In a significant ruling, the South Dakota Supreme Court upheld a lower court's decision regarding a lawsuit brought by homeowners in the Hideaway Hills subdivision. The court ruled that the State of South Dakota was not liable for damages related to subsidence and property devaluation caused by mining activities beneath the residential area. This decision affects over 150 homeowners who have been dealing with structural issues in their homes due to the instability of the land.
The case, Morse v. State, was filed on July 9, 2026, under docket number 30899. Homeowners Andrew Morse, along with John and Emily Clarke, represented the plaintiffs in this class action lawsuit. The homeowners claimed that the State's improper reclamation of land previously mined for gypsum led to serious foundational problems, including cracking walls and the opening of sinkholes. The ruling is crucial as it addresses the legal responsibilities of state entities concerning land reclamation and homeowners' rights.
The dispute began when residents of Hideaway Hills first noticed structural issues in their homes in 2008, escalating to a significant sinkhole in April 2020. The homeowners alleged that the State's mining activities and subsequent reclamation efforts were inadequate, leading to their property damage. They argued that the State's failure to provide proper subsurface support amounted to a taking or damaging of their property under the South Dakota Constitution.
The legal battle reached the South Dakota Supreme Court after the circuit court granted summary judgment in favor of the State. The circuit court found that the homeowners' claims were essentially tort claims, which are barred by sovereign immunity principles. The homeowners appealed this decision, arguing that their claims for inverse condemnation should not be subject to sovereign immunity.
In its ruling, the South Dakota Supreme Court affirmed the lower court's decision, stating, "The Plaintiffs have failed to set forth a viable claim for inverse condemnation." The court explained that the State's mining and reclamation activities occurred while it owned the property, thus not constituting a taking of private property. The court emphasized that the State had the right to utilize the land it purchased, and the homeowners could not claim damages for actions taken on publicly owned land.
The ruling has significant implications for homeowners and property owners in South Dakota. It clarifies the limits of state liability regarding land reclamation and mining activities. The court's decision reinforces the principle of sovereign immunity, which protects the State from tort claims unless explicitly waived by law. This outcome may deter similar claims from homeowners affected by state actions in the future.
Looking ahead, it is unclear if the plaintiffs will seek to appeal the decision further. The court's ruling appears to set a precedent regarding the responsibilities of state entities in managing land previously used for mining and the legal protections available to homeowners in such situations. The case highlights the ongoing challenges faced by residents living in areas with a history of mining and the complexities of property rights in relation to state actions.