480 U. S. 470
March 9, 1987
To prevent damage to homes, public buildings, and cemeteries from coal mining, the Pennsylvania legislature prohibited mining above a certain distance below the surface, and required mining companies to compensate those whose buildings were damaged anyway. Coal companies argued that this law violated both the takings clause and the contracts clause, and that a Supreme Court case from 1922 known as Mahon controlled.
Stevens wrote for the Court, which ruled 5-4 that the Pennsylvania law was Constitutional. The majority said that Mahon could be distinguished, because the mining law there was intended to benefit private parties rather than society as a whole. Stevens cited precedents to show that legislation enacted to serve compelling societal interests did not require that owners be compensated for corresponding diminution in their property values. Mahon could also be distinguished because the law at issue in that case would have made mining impracticable – something not asserted by the coal companies in DeBenedictis.
Turning from Mahon, the petitioners also argued that the law deprived them of 27 million tons of coal. Stevens replied that this was only about 2% of the coal in the mines, and that it ought not be seen as a separate parcel of property under Court precedents. Finally, the petitioners argued that the law destroyed the value of a unique feature in Pennsylvania property law known as the Support Estate. Stevens contended that strange features of state property law did not matter, and that the Support Estate lacked appreciable independent economic value. In response to the contracts clause challenge – the law abrogated contracts where surface owners had waived the right to claim compensation against the coal companies – the Court held, citing the horrendously activist Blaisdell ruling from 1934, that contracts could be abrogated if the societal interests in doing so were significant enough.
Rehnquist wrote the dissent, which was joined by Powell, O’Connor, and Scalia. He first pointed out that the law in Mahon, contrary to the majority’s intimations, actually was geared toward the general societal welfare, and thus could not be so easily distinguished. Rehnquist also faulted the majority treating coal mining as if it were a public nuisance. Moving on to address the 27 million tons of unusable coal, Rehnquist argued that it was a discrete amount of physical matter that was just as effectually taken from the companies as it would have been if the government had literally confiscated it. Compensation was thus required. Finally, Rehnquist showed that the Support Estate most certainly did have economic value, and that this value was totally destroyed by the Pennsylvania law.
I remember well the outcry when Kelo v. New London came down in 2005. It’s the most universally hated decision I can remember in my lifetime. Even in that case though, Kelo still got compensated. This decision appears to be several degrees worse. In one fell swoop, coal companies had 27 million tons of coal effectually taken from them without any compensation at all, and the economic value of all Support Estate was obliterated. When I award the prize for worst decision of the term, this figures to be a strong contender.
Justice Stevens, keeping it classy: “it is petitioners’ position that, because they contracted with some previous owners of property generations ago, they have a constitutionally protected legal right to conduct their mining operations in a way that would make a shambles of all those buildings and cemeteries.” Guy doesn’t sound biased at all, does he?