The city insisted that nonprofits given free use of its property must abide by local anti-discrimination laws.
The scouts said they can legally limit their membership because of a 2000 Supreme Court decision. They had sued in federal court to stop the eviction.
Cradle of Liberty Council leaders have tried to walk a fine line to retain city support without losing their national Boy Scouts charter. The national organization bans gays.
Scouts lawyer Jason Gosselin says he hopes the two sides can work out their differences in negotiations.
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