North Carolina Inverse Condemnation: Must You Prove 'Public Use'?

In North Carolina, a landowner seeking compensation through the filing of a lawsuit for inverse condemnation does NOT have to show that the government's action was for "public use." This was the holding of the North Carolina Supreme Court in the case of Wilkie v. City of Boiling Spring Lakes, 809 SE 2d 853 (NC Supreme Court 2018). The court issued its decision after a review, analysis and comparison of several North Carolina statutes relevant to the question.

The legal question and the court's involved decision are prime examples of the legal complexity surrounding taking of private land by the government through the power of eminent domain. If you are confronted with a possible taking of your land or the government has taken action that has diminished the value of your land, it is essential to retain experienced and talented eminent domain and land use attorneys to help. The legal complexity of these issues is further shown by the fact that the North Carolina rule is not used in other states. As discussed briefly below, in California, it IS necessary to show "public use" when filing an inverse condemnation lawsuit. Here is a brief explanation.

In general, the power of eminent domain may be used by governmental subdivisions or agencies to take private land for public use as long as the agency pays just compensation for the land. Just compensation is generally defined as the fair market value of the land taken.

By contrast, inverse condemnation occurs when a governmental subdivision/agency takes some action that has the effect of taking private land. When this happens, the landowner can file a lawsuit for inverse condemnation. This is permitted and authorized by North Carolina statute. See N.C.Gen. Stat. § 40A-51.

Thus, for example, in the Wilkie case, the local City made a decision to raise the level of a local lake owned by the City. The lake was/is fed by natural, underground springs in the lake and by surface water runoff. Excess water drains from the lake through two pipes at the west end of the lake. The City raised the lake level by adding up-turned "elbows" to the pipes.

As a result, various lands along the shore of the lake became immersed under the waters because of the higher water level. The Wilkies, for example, had a home on the lakeshore and about 1,100 square feet of their property was submerged by the rising waters. Eventually, the City Council changed its mind and removed the elbows and allowed the lake to return to its previous level. But the Wilkies (and others) had portions of their land submerged for over a year.

The Wilkies (and others) sued the City for inverse condemnation. They claimed that raising the lake level was a temporary taking of their land and that they were entitled to compensation for the taking.

Among other legal defenses, the City argued that the Wilkies' case should be dismissed because they could not prove that the City took the various land along the shore for "public use." The trial court rejected the City's argument. However, the North Carolina Court of Appeals disagreed and reversed the trial court. As noted, the North Carolina Supreme Court agreed with the City and reversed the Court of Appeals. The Supreme Court reviewed the words used in the statutes and concluded that proving "public use" was not necessary in an inverse condemnation case. Only four legal elements need be proven:

1. Land/property has been taken
2. By an act or omission
3. Of a governmental agency or other permitted to take land under North Carolina law (that is, under N.C. Gen. Stat. § 40A-3(b) or (c) and
4. That no condemnation complaint containing a declaration was filed by the governmental agency or other permitted condemnor

As noted, the Wilkie decision was explicitly based on a close reading of the North Carolina statutes. But, obviously, other states have different statutes. Under the wording of those statutes, the result can be different. Thus, in California, a person filing an inverse condemnation lawsuit IS required to prove public use. So, in the case of Foley Investments, LP v. Alisal Water Co., Case No. D079045 (2021), the California Court of Appeals dismissed an inverse condemnation case involving a water main break because the water main was installed via a private contract, went under private land and was used exclusively for that apartment complex.

For more information, and to schedule a confidential consultation with experienced and dedicated eminent domain and condemnation attorneys in Charlotte, contact Arnold & Smith, PLLC. Use our “Contact” page or give us a call at 704-370-2828. We handle land use, zoning and condemnation legal matters in federal court, in Mecklenburg County and elsewhere in North Carolina. We have offices in Charlotte, Lake Norman, and Union County.