National Housing Law Project Housing Law Bulletin

California Fair Housing Law Narrowly
Withstands Religious Challenge

The court had a difficult time resolving what appeared to be a relatively straightforward case, with two opinions forming the majority, and with two separate dissents. The result of these lengthy opinions, however, is consistent with that of the only other state court that has decided whether other federal and state free-exercise laws require an exemption for the tenant selection practices of certain religious landlords.² The California case was closely watched because the landlord had prevailed at the intermediate appellate level and numerous religious rights advocates from around the country had hoped to establish a key beachhead in the movement to exempt religious adherents from complying with otherwise neutral generally applicable civil laws.

Facts

The landlord owned and leased four rental units operated exclusively for commercial purposes. When showing vacant units, the landlord states that she prefers married couples. This preference for married couples stems from her religious belief that sexual relationships outside of marriage are sinful. She believes that it is also a sin for her to rent her units to people who will engage in sex outside of marriage on the property. While she has rented to single, divorced, widowed or married tenants, she would not knowingly rent to anyone who engages in sex outside of marriage.

The prospective tenants were an unmarried couple who, in response to the landlord's inquiry, falsely represented that they were married. After subsequently executing a lease, but prior to occupancy, one of the couple told the landlord that they were not married. The landlord then responded that she could not rent to an unmarried cohabiting couple because of her religious beliefs, and she would return their security deposit.

Procedural History

The couple then filed separate complaints against the landlord with the California Fair Employment and Housing Commission, the agency with administrative jurisdiction over the California Fair Employment and Housing Act (FEHA), Gov't Code §§ 12900 et seq. The Act makes unlawful the discrimination by an owner of any housing accommodation against any person because of the marital status of that person.³ The administrative law judge issued a proposed decision in favor of the couple. The Commission subsequently exercised its power to hear the case itself on the record, also issuing a decision in favor of the couple. The Commission found that the landlord had violated the statute, but that it had no power to address her constitutional arguments. It ordered the landlord to cease and desist from the discrimination, to post and give to prospective tenants various notices setting forth FEHA's provisions, and to pay $454 in compensatory damages and $500 in damages for emotional distress.

The landlord petitioned for a writ of mandate to review the Commission's decision, and the intermediate court of appeal reversed.⁴ That court held that the state statute could not be applied so as to require the landlord to rent to unmarried couples, since that would violate her rights to free exercise of her religion under the free-exercise clauses of the federal and state constitutions⁵ and the federal Religious Freedom Restoration Act of 1993 (RFRA).⁶

The Commission then filed a petition for review which the California Supreme Court granted, thus automatically superseding the appellate court's opinion.

The California Supreme Court's Opinion

Statutory coverage. The California Supreme Court first analyzed the question of whether FEHA's "marital status" provision prohibits discrimination against unmarried couples, spending several pages explaining its unsurprising conclusion that the statute protects unmarried cohabitants. Various amicus curiae argued that the landlord's refusal to rent to unmarried couples did not violate the statute because it was based on her assumptions about their sexual conduct rather than their marital status. The court cited the Swanner and Desilets opinions⁷ to reject this contention, since it is the prospective tenants' marital status that makes their conduct allegedly immoral in the landlord's eyes. Amicus curiae had also attempted to argue that FEHA protects only individuals rather than unmarried couples, to which the court responded, based on other states' statutes and legislative history of prior statutes using the term and the Commission's longstanding consistent administrative interpretation, that the statutory language naturally covers both. Here the court noted that most cases from other states that found conflicts between the marital status provision and other statutes criminalizing private sexual conduct between consenting adults were inapplicable in California because such criminal statutes had been repealed in 1975.

First Amendment rights. The court's opinion then addressed the more difficult questions involving the landlord's free-exercise rights. The landlord's claim to an exemption from FEHA based on her rights to freely exercise her religion required the court to analyze three different provisions: the United States Constitution's First Amendment, the federal RFRA, and the free-exercise clause of the California Constitution.

Under the United States Supreme Court's 1990 Smith decision⁸ interpreting the free-exercise clause, the California court found no support for the landlord's claim. The free-exercise clause does not excuse an individual from the obligation of complying with valid and neutral laws of general applicability simply because the law requires or prohibits conduct inconsistent with religious beliefs. If the law in question is generally applicable and neutral towards religion, then it must be given full effect. The court found that FEHA's "marital status" provision met this standard.

The court then reviewed the history of the free-exercise clause's interpretation, not for purposes of ruling on the landlord's federal constitutional free-exercise claim, but for purposes of understanding her claims under the recent federal RFRA which provides different and broader statutory protection than the federal Constitution. Prior to 1990, the United States Supreme Court, when faced with conflicts between generally applicable civil laws and burdens on religious exercise, generally pursued a balancing process, weighing the burden on religious exercise against the government's interest in applying the law.⁹ The United States Supreme Court abandoned this balancing approach in its 1990 Employment Div. v. Smith decision.¹⁰ That decision also noted that other cases granting exemptions for religiously motivated conduct involved stronger "hybrid" claims based upon the free-exercise clause in conjunction with other constitutional protections, such as freedom of speech.

Here, the landlord also claimed that that portion of the Supreme Court's Smith opinion preserving a balancing test for burdens on "hybrid" rights was implicated because the Commission's remedial order required her to post a sign informing prospective tenants of their FEHA rights, assertedly violating her freedom of speech rights. The California court said that, even if the landlord were correct, the analysis required would be no different than that required for her claim under the RFRA, to which it next turned.

The Religious Freedom Restoration Act. In response to the United States Supreme Court's Smith decision, Congress restored the balancing test in 1993 by passing the RFRA.¹¹ This statute essentially sought to codify free-exercise law as it existed prior to 1990, when the Supreme Court abandoned the balancing act in its Employment Division v. Smith opinion. The RFRA prohibits governments from substantially burdening a person's exercise of religion, even under rules of general applicability, unless those rules further a compelling governmental interest and are the least restrictive means of furthering that interest.¹² The RFRA applies to all federal, state and local laws, regardless of their date of adoption, and expressly provides a private right of action to assert an alleged violation.

Under this RFRA standard, substantial burdens outweighing the government's interest would require an exemption for the religiously motivated conduct. On the other hand, if the government's interest were sufficiently important to outweigh the burden on religious exercise (usually "compelling"), and it could not be achieved by less restrictive means, no accommodation is required. Nor would an accommodation be required if the burden on religious exercise were not considered substantial. The California court thus developed the following analysis for free-exercise cases involving neutral generally applicable law, combining the RFRA and subsequent case law with case law prior to 1990: (1) the burden must fall on a religious belief rather than a philosophy or way of life, (2) the burdened belief must be sincerely held, (3) the plaintiff must prove the burden is substantial or legally significant, and (4) the government must then demonstrate that application of the burden furthers a compelling governmental interest and is the least restrictive means of furthering that interest.

In an effort to avoid this entire analysis, the prospective tenants had urged the court to pursue an initial inquiry about whether the prohibited activity constitutes the exercise of religion. Their view was that since the renting of an apartment does not constitute the exercise of religion, it is not entitled to RFRA protection. Refusing this easy exit, the California court replied that the religious practice allegedly burdened by the FEHA is not the renting of apartments, but the landlord's practice of not committing the sin she believes inherent in renting to unmarried cohabitants. In other words, for the court, it is the effect and indirect coercion that count for RFRA purposes. Accepting the landlord's "sin via the facilitation of the sin of others" characterization forced the court to continue its RFRA analysis.

For the court, the key question under the RFRA was whether or not the FEHA's marital status provision imposed a "substantial" burden. This term is not defined by RFRA; instead, its legislative history indicates that pre-1990 caselaw would govern. However, those cases offer only guidance, not a specific definition or test, instead disclosing a case-by-case approach.

Under this approach, the California court concluded that the degree of compulsion imposed on the landlord's religious belief by the marital status protection is less than that present in other cases, because a landlord may avoid the conflict by selling her rental units and redeploying the capital in other investments. In addition, unlike some of the previous cases, granting an exemption to the landlord would have a serious impact on the rights and interests of third-party tenants who have equal access rights to her commercial enterprise. Simply stated, her religious belief is that she should not rent to unmarried couples, and she can avoid any burden by reinvesting her capital elsewhere with "no threat to her livelihood." While this "avoidability" characteristic may not be generally applicable for defining which burdens are "substantial," it provided the foundation for the court's conclusion. In finding that the FEHA's burden on the landlord's religious exercise was not sufficiently "substantial," the court thus had no need to address the "compelling interest" or "least restrictive alternative" provisions of the RFRA.

The California Constitution. Finally, the court addressed whether the free-exercise clause of the state constitution exempted the landlord from the FEHA's requirements. Because the interpretation of the California provisions by the courts was similar to that required by the pre-1990 cases for the federal free-exercise clause, the court held that its previous analysis under the RFRA, which had incorporated that pre-1990 analysis, also disposed of this claim.

The court almost entirely reversed the judgment of the court of appeal. It affirmed that judgment only to the extent it had vacated the award of damages for emotional distress due to a previous decision holding that a commission has no power to award such damages.¹³ Another concurring opinion for the majority took the position that the RFRA violates the separation of powers clause of the United States Constitution, and therefore cannot be applied to this case, thus upholding the FEHA because it does not violate the free-exercise clause or the California Constitution. The two dissenting opinions differed in their analysis, one finding the FEHA violated the RFRA by imposing a substantial burden without granting the required accommodation, while the other would have remanded the case to determine compliance with the RFRA.

As a result of this decision from a generally conservative court, tenants in California and other states with marital status protection should now be able to enjoy more complete access to the rental market. The primary exception will be those jurisdictions where older statutes criminalizing private sexual conduct between consenting adults are still on the books and given full effect by the courts.

1. Smith v. Fair Employment and Housing Comm'n, No. S040653, 1996 Westlaw 163908, ___ P.2d ___ (Cal. Sup. Ct. Apr. 9, 1996), vacating 39 Cal. App. 4th 877 (1994).
2. Prior to the California ruling, only the Supreme Court of Alaska had decided the free-exercise question, rejecting the landlord's claim to an exemption. Swanner v. Anchorage Equal Rights Comm'n, 874 P.2d 274 (Alaska 1994). While other cases have raised these issues, none has reached the free-exercise questions. See Attorney General v. Desilets, 66 N.E.2d 233 (Mass. 1994) (while state's "marital status" provision covers unmarried cohabitation, free-exercise issues remanded); State Ex Rel Cooper v. French, 460 N.W.2d 2 (Minn. 1990) (state "marital status" provision conflicts with other state statutes criminalizing private sexual conduct between consenting adults); Mister v. A.R.K. Partnership, 553 N.E.2d 1152 (Ill. App. 1990) (same); McFadden v. Elma Country Club, 613 P.2d 146 (Wash. App. 1980) (same). See also County of Dane v. Norman, 497 N.W.2d 714 (Wis. 1993) (invalidating county "marital status" ordinance to extent it seeks to protect "cohabitants" because inconsistent with perceived state public policy promoting marriage); Hudson View Properties v. Weiss, 450 N.E.2d 234 (N.Y. 1983) (court held that lease provision restricting occupancy to tenant's immediate family may not implicate state's "marital status" law); Prince George's County v. Greenbelt Homes, Inc., 431 A.2d 745 (Md. App. 1981) (state's "marital status" provision did not protect unmarried couples).
3. Cal. Gov't Code § 12955(a) (West Supp. 1995).
4. See the vacated opinion at 39 Cal. App. 4th 877 (1994).
5. U.S. Const. amend. I; Cal. Const. art. I, § 4.
6. 42 U.S.C.A. §§ 2000bb et seq. (West Supp. 1995).
7. Both supra note 2.
8. Employment Div. v. Smith, 494 U.S. 872 (1990).
9. See, e.g., Wisconsin v. Yoder, 406 U.S. 205 (1972); Sherbert v. Verner, 374 U.S. 398 (1963).
10. 494 U.S. 872.
11. Supra note 6.
12. 42 U.S.C.A. §§ 2000bb-1(b).
13. Walnut Creek Manor v. Fair Employment and Hous. Comm'n, 54 Cal. 3d 245 (1991).