San Remo Hotel, L. P. v. City & County of San Francisco
125 S. Ct. 2491, 162 L. Ed. 2d 315, 2005 U.S. LEXIS 4848 (2005)
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Rule of Law:
The federal full faith and credit statute, 28 U.S.C. § 1738, requires federal courts to give preclusive effect to a state court's judgment on a federal takings claim. Federal courts may not create a judicial exception to this rule for claims that were litigated in state court solely to satisfy the ripeness requirement of Williamson County.
Facts:
- The San Remo Hotel is a 62-unit hotel in San Francisco operated by petitioners.
- In 1981, San Francisco passed a Hotel Conversion Ordinance (HCO) to regulate the conversion of residential hotel rooms to tourist rooms, requiring hotels to submit a usage report.
- A lessee of the San Remo Hotel filed a report erroneously classifying all 62 rooms as 'residential,' subjecting the hotel to the HCO's restrictions.
- In 1990, the city strengthened the HCO, increasing the 'in lieu' fee required to convert residential rooms to tourist use.
- In 1993, petitioners applied to convert all rooms to tourist use, and the City Planning Commission granted the permit on the condition that they pay a $567,000 'in lieu' fee.
- Petitioners appealed the fee to the City Board of Supervisors, which rejected their appeal.
Procedural Posture:
- San Remo Hotel (petitioners) filed suit against the City and County of San Francisco in the U.S. District Court for the Northern District of California, alleging federal takings violations.
- The District Court granted summary judgment to the City, finding the facial takings claim untimely and the as-applied claim unripe per Williamson County.
- On appeal, the U.S. Court of Appeals for the Ninth Circuit affirmed the unripeness finding but invoked Pullman abstention for the facial claim, staying the federal action pending resolution of state-law issues in state court.
- Petitioners reactivated their state court case, where the California Supreme Court ultimately ruled against them on the merits of their state takings claim, which it construed congruently with federal takings law.
- Petitioners returned to the U.S. District Court, which dismissed their federal claims, holding they were barred by issue preclusion.
- The U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal on preclusion grounds.
- The U.S. Supreme Court granted certiorari to resolve a circuit split on the issue.
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Issue:
May federal courts create an exception to the Full Faith and Credit Statute, 28 U.S.C. § 1738, for Fifth Amendment takings claims that were litigated in state court to satisfy the ripeness requirement of Williamson County?
Opinions:
Majority - Justice Stevens
No. Federal courts may not create an exception to the Full Faith and Credit Statute for takings claims. The statute, 28 U.S.C. § 1738, requires federal courts to give a state-court judgment the same preclusive effect it would have in the courts of the rendering state. The Court has repeatedly held that there is no general right to litigate a federal claim in a federal forum, and issues actually decided in state court proceedings are not subject to relitigation, even if the plaintiff's presence in state court was involuntary. Congress has not expressed any intent to create an exception to § 1738 for takings claims. The ripeness requirement from Williamson County does not prevent a state court from hearing a federal takings claim simultaneously with a state-law claim for compensation, as state courts are fully competent to adjudicate such federal constitutional issues.
Concurring - Chief Justice Rehnquist
No. The Full Faith and Credit Statute, 28 U.S.C. § 1738, plainly precludes petitioners from relitigating issues already decided by the California courts. However, the underlying state-litigation requirement of Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City may have been mistaken and should be reconsidered in an appropriate case. This requirement creates the anomaly of forcing a takings claimant into state court, only to have that state court's decision preclude any subsequent federal court review, effectively guaranteeing that the federal courts cannot enforce the Fifth Amendment's just compensation guarantee.
Analysis:
This decision solidified what critics called the 'Williamson County trap,' confirming that a takings plaintiff forced into state court to ripen a federal claim would be precluded from later bringing that claim in federal court. The ruling effectively channeled most regulatory takings litigation into state court systems, with the U.S. Supreme Court as the only avenue for federal review. The concurrence by Chief Justice Rehnquist, joined by three other justices, was highly significant, as it signaled a deep-seated judicial skepticism toward the Williamson County ripeness doctrine itself, foreshadowing its eventual overruling in Knick v. Township of Scott (2019).
