San Remo - You Have to Litigate Fed Takings Claims in State Court - But 4 Justices Want to Review the Core Issue

In San Remo Hotel v San Francisco , here's the link, the US Supremes upheld the 9th Circuit's determination that the plaintiffs were precluded from litigating their takings claims in federal court because the state court had claimed that it had reached the federal issues. The most important and clear holding - if you actually litigate a federal claim inside a state claim, even an England reservation won't preserve your ability to litigate it again in federal court.

The second clear holding - if the state court holds that state taking law is generally co-extensive with federal law, you probably are going to have to argue your federal claims in the state court case and then appeal to the US Supreme Court to resolve the question of whether there has been a violation of the US constitution (Fifth through Fourteenth). You'll want to have the state court clearly indicated its position with regard to what the federal law requires and how that relates to state law.

This is a procedural nightmare case that may be more of a cautionary tale about how not to litigate takings cases. Space and time preclude me from giving you the whole background, but suffice it to say that the plaintiffs were trying too hard to get to federal court, managed to let the state courts try some of the issues, failed to appeal the state supreme court holding (which indicated that federal issues has been tried along with the state issues), and were in a very bad position back in federal district court. Despite their England reservation, the federal issues had been heard (though perhaps not as a federal court would hear them - more on that later), and neither the 9th or the US Supremes were willing to create a massive whole in the full faith and credit statute to allow the plaintiffs to go back to federal court to argue that the state court had either not heard the federal claim or had got it wrong.

The core problem, of course, is that if landowners want to claim that federal law is being interpreted too narrowly, or for an expansion of federal precedents, they can't do it in a federal forum. While this doesn't violate any substantive right (as both the majority and concurring opinions point out), it does prevent the federal courts from engaging the facts and law in what is a pretty dynamic area.

The basis for all of this madness is the part of the Williamson County case that holds that federal takings claims aren't ripe unless a state court has refused to provide an inverse condemnation remedy under state law. This has, in prior cases, been held to apply to the particular facts and plaintiffs, requiring each taking case to be litigated in state court first. And, as this case demonstrates, once you're in state court, it's almost impossible to effectively reserve your federal claims and not try them, especially if the state courts claim that they interpret state takings law co-extensively with federal 5th amendment jurisprudence. Effectively, the state courts can use this to hijack the interpretation of the US Constitution, with cert to the US Supreme Court the only available correcting mechanism.

The four-member concurrence invited plaintiffs to raise anew whether this is the right interpretation of Williamson County. This means that there is a sufficient number (4) on the court to force a hearing on the matter if it comes back.

With only short consideration, I can see that such a case might be predicated one of three ways: either the plaintiff would allege in US District Court that there was no takings remedy at all for the plaintiff under state law, pointing to state precedents (kind of a facial issue), or that state law was claimed to be co-extensive with federal law but did not reach the harm done to the landowner under the facts (a kind of as-applied challenge), again citing precedents. The federal court would then either a) dismiss the case under Williamson for failure to give the state court a chance to conform its holdings to federal requirements, or b) allow them to proceed under the basis that established state law doesn't provide a remedy. Either course would run into standing problems under different interpretations of Williamson, run its way through the Circuit Court and have 4 members of the Supreme Court waiting to grant cert to hear it.

Another way to play this MIGHT be to try to plead both federal and state claims in US court, claiming supplemental jurisdiction to hear the state claim. Again, you'd get bounced (probably) on Williamson, and then bring it up through the appeals process. This may be the quickest way to get to having a cert petition before the high court.

The final approach might be to again try an England reservation and attempt to force the state court to avoid any direct interpretation of the 5th/14th in its rulings, and then go back into District Court to try the federal issues. But after San Remo, I don't give that theory much hope.

Ultimately, I don't see this case as a major blow to property rights, given the 4 member concurrence. I don't see it as the court's last word on the process of litigating takings claims because of the concurrence, and it may be that we'll see a very different kind of case with different results soon. In the meantime, the safest route will be to litigate your federal claims in state court, knowing that you're only remedy for a misapplication of federal law will be the low-probability of cert review by the US Supremes.