South Dakota Homeowners Win Key Ruling in Lawsuit Over Dangers Caused by Unstable Underground Mines 

Judge approves class certification for Hideaway Hills homeowners in class-action lawsuit against state 

RAPID CITY, S.D. – A South Dakota judge has awarded class certification to all owners of homes rendered worthless by unstable underground mines operated by the state of South Dakota. 

The ruling on Thursday means all 158 homeowners in the Hideaway Hills neighborhood in Black Hawk, South Dakota, are part of the class-action lawsuit unless they opt out. A lawsuit filed by the Fox Rothschild law firm will now proceed demanding that the state pay full value of each home based upon the fair market value of the home before the collapse incident, plus lost opportunity costs. Homeowners can participate in the lawsuit without impacting any claims they might have against other defendants. 

Obtaining class certification is a major milestone and follows extensive work by geological experts to document the imminent dangers faced by all homes in the neighborhood and the challenges that homeowners would face pursuing individual lawsuits. Circuit Court Judge Kevin Krull previously ruled that the plaintiffs “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.” 

“This has been a living nightmare for every family in this neighborhood,” said lead attorney Kathleen Barrow. “The judge carefully reviewed the detailed findings from geological experts and agreed that a class-action lawsuit is the best way for homeowners to obtain justice. We look forward to the next phase of this litigation and continuing to seek a fair resolution for members of the class.” 

The underground dangers were exposed in April 2020 when an abandoned gypsum mine collapse opened a large hole near East Daisy Drive. According to geological and engineering analysis, correcting the subsurface dangers would require removing the homes, which would cost more than the homes are worth with no guarantee that the remediation would work. Mounting a lawsuit would be too costly for any individual homeowner. As a class-action lawsuit, those costs would be shared by all of the plaintiffs.  

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 Meade County 4th Judicial District.   


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Robert Tharp 

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