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World Outreach Conference Center v. City of Chicago

United States Court of Appeals, Seventh Circuit

July 24, 2018

World Outreach Conference Center, et al., Plaintiffs-Appellants,
City of Chicago, Defendant-Appellee.

          Argued May 29, 2018

          Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 06 C 2891-Joan Humphrey Lefkow, Judge.

          Before Bauer, Barrett, and St. Eve, Circuit Judges.


         This is the third time World Outreach Conference Center's (World Outreach) long-running dispute with the City of Chicago has appeared before us. See World Outreach Conference Ctr. v. City of Chicago, 591 F.3d 531 (7th Cir. 2009) ("World Outreach I"); World Outreach Conference Ctr. v. City of Chicago, 787 F.3d 839 (7th Cir. 2015) ("World Outreach II"). In this appeal, World Outreach contends that the district court erred by making a 70% across-the-board reduction to its award of attorney's fees. We find no reason to disrupt the district court's determination and affirm.

         I. BACKGROUND

         The dispute and its ensuing litigation between World Outreach and the City of Chicago has a history beginning in 2005. We assume familiarity with our earlier opinions and abbreviate our discussion.

         In July 2005, World Outreach, a Christian religious organization, purchased a building in the Roseland neighborhood on Chicago's south side from the YMCA. The building contains 168 single-room occupancy (SRO) units. The YMCA operated a community center and the SROs for the previous 80 years with little interference from the City's zoning authority. The community center was a "legal nonconforming use," meaning that the use of the center had previously conformed to zoning regulations, and when the zoning regulations changed to prohibit that use, the YMCA was allowed to continue using the building as a community center. See Chicago Zoning Ordinance § 17-15-0301.

         The legal nonconforming status meant the YMCA, and ultimately World Outreach, did not need to obtain a Special Use Permit to operate the center. According to the City's zoning ordinance, the "[n]onconforming status runs with the land and is not affected by changes of tenancy, ownership, or management." Chicago Zoning Ordinance § 17-15-0106. The YMCA and World Outreach only needed to obtain the necessary licenses from the City to operate the community center and the SROs.

         When World Outreach applied for the necessary community center and SRO licenses in August 2005, the City informed World Outreach that it needed a Special Use Permit. The mystery as to why the City refused to issue the licenses and insist on the Special Use Permits, despite the legal nonconforming status, is not relevant and has been discussed in our previous opinions. See World Outreach I, 591 F.3d at 536; World Outreach II, 787 F.3d at 841-42. Regardless, the City's denial of the licenses and insistence on obtaining a Special Use Permit was unlawful.

         While the City was preventing World Outreach from operating its community center and SROs, Hurricane Katrina struck New Orleans in late August 2005. Thousands of residents from the Big Easy were evacuated and transplanted to other cities, including Chicago. Representatives from the Federal Emergency Management Agency (FEMA) contacted World Outreach's director, Pastor Pamela Blossom, about entering into a contract to utilize their SROs. World Outreach claimed that it had a verbal agreement with FEMA to use the rooms at $750 per room, per month, for one year. However, World Outreach never received any evacuees.

         In December 2005, the City pursued its unlawful demands by suing World Outreach in Illinois state court for operating the community center without a Special Use Permit. The suit was frivolous, and the City voluntarily dismissed it in April 2006 after World Outreach presented the City with its affirmative defenses and counterclaims. Shortly thereafter, World Outreach turned around and filed a new lawsuit in state court against the City, which the City removed to federal court. However, the City continued to deprive World Outreach of the necessary licenses. Finally, in January 2007, the City signed off on World Outreach's license applications, and issued the licenses in August 2007.

         World Outreach's nine-count lawsuit put forward a variety of claims, including claims under the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), 42 U.S.C. § 2000cc. The district court initially dismissed the complaint for failure to state a claim, but we reversed in part, sending the RLUIPA claims back, among others. See World Outreach I, 591 F.3d at 537-38. On remand, the City and World Outreach each filed motions for summary judgment; the City on all remaining claims, and World Outreach only on its RLUIPA claims. The district court granted summary judgment to World Outreach on part of its RLUIPA claim relating to defending the frivolous lawsuit, but found in favor of the City on all the remaining claims. The court awarded damages to World Outreach for the amount of fees and expenses incurred in responding to the frivolous lawsuit, and the parties entered into an agreed final judgment order in November 2013, awarding $15, 000 to World Outreach.

         The City and World Outreach cross-appealed, and we affirmed the district court's grant of summary judgment to World Outreach on the RLUIPA claim relating to the frivolous lawsuit. However, we reversed and remanded again, but only with respect to World Outreach's RLUIPA claim regarding the City's unlawful deprivation of the licenses. See World Outreach II, 787 F.3d at 843-45. We provided the district court "guidance" on remand, and noted that the largest element of damages from the deprivation of the licenses related to the lost opportunity to house Hurricane Katrina evacuees. Id. at 844 ("$750 times 12 months times 168 rooms is $1, 512, 000"). Importantly, we stated that the evidence put forth by World Outreach was "weak," and there was uncertainty as to "whether World Outreach would have received any, let alone 168, evacuees, let alone for a full year." Id. We concluded that "[t]here has been a ...

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