Interesting Case Related to Development Moratorium Possibly Triggered by Hostility to Muslims

A brief excerpt from the 6500+-word opinion in Zikar Holdings LLC v. Ruhland, decided Dec. 26 by Judge Jeffrey Bryan (D. Minn.):

Plaintiffs allege that Defendant City of Lino Lakes … and two of its City Council members, Defendants Michael Ruhland and Christopher Lyden, enacted a one-year moratorium on development in a discrete area of the City where Plaintiffs had proposed to build a residential development that would include a masjid (mosque), and that they did so because of their discriminatory animus toward Islam and Muslims.

Plaintiffs assert that, in doing so, Defendants have violated the Fair Housing Act (FHA), the Free Exercise Clause …, the Equal Protection Clause …, and the Religious Land Use and Institutionalized Persons Act (RLUIPA). In their motion for a preliminary injunction, Plaintiffs ask the Court to enjoin the City from enforcing the moratorium, among other things….

A brief excerpt of the background factual allegations:

Ahmed and Mohammed took an interest in developing the Robinson Property. Ahmed and Mohammed are Muslims who worship at a masjid in nearby Blaine, a suburban city directly adjacent to Lino Lakes. Ahmed's and Mohammed's masjid in Blaine had more worshippers than capacity, and its services were regularly crowded. According to certain Islamic hadiths to which Ahmed and Mohammed subscribe, Muslims receive spiritual blessings if they are able to walk to their place of worship. Ahmed and Mohammed wished to develop a community that would permit Muslim community members to walk to their place of worship. In furtherance of this idea, they formed Zikar Holdings, LLC. In late 2023, Plaintiffs identified the Robinson Property as a workable location for their contemplated residential development, which they would call "Madinah Lakes."

The court pointed out that there was evidence of religious discrimination:

On the record before the Court on this motion, a factfinder would be presented with the following evidence: Ruhland admitted that he did not think of proposing a moratorium on development in the City's northwest corner until after Zikar posted its promotional video about Madinah Lakes; Lyden openly criticized the way non-native-English-speaking proponents of the Madinah Lakes project pronounced "Lino Lakes" and suggested that, given the events on October 7, 2023 in Israel, Muslims in general are not community-oriented people; Lyden expressed his enthusiastic approval and endorsement of an email that expressed vituperative and disparaging views of Islam and all Muslim people; Ruhland did not vote in favor of censuring Lyden for endorsing the email on grounds that Lyden was entitled to his opinion about the email; the City Attorney informed the City Council that the Moratorium was not legally necessary to undertake master planning; the City Council was aware of strong public opposition to Madinah Lakes and even received into the record more than eighty-two pages of posts made on social media by their constituents regarding their negative views of Islam, Muslims, and immigrants; the Mayor asked Zikar to remove its promotional video about Madinah Lakes due to the volume of public outcry against it; the comments of members of the public, the Mayor, and Lyden at the July 8 City Council meeting (during which the City Council voted on the Moratorium) often centered on Madinah Lakes, not the merits of conducting master planning.

It is true that Plaintiffs may not rely on the motives of just two City council members to establish discriminatory animus on the part of a larger decision-making body. However, when those two council members comprise 40% of the City Council, and when those council members' statements are combined with constituent complaints that are both "public and pervasive in nature," a factfinder could make a "reasonable inference that [discriminatory] animus was a widely held motive, or that the [challenged] Ordinance 'effectuate[d] the discriminatory designs of private individuals.'"

On this evidence, the Court believes a reasonable juror could infer that the Moratorium was pretextual.

But the court concluded that "the evidence presented at this stage, prior to discovery, is not so strong that it satisfies the heightened … standard" necessary for a preliminary injunction against a statute or ordinance:

The motives and beliefs of the council members, as well as the basis for the timing of the Moratorium decision remain unknown at this stage, and absent additional circumstantial evidence of discriminatory intent, a reasonable fact-finder could conclude that supporting the Moratorium reflected the importance of complying with the 2040 Plan and prudent infrastructure and resource planning. Thus, the Court concludes that this factor is neutral, weighing neither in favor of nor against granting Plaintiffs' preliminary injunction motion….

And the court concluded that the injunction was also unjustified because of the absence of showing of irreparable harm:

Plaintiffs have told the Court—but have not shown—that the purchase agreement between Zikar and the Robinson Property's owners "expires long before the expiration of the Moratorium." … Further, the Court cannot determine for itself what the purchase agreement says because it has not been placed in the record, neither in whole nor in part, by Plaintiffs.

Further, the Court observes that Zikar does not frame the threat of irreparable harm in concrete terms. Instead, it describes the potential irreparable harm as a "likely los[t]" opportunity or a "risk[ed] los[s]." …

Moreover, based on the limited description of the purchase agreement provided by Mohammed (who the Court assumes has requisite foundation to make), the Court can discern that the purchase agreement was subject to certain conditions precedent. According to Mohammed, the purchase agreement was "contingent on [Zikar] obtaining any necessary City or government approvals." The Court observes that Plaintiffs have not provided the Court with any proof that Zikar had satisfied or was surely poised to satisfy those conditions precedent generally, let alone before any deadline that may or may not be set forth in the purchase agreement…. Plaintiff's argument amounts to mere speculation concerning theoretical future loss, and on the record presented, the Court concludes that the irreparable-harm factor weighs resolutely against granting the requested injunctive relief.