Pennsylvania Coal Co. v. Mahon

Supreme Court of United States
260 U.S. 393 (1922)

ELI5:

Rule of Law:

While property may be regulated to a certain extent under the police power, if a regulation goes so far in diminishing property value as to be tantamount to a direct appropriation, it will be recognized as a taking for which just compensation is required under the Fourteenth Amendment.

Facts:

In 1878, the Pennsylvania Coal Company executed a deed conveying the surface rights to a parcel of land to the predecessors of the Mahons.
The deed expressly reserved the right for the Pennsylvania Coal Company to remove all the coal under the surface.
The deed also contained a clause stating the grantee assumed the risk and waived all claims for damages that might arise from the mining of the coal.
The Mahons subsequently acquired the property and their house sits upon the surface.
In 1921, the Commonwealth of Pennsylvania enacted the Kohler Act, which prohibited the mining of anthracite coal in any way that would cause the subsidence of any structure used as a human habitation.
After the Act was passed, the Pennsylvania Coal Company notified the Mahons of its intention to mine the coal underneath their property, which would cause the subsidence and destruction of their house.

Procedural Posture:

The Mahons (plaintiffs) filed a bill in equity in the Pennsylvania Court of Common Pleas to enjoin the Pennsylvania Coal Company from mining under their house.
The Court of Common Pleas, acting as the trial court, found that the Kohler Act was unconstitutional as applied to the case and denied the injunction.
The Mahons (appellants) appealed the decision to the Supreme Court of Pennsylvania.
The Supreme Court of Pennsylvania reversed the trial court, holding that the Kohler Act was a legitimate exercise of the state's police power, and ordered that an injunction be issued.
The Pennsylvania Coal Company (plaintiff in error) was granted a writ of error to bring the case before the Supreme Court of the United States.

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Issue:

Does a state law that destroys a coal company's previously existing and contractually reserved right to mine its coal, by forbidding the mining in a way that causes subsidence of a private home, constitute a taking of private property for public use that requires just compensation under the Fourteenth Amendment?

Opinions:

Majority - Mr. Justice Holmes

Yes, a state law that makes it commercially impracticable to exercise a company's valid property and contract rights amounts to a taking that requires just compensation. While government can diminish property values to some extent through regulation under its police power, that power has limits. When a regulation reaches a certain magnitude of diminution, as this one does by completely destroying the Coal Company's right to mine, it effectively becomes a taking. The public interest in protecting a single private home is not sufficient to warrant such an extensive destruction of the defendant's constitutionally protected property and contract rights without compensation. To allow the state to achieve its goals by this shorter cut rather than the constitutional way of paying for the change would render the protections of the Fifth and Fourteenth Amendments meaningless.

Dissenting - Mr. Justice Brandeis

No, a state law prohibiting a use of property that is noxious and threatens public safety is a legitimate exercise of the police power, not a taking that requires compensation. A restriction imposed to protect the public from harm is not a taking, even if it deprives the owner of a profitable use of the property. The state is merely preventing the owner from using their property in a way that interferes with the paramount rights of the public. The value of the coal that must be left in place should be compared to the value of the entire property, not viewed as a separate, destroyed estate. The legislature and the state's highest court, with greater knowledge of local conditions, determined that this restriction was necessary for public safety, and that judgment should be respected.

Analysis:

This case is the cornerstone of modern regulatory takings jurisprudence, establishing for the first time that a government regulation, short of a physical appropriation, can constitute a compensable taking. By introducing the concept that a regulation that "goes too far" is functionally equivalent to an act of eminent domain, the Court created a new check on the state's police power. This decision opened the door for property owners to challenge burdensome regulations and has led to a complex body of law attempting to define the point at which regulation crosses the line from a legitimate exercise of police power to an unconstitutional taking.

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