Riverside Church v. City of St. Michael, Civil No. 15-1575 (DWF/JSM)

• Decision Date: 31 August 2016
• Docket Number: Civil No. 15-1575 (DWF/JSM)
• Citation: 205 F.Supp.3d 1014
• Parties: Riverside CHURCH, Plaintiff, v. CITY OF ST. MICHAEL, Defendant.
• Court: U.S. District Court — District of Minnesota

205 F.Supp.3d 1014

Riverside CHURCH, Plaintiff,

v.CITY OF ST. MICHAEL, Defendant.

Civil No. 15-1575 (DWF/JSM)

United States District Court, D. Minnesota.

Signed August 31, 2016

Dean A. LeDoux, Esq., Matthew P. Webster, Esq., and Samuel W. Diehl, Esq., Gray Plant Mooty Mooty & Bennett, PA; and G. Craig Howse, Esq., and Jacob R. Grassel, Esq., Howse & Thompson, PA, counsel for Plaintiff.

George C. Hoff, Esq., and Jared D. Shepherd, Esq., Hoff, Barry & Kozar, P.A., counsel for Defendant.

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, United States District Judge

INTRODUCTION

Plaintiff Riverside Church (the "Church") sued Defendant City of St. Michael (the "City") after the Church tried, without success, to purchase a former movie theater (the "Theater Property") for religious worship. At the time, the City's zoning ordinance prohibited churches in the district where the Theater Property was located. When the Church petitioned the City to amend the zoning ordinance to allow churches as a permitted use in the district, the City denied the petition. After the Church filed this lawsuit, however, the City amended the zoning ordinance to permit churches as conditional uses in the district, and it granted the Church a conditional use permit.

In this lawsuit, the Church challenges the former zoning ordinance under the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. §§ 2000cc to 2000cc–5 ("RLUIPA"), and the First Amendment to the U.S. Constitution. It also asserts a defamation claim related to the City's statements about the Church's petition to amend the zoning ordinance. Presently, the Church seeks partial summary judgment, asserting that the Court should rule in its favor—with respect to liability but not damages—on two claims:

(1) violation of RLUIPA's equal terms provision, 42 U.S.C. § 2000cc(b)(1) ; and (2) violation of the right to free speech and assembly under the First Amendment. The City seeks summary judgment on all of the Church's claims against it.

For the foregoing reasons, the Court denies the Church's motion, grants the City's motion as to the Church's RLUIPA and free exercise claims, and denies the City's motion as to the Church's speech and defamation claims. The Court also dismisses the Church's claims for declaratory and injunctive relief as moot.

BACKGROUND

I. The City's Zoning Ordinance

The zoning ordinance at issue in this case is codified at St. Michael, MN, Code of Ordinances §§ 155.001-155.999 (the "Zoning Ordinance").¹ The purpose of the Zoning Ordinance is, in relevant part, "to provide for the orderly, economic, and safe development of land and urban services and facilities and to promote the public health and safety ... and to promote the general welfare of the inhabitants of the city." Zoning Ordinance § 155.002. To that end, the Zoning Ordinance divides the City into thirteen districts, including agricultural, residential, business, and industrial districts. Id. §§ 155.002, 155.100. The district at issue in this case is B-1, the General Business District, whose purpose is:

[T]o provide appropriately located lands for the full range of business uses needed by the city's residents, businesses, and workers, consistent with the Comprehensive Land Use Plan; to strengthen the city's economic base and provide employment opportunities close to home for residents; and to create suitable environments for various types of business, office, and retail uses.

Id. § 155.205.

For many districts, including B-1, the Zoning Ordinance authorizes certain categories of land use as "permitted" or "conditional." Id. § 155.105. The Zoning Ordinance allows permitted uses within a given district, subject to other City ordinances, but requires conditional use permits for conditional uses. Id. §§ 155.009, 155.105(B)(2)(c), 155.440. On January 28, 2014, the City Council adopted Ordinance No. 1401,² which amended the Zoning Ordinance by, among other things, creating a new category of use, "Assembly, religious institution, house of worship." (Doc. No. 73 ("Second Weigle Aff.") ¶ 5.). That category, which was undefined, existed until the City Council amended the Zoning Ordinance on April 8, 2015.³ See Zoning Ordinance § 155.105. Another undefined land use category, "Theaters (not outdoor drive-in)," existed until the City Council amended the Zoning Ordinance on November 10, 2014.⁴ See id. Although "Assembly, religious institution, house of worship" was a permitted use in all four residential districts (R-1, R-2, R-3, and R-4) and a conditional use in the public/institutional district (P/I), it was a prohibited use in B-1. Id. §§ 155.007, 155.105. "Theaters (not outdoor drive-in)," in contrast, was a permitted use in B-1. Id. § 155.105; see also Ordinance No. 1406 (establishing "Multi-Plex Theaters" as a conditional use in B-1).

II. The Church's Attempts to Purchase the Theater Property

The Church is a Christian and Missionary Alliance church that holds worship services at its building in Big Lake, Minnesota. (Doc. No. 66 ("Machmer Aff.") ¶ 2.) Between 2004 and 2014, average attendance at the Church's Sunday worship services increased from 665 people to 1,481 people. (Id. ¶ 3, Ex. A.) To accommodate this growth, Riverside began to consider adding a second location for worship. (Id. ¶ 5.) Starting in January 2014, the Church sought to purchase the Theater Property, a building that formerly operated as a 15-screen movie theater. (Id. ¶¶ 6-8; see also Doc. No. 57 ("Shepherd Aff.") ¶ 35, Ex. 34 ("Findings of Fact & Decision") ¶ 9.) The Theater Property is located in the City's B-1 district. (See Shepherd Aff. ¶ 21, Ex. 20 ("Planning Application") at 7.) The Church claims that the City's Zoning Ordinance prevented it from purchasing the Theater Property on three occasions.

A. The Church's First Attempt to Purchase the Theater Property and City Staff's Representation that the Zoning Ordinance Prohibited Religious Worship at the Theater Property

In January 2014, the Church learned that the Theater Property was for sale at a price that the Church could afford: $2,950,000. (Machmer Aff. ¶ 7.) Shortly thereafter, one of the Church's pastors, Skipp Machmer, as well as its attorney, Craig Howse, contacted Marc Weigle, the City's Community Development Director, to ask about uses at the Theater Property under the Zoning Ordinance. (Id. ¶ 8.) Weigle informed Machmer and Howse that the Zoning Ordinance did not permit the Church to use the Theater Property for religious worship. (Shepherd Aff. ¶ 6, Ex. 5 ("Machmer Dep.") at 31:11-25.) During the same month, the Church made an offer to purchase the Theater Property, but the Church's prospective lender, the Alliance Development Fund ("ADF"), required the Church to obtain "[c]ity zoning approvals" before closing. (Machmer Aff. ¶ 9, Ex. I at 1.) Ultimately, the seller accepted an offer made by Cinemasota, Inc. ("Cinemasota"), a movie theater operator. (Id. ¶ 10.)

In April 2014, Cinemasota offered to allow the Church to take over Cinemasota's purchase agreement with the seller for $1,750,000 plus closing costs. (Id. ¶ 11.) Church member Christian Bame offered to provide interim financing to the Church, so long as the Church obtained City approval to use the Theater Property for worship. (Doc. No. 68 ("Hannon Aff.") ¶ 3.) Church representatives met with Weigle and explained that the Church sought to project a video simulcast of its services onto a screen in one of the movie auditoriums at the Theater Property. (Machmer Aff. ¶ 12.) Weigle responded that the Zoning Ordinance did not allow the Church's proposed use, because it fell within the "Assembly, religious institution, house of worship" category, which was prohibited in B-1. (Id. ¶ 12; Weigle Aff. ¶ 2.) In addition, Weigle suggested that the Church could request an interpretation of the Zoning Code from the City Planning Commission. (Weigle Aff. ¶ 2.) Thereafter, the Church declined to take over the purchase agreement, and on April 23, 2014, Cinemasota closed on its purchase of the Theater Property. (See Shepherd Aff. at ¶ 48, Ex. 47.)

B. The Church's Second Attempt to Purchase the Theater Property and the City's Rejection of the Church's Request to Amend the Zoning Ordinance

On July 17, 2014, the Church submitted a formal Planning Application to the City, seeking an amendment to the text of the Zoning Ordinance. (Machmer Aff. ¶ 13; Planning Application.) Specifically, the Planning Application requested that the Zoning Ordinance be amended to add "Assembly, religious institution, house of worship" as a permitted use in B-1. (Planning Application at 3.) It also included an addendum explaining the purpose of the Application, stating in part: "[The City's] denial of the use of the [Theater] Property by Riverside, a religious institution, within the B-1 District is inhibiting Riverside's ability to purchase and use the property." (Id. at 7.)

At the same time, the Church engaged in negotiations with Cinemasota and ADF regarding the Church's continued desire to purchase the Theater Property. On August 19, 2014, the Church and Cinemasota executed a Purchase and Sale Agreement ("Purchase Agreement"), which provided for the sale of the Theater Property from Cinemasota to the Church for a purchase price of $2,273,000. (Shepherd Aff. ¶ 22, Ex. 21 ("Purchase Agreement").) The Church's obligations under the Purchase Agreement were contingent upon City approval of the Church's intended use of the Theater Property. (Purchase Agreement ¶ 5.) Under the Purchase Agreement, if the City failed to grant approval by the closing date of December 1, 2014, the Purchase Agreement terminated, unless the Church waived the contingency. (Id. ¶¶ 5-6.) In addition, in a letter dated September 22, 2014, ADF approved a $3,210,000 loan to the Church, subject to certain requirements, including "[c]ity zoning approvals." (Shepherd Aff. ¶ 25, Ex. 24 at 1.) On November 20, 2014, the letter was amended to reflect ADF's approval of a $3,047,500 loan, subject to ADF's receipt of an...