San Leandro's $20 Million Legal Gambit

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.

Background

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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