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Non-Religious Commercial Activities Not Protected as “Religious Exercise” Under RLUIPA

Scottish Rite Cathedral Assn. of Los Angeles v. City of Los Angeles (2007) 2007 WL 2973362. A recent appellate decision held that Federal Religious Land Use and Institutionalized Persons Act (RLUIPA) did not protect commercial activities conducted by the Scottish Rite Cathedral Association of Los Angeles (SRCALA) and its lessee, Los Angeles Scottish Rite Center, LLC (LASRC).

The court reached this decision despite the fact that the activities were held at the Scottish Rite Cathedral, and SRCALA’s affiliation with Freemasonry, an organization that the court found to “foster principles and practices that resemble religious exercise.”

In Scottish Rite Cathedral Association of Los Angeles v. City of Los Angeles, SRCALA and LASRC challenged the City’s revocation of the Cathedral’s certificate of occupancy. The City had originally approved the Cathedral’s construction and occupancy, including substandard on-site parking, based on representations that the Cathedral would only be used by charitable and nonprofit organizations. However, from its inception the building was leased to for-profit businesses for various non-Masonic events and uses, increasing parking-related impacts on the surrounding neighborhood. Most recently, LASRC was operating the building primarily as an entertainment venue, including hosting a professional boxing match at which alcohol was served without the required use permit. At a public hearing the City’s zoning administrator found that LASRC’s use of the Cathedral violated conditions imposed on the building’s use, declared the site a public nuisance, and revoked the Cathedral’s certificate of occupancy. The City Council rejected an appeal from the zoning administrator’s decision and SRCALA and LASRC petitioned for writ of mandamus. The trial court denied the petition, finding that SRCALA’s claimed religious affiliation, Freemasonry, was not a religion.

The appellate court disagreed with the basis of the trial court’s decision, finding “no principled way” to distinguish Masonic practices and principles from those of entities more widely acknowledged to be religious. Nevertheless, the appellate court upheld the trial court’s denial of the petition. The court noted that under RLUIPA, “[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.” Therefore, the threshold question for the court was whether the Cathedral was being used for the purpose of religious exercise. The court disagreed with SRCALA and LASRC’s contention that RLUIPA protected non-religious activities necessary to financially support a religious facility’s continued operation. While acknowledging RLUIPA’s broad language, the court determined this was not Congress’ intent, holding that, “a burden on a commercial enterprise used to fund a religious organization does not constitute a substantial burden on ‘religious exercise’ within the meaning of RLUIPA.” The fact that property is used by a religious institution may host various activities or facilities, “does not automatically bring these activities or facilities within [RLUIPA’s] definition of ‘religious exercise.’” The court also noted that in ceding its right to operate the Cathedral to LASRC, which had no apparent relationship to Masonic practices beyond its name, SRCALA cannot establish that the City’s action had any effect on the religious exercise of its members.

Implicit in the court’s decision, is that even the activities of a clearly religious organization may not be protected where their only connection to religion is that their commercial nature helps fund other religious enterprises. The decision serves as an important clarification of the “religious exercise” element of RLUIPA.

For more information on this, or any labor and employment issue we urge you to contact the Meyers Nave Labor and Employment Practice Group.