24 Inverse Condemnation
A. Definition1
An action for inverse condemnation, recognized at common law,2 is appropriate where the government takes private property for public use.3 The difference between condemnation and inverse condemnation is that in the former the governmental entity is the moving party, but in the latter the property owner is the moving party.4 Inverse condemnation is a cause of action against a government to recover the value of property that has been taken even though no formal exercise of eminent domain was attempted by the taking agency.5 It is not a tort action, but rather is based on the constitutional prohibition against taking property without compensation.6 The prohibition is found in both the federal and state constitutions. The Fifth Amendment to the United States Constitution provides that "private property [shall not] be taken for public use, without just compensation." It is applicable to the states through the Fourteenth Amendment. Under Art. I, § 13 of the South Carolina Constitution: "Except as otherwise provided in this Constitution, private property shall not be taken for private use without the consent of the owner, nor for public use without just compensation being first made therefor." Actions may be brought under both constitutions.7
South Carolina courts have construed the state provision not to require an actual physical taking of property to entitle its owner to compensation. Property may be taken, within the meaning of the state constitution even though the owner's title and possession remain undisturbed. Deprivation of the ordinary beneficial use and enjoyment of property is equivalent to taking it just as if the property itself were actually appropriated."8
There is no constitutional right to a jury trial in an inverse condemnation case; however, the statutory right to a jury in eminent domain cases applies to the compensation phase of inverse condemnation actions.9 Thus, in an inverse condemnation case, the trial judge must determine whether a claim has been established, after which the issue of compensation may then be submitted to a jury at the request of either party.10
It is important to note that regulatory taking cases are for strategic reasons — statutory attorney's fees11 and availability of punitive damages12 — frequently brought under the federal Civil Rights Act.13 The Act is a vehicle for challenging alleged violations of federal constitutional or statutory rights.
B. Elements
Until the South Carolina Supreme Court decided Byrd v. City of Hartsville,14 the elements of an inverse condemnation were: (1) an affirmative, positive aggressive act on the part of the government agency; (2) a taking; (3) the taking is for a public use; and (4) the taking has some permanence.15 In Byrd the court changed the elements. It removed the element of "some degree of permanence, because, said the court, it conflicts with the principle that the government must compensate for even a temporary taking."16 Then it said that, in the case of a regulatory taking, the element that requires the taking to be for "public use" is inapplicable. Finally, the court stated the first element as simply "affirmative conduct of a government entity."
Thus there are apparently now two sets of elements for inverse condemnation actions. In a regulatory inverse condemnation there are only two elements:
(1) affirmative conduct, and
(2) a taking.17
If inverse condemnation results from a physical appropriation of private property, then there is a third element: the taking is for a public use.
C. Elements Defined
1. Affirmative Conduct
Prior to Byrd v. City of Hartsville,18 the first element was usually stated as "an affirmative, positive, aggressive act on the part of the government agency."19 Byrd described the element as: "affirmative conduct of a government entity." It is not clear that the Byrd court intended to change the first element and eliminate the words "positive" and "aggressive," or that if those words have been eliminated, that any substantive change has occurred. Be that as it may, the use of the word "aggressive" in the first element did not imply malice. Malice has not been required to prove an action in inverse condemnation,20and neither has negligence21 or intent.22 Omissions have not been considered to constitute "affirmative, positive, aggressive acts."23 A mere mistake will generally not rise to the level of an affirmative, aggressive, and positive act that is sufficient to constitute inverse condemnation.24 Damages resulting from ordinary malfunctions in public works facilities — burst water pipes,25 backed up sewer lines26 — are also insufficient to support an action for inverse condemnation.27 Overt, positive actions must be alleged.28 When the government has initially engaged in affirmative conduct, the property owner is not required to request that it cease that conduct before bringing an action at law for a taking.29
For example, in Newsome v. Town of Surfside Beach,30 a town rebuilt a street. As a result, the street was higher than the plaintiff's house, causing water to congregated there. The court decided that from the evidence the jury could easily have concluded that building up the street satisfied the requirement of an overt or positive action. Similarly, during an urban redevelopment project a city removed a public sidewalk and support and failed to backfill the excavation, causing flood waters to enter a basement. The city's behavior constituted an affirmative, positive, aggressive act.31 In Kline v. City of Columbia,32 the city excavated a street to change the location of a fire hydrant as part of a street-widening. A gas line running from the street to the plaintiffs' building was alleged to have been negligently pulled loose while the street was excavated. The result was an explosion and fire allegedly caused by leaking gas. The court found a cause of action for inverse condemnation because it appeared the city was "involved in an affirmative, aggressive and positive act of improving and widening a public street for public use."33
In Kiriakides v. Sch. Dist.,34 the parties engaged in extensive negotiations about the potential voluntary sale of the appellant's property to the appellee school district. When the negotiations failed, the district followed the statutory procedures for an eminent domain action and served a notice of condemnation on the appellant. The appellant challenged the right of the district to condemn after being served with the district's notice by filing a separate action alleging inverse condemnation. The action stayed the condemnation proceedings. The school district subsequently notified the appellant that it had abandoned its efforts to condemn the property and, indeed ultimately purchased a different piece of property located nearby. The court found no merit in the appellant's arguments that the mere threat of a condemnation suit stigmatized his property and that the district's alleged delay in bringing the condemnation action entitled him to damages for an inverse condemnation. Institution of condemnation proceedings, said the court, is a legitimate exercise of the government's authority and does not constitute a taking. No public action stigmatized the property because no public communication of the district's interest in the property was made until it sought a court order to allow an appraiser to enter the property after the appellant denied access. The court concluded that the nine-month period between the time the district served notice of condemnation and the date on which it notified the appellant in writing that it was abandoning the condemnation proceeding because of the appellant's opposition and the need to proceed with the project also did not establish a taking.
2. A Taking
A taking may result from physical intrusion — e.g., flooding35 — or regulation — i.e., zoning ordinances, exactions or other regulations.36 That the defendant lacks eminent domain power — and, therefore may not have had authority to the commit acts complained of — is not relevant to the question of whether there has been a taking, nor does it render affirmative, positive, aggressive acts any less a taking.37
Proper analysis of an inverse condemnation claim premised on an alleged physical taking begins with a determination of the scope of the property rights at issue.38
The South Carolina Supreme Court has outlined the variables.39 There are two circumstances in which there is a "per se" taking. First, if there is a permanent physical occupation of property, a taking occurs regardless of the public interest it may serve or the minimal economic impact to the landowner. Secondly, a regulation that deprives property of all economic value is also a taking.40 If, however, there is not a total economic deprivation, a balancing test is applied to determine whether there has been a taking, unless a regulation imposes a "physical exaction"— a dedication of property to public use — as a condition of an approval or permit, in which case a more stringent review is employed.41 The balancing test derives from the United States Supreme Court decision in Penn Central Transportation Co. v. New York City.42 Three factors are weighed to decide whether the public benefit of a regulation transcends the private harm to the landowner: (1) the character of the government action; (2) the economic impact of the regulation on the plaintiff; and (3) the degree to which the regulation interferes with distinct "investment-backed expectations."43Where the public benefit outweighs the harm to the landowner, there is no taking.44 The general principles do not change when there is a temporary regulatory taking.45
The South Carolina Supreme Court has recognized that temporary takings may occur,46and has said there may be a taking even if the property owner has suffered only a temporary loss of part of the economically viable use of his or her property.47 The concept was limited by the...
