San Remo Hotel, LP v. San Francisco (United States Supreme Court)

San Remo Hotel, LP (“San Remo”) brought a 42 U.S.C. § 1983 claim in the United States District Court for the Northern District of California against San Francisco, based on restrictions the city had placed on San Remo’s ability to use its hotel property requiring it to restrict its room rentals to long-term residents subject to rent-control provisions. San Remo asserted that a regulatory taking had occurred in violation of its federal Fifth Amendment rights. On appeal from pre-trial rulings, the United States Court of Appeals for the Ninth Circuit ordered the District Court to abstain from considering the case until the state courts had determined the extent of relief available under state law, in part under the regulatory takings ripeness doctrine of Williamson County Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985). San Remo then pursued its state law remedies in state court as mandated by the Ninth Circuit, while expressly reserving its right to relief in federal court for its federal claims pursuant to England v. Louisiana Bd. of Medical Examiners, 375 U.S. 411, 414–16 (1964), which held that a party cannot be involuntarily deprived of its right to a federal adjudication of its federal rights through abstention. Ultimately, San Remo’s state law claims were dismissed by the California state courts. When San Remo tried to resurrect its federal takings claims, the federal District Court dismissed on the ground that the final state court resolution of San Remo’s state takings claims was an “equivalent determination” to a decision on the federal claims and therefore San Remo’s federal claims were barred by issue preclusion. The Ninth Circuit affirmed and the Supreme Court granted certiorari to review the Ninth Circuit’s application of state court determinations to preclude parallel federal actions. NELF and Defenders of Property Rights filed an amicus brief arguing that, especially in the area of property rights, the availability of the federal forum is essential to the protection of basic federal rights. As amici pointed out, under current United States Supreme Court jurisprudence, a developer facing a regulatory taking by a severely over-restrictive land-use agency must first ripen its claim through state court action to determine the maximum extent to which the state is willing to allow development under Williamson County, 473 U.S. 172. A property developer should not then be forced to accept a state court’s determination of the propriety of the regulatory taking under the Fifth and Fourteenth Amendments without recourse to the federal courts. Federal courts were created in part to provide a forum less likely to be affected by local concerns and pressures, which often play a part in State courts, especially those with elected judges. The Supreme Court decided against NELF's position, that when a state court has fully litigated a federal issue under federal legal standards, a party has no right to a separate federal court review of the issues. In a concurring opinion by four justices, Chief Justice Rehnquist cited to NELF's brief questioning the appropriateness of the Williamson Country requirement that property owners ripen their regulatory takings claim first in state court before federal court action. 125 S.Ct. 2491 (2005).