Pennsylvania Coal Co. v. Mahon
Citation
260 U.S. 393 (1922). Supreme Court of the United States.
Facts
Pennsylvania Coal had sold the surface rights to land to the Mahons but expressly reserved the right to mine coal beneath the surface. Pennsylvania then enacted the Kohler Act, which prohibited mining in ways that would cause subsidence of homes. Enforcing the Act would prevent Pennsylvania Coal from mining its reserved mineral rights. The company challenged the Act as an unconstitutional taking of its property without compensation.
Issue
Does a regulation that substantially diminishes the value of property constitute a “taking” requiring just compensation under the Fifth Amendment?
Holding
Justice Holmes held that the Kohler Act constituted a compensable taking of Pennsylvania Coal’s mineral rights. While a state may regulate property in some degree without paying compensation, a regulation that goes “too far” in diminishing property value crosses into a taking.
Rule / Doctrine
“The general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” Whether a regulation goes “too far” depends on the extent of the diminution in value and whether the regulation serves a sufficiently strong public interest to justify that diminution without compensation. The case established the foundational principle of regulatory takings — that government regulation, not just physical appropriation, can constitute a taking requiring just compensation. The Penn Central Transportation Co. v. New York City balancing framework later developed the multi-factor analysis for regulatory takings.
Significance
Pennsylvania Coal is the genesis of regulatory takings doctrine. It is paired with Penn Central (multi-factor balancing), Loretto v. Teleprompter (permanent physical occupation as per se taking), and Lucas v. South Carolina Coastal Council (total economic wipeout as categorical taking).