Term: 2004
Docket: 04-340
San Remo Hotel, L. P., Et Al. v. City And County Of San Francisco, California, Et Al.
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04-340 SAN REMO HOTEL V. SAN FRANCISCO, CA DECISION BELOW: 364 F3d 1088 LIMITED TO QUESTION 1 PRESENTED BY THE PETITION. CERT. GRANTED 12/10/2004 QUESTION PRESENTED: The City and County of San Francisco adopted an ordinance that prohibited hotels from continuing their historic, duly-licensed operation as hotels, but allowed hotel owners to avoid those restrictions by paying an exaction. Petitioners brought this action challenging the exaction based on the Takings Clause of the Fifth Amendment and 42 U.S.C. § 1983. The United States Court of Appeals for the Ninth Circuit initially refused to reach the merits of the constitutional challenge, finding that petitioners were required to ripen their claim by seeking compensation in state court under Williamson County Planning Commission v. Hamilton Bank of Johnson City. Once the claim was ripe, the Ninth Circuit again refused to reach the merits of the constitutional challenge, finding that the claim was barred by issue preclusion. In reaching that conclusion, the Ninth Circuit held that the California Supreme Courts' refusal to apply heightened scrutiny to legislative exactions under state law is consistent with federal Takings law. The questions presented are: 1. Is a Fifth Amendment Takings claim barred by issue preclusion based on a judgment denying compensation solely under state law, which was rendered in a state court proceeding that was required to ripen the federal Takings claim? 2. Is deferential scrutiny, akin to the rational basis test, appropriate for exactions imposed by legislation even though exactions imposed by administrative adjudications are subject to heightened scrutiny under Nollan v. California Coastal Commission and Dolan v. City of Tigard? LOWER COURT CASE NUMBER: 03-15853
In the 2004 case of San Remo Hotel, L.P. v. City and County of San Francisco, California, the U.S Supreme Court ruled in favor of the city and county. The dispute arose when owners of a residential hotel were required by local law to obtain a permit before converting their property into tourist accommodations or pay an "in lieu" fee for potential loss in low-cost housing stock if they did not replace any removed units. The plaintiffs argued that this requirement was unconstitutional as it violated their Fifth Amendment rights against government taking private property without just compensation (the Takings Clause). However, the court held that since these requirements were part of a valid regulatory scheme aimed at mitigating adverse impacts on affordable housing caused by conversion or demolition activities within its jurisdiction, they did not constitute a compensable taking under federal law.
In the dissenting opinion for San Remo Hotel, L.P., et al. v. City and County of San Francisco, California, et al., Justice John Paul Stevens argued that federal courts should not be barred from hearing cases involving constitutional issues simply because a state court has already made a decision on the same matter under state law. He contended that this approach undermines the supremacy of federal law and prevents litigants from seeking relief in federal courts for alleged violations of their rights under the U.S Constitution. Furthermore, he expressed concern about how this ruling could affect future litigation by discouraging plaintiffs from raising potential constitutional claims in state court proceedings out of fear they would lose their chance to have these issues heard at all if they were unsuccessful at the state level.
