904 N.W.2d 358
S.D.2017Background
- Landowners owned property near Highway 11 (state-controlled) and suffered flooding damage in July 2010; they sued the State (and City) for inverse condemnation under S.D. Const. art. VI, § 13.
- The circuit court found the State liable for constructing Highway 11 with inadequate culverts; a jury later awarded individualized damages to each Landowner set.
- After prevailing on liability and damages, Landowners moved under SDCL 5-2-18 (which references the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA)) for reimbursement of "reasonable attorney, appraisal and engineering fees, and other related costs."
- The circuit court denied the motion, relying on Rupert v. City of Rapid City and the American Rule (each party bears its own fees) because SDCL 5-2-18 uses permissive language and does not expressly authorize fee awards.
- Landowners argued the Legislature intended to adopt the URA (including fee provisions) by reference via SDCL 5-2-18; the State argued adoption was permissive, the URA’s fee provisions apply to federal proceedings only, and federal regulations cannot expand state remedies.
- The Supreme Court of South Dakota affirmed: SDCL 5-2-18 is permissive ("may"), does not plainly authorize attorney’s fees, and the URA/49 C.F.R. § 24.107 does not create a private right to fees in state inverse-condemnation suits absent state statutory authorization.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a prevailing state inverse-condemnation claimant may recover attorney’s fees and litigation expenses under SDCL 5-2-18 (which references the URA) | SDCL 5-2-18 incorporates URA by reference; URA (and 49 C.F.R. § 24.107) requires reimbursement of reasonable attorney, appraisal, and engineering fees for successful inverse-condemnation claimants | SDCL 5-2-18 is permissive and does not expressly authorize fees; URA fee provisions apply to federal takings proceedings and cannot create new state-law remedies; American Rule bars fees absent clear legislative grant | Court held SDCL 5-2-18 is permissive and does not authorize attorney’s fees; URA/regs do not create a private right to fees in state court; affirmed denial of fees |
Key Cases Cited
- Rupert v. City of Rapid City, 827 N.W.2d 55 (S.D. 2013) (reaffirming American Rule and that statutes must expressly authorize fee awards)
- Rapid City v. Baron, 227 N.W.2d 617 (S.D. 1975) (refusing to let URA policy language modify state constitutional/statutory measures of compensation)
- Travis County Landfill Co. v. City of Austin, 25 S.W.3d 191 (Tex. App. 1999) (URA fee provisions apply to federal proceedings; do not authorize state-court fee awards)
- Randolph v. Missouri Highways & Transportation Comm'n, 224 S.W.3d 615 (Mo. Ct. App. 2007) (declining to apply URA to create fee awards in state inverse-condemnation actions under American Rule)
- McCarran Int'l Airport v. Sisolak, 137 P.3d 1110 (Nev. 2006) (different outcome where Nevada statute mandated URA compliance)
- Bonanza, Inc. v. Carlson, 9 P.3d 541 (Kan. 2000) (award of fees where Kansas statutes/regulations expressly adopted URA and federal regs by reference)
- Estate of Kirkpatrick v. City of Olathe, 215 P.3d 561 (Kan. 2009) (similar Kansas precedent awarding fees based on state adoption of URA/regulations)