Pennsylvania Coal sold off some deeds to land. But the
deeds only sold the surface of the land, expressly granting Pennsylvania
Coal the right to mine under the surfaces.
The deeds also gave Pennsylvania Coal immunity for any
damage caused to the surface from their mining activities.
Pennsylvania has complex property laws. Under Pennsylvania law there are three different layers of property; the surface, the
subsidence layer, and the coal layer. It's possible to sell off one
layer of property and keep the rest.
The subsidence layer is the layer just under the surface
where mining could cause the surface to collapse.
40 years later, Mahon owned a home on one of the plots
originally sold by Pennsylvania Coal. Mining activity was causing
subsidence and damaging his home, so he sued for an injunction.
The Trial Court found for Pennsylvania Coal. Mahon appealed.
Mahon argued that Pennsylvania had passed The Kohler
Act (P.L. 1198), which took away Pennsylvania Coal's mining rights.
The Kohler Act forbid the mining of coal in the
subsidence layer in such a way to cause subsidence damage of improved
properties.
Pennsylvania Coal argued that if The Kohler Act
were applied in this case, it would be an illegal taking under the
Constitution.
They argued that it should only apply to subsidence
damage on land that they didn't have a property right to.
The Pennsylvania Supreme Court reversed. Pennsylvania
Coal appealed.
The Pennsylvania Supreme Court found that The Kohler
Act was a legitimate exercise of the police power.
The US Supreme Court reversed and found for Pennsylvania
Coal.
The US Supreme Court found that The Kohler Act was
not a legitimate use of police power when applied to lands where the
right to mine coal had been reserved.
Under the 5th Amendment, the government
has a right to take land, but it must be for the public good and there
must be compensation. If you look at The Kohler Act as a taking,
there is no "public" good, and there is no compensation.
In fact, it was argued that since the coal was valuable
and supported many jobs, it was more in the public's interest to mine
the coal even at the expense of a single homeowner.
The US Supreme Court found that, while property may be
regulated to a certain extent, if regulation goes too far it will be
recognized as a taking.
In order to determine whether or not the regulation goes
too far, you have to look at the average reciprocity of advantage.
Average reciprocity of advantage basically says
that the aggregate amount of benefit that comes from a regulation is
approximately equal to the amount of burden the regulation causes.
Of course, you have to consider the fact that the
burden can completely fall on one person and the benefits could fall
on a different segment of the community.
The Court felt that since Mahon only purchased the
surface of the land, and had indemnified Pennsylvania Coal from damage
resulting from subsidence, he took a risk and has to live with the
consequences.
In a dissent, it was argued that coal is, while in place,
land. You aren't allowed to use your land to create a nuisance, or
disturb other people's land. The government has a right to regulate
public nuisances, so what's special about coal?
The dissent felt that the restriction was not a taking
at all but was instead a prohibition of a noxious use, which is perfectly
within the bounds of the law.
Pennsylvania Coal argued that they had lost 100% of the
value of the coal in the subsidence layer, and a 100% loss was going too
far. However, the dissent argued that they hadn't lost 100% of their
coal, they'd only lost a small percentage of their coal since they still
could mine all the coal in the lower layers.
The idea that losing 100% of part of an investment is not
the same as losing a small percentage of the overall investment is known
as conceptual severance.
The general rule for takings had been that
permanent physical occupations are always considered takings, while
nuisance control measures are never considered takings. But this
case modified the rule a bit. Here it was held that if the nuisance
control measure creates too much of a burden on the property owner, it is
considered a taking.
Although never overruled, the Courts have been unable to
develop any set formula for determining if a regulation went so far as to
be a taking.
