I go to a bible study every weds night at a friends house. They only last 1 1/2 hours. I would sue the city for harrasment.
Our church has a couple every month, beside the ones conducted at church on Sunday. If this is illegal, so are family reunions held at homes, birthday parties, family cookouts, etc. Not to mention the holidays as another poster noted above.
And, as you state, the city should be sued. Not only does it confront the right of freedom of Religion, it confronts the right to peaceably assemble.