A quick one from the South Carolina Supreme Court.
In Applied Building Sciences, Inc. v. South Carolina Dep't of Commerce, No. 28184 (Jan. 17, 2024), the court held that the $50,000 cap on relocation benefits provided to ABS by South Carolina's version of the Relocation Act was enough, and did not deprive ABS of just compensation.
Applied Building Sciences was a tenant in a building taken by the South Carolina Division of Railways, and was listed as an "Other Condemnee" in the eminent domain action. The taking forced it to relocate its business, which triggered its right to seek relocation benefits. South Carolina offers those displaced up to $50,000 in benefits, even if the taking isn't federally funded (and thus not covered by the federal URA).
ABS thought the cap was unconstitutional and asked for $560k in expenses, and raised an inverse condemnation claim. The Department said no, and "refused to pay more than $50,000." Slip op. at 2. ABS obtained its share of the lessor's compensation, after which the parties agreed to sever its inverse claim for what it claimed was the shortfall.
The South Carolina Supreme Court concluded that relocation expenses are not a part of "just compensation" under the U.S. Constitution. Relying on United States v. Petty Motor Co., 327 U.S. 372 (1946), the court held that "removal or relocation of personal property is not to be included in valuing property taken and that businesses displaced as a result of the condemnation do not have a constitutional right to receive expenses related to relocation." Slip op. at 6.
ABS fared no better under South Carolina's just compensation clause. The court noted that "'South Carolina courts have embraced federal takings jurisprudence as providing the rubric under which we analyze whether an interference with someone's property interests amount to a constitutional taking.' ... Therefore, Petty Motor, Westinghouse, and Joslin Mfg. Co. guide our decision today." Id. (citations omitted).
The old rubric of "we're taking the property, not the business."
In short, the relocation benefits in South Carolina's Act are gravy, property owners; the legislature is doing you a solid. The court didn't say exactly that, but it did note that the S.C. legislature adopted the Act to provide something -- although limited -- to owners who incur relocation expenses in takings not covered by the federal URA:
South Carolina codified the relocation requirements of the Federal Relocation Act in sections 28-11-10 to -70, mandating relocation payments to displaced persons and businesses regardless of whether a project uses any federal dollars. See S.C. Code Ann. § 28-11-10 (2007); Brown v. City of N. Charleston, 314 S.C. 298, 299-301, 442 S.E.2d 633, 634-35 (Ct. App. 1994); Act No. 1345, 1972 S.C. Acts 2522 (referring to relocation assistance "when any program or project undertaken involving acquisition of real property will result in displacement of any person or other legal entity"); 18 S.C. Jur. Eminent Domain § 22.1 (West 2023). When the government uses the power of eminent domain to take property which is being leased, the tenants may recover moving costs and rent differential payments. See S.C. Code Ann. § 28-11-10; Brown, 314 S.C. at 299-301, 442 S.E.2d at 634-35; 18 S.C. Jur. Eminent Domain § 22.1.
Slip op. at 4.
Thank you very much.
Applied Building Sciences, Inc. v. South Carolina De'pt of Commerce, No. 28184 (S.C. Jan. 17, 2024)
