Opinions and documents
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
KALYN AGA, et al., CIV. 21-5059-JLV
Plaintiffs,
vs. ORDER
MEADE COUNTY, a political
subdivision of the State of South
Dakota,
Defendant.
TABLE OF CONTENTS
I. Introduction ................................................................................. 2
II. Standard of Review ...................................................................... 2
III. Analysis ....................................................................................... 4
A. Res Judicata ....................................................................... 4
1. Facts ......................................................................... 4
2. Arguments of the Parties ........................................... 7
3. Resolution of Defendant’s Motion ............................. 7
A. Same Issue ......................................................... 10
B. Parties, Opportunity, and Final Judgment .......... 10
B. Comity .............................................................................. 12
C. State-Created Danger Claim ............................................. 13
1. Facts ...................................................................... 14
2. Arguments of the Parties .......................................... 18
3. Resolution of Count 1 .............................................. 20
D. Equal Protection Claim ...................................................... 21
1. Facts ....................................................................... 22
2. Arguments of the Parties .......................................... 24
3. Resolution of Count 2 ............................................. 25
E. Inverse Condemnation Claim ............................................. 27
1. Facts ....................................................................... 29
2. Arguments of the Parties .......................................... 29
3. Resolution of Count 3 ............................................. 31
F. Inverse Condemnation-State Claim.................................... 34
1. Facts ....................................................................... 35
2. Arguments of the Parties .......................................... 36
3. Resolution of Count 4 .............................................. 37
IV. Order ......................................................................................... 38
I. INTRODUCTION
Plaintiffs filed a multi-count amended complaint against the defendants.
(Docket 7). Plaintiffs voluntarily dismissed their claims against defendants
United States Gypsum Corporation and Knauf KG. (Docket 22). Defendant
Meade County filed a motion to dismiss the amended complaint pursuant to
Fed. R. Civ. P. 12(b)(6). Plaintiffs resist Meade County’s motion. (Docket 17).
For the reasons stated below, defendant’s motion to dismiss is granted.
II. STANDARD OF REVIEW
Fed. R. Civ. P. 12(b)(6) provides for dismissal of plaintiffs’ amended
complaint (“complaint”) if the complaint fails to state a claim upon which relief
can be granted. In evaluating Meade County’s Rule 12(b)(6) motion, the court
accepts as true all of the factual allegations contained in plaintiffs’ complaint
and grants all reasonable inferences in favor of plaintiffs as the nonmoving
party. Braden v. Wal-Mart, 588 F.3d 585, 594 (8th Cir. 2009) (“a complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’ ”) (citing Ashcroft v. Iqbal, 556 U.S. 662,
663 (2009)). See also Crooks v. Lynch, 557 F.3d 846, 848 (8th Cir. 2009) (the
court must review “a Rule 12(b)(6) motion to dismiss for failure to state a claim,
accepting the facts alleged in the complaint as true and granting all reasonable
inferences in favor of the plaintiff, the nonmoving party.”) (brackets omitted).
“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need
detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of
his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do[.]” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted).
“Factual allegations must be enough to raise a right to relief above the
speculative level.” Id. “[O]nly a complaint that states a plausible claim for
relief survives a motion to dismiss.” Iqbal, 556 U.S. at 679. The “plausibility
standard” at the pleading stage requires a showing greater than the mere
possibility of misconduct yet less than the probability of misconduct.
Twombly, 550 U.S. at 556-58. “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Iqbal,
556 U.S. at 678 (citing Twombly, 550 U.S. at 570). “Determining whether a
complaint states a plausible claim for relief will . . . be a context-specific task
that requires the reviewing court to draw on its judicial experience and
common sense.” Id. at 679. “But where the well-pleaded facts do not permit
the court to infer more than the mere possibility of misconduct, the complaint
has alleged—but it has not ‘show[n]’— that the pleader is entitled to relief.” Id.
(citing Fed. R. Civ. P. 8(a)(2)).
III. ANALYSIS
Plaintiffs’ complaint is twenty-three pages in length, contains numerous
conclusory statements of law, commentary on the facts and exceeds the
boundaries contemplated by Rule 8(a)(2).1 (Docket 7). The complaint asserts
four claims against Meade County. Those are:
1. Violation of the Fourth and Fourteenth Amendments,
42 U.S.C. § 1983, a “state-created danger due process”
claim. Id. at p. 13 (capitalization and underlining omitted).
2. Violation of the Fourteenth Amendment, 42 U.S.C. § 1983,
an “equal protection” claim. Id. at p. 16 (capitalization and
underlining omitted).
3. Violation of the Fifth and Fourteenth Amendments,
42 U.S.C. § 1983, an “inverse condemnation” claim. Id. at
p. 19 (capitalization and underlining omitted).
4. Violation of Article VI § 13 of the South Dakota Constitution,
an “inverse condemnation state claim.” Id. (capitalization,
underlining and parenthesis omitted).
Plaintiffs seeks compensatory and consequential damages and “other relief
allowed by law or equity.” Id. at p. 22. To resolve Meade County’s motion to
dismiss, the court will separately analyze each of plaintiffs’ causes of action.
A. RES JUDICATA
1. FACTS
The court takes judicial notice of the state court proceedings in
46CIV20-000177. Fed. R. Evid. 201. Rule 201(b) states:
1Under Rule 8(a)(2), a “pleading that states a claim for relief must contain
. . . a short and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P. 8(a)(2). The purpose of this Rule is to give a
defendant fair notice of plaintiff’s claims and the grounds upon which those
claims rest. Twombly, 550 U.S. at 555.
(b) Kinds of facts that may be judicially noticed. The court may
judicially notice a fact that is not subject to reasonable dispute
because it:
(1) is generally known within the trial court’s territorial
jurisdiction; or
(2) can be accurately and readily determined from sources
whose accuracy cannot reasonably be questioned.
Fed. R. Evid. 201(b). Because Meade County asked the court to take judicial
notice of the state court litigation and plaintiffs referenced the same
proceeding, the court finds the parties were provided an adequate opportunity
to be heard on the issue of judicial notice. Fed. R. Evid. 201(e).
On June 8, 2020, 138 named plaintiffs (“state plaintiffs”) filed a
complaint in Circuit Court in the Fourth Judicial Circuit in the State of South
Dakota. Trudo, et al v. Meade County, et al, 46CIV20-000177 at pp. 1-42. On
July 1, 2020, the state plaintiffs filed an amended complaint alleging 20
causes of action against 35 defendants including Meade County. Id. at pp. 47-
89.
On October 1, 2020, the state court granted Meade County’s motion to
dismiss the state plaintiffs’ amended complaint. Id. at pp. 568-72. The order
dismissed the amended complaint claims against Meade County with
prejudice. Id. at pp. 571-72. The order also dismissed the claims against
Meade County “without prejudice for insufficient service of process[.]” Id. at
p. 572. In a November 20, 2020, order the state court clarified
the Meade County Defendants [including Meade County] have
voluntarily submitted to the jurisdiction of this Court, waived their
right to service of process, and requested a judgment on the
merits. To the extent that they requested a dismissal on service of
process grounds, the Meade County Defendants specifically stated
that they would rely on that argument only to the extent that this
Court denied their motion to dismiss for failure to state a claim.
Id. at pp. 934-35.
The state court plaintiffs filed two separate notices of appeal to the
South Dakota Supreme Court from the state court order dismissing the
amended complaint with prejudice. See 46CIV20-000177 at p. 1004; South
Dakota Supreme Court Appeal No. 29489; 46CIV20-000177 at p. 1384; and
South Dakota Supreme Court Appeal No. 29931. In each instance, the state
plaintiffs moved to dismiss their appeal because there was no final judgment
as it relates to issues associated with defendants other than Meade County.
See Appeal No. 29489, Docket 19, and Appeal No. 29931 at pp. 138-42. With
each appeal, the South Dakota Supreme Court dismissed the appeals because
the orders were not a “final order appealable of right pursuant to SDCL 15-
26A-3 . . . [as there was a] lack of a final judgment.” See Appeal No. 29489,
Docket 19 and Appeal No. 29931 at pp. 154-57. The most recent order of the
South Dakota Supreme Court was entered on April 14, 2022. See Appeal No.
29931 at p. 157. The appeals dealt with only 11 of the 33 defendants in the
state case. Id.
On September 28, 2021, while the state case was pending, 158
plaintiffs, including the 138 state plaintiffs, filed a complaint in federal court.
(Docket 1). On November 4, 2021, plaintiffs filed an amended complaint.
(Docket 7). On November 17, 2021, Meade County filed a motion together
with a legal memorandum seeking dismissal of plaintiffs’ amended complaint.
(Dockets 11-12).
2. ARGUMENTS OF THE PARTIES
Meade County seeks dismissal of plaintiffs’ federal amended complaint
as it relates to the 138 state plaintiffs under the doctrine of res judicata.
(Docket 12 at pp. 4-5 & 22-24). Meade County asks the court to take judicial
notice of the state litigation. Id. at p. 6. Applying the doctrine of res judicata,
Meade County asks the court to find the state plaintiffs’ claims are barred. Id.
at p. 22.
Plaintiffs acknowledge the existence of the state court litigation and the
fact that the state court judge dismissed the state plaintiffs’ claims against
Meade County with prejudice. (Docket 17 at p. 14). Yet, plaintiffs argue res
judicata should not apply as the decision of the state court was not a final
judgment. Id. at p. 15.
In rebuttal, Meade County argues “[t]here was no final judgment from
which [the state] Plaintiffs could appeal as a matter of right because the order
dismissing Meade County did not adjudicate all the claims between all of the
parties and thus did not terminate the action.” (Docket 18 at p. 9) (referencing
SDCL § 25-6-54(b)). Because the state court dismissal was based on a failure
to state a claim, Meade County asserts the decision “operates as an
adjudication upon the merits.” Id. at pp. 8-9 (citing SDCL § 15-6-41(b)).
3. RESOLUTION OF DEFENDANT’S MOTION
“The law of the forum that rendered the first judgment controls the res
judicata analysis.” Schaefer v. Putnam, 827 F.3d 766, 769 (8th Cir. 2016).
“[F]or res judicata to apply in this case: (1) the issue sought to be litigated in
the second suit must have been actually litigated in the earlier suit; (2) there
must have been a final, unreversed judgment on the merits in the previous
case; and (3) the wrong sought to be redressed must be the same in both
actions.” SDDS, Inc. v. State of South Dakota, 994 F.2d 486, 492 (8th Cir.
1993) (referencing Bank of Hoven v. Rausch, 449 N.W.2d 263, 265-66 (S.D.
1989)).
“Res judicata consists of two preclusion concepts: issue preclusion and
claim preclusion.” Estate of Johnson by & through Johnson v. Weber, 898
N.W.2d 718, 733 (S.D. 2017). “Issue preclusion refers to the effect of a
judgment in foreclosing relitigation of a matter that has been litigated and
decided, and also is referred to as direct or collateral estoppel.” Id. (internal
quotation marks omitted). In contrast, claim preclusion has a broader effect
because it “prevents the relitigation of a claim or issue that was ‘actually
litigated or which could have been properly raised.’ ” Dakota, Minn. & E. R.R.
Corp. v. Acuity, 720 N.W.2d 655, 660 (S.D. 2006) (citing Nelson v. Hawkeye
Sec. Ins. Co., 369 N.W.2d 379, 381 (S.D. 1985)).
“The doctrine of res judicata is premised on two maxims: [a person]
should not be twice vexed for the same cause and it is for the public good that
there be an end to litigation. Res judicata seeks to promote judicial efficiency
by preventing repetitive litigation over the same dispute.” People ex rel. L.S.,
721 N.W.2d 83, 90 (S.D. 2006) (internal citations and quotation marks
omitted).
“The collateral estoppel doctrine ‘bar[s] relitigation of an essential fact or
issue involved in the earlier suit’ if a four-part test is satisfied: ‘(1) Was the
issue decided in the prior adjudication identical with the one presented in the
action in question? (2) Was there a final judgment on the merits? (3) Was the
party against whom the plea is asserted a party or in privity with a party
to the prior adjudication? (4) Did the party against whom the plea is
asserted have a full and fair opportunity to litigate the issue in the prior
adjudication?’ ” Hamilton v. Sommers, 855 N.W.2d 855, 866 (S.D. 2014)
(quoting Estes v. Millea, 464 N.W.2d 616, 618 (S.D. 1990)).
“In examining whether these elements are present, a court should
construe the doctrine liberally, unrestricted by technicalities. However,
because the doctrine bars any subsequent litigation, it should not be used to
defeat the ends of justice. Instead, courts ‘must give careful consideration to
the case at hand before erecting the doctrine’s preclusive bar.’ ” L.S., 721
N.W.2d at 90 (quoting Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394,
401 (1981)).
Under South Dakota law, a court’s analysis of the similarity in the prior
judgment and the current case is comparable in both issue and claim
preclusion. Compare Hamilton, 855 N.W.2d at 866 (issue preclusion), with
L.S., 721 N.W.2d at 90 (claim preclusion). South Dakota courts have clearly
delineated how to conduct that analysis in claim preclusion: “the Eighth
Circuit [ ] in Hanson v. Hunt Oil Co., 505 F.2d 1237, 1240 (8th Cir. 1974),
established the test which this Court has repeatedly applied: whether the
wrong for which redress is sought is the same in both actions.” Dakota, 720
N.W.2d at 661 (internal quotation marks omitted). But South Dakota cases
applying issue preclusion have not directly held the same inquiry must be
used. See Hamilton, 855 N.W.2d at 866; Estes, 464 N.W.2d at 618.
A. SAME ISSUE
In the first step, the court must determine whether the issues “actually
litigated or which could have been properly raised and determined in a prior
action” are present in the current case. SDDS, Inc., 994 F.2d at 492; see also
Dakota, 720 N.W.2d at 660.
The claims of liability plaintiffs assert in this case are different from
those asserted in the state case. Absolutely identical proof is not required but
only that the actions seek to address the same wrong. Farmer v. South
Dakota Department of Revenue & Regulation, 781 N.W.2d 655, 660 (S.D.
2010). The parties do not dispute the issues litigated in the state court
proceeding and this proceeding seek to address the same wrong. See Dockets
12 at pp. 4-5 & 22-24 and 17 at pp. 14-15. The court finds “the precise
issues” in the present action are the same issues raised or which could have
been raised by the state plaintiffs in the state court action. SDDS, 994 F.2d at
493; Dakota, Minn. & E. R.R. Corp., 720 N.W.2d at 660.
The court finds the first element of issue preclusion is met.
B. PARTIES, OPPORTUNITY AND FINAL JUDGMENT
Meade County and the state plaintiffs in this federal case are the same
parties as those in the state case. The parties acknowledge this reality.
Based on the court’s determination, the state plaintiffs’ action presented
the same issues as their current federal amended complaint, or could have
included those claims in the state case, the court finds the state plaintiffs had
“a full and fair opportunity” to litigate the issues in the state court. Hamilton,
855 N.W.2d at 866.
Meade County’s argument on finality and the defendant’s reliance on
Allan v. Sheesley, 447 N.W.2d 361 (S.D. 1989), is misplaced. See Docket 12 at
p. 23. In Allan, the order dismissing a cross-claim at issue had, in fact, been
affirmed by the South Dakota Supreme Court in an earlier appeal. “The
dismissal of the cross-claim was appealed to [the South Dakota Supreme
Court] court and [was] affirmed” in an earlier companion case. Allan, 447
N.W.2d at 362.
That is not the procedural posture of the state case here. While the
state court order dismissing plaintiffs’ case against Meade County was
appealed to the South Dakota Supreme Court on two separate occasions, the
order was never affirmed by that court. Rather, the appeals were dismissed
without prejudice because a final judgment had not been entered. The state
case decision in favor of Meade County is not a final judgment. Black Hills
Jewelry Mfg. Co., 336 N.W.2d at 157.
Defendant’s request to dismiss plaintiffs’ federal amended complaint
based on the doctrine of res judicata is denied.
B. COMITY
It is a well-recognized rule in cases of concurrent jurisdiction that “the
doctrine of federal comity permits a court to decline jurisdiction over an action
when a complaint involving the same parties and issues has already been filed
in another district.” Orthmann v. Apple River Campground, Inc., 765 F.2d
119, 121 (8th Cir. 1985). “[C]ourts follow a ‘first to file’ rule that where two
courts have concurrent jurisdiction, the first court in which jurisdiction
attaches has priority to consider the case.” Id. (citing Pacesetter Systems, Inc.
v. Medtronic, Inc., 678 F.2d 93, 94-5 (9th Cir. 1982); Hospah Coal Co. v.
Chaco Energy Co., 673 F.2d 1161, 1163 (10th Cir. 1982)). “[I]n the absence of
compelling circumstances, the court initially seized of a controversy should be
the one to decide the case.” Id. (citing Merrill Lynch, Pierce, Fenner & Smith v.
Haydu, 675 F.2d 1169, 1174 (11th Cir. 1982)). “The purpose of this rule is to
promote efficient use of judicial resources. The rule is not intended to be rigid,
mechanical, or inflexible, but should be applied in a manner serving sound
judicial administration.” Id. (citing Pacesetter Systems, Inc., 678 F.2d at 95).
The 20 plaintiffs in this federal litigation who were not included in the
state case are in privity with the state plaintiffs in the state case. “Identity of
parties is not a mere matter of form, but of substance. Parties nominally the
same may be, in legal effect, different, and parties nominally different may be,
in legal effect, the same.” Schell v. Walker, 305 N.W.2d 920, 922 (S.D. 1981).
Abstention is appropriate because all the plaintiffs have “an opportunity to
litigate [their] claims in the South Dakota courts,” including the South Dakota
Supreme Court. Oglala Sioux Tribe v. Fleming, 904 F.3d 603, 613 (8th Cir.
2018). “State courts are competent to adjudicate federal constitutional claims
. . . and when a litigant has not attempted to present [their] federal claims in
related state-court proceedings, a federal court should assume that state
procedures will afford an adequate remedy, in the absence of unambiguous
authority to the contrary.” Id. (internal quotation marks and citations
omitted).
“[T]he district court has the authority to refuse to hear [a] case if [the
case] raises issues that substantially duplicate those raised by a case pending
in another court.” Ritchie Capital Mgmt., L.L.C. v. Jeffries, 653 F.3d 755, 763
n.3 (8th Cir. 2011) (referencing United States v. Rice, 605 F.3d 473, 476 (8th
Cir. 2010) (citing Colorado River Water Conservation Dist. v. United States,
424 U.S. 800, 817 (1976)); Orthmann, 765 F.2d at 121). “[T]he federal comity
doctrine is best served in this case by dismissing” this federal litigation and
allowing the state case to proceed. Orthmann, 765 F.2d at 121.
Notwithstanding the court’s ruling on res judicata and comity, in the
interest of judicial economy, the court will proceed to resolve plaintiffs’ claims
in this court.
C. STATE-CREATED DANGER CLAIM
To plead a state-created danger claim, plaintiffs must allege:
1. They were members of a limited, precisely definable group;
2. Meade County’s conduct put plaintiffs at significant risk of
serious, immediate, and proximate harm;
3. The risk to plaintiffs was obvious or known to Meade
County;
4. Meade County acted recklessly in conscious disregard of the
risk; and
5. Meade County’s conduct shocks the conscience.
Hart v. City of Little Rock, 432 F.3d 801, 805 (8th Cir. 2005) (internal citations
omitted).2
1. FACTS
Accepting the relevant facts of the complaint and drawing all reasonable
inferences consistent with the facts in favor of plaintiffs, the allegations to
support the state-created danger claim are as follows.
From 1930 until May 1945 U.S. Gypsum mined gypsum from the land
which is the subject of this litigation. (Docket 7 ¶ 10). Using “room and pillar
mining,” underground caverns were created so that 90 to 95 percent of the
gypsum was extracted leaving pillars of gypsum to support the area above the
mine. Id. ¶ 11. In the mid-1980s, the South Dakota Cement Plant (“Cement
Plant”) purchased the tract of land. Id. ¶ 14. The Cement Plant mined the
surface for gypsum for use in its processing plant. Id. 16.
On September 15, 1988, the Cement Plant submitted a reclamation plan
to the South Dakota Department of Environment and Natural Resources
(“DENR”) and Meade County. Id. ¶ 18. On October 1, 1988, an employee of
the Cement Plant contacted the Meade County Planning Commission regarding
the reclamation plan. Id. ¶ 23. In response, the Planning Commission advised
2Plaintiffs and Meade County acknowledge these are the five elements of
a state-created danger claim. (Dockets 7 ¶ 54 and 12 at p. 10).
the Cement Plant that Meade County had no zoning requirement, as the state
regulations covered mining operations. Id. ¶ 24. On December 2, 1988, the
Cement Plant notified DENR and Meade County that the subject land would be
reclaimed to rangeland status. Id. ¶ 25.
In 1994, Raymond Fuss purchased the property from the State of South
Dakota. Id. ¶ 26. Mr. Fuss sold the property to his son Larry Fuss. Id. In
2000, Larry Fuss partnered with Keith Kuchenbecker, who was a business
partner of Robert Powles, the Meade County Planning Director. Id. ¶ 27. Mr.
Kuchenbecker and Mr. Fuss drafted a residential development proposal for
consideration by Mr. Powles and the other members of the Meade County
Planning Commission. Id. ¶ 28. The proposal disclosed the existence of the
underground gypsum mine. Id. The proposal stated “[f]ield boring operation
[sic] may be required to identify any cavities that may be a safety hazard.” Id.
¶ 29.
As part of their business arrangement, Mr. Powles would pay for a deep
water well and sewer. Id. ¶ 27. Mr. Powles planned to sell water to the
sanitary district servicing the proposed subdivision. Id. Mr. Powles would
receive a percentage from the utility bills for each new home built. Id. In
exchange, Mr. Powles would ensure that Mr. Kuchenbecker’s subdivision
development proposals were passed by Meade County. Id.
Meade County Planning Commission member and Meade County
Commissioner Robert Mallow lived in close proximity to the planned
community. Id. ¶ 30. Sometime during the 1960s Mr. Mallow “convinced a
division of the armed forces to dynamite the entrances of the mine out of
concern for his children.” Id.
In late 2001, Mr. Fuss sold his interest in the project to Mr.
Kuchenbecker. Id. ¶ 31. During road excavation activities in July 2002, six
large voids opened at the surface into the mine. Id. ¶ 32. County inspectors
became aware of the situation, the lack of permits for the project, and reported
the matter to Kirk Chafee, Meade County Director of Equalization. Id. Mr.
Chafee took no action. Id. Commissioner Mallow, who became aware of the
issues, took no action. Id. Sewer lines were placed at four feet beneath the
surface rather than six feet because of concerns associated with the mine. Id.
Inspectors reported the situation to the Meade County Planning Commission
but no action was taken. Id.
On September 3, 2003, the Meade County Planning Commission
approved the subdivision proposal. Id. ¶ 33. The Meade County Commission
approved the proposal sometime later in 2003. Id. The property became
known as the Hideaway Hills Subdivision.
During late 2003, Mr. Kuchenbecker began selling subdivision lots to
contractors. Id. ¶ 37. Each sale had a disclaimer of liability regarding the
gypsum mine. Id. ¶ 38. The disclaimer made it the buyer’s responsibility to
remediate any subsurface conditions as a result of the past mining activities.
Id. Buyers were buying the property “as is” with no warranty by the seller. Id.
Meade County began issuing building permits in 2003. Id. ¶ 39. On
September 10, 2003, a large piece of construction equipment fell into the
mine. Id.
In the spring of 2006, a large part of East Daisy Drive in the subdivision
collapsed into the mine. Id. ¶ 40. When Mr. Kuchenbecker’s engineer sought
approval to abandon the road, the Meade County Commission rejected that
proposal insisting Daisy Drive remain open. Id. ¶ 41. Prior to this decision,
Meade County approved the addition of 31 lots to the Hideaway Hills
Subdivision. Id. ¶ 43. These lots were adjacent to and on the canopy of the
mine. Id. Building permits and certificates of occupancy for 31 homes were
subsequently approved by the County Commission.
In 2007, Tom and Sue Kelly discovered the road in front of their home
collapsed making their driveway on East Daisy Drive inaccessible. Id.¶ 45.
The sanitation district agreed to patch the street in front of Kellys’ home. Id.
Kellys were not told the mine may have been the cause of the road collapse.
Id.
In 2010, homeowners on Blue Bell Drive filed a lawsuit in state court.
Id. ¶ 46. That complaint alleged their homes had been constructed on
expansive gypsum tailings. Id. In 2011, a large depression formed in the
driveway and yard of a home on East Daisy Drive. Id. ¶ 47. In March 2020, a
sinkhole opened on East Daisy Drive. Id. ¶ 48. This exposed a classic car in
the mine. Id.
On April 27, 2020, Albert Reitz, one of the plaintiffs in this case,
experienced a collapse in his yard, the neighbors’ yard and part of East Daisy
Drive. Id. ¶ 49. The collapse exceeded 50 feet wide and over 60 feet deep. Id.
This is the date plaintiffs allege they discovered or it became known to them
that their homes were built on top of a gypsum mine. Id.
In April 2021, the Meade County Tax Assessor’s Office reassessed for tax
purposes plaintiffs’ homes in Hideaway Hills. Id. ¶ 56. Using a sliding scale of
a reduction of value, the assessed valuation of plaintiffs’ properties decreased
in an amount exceeding 39 million dollars. Id. Plaintiffs allege their actual
damages exceed this amount. Id.
2. ARGUMENTS OF THE PARTIES
Meade County’s motion to dismiss Count 1 focuses on two of the
elements of a state-created danger claim. Those are the second element,
“immediate and proximate harm” and the fifth element, conduct which shocks
the conscience. (Dockets 12 at p. 10 and 18 at p. 5). Meade County argues
plaintiffs allege the county approved the Hideaway Hills Subdivision “and 17
years later, a sinkhole opened and yards collapsed.” (Docket 12 at p. 11).
Defendant submits this progression “is not immediate and proximate harm.”
Id. (references omitted).
Additionally, Meade County argues its conduct did not “put Plaintiffs at
risk of serious, immediate, and proximate harm.” Id. Instead, defendant
contends an allegation in plaintiffs’ complaint is “fatal to this element: ‘The
land known as Hideaway Hills would have subsided regardless of whether the
Plaintiffs[’] homes were built.’ ” Id. (citing Docket 7 ¶ 95).
Meade County raised the “shock the conscience” argument for the first
time in its reply brief. (Docket 18 at p. 5). The court will not consider this
argument as plaintiffs have not had an opportunity to respond. North Star
Mutual Ins. Co. v. CNH American LLC, No. CIV. 11-4133, 2013 WL 5156457, at
*7 (D.S.D. Sept. 12, 2013) (references omitted). See also Kirt v. Fashion Bug #
3253, Inc., 479 F. Supp. 2d 938, 948 n.4 (N.D. Iowa 2007) (“Raising a new
issue in a reply brief . . . generally does not require the court to consider that
issue. . . . Ordinarily, inclusion of a new argument in a reply brief is improper
as a matter of motion practice in this court[.]”) (internal references omitted).
Plaintiffs’ response memorandum claims they “were put in a ‘risk of,’
immediate proximate harm right after moving into the subdivision.” (Docket
17 at p. 7). Plaintiffs argue:
The mine began collapsing as the subdivision was being built and
continued during the approval of the 32 additional homes to the
subdivision. Collapses occurred frequently thereafter, but
remained unknown to the Plaintiffs. It took years for the residents
in the subdivision to learn their homes were above a dangerous
underground mine, but the risk of immediate harm never changed.
The County’s decisions to approve the subdivision, issue building
permits, and make possible all other accommodations put the
residents at risk immediately.
Id. Plaintiffs submit “[t]he question . . . is not how long or how short of a
period of time it took for the general community to become aware of the
dangerous situation, but whether it was foreseeable that a collapsing mine
would continue to collapse.” Id. at p. 8.
3. RESOLUTION OF COUNT 1
“In [al]most every circuit court decision imposing § 1983 liability
because the State affirmatively created or enhanced a danger, ‘the immediate
threat of harm has a limited range and duration[.]’ ” Dorothy J. v. Little Rock
School District, 7 F.3d 729, 733 n.4 (8th Cir. 1993) (reference omitted). The
court looked to guidance from Martinez v. California, 444 U.S. 277 (1980), in
resolving the immediate threat of harm and the limited range and duration
issues. Id. “In Martinez, a parolee committed murder five months after his
release. . . . [and] [t]he Supreme Court affirmed dismissal of the victim’s
§ 1983 complaint, holding that the [victim’s] ‘death is too remote a
consequence of the parole officers’ action to hold them responsible under the
federal civil rights law.” Id. (citing Martinez, 444 U.S. at 285). Adopting the
rationale of Martinez, the Dorothy J. court concluded an assault on a child at
a residential education program was “ ‘too remote a consequence’ of enrolling
[the assailant] in the . . . program two years earlier.” Id. (citing Martinez, 444
U.S. at 285).
Giving plaintiffs the benefit of every reasonable inference from the
allegations in the complaint, the outside range of state action by Meade
County occurred in 2006 when the County Commission approved 31 more
lots for the subdivision and subsequently issued certificates of occupancy.3
3The complaint provides no specific chronology as to when certificates of
occupancy were issued. Based on the entirety of the complaint’s allegations,
the court can only infer the certificates were issued in the 2006 timeframe.
Meade County’s action “presented a threat of an indefinite range and
duration.” Estate of Johnson v. Weber, No. CIV. 12-4084, 2014 WL 2002882,
at *8 (D.S.D. 2014) (citing Ruiz v. McDonnell, 299 F.3d 1173, 1183 (10th Cir.
2002)). The action of Meade County in 2006 did not present “an immediate
and proximate risk of harm.” Id. Plaintiffs’ alleged injuries five years later are
“too remote a consequence” of the action by Meade County. Martinez, 444 U.S.
at 285; Dorothy J., 7 F.3d at 733 n.3; Estate of Johnson, 2014 WL 2002882, at
*8.
Plaintiffs’ state-created danger claim fails to state a claim upon which
relief can be granted under § 1983. Defendant’s motion to dismiss Count 1 is
granted.
D. EQUAL PROTECTION CLAIM
Count 2 of the complaint alleges a “class of one” equal protection claim.
(Docket 7 at pp. 16-19). To advance a “class of one” equal protection claim, a
plaintiff must plead sufficient allegations, which the court must accept as
true, that (1) Meade County treated plaintiff differently from those who are
similarly situated and received preferential treatment; (2) Meade County did so
intentionally; and (3) there is no rational basis for the difference in treatment.
Village of Willowbrook v. Olech, 528 U.S. 562, 564 (2000). As the Supreme
Court explained,
the purpose of the equal protection clause of the Fourteenth
Amendment is to secure every person within the State’s
jurisdiction against intentional and arbitrary discrimination,
whether occasioned by express terms of a statute or by its
improper execution through duly constituted agents.
Id. (internal quotation marks and citations omitted). “To be similarly situated
for purposes of a class-of-one equal-protection claim, the persons alleged to
have been treated more favorably must be identical or directly comparable to
the plaintiff in all material respects.” Robbins v. Becker, 794 F.3d 988, 996
(8th Cir. 2015) (internal citation omitted). “A class-of-one plaintiff must
therefore ‘provide a specific and detailed account of the nature of the preferred
treatment of the favored class,’ especially when the state actors exercise broad
discretion to balance a number of legitimate considerations.” Id. (citing Nolan
v. Thompson, 521 F.3d 983, 990 (8th Cir. 2008) (internal citation omitted).
1. FACTS
Count 2 alleges a number of other individuals or groups received
preferential treatment from Meade County. The allegations are as follows.
On July 17, 2000, two individuals submitted a proposal to replat a 10-
acre parcel inside a flood plain to grow trees. (Docket 7 ¶ 68). Planning
Commissioner Powles required the plat be edited to specify the property would
remain non-residential. The Meade County Commission approved the replat
with Commissioner Mallow opposing the motion. Id.
On November 20, 2000, two different individuals sought to obtain
approval for a preliminary plat of two tracts. Id. ¶ 69. Because one of the
tracts was in the flood plain, the Meade County Commissioners mandated the
plat reflect this lot could never be a building site. Id.
On October 18, 2004, an individual sought approval of a 24-acre tract for
homes. Id. ¶ 70. The Planning Commission required the individual to conduct
soil borings because the area under development had a history of gypsum
mining activities. Id. The Commission required the locations of the soil
borings be identified on the plat. Id.
On August 22, 2005, an individual presented a preliminary plat to the
Meade County Planning Commission. Id. ¶ 71. One of the tracts contained a
mobile home. Id. The Meade County Commission required the plat to identify
the buildable portion of lots in the flood plain and that the flood plain
statement from a county ordinance be included on the plat. Id. The County
Commission required the mobile home be removed from the flood plain and
that no future buildings could be located within the flood plain. Id. On
September 5, 2005, the County Commission rejected the plat as the County’s
requirements had not been met by the developer. Id.
On April 21, 2008, a surveyor’s representative was directed by the
County Commission to conduct soil boring tests and obtain an inspection
certificate for previously buried water lines. Id. ¶ 72. These directives were
forwarded to the Meade County Planning Commission. Id.
On July 19, 2010, the Meade County Planning Commission, including
Mr. Powles, approved a variance for a 2- to 3-child daycare which was located
next to an aggregate mine. Id. ¶ 73. The mine owner supported the daycare
center but wanted the County and the business proprietor to know that the
mining operation was a pre-existing activity. Id. ¶ 74.
The complaint alleges there was no rational basis for the decision of
Meade County to approve allowing the Hideaway Hills Subdivision “over a
collapsing mine.” Id. ¶ 76. Particularly since the area had been reclaimed for
rangeland and not for home sites. Id. Plaintiffs alleged Meade County
disregarded plaintiffs’ safety by approving the Hideaway Hills Subdivision
which enriched Mr. Powles. Id.
2. ARGUMENTS OF THE PARTIES
Meade County moves to dismiss Count 2 because plaintiffs “fail[ed] to
identify any identical or comparable persons who were treated more favorably.”
(Docket 12 at p. 12). Defendant submits “Plaintiffs are not builders or
developers and never sought plat approval, exceptions to inspections, or
variances concerning their property.” Id. at pp. 12-13. Meade County argues
plaintiffs “are homeowners. . . . [who] fail to identify one single other
homeowner, let alone homeowners purportedly owning homes on and adjacent
to an actively collapsing underground gypsum mine, who were treated better.”
Id. at p. 13. Defendant contends a “ ‘class-of-one theory does have limits’ and
does not apply to discretionary decisions.” Id. (citing Robbins,794 F.3d at 995).
Because the County is charged with discretion to approve or disapprove plats
and similar activities, Meade County concludes treating individuals differently
is a consequence of that discretion. Id. at pp. 13-14 (referencing Engquist v.
Oregon Department of Agriculture, 553 U.S. 591, 603 (2008)).
Plaintiffs’ response acknowledges they are not builders but “[t]he
material aspect. . . [is] the safety concerns displayed by the County” in the
other actions alleged in the complaint. (Docket 17 at p. 9). They contend
“treatment received by the favored class was the County’s concern for the
safety of every other resident in Meade County subdivisions where Bob Powles
was not going to financially benefit from passages of those subdivisions.” Id.
Plaintiffs assert the approval of the Hideaway Hills plat “was devoid of any
legitimate state activity and was wholly sponsored by County corruption.” Id.
“The passage of the Hideaway Hills plats was not arbitrary,” in plaintiffs’ view
as the plats were approved “because it was going to financially enrich the
planning committee chairman.” Id.at pp. 9-10.
In reply, Meade County argues plaintiffs miss the crux of defendant’s
argument. Defendant submits “Plaintiffs must show they were treated
differently from other homeowners, not that developers, builders, or other
persons requesting plat approval were treated differently from each other.”
(Docket 18 at p. 6) (italics omitted). Because the County’s decision-making
functions involved the use of discretion, whether to approve a plat or grant a
variance, Meade County asserts plaintiffs’ “case of one” claim fails. Id. at
pp. 6-7.
3. RESOLUTION OF COUNT 2
Plaintiffs’ class-of-one claim fails for a number of reasons. First, in
recognizing a “ ‘class of one’ equal protection claim,” the Supreme Court
contemplated that “the plaintiff did not allege membership in a class or group,”
but rather a single plaintiff who was “intentionally treated differently from
others similarly situated.” Robbins, 794 F.3d at 995 (citing Village of
Willowbrook, 528 U.S. at 564). The courts specifically reference “a single
plaintiff” in considering a class of one claim. Id. (citing Engquist, 553 U.S. at
602).
Allegations in the complaint assert all 159 plaintiffs were treated the
same but differently from other identified individuals. (Docket 7 ¶¶ 77-81). By
this language, plaintiffs allege that they, in fact, are “members[] in a . . .
group.” Robbins, 794 F.3d at 995. This designation becomes a known class of
members seeking damages. As a group, plaintiffs cannot advance a class of
one claim. Robbins, 794 F.3d at 995; Village of Willowbrook, 528 U.S. at 564;
Engquist, 553 U.S. at 602).
Second, plaintiffs’ designated comparable individuals who were more
favorably treated by Meade County are not “identical or directly comparable to
the plaintiff[s] in all material respects.” Robbins, 794 F.3d at 996. It is not
proper to compare homeowners to developers, surveyors or others who
ultimately have a role in building homes. It was plaintiffs’ developer and the
contractors who may have sought building permits and certificates of
occupancy who were more closely aligned with the allegedly comparable
individuals in the complaint.
Third, plaintiffs’ argument that others had to follow the law by
completing soil boring and other activities to develop their property while
plaintiffs’ developer did not have to do so because of the County’s allegedly
corrupt decisions, misses the mark. Plaintiffs arguably received less restrictive
“better treatment” than others. Novotny v. Tripp County, 664 F.3d 1173, 1179
(8th Cir. 2011).
Finally, “[a]lthough the Supreme Court has recognized a ‘class-of-one’
theory, . . . it has declined to apply the principle against state action ‘which by
[its] nature involve[s] discretionary decisionmaking based on a vast array of
subjective, individualized assessments.’ ” Id. (referencing Village of
Willowbrook, 528 U.S. at 564; citing Engquist, 553 U.S. at 603). Plaintiffs’
account of the alleged preferential treatment received by others involved the
exercise of broad discretion by both the Meade County Planning Commission
and the Meade County Commission. In each instance, the governmental
employees and commissioners had “to balance a number of legitimate
considerations.” Robbins, 794 F.3d at 996. Those decisions were “based on a
number of subjective factors within the purview of the county officials’
discretionary authority.” Novotny, 664 F.3d at 1179.
Plaintiffs’ class of one due process claim fails to state a claim upon
which relief can be granted under § 1983. Plaintiffs’ Count 2 is dismissed.
E. INVERSE CONDEMNATION CLAIM
Count 3 asserts an inverse condemnation claim against Meade County.
(Docket 7 ¶¶ 77-80). Plaintiffs bring this constitutional claim under the
authority of 42 U.S.C. § 1983. Id. ¶ 77.
“The Takings Clause of the Fifth Amendment, applicable to the States
through the Fourteenth Amendment, . . . prohibits the government from
taking private property for public use without just compensation.” Palazzolo v.
Rhode Island, 533 U.S. 606, 617 (2001) (referencing Chicago, B. & Q.R. Co. v.
Chicago, 166 U.S. 226 (1897)). “The clearest sort of taking occurs when the
government encroaches upon or occupies private land for its own proposed
use. . . . [E]ven a minimal ‘permanent physical occupation of real property’
requires compensation under the Clause.” Id. (citations omitted). “[T]here will
be instances when government actions do not encroach upon or occupy the
property yet still affect and limit its use to such an extent that a taking
occurs.” Id. (referencing Pennsylvania Coal Co. v. Mahon, 260 U.S. 393
(1922)).
“ ‘The Fifth Amendment right to full compensation arises at the time of
the taking’ and . . . ‘[t]he availability of any particular compensation remedy,
such as an inverse condemnation claim under state law, cannot infringe or
restrict the property owner’s federal constitutional claim.’ ” Pakdel v. City &
County of San Francisco, California, ___ U.S. ___, 141 S. Ct. 2226, 2229 (2021)
(citing Knick v. Township of Scott, 588 U. S. ____, 139 S. Ct. 2162, 2171
(2019). “[Section] 1983 . . . guarantees a federal forum for claims of
unconstitutional treatment at the hands of state officials.” Id., 141 S. Ct. at
2230 (citing Knick, 139 S. Ct. at 2167).
A plaintiff asserting a regulatory taking must proceed under one of four
theories. Lingle v. Chevron USA, Inc., 544 U.S. 528, 538 (2005). Those
theories are:
1. A regulation which “requires an owner to suffer a permanent
physical invasion of her property.” Id. (internal citation
omitted).
2. A regulation that “completely deprive[s] an owner of all
economically beneficial use of her property.” Id. (brackets
omitted) (internal citation omitted).
3. A governmental requirement that, without sufficient
justification, requires an owner to “dedicate” a portion of his
property in exchange for a building permit. Id. at 546-48
(internal citation omitted).
4. Any other regulation which, after considering its economic
impact upon the plaintiff and its essential character, is
“functionally equivalent to the classic taking in which
government directly appropriates private property or ousts
the owner from his domain.” Id. at 538-39 (internal citation
omitted).
1. FACTS
The complaint alleges Meade County took plaintiffs’ land by the approval
of the Hideaway Hills plat in 2003 and the approval of the second plat adding
31 homesites in 2006. (Docket 7 ¶ 79). It is alleged these County actions
effectively took plaintiffs’ lands without compensating them for their loss in
violation of the Fifth and Fourteenth Amendments. Id. ¶¶ 77-80.
2. ARGUMENTS OF THE PARTIES
Meade County’s motion to dismiss Count 3 is premised on a number of
grounds. Defendant argues there are “two basic elements required for a taking:
(1) physical occupation by the government; or (2) a regulatory taking [by] the
government[.]” (Docket 12 at p. 14).
First, defendant asserts plaintiffs’ claim must fail because there has been
“no physical taking by Meade County.” Id. at p. 15. Second, Meade County
submits there has been no regulatory taking. Id. Third, defendant claims
there has been no taking by Meade County of plaintiffs’ property for a public
use. Id. at p. 17. Meade County argues it “has not authorized any use by the
public [of plaintiffs’ land], has never owned the property or mineral rights, and
never mined the property.” Id. For these reasons, defendant argues “[t]he
‘public use’ element is lacking.” Id.
Plaintiffs’ response asserts “[t]he regulation at issue is stated in the . . .
complaint.” (Docket 17 at p. 10). That regulation according to plaintiffs’ brief
is the rangeland standard of reclamation proposed by the State of South
Dakota and adopted by Meade County by acquiescence. Id. In plaintiffs’ view,
“[t]his restriction or regulation caused the Plaintiffs’ land to be
unconstitutionally taken by the county.” Id. “The ‘rangeland’ standard of
reclamation is vastly different” plaintiffs argue “from the very exacting and high
standards of reclamation for homesites for which the land was ultimately
approved by the County’s actions.” Id. at pp. 10-11.
Plaintiffs contend they “are not barred as post-enactment purchasers
from receiving compensation under a regulatory taking claim theory.” Id. at
p. 12. Plaintiffs argue they “may pursue their claims now even though Meade
County’s decision to restrict the property to rangeland [occurred] prior to
Plaintiffs’ ownership.” Id. (referencing Palazzolo, 533 U.S. at 628) (“It would be
illogical, and unfair, to bar a regulatory takings claim because of the post-
enactment transfer of ownership where the steps necessary to make the claim
ripe were not taken, or could not have been taken, by a previous owner.”).
Plaintiffs argue “[r]estricting the property to rangeland was a ‘public use,’ since
the restriction was for the benefit of the public, for the protection of the public
and not a valid exercise of police power in this instance.” Id.
Because South Dakota’s administrative rule concerning rangeland
reclamation was “proposed to the County and the County adopted this
regulation[,]” plaintiffs contend this administrative restriction “embraced the
broader and more natural interpretation of public use as ‘public purpose.’ ” Id.
at p. 13. (referencing Fallbrook Irrigation District v. Bradley, 164 U.S. 112,
158-64 (1896)). Plaintiffs submit “[t]he State administrative rules that
restricted this property to ‘rangeland,’ a restriction that was agreed to by the
County, were not a valid exercise of the County’s police powers.” Id. at p. 14.
As the rangeland “regulation has gone too far[,]” Plaintiffs conclude the
regulation is unconstitutional “without the payment of just compensation.” Id.
(referencing John Corp. v. City of Houston, 214 F.3d 573, 578 (5th Cir. 2000)
(“The Supreme Court’s entire ‘regulatory takings’ law is premised on the notion
that a city’s exercise of its police powers can go too far, and if it does, there has
been a taking.”).
3. RESOLUTION OF COUNT 3
The complaint does not allege an actual physical taking of plaintiffs’
property and plaintiffs’ brief does not make that argument. (Docket 17 at
pp. 12-14). Plaintiffs assert a regulatory taking of their property. (Docket
7 ¶¶ 77-80). Plaintiffs’ brief does not identify which category of regulatory
taking is applicable to their claim. See Docket 17.
It appears the plaintiffs are claiming either a second type of regulatory
taking, that is, a regulation which “completely deprive[s] an owner of all
economically beneficial use of [their] property”; or the fourth type, any other
regulation which, after considering its economic impact upon the plaintiff and
its essential character, is “functionally equivalent to the classic taking in which
government directly appropriates private property or ousts the owner from
[their] domain.” Lingle, 544 U.S. at 538-39. The other types of regulatory
taking are not applicable to the allegations in the complaint.
The Supreme Court identifies “two discrete categories of regulatory action
as compensable without case-specific inquiry into the public interest advanced
in support of the restraint.” Lucas v. South Carolina Coastal Council, 505 U.S.
1003, 1015 (1992). “The first encompasses regulations that compel the
property owner to suffer a physical ‘invasion’ of his property. In general (at
least with regard to permanent invasions), no matter how minute the intrusion,
and no matter how weighty the public purpose behind it, [the court has]
required compensation.” Id. “The second situation in which [the court] found
categorical treatment appropriate is where regulation denies all economically
beneficial or productive use of land.” Id.
The complaint alleges a regulatory taking of plaintiffs’ properties
occurred because of the 2003 final approval by Meade County of the Hideaway
Hills plat and its 2006 approval of an additional 31 homesites plat. (Docket
7 ¶ 79). The complaint asserts it was the approval of the “plats, building
permits and certificates of occupancy” which “were executed with such an
extreme degree of recklessness that destruction and devaluation of the
[plaintiffs’] properties was foreseeable.” Id. ¶ 80.
Yet, in their brief, plaintiffs argue the objectionable action by Meade
County was its acquiescence and adoption by inference of the South Dakota
rangeland reclamation regulation. (Docket 17 at p. 10). Plaintiffs contend
“[r]estricting the property to rangeland was a ‘public use,’ since the restriction
was for the benefit of the public, for the protection of the public, and not a valid
exercise of police power in this instance.” Id. at p. 12. Plaintiffs argue they
have standing to assert an adverse condemnation claim because a challenge of
the rangeland regulation was not yet ripe so as to permit the previous owner,
the developer, to assert that claim. Id.
Plaintiffs’ position is without merit. Contrary to plaintiffs’ argument, the
rangeland regulation, as well as its purported application to the property which
became the Hideaway Hills Subdivision, was ripe for challenge in 2003.
Nothing about the language or application of the rangeland regulation changed
after 2003 so as to limit the right of the developer of the subdivision to
challenge the regulation’s application to that property. A challenge was ripe in
2003 to the rangeland designation and approval of the subdivision plat for
home building. Because the developer chose not to acknowledge the conflict
does not mean plaintiffs can assert this claim 18 years later.
Whether the Hideaway Hills Subdivision was to be limited to rangeland
activities or authorized for home building, that decision was made before
plaintiffs purchased their lots in the subdivision. It is neither illogical nor
unfair to bar plaintiffs’ regulatory taking claim where the previous owner had
all the necessary facts with which to assert a regulatory taking claim in 2003.
Palazzolo, 533 U.S. at 628.
Plaintiffs did not suffer a “physical invasion” of their property nor were
they denied “economically beneficial or productive use” by the decision of
Meade County not to implement the rangeland reclamation regulation but to
permit the property to be used for home building. Lucas, 505 U.S. at 1015
(internal quotation marks omitted). Plaintiffs did not suffer a “physical
invasion” of their property nor were they denied “economically beneficial or
productive use” of their property by the decisions of Meade County to approve
the 2003 and 2006 plats. Id. (internal quotation marks omitted).
Based on the facts alleged in the complaint and all reasonable inferences
associated with those facts, plaintiffs fail to state a claim for inverse
condemnation. Defendant’s motion to dismiss Count 3 is granted.
F. INVERSE CONDEMNATION―STATE CLAIM
The complaint alleges an inverse condemnation state claim in violation of
Article VI § 13 of the South Dakota Constitution. (Docket 7 ¶¶ 81-86). Section
13 of Article VI provides that “[p]rivate property shall not be taken for public
use, or damaged without just compensation, which will be determined
according to legal procedure established by the Legislature and according to § 6
of this article.” South Dakota Constitution, Art. VI § 13. Section 6 of Article VI
mandates a jury trial , a right which “shall extend to all cases at law without
regard to the amount in controversy[.]” South Dakota Constitution, Art. VI § 6.
The South Dakota Constitution differs from the Fifth Amendment of the
United States Constitution in that South Dakota imposes “ ‘public use’
requirements that are more strict than the federal baseline.” Krier v. Dell
Rapids Township, 709 N.W.2d 841, 846 (S.D. 2006). Also, the South Dakota
Constitution “requires that the government compensate a property owner not
only when a taking has occurred, but also when private property has been
‘damaged.’ ” Id. “Under the taking and damaging clause . . . it is a basic rule
. . . governing compensation for consequential damages that where no part of
an owner’s land is taken but because of the taking and use of other property so
located as to cause damage to an owner’s land, such damage is compensable if
the consequential injury is peculiar to the owner’s land and not of a kind
suffered by the public as a whole.” Id. at 847 (citing State Highway
Commission v. Bloom, 93 N.W.2d 572, 577 (1958)).
In South Dakota, an inverse condemnation claim “is maintainable where
a governmental entity causes an invasion of the land by ‘water, earth, sand, or
other matter or artificial structures placed upon it, so as effectually to destroy
or impair its usefulness . . . [,]’ but that it is not required ‘that the damage shall
be caused by a trespass or an actual physical invasion of the owner’s real
estate[.]’ ” Rupert v. City of Rapid City, 827 N.W.2d 55, 61 (S.D. 2013) (citing
Searle v. City of Lead, 73 N.W. 101, 103-04 (S.D. 1897)).
1. FACTS
As with Count 3, plaintiffs allege the state action was Meade County’s
2003 approval of the Hideaway Hills plat and its 2006 approval of the second
plat adding 31 home sites. (Docket 7 ¶ 83). The complaint alleges the approval
of the two “plats, building permits and certificates of occupancy were executed
with such an extreme degree of recklessness that destruction and devaluation
of [plaintiffs’] properties was foreseeable.” Id. ¶ 84. The claim alleges “[t]he
direct and foreseeable effect of approving the final plats . . . were the placement
of artificial structures on the land. The issuance of building permits and
certificates of occupancy for these artificial structures caused the invasion of
[plaintiffs’] land. The usefulness of the land has been impaired and destroyed.”
Id. ¶ 86.
2. ARGUMENTS OF THE PARTIES
Meade County seeks dismissal of Count 4 for several reasons. Defendant
argues “[e]ven if the ‘placement of artificial structures on the land’ (Plaintiffs’
own houses) was a ‘direct and foreseeable effect of approving’ the plat for the
subdivision, Meade County did not cause any artificial structures to be placed
upon Plaintiffs’ land.” (Docket 12 at p. 21). Defendant asserts “[t]here was no
requirement by Meade County that homes be built or that they be built in a
specific manner or to a specific degree.” Id. Meade County contends the
complaint fails to identify “what property, other than the Plaintiffs’, was taken
that caused consequential damages to [plaintiffs’] property.” Id.
Plaintiffs’ brief submits “[i]n the interest of judicial efficiency, . . . the
state law claims for inverse condemnation be incorporated into the . . .
arguments supporting federal claims of inverse condemnation.” (Docket 17 at
p. 14). Plaintiffs represent their “state law claims . . . are not materially
dissimilar and arise from the same set of facts [as the federal inverse
condemnation claim].” Id.
3. RESOLUTION OF COUNT 4
Plaintiffs’ assertion that their homes constitute “artificial structures” so
as come within the scope of Rupert is an overreach which defeats the inverse
condemnation―state claim. Rupert, 827 N.W.2d at 61. The clear intent and
guidance of Rupert is that Meade County may be held responsible if it caused
or placed “water, earth, sand . . . or artificial structures” on plaintiffs’ land “so
as effectually to destroy or impair [plaintiffs’ land’s] usefulness.” Id. Meade
County did not cause or place artificial structures on plaintiffs’ land—plaintiffs
and their building contractors placed homes on the lots in Hideaway Hills
Subdivision. Nor did Meade County cause or place structures on other
property which allowed “water, earth, sand or other matter” to migrate to or
have an impact upon plaintiffs’ property effectively destroying or impairing the
usefulness of their property. Rupert, 827 N.W.2d at 61. Approving plats,
granting building permits and issuing certificates of occupancy before property
may be inhabited are not the types of County action upon which a state claim
of inverse condemnation may proceed.
Plaintiffs’ claim is without merit. Plaintiffs did not suffer a “physical
invasion” of their property nor were they denied “economically beneficial or
productive use” by the decision of Meade County to not use the rangeland
reclamation designation but to permit the property to be used for home
building. Lucas, 505 U.S. at 1015 (internal quotation marks omitted).
Plaintiffs did not suffer a “physical invasion” of their property nor were they
denied “economically beneficial or productive use” of their property by the
decisions of Meade County to approve the 2003 and 2006 plats. Id. (internal
quotation marks omitted).
Plaintiffs’ inverse condemnation―state allegations fail to state a claim
upon which relief can be granted. Defendant’s motion to dismiss Count 4 is
granted.
IV. ORDER
Based on the above analysis, it is
ORDERED that Defendant Meade County’s motion to dismiss (Docket 11)
is granted.
IT IS FURTHER ORDERED that plaintiffs’ amended complaint (Docket 7)
is dismissed with prejudice.
Dated August 29, 2022.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
UNITED STATES DISTRICT JUDGE
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