Chapter 8 - § 8.4 • INVERSE CONDEMNATION

• Jurisdiction: Colorado

§ 8.4 • INVERSE CONDEMNATION

Inverse condemnation, as its name suggests, is the mirror image of eminent domain. The doctrine applies when a governmental entity with the power of eminent domain has "taken" private property for public or private use, without compensation, but refuses to exercise its eminent domain power.²²

Because claims for inverse condemnation under eminent domain laws are not subject to the CGIA, this doctrine may provide relief to homeowners whose property is "taken" or "damaged" by government action.²³ To exercise eminent domain, a governmental or public entity must have eminent domain power, must intend to use the property taken for a proper public purpose, and must pay the owner just compensation for the property after providing due process of law.²⁴

"An action for inverse condemnation is allowed where a governmental or public entity with the power of eminent domain takes action that 'substantially depriv[es] the property owner of the use and enjoyment of the property, but the [entity] has not formally brought condemnation proceedings.'"²⁵ A "taking can be effected by a legal interference with the physical use, possession, enjoyment, or disposition of property, or by acts which translate to an exercise of dominion and control by a governmental entity."²⁶

To recover on an inverse condemnation claim alleging that property has been "damaged," a plaintiff must establish, (1) there has been a taking of or damage to a property interest; (2) for a public purpose without just compensation; (3) by a governmental or public entity possessing the power of eminent domain that has refused to exercise it.²⁷ To establish the damage element, the plaintiff must prove that he or she has suffered a unique or special injury different in kind from any injury suffered by the general public as a result of the damage.²⁸

Inverse condemnation proceedings are appropriate where the underlying activity warrants condemnation pursuant to the entity's eminent domain power.²⁹ The saturation of land by surface water flooding or by groundwater, under the proper circumstances, can constitute a compensable "taking" of property.³⁰ A taking of property occurs when the entity clothed with eminent domain power substantially deprives a property owner of the use and enjoyment of his or her property.³¹ A taking can also be effected by "a legal interference with the physical use, possession, enjoyment, or disposition of the property, or by acts . . . of dominion and control by a governmental entity."³² In theory, a taking can occur if an owner is required to forego an economically beneficial use of his or her property, although Colorado's appellate courts have set the bar high for such recovery.³³

"For a governmental action to result in a taking, the consequence of the action that is alleged to be a taking must be at least a direct, natural, or probable result of that...