FILED

November 13, 2017

released at 3:00 p.m.

EDYTHE NASH GAISER, CLERK

SUPREME COURT OF APPEALS

OF WEST VIRGINIA

No. 16-1047 - West Virginia Lottery, West Virginia Lottery Commission, and Alan

Larrick, Director of the West Virginia Lottery v. A-1 Amusement, Inc.,

Action Gaming, Inc., Advanced Lottery Technologies, LLC, Blue

Diamond, LLC, CD 3 LLC, Clay Music Corp., Coach’s Club

Association, Dusty Enterprises, Inc., Elm Room, Inc., Fabulous 50's

Café, LLC, Gridcoach, LLC, Hot 5 Stop, LLC, Jerry’s Bar Association,

Leejay, Inc., LL&M, LLC, Mimi’s Inc., Moose Nitro Lodge 565,

Mountaineer Music, LLC, PDM Associates of Weirton, LLC, Palatokas

Associates, LLC, Patty’s, Inc., Progressive Video Lottery, LTD.,

Random World, LTD., TA Vending, LLC, The Lounge, LLC, Tiffany’s,

LLC, Trans-allegheny Enterprises, LLC, Wheeling Coin, LLC, Woldap,

LLC, WV “Café” Holding Company, LLC, and West Virginia

Amusement & Limited Video Lottery Association, Inc.

Davis, Justice, dissenting:

This was a simple case that the majority has transformed into a fiscal nightmare

for the State treasury and its taxpayers. In this proceeding, the circuit court ruled that the

plaintiffs did not have to limit their “takings” claim for relief to the insurance policy limits

provided by the Lottery Commission. The circuit court found that, because the plaintiffs’

theory of liability was grounded on the Takings Clause of the State Constitution, the

plaintiffs are entitled to receive whatever amount of compensation a jury decides to award

them. The majority opinion not only agreed with the circuit court, but it went where no

judicial opinion of this Court has ever gone in the history of this State! That is, the majority

of the Court has now ruled that all claims against the State for injury to personal property

unrelated to real estate must be litigated as an eminent domain proceeding under W. Va.

Code § 54-2-1 et seq. Such a decision is fiscally irresponsible because it extends the concept

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of condemnation to arenas where no one could have fathomed it would ever apply and will

undoubtedly be financially devastating to this State. For the reasons set out, I firmly dissent.1

Only the Legislature has Authority to Expand the Scope of 

Eminent Domain Proceedings

The greatest tragedy in the majority opinion is the complete absence of any

constitutional or statutory analysis to determine whether a claim against the State for the

alleged taking of purely personal property, unrelated to real estate, is authorized in an

eminent domain proceeding. Because the majority opinion utterly fails to include this critical

legal analysis in its decision of this case, I will supply it in my dissent.

To begin, the state constitutional basis for compensation by the State for taking

property is found in article III, § 9 of the West Virginia Constitution:

Private property shall not be taken or damaged for public

use, without just compensation; nor shall the same be taken by

any company, incorporated for the purposes of internal

improvement, until just compensation shall have been paid, or

secured to be paid, to the owner; and when private property shall

be taken, or damaged for public use, or for the use of such

corporation, the compensation to the owner shall be ascertained

in such manner as may be prescribed by general law: Provided,

That when required by either of the parties, such compensation

shall be ascertained by an impartial jury of twelve freeholders. 

(Emphasis added). This constitutional provision clearly states that both the State and

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The majority opinion resolved two other issues that pale in comparison to the

profoundly catastrophic eminent domain ruling.

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authorized corporations must provide just compensation for taking “private property.” More

importantly, the Takings Clause expressly requires the Legislature to enact legislation for

carrying out the intent of this constitutional provision. Relevant to this case, the Legislature

enacted W. Va. Code § 54-2-1 et seq. to govern the taking of private property by the State. 

Consequently, we must look to this statutory scheme to discern whether the Legislature has

authorized an eminent domain proceeding by the State to compensate a party for purely

personal property, unrelated to land.

The jurisdiction in which the State may bring a condemnation proceeding is

set forth in W. Va. Code § 54-2-1 (1882) as follows:

In any case in which property may lawfully be taken for

a public use, application may be made by petition to the circuit

court or the judge thereof in vacation, of the county in which the

estate is situated, to appoint commissioners to ascertain a just

compensation to the owners of the estate proposed to be taken.

If a tract lies partly in one county and partly in another, the

application in relation thereto may be made in either county.

(Emphasis added). West Virginia Code § 54-2-2 (1957) outlines certain matters the State

must include in a complaint for eminent domain. This statute states, in pertinent part:

The pleadings shall be in writing and shall be verified. 

The petition shall describe with reasonable certainty the

property proposed to be taken, and may embrace one or more

parcels of land where the ownership is the same. If an estate

less than a fee is proposed to be taken, the petition shall describe

with reasonable certainty the particular estate less than the fee

which it is proposed to take, the name of the owner or owners

thereof, the manner and extent of their respective interests. If

there are any liens upon or conflicting claims to such real estate,

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the petition shall state the nature and amount of such liens and

claims and the names and places of residence of the persons who

hold the same, so far as known to the petitioner.

(Emphasis added). When a condemnation proceeding is initiated, it is first heard by a

condemnation commission. West Virginia Code § 54-2-9 (1963) describes the duties of the

commission as follows:

The commissioners, after viewing the property, if a view

is demanded, and hearing any proper evidence which is offered

shall ascertain what will be a just compensation to the person

entitled thereto for so much thereof as is proposed to be taken,

or for the interest therein, if less than a fee, and for damage to

the residue of the tract beyond all benefits to be derived, in

respect to such residue, from the work to be constructed, or the

purpose to which the land to be taken is to be appropriated,

including, when less than the fee is taken, the actual damage, if

any, done, or that may be done, to the fee by such

construction[.] 

(Emphasis added).

It is quite clear to me that, pursuant to the above-quoted statutes, the

Legislature has provided for a condemnation proceeding involving the State when the matter

concerns taking real property, i.e., land. Nothing in these statutes provides for a

condemnation action involving the State that is brought to compensate a party for the socalled taking of purely personal property that is completely unrelated to land. It is equally

clear to me why the majority opinion conveniently failed to examine these statutes: none of

these statutes support the cause of action created by the majority for the alleged additional

expenditure of money to compensate the plaintiffs for buying new computer programs!

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The only authority relied upon by the majority opinion in reaching its absurd

decision was dicta from the opinion in G.M. McCrossin, Inc. v. West Virginia Board of

Regents, 177 W. Va. 539, 355 S.E.2d 32 (1987), wherein Chief Justice McGraw suggested

that a claim against the State for injury to personal property might be brought under W. Va.

Code § 54-2-1 et seq. If the majority opinion had performed a scintilla of research, however,

it would have discovered that the case Justice McGraw cited for support of his dicta, Teter

v. West Virginia Central & Pittsburgh Railway Co., 35 W. Va. 433, 14 S.E. 146 (1891), did

not involve a State eminent domain proceeding. 

The decision in Teter involved a railroad company that had removed “valuable

stone” from the plaintiffs’ land for the purpose of building a bridge. The plaintiffs filed an

action to enjoin the railroad company from removing the stone. The trial court ultimately

granted a partial injunction that prohibited the railroad company from quarrying and splitting

out stone, but allowed it to remove stone that was “already split by the defendant in sizes

suitable for building and abutment purposes[.]” Teter, 35 W. Va. at 434, 14 S.E. at 147. The

plaintiffs appealed the partial injunction order. On appeal, this Court examined the railroad

company’s conduct under the Takings Clause and specific statutes related to takings by

railroad companies and by corporations generally. In doing so, the Court in Teter found that

the Legislature provided for eminent domain proceedings against railroad companies for

taking not only real estate, but personalty such as “wood, earth, gravel, shale, or stone,

necessary to be used in constructing its railroad[.]” Teter, 35 W. Va. at 436, 14 S.E. at 147. 

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The opinion reasoned as follows:

That this provision [the Takings Clause] was intended to

protect stone and other “material” annexed to the freehold, or

detached therefrom, is sufficiently proved by the fact that the

legislature has provided all of the procedure for taking the same,

by the exercise of eminent domain, which it has instituted for

the taking of real estate. This is abundantly proved by section

14, c. 52, Code, in regard to corporations generally, and by the

provisions of chapter 54, § 49, which are exclusively applicable

to railway companies. . . .

. . . .

[T]he mode of taking material from lands adjoining a railway is

fully provided for, and such material is placed by our Code

under the full protection of the shield of the constitution. It is

hardly necessary to add that such material cannot be taken,

without the owner’s consent, until due compensation is paid or

secured by the company; nor does it make a particle of

difference whether the same is still attached to the land, or has

been detached therefrom by the agents of the company; neither

the constitution nor the statute recognizes any such distinction. 

The action of the Circuit Court, therefore, in treating the

company as an ordinary trespasser, was erroneous. It should

have been treated as an internal improvement company, or

railroad company, which had the right to take material for the

construction of its road, without the owner’s consent, and which,

in the exercise of that right, had failed to comply with the

conditions imposed by the constitution and the legislature of the

State.

The clause of the constitution which we are now

considering protects private property in personalty as fully as in

real estate; neither can be taken against the owner’s consent

until payment is first made or secured.

But, for the purposes of this suit, it is sufficient to know

that the legislature has construed the Constitution for us in the

matter of taking stone and the like material by railway

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companies from adjacent lands without the owner’s consent.

Teter, 35 W. Va. at 435-36, 14 S.E. at 147-48 (emphasis in original; citations omitted). The

opinion in Teter reversed the circuit court’s order and remanded the case for further

proceedings that included an eminent domain proceeding as provided for against railroad

companies.

What is important to understand about Teter is that its discussion of an eminent

domain proceeding involving personalty was limited to items removed from land by railroad

companies–as expressly authorized by the Legislature. The dicta by Chief Justice McGraw

in McCrossin, which was relied upon by the majority opinion, took the ruling in Teter out

of context. Teter did not hold that this Court may create an eminent domain cause of action

that requires the State to compensate a party for taking personal property, unrelated to land.2

This Court does not have the authority to create such a cause of action. The West Virginia

State Constitution expressly has delegated exclusive authority to the Legislature to create

eminent domain proceedings. This point was acknowledged by this Court in Syllabus point

2 of State ex rel. Firestone Tire & Rubber Co. v. Ritchie, 153 W. Va. 132, 168 S.E.2d 287

(1969), wherein we held:

Where the constitution provides that private property

shall not be taken or damaged for public use without just

2

In fairness to the parties in this litigation, they did not raise or brief this issue. The

majority opinion sua sponte decided to address this matter with literally no briefing on the

matter by the parties.

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compensation, damage to personal property is covered therein

and is subject to condemnation proceedings; provided, proper

procedure is enacted by the legislature to cover such property

where required in the constitution unless such provisions are

self-executing.

(Emphasis added). The decision in Firestone pointed out that

[t]he general law with regard to the procedure for

compensation in eminent domain proceedings is found in

Chapter 54 of the Code of West Virginia. When the state

institutes condemnation proceedings under the general law

dealing with eminent domain, the only procedure set out therein

for compensation is for land or real estate taken or for the

interest therein if less than a fee, and for damages to the residue

of the tract adjacent thereto. Code, 54-1-1 et seq., as amended,

and in particular Code, 54-2-9, as amended. There is no

procedure prescribed by general law for compensation for

personal property[.]

This Court has clearly indicated that there is no procedure to

obtain damage to personal property in eminent domain

proceedings instituted by the state under Chapter 54 of the

Code.

Firestone, 153 W. Va. at 138, 168 S.E.2d at 290-91 (citation omitted; emphasis added).

In the final analysis, when the Legislature intends for personal property to be

the sole basis of a condemnation proceeding, it knows exactly how to enact legislation to

achieve this result. See W. Va. Code § 54-2-2a (1973) (“[A] public utility, person or

corporation required . . . to obtain a certificate of public convenience and necessity for the

construction and location of a high voltage transmission line, shall file a certified or attested

copy of such certificate with its petition to condemn real or personal property for the

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construction of such high voltage transmission line. Failure to file such certified or attested

copy of such certificate shall result in dismissal of the petition.” (emphasis added)). The

Legislature has not authorized a condemnation proceeding to require the State to condemn

personal computer programs and compensate their owners. The majority opinion has

determined to adopt such a procedure of its own accord. And, simply put, the majority is

flatly wrong because it has chosen to ignore the very clear constitutionally-drawn line of

demarcation!!!

The implications of the majority’s rogue opinion are fiscally frightening. I urge

the Legislature to act quickly to undo the potentially catastrophic financial consequences to

the State that could result from the majority’s absurd and patently unfounded decision. For

example, the hundreds of personal property cases against the State that are yearly litigated

in the former Court of Claims3

 can now, thanks to the majority’s opinion, be brought as

inverse condemnation actions to force the State to institute condemnation proceedings. The

Legislature must make clear that which has always been clear until the majority inexplicably

blurred the unmistakable line. Therefore, I implore the Legislature to swiftly enact

legislation that prohibit a party from bringing an inverse condemnation proceeding to require

the State to condemn purely personal property that is unrelated to the taking of land. The

sanctity of our State’s coffers depends on it.

3

The Court of Claims was renamed the West Virginia Legislative Claims Commission.

See W. Va. Code § 14-2-4 (2017).

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Based on the foregoing, I vigorously dissent.

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