San Remo Hotel, L. P. v. City and County of San Francisco, 545 U.S. 323 (2005)

In the case of *San Remo Hotel, L. P. v. City and County of San Francisco*, the underlying dispute arose when the San Remo Hotel, a 62-unit hotel located in San Francisco, was subjected to a city ordinance requiring the payment of a $567,000 "conversion fee" in 1996. This fee was part of the San Francisco Residential Hotel Unit Conversion and Demolition Ordinance, which aimed to address a severe shortage of affordable housing by regulating the conversion of residential hotel units into tourist accommodations. The hotel, originally opened in 1906 and later restored in the 1970s, was impacted by this ordinance, leading its owners to file various state-law takings claims in California courts, which were ultimately rejected. Following the state court's dismissal of their claims, the petitioners sought to advance federal takings claims in the U.S. District Court, arguing that the issues were identical to those previously resolved in state court. To circumvent the issue preclusion that would arise from the state court's decisions, the petitioners requested that the federal court exempt their claims from the full faith and credit statute, 28 U.S.C. §1738. They based their argument on the precedent set in *Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City*, which established that takings claims are not ripe until the state fails to provide adequate compensation. The Ninth Circuit ultimately rejected the petitioners' argument, leading to a conflict with a decision from the Second Circuit, prompting the Supreme Court to grant certiorari to resolve the issue. The case highlights the tension between state and federal jurisdictions regarding takings claims under the Fifth Amendment. The San Remo Hotel's owners contended that without the proposed exemption, plaintiffs would be forced to litigate their claims solely in state courts, effectively barring access to federal review. This situation was exacerbated by the differing interpretations of the law across circuit courts, necessitating the Supreme Court's intervention to clarify the application of the full faith and credit statute in the context of takings claims.

Whether federal courts may craft an exception to the full faith and credit statute, 28 U.S.C. §1738, for claims brought under the Takings Clause of the Fifth Amendment.

The judgment is affirmed.