San Leandro's $20 Million Legal Gambit

The City Attorney wants a federal judge to dismiss a lawsuit that threatens to sock San Leandro taxpayers to the tune of $20 million.


Church will face state -- or rather city -- in federal court today, when San Leandro tries to squash a lawsuit that has already gone to the U.S. Supreme Court and could now come back to bite taxpayers to the tune of $20 million.

The case revolves around the , a fast-growing congregation in Washington Manor.


In 2006, the Fellowship bought a building on Catalina Street in the city's industrial area.

The city said the congregation could not use the building as a church hall because the area wasn't zoned for such a use.

All this happened around the time that real estate crashed. Faith Fellowship ended up selling the building for a loss.

In 2007, this local dispute became a federal case when Faith Fellowship invoked a national law, the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), to challenge the city's actions and seek recompense for its losses.

The city won the first round when a federal district court dismissed the case.

But the Faith Fellowship .

San Leandro asked the U.S. Supreme Court to intervene.

But , which sent the case back to the federal courtroom where it all began.

The showdown

Today San Leandro will ask Federal Court Judge Phyllis Hamilton to throw the case out of court -- again.

The city is hoping to avoid a trial in which Faith Fellowship could seek between $19 million and $23 million in damages, according to the city's estimates.

In a nutshell, City Attorney Jayne Williams will argue that Faith Fellowship Pastor Gary Mortara goofed by failing to make the purchase of the Catalina building contingent on getting permission to use it as a congregation hall.

The city's legal argument states in part:

"In real estate matters, it is standard for those purchasing property to avail themselves of a contingency clause that will protect them from the loss of their investment in the event that needed zoning and permitting is not approved . . . (but) . . . the church's local pastor, negotiating on behalf of the Church, signed a voluntary waiver of that contingency prior to the close of escrow, and the Church completed its purchase of the property before the City could reasonably complete the land use application process."

The Church's Rebuttal

Attorneys for Faith Fellowship will make several counter-arguments:

  • A federal appeals court has already ruled that "there were triable issues of fact as to whether the City’s actions had substantially burdened the Church’s religious" rights. So how can Judge Hamilton dismiss the case, they ask?
  • As for the Mortara's supposed goof, the church's lawyers allude to verbal assurances: "The City . . . stated to Pastor Gary that . . . the Church's request would be approved" before he completed the purchase.
  • Church lawyers also argue that San Leandro's zoning rules were unfair to the church. "Hundreds and hundreds of people could gather in buildings in this zone for entertainment, recreation, or to view adult movies at a theater, but not if they wanted to assemble in religious worship," their legal papers state.

What's Next?

Regardless of today's outcome this case is far from over.

If San Leandro wins and the judge dismisses the lawsuit, the church could appeal.

If the church wins, the case ould go trial in the fall.

It is also possible that, once the parties see how San Leandro's legal gambit plays out, the church and the city will talk about settling this five-year-old case that hangs like a dark cloud on San Leandro's horizon.

(Thanks to Chris Crow, who has been tracking this lawsuit and provided Patch with the federal court documents upon which this story is based.)

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Chris Crow June 21, 2012 at 04:26 AM
:) I don't understand how your point relates to mine. I'm simply stating a fact found in John Jermanis' deposition. It's not my point, it's John's point - it's his own testimony.
Tom Abate (Editor) June 21, 2012 at 04:28 AM
Thanks for some very enlightening comments. Marga's last quip had me LOL. However the magnitude of the city's exposure is no laughing matter. Although I used $20 million because the city used that range, that was divided between the church's "hard" losses of about $6 million associated with the building transaction, and "soft" losses associated with, as I understand it, lower donations and gifts from members of the congregation.
Chris Crow June 21, 2012 at 04:30 AM
additionally from the Ninth Circuit opinion: "the Church offered evidence from its realtor and a former City Manager that no other suitable sites exist in the City to house the Church’s expanded operations."
Theresa Lupo June 21, 2012 at 05:13 AM
There is no way that San Leandro should pay any "soft losses" because of "lower donations".Hard losses would be the only fair amount plus court costs.Oh & Leah.....maybe pink is'nt your color & being 21 forever is over rated LOL!Hey....what does David have to do with this?
Leah Hall June 21, 2012 at 05:34 AM
Sorry, that makes no sense to me. My apologies. This is what I am getting out of your comments: My point doesn't relate to yours, but your not making a point, your presenting someone else's point....but actually you didn't do that either (I'd say you sort of presented a finding and left it dangle).
Leah Hall June 21, 2012 at 05:41 AM
Absolutely nothing. Good question and I appreciate your wisdom. I think we all need to be the best age we actually are, take care of ourselves, and choose our colors carefully. ;-)
anthony June 21, 2012 at 05:51 AM
Chris... read a little further on just to be fair. Go to Marga's link and jump to page 16, the court rejects the qualifications and evaluation of the church's realtor. In addition it further qualifies the statements by the City Manager that you left short sided.
Chris Crow June 21, 2012 at 05:53 AM
just trying to add clarity to the conversation (insert here quip Leah would say in rebuttal to the dangle comment) :)
Chris Crow June 21, 2012 at 05:59 AM
Anthony: "The district court instead held that the Church did not adequately demonstrate that its realtor was qualified to determine whether suitable sites exist in the City. The district court simply rejected the realtor’s evaluation, which was based on the Church’s stated requirements, rather than on a detailed and objective analysis of all the plots in the AU Overlay District. The district court also noted that it found the realtor’s comments vague. Int’l Church, 632 F. Supp. 2d at 942-43. Further, the district court concluded that the former City Manager’s testimony that there were no other buildings in the City to which the Church could acceptably relocate meant only that there were no other buildings ready for occupancy that met the Church’s requirements, not that there were no other sites that were objectively reasonable alternatives for the Church in the City." This language is describing the district court ruling that was overturned by this appeals court decision. This language you are referring to is part of what the appeals court said the district court was wrong about.
David June 21, 2012 at 01:59 PM
You mean $6M in possibly real losses (though ones that might have been incurred in any transaction, including if this one had gone through), and $14M in settlement negotiation monopoly money.
David June 21, 2012 at 02:02 PM
Those "hard losses" aren't that hard. If the church was planning on selling the old building anyway (which it was), it was going to take a loss no matter what, due to that recent unpleasantness in the real estate market people might have heard about. Leah is jealous that I can (and sometimes do) wear pants and other clothes items that I have had since I was 21 (or perhaps earlier, I'm the same weight I was when I was 18). Indeed, several of my casual outfits could easily have graduated from high school by now.
Leah Hall June 21, 2012 at 02:42 PM
David's correct, I'm so jealous. ;(
Mike June 21, 2012 at 02:56 PM
I guess you believe they were just going to move into the Catalina site without building a new building. The city showed the church over 30 alternative sites that the church refused to consider. The Doolittle site being the best choice. I guess your distain for the city of San Leandro is so great that you can ignore your atheism in this case to support the church over the city you reside in.
Leah Hall June 21, 2012 at 03:22 PM
The NIMBY's of Dolores Manifesto: http://www.youtube.com/watch?v=lwTpZpwjtIE
David June 21, 2012 at 04:20 PM
I really wish I could have thought of this. Start up a church. it's non profit, so all your money is tax-free, set up a lawsuit with a city, sue for a ridiculous amount of money, and anything you get is all gravy (and tax-free). This preacher is smart.
Leah Hall June 21, 2012 at 04:55 PM
Don't forget, his attorneys are working pro-bono on the case.
Rob Rich June 21, 2012 at 05:26 PM
If you buy low and sell high, keep the profits. If your speculation goes south, sue and make the public pay. And don't do any of this in the town that you live in so as not to foul your own nest.
Theresa Lupo June 21, 2012 at 06:03 PM
I'm jealous too LOL!Hey did you guys go to school together?
Leah Hall June 21, 2012 at 06:11 PM
Nope. I've actually never met David in person.... I merely pine over his little postage stamp sized profile picture at my home computer. ;-)
David June 21, 2012 at 06:14 PM
It's sad. Leah finds me so attractive, she knows she can't meet me in person, lest she throw herself at me.
Leah Hall June 21, 2012 at 06:25 PM
Patience, Ladies! There's enough David for everyone.
Theresa Lupo June 21, 2012 at 06:30 PM
You guys crack me up.....kinda reminds me of Saturday Night Live...remember the the 2 news debaters?They would voice their opinions & then end-up insulting each other. I'm laughing right now!
Antonio Cardenas June 21, 2012 at 06:31 PM
How does one opts out of this conversation? This subject is no longer of interest to me. Specially when David starts talking about been "so attrative..."
Leah Hall June 21, 2012 at 06:37 PM
Sounds like you made the fatal mistake of not "unclicking" the e-mail updates box at the bottom of this thread, Antonio. Yikes!
Marga Lacabe June 21, 2012 at 07:55 PM
Mike, it's called principles. Some of us care about the outcome - who wins, who loses - some of us care more about the rules of play. I fall on the second camp. A couple of weeks ago you had a field day attacking me over my designation as "human rights lawyer" when I'm not a member of the bar, perhaps should have noticed the first two words before "lawyer", though. It's my commitment to human rights which define me as individual. And freedom of religion is a fundamental human right. The exact issue of what properties the City showed the Church will be played out at trial in October. All I can tell you is that the Church said in court that none of the properties the city suggested were suitable, only one of them was even for sale, and that was under contract. The City did not deny that was the case. The City argued that the mere existence of properties in town where the church could legally locate, even if in reality it was unable to do so because the properties were unavailable for sale, was enough. The Court didn't buy it. I don't either. But that is the question of fact that will be decided by the jury. If you are right, then the City lawyers should have no problem making that case and winning this part of the lawsuit. Of course, if the City does win this part - we get to do the whole thing over again, let's remember that. Meyers Nave, I'm sure, is more than happy.
Marga Lacabe June 21, 2012 at 07:59 PM
Theresa, you have hit on the "David and Leah show" which is, by far, the best thing happening on the Patch. I have to go and find the link for a particular article in which their conversation was just so out of this world funny.
Theresa Lupo June 21, 2012 at 09:00 PM
Antonio.......not to worry.....you're cute also.... your wife thinks so & that's saying something because she is also attractive.Now can we get back to the David & Leah show?uh? can we?
David June 22, 2012 at 01:09 AM
For some reason, I feel like Joe Pesci here. http://www.youtube.com/watch?v=7EJLoxdoI-Q warning: LANGUAGE
Leah Hall June 22, 2012 at 06:10 AM
Wow - you found your comic persona, David. I'm impressed. Buona ventura! http://www.helium.com/items/1769822-your-comic-persona-finding-and-loving-it
Paul Vargas July 20, 2012 at 03:29 AM
Jermanis and his talking parrot Shelia Young can't be trusted.


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