South Dakota has remained almost entirely free of eminent domain controversy. There have been no reports at all of state or local governments condemning property for private use. South Dakotans then do not have to fear the abuse of eminent domain for private parties.
Indeed, the only dispute was between the state government and a railroad company that wanted to condemn land. The railroad’s eminent domain power comes from the State but is largely governed by federal law. South Dakota passed a statute that placed additional requirements on railroads seeking to condemn. Under the new law, before condemning, railroads must get approval from the governor or another state body that the condemnation would be “for a public use consistent with public necessity.” South Dakota also required railroads to secure financing prior to condemnation. The Dakota, Minnesota, and Eastern Railroad sought to condemn property for an extension, but could not acquire the financing without being able to guarantee the land, and after South Dakota’s new law, it couldn’t acquire the land without having the financing. It sued the State in federal court, alleging violations of the U.S. Constitution’s Interstate Commerce Clause and also that the South Dakota law was preempted by federal law. The federal court held that South Dakota could not impose its financing requirements and some other requirements, but it could still require approval of the public use from the state. According to the court, the State had a legitimate interest in protecting landowners and ensuring public use.625
625 See Dakota, Minnesota &Eastern Railroad v. South Dakota, 236 F. Supp. 2d 989, 996-1004, 1022 (D.S.D. 2002).