Andon, LLC v. The City of Newport News, VA , 813 F.3d 510 ( 2016 )


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  •                                 PUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 14-2358
    ANDON,   LLC;    RECONCILING     PEOPLE      TOGETHER     IN   FAITH
    MINISTRIES, LLC,
    Plaintiffs - Appellants,
    v.
    THE CITY OF NEWPORT NEWS, VIRGINIA,
    Defendant - Appellee.
    Appeal from the United States District Court for the Eastern
    District of Virginia, at Newport News. Robert G. Doumar, Senior
    District Judge. (4:14-cv-00076-RGD-LRL)
    Argued:   December 9, 2015                  Decided:    February 9, 2016
    Before WILKINSON, KEENAN, and HARRIS, Circuit Judges.
    Affirmed by published opinion. Judge Keenan wrote the opinion,
    in which Judge Wilkinson and Judge Harris joined.
    ARGUED: Michael Bruce Ware, SCHEMPF & WARE, PLLC, Yorktown,
    Virginia, for Appellants.   Darlene P. Bradberry, OFFICE OF THE
    CITY ATTORNEY FOR THE CITY OF NEWPORT NEWS, Newport News,
    Virginia, for Appellee.     ON BRIEF: Adrienne Michelle Sakyi,
    SCHEMPF & WARE, PLLC, Yorktown, Virginia, for Appellants.
    BARBARA MILANO KEENAN, Circuit Judge:
    In     this    appeal,    we    consider       whether   the     district    court
    erred   in    dismissing       with    prejudice      a   complaint     filed     by   two
    entities, Andon, LLC, and Reconciling People Together in Faith
    Ministries, LLC (collectively, the plaintiffs) against the City
    of Newport News, Virginia (the City, or Newport News).                                 The
    plaintiffs’ complaint alleged that the City, acting through its
    Board of Zoning Appeals (BZA), violated the Religious Land Use
    and   Institutionalized          Persons       Act   (RLUIPA,     or    the    Act),   42
    U.S.C. § 2000cc et seq., by denying the plaintiffs’ request for
    a variance to permit a certain property to be used as a church
    facility.
    Upon our review, we conclude that the plaintiffs failed to
    state   a    claim    that     the    BZA’s    decision    imposed      a    substantial
    burden on the plaintiffs’ right of religious exercise.                          We also
    conclude that the district court did not abuse its discretion in
    denying      the    plaintiffs’        request       to   amend   their       complaint,
    because any such amendment would have been futile.                          We therefore
    affirm the district court’s judgment.
    I.
    In 2012, Walter T. Terry, Jr. formed a congregation for
    religious worship known as Reconciling People Together in Faith
    Ministries, LLC (the congregation) in Newport News, and served
    2
    as   its   pastor.      Although    the      members       of     the   congregation
    initially   gathered     to   worship       in    a    local    business   owned   by
    Terry, they later sought a larger location for their use.
    Terry ultimately found a suitable property, which included
    an office building (the building) and a small parking lot, that
    was offered for “lease or sale” by Andon, LLC (Andon).                             The
    property is located at 6212 Jefferson Avenue in Newport News
    (the property).
    Andon had purchased the property, a 0.32-acre parcel of
    land, in 2011.        Since 1997, the property continuously has been
    classified for commercial use under the City’s zoning ordinance.
    The ordinance provides that properties zoned for commercial use
    may be used for a “community facility,” including a “place of
    worship” or church, only when four conditions are satisfied:
    (a) access is provided from a public street directly
    to the property; (b) no use is operated for commercial
    gain; (c) no building or structure, nor accessory
    building or structure is located within 100 feet of
    any side or rear property line which is zoned single-
    family residential; and, (d) any parking lot or street
    serving such use is located 25 feet or more from a
    side or rear property line zoned single family
    residential.
    Newport News, Va. Municipal Code § 45-519.
    Although     the    property    complied            with     three    of   these
    conditions,     the     property    did          not    satisfy     the    “setback”
    requirement in subsection (c), because the building is located
    fewer than 100 feet from the rear and side property lines that
    3
    are adjacent to properties zoned for “single-family residential”
    use. 1        Despite     knowledge     of     this    problem,       the   congregation
    entered       into    a   written   lease      agreement       with    Andon    that    was
    contingent on Andon obtaining “City approval” allowing operation
    of a church facility on the property.                       Seeking to satisfy this
    contingency in the lease agreement, Andon filed with the BZA an
    application requesting a variance from the setback requirement.
    After    reviewing      Andon’s      application,      the    City    Codes    and
    Compliance Department (the Compliance Department) filed a report
    with the BZA concerning the variance request.                         The report stated
    that the BZA, prior to issuing a variance, must first find that:
    (1) “strict application of the ordinance would produce an undue
    hardship”         relating   to   the    property       “not   shared       generally    by
    other        properties”;     (2)      such    a   variance       “will      not   be    of
    substantial          detriment    to    adjacent        property”;      and    (3)      “the
    character of the district will not be changed” by granting the
    variance.          See Newport News, Va. Municipal Code § 45-3203(c).
    Based        on    these     restrictions,            the   Compliance         Department
    recommended that the BZA deny the variance, because the property
    could be used for other purposes without a variance, and because
    1
    The building is located 33 feet, 85 feet, and 80 feet away
    from the rear and side property lines abutting neighboring
    residential properties.
    4
    denial of a variance would not cause Andon to suffer a hardship
    unique among other commercial property owners in the vicinity.
    After       holding        a    public    hearing,           the       BZA       adopted          the
    Compliance      Department’s          recommendation             and    voted         to       deny    the
    variance request.             Andon appealed from the BZA decision to a
    Virginia        state     circuit        court,           which        upheld          the           BZA’s
    determination.
    The plaintiffs filed the present suit in federal district
    court alleging that the BZA’s denial of their variance request
    imposed     a    substantial          burden        on     the    plaintiffs’                  religious
    exercise in violation of RLUIPA, 42 U.S.C. § 2000cc(a)(1) (the
    substantial      burden       claim).         The        plaintiffs      alleged               that    the
    BZA’s     action       caused       “delay     in        obtaining      a     viable            worship
    location”       and      “uncertainty          as         to     whether          .        .     .     the
    [c]ongregation will be able to go forward with the lease of the
    [p]roperty.”
    The    plaintiffs          attached      to     their       complaint            an       affidavit
    from Terry, who stated that he “could not find a[n alternate
    property] that was the appropriate size, location, and price” to
    serve as a place of worship for the congregation.                                               He also
    stated     in    the    affidavit       that        “[m]any       of     the      [alternative]
    buildings       were    too     large   and     too        expensive        for       [the]          young
    congregation.”
    5
    The    City    moved   to   dismiss     the   complaint   with    prejudice
    under Federal Rule of Civil Procedure 12(b)(6) for failure to
    state a claim.        The district court granted the City’s motion,
    denied the plaintiffs’ request to file an amended complaint, and
    entered judgment in favor of the City. 2              The plaintiffs timely
    filed this appeal.
    II.
    We    review    de   novo   the   district     court’s    dismissal    of   a
    complaint    under   Rule   12(b)(6)    for     failure   to   state   a   claim.
    United States ex rel. Nathan v. Takeda Pharms. N. Am., Inc., 
    707 F.3d 451
    , 455 (4th Cir. 2013).              To survive a motion to dismiss,
    a complaint must “state a claim to relief that is plausible on
    its face.”     Ashcroft v. Iqbal, 
    556 U.S. 662
    , 678 (2009).                 When
    reviewing the district court’s action, we consider the factual
    allegations in the plaintiffs’ complaint as true.                 Bass v. E.I.
    DuPont de Nemours & Co., 
    324 F.3d 761
    , 764 (4th Cir. 2003).
    2 The City also argued in its motion to dismiss that Andon
    lacked standing to bring the RLUIPA claim.    The district court
    disagreed, and the City does not challenge this ruling on
    appeal.       Although  a   litigant’s   standing   presents   a
    jurisdictional question that may be considered sua sponte by
    this Court, see Benham v. City of Charlotte, 
    635 F.3d 129
    , 134
    (4th Cir. 2011), we need not address the district court’s ruling
    regarding    Andon’s   standing,   because    the   congregation
    unquestionably had standing to file suit alleging a violation
    under RLUIPA.
    6
    The   plaintiffs     argue    that     the   district      court    erred    in
    dismissing      their    complaint      of   a   RLUIPA      violation,      contending
    that the BZA’s action denying a variance imposed a substantial
    burden     on   their    religious      exercise.       Citing       our   decision   in
    Bethel World Outreach Ministries v. Montgomery County Council,
    
    706 F.3d 548
    (4th Cir. 2013), the plaintiffs assert that they
    plausibly alleged a claim under RLUIPA, because, as a result of
    the BZA’s action, the congregation has been unable to find a
    suitable location in the City for worship, and the plaintiffs
    have suffered “delay, expense, and uncertainty” in establishing
    a church location and in executing the lease agreement.                               The
    plaintiffs alternatively contend that the district court abused
    its   discretion         in   refusing       their     request    to       amend   their
    complaint.       We disagree with the plaintiffs’ arguments.
    RLUIPA      contains       two     provisions       limiting         governmental
    regulation       of   land    use   with     respect    to    religious      exercise. 3
    The first such RLUIPA provision prohibits governmental entities
    from imposing land use restrictions that: (1) treat a religious
    organization       “on    less   than    equal    terms”      with    a    nonreligious
    3Under RLUIPA, “‘religious exercise’ includes any exercise
    of religion, whether or not compelled by, or central to, a
    system of religious belief.”   42 U.S.C. § 2000cc-5(7)(A).   And
    “[t]he use, building, or conversion of real property for the
    purpose of religious exercise shall be considered to be
    religious exercise of the person or entity that uses or intends
    to use the property for that purpose.”      42 U.S.C. § 2000cc-
    5(7)(B).
    7
    organization; or (2) discriminate against any organization on
    the basis of religion.          42 U.S.C. § 2000cc(b)(1), (2).
    The    second        RLUIPA     provision         addressing       governmental
    regulation    of    land    use,     on    which   the    plaintiffs      base    their
    claim, does not require a showing of discriminatory governmental
    conduct.     42 U.S.C. § 2000cc(a)(1); see 
    Bethel, 706 F.3d at 557
    .
    Instead,    this    provision       prohibits      a    governmental     entity    from
    imposing or implementing a
    land use regulation . . . 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.
    42 U.S.C. § 2000cc(a)(1).
    To    state    a   substantial        burden       claim   under    RLUIPA,     a
    plaintiff therefore must show that a government’s imposition of
    a   regulation      regarding       land   use,    or    application      of   such   a
    regulation, caused a hardship that substantially affected the
    plaintiff’s right of religious exercise.                    See 
    Bethel, 706 F.3d at 556
    ; Guru Nanak Sikh Soc’y of Yuba City v. Cty. of Sutter,
    
    456 F.3d 978
    , 988-89 (9th Cir. 2006); Civil Liberties for Urban
    Believers v. City of Chicago, 
    342 F.3d 752
    , 761 (7th Cir. 2003).
    We addressed the scope of substantial burden claims under RLUIPA
    in our decision in Bethel.
    8
    The plaintiff in Bethel asserted a substantial burden claim
    against a county that had adopted two land use regulations after
    the   plaintiff       had   purchased         property        for    the     then-permitted
    purpose of constructing a large 
    church. 706 F.3d at 553-55
    .
    The   first     regulation      at       issue       in   Bethel    banned      extension    of
    public water and sewer services to certain classifications of
    property, including the plaintiff’s property.                             
    Id. at 553.
           In
    response to the county’s implementation of this regulation, the
    plaintiff modified its construction plans and proposed to build
    a smaller church that operated on a private septic system.                                  
    Id. at 554.
          Before those plans were approved, however, the county
    adopted     a   second      regulation           applicable         to    the    plaintiff’s
    property,       which       prohibited           the       construction         of    private
    institutional facilities including churches.                         
    Id. Although the
    county regulations we considered in Bethel did
    not   target     religious       exercise        and      applied     generally       to   both
    secular   and     religious      uses,       we       concluded      that    the     plaintiff
    nevertheless         presented       a    triable         RLUIPA    claim,      because     the
    regulations substantially pressured the plaintiff to modify and
    ultimately      to    abandon     its       pre-existing           plan    to   construct    a
    church.     
    Id. at 556-59.
                  And, we explained, although other real
    property may have been available for the plaintiff to purchase,
    the “delay, uncertainty, and expense” of selling the plaintiff’s
    property and finding an alternate location increased the burden
    9
    imposed on the plaintiff’s religious exercise.                            
    Id. at 557-58.
    In   reaching       this    conclusion,         we    emphasized        that    a     critical
    function      of     RLUIPA’s       substantial        burden        restriction          is     to
    protect      a     plaintiff’s       reasonable         expectation        to       use        real
    property      for     religious      purposes.          
    Id. at 556-57;
          see    Petra
    Presbyterian Church v. Vill. of Northbrook, 
    489 F.3d 846
    , 851
    (7th   Cir.       2007)     (explaining     that       when     an    organization             buys
    property “reasonably expecting to obtain a permit, the denial of
    the permit may inflict hardship” on the organization).
    The    circumstances          of   the        present     case    are       materially
    different from those presented in Bethel.                            The plaintiffs here
    never had a reasonable expectation that the property could be
    used    as    a     church.        When    the       plaintiffs       entered       into        the
    prospective lease agreement, the property was not a permitted
    site for a community facility such as a church, and had not met
    applicable        setback     requirements       for     that    type    of     use       for    at
    least 14 years.             Before Andon filed the application seeking a
    variance, the Zoning Administrator had informed Andon that the
    application         would    not    be    approved      for     failure       to    meet        the
    setback requirement.               Thus, the plaintiffs assumed the risk of
    an unfavorable decision, and chose to mitigate the impact of
    such a       result    by    including     the       contingency       provision          in    the
    lease.       Accordingly, unlike the governmental action at issue in
    Bethel, the BZA’s denial of the variance in the present case did
    10
    not alter any pre-existing expectation that the plaintiffs would
    be able to use the property for a church facility, or cause them
    to suffer delay and uncertainty in locating a place of worship.
    Because the plaintiffs knowingly entered into a contingent
    lease    agreement       for     a    non-conforming                 property,       the   alleged
    burdens    they    sustained         were    not      imposed          by    the   BZA’s     action
    denying    the    variance,          but    were      self-imposed            hardships.       See
    Petra     Presbyterian         
    Church, 489 F.3d at 851
       (because    the
    plaintiff purchased property with knowledge that the permit to
    use the property for a church would be denied, the plaintiff
    “assumed the risk of having to sell the property and find an
    alternative       site    for    its       church”).             A    self-imposed         hardship
    generally    will    not       support       a    substantial             burden     claim    under
    RLUIPA, because the hardship was not imposed by governmental
    action altering a legitimate, pre-existing expectation that a
    property    could    be    obtained         for       a    particular         land    use.     See
    
    Bethel, 706 F.3d at 556
    -58; Petra Presbyterian 
    Church, 489 F.3d at 851
    .     Therefore, we hold that under these circumstances, the
    plaintiffs        have     not        satisfied            the        “substantial         burden”
    requirement of governmental action under RLUIPA. 4                                   See Bethel,
    4 We do not reach the                 merits of the plaintiffs’ separate,
    speculative contention that                 if the congregation had purchased
    the property, instead of                   entering into a contingent lease
    agreement, the financial                    loss sustained would have been
    (Continued)
    
    11 706 F.3d at 556
    ; Guru Nanak Sikh Soc’y of Yuba 
    City, 456 F.3d at 988-89
    ; Civil Liberties for Urban 
    Believers, 342 F.3d at 761
    .
    Our conclusion is not altered by the plaintiffs’ further
    contention that they have been unable to find another property
    that    meets    the    congregation’s            desired       location,        size,     and
    budgetary limitations.              The absence of affordable and available
    properties within a geographic area will not by itself support a
    substantial burden claim under RLUIPA.                        See Civil Liberties for
    Urban 
    Believers, 342 F.3d at 762
    (concluding that the “scarcity
    of affordable land available” and costs “incidental to any high-
    density      urban     land        use”    represent          “ordinary         difficulties
    associated      with    location”         and    do     not    support      a   substantial
    burden claim under RLUIPA).
    We further observe that if we agreed with the plaintiffs
    that the BZA’s denial of a variance imposed a substantial burden
    on their religious exercise, we effectively would be granting an
    automatic     exemption       to    religious         organizations      from     generally
    applicable land use regulations.                  Such a holding would usurp the
    role of local governments in zoning matters when a religious
    group   is    seeking    a     variance,         and    impermissibly           would    favor
    religious     uses     over    secular          uses.         See   Petra       Presbyterian
    sufficient to state a substantial burden claim.                             We decline to
    pass judgment on facts not before us.
    12
    
    Church, 489 F.3d at 851
    (reasoning that the substantial burden
    requirement must be taken seriously, or religious organizations
    would be free “from zoning restrictions of any kind”); Civil
    Liberties for Urban 
    Believers, 342 F.3d at 762
    (explaining that
    no    “free       pass    for   religious     land    uses    masquerades    among    the
    legitimate protections RLUIPA affords to religious exercise”).
    The    plain       language    of    RLUIPA,    however,       prevents   such   a
    result.       By requiring that any substantial burden be imposed by
    governmental action and by carefully balancing individual rights
    and compelling governmental interests, the language of RLUIPA
    demonstrates         that       Congress     did     not     intend    for   RLUIPA     to
    undermine the legitimate role of local governments in enacting
    and implementing land use regulations.                       See Petra Presbyterian
    
    Church, 489 F.3d at 851
    ; Civil Liberties for Urban 
    Believers, 342 F.3d at 762
    .
    Finally, we conclude that the district court did not abuse
    its discretion in denying the plaintiffs’ request to amend their
    complaint.         See HealthSouth Rehab. Hosp. v. Am. Nat'l Red Cross,
    
    101 F.3d 1005
    ,    1010   (4th     Cir.    1996)   (stating    the   applicable
    standard of review).                Because the plaintiffs did not have a
    reasonable expectation to use the property as a church and any
    burden       on     their       religious    exercise        was   self-imposed,      the
    plaintiffs cannot articulate any set of facts demonstrating that
    an amendment would survive the City’s motion to dismiss.                           Thus,
    13
    we   agree   with   the   district   court   that   any   amendment    to   the
    complaint would have been futile.            See Scott v. Family Dollar
    Stores, Inc., 
    733 F.3d 105
    , 121 (4th Cir. 2013) (“Denying leave
    to amend is appropriate when . . . the amendment would have been
    futile.”).
    III.
    For these reasons, we affirm the district court’s judgment
    dismissing with prejudice the plaintiffs’ complaint against the
    City.
    AFFIRMED
    14