Judge Rules South Dakota Can’t Shirk Sinkhole Liability Lawsuit

Ruling allows homeowners to proceed with case 


RAPID CITY, S.D. – Black Hawk residents forced by collapsing subsurface mines to risk their lives in unstable homes have won an important legal victory in a lawsuit to hold the state of South Dakota accountable for failing to safely close, remediate and maintain subsurface of mines owned and operated by the state. 


A state court judge on May 14 rejected the argument made by the state of South Dakota that the homeowners lack legal standing to seek damages. The court’s ruling means the lawsuit, brought following the 2020 collapse of ground supporting over 150 homes in the Hideaway Hills neighborhood, has overcome an important legal hurdle and will proceed.  


“The named Plaintiffs have demonstrated that their injuries likely will be redressed by a favorable decision – i.e., an award of damages, based on their constitutional right to individually bring an inverse condemnation case against the State,” wrote Circuit Court Judge Kevin Krull in the ruling. 


Hideaway Hills homeowners are seeking class-action status so all affected residents may be compensated for the loss of their homes, said attorney Kathleen Barrow of the Fox Rothschild law firm, who along with Terence Quinn of Rapid City’s The Quinn Law Firm, is representing the homeowners. 


“South Dakota can’t have it both ways,” Ms. Barrow said. “You can’t make millions off mining and retain the ownership of the subsurface estate, but then say you’re not responsible for the damage caused to homes on the surface.” 


For generations, the state operated gypsum mines throughout the region and still owns the subsurface mineral rights. The lawsuit charges the state failed to properly remediate and maintain unstable land after the mining operation was shuttered in the early 1990s and the surface property was sold to developers who built the Hideaway Hills neighborhood. Homeowners were not informed of the hidden dangers to the land and their homes caused by the state’s mining activity and neglect, Ms. Barrow said. 


“This is an important ruling for Hideaway Hills homeowners,” Ms. Barrow said. “We will now proceed with the class-certification process.” 


The large sinkholes that opened in April 2020 forced some homeowners in Hideaway Hills to evacuate their homes. Houses in the neighborhood cannot be sold and property values have plummeted. South Dakota Gov. Kristi Noem has said the state is not responsible for the destruction, even though a trust fund created with revenue generated from the mining operation is now valued at over $300 million. 


The case is Andrew Morse and John and Emily Clarke et al. v. State of South Dakota et al., No. 46CIV-20-000295 in the Circuit Court, 4th Judicial District, County of Meade, South Dakota.  


Fox Rothschild has grown to a 950-lawyer national law firm with 27 offices by focusing on client service and responsiveness, and by attracting bright and creative lawyers who know how to deliver. More information at foxrothschild.com 


Media Contact: 

Mark Annick 



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