913 P.2d 909 (Cal. 1996)
Evelyn Smith owns and leases four rental units located in two duplexes in Chico, California.1 They are operated exclusively for business and commercial purposes, with income generated from the rentals reported as business income.2 Smith is a Christian.3 She is a member of Bidwell Presbyterian Church in Chico and has attended there for approximately 25 years.4 She believes that sex outside of marriage is sinful. She believes that it is a sin for her to rent her units to people who will engage in nonmarital sex on her property. She believes that God will judge her if she permits people to engage in sex outside of marriage in her rental units. If she does so, she will be prevented from meeting her deceased husband in the hereafter.
From on or about March 29, 1987, to April 13, 1987, Smith advertised the availability of one of her units in the Chico Enterprise-Record.5 On April 1, 1987, Kenneth Phillips and Gail Randall saw the advertisement, viewed the unit that night, and called Smith the next morning.6 During that call Smith stated that she preferred to rent to married couples.7 On or about April 2, 1987, the complainants met with Smith and were shown the premises.8
On April 7, 1987, a lease agreement was executed between the parties for the unit located at 677 Eastwood Avenue.9 It was for a month-to-month tenancy commencing May 1, 1987 at a rent of $325 per month.10 Complainants also paid respondent a security deposit of $150 for which a receipt was given.11 Complainant Randall signed the lease agreement "Gail Phillips."12 Later on the same day, complainant Phillips called respondent and told her that he and Randall were not married.13 Respondent told him that she could not rent to an unmarried cohabiting couple because that would violate her religious beliefs.14 Respondent said that she would return their deposit.15 She sent them a check for $150.16
Randall and Phillips filed separate complaints against Smith with the commission.17 Based on the complaints, the commission issued two accusations.18 As subsequently amended, the accusations alleged Smith had violated Government Code section 12955, subdivisions (a), (b), (c) and (d), Civil Code section 51 (the Unruh Civil Rights Act), and Government Code section 12948.19 The commission exercised its power not to adopt the proposed decision and to hear the case itself on the existing record.20 After additional briefing, the commission issued its decision in favor of Randall and Phillips.21 The commission found Smith had violated Government Code sections 12955, subdivisions (a) and (d), Civil Code section 51, and Government Code section 12948.22 As relief, the commission ordered Smith to cease and desist from discriminating on the basis of marital status; to post and give to prospective tenants various notices setting out the provisions of FEHA, the outcome of this case, and the statement that Smith practices equal housing opportunity; and to pay Randall and Phillips a total of $454 in compensatory damages and $500 in damages for emotional distress.23 Smith sought review of the commission's decision by petition for writ of mandate.24 The Court of Appeal reversed.25 We granted review.26
Whether the Fair Employment and Housing Act prohibits a landlord from refusing to rent to an unmarried couple?27
Yes. The statute's plain language protects both individuals and couples by prohibiting refusal to rent based on whether prospective tenants are married.30 Evelyn Smith asked Phillips and Randall whether they were married and refused to rent to them because they were not.31 The commission's interpretation and legislative history confirm that the prohibition encompasses unmarried cohabitants.32
The Fair Employment and Housing Act prohibits a landlord from refusing to rent to an unmarried couple.33
Whether the First Amendment requires the state to exempt a landlord from the Fair Employment and Housing Act when the landlord's religious beliefs prohibit renting to unmarried couples?34
Under Employment Division v. Smith, a neutral law of general applicability need not satisfy the compelling interest test even if it incidentally burdens religious exercise.35
No. Government Code section 12955 is neutral and generally applicable because it prohibits marital status discrimination irrespective of motivation and without reference to religion.36 Evelyn Smith operates four rental units exclusively for business purposes as a commercial enterprise.37 The statute applies to all landlords without targeting religious conduct.38
The First Amendment does not require the state to exempt a landlord from the Fair Employment and Housing Act when the landlord's religious beliefs prohibit renting to unmarried couples.39
Whether the Religious Freedom Restoration Act requires the state to exempt a landlord from the Fair Employment and Housing Act when compliance would burden the landlord's religious exercise?40
No. Although Evelyn Smith's Christian beliefs are sincerely held, FEHA does not substantially burden her religious exercise.43 She can avoid the conflict by selling the units and redeploying capital without threatening her livelihood.44 The burden is merely economic.45 Granting an exemption would impair the third-party rights of prospective tenants Phillips and Randall to equal access to housing.46
The commission's findings establish that Smith has no religious objection to renting to single, divorced, or widowed persons and that her business is operated for commercial purposes.47
The Religious Freedom Restoration Act does not require the state to exempt a landlord from the Fair Employment and Housing Act when compliance would burden the landlord's religious exercise.48
Related opinions on this issue
Justice Kennard dissents from the conclusion that FEHA does not substantially burden Smith's religious exercise.49 In requiring Smith to rent to an unmarried heterosexual couple against her sincerely held religious beliefs, the state substantially burdens Smith's exercise of religion.50 It conditions receipt of an important benefit upon conduct proscribed by a religious faith.51 This puts substantial pressure on her to modify her behavior and to violate her beliefs.
She further concludes that the commission failed to demonstrate that exempting Smith and similarly situated religious objectors would be infeasible.52 The record contains no evidence that religiously based exemptions would significantly reduce housing available to unmarried couples.53
Whether article I, section 4 of the California Constitution requires the state to exempt a landlord from the Fair Employment and Housing Act when the landlord's religious beliefs conflict with the statute?54
Article I, section 4 of the California Constitution guarantees free exercise of religion without discrimination or preference.55 This liberty of conscience does not excuse acts that are licentious or inconsistent with the peace or safety of the state.56 Prior California cases have applied the compelling interest test from Sherbert and Yoder.57
No. Because Smith's claim fails under the compelling interest analysis applied in RFRA, the same result follows under article I, section 4.58 Evelyn Smith's operation of a commercial rental business for business income means that any burden is not substantial under the established standard.59 The court need not decide whether the state provision is more protective than the federal clause as interpreted in Employment Division v. Smith.60
Article I, section 4 of the California Constitution does not require the state to exempt a landlord from the Fair Employment and Housing Act when the landlord's religious beliefs conflict with the statute.61