Court Opinion

ID: 3049713
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:28:18.748988+00
Date Added: 2024-06-11T12:46:39.730836
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

THE LEAGUE OF RESIDENTIAL              
NEIGHBORHOOD ADVOCATES, a
California non-profit corporation;
LARRY FAIGIN; THOMAS LARKIN;
EDWARD C. CAZIER; CYNTHIA
CHVATAL; J. LARSON JAENICKE;
ELIZA LEWIS; GARY J. HERMAN,
                                             No. 06-56211
SR.; MARGARET KUHNS; MADELINE
WARREN,
              Plaintiffs-Appellants,
                                              D.C. No.
                                           CV-03-04890-CAS
                v.                            OPINION
CITY OF LOS ANGELES;
CONGREGATION ETZ CHAIM; JAMES
HAHN, Mayor, City of Los
Angeles; ROCKY DELGADILLO, City
Attorney, City of Los Angeles,
             Defendants-Appellees.
                                       
       Appeal from the United States District Court
           for the Central District of California
       Christina A. Snyder, District Judge, Presiding

                   Argued and Submitted
            July 10, 2007—Pasadena, California

                   Filed August 21, 2007

   Before: Barry G. Silverman, William A. Fletcher, and
            Richard R. Clifton, Circuit Judges.

                Opinion by Judge Silverman

                            10181
              LEAGUE v. CITY OF LOS ANGELES        10183

                      COUNSEL

Leslie M. Werlin, McGuire Woods, Los Angeles, California,
for the plaintiffs-appellants.

Susan S. Azad, Latham & Watkins, Los Angeles, California,
for defendant-appellee Congregation Etz Chaim.
10184           LEAGUE v. CITY OF LOS ANGELES
Tayo A. Popoola, Los Angeles, California, for defendants-
appellees City of Los Angeles, James K. Hahn, and Rocky
Delgadillo.

                          OPINION

SILVERMAN, Circuit Judge:

   An Orthodox Jewish congregation applied for a conditional
use permit to operate a synagogue in an area zoned solely for
residential use. Neighbors of the proposed synagogue
objected and, ultimately, the City of Los Angeles denied the
application. The Congregation then filed a federal lawsuit
alleging that the denial of the permit violated its federal and
state constitutional rights. All these claims were later dis-
missed. However, while the lawsuit was pending, Congress
passed the Religious Land Use and Institutionalized Persons
Act (“RLUIPA”), 42 U.S.C. § 2000cc. Concerned about the
force of this new federal law and seeking to avoid further liti-
gation, the City entered into a settlement agreement that
allowed the Congregation to operate the synagogue under cer-
tain conditions.

   Neighbors of the synagogue brought the present action,
alleging that the Settlement Agreement is void because, in set-
tling the lawsuit as it did, the City effectively granted the
Congregation a conditional use permit without providing
notice and a hearing to the affected community. This, they
say, violated state law and their right to due process.

  We agree with the neighbors on their state law claim. To
paraphrase Justice O’Connor in a different context, the pen-
dency of litigation is not a blank check for a city when it
comes to the rights of its residents. In the Settlement Agree-
ment, the City granted a conditional use right without first
giving affected persons notice and an opportunity to be heard,
                LEAGUE v. CITY OF LOS ANGELES              10185
thereby violating state law. A settlement agreement cannot
override state law absent a specific determination that federal
law has been or will be violated. Since no such findings were
made here, the Settlement Agreement is invalid and unen-
forceable.

I.   Background

   Congregation Etz Chaim, an Orthodox Jewish congrega-
tion, acquired property on Highland Avenue in the Hancock
Park neighborhood of Los Angeles. In light of the area’s des-
ignation as an “R1” residential zone under Los Angeles
Municipal Code § 12.08, the Congregation sought from the
City a conditional use permit (“CUP”) to allow for congrega-
tional religious worship and services on the property. In Octo-
ber 1996, the City’s Zoning Administrator denied the
application and the requested variances. This action was later
upheld by the Board of Zoning Appeals and the Los Angeles
City Council.

   Then, in 1997, the Congregation brought a federal action
under 42 U.S.C. § 1983, alleging that the City’s denial of its
CUP application violated state and federal law. In June 1998,
while this federal action was pending, the Congregation peti-
tioned for a writ of mandate in Los Angeles Superior Court,
seeking to overturn the City’s denial of the CUP. The Supe-
rior Court upheld the denial and the California Court of
Appeal affirmed.

   Shortly thereafter, the Congregation filed an amended com-
plaint in the federal action to include an alleged violation of
RLUIPA. RLUIPA’s effective date was September 22, 2000.
Pub. L. No. 106-274, 114 Stat. 803 (2000). Citing to the pre-
clusive effect of the state court proceedings, the district court
granted summary judgment to the City on all issues raised by
the Congregation in its original complaint. However, the court
denied the City’s motion for summary judgment with respect
to the newly added RLUIPA claim.
10186               LEAGUE v. CITY OF LOS ANGELES
   On September 27, 2001, the City and the Congregation set-
tled. The City denied any violation of federal law on its part.
However, the Settlement Agreement authorized the use of the
Highland property for congregational worship, subject to sev-
eral restrictions. It restricted the number of congregants and
the number of cars at the property during services. Moreover,
the Congregation could not hold weddings, funerals, ban-
quets, fund-raising events, or offer day care services. Finally,
the Congregation had to maintain the property’s residential
exterior and could not post signs, posters, or flyers on the
premises.

   Pursuant to the Agreement, the district court dismissed the
Congregation’s federal action with prejudice on February 1,
2002, with the court retaining jurisdiction over the subject
matter and the parties for a period of five years.1 The League
of Residential Neighborhood Advocates and individual Han-
cock Park homeowners (collectively, “the League”), none of
whom were parties to the first federal court action, filed a
complaint under 42 U.S.C. § 1983 against the City, Mayor
James Hahn, City Attorney Rocky Delgadillo (collectively,
“the City”), and the Congregation.2 The League argued that
local zoning ordinances denied the City authority to enter into
such an agreement. It also asserted federal and state constitu-
tional violations.

  On December 22, 2003, the district court granted the Con-
gregation’s motion to dismiss with prejudice. The court found
  1
     The City and the Congregation have since been involved in litigation
over the scope and enforcement of the Settlement Agreement. See Congre-
gation Etz Chaim v. City of Los Angeles, 371 F.3d 1122 (9th Cir. 2004).
Additionally, while the district court initially agreed to retain jurisdiction
over the Settlement Agreement and the parties for five years, on Septem-
ber 6, 2006, the court entered a joint stipulation and order extending its
jurisdiction until February 1, 2012.
   2
     This action was originally assigned to the Honorable Harry L. Hupp.
On February 2, 2004, it was reassigned to the Honorable Christina A. Sny-
der following the death of Judge Hupp.
                LEAGUE v. CITY OF LOS ANGELES              10187
that the Settlement Agreement did not create a CUP, and that
the privileges granted to the Congregation did not run with the
land and were created by contract against a threat of litigation.
Further, the court found, these privileges would be enforced
through contractual, and not criminal, sanctions. Therefore,
the court held, the City did not have to comply with the stan-
dards and procedures outlined in the local zoning ordinances
for the granting of a CUP.

   The district court later granted the City’s motion for judg-
ment on the pleadings with leave to amend, concluding that
“the law of the case established by the December 22, 2003
order . . . bar[red] any claim predicated on the theory that the
Settlement Agreement is a de facto CUP.” The League there-
after amended its complaint against the City, which the dis-
trict court dismissed with prejudice under Fed. R. Civ. P.
12(b)(6).

   The League appealed. We remanded the case to the district
court for reconsideration of its ruling in light of Trancas
Property Owners Ass’n v. City of Malibu, 138 Cal. App. 4th
172 (2006). In Trancas, the California Court of Appeal invali-
dated a city’s decision to settle a lawsuit by granting the func-
tional equivalent of a zoning variance without complying with
statutory zoning procedures. Id. at 181-82. Having previously
held that the Settlement Agreement did not grant a de facto
CUP, the district court found Trancas distinguishable and
affirmed its earlier order.

II.   Jurisdiction

   The district court had subject matter jurisdiction over the
League’s constitutional claims under 28 U.S.C. §§ 1331,
1343(a), and over its state claims under 28 U.S.C. § 1367(a).
Furthermore, the district court retained subject matter jurisdic-
tion over the Settlement Agreement for the purpose of issuing
any order construing, modifying, enforcing, terminating, or
reinstating its terms. See Flanagan v. Arnaiz, 143 F.3d 540,
10188             LEAGUE v. CITY OF LOS ANGELES
544-45 (9th Cir. 1998). We have jurisdiction pursuant to 28
U.S.C. § 1291.

III.    Standard of Review

   We review de novo the district court’s dismissal of the
League’s claims under Fed. R. Civ. P. 12(b)(6). See Hol-
combe v. Hosmer, 477 F.3d 1094, 1097 (9th Cir. 2007). All
facts alleged in the complaint are assumed true. Id.

IV.     Discussion

   A federal consent decree or settlement agreement cannot be
a means for state officials to evade state law. See Keith v.
Volpe, 118 F.3d 1386, 1393 (9th Cir. 1997) (holding that state
officials “could not agree to terms which would exceed their
authority and supplant state law”); Perkins v. City of Chicago
Heights, 47 F.3d 212, 216 (7th Cir. 1995) (“ ‘Some rules of
law are designed to limit the authority of public officeholders
. . . . They may chafe at these restraints and seek to evade
them,’ but they may not do so by agreeing to do something
state law forbids.”) (internal citation and alteration omitted).
In California, a duly enacted local ordinance has the same
binding force as a state statute. See, e.g., Empire Fire &
Marine Ins. Co. v. Bell, 55 Cal. App. 4th 1410, 1419, 1422
(1997). We must therefore review the validity of the City’s
action under state law before examining any possible interac-
tion with federal law.

  A.     The Settlement Agreement was not authorized by
         state law

   [1] Los Angeles Municipal Code § 12.08(A) limits the use
of buildings or structures in an R1 residential zone primarily
to one- or two-family dwellings:

       A. Use. No building, structure or land shall be used
       and no building or structure shall be erected, struc-
                LEAGUE v. CITY OF LOS ANGELES              10189
    turally altered, enlarged or maintained except for the
    following uses . . . .

         ...

         6. Conditional uses enumerated in Sec.
         12.24 when the location is approved pursu-
         ant to the provisions of said section.

Among the conditional uses requiring approval are the opera-
tion of “Churches/Houses of worship.” Los Angeles Munici-
pal Code § 12.24(T)(3)(b).

   [2] The procedure for reviewing CUP applications requires
an initial decision by the Zoning Administrator, public notice,
and a public hearing. Id. § 12.24(C), (D). Furthermore, the
decision-maker must issue a series of factual findings before
granting a CUP. Id. § 12.24(E). Any aggrieved person may
administratively appeal the decision of the Zoning Adminis-
trator to the Planning Commission and, if still unsatisfied, to
the City Council. Id. § 12.24(I).

   [3] Municipalities may not waive or consent to a violation
of their zoning laws, which are enacted for the benefit of the
public. See Hansen Bros. Enters., Inc. v. Bd. of Supervisors,
907 P.2d 1324, 1343 (Cal. 1996); Trancas, 138 Cal. App. 4th
at 181-82; see also Cal. Civ. Code § 3513. Any such agree-
ment to circumvent applicable zoning laws is invalid and
unenforceable. See Smith v. City of San Francisco, 225 Cal.
App. 3d 38, 55 (1990).

   The League contends that the Settlement Agreement did
just that; it granted use permission to the Congregation out-
side of the required statutory processes and, therefore, is void.
The district court rejected this argument because it determined
that the Settlement Agreement was not a CUP. It was created
by agreement and its obligations did not run with the land.
Enforcement would not be accomplished through criminal
10190           LEAGUE v. CITY OF LOS ANGELES
law, but through contractual remedies. Therefore, because the
Settlement Agreement was something less than a traditional
CUP, the procedures and standards mandated by Los Angeles
Municipal Code §§ 12.08, 12.24 were never triggered.

   We disagree. The district court’s analysis — a comparison
between a traditional CUP and the terms of the Settlement
Agreement — ignores the plain language of Los Angeles
Municipal Code § 12.08: All “conditional use” is forbidden in
an R1 zone unless “approved pursuant to the provisions of
[Section 12.24].” The question is not whether the Congrega-
tion has been granted, in all respects, the de facto equivalent
of a CUP. The question, rather, is whether, within the frame-
work of the City’s zoning ordinance, the Congregation could
engage in the uses permitted by the Settlement Agreement
without first obtaining a CUP. Therefore, we need only ask
whether the Settlement Agreement grants the Congregation
permission to engage in a “conditional use” as defined by the
ordinance that is forbidden in the absence of a valid CUP. If
so, the statutory framework is triggered in full.

   [4] Here, the answer is evident. The Congregation sought,
and the Settlement Agreement granted, permission to operate
a synagogue on the Highland property. In an R1 zone, congre-
gational worship is considered a “conditional use” under Sec-
tion 12.24, and requires a permit. Before allowing such a use,
the City was required to comply with the ordinance’s proce-
dural formalities. Because the City did not satisfy those for-
malities when it entered into the Settlement Agreement, the
Agreement is invalid and unenforceable under state law.

   The California Court of Appeal’s recent decision in Tran-
cas confirms our conclusion. There, the City disapproved a
developer’s tract maps and the developer filed suit. 138 Cal.
App. 4th at 176-77. In order to settle the claims, the City
approved, in a closed session, a written agreement to rescind
the disapproval and exempt the developer from all present and
                 LEAGUE v. CITY OF LOS ANGELES             10191
future zoning density restrictions that would otherwise block
the development. Id. at 178-79.

  The Trancas court invalidated the agreement on two
grounds.

   First, it held the provision exempting the developer from all
future density restrictions to be unlawful. Id. at 181. “ ‘Land
use regulations . . . involve the exercise of the state’s police
power, and it is settled that the government may not contract
away its right to exercise the police power in the future.’ ” Id.
(quoting Avco Cmty. Developers, Inc. v. S. Coast Reg’l
Comm’n, 553 P.2d 546, 556 (Cal. 1976)).

   Second, the court focused on another provision that
exempted the developer from existing density limitations in
the zoning code. Id. at 181 (summarizing provision as an
“agreement that the development need not comply with den-
sity limitations different from the density set forth in the cove-
nant”). The court held:

    This contractual exemption from an element of the
    city’s zoning is indistinguishable from the one con-
    demned by Avco. Moreover, it functionally resem-
    bles a variance. Such departures from standard
    zoning, however, by law require administrative pro-
    ceedings, including public hearings, followed by
    findings for which the instant density exemption
    might not qualify. Both the substantive qualifications
    and the procedural means for a variance discharge
    public interests. Circumvention of them by contract
    is impermissible.

Id. at 182 (emphasis added and citations omitted).

  Here, the Settlement Agreement violated both principles of
Trancas. The City did bargain away its right to exercise its
police power over the Highland property so long as the Con-
10192            LEAGUE v. CITY OF LOS ANGELES
gregation is in existence. It is now contractually obligated to
tolerate the conditional use approved in the Agreement and
may not enforce Section 12.08 or any other zoning ordinance
to the extent that they deviate from the Agreement’s provi-
sions.

  Moreover, in doing so, the City impermissibly circum-
vented the procedural and substantive limitations contained in
Los Angeles Municipal Code § 12.24. It granted the Congre-
gation a right to use property in a residential neighborhood for
congregational worship without going through the necessary
procedures and issuing the requisite factual findings.

   [5] Finally, we reject any argument that the City may cir-
cumvent its zoning procedures by referencing its general
authority to settle litigation under § 273(c) of the city charter.
Section 273(c) generally empowers the city council “to
approve or reject settlement of litigation that does not involve
only the payment or receipt of money.” This provision does
not purport to authorize contractual exemptions from zoning
requirements. Trancas clearly holds that such exemptions are
illegal, and § 273(c) cannot grant the City more authority than
is permitted under California law. See Elysian Heights Resi-
dents Assn., Inc. v. City of Los Angeles, 182 Cal. App. 3d 21,
40 (1986) (“Local legislation in conflict with general law is
void.”) (citation and alteration omitted).

   [6] We hold that Settlement Agreement is invalid and unen-
forceable as a matter of California law.

  B.    There was no judicial determination that federal
        law had been or would be violated

   Our inquiry is not yet complete. The City might not have
to comply with the procedural and substantive limitations set
forth in its zoning ordinances if there has been a violation of
federal law or if compliance will result in such a violation. Cf.
Perkins, 47 F.3d at 216 (“Once a court has found a federal
                 LEAGUE v. CITY OF LOS ANGELES             10193
constitutional or statutory violation, however, a state law can-
not prevent a necessary remedy.”).

   The district court validated the Settlement Agreement by
referencing RLUIPA, 42 U.S.C. § 2000cc: “[The Settlement
Agreement] was negotiated against the background not only
of City zoning law, but federal law which might or might not
be held valid after long and expensive litigation.” On this the-
ory, the City had the right to settle the Congregation’s claim
rather than litigate over RLUIPA’s uncertain legal landscape.

   [7] This logic contains one critical flaw. By placing its
imprimatur on the Settlement Agreement, the district court
effectively authorized the City to disregard its local ordi-
nances in the name of RLUIPA. Such judicial action is autho-
rized only when the federal law in question mandates the
remedy contained in the settlement. See Keith, 118 F.3d at
1393 (“Under the Constitution, the district court could not
supersede California’s law unless it conflicts with any federal
law.”). As summarized by the Seventh Circuit:

    [U]pon properly supported findings that such a rem-
    edy is necessary to rectify a violation of federal law,
    the district court can approve a consent decree which
    overrides state law provisions. Without such find-
    ings, however, parties can only agree to that which
    they have the power to do outside of litigation.

Perkins, 47 F.3d at 216; see also Cleveland County Ass’n for
Gov’t by the People v. Cleveland County Bd. of Comm’rs, 142
F.3d 468, 477 (D.C. Cir. 1998).

   [8] Here, the district court held that a potential violation of
federal law allowed a settlement agreement authorizing the
City to disregard its zoning regulations. This was incorrect.
Before approving any settlement agreement that authorizes a
state or municipal entity to disregard its own statutes in the
10194               LEAGUE v. CITY OF LOS ANGELES
name of federal law, a district court must find that there has
been or will be an actual violation of that federal law.3

   Such a finding could not have been made in this case.
While a district court would not be bound by the parties’ stip-
ulation that a violation of federal law had occurred or would
occur, the district court here was presented with a settlement
agreement that specifically reiterated the City’s denial of all
of the allegations of the complaint, and disclaimed any “ad-
mission of liability . . . under any federal, state, or local law,
including [RLUIPA].”

  [9] Absent a finding that federal law was violated or would
be violated, the district court could not approve a settlement
agreement that authorized the City to disregard its own zoning
ordinances. Since no such finding was made, the Settlement
Agreement is invalid and unenforceable.4

                            V.    Conclusion

   We reverse the district court’s dismissal of the League’s
collateral attack on the Settlement Agreement and we remand
the case to the district court for further proceedings consistent
with this opinion.

  REVERSED AND REMANDED FOR FURTHER
PROCEEDINGS.

   3
     Even if such a finding is made, a district court would then have to con-
sider the appropriateness of the agreed-to remedy under federal law.
   4
     In light of this holding, we decline to reach any of the League’s consti-
tutional claims.