Keystone Bituminous Coal Association. v. DeBenedictis

PETITIONER:Keystone Bituminous Coal Association et al.
RESPONDENT:Debenedictis et al.
LOCATION:Pennsylvania General Assembly

DOCKET NO.: 85-1092
DECIDED BY: Rehnquist Court (1986-1987)
LOWER COURT: United States Court of Appeals for the Third Circuit

CITATION: 480 US 470 (1987)
ARGUED: Nov 10, 1986
DECIDED: Mar 09, 1987

ADVOCATES:
Andrew S. Gordon – on behalf of the Respondents
Rex E. Lee – on behalf of the Petitioners

Facts of the case

By passing the the Bituminous Mine Subsidence and Land Conservation Act (Act), the Pennsylvania Legislature empowered the Pennsylvania Department of Environmental Resources (DER) to regulate underground coal mining that damaged structures on the surface. When implementing the Act, DER prevented coal miners from removing more than 50% of coal from mines located beneath buildings. Historically, coal miners acquired rights to “mining estates” separate from the property owned on the above “surface estates.” The Keystone Bituminous Coal Association, a group of miners, complained that the Act created a “support estate” that effectively took away its property without compensation. Keystone relied on the Supreme Court’s decision inPennsylvania Coal Co. v. Mahon to allege that this state action violated the Contract Clause and the Takings Clause found in the Fifth and Fourteenth Amendments. The District Court rejected both allegations and the United States Court of Appeals for the Third Circuit affirmed the decision.

Question

Does a state violate the Takings Clause by forcing coal mining companies to keep certain amounts of coal in underground mines in order to support structures on the surface? Does this restriction violate the Contract Clause by canceling agreements miners have made to secure their rights to underground coal?

William H. Rehnquist:

We will hear arguments next in Keystone Bituminous Coal Association against Nicholar DeBenedictis.

Mr. Lee, you may proceed whenever you’re ready.

Rex E. Lee:

Thank you, Mr. Chief Justice, and may it please the Court:

This case involves two Constitutional provisions, the takings clause and the contract clause.

The principle that controls the takings issue is simple and well established.

Sixty-four years ago this Court held in Pennsylvania Coal v. Mahon that regulation which goes too far amounts to an unconstitutional taking.

And specifically, it held that the State of Pennsylvania went too far when it required anthracite coal owners to leave certain coal in the ground in order to serve a public purpose.

There is, very simply, no meaningful distinction between Section 4, which is one of the two sections of the statute at issue today, and the Kohler Act, which held… which Pennsylvania Coal held unconstitutional.

Indeed, the parallels between the two statutes are remarkable.

The operative language in the Kohler Act was as follows: It shall be unlawful for any owner so to mine anthracite coal as to cause subsidence.

Whereas its modern day counterpart, Section 4, states that no owner shall mine bituminous coal so as to cause damage from subsidence.

The one deals with anthracite, and the other, bituminous.

But that’s the only real difference.

If Pennsylvania Coal is still good law, as this Court has stated on many occasions that it is, the then Third Circuit’s judgment in this case must be reversed.

The controversy arises out of the following circumstances.

Pennsylvania law recognizes three separate property interests, or estates in land: the mineral estate; the surface estate; and the support estate.

My clients’ Constitutional rights are based on the right that as to most of their properties, they have acquired two of these three estates.

And it’s important to understand why it is that they acquired the support estate in addition to the coal.

Most of Pennsylvania’s bituminous coal, which is located in the western part of the State, lies hundreds of feet below the ground and is extracted by underground mining.

When that happens, the surface will subside.

In some cases, the subsidence will cause damage, and in other cases, it doesn’t.

And it is impossible to predict in advance which parcels will be damaged by subsidence, and which will not.

Two facts, then, bring the interests of the coal owners on the one hand and the surface owners on the other into an obvious conflict.

On the one hand, coal in the ground has no value unless it can be mined.

It’s worthless unless it can be mined.

Yet on the other hand, the underground mining of any coal in any quantity creates some risk of subsidence.

So that if it isn’t mined, it’s valueless.

And if it is mined, there will be subsidence, and there may be some damage.

In the case of about 90 percent of the bituminous parcels in Pennsylvania, these competing interests have been accommodated, and the relevant burdens and risks have been shifted by contract.

Between about–

Sandra Day O’Connor:

Mr. Lee, are you… are your clients complaining only about parcels as to which they have acquired the support estate?

Rex E. Lee:

–Yes.

Sandra Day O’Connor:

Nothing else is at issue here?

Rex E. Lee:

That is correct.

The coal owners–

Sandra Day O’Connor:

As to such parcels, do you think that under the regulatory power of government, that there’s any leeway for the State of Pennsylvania to prevent and prohibit the taking of any portion of the coal to prevent contamination of water, underground water, or to prevent destruction of utility lines?

Is that beyond the regulatory power of the State?

Rex E. Lee:

–Those are… I think it is not totally beyond the regulatory power of the State, Justice O’Connor.

I want to stress at the outset that that’s outside what we’re talking about in this instance.

But–

Sandra Day O’Connor:

I thought it was part of it.

I thought this act dealt in part with underground water aquifers and utility lines.

Rex E. Lee:

–Yes.

Insofar as… and let me draw the distinction.

In the Pennsylvania Coal case, there was a case that the majority… that the Court distinguished.

It was called the Plymouth Coal case, which dealt with the requirements for mine safety.

I think that when the coal miners engage in a certain kind of activity, then the State has the right to regulate that activity in such a way as to make it safe.

But when they go beyond that, and attempt to take property in such a way as to… as to protect other property, then that’s the point at which it goes too far.

And that, we submit, is the necessary holding of Pennsylvania coal.

Sandra Day O’Connor:

Well, but applying that to protection of aquifers and utility lines: What is your view?

I’m not clear.

Rex E. Lee:

Our view is… now, of course, aquifers and utility lines is different factually from what happened in Pennsylvania Coal.

But we don’t think that it’s a different… there’s a difference in concept, and we don’t think that the legal rule is different insofar as aquifers and utility are concerned.

It’s not private property; public property in a sense.

But it involves the same principle, that if Pennsylvania wants to accomplish its purposes… and certainly those are proper purposes… that there comes a point at which regulation goes too far, if it takes too much, if it regulates too much, then it goes too far.

And the necessary holding of Pennsylvania Coal is that when coal has only one value, unlike the situation in Penn Central, where there were other values, and unlike all of the other cases, when it only has one value, then if Pennsylvania eliminates that value, it has gone too far.

Sandra Day O’Connor:

Well, as I understand it, the State requires only a small percentage of the coal to be left in place, from one to nine percent?

Rex E. Lee:

No, that is not correct.

Let me clarify the answer to that.

And let me compare it in that respect, to the Kohler Act.

Rex E. Lee:

Note the parallels in the language.

Both simply said you can’t… you can’t mine anthracite or bituminous in such a way as to cause subsidence.

Neither statute said you have to leave so much in the ground.

It was assumed however in the Pennsylvania Coal case that the amount that would be required to be left in the ground was about a third.

And that’s in the opinion, mostly in the argument portion of the opinion, in Pennsylvania Coal.

In the case of the modern day counterpart to the Kohler Act, in the case of Section 4, the State of Pennsylvania in 1982 adopted regulations which require that 50 percent of the coal underlying certain designated surface structures be left in the ground.

Now, the one percent to nine percent that they’re talking about is the percentage of the coal that has to be left in the ground, that is, the 50 percent under surface structure; the percentage that that is to the total coal holdings of the company.

But they’re the same.

The only difference in that respect is that where it was assumed in Pennsylvania… and apparently correctly, because that’s what the lower court said as well… was that you had to leave 30 percent of the anthracite.

We are required to leave 50 percent of the bituminous.

So that these contractual arrangements that were made mostly between the years 1890 and 1920, carefully shifting the burdens between the parties, among the parties that are affected, have been rearranged by the State of Pennsylvania.

Sandra Day O’Connor:

Does the record really tell us how much has to be left in place?

Rex E. Lee:

Oh, yes.

Sandra Day O’Connor:

And therefore, is this right for our decision?

Rex E. Lee:

Oh, it is indeed right.

The State of Pennsylvania’s own exhibit, which appears, Justice O’Connor, at page 284 of the joint appendix, shows in excess of 26 million tons that have been left.

Part of the record, though it hasn’t been sent here to the clerk’s office, are maps that show exactly where those parcels are; where they are in the mining plans; and which parts are going to have to be… and which parts are going to have to be left.

This cases contrasts, in that respect, with other cases in which in recent years the Court has not reached the takings issue in land use cases because of ripeness problems.

And I’d like to contrast in that respect with Yolo County.

In Yolo County the Court had to–

William H. Rehnquist:

Mr. Lee, let me get back just a minute to the question Justice O’Connor asked you.

You don’t really dispute the 9.4 percent in this table on page 284, but you just say, that’s applied to the total amount of coal holdings.

Rex E. Lee:

–That is correct.

William H. Rehnquist:

That as much as 50 percent can be required to support a particular building.

Rex E. Lee:

That is correct.

William H. Rehnquist:

But now, 50 percent of what?

Rex E. Lee:

Of the coal underlying the particular structures that are protected by Section 4.

What the statute, as implemented by the regulations, requires is this: You have a designated structure.

You move out 15 feet from each side of that structure.

And then you go down at an angle of 15 degrees from a perpendicular to the point where the coal seam lies.

Rex E. Lee:

And then within that circumscribed area, you have to leave 50 percent of the coal that is within that area.

It’s exactly the same as you had in Pennsylvania Coal.

And the amount that was left under the man’s home in Pennsylvania Coal was an even smaller percentage of the total Pennsylvania Coal holdings.

Now, let me just complete–

John Paul Stevens:

Let me just follow up on that for a second.

Supposing you have a house on a big farm.

Rex E. Lee:

–Yes.

John Paul Stevens:

What you’re saying is, 50 percent of the coal under the house has to be retained.

Rex E. Lee:

That is correct.

John Paul Stevens:

But the rest of it on the farm wouldn’t.

And you’re mainly concerned about mining under urban areas, is that what the problem is?

Rex E. Lee:

No, it really isn’t.

John Paul Stevens:

It’s just the structures out in the–

Rex E. Lee:

The coal reserves in this area just aren’t in urban areas.

John Paul Stevens:

–I see.

Well, but if you’re just concerned about 50 percent of, say, a 40-foot square parcel in a 20-acre farm, it doesn’t sound… 50 percent is a little bit misleading, isn’t it?

Rex E. Lee:

Would that that were the case, Justice Stevens.

By the time–

John Paul Stevens:

Does the record tell us what proportion of the given coal fields have structures on them?

Rex E. Lee:

–The record tells us–

John Paul Stevens:

What does the 50 percent reduce to in terms of the total field, in other words?

Rex E. Lee:

–What the record tells us… it doesn’t tell us what it reduces to in terms of the total field.

But it does tell us this–

John Paul Stevens:

Except insofar as the exhibit on page 284 indicates it’s about nine percent.

Rex E. Lee:

–That is correct.

That is correct.

It’s about nine… that’s right, it’s about nine percent of the total coal fields.

But a couple of things need to be said.

Would that it were only 40 feet by the time it gets down to the seam.

By the time you extent that down at a 15 degree angle for 800 feet, it amounts to acres by the time you actually reach the point where the coal is.

Rex E. Lee:

But the important thing is that there is no question that it amounts somewhere between their figure of 26 million tons, and 30 million tons.

And that is the amount that is have to be left… that has had to be left in the ground underneath these structures solely because of this statute.

And it is indistinguishable, for those purposes, from Pennsylvania Coal.

John Paul Stevens:

Mr. Lee, how much of that do you think you have a Constitutional right to remove?

Rex E. Lee:

Oh, all of it.

John Paul Stevens:

You have a right to remove all of it?

Rex E. Lee:

Yes, that is the thrust of Pennsylvania Coal, that… because from 1890 to 1920 we acquired those rights.

The question is who–

Sandra Day O’Connor:

You acquired the support rights.

Rex E. Lee:

–Support estate.

Sandra Day O’Connor:

A support estate in every piece of the land affected by this that you’re bringing before us?

Rex E. Lee:

That is correct.

Those parcels as to which we acquired the support estate.

I refer you back to my earlier comment that they’re in irreconcilable conflict with each other.

The coal is worthless unless you can mine it.

On the other hand, if you do mine it, there is going to be subsidence, and in some instances, there will be damages.

Now the way that that is accommodated is, that someone has the support right.

Which can only be used valuably in connection with either one of the other two estates.

If it belongs to the surface owner, then you can’t mine.

If it belongs to the coal owner, then you can mine.

And what Pennsylvania has done is to redistribute these property rights and contract rights that the parties have acquired as between themselves.

And that is Pennsylvania Coal.

Now coming to ripeness, and let me just finish it up.

There is identifiable, recognizable coal in identifiable amounts that has been left under the ground in order to accomplish a public purpose.

In Yolo County, the Court properly observed that it had… well, let me say, the Court had two tasks.

It had to determine, first, how much of a land… how much land use regulation amounted to a taking; that had never been determined.

And then it had to determine whether the particular… particular case did or did not meet that measure.

But as the Court said, a court cannot determine whether a regulation has gone too far unless it first knows how far the regulation goes.

There, there was no indication whether some less dense development was possible, and therefore, how badly the surface owners had been hurt.

And until you could know that, you could not know whether the regulation went too far.

Rex E. Lee:

Here it has been established how far is too far.

And here we know that 30 million tons of identifiable coal have been left.

Byron R. White:

Mr. Lee, suppose you hadn’t taken what you think you’ve taken in the transaction, namely, the support estate; that you bought the mineral right… mineral rights, but you didn’t take the support estate.

What would your argument be now?

Rex E. Lee:

I wouldn’t have any.

We wouldn’t be here.

Byron R. White:

Because?

Rex E. Lee:

Because the State of Pennsylvania then wouldn’t be taking anything, because then they would just be adjusting something that the parties themselves unadjusted.

I supposed there might be an argument.

Byron R. White:

Well, what if in the contract the surface owners just waived any right to any damage?

Rex E. Lee:

It’s the same thing.

Then we would be here, because that’s–

Byron R. White:

Then it would just be a contract?

Rex E. Lee:

–Then it would be the contract clause.

Then I would be talking to you about my Section 6 rather than Section 4.

Byron R. White:

All right, where did the support estate… is that Pennsylvania law?

Rex E. Lee:

It is Pennsylvania law.

There’s the Captline case that you might want to look at, Justice White, cited in our brief.

Byron R. White:

Well, have you… you’re really saying, then, that what they’ve taken here is not 25 million tons of coal directly.

They’re just taken the support estate.

Rex E. Lee:

That is correct.

But it is measured by the value of the 25 million tons.

Byron R. White:

You think that’s what was taken in the Pennsylvania Coal case?

Rex E. Lee:

Yes, it is, because the support… Pennsylvania is unique in this respects.

You could accomplish the same thing in West Virginia by getting the waiver.

Put it is conceptually cleaner–

Byron R. White:

But then you would just be a contract claimant.

It wouldn’t be a takings case.

Rex E. Lee:

–That is arguably correct, though I think–

Byron R. White:

Arguably?

Byron R. White:

Or I thought you said it was–

Rex E. Lee:

–No, arguably.

Arguably.

I think you could still make a takings argument under those circumstance.

But I will save that for the case if it ever comes up.

John Paul Stevens:

–It is correct, is it not, that your… that Pennsylvania law differs from, say, West Virginia, Indiana, and Illinois with regard to this underground support estate?

Rex E. Lee:

It’s unique in that respect.

John Paul Stevens:

And so that your… there at least would be a different takings argument in the rest of the country, basically?

Rex E. Lee:

That is correct.

Byron R. White:

But the same contract argument that you’re making here?

Rex E. Lee:

Identical.

Byron R. White:

And if it wouldn’t be any good in those other cases, it wouldn’t be any good here.

I’m not saying it isn’t any good, but–

Rex E. Lee:

The statement is a correct one.

Lewis F. Powell, Jr.:

–Does any other State have a law like Pennsylvania?

Rex E. Lee:

It really doesn’t, Justice Powell.

Lewis F. Powell, Jr.:

You say it’s unique?

Rex E. Lee:

It’s unique.

Pennsylvania… oh, excuse me Pennsylvania is unique both in recognizing the support estate.

It is also unique in that it is the only State that has ever found it necessary to go as far as Pennsylvania has gone both in 1921 and then almost half a century later in this particular statute.

Byron R. White:

Well, what’s the citation of the case?

Rex E. Lee:

The Captline?

It’s cited in our brief, and I’m sure in the State’s as well.

And it is 459 A. 2nd 1298.

On the merit–

John Paul Stevens:

May I just one other question about the three estates?

Does the record give us any indication of the relative costs of the three… just of the two estates?

How much extra for underground coal do they have to pay to get the support as well?

Rex E. Lee:

–It really doesn’t.

There are a number of deeds, and I’m told that you can reconstruct from the information on the deeds.

Rex E. Lee:

But they bought the whole package, as a single package.

Sandra Day O’Connor:

Mr. Lee, what if the State here had simply passed a law allowing owners of the surface estate to compel your clients to convey to them for a fair price the support structure estate.

Rex E. Lee:

I get your question.

The state in fact did that, at Section 15 of the same statute, and we’re not challenging it.

On the merits, the respondents make two arguments.

The first is an attempt to distinguish Pennsylvania Coal, and the second, we contend, amounts to an attempt to overrule it.

We are told–

Byron R. White:

xxx has Pennsylvania ever recognize a support estate?

Rex E. Lee:

–No, of course not.

Of course not.

But it’s about… it’s a good discussion of the general rule, is all I’m saying, Justice White.

Byron R. White:

Is that a common law rule in Pennsylvania or is that statutory?

Rex E. Lee:

I think it has both common law and ancient statutory roots.

Byron R. White:

Ancient statutory roots in Pennsylvania?

Rex E. Lee:

Ancient… ancient for… I don’t… yes, ancient for Pennsylvania.

Let me revise that statement.

It has both common law and long-standing statutory roots.

Byron R. White:

And is there any notion of why such an estate came to pass?

Rex E. Lee:

Oh, I think there’s little question why it came to pass.

It’s because Pennsylvania is an importing coal mining State, and there was a need to accommodate these obviously competing interests.

Byron R. White:

Some reason other than just an action for damages or a duty to support or–

Rex E. Lee:

I’m really not sure, but I’ve always assumed that it was because of something more than an action for damages.

That it was, whether there was or was not a duty to support.

The State suggests that this is not like the Kohler Act, and they suggest only one difference.

And that difference is that, whereas the Kohler Act was designed to protect personal safety, that the purpose of the Subsidence Act is to promote land development and preserve the tax basis.

That argument is insufficient for two reasons.

The first is that the Constitution guarantees against takings without compensation.

It does not permit takings without compensation for some purposes but not others.

Once it’s determined that the State has gone too far, then the State has only two options: They either stop the restriction or pay for the property taking.

It makes no difference in a particular case that a State may or may not have a very good reason for taking.

Rex E. Lee:

If the reason is good enough, then it can take.

But if it takes it has to pay.

And if it doesn’t pay, then it must stop the taking.

Here it is beyond dispute that the State has gone too far, because Pennsylvania Coal holds that requiring coal to be left in the ground is a taking.

Byron R. White:

–Mr. Lee, what precautions are taken in Pennsylvania, or required in Pennsylvania, under Federal law, when you mine coal for the safety of miners to keep the mine from collapsing?

Rex E. Lee:

Those are extensive.

Byron R. White:

Do you leave pillars of coal?

Rex E. Lee:

Yes, indeed we do.

Byron R. White:

Or do you put in steel supports, or what?

Rex E. Lee:

Mostly… there can be artificial supports; it’s a combination of both.

Byron R. White:

Would you suppose that… why aren’t those precautions… why wouldn’t those be sufficient to satisfy any requirement for support and to prevent damage to the surface areas?

Rex E. Lee:

The reason that they don’t… let me give you a twofold answer.

The first is just a precedent answer, that that really is the Plymouth Coal case, which a few years prior to Pennsylvania Coal, had involved the requirement that coal be left in the ground for support purposes… excuse me, for safety purposes.

Byron R. White:

Safety.

Rex E. Lee:

For safety purposes.

And this Court, in its decision in Pennsylvania Coal, distinguished that case on two grounds, as I read the opinion.

One is that it was related to a purpose that is attributable to what the mining companies themselves were doing, that if they’re going to mine, that the State does have an interest in controlling that activity.

Byron R. White:

Sure.

Rex E. Lee:

And the second is, that it was only temporary; that whereas… it was only temporary during the period of time that the coal is in the ground.

You see, for the miners own purposes… that is, for the company’s own purposes, they can never get it all out.

Byron R. White:

Well, what I really want to know, as you well know, is why do you… why is it so impossible that you couldn’t satisfy the act, this act’s requirements, by saying, well, if we’re going to mine, we can easily supply the support in another way?

Rex E. Lee:

Yes, yes.

Let me answer that question, and the answer to that one is–

Byron R. White:

Suppose that were true, that you could prove that, would you have any kind of a claim?

It might cost you a lot of money, but would you have some claim against somebody?

Rex E. Lee:

–Yes, we would have a claim.

And here is the answer.

And the factual support for this is, incidentally, is in the record.

It’s contained in the Joint Appendix.

There are certain parts of a coal mine that the companies, from time immemorial, would leave only… actually more than 50 percent of the coal in the ground for their own purposes: for safety for their own miners; for access; and for ventilation.

Rex E. Lee:

And those are sometimes referred to as the mains, the submains, the development entries, and so forth.

Those are the parts of the mine that for the miners’ own purposes, you have to leave substantial amounts of coal in the ground.

In between those areas are what are called the mining panels, or the development panels.

And within that area you try… the effort is to get just as much of the coal out as you possible can.

Now, it is possible in many instances, and the record bears this out, that in setting out the mining plan, it is possible to locate these areas where the mining companies would in any event leave underneath the protected structures.

But you can’t do it in all instances.

And what happens is, that there are 3,000 structures that belong to my clients, and this is also in the record–

Byron R. White:

Well, the act does say that… provide a mechanism whereby you can at least try to get–

Rex E. Lee:

–That’s right, and we do.

And we do.

Byron R. White:

–And have you?

Rex E. Lee:

Of course.

Byron R. White:

In all of these areas?

Rex E. Lee:

Oh, no, no, no.

Well, we have made the effort.

Because it’s to our advantage to do so.

Some of the mines, of course, were already set up and operating prior to the time… prior to the time… that the act came into effect.

Byron R. White:

So any statutory remedies you’ve had you’ve exhausted?

Rex E. Lee:

Yes.

Yes, we think we have.

Byron R. White:

And you’ve never been able to prove up, or to demonstrate, that there’s some other way of doing this?

Rex E. Lee:

We not only have not been able to demonstrate it, Justice White… the answer to that question is no, we’ve never been able to demonstrate it.

And we alleged in the complaint that we could not.

And the answer to the complaint was… or the answer to that allegation was, that we were right.

Let me say just one word about the contract clause, then I do want to save just a little bit for rebuttal.

Simple… our contract clause argument is this simple.

The contract clause is there.

It is one of the most specific provisions in the Constitution.

It is the only… it is one of the few in the original 1787 document that particularly applies to the states.

It has to mean something.

Rex E. Lee:

It has to protect some contracts.

And this Court said in Spannaus that the height of the impairment… that the nature of the impairment measures the height of the hurdle that the State must clear.

If the contract clause does not apply to protect this particular contract in this case, then it is hard to see that the contract clause has any value at all.

Because unlike Spannaus, where, as this Court said, there was one provision that was modified, this case does not involve just a modification of a provision; it involves a complete rewriting of the entire contract.

Byron R. White:

You really… I take it you’re really submitting that even though you lose on the takings clause, you should win on the contracts clause?

Rex E. Lee:

No, I’m really not saying that.

Well, yes, I’m saying that, but I’m saying one other thing.

I’m saying also that there is a separate ground that is particularly applicable to Section 6.

But we do think we can win on both grounds.

I’d like to reserve the rest of my time, Mr. Chief Justice, unless the Court has questions.

William H. Rehnquist:

Thank you, Mr. Lee.

We’ll hear now from you, Mr. Gordon.

Andrew S. Gordon:

Mr. Chief Justice, and may it please the Court:

As Mr. Lee mentioned, this appeal raises questions under the takings clause and the contract clause.

I’d like to address my remarks this morning primarily to the taking clause issue.

If my time permits, or if the Court has questions, I’ll address the contract clause issue as well.

The coal companies, it seems to me, have conceded a great deal in this case.

First of all, they do not contest the fact that Pennsylvania’s subsidence program is a land conservation measure; that it is designed to promote land development, to protect the municipal tax base, and generally, to preserve the health, safety and welfare of the Commonwealth citizens.

William H. Rehnquist:

Do you think that makes it difference from the Kohler Act in Mahon?

Andrew S. Gordon:

Well, it certainly has a far broader focus.

It is intended to accomplish a great deal.

I’m not sure that that difference in itself, and we don’t argue that that difference in itself, makes the case distinguishable from Pennsylvania Coal.

There are other factors which I will elaborate on in a few moments.

The coal companies do not contest the fact, as well, that this program accomplishes these broad purposes.

The coal companies admit that the government may regulate the use and enjoyment of property, even though the regulation in particular cases may affect property values adversely, and sometimes substantially.

They admit as well that the effect of these regulations on their coal mining operations is relatively small.

As the Court noted in the chart we that we have prepared as part of the Joint Appendix, as little as four-hundreths of one percent of a coal mine is involved in this particular case.

And the percentage varies.

William H. Rehnquist:

But as much as nine percent?

Andrew S. Gordon:

It goes up to nine percent, that’s correct.

Andrew S. Gordon:

And of course, focussing more broadly–

Sandra Day O’Connor:

And as much as 50 percent under a particular structure?

Andrew S. Gordon:

–That’s right, that’s correct.

Focussing even more broadly than that, the contracts and the arrangements that are involved that make up these coal mines, that these coal companies purchase, involve more than the purchase of coal.

They purchase many other rights along with it.

They’re outlined in the deeds that are in the record.

But many rights: the right to sink shafts, to erect buildings on the surface; a whole variety of other rights were purchased along with the coal.

So we’re talking about a small aspect, really, as far as this record shows, of what they have and what they control.

And finally, the companies do not contest the fact that since this program was initiated back in 1966, that they have operated their mines, they have operated them at a profit.

And in fact, as recently as 1980 and ’81, in the face of these regulatory requirements, and Federal regulatory requirements, which are to some extent similar, Consolidation Coal Company, one of the petitioners here, purchased vast new mining properties; began to plan a new complex of mines–

Byron R. White:

But I don’t suppose you would contend that if during these years instead of doing what the State did, the State said, by the way, we would like to have 50 percent of your coal under these structures and we’re going to mine it, and they just went and mined it; they would have to pay for it, I suppose?

Andrew S. Gordon:

–If they went… if the mined the coal–

Byron R. White:

If the State just mined the coal and said, you can make plenty of profit without this coal; we just want it.

Andrew S. Gordon:

–Well, obviously, as I will elaborate on more in the rest of my argument, the character of the government action makes a difference.

And certainly that would make a–

Antonin Scalia:

Well, you’re arguing that the quantity of it makes a difference.

And I think the import of Justice White’s question is: Does it?

If there’s a taking, if there is a taking of property, does it make any difference that you’re only taking a little bit of the property?

Or if you leave the other fellow with a lot of his property.

If I have $200 million, is it okay for you to come and take $1 million just because it’s not… it’s not very much of the total?

Andrew S. Gordon:

–Well, but the question here, of course, is: Is there a taking.

And what that… and what–

Antonin Scalia:

But does that have anything to do with what proportion you’re taking?

Andrew S. Gordon:

–It does in the… when you’re talking about a regulatory taking that affects the use and enjoyment of property, it makes a big difference what the economic impact and the relative impact is.

Antonin Scalia:

xxx it does if you haven’t established that there’s a taking.

But if Pennsylvania Coal says that there’s a taking, then what difference does it make that there’s less of a taking here?

Andrew S. Gordon:

Well, if Pennsylvania Coal establishes that there is a taking here, then obviously, we don’t prevail.

But what our argument is that you can’t read it that simply; that you have to look at the question of regulatory takings in its proper perspective.

Through the years in the Court’s… sometimes its struggle to come up with guidelines to judge takings clause claims–

Lewis F. Powell, Jr.:

General, before you move on, do you agree with Mr. Lee that perhaps up to, what, 30 million tons of coal will have to be left in the ground with no economic value under this act?

Andrew S. Gordon:

–We might have a slight difference on the amount.

But as I read the charts in the Appendix, it’s upwards of–

Lewis F. Powell, Jr.:

It could be 27 to 30?

Andrew S. Gordon:

–Yes, somewhere in that amount.

Lewis F. Powell, Jr.:

Is it possible that that could be… I don’t know too much about the particular petitioners here… but is it possible that there could be a very small owner of coal that substantially all of which could be taken under this act?

Andrew S. Gordon:

My understanding is, like most industries which are capital intensive like the coal industry is, it’s becoming more and more large companies.

It’s possible; I don’t know.

Lewis F. Powell, Jr.:

Yes, I would agree with that.

Andrew S. Gordon:

I don’t know.

Lewis F. Powell, Jr.:

But let’s assume, for example, you own a hundred or a thousand acres, and you leased it to a coal company.

And it so happened that because of the effect of this act, you had a lease depending upon the percentage of the coal drawn from the ground.

If you just happened to have it where the act was applied, you’d lose 90 percent of your rent.

Would that be a taking?

Andrew S. Gordon:

It could be.

Lewis F. Powell, Jr.:

It would be, wouldn’t it?

Andrew S. Gordon:

Well, I’m not sure… would be no compensation?

owner all of the economically viable use, or almost all taking.

I’m not sure that I am able to say that 90 percent, 95 percent, 98 percent, where that line is; and I don’t think the Court has ever said where that line is.

There are cases, though, that certainly have found no taking where there was a diminution of upwards of 90 percent.

So I’m not sure where that line is.

But it’s possible, as applied to a particular coal mine and a particular miner, that there could be a taking.

We don’t dispute that.

Byron R. White:

You’d be in much better shape if Pennsylvania had never recognized the support estate, wouldn’t you?

Andrew S. Gordon:

Well, I’m not sure that we ascribe the features to it that the petitioners do.

Byron R. White:

Well, you might address that.

Because as I understand it, Mr. Lee said that he would be in tough trouble if they hadn’t acquired the support estate.

Andrew S. Gordon:

My understanding of the effect of the support estate, or a waiver of liability, whether it’s in Pennsylvania or in most coal mining States is, it’s pretty much the same.

What it is, is a waiver of liability for damages caused by coal mining to the surface.

Or if it’s owned by the surface owner, it’s a protection against damage, and a right to be compensated irrespective of fault.

What happened in Pennsylvania was–

Byron R. White:

But that would eliminate the takings argument.

It wouldn’t eliminate the contracts argument.

If it were just a waiver.

Andrew S. Gordon:

–Well, I don’t know that it would eliminate the takings argument entirely, really, for two reasons.

One is, they are claiming not so much that we are taking their support right, but we’re taking their coal.

They can’t take the coal out, so we’ve taken it.

That’s point one.

Point two is, of course a contract right can be the subject of a takings claim as well.

Antonin Scalia:

I don’t think, unless I mistake their argument, I think they’re saying you’re taking the support estate, whose value is measured by the coal.

Andrew S. Gordon:

They’re really saying both.

As I read their main brief, what they say is: We have to leave our coal in the ground.

We can’t use it.

You’re taking it.

We bought the support right.

We can’t get the benefit of it.

So you’re taking it.

I read their reply brief, and I don’t really the support estate talked about very much at all; they’re concentrating on the coal.

So I think it’s a little bit of both.

But our argument really doesn’t change based upon the focus.

Because the focus is, in a case like this, on the overall economic impact.

This is not a case that falls into one of the areas where the Court has seen fit to adopt a per se rule.

This is not a case like a physical appropriate case, or a physical invasion case, where in almost every instance, regulation will be found to be a taking.

In the absence of invasion or appropriation, the Court’s approach has been less structured and, frankly, more lenient towards regulation.

And there are good reasons for this.

The police power on which regulatory actions like this one is based… are based… is an essential component of an organized society.

And this power, as this Court has recognized time and again, can’t be overly restrained without doing damage to the State’s and the government’s ability to protect the citizens.

In theory, of course, compensation could be paid every time regulation diminished property values at all.

But the Court has recognized in many cases that this is an unworkable solution.

And frankly, property and all property values are not entirely sacrosanct.

To a degree, they may be limited.

Andrew S. Gordon:

They may be regulated.

Sometimes in return for… really, for nothing more than the owner’s right to live and do business in an organized society.

Police power regulation of this sort is especially important in the area of land use, which is what we are dealing with here.

The zoning cases have recognized through the years that land use is interdependent; that my use of my land has spillover effects beyond the borders of my property, in fact, beyond the borders of my neighbor’s property as well.

In order to deal with this competition between, on the one hand, the right of property owners to use and enjoy their property, and on the other hand, the government’s need to regulate the use and enjoyment of property in the spillover effects, to deal with this competition the Court has adopted the practice of looking broadly at what an owner has, and assessing against that baseline the overall effect of regulation on the owner’s economic interest.

And this has been an evolutionary process.

Pennsylvania Coal was the first step.

In that case, the Court made the general statement that regulation, if it goes too far, can amount to a taking.

This was carried forward in the later cases, particularly Goldblatt, Penn Central, and Hodel.

And what these later cases make abundantly clear is that the effect of regulation must be judged against the entire package of rights which the owner controls; not by isolating a particular segment which may be most clearly affected by the regulation, and just looking at the effect on that segment.

To do otherwise, quite simply, is unrealistic.

Property is not purchased, it is not valued or viewed in legally discrete components.

It is purchased and acquired and viewed in legally recognized bundles.

So in this case we have coal companies who operate coal mines.

They operate them as economic units.

Byron R. White:

It sounds to me like your argument there would take you to saying that they… by regulation you could reduce the value of a piece of property to zero, and deny the owner any economic value of it, without effecting a taking.

Andrew S. Gordon:

No, we certainly don’t say that.

Byron R. White:

Well, that’s where your argument goes.

Andrew S. Gordon:

Our argument goes that you take a look at what the owner has.

You take a–

Byron R. White:

Well, what value is left to the owner of this 25 million tons of coal?

Andrew S. Gordon:

–The value is the coal mine, an operating, a profitable coal mine.

That is–

William H. Rehnquist:

Go ahead.

Andrew S. Gordon:

–That is the economic unit under which coal miners operate.

It is the way we all… we, being the regulators as well as the industry… views what is at issue here.

William H. Rehnquist:

Well, could you take 5 percent per year, and over 20 years you would take the entire thing; but so long as you do it in 5 percent increments, is that permissible?

Andrew S. Gordon:

I think in each case you have to take a look at the overall regulatory scheme, at the complete package of property rights which the owner controls, and assess the economic impact of that regulation.

And if, for example… in your example, the result would be, ultimately, that there would be a taking, then the State, I suppose, would be put to the choice of deciding whether it wanted to go that far.

And if it did, it would have to pay compensation.

Andrew S. Gordon:

If it wanted to go to the point where it denied the owner economically valuable use of his property, then it would have to pay compensation.

William H. Rehnquist:

It’s only economically viable use of the property.

You could take… to take away a good many uses, I take it, and still not have a taking under your view?

Andrew S. Gordon:

Absolutely.

And under the case law, for example, the regulation… I believe they could be categorized as zoning cases… but the regulation of the brickyard, or the regulation of the sand and gravel quarry, took away a substantial use; no doubt the best use, the most profitable use, of that property, and was nevertheless not found by the Court to be a taking because–

Byron R. White:

But Pennsylvania has a mineral right, doesn’t it?

Andrew S. Gordon:

–Yes.

Byron R. White:

I mean, it recognizes the rights to minerals as a separate piece of property.

Andrew S. Gordon:

Yes.

All states do, as far as I know.

Byron R. White:

And it also says that there is a support estate.

Andrew S. Gordon:

Well, it does.

Byron R. White:

At least, this takes a piece… or this reduces the economic value to zero of a piece of the mineral estate.

Andrew S. Gordon:

Well, let me say this–

Byron R. White:

That’s a Pennsylvania law; it’s a piece of property.

Andrew S. Gordon:

–What Pennsylvania law says is, that there is a support right.

You have it if you own the surface, and you can waive it.

Byron R. White:

No, but just think of the mineral estate.

Andrew S. Gordon:

Okay.

Byron R. White:

You say there’s 25 million tons of that mineral estate whose value is reduced to zero.

Andrew S. Gordon:

That is correct.

Out of many millions, I think billions of tons, as the record reflects, which lie in these coal mines.

It is really no different than if you say, well, we have a building setback ordinance.

And you can’t really use certain portions of your parcel.

Now, maybe you can’t use the full air rights that you have.

You can’t build as high as you want.

If you’re still permitted economically viable use of that property, it’s not a taking.

And the same rationale applies here.

Antonin Scalia:

Don’t we… the crucial word in all of this discussion is property.

And you want us to look upon the property in question as being the coal, or the right to get the coal.

Antonin Scalia:

But isn’t what is property or what is not property dependent on what the State chooses to define as property?

Some States will give you property rights in water, and if you take that away, you’re taking properties, ferae naturae.

I suppose different States have different rules on that.

Here Pennsylvania has chosen to define as property, as a separate estate, the support estate.

Now, aren’t we bound to recognize that as a property right.

And hasn’t the totality… the totality… of that piece of property been taken by this regulation?

Andrew S. Gordon:

Yes, you are bound to respect State law with respect to the definition of property.

No, the totality of that right has not been taken here, and let me tell you why.

Both courts below recognized, in taking a look at Pennsylvania law, and a look at the facts of this case, a couple of very important points.

First of all, the support right, the support estate, it may have been given the label of an estate in land; and we don’t dispute that.

But it has no value, it has no economic value, separate and apart from other property interests.

That’s the first part.

It has to be combined with the surface right, it has to be combined with the mineral rights, to have any value.

Second point, what we have here–

Antonin Scalia:

Well, excuse me, you could say about any estate in land.

You could say that about the surface right, too.

It has no economic value apart from the ability to cultivate it, or to build a structure upon it.

Andrew S. Gordon:

–I think that’s precisely our point.

Antonin Scalia:

So you can take the surface right, too, without any consequences.

Andrew S. Gordon:

Let’s take your example, the right to cultivate.

What if we say, here is land, we’ll assume it’s a good public purpose, you can’t have a farm there, because of erosion problems or whatever.

You can do whatever else you want with it.

You can build an apartment building.

The judgment is, well, that’s certainly an economically viable use of that land.

And the result is, no taking.

That’s exactly right.

It’s consistent with our position.

Antonin Scalia:

No, but you’ve reversed what happened.

The State, in your hypothetical, has said you still have… you still have… the surface right.

Whereas in this case the State is saying, you do not have the support estate any more.

Antonin Scalia:

It isn’t just saying, you can’t take the coal out.

It’s saying, you do not have the support estate.

Andrew S. Gordon:

That gets me to point two, which is, if you look at the record in this case, we haven’t completely destroyed the support right.

Even if you isolate it away from the coal, all the other interests that were purchased as a part of this single contract of which the support estate is a part.

Because what we’ve said is, here you have a limited class of structures, and certain environmental features.

And under those particular features and structures, we don’t want you to mine coal because of subsidence.

The rest of your mines, the other thousands and thousands of acres, covered by this same transaction, the same support right that you purchased from the surface owner, you can use that.

Antonin Scalia:

Well, that’s just like saying, if you take only one of my hundred acres of surface estate, it’s not a taking.

Andrew S. Gordon:

Well, again, the question is, if we are restricting your use… the use of your land, that’ll get back to my example with the setback regulations or the height restrictions.

We certainly restricted the property owner’s use of a portion of his parcel, or maybe a separate property right, like air rights.

And nevertheless–

Antonin Scalia:

You haven’t restricted.

You’ve taken away entirely so many acres of surface estate.

Now, you know, it wouldn’t occur to me to create an estate like that.

But if Pennsylvania has chosen to create a property interest in what is called a surface estate, you’ve taken so many acres of it.

Andrew S. Gordon:

–Well, Justice White was asking Mr. Lee a little bit about the support estate and how it came about and what does it all mean, and maybe this will help a little bit.

There’s a law review article which is cited in the Court of Appeals’ opinion at page 15A of the appendix to the petition.

And that article is a fairly comprehensive review of the case law having to do with the support estate and how this concept came about.

And it didn’t come about because coal mining is such an important industry to Pennsylvania, although obviously, it is.

It came about because of some rather strange conveyancing problems that arose in a couple of isolated transactions where you had, in one situation, the surface conveyed without the right to support, and then the coal conveyed without a waiver as well… without a conveyance of the support estate.

And you had a situation where subsidence occurred.

And here comes the case.

And the owner of the surface says, you didn’t have a waiver, you have to repair it.

And the court said, well, no, you didn’t own the surface either.

The coal miner didn’t own it.

But you didn’t own it either.

So you can’t enforce that.

It didn’t come about because of some overwhelming need to have this concept for the purpose of advancing coal mining or the interests of coal mining.

It arose in a rather strange set of circumstances.

And that’s really where it’s remained.

Andrew S. Gordon:

There hasn’t been anything since those cases at the turn of the century that have really amplified it.

And as both courts below found, after examining State law, and the facts of this case, it really does not make sense, realistically, without… without in any way tampering with Pennsylvania law and the definition of this property interest, to view it in isolation.

William H. Rehnquist:

Mr. Gordon, let me ask you something about one of your responses to Justice Scalia’s question.

Is it your position that a takings inquiry would be different if the State comes and takes one acre out of one thousand acres as opposed to taking one acre out of ten acres?

Does it depend on how much you own and what percentage is taken as to whether there’s a takings clause problem?

Andrew S. Gordon:

I take it in your hypothetical you mean to restrict the use of it as opposed to physically occupying it.

William H. Rehnquist:

No, let’s say, simply, the State wants one of your ten thousand acres.

Andrew S. Gordon:

It is our view, based on the State law, that if the State takes and occupies any of your land, however small, that that is a taking under Loretto.

William H. Rehnquist:

But regulatory… but so-called regulatory takings, which you say involve something less than a complete taking, are to be judged by the percentage of the estate that is disabled or impaired?

Andrew S. Gordon:

That’s an important factor; it is.

Now, in the face of these developments which I mentioned a few minutes ago, namely, the principle that you look at the entire package–

Byron R. White:

Don’t you think that you’re making the very arguments that Justice Brandeis made in dissent in the Mahon case, and that were rejected by the majority?

Andrew S. Gordon:

–We’re making one of the arguments that he made in dissent.

Byron R. White:

And that was rejected by the majority?

Andrew S. Gordon:

I will assume it was rejected since it wasn’t accepted and he mentioned it in his dissent.

The Court didn’t say anything about it.

William H. Rehnquist:

Fair inference.

Andrew S. Gordon:

I think that’s a fair inference.

But let me say this–

Lewis F. Powell, Jr.:

Mr. Gordon, over here.

Excuse me for interrupting you when you were just going to start on another subject.

But I’d like to follow up on the Chief Justice’s question.

Let’s assume that you owned a profitable farm.

And it was necessary in the interests of public safety for a highway that adjoined your farm to be substantially widened, to take a substantial… well, to take a fraction of your property.

You draw the distinction between regulation and taking.

There you would have the interests of the State in public safety.

Would the State not have to pay for whatever part of your property it took, even though the property remained economically viable, and even though the State had a legitimate public interest?

Would the State have to pay or not?

Andrew S. Gordon:

–The State would have to pay for the same reason that payment was required in Loretto, because no matter how small the area that’s involved, when there is an authorization for a physical invasion, that is a different case.

That is a special case that involves essentially… at least in most cases, with the exception of a case like Prune Yard, for example… of a per se rule.

Andrew S. Gordon:

But that’s not this case.

Lewis F. Powell, Jr.:

But here there’s no taking because the coal remains in the ground, even though it has no value?

Andrew S. Gordon:

That’s right.

A more sophisticated inquiry is required.

John Paul Stevens:

Mr. Gordon–

–Do you concede that the coal has no value when it’s in the ground?

Doesn’t it perform the function of supporting the surface, and isn’t that value?

Andrew S. Gordon:

Well, it is value.

Although I would say that in the record, there were allegations in affidavits in support of the summary judgment motion that the coal in the ground was valueless, and we didn’t directly dispute that.

So we are assuming for at least the purposes–

John Paul Stevens:

You’re assuming that the support estate, even when owned by the owner, is totally valueless?

Andrew S. Gordon:

–No, I’m not.

It’s certainly valuable to the owner.

And it’s valuable to the community generally, as is reflected in the statute.

I was just pointing out that the specific allegation was that it was valueless as coal.

You’re right; it’s value in support.

John Paul Stevens:

It’s valueless as part of the mineral estate.

But the mineral estate is something else.

Andrew S. Gordon:

That’s right.

Sandra Day O’Connor:

Mr. Gordon, the Pennsylvania statute deals in part with taking support estate rights under publicly owned buildings, does it not?

Andrew S. Gordon:

Yes, public buildings are one of the categories.

Sandra Day O’Connor:

And doesn’t that fall just squarely within one of the concerns if Pennsylvania Coal, where the State takes land or an interest in land for its own use?

Andrew S. Gordon:

It was one of the concerns expressed in the Pennsylvania Coal opinion.

What you have to do here, I think, is to not abstract one small feature of this regulatory program, and look at it in–

Sandra Day O’Connor:

To that extent, it’s awfully hard for me, anyway, to distinguish it.

Andrew S. Gordon:

–Well, let me say this about the comment earlier about Justice Brandeis’ dissent.

Interestingly enough, this idea that you look at the whole package seemingly had its source in Justice Brandeis’ dissent.

It wasn’t cited in the later cases, but it seems remarkably close.

And really it is this principle, and this principle alone, it seems to me, that explains the more recent results in cases such as Goldblatt and Penn Central.

There… Pennsylvania Coal, quite frankly, if it ever… if it ever did, no longer stands for the proposition that an owner has a Constitutionally protected right in the full use of every segment of his property.

Andrew S. Gordon:

That is the development since Pennsylvania Coal, and that’s what commands the result that we urge here.

I think we lose sight of the fact that what we are talking about… or we risk losing sight of the fact that what we are talking about in a case like this is the regulation of business and the use of this property in the operation of a business.

And of course the primary… the primary concern of businessmen are profits.

And yet all that they’ve shown here, all that the coal companies have shown here, is that they have lost the opportunity to sell at a profit some small portion of their coal.

Yet the curtailment of maximum profit opportunities never has been viewed by the Court, nor should it, as standing alone, a basis on which to rest a takings claim.

The Court has endeavored through the years to apply what it has termed rules of judgment, common sense, and fairness.

The hypertechnical distinctions, it seems to me, which the coal companies ask the Court to draw here, namely that, well, in a case like Penn Central, for example, or Goldblatt, you can’t draw lines between the air rights, the surface rights, the subsurface rights, and just look at the effect on one of those segments.

But in a case such as this, what they would like the Court to do is draw the lines at the boundaries of this protected building; take a look at the coal under there; and just assess the effect on that segment of their property.

Sandra Day O’Connor:

Well, Mr. Gordon, wouldn’t it be more fair in your view for Pennsylvania to tell the coal companies that they would have to sell back the support estate to a surface owner if there were a structure on it that required protection?

Isn’t that a fair way to approach the problem?

Andrew S. Gordon:

Well, of course, the way this program is set up, we’ve done that to a certain extent.

With respect to some structures, that really is the only right that’s available.

But frankly the concern here, although there was concern with the people who lived above these mines, it’s a far broader concern.

It’s a community-wide concern in… for the interests of land development, for the preservation of the tax base.

And that’s what makes it fair, in our view.

That, combined with really the minimal effect.

Not only is there–

Antonin Scalia:

Can’t the owners waive it?

Doesn’t that take away some of the very appealing public interest argument that you’re making?

The owner of the surface land can waive the application of the statute, can’t he?

Andrew S. Gordon:

–Yes, in 1980 the statute was amended to provide for a waiver under limited circumstances.

Antonin Scalia:

So it’s for the benefit of the surface owner, and not for the polity at large.

If the surface wants to give all of this good stuff away, he can.

Andrew S. Gordon:

Well, except there are two reasons why it doesn’t go quite that far.

First of all, let me say that in experience the waiver provision is not something that’s widely used.

And in fact the protections of the Act have been widespread.

But second of all, if you a look–

Antonin Scalia:

Well, maybe that’s because nobody’s willing to buy the waiver, since that might be taken away by some later statute.

I mean, they already bought it once.

Andrew S. Gordon:

–I think you need to also note, with respect to the waiver provision, that it only applies if the miner has the consent of the present owner.

Andrew S. Gordon:

And what that means is, if the miner gets consent, and for some reason the land is sold, the consent isn’t binding on the successor.

The point is this–

William H. Rehnquist:

I think your time has expired, Mr. Gordon.

Mr. Lee, do you have anything more?

You have three minutes left.

Rex E. Lee:

Mister–

Byron R. White:

xxx 25 million tons, that’s just what’s involved in the 50 percent of–

Rex E. Lee:

–That is correct.

And only… the only–

Byron R. White:

–Now, I take it, then… I take it, then, that you do not contend that it would be uneconomical to mine the other 50 percent?

Rex E. Lee:

–I’m not sure I understand the question.

That it would be uneconomical–

Byron R. White:

This statute says you can’t mine any more than 50 percent.

Rex E. Lee:

–Well… I understand the question.

Byron R. White:

Would it be economical to mine the other 50?

Rex E. Lee:

It is economical to mine the other 50 percent.

Byron R. White:

So under every underground acre of mineral estate, you can take out half the coal, and do it economically?

Rex E. Lee:

That is correct.

But it’s the 30 million tons that have to be left.

Byron R. White:

Yes.

Rex E. Lee:

And that is what this case really comes down to.

Antonin Scalia:

Mr. Lee, could you settle the theoretical quandry that was raised?

Are you arguing that there is a taking of the support estate–

Rex E. Lee:

Yes.

Antonin Scalia:

–or that there is a taking of the coal?

Rex E. Lee:

We’re arguing both.

We would have the same argument for the support estate.

But it is made theoretically much cleaner, much easier.

And also, the case on which we rely, and the case which has not been distinguished through briefs or oral argument, also happened to involve Pennsylvania law with the same support estate.

And in that respect, Justice Scalia, under Pennsylvania law, in 1970.17, Pennsylvania Supreme Court case, that support estate can be owned by a third person other than the owner of the surface or the coal.

Rex E. Lee:

The case is found at 256 Pennsylvania 416.

It’s cited on the first page in the first footnote of our petition for certiorari.

John Paul Stevens:

Mr. Lee, doesn’t that cut against you, then?

Rex E. Lee:

Excuse me?

John Paul Stevens:

Doesn’t that demonstrate… cut against you?

Because doesn’t that demonstrate that the coal in place has economic value apart from being mined and taken out of there?

Rex E. Lee:

No.

What it shows is that the support estate–

John Paul Stevens:

The support estate, as I understand, to be a bunch of pillars of coal or solid coal underground.

There is some value in not having the surface collapse.

Rex E. Lee:

–It does have some value if you can use it in connection with supporting your mining operations.

And by hypothesis, as I mentioned earlier–

John Paul Stevens:

Well, I suppose if you didn’t have a waiver of surface subsidence, it would also protect you against liability.

Rex E. Lee:

–That is correct.

That is correct.

But these 30 million tons that we’re talking about are what we can’t use for any other purpose.

John Paul Stevens:

I understand.

Let me ask you one other question.

Suppose that instead of going about it the way they did, Pennsylvania had passed a statute saying: When you remove all of the pillars underground, they must be replaced with steel structures.

Would that be Constitutional?

It’d be a lot more expensive, I know.

Rex E. Lee:

It clearly would not be Constitutional.

Indeed, go back and look at John W. Davis’ argument in Pennsylvania Coal.

And that is the premise from which he started, from which I think everyone in the Courtroom that day started, that it would be unconstitutional to require concrete pillars.

Byron R. White:

Why would that be?

It wouldn’t be a taking, would it?

Rex E. Lee:

It would not be a taking.

It would be a different… well, I think it would be… I think it would be a taking in the same sense that Pennsylvania Coal is a taking, but it’s regulation that goes too far.

But it’s a different kind of “too far” concept–

Byron R. White:

But not a taking?

Rex E. Lee:

–from the one that’s here, which under Pennsylvania Coal, clearly does go too far.

William H. Rehnquist:

Thank you, Mr. Lee.

The case is submitted.