United States District Court, D. Minnesota
W. Diehl, Esq., Dean A. LeDoux, Esq., Gregory R. Merz, Esq.,
and Matthew P. Webster, Esq., Gray Plant Mooty Mooty &
Bennett, PA, and G. Craig Howse, Esq., and Jacob R. Grassel,
Esq., Howse & Thompson, PA, counsel for Plaintiff.
C. Hoff, Esq., and Jared D. Shepherd, Esq., Hoff, Barry &
Kozar, counsel for Defendant.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE
case arose after a church tried unsuccessfully to purchase a
theater as a place to show simulcasts of its services. The
city blocked the purchase by concluding that its zoning
ordinance prohibited the proposed use. The city, however,
knew at the time that it could amend the ordinance to allow
the church to purchase the theater without abandoning its
zoning concerns. The church filed suit alleging that the
ordinance violated the church's constitutional rights and
that the city had defamed the church in various press
releases. After a bench trial, the Court concluded that the
city had violated the church's constitutional rights and
that the church had not been defamed. The Court awarded the
church $1, 354, 595.
parties both moved for post-judgment relief. This matter is
before the Court on the defendant's motions for amended
findings and for a new trial (Doc. No. 168), and the
plaintiff's amended motion to amend the judgment (Doc.
No. 176). Based on the parties' submissions and the
Court's review of the record, the Court grants the
parties' motions in part and denies them in part. The
Court will issue amended findings and conclusions consistent
with this memorandum opinion.
Court assumes the reader's familiarity with the facts as
set forth in the amended findings. (Doc. No. 191.) This
dispute centers on a fifteen-screen movie theater in St.
Michael, Minnesota (generally, the “Theater
Property”). In early 2014, a bank was selling the
Theater Property after it had sat unused since 2010. The
Theater Property was zoned in a commercial district (the
“B-1 Zone”). During this time Riverside Church, a
church in Big Lake, Minnesota, had explored expanding to a
satellite site after it had exhausted its ability to expand
the Big Lake site. Riverside identified the Theater Property
as a possible satellite location where it could play
simulcasts of its services in Big Lake.
January 2014, Riverside called Marc Weigle about whether
Riverside could purchase the Theater Property as its
satellite site. Weigle is the most knowledgeable employee for
the City of St. Michael regarding zoning and ordinance
issues. Weigle told Riverside that the Theater Property was
not zoned for assembly uses, which included houses of
worship. Riverside worked with the City from January to April
to try to reach a resolution where Riverside could use the
Theater Property. But those efforts somewhat ended in April
2014 when another buyer purchased the Theater Property.
however, was still trying to purchase the Theater Property
from its new owner, and Riverside therefore continued to
discuss the zoning ordinance with the City. On June 12, 2014,
the City's attorney wrote to Riverside and recommended
that Riverside “file an application to re-zone the
property or to amend the city's zoning regulations to
allow a religious institution to operate in a commercial
zone.” (P045.) So, in July 2014, Riverside did just
that: It filed an application requesting that the City change
the B-1 Zone to allow assemblies, including houses of
worship, as a permitted use.
August 2014, Riverside entered into a purchase agreement to
buy the Theater Property. Thus, the need for the City's
decision on Riverside's application became more urgent.
The parties exchanged possible solutions, but nothing
definitive materialized. The City's principal (if not
only) concern with the sale was the impact on traffic in the
area. The City commissioned a traffic study, which was
completed in October 2014. The traffic study found that once
the church reached 1, 200 worshippers, the traffic at an
intersection leading to a highway would not function
properly. The parties then tried to negotiate a settlement
around a 1, 200-person limit. The parties reached an impasse
after the City added a provision that required Riverside to
waive its rights in the event that the City had to sue to
enforce the agreement.
the City had to make a decision on Riverside's pending
application. The City had held a number of working sessions
and public hearings on the matter. The City considered a
number of options, including amending the ordinance to allow
assembly uses in the B-1 Zone as a conditional use. On
November 10, 2014, however, the City adopted a moratorium on
new assembly uses, including churches, while the City studied
potential impacts. At the same meeting, the City amended the
ordinance to remove theaters from the list of permitted uses
in the B-1 Zone and added multiplex theaters as a conditional
use. Then on November 25, 2014, the City rejected
early 2015, Riverside had yet another opportunity to purchase
the Theater Property through an option contract. Under the
option contract, Riverside could purchase the Theater
Property for roughly $3.5 million plus the costs that the
owner had incurred to prepare the Theater Property for use.
This time, Riverside filed a lawsuit to compel the City to
change the ordinance. On April 8, 2015-mere weeks after
Riverside filed its complaint-the City amended the ordinance
to allow assembly uses, including churches, in the B-1 Zone.
On April 21, 2015, the City issued a conditional use permit
to Riverside. But by then, the price-over $5 million-had
exceeded what Riverside could afford. Thus, Riverside could
not exercise the option.
procedural history of this case is complex. As relevant here,
Riverside brought claims alleging that the City had violated
Riverside's First Amendment rights to free exercise of
religion and its rights to free speech and assembly.
Riverside also claimed that it was defamed by the City in
released statements. The Court denied Riverside's
free-exercise claim on the City's motion for summary
judgment, but allowed Riverside's
free-speech-and-assembly claim and its defamation claim to
proceed to trial.
Court held a bench trial from October 18, 2016, to November
8, 2016. At the conclusion of the trial, the Court found that
the City had violated Riverside's constitutional rights,
but that the City had not defamed Riverside. As a result, the
Court awarded Riverside damages in the amount of $1, 354,
595. The City filed a motion for a new trial and a motion to
amend the judgment. Riverside also filed a motion to amend
Motion for a New Trial