480 U.S. 491 (1987)
Beginning well over 100 years ago, landowners in western Pennsylvania began severing title to underground coal and the right of surface support while retaining or conveying away ownership of the surface estate.1 Approximately 90 percent of the coal that petitioners mine or will mine was severed from the surface in the period between 1890 and 1920.2
When acquiring or retaining the mineral estate, petitioners or their predecessors typically acquired the right to deposit wastes, provide drainage and ventilation, erect surface facilities, and obtained waivers of claims for damages resulting from coal removal.3
In 1966 the Pennsylvania Legislature enacted the Bituminous Mine Subsidence and Land Conservation Act after concluding that existing subsidence legislation had failed to protect public safety, land conservation, municipal tax bases, and land development.4 Section 4 of the Act prohibits mining that causes subsidence damage to public buildings and noncommercial buildings used by the public, dwellings used for human habitation, and cemeteries that were in place on April 17, 1966.5 The Department of Environmental Resources applies a formula that generally requires 50 percent of the coal beneath protected structures to remain in place.6 Section 6 authorizes the Department to revoke a mining permit if removal of coal causes damage to a protected structure and the operator has not repaired the damage, satisfied any claim, or deposited security equal to the reasonable cost of repair within six months.7
Petitioners are an association of coal mine operators and four corporations engaged in underground mining of bituminous coal in western Pennsylvania.8 Their members and the corporate petitioners own, lease, or control substantial coal reserves and support estates beneath surface property affected by the Act.9 In 1982, petitioners filed a civil rights action in the United States District Court for the Western District of Pennsylvania seeking to enjoin officials of the DER from enforcing the Subsidence Act and its implementing regulations.10
The parties entered a stipulation of facts on the facial challenge and filed cross-motions for summary judgment.11 The District Court granted respondents' motion in 1984.12 The Court of Appeals affirmed in 1985.13 The Supreme Court granted certiorari in 1986.14
Stipulations established that enforcement of the 50 percent rule would require petitioners to leave approximately 27 million tons of coal in place across 13 mines containing over 1.46 billion tons total.15 This amount represents less than 2 percent of the coal in those mines.16 Petitioners did not claim that any specific mine had become unprofitable since the Act's passage.17
Whether sections 4 and 6 of the Bituminous Mine Subsidence and Land Conservation Act effect a taking of petitioners' property interests without just compensation?18
Land use regulation effects a taking if it does not substantially advance legitimate state interests or denies an owner economically viable use of land.19 Analysis turns on the character of the governmental action, the economic impact, and interference with investment-backed expectations.20 The parcel is the property as a whole rather than discrete segments such as particular coal tonnage or a support estate viewed in isolation.21
No. The character of the governmental action leans heavily against finding a taking because the Commonwealth enacted the Subsidence Act to arrest a significant threat to public safety, land conservation, municipal tax bases, and land development after determining that prior legislation had failed.22 Section 4 prohibits mining that causes subsidence damage to public buildings, dwellings, and cemeteries in place on April 17, 1966.23 The Department applies a 50 percent rule requiring that coal remain in place beneath protected structures.24 Section 6 authorizes permit revocation when damage occurs and the operator fails to repair, satisfy claims, or post security.25 These provisions substantially advance the public interests recited in section 2 of the Act.26
Petitioners own or control coal reserves and support estates severed from the surface between 1890 and 1920.27 Approximately 90 percent of the coal they mine is subject to such severance.28 They typically acquired waivers of surface damage claims.29 Enforcement of the 50 percent rule requires them to leave approximately 27 million tons of coal in place across 13 mines containing over 1.46 billion tons total.30 This amount represents less than 2 percent of the coal in those mines. Petitioners have not claimed that any specific mine has become unprofitable since the Act's passage.31 Nor have they shown that the Act makes mining commercially impracticable or unduly interferes with investment-backed expectations.32
The 27 million tons do not constitute a separate parcel for takings analysis.33 The support estate is not a distinct segment whose value has been entirely destroyed because it is practically tied to the mineral or surface estate. Petitioners retain the ability to mine virtually all their coal profitably.34 The posture of the case is a facial challenge on stipulated facts.35 Petitioners therefore face a heavy burden that they have not met.36
Sections 4 and 6 of the Subsidence Act do not effect a taking of petitioners' property interests without just compensation.37
Related opinions on this issue
Joined by Justice Powell, Justice O’connor, And Justice Scalia
Chief Justice Rehnquist dissented, concluding that the Subsidence Act works a taking of petitioners' property interests.38 He viewed the 27 million tons of coal left in place as an identifiable and separable property interest whose value had been completely extinguished.39 This made the regulation indistinguishable from a physical appropriation by the government.40 Rehnquist also concluded that the Act destroys petitioners' purchased support estates by imposing strict liability for subsidence damage regardless of prior waivers obtained generations earlier.41
Rehnquist rejected the majority's broad definition of the parcel whose value furnishes the denominator in the takings fraction.42 He argued that the nuisance exception does not permit complete extinction of value without compensation.43 Pennsylvania Coal controlled the case because the differences between the two statutes were trivial.44
Whether section 6 of the Bituminous Mine Subsidence and Land Conservation Act unconstitutionally impairs petitioners' contractual obligations?45
The Contracts Clause prohibits state laws that substantially impair contractual obligations.46 The prohibition is not read literally.47 When the state is not a party to the contract, courts defer to legislative judgment on the necessity and reasonableness of an impairment.48 The impairment must serve a significant and legitimate public purpose.49 The adjustment of rights must be based upon reasonable conditions and be of a character appropriate to the public purpose.50
No. Section 6 substantially impairs petitioners' contractual rights by preventing enforcement of damages waivers obtained from surface owners generations earlier.51 The impairment is justified by the Commonwealth's strong public interest in preventing subsidence damage to structures and areas protected by section 4.52 Petitioners have conducted mining operations under approximately 14,000 protected structures since 1966.53 They claim a right to mine in a manner that would damage those buildings and cemeteries pursuant to the old waivers.54 The legislature determined that requiring operators either to repair damage or to compensate surface owners deters harmful mining practices and restores the environment.55 This serves the public purposes of health, safety, environmental protection, and preservation of tax bases.56 Because the state is not a party to the contracts, deference is owed to the legislative judgment that these measures are the most appropriate means of addressing the problem.57
The adjustment of rights is based on reasonable conditions and is of a character appropriate to the public purpose.58
Section 6 of the Subsidence Act does not unconstitutionally impair petitioners' contractual obligations.59
Related opinions on this issue
Joined by Justice Powell, Justice O’connor, And Justice Scalia
Chief Justice Rehnquist did not reach the Contracts Clause issue because he would have held section 6 unconstitutional under the Takings Clause.60 He noted that the majority's conclusion on contracts rested on assumptions about the extent of impairment that the record did not fully support.61 Rehnquist focused his analysis on the takings claim instead.62
He concluded that the Act extinguished petitioners' interests in both the coal left in place and their support estates without providing just compensation. The public purposes of the Subsidence Act were similar to those of the Kohler Act and did not distinguish the two cases.63