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San Remo Hotel, L.P. v. City and County of San Francisco


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545 U.S. 323 (2005), argued Mar. 28, 2005, decided June 20, 2005 by vote of 9 to 0; Stevens for the Court; Rehnquist concurred in the judgment and filed a separate opinion, joined by O’Connor, Kennedy, and Thomas. In San Remo Hotel, L.P. v. City and County of San Francisco, the Supreme Court refused to create an exception to a full faith and credit statute for litigants seeking to advance federal takings claims. The unanimous decision has implications for the resolution of an increasingly common dilemma for litigants attacking land use regulations under the Fifth Amendment's Takings Clause. In particular, when required to seek relief in state court under the two-pronged ripeness requirement articulated in Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City (1985), the plaintiff property owner is usually precluded from litigating the same issues in federal court.

The ripeness rule in Williamson County requires that the landowner: (1) obtain a “final decision” from the relevant state or county agencies on its application for land development, and (2) seek and fail to obtain compensation for the regulatory taking in state court. The San Remo decision did not deal directly with either prong, but rather with the preclusion problem faced by litigants who are required to first seek relief in state court under either or both prongs of Williamson County and are then barred from relitigating the same claims in federal court.The petitioners owned and operated a three-story, sixty-two-unit hotel in San Francisco as a bed and breakfast inn when, in 1979, the city passed an ordinance instituting a moratorium on the conversion of residential hotel units into tourist units. The ordinance requires a permit for such conversion, which is obtainable only if an applicant constructs new units, rehabilitates old ones, or pays an “in lieu” fee into a city fund for such construction or rehabilitation. In 1993 the San Francisco City Planning Commission granted the petitioners the permit, but only upon the condition that they paid a $567,000 in lieu fee.

(1) obtain a “final decision” from the relevant state or county agencies on its application for land development, and (2) seek and fail to obtain compensation for the regulatory taking in state court. The San Remo decision did not deal directly with either prong, but rather with the preclusion problem faced by litigants who are required to first seek relief in state court under either or both prongs of Williamson County and are then barred from relitigating the same claims in federal court.

A federal district court ruled that because the petitioners had not sought and been denied just compensation in state court, the claim was unripe under Williamson County. The petitioners went to state court, as directed, and eventually the California Supreme Court decided against them on their takings claims. When the petitioners returned to federal court, having satisfied their Williamson ripeness obligation, the federal district court held that the full faith and credit statute required federal courts to give preclusive effect to any state court judgment that would, in turn, have preclusive effect under the laws of that state. Because California courts had interpreted the relevant state takings law at the same time as federal takings law, the petitioners’ federal claims were the same as those already resolved in state court. It followed, therefore, that they were precluded from relitigating those claims in federal court.

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Subjects: Law.


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