Amicus Curiae Brief — San Remo Hotel, LP v. City and County of San Francisco

No. 04-340 MAR 1 - 2005

IN THE

Supreme Court of the Anited States

SAN REMO HOTEL L.P., THOMAS FIELD,

ROBERT FIELD, AND T & R INVESTMENT Corp..,

Petitioners,

Vv.

CITY AND COUNTY OF SAN FRANCISCO, DEPARTMENT OF

CITY PLANNING, CITY PLANNING COMMISSION,

BOARD OF PERMIT APPEALS, BOARD OF SUPERVISORS

OF THE CITY AND COUNTY OF SAN FRANCISCO,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE NATIONAL ASSOCIATION OF

COUNTIES, NATIONAL LEAGUE OF CITIES,

COUNCIL OF STATE GOVERNMENTS, NATIONAL

CONFERENCE OF STATE LEGISLATURES, U:S.

CONFERENCE OF MAYORS, INTERNATIONAL

MUNICIPAL LAWYERS ASSOCIATION, AND

INTERNATIONAL CITY/COUNTY MANAGEMENT

ASSOCIATION AS AMICI CURIAE

SUPPORTING RESPONDENTS

RICHARD RUDA*

Chief Counsel

JAMES I, CROWLEY

STATE AND LOCAL LEGAL CENTER

444 North Capitol Street, N.W.

Suite 309

Washirgton, D.C. 20001

(202) 434-4850

* Counsel of Record for the

Amici Curiae

WiLSON-EPES PRINTING Co., INC. — (202) 789-0096 — WASHINGTON, D. C. 20001

[BEST AVAILABLE COPY |

QUESTION PRESENTED

Whether the Full Faith and Credit Statute, 28 U.S.C.

§ 1738, bars federal takings claimants from relitigating in

federal court legal issues decided adversely to them_in state

court.

(i)

TABLE OF CONTENTS

Ee

RR Ge Fy CU OID cecescsnsceseenecenessccesssnsesesnesses

INTEREST OF THE AMICI CURITAE .......0.0.0c0cccccce0e

SUMMARY OF ARGUMENT ...............cccccccccssssseesseees

IOS cxtertaiernnsnnincnintnnsccssnsnrasecnecsesunesnccscessecaseneses

THE LOWER FEDERAL COURTS PROPERLY

APPLIED THE FULL FAITH AND CREDIT

STATUTE, 28 U.S.C. § 1738, TO DISMISS

PETITIONERS’ TAKINGS CLAIMS ........0..8.

A.

Williamson County Did Not Overrule The Full

Faith And Credit Statute ....................ccccecseeseeeees

Even If Federal Courts Were Authorized To

Create Federal Common Law Regarding The

Effect To Be Given State Court Judgments,

Petitioners’ Rule Would Be Ill-Advised............

Petitioners’ Claims Are Not Exempt From Pre-

Clusion Under Section 1738 ..........ccccccceceeeeeees

The Court Should Disregard The Suggestion

Of Petitioners’ Amici To Overrule Williamson

(itt)

wa tw

2 8

iV

TABLE OF AUTHORITIES

Cases Page

Agins v. City of Tiburon, 447 U.S. 255 (1980) ..13, 14, 1S

Alabama DOT v. Land Energy, Ltd., 886 So.2d

787 (Ala. 2OD4) .....cccccsscrrccesccssscosensrsesenscssssseesooes 18

Alexander v. Gardner-Denver, 415 U.S. 36

| | q l

Allen v. McCurry, 449 U.S. 90 (1980)... ccceceeees passim

Armstrong v. United States, 364 U.S. 40 (1960) ... 14

Breneric Associates v. City of Del Mar, 69 Cal.

App-dth 166 (1998) ..........eseseenensnennsnnnennnnnnnnnnes 22

Chandler v. Roudebush, 425 U.S. 840 (1976)....... | 10, 11

City of Chicago vy. International College of

Surgeons, S22 U.S. 196 (BGT) ccccccccrsecsccssscssssese 28

City of Monterey v. Del Monte Dunes at

Monterey, 526 U.S. 687 (1999) cs... 15, 17, 17-18

Corey v. Town of Merrimack, 666 A.2d 1359

(1 2 18

Coscia v. McKenna & Cuneo, 25 P.3d 670 (Cal. ,

0 | 26

Davis v. Davis, 30S U.S. 32 (1938) .....cccccceeeeeeeeeees Ss

Dodd vy. Oregon, 136 F.3d 1219 (9th Cir. 1998).... 35

Dolan v. City of Tigard, 512 U.S. 374 (1994) ....... passim

Dows v. City of Chicago, 78 U.S. (11 Wall.) 108 ao

CU 2

Seats v. Town of Sanford, 643 A.2d 367 (Me.

Ea 18

Ehrlich v. City of Culver City, 911 P.2d 429 (Cal. :

1996) ......essvessseessneesnessnessnnennnecsnnensnensnennnnsennensnesss 22

England v. Louisiana State Bd. of Medical .

Exam’ rs, 375 U.S. ALL (V9GA9) 20... ccceeeeeneennnes passim

Fair Assessment in Real Estate Ass'n, Inc. v.

McNary, 454 U.S. 100 (198 1)..........ccccccceeeeeeeeee 27, 28

Great Lakes Dredge & Dock Co. v. Huffman,

BS SS 27

Vv

TABLE OF AUTHORITIES—Continued

Page

Hickerson v. City of New York, 146 F.3d 99 (2d

ee ae ae eee Wer ree 21

Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S.

aS le oe SOE e aneD 19, 20, 28

Kavanau v. Santa Monica Rent Control Bd., 94|

a ee a 19, 22

Keystone Bituminous Coal Ass'n v. DeBene-

dictis, 480 U.S. 470 (1987) ooo. ccccccccceececeeeeeeeeee 1S

Kremer v. Chemical Constr. Corp., 456 U.S. 461

ee Ne ae nee passim

Lucas v. South Carolina Coastal Council, 505

Sa eee 13, 14, 15

McDonnell Douglas Corp. v. Green, 411 U.S.

Son itiiiiericiamasiias tintin i a 11

McElmoyle v. Cohen, 13 Pet. 312 (1839) ..............

Migra v. Warren City School Dist., 465 U.S. 75

eae ireintipricninneiicinsieiiincimiatisiidat tata tis 21

Mills v. Duryee, 11 U.S. (7 Cranch) 481 (1813)... 8

Montana v. United States, 440 U.S. 147 (1979)... 12, 18

National Private Truck Council, Inc. v. Okla-

homa Tax Comm'n, 515 U.S. 582 (1995)........ 8, 27-28

Nollan v. California Coastal Comm'n, 483 U.S.

ey iictntiantapstiiennninciatiettiniaminoiadaditiainaniiaes iin 13,14

Ohio Civ. Rights Comm'n v. Dayton Christian

Schools, Inc., 477 U.S. 619 (1986) oo... 8

Penn Central Transp. Co. v. City of New York,

RE eee 14, 15

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393

Foe rnepneitnsstesiitiseininattaraininains mepnionoee a 15

Railroad Comm'n v. Pullman Co., Inc., 312 U.S.

pede ctetsiinitgertrttiedisinitatesentaneineniiit ctl 4,5, 23, 26

San Remo Hotel, L.P. v. City of San Francisco,

83 Cal. App.4th 239 (2000) 2000.0... ccccccceceeeseees 12, 13, 20

vi

TABLE OF AUTHORITIES—C ontinued

Santa Monica Beach, Lid. v. Santa Monica Rent

Control Bd., 968 P.2d 993 (Cal. 1999) .............. 19, 22

Santini v. Connecticut Hazardous Waste Man-

agement Serv., 342 F.3d 118 (2d Cir. 2003)....7, 17, 25

Seawall Associates v. City of New York, 542

EEE 13

Semtek Int'l Inc. v. Lockheed Martin Corp., 531

Oa 17

Stolz v. Bank of America, \5 Cal. App.Ath 217

| 5, 26

Stone v. Powell, 428 U.S. 465 (1976) .......c.-cceee0es )

Testa v. Katt, 330 U.S. 386 (1947) ........ccccceeeeeenees 19

Village of Euclid v. Ambler Realty Co., 272 U.S.

ee 28

Williamson County Planning Comm'n v. Hamil-

ton Bank, 473 U.S. 172 (V9BS) .....ccccccceceeeeeeeenees passim

Yee v. City of Escondido, 503 U.S. 519 (1992)....... 24, 27

Younger v. Harris, 401 U.S. 37 (1971) .....cecceeeeeee 8

Statutes and Constitutional Provisions

N.Y. Exec. Law § 29516) ...cccccocccccssccccsssccccsssccsserees 10

N.Y. Exec. Law § 29601 (a).......--ccccceeeceeereensseeneees 10

FB UBC. 6 1D GG cccececcescscscesscscsesscsesescnssscssensvcssensses 8

y PR Co 0) passim

BB UBC. 6 BGT B ccccecnccnccsccssvescsssescecesssssesssssssssssses 8

42 U.S.C. §§ WOOD! ef SEG. .....000...eecceerereseeeererseeees 9-10

42 U.S.C. § DOBDe-HC) .2cccececccccescrccsccccccsseccsccssessees 10

U.S. Comat. ant. VI, 64.2........ccccccccccscsscccsesesessseceseoce 15, 29

Other Authorities

Witkin, California Procedure 4th (1997) .........0++- 22

Charles Alan Wright et al., Federal Practice and

nL __, | 4,25

INTEREST OF THE AMICI CURIAE

Amici are organizations whose members include state,

county and municipal governments and officials throughout

the United States.' Amici have a compelling interest in the

legal issue presented by this case: whether an unsuccessful

takings plaintiff who has been provided a full and fair hearing

on his claims in state court can later file takings claims in

federal court, with no consequence attached to the judgment

of the state courts.

Land use regulation is one of the essential functions of

state and local governments and is subject to extensive

control through state statutes and state and federal constitu-

tional prohibitions against uncompensated takings. Through

the mechanism of judicial review, state courts ensure that

land use regulators comply with both state and federal law.

Since 1790, the Full Faith and Credit Statute has required

that a federal! court give the same preclusive effect to a

judgment of a state court as would that State's courts. See 28

U.S.C. § 1738. This statute is fundamental to the functioning

of the federal system. The court of appeals properly applied

the statute in this case to bar petitioners from relitigating

issues previously decided against them in the state courts.

Because adoption of petitioners’ position would result in

vexatious, duplicative and wasteful litigation and violate

basic principles of federalism, amici submit this brief to assist

the Court in its resolution of the case.

' The parties have consented to the filing of amicus curiae briefs and

have filed blanket consent letters with the Clerk of the Court. This brief

was not authored in whole or in part by counsel for a party, and no person

or entity other than amici or their members has made a monetary contri-

bution to the preparation or submission of this brief.

5

SUMMARY OF ARGUMENT

|. Petitioners argue that because Williamson County Reg.

Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985),

requires a takings plaintiff to exhaust state judicial remedies

to ripen a federal takings claim, “the federal courts [are]

required to disregard the decision of the state court” and

provide them with a hearing on the merits of their federal

claim. Pet. Br. 8. To the contrary, the Full Faith and Credit

Statute, 28 U.S.C. § 1738, expressly bars this result.

Section 1738 requires a federal court to give a state court

judgment the same effect as would that State's courts. If the

State’s courts would give preclusive effect to determinations

of fact and law so must the federal court. This Court has

made clear that even if a litigant brings only a state law claim

in state court, a subsequent federal court suit raising a federal

claim can be precluded if the elements of the federal and state

claims are “virtually identical,” or if issues relevant to the

federal claim were necessarily decided by the state court.

Kremer v. Chemical Constr. Corp., 456 U.S. 461, 479 (1982).

Nor is it relevant that the plaintiff was forced to litigate “in a

state proceeding in which he would rather not have been

engaged at all.” Allen v. McCurry, 449 U.S. 90, 104 (1980).

What does matter is that petitioners had a full and fair

opportunity to litigate their takings claims in the state courts.

Not only did petitioners assert a violation of the federal

Takings Clause in their first amended complaint in state

court, their second amended complaint, while nominally rais-

ing claims under the California Constitution, repeatedly in-

voked the principles of federal takings law.

Moreover, the Supreme Court of California “analyze{d]

their takings claim under the relevant decisions of both [that

court] and the United States Supreme Court.” Pet. App. 13 1a.

Indeed, the majority opinion in the California ‘supreme Court

extensively discussed the application to petiiioners’ state law

3

claims of numerous precedents of this Court. Petitioners thus

have had a full and fair hearing on the issue of whether the

ordinance caused a taking under federal constitutional

principles and further litigation is barred by section 1738.

2. While the Full Faith and Credit Statute sets forth Con-

gress’s view on what deference the federal courts must give

state court judgments, even if this Court were to create a

common law rule of preclusion the judgment below should be

affirmed. Petitioners argue that because they were required to

gO to state court to ripen their federal claim, “the federal courts

were required to disregard the decision of the state court.” Pet.

Br. 8. The consequence of petitioners’ rule would be that

every time a takings plaintiff loses in state court, a federal

takings suit could then be brought in federal court.

Indeed, if federal courts are required to disregard the result

of state cour! proceedings, plaintiffs would be able to bring a

federal court suit even when there has been a state-court jury

determination that no taking has occurred and the jury

instructions were correct as a matter of federal law. More-

over, plaintiffs could bring a subsequent federal court suit

challenging the amount of compensation awarded in state

court as inadequate under the Fifth Amendment's “just com-

pensation” requirement.

Under petitioners’ rule, plaintiffs would always have a

second chance to prevail and the governmental defendant

would have to prevail twice to defeat a takings claim. This

system would greatly increase litigation costs for both parties,

require the diversion of limited public funds from other pro-

grams, and waste scarce judicial resources. Petitioners’ rule

belittles the role of the state courts and disregards the

principles of comity that are the foundation of the federal

system. To contend that federal courts are required to disre-

gard the Supreme Court of California's judgment shows

ng for state courts and undermines public confidence

in .

4

3. Nor are petitioners’ claims reservable under England v.

Louisiana State Bd. of Medical Exam'rs, 375 U.S. 411

(1964). While England sanctions a right to return to federal

court to litigate a federal claim, it does so only within the

limited circumstance of Pullman abstention. See Railroad

Comm'n y. Pullman Co., 312 U.S. 496 (1941). There is no

general right to reserve claims for adjudication in federal

court. See Allen, 449 U.S. at 101 n.17. Rather, the right to

reserve a claim attaches only where plaintiffs “properly

invoke|] federal-court jurisdiction in the first instance on a

federal claim” and the federal court orders abstention. /d.

Here, the only federal takings claim which was subject to

abstention and England reservation was petitioners’ facial

challenge based on the theory that the ordinance did not

substantially advance legitimate government interests. See

145 F.3d at 1102, 1104-05. In their state court suit,

petitioners did not reserve this claim. Rather, they reserved

their claim that “[t}he Regulatory Scheme and the City’s

administrative actions as applied to plaintiff violate the

Takings Clause of the Fifth and Fourteenth Amendments.”

J.A. 125 (second amended complaint) (emphasis added).

This claim, however, was not properly before the federal

courts and was not subject to the court of appeals’ abstention

order. See 145 F.3d at 1102, 1104-05. Thus, petitioners

reserved the wrong claim.

Furthermore, there is a fundamental difference between the

Williamson County rule and Pullman abstention that fore-

closes England reservation of federal takings claims. Pull-

man abstention is based “on the desire to improve federal

adjudication of federal issues by establishing a certain

foundation in state law.” 18B Charles Alan Wright er al..

Federal Practice and Procedure § 4471.1 (2004). In con-

trast, the purpose of the Williamson County rule “is to provide

state courts an opportunity to supervise state regulatory

practices.” /d. Petitioners’ contention that federal courts are

“required to disregard” the results of prior state court

5

proceedings, Pet. Br. 8, manifests a gross disregard “for the

rightful independence of . . . state governments,” Puil-

man, 312 U.S. at 501, and creates “a potential source of

friction between the state and federal judiciaries.” England,

375 U.S. at 419, }

ARGUMENT

THE LOWER FEDERAL COURTS PROPERLY

APPLIED THE FULL FAITH AND CREDIT

STATUTE, 28 U.S.C. § 1738, TO DISMISS PETI-

TIONERS’ TAKINGS CLAIMS

Both the district court and the court of appeals correctly

applied federal law in holding that the doctrine of issue

preclusion barred petitioners from re-litigating in the federal

courts the legal issue of whether respondent’s Hotel Conver-

sion Ordinance effectuated a taking. See Pet. App. 16a-21a

(Ct. App. Op.); id. at 37a-44a (Dist. Ct. Op.). In accordance

with circuit precedent applying the Full Faith and Credit

Statute, 28 U.S.C. § 1738 (see Pet. App. 16a (citing Dodd vy.

Oregon, 136 F.3d 1219, 1225 (9th Cir. 1998))), the court of

appeals did exactly what the statute required it do. It

examined California law and determined that “the state courts

would give preclusive effect to the judgment of the state

court” because “(1) the issue decided in the prior case [was]

identical [to] the one now presented; (2) there was a final

judgment on the merits in the prior case, and (3) the party to

be estopped was a party to the prior adjudication.” Pet. App.

16a (citing Stolz v. Bank of America, 15 Cal. App.4th 217,

222 (1993)).

~ Several of petitioners’ amici make the radical suggestion that the

Court overrule or modify Williamson County's requirement of exhaustion

of state judicial remedies. But not even petitioners seek this result. It is

not the question presented, nor is it fairly included therein. See Pet. i.

Moreover, for reasons explained below at pp. 26-29, the argument of

petitioners’ amici is without merit.

6

In petitioners’ view, Williamson County Reg. Planning

Comm'n vy. Hamilton Bank, 473 U.S. 172 (1985), “promised”

takings plaintiffs that a federal forum will be available to hear

the merits of a federal takings claim upon exhaustion of a

State’s judicial remedies. See Pet. Br. 7. Williamson County,

however, made no such promise. Although petitioners down-

play its importance (see id. at 17-19), the Full Faith and

Credit Statute is—contrary to petitioners’ view—a_ spe-

cific “doctrinal . . . barrier to that result.” /d. at 7. Petitioners’

extraordinary assertion that “because the state court pro-

ceedings were required to ripen the federal takings claim

under Williamson County, the federal courts were required to

disregard the decision of the state courts,” is irreconcilable

with numerous cases applying the statute.

In short, petitioners’ position is a prescription for dupli-

cative, wasteful and vexatious litigation. Where, as here, a

state court has clearly “analyze{d] [a] takings claim under the

relevant decisions of both [the state supreme court] and the

United States Supreme Court,” see Pet. App. 131a, there is no

reason to depart from settled precedent and allow plaintiffs

two opportunities to litigate their takings claims. Indeed,

contrary to the arguments of petitioners’ amici, there is

simply no right to litigate every claim created by federal law

in a federal court, let alone do so without regard to the result

of prior state court proceedings. The judgment of the court of

appeals should therefore be affirmed.

A. Williamson County Did Not Overrule The Full

Faith And Credit Statute

Petitioners assert that the Court in Williamson County

“stated clearly and repeatedly, [that] takings plaintiffs may

ripen their federal takings claims and then pursue them in

federal court.” Pet. Br. 10-11. They further contend that

“{njothing in the Williamson County opinion even suggests

that the outcome of state compensation procedures could

7

preclude a federal takings claim.” /d. at 12. Petitioners argue

that “[i]t would be both ironic and unfair if the very pro-

cedure that the Supreme Court required [takings plaintiffs] to

follow before bringing a Fifth Amendment takings claim—a

State-court inverse condemnation action—also precluded

[them] from ever bringing a Fifth Amendment takings claim.”

Id. (quoting Santini v. Connecticut Hazardous Waste Man-

agement Serv., 342 F.3d 118, 130 (2d Cir. 2003)). ~

Williamson County did not, however, address the applic-

ability of the Full Faith and Credit Statute to a federal takings

claim brought in federal court subsequent to a state court

judgment. Indeed, nowhere in the opinion’s discussion of

the Williamson plaintiff's failure to seek just compensation

through the existing state judicial procedures (or elsewhere in

the opinion) did the Court even mention the Full Faith and

Credit Statute. See 473 U.S. at 175-97.

Thus, it is of no significance that—as petitioners contend

—"[nJothing in the Williamson County opinion even suggests

that the outcome of state compensation procedures could

preclude a federal takings claim.” Pet. Br. 12. This question

was not presented nor reasonably subsumed within the

question presented in Williamson County. Thus, contrary to

petitioners’ contention, Williamson County did not “prom-

ise[]” that “a federal court [would] hear the merits of the

federal takings claims . . . they filed in federal court.” /d.

Indeed, it would have been exceedingly strange for the

Court to have made such a promise in light of both the

language of the Full Faith and Credit Statute and its cases

applying it to various federal claims filed in federal court

subsequent to a state court judgment. See 28 U.S.C. § 1738:

see also Kremer v. Chemical Constr. Corp., 456 U.S. 461

(1982); Allen v. McCurry, 449 U.S. 90 (1980). First enacted

in 1790, the statute provides that “judicial proceedings . . .

shall have the same full faith and credit in every court within

the United States . . . as they have by law or usage in the

8

courts of such State . . . from which they are taken.”

28 U.S.C. § 1738.

The Court has observed that Section 1738 was enacted

“specifically to insure that federal courts, not included within

the [Constitution’s Full Faith and Credit Clause] would be

bound by state judgments.” Kremer, 456 U.S. at 483 n.24

(citing Davis v. Davis, 305 U.S. 32, 40 (1938)). The Court has

further explained that the statute “goes beyond the common

law and commands a federal court to accept the rules chosen

by the State from which the judgment is taken.” /d. at 482

(citing McElmoyle v. Cohen, 13 Pet. 312, 326 (1839); Mills v.

Duryee, 11 U.S. (7 Cranch) 481, 485 (1813)). ;

In Allen, which involved a federal court suit brought under

the same statute (42 U.S.C. § 1983) petitioners invoked here,

the Court expressly rejected the notion “that every person

asserting a federal right is entitled to one unencumbered

opportunity to litigate that right in a federal district court,

regardless of the legal posture in which the federal claim

arises.” 449 U.S. at 103. As the Court explained, “the

authority for this principle is difficult to discern. It cannot lie

in the Constitution, which makes no such guarantee, but

leaves the scope of the jurisdiction of the federal district

courts to the wisdom of Congress.” Id.”

‘It is well established that some federal claims of right must be liti-

gated in state proceedings. For example, there is an extensive body of

jurisprudence holding that where a State provides an adequate remedy, a

claim alleging that a state tax violates the federal Constitution must be

litigated in state court. See, e.g. National Private Truck Council, Inc. v.

Oklahoma Tax Comm'n, 515 U.S. 582, 586-87 (1995) (discussing Tax

Injunction Act, 28 U.S.C. § 1341, and comity doctrine). Likewise, under

Younger v. Harris, 401 U.S. 37 (1971), a federal district court is barred

from enjoining pending state criminal proceedings because federal

constitutional rights can be vindicated in the state proceeding. See also

Ohio Civ. Rights Comm'n v. Dayton Christian Schools, Inc., 477 U.S.

619, 629 (1986) (barring federal court interference with pending state

administrative proceedings even if federal constitutional claims could only

9

Allen thus held that the plaintiff could not bring a section

1983 suit to relitigate the issue of whether the police violated

his Fourth Amendment rights, an issue which had been

decided adversely to him in the state criminal proceedings.

See id. at 92, 104-05. The Court expressly noted that section

1983, like the Williamson County opinion relied on by

petitioners here, “says nothing about the preclusive effect of

state-court judgments.” /d. at 98. The Court further observed

that “nothing in the language or legislative history of § 1983

proves any congressional intent to deny binding effect to a

State-court judgment or decision when the state court, acting

within its proper jurisdiction, has given the parties a full and

fair opportunity to litigate federal claims, and thereby has

shown itself willing and able to protect federal rights.” /d.

at 103-04,

The Court explained that “[t}here is . . . no reason to

believe that Congress intended to provide a person claiming a

federal right an unrestricted opportunity to relitigate an issue

already decided in state court simply because the issue arose

in a state proceeding in which he would rather not have been

engaged at all.” /d. And in addressing whether there is “a

universal right to litigate a federal claim in a federal district

court,” Allen expressly rejected the notion that state courts

lack “the capacity . . . to render correct decisions on con-

stitutional issues.” /d. at 105,

In Kremer, the Court subsequently made clear that section

1738 bars a federal court suit based on a federal right even

when a plaintiff litigated only a state law claim in the state

court action. /d. at 485. Kremer involved a claim of em-

ployment discrimination under Title VII, 42 U.S.C. §§ 2000e

be raised in state-court review of agency's decision). And under Stone vy.

Powell, 428 U.S. 465, 494 (1976), a state prisoner cannot bring a federal

habeas corpus suit challenging his confinement on the ground that his

Fourth Amendment rights were violated if he had “an opportunity for full

and fair litigation of [the] claim” in the state courts.

10

et seq. See 456 U.S. at 463. Under the Title VII scheme, see

42 U.S.C. § 2000e-S(c), the EEOC referred Kremer’s

complaint to the New York State Division of Human Rights,

the agency charged with authority to enforce that State's

employment discrimination law. See 456 U.S. at 463-64

(citing N.Y. Exec. Law §§ 295(6), 296(1)(a)).

The state agency found that Kremer had not experienced

discrimination; this finding was upheld by the agency's

appeal board. See id. at 464. Kremer then filed a petition for

review in the Appellate Division of the New York Supreme

Court. See id. The court unanimously affirmed the agency's

order. See id. Kremer declined to seek review by the New

York Court of Appeals. See id.

Following the EEOC’s rejection of Kremer’s complaint,

Kremer brought suit under Title VII in federal district court.

Id. at 465. The employer defended on the ground of res

judicata. See id. Initially the district court rejected the

defense but after the court of appeals held in another case that

a state determination was res judicata in a Title VII action, the

district court dismissed the case. See id. at 465-66. The court

of appeals affirmed. See id. at 466.

This Court upheld that judgment. See id. The Court ac-

knowledged that under Title VII, “the federal courts were

entrusted with ultimate enforcement responsibility.” /d. at 468.

The Court recognized that under the federal scheme “no charge

of discrimination may be actively processed by the EEOC until

the state remedy has been invoked and at least 60 days have

passed, or the state proceedings have terminated.” /d. at 469

(citing 42 U.S.C. § 2000e-5(c)). The Court also noted that

“{njo provision of Title VII requires claimants to pursue in

state court an unfavorable state administrative action” and that

it had “interpreted the ‘civil action’ authurized to follow

consideration by federal and state administrative agencies to be

a ‘trial de nove.” Id. (quoting Chandler v. Roudebush, 425

U.S. 840, 844-45 (1976)) (other citations omitted).

The Court observed, however, that “neither the statute nor

our decisions indicate that the final judgment of a state court

is subject to redetermination at such a trial.” /d. at 470. And

while Title VII requires the EEOC to “give ‘substantial

weight’ to findings made in state proceedings, [the statute]

indicates only the minimum level of deference the EEOC

must afford all state determinations; it does not bar affording

the greater preclusive effect which may be required by § 1738

if judicial action is involved.” /d. The Court reasoned that its

earlier decisions holding “that initial resort to state admin-

istrative remedies does not deprive an individual of a right to

a federal trial de novo on a Title VII claim . . . is not a holding

that a prior state court judgment can be disregarded.” /d. at

477 (citing Chandler, 425 U.S. 840; McDonnell Douglas

Corp. v. Green, 411 U.S. 792 (1973)). And the Court further

explained that although Congress vested “‘final responsibility

for enforcement of Title VII. . . with federal courts,’” this did

not imply that “Congress intended to deny finality to deci-

sions in” the state courts. /d. (quoting Alexander v. Gardner-

Denver, 415 U.S. 36, 44 (1974)).

Most significantly for this case, it did not matter that the

claims Kremer “presented to the [state agency] and subse-

quently reviewed by the [New York courts] were necessarily

based on New York law.” /d. at 479. As the Court reasoned,

“the alleged discriminatory acts are prohibited by both federal

and state laws. The elements of a successful employment

discrimination claim are virtually identical{.|” /d. (footnote

omitted). The Court therefore held: “(t]he Appellate Divi-

sion’s affirmance of the [state agency's] dismissal necessarily

decided that petitioner's claim under New York law was

meritless, and thus it also decided that a Title VII claim arising

from the same events would be equally meritless.” /d. at 480.

Allen and Kremer thus establish that the Full Faith and

Credit Statute requires a federal district court to give preclu-

sive effect to those issues of both fact and law which were

12

decided in a state court proceeding. As the Court explained

in Allen, “once a court has decided an issue of fact or law

necessary to its judgment, that decision may preclude

relitigation of the issue in a suit on a different cause of action

involving a party to the first case.” 449 U.S. at 94 (citing

Montana v. United States, 440 U.S. 147, 153 (1979)). More-

over, as Kremer demonstrates, it does not matter that the state

court proceeding was based only on a state law claim. See

456 U.S. at 479. Finally, it is irrelevant that the plaintiff was

forced to litigate “in a state proceeding in which he would

rather not have been engaged at all.” Allen, 449 U.S. at 104.°

What does matter is that petitioners had “a full and fair

opportunity to litigate the . . . issue” in the state courts. /d. at

101. In their first amended complaint in state court, peti-

tioners alleged that “*[t}he City’s ordinances and its admin-

istrative actions regarding the San Remo violate plaintiffs’

federal and state constitutional rights in that they fail to

substantially advance legitimate government interests as

required by the Takings Clause of the Fifth Amendment to the

United States Constitution and Article 1, Section 19, of the

California Constitutional [sic]."” San Remo Hotel, L.P. v. City

of San Francisco, 83 Cal.App.4th 239, 247 (2000) (quoting

petitioners’ third cause of action) (emphasis added). The

complaint further alleged that “[t}he application of the City’s

ordinances to plaintiffs forces them, and a small group of

other property owners, to bear the full cost of providing a

general public benefit: housing for low income, elderly and

disabled San Francisco residents. This violates the Takings

Clause... .” Id. (emphasis added).”

* It should be noted that petitioners voluntarily invoked Pullman

abstention and sought to return to state court. See 145 F.3d at 1104-05. It

is also significant that petitioners did not seek to return to state court until

they lost in the federal district court. See id. at 1100-01.

* The California Court of Appeals’ discussion of the proceedings in the

Calitornia Superior Court casts serious doubt on petitioners’ assertion that

13

Moreover, while in their second amended complaint peti-

tioners separately pleaded their state and federal takings

claims, it is clear that the state takings claims were based on

this Court’s Fifth Amendment jurisprudence. For example,

petitioners’ second cause of action, which was based on

inverse condemnation, alleged that the zoning administrator's

classification of their property and the replacement housing

fee “amounts to just the sort of exaction which could be

classified, not as ‘a valid regulation of land use but an out-

and-out plan of extortion.”” J.A. 104-05 (4 22) (quoting

Seawall Associates v. City of New York, 542) N.E.2d 1059,

1070 (N.Y. 1989) (other quotations omitted)). Beyond the

fact that the key language attributed to the New York Court

of Appeals comes directly from Nolian v. California Coastal

Comm'n, 483 U.S. 825, 837 (1987) (citation omitted), it

would be strange to rely on an opinion of the New York

Court of Appeals for a correct statement of the California law

of takings. Rather, petitioners’ state takings theory was based

on the federal standard, as was their allegation that the zoning

administrator’s classification of their property “precludes all

economically viable use of [their] property.” J.A. 105 (4 24).

See Lucas v. South Carolina Coastal Council, 505 U.S. 1003,

1016 (1992) (quoting Agins v. City of Tiburon, 447 U.S. 255,

260 (1980) (other citations omitted)).

“the state court did not even consider the federal constitutional claim,

much less rule on it.” Pet. Br. 8. The Superior Court clearly ruled on the

City’s demurrer to petitioners’ takings claim, which was expressly based

on the federal Takings Clause. See 83 Cal. App.4" at 248. The trial court

ruled on the merits of petitioners’ facial takings challenge, rejecting it not

once but twice. /d. Even if the facial takings challenge in the second

amended complaint no longer alleged a violation of the Fifth Amendment,

having suffered an adverse ruling on the merits with respect to the federal

facial challenge raised in the first amended complaint petitioners were

required to appeal the dismissal of the federal claim in the state courts.

Their failure to do so should be deemed a waiver and bar to relitigation of

that claim in the federal courts. Nor is petitioners’ “as-applied” federal

claim properly before the federal courts. See discussion infra at p. 24.

14

Petitioners’ third cause of action, which was also based on

inverse condemnation, alleged that the replacement housing

fee “is not roughly proportional to the impact of the

historically permitted . . . use of the San Remo,” that “the fee

fails to substantially advance a legitimate government inter-

est,” and that “[t}he requirement of the fee denies San Remo

economically viable use of the hotel.” J.A. 107 (4 30). The

source of the first formulation is Dolan v. City of Tigard, 512

U.S. 374, 391 (1994), the second Agins and other cases, see

447 U.S. at 260, and the third Lucas, Agins and Penn Central.

See Lucas, 505 U.S. at 1015-16, Agins, 447 U.S. at 260, Penn

Central Transp. Co. v. City of New York, 438 U.S. 104, 138

n.36 (1978)). The same cause of action further alleged that

“[a]s a direct result of the City’s conduct, plaintiffs are also

being deprived of their reasonable investment backed

expectation.” J.A. 118 (§ 62). This, too, is a formulation of

federal takings law. See Penn Central, 438 U.S. at 124

(“interfere[nce] with distinct investment-backed expecta-

tions” is a “relevant consideration| }”).

Petitioners’ fourth and fifth causes of action in state court

are also based on this Court’s jurisprudence, alleging that

the HCO and fee “fails to substantially advance legitimate

government interests, deprives plaintiffs of the opportunity to

earn a fair return on their investment, [and] denies plaintiffs

economically viable use of their property.” J.A. 119 (4 68);

id. at 120 (§ 69). See also id. at 120 (4 73) (“[t}he City’s

application of its legislative scheme to the San Remo does not

substantially advance a legitimate government interest”); id.

at 121 (4 74; alleging that government cannot “forc{e] some

people alone to bear public burdens which, in all fairness and

justice, should be borne by the public as a whole”); compare

with Armstrong v. United States, 364 U.S. 40, 49 (1960);

J.A.121 (Complaint ¢ 75; repeating allegation that fee is not

“a valid regulation of land use but an out-and-out plan of

extortion”) (citation & quotations omitted); compare with

Nollan, 483 U.S. at 837; J.A. at 122 (4 77; “The City’s ordi-

i)

nances and defendants’ administrative actions also preclude

all economically viable use of plaintiffs’ property.”); compare

with Lucas, 5OS U.S. at 1015-16.

Moreover, the judges of the California state courts did

exactly what the Supremacy Clause of the federal Consti-

tution required them to do. See U.S. Const. art. VI, cl. 2.

Notwithstanding that petitioners’ takings claims in the second

amended complaint were brought only under the California

Constitution, the Supreme Court of California “analyze[d]

| petitioners’ | takings claim|[s] under the relevant decisions of

both [the state supreme court] and the United States Supreme

Court.” Pet. App. 13la (opinion of the Supreme Court of

California). Indeed, the majority opinion of the state supreme

court extensively discussed the application to petitioners’

state takings claims of the principles this Court articulated in

Nollan and ivolan, as well as other relevant federal

precedents. See id. at 132a-37a, 140a-43a (discussing Nollan

and Dolan). See also id. at 131a (citing Lucas, 503 U.S. at

1015, Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 —

U.S. 470, 493-501 (1987); Penn Central, 438 U.S. at 124); id.

at 139a n.12 (citing Penn Central, 438 U.S. at 132); id. at

143a (citing City of Monterey v. Del Monte Dunes at

Monterey, Lid., 526 U.S. 687 (1999)); id. at 143a-44a (citing

Penn Central, 438 U.S. at 133); id. at 148a-49a (discussing

applicability of Pennsylvania Coal Co. v. Mahon, 260

U.S. 393, 415 (1922), Keystone, 480 U.S. at 491 & n.21, &

Agins, 447 U.S. at 262); id. at 149a-52a (discussing Agins &

Penn Central). ,

The opinions of the concurring and dissenting justices in

the state supreme court also extensively discussed this

Court's takings jurisprudence. See id. at 165a-66a (Baxter, J.,

concurring and dissenting) (noting agreement “with the

majority that in-lieu fees assessed under the HCO are not

subject to the ‘rough proportionality’ test articulated in

Dolan,” and that the applicable “legal standard” is that “*[a]

land use regulation does not effect a taking if it “substantially

16

advances legitimate state interests”””) (quoting Dolan, 512 —

U.S. at 385). See also id. at 166a (discussing Del Monte

Dunes & Nollan), id. at 18la-82a, 184a (Brown, J., dis-

senting) (discussing Nollan & Dolan), id. at 189a-92a

(discussing Pennsylvania Coal & Penn Central).

Where, as here, the state courts provided petitioners with a

full and fair opportunity to litigate the issue of whether the

city took plaintiffs’ property, the requirements of the Full

Faith and Credit Statute are met. And while it is clear that

under this Court’s precedents the City did not take peti-

tioners’ property, even if the Supreme Court of California

erred in its application of federal law to their state claim,

petitioners are not entitled to relitigate the issue in federal

court. As the Court has explained, plaintiffs cannot “reliti-

gat[e] federal issues decided after a full and fair hearing in a

state court simply because the state court's decision may have

been erroneous.” Allen, 449 U.S. at 101. °

B. Even If Federal Courts Were Authorized To Cre-

ate Federal Common Law Regarding The Effect

To Be Given State Court Judgments, Petitioners’

Rule Would Be IIl-Advised

As explained above, by enacting § 1738 Congress has

spoken on the matter of what deference the federal courts

must give the judgment of the Supreme Court of California in

this case. Under the Full Faith and Credit Statute, the federal

courts are not free to create their own rules as to what effect a

* Petitioners ignore that the Ninth Circuit extensively reviewed the

Supreme Court of California's analysis of the federal precedents to ensure

that the state court's reasoning was “equivalent to the approach taken in

this circuit.” Pet. App. 19a-21a. While this occurred in the context of

ruling on the applicability of section 1738, a fair reading of the opinion

shows that the court of appeals’ analysis is essentially the same as a ruling

that petitioners had failed to state a claim upon which relief could

be granted.

17

state court judgment has in federal court. See, e.g., Kremer,

456 U.S. at 481-82. Cf. Semtek Int'l Inc. v. Lockheed Martin

Corp., 531 U.S. 497, 507 (2001) (“this Court . . . has the last

word on the claim-preclusive effect of all federal judg-

ments”). But even if the degree of respect that a federal court

owes a state Court judgment were a matter of federal common

law, the result sought by petitioners would be unwarranted.

Petitioners contend that “because the state court proceed- —

ings were required to ripen the federal takings claim under

Williamson County, the federal courts were required to disre-

gard the decision of the state court.” Pet. Br. 8. Petitioners

further argue that it is “unfair” to bar their takings claims

from federal court. /d;at 8-9 (quoting Santini, 342 F.3d at

130.) What would be “unfair,” however, would be to allow -

petitioners to relitigate issues that they have already argued

and lost in state court proceedings.

Indeed, were a judgment in a state court takings case to

have no preclusive effect on a federal takings claim filed in

federal court, the federal courts would be inundated with

duplicative takings litigation, The consequence of peti-

tioners’ rule would be that every time a takings plaintiff lost

in state court, a federal takings suit would likely then be

brought in federal court.

Under petitioners’ view, plaintiffs could—as petitioners

have done here—bring a federal takings suit challenging a

state court holding that the allegations of the complaint do not

establish a taking. Likewise, if federal courts are “required to

disregard” the results of state court proceedings, Pet. Br. 8,

plaintiffs would be able to bring a federal court suit even

when there has been a state court jury determination that no

taking has occurred. Cf, Del Monte Dunes, 526 U.S. at 720-

21 (“the issue whether a landowner has been deprived of all

economically viable use of his property is a predominately

factual question” and thus “for the jury”); id. at_ 721 (holding

that whether the City of Monterey’s actions in reviewing

18

development applications “substantially advance[d] legiti-

mate public interests” was a jury question). See also Ala-

bama DOT v. Land Energy, Ltd., 886 So.2d 787 (Ala. 2004)

(jury trial on regulatory takings claim); Drake v. Towi of

Sanford, 643 A.2d 367, 369 (Me. 1994) (jury verdict on

whether ordinance substantially advanced legitimate govern-

ment interests); Corey v. Town of Merrimack, 666 A.2d 1359,

1360 (N.H. 1995) (jury trial on whether property owner “was

substantially deprived of the economically viable use of the

land”). And they could do so even when the state jury

instructions were correct as a matter of federal law.

Moreover, if a state judgment has no preclusive effect,

plaintiffs could bring a subsequent federal court suit chal-

lenging whether the amount of compensation awarded in the

state court proceeding was constitutionally adequate under the

Fifth Amendment's “just compensation” requirement. And

takings plaintiffs could do so even when they had a jury trial in

state court on the issue. This would hold true whether the Fifth

Amendment claim arose out of an inverse condemnation action

as in this case or an eminent domain proceeding.

The net result of petitioners’ position is that takings plain-

tiffs would always have two separate opportunities to prevail

by filing actions: first in state court and, if unsuccessful,

thereafter in federal court. Concomitantly, the governmental

defendant would have to prevail not once but twice.

Such a system has nothing to commend it. Not only would

it greatly increase litigation costs for both parties, it would be

especially burdensome on governmental defendants as it

would require the diversion of limited public funds from

other programs to pay legal fees and other litigation costs.

Moreover, it would waste scarce judicial resources. See

Allen, 449 U.S. at 94; Montana y. United States, 440 U.S.

at 153-54.

19

Petitioners’ view ignores the role of the state courts and

disregards the principles of comity that are the foundation of the

federal system. By virtue of the Supremacy Clause, see U.S.

Const. art, VI, cl. 2, state judges are bound to abide by this

Court’s takings jurisprudence in interpreting state law and

adjudicating state takings claims. Cf. Testa v. Katt, 330 US.

386, 394 (1947); see also Idaho v. Coeur d'Alene Tribe of

Idaho, 521 U.S. 261, 275 (1997) (principal op. of Ken-

nedy, J.) (“Interpretation of federal law is the proprietary

concern of state, as well as federal, courts.”). As explained

above, the Justices of the Supreme Court of California fully

satisfied their obligation to respect federal rights under the Fifth

Amendment in interpreting the Califomia Constitution. See

discussion supra at pp. 15-16.’ They clearly applied federal law

in analyzing the merits of petitioners’ state law claims.

Petitioners further assert that “[t]he practical effect of the

Ninth Circuit’s rule . . . when combined with the ripeness

requirement of Williamson County is that federal takings

claims can never be considered on the merits in any federal

court, including this Court.” Pet. Br. 14. That is simply

untrue.” Petitioners could have pursued their federal claims in

” See also Santa Monica Beach, Ltd., v. Santa Monica Rent Control

Bd., 968 P.2d 993, 998 (Cal. 1999) (“We begin by recognizing the well-

established case law of the United States Supreme Court. . . .”); Kavanau

v. Santa Monica Rent Control Bd., 941 P.2d 851, 860 (Cal. 1997)

(“[E}ven if we did intend to interpret the state [takings clause] more

narrowly than the federal right, the federal Constitution would never-

theless apply here to protect Kavanau.”).

* Petitioners erroneously assert that “[ajll seven justices of the

California Supreme Court stated that they expected that the Field Brothers

would obtain a ruling on the merits of their federal claims in this tederal

court action.” Pet. Br. 15 n.2 (citing Pet. App. 107a n.1). While the

California Supreme Court majority acknowledged that petitioners “explic-

itly reserved their federal causes of action,” Pet. App. 107a n.1, they

expressed no view on whether the Full Faith and Credit Statute would

preclude relitigation in the lower federal courts of issues that the state

courts had already decided. Similarly, the opinion concurring in part

20

State court—indeed they initially did exactly that with respect

to their facial challenge, see 83 Cal.App.4th at 247—and

sought review in this Court if the state courts denied their

claims. Even if the state courts would have *.zated some of

petitioners’ federal claims as unripe at the time the lawsuit was

filed—a dubious assertion on their part given the numerous

instances in which federal takings claims have been adjudi-

cated on the merits along with state law claims, see cases cited

infra at pp. 22-23, the claims would have eventually ripened

and the state courts would have rendered a judgment on them.

That judgment would have been reviewable in this Court.

To contend as petitioners do that the federal courts are

required to disregard the Supreme Court of California’s judg-

ment is insulting to the judges of state court systems and

undermines public confidence in the state courts as institu-

tions. Under petitioners’ position, see Pet. Br. 15, it is not, as

they assert, the Fifth Amendment which is diminished in

significance, but rather the state courts which are “relegated

to the status of a poor relation” of their federal counterparts.

Dolan, 512 U.S. at 392.

This Court long ago rejected the notion that the state courts

lack “the capacity . . . to render correct decisions on con-

stitutional issues” and has repeatedly expressed its “confi-

dence in their ability to do so.” Allen, 449 U.S. at 105.

Indeed, “{a] doctrine based on the inherent inacequacy of

State forums would run counter to basic principles of fed-

eralism.” Coeur d'Alene Tribe, 521 U.S. at 275 (principal op.

of Kennedy, J.) And in elevating the Takings clause to the

and dissenting in part does no more than express those justices’

understanding of petitioners’ intentions. See id. at 170a (“Plaintiffs have

reserved their federal claims and, if rebuffed here, will resume their

federal litigation, which is now subject to Pullman abstention.”). This

Statement says nothing about whether § 1738 would bar relitigation of

issues already decided adversely to them under the same legal standard.

Cf. Kremer, 456 U.S. at 479-80.

21

-_

status of favori.2 son in contrast to other federal rights, which

cannot be relitigated in federal court following an adequate

state court proceeding, petitioners do not explain why the

Takings clause warrants such treatment. Cf. Hickerson vy.

City of New York, 146 F.3d 99, 103 (2d Cir. 1998) (applying

issue preclusion to bar First Amendment claim brought in

federal court following state court's rejection of state

constitutional claim because “the same issues . . . were

resolved against [plaintiffs] in state court”); see also id. at

112 (observing that “the issues decided and the standards

applied by the New York courts are the same as those that

would be dispositive under the First Amendment”).

C. Petitioners’ Claims Are Not Exempt From Pre-

clusion Under Section 1738

When petitioners finally address the relevance of section

1738 to this case, they distort the significance of this Court's

holdings in Allen and Migra, asserting that they “only hold that

there is no blanket exemption from issue and claim preclusion

for suits brought under § 1983.” Pet. Br. 17. As explained

above, however, these cases establish “that issues actually

litigated in a state-court proceeding are entitled to the same

preclusive effect in a subsequent federal § 1983 suit as they

enjoy in the courts of the State where the judgment was

rendered.” Migra v. Warren City School Dist., 465 U.S. 75, 83

(1984) (citing Allen, 449 U.S. at 97-99). Migra further holds

that § 1983 “does not override state preclusion law and guar-

antee petitioner a right to proceed to judgment in state court on

her state claims and then turn to federal court for adjudication

of her federal claims.” /d. at 85. Thus, if California law would

bar litigation of a clain: that could have been but was not raised

in an earlier proceeding, the Full Faith and Credit Statute

requires that a federal court dismiss the claim.

“In our system of jurisprudence the usual rule is that merits

of a legal claim once decided in a court of competent

jurisdiction are not subject to redetermination in another

9

forum.” Kremer, 456 U.S. at 485. Contrary to the views of

petifioners, see Pet. Br. 17-19, the exceptions to the appli-

cation of section 1738 are limited. One exception is “where

the party against whom an earlier court decision is asserted did

not have a full and fair opportunity to litigate the claim or issue

decided by the first court.” Allen, 449 U.S. at 101. But as

shown above, the California courts clearly provided petitioners

with a full and fair hearing on the issue of whether the City’s

ordinance caused a taking of their property under the applic-

able federal principles. See discussion supra at pp. 13-16.

Nor can petitioners deny that the California courts provided

them a full and fair opportunity to litigate their federal claims.

Petitioners categorically assert that “the California courts could

not have decided the federal takings claims because those

claims are subject to the same ripeness requirements when

brought in state court as they are in federal court.” Pet. Br. 15

(citing Breneric Associates v. City of Del Mar, 69 Cal.App.4th

166 (1998)). The authority they cite for this proposition,

however, is not the Supreme Court of California, which has the

last word on California law, but an intermediate appellate court

whose decisions are not controlling beyond its own geographic

area and was not binding precedent in their case. See 9 Witkin,

Cal. Proc. 4th Appeal, § 934, at 971 (1997) (“One district or

division may refuse to follow a prior decision of a different

district or division.”).

Most tellingly, the Supreme Court of California has adju-

dicated federal takings claims arising in several cases arising

in the same procedural posture as plaintiff's state court suit—

that is, where the federal claim is litigated simultaneously

with the state law claim. See Santa Monica Beach, Ltd. v.

Santa Monica Rent Control Bd., 968 P.2d 993, 1000-07 (Cal.

1999) (adjudicating merits of federal takings claim brought in

inverse condemnation case); Kavanau v. Santa Monica Rent

Control Bd., 941 P.2d 851 (Cal.1997) (same); Ehrlich v. City

of Culver City, 911 P.2d 429, 435 (Cal.1996) (petition for

23

writ of mandate and complaint for damages). Moreover,

having failed to pursue these claims in the state courts—and

notwithstanding that petitioners initially litigated their facial

federal takings claim in the state courts, see discussion supra

at 12—petitioners cannot claim that the California courts

denied them a fair opportunity to litigate their federal claims.

No more persuasive is petitioners’ attempt to prevent the

application of section 1738 by invoking England v. Louisiana

State Bd. of Med. Exam’ nrs, 375 U.S. 411 (1964). See Pet.

Br. 17-18; see also id. at 12-14. True enough, England

sanctions a right to return to federal court to litigate a federal

claim. But it does so only within the limited circumstance of

abstention under Railroad Comm'n v. Pullman Co., Inc., 312

U.S. 496 (1941), where a federal court exercises its equitable

discretion to refrain temporarily from deciding a case because

of unsettled issues of state law and to prevent needless

friction with state policy. As Allen explains:

The holding in England depended entirely on this

Court's view of the purpose of abstention in such a case:

Where a plaintiff properly invokes federal-court juris-

diction in the first instance on a federal claim, the federal

court has a duty to accept that jurisdiction. Abstention

- may serve only to postpone, rather than to abdicate,

jurisdiction, since its purpose is to determine whether

resolution of the federal question is even necessary, or to

obviate the risk of a federal court’s erroneous con-

struction of state law.

449 US. at 101 n.17 (quoting England, 375 U.S. at 415, 416

& n.7).

Petitioners cannot invoke England to avoid the application

of section 1738 for several reasons. First, as Allen

demonstrates, there is no general right to reserve claims for

adjudication in federal court. Rather, the right to reserve

arises only when a plaintiff “properly invokes federal-court

jurisdiction in the first instance on the federal claim,” id., and

the federal court orders abstention.

24

Here, the only one of petitioners’ federal takings claims

which was properly brought in federal district court in the

first instance and thus subject to England reservation was

their facial challenge based on the theory that the ordinance

did not substantially advance legitimate government interests.

See 145 F.3d at 1102, 1104-05; see also Yee v. City of

Escondido, 503 U.S. 519, 534 (1992). But this was the same

claim which petitioners litigated in the state courts. See 83

Cal. App.4th at 247 (quoting first amended complaint in state

court) (“The City’s ordinances and its administrative actions

regarding the San Remo violate plaintiffs’ federal and state

constitutional rights in that they fail to substantially advance

legitimate government interests as required by the Takings

Clause of the Fifth Amendment to the United States

Constitution and Article I, Section 19 of the California

Constitutional [sic].”).

Petitioners’ second amended state court complaint, how-

ever, did not reserve their facial challenge. Rather, peti-

tioners reserved their federal claim that “[t}he Regulatory”

Scheme and the City’s administrative actions as applied to

plaintiff violate the Takings Clause of the Fifth and Four-

teenth Amendments to the United States Constitution.” J.A,

125 (emphasis added). This claim, however, was unripe and

not properly before the federal courts, and not subject to the

court of appeals’ abstention order. See 145 F.3d at 1105

(“We reverse the district court’s dismissal of Field’s facial

takings claim and remand with instructions to enter a stay

under Pullman.”) (footnoted omitted). Thus, petitioners re-

served the wrong claim.

Moreover, even if the Court were to overlook petitioners’

procedural default, expanding the England rule to as-applied

takings claims would untether the doctrine from its analytical

moorings. In contrast to the discretionary nature of Pul/man,

the text of the Fifth Amendment requires a plaintiff seeking

compensation to pursue a State's takings remedies, including

25

judicial remedies. See Williamson County, 473 U.S. 194-95

& n.13. See also Pet. Br. 13 (Williamson County's ripeness

requirement is mandated by the Fifth Amendment”).

Moreover, the purpose of the Williamson County rule is

fundamentally different than that served by Pul//man absten-

tion. As a leading authority observes,.“the purpose of [the

Williamson County] ripeness doctrine is to provide state

courts an Opportunity to supervise state regulatory practices.”

18B Charles A’an Wright e7 al., Federal Practice and Proce-

dure § 4471.1 (2004), As Wright & Miller further explain:

The reasons for denying an opportunity to reserve fed-

eral questions in these circumstances seem reasonably

clear. The policies that compel prior resort to state

courts are different from the policies of “Pullman”

abstention, and reflect a different balance between the

imperative of federal subject-matter jurisdiction and

deference to state interests. Pullman abstention rests on

the desire to improve federal adjudication of federal

issues by establishing a certain foundation in state law.

In a real sense, the very purpose of resort to state court is

to support the eventual return for federal adjudication of

federal questions properly brought to federal court. In

these other settings, prior resort to state court is

compelled by policies that include a desire to support the

role of state adjudication.

ld.

Thus, totally without merit is petitioners’ suggestion that

“any procedural difference between the Williamson County

ripeness doctrine and the Pullman abstention doctrine ‘is not

a meaningful one.” Pet. Br. 13 (quoting Santini v. Con-

necticut Hazardous Waste Memt. Serv., 342 F.3d 118, 129

(2d Cir. 2003)). Not only is there a meaningful procedural

difference between the two—in Pul/man the federal district

court retains jurisdiction, while in Williamson the federal

claim is dismissed—there is also a fundamental difference in

26

the policies which the rules effectuate. Inc>ed, it is peti-

tioners’ contention that federal courts are “required to

disregard the decision of the state court,” Pet. Br. 8, that

manifests a gross disregard “for the rightful independence of

the state governments” and would strain the “harmonious

relation|s] between state and federal authority.” Pullman,

312 U.S. at SO1 (internal quotations and other citations

omitted).” See also England, 375 U.S. at 419 (allowing

relitigation in federal court of claims submitted to state court

“would .. . be a potential source of friction between the state

and federal judiciaries”). The Court should therefore reject

this incongruous, unnecessary and unwarranted result.

D. The Court Should Disregard The Suggestion Of

Petitioners’ Amici To Overrule Williamson County

Several amici supporting petitioners urge this Court to

overrule Williamson County or modify it by abolishing the

requirement that takings plaintiffs pursue their compensation

"Amici agree with the City that the court of appeals properly applied

California law in holding that the California courts would apply the

doctrine of issue preclusion to bar petitioners from relitigating the issues.

See Pet. App. 16a-21la. As the court of appeals stated, the Supreme Court

of California expressly recognized that “it had construed [the state and

federal takings| clauses congruently,” and that “in reaching its decision on

the merits of the plaintiffs’ state takings claims, it applied ‘the relevant

decisions of both this court and the United States Supreme Court.”” /d. at

17a (quoting 27 Cal. 4th at 664), reprinted at Pet. App. 130a. As noted

by the court of appeals, petitioners “were a party to the state court

adjudication” and there “was a final judgment on the merits.” /d. at 16a.

Moreover, “the facial and as-applied takings challenges raised in state

court are identical to the federal claims asserted by the plaintiffs, and are

based on the same factual allegations.” /d. at 17a. Accordingly, under

California preclusion law, “the issue decided in the prior case is identical

with the one now presented.” /d. at 16a (citing Stolz, 1S Cal. App.4th at

222); see also Coscia v. McKenna & Cuneo, 25 P.3d 670, 673 nt (Cal.

2001) (the issue necessarily decided im the previous proceeding is

identical to the one that is sought to be relitigated”).

27

claims in the state courts. See, e.g., Br. Am. Cur. Defenders

of Property Rights 7-18; Br. Am. Cur. Franklin P. Kottschade

4-15. The Court should reject this radical suggestion for

several reasons.

First, not even petitioners seek this result. It is not the

question presented, see Pet. i, nor is it “fairly included

therein.” Yee, 503 U.S. at 535 (quoting S.Ct. Rule 14.1(a)).

Rather, the issue in this case is whether a federal court must

apply principles of issue preclusion to state court proceedings

undertaken to comply with Williamson. Beyond that,

petitioners are precluded from arguing that Wi/liamson should

be overruled because upon reaching the federal court of

appeals they voluntarily sought to return to state court by

invoking Pullman, See 145 F.3d at 1104. Petitioners’ amici

simply ignore these dispositive aspects of this case.

Several of petitioners’ amici attempt to portray the

Williamson rule as creating a unique class of federal claim-

ants who are required to litigate their claims in state court.

See, e.g., Br. Am. Cur. Kottschade 20 (“Lower courts have

misused Williamson County as a device to prevent property

owners—alone among citizens—from litigating federal con-

stitutional issues in federal court.”); Br. Am. Cur. Defenders

of Property Rights 17 (“[NJo other class of federal con-

stitutional plaintiffs are [sic] so routinely shut out of the

federal courthouse.”).

These assertions are, however, just plain wrong. For exam-

ple, plaintiffs challenging state taxes as violative of federal law

have long been required to litigate in state court as long as the

State provides an adequate remedy. See Fair Assessment in

Real Estate Ass'n, Inc. v. McNary, 454 U.S. 100, 112-16

(1981); Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S.

293 (1943). This rule applies not only to suits for equitable

relief but also to actions for damages. It was in existence long

before the Court held that section 1983 does not provide a

remedy to challenge state taxes. See National Private Truck

28

Council, Inc. v. Oklahoma Tax Comm'n, 515 U.S. 582 (1995);

see also Dows vy. City of Chicago, 78 U.S. (11 Wall.) 108, 110

(1871). Among the reasons for this rule is that “federal

constitutional issues are likely to turn on questions of state tax —

law, which, like issues of state regulatory law, are more

properly heard in the state courts.” Fair Assessment, 454 U.S.

at 108 n.6 (internal quotations and citations omitted). It bears

noting that taxpayers do not get a second opportunity to litigate

in federal court following state court proceedings and are not

entitled to reserve their federal claims. Rather, federal review

can be obtained only by “seek{ing] review of the state

decisions in this Court.” /d. at 116.

Indeed, the reasons for requiring takings plaintiffs to

litigate in state court are even stronger. First, land use

regulation is a quintessentially state and local government

function. See Village of Euclid v. Ambler Realty Co., 272 U.S.

365 (1926). Second, the law governing zoning, variances,

and permitting is highly complex and federal constitutional

questions are likely to turn on issues of state land use law.

Cf. Fair Assessment, 454 U.S. at 108 n.6. Moreover, where

“the parties invoke federal principles to challenge state

administrative action, the courts of the State have a strong

interest in integrating those sources of law within their own

system for the proper judicial control of state officials.”

Coeur d'Alene Tribe, 521 U.S. at 276 (principal opinion of

Kennedy, J.). See also City of Chicago v. International

College of Surgeons, 522 U.S. 156, 185 (1997) (Ginsburg, J..

dissenting) (recognizing “the vital interest States have in

developing and elaborating state administrative law”).

As the foregoing demonstrates, systemically the state

courts are the proper forum for resolving these disputes. The

Court should therefore reject the suggestion of petitioners’

amici to overrule or modify Williamson County's exhaustion

of judicial remedies rule. And consistent with the Full Faith

and Credit Statute and structural principles of federalism,

29

when a takings plaintiff is required to litigate in the state

courts, the judgment of the state courts must be respected.

Because petitioners had a full and fair opportunity to litigate

in the California courts the issue of whether a taking oc-

curred, this Court should reject their attempt to relitigate the

issue in the federal courts.

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted,

RICHARD RUDA*

Chief Counsel

JAMES |. CROWLEY

STATE AND LOCAL LEGAL CENTER

444 North Capitol Street, N.W.

Suite 309

Washington, D.C. 20001

(202) 434-4850

* Counsel of Record for the

March 1, 2005 Amici Curiae