RLUIPA

The Faith Fellowship v. San Leandro Case Continues and it’s not all bad for the City

The Faith Fellowship v. San Leandro Case Continues and it’s not all bad for the City Faith Fellowship v. SL case, Legal No Responses »

Aug 212012

District judge Phyllis J. Hamilton is presiding over the case.

Court rules City is not responsible for lost contributions.

San Leandro won a partial victory on August 20th in its ongoing legal battle against the Faith Fellowship Four Square Church. A federal judge ruled that the City is not liable for the contributions the Church alleged it has lost by not being able to grow its congregation. Faith Fellowship had been rapidly growing through 2006, when they reached the limit of how many people their existing facilities could accommodate. They bought a much larger property in the industrial area of town, but the City stopped them from using it as the zoning code did not allow non-commercial assembly use in that area. Faith Fellowship alleges that this has cause them $19M to $23M in total damages, including $10.4M to $14.3M in contributions it would have received, had it been able to move to its new facilities and further grow its congregation. The Court found these specific damages were too speculative to be considered.

The Court also found, however, that the City may be liable for the “hard” damages incurred by the Church as it was forced to sell the property at a loss, as well as for the mortgage, insurance and taxes it paid while it owned the property. According to the Church, these add up to about $8.4M.

The case is scheduled to go to trial in October, when a jury will decide whether the City imposed a “substantial burden” on the Church by not allowing them use of their newly acquired property. If so, the jury will also determine the amount of damages that should be paid to the Church. The Court will then decide whether the City must also pay the Church’s legal fees. The City has spent close to $1M on its own legal fees, and may be liable to the Church for a similar amount for theirs.

If the jury finds for the City, the Church may still appeal to the 9th Circuit alleging that the City violated the equal treatment clause of the Religious Land Use and Institutionalized Persons Act (RLUIPA) by allowing commercial entertainment in properties zoned industrial, but not religious assemblies. Recent jurisprudence makes it very likely that the Church would win on these grounds. The case may then be sent back to trial for a determination of the monetary damages. This whole procedure is likely to cost the City hundreds of thousands of dollars in additional legal fees. We better hope we lose at trial this October and the jury doesn’t feel too generous with the Church.

Many interesting things have been happening on this case in the last few months, and I will write about them in a different post.

San Leandro City Council: No to Theater but Yes to Strip Bars?

San Leandro City Council: No to Theater but Yes to Strip Bars? City Hall, Faith Fellowship v. SL case, Legal No Responses »

Mar 122012

The Fox Cinema in Vancouver shows adult movies all day long.

Proposed Amendments to the Zoning Code would ban recreation and entertainment from the industrial area – but would allow “adult businesses” to continue.

Ban likely to be unconstitutional and won’t help with the Faith Fellowship lawsuit.

If Meyers Nave, the law firm that represents the City of San Leandro, gets its way, strip bars and peep shows could flourish in the industrial area of San Leandro. But theaters, cinemas and recreational venues would not be welcomed. Shakespeare would be OK, but only if all the actors were nude and got frisky with one another.

At its next meeting, the City Council will again consider banning entertainment and recreational uses from the industrial area of town. This short-sighted plan was concocted by Meyers Nave in response to the Faith Fellowship litigation. Currently, the Zoning code allows entertainment and recreational uses of properties zoned industrial, but not assembly or religious uses. The 9th Circuit recently ruled that such unequal treatment violates RLUIPA.

The City has potentially two ways in which to amend the code to comply with federal law. It can either allow religious/assembly uses in the industrial area or it can ban entertainment and recreational uses. The former approach can contribute to the development of the industrial area, it can bring new people to San Leandro – who will then be likely to shop and dine in this city -, and it can create competition for the purchase of properties, bringing up property values.

The City Council, however, has chosen to focus on the second option: banning entertainment and recreational uses in the industrial area. I have written before as to why this is a bad idea: the high-tech companies we want to attract realize the importance of combining entertainment and recreation with work – it makes for happier, more productive employees. Indeed, this is a point that David Johnson, CEO of the San Leandro Chamber of Commerce, has repeatedly made to the City. Johnson spent a decade working on economic development in Oakland and knows first hand how companies seek to move to cities that don’t make them jump through hoops. When presented with these facts, the Planning Commission voted twice to reject the entertainment and recreation bans.

The City’s attorneys, however, are adamant about further restricting uses in the industrial area, and they hold a lot of sway with the City Council. At the last Council meeting, Deborah Fox admitted that the only reason to amend the code was to facilitate the city’s legal strategy on the Faith Fellowship case. She stated that the district judge will consider the Zoning code as it stands when trial begins, and thus there is a hurry to make these changes soon.

I am unable, however, to figure out what advantage Fox thinks the City will gain by making these changes. Leaving the issue of adult entertainment aside, the proposed changes in the Zoning code would likely prevent the Church from obtaining a declaratory judgment to the effect that the City’s Zoning code violates RLUIPA. The district court, however, would still have to decide whether the City violated the equal terms clause of RLUIPA back when it stopped FF from moving into the property they’d bought, and if so, award monetary damages to the Church. The only “advantage” I can see for the City is in being able to stop Faith Fellowship from acquiring another property in the industrial section and putting a church there. This may seem very petty, but the City Attorney may have been able to sell this approach to the Council as some sort of “victory”.

In any case, their strategy is very unlikely to work. The Zoning code amendments will bar entertainment and recreational uses from the industrial area, but will continue to allow adult businesses, including adult entertainment businesses, to operate. The City doesn’t have much of a choice about this, it must allow such businesses to locate somewhere in town and the industrial area seemed the most unobjectionable one when the code was last amended. But this means that in order to ban adult entertainment in the industrial area, the City must first allow it elsewhere within City limits. That would open a whole new can of worms that the City, of course, wants to avoid.

But if the Zoning code isn’t changed to disallow adult entertainment in the industrial area, the City is in exactly the same position that it is today: treating churches differently than entertainment venues, and that’s what the 9th circuit has said they cannot do.

As if this wasn’t enough, it seems quite likely that the City doesn’t have the right to ban entertainment from the industrial area in the first place. Entertainment is considered a form speech and therefore protected by the first amendment. In Schad v. Mount Ephraim, the US Supreme Court ruled that any ban on entertainment must be “narrowly drawn and must further a sufficiently substantial government interest”. Schad concerned a city ordinance which prohibited live entertainment in the commercial district, while allowing businesses such as motels, lumber stores, restaurants and office buildings. In that case, the Court could not find any “substantial government interest” accomplished by the ban. But a Court looking at an entertainment ban in San Leandro would not even have to look that far – Deborah Fox is on record saying that the only reason for the ban was to gain an advantage in their litigation against Faith Fellowship. No Court in the land will consider that to be a legitimate, much less a “substantial,” reason for restricting speech.

We are left with the question, then, of what the City’s attorneys reasons for pushing these changes are. As I’m not a mind reader, I can only speculate:

– Incompetence. Meyers Nave handled this case badly from the start, neglecting to tell the Council about the risks and potential costs of stopping FF from building their church. Deborah Fox, in particular, did a horrendous job of arguing the case before the 9th circuit; she seemed surprised by the questions posed by the judges and had no answers. Her whole handling of the situation since does not inspire confidence in her legal acumen. So it may simply be that Meyers Nave didn’t look carefully enough at the Zoning code or the law to actually understand the issues at play.

– Presumed incompetence. Meyers Nave tried very hard to have the amendments to the Zoning code be made as quietly as possible. City staff made up reasons for why these changes were needed, they hid the actual nature of the changes, and the City Council was only informed about them in closed session – very likely in violation of the Brown Act. They probably believed that they could sneak them by without Faith Fellowship’s attorneys noticing. I wouldn’t be surprised if Meyers Nave is also hoping that FF’s lawyers won’t re-read the Zoning code and notice that the “adult-oriented businesses” clause will remain in place.

– Profit. The City pays Meyers Nave a very generous amount for general City Attorney services, but they must pay them by the hour for any litigation services. This means that the more bad advice Meyers Nave gives the city, the more likely the city is to get sued, and the more money Meyers Nave will make in attorney’s fees. Smart cities avoid this clear conflict of interest by having the City Attorney be an employee, and thus not personally benefit from any litigation.

So what now? We can hope that the City Council will see reason, and will realize that what’s best for Meyers Nave is not what’s best for the City. We can ask that they do what they were elected to do and include the citizens in any and all decisions that will have such a great impact in the community. And we can urge them to let get independent legal advise on this matter – from a firm not hired or recommended by Meyers Nave.

Unfortunately, I’m not too hopeful.

San Leandro gears up for Constitutional fight.

San Leandro gears up for Constitutional fight. Faith Fellowship v. SL case, Religion 2 Responses »

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

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

The Faith Fellowship lawsuit: it’s time for the city of San Leandro to settle City Hall, Faith Fellowship v. SL case, Legal No Responses »

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.

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

A look at San Leandro’s City Attorney: Time to fire Jayne Williams and Meyers Nave? City Hall, Featured, Legal 7 Responses »

Apr 162011

Unlike 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.

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