Mdu v. Parkshill Farms
2017 SD 88
| S.D. | 2017Background
- Montana-Dakota Utilities Co. and Otter Tail Power Co. (Utilities), members of MISO and subject to FERC rules, sought permanent 150-foot-wide easements across four Parkshill Farms / Parks parcels to build a 345 kV transmission line (part of the BSSE project).
- Utilities negotiated routes and obtained voluntary easements from about 91% of affected parcels; the Parkses refused and the Utilities condemned the easements by eminent domain.
- The circuit court granted the petition; a jury trial later determined just compensation (after-value loss). The jury awarded approximately $95,046 to multiple landowners; the Parkses’ appraiser had sought $840,000.
- Parks argued on appeal that (1) the taking was not for a public use, (2) the easements (including perpetual duration and broad rights) were not necessary, and (3) the trial court erred by refusing a jury instruction requiring consideration of the most injurious reasonably possible use under the easement.
- The Supreme Court of South Dakota held the easements were for a public use and the Utilities’ necessity determination was not an abuse of discretion, but reversed and remanded for a new compensation trial because the jury instructions failed to require consideration of all rights actually taken under the easements.
Issues
| Issue | Plaintiff's Argument (Utilities) | Defendant's Argument (Parks) | Held |
|---|---|---|---|
| Whether the easements were taken for a public use | Utilities are public utilities required to provide nondiscriminatory, regulated service; transmission is public use | Parks: public must have same right to use as condemnor; Utilities could exclude or sell rights, so not public use | Held: Public use satisfied — public has equal right to service; regulatory duties and nondiscriminatory access make the use public |
| Whether the easements were necessary (scope & duration) | Necessity and scope are legislative/administrative decisions; court limited to fraud, bad faith, or abuse of discretion; perpetual easements reasonable for long-term transmission needs | Parks: Perpetual easements unnecessary when ND easements limited; taking broad rights Utilities do not intend to use is abuse of discretion | Held: No abuse of discretion; utilities may take enumerated rights for possible future needs; limited judicial review under abuse-of-discretion standard |
| Whether jury should consider all rights taken (including unused rights) in valuation | Instructions given (before/after formula; value of land occupied and diminution of remainder) were sufficient | Parks: Jury must consider all present and prospective damages and the most injurious reasonably possible use under the easement | Held: Reversed on this point — jury instructions were inadequate; jury must be instructed to value property assuming the condemnor may exercise rights expressly acquired (reasonable, non-speculative uses) |
| Remedy / Relief | Affirm condemnation; uphold compensation award | New trial on compensation if jury not instructed to value all taken rights | Held: Affirmed public-use and necessity; reversed on compensation issue and remanded for new trial with proper instruction on rights taken |
Key Cases Cited
- Darnall v. State, 79 S.D. 59 (1961) (discusses eminent domain as an attribute of sovereignty)
- Ill. Cent. R.R. Co. v. E. Sioux Falls Quarry Co., 33 S.D. 63 (1913) (defines public use and analyzes rights of public-service condemnors vs. public)
- Kelo v. City of New London, 545 U.S. 469 (2005) (addresses judicial deference to legislative determinations of public purpose)
- State ex rel. Dep’t of Transp. v. JB Enters., Inc., 889 N.W.2d 131 (S.D. 2016) (property owner entitled to compensation for rights expressly taken, even if condemnor does not use them)
- Basin Elec. Power Coop. v. Payne, 298 N.W.2d 385 (S.D. 1980) (defines abuse of discretion standard in eminent domain context)