Court Opinion

ID: 4222944
Source: CourtListenerOpinion
Date Created: 2017-11-22 14:15:43.712398+00
Date Added: 2024-06-11T07:47:50.479136
License: Public Domain

#27381-a-JMK
2017 S.D. 78

                             IN THE SUPREME COURT
                                     OF THE
                            STATE OF SOUTH DAKOTA

                            ****
MARK AND MARILYN LONG,
ARNIE AND SHIRLEY VAN VOORST,
TIM AND SARA DOYLE,
TIMOTHY AND JANE GRIFFITH
AND MICHAEL AND KAREN TAYLOR,                Plaintiffs and Appellants,

      v.

STATE OF SOUTH DAKOTA,                       Defendant and Appellee.

                                    ****
                   APPEAL FROM THE CIRCUIT COURT OF
                      THE SECOND JUDICIAL CIRCUIT
                    LINCOLN COUNTY, SOUTH DAKOTA
                                    ****
                   THE HONORABLE PATRICIA C. RIEPEL
                            Retired Judge
                                    ****

MARK V. MEIERHENRY
CHRISTOPHER HEALY
CLINT SARGENT of
Meierhenry Sargent, LLP
Sioux Falls, South Dakota                    Attorneys for plaintiffs
                                             and appellants.

GARY P. THIMSEN
JOEL E. ENGEL III of
Woods, Fuller, Shultz & Smith, PC
Sioux Falls, South Dakota                    Attorneys for defendant
                                             and appellee.

                                    ****
                                             ARGUED ON
                                             JANUARY 12, 2016

                                             OPINION FILED 11/21/2017
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KERN, Justice

[¶1.]         After Landowners prevailed against the State on a claim of inverse

condemnation, Landowners requested that the State pay “reasonable attorney,

appraisal and engineering fees, and other related costs” pursuant to SDCL 5-2-18

and the Uniform Relocation Assistance and Real Property Acquisition Policies Act

of 1970, which is codified at 42 U.S.C. §§ 4601–4655 (2012). The circuit court

denied their request. Landowners appeal. We affirm.

                                  BACKGROUND

[¶2.]         In July 2010, Landowners1 suffered significant flooding that damaged

their real and personal properties. Landowners’ properties are located on the west

side of Highway 11, north of the intersection of Highway 11 and 85th Street. The

South Dakota Department of Transportation (DOT) built Highway 11 in 1949 and

the State maintains sole control of Highway 11. Highway 11 runs north and south

through Lincoln and Minnehaha Counties and lies across the natural waterway

known as Spring Creek.

[¶3.]         Landowners filed an inverse condemnation claim against the State and

the City of Sioux Falls seeking damages due to the flooding of Landowners’

properties after a heavy rainfall. A court trial was held in February 2014 on the

issue of liability. The circuit court found the construction of Highway 11 and the

inadequate culverts beneath it caused the flooding damage to Landowners’ real and

personal properties. In December 2014, a jury trial was held on the issue of

1.      Landowners include Mark and Marilyn Long, Arnie and Shirley Van Voorst,
        Tim and Sara Doyle, Timothy and Jane Griffith, and Michael and Karen
        Taylor.

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damages. The jury awarded each set of Landowners individualized damages.2 In

August 2014, Landowners made a motion pursuant to SDCL 5-2-18 and the

Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970

as amended by the Surface Transportation and Uniform Relocation Assistance Act

of 1987 (collectively, “the URA”) for payment of “reasonable attorney, appraisal and

engineering fees, and other related costs.” The URA is codified at 42 U.S.C. §§

4601–4655 (2012). The circuit court denied Landowners’ motion based on Rupert v.

City of Rapid City, 2013 S.D. 13, 827 N.W.2d 55. In January 2015, the circuit court

issued its order denying fees and expenses. Landowners appeal.

[¶4.]         We restate Appellants’ issue as follows:

              Whether a party who prevails on a claim of inverse
              condemnation arising under South Dakota Constitution article
              VI, § 13 is entitled to recovery of attorney’s fees and litigation
              expenses under SDCL 5-2-18.

                              STANDARD OF REVIEW

[¶5.]         “Questions of statutory interpretation and application are reviewed

under the de novo standard of review with no deference to the circuit court’s

decision.” Deadwood Stage Run, LLC v. S.D. Dep’t of Revenue, 2014 S.D. 90, ¶ 7,

857 N.W.2d 606, 609 (quoting Argus Leader v. Hagen, 2007 S.D. 96, ¶ 7, 739 N.W.2d

475, 478).

                                      ANALYSIS

[¶6.]         Landowners contend they are entitled to recovery of attorney’s fees and

litigation expenses under SDCL 5-2-18 as they prevailed on their claim of inverse

2.      The State appealed the circuit court’s determination of liability and the jury’s
        verdict. See Long v. State, 2017 S.D. 79, ___ N.W.2d ___.

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condemnation. They assert that the South Dakota Legislature intended to adopt by

reference the URA when it enacted SDCL 5-2-18. The purpose of the URA is to

establish a uniform policy for the fair treatment of persons “displaced as a direct

result of programs or projects undertaken by a Federal agency or with Federal

financial assistance” and to ensure they do not suffer disproportionate injuries due

to a program designed to benefit the public as a whole. 42 U.S.C. § 4621(b).

Displaced persons are defined as “any person who moves from real property, or

moves his personal property from real property” in response to “a written notice of

intent to acquire or the acquisition of such real property in whole or in part for a

program or project undertaken by a Federal agency or with Federal financial

assistance[.]” 42 U.S.C. § 4601(6)(A)(i)(I). The URA contains a section permitting

property owners to “be paid or reimbursed for necessary expenses as specified in

section 4653 and 4654 of this title.” 42 U.S.C. § 4655. Necessary expenses are

defined, in part, in 42 U.S.C. § 4654(c) as “reasonable costs, disbursements, and

expenses, including reasonable attorney, appraisal, and engineering fees[.]”

Landowners further contend that 49 C.F.R. § 24.107 (2015) reinforces the State’s

obligation to pay the Landowners’ inverse condemnation expenses.

[¶7.]        The URA places several requirements on the receipt of federal funding

related to the acquisition of land. It is within the power of Congress to “attach

conditions on the receipt of federal funds . . . ‘by conditioning receipt of federal

moneys upon compliance by the recipient with federal statutory and administrative

directives.’” South Dakota v. Dole, 483 U.S. 203, 206, 107 S. Ct. 2793, 2795-96, 97

L. Ed. 2d 171 (1987) (quoting Fullilove v. Klutznick, 448 U.S. 448, 474, 100 S. Ct.

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2758, 2772, 65 L. Ed. 2d 902 (1980) (plurality opinion)). In certain instances, South

Dakota has complied with federal directives in order to receive federal funding. See

SDCL 35-9-4.1 (noting adoption of laws “under the duress of a funding sanction

imposed by the United States Department of Transportation”).

[¶8.]        42 U.S.C. § 4655 provides, in part:

             (a) Notwithstanding any other law, the head of a Federal agency
             shall not approve any program or project or any grant to, or
             contract or agreement with, an acquiring agency under which
             Federal financial assistance will be available to pay all or part of
             the cost of any program or project which will result in the
             acquisition of real property on and after January 2, 1971, unless
             he receives satisfactory assurances from such acquiring agency
             that—
             ...
             (2) property owners will be paid or reimbursed for necessary
             expenses as specified in sections 4653 and 4654 of this title.

The relevant “necessary expenses” are defined in 42 U.S.C. § 4654(c) which

provides:

             The court rendering a judgment for the plaintiff in a proceeding
             brought under section 1346(a)(2) or 1491 of title 28, awarding
             compensation for the taking of property by a Federal agency, or
             the Attorney General effecting a settlement of any such
             proceeding, shall determine and award or allow to such plaintiff,
             as a part of such judgment or settlement, such sum as will in the
             opinion of the court or the Attorney General reimburse such
             plaintiff for his reasonable costs, disbursements, and expenses,
             including reasonable attorney, appraisal, and engineering fees,
             actually incurred because of such proceeding.

(Emphases added.) Additionally, 49 C.F.R. § 24 contains the federal regulations

implementing the URA. 49 C.F.R. § 24.107 addresses entitlement to certain

litigation expenses. It provides:

             The owner of the real property shall be reimbursed for any
             reasonable expenses, including reasonable attorney, appraisal,

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             and engineering fees, which the owner actually incurred because
             of a condemnation proceeding, if:
             ...
             (c) The court having jurisdiction renders a judgment in favor of
             the owner in an inverse condemnation proceeding or the Agency
             effects a settlement of such proceeding.

[¶9.]        The State argues our state statutes and case law do not authorize an

award of attorney’s fees and, consequently, Landowners have no relief under state

law. The State further contends that the application of the URA in state law is

permissive rather than mandatory. The State submits that Landowners are

attempting to read into SDCL 5-2-18 the authority to assess attorney’s fees. Lastly,

the State argues that the primary purpose of the URA is to provide relocation

assistance to persons displaced by condemnation actions instituted by federal

agencies as set forth in 42 U.S.C. § 4621(b). In the State’s view, the “most relevant

portion of the URA for purposes of this appeal is 42 U.S.C. § 4654(c),” which it

argues authorizes an award of attorney’s fees in federal court for federal inverse

condemnation claims. Further, the State submits that the federal regulations

implementing the URA, specifically 49 C.F.R. § 24.107, cannot provide more rights

or remedies than the URA itself. Relying on City of Austin v. Travis County

Landfill Co., 25 S.W.3d 191, 207 (Tex. App. 1999), rev’d on other grounds, 73 S.W.3d

234 (Tex. 2002), the State contends that § 24.107 “[a]t most . . . clarifies that section

4654 applies to governmental entities facing claims in federal court or the Court of

Federal Claims.”

[¶10.]       South Dakota adheres to the “American Rule” for awarding attorney’s

fees. Rupert, 2013 S.D. 13, ¶ 32, 827 N.W.2d at 67. The “American Rule” provides

“that each party bears the burden” of paying their own attorney’s fees. Eagle Ridge
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Estates Homeowners Ass’n, Inc. v. Anderson, 2013 S.D. 21, ¶ 28, 827 N.W.2d 859,

867 (quoting In re S.D. Microsoft Antitrust Litig., 2005 S.D. 113, ¶ 29, 707 N.W.2d

85, 98). However, exceptions to this rule exist. Id. One exception is that attorney’s

fees may be awarded to a prevailing party pursuant to a contractual agreement

between the parties. Id. Another exception is that fees may be ordered “when an

award of attorney fees is authorized by statute.” Id. In determining whether a

statute authorizes the award of attorney’s fees, “[t]his Court has rigorously followed

the rule that authority to assess attorney fees may not be implied, but must rest

upon a clear legislative grant of power.” Rupert, 2013 S.D. 13, ¶ 32, 827 N.W.2d at

67 (quoting In re Estate of O’Keefe, 1998 S.D. 92, ¶ 17, 583 N.W.2d 138, 142).

Similarly, a party may recover costs only as specifically authorized by statute.

DeHaven v. Hall, 2008 S.D. 57, ¶ 48, 753 N.W.2d 429, 444.

[¶11.]        The circuit court, relying on the settled case law in Rupert, applied the

American Rule and denied Landowners’ request for attorney’s fees. In Rupert, a

property owner prevailed on a claim for inverse condemnation under Article VI, § 13

of the South Dakota Constitution for damage to trees on his property. Rupert, 2013

S.D. 13, ¶ 6, 827 N.W.2d at 60. Plaintiff requested an award of attorney’s fees

against the City pursuant to SDCL 21-35-23.3 Id. The circuit court denied the

3.       SDCL 21-35-23 provides:
              If the amount of compensation awarded to the defendant by
              final judgment in proceedings pursuant to this chapter is twenty
              percent greater than the plaintiff’s final offer which shall be
              filed with the court having jurisdiction over the action at the
              time trial is commenced, and if that total award exceeds seven
              hundred dollars, the court shall, in addition to such taxable
              costs as are allowed by law, allow reasonable attorney fees and
                                                                   (continued . . .)
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request finding that the statute was specific to condemnation proceedings and not

cases involving inverse condemnation. Id. ¶ 31, 827 N.W.2d at 67. In affirming, the

Court reiterated that “attorney fees may not be awarded pursuant to a statute

unless the statute expressly authorizes the award[.]” Id. ¶ 32, 827 N.W.2d at 67.

Landowners herein argue this holding is inapposite as the claim for attorney’s fees

in Rupert was not made under SDCL 5-2-18. They contend, and we agree, that

their request for attorney’s fees under this statute is a question of first impression

before this Court.

[¶12.]       “We begin our interpretation of a statute with [an analysis of] its plain

language and structure.” Puetz Corp. v. S.D. Dep’t of Revenue, 2015 S.D. 82, ¶ 16,

871 N.W.2d 632, 637. SDCL 5-2-18 provides:

             The State of South Dakota . . . may provide relocation benefits
             and assistance to persons, businesses, and farm operations
             displaced as the result of the acquisition of land or rehabilitation
             or demolition of structures in connection with federally assisted
             projects to the same extent and for the same purposes as
             provided for in the Uniform Relocation Assistance and Real
             Property Acquisition Policies Act of 1970 (P.L. 91-646) as
             amended by Surface Transportation and Uniform Relocation
             Assistance Act of 1987 (P.L. 100-17), and may comply with all
             the acquisition policies contained in said federal act.

(Emphases added.) The State argues that “[n]othing in [SDCL] 5-2-18 expressly

authorizes attorney fees as required by the American Rule[.]” Pointing to Breck v.

Janklow, 2001 S.D. 28, ¶ 11, 623 N.W.2d 449, 455, the State contends that “the

statute includes the word ‘may’ twice, which this Court has held is construed in the

permissive sense.” In response, Landowners submit that the plain meaning of the
_________________________________
(. . . continued)
               compensation for not more than two expert witnesses, all as
               determined by the court.

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statute is to provide assurances, under 42 U.S.C. § 4655, that all programs in South

Dakota will comply with the URA’s acquisition policies. Landowners contend that

“the [L]egislature clearly intended to adopt and agreed to follow the policies of the

URA in order to receive federal funds.”4 The URA, they assert, requires payment of

attorney’s fees and litigation expenses for successful inverse condemnation

claimants.

[¶13.]         When conducting statutory interpretation, we determine the intent of

a statute “from what the Legislature said, rather than what [we] think it should

have said, and . . . must confine [ourselves] to the language used.” Puetz Corp.,

2015 S.D. 82, ¶ 16, 871 N.W.2d at 637 (quoting State v. Clark, 2011 S.D. 20, ¶ 5, 798

N.W.2d 160, 162). “Words and phrases in a statute must be given their plain

meaning and effect. When the language in a statute is clear, certain, and

unambiguous, there is no reason for construction, and this Court’s only function is

to declare the meaning of the statute as clearly expressed.” Id.

[¶14.]         A reading of the plain language of SDCL 5-2-18 reveals no language

referencing payment of attorney’s fees or expenses. However, Landowners urge us

to consider the legislative history of the statute, arguing that “[t]he clear intent of

4.       Landowners claim that the State is heavily dependent upon federal funding
         for its highway budget. The State contends that to support this assertion
         Landowners have alleged facts without citation to the record as required by
         SDCL 15-26A-60(5). Additionally, the State objected to documents in
         Landowners’ appendix that were not presented to the circuit court and made
         part of the settled record. “Documents in the appendix must be included
         within, and should be cross-referenced to, the settled record.” Klutman v.
         Sioux Falls Storm, 2009 S.D. 55, ¶ 37, 769 N.W.2d 440, 454 (citing SDCL 15-
         26A-60(8)). Factual assertions not supported by the record and documents
         not admitted into evidence are not considered herein.

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the passage of the 1972 and 1988 Session Laws [codified as SDCL 5-2-18] was to

enable state officials to give the federal government the assurance the State would

comply with the [URA].” Landowners contend that the use of “[t]he words ‘to

comply with all the acquisition policies’ [in the 1972 Chapter 136 Session Law] is a

complete acceptance of the federal policies by force of statute.” Landowners do not

address the effect of the substantive amendment to the statute in 1988, which no

longer obligates the State to “provide relocation benefits and assistance” or “comply

with all the acquisition policies” of the URA. Instead, as amended, the statute

indicates that the State may provide such benefits and assistance and may comply

with the URA’s acquisition policies.

[¶15.]       Regardless, the State urges us to decline Landowners’ request to

consider the legislative history of SDCL 5-2-18, asserting such review is not

performed when statutory language is clear. We agree with the State. As the

language of the statute is clear and unambiguous, our only function is to declare the

meaning of the statute as clearly expressed. Clark Cty. v. Sioux Equip. Corp., 2008

S.D. 60, ¶ 28, 753 N.W.2d 406, 417. We do not review legislative history unless the

statute is ambiguous. Bertelsen v. Allstate Ins. Co., 2009 S.D. 21, ¶ 15, 764 N.W.2d

495, 500.

[¶16.]       SDCL 5-2-18 indicates that the State may provide relocation benefits

and assistance and may comply with the URA’s acquisition policies. We have “held

that the word ‘may’ should be construed in a permissive sense unless the context

and subject matter indicate a different intention.” Breck, 2001 S.D. 28, ¶ 11, 623

N.W.2d at 455.

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               Although the form of verb used in a statute, i.e., whether it says
               something “may,” “shall” or “must” be done, is the single most
               important textual consideration determining whether a statute
               is mandatory or directory, it is not the sole determinant. Other
               considerations, such as legislative intent, can overcome the
               meaning which such verbs ordinarily connote. In our search to
               ascertain the legislature’s intended meaning of statutory
               language, we look to the words, context, subject matter, effects
               and consequences as well as the spirit and purpose of the
               statute.

In re Estate of Flaws, 2012 S.D. 3, ¶ 18, 811 N.W.2d 749, 753 (quoting Matter of

Groseth Int’l, Inc., 442 N.W.2d 229, 232 n.3 (S.D. 1989) (citing 2A Sutherland Stat.

Const. § 57.03 at 643-44 (4th ed. 1984))). We hold that the plain language of this

statute provides that compliance with the URA is permissive rather than

mandatory.

[¶17.]         Landowners rely on cases from Nevada and Kansas in support of their

position that the URA permits imposition of litigation fees for successful plaintiffs,

even without an independent state statute authorizing such payment.5

Landowners’ authorities, however, are readily distinguishable. Citing McCarran

International Airport v. Sisolak, 137 P.3d 1110, 1129 (Nev. 2006), Landowners

contend that “Nevada’s method of adoption of the URA is strikingly similar to South

Dakota’s[.]”

[¶18.]         In McCarran, the Nevada Supreme Court affirmed the lower court’s

determination that plaintiff was entitled to an award of attorney’s fees and costs

after prevailing on his claim of inverse condemnation for the taking of his airspace

5.       Landowners also rely on federal correspondence from the Comptroller
         General to members of Congress. As we have declined to consider the
         legislative history of the enactment of the URA or SDCL 5-2-18, we do not
         consider this type of communication to members of Congress.

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near the Municipal Airport. Id. at 1128. While Nevada’s statute does refer to the

URA, there is an important distinction between Nevada’s statute and ours. N.R.S.

342.105 mandates compliance with the Relocation Act, requiring that any entity

subject to the act “shall provide relocation assistance” in contrast to the permissive

language of SDCL 5-2-18. Such mandatory compliance is also noted in the statute’s

title: “Compliance with federal law required; adoption of regulations by Director of

Department of Transportation[.]” Nev. Rev. Stat. Ann. § 342.105 (West).

[¶19.]       The Landowners also rely on two Kansas cases, Bonanza, Inc. v.

Carlson, 9 P.3d 541 (Kan. 2000), and Estate of Kirkpatrick v. City of Olathe, 215

P.3d 561 (Kan. 2009), both awarding attorney’s fees to prevailing parties for their

state inverse condemnation claims. Both are inapposite. Kansas has enacted

statutes similar to the URA and adopted by reference both the URA and the federal

regulations implementing it. See Kan. Admin. Regs. § 36-16-1; Bonanza, 9 P.3d at

543. Having adopted 49 C.F.R. § 24 and its amendments by reference, K.A.R. 36-

16-1 provides “(b) The provisions of 49 C.F.R. Part 24 . . . and all amendments

thereto, shall be applicable to all acquisitions of real property by the department of

transportation . . . .” (Emphasis added.) The court in Bonanza held

             The authority for the award sought by the landowners are
             Kansas statutes and Kansas regulations enacted by the Kansas
             Legislature to comply with federal law. Under the Kansas
             regulations, state agencies receiving federal financial assistance
             are required to reimburse owners for incidental expenses and
             litigation expenses as provided in the federal statute as a
             precondition for receiving federal monetary assistance.

9 P.3d 541 at 547. These cases do not lend support for Landowners’ claims because

the courts of Nevada and Kansas were interpreting specific state statutes that

mandated the payment of successful plaintiffs’ litigation expenses. In contrast, the
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South Dakota Legislature has not mandated compliance with the URA and has not

abrogated the State’s sovereign immunity for the payment of litigation expenses.

As we noted in Rupert, “abrogation of sovereign immunity by the Legislature must

be express.” 2013 S.D. 13, ¶ 33, 827 N.W.2d at 67.

[¶20.]       This Court has on one prior occasion interpreted the URA and SDCL 5-

2-18—although the precise question of whether SDCL 5-2-18 mandates compliance

with the URA was not addressed. Rapid City v. Baron, 88 S.D. 693, 227 N.W.2d

617 (1975). In Baron, the City of Rapid City and Baron disputed the value of

Baron’s property which was condemned by the City along with 1,300 other

properties after the 1972 flood in order to create a flood plain. Id. at 694-95,

227 N.W.2d at 618. Baron sought admission of evidence regarding the values of

other properties paid for by the City as part of its urban renewal program. Id. at

696, 227 N.W.2d at 618-19. Baron argued that the policy of the URA was to “assure

consistent treatment for owners in the many Federal programs.” Id. at 695, 227

N.W.2d at 618. The circuit court admitted the evidence and instructed the jury that

they could consider the prices paid by the City to other owners when measuring

damages. Id. at 695-96, 227 N.W.2d at 618-19.

[¶21.]       We reversed, citing to Article VI, § 13 of the South Dakota

Constitution, which requires that “just compensation” be paid as determined by the

legal procedures established by the Legislature—not under the policy language

from the URA. Id. at 698, 227 N.W.2d at 620. We determined that the court erred

by failing to instruct the jury of the correct measure of damages and permitting

evidence on the value of other properties taken by the City. Id. at 699, 227 N.W.2d

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at 620. We noted that there was “no compelling reason to hold that the quoted

phrase from [§] 4651, 42 U.S.C.A., even when read in conjunction with SDCL 5-2-

18, in any manner modifies our Constitution, statutes or case law.” Id. at 699, 227

N.W.2d at 620. Although we were not asked in Baron to determine if application of

the URA was mandatory, we did find the circuit court erred by utilizing language

from the URA inconsistent with South Dakota law. As discussed previously, South

Dakota has adopted the American Rule requiring each party to bear its own

attorney’s fees unless exceptions exist. Landowners have put forth no compelling

reason to modify our adoption of the American Rule.

[¶22.]       In forming our opinion, we also find persuasive two cases cited by the

State: Travis County Landfill Co., 25 S.W.3d 191, and Randolph v. Missouri

Highways & Transportation Communication, 224 S.W.3d 615 (Mo. Ct. App. 2007).

In Travis, the plaintiff who prevailed on a state inverse condemnation claim argued

it was entitled to recovery of attorney’s fees under the URA. 25 S.W.3d at 207. The

Court of Appeals of Texas determined that, “section 4654 provides authority for the

award of attorney’s fees and expenses in actions brought in either federal court or

the Court of Federal Claims. The Uniform Act contains no express authority for a

similar award for state causes of action filed in state court.” Id. The court also

considered 49 C.F.R. § 24.107, stating that “[a]t most, section 24.107 clarifies that

section 4654 applies to governmental entities facing claims in federal court or the

Court of Federal Claims. It does not provide statutory authority for state courts to

award attorney’s fees for successful inverse condemnation claims arising under

state law.” Id.; see also 8A Patrick J. Rohan & Melvin A. Reskin, Nichols on

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Eminent Domain § G20.05[3] (3d ed. 2015) (§ 4654 applies only to takings by a

federal agency not to an award under a state condemnation action). Lastly, the

court analyzed 42 U.S.C. § 4655, finding the section “governs the relationship

between the City and the federal agency from which it seeks federal funds. It does

not create a landowner’s cause of action for attorney’s fees in the event the City fails

to comply with the land acquisition policies outlined in the statute.” Id. at 208.

[¶23.]       In Randolph, the Missouri Court of Appeals considered the question of

whether the URA and 49 C.F.R. § 24.107 authorize attorney’s fees for a state claim

of inverse condemnation. 224 S.W.3d at 619. Missouri, like South Dakota, follows

the “American Rule” requiring “each party to bear the expense of their own attorney

fees.” Id. The court determined the URA “would only be applied where Missouri

law does not expressly prohibit its application,” noting that “Missouri law expressly

prohibits the application of attorney fees absent statutory authority.” Id. at 619-20.

The court affirmed the lower court’s denial of attorney’s fees in accordance with the

long-standing and strict application of the American Rule in Missouri and the

prohibition of awarding costs against state agencies. Id. at 620.

[¶24.]       The circuit court’s denial of Landowners’ motion is supported by the

holdings in Travis and Randolph. First, Landowners’ claim was not brought in

federal court or the Court of Federal Claims. The plain language of 42 U.S.C. §

4654(c) defining necessary expenses provides that it applies to “proceeding brought

under section 1346(a)(2) or 1491 of Title 28, awarding compensation for the taking

of property by a Federal agency[.]” Second, as the court held in Randolph, the

application of the URA contradicts strict application of the American Rule.

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                                    CONCLUSION

[¶25.]          The circuit court did not err in denying Landowners’ motion for

attorney’s fees and expenses as they are not authorized by the plain language of

SDCL 5-2-18. While SDCL 5-2-18 incorporates by reference the provisions of the

URA, its application is permissive rather than mandatory. Even if mandatory, the

URA does not create a private cause of action in state courts for payment of

litigation expenses in inverse condemnation cases unless mandated by state statute

or implementing regulations. The circuit court did not err in denying Landowners’

motion for attorney’s fees and expenses. We affirm.

[¶26.]          GILBERTSON, Chief Justice, and ZINTER, and SEVERSON, Justices,

and BARNETT, Circuit Court Judge, concur.

[¶27.]          BARNETT, Circuit Court Judge, sitting for WILBUR, Retired Justice,

disqualified.

[¶28.]          JENSEN, Justice, not having been a member of the Court at the time

this action was submitted to the Court, did not participate.

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