Land Use Litigation – Trends, Exposures and Moral Hazards

By Howard Mankoff, Esq. and Audrey Copeland, Esq.*

The Religious Land Use and Institutionalized Persons Act (RLUIPA), 42 USCS § 2000cc, is a complex federal statute that in theory was written to prevent municipalities from discriminating against religious institutions in land use decisions, among other things. In practice, this shield is often used as a sword to bludgeon municipalities into granting to religious institutions approvals of applications for land uses that are often inconsistent with the municipal entity’s zoning ordinances. Municipalities seek to obtain the necessary insurance coverage for costly RLUIPA litigation challenging their zoning decisions. On the other hand, insurers providing the coverage may find themselves facing the moral hazard of providing financial cover for discrimination.

In Cutter v. Wilkinson, 544 U.S. 709 (2005), the United States Supreme Court held that RLUIPA is “the latest of long running congressional efforts to accord religious exercise heightened protection from government imposed burden....” RLUIPA prohibits municipalities from enacting land use regulations that place a substantial burden on the free exercise of religion and prohibits the enactment of land use regulations that have the effect of discriminating against religious institutions, as well as discriminating against religious institutions compared to secular institutions.

Despite arguments from RLUIPA plaintiffs to the contrary, RLUIPA does not allow a religious institution to operate “wherever it so chooses, without regard for zoning rules,” and such a position is “simply unreasonable and not supported by the statute or by the First Amendment.” See Christian Methodist Episcopal Church v. Montgomery, 2007 U.S. Dist. LEXIS 5133, at *30-31 (D.S.C. Jan. 18, 2007). “[S]o long as a municipality applies its codes uniformly and does not impose an unjustified substantial burden on religious exercise, it may apply traditional zoning concerns—such as regulations addressing traffic, hours of use, parking, maximum capacity, intensity of use, setbacks, frontage—to religious uses just as they are applied to any other land uses.” Statement of the Department of Justice on the Land-Use Provisions of the Religious Land Use and Institutionalized Persons Act (RLUIPA), (December 2010), at pp. 3-4.

These principles seem clear enough, but in practice, issues abound. For instance, in one of our firm’s cases, the question was whether different parking regulations can be applied to a mosque, where the most well-attended religious service is on Friday afternoon and attended by individual congregants driving their own vehicles, compared to a church’s Sunday service, where families are more likely to travel together. In another instance, we represented a municipality sued by a church that claimed the municipality violated RLUIPA by excluding the proposed church from a downtown redevelopment zone, which allowed movie theaters and other secular assemblies.

Among the many challenges in defending against RLUIPA claims is dealing with public statements by fervent objectors to the religious institution’s land use application, whether it be a mosque, church or synagogue. Objectors often form rudimentary organizations to campaign against the applicant, and they may use social media—such as Facebook—to make vile and bigoted comments. This can raise a factual issue for the jury as to whether such commentary influenced the zoning board to act with a discriminatory animus. This is also why RLUIPA complaints are often so long and contain detailed descriptions of social media postings, thus requiring equally detailed answers. Discovery can also become extremely expensive very quickly, such as when the plaintiffs seek emails and other communications between the objectors and public officials, like members of the zoning board.

RLUIPA provides several types of damages that create significant exposure for defendants and their insurers. First, the statute provides an award of prevailing party counsel fees. This, by itself, can dramatically increase the cost of RLUIPA litigation. In a current case, the counsel fee claim exceeded $1.5 million before the first case management conference was held. It is clear that the threat of prevailing party counsel fees often drives this litigation. Compensatory damages are also available. Such damages are fact specific and can include the fees for the necessary land use approvals, the rent paid to use another location, and the amorphous damages that courts allow for the violation of first amendment rights.

In addition to the damages allowed by RLUIPA, these cases often attract the attention of the Justice Department, which conducts an independent inquiry to determine whether the plaintiff’s civil rights have been violated. Compliance with the Justice Department’s demands for production of documents and witness interviews also adds a great deal to the cost of RLUIPA litigation.

Municipalities that find themselves defendants in RLUIPA litigation turn to their insurers, who strive to provide a vigorous defense. An analysis of the many coverage questions surrounding RLUIPA litigation is beyond the scope of this article. However, experience has shown that among these questions is whether violation of RLUIPA requires a showing of intent, and the answer is anything but clear. The insurer’s dilemma is the moral hazard of insuring against inappropriate and illegal discriminatory conduct. Should insurers provide insurance that allows public officials to implement and enforce land use regulations that discriminate against religious groups? A solution to this problem is equally evasive.

*Howard is a shareholder in our Roseland, New Jersey office who can be reached at 973.618.4118 or hbmankoff@mdwcg.com. Audrey, a shareholder in our King of Prussia, Pennsylvania office, can be reached at 610.354.8274 or alcopeland@mdwcg.com.

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_{Defense Digest, Vol. 22, No. 3, September 2016. Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2016 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}