Condemnation of Church Property Presents Unique Legal Issues BY MARTIN DOYLE DAVID FELDER

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1 Condemnation of Church Property Presents Unique Legal Issues BY MARTIN DOYLE AND DAVID FELDER As originally published as a Special to the Legal Intelligencer, PLW, April 21, 2008 MARTIN DOYLE and DAVID FELDER are members of the Saul Ewing s Real Estate Department in the Firm s Philadelphia office. Both have worked on a number of major real estate transactions and have been involved in all aspects of real estate development, sales, finance and leasing. Doyle received his J.D., cum laude, from the University of Pennsylvania Law School. Felder received his J.D., cum laude, from Harvard Law School. In an article titled "Fla. Church Argues Religious Freedom in Eminent Domain Battle," the March 18 edition of The Legal Intelligencer chronicles the ongoing battle between Broward County and Christian Romany Church, a 300-member Roma (ethnic gypsy) congregation in Fort Lauderdale. The county is seeking to condemn an acre and a half parcel that is home to CRC, combine it with adjacent land owned by the county and build a drug abuse treatment facility on the property. The church has challenged the legality of the taking under the Florida Religious Freedom Restoration Act of 1998, which prohibits governmental entities from imposing a substantial burden on a person's exercise of religion unless the burden is the least restrictive means of furthering a compelling governmental interest. CRC claims that the seizure of its property by eminent domain would substantially burden the free exercise of religion and does not meet the strict scrutiny requirements of the FRFA. Controversies regarding governmental takings of property used for religious purposes are rare but not unprecedented. Locally, in Living Faith Ministries v. Camden County Improvement Authority, a Pennsauken, N.J., congregation filed suit in federal court charging that Pennsauken Township, Camden County and the Camden County Improvement Authority violated the United States and New Jersey constitutions and the Religious Land Use and Institutionalized Persons Act of 2000 by seeking to take church property. The case was subsequently settled. Condemnation of property used for religious purposes has been challenged in both state and federal courts from time to time on a variety of grounds, including state statutory law, state constitutional law, federal statutory law and federal constitutional law. The question of the legality of a governmental taking of church property under Pennsylvania statutory law was addressed by the Pennsylvania Commonwealth Court in Township of O'Hara v. Condemnation of a Permanent Fee Simple Interest for Public Park and Recreation Area and Facilities of 4.65 Acres, More or Less in O'Hara. O'Hara Township is a first class township in Allegheny County. With the consent of St. Mary's Catholic Church of Sharpsburg, the township constructed and used an athletic field and other

2 recreation facilities on property owned by the church. St. Mary's eventually terminated the township's right to use the property, in order to expand the church cemetery and construct a mausoleum. When this occurred, the township proceeded to take the land by eminent domain. St. Mary's challenged the condemnation, arguing that first class townships do not have authority to condemn church property or burial grounds under Pennsylvania law. The First Class Township Code does not expressly authorize the condemnation of church property or burial grounds. This lack of express authorization, according to the church, deprived the township of the power to take the property. Noting that under Pennsylvania law, counties and school boards are expressly prohibited from condemning church property or burial grounds, the church argued that there is a "strong policy in the Commonwealth against condemnation of cemetery property" and that condemnation of church/cemetery property should be prohibited absent express authority to do so. The Commonwealth Court rejected the church's position and ruled that the taking was proper. In reaching this conclusion, the court relied in significant part upon the fact that prior to 1953, the township code had expressly prohibited the taking of cemetery and church property. According to the court, the deletion of the former prohibition supported the conclusion that a taking of church property for park and recreational purposes is not currently prohibited. "[A] change in statutory language ordinarily demonstrates a change in legislative intent." The court also pointed out that although specific provisions of the township code expressly prohibit first class townships from taking church or cemetery property for laying out and opening roads and erecting certain types of public buildings, no such restriction is applicable with respect to takings for parks or recreational purposes. Accordingly, "the Township was statutorily authorized to condemn St. Mary's property, notwithstanding the absence of express authorization to condemn property of this nature. To conclude otherwise would... render those instances where the legislature has expressly prohibited the taking of church and cemetery property mere surplusage." In addition to its statutory challenge, St. Mary's argued that the condemnation of church property violated the Free Exercise Clause of the First Amendment. The court dismissed this claim on technical grounds. Since St. Mary's failed to raise this in its preliminary objections, the argument was deemed waived. Churches and others have asserted First Amendment challenges to governmental takings of property used for religious purposes, most frequently in the federal courts. Under current law, such a challenge usually goes hand-in-hand with a claim under the RLUIPA. These federal cases almost always involve the same two legal questions: Does the RLUIPA apply to takings of land by eminent domain, and does the Free Exercise Clause require "strict scrutiny" of takings of property used for religious purposes? The RLUIPA prohibits government agencies 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 -2-

3 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." In short, the RLUIPA requires a strict scrutiny standard of review with respect to land use regulations that impose a substantial burden on the exercise of religion. The obvious question then is whether a taking by eminent domain constitutes a "land use regulation" under the RLUIPA. Since the adoption of the RLUIPA, there have been three federal court cases that explore governmental takings of religious property within the context of the RLUIPA. Cottonwood Christian Center v. Cypress Redevelopment Agency involved an undeveloped 18- acre parcel located in Cypress, Calif. Cottonwood Christian Center, a mega-church that owned the land, proposed to build a 4,700-seat auditorium and related buildings on the property. The city rejected CCC's application for a conditional use permit because it wanted the parcel to be developed as commercial retail space. The Cypress Redevelopment Agency filed an action in state court to condemn the land after the church refused to sell the property to it. CCC then filed an action in federal district court seeking to preliminarily enjoin the condemnation action. The church argued that the city's refusal to grant the conditional use permit and the exercise of eminent domain violated both the RLUIPA and the Free Exercise Clause. The court agreed with CCC and granted the injunction. With respect to the RLUIPA claim, the city contended that the act did not apply since the exercise of eminent domain is not a "land use regulation." The court said that the refusal to issue the conditional use permit clearly implicated a land use regulation, but, even more significantly, it found that the condemnation proceedings came within the RLUIPA separate and apart from the zoning determination. The court ruled that the city's zoning and eminent domain decisions imposed a substantial burden on the exercise of religion, that a strict scrutiny standard of review was required under the RLUIPA, and that the city had failed to satisfy its burden of showing that the least restrictive alternative had been used to further a compelling governmental interest. Two subsequent federal court decisions addressing the same issue as Cottonwood reach a different result. Faith Temple Church v. Town of Brighton involved a 66-acre parcel that the plaintiff wanted to develop as a church building, auditorium and other facilities for "faith-based" programs. On April 13, 2004, the church announced that it had executed an agreement of sale to purchase the land. Shortly thereafter, the town commenced condemnation proceedings against the land in order to expand an adjacent park. The church sought an injunction barring the town from pursing the condemnation, alleging that the town's actions violated the United States and New York constitutions and the RLUIPA. The -3-

4 defendants moved for summary judgment with respect to the RLUIPA claims only. The court granted the motion for summary judgment, dismissing the RLUIPA claims on the basis that the RLUIPA does not apply to eminent domain proceedings. "The simple fact is that Congress chose to limit the application of RLUIPA to cases involving 'a zoning or landmarking law, or the application of such a law, that limits or restricts a claimant's use or development of land....' Conspicuously absent is any mention of eminent domain. Eminent domain is hardly an arcane or little-known concept, and the Court will not assume that Congress simply overlooked it when drafting RLUIPA." The most recent federal case is the 7th U.S. Circuit Court of Appeals case, St. John's United Church of Christ v. City of Chicago, which involved the condemnation of land by the city of Chicago for the modernization and expansion of O'Hare International Airport. The case is very complicated, both legally and factually, involving a variety of claims asserted by various municipal and private entities and individuals against the city of Chicago, the state of Illinois, the FAA and other defendants. Central to the case, however, were St. John's claims that the city's efforts to condemn a cemetery located on church property violated the RLUIPA. The court affirmed the lower court's dismissal of the RLUIPA claims because the city's plan to condemn the cemetery was not a "land use regulation" within the meaning of the RLUIPA. In reaching this conclusion, the 7th Circuit said that it was "not persuaded" by the dictum in Cottonwood that the exercise of eminent domain constitutes a land use regulation under the RLUIPA. As indicated above, a challenge to a condemnation under the RLUIPA generally goes hand-inhand with a claim that the governmental action also violates the Free Exercise Clause of the First Amendment. The specific constitutional question such claims raise is whether, apart from the RLUIPA, a strict scrutiny standard of review is required under the First Amendment with respect to governmental takings of property used for religious purposes. Under established principles of constitutional jurisprudence, not every governmental action that imposes a substantial burden on religious practice is subject to strict scrutiny. A law that is religion-neutral and has general application does not run afoul of the Free Exercise Clause, even if it has the incidental consequence of burdening a religious practice. Unlike RLUIPA and some state statutes, the First Amendment does not require strict scrutiny of a burden imposed on a religious practice if the burden is incidental to the application of a religion-neutral law. Applying Employment Div. Dept. of Human Resources v. Smith, the 10th Circuit ruled in Thiry v. Carlson that a taking that is part of a government project in which the law is neutrally applied to all properties and is not directed at religious uses does not violate the Free Exercise Clause, even if it incidentally affects religious practice. According to the district court in Cottonwood, however, the RLUIPA and the First Amendment mandate strict scrutiny of a condemnation of property used for religious purposes, at least in some circumstances. While Smith holds that the application of a neutral law does not violate the -4-

5 Free Exercise Clause even if it incidentally burdens religious practice, "it left undisturbed the application of a strict scrutiny test to situations where there are 'individualized governmental assessment[s]'... Cases before and after Smith have continued to apply a strict scrutiny test to such individualized assessment questions." In other words, in situations where individual case-by-case determinations are made based upon the particular facts or circumstances, the First Amendment requires strict scrutiny if such a determination imposes a substantial burden on free exercise. In Cottonwood, the court ruled that the defendants' land use and condemnation decisions were both "individualized governmental assessments"; that strict scrutiny was mandated under the First Amendment; and that the defendants had failed to satisfy their burden of showing that they used the least restrictive alternative to meet a compelling governmental interest. Based upon the general direction of federal case law, the federal courts are unlikely to treat a taking of property used for religious purposes any differently than the taking of any other property. The only exception to these cases is Cottonwood, which holds that at least in some circumstances, a condemnation may be considered a "land use regulation" under RLUIPA and an "individualized governmental assessment" under the First Amendment, thereby triggering strict scrutiny if the condemnation imposes a substantial burden on the free exercise of religion. The question of whether a taking of property used for religious purposes violates state statutory law will depend on the jurisdiction. There are a number of states, like Florida, that have adopted so-called religious freedom restoration acts. Some of these state statutes go beyond the First Amendment by imposing strict scrutiny with respect to any governmental action that substantially burdens religious practice, even if the burden results from a rule of general applicability. In such jurisdictions, a taking of property used for religious purposes may be vulnerable to challenge if the taking substantially burdens religious practice. This article is reprinted with permission from the April 21, 2008 issue of The Legal Intelligencer. (c) 2008 ALM Properties Inc. Further duplication without permission is prohibited. All rights reserved. -5-

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