7th Cir.: Att’y fees to defend frivolous suit are substantial burden; jury must decide zoning denial

The Seventh Circuit affirmed that incurring attorney fees in a frivolous lawsuit brought by a governmental entity can constitute a substantial burden under RLUIPA this week. It also reversed a determination that the City of Chicago had demonstrated the city had not imposed a substantial burden on a religious outreach center's religious activities by denying licenses required to conduct those activities. Judge Richard A. Posner wrote the opinion for the court, and Judge Richard D. Cudahy wrote the following, exceptional concurrence: "Unfortunately, and I think the opinion must be stamped with a large ‘MAYBE.’” Judge Ilana Rovner was the third vote. Another notable aspect of the case is that, like most RLUIPA cases, it has been in litigation a long time—nine years. As Judge Posner wrote, “We can understand the judge’s desire to end a litigation that will soon have lasted as long as the Trojan War, but we do not think that the end is yet in sight.”


In World Outreach Conference Center v. City of Chicago, Nos. 13-3669, 13-3728 (7th Cir. June 1, 2015), the Seventh Circuit considered cross-appeals from the Northern District of Illinois brought after remanding in World Outreach Conference Center v. City of Chicago, 591 F.3d 531 (7th Cir. 2009), which considered similar issues on Chicago’s dismissal motion. In this round, the review was of an order granting partial summary judgment to World Outreach for attorney fees in a frivolous suit brought in state court by Chicago and summary judgment to Chicago on the question of whether the city substantially burdened the center’s religious activities.

In affirming the award of attorney fees, the court noted,

It’s hard to imagine a vaguer criterion for a violation of religious rights. But a frivolous suit aimed at preventing a religious organization from using its only facility—a suit that must have distracted the leadership of the organization of the organization, that imposed substantial attorneys’ fees on the organization, and that seems to have been part of a concerted effort to prevent it from using its sole facility to serve the religious objectives of the organization (to provide, as a religious duty, facilities for religious activities and observances and living facilities for homeless and other needy people)—cannot be thought to have imposed a merely insubstantial burden on the organization.

World Outreach operates one facility, which it bought from the YMCA. Part of the building contains 168 single-occupant rooms. The YMCA, which the court observed “is also of course a religious organization,” had operated the building in almost the identical way, including using the rooms to rent to needy people. That use was no longer in compliance with Chicago’s zoning, but the YMCA was grandfathered in. Under the zoning law, that status does not change with a change in ownership, but Chicago insisted that World Outreach obtain a special-use permit, which the YMCA was not required to obtain.

The court speculated about different reasons Chicago might not give the required licenses to World Outreach that the YMCA had acquired, from alderman opposition to the YMCA’s better name recognition. It also observed World Outreach had a “weak” case that it could have housed victims of Hurricane Katrina had Chicago not denied the required licenses, costing about $1.5 million in rent, meaning about $591,000 net to the center. Ultimately, the court decided that there was not enough evidence on either side to grant summary judgment, leaving the decision to a jury.

Listen to the oral argument here.
Listen to the previous appeal, argued on October 30, 2009, here.

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