Daily Development for
Thursday, December 5, 1996

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

INVERSE CONDEMNATION; TRESPASS; PUNITIVE DAMAGES: A landowner whose property is taken by a private authority with the power of eminent domain is not limited to an action for inverse condemnation, but may alternatively proceed on a trespass theory and, in that event, collect punitive damages.

Meighan v. U.S. Sprint Comms. Co., 924 S.W.2d 632 (Tenn. 1996), reh'g denied, 1996 Tenn. LEXIS 435 (Tenn. July 1, 1996).

A telecom company laid fiber optic cable along a railroad right-of-way, thereby crossing the plaintiff's land, but failed to pursue statutory condemnation, obtain the plaintiff's consent or offer compensation to the plaintiff. Apparently the company carried out this practice across the state, and the plaintiff brought this action as a class action, which the court here authorized.

The plaintiff alleged a taking by inverse condemnation because the communications company had the right of condemnation but did not exercise it here. The plaintiff, in the alternative, brought an action for trespass, seeking compensatory and punitive damages. The lower court dismissed the trespass claim, supporting the defendant's position that the plaintiff was limited to an inverse condemnation claim.

On appeal, held: reversed.

The Tennessee Supreme Court, upon an examination of the statute and precedents, upheld the "long-standing" doctrine that a landowner may proceed under either alternative and explained that "[c]oncomitant with the legislative right to sue for trespass is the corresponding remedy which may in unusual, unique cases include punitive damages ... [m]oreover, we believe that the availability of punitive damages in appropriate condemnation cases is necessary to compensate fully aggrieved landowners in accordance with the [Tennessee] constitution."

Comment 1: Of course, it is unlikely that most inverse condemnation cases would also be actionable as torts because the defendant would be a public agency. Here, however, the defendant is a private entity with the power of condemnation, and does not enjoy governmental immunity. There is no indication in the case that the court would uphold an award of punitive damages in this case, but the threat of such an award will make the defendant's seat quite a bit hotter during negotiations for settlement.

Comment 2: The court gives little indication as to the rationale for the double remedy analysis, other than a somewhat confusing analysis of the statute, which the editor would have read another way. It does indicate that preservation of the punitive damages concept in cases otherwise sounding in inverse condemnation is a desirable thing. Certainly, without such threat of higher liability, a private company with inverse condemnation rights in a case like this one might try to bull its way along without compensating affected parties, secure in the knowledge that the worst consequence it would suffer would be to pay relatively small just compensation, while the best result might be that potential plaintiffs would be deterred from suing because each plaintiff would have relatively small damages for the cable installation. But the combination of the class action and punitive damages certainly will change the stakes for the defendant here.

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