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Seventh Circuit Decides Two Substantial Burden Claims Under RLUIPA

In a decision addressing two separate claims of substantial burden under the Religious Land Use and Institutionalized Persons Act (RLUIPA) the Seventh Circuit Court of Appeals reached two different conclusions as to the effects of municipal actions on religious groups. In World Outreach Center v. City of Chicago and Trinity Evangelical Lutheran Church v. City of Peoria, the court held that World Outreach Center had been substantially burdened but that Trinity Evangelical Church had not.

In the World Outreach case the district court had dismissed the action. The building at issue contains mainly recreational and living quarters with some space for religious service. However, the circuit court found that the building’s uses were all in furtherance of the religious mission of the organization. Before being purchased the building had been operated as a YMCA for many years and included renting out 168 single room occupancy (SRO) units. During the 80 years of operation by the YMCA the City never required a special permit. Rather the building’s use was considered legal nonconforming as it was legal when established and subsequent changes in zoning regulations requiring a special permit for such use did not change its status. Under the Chicago zoning code the legal nonconforming status runs with the land and is not changed by changes in ownership.

However, World Outreach was required to apply for a license to operate the SRO units and the City took the position that it would not issue the SRO licenses without World Outreach first obtaining a special permit. This was despite the fact that the YMCA was issued SRO licenses without being required to apply for the special permit, even after the zoning was changed to require a special permit for the use.

At the instigation of an alderman who was seeking to help a developer acquire the property, the City then rezoned the property to a district which did not even permit SRO as a special permit use. The City continued to insist that a special permit was needed and brought a suit claiming the special permit was required but could not be issued due to the new zoning. The City then voluntarily discontinued the lawsuit but continued, without giving a reason, to deny the SRO license. When Hurricane Katrina struck FEMA contracted to rent 150 of the rooms for a year but the City continued to refuse the SRO licenses.

In April, 2006 World Outreach commenced this action and in August, 2006, without requiring the special permit, the City issued the SRO licenses. The court noted “World Outreach was impeded in its religious mission of providing living facilities to homeless and other needy people and incurred substantial legal expenses as well. It seeks damages, having abandoned its claim for injunctive relief when the City finally issued the SRO license that it had applied for two years earlier.”

While the district court dismissed the action on what is essentially as exhaustion of administrative remedies ground-failure to seek the special permit from the zoning board- the circuit court points out the futility of such an application under all of the circumstances and disposes of that argument. Instead the circuit court held the “burden imposed on a small religious organization catering to the poor was substantial (for burden is relative to the weakness of the burdened) …and there was no possible justification for it.”

Interestingly, the court found that the discrimination against World Outreach was not motivated by religious views but rather an attempt by a Chicago alderman to help a developer, who supported the alderman, to acquire the property. The court found that anyone, irrespective of religion would have been discriminated against because of the intent to aid the developer to acquire the site. Yet, the court still held that the equal protection clause is also implicated stating “a deliberate, irrational discrimination, even if it is against one person (or other entity) rather than a group, is actionable under the equal protection clause. . …That is one of the claims that World Outreach alleges; the claim is supported by the allegations of the complaint; and so it should not have been dismissed. It has nothing to do with religion, but so what?”

The second case, decided as part of the same decision, involves a RLUIPA claim by Trinity Evangelical Lutheran Church against the City of Peoria regarding a parcel the church purchased next to its existing church. A neighborhood group later applied to the City to have the building on the adjacent property designated a landmark. The landmark designation was granted. When the church sought to demolish the building to build a new center it was denied permission, due to the landmark status.

The Church brought a RLUIPA action claiming a substantial burden, The district court granted summary judgment to the City. The circuit court noted that the issue of substantial burden is a factual question “substantiality is a relative term-whether a given burden is substantial depends on its magnitude in relation to the needs and resources of the religious organization in question.”

The court then went on to affirm the dismissal noting that the burden on the church is modest not substantial. The court found that the burden would only be substantial if the church had no alternative. But, in this case there is a market for the property and the church can sell the property and use the proceeds to construct its center on other property owned by the church. The court went on to note that the City conceded that the center could be built on the empty lot owned by the church and the court went on to state:

“We imagine that the real purpose of this litigation is to extract a commitment from the City to allow Trinity to build the family-life center on the empty lot, and so viewed the suit has succeeded.”

-Steven Silverberg

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