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“Place to Worship Initiative” and Suits Against Municipalities on the Rise.

Michael J. Faul, Jr., a Shareholder at Herold Law and Special Insurance Counsel to governmental entities, warns of the prospect of future civil rights suits and insurance coverage implications for defense and indemnification. 

There has been a significant increase in suits against Township Committees and Planning and Zoning Boards alleging their actions violate civil rights. As recently as June, 2018, the Attorney General of the United States, Jeff Sessions, approved a “Place to Worship Initiative” on protecting the ability of houses of worship and other religious institutions to build, expand, buy or rent facilities. The Federal government will enforce RLUIPA to the fullest extent of the law and file suits or enforcement proceedings to compel local governments to comply with the Act. The Borough of Woodcliff Lake and its Zoning Board were sued by the United States Attorney in June, 2018. In 2017, there were a rash of lawsuits and enforcement proceedings against municipalities by the Federal government and New Jersey State agencies.

Michael Faul has been retained as Special Counsel to seek insurance coverage for defense and indemnification with regard to both the civil suits and parallel federal investigations and complaints. These matters are very costly; however, municipalities may have insurance coverage in place to defray or recoup associated legal fees and costs. Mr. Faul represented several municipalities where the insurers sought to severely limit available coverage for such disputes. Mr. Faul has been highly successful in challenging exclusions and limitations on insurance coverage. In 2017, Mr. Faul secured over $4.2 million in insurance coverage for a municipality sued by a religious institution and the Federal government. The municipalities’ legal fees and costs were recovered from insurance as part of the settlement.

Recently, Mr. Faul prevailed in an arbitration proceeding on a dispositive motion to compel the insurance carrier to tender a defense for the pending Department of Justice/US Attorney’s Office litigation. This is a critical ruling that may affect other municipalities and government agencies facing the prospect of a costly federal investigation or lawsuit.

Mr. Faul also counsels municipalities, in conjunction with their risk management professionals, when liability policies are due to renew and the municipality is exploring their insurance options in the commercial marketplace.