## Facts

- The City of Rajneeshpuram was incorporated in Wasco County, Oregon, on May 26, 1982.
- The city was located on land collectively known as Rancho Rajneesh; the land was owned by Rajneesh Investment Corporation, which was owned by Rajneesh Foundation International, and leased and controlled for residency by an affiliated commune entity.
- Oregon alleged the city was created primarily to advance the Rajneesh religious movement and to serve as a religious center rather than a conventional municipality.
- Oregon further alleged that the city’s residents and governance were pervasively controlled by interrelated religious organizations and leaders, and that religious doctrine permeated political decisionmaking and daily civic life.
- Oregon sought declaratory relief that the state need not recognize the city’s municipal status, need not provide public monies or services to it, and that the county’s incorporation proclamation was invalid on state and federal religion-clause grounds.
- Defendants removed the action to federal court; the court denied remand and later addressed defendants’ Rule 12(b)(6) motion to dismiss.

## Issues

1. Whether the complaint, taking its factual allegations as true, stated a plausible claim that state recognition, funding, or servicing of the city could violate the Establishment Clause and parallel state constitutional provisions.
2. Whether the requested declaratory relief presented a justiciable case or controversy, rather than an advisory opinion, at the pleading stage.

## Decision

- The court denied defendants’ Rule 12(b)(6) motion to dismiss.
- Applying the pleading standard, the court held Oregon alleged facts under which recognizing and supporting the city could amount to governmental establishment or sponsorship of religion.
- The court held the dispute over recognition, services, funding, and the incorporation proclamation was sufficiently concrete to support declaratory relief.

## Legal Principles

- On a Rule 12(b)(6) motion, the court assumes the complaint’s factual allegations are true and draws reasonable inferences in the plaintiff’s favor; dismissal is improper unless no set of facts consistent with the allegations would entitle the plaintiff to relief.
- Government action may violate the Establishment Clause where it constitutes governmental sponsorship or endorsement of religion or creates excessive entanglement between government and religion.
- A declaratory judgment action is justiciable when it addresses a real, immediate dispute over legal obligations and would resolve concrete questions between the parties.

## Conclusion

Because Oregon alleged that the municipality was created and operated as an instrumentality of a religious organization, the court held the complaint adequately pleaded a potential Establishment Clause violation and presented a live controversy suitable for declaratory relief, allowing the case to proceed beyond the pleading stage.


Oregon v. City of Rajneeshpuram, 598 F. Supp. 1208 (D. Or. 1984)