Fox Rothschild attorney: If left to stand, ruling opens 'Pandora’s Box’ for all citizens

Attorneys for Hideaway Hills homeowners have asked the South Dakota Supreme Court to rehear a ruling that invalidates claims seeking to hold the State responsible for areas of instability that have left the Black Hawk-area subdivision virtually uninhabitable.

“We appreciate the court’s focus on the questions of inverse condemnation. However, its July 9 opinion in this case is inconsistent with both its own prior opinions and the South Dakota Constitution,” said attorney Kathleen Barrow of Fox Rothschild, who, along with David Grant Crooks, represents Hideaway Hills homeowners.

The request for rehearing is based on the court’s failure to acknowledge that the State’s remediation work was the direct cause of current and ongoing damage to surface owners of land and homes at Hideaway Hills. The court’s opinion also misapplied the “public use” standard, according to the filing.

“Not only does this opinion fail the residents of this endangered subdivision, it overlooks the need to establish consequences for the actions of the State and accountability to all citizens of South Dakota,” said Ms. Barrow. “The retention of the mineral estate is a public use benefiting South Dakota schools as well as the State generally, as a matter of South Dakota constitutional law. In concluding otherwise, this court has opened Pandora’s Box.

“If the retention of mineral rights is not a public use, then it is not a lawful exercise of the eminent domain power. And if it is not a lawful exercise of the eminent domain power, then it is nothing more than an unlawful refusal to fulfill the State’s obligations as the servient landowner—which can be the subject of an action for a costly injunction ordering the State to fix Hideaway Hills for all time.”

Andrew Morse and John and Emily Clarke et al. v. State of South Dakota dates to April 2020, when a sinkhole revealed an abandoned State-operated gypsum mine directly below the Hideaway Hills subdivision. Investigations by geotechnical engineers revealed that inadequate remediation of the cement plant-related gypsum mine left the subsurface areas of the subdivision unstable. The movement and sinking of the subsurface has resulted in neighborhood damage, has forced 13 homes into condemnation, and more than 150 additional homes are threatened by potential collapse due to surface instability, according to the filing.

The class action lawsuit seeks to hold the State responsible for its ineffective attempts at remediation after closing the gypsum mines that supported a for-profit cement company. Geotechnical testing on soils in the neighborhood has shown high concentrations of water-soluble gypsum in fill dirt the State used to reclaim the acreage on which the subdivision was built. Testing indicates that soils used by the State for mine reclamation contain an average of about 50% pulverized gypsum and a high of 80%, leaving them prone to disintegration when exposed to moisture.

The attorneys say more than $300 million in proceeds from the past sale of the cement plant are held by the State currently and could be available to remediate the damage to homes and property at Hideaway Hills.

The filing in Andrew Morse and John and Emily Clarke et al. v. State of South Dakota et al., No. 30899 can be found here.

About Fox Rothschild LLP

Fox Rothschild is a national law firm with 30 offices, located across 18 states and Washington, D.C. The firm focuses on client service and responsiveness with bright and creative lawyers who know how to deliver. More information at foxrothschild.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260730444504/en/