The Daily Journal - April 7, 2005
State Courts Can 'Ripen' Developers' Cases for Federal Courts
Forum Column
By Michael M. Berger

Did you ever wonder why it is perfectly proper for Nazis and Klansmen to seek redress in federal court when some municipality denies them a right to parade or conduct some other demonstration?

Or how about convicted inmates complaining about conditions in the local jail? Or students concerned about random drug tests conducted by the high school band leader? If all those are OK (and the courts have held that they are), why is it not permissible for property owners to challenge those same municipalities in federal court when they believe their federal constitutional rights are violated?

Apparently such questions never occur to Timothy J. Dowling ("High Court Must End Developers' Relitigation Campaign," March 28 Daily Journal). Dowling believes that all "developers" - a term he seems to use derogatorily for those in the business of creating housing - should be restricted to litigation in state courts, regardless of the nature of the issues they raise.

The case of San Remo Hotel v. City & County of San Francisco, No. 04-340, argued in the U.S. Supreme Court on March 28, focuses some light on the issue of the proper venue for litigating federal constitutional questions, regardless of who the plaintiff might be.

One point must be stated clearly up front: most developers do not, in fact, want to litigate their disputes with local governments twice - once through the state court system and then again through the federal system. That is expensive and time consuming. To someone holding vacant land awaiting development - land that is consuming mortgage, interest and tax payments at sometimes astounding rates - time is an enemy. Multiple lawsuits mean, by definition, extra time and extra expense, with nothing to show for it.

What developers want is the same option given to all others with federal constitutional complaints - that is, the right to choose the courthouse in which to file their complaints. Compare, e.g., Bell v. Hood, 327 U.S. 678 (1946).

This issue surfaced only after the Supreme Court decided Williamson County Reg. Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985). There, the high court decided that federal constitutional claims - when raised by property owners - were not yet "ripe" for federal court litigation "until" the plaintiff sought, and was denied, relief under state procedures.

Thus, although many property owners did not like the result of Williamson County, because the court there created a system requiring the use of multiple litigation in order to obtain federal adjudication of federally protected rights, they understood that the court's plain words told them they could "ripen" their cases in state court by seeking relief under state law, and thereafter try their federal issues in federal court.

The court's opinion is written in plain English and is clearly based on the concepts of "not yet" and "not until."

Thus, the assertion that the developers' lobby wants to let regulatory takings claimants relitigate issues already decided by state courts is a mystery. It is a mystery because that is what the court said precisely in Williamson County, 20 years ago: that after testing the matter under state law, the matter may be tried in federal court.

The argument of those who believe that property owners are entitled to the same kind of constitutional protection granted to other citizens is simply that the court - if it wishes to maintain the Williamson County rule of state litigation first - needs to make it clear to lower courts that following the instructions of Williamson County will, in fact, "ripen" the federal issues for litigation, not make them dead on arrival at the federal courthouse.

For all its concern for the Full Faith and Credit Act, and the need to honor the results reached in state courts, Dowling's commentary wholly ignores the concept of stare decisis, and the idea that the U.S. Supreme Court establishes ground rules that must be followed below.

Why is there a problem? Two decades of experience with Williamson County have shown that lower courts either don't understand the rule laid down by the Supreme Court or don't want to follow it. Instead of acknowledging that state court litigation has made the federal claims "ripe" for federal court trial, they have invoked either the Full Faith and Credit Act, or well-worn concepts of res judicata and collateral estoppel (or claim and issue preclusion, depending on when you went to law school), and held that (as the 9th Circuit did in San Remo) the state litigation was the "functional equivalent" of federal litigation and thus the act of "ripening" the federal issues actually killed them.

Could that have been the Supreme Court's intent? Surely, its words do not reveal that. Even the passage quoted by Dowling says: "if a State provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied compensation."

Indeed, in England v. Louisiana State Board of Medical Examiners, 375 U.S. 411 (1964), the court emphasized that a state trial is not the equivalent of a federal trial, and the former may not be used as a substitute for the latter.

Thus, the question in San Remo is not "whether federal courts should respect state court rulings in cases filed by takings claimants in accordance with Williamson's mandate" - but whether federal courts should respect the Supreme Court's direction in Williamson that federal litigation would finally be ripe for trial once state procedures had been invoked, unsuccessfully, by the property owner.

The problem that those who adhere to Dowling's position have is that Williamson did not hold that regulatory takings claims could not be tried in federal courts. All it held was that there were steps that needed to be taken before that event could occur.

Much of Dowling's column is devoted to something of a personal vendetta - an ad hominem attack on developers in general and the National Association of Home Builders in particular. While exercising his own First Amendment rights, for example, Dowling denigrates the homebuilders association for attempting to persuade Congress to change the Williamson rule and permit property owners to sue in federal court on claims that local authorities had violated federal constitutional law.

Why developers should have less of a right to seek Congressional action than others is never explained.

Such a negative attitude toward the homebuilders association is particularly difficult to understand. Its members do nothing but provide housing for the people of this country, something of which we are long on demand and short on supply. For those who are not aware, it has long been legislative policy (both state and federal) to promote the construction of housing for all economic levels. (E.g., 42 U.S.C. Section 1441.) Hindering the production of housing only adds to the cost, pricing many at the middle and lower economic levels out of the market.

Although Dowling lauds the views of Sen. Patrick Leahy, D-Vt., he neglects to mention that the legislation favored by the homebuilders association passed overwhelmingly in the House of Representatives (in two different congressional sessions) and that a majority of senators also supported it. It did not become law only because Leahy threatened a filibuster and the majority in the Senate was less than 60 and thus could not stop him. So the advocates of democracy prevailed in this skirmish by preventing the matter from ever coming to a democratic vote.

U.S. Rep. Steven Chabot, R-Ohio, who chaired the House committee that labored on that legislation, has twice filed amicus curiae briefs in the Supreme Court (most recently in San Remo), explaining to the court the inability of Congress to come to a final determination on this knotty issue and asking for the court's assistance.

Interestingly, at the San Remo oral argument, Justice Sandra Day O'Connor made the following comments to counsel for San Francisco: "Frankly, it isn't clear to me that the Court ever contemplated just cutting off any determination in Federal court of takings claims in the way that it seems to work out by application of Williamson County. ... So now we're faced with the consequences of that, and it looks to me like the lower courts have run pretty far with Williamson County. So what's a takings claimant supposed to do?"

The Full Faith and Credit Act, res judicata and collateral estoppel are the stuff of first year civil procedure classes in all law schools. Surely the justices of the U.S. Supreme Court and their highly educated crew of research attorneys knew of those concepts when they went through the various drafts of Williamson County before finally putting it to bed and calling it precedential.

If Williamson County has any validity (a longer story for another time), it must have been the court's intent to create an exception to these standard preclusion doctrines. All the property owners in San Remo ask is that the court enforce Williamson County as written.