Ninth Circuit Rules Landlords' Religious Rights Can Trump Antidiscrimination Law

Gerald J. Russello*

In a decision that could have far-reaching consequences for religious liberties jurisprudence, a panel of the Ninth Circuit has ruled, in Thomas v. Anchorage Equal Right Commission, 165 F.3d 692 (9th Cir. 1999), that state and municipal antidiscrimination laws barring landlords from refusing to rent to unmarried couples placed a substantial burden on landlords and are not justified by any compelling governmental interest, when the refusal is based upon religious belief.

Challenging such laws on the basis of religious belief has been made more difficult since the decision in Employment Division v. Smith, 494 U.S. 872 (1990), which generally barred free exercise challenges to generally applicable, neutral laws. A small loophole was created three years later in Church of the Lukumi Babalu Aye v. City of Hialeah, 508 U.S. 520, 542 (1993), which mandated strict scrutiny for laws that were found to "target" specific religious groups. The courts of appeals have been groping toward a more flexible rule, drawing upon language in Smith that seems to permit strict scrutiny when the challenged laws infringe other constitutional rights in addition to those of free exercise, the so-called "hybrid-rights" exception. See Smith, 494 U.S. at 881.

Judge O'Scannlain, writing for himself and Judge Farris, affirmed the District court and found that the state and municipal provisions infringed upon the landlords' First and Fifth Amendment rights along with their free exercise rights, thus mandating a strict scrutiny analysis of the provisions. Subject to that analysis, Alaska and Anchorage failed to demonstrate a compelling government interest to justify the substantial burden placed upon the landlords. Judge Hawkins dissented. Thomas, 165 F.3d at 718.

In Thomas, two landlords sued for prospective declaratory and injunctive relief, claiming that enforcement of the municipal or state provisions would violate their constitutional rights. There was no dispute that the landlords had refused to rent to unmarried couples in the past, would do so in the future, and that their refusals were based on religious belief. Thomas, 165 F.3d at 696-97. The District court granted summary judgment to the landlords, ruling that the landlords had standing to sue and that their claims were ripe for review, despite the fact that they had not yet been prosecuted under either provision. In a separate order, the District court found that the provisions would violate the landlords' free exercise rights, and permanently enjoined the defendants from enforcing the provisions. The Anchorage Equal Rights Commission and the head of the Alaska State Commission for Human Rights appealed.

The majority first rejected the landlords' contention that their claims fell within the exception to Smith outlined in Lukumi. The court determined that the provisions were not motivated by any illicit intention that targeted religious belief. Any burden on religiously motivated conduct, the court found, was incidental. Thomas, 165 F.3d at 702. The landlords relied upon the "hybrid rights" exception in Smith. The landlords alleged violations of their Fifth Amendment "right to exclude" others from their property, as well as First Amendment free speech rights.

The "hybrid-rights" doctrine has found a life of its own in the appellate courts, with several Circuits designing tests that preserve the general rule of Smith while remaining faithful to other precedents that Smith left intact. The majority steered a middle course in enunciating a hybrid-right doctrine between the "independently-viable" and "implication" theories rejected by Justice Souter in his dissent in Lukumi. Lukumi, 508 U.S. at 567. The court determined that strict scrutiny would apply if a "colorable" claim that the companion (non-free exercise) claim has been violated by an otherwise neutral and generally

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applicable law was made by the plaintiff. Thomas, 165 F.3d at 705. Such a standard, the court found, would preserve the validity of Smith's holding that generally applicable, neutral laws will survive a free exercise challenge. At the same time it would preserve the free exercise component of hybrid-rights claims, which would be superfluous if the companion right was independently viable. Id. at 706.

Under the "colorable claim" standard, courts will be required to make "difficult, qualitative, case-by-case judgements" concerning the strength of the companion claims. Thomas, 165 F.3d at 705. The majority found that the landlords had made out colorable claims under the Fifth and First Amendments. The court also found that the provisions authorized a physical invasion of the landlords' property and amounted to a regulatory taking. Id. at 709. The court rejected the appellants' claim that the landlords' refusal to rent to unmarried couples represented only commercial speech entitled to little constitutional protection; on the contrary, the court found that the speech here went beyond a simple commercial transaction and was in fact fully protected religious speech. Id. at 710-11.

The closing portions of the majority opinion found that the provisions had placed a substantial burden upon the exercise of the landlords' religious beliefs because the provisions "de facto banish [the landlords] from the Alaska rental market altogether and force them to forsake their livelihoods" as property owners. Thomas, 165 F.3d at 713. The mere fact that the landlords entered into a regulated industry did not make the burdens placed upon them insubstantial. The majority further found that the appellants had not shown a compelling government interest to support enforcement of the provisions. Id. at 717. The appellants had advanced insufficient evidence to support the conclusion that ending discrimination against unmarried couples (unlike, for example, racial discrimination) was a "firm national policy" sufficient to permit the substantial burden upon the landlords' rights. Id. at 715-17.

Thomas's careful analysis of precedent and close reasoning establish important protections for religious believers. It makes clear that, despite Smith, neutral laws that impact upon religious belief may still be subject to strict scrutiny if a colorable claim can be made out under a companion right, which may often happen given the many points at which government regulations and religious speech or belief may intersect. The hybrid-rights analysis developed by the majority allows a more nuanced look at the contours of belief and law than that allowed by the central holding of Smith. Once a colorable claim has been made, the strict scrutiny analysis will compel government agencies to connect the challenged laws with firm national policies or "paramount."


2002 The Federalist Society