In its most recent term the United States Supreme Court issued four rulings that will be of interest to church leaders. In one case the Court ruled that a city has the power to seize private property using the power of eminent domain in furtherance of an “economic development” plan. In the second case, the Court affirmed the constitutionality of portions of the Religious Land Use and Institutionalized Persons Act (RLUIPA). This ruling will provide churches with significant protection in the event that a city attempts to seize their property to expand the tax base or further an economic development plan. The third and fourth cases address the constitutionality of posting the Ten Commandments on public property. In one case, the Court ruled that posting the Ten Commandments in a Kentucky courtroom violated the first amendment’s “nonestablishment of religion” clause, while in the other case the Court concluded that a monument depicting the Ten Commandments on the grounds of the Texas state capitol building was permissible. The first two of these rulings are summarized in this article. The other rulings are addressed in the next edition of Church Law & Tax Report.
Case #1. Seizing Private Property to Expand the Tax Base or Promote Economic Development—Kelo v. City of New London, 2005 WL 1469529 (2005)
The Fifth Amendment to the United States Constitution states simply, “Nor shall private property be taken for public use, without just compensation.” There are three important principles embodied in this phrase. First, government agencies have the authority to acquire private property, even if the property owner objects. Second, government agencies can only acquire private property for a public use. Third, government agencies must provide “just compensation” to private property owners whose land is seized. The taking of private property by an act of government for a public use is commonly called “eminent domain” or “condemnation.”
Just what is a “public use?” The definition of this term is critical, since it describes the purposes for which private property can be seized by an act of government. In the Kelo case, the Supreme Court defined the concept of “public use” very broadly.
facts
In 2000, the city of New London, Connecticut approved a development plan that was “projected to create in excess of 1,000 jobs, to increase tax and other revenues, and to revitalize an economically distressed city, including its downtown and waterfront areas.” In assembling the land needed for this project, the city purchased property from willing sellers, and sought to use the power of eminent domain to acquire the remainder of the property from unwilling owners in exchange for just compensation.
One property owner whose property the city sought to acquire was born in her home in 1918 and had lived there her entire life. Her husband had lived in the house since they married some 60 years ago. This couple, along with other property owners, went to court to block the seizure of their property by the city. They claimed that the concept of “public use” did not include expanding the tax base or the promotion of economic development. The state supreme court ruled that the city was pursuing a public purpose and dismissed the landowners’ claims. The case was appealed directly to the United States Supreme Court.
the Court’s ruling
The Court began its opinion by observing, “The disposition of this case therefore turns on the question whether the city’s development plan serves a public purpose.” It noted that “without exception, our cases have defined that concept broadly, reflecting our longstanding policy of deference to legislative judgments in this field,” and that “for more than a century [we] have eschewed rigid formulas and intrusive scrutiny in favor of affording legislatures broad latitude in determining what public needs justify the use of the takings power.” The Court continued,
The city has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including—but by no means limited to—new jobs and increased tax revenue. As with other exercises in urban planning and development, the city is endeavoring to coordinate a variety of commercial, residential, and recreational uses of land, with the hope that they will form a whole greater than the sum of its parts. To effectuate this plan, the city has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development …. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the fifth amendment.
The private property owners who opposed the seizure of their property insisted that economic development and expansion of the tax base never qualify as a public use. The Court disagreed, noting that “clearly, there is no basis for exempting economic development from our traditionally broad understanding of public purpose,” and that “the public end may be as well or better served through an agency of private enterprise than through a department of government.” Further, “any number of cases illustrate that the achievement of a public good often coincides with the immediate benefiting of private parties.” The Court also observed:
It is further argued that without a bright-line rule nothing would stop a city from transferring citizen A’s property to citizen B for the sole reason that citizen B will put the property to a more productive use and thus pay more taxes. Such a one-to-one transfer of property, executed outside the confines of an integrated development plan, is not presented in this case. While such an unusual exercise of government power would certainly raise a suspicion that a private purpose was afoot, [such] hypothetical cases can be confronted if and when they arise. They do not warrant the crafting of an artificial restriction on the concept of public use.
The Court insisted that it did not “minimize the hardship that condemnations may entail, notwithstanding the payment of just compensation.” And, it stressed that
nothing in our opinion precludes any state from placing further restrictions on its exercise of the takings power. Indeed, many states already impose public use requirements that are stricter than the federal baseline. Some of these requirements have been established as a matter of state constitutional law, while others are expressed in state eminent domain statutes that carefully limit the grounds upon which takings may be exercised …. The necessity and wisdom of using eminent domain to promote economic development are certainly matters of legitimate public debate. This Court’s authority, however, extends only to determining whether the city’s proposed condemnations are for a “public use” within the meaning of the fifth amendment to the federal Constitution. Because over a century of our case law interpreting that provision dictates an affirmative answer to that question, we may not grant petitioners the relief that they seek.
Four of the Court’s nine justices dissented from this ruling. One of the dissenting justices’ opinions concludes with these remarks:
The consequences of today’s decision are not difficult to predict, and promise to be harmful. So-called “urban renewal” programs provide some compensation for the properties they take, but no compensation is possible for the subjective value of these lands to the individuals displaced and the indignity inflicted by uprooting them from their homes. Allowing the government to take property solely for public purposes is bad enough, but extending the concept of public purpose to encompass any economically beneficial goal guarantees that these losses will fall disproportionately on poor communities …. [The Court’s decision in this case] encourages those citizens with disproportionate influence and power in the political process, including large corporations and development firms, to victimize the weak.
relevance to church leaders
Does this ruling mean that city and state governments can seize church property to promote an economic development plan, or to increase the tax base? To illustrate, could a city “take” a church’s property (for just compensation) in order to allow a developer to demolish the church and construct a commercial building that will provide property tax revenue to the city? It is important to remember that churches are different from other private property owners in three important respects.
- The first amendment guaranty of religious liberty provides churches with some enhanced protection that would not be available to other property owners. While this protection has been diminished by the Supreme Court in recent years, it retains some vitality.
- State constitutions also provide churches with guarantees of religious liberty. These protections vary widely from state to state. They may provide churches with additional protections when a city wants to take their property.
- The federal Religious Land Use and Institutionalized Persons Act states that “no government shall impose or implement a land use regulation in a manner that imposes a burden on the religious exercise of a person, including a religious assembly or institution, unless the government demonstrates that imposition of the burden on that person, assembly, or institution—(A) is in furtherance of a compelling governmental interest; and (B) is the least restrictive means of furthering that compelling governmental interest.” This law may provide churches with additional protections when confronted with an attempt by a city government to take their property for economic development or to increase the tax base.
In recent years many courts have suggested that RLUIPA is an unconstitutional “establishment of religion.” This argument has been considerably weakened by the next Supreme Court ruling addressed in this article.
the Cottonwood Christian Center Case
A federal district court in California ruled that a city could not seize a church’s property through eminent domain in order to allow a discount warehouse to be constructed that would generate more tax revenues. A church grew rapidly from 50 members to more than 5,000. As a result of this growth, the church outgrew its 700-seat sanctuary and the church was forced to conduct 6 services each weekend and “bus” parishioners from remote parking areas. But even with the buses and multiple weekend services, the church is unable to accommodate all the people that want to attend its services and it is unable to conduct outreach to potential new members. The physical constraints of its current facility also limit the church’s ability to conduct many of its different programs including youth conferences, women’s ministries, daycare facilities, English language classes for native Spanish speakers, and missionary training. The church eventually purchased 18 acres of property, and developed detailed plans to use the property. Its proposed church center would contain a 300,000 square foot worship center with more than 4,700 fixed seats, multiple classrooms and a multi-purpose room for youth and other ministries. The proposed center would also have a youth activity center, gymnasium, and study rooms for after school youth programs. The facility would also include a daycare facility for church members and the surrounding community and a religious bookstore. The proposed center would have sufficient space for all of the church’s current ministries, community service programs, and worship services. The church contacted city officials to obtain a conditional use permit that would allow it to build its new facility.
What the church did not know was that city officials had other plans for the church’s property. Initially, the city planned a 45-acre development that included the church’s property, and that would have three major retail anchor stores and a mix of restaurants, smaller retail stores, and movie theaters. This plan was eventually abandoned, and a modified plan was adopted that only pertained to the church’s 18 acres. The city planned on allowing a large discount warehouse (such as Costco) to locate on the property. The city then offered to buy the property from the church at a specified price. When the church rejected this offer, the city instituted eminent domain proceedings to compel the church to sell its property to the city.
The church filed a lawsuit in federal court, claiming that the city’s refusal to issue the conditional use permit and the eminent domain proceeding violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) as well as federal and state constitutional protections of religious liberty.
RLUIPA
RLUIPA prohibits any government agency from imposing or implementing “a land use regulation in a manner that imposes a substantial burden on the religious exercise of a person, including a religious assembly or institution, unless the government demonstrates that imposition of the burden on that person, assembly, or institution—(A) is in furtherance of a compelling governmental interest; and (B) is the least restrictive means of furthering that compelling governmental interest.” The court concluded that the city’s refusal to grant the church a conditional use permit “involves a land use regulation or system of land use regulations, under which a government makes, or has in place formal or informal procedures or practices that permit the government to make, individualized assessments.” The court also concluded that the city’s attempt to seize the church’s property through eminent domain “falls under RLUIPA’s definition of land use regulation which is defined as a zoning or landmarking law, or the application of such a law, that limits or restricts the claimant’s use or development of land. The city’s authority to exercise eminent domain … would unquestionably limit or restrict the church’s use or development of land.”
freedom of religion
In 1990 the United States Supreme Court ruled that “neutral laws of general applicability” that impose burdens on religious practice do not violate the first amendment guaranty of religious freedom, and need not be based on a “compelling government interest.” However, the federal district court noted that the city’s refusal to grant the church’s conditional use permit was an “individualized assessment” for which a compelling government interest must be proven. It observed, “The city’s land-use decisions here are not generally applicable laws. [Its] refusal to grant the conditional use permit invites individualized assessments of the subject property and the owner’s use of such property, and contain mechanisms for individualized exceptions.” Even the city’s eminent domain proceeding constituted an individualized assessment, the court concluded.
The court concluded that the city’s actions were not neutral, but instead specifically aimed at discriminating against the church’s religious uses. It observed,
Why had the city, so complacent before the church purchased the property, suddenly burst into action? Although some innocent explanations are feasible—such as new leadership or robust economic growth—the activity suggests that the city was simply trying to keep the church out of the city, or at least from the use of its own land. This suspicion is heightened by the nature of the projects. The city’s plan called for the church’s property to be used as business offices. Yet, while the city has been insistent that a church would be inconsistent with this plan, it has proceeded to plan a shopping/entertainment center and a strip mall anchored by Costco, neither of which are [sic] consistent with a business park …. Similarly, the city’s claim that it needs the tax revenue of a retail store is dubious. In her state of the city address [the mayor] trumpeted [the city’s] good fiscal condition, stating that the city continues to set aside 25% in reserves annually while still delivering the highest quality of service to our community.
conclusion
There can be no violation of RLUIPA or the first amendment unless government action imposes a substantial burden on core religious beliefs. The court concluded that this requirement was met: “Preventing a church from building a worship site fundamentally inhibits its ability to practice its religion. Churches are central to the religious exercise of most religions. If a congregation could not build a church it could not exist.” The court also concluded that no compelling governmental interest supported the city’s actions. In rejecting the city’s argument that “revenue generation” (having a Costco store on the church’s property) was a compelling interest, the court observed, “If revenue generation were a compelling state interest, municipalities could exclude all religious institutions from their cities.”
application
The Cottonwood Christian Center case will be a useful precedent for any church that is encountering resistance from city officials in building a new sanctuary. Here are the main points:
- A city’s refusal to grant a conditional use permit is a “land use regulation” that is subject to the protections of RLUIPA.
- A city’s attempt to seize church property through the exercise of eminent domain is a “land use regulation” that is subject to the protections of RLUIPA.
- “Neutral laws of general applicability” can impose burdens on the exercise of religion without offending the first amendment whether or not they are supported by a compelling government interest. However, the court concluded that a compelling governmental interest was required to sustain the city’s actions in this case because (a) the city’s actions were not “neutral” but rather were hostile to religion, and (b) the city’s actions amounted to “individualized assessments.”
- The city’s desire for additional tax revenue is not a compelling governmental interest that would justify its denial of the church’s conditional use permit or its attempt to seize the church’s property through eminent domain. Cottonwood Christian Center v. Cypress Redevelopment Agency, 218 F.Supp.2d 1203 (C.D. Cal. 2002).
Case #2. The Religious Land Use and Institutionalized Persons Act – Cutter v. Wilkinson, 125 S.Ct. 2113 (2005)
In 2000 Congress enacted the Religious Land Use and Institutionalized Persons Act (“RLUIPA”). The Act, which was enacted by unanimous consent of both the Senate and House of Representatives, addresses two areas where religious freedom has been threatened: (1) land use regulation, and (2) persons in prisons, mental hospitals, nursing homes and similar institutions.
(1) land use regulation
Section 2 of RLUIPA specifies that state and local governments cannot subject religious organizations to a land use regulation that imposes substantial burdens on the free exercise of religion unless the law is supported by a compelling governmental interest:
No government shall impose or implement a land use regulation in a manner that imposes a substantial burden on the religious exercise of a person, including a religious assembly or institution, unless the government demonstrates that imposition of the burden on that person, assembly, or institution—(A) is in furtherance of a compelling governmental interest; and (B) is the least restrictive means of furthering that compelling governmental interest.
(2) institutionalized persons
Section 3 of RLUIPA seeks to protect the religious practices of institutionalized persons. The Act provides:
No government shall impose a substantial burden on the religious exercise of a person residing in or confined to an institution … even if the burden results from a rule of general applicability, unless the government demonstrates that imposition of the burden on that person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.
The term “institution” is defined as any facility that is owned, operated, or managed by a state or local government and that is (1) for persons who are mentally ill, disabled, or retarded, or chronically ill or handicapped; (2) a jail, prison, or other correctional facility; (3) a pretrial detention facility; (4) for juveniles who are being held awaiting trial; or (5) providing skilled nursing, intermediate or long-term care, or custodial or residential care.
facts
Several current and former inmates of correctional institutions operated by the Ohio Department of Corrections sued prison officials for unduly restricting their religious practices in violation of RLUIPA. The officials responded by asserting that RLUIPA was an unconstitutional establishment of religion. A federal district court ruled that section 3 of RLUIPA (pertaining to the religious practices of institutionalized persons) was constitutional. A federal appeals court reversed, concluding that section 3 of RLUIPA was unconstitutional. The case was then appealed to the United States Supreme Court.
the Court’s ruling
The Supreme Court concluded that section 3 of RLUIPA was not an unconstitutional establishment of religion. In reaching this conclusion the Court noted the following factors:
- Before enacting section 3, Congress documented, in hearings spanning three years, that “frivolous or arbitrary” barriers impeded institutionalized persons’ religious exercise.
- “The constitutional obligation of ‘neutrality’ is not so narrow a channel that the slightest deviation from an absolutely straight course leads to condemnation.”
- “In accord with the majority of [federal] Courts of Appeals that have ruled on the question, we hold that section 3 of RLUIPA fits within the corridor between the [first amendment’s free exercise of religion and nonestablishment of religion clauses]. On its face, the Act qualifies as a permissible legislative accommodation of religion that is not barred by the [nonestablishment of religion] clause.”
- “We find RLUIPA’s institutionalized-persons provision compatible with the establishment clause because it alleviates exceptional government-created burdens on private religious exercise.”
- “Furthermore, the Act on its face does not founder on shoals our prior decisions have identified: Properly applying RLUIPA, courts must take adequate account of the burdens a requested accommodation may impose on nonbeneficiaries, and they must be satisfied that the Act’s prescriptions are and will be administered neutrally among different faiths.”
The Court cautioned that “section 2 of RLUIPA is not at issue here.” Section 2, as noted above, is the section that pertains to land use regulations. As a result, the Court’s ruling does not directly affirm the constitutionality of section 2. This conclusion, however, can be inferred to some degree because most if not all of the same five factors (noted above) that the Court relied on in concluding that section 3 is constitutional apply equally to section 2.
Key point. The Supreme Court only upheld the constitutionality of the institutionalized persons provisions of RLUIPA. It did not address section 2 pertaining to the application of land use regulations to religious organizations.
The force of the Court’s decision is weakened by the following two considerations.
- The only constitutional challenge to section 3 of RLUIPA made by the prison officials in the lower courts was that it violated the first amendment’s nonestablishment of religion clause. When the case was appealed to the Supreme Court, the prison officials also argued that section 3 was an unconstitutional exercise of congressional power under the Constitution’s commerce and spending clause. Since this argument was not made in the lower courts, the Supreme Court declined to address it. It is possible that section 3 (and section 2) of RLUIPA will be challenged in the future on this ground.
- The Court observed that “in upholding RLUIPA’s institutionalized-persons provision, we emphasize that [prison officials] have raised a facial challenge to the Act’s constitutionality, and have not contended that … applying RLUIPA would produce unconstitutional results.” Again, it is possible that sections 2 and 3 will be challenged in the future on the ground that they are unconstitutional as applied (rather than on their face).
Key point. The Court refused to address the constitutionality of the federal Religious Freedom Restoration Act in the context of federal laws and practices. It observed, “RFRA, Courts of Appeals have held, remains operative as to the federal government …. This Court, however, has not had occasion to rule on the matter.”
- What this means for churches
- This case is important because it suggests (although does not specifically hold) that section 2 of RLUIPA does not violate the first amendment’s nonestablishment of religion clause. Several previous state and federal cases have suggested that section 2 of RLUIPA is an impermissible establishment of religion. This conclusion is now far less likely.
- It is significant that this case was decided at the same time as the Kelo case (discussed above, addressing the seizure of private property by city governments), since it can be cited as indirect evidence of the constitutionality of section 2 of RLUIPA and thereby bolsters one of the main defenses a church has when confronted with a city government that wants to take its property for economic development or to expand the tax base.
Example. A city council votes to condemn a church’s property in order to allow the construction of a new Wal-Mart. The city council believes that its plan will significantly improve the city’s finances because of the property taxes that will paid by a Wal-Mart store. The church opposes the taking of its property. The Supreme Court’s decision in the Kelo case (discussed above) demonstrates that a city can seize private property for economic development or to expand the tax base (assuming that just compensation is paid). However, section 2 of RLUIPA states that “no government shall impose or implement a land use regulation in a manner that imposes a substantial burden on the religious exercise of a religious assembly or institution, unless the government demonstrates that imposition of the burden on that person, assembly, or institution—(A) is in furtherance of a compelling governmental interest; and (B) is the least restrictive means of furthering that compelling governmental interest.” This language provides churches with a potent defense when faced with an attempt by a city government to seize its property to expand the tax base or promote economic development. There is no guaranty that this defense will be effective, but it is one that should be vigorously pursued by any church wanting to resist the taking of its property by a government agency.
Example. A state notifies a church that it is going to take its property pursuant to the power of eminent domain as part of a highway construction project. There is no question that a state has the authority to take a church’s property for a public use, and this would certainly include the construction of a highway. The church could assert RLUIPA as a defense to such a taking, but it is less likely that this defense will be effective when a state or local government is attempting to take church property for an overtly public purpose.
