This case however, involves alleged preferential treatment for non-religious activities with similar land use characteristics. A small church wanted to relocate to a new town, to a building in the commercial area of the city which does not permit noncommercial activities. The 7th Circuit in Chicago wanted to review the standard by which to judge such cases.
The original zoning ordinance authorized “[a]ll general commercial and retail uses” in the B-2 District and also enumerated the following specific permitted uses: art galleries; automobile service stations; dry-cleaning establishments and laundries; funeral parlors; gymnasiums,
health clubs, and salons; hotels and motels; laboratories; medical and dental clinics; meeting halls; newspaper offices; business, professional, and public offices; resale or secondhand stores; restaurants; taverns or cocktail lounges; and accessory uses to the foregoing permitted uses. In addition, the ordinance authorized certain “special uses” (by permit) in the B-2 District: art galleries and museums; daycare centers; schools of any kind; public libraries; parking lots and storage garages; a variety of utility and public-agency buildings; recreational buildings
and community centers; and taverns, cocktail lounges, and restaurants featuring live entertainment. The ordinance also specifically prohibited church services from being held in any “business use” building; this restriction was applicable in all business districts in the village, including the B-2 District.
After the suit was filed, the Village amended its zoning ordinance in an effort to cure the rather obvious facial violation of RLUIPA's equal-terms provision. Note to local Tennessee local governments: it is difficult to allow meetings halls, community centers, and live entertainment and disallow churches in the same district.
The amended ordinance removed certain secular assemblies from the list of permitted and special uses authorized in the B-2 District-meeting halls, art galleries, museums, schools, libraries, recreational buildings, community centers, and certain other secular assembly uses-but continued to expressly permit commercial gymnasiums, health clubs, and salons; hotels and motels; restaurants and taverns; and day-care centers (as an allowed “special use”). River of Life maintains that these remaining permitted uses are “nonreligious assemblies” within
the meaning of § 2(b)(1) of RLUIPA, and that allowing these uses in the B-2 District while excluding churches like River of Life treats religious assemblies on “less than equal terms” than “a nonreligious assembly or institution” in violation of RLUIPA.
The 3rd Circuit (in Philadelphia) ruled in another case that "a regulation will violate the Equal Terms provision only if it treats religious assemblies or institutions less well than secular assemblies or institutions that are similarly situated as to the regulatory purpose." That is, if a secular assembly is allowed and the religious assembly banned even though the two assemblies don't differ in any way material to the regulatory purpose behind the ordinance, then neutrality has been violated and equality denied. Lighthouse Institute for Evangelism, Inc. v. City of Long Branch, 510 F.3d 253, 266 (3d Cir.2007).
The 11th Circuit took another approach. A zoning ordinance that permits any “assembly,” as
defined by dictionaries, to locate in a district must permit a church to locate there as well even if the only secular assemblies permitted are hospital operating theaters, bus terminals, air raid shelters, restaurants that have private dining rooms in which a book club or professional association might meet, and sports stadiums. Midrash Sephardi, Inc. v. Town of Surfside,
366 F.3d 1214, 1230-31 (11th Cir.2004).
The 7th Circuit agrees with the 3rd Circuit's test, amending it slightly to consider the ordinance in terms of its regulatory criteria, as opposed to its underlying purpose, fearful that the purpose could be difficult to construe and manipulation. The 7th Circuit suggests instead that the Court should look at the criteria of land use, traffic, parking, and others. A cynic might suggest that those are just as susceptible to manipulation as the "purpose" but the 7th Circuit clearly felt more comfortable with those criteria. Indeed, one of the concurring opinions makes exactly that point.
The permitted land use that is most like the plaintiff's is a commercial gymnasium, and that's not close enough because a commercial assembly belongs in an all-commercial district and a noncommercial assembly, secular or religious, does not.
The court ends by reminding the reader that the "substantial burden" part of the RLUIPA is not before the court, and that if that section had been before it, the result might have been different.
In a lengthy dissent, Judge Sykes first explains that both approaches are flawed (and not significantly different in any event) and then why he disagrees with the majority.
There are a couple of reasons why this analysis is flawed. First, the unmistakable implication is that comparing the excluded religious assembly to a permitted commercial-i.e., for-profit-assembly is either categorically improper or will always defeat the claim. But nothing in the text of the equal-terms provision presumptively rules out using commercial secular assemblies and institutions for equal-terms comparison just because they are commercial and therefore “belong” in a commercial district. Second, the focus on other excluded assemblies has the analysis backward. A decision method that justifies excluding religious assemblies from a zone because nonreligious assemblies are also excluded turns the equal-terms provision on its head. The equal-terms provision is a remedy against exclusionary zoning; reading it to require equality of treatment with excluded secular assemblies-rather than included secular assemblies-gives religious assemblies no remedy at all. The statute plainly requires religious-group equality with permitted secular assemblies, not excluded secular assemblies.This is a quite interesting decision and the give and take between the majority and the dissent illustrates some of the difficulties of interpreting the federal statute. From my perspective, the 7th Circuit's idea that tax policy is a legitimate part of land use planning is suspect: land use issues should be decided on the impact of the land use on surrounding land uses, not how much tax is going to be generated by the permit. Once we begin to allow local governments to make decisions in zoning on that basis, the system is in serious trouble.