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San Remo Hotel, L.P. v. City & Cty. of S.F. - 545 U.S. 323, 125 S. Ct. 2491 (2005)

Rule:

28 U.S.C.S. § 1738 provides that judicial proceedings shall have the same full faith and credit in every court within the United States and its territories and possessions as they have by law or usage in the courts of such state. This statute is understood to encompass the doctrines of res judicata, or claim preclusion, and collateral estoppel, or issue preclusion. 

Facts:

The owners of plaintiff San Remo Hotel, L.P. sought to challenge a $ 567,000 fee imposed, purportedly pursuant to a city ordinance, for allegedly converting residential hotel units to tourist units. After a city board rejected the owners' appeal, the owners filed a lawsuit against defendants City & County of San Francisco (collectively, "City") in California state court for a writ of administrative mandamus, alleging that an ordinance requiring an in lieu fee to convert to a tourist hotel was a "taking." The state courts rejected the owners' claims. The owners then filed suit federal district court. In order to avoid the bar of issue preclusion, the owners asked the district court to exempt from 28 U.S.C.S. § 1738's reach claims brought under the Takings Clause of the Fifth Amendment. The district court refused. On appeal, the appellate court rejected the owners' argument that unless courts disregard § 1738 in takings cases, claimants such as the owners would be forced to litigate their claims in state court without any realistic possibility of ever obtaining review in a federal forum. The owners were granted a writ of certiorari.

Issue:

Can federal courts create an exception to the full faith and credit statute in order to provide a federal forum for litigants who sought to advance federal takings claims that were not ripe until the entry of a final state judgment denying just compensation?

Answer:

No.

Conclusion:

The Supreme Court of the United States explained that although the owners were entitled to reserve their facial constitutional challenge when they returned to state court after the federal court invoked Pullman abstention, they had advanced their federal constitutional claims when the matter was returned to state court. By broadening their state action beyond the mandamus petition, the owners had effectively asked the state court to resolve the same federal issues they had initially asked to reserve. The Court held that judicial precedent did not support any such right. Moreover, courts could not simply create exceptions to the full faith and credit statute; a fundamental departure from traditional rules of preclusion could be justified only if plainly stated by Congress. Since Congress had not expressed any intent to exempt federal takings claim from the full faith and credit statute, the lower court correctly declined to ignore the requirements of § 1738. The lower court's judgment was affirmed.

 

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