#30899-a-JMK
2026 S.D. 45
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
ANDREW MORSE and JOHN and
EMILY CLARKE, for themselves and
on behalf of all similarly situated
individuals, Plaintiffs and Appellants,
v.
STATE OF SOUTH DAKOTA, and/or
THE SOUTH DAKOTA COMMISSION
OF SCHOOL AND PUBLIC LANDS, as
successors of the SOUTH DAKOTA
CEMENT PLANT COMMISSION, and the
SOUTH DAKOTA CEMENT PLANT TRUST, Defendants and Appellees.
APPEAL FROM THE CIRCUIT COURT OF
THE FOURTH JUDICIAL CIRCUIT
MEADE COUNTY, SOUTH DAKOTA
THE HONORABLE ERIC J. STRAWN
Judge
MATTHEW HUGHES
MATTHEW NIS LEERBERG
KATHLEEN R. BARROW
DAVID G. CROOKS of
Fox Rothschild, LLP
Dallas, Texas
ANTHONY VITULLO
Dallas, Texas
MICHAEL S. BEARDSLEY
MATTHEW J. MCINTOSH of
Beardsley, Jensen & Lee
Rapid City, South Dakota Attorneys for plaintiffs and
appellants
ARGUED
OCTOBER 8, 2025
OPINION FILED 07/09/26
TERRA M. LARSON
ROBERT B. ANDERSON
JUSTIN L. BELL of
May, Adam, Gerdes & Thompson LLP
Pierre, South Dakota
ROBERT L. MORRIS
Belle Fourche, South Dakota Attorneys for defendants and
appellees.
#30899
KERN, Retired Justice
[¶1.] Hideaway Hills, a residential subdivision in Black Hawk, South
Dakota, is sinking. Built atop an old, underground mine and previously reclaimed
land, the subdivision is home to over 150 homeowners. Residents first noticed
foundational issues including cracking and settling in the walls and basements of
their homes in 2008. The neighborhood’s streets also showed significant stress, and
several small sinkholes opened later that year. Stability issues throughout the
entire neighborhood became unmistakable in April 2020 when a large sinkhole
opened on East Daisy Drive.
[¶2.] The mining history of the land underneath Hideaway Hills is at the
center of Plaintiffs’ claims. In the 1900s, several companies mined the land for
gypsum by means of an underground mine. The South Dakota Cement Plant
Commission (Cement Plant), a subdivision of the state, purchased the property
thereafter for fair market value and surface mined the property for gypsum for
several years. When it completed its mining operation, the State reclaimed the land
to pastureland and sold it via public sale to Raymond Fuss and his son, Larry Fuss.
Aware of the presence of previous underground and surface mines, Larry and a local
developer, Byron Keith Kuchenbecker, then developed the land into a residential
subdivision now known as Hideaway Hills.
[¶3.] When the largest sinkhole, and the catalyst of this litigation, opened in
late April 2020, Andrew Morse, the class representative for the Plaintiffs, sued the
State on behalf of many of the homeowners in Hideaway Hills for damages related
-1-#30899
to the subsidence1 and devaluation of their homes. Plaintiffs voluntarily dismissed
each of their claims against the State related to the litigation except for their
inverse condemnation claim. Under several theories of liability, they argue the
State’s improper reclamation of its surface mine and failure to provide subsurface
support amounted to a taking or damaging under the South Dakota Constitution.
Plaintiffs allege strict liability applies to the taking or damaging element of their
inverse condemnation claim. In response, the State contends the Cement Plant’s
mining activities were not on private property and were not for a public use,
Kuchenbecker’s actions were superseding causes, and Plaintiffs’ claim is barred by
SDCL 15-3-1. The parties filed cross-motions for summary judgment in the circuit
court, supported by extensive deposition testimony and exhibits from which the
facts in this opinion are derived. The circuit court heard argument on the issue and
granted summary judgment to the State, reasoning that Plaintiffs’ inverse
condemnation claim was, in essence, a tort claim, and therefore must be dismissed
under sovereign immunity principles. Plaintiffs appeal. We affirm the circuit court
on the ground that the Plaintiffs have failed to set forth a viable claim for inverse
condemnation.
Factual and Procedural History
[¶4.] A nearly 30-foot-deep sinkhole opened in the Hideaway Hills
residential community located in Black Hawk, South Dakota, on April 27, 2020,
1. Under the Restatement of Torts, “[a] subsidence is any movement of the soil
from its natural position.” Restatement (Second) of Torts § 817 cmt. h (1979).
Such movement can be in any direction, including “shifting, falling, slipping,
seeping or oozing of the soil” or subsurface soil. Id.
-2-#30899
leading to the class action at issue. The sinkhole appeared in a resident’s front
yard, consuming much of the yard and adjacent residential street and exposing a
large underground void. Soon after the sinkhole opened, it became apparent to the
residents of Hideaway Hills that the community was built atop an old, underground
gypsum mine, which was causing surface and subsurface instability. Thirteen
homes were evacuated due to the instability, and around 150 homeowners
experienced and are currently experiencing issues such as cracking and settling.
Andrew Morse and the affected residents of the Hideaway Hills community filed
suit against the State of South Dakota, among other parties, seeking compensatory
and consequential damages.
[¶5.] A brief history of the ownership and mining activity on the land at
issue is necessary to provide context for Plaintiffs’ claims. Dakota Plaster
conducted the first recorded mining activity on the land in the early 1900s, which
included both surface and underground mining. The dates of Dakota Plaster’s
underground mining activities are not fully documented, but it appears they mined
the site for almost 30 years. Dakota Plaster used the “room and pillar” method,
which resulted in a substantial network of underground tunnels and large,
cavernous rooms. Existing documents revealed that Dakota Plaster supplied the
Cement Plant with gypsum beginning in 1924, but it is suspected that the
underground mine was inactive by 1927. US Gypsum acquired the mine from
Dakota Plaster in 1930. However, because South Dakota lacked a state mine
inspector from 1926 to 1936, there are no records regarding US Gypsum’s mining
activities during these years.
-3-#30899
[¶6.] In 1945, Edwin Stensaas purchased the property from US Gypsum and
resided in a ranch house with his family on the northwest corner of the property
from 1945 until the late 1980s. Stensaas worked for Northwestern Engineering at
the time. Hills Materials, a subsidiary of Northwestern Engineering, began strip
mining the property for gypsum in 1946. The existing records from this time frame
do not indicate that Hills Materials mined underground. In that year alone, Hills
Materials supplied 2,066 tons of gypsum to the Cement Plant, and 8,703 tons of
gypsum to cement plant industries in Mason City, Iowa. There is no evidence in the
record to establish whether Hills Materials mined the property after 1946, but
Goldie Prestjohn, Stensaas’s daughter, testified by deposition that she recalled Hills
Materials mining the northern area of the property into the mid-1950s. Despite her
recollection, however, there is no documentary evidence in the record that indicates
mining occurred on the property between 1947 and 1985.
[¶7.] The next recorded mining activity occurred when the Cement Plant, a
subdivision of the State, purchased the property in 1985 from Stensaas by contract
for deed for $140,000. Stensaas preserved a life estate in the property so that he
could continue to reside in his home and on nearby land.
[¶8.] The Cement Plant applied for and received authority to mine the
property in 1985 under Permit 424. The application for the permit was publicly
filed with the Meade County Register of Deeds on June 25, 1985, and mining began
in April 1986. The Cement Plant strip mined the property throughout the 1980s
and into the 1990s. But, unlike Dakota Plaster, the State contends that it did not
perform underground mining, instead relying on surface mining to extract gypsum.
-4-#30899
Surface mining is conducted by digging large, open-air pits to extract the exposed
minerals. Plaintiffs’ experts—Doug Beahm, Nicholas Anderson, and Brandt
Lyman—agreed that there is no documentary evidence that the State performed
underground mining. The parties dispute the extent and location of the mining
activities on the property, but no documents or historical records indicate that the
State mined outside of the permit area.
[¶9.] By 1987, the State had mined and reclaimed2 a five-acre portion of the
land in the northeastern area, which involved grading and contouring the land.
Lyle Dennis, the blasting supervisor on the project, testified that part of this
reclamation process involved blasting to close an underground mine entrance. Prior
to closing the entrance, the State drilled six test holes in the area to determine if
there was sufficient gypsum to mine. Dennis further testified that he confirmed
there was insufficient gypsum to mine in that area, and that the blasted area was
then graded and contoured. Morse, however, maintains that the State conducted
blasting in the underground tunnels previously mined by Dakota Plaster, searching
for additional deposits of gypsum.
[¶10.] Three years into the surface mining operation, on October 6, 1989, the
Department of Water and Natural Resources approved an amendment to the
Cement Plant’s mining permit to include a small area of land immediately south of
2. “Reclamation” is “the employment during and after a mining operation of
procedures reasonably designed to minimize as much as practicable the
disruption from the mining operation and to provide for the rehabilitation of
affected land through the rehabilitation of plant cover, soil stability, water
resources, or other measures appropriate to the subsequent beneficial use of
such mined and reclaimed lands[.]” SDCL 45-6B-3(14).
-5-#30899
the permit area on resident Victor Pengra’s property. The Cement Plant entered
into a lease with Pengra to mine a little over half an acre of his property.
[¶11.] The Cement Plant converted their mining permit—Permit 424—to a
mining license—License 89-383—in 1991 after a statutory change to SDCL chapter
45-6 transformed the system from a permitting system to a licensing system.
Under the new scheme, however, the Cement Plant was still required to reclaim
any land affected under the permit and the license in accordance with the terms of
chapter 45-6. Both of the Cement Plant’s mining applications were publicly filed
with the Meade County Register of Deeds office, and the applications and associated
materials, including the State’s reclamation plan, were publicly accessible.
[¶12.] As required by statute, the State reclaimed the land it mined,
ultimately reclaiming around 16 acres by the end of its operations. This process
involved filling the previously mined locations with backfill it had preserved from
prior mining activities, ensuring that the backfill was sloped according to natural
grade, and then reseeding the reclaimed area with vegetation native to the area
along with watering the vegetation. Prior to the State’s mining activities, the area
was used for pastureland, and it was reclaimed to return to “pasture condition”
under the approved permit.3 The State, when reclaiming the surface mines, used
3. The State’s June 24, 1985 mining permit laid out a reclamation plan to
return the land to “pasture condition” in accordance with SDCL 45-6B-45 and
45-6B-7, which included removing topsoil and overburden and then
backfilling and contouring the area to match existing slopes. In 1988, the
regulations changed and added reclamation guidelines for “rangeland.” If
land is to be reclaimed to rangeland, the “[a]ffected land must have the
capability to support a livestock carrying capacity that is equivalent to that of
the surrounding area[.]” ARSD 74:29:07:20(1). Under the 1988 rules which
(continued . . .)
-6-#30899
backfill from locally available materials, including pulverized gypsum. Morse
asserts this form of gypsum dissolves when exposed to water, creating piping
through the soils, which creates a conduit to allow more water to enter the
subgrade, leading to further instability. Plaintiffs therefore maintain that the State
improperly reclaimed the land it mined, leading to the settlement and structural
issues that Plaintiffs aver caused their damages.
[¶13.] After the property was reclaimed, the State prepared it for sale. On
March 2, 1993, the State, as required by statute, had the land appraised for its
“highest and best use,” which the appraiser determined was for a “[r]esidential
ranchette.” The land area assessed in the appraisal included both the permit area
and the land that was excluded from the permit area as a result of Stensaas’s life
estate. The appraisal for “residential ranchette” was a nod to the old Stensaas
ranch house and outbuildings on the northwest corner of the property, which the
appraiser described as in “fair condition.” The appraiser noted that the lack of
utilities foreclosed the possibility of other types of developments, and that the
location of a “sewer lagoon” on the southern border of the property was “considered
adverse for any development on the subject in the immediate proximity of the
lagoon.”
(. . . continued)
are still in place, reclamation to rangeland is complete “when the reclaimed
range is capable of withstanding proper stocking rates for two consecutive
years prior to bond release.” ARSD 74:29:07:20(4). The State’s 1989
amended permit, which incorporated the Pengra property into the permit
area, included this reclamation condition.
-7-#30899
[¶14.] The Cement Plant began soliciting public bids for the property in April
1994. Public notice of the sale was posted in both the Argus Leader and the Rapid
City Journal, and the advertisement described the property and directed all
questions to Vince Street and Steve Zellmer at the Cement Plant. The State sold
the property via public sale to Raymond Fuss on June 17, 1994, for $92,154, while
reserving its subsurface mineral rights to the land as required by the South Dakota
Constitution.4 The deed from the State to Raymond did not contain restrictions on
future development. Raymond later transferred the property to his son, Larry Fuss.
[¶15.] Larry moved into Stensaas’s house on the northwest corner in 1998.
He cut hay on the land and leased it to pasture horses until approximately 2000.
After the current lawsuit was filed, the parties engaged in discovery, which revealed
that Larry knew the Cement Plant had previously engaged in surface mining on the
property, and that he had knowledge of an existing underground mine. Larry
testified by deposition that he was aware that children used to play in the
underground mine, and that the Stensaases had previously used the mine as a
dump for large items of trash, including old cars.
[¶16.] Larry was approached in 2000 by Byron Keith Kuchenbecker, a local
developer, regarding a proposal to develop the pastureland into a residential
community. Larry suggested that Kuchenbecker develop a manufactured home
park rather than a residential, stick-built development because he was concerned
about the presence of an underground mine on the property. Larry testified by
4. “All gas, coal, oil and mineral rights, and any other rights, as specified by
law, to or in public lands, are reserved for the state.” S.D. Const. art. 8, § 19.
-8-#30899
deposition that he knew multiple companies had mined the property, but he did not
know the location or extent of the mining that had occurred.
[¶17.] Kuchenbecker proposed his plan for a “Manufactured Housing
Community” to the Meade County Planning Commission in July 2000. In his
application, Kuchenbecker acknowledged:
In the 1980’s[,] the South Dakota Cement Plant mined the
gypsum rock from the site. One can still identify spoil pile areas
by abnormal terrain and exposed gypsum fragments. In the
early 1900’s[,] an underground gyp[sum] mining operation took
place on the NE corner of the property. Field boring operation
may be required to identify any cavities that may be a safety
hazard.
[¶18.] At some point after the submission of his application, Kuchenbecker
decided to develop a residential, stick-built community rather than one comprised of
manufactured homes. This was allegedly because a member of the Planning
Commission who lived nearby was more amenable to a traditional development
than a manufactured housing community. Larry testified that he did not approve of
the idea, and that he “still didn’t recommend it for development.” Larry removed
himself from Kuchenbecker’s development plans a short time later, selling the
property to Kuchenbecker for $250,000.
[¶19.] The purchase agreement offered by Larry to Kuchenbecker contained
the following disclaimer:
12. CONDITION OF PROPERTY. KUCHENBECKER [has]
thoroughly researched, examined and tested the property to
[his] own satisfaction and know[s] that there may be excessive
rock, underground cavities, foundations, and junk underground.
KUCHENBECKER accept[s] the property in an “as is” condition
with no guaranty by FUSS that the property is suitable for any
development contemplated by KUCHENBECKER.
-9-#30899
[¶20.] The Meade County Board of Commissioners voted to approve
Kuchenbecker’s proposal in August 2002, and he began developing Hideaway Hills,
a planned residential subdivision. Kuchenbecker conducted and oversaw much of
the development himself. He first leveled portions of the property and removed
surface vegetation and topsoil by personally grading the surface. John Ogden, a
friend of Kuchenbecker’s, also helped with the development. Kuchenbecker became
aware of significant issues with the subsurface of the land in early 2004 when he
and his developers ran into several large underground voids while scraping the land
and digging utility trenches.
[¶21.] The first incident occurred around April 2004, when Kuchenbecker was
driving a scraper over the northeast portion of the land which would later become
East Daisy Drive. The wheel on the scraper fell into a hole that he described as
around two to three feet wide. The hole revealed a “cavern” below that
Kuchenbecker described as 40 to 50 feet deep. Kuchenbecker repelled through the
hole and down into the cavern to investigate, stating the conditions were “wet and
damp” and tall enough “that you could stand up in.” He could not recall the length
of the cavern. Kuchenbecker testified that he notified his realtor, Ron Sjodin, John
Ogden, Bob Powles—a member of the Meade County Planning Board—and Doug
Sperlich, his engineer, about the void. However, both Sperlich and Powles testified
by deposition that they were not notified about the hole or cavern. Kuchenbecker’s
solution was to fill the hole back in and compact the ground. After discovering the
cavern, Kuchenbecker employed American Engineering Testing (AET) to drill bore
holes where he intended to build the houses on East Daisy Drive. AET drilled 25--10-#30899
foot-deep bore holes in the footprint of ten houses and did not encounter voids, so
Kuchenbecker continued development.
[¶22.] Shortly after the first incident, Brandon Powles, who was digging
sewer line trenches for the development, encountered another small void. He
estimated that this void was six feet deep. Kuchenbecker decided to fill the hole
and encase the utility pipe in steel casing. Sperlich testified by deposition that
Kuchenbecker did not contact him about this second void, and that he “wouldn’t
want any part” of developing on land over an underground mine or gypsum
deposits. Additionally, Sperlich testified that he was not aware of any compaction
testing done at any point during development.
[¶23.] Once development concluded in 2005, Kuchenbecker contracted with
realtor Ron Sjodin on an exclusive listing basis to sell the lots in Hideaway Hills to
individual homebuilders. The purchase agreement from Kuchenbecker to each
homebuilder contained the following disclaimer:
The BUYERS acknowledge that they have been made aware
that the property being purchased hereunder, along with the
adjoining property, was once mined on the surface and
underground for gypsum. The SELLER is unaware as to the
exact date that the underground mining ceased but believes it
was sometime in the 1950’s. The surface of the property was
reclaimed to meet the requirements of the State of South Dakota
after the surface mining operation was completed. The SELLER
is not making any warranty, express or implied, concerning any
sub-surface conditions that may exist on the property being
purchased by the BUYER herein. It will be the BUYER’S
responsibility to remediate any subsurface conditions that exist
on the property including, but not limited to, fissures or cavities
that may be as a result of these mining operations. The BUYER
has accepted the subsurface of the property in an “as is”
condition, without any warranty by the SELLER.
-11-#30899
[¶24.] Realtor Sjodin also represented each homebuilder on the subsequent
sale to each of the homebuyers. In these purchase agreements, he did not provide
the homebuyers with a disclaimer related to prior mining activity below ground like
those in the contracts between Kuchenbecker and the homebuilders. The purchase
agreements between the homebuilders and homebuyers did not contain any
reference to mining or underground activity. When asked why he did not include a
similar disclaimer, Sjodin explained that, in his opinion, no disclosure was required
because such a disclosure would only be required for existing homes, not for new
construction. He further stated that he did not feel the history of the mining on the
property was a material defect.5 Nearly all homebuyers lacked knowledge of the
existence of underground mines or surface issues when they purchased their homes
in Hideaway Hills.
[¶25.] The Hideaway Hills Subdivision was completed around 2005, and
residents began moving in shortly thereafter. Homeowners began reporting signs of
settlement and cracking within their houses in 2008. The first recorded sinkhole
opened on East Daisy Drive in 2008 at a home owned by Thomas and Susanne
Kelly. Shortly thereafter, another sinkhole developed in their backyard, exposing
the bumper of a car in the hole below. The sinkhole that triggered the present
cause of action formed on April 27, 2020. The nearly 30-foot-deep sinkhole opened
mere feet from the edge of a resident’s home, exposing pipes and underground lines
5. Sjodin did not deny his lack of transparency with the homebuyers. He
testified that if he had been required to disclose the presence of prior mining
activity on the property, he “would have walked away from the subdivision
[project].”
-12-#30899
that crossed beneath the subdivision. As a result of the subsurface instability,
thirteen homes were evacuated and remain vacant.
[¶26.] An attorney for the Plaintiffs brought multiple lawsuits in both state
and federal court against various entities including Meade County, Kuchenbecker,
Sjodin, and other developers. All of these lawsuits were dismissed. Resident
Andrew Morse, in November 2020, brought the present class action lawsuit against
the State on behalf of the Hideaway Hills residents affected by the unstable
subsurface conditions. The complaint alleged inverse condemnation, breach of duty
of subsurface/subjacent support, breach of express covenant, and unjust
enrichment. Morse later dismissed all claims except for the inverse condemnation
claim, arguing the State “took or damaged his property for public use without just
compensation,” not as an exercise of a valid police power, and in violation of Article
VI, § 13 of the South Dakota Constitution. Morse contends that the “failure to
provide adequate subsurface support is a taking” under the state Constitution, and
strict liability applies.
[¶27.] The parties filed cross-motions for summary judgment. The circuit
court granted summary judgment to the State and dismissed the matter with
prejudice. The court reasoned that Morse’s claims sounded in tort, in that the case
was primarily a tort action for withdrawal of subjacent support rather than a claim
for inverse condemnation. As such, the court determined that Morse was precluded
from pursuing a tort claim against the State because the State, as a sovereign
entity, is immune from suit unless authorized by statute.
-13-#30899
[¶28.] Morse appeals the circuit court’s decision, arguing the circuit court
erred in granting summary judgment to the State on sovereign immunity grounds
and that the record supports their claim for inverse condemnation under the
taking/damaging clause in Article VI, § 13. The State responds that the circuit
court properly granted summary judgment based upon sovereign immunity, and
also asserts several alternative grounds to affirm the circuit court, including the
fact that the State owned the property at the time of its mining activities; that the
State’s activities on the property were not a public use; that the State’s activities
were not the proximate cause of Plaintiffs’ alleged injuries; that the Plaintiffs lack
standing because Kuchenbecker’s and Sjodin’s actions were superseding causes; and
that Plaintiffs’ claim is barred by SDCL 15-3-1.
Standard of Review
[¶29.] “This Court reviews a grant of summary judgment ‘to determine
whether the moving party has demonstrated the absence of any genuine issue of
material fact and entitlement to judgment on the merits as a matter of law.’”
Rupert v. City of Rapid City, 2013 S.D. 13, ¶ 8, 827 N.W.2d 55, 60 (quoting Hall v.
S.D. Dep’t of Transp., 2011 S.D. 70, ¶ 9, 806 N.W.2d 217, 221). A trial court’s grant
of summary judgment will be affirmed “if there is any legal basis to support its
ruling.” Krier v. Dell Rapids Twp., 2006 S.D. 10, ¶ 12, 709 N.W.2d 841, 845 (citing
Schulte v. Progressive N. Ins. Co., 2005 S.D. 75, ¶ 5, 699 N.W.2d 437, 438). “[I]n any
takings case, the determination whether a property interest was taken or damaged
for public use is a question of law for the court.” Krsnak v. Brant Lake Sanitary
Dist., 2018 S.D. 85, ¶ 15, 921 N.W.2d 698, 702 (alteration in original) (quoting Dep’t
-14-#30899
of Transp. v. Miller, 2016 S.D. 88, ¶ 43, 889 N.W.2d 141, 154). “On appeal, an
alleged violation of constitutional rights—such as whether a sufficient inverse
condemnation claim exists—‘is an issue of law to be reviewed under the de novo
standard.’” Id. (citation omitted).
Analysis
1. Whether the circuit court properly granted summary
judgment to the State.
[¶30.] The issues of sovereign immunity and inverse condemnation are
intertwined, and we address them together. The United States Constitution
provides that private property shall not be “taken for public use, without just
compensation.” U.S. Const. Amend. V. The South Dakota Constitution supplies
additional protection by providing that “[p]rivate property shall not be taken for
public use, or damaged, without just compensation[.]” S.D. Const. art. VI, § 13
(emphasis added). “An inverse condemnation action is an eminent domain
proceeding initiated by the property owner rather than the condemner.” Hamen v.
Hamlin Cnty., 2021 S.D. 7, ¶ 18, 955 N.W.2d 336, 344 (quoting Schliem v. State ex
rel. Dep’t of Transp., 2016 S.D. 90, ¶ 13 n.9, 888 N.W.2d 217, 224 n.9). “Inverse
condemnation proceedings allow landowners to recover just compensation when
eminent domain proceedings have not been instituted.” Id. (citation omitted).
[¶31.] “Sovereign immunity is the right of public entities to be free from
liability for tort claims unless waived by legislative enactment.” Truman v. Griese,
2009 S.D. 8, ¶ 9, 762 N.W.2d 75, 78 (quoting Pub. Entity Pool for Liab. v. Score,
2003 S.D. 17, ¶ 7 n.3, 658 N.W.2d 64, 67 n.3). The defense of sovereign immunity
does not apply to inverse condemnation claims because Article VI, § 13 of the South
-15-#30899
Dakota Constitution “essentially abrogates sovereign immunity.” Rupert, 2013 S.D.
13, ¶ 43, 827 N.W.2d at 71.
[¶32.] As noted above, the South Dakota Constitution is unique and differs in
important respects from the United States Constitution. With the addition of the
phrase “or damaged” in Article VI, § 13, this Court has previously held that the
South Dakota Constitution provides greater protection for its citizens than the
United States Constitution. Krier, 2006 S.D. 10, ¶ 21, 709 N.W.2d at 846. “The
intent of the [damages] ‘clause is to ensure that individuals are not unfairly
burdened by disproportionately bearing the cost of projects intended to benefit the
public generally.’” Hamen, 2021 S.D. 7, ¶ 17, 955 N.W.2d at 344 (citing Rupert,
2013 S.D. 13, ¶ 9, 827 N.W.2d at 61). A claim for inverse condemnation is
maintainable where a governmental entity, through the exercise of its power of
eminent domain, “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 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, 2013
S.D. 13, ¶ 10, 827 N.W.2d at 61 (alterations in original) (quoting Searle v. City of
Lead, 10 S.D. 312, 73 N.W. 101, 103, 104 (1897)).
[¶33.] The starting place for an inverse condemnation claim is to determine
whether the alleged governmental invasion resulted from its exercise of the power
of eminent domain under Article VI, § 13. This section of the Constitution provides
that “[p]rivate property shall not be taken for public use, or damaged, without just
compensation[.]” S.D. Const. art. VI, § 13 (emphasis added). The Nebraska
-16-#30899
Supreme Court’s6 opinion in Henderson v. City of Columbus is instructive in this
regard:
[T]he initial question is whether the governmental entity’s
actions constituted the taking or damaging of property for public
use. That is, it must first be determined whether the taking or
damaging was occasioned by the governmental entity’s exercise
of its power of eminent domain. Only after it has been
established that a compensable taking or damage has occurred
should consideration be given to what damages were
proximately caused by the taking or damaging for public use.
827 N.W.2d 486, 489 (Neb. 2013). Therefore, we initially consider whether the
State’s actions or inaction in this case amounted to a compensable taking or
damaging of Plaintiffs’ private property for public use.
[¶34.] Plaintiffs allege that the State damaged property for public use
through its mining and reclamation activities on the property. The Plaintiffs claim
that the Cement Plant’s prior mining activities on the property created surface
instability and that the State’s reclamation activities were inadequate to restore the
property and provide adequate surface stability for future landowners. The
Plaintiffs also allege that the State failed to adequately disclose the risks to future
property owners at the time they sold the property.
[¶35.] Plaintiffs rely heavily on our decision in Rupert v. City of Rapid City,
where we upheld the property owner’s claim for inverse condemnation when the
city’s use of deicer on the city streets ran onto their property, killing the owners’
trees. 2013 S.D. 13, ¶ 1, 827 N.W.2d at 58. Plaintiffs also cite Long v. State, where
6. The Nebraska Constitution’s takings clause is nearly identical to South
Dakota’s, providing that: “The property of no person shall be taken or
damaged for public use without just compensation therefor.” Neb. Const. art.
I, § 21 (emphasis added).
-17-#30899
we upheld private property owners’ claims for inverse condemnation after they
sustained damage from flooding caused by inadequate culverts installed along
Highway 11 during the original construction and during a later resurfacing project.
2017 S.D. 79, ¶ 8, 904 N.W.2d 502, 506. In both cases, it was undisputed that the
governmental invasion that damaged private properties arose from the exercise of
the governmental power of eminent domain.
[¶36.] Here, the State claims it did not damage private property because, in
1985, the Cement Plant acquired the right to mine and reclaim the property when
the State purchased full property rights to the land. This included ownership of
both the surface estate and the mineral estate. It is undisputed that all of the
Cement Plant’s mining and reclamation activities occurred while the land was
publicly owned.
[¶37.] In contrast, in Rupert, “the undisputed evidence established that the
City’s use of the deicer killed 42 mature pine trees on [private property].” 2013 S.D.
13, ¶ 16, 827 N.W.2d at 63. Similarly, in Long, the State’s action in building a
highway in 1949 and then failing to modify the drainage during a 2009 resurfacing
project, and the resultant damage from flood waters, all occurred while the
damaged properties were owned privately. 2017 S.D. 79, ¶¶ 2–7, 904 N.W.2d at
505–06. More importantly, the Court in Long specifically noted the state did not
claim that the flood damage to the landowners’ properties was “within the scope of
the right previously acquired by the State to construct the highway.” Id. ¶ 19, 904
N.W.2d at 510. When the State surface mined and reclaimed the land in this case,
the State was acting within the scope of its right to mine and damage the land,
-18-#30899
which it acquired when it purchased the land from Edwin Stensaas for fair market
value.
[¶38.] The Cement Plant’s mining and reclamation efforts, as well as its
actions in selling the property, occurred while it owned the property at issue in this
litigation. As such, the State’s activities do not constitute a taking of “private
property” because the State was entitled to commercially utilize the property it had
purchased. The Plaintiffs’ claims are inconsistent with the language of Article VI,
§ 13 of the South Dakota Constitution, providing for just compensation when
“private property” is taken or damaged for public use. Further, Plaintiffs have not
cited any decision permitting an inverse condemnation claim where the
governmental activities which allegedly caused the damage occurred on publiclyowned property. Plaintiffs therefore cannot satisfy the “private property” element
of an inverse condemnation claim.
[¶39.] Nonetheless, Plaintiffs maintain that selling the surface property to
private owners while retaining the mineral rights to the property to the present
date renders the State strictly liable for any damage to their private property that
has occurred or will occur in the future as a result of the prior mining activities on
the property. Because the State reserved the mineral rights, as is required by law,
Plaintiffs argue that “the subsurface owner must leave sufficient support for the
surface to remain in its natural condition.”7 Plaintiffs argue that the State’s
7. Plaintiffs argue that Restatement (Second) of Torts § 817 (1979) (withdrawal
of lateral support) and Restatement (Second) of Torts § 820 (1979)
(withdrawal of subjacent support) create strict liability for any damage
caused by the failure of the subsurface owner to provide subjacent support for
(continued . . .)
-19-#30899
retention of the subsurface estate (mining rights) after selling the surface rights to
private owners has caused damage to private property owners and is a public use
pursuant to Article VI, § 13 of the South Dakota Constitution because the gypsum
deposits “could be mined in the future if mining technology advances to the point
that extracting those deposits becomes economically viable.”
[¶40.] Even if we were to classify the State’s retention of the subsurface
rights, after completing its mining and reclamation activities on the property, an
activity causing damage to private property, the Plaintiffs have failed to establish
that the State’s retention of the mining rights to the property is a “public use” under
the damaging clause of the South Dakota Constitution. We defined “public use”
long ago in Illinois Central Railroad Co. v. East Sioux Falls Quarry Co., 33 S.D. 63,
144 N.W. 724, 728 (1913), and again addressed the definition in Benson v. State,
2006 S.D. 8, ¶¶ 42, 88, 710 N.W.2d 131, 146, 163. We adopted the “use by the
public test,” which “requires that there be a ‘use or right of use on the part of the
public or some limited portion of it[.]’” Benson, 2006 S.D. 8, ¶ 42, 710 N.W.2d at 146
(alteration in original) (citing Ill. Cent. R.R. Co., 144 N.W. at 728).
[¶41.] More recently, we have clarified that “the term public use, as used in
Article VI, simply means ‘use by the public[.]’” Montana-Dakota Utils. Co. v.
Parkshill Farms, LLC, 2017 S.D. 88, ¶ 10, 905 N.W.2d 334, 338 (alteration in
(. . . continued)
the surface owner’s property. See, e.g., Ambrosia Land Invs., LLC v. Peabody
Coal Co., 521 F.3d 778, 785 (7th Cir. 2008) (“[L]iability depends not on fault
but arises from its absolute duty to provide the surface with support[.]”
(citing Wilms v. Jess, 94 Ill. 464 (1880))). However, Plaintiffs must first
establish a viable inverse condemnation claim to maintain their claims for
strict liability.
-20-#30899
original) (quoting Ill. Cent. R.R. Co., 144 N.W. at 728). “[T]he matter that is
controlling . . . is not the necessity of the use, not even the fact of use, but the right
to use.” Id. (alterations in original) (citation omitted). “As long as every member of
the public has an equal right to use the [goods] produced by the facility, it does not
matter how many use the [goods] or that not every person benefits from the
facility’s use.” Id. ¶ 13, 905 N.W.2d at 339 (quoting 2A Julius L. Sackman, Nichols
on Eminent Domain § 7.05(4)(d)). Under the public use test, South Dakota citizens
and the public do not have the right to use the mining rights retained by the State
or to appropriate any of the gypsum should the State ever decide to mine gypsum
from this location in the future.
[¶42.] Additionally, the Plaintiffs’ claims for inverse condemnation based
upon an alleged ongoing duty on the part of the State, as the subsurface owner, to
permanently provide subsurface support to private property owners lacks any
discernable public use. Plaintiffs seemingly acknowledge that mining gypsum is not
currently economically feasible, and they have not identified any other public use of
the State’s ownership of the mining rights to the property. “The underlying intent
of the [damaging] clause is to ensure that individuals are not unfairly burdened by
disproportionately bearing the cost of projects intended to benefit the public
generally.” Rupert, 2013 S.D. 13, ¶ 9, 827 N.W.2d at 61 (citation omitted).
Plaintiffs have failed to show any general public benefit from the State’s ownership
of the mining rights to the property within the meaning of Article VI, § 13 of the
South Dakota Constitution. This case is unlike Rupert, where the city intentionally
used deicer on the streets for the safety of the public, and the deicer runoff damaged
-21-#30899
private property. Similarly, in Long, damage occurred as a result of the initial
construction and subsequent resurfacing project that installed an inadequate
culvert, which damaged the plaintiff’s private property. In both Rupert and Long,
the governmental entities involved were intentionally providing a benefit to the
public through the ongoing maintenance and construction of streets and highways.
Here, neither the State’s ownership of the mining rights to the property, nor the
alleged failure of the State to provide adequate subsurface support to the surface
owner, are intended to benefit the general public.
[¶43.] Applying the use by the public test, the Cement Plant’s prior surface
mining operations and resulting minerals were for proprietary and commercial use,
not for “public use.” Under these facts, Plaintiffs cannot satisfy the “public use”
element of an inverse condemnation claim. Because we may “affirm the circuit
court on summary judgment if it is correct for any reason,” we conclude the circuit
court did not err in granting summary judgment to the State. A-G-E Corp. v. State,
2006 S.D. 66, ¶ 13, 719 N.W.2d 780, 785 (citation omitted).
[¶44.] Based upon our conclusion that the State’s activities in this case
relating to the mining and ownership of the subject property did not constitute a
taking or damaging of private property for a public use, Plaintiffs have not
established a claim for inverse condemnation. We need not address Plaintiffs’
claims of strict liability, nor the State’s claims that the action should also be
dismissed on the basis of causation, standing, or that the action is untimely under
SDCL 15-3-1.
-22-#30899
[¶45.] While we acknowledge the devastating and sympathetic circumstances
in which Plaintiffs find themselves, our review is limited to the claims before us,
and Plaintiffs have not presented viable claims against the State in the present
action.
Conclusion
[¶46.] We affirm the circuit court’s grant of summary judgment because
Plaintiffs have failed to prove that a genuine issue of material fact exists regarding
whether the Cement Plant’s activities constitute a taking or damaging of private
property for public use.
[¶47.] JENSEN, Chief Justice, and SALTER, DEVANEY, and MYREN,
Justices, concur.
[¶48.] GUSINSKY, Justice, not having been a member of the Court at the
time this action was considered by the Court, did not participate.
-23-