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The Supreme Court 6/20/05 held that a federal takings claim may not be litigated in federal court after state court litigation that is preclusive under state law, even where the claim was not ripe for litigation in federal court before the state court litigation. The Court has previously held that a property owner who alleges that his property was taken by the state without fair compensation generally must seek relief in the state court system prior to litigating his claim in the federal courts. At the same time, the full faith and credit statute, 28 U.S.C. § 1738, mandates that if a state court decides a particular issue, that decision precludes subsequent litigation in federal courts to the same extent that it precludes subsequent litigation in state court. The Supreme Court held that it could not carve out an exception to this statute to ensure that a litigant receives a day in federal court, after already having his day in state court. The Court clarified, however, that a facial takings challenge is ripe for federal court litigation without prior resort to state court. If a plaintiff asserts both a facial challenge and an as-applied challenge, the ability to pursue the facial claim in federal court can be preserved if the federal court invokes Pullman abstention and the plaintiff does not voluntarily litigate the facial challenge while litigating the as-applied challenge in state court. This decision is important to all businesses that may be subject to an uncompensated taking of property.

Decision Below: 362 F.3d 1088 (9th Cir. 2004)