World Outreach Conference Center v. City of Chicago

In the

United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 13-3669, 13-3728
WORLD OUTREACH CONFERENCE CENTER and PAMELA
BLOSSOM,
Plaintiffs-Appellants/Cross-Appellees,

v.

CITY OF CHICAGO,
Defendant-Appellee/Cross-Appellant.
____________________

Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 6 C 2891— Joan Humphrey Lefkow, Judge.
____________________

ARGUED MARCH 31, 2015 — DECIDED JUNE 1, 2015
____________________

Before CUDAHY, POSNER, and ROVNER, Circuit Judges.
POSNER, Circuit Judge. This appeal (actually appeal and
cross-appeal) from a district court decision that attempted to
resolve a messy and protracted litigation is a sequel to an
appeal that we decided five and a half years ago in World
Outreach Conference Center v. City of Chicago, 591 F.3d 531 (7th
Cir. 2009); the reader’s familiarity with our earlier opinion is
assumed, enabling us to abbreviate our discussion.
2 Nos. 13-3669, 13-3728

The former appeal was brought primarily (and for the
sake of simplicity we’ll assume only) by the World Outreach
Conference Center, a Christian religious organization in Chi-
cago. (We’ll call it, for the sake of brevity, “World Outreach,”
but the reader should understand that the World Outreach
Conference Center is only one World Outreach religious or-
ganization.) It challenged the district court’s dismissal of the
suit on the pleadings. We agreed with the challenge, and re-
versed the district court’s decision and remanded the case.
World Outreach’s current appeal is from the grant of sum-
mary judgment (by a different district judge, her predecessor
having resigned) in favor of the City on all but one of World
Outreach’s claims. The City’s cross-appeal is from the
judge’s grant of partial summary judgment in favor of
World Outreach on that claim. The effect of the two partial
grants of summary judgment was to terminate the litigation,
begun nine years ago.
The only basis for the suit that requires discussion (it is
duplicated by the other grounds alleged) is the provision in
the Religious Land Use and Institutionalized Persons Act of
2000 (RLUIPA), 42 U.S.C. §§ 2000cc et seq., that a land-use
regulation “that imposes a substantial burden on the reli-
gious exercise of a … religious assembly or institution” is
unlawful “unless the government demonstrates that imposi-
tion of the burden … is in furtherance of a compelling gov-
ernmental interest; and is the least restrictive means of fur-
thering that compelling governmental interest.” 42 U.S.C.
§ 2000cc(a)(1). We can ignore the “unless” clause, as the
City’s argument is limited to denying that it imposed a sub-
stantial burden on World Outreach’s religious activities; it
does not assert “a compelling governmental interest” in do-
Nos. 13-3669, 13-3728 3

ing so or deny that World Outreach is indeed a religious in-
stitution.
World Outreach (which remember is our abbreviation of
World Outreach Conference Center) emphasizes assistance
to the poor. See World Outreach Conference Center, “Mis-
sion Statement,” www.worldoutreachconferencecenter.org/
index.php?option=com_content&view=article&id=47&Itemi
d=53 (visited May 8, 2015). Its only facility is a building that
it bought from the YMCA in July 2005, located in a poor area
on Chicago’s south side. The building has several floors. The
first floor has a swimming pool, two gyms, and several
meeting rooms sometimes used for religious services. The
upper floors have a total of 168 single-room apartments
called single-room occupancy—SRO—units. As the YMCA
had done, World Outreach rents these apartments on a tem-
porary basis to needy persons.
The YMCA needed to get a license every year, as did its
successor as owner of the building, World Outreach, to per-
mit it to rent rooms. The YMCA had had no trouble getting
the license year after year even after the area in which its
building was located had been rezoned as a community
shopping district, in which residential use would not be
permitted. For the YMCA’s residential use of the 168 rooms
was what is called a “legal nonconforming use”—
nonconforming because it didn’t conform to the new zoning
ordinance but legal because its nonconforming use was
grandfathered; a “nonconforming status runs with the land
and is not affected by changes of tenancy, ownership, or man-
agement.” Chicago Zoning Ordinance § 17–15–0106 (empha-
sis added). So World Outreach’s use of the building for the
4 Nos. 13-3669, 13-3728

same basic purposes as the YMCA (which is also of course a
religious organization) was legal.
The passage we just quoted from the zoning ordinance
has a further significance. A change in ownership as such
has no effect on a building’s status as a legal nonconforming
use. And the City’s zoning department had no reason to
think that the change of ownership in this case would signif-
icantly change the use to which the building was put. World
Outreach wasn’t intending to tear the building down, con-
solidate the 168 single rooms into a dozen luxury suites, or
fill the swimming pool with golden carp; it intended to use
the building as the YMCA had used it. It is true that at first
Pastor Blossom, the director of World Outreach, was unclear
whether she would continue to rent the SROs. She thought
she might replace them with a conference center, office
space, day care center, Christian nightclub, and bible school.
But she never followed through with that idea. Instead she
sought a license to continue renting the SRO units, as the
YMCA had done.
World Outreach encountered great difficulty in obtaining
the licenses it needed (the one we just mentioned, plus a li-
cense to operate the community center). Such licenses must
be obtained annually by the building’s owner, not to prove
legal nonconforming use but to make sure that the building
is being operated in conformity with the City’s building
code. The reasons for the difficulty that World Outreach en-
countered in obtaining the required licenses remain obscure
even after all these years of litigation. But on the basis of the
evidence compiled to date (remember that there has been no
trial), the likeliest reasons appear to be incompetence by the
City’s zoning department, a desire of the alderman (Antho-
Nos. 13-3669, 13-3728 5

ny A. Beale) of the Ninth Ward, in which the building is lo-
cated, that the building be owned either by Chicago State
University or Provider Realty Corporation, or fumbles on
the part of World Outreach.
Chicago aldermen are powerful figures in the city’s polit-
ical system, and Alderman Beale may have pressured the
City’s zoning department to prevent World Outreach from
using the building as it intended even though the intended
use would be virtually identical to that of its predecessor the
YMCA, which had owned and operated the building for
eighty years. His stated reason for opposing World Out-
reach’s buying the building—and for all we know his prima-
ry or even sole reason—was concern that World Outreach
wouldn’t be able to afford the repairs that the building ap-
parently needed. We don’t know the current status of those
repairs.
The zoning department refused to grant World Outreach
a license, ostensibly because World Outreach didn’t have a
Special Use Permit (SUP), which would have permitted the
building to be used for a purpose (residence) forbidden by
the current zoning of the area in which the building was lo-
cated. The department should have known—maybe did
know, since the YMCA’s prior use of the facility was noted
in its records—that World Outreach didn’t need a Special
Use Permit, because its intended use of the building was as a
legal nonconforming use—basically it was continuing the
YMCA’s use of the building, only under a different name. It
did need, and promptly after buying the building applied
for, both a license to operate the community center in the
building (that is, the facilities on the first floor) and an SRO
license to allow it to rent the 168 single-room occupancy
6 Nos. 13-3669, 13-3728

units. But the City refused to issue the SRO license, on the
ground that it could not lawfully do so until World Outreach
obtained a Special Use Permit. World Outreach did need an
SRO license in order to be allowed to rent the rooms, just as
it needed a license to operate the community center, in order
to certify the facilities’ compliance with the City’s building
code. But it didn’t need—and after September, when the ar-
ea was reclassified as a Limited Manufacturing/Business
Park District, could no longer have gotten—a Special Use
Permit.
In December 2005 the City backed up its unlawful insist-
ence that World Outreach obtain a Special Use Permit by su-
ing World Outreach in an Illinois state court, contending that
the religious organization’s use of the building as a commu-
nity center and church or religious assembly was illegal be-
cause it had no SUP. The complaint, consisting of 66 para-
graphs of accusations and demands, was frivolous, and was
voluntarily abandoned by the City in April of the following
year. World Outreach, which had informed the City prior to
dismissal that it planned to file counterclaims, promptly as-
serted its claims in a separate suit that it filed in state court.
The City removed the case to federal court, kicking off the
present litigation. Finally, in August 2007, two years after
World Outreach had bought the YMCA’s building—and ac-
cording to World Outreach, after the City had required in-
formation on World Outreach’s permit applications far be-
yond anything it had required of the YMCA—the City re-
lented and licensed World Outreach to operate the building
as a community center (using the facilities on the first floor
of the building) and to rent the 168 rooms on the upper
floors for single-room occupancy. Yet according to World
Outreach the City continued harassing it, by conducting in-
Nos. 13-3669, 13-3728 7

spections with a frequency unknown when the YMCA had
occupied the building (using it for essentially identical pur-
poses).
The City’s state court suit against World Outreach was
indeed frivolous, as the district judge in this second round of
the litigation ruled on summary judgment. Some very minor
claims included in the suit may have had merit, such as that
World Outreach had committed off-street parking violations
and posted signs without obtaining proper permits, but the
district judge was properly skeptical that the City would
have filed a lawsuit based on just those claims, as opposed to
issuing parking tickets or other minor administrative penal-
ties. The judge was also on sound ground in ordering the
City to reimburse World Outreach for the litigation expenses
that it incurred in that suit; for such an award is of course a
conventional remedy for having to defend against a frivo-
lous suit. It’s true that to show that the suit violated
RLUIPA, World Outreach had to show that the attorneys’
fees that it had incurred constituted a “substantial burden”
on its religious activities. It’s hard to imagine a vaguer crite-
rion 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, 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 ob-
servances and living facilities for homeless and other needy
people)—cannot be thought to have imposed a merely in-
substantial burden on the organization.
8 Nos. 13-3669, 13-3728

A more difficult question is whether the district judge
was also correct to grant summary judgment in favor of the
City with respect to World Outreach’s remaining claims.
Remember that it took it two years to obtain the licenses it
needed in order to be able to operate its building for the reli-
gious purposes that it intended. The district judge thought
that the responsibility for the delay lay with World Out-
reach’s failure to prove to the City’s satisfaction that the
building would be safe and, in particular, that its 168 SRO
rooms would be habitable. The judge noted that the YMCA
had had a number of citations for building code violations
pending when it sold the building. The zoning department
told World Outreach in May 2006 that it would have to
submit to the department, among other things, “architectur-
al drawings of every floor and the entire building” and the
“square footage of every floor and the entire building.”
World Outreach did not fully comply for eight months. But
it had been an odd request, for the zoning department must
have had this information already, dating from the YMCA’s
ownership of the building. The change in ownership had not
changed the size or shape or design of the building. If the
zoning department was concerned about changes that World
Outreach was thinking of making in the building’s interior,
it could have asked it for the building plans relating to any
projected changes. The request in its expansive scope thus
looks like harassment. But even if this is wrong, and World
Outreach’s other excuses for delay in complying are rejected,
the consequence would merely be to shorten, rather than to
eliminate, the period during which it was wrongfully denied
the licenses it needed in order to be permitted to operate the
building in accordance with its religious plans. The effect of
Nos. 13-3669, 13-3728 9

invalidating all its excuses would thus be limited to reducing
the damages it could prove.
The evidence presented in support of and opposition to
the City’s motion for summary judgment was too well bal-
anced to justify the district judge in granting the motion.
There was the animosity of the alderman to be considered,
along with the fact that Chicago aldermen exercise signifi-
cant power over activities of City government in their wards.
There was the fact that the YMCA had accumulated a great
number of citations for building code violations over the
years, yet its licenses to operate the community center in the
building and to rent the 168 rooms had always been issued
in the ordinary course. (Maybe the zoning department con-
sidered the YMCA a more “respectable” religious organiza-
tion than World Outreach; it is certainly older and better
known.) There is the mysterious, and possibly malevolent,
insistence by the City, contrary to its own ordinance, that
World Outreach required a Special Use Permit for the build-
ing.
We do not say that World Outreach proved its case, oth-
er than with regard to the frivolous suit that the City had
brought against it. But this is just to say that a trial is re-
quired to determine the rights of the parties; for contrary to
the decision of the district court, a reasonable jury could
find, especially by comparison with how the City had treat-
ed the YMCA’s ownership and virtually identical manage-
ment (replete with building-code violations) of the building,
that the City had arbitrarily imposed a substantial burden on
World Outreach’s religious activities. We can understand the
judge’s desire to end a litigation that will soon have lasted as
10 Nos. 13-3669, 13-3728

long as the Trojan War, but we do not think that the end is
yet in sight.
For guidance on remand, we consider finally the largest
element of damages sought by World Outreach, besides the
expenses it incurred, which the district judge properly
awarded to it, in defending against the City’s frivolous suit.
Hurricane Katrina struck New Orleans and other places on
the Gulf Coast late in August of 2005 with enormous de-
structive force. Many thousands of residents of the region
had to be evacuated. As many as 10,000 of them may have
been evacuated to Chicago. Living quarters had to be found
for them. World Outreach volunteered its rooms, which at
the time were still empty. There is evidence that it might
have been able to charge the state or federal governments
$750 a month, for an entire year, for each evacuee that it
housed, had it been permitted by the City to rent its rooms
(it was forbidden, because it had been denied a license to
rent them); and $750 times 12 months times 168 rooms is
$1,512,000. World Outreach would have incurred some ex-
penses but probably have cleared a tidy profit to use for its
other activities—$591,000, it says.
But the evidence it presented is weak. It is limited to a
few statements by Ronald Carter, the Director of Strategic
Planning of the Illinois Department of Human Services—
statements uttered before any final arrangements for Katrina
evacuees had been made by FEMA (the Federal Emergency
Management Agency)—that World Outreach’s SRO units
could be used to house evacuees. It is uncertain whether
World Outreach would have received any, let alone 168,
evacuees, let alone for a full year (there is no evidence of
how long evacuees remained in Chicago before returning
Nos. 13-3669, 13-3728 11

home), even if the City had allowed it to rent the rooms, ra-
ther than insisting erroneously on the necessity of a Special
Use Permit. World Outreach has presented no evidence of
where the evacuees to Chicago ended up being housed, or
for how long, or at what expense to government agencies,
and whether World Outreach’s SRO units would have been
preferred by the Illinois Department of Human Services or
by FEMA to accommodations in other buildings in Chicago.
There is no indication that Carter was authorized to place
evacuees with World Outreach, and his strongest statement
was merely that he was “very interested in the facility.” (In a
similar vein, another official with the Department said “I
didn’t see any reason why I would not use them [i.e., World
Outreach] as a referral.”) There has been a failure of proof,
which leaves us uncertain whether World Outreach can re-
cover substantial damages.
But that is an issue for trial. At this stage of the litigation
we can only affirm the grant of partial summary judgment in
favor of World Outreach (regarding the attorneys’ fees it
sought as compensation for having to defend itself against a
frivolous suit by the City), reverse the grant of partial sum-
mary judgment to the City, and remand the case to the dis-
trict court with directions to proceed in conformity with this
opinion.
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
12 Nos. 13-3669, 13-3728

CUDAHY, Circuit Judge, concurring.

Unfortunately; and I think the opinion must be stamped
with a large “MAYBE.”