Inverse Condemnation Anomaly: Why must Property Owner Prove a "Public Use?"

When a state agency seeks to condemn property, it must prove, among other things, that it has an appropriate public purpose in condemning it. Under the Utah Constitution, Article I Sec. 22, “Private property shall not be taken or damaged for public use without just compensation.” (emphasis added). Property is taken for the public use "when the taking is for a use which will promote the public interest and tend to develop the resources of the state." Utah Law of Eminent Domain p. 6 (2008).   The Utah constitution and statutes make it clear that public purpose is required and what the public purposes are. Utah Code Ann. § 78B-6-501 gives an approved list of public purposes that justify an eminent domain action by a state agency (other statutes expand this list, such as 72-5-204). If a state agency cannot show that its purposes fall under one of these categories, its eminent domain action may fail.

When a state agency takes or damages property informally, through regulation or by taking possession of property inappropriately, an individual may bring an action for “inverse condemnation” of his property. The world “inverse” does not mean that the person is taking the state’s property by condemnation. Rather, it refers to the fact that the state has taken the property already, but not paid just condemnation, so the property owner becomes the plaintiff in an action to prove that a condemnation has happened, where, in the usual, and inverse, circumstance, the state would be the plaintiff seeking to condemn. It would make sense that when an owner has been informally taken by government action or regulation, that in an inverse condemnation action, the state would bear the burden of showing its regulation or action had a public purpose, notwithstanding its status of defendant. Surely, the state cannot have acted for a private purpose. Nevertheless, the case law strangely requires the property owner to prove that the regulation had a public purpose. In Farmers New World Life Ins. Co. v. Bountiful City, 803 P.2d 1241, 1246, the court held that "inverse condemnation damages are limited to those necessarily arising out of the public use."

The court continued to explain, saying, "such damages must 'grow out of' a public use rather than being merely the result of a negligent or wrongful government act." Id.

Here the court is explaining that the inverse condemnation claim is not a cure for all bad government action that harms property. It is a narrow cause of action that is only available when the government is taking for a public use. If the government negligently damages your property, you may (or may not) have a cause of action against the government, or the agent of government, that harmed you.