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

Supreme Court of the United States · 2005 · Federal Courts

Federal CourtsPropertyTakingsPreclusionFull Faith and Creditfull faith and creditissue preclusioncollateral estoppel

Facts

Petitioners owned and operated the San Remo Hotel in San Francisco. Under the city's Hotel Conversion Ordinance, the City approved petitioners' request to convert hotel rooms to tourist use only on conditions including payment of a $567,000 in-lieu fee. Petitioners first sued in federal court, where the Ninth Circuit abstained as to a facial challenge and held the as-applied takings claim unripe under Williamson County because petitioners had not pursued state compensation procedures. In state court, petitioners reserved federal causes of action but litigated state takings claims using standards drawn from federal takings doctrine, and the California Supreme Court rejected those claims; petitioners then returned to federal court seeking to relitigate the federal takings issues.

Issue

May federal courts create an exception to 28 U.S.C. § 1738 for federal Takings Clause claims so that a plaintiff who litigated in state court to satisfy Williamson County may still obtain de novo adjudication of the same issues in federal court? Relatedly, does an England reservation prevent preclusion when the plaintiff actually asked the state court to decide the same substantive issues later asserted federally?

Rule

Federal courts must give state-court judgments the same preclusive effect they would receive in the rendering state's courts under 28 U.S.C. § 1738, and they may not craft a takings-specific exception absent congressional authorization. An England reservation preserves only properly reserved federal issues when the plaintiff does not voluntarily submit those same issues for state-court decision; it does not negate preclusion as to issues actually decided by the state court.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nadia Flores owns a warehouse in Cleveland, Ohio. After the city denied compensation under Ohio procedures for a claimed regulatory taking, she filed a federal § 1983 action arguing that federal courts should ignore the Ohio judgment because she had to go to state court first to satisfy ripeness requirements.

How should the federal court rule on Nadia's argument?

Explanation. The majority held that 28 U.S.C. § 1738 governs state-court judgments in later federal litigation, including takings suits, and federal courts may not craft an ad hoc exception simply because Williamson County pushed the plaintiff into state court first. The relevant inquiry is whether the state court actually decided issues that would be preclusive under the rendering state's law, not whether the plaintiff preferred a federal forum. (Derived from San Remo Hotel, L.P. v. City and County of San Francisco (2005).)