Pennsylvania Coal Co. v. Mahon

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1922 United States Supreme Court case

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), was a case in which the Supreme Court of the United States held that whether a regulatory act constitutes a taking requiring compensation depends on the extent of diminution in the value of the property.

The decision thereby started the doctrine of regulatory taking . The Takings Clause originally applied only when the government physically seized or occupied property. Prior to 1922, American courts followed a clear rule: regulation of land was not a taking. Rather, it was simply an exercise of the government’s police power to protect the public health, safety, welfare, and morals.

Pennsylvania Coal also established the diminution-of-value test, in contrast to other tests, such as the permanent physical occupations test of _Loretto v. Teleprompter Manhattan CATV Corp. _ (1982), the nuisance-control measures test of _Hadacheck v. Sebastian _ (1915), and the total takings test of _Lucas v. South Carolina Coastal Council _ (1992). Additionally, the case was one of the first to address the denominator problem with regard to regulatory taking.

Parties

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Plaintiff/Respondent: H.J. Mahon, owner of surface rights to a parcel of land.

Defendant/Petitioner: Pennsylvania Coal Co. , owner of two sorts of mining rights to a parcel of land: the mineral rights and the "support estate," which concern pillars of coal that prop up the surface after/during coal mining..

Background

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State of law

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In the late 19th century, the modern regulatory state was developing and the "scope of police regulation" was broadened. Whereas police regulations that restricted private property uses were originally thought to be used mostly to avoid noxious uses, police powers were expanding. Consequently, takings without compensation increased and the flaws of the previous takings doctrine, that exercises of police power could never be takings, became more apparent along with the need for changes in the takings law.

At the time this case was decided, _Mugler v. Kansas _, "was the leading case standing for the proposition that an exercise of the police power could never be a taking ... even if they deprive property holders of all economic use of their property."

Facts of case

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In an 1878 deed, the Pennsylvania Coal Co. granted to H. J. Mahon the surface rights to a parcel of land, but retained the mining rights to the land, and Mahon accepted any risk from, and waived all claim for damages resulting from, mining below the property. In 1921, the Commonwealth of Pennsylvania passed the Kohler Act , which prohibited the mining of anthracite coal in such way as to cause the subsidence of, among other things, any structure used as a human habitation. Prior Pennsylvania law had recognized that such pillars of coal necessary to support the land surface were an estate in land (a "support estate"), separate from the rights in removable coal. Pennsylvania Coal provided notice to Mahon that it planned to mine for coal under Mahon's habitation, and Mahon brought suit to prevent Pennsylvania Coal from mining under his land pursuant to the Kohler Act.

Prior history

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Mahon sued in the Court of Common Pleas to enjoin Pennsylvania Coal from conducting mining, but the court denied the injunction, holding the application of the Kohler Act to this case would be unconstitutional. The Supreme Court of Pennsylvania reversed, holding that the statute was a, "legitimate exercise of the police power" and granted an injunction. PA Coal v. Mahon, 43 Sup Ct. 412.

Legal analysis

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Issues and Holdings

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Issue: Whether the Kohler Act discloses a public interest sufficient to warrant the (admitted) destruction of the Pennsylvania Coal Co.'s property and contract rights? (As applied.)

-Holding #1: No. This was an invalid exercise of the police power and constituted a (14th Amendment) taking of Pennsylvania Coal's property and contract rights.

Issue #2: Whether the Kohler Act, in general, was a valid exercise of the police power. (Facial challenge.)

-Holding #2: No. The Kohler Act "goes too far" by restricting the right to mine anthracite coal to so great an extent as to violate the 14th Amendment Due Process clause's protection of property and contract rights by effectively nullifying those rights. (The property rights being the "support estate" and thus the right to mine the pillars of coal which support the surface; the contract rights being those found in the deed of purchase of the surface rights from the coal company, which concern the surface owners'/purchaser's waiver of liability for any damage caused by subsidence.)

Rule of law

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The Court ruled that whether a regulatory act constitutes a taking requiring compensation depends on the extent of diminution in the value of the property.

Reasoning

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The Court argued as follows: (1) The damage done by the activity prohibited by the act is a private, not a public nuisance ; there is no public safety justification for the statute, as notice before mining would suffice to protect public safety. On the other hand, the damage done by the statute is significant, insofar as it abolishes an estate in land and a binding contract. (2) The statute, in general, purports to extinguish the mining rights to valuable properties under surfaces owned by the public and the government. The statute makes prohibitively expensive the mining of coal in these areas, and thereby effectively destroys the right; after all, owning coal is not worth anything if the coal cannot be mined. The rights of the public to its streets and other property are rights paid for. If the representatives of the public have been so shortsighted as not to pay for the mining rights of the land as well, there is no authority to grant those rights without compensation. (If the land above required compensation, so therefore does the land below.)

The Court also advanced its policy concern of governmental overreach when it stated, "We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change." Id. at 416.

Dissenting Opinion: Brandeis, J.

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Justice Brandeis, "chiefly argued for what is now called the nuisance exception: if a land use is itself noxious, dangerous, or causes a public nuisance, the legislature is free to regulate its use without compensation, even though the police power may cause great loss to the property owner."

Brandeis explained nearly every restriction upon the use of property entails a deprival of some right of the owner, but this can be justified by the police power because restrictions, "imposed to protect the public health, safety or morals from dangers threatened is not a taking." In this case, the police power applies insofar as the Kohler Act prohibits a noxious use, the noxious use here being the subsidence of buildings. Justice Brandeis also addresses the public/private aspect of the Kohler Act stating that, "the purpose of a restriction does not cease to be public, because incidentally some private persons may thereby receive gratuitously valuable special benefits...Furthermore, a restriction, though imposed for a public purpose, will not be lawful, unless the restriction is an appropriate means to the public end. But to keep coal in place is surely an appropriate means of preventing subsidence of the surface; and ordinarily it is the only available means."

Result

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Judgment/disposition

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Supreme Court of Pennsylvania judgment reversed.

Subsequent Case History

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Today, the Supreme Court quotes Justice Holmes in Mahon for the recognition of the invalidity of a government regulation that so severely burdens private property that it constitutes a taking under the Fifth Amendment, even though it was technically a Fourteenth Amendment "takings" case. The cited cases include: _Goldblatt v. Hempstead _, 3

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