impairment of the obligation of contract

In 1795 the Vermont legislature created the West River Bridge Company as a corporation. It granted the company the exclusive privilege of erecting a bridge over West River within four miles of its mouth together with the right to collect tolls for one hundred years. The company constructed the bridge, maintained it, and collected tolls until the proceedings that gave rise to this litigation. On November 19, 1839, Vermont enacted a general statute empowering county courts to lay out highways and assess damages to landholders. A companion statute declared that the Supreme and County Courts could take any real estate, easement, or franchise of any turnpike or other corporation when the public good required a public highway. The same compensation rules used for private property applied to such takings. Joseph Dix and others petitioned the Windham County Court. That court entered judgment establishing a public road that passed over the West River Bridge. The judgment converted the bridge into a free public highway and awarded compensation to the company for the appropriation and extinguishment of its franchise. The company removed the judgment by certiorari to the Supreme Court of Vermont, which affirmed the county court's decision. While the law proceeding was pending, the West River Bridge Company filed a bill in the chancery court of the first judicial circuit seeking an injunction against the highway proceedings. The chancellor sustained a demurrer and dismissed the bill. The Vermont Supreme Court affirmed that decree on appeal. The company prosecuted two writs of error to the United States Supreme Court from the Vermont Supreme Court's judgments, one arising from the law proceeding and one from the equity proceeding, both brought under section 25 of the Judiciary Act.

Allied Structural Steel Co., an Illinois corporation, maintained a pension plan for its salaried employees that it had adopted in 1963 and qualified under section 401 of the Internal Revenue Code. The plan provided that the company was the sole contributor to the pension trust fund. The company made contributions based on actuarial predictions. It retained the right to amend or terminate the plan at any time and for any reason. In the event of termination, assets were distributed first to retired employees, then to those eligible for retirement, and finally to other covered employees whose rights had not vested, with employees assured payment only to the extent of the assets. The plan expressly stated that no employee had any right to trust assets upon termination of employment except as provided, and that neither the employer nor trustee was liable beyond the assets. On April 9, 1974, Minnesota enacted the Private Pension Benefits Protection Act, which applied to private employers of 100 or more employees with at least one Minnesota resident who provided pension benefits under a qualified plan. The Act imposed a pension funding charge on such an employer if it terminated the plan or closed a Minnesota office. It required the employer to purchase deferred annuities for employees with at least 10 years of service whose nonvested benefits would otherwise be forfeited. Periods of employment prior to the Act's effective date were included in the 10-year criterion. During the summer of 1974, the company began closing its Minnesota office, which had 30 employees, and on July 31 discharged 11 of them. At least nine of the discharged employees had worked for the company for 10 years or more but did not have vested pension rights under the plan. On August 18, the State notified the company that it owed a pension funding charge of approximately $185,000 under the Act. The company brought suit in federal district court seeking injunctive and declaratory relief on the ground that the Act unconstitutionally impaired its contractual obligations. A three-judge district court upheld the constitutional validity of the Act as applied to the company. An appeal was taken to the Supreme Court under 28 U.S.C. § 1253, and the Court noted probable jurisdiction.

The Blaisdells executed a mortgage on their property in Minneapolis to the Home Building & Loan Association on August 1, 1928. The mortgage contained a valid power of sale by advertisement. After default, the mortgage was foreclosed and the property sold to the Association on May 2, 1932, for $3700.98. The period of redemption under the law then in effect was set to expire on May 2, 1933. On April 18, 1933, Minnesota enacted Chapter 339 of the Laws of 1933, known as the Mortgage Moratorium Law. The statute authorized district courts to extend the period of redemption from foreclosure sales for such additional time as the court deemed just and equitable, not beyond May 1, 1935, upon condition that the mortgagor pay a reasonable part of the income or rental value toward taxes, insurance, interest, and principal. The Blaisdells applied to the District Court of Hennepin County for an extension of the redemption period. The district court found that the reasonable rental value of the property was $40 per month and the present market value was $6000. It extended the redemption period to May 1, 1935, requiring the Blaisdells to pay $40 per month to the Association. The Supreme Court of Minnesota affirmed the order. The Home Building & Loan Association appealed to the United States Supreme Court, which reviewed the judgment sustaining the statute as applied to the preexisting mortgage.

In 1966 the Pennsylvania Legislature enacted the Bituminous Mine Subsidence and Land Conservation Act to address land subsidence caused by underground coal mining. The Act authorizes the Department of Environmental Resources to implement and enforce a comprehensive program preventing or minimizing subsidence and consequent damage to surface structures. Section 4 prohibits mining that causes subsidence damage to public buildings, dwellings used for human habitation, and cemeteries, and generally requires that 50 percent of the coal beneath such structures remain in place to provide surface support. Petitioners are an association of coal producers and several of its member corporations engaged in underground bituminous coal mining in western Pennsylvania. They own, lease, or control substantial coal reserves and associated support estates beneath surface properties affected by the Subsidence Act. Many of these interests were severed from the surface estate between 1890 and 1920, and petitioners or their predecessors typically acquired waivers of liability for subsidence damage along with rights to deposit wastes, provide drainage and ventilation, and erect surface facilities. In 1982 petitioners filed a civil rights action in the United States District Court for the Western District of Pennsylvania against the Secretary of the Department of Environmental Resources and other officials. They sought to enjoin enforcement of the Subsidence Act and its implementing regulations, alleging that Section 4 and Section 6 effected a taking of their property without compensation and that Section 6 impaired their contractual obligations. The parties entered a stipulation of facts concerning the facial challenge and filed cross-motions for summary judgment. The District Court granted summary judgment in favor of the Department officials. The Court of Appeals for the Third Circuit affirmed. The Supreme Court granted certiorari to consider the constitutional challenges to the Subsidence Act. Petitioners have never claimed that the Subsidence Act makes it commercially impracticable for them to continue mining their bituminous coal interests in western Pennsylvania, nor have they identified any specific mine rendered unprofitable by the statute. The evidence in the record shows that enforcement of the 50 percent rule has required petitioners to leave less than 27 million tons of coal in place. This applies across 13 mines containing over 1.46 billion tons. It amounts to less than 2 percent of the total coal in those operations.