The U.S. Supreme Court Rids Constitutional Takings Claims of the “San Remo Preclusion Trap”

On June 21, 2019, the U.S. Supreme Court released Knick v. Township of Scott, in which the Court overruled a 1985 decision holding that a property owner’s claim against a local government under the Takings Clause of the Fifth Amendment was not ripe until a state court had denied the just-compensation claim under state law.  After that 1985 decision was released, however, it set up a trap that the Knick decision dubbed the “San Remo preclusion trap.”  In 2005, the Court held in San Remo Hotel, L.P v. City and County of San Francisco, that a state court’s resolution of a claim for just compensation under state law has a preclusive effect if the property owner subsequently brings a takings action in federal court.  In other words, the property owner has to go to state court before that owner can go to federal court to adjudicate the claim; but if the owner’s claim is denied in state court, the federal court will almost assuredly deny it as well on that basis.  Thus, the San Remo preclusion trap.  In overruling the state litigation requirement, the Knick decision stated that the existence of the trap is a tip-off that the San Remo decision rests on a faulty understanding of the Fifth Amendment.