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Pennsylvania Coal Co. v. Mahon

Facts of the Case

Provided by Oyez

Pennsylvania Coal Co. entered an agreement with H.J. Mahon in 1878 to gain full rights to mine the coal located beneath his surface-level property. However in 1921 the state of Pennsylvania passed the Kohler Act, which prohibited miners from extracting below-surface coal that supported surface-level buildings. When Pennsylvania Coal notified Mahon that it would mine coal beneath his property, Mahon filed suit in the Court of Common Pleas to prohibit mining in accordance with the Kohler Act. The court denied his suit but the Supreme Court of Pennsylvania reversed and allowed the ban on mining. Pennsylvania Coal contended that the Takings Clause of the Fifth Amendment protected its contractual rights to the coal.

 

Questions

  1. Did the Kohler Act restrict coal mining to an extent that violated the Takings Clause of the Fifth Amendment by depriving mine owners of coal without compensation?

Conclusions

  1. Writing for an 8-1 Court, Justice Oliver Wendell Holmes ruled that the Kohler Act violated the Takings Clause of the Fifth Amendment. He reasoned the state exceeded its police powers by significantly diminishing the value of the land estates without having a strong public interest reason to do so. The Court reasoned that "so far as private persons or communities have seen fit to take the risk of acquiring only surface rights, we cannot see that the fact that their risk has become a danger warrants the giving to them greater rights than they bought."

    In dissent, Justice Brandeis 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. In this case, he reasoned, the police power applied insofar as the Kohler Act prohibited a noxious use of the subsidence of buildings. Brandeis further argued that the diminution-of-value test presented by the majority was flawed because value is relative and cannot be determined by a court of law.