Taking Without Just Compensation

San Remo Hotel v. San Francisco


In 1981 the City of San Francisco enacted the Hotel Conversion Ordinance ("the HCO") in order to stem the depletion of housing for the poor, elderly, and disabled by controlling the conversion of hotel units from residential to tourist use. The HCO, as revised in 1990, places harsh requirements on the owners of hotels who want to convert their property from residential to tourist use. These requirements include the construction of a new residential unit for each unit that is converted, or a payment to the city of 80 percent of the cost of constructing such a replacement. The owners of the San Remo Hotel sought to convert their hotel from residential to tourist use, and challenged the legality of the HCO under the takings clause of the California constitution. The California Supreme Court upheld the HCO, and the owners of the hotel then challenged it in federal court under the takings clause of the U.S. Constitution. The Court of Appeals for the Ninth Circuit, however, ruled that they were precluded from raising this issue by virtue of the state court's prior ruling.

Questions as Framed for the Court by the Parties

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?

In 1981 the City of San Francisco ("the City") enacted its first Hotel Conversion Ordinance ("HCO"). The San Remo Hotel v. City and County of San Francisco, 145 F.3d 1095, 1099 (9th Cir.1998) ("San Remo I"). The HCO was designed to stop the depletion of housing for the poor, elderly, and disabled by controlling the conversion of hotel units from residential to tourist use. Id. at 1098.

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