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SAN REMO HOTEL, L. P., et al. v. CITY AND COUNTY OF SAN FRANCISCO, CALIFORNIA, et al., 545 U.S. ---

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SAN REMO HOTEL, L. P., et al. v. CITY AND COUNTY OF SAN FRANCISCO, CALIFORNIA, et al.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

No. 04-340.Argued March 28, 2005--Decided June 20, 2005

Petitioners, hoteliers in respondent city, initiated this litigation over the application of an ordinance requiring them to pay a $567,000 fee for converting residential rooms to tourist rooms. They initially sought mandamus in California state court, but that action was stayed when they filed suit in Federal District Court asserting, inter alia, facial and as-applied challenges to the ordinance under the Fifth Amendment's Takings Clause. Although the District Court granted the city summary judgment, the Ninth Circuit abstained from ruling on the facial challenge under Railroad Comm'n of Tex. v. Pullman Co., 312 U. S. 496, because the pending state mandamus action could moot the federal question. The court did, however, affirm the District Court's ruling that the as-applied claim was unripe. Back in state court, petitioners attempted to reserve the right to return to federal court for adjudication of their federal takings claims. Ultimately, the California courts rejected petitioners' various state-law takings claims, and they returned to the Federal District Court, advancing a series of federal takings claims that depended on issues identical to those previously resolved in the state courts. In order to avoid being barred from suit by the general rule of issue preclusion, petitioners asked the District Court to exempt their federal takings claims from the reach of the full faith and credit statute, 28 U. S. C. §1738. Relying on the Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U. S. 172, 195, holding that takings claims are not ripe until a State fails "to provide adequate compensation for the taking," petitioners argued that, unless courts disregard §1738 in takings cases, plaintiffs will be forced to litigate their claims in state court without any realistic possibility of ever obtaining federal review. Holding, inter alia, that petitioners' facial attack was barred by issue preclusion, the District Court reasoned that §1738 requires federal courts to give preclusive effect to any state-court judgment that would have such effect under the State's laws. The court added that because California courts had interpreted the relevant substantive state takings law coextensively with federal law, petitioners' federal claims constituted the same claims the state courts had already resolved. Affirming, the Ninth Circuit rejected petitioners' contention that general preclusion principles should be cast aside whenever plaintiffs must litigate in state court under Pullman and/or Williamson County.

Held: This Court will not create an exception to the full faith and credit statute in order to provide a federal forum for litigants seeking to advance federal takings claims. Pp. 11-23.


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