Posted by: Patricia Salkin | September 2, 2015

Fed. Dist. Court in Illinois Dismisses Some, But Not All, RLUIPA Claims

Editor’s Note: The following summary appears on the RLUIPA Defense Blog: http://www.rluipa-defense.com

A federal court in Illinois, in Church of Our Lord and Savior, Jesus Christ v. City of Markham, Illinois (N.D. Ill. 2015), dismissed some of the Church’s religious land use claims while allowing others to proceed. The case is important for a couple of reasons. First, it serves as a welcome reminder for local governments that “RLUIPA does not authorize any kind of relief against public employees.” Second, its interpretation and application of RLUIPA’s substantial burden provision appears to go against a recent Seventh Circuit decision applying the same provision in a prisoner case, Schlemm v. Wall (7th Cir. 2015).

The Church, which had been operating at its current location for 10 years “without issue,” brought the lawsuit after the City issued a summons for the Church to cease its operations due to safety violations or else obtain a conditional use permit. According to the Church, building and fire inspectors approved the Church’s use of the property, but the City’s Planning Board denied the Church a permit without explanation. The Church alleged violations of RLUIPA’s substantial burden and nondiscrimination provisions, the First Amendment’s Free Exercise Clause, Illinois’ Religious Freedom Restoration Act, and other state law. The City of Markham, its mayor, and several of its aldermen were sued in their individual capacities and were named as defendants.

First, the Court dismissed all RLUIPA claims against the City’s mayor and aldermen because the statute does not authorize relief against public employees. See Vinning-El v. Evans, 657 F.3d 591, 592 (7th Cir. 2011) (citing Nelson v. Miller, 570 F.3d 868 (7th Cir. 2009)). The Court also dismissed the RLUIPA nondiscrimination claim against the City. RLUIPA’s nondiscrimination provision provides that “[n]o government shall impose or implement a land use regulation that discriminates against any assembly or institution on the basis of religion or religious denomination.” 42 U.S.C. § 2000cc(b)(2). Because the Church failed to allege any facts to support its nondiscrimination claim, the Court dismissed this allegation.

Next, the Court considered, and declined to dismiss, the Church’s RLUIPA substantial burden claim. The Court noted that the availability of alternative locations for the Church to operate and the City’s reason for denying the Church’s permit were not clear and, therefore, dismissal of the substantial burden claim would be premature.

The Court’s interpretation of RLUIPA’s substantial burden provision is significant. As we reported in our prior post, the Seventh Circuit, in Schlemm, recently appeared to alter the substantial burden standard for courts considering claims within the circuit. Schlemm concluded that the Supreme Court’s decisions in Holt v. Hobbs and Burwell v. Hobby Lobby Stores, Inc., articulated a substantial burden standard “much easier to satisfy” than that used in another RLUIPA case, Eagle Cove Camp & Conference Center, Inc. v. Woodboro (7th Cir. 2013) (“to be substantial, a burden must be ‘one that necessarily bears direct, primary, and fundamental responsibility for rendering religious exercise … effectively impracticable.’”) (prior post about Eagle Cove available here). It is interesting to note that the Court did not even refer to Schlemm when allowing the Church’s substantial burden claim to proceed, and instead operated under the traditional standard used to assess such claims in the Seventh Circuit.

Because the RFRA and free exercise claims are subject to virtually the same analysis as the RLUIPA substantial burden claim, the Court also allowed those claims to proceed. The Court dismissed the Illinois Open Meeting Act claim as time-barred, but allowed the Church to move forward with its claim that the City’s decision was arbitrary and capricious in violation of Illinois’ constitution.

Church of Our Lord and Savior, Jesus Christ v. City of Markham, Illinois,  No: 15 C 4079 (N.D. Ill. 8/19/2015)

Metro Bank planned to build new branch and sought judicial review of the calculation township’s board of commissioners used to assess transportation impact fee for new development, asserting that township should not have included “pass-by trips” when calculating the number of new peak-hour trips generated by the development. The Court of Common Pleas affirmed board’s calculation, and the Bank appealed.

The Commonwealth Court held that the statute providing transportation impact fee calculation for a new development based, in part, on the estimated number of peak hour trips to be generated by the new development does not exclude pass-by trips. Pass-by trips are only excluded when evaluating whether a municipality can assess an additional transportation impact fee.

Metro Bank v. Board of Commissioner of Manheim Township., 2015 WL 4130405 (PA Commwlth 7/9/2015)

The opinion can be accessed at: http://caselaw.findlaw.com/pa-commonwealth-court/1707387.html

Editor’s note: This summary appeared in Bond Case Briefs at: http://bondcasebriefs.com/2015/08/04/cases/metro-bank-v-board-of-comrs-of-manheim-tp-3/

The County of Sarpy revised an overlay zoning ordinance to exempt properties platted before the effective date of the original ordinance. In effect, the overlay ordinance imposed additional regulations on land along a specified road corridor. An owner of nonexempt property sought a judgment declaring the exemption unconstitutional as special legislation. The District Court, Sarpy County, entered judgment for county, and the owner appealed.

In considering whether the exemption in the revised ordinance is special legislation, the court first considered whether it created a closed class. The court reasoned that because the real property was alienable, the composition of any class consisting of owners of property in a certain area is subject to constant change. Because the future transfer of property within the exemption’s geographic area was probable, the class was not closed.

The court next addressed the issue of whether the class benefited by the exemption was arbitrarily selected. Here, the evidence established substantial differences between those exempted and those who were not. Only those property owners who filed a plat prior to enactment of the overlay ordinance were exempt. Because the submission of a plat application entails significant expense and planning, to subject those property owners to the design requirements contained in the overlay ordinance after they had already submitted a plat based on the absence of those design requirements would be harsh and unfair. Thus, limiting the exemption to those property owners who had completed the process of actually submitting a plat was a reasonable distinction. Because the exemption was not unconstitutional special legislation, the court affirmed the district court’s judgment.

Dowd Grain Company, Inc. v County of Sarpy, 2015 291 Neb. 620 (NE 8/14/2015)

The opinion can be accessed at: https://supremecourt.nebraska.gov/sites/supremecourt.ne.gov/files/sc/opinions/scAug14S-14-611.pdf

Relator-landowner Jeffery August owned a 20–acre tract of land located in the Sunrise Township, zoned for agricultural use. August built a fenced-in arena on his property for mounted shooting events, and a public announcement system to use in connection with the events. In 2013, August formed a club, Cowboy Mounted Shooting, and began hosting mounted shooting competitions and clinics. The Sunrise Township Board recommended denying the CUP application under section 8.05 of the CCO due to negative impact and the intrusion of noise caused by the proposed use. The county board then voted to deny the CUP application. August challenged respondent Chisago County Board of Commissioners’ denial of his conditional-use permit (CUP) application. August argued that the county board’s denial was arbitrary and capricious, and the county board erred when it failed to consider certain Minnesota Pollution Control Agency (MPCA) rules.

The record indicated that the county board voted to deny the CUP based on its conflict with the rural retail tourism use, specifically the small-scale/low-impact requirement and the impact it will have on the neighborhood “by intrusion of noise, glare, odor, or other adverse effects.” The county board relied on the criteria enumerated in the county zoning ordinances and thereby provided legally sufficient reasons for denying the CUP. August next contended that the county board could not consider the effects of noise unless the noise met or exceeded the controlling noise standards as determined by the responsible government entity. The court found that section 7.05 did not establish noise standards different from those promulgated by the MPCA. Instead, the zoning ordinances required that a CUP applicant demonstrate that the noise created by the proposed use will not adversely affect neighboring properties, and the rural retail tourism sections require that the use will not impact the neighborhood by intrusion of noise. Accordingly, section 7.05 was not in conflict with the MPCA noise standards, as it did not define any decibel limits for noise considerations. Here, the county zoning staff report stated that it estimated that noise from the property would not exceed the MPCA decibel limits, but the report did not confirm that noise level was measured in accordance with the statutory and administrative rules’ guidelines.

Moreover, members of the planning commission visited the property and heard, firsthand, the noise caused by the mounted shooting events and relied on these observations when making their recommendation. Thus, the court found the county board reasonably relied on the landowners’ concerns and planning commission members’ observations and therefore had a sufficient factual basis to determine that the increase in noise would adversely affect the neighborhood. Accordingly, the county board’s decision to deny the CUP was not unreasonable, arbitrary, or capricious.

August v Chisago County Board of Commissioners, 2015 WL 4877658 (MN App. 8/17/2015)

The opinion can be accessed at: http://caselaw.findlaw.com/mn-court-of-appeals/1710859.html

Posted by: Patricia Salkin | August 29, 2015

NY Appellate Court Reverses Dismissal of Takings Claim Against Town

The plaintiffs, Blue Island Development, LLC, and Posillico Development Company at Harbor Island, Inc., purchased land in the Town of Hempstead which had formerly been used as an oil storage facility with the intention to remediate the environmental contamination and to develop the property into 172 waterfront condominium units. The Town granted the zoning change for this proposed use; however, restrictive covenants were imposed on the property, including a provision which required Blue Island to sell all the units in the proposed developments as condominium units, but permitted subsequent owners of the units to lease them to the extent otherwise permissible under Town law. By petition, the Town modified the subject covenant to provide that Blue Island was permitted to lease up to 17 of the 172 units for a period of five years after the issuance of the certificate of occupancy or until the delivery of title to the 155th unit, whichever occurred first. In 2013, Blue Island sought a further modification allowing it to sell 32 units and maintain the remaining 140 as rentals, but the Town denied this application without explanation. The trial court determined that Blue Island’s challenge to the zoning action could not be entertained as a CPLR article 78 proceeding because it challenged a legislative act, and converted that claim to a CPLR 3001 declaratory judgment cause of action pursuant to CPLR 103(c). The Town appealed, asserting that the court should have granted those branches of its motion to dismiss the CPLR 3001 and RPAPL 1951 causes of action. Blue Island cross-appealed, asserting that the court should have granted its cross motion for summary judgment and denied that branch of the Town’s motion to dismiss the unconstitutional taking cause of action.

The appellate court found that Blue Island sufficiently alleged that the restrictive covenant was improper because it regulated Blue Island’s ability as the owner of the property to rent the units rather than the use of the land itself. Furthermore, assuming that there was a benefit to be obtained by requiring the units to be sold rather than rented, Blue Island alleged that, because the rental restriction imposed by the restrictive covenant only applied to it and not to any subsequent owner of any of the units in the planned development, it was of no substantial benefit to the Town or its citizens. The Town failed to offer any explanation or evidence combatting this claim. Also unchallenged by the Town was Blue Island’s complaint alleging that the restrictive covenant did not advance any legitimate municipal interest, and that the covenant denied it an economically viable use of the land. Accordingly, the court found that the Supreme Court should have adhered to its prior determination denying that branch of the Town’s motion which was to dismiss the unconstitutional taking cause of action.

Blue Island Development, LLC v Town of Hempstead, 2015 WL 4744517 (NYAD 2 Dept 8/12/2015)

Posted by: Patricia Salkin | August 28, 2015

Fed. Dist. Court of Maryland Denies Motion to Remand Takings Case

Pulte was in the business of residential real estate development. This case involved a civil rights action brought by Pulte Home Corporation and Shiloh Farm Investments, LLC against Montgomery County, Maryland and the Maryland–National Capital Park and Planning Commission (collectively, “Defendants”) for allegedly violating Pulte’s state and federal civil rights by enacting land use legislation that adversely affected Pulte’s ownership interests in approximately 541 acres of land it owns in Clarksburg, Maryland. Before the Court were Pulte’s motion to remand to state court and the Commission’s motion to dismiss.

Pulte contended that the court should abstain and issue a remand order based on the well-established Burford abstention doctrine, or in the alternative decline to exercise supplemental jurisdiction. The Burford abstention doctrine justifies the dismissal of a federal action in a narrow range of circumstances when federal adjudication would unduly intrude upon complex state administrative processes because there exists: difficult questions of state law, whose importance transcends the result in the case then at bar; or federal review would disrupt state efforts to establish a coherent policy with respect to a matter of substantial public concern. Pulte contended that Defendants acted arbitrarily and capriciously by drafting and adopting amendments to the 1994 Master Plan and by downzoning the Development Land so as to deprive Pulte of its constitutionally protected property interests. Thus, while requiring reference to Maryland land use law, these claims were constitutional in nature. Accordingly, the court denied the motion to remand.

As to the motion to dismiss, the Commission argued that Pulte’s complaint must be dismissed because the Commission did not have the “legal authority to zone, rezone, upzone, or ‘downzone’ property in Montgomery County” and therefore could not have caused Pulte’s injuries. Here, however, Maryland law specifically authorized the Commission to acquire and manage lands for public parks, draft and adopt master plans, draft zoning and subdivision ordinances, adopt development regulations, act on land development applications, and recommend other land use policies to Montgomery County. Thus, while the Commission may not have the authority to formally approve or enact a master plan or amendments thereto, the Commission’s role in land use regulation is nevertheless essential to continued real estate development in Montgomery and Prince George’s Counties. At the motion to dismiss stage of the prosecution, the court found that Pulte sufficiently alleged that the flawed opinions and reports created by the Commission or its agents could have been used to justify the Master Plan Amendment and its downzoning of the Development Land.

Pulte Home Corporation v Montgomery County, Maryland, 2015 WL 4430588 (D. MD 7/17/2015)

The parties to this appeal are two foreign limited liability companies: A Guy Named Moe, LLC (“Moe’s”), appellant, and Chipotle Mexican Grill of Colorado, LLC (“Chipotle”), appellee. Moe’s, a Virginia LLC, leases 122 Dock Street in Annapolis and has operated a restaurant at that location since 2006. On August 27, 2012, Chipotle, a competitor of Moe’s, filed an application for a special exception with the City’s Department of Planning and Zoning, so that it could open a “standard restaurant” at 36 Market Space in downtown Annapolis, a location just four to five hundred feet from one of Moe’s restaurants. Moe’s petitioned for review of decision of city department of zoning and planning, approving application for special exception. The circuit court responded by dismissing Moe’s petition, reasoning that, because Moe’s, as a lessee of the Dock Street property, did not pay any taxes on that property, it lacked standing to challenge the Board’s decision.

The court found that the threshold issue of this appeal was not whether Moe’s was a “taxpayer” or “a person aggrieved,” or neither one at all, but whether the petition at issue was void ab initio, given that, at the time that it was filed, Moe’s had lost its right to do business in Maryland and was nonetheless continuing to do business in Maryland. Moe’s had its right to do business forfeited by the SDAT on November 16, 2006, which occurred because Moe’s “hadn’t filed the proper registration and the fees” in violation of C.A. § 4A–1002 and 4A–1013. That right was not reinstated nearly seven years later, on September 24, 2013. Moe’s nonetheless continued to do business in Maryland during the period of forfeiture and, during that period, it not only opposed Chipotle’s special-exception application before the Board but then filed the petition at issue, in the circuit court, contesting the Board’s decision to grant Moe’s a special exception. The court found that if a domestic LLC could not, by “negative implication,” file or maintain suit, then surely a foreign LLC containing an express bar to such legal action could not file or maintain suit, or its legal equivalent, a petition for judicial review.

Furthermore, the court held that even if Moe’s were a “person aggrieved” under L.U. § 4–401(a)(1) and therefore had standing to petition the court for review as such, Moe’s petition must nonetheless be dismissed because it did not meet Rule 7–203(a)’s 30–day deadline, as it had no right to “maintain suit” under C.A. § 4A–1007(a) during the entire 30–day period and, when it re-attained that right, the thirty-day period had long since lapsed. Additionally, the court found “a person is not ‘aggrieved’ for standing purposes when his sole interest in challenging a zoning decision is to stave off competition with his established business.” As this was the case here, the dismissal of Moe’s claim was affirmed.

A Guy Named Moe, LLC and Chipotle Mexican Grill of Colorado, LLC, 115A.3d 733 (MD 5/29/2015)

The opinion can be accessed at: http://caselaw.findlaw.com/md-court-of-special-appeals/1702502.html

Plaintiff, Tower Properties LLC, a limited liability company organized under the laws of the State of New York, operated Nicoles catering hall located in Highland Falls, New York. Plaintiff brought an action pursuant to 42 U.S.C. §§ 1982 and 1983 against Defendants Village of Highland Falls and Mayor Patrick Flynn, individually and in his official capacity, asserting violations of its First and Fourteenth Amendment rights, as well as its rights to make and enforce contracts, and to purchase, lease, sell, hold and convey real and personal property. Plaintiff alleged that the Village and the Mayor “intentionally embarked on a continuous policy and practice … to harass and shut down Nicoles because of the race of those who came to Nicoles.” Plaintiff asserted four theories of liability under § 1983: Defendants’ violated its constitutional rights of freedom of association, equal protection, and due process, as well as its statutory rights under § 1981. Defendants made a motion to dismiss the Second Amended Complaint and to disqualify Plaintiff’s counsel.

Plaintiff first alleged that Defendants’ interfered with its minority clientele’s right to associate at its catering hall. However, Plaintiff did not allege that any of the events at its catering hall were held for the purpose of engaging in protected speech, assembly, or to petition for the redress of grievances, which would warrant First Amendment protection as “expressive association.” Although Plaintiff argued that Defendants’ actions infringed on its clientele’s rights to express their religion at their marriage celebrations-allegedly implicating protections for both expressive and intimate association, Plaintiff’s complaint was devoid of any allegations to support such a claim. As such, the freedom of association claim was dismissed.

Plaintiff’s second theory of liability under § 1983 was premised on the Defendants’ alleged selective enforcement of the Live Entertainment Statute and its 2 a.m. curfew against Plaintiff but not against similarly situated White Establishments, in violation of the Equal Protection Clause of the Fourteenth Amendment. Here, the class-of-one standard was met because the SAC raised allegations sufficient to satisfy this standard. Plaintiff’s allegations demonstrated that the White Establishments, five bars located in Highland Falls, are roughly equivalent to the Plaintiff-each establishment has live entertainment at its facility from time to time; plays music up to and at times past the 2 a.m. curfew; serves alcohol; and has a history of altercations on its premises. However, the claim was based upon the race of its clientele, a particular group, and was therefore not be analyzed under a “class-of-one” theory. Under a theory of selective enforcement, the court found that Plaintiff had not alleged that the White Establishments were providing live entertainment without the requisite permit at the same time Plaintiff received its violation notice, and therefore could not claim that the other establishments were treated differently by the Defendants.

In its due process claim, Plaintiff’s alleged interference with its “ability to use and enjoy its real property” and its “liberty right in being prevented from pursuing its catering and bar business.” However, because Plaintiff was still able to maintain its business despite Defendants’ purported harassment, Plaintiff had not sufficiently plead the deprivation of any property right. Despite this, because the Plaintiff alleged that is closed Nicoles as a result of this discrimination, the court granted Plaintiff the opportunity to amend the SAC to state a valid claim for a violation of the Due Process Clause. The claims under § 1981 and § 1982, were likewise dismissed since plaintiff merely alleged possible loss of future opportunities with unnamed persons, rather than the loss of an identified business relationship that was the subject of interference.

Finally, Defendants moved to disqualify Mr. Feigelson as Plaintiff’s counsel on the basis that Mr. Feigelson “is listed as an involved person on all of the police reports and will likely be called to testify about these incidents.” This motion failed because Mr. Feigelson stated that he has no knowledge concerning these incidents, and the court found it would be highly unlikely he would be called as a witness related to these incidents. His disqualification was therefore improper on this basis.

Tower Properties LLC v Village of Highland Falls, 2015 WL 4124499 (SDNY 7/7/2015)
The opinion can be accessed at: http://law.justia.com/cases/federal/district-courts/new-york/nysdce/7:2014cv04502/428713/23/

Posted by: Patricia Salkin | August 25, 2015

HUD Releases Final Rule on Affirmatively Furthering Fair Housing

From HUD’s Press Release:

“The U.S. Department of Housing and Urban Development (HUD) announced a final rule today to equip communities that receive HUD funding with data and tools to help them meet long-standing fair housing obligations in their use of HUD funds. HUD will also provide additional guidance and technical assistance to facilitate local decision-making on fair housing priorities and goals for affordable housing and community development.

For more than forty years, HUD funding recipients have been obligated by law to reduce barriers to fair housing, so everyone can access affordable, quality housing. Established in the Fair Housing Act of 1968, the law directs HUD and its program participants to promote fair housing and equal opportunity. This obligation was intended to ensure that every person in America has the right to fair housing, regardless of their race, color, national origin, religion, sex, disability or familial status. The final rule aims to provide all HUD program participants with clear guidelines and data they can use to achieve those goals.

***

HUD’s final rule responds to the recommendations of a 2010 Government Accountability Office reportas well as stakeholders and HUD program participants who asked for clearer guidance, more technical assistance, better compliance and more meaningful outcomes.  HUD considered and incorporated feedback from the significant public input and comments that it received during the development of this final rule. For example, in response to public feedback, HUD will phase in implementation of the rule so that grantees have substantial time to transition to the new approach.  By encouraging a balanced approach that includes targeted investments in revitalizing areas, as well as increased housing choice in areas of opportunity, the rule will enable program participants to promote access to community assets such as quality education, employment, and transportation.

HUD’s rule clarifies and simplifies existing fair housing obligations and creates a streamlined Assessment of Fair Housing planning process, which will help communities analyze challenges to fair housing choice and establish their own goals and priorities to address the fair housing barriers in their community.  While the final rule will take effect 30 days after publication, it will not be fully implemented immediately.  HUD will provide support to program participants that need to complete an Assessment of Fair Housing to ensure they understand the process and to identify best practices across a diverse group of communities.”

For more information see: http://www.huduser.org/portal/affht_pt.html#final-rule

Stars Cabaret is a nude dancing establishment in Neenah, Wisconsin, which lies in Winnebago County. The Town/County Zoning Ordinance 17.13 required adult entertainment establishments to locate within adult entertainment overlay AEO districts. An AEO district could be established only if the County issued a conditional-use permit to the adult entertainment operator. The zoning committee would issue such a permit only if it found that the proposed use complied with several requirements, including that it would “not be a detriment to the public welfare” and “in no way would contribute to the deterioration of the surrounding neighborhood” or “have a harmful influence on children residing in or frequenting the area.” The application also had to demonstrate that no alcoholic beverages would be sold within the AEO district, and that any adult use within the district would be located at least 1500 feet from any other adult use and at least 2000 feet from land zoned residential or institutional.

The owner of the adult entertainment establishment brought action against county, seeking declaration that, because zoning ordinance governing adult entertainment overlay districts violated First Amendment, its establishment had been legal from the outset, such that it had become legal nonconforming use that could not be banned by later ordinance. The United States District Court for the Eastern District of Wisconsin granted the County’s summary judgment motion and the owner appealed.
Here, the court found that the ordinance unquestionably imposed a prior restraint by requiring applicants such as Green Valley to apply to the County for permission to undertake their selected mode of expression—nude dancing. Since none of the safeguards the Court recognized including: the imposition on the censor of the burden of instituting judicial proceedings; the limitation of the restraint to a brief period for the purpose of preserving the status quo pending judicial review; and the assurance of a prompt judicial determination were present in this case, the permitting scheme set up in the 2006 ordinance created an unconstitutional prior restraint and could not be enforced.

In addressing the severability of the ordinance, the district court judge was satisfied that two parts of the truncated ordinance could function without the permitting scheme: the clause establishing setbacks for the locations of adult establishments relative to other land uses, and the provision banning the use of alcohol within AEO districts. However, whether the alcohol and setback parts of the County’s zoning ordinance could be severed and function on their own is squarely within the scope of state law. The court therefore concluded that the district court, after confirming that the 2006 ordinance violated the federal constitution in some respects, should have relinquished its jurisdiction over the supplemental state claims and dismissed them without prejudice.

Green Valley Investments, LLC v Winnebago County, 2015 WL 4509767 (7th Cir. CA 7/27/2015).

The opinion can be accessed at: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2015/D07-27/C:14-2473:J:Wood:aut:T:fnOp:N:1594104:S:0

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