545 U.S. 323
Petitioner hotel owners sued respondent city, alleging that an ordinance requiring an in lieu fee to convert to a tourist hotel was a taking. After a federal court invoked Pullman abstention, the state courts rejected the takings claim. The owners refiled the takings claims, seeking to have the claim exempted from 28 U.S.C.S. § 1738. The United States Court of Appeals for the Ninth Circuit rejected the argument. Certiorari was granted.
ISSUE: The issue was whether federal courts could create an exception to the full faith and credit statute, 28 U.S.C.S. § 1738, in order to provide a federal forum for litigants who sought to advance federal takings claims that were not ripe until the entry of a final state judgment denying just compensation.
Although the owners were entitled to reserve their facial constitutional challenge when they returned to state court after the federal court invoked Pullman abstention, they had advanced their federal constitutional claims when the matter was returned to state court. By broadening their state action beyond the mandamus petition, the owners had effectively asked the state court to resolve the same federal issues they had initially asked to reserve. Judicial precedent did not support any such right. Moreover, courts could not simply create exceptions to § 1738; a fundamental departure from traditional rules of preclusion could be justified only if plainly stated by Congress.
Since Congress had not expressed any intent to exempt federal takings claim from the full faith and credit statute, the lower court correctly declined to ignore the requirements of § 1738.
OUTCOME: The lower court's judgment was affirmed.
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