Faith Fellowship

Oct 042011

Today (Oct. 3, 2011), the US Supreme Court denied certiorari on the City of San Leandro vs. Faith Fellowship case.  As it is its practice, the Supreme Court did not provide a reason for this denial.  What this means is that if this case it’s not settled, it will go on to trial.  The jury will then have to decide basically whether the Church could have acquired another property in a residential-zoned area of San Leandro that would have suited their purposes.  Former city manager Jermanis said in his deposition that it couldn’t.  In my opinion, it’s quite likely that the Church would win.

The question now is one of damages.  How much would the Church be awarded if it went to trial, and how much should the city offer to settle for so as to avoid going to trial.   Previous statements by the Church, suggest that they’ll be asking for as much as $3.7 million in damages, the $1.2 million they paid in mortgage payments while the owned, but could not occupy the Catalina St. property, and the $2 million they lost when they finally had to sell it.  To that we should add the Church’s attorney fees, which could be in the hundreds of thousands of dollars (the City of San Leandro itself has spent about $600,000 on this lawsuit).

The city has an ace up its sleeve, however.  Quoting from a previous post: “it is not clear that RLUIPA [the Religious Land Use and Institutionalized Persons Act, under which this case is being fought]  allows for money damages.  While some courts have found that it does, following the Supreme Court’s reasoning in Franklin v. Gwinett, the US Supreme Court just ruled in Sossamon v. Texas (a case involving prisoners’ religious rights) that  the phrase “‘[a]ppropriate relief’ is open-ended and ambiguous about what types of relief it includes” and that, at least in the case of lawsuits against states (which, unlike municipalities, enjoy sovereign immunity) it should not be interpreted to include monetary damages.  Now, because the Sossamon court ruled on very specific circumstances, it’s not clear how lower courts will interpret the decision.  They may very well conclude that it would be inconsistent to read RLUIPA’s grant of “appropriate relief” to include monetary damages when the state actor is a municipality or county, but to not include them when the actor is a state.  Or they may decide that the fact that Supreme Court specifically differentiated Sossamon from Franklin means that Franklin applies to non-sovereign RLUIPA defendants.”

This means that while the city has almost certainly lost the case, the matter of how much – if anything – it will have to pay Faith Fellowship is still in the air.  The city could chose to try its chances at a trial and, if it loses (as it’s likely), fight the question of monetary damages.  It once again can go up the appellate ladder all the way to the US Supreme Court.   This would certainly please Meyers Nave, the city’s law firm, which has raked in millions of dollars out of the bad advise it’s given the city.  Another series of trials and appeals could mean hundreds of thousands of dollars more in their pockets.

The realistic threat of further litigation, which would mean not getting a final settlement for several more years, if at all, might make Faith Fellowship more willing to settle for a reasonable sum.  Of course, pursuing settlement options would have been a better choice back in February before the 9th circuit and the Supreme Court said “no”  to the City, now Faith Fellowship has much less to lose.  But money with which they could buy a new property now is better than money a few years from now.

Whether the city decides to settle or go to trial, I can only hope they will finally do the smart thing and hire a /new/ law firm to represent them.  Meyers Nave terrible advise on this case will most likely end up costing the city millions of dollars, and truth be told, we cannot afford to keep taking their advise.

Previous Posts on this subject

San Leandro gears up for Constitutional fight (May 2011)

The Faith Fellowship lawsuit: it’s time for the city of San Leandro to settle (April 2011)

A primer on the Faith Fellowship v. San Leandro lawsuit (April 2011)

A look at San Leandro’s City Attorney: Time to fire Meyers Nave?

May 072011

Hires premier anti-RLUIPA advocate to argue for its unconstitutionality

I was sad, if not surprised, to read that the San Leandro City Council voted 5-2 (with Mayor Cassidy & Councilwoman Cutter in the minority) to appeal the 9th circuit Faith Fellowship decision to the US Supreme Court.   That’s exactly what I predicted Meyers Nave, the City’s law firm, would push the City Council to do.  I was tickled, however, to read that they’ve engaged Cardozo Law Professor Marci A. Hamilton to represent them on this appeal.  Hamilton is not only the country’s most prominent critic of RLUIPA,  and of government accommodation of religion in general, but she’s a woman with a mission:  get the Supreme Court to declare RLUIPA unconstitutional.   San Leandro may just help her accomplish that goal.

The Faith Fellowship case has so far involved rather technical matters: what is the proper standard for “substantial burden” under RLUIPA.  Circuits courts have come to different conclusions as to what this entails, which allows the Supreme Court to take on the case.  However, the US Supreme Court has so far denied all cert petitions on RLUIPA land issues, most recently in January.  This is not surprising, finding a “substantial burden” test that would make the law both meaningful without being abusive in all circumstances is quite difficult, courts have gone back and forth on definitions as new situations arise.  The Supreme Court may find it prudent to wait until the dust is a bit more settled at the circuit court  level before it intervenes.

But I don’t believe that Professor Hamilton has any plans to appeal this case, other than nominally, on the proper definition of “substantial burden”.  Hamilton, indeed, has repeatedly said that RLUIPA allows religious institutions to do anything they want.  She’s suggested the statute be subtitled “A Bill to Permit Religious Landowners to Do Whatever They Want in Residential Neighborhoods and to Subsidize Lawyers for Religious Landowners with an Attorney’s Fee Provision”.   A narrow “substantial burden” definition would not fit neatly with her description of RLUIPA as a “circus“.

Hamilton, I suspect, will use this opportunity to lounge a full front attack on the constitutionality of RLUIPA, most likely on federalist grounds (i.e. that the federal government doesn’t have the right to tell municipalities how to regulate land use).  She’s well suited for the task.  In 1997 she represented the City of Boerne in the landmark Supreme Court case that overturned the Religious Freedom Restoration Act vis a vis state and local governments.  While Congress created RLUIPA mindful of the Boerne case, and every single circuit court that has looked at the constitutionality question has upheld it, Hamilton is hopeful that the more conservative members of the court will side with her.  My guess is that if the Supreme Court does take this case it will do so to tackle the constitutional question.  The fact that Hamilton will be the one arguing the case, may indeed make it more likely that they’ll take it.  The odds are still quite slim, however.

If the Supreme Court does take the case, Hamilton won’t just be facing the able lawyers from the Pacific Justice Institute (PJI).  The US Justice Department will most likely intervene to defend the constitutionality of the law.

Even if the Supreme Court finds that the “strict scrutiny” provisions of RLUIPA are unconstitutional, the Supreme Court (or lower courts, if the Supreme Court remands the case) will still have to consider the question of whether the City of San Leandro violated Faith Fellowship’s constitutional rights to freedom expression and religious exercise and its constitutional and statutory right to equal protection of the laws.  The latter claims come about because San Leandro allows “commercial entertainment” uses in the industrial area but not “assembly” uses.  The 9th circuit didn’t address this issue, but left it open for future litigation.

Personally, I continue to believe that appealing this case to the Supreme Court is a costly mistake.  If the Supreme Court takes the case, it’s very unlikely that it will rule for the city on all grounds without remanding any to a lower court.  If it does remand the case, that would mean further litigation and much more money spent on attorneys’ fees.  We are a poor city that has had to cut libraries, recreational activities and most social services – we can’t afford to be handing money to lawyers for no good reason.

The prudent thing for San Leandro to do is to work to settle this case, preferably in the next 6 months before the Supreme Court either rejects it or takes it on.

Update 5/8/11

I e-mailed Prof. Hamilton and asked her why she took the case.  Here is her answer:

“I took this case, because it meets the typical criteria that interest the Supreme Court: the relevant issues have been percolating for a significant period of time, the courts are split on the proper interpretation of the key terms, and the issues were directly addressed by the appellate court.  It is time for the Court to take up one or more RLUIPA land use issues.

 Also–the Ninth Circuit’s interpretation in this case is an extreme interpretation that unfairly favors religious land owners and, therefore, is a good case to take up to the Supreme Court.”

Marci Hamilton on the Daily Show

Marci A. Hamilton on Flaws of Religious Land Use Law

May 022011

I pride myself on being San Leandro’s most infamous atheist.  I came into local prominence a couple of years ago when I challenged the San Leandro School District to stop teaching overtly religious songs in school.  I had been appalled to find out that McKinley Elementary School‘s evangelical Christian music teacher, Kathy Maier, had made my 6-year old learn and sing the song “Silent Night” which praises Jesus as God.  Not kosher in my book. So when I read a letter on last Thursday’s San Leandro Times accusing the city of establishing religion by allowing the Calvary Chapel church/religious group to hold services at the newly opened Senior Center, I had to investigate what was going on.  And apparently it’s much ado about nothing.

Calvary Chapel is a small religious group started/run by the Cortez family, who relocated their ministry to San Leandro  from the city of Guadalupe in late 2009.  They are fundamentalist neo-Pentecostals (competition for Faith Fellowship?) but they don’t seem to make too big a deal out of speaking in tongues.  They’ve been meeting at the Marina Community Center since they started, and apparently now they are moving to the Senior Center. I don’t know if that’s because the Senior Center is more centrally located or if they were able to see the signs predicting the end of the Marina center.

Meeting rooms at the Marina and Senior Centers are available for rental by any member of the community.  Non-profit groups, apparently including churches, are charged reduced non-profit rates during non-peak hours and regular rates during the peak hours that Calvary Chapel mostly reserves.  Any group is allowed to use these facilities, provided they pay the appropriate fees & deposit, have insurance  and don’t have a history of trashing the facilities.

Personally, I don’t have a problem with that.  I don’t really want the government to have to inquire as to what every group who rents a room at a public building is going to do in the room.   Whether a group of people want a room to hold masturbation workshops,  have a Barbie convention or pray to imaginary cosmic entities, it’s really nobody’s business but their own.

The fees that Calvary Chapel pays the city for the use of its facilities, moreover, help tremendously in keeping the Senior Center open.  And who can complain about that?

Apr 222011

(Note, to understand the particulars of this case please read A primer on the Faith Fellowship v. San Leandro lawsuit first).

The 9th circuit court of appeals has just denied the City of San Leandro’s petition for an en banc hearing of the apellate decision against the City on the Faith Fellowship case.  None of the 29 9th circuit judges requested to hear the case.  That is of little surprise, the petition not only had no merit but was terribly and insultingly written.  It was so bad that I’ve argued that it should be grounds to fire Meyers Nave, the law firm that represents the city and wrote the petition.  The City Council will be meeting next Monday in closed session to discuss what to do next.  They have three choices:  appeal to the Supreme Court, go to trial or settle.

I daresay that City Attorney Jayne Williams will recommend the first option.  A Supreme Court appeal will mean that Meyers Nave gets to charge the City even more money on attorney’s fees. It also allows Williams to continue telling the City Council that the her firm’s advise to deny Faith Fellowship’s rezoning petition was correct: the 9th circuit just got it wrong.  Most members of the San Leandro City Council are not very astute legally and may not realize that not only are the chances of the Supreme Court taking the case minute, but in all likelihood the current conservative, religious-loving Supreme Court would not side with the city against the church.  It is thus possible that the City Council may go along with Williams.  An appeal would slow down the case,  putting off paying the church’s damages for some years, but it will increase the legal costs for the city.

Going to trial presents significant legal risks to the city.  The facts are with the Church: former City Manager John Jermanis himself said that there we no other properties suitable to Faith Fellowship’s needs in San Leandro.  The City led the church on for a year, suggesting it would let it use the property if the church jumped through enough hoops, only to deny them the use of the property after they had bought it and for what looks like arbitrary reasons.  I think a jury, looking at the facts, is likely to agree with that conclusion.  But even if it doesn’t,  the church still gets to re-appeal the case to the 9th circuit on “equal protection” grounds, and the 9th circuit panel that heard the case originally hinted that it would side with the church.  Personally, I think the substantial issues on this case are already lost: the city violated RLUIPA and the church is entitled to “appropriate relief”.  The question the city should be addressing is what that means.

RLUIPA provides that “a person may assert a violation of this Act as a claim or defense in a judicial proceeding and obtain appropriate relief against a government”.  It also provides for attorney fees’ for the prevailing plaintiff.  While it is universally accepted that this “appropriate relief” includes injunctive relief and that the court could order the City to allow the church to operate on the Catalina St. property, Faith Fellowship no longer owns said property.  It was forced to sell it last year, for $2.5 million under what it paid for, when it could no longer afford to pay its mortgage and run its existing facilities at the same time.  Faith Fellowship has indicated that at this point what it seeks are monetary damages, the $1.2 million that it made in mortgage payments while it owned the property and perhaps even the $2.5 million it lost when it sold it.

But it is not clear that RLUIPA allows for money damages.  While some courts have found that it does, following the Supreme Court’s reasoning in Franklin v. Gwinett, the US Supreme Court just ruled in Sossamon v. Texas (in a case involving prisoners’ religious rights) that  the phrase “‘[a]ppropriate relief’ is open-ended and ambiguous about what types of relief it includes” and that, at least in the case of lawsuits against states (which, unlike municipalities, enjoy sovereign immunity) it should not be interpreted to include monetary damages.  Now, because the Sossamon court ruled on very specific circumstances, it’s not clear how lower courts will interpret the decision.  They may very well conclude that it would be inconsistent to read RLUIPA’s grant of “appropriate relief” to include monetary damages when the state actor is a municipality or county, but to not include them when the actor is a state.  Or they may decide that the fact that Supreme Court specifically differentiated Sossamon from Franklin means that Franklin applies to non-sovereign RLUIPA defendants.  Personally, I think the latter is the more compelling interpretation of the Sossamon decision, but I think that the City (if it hired a good law firm to represent it) could make a viable argument that “appropriate relief” does not include monetary damages.  At the very least, the City should be able to convince the court to limit those damages.

But litigation is expensive.  The City admits that it has spent $450,000 pursuing this case so far, though the real amount may indeed be higher.  It will likely be on the hook for Faith Fellowship’s attorney fees as well – which may very well be higher than the city’s.  A trial, even if purely on the money issues, and the appeals that would follow it, would prove terribly expensive.  Personally, I think the city needs to do whatever it can to settle the case – as long as Faith Fellowship is reasonable on its demands.  Now, the City Attorney should go to the City Council and put the figures on the table: this is how much we’ve spent so far, this is how much we’re on the hook for the Church’s attorney’s fees, this is how much more we’re likely to have to spend if we go to trial and lose.  Then, based on those costs and on Faith Fellowship’s damages, the city should make a reasonable settlement offer.  Without knowing those figures, I’d say something like $1.5 million plus attorney’s fees seems reasonable.   City help in identifying and rezoning a suitable property should be part of the deal as well.  It would behoove Faith Fellowship to accept such a settlement as well: they could get the money now rather than in a few years.  That would mean they could go on and buy a new property now – when prices are still low – and be able to move soon rather than years from now, when all the litigation would be finally over.  I can only hope that both sides will see reason.

Update 10/11:  The City appealed this case to the US Supreme Court last summer, their appeal was denied.

Apr 162011

San Leandro City Attorney Jayne WilliamsUnlike many cities, San Leandro does not have a full time City Attorney of its own.  Instead, it contracts with Meyers Nave, one of the most important municipal law firms in the state, for legal advice and representation.  Jayne Williams, one of Meyers Nave’s principals, functions as San Leandro’s City attorney – but other members of the firm also do work for the city.  Unfortunately, the quality of the legal advice that San Leandro is getting from Meyers Nave seems to be quite poor. San Leandro is currently facing a multi-million dollar settlement/judgement in the Faith Fellowship case and is opening itself up to litigation on several fronts.  Meyers Nave benefits from the poor legal advice it provides to the city, charging attorney’s fees to represent it in lawsuits that arise when the city follows its advice.

As mentioned above, the most egregious example of this conflict of interest is the Faith Fellowship case.  Here, a local church that had undergone dramatic growth tried to move to a building large enough to accommodate its congregation.  The only property they could find that would work for them was zoned industrial, and the City Council refused to let them use that property as a church.  Faith Fellowship sued under the Religious Land Use and Institutionalized Persons Act (RLUIPA), and the 9th circuit recently ruled that the city had no compelling interest in denying them that use, and remanded the case for trial on other issues.  A close examination of the case leads me to believe that the city is not likely to prevail and will likely have to pay several million dollars in damages to the church.  The city has already spent $500,000 on legal costs alone, and will be on the hook for Faith Fellowship’s attorneys fees as well.

Meyers Nave’s behavior on this case has been outrageous.  First, it failed to warn the city about its legal liabilities under RLUIPA if it denied the church’s rezoning application.  While it did warn the City Council that they could get sued, it did not explain what the potential damages of the lawsuit might be or what the likelihood of the church succeeding was.  Once the City was sued, rather than advising the City to hire a law firm that specialized in RLUIPA and/or first amendment litigation, Meyers Nave had its own attorneys represent the city.  Meyers Nave made a lot of money on attorneys fees by doing so, but its attorneys were unable to produce coherent or convincing arguments. Attorney Deborah Fox, in particular, made a fool of herself during oral arguments before the 9th circuit – she was clearly unprepared and was unable to answer the judge’s questions with any credibility or coherence.  The rehearing petition filed after the 9th circuit unanimously ruled against the city is so poorly written and so disrespectful of both Faith Fellowship and the 9th Circuit appeals panel, that the city of San Leandro should be ashamed to be associated with it. Still, as inadvisable as filing that rehearing petition was, it does generate additional legal fees for Meyers Nave.

But the firm’s inadequate legal advice goes beyond the Faith Fellowship case.  In 2005, the City of San Leandro entered into an agreement with Redflex for the installation of six red light cameras in the city.  This agreement included a “cost neutrality” clause, which provided that the city and Redflex would share in the revenue from the red light camera tickets.  This cost neutrality provision, however, is explicitly in violation of California law and San Leandrans have been able to have their tickets dismissed on these grounds.  Moreover, there is currently a class action lawsuit on those exact grounds making its way through the courts that, if successful, might force the city in question to provide a refund to everyone who received a red light citation during that contract.   Meyers Nave does not appeared to have warned the city about the illegality of that contract provision and of the potential legal and financial consequences of having it in place – thus, once again, subjecting the city to needless legal risk.

At its next meeting, the City of San Leandro will likely extend its contract with Redflex.  The cost neutrality clause is gone (fortunately), but it remains questionable whether red light camera tickets are legal.  The City Attorney has not, once again, explained to City Council members what the legal issues related to red light cameras are and what the city’s legal risk is in signing this contract.

The same can be said about a new policy that the City is considering to automatically delete all staff and council e-mails.  This policy would violate the California Public Records Act, and would subject the city to litigation.  Has the City Attorney explained these risks (and potential costs) to the City Council?

I suspect that this is the proverbial tip of the iceberg.

My suspicion is that San Leandro would do better if it hired its own full-time city attorney, someone who was able to give it objective, realistic advice and had no incentive to get the city into costly litigation.

April 17th Update

In response to a question in the comments, I’m updating this note with some information about the financial arrangements between Meyers Nave and the City of San Leandro.  In 2008, the city entered into an amended agreement with Meyers Nave, for the firm to provide legal services indefinitely.  Until then, the city legal costs averaged about $900,000 a year, though they were over $1.2 MILLION for the 2007-08 fiscal year.  Legal costs under the amended contract are higher, and I will publish the actual expenditures when I get the numbers.  Under this new contract, Meyers Nave gets paid:

-around $28K a month for basic City Attorney services

-$210/hour for attorney services and $110/hour for paralegal services for non-basic services

-travel expenses

-5% of their fees for administrative costs

The amounts are to increase annually based on the consumer tax index, plus Meyers Nave may ask for additional compensation as it sees fit.

For more recent updates of what Jayne Williams and/or Meyers Nave has been up to in San Leandro, check out the Meyers Nave tag.