Keystone Bituminous Coal Ass'n V. de Benedictis - Majority Opinion

Majority Opinion

When Keystone was argued before the Supreme Court in 1986, its facts were strikingly similar to the facts of PA Coal. However, the Court began its opinion by rejecting the petitioners' argument that PA Coal should control in this case because "he similarities . . . far less significant than the differences." Id. at 481.

Citing prior takings cases, the Court listed two factors that must be considered when evaluating whether a taking has occurred. These factors suggest that a land use regulation will be deemed a taking if it 1) "'does not substantially advance legitimate state interests,'" or 2) "'denies an owner economically viable use of his land.'" 225, 260 (1980); citing Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124 (1978)).

Using the two factors above, the Court found that the petitioners didn't meet their burden of proof in order to establish a taking. Keystone Bituminous Coal Ass'n, 480 U.S. at 485. The Court found that the Subsidence Act "substantially advanced legitimate state interests" by trying to prevent "a significant threat to the common welfare" and that it wasn't "impossible for petitioners to profitably engage in their business." Id.

According to the Court, the first difference between PA Coal and this case was that one act benefited a few and the other act benefited many. Id. at 482-85. The Kohler Act challenged in PA Coal was intended to benefit a few private parties, while the Subsidence Act in this case was intended to benefit the general public. Id. The Court stressed that the Kohler Act was not a legitimate exercise of the State's police power because it was only meant to protect "some private landowners' homes." Id. at 487. Conversely, the Subsidence Act was a legitimate exercise of the State's police power because it was meant "to protect the public interest in health, the environment, and the fiscal integrity of the area." Id. at 488. To be a legitimate exercise of the State's police power, "the nature of the State's action" must protect the general well-being of the community. Id. at 484, 488. Regulations protecting the general well-being of the community generally involve heatlth, safety, or morals. Id. at 489 (quoting Mugler v. Kansas, 123 U.S. 623, 668-69 (1887)). In this case, the Court deferred to the Pennsylvania Legislature's finding "that important public interests are served by enforcing a policy that is designed to minimize subsidence in certain areas" because this purpose was "genuine, substantial, and legitimate." Keystone Bituminous Coal Ass'n, 480 U.S. at 485-86. Basically, the Court found that the Subsidence Act was meant to protect the general well-being of the community, rather than just a select few in the community, and was an acceptable use of the police power.

Second, the Court pointed out that the two cases are distinguishable because they were decided at different points in time. The Subsidence Act showed that "'ircumstances may so change in time ... as to clothe with such a interest what at other times ... would be a matter of purely private concern.'" Id. at 488 (quoting Block v. Hirsh, 256 U.S. 135, 155 (1921)). Therefore, during the 44 years between the PA Coal decision and the enactment of the Subsidence Act there was a change in the public's attitude toward regulations affecting private land.

A third difference between the two cases was that the mining being regulated in this case was compared to a public nuisance, while the mining being regulated in PA Coal was not. In this case, the Court held that there is not a taking if "the State merely restrains uses of property that are tantamount to public nuisances." Keystone Bituminous Coal Ass'n, 480 U.S. at 491. This public nuisance argument is associated with the "'reciprocity of advantage'" analysis in takings law. Id. Reciprocity of advantage means that people may have burdensome restrictions on their private property, but they will benefit greatly from the restrictions that are placed on others. Id. Apparently, the PA Coal majority did not think there was a reciprocity of advantage in restricting the few private landowners' land use, but the Keystone majority did.

The last difference between the two cases was the diminution in value of the coal companies' properties. In PA Coal, "mining of 'certain coal'" was deemed "commercially impracticable" as a result of the Kohler Act. Id. at 493. In Keystone, the court held that there was no "show any deprivation significant enough to satisfy the heavy burden placed upon one alleging a regulatory taking." Id. The Court categorized the cause of action in this case as a "facial challenge" to the Act. Id. at 495. From the Court's perspective, the petitioners challenged the statute's possible consequences without showing that any actual injury had occurred. As the Court mentioned, there was no evidence that any of the petitioners' mines could "no longer be mined for profit." Id. at 496.

In regulatory takings cases, the Court "compare the value that has been taken from the property with the value that remains in the property." Id. at 497 (citing Frank I. Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of "Just Compensation" Law, 80 Harv. L. Rev. 1165, 1192 (1967)). The property that the Court analyzed was the whole parcel, not "discrete segments" of the whole property. Keystone Bituminous Coal Ass'n, 480 U.S. at 497. So, the Court found that the 27 million tons of coal to be left in place was not "a separate segment of property for takings law purposes." Id. at 498. Instead, the Court looked at the petitioners' total amount of coal. For this reason, the Court decided that the Subsidence Act had not denied the petitioners "economically viable use" of their coal mine properties and that their "reasonable 'investment-backed expectations'" in the properties had not been "materially affected." Id. at 499.

The Court denied the petitioners' argument that their support estate had been taken. It analogized the support estate in this case to the "air rights" above Grand Central Station in Penn Central v. New York City and found that it was not "a separate segment of property for Takings Clause purposes." Id. at 500 (citing Penn Central Transp. Co., 438 U.S. at 130). Declining to allow state law definitions of property interests to govern its takings analysis, the Court viewed Pennsylvania's three estates in land as one combined property interest. Keystone Bituminous Coal Ass'n, 480 U.S. at 500.

Finally, the petitioners' Contract Clause violation claim alleged that Section 6 of the Subsidence Act interfered with the liability waivers that they had with surface property owners. Id. at 502. Rejecting this claim, the Court held that the state's "strong public interest" in preventing subsidence outweighed any contractual obligations between surface property owners and the petitioners. Id. at 505.

In the end, the petitioners' Takings Clause and Contracts Clause claims failed.