Facts
- Pennsylvania Coal Co. owned the subsurface coal estate and held an express contractual right to remove all coal under Mahon’s land.
- Mahon owned the surface estate; his deed reserved mining rights to the coal company and included a waiver of claims for subsidence damage.
- Pennsylvania enacted the Kohler Act (1921), barring anthracite mining that would cause subsidence of structures used as human habitations, with limited exceptions.
- Mahon sought an injunction to stop mining that would remove support and cause subsidence damaging his house, relying on the Kohler Act.
- The trial court found the mining would cause the alleged harm but denied injunctive relief, concluding the Act would be unconstitutional as applied.
- The Pennsylvania Supreme Court reversed and directed entry of an injunction, treating the Act as a valid exercise of the police power.
- Pennsylvania Coal Co. obtained U.S. Supreme Court review, challenging the Act’s application to its reserved mining rights.
Issues
- Whether applying the Kohler Act to bar mining under Mahon’s parcel so diminished the coal company’s property and contract rights that it constituted a taking requiring just compensation.
- Where the constitutional line lies between permissible police-power regulation and a compensable taking when regulation substantially restricts a discrete property interest.
Decision
- The U.S. Supreme Court reversed the Pennsylvania Supreme Court.
- The Court held the Kohler Act unconstitutional as applied to Pennsylvania Coal Co.’s reserved right to mine under Mahon’s land because it effected a taking without compensation.
- The Court reasoned that making mining commercially impracticable could be constitutionally equivalent to appropriating or destroying the coal estate.
- The Court emphasized that Mahon purchased only surface rights and assumed subsidence risk by deed; the statute could not shift that burden to the coal owner without compensation.
- Justice Brandeis dissented, viewing the statute as a permissible prohibition of a dangerous/noxious use to protect public safety.
Legal Principles
- A regulation may be a taking even without physical appropriation if it goes “too far.”
- In assessing whether regulation is a taking, the magnitude of the diminution in value is a key consideration; severe diminution may require eminent domain and compensation.
- Police power permits substantial restrictions on property, but its implied limits cannot erase established property and contract rights without triggering constitutional constraints.
- Prohibiting a use characterized as harmful or nuisance-like may be treated differently from reallocating private risks and benefits; the majority and dissent diverged on that characterization here.
Conclusion
The Court held that the Kohler Act, as applied to prevent Pennsylvania Coal from exercising its reserved and deed-protected mining rights beneath Mahon’s home, imposed a sufficiently severe economic burden to constitute a compensable taking, establishing the principle that regulation can require compensation when it goes too far.