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First Lutheran Church v. City of St. Paul

United States District Court, D. Minnesota

June 7, 2019

First Lutheran Church, Plaintiff,
v.
The City of St. Paul, Defendant.

          ORDER

          Katherine Menendez United States Magistrate Judge

         This matter is before the court on Plaintiff First Lutheran Church's (“First Lutheran”) post-settlement motion for attorney fees. (ECF No. 78.) The Defendant, the City of St. Paul (“the City”), opposes First Lutheran's motion. For the reasons stated below, First Lutheran's motion is GRANTED in part.

         I. Factual Background

         This litigation arises out of a dispute between First Lutheran and the City regarding First Lutheran's use of its property. Specifically, First Lutheran challenged the City's Resolution 18-145, which limited how a nonprofit, Listening House, could operate out of First Lutheran's property, arguing that it violated the First Amendment and the Religious Land Use and Institutionalized Persons Act (RLUIPA).[1] Listening House is a day shelter and community center that serves the homeless and other vulnerable populations in the Twin Cities area. (Amend. Compl. ¶ 27.) First Lutheran began a partnership with Listening House by offering space in its basement out of which Listening House could run its programming. (Id. at ¶ 31-32.) The City informed First Lutheran and Listening House that they would need to apply for a Determination of Similar Use in order to operate as planned in the space. (Id. at ¶ 37.) The City issued its Determination, which required First Lutheran and Listening House to meet the standards for “home occupation” as listed in the zoning code, including three additional conditions. (Id. at ¶ 43-45.) After experiencing significant pushback from the community about Listening House's work at the church, the City's Planning Commission modified the Determination of Similar Use and added eleven more conditions limiting Listening House's use of the space. (Id. at ¶ 73.) This Determination and its fourteen total conditions, with minor modifications, became Resolution 18-145. (Id. at ¶ 85.)

         While Listening House filed suit in state court, First Lutheran sought a preliminary injunction in federal court to prevent the City from enforcing Resolution 18-145. (ECF No. 5.) The City opposed the injunction and brought a motion to dismiss the complaint. (ECF No. 16.) First Lutheran was largely successful in this first round of litigation. The Court granted First Lutheran's motion for preliminary injunction in part in July 2018, prohibiting the City from enforcing two of the fourteen conditions. (ECF No. 37.) In August 2018, the Court denied the City's motion to dismiss nearly in its entirety, dismissing only a substantive due process claim. (ECF No. 39.)

         Following the injunction, extensive settlement negotiations took place. In July 2018, several proposals were exchanged for the resolution of the lawsuit. Listening House and First Lutheran send a final coordinated settlement proposal. (Hayes Aff. Ex. 3.) The letter specifically represented that they were not challenging the Determination of Similar Use, but instead were challenging those conditions that Listening House and First Lutheran deemed inconsistent with that determination. (Id.) They also agreed to accept the removal and modification of several conditions as described in the City's previous offer. (Id.) Similarly, by September, the City had almost finalized a settlement with Listening House in the parallel state court case, allowing them to continue doing their work with the homeless in the basement of First Lutheran. (Id., Ex. 4, p.1.) And the City indicated a willingness to revise or rescind all of the challenged conditions. (Id. at p. 2.)

         Despite the substantial progress made toward a negotiated settlement of the remaining areas in dispute, talks soon broke down and a pretrial conference was scheduled. At that conference, both sides expressed an interest in prioritizing settlement over the costs of litigation. (September 11, 2018 Minutes, ECF No. 46 (“The Court and counsel are all in agreement that the best outcome of this litigation would be a prompt settlement, and would likely be settlement ahead of further work on discovery.”).) This was particularly important in light of the not-for-profit status of both parties. The Court scheduled a settlement conference for early January, the first available date that worked for all parties. The City wanted to stay the proceedings until that settlement conference. (Hayes Aff. Ex. 4.) First Lutheran, however, quickly took an approach directly at odds with its expressed interest in settlement.

         Despite its stated commitment to prioritizing settlement, First Lutheran's counsel remained focused on litigation, and in October 2018 filed a motion to amend its complaint reflecting a radically changed position on the Home Occupation Status issue. Specifically, where before First Lutheran had only challenged the conditions the City had placed on First Lutheran and Listening House rather than the procedural vehicle used by the City, now First Lutheran contested the City's use of the home occupation standard at all in this case. (ECF No. 51.) First Lutheran, surprisingly, also noticed ten depositions for the middle of November 2018, including a deposition of an Assistant City Attorney.

         Originally, the Court had declined to formally stay the litigation in its entirety, though it had strongly encouraged parties to focus primarily on preparing for settlement rather than on discovery. However, as detailed above, despite agreeing with this idea in theory, counsel for First Lutheran instead dove headfirst into costly discovery and motion practice. Concerned that such extensive discovery undertaken so close to a settlement conference would undermine those efforts, this Court formally stayed discovery until after the conference took place in early January 2019. (ECF No. 68.)

         As hoped for, a successful settlement was negotiated at the January settlement conference. Ultimately, that settlement agreement did not embrace First Lutheran's newer opposition to the Determination of Similar Use, which remains in effect. The parties also did not agree on attorneys' fees during the settlement, and instead opted to bring a motion before this Court.

         II. Analysis

         The City does not dispute First Lutheran's motion for fees in its entirety. Rather, the City argues that First Lutheran is not entitled to its full request of nearly $400, 000. First, the City believes that settlement was possible in July 2018, and therefore most work done after this point was unnecessary. Second, the City argues that First Lutheran should not be permitted to collect any fees for its time spent drafting an Interim Fee Petition that it ultimately did not file. The Court agrees with the City in substantial part.

         A. Standard

         Prevailing parties in RLUIPA claims may bring a motion to recover attorneys' fees under 42 U.S.C. § 1988(b). Plaintiffs are considered prevailing parties for the purposes of § 1988(b) “if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir. 1978)) (internal quotation marks omitted). Because the purpose of § 1988(b) is to promote access the courts for individuals with civil rights claims, prevailing plaintiffs should ordinarily be permitted to recover attorneys' fees. Id. at 429. However, “[t]his is ...


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