San Remo Hotel, L. P. v. City & County of San Francisco
The Supreme Court ruled that hotel owners who had already litigated and lost their takings claims in California courts could not get a second, independent look at the same issues in federal court. The full faith and credit statute required federal judges to respect the state court's rulings, even though the owners had been forced into state court in the first place by federal ripeness rules.
The decision closes off a strategy some property owners had used to preserve a federal-court shot at their takings claims after being routed through state court, meaning many takings disputes will now be decided finally in state court with no federal-court do-over.
“Federal courts, moreover, are not free to disregard 28 U. S. C. § 1738 simply to guarantee that all takings plaintiffs can have their day in federal court.”
The Court's core rejection of an exception to the full faith and credit statute for takings claims.
How it got here: The Ninth Circuit had abstained on the facial takings claim and sent the case back to state court, which ruled against the owners; they then returned to federal court, which held their federal claims barred, and the Ninth Circuit affirmed.
The Case in Depth
What happened
A San Francisco hotel's owners were required to pay a $567,000 fee under a city ordinance before converting long-term residential rooms into tourist rooms. They challenged the fee as an unconstitutional taking, pursuing both a state-court mandamus action and a federal lawsuit. After years of parallel litigation, the California courts rejected their state-law takings claims, applying tests drawn largely from federal takings case law.
The question before the Court
After a San Francisco hotel's owners lost their property-fee dispute in state court, could they still get a fresh, independent decision on the same claim in federal court?
The Court's answer
No — the Court ruled that once California's courts had actually decided the substance of the hotel owners' takings arguments, the owners could not get a fresh, independent ruling on those same issues from a federal court. The federal full faith and credit statute requires federal courts to give state-court judgments the same binding effect state courts would give them, and the owners' attempt to reserve a right to return to federal court did not protect claims they had voluntarily asked the state courts to resolve.
The Court acknowledged this is tough for property owners who are often forced into state court first under earlier rules requiring them to seek compensation there before suing in federal court. But it held that federal courts cannot simply carve out an exception to the preclusion statute for takings cases without a clear signal from Congress, and that nothing prevented the owners from presenting their federal claim to the state court as an alternative to their state-law claim.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Property owners nationwide who challenge government land-use fees or regulations as unconstitutional takings often must first sue in state court to seek compensation. This ruling means that once a state court decides the merits of that claim, the outcome is normally final — the owner cannot then relitigate the same issues in federal court, even though federal rules initially pushed the case into state court.
What changes now
The judgment against the hotel owners stands as final; their takings claims cannot be relitigated in federal court. The decision does not disturb the underlying requirement from Williamson County that property owners often must first seek compensation in state court, though Chief Justice Rehnquist's concurrence questioned that requirement's soundness and invited a future case to reconsider it. No further proceedings in this case are expected.
What this does not decide
The Court's review was limited to whether issue preclusion barred the federal takings claim; it did not decide whether California's takings law is actually the same as federal takings law, nor whether the Williamson County requirement that owners first seek compensation in state court was correctly decided — a question the concurrence urged the Court to revisit later.
Concurrences and dissents
Concurrence — Justice Rehnquist
Chief Justice Rehnquist agreed the judgment should be affirmed under ordinary preclusion rules but wrote separately to question whether the Court's earlier decision in Williamson County was correctly decided. He argued that requiring takings plaintiffs to first seek compensation in state court lacks strong constitutional or comity-based justification, unlike the tax-comity doctrine the majority invoked, and that this requirement now effectively locks takings plaintiffs out of federal court altogether. He urged the Court to reconsider Williamson County in a future case, though he agreed no party here had asked for that.
How the Court got there
The legal reasoning, step by step
- The Court applied the full faith and credit statute, 28 U.S.C. §1738, which requires federal courts to give a state-court judgment the same preclusive effect — meaning the same power to bar re-litigation of decided issues — that courts of that state would give it.
- The Court examined England v. Louisiana Board of Medical Examiners, the 1964 case allowing plaintiffs sent to state court to first decide an unrelated state-law question to reserve their distinct federal claim for later federal review, and found that the 'typical case' for that reservation involved a state-law question genuinely separate from the federal issue.
- Because the hotel owners voluntarily asked the state courts to decide the very same substantive takings questions they had reserved — going beyond the narrow mandamus issue the Ninth Circuit had sent back for state resolution — the Court held that their reservation did not shield those broader issues from preclusion.
- As for the as-applied takings claims, the Court noted those had never been properly before the federal district court in the first place because they were unripe, so there was never a federal reservation to protect them.
- The Court rejected the reasoning of a Second Circuit decision that would have exempted takings plaintiffs from ordinary preclusion rules, explaining that no litigant has an inherent right to a federal forum, that courts cannot create exceptions to §1738 without a clear statement from Congress, and that Williamson County does not actually bar a plaintiff from presenting a federal takings claim in state court alongside a state-law claim.
- Concluding that Congress had expressed no intent to exempt federal takings claims from ordinary full faith and credit rules, the Court determined it lacked authority to fashion such an exception itself.
Doctrinal impact
Cases affected by this decision
Distinguishes England v. Louisiana Bd. of Medical Examiners (375 U. S. 411)
The Court found England's reservation rule did not cover the broader claims petitioners chose to litigate in state court.