Posted by: Patricia Salkin | December 20, 2014

Fed. Dist Court in CA Says RLUIPA Does Not Apply to Sale of Church Property for Residential Market Rate Condos but Permits First Amendment Claim to Proceed

The City and County of San Francisco (“the City”) moved to dismiss the First Amended Complaint (“FAC”) of Plaintiff California–Nevada Annual Conference of the Methodist Church (“the Conference”), in which the Conference alleged the following three causes of action: (1) violation of the Religious Land Use and Institutionalized Persons Act (“RLUIPA”); (2) violation of the First Amendment; and (3) regulatory takings.

In 2004, the Conference agreed to sell the property to Pacific Polk Properties, LLC (“Pacific Polk”) for the construction of market rate condominiums. However, it was not until almost ten years after the Conference first sought the demolition permit that the Department of Building Inspection issued a demolition permit allowing Pacific Polk to demolish the structure and a building permit allowing Pacific Polk to build its condominium project.

The Conference claimed that its use of the property was burdened substantially by the City’s ten year delay in issuing a demolition permit, which prevented it from converting the property into liquid assets that it could then use to further its religious mission. The court disagreed, stating that the sale of property for the construction of market rate condominiums, even if undertaken by the Conference in order to fund its religious mission, do not constitute “religious exercise” protected by RLUIPA. Unlike the Conference’s RLUIPA claim, the Conference’s First Amendment claim was based on a broader notion of unequal treatment; the City embroiled the Conference in bureaucratic proceedings, many of which were unnecessary, in an effort to prevent the Conference engaging in religious exercise. The Conference alleged that at a Planning Commission meeting in December 2012, the Commissioners expressed “hostility” and “anger” toward the Conference and Pacific Polk for having brought the instant lawsuit and for challenging the earlier landmarking effort. According to the Conference, it was evident that the community negotiation process had been used by the Commissioners to “stall the process and punish the Conference for exercise of its constitutional and statutory rights.” Therefore, construing the FAC in the light most favorable to the Conference and taking as true all factual allegations therein, the court denied the City’s motion to dismiss the First Amendment claim.

Finally, the Conference asserted that a continuing ten year course of conduct and including numerous refusals to grant a demolition permit resulted in a taking. The court found that the Conference’s “course of conduct” theory, as pleaded in its FAC and as clarified in its briefing, does not sufficiently allege a cognizable legal theory for its regulatory takings cause. As such, the court granted the Conference leave to amend its taking complaint.

California-Nevada Annual Conference of the Methodist Church v City and County of San Francisco, 2014 WL 6665915 (ND Ca. 11/24/2014)

The opinion can be accessed at:

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