U.S. Supreme Court Holds That Final Takings Judgment In State Court Precludes Federal Claim
San Remo Hotel v. City and County of San Francisco
05CD05 5313 No. 04-340 (U.S. Supreme Court, June 20, 2005)
In San Remo Hotel v. City and County of San Francisco, the U.S. Supreme Court barred Petitioners from raising federal takings claims in federal court after Petitioners advanced in state court, and the state court decided, federal takings claims congruently with state takings claims. The hotel owned by Petitioners was previously used for various purposes?tourist hotel, long-term rooms, and mixed use. In 1981, San Francisco enacted the Hotel Unit Conversion and Demolition Ordinance that required hotel owners to apply for permits and pay fees before they could convert residential units into tourist units. In 1990 when Petitioners applied to convert all of the rooms in the San Remo Hotel into tourist rooms, the City issued a permit that allowed the conversion but for a $567,000 conversion fee. Petitioners challenged the ordinance and the imposition of a conversion fee as unconstitutional.
The U.S. Supreme Court held that the full faith and credit statute, 28 U.S.C. § 1738, bars a federal court from considering federal takings claims where a state had interpreted the state takings claims congruently with federal takings law. In Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City (1985), the Court had held that federal takings claims are not ripe until plaintiffs first seek entry of a final judgment denying just compensation in state court. Petitioners argued that, in light of the Williamson County state-litigation requirement, parties would be barred from raising federal takings claims in federal court if the Court refused to exempt federal takings claims from the preclusive effect of 28 U.S.C. § 1738. The Court unanimously refused to create such an exception to 28 U.S.C. § 1738, although four justices in a concurring opinion questioned the Williamson County requirement.
For more information please contact Michael Wilmar. Michael B. Wilmar is special counsel in the Real Estate, Land Use and Natural Resources Practice Group in the firm’s San Francisco office.