## Facts

- Whitney Benefits, Inc. owned a coal mineral estate in Campbell County, Wyoming, and Peter Kiewit Sons’ Co. partnered to develop the coal by surface mining.
- The coal deposit lay beneath an alluvial valley floor used for agriculture.
- Before 1977, the coal was economically, legally, and technologically feasible to mine, and there were established markets (including utilities and industrial users).
- Plaintiffs spent about $1 million on testing, engineering, and mine planning in anticipation of surface mining.
- In 1977, Congress enacted the Surface Mining Control and Reclamation Act (SMCRA), which restricted surface coal mining on alluvial valley floors unless impacts on farming were negligible.
- Federal regulators treated SMCRA’s alluvial valley floor provisions as precluding permits for surface mining on the tract and denied plaintiffs’ permit efforts.
- Plaintiffs filed an inverse condemnation action under the Tucker Act, claiming the restrictions eliminated all economically viable use of their coal estate.

## Issues

1. Whether SMCRA’s alluvial valley floor restrictions, as applied to plaintiffs’ coal estate, effected a Fifth Amendment taking.
2. If a taking occurred, whether it occurred upon SMCRA’s enactment in 1977 or upon later administrative permit denial.
3. How to determine just compensation for the coal estate, including the proper valuation method and inputs.

## Decision

- The court held that SMCRA’s alluvial valley floor prohibition, as applied, constituted a compensable taking of plaintiffs’ coal mining rights.
- The court found the taking occurred upon enactment of SMCRA in 1977, not upon later permit denial.
- The court awarded approximately $60.296 million in just compensation plus prejudgment interest.
- The court valued the coal estate using plaintiffs’ discounted cash flow valuation (“Boyd Plan”) and rejected a comparable-sales approach as unreliable on the record.

## Legal Principles

- A regulation that eliminates all economically viable use of a defined property interest can constitute a compensable taking requiring just compensation.
- In evaluating a regulatory taking, courts consider the degree of economic impact and interference with reasonable investment-backed expectations.
- Where a statute by its terms definitively forecloses the only economically viable use of an identified property interest, the taking may occur at enactment rather than at a later permitting decision.
- For income-producing natural resource property, discounted cash flow evidence may be used to determine fair market value when comparable sales are not reliable.
- A takings judgment awards compensation for the restricted property interest and does not depend on invalidating the underlying regulatory statute.

## Conclusion

The court concluded that SMCRA’s alluvial valley floor provisions, as applied to plaintiffs’ coal estate, destroyed the estate’s economic value and thus effected a total taking at the time of the statute’s enactment, warranting an award of just compensation calculated by discounted cash flow plus prejudgment interest.


Whitney Benefits, Inc. v. United States, 18 Cl. Ct. 394 (Cl. Ct. 1989)