, LLC v. City of Newport News, Virginia, the Court was asked to review a RLUIPA case to determine if a substantial burden existed when the Church sought zoning approval after they were told by the planning staff that it would not be approved for a commercial parcel of property.  The Court addresses a significant standing issue in the case as well.

Reconciling People Together in Faith Ministry (the “Congregation”) is a small, religious organization native to the City of Newport News, Virginia (the “City”). Founded in June of 2012, the Congregation initially held its meetings at a local business owned by its pastor. However, it soon decided that this location did not have the appropriate size or amenities to continue use as a meeting place. The Congregation thus sought an alternate location at which to conduct its meetings, and ultimately settled on 6212 Jefferson Avenue (the “Property”), owned by Andon, LLC. The Property is designated as a “C1” zoning district, which supports the use of a church or other similar place or worship only if the property meets certain conditions. Under the Code of Ordinances for the City of Newport News (the “Code”), using a C1 property as a place of worship is a permitted use only if:

(a) access is provided from a public street directly to the property;

(b) no use is operated for commercial gain;

(c) no building or structure, nor accessory building or structure is located within 100 feet of any side or rear property line which is zoned single-family residential; and,

(d) any parking lot of street serving such use is located 25 feet or more from a side or rear property line zoned single family residential.

Although the physical contours of the Property satisfied conditions (a), (b), and (d), the Property violated subsection (c). Nevertheless, on November 28, 2012, the Congregation entered into an agreement with Andon to lease the property contingent on receiving City approval to operate a church on the Property. Initial conversations with the City’s Zoning Administrator revealed that the City intended to reject an application for a zoning variance to use the Property as a church. Despite this assertion by the City, on March 4, 2013, Andon filed a variance application with the Newport News Board of Zoning Appeals (the “Board”) to operate the church on the Property. On April 9, 2013, staff from the Newport News Department of Codes Compliance (the “Department”) filed a staff report with the Board recommending a denial of Andon’s application.

In its report, the Department reference the Code, which stated that the Board “shall not authorize a variance” unless it finds: (1) “strict application of the ordinance would produce an undue hardship” relating to the property “not shared generally by other properties”; (2) such a variance “will not be of substantial detriment to adjacent property”; and (3) “the character of the district will not be changed” by granting the variance. After reviewing the facts, the Department found that Andon had failed to meet the standards for a variance because it failed to establish undue hardship existed when “the property may be used without the variance approval.” After a public hearing on April 16, 2013, the Zoning Board adopted the Department’s recommendation and voted to deny the variance.

Andon subsequently appealed the decision of the Board, and on October 11, 2013, the Circuit Court affirmed the Board’s decision. Andon and the Congregation (collectively, “Plaintiffs”) then brought suit against the City in the District Court for the Eastern District of Virginia. In Response, the City filed a motion to dismiss.

Motion to Dismiss   

At the district court level, Plaintiffs alleged that the Board’s denial of their variance request imposed a substantial burden on Plaintiffs’ religious exercise in violation of the Religious Land Use and Institutionalized Persons Act (“RLUIPA”). Specifically, Plaintiffs asserted that the Board’s action caused “delay in obtaining a viable worship location” and “uncertainty as to whether . . . the [c]ongregation [would] be able to go forward with the lease of the Property.” Plaintiffs also noted that they were unable to find an alternate property “that was the appropriate size, location, and price” to serve as a place of worship, and that “[m]any of the [alternative] buildings were too large and too expensive for the young congregation.” The City moved to dismiss Plaintiffs’ RLUIPA claim on two grounds. First, the City claimed that Andon should be dismissed as a party for lack of standing. Second, the City maintained that Plaintiffs had failed to sufficiently plead a RLUIPA claim.

Standing

The City first contends that RLUIPA requires that all plaintiffs prove a substantial burden on their exercise of religion, yet Plaintiff’s complaint alleges interference with religious exercise only with respect to the Congregation. Therefore, because Plaintiffs’ complaint failed to allege that Andon is engaged in religious exercise, it lacks standing and should therefore be dismissed as a party to the lawsuit. Alternatively, Plaintiffs asserted that Andon has standing simply as the owner of the property. Further, Plaintiffs argued that RLUIPA contains no requirement that a plaintiff be engaged in religious activity to bring a claim. As a result, Andon would needed to satisfy only those standing requirements mandated by Article III of the Constitution, which Andon clearly meets as the owner of the property. After reviewing the statute and relevant case law, the district court found that there was no such requirement that a plaintiff be engaged in religious activity to bring a RLUIPA claim.

The court first noted that the plain reading of Section (a)(1) of RLUIPA shows that a plaintiff must establish only “a substantial burden on the religious exercise of a person.” Further, RLUIPA states that “[s]tanding to assert a claim or defense under this section shall be governed by the general rules of standing under Article III of the Constitution.” The court further found that an interpretation of RLUIPA which avoids the requirement that each plaintiff be engaged in religious activity aligned with the clearly stated congressional intent of RLUIPA. The statute explicitly states that “[t]his chapter shall be construed in favor of a broad protection of religious exercise, to the maximum extent permitted by the terms of this chapter and the Constitution.” Thus, recognition of an additional limit for standard would clearly contradict the stated purpose of the statute.

The district court also looked to existing case law, which likewise called the existence of an additional standing requirement into doubt. Specifically, the court referenced Dilaura v. Ann Arbor Charter Township, 30 Fed. App’x 501 (6th Cir. 2002), a case in which a religious organization and a development company brought a RLUIPA claim against a town following the town’s denial of a zoning variance. The Sixth Circuit found that the “religious use of land is the core concept protected by the statute.” Consequently, the Dilaura court looked to the definition of the term “land use regulation,” which under RLUIPA is described as

a zoning or landmarking law, or the application of such a law, that limits or restricts a claimant’s use or development of land (including a structure affixed to land), if the claimant has an ownership, leasehold, easement, servitude or other property interest in the regulated land or contract or option to acquire such an interest.

The Sixth Circuit relied on this language to conclude that the development company had standing “as record title owner” of the property at issue. Throughout this analysis, the court never considered whether the development company had engaged in religious exercise—signifying no such requirement exists. Thus, the district court concluded that the holding in Dilaura, when considered together with the statutory language of RLUIPA, indicates that a plaintiff is not required to be engaged in religious activity to have standing under RLUIPA.

To rebut Plaintiffs’ assertion and support the contention that RLUIPA does include such a requirement, the City cited to a single case, Calvary Christian Center v. City of Fredericksburg, Virginia, 832 F.Supp.2d 635 (E.D. Va. 2011), in which the court announced that “[t]o qualify for protection under RLUIPA, a plaintiff must be engaged in a religious activity.” However, in applying RLUIPA, the Calvary Christian Center court made the statement that “a plaintiff must be engaged in a religious activity” in passing with no explanation or reason for or against its adoption. The court then found that plaintiff had “not plead any facts demonstrating that the operation of the day school by a third party is a religious exercise.” The court in the instant case found that this statement was merely an attempt to repeat the statutory requirement that a plaintiff must prove “a substantial burden on the religious exercise of a person.” As the plaintiff in Calvary Christian Center was the person whose religious exercise was allegedly being burdened, the court used this language to explain that in such cases, the plaintiff must in fact prove that he was engaged in religious activity that was substantially burdened. The fact that the statement was made in passing without any further explanation reinforces this conclusion. Therefore, the court found that a Andon, as a Plaintiff, was not required to be engaged in religious activity to bring a claim under RLUIPA. As a result, the only standing requirement that a plaintiff must satisfy under RLUIPA is “the general rules of standing under Article III of the Constitution.”

Article II grants federal courts jurisdiction only over “cases and controversies.” The doctrine of standing identifies these “case and controversies” “appropriate for judicial resolution.” Miller v. Brown, 462 F.3d 312, 316 (4th Cir. 2006). Under this doctrine, “[t]here are three components of constitutional standing: (1) the plaintiff must allege that he or she suffered an actual or threatened injury that is not conjectural or hypothetical, (2) the injury must be fairly traceable to the challenged conduct; and (3) a favorable decision must be likely to redress the injury.” Id. (citing Lujan v. Defenders of Wildlife, 504 U.S 555, 560-61 (1992). Thus, the court first had to consider whether Andon suffered an actual injury from the City’s denial of its application for a zoning variance.

The court noted that “[f]ederal courts have recognized the standing of developers with contracts contingent on acquiring rezoning or building permits to challenge government action concerning the rezoning or issuing of permits.” Chesterfield Dev., Corp. v. City of Chesterfield, 758 F.Supp. 1309, 1311 (E.D. Mo. 1991). Further, in Scott v. Greenville County, 716 F.2d 1409 (4th Cir. 1983), the Fourth Circuit found that the “denial of a building permit for [plaintiff’s] proposed multi-family housing complex” constituted an actual injury. The Fourth Circuit came to this conclusion despite the fact that the development had only been proposed at this time, which, consequently, meant the benefit had not yet been realized. As a result, the court concluded that the loss of a future, but non-speculative, benefit is sufficient to establish an actual injury. Although Andon had not alleged a specific amount of lost future profits, the court found that the mere fact that Andon lost the future, non-speculative benefit of lease payments was sufficient by itself to constitute an actual injury. “[A] relatively small economic loss—even an ‘identifiable trifle’—is enough to confer standing.” Katz v. Pershing. LLC, 672 F.3d 64, 76 (1st Cir. 2012) (quoting Adams v. Watson, 10 F.3d 915, 924 (1st Cir.1993)); see also Brandt v. Vill. of Winnetka, 612 F.3d 647, 649 (7th Cir. 2010) (“Standing exists when the plaintiff suffers an actual or impending injury, no matter how small.. ..”). Therefore, the loss of any future profits from the conditional lease resulted in an actual injury to Andon. As the remaining elements of Article III were easily satisfied, the court concluded that Andon had standing to bring a RLUIPA claim against the City.

Appeal

The district court also found that Plaintiffs could not plausibly alleged a substantial burden to the Congregation’s religious exercise as required under RLUIPA. As a result, Plaintiffs appealed the decision of the district court. On appeal, the appellate court considered whether the district court erred in dismissing Plaintiffs’ complaint with prejudice. Plaintiffs here asserted that they plausibly alleged a claim under RLUIPA, because, as a result of the Board’s action, the Congregation was unable to find a suitable location in the City for worship, and thus Plaintiffs have suffered “delay, expense, and uncertainty” in establishing a church location and in executing the lease agreement.

The appellate court first addressed Plaintiffs’ substantial burden claim under RLUIPA, noting that RLUIPA contains two provisions limiting governmental regulation of land use with respect to religious exercise. The first such RLUIPA provision prohibits governmental entities from imposing land use restrictions that: (1) treat a religious organization “on less than equal terms” with a nonreligious organization; or (2) discriminate against any organization on the basis of religion. The second RLUIPA provision addressing governmental regulation of land use, on which the plaintiffs base their claim, does not require a showing of discriminatory governmental conduct. See Bethel World Outreach Ministries v. Montgomery County Council, 706 F.3d 548, 557 (4th Cir. 2013). Instead, this provision prohibits a governmental entity from imposing or implementing a

land use regulation . . . that imposes a substantial burden on the religious exercise of a person, including a religious assembly or institution, unless the government demonstrates that imposition of the burden on that person, assembly, or institution . . . is in furtherance of a compelling governmental interest; and . . . is the least restrictive means of furthering that compelling governmental interest.

To state a substantial burden claim under RLUIPA, a plaintiff therefore must show that a government’s imposition of a regulation regarding land use, or application of such a regulation, caused a hardship that substantially affected the plaintiff’s right of religious exercise. See Bethel, 706 F.3d at 556; Furu Nanak Sikh Soc’y of Yuba City v. Cty. of Sutter, 456 F.3d 978, 988-89 (9th Cir. 2006); Civil Liberties for Urban Believes v. City of Chicago, 342 F.3d 752, 761 (7th Cir. 2003).

The Fourth Circuit addressed the scope of substantial burden claims under RLUIPA in its decision in Bethel. Although the county regulations considered did not target religious exercise and applied generally to both secular and religious uses, the court concluded that the plaintiff presented a triable RLUIPA claim, because the regulations substantially pressured the plaintiff to modify and ultimately to abandon its pre-existing plan to construct a church. Id. at 556-59.

Although other real property may have been available for the plaintiff to purchase, the “delay, uncertainty, and expense” of selling the plaintiff’s property and finding an alternate location increased the burden imposed on the plaintiff’s religious exercise. Id. at 557-58. In reaching this conclusion, the court emphasized that a critical function of RLUIPA’s substantial burden restriction is to protect a plaintiff’s reasonable expectation to use real property for religious purposes. Id. at 556-557. See Petra Presbyterian Church v. Vill. of Northbrook, 489 F.3d 846, 851 (7th Cir. 2007) (explaining that when an organization buys property “reasonably expecting to obtain a permit, the denial of the permit may inflict hardship” on the organization).

However, in the instant case, the court noted that Plaintiffs never had a reasonable expectation that the property could be used as a church. The court reasoned that when Plaintiffs entered into the prospective lease agreement, the property was not a permitted site for a community facility such as a church, and additionally did not meet applicable setback requirements for that type of use.

Additionally, before Andon filed the application seeking a variance, the Zoning Administrator had informed Andon that the application would not be approved for failure to meet the setback requirement. Thus, the court determined that Plaintiffs assumed the risk of an unfavorable decision, and chose to mitigate the impact of such a result by including the contingency provision in the lease. Accordingly, the Board’s denial of the variance did not alter any pre-existing expectation that the plaintiffs would be able to use the property for a church facility, or cause them to suffer delay and uncertainty in locating a place of worship.

Therefore, the Court concluded that Plaintiffs’ alleged burdens were not imposed by the Board’s action in denying the variance, but rather, were self-imposed hardships. See Petra Presbyterian Church, 489 F.3d at 851 (because the plaintiff purchased property with knowledge that the permit to use the property for a church would be denied, the plaintiff “assumed the risk of having to sell the property and find an alternative site for the church”).

According to Bethel, a self-imposed hardship generally will not support a substantial burden claim under RLUIPA, because the hardship was not imposed by governmental action alternating a legitimate, pre-existing expectation that a property could be obtained for a particular land use. Therefore, the court held that Plaintiffs had not satisfied that “substantial burden” requirement of governmental action under RLUIPA. See Bethel, 706 F.3d at 556-58; Guru Nanek Sikh Soc’y of Yuba City, 456 F.3d at 988-89; Civil Liberties for Urban Believers, 342 F.3d at 761.

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