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In a major upset, the Second Circuit Court of Appeals in Manhattan has just reinstated a lawsuit accusing the Town of Clarkstown, Clarkstown Superintendent George Hoehmann and CUPON (Citizens United to Protect Our Neighborhoods) of interfering with Ateres Bais Yaakov Academy of Rockland’s contract to purchase a church in Nanuet and of violating the Academy’s religious rights.

The appeals court decision reverses the United Stated District Court for the Southern District of New York’s earlier dismissal of the suit.

In October 2018, Ateres contracted with Grace Baptist Church to acquire their property in for $4.3 million for the purposes of establishing an Orthodox Jewish school on the property. They planned to close two months later.

However, in response, the Town of Clarkstown, and Town Supervisor George Hoehmann, along with local citizens who had formed a chapter of an organization known as Citizens United to Protect Our Neighborhood Inc. (CUPON), came together to keep the Orthodox school out of the community. To achieve this result, they worked together to derail the yeshiva’s financing, building permit, zoning application, and contract with the church.

Eventually, the Town’s efforts were successful, and Grace Church refused to sell the property to ABY. Additionally, in November 2019, the Town of Clarkstown’s council authorized the town to purchase the Grace Baptist Church in Nanuet for $4.5 million for “general municipal purposes.” The transaction closed in early 2020.

ABY filed suit in the United States District Court for the Southern District of New York, asserting claims under the Religious Land Use and Institutionalized Persons Act (RLUIPA) and state law for tortious interference with contract.

According to Ateres, shortly after the contract was signed, Clarkstown held a public meeting where vocal opposition to the purchase for the girls’ yeshiva was robust, and at which time Hoehmann made public statements in opposition to the deal, including the threat of issuing “search warrants” if necessary.

Also, according to Ateres, it contracted to buy the church believing it could occupy the school “as-of-right” under existing zoning, operating in a manner similar to Grace Baptist Church. Although the property was zoned R-10 (residential), the church’s use predated the zoning code and was considered a “pre-existing non-conforming use” and was grandfathered. Ateres asserts Hoehmann publicly announced the denial of the building permit before the town’s building inspector made his determination. Later, Ateres claimed the town’s Zoning Board of Appeals put unreasonable obstacles in place to prevent it from ever having its application heard for a variance, and that its repeated requests to have its application heard were ignored.

“These steps,” the school alleged, “prevented it from fulfilling its contractual obligations with Grace Baptist Church,” which subsequently terminated the contract in June of 2019.

In July 2022, the District Court in White Plains dismissed the complaint for lack of subject matter jurisdiction reasoning that ABY failed to plead adequately that the Town's conduct caused ABY’s lost-contract injury, as required for Article III standing. Additionally, the court dismissed the complaint for failure to state claims, finding that ABY failed to sufficiently establish that its civil rights and religious discrimination claims based on the denial of a building permit application were ripe because Clarkstown’s Zoning Board of Appeals never issued a final decision on the application.

In a written ruling released on Friday, Circuit Judges Parker, Park, and Nathan disagreed and reinstated the lawsuit.

The judges found that the Zoning Board of Appeals’ refusal to entertain the application obviated the need for a final decision that is normally required to secure standing. 

The lower court had dismissed the tortious interference claims against the town and CUPON, saying that the loss of the contract wasn’t traceable to specific actions by the Township. The Appeals Court disagreed and reversed the lower court’s dismissal of the tortious interference claim, saying the yeshiva adequately alleged “that through their oversight and participation in the zoning process, the Town and Hoehmann worked together with CUPON to prevent the (yeshiva) from performing under its contract with Grace Church by obstructing the (yeshiva’s) attempts to secure financing, denying its permit application, and refusing to consider its Zoning appeal.”

Further, the complaint states – and the appellate court cites – that the Township “signaled their opposition to its acquisition of the property, encouraged residents to voice their complaints, worked with CUPON to block the purchase and denied the yeshiva’s initial permit application in an attempt to delay it.”

The Second Circuit decision made clear that the school did adequately plead a case supporting its RLUIPA (Religious Land Use and Institutionalized Persons Act) action.

Now, with the Appeals Court sending the case back to the district court, the lower court must determine whether the yeshiva’s religious rights were violated and whether the town and CUPON wrongly interfered with the contract.

Ateres was represented by Joshua Halpern and Yehudah Buchweitz of Weil, Gotshal & Manges, LLP of New York City.

In response to the decision, Yehudah Buchweitz, who is representing Ateres Bais Yaakov Academy of Rockland, said, “This case is unfortunately one of the many instances where a municipality abuses its powers to try to keep religious minorities from moving in or practicing their religion freely.”

He went on to say “this is the latest in a decades long battle against anti-Semitism, in particular with respect to Orthodox Jews, and we will not stop in our efforts to try to stop religious discrimination.”

Agudath Israel of America supported the school by filing an Amicus Curiae brief in the matter.

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