Amicus Curiae Brief — Keystone Bituminous Coal Assn. v. DeBenedictis

OcTOBER TERM, 1986

KEYSTONE BITUMINOUS COAL ASSOCIATION, et al.,

Petitioners,

VS.

Peter S. DUNCAN, et al.,

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Third Circuit

Amici Curiae Brief of State of California ex rel.

John K. Van de Kamp, Attorney General, and the

California Coastal Commission, the States of Arkansas, Florida,

Hawaii, Indiana, Kansas, Louisiana, Maine, Maryland,

Massachusetts, Michigan, Minnesota, Mississippi, Missouri,

Nebraska, New Hampshire, New Jersey, New York, North Carolina,

Oklahoma, Oregon, South Dakota, Tennessee, Vermont,

Washington and Wisconsin

JOHN K. VAN DE Kamp

Attorney General

RICHARD C. JACOBS

Special Counsel

N. GREGORY TAYLOR

THEODORA BERGER

Assistant Attorney General

Richard M. Frank

Craig C. Thompson

Counsel of Record

Deputy Attorneys General

1515 K Street

Post Office Box 944255

Sacramento, CA 94244-2550

(916) 324-5499

Attorneys for Amicus State - J California ex rel. John K. Van de

Kamp, Attorney General, and the California Coastal Commission

(Other counsel listed on inside front cover)

BOWNE OF GAN FRANCISCO. INC. + 190 NINTH ST. + G.F.. CA 04103 + (415) 664-2300

LISTING OF STATE ATTORNEYS GENERAL

OTHER THAN CALIFORNIA

JOHN STEVEN CLARK

Attorney General

State of Arkansas

Jim SMITH

Attorney General

State of Florida

CoRINNE K.A. WATANABE

Attorney General

State of Hawaii

LINLeEY E. PEARSON

Attorney General

State of Indiana

ROBERT T. STEPHAN

Attorney General

State of Kansas

WiLtiaM J. Guste, Jr.

Attorney Generai

State of Luuisiana

STEPHEN H. SACHS

Attorney General

State of Maryland

FRANCIS X. BELLOTTI

Attorney General

State of Massachusetts

James E. TIERNEY

Attorney General

State of Maine

FRANK J. KELLEY

Attorney General

State of Michigan

Husert H. Humeurey, lil

Attorney General

State of Minnesota

Epwin L. PITTMAN

Attorney General

State of Mississippi

WILLIAM L. WEBSTER

Attorney General

State of Missouri

Rosert M. Spire

Attorney General

State of Nebraska

STEPHEN E. MERRILL

Attorney General

State of New Hampshire

W. Cary Epwarps

Attorney General

State of New Jersey

ROBERT ABRAMS

Attorney General

State of New York

Lacy H. THORNBERG

Attorney General

State of North Carolina

MICHAEL TURPIN

Attorney General

State of Oklahoma

Dave FROHNMAYER

Attorney General

State of Oregon

Mark V. MEIERHENRY

Attorney General

State of South Dakota

W. J. MicHaet Copy

Attorney General

State of Tennessee

Jerrrey L. AMESTOY

Attorney General

State of Vermont

KENNETH O. EIKENBERRY

Attorney General

State of Washington

BRONSON C. LA FOLLETTE

Attorney General

State of Wisconsin

TABLE OF CONTENTS

INTEREST OF AMICI....

STATEMENT OF THE CASE

SUMMARY OF ARGUMENT

ARGUMENT

I

NO UNCONSTITUTIONAL TAKING OF PETITION-

ERS’ PROPERTY HAS TRANSPIRED AS A

RESULT OF THE STATE’S HEALTH AND

SAFETY-BASED SUBSIDENCE LAW. PETITION-

ERS’ RADICAL ATTEMPT TO RECAST APPLICA-

BLE TAKINGS ANALYSIS DOES VIOLENCE TO

BOTH A CENTURY OF SUPREME COURT PRE-

CEDENT AND COMMON LOGIC

A. A Regulation The Principal Purpose Of Which, As

Here, Is To Prevent A Noxious Or Hazardous Use

Cannot Conszitute An Unconstitutional Taking Of

Property

A Careful Review Of The Character Of The Regula-

tion At Issue, Petitioners’ Reasonable Investment-

Backed Expectations And The Economic Impact Of

The Subsidence Act Mandate The Conclusion That

No Unconstitutional Taking Of Property Exists [n

The Present. Case

The Character Of The Police Power Measures

At Issue, Which Limit Petitioners’ Ability To

Exploit A Natural Resource Rather Than

Authorize Public Use Of Private Property, Sim-

ply Does Not Support A Taking Claim

There Can Be No Reasonable Expectation Of A

Right To Extract Underground Coa! Deposits

When Such Extraction Wil! Cause Subsidence

il

TABLE OF CONTENTS

3. Petitioners Have Failed To Demonstrate That

They Have Suffered An Economic Impact Suffi-

cient To Trigger The Taking Clause .........

C. Petitioners Propose A Muitifaceted And Radical

Change In Modern Takings Jurisprudence. Besides

Contravening Established Precedent, The Suggested

Changes Would Effectively Hamstring Government’s

Ability To Perform A Multitude Of Vital Public

|. Takings Jurisprudence Does Not Permit Analy-

sis Of A Regulation’s Economic Impact To The

Exclusion Of The Other Factors Identified By

Ge odes ctv biovebundes te ah meas Sa

2. Judicial Inquiry Into The Character Of A Par-

ticular Regulation Is Far More Extensive Than

Petitioners Would Have This Court Believe ...

THE CONTRACT CLAUSE DOES NOT PREVENT

THE STATE FROM EXERCISING THE POLICE

POWER TO PROTECT HEALTH, SAFETY AND

THE GENERAL WELFARE

A. The Presumption That State Legislation Regulating

Private Conduct So As To Prevent Darnage To The

Public Interest Does Not Disappear Upon The Sign-

ing Of A Contract Between Two Private Parties

B. Petitioners Attempt To Confuse The Tests Employed

By This Court In Enforcing The Contract Clause

CONCLUSION

22

ill

TABLE OF AUTHORITIES CITED

Cases

Page

Agins v. City of Tiburon, 447 U.S. 255, 261 (1980) ...4, 13, 19

Agins v. City of Tiburon, 24 Cal.3d 266, 598 P.2d 25, 157

Cal.Rptr. 372, aff'd. on other grds, 474 U.S. 255 (1980) 4

Allied Structural Steel v. Spannaur, 438 U.S. 234 (1978)

Andrus v. Allard, 444 U.S. 51 (1979)........ 15, 19, 20, 21, 23

Arcara v. Cloud Books, ____ U.S. ____, 54 U.S.L.W. 5060

SCRE Sees ides hbyncdpadcuty os4 60.0 0 27

Atlantic Coast v. Goldsboro, 232 U.S. 548 (1914) ....... 5

Berman v. Parker, 348 U.S. 26, 33 (1954) .............. 4

Consolidated Rock Products Co. v. City of Los Angeles, 57

Cal.2d 515, 20 Cal.Rptr. 638, 370 P.2d 342, appeal dis-

eke ences 10

Deltona Corp. v. United States, 657 F.2d 1184 (Ct.Cl.

1981), cert. den., 455 U.S. 1017 (1982) ............ 11, 20

Energy Reserves Group v. Kansas Power & Light, 459 US.

EE ae gS a ee 30

Euclid v. Ambler Realty Co., 272 U.S. 365 (1926) ....1,4, 15

First English Evangelical Lutheran Church of Glendale v.

County of Los Angeles, Docket No. 85-1199 .......... 2

Fred F. French Invest. Co. v. City of New York, 39 N.Y.2d

587, 350 N.E.2d 381, 385 N.Y.Supp.2d 5, appeal dis-

I I PID cc cccctcccckcccescocses 4

Furey v. City of Sacramento, 592 F.Supp. 463 (E.D. Cal.

1984), affd 780 F.2d 1448 (9th Cir. 1986) ........... 20

Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962)

Pe OE OPE es RAC, Lech ae a ee 8,9, 15, 20

ee a ts ee ETD oc cece svcdeacnecs 7

Graham v. Estuary Properties, Inc., 399 So.2d 1374 (Fla.

PCC Chh beagle et es CCG hl ch ern s eee ek kd hken Oo he 10

Hadacheck v. Sebastian, 239 U.S. 394 (1915)

ae ati ioe Ae le re ait Be ike cae 6, 7, 9, 12, 16, 20

iV

TABLE OF AUTHORITIES CITED

CASES

Page

Hodel v. Virginia Surface Mining and Reclamation Assn.,

CR rere re 9, 10, 15, 19

Home Bldg. & L. Assn. v. Blaisdell, 290 U.S. 398 (1934)

ee eee my Oy nee Pee ae 28, 29

Hudson Water Co. v. McCarter, 209 U.S. 349 (1908) .... 27

Kaiser Aetna v. Uniteu States, 444 U.S. 164 (1979) ..... 9,14

Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S.

GPE, obipd¥ideatsidedcerecse¥s ooo bh, £2, 84, 15,25

MacDonald, Sommer and Frates v. County of Yolo,

US. , 54 U.S.L.W. 4782 (1986)........ 2, 19, 22

MacLeod v. Santa Clara County, 749 F.2d 541 (9th Cir.

1984), cert. denied, 105 S.Ct. 2705 (1985)............ 23

Metromedia, Inc. v. City of San Diego, 453 U.S. 490 (1981) 4

Milardo v. Coastal Resources Management Council of

Rhode Island, 434 A.2d 266 (R.I. 1981) ............ 10, 11

Miller v. Schoene, 276 U.S. 272 (1928) ................ 7

Mosca v. United States, 417 F.2d 1382 (Ct.Cl. 1969) cert.

i ee, dese ccesa ween 23

Mugler v. Kansas, 123 U.S. 623 (1887) ............... 1,5,9

National Board of Young Men’s Christian Association v.

United States, 395 U.S. 85 (1969) .................. 25

Penn Central Transportation Co. v. City of New York, 438

5 7 he ee ee Ere erry passim

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922)

cae che ekeeeen ne Secs Chk Ee beat Kass barewres passim

Plymouth Coal Co. v. Pennsylvania, 232 U.S. 531 (1914)

vinsd'd Sato ky SAR ERAGE ek eae ESSE ESS 0. Oe EBA 6, 17, 25

Pruneyard Shopping Center v. Robins, 447 U.S. 74 (1980)

ey ee eM Pe RSE PI Se Ee eet .12, 23

Reinman v. Little Rock, 237 U.S. 171 (1915)........... 6

Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984)

yy Lea hee se .13, 14, 18, 17, 19, 24

v

TABLE OF AUTHORITIES CITED

CASES

Schad v. Borough of Mount Ephraim, 452 U.S. 61, 68

RISER ROMS EID Ie Rr 12

Smoke Rise, Inc. v. Washington Suburban Sanitary Com-

mission, 400 F.Supp. 1369 (D.Md. 1975) ............. 11

Sporhase v. Nebraska, 458 U.S. 941 (1982) ............ 27

State v. Dexter, 32 Wash.2d 551, 202 P.2d 906, aff'd per

eB 10

Turner v. County of Del Norte, 24 Cal.App.3d 311, 101

SEER RE OE ee ie a 10

United States v. Causby, 328 U.S. 256 (1946) .......... 16

United States v. Central Eureka Mining Co., 357 U.S. 155

ERR RR RSE Reet germ) = GED RG ae a 12

United States Trust Co. v. New Jersey, 431 U.S. 1 (1973)

FAN ESCRAN Web aesaweeL dite eset eval veecectan 28, 29, 30

Village of Arlington Heights v. Metropolitan Housing Deve!-

opment Corp., 429 U.S. 252 (1977) ................. 12

Village of Belle Terre v. Boraas, 416 U.S. 1 (1974) ...... 4

Welch v. Swasey, 214 U.S. 91 (1909) .................. 5, 6

Williamson County Regional Planning Commission v. Ham-

ilton Bank of Johnson City, 473 U.S. ___, 105 S.Ct.

a ach elpnpa tie PURRb a re Ra 4, 13,18

vi

TABLE OF AUTHORITIES CITED

Other Authorities

F. Bosselman, D. Callies & J. Banta, The Taking Issue 97-

i ch oda ibid Chk Hoss 4% wad Keke

Costonis, ‘‘Fair’’ Compensation and the Accommodation

Power: Antidotes for the Taking Impasse in Land Use

Controversies, 75 Columbia L.R. 1021, 1034-1035 (1975)

Freund, The Police Power, 546-547 (1904) .............

Hagman and Misczynski, Windfails for Wipeouts: Land

Value Capture and Compensation, 256, 272 (1978) ....

Michelman, Property, Utility and Fairness’ Comments on

the Ethical Foundation of “Just Compensation” Law, 80

ee, en oN cece tek eesenecese

The Origins and Original Significance of the Just Compensa-

titon Clause of the Fifth Amendment, 94 Yale L.J. 694,

ELIS Tan SARC RS a

Rules of the Supreme Court, rule 36.4 .................

Sax, Some Thoughts on the Decline of Private Property, 58

a os dee eb i deeetaenaeae en

Sax, Takings, Private Property and Public Rights, 81 Yale

Se TED * 4% ink CU ORMG-< Oe ed OW CaM aeons t 06.

Williams, et al., The White River Junction Manifesto, 9

Vermont L-R. 193, 208-214 (1984) .............

le

i

o

~~ s

No. 85-1092

IN THE

Supreme Court of the United States

OcToBER TERM, 1986

KEYSTONE BITUMINOUS COAL ASSOCIATION, et al.,

Petitioners,

VS.

Peter S. DUNCAN, et al.,

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Third Circuit

Amici Curiae Brief of State of California ex rel.

John K. Van de Kamp, Attorney General, and the

California Coastal Commission, the States of Arkansas, Florida,

Hawaii, Indiana, Kansas, Louisiana, Maine, Maryland,

Massachusetts, Michigan, Minnesota, Mississippi, Missouri,

; Nebraska, New Hampshire, New Jersey, New York, North Carolina,

| Oklahoma, Oregon, South Dakota, Tennessee, Vermont,

Washington and Wisconsin

hed

INTEREST OF AMICI

Amici respectfully file this brief in support of respondents

pursuant to rule 36.4 of the Rules of the Supreme Court of the

United States.

The 26 states which have joined as amici in this case, together

with their political subdivisions, exercise a broad range of regula-

tory powers within their respective jurisdictions. Amici are

charged with the delicate responsibility of balancing demands for

economic growth and development against health and safety

concerns and the need to preserve finite natural resources located

within their borders. The nature of regulatory responsibilities with

which amici are charged is diverse indeed: the setting of utility

rates, the enactment of floodplain zoning measures, and the

prevention of the sale of contaminated foods or drugs are merely

illustrative. Affected natural resources run the gamut from wil-

derness areas to urban centers, coastal wetlands to rural farm-

lands. In the land use context, proposed development projects

that amici review include residential subdivisions, commercial

centers, recreational developments and—as herein—mineral min-

ing projects. The power of state, regional and local governments

to control untoward development has been recognized for genera-

tions. Euclid v. Ambler Realty Co., 272 U.S. 365 (1926); Mugler

v. Kansas, 123 U.S. 623 (1887). It has grown more important

with the passage of time and the increasing complexity of society

and technolo-v.

The issues presented by this case are of fundamental impor-

tance to California and each of the other governmental entities

joining in this brief. A decision holding that the statute and

regulations enforced by respondents herein have violated the

United States Constitution would seriously impair the ability of

these states and their political subdivisions to carry out their

diverse police power respo . “ties. Adoption of petitioners’

radical reformulation cf taking 4 contract jurisprudence would

cripple amici’s ability to perform regulatory functions upon which

their citizens’ health, safety and welfare quite literally depend.

2

STATEMENT OF THE CASE

Amici adopt respondents’ statement of the case.

SUMMARY OF ARGUMENT

1. ‘Regulations which prohibit or restrict noxious or hazardous

uses of property cannot constitute a taking regardless of their

economic impact as one cannot acquire a right to injure the

public.

2. Petitioners fail to satisfy even one of the factors identified

by this Court as relevant in conventional takings analysis. The

governmental action consisted of regulation rather than physical

occupation and was intended to prevent harm to the public.

Petitioners could have had no “reasonable expectation” that they

would forever be allowed to remove underground coal without

regard to the surface impact. Since this is only a facial attack,

petitioners cannot begin to show the type of concrete, specific

economic effects of the statute and regulations required by this

Court to prove a taking.

3. Contrary to petitioners’ bald assertions, courts are fully

entitled to consider the nature of the public interest involved

when deciding whether a regulation constitutes a taking. Were

petitioners’ view to prevail, society would have no power to

prevent injury to it or its members if the means of prevention

would seriously injure the economic expectations of those who

would cause the injury. The proposition that society must elevate

' Amici note that petitioners sought only equitable relief from the trial

court. Accordingly, the question of whether monetary damages are a

constitutionally compelled remedy to cure a “regulatory taking” is not

before the Court in this case. The Court has attempted without success

to resolve the issue in several recent cases, and will visit the question

again this term in First English Evangelical Lutheran Church of Glen-

dale v. County of Los Angeles, Docket No. 85-1199. The position of

several of these amici on the damages issue was most recently presented

to the Court in their brief filed in MacDonald, Sommer and Frates v.

County of Yolo, Docket No. 84-2015, _— US. , 54 US.L.W

4781 (1986).

3

the economic interests of a few over the well-being of society at

large finds no support in the Constitution or the decisions of this

Court.

4. The Contracts Clause does not override the police power so

as to limit the state’s ability to regulate harmful conduct simply

because two-private parties have made a contract about it.

ARGUMENT

I

NO UNCONSTITUTIONAL TAKING OF PETITIONERS’

PROPERTY HAS TRANSPIRED AS A RESULT OF THE

STATE’S HEALTH AND SAFETY-BASED SUBSI-

DENCE LAW. PETITIONERS’ RADICAL ATTEMPT TO

RECAST APPLICABLE TAKINGS ANALYSIS DOES VI-

OLENCE TO BOTH A CENTURY OF SUPREME COURT

PRECEDENT AND COMMON LOGIC.

A. A Regulation the Principal Purpose of Which, as Here, Is to

Prevent a Noxious or Hazardous Use Cannot Constitute an

Unconstitutional Taking of Property.

Assuming arguendo that mere enactment of a regulation can

result in an unconstitutional taking for which compensation must

be awarded if the regulation is to continue in force,’ not all

?The doctrine of “inverse condemnation” is of relatively recent

vintage. Constitutional scholars have established that the drafters of the

Just Compensation Cieuse “intended the clause to have narrow legal

consequences: It was to apply only to the federal government and only to

physical takings.” Note, The Origins and Original Significance of the

Just Compensation Clause of the Fifth Amendment, 94 Yale L.J. 694,

708 (1985); see also, F. Bosselman, D. Callies & J. Banta, The Taking

Issue 97-104 (1973); Hagman and Misczynski, Windfalls for Wipeouts:

Land Value Capture and Compensation 256, 272 (1978).

The notion that regulations can effect a “taking” of property was first

articulated by Justice Holmes in Pennsylvania Coal Co. v. Mahon, 260

U.S. 393 (1922). Subsequent commentators have argued persuasively

that Justice Holmes used the term “taking” solely in a metaphorical

sense, as a shorthand term for a regulation that was constitutionally

excessive and therefore invalid. Costonis, Fair Compensation and the

Accommodation Power: Antidotes for the Taking Impasse in Land Use

Controversies, 75 Columbia L.R. 1021, 1034-1035 (1975); Williams, et

4

exercises of the police power so qualify. Specifically, measures

whose principal purpose is to prevent a noxious or hazardous use

cannot, under longstanding precedent, result in a so-called “regu-

latory taking.”

Over the past century of takings jurisprudence, this Court has

generally rejected claims that regulatory measures result in an

unconstitutional taking of property. Indeed, laws enacted for the

purpose of promoting purely aesthetic objectives have been sus-

tained in the face of repeated constitutional challenges. See, ¢.g.,

Agins v. City of Tiburon, 447 U.S. 255, 261 (1980), Village of

Belle Terre v. Boraas, 416 U.S. 1, 9 (1974); Berman v. Parker,

348 U.S. 26, 33 (1954); Euclid v. Ambler Reality Co., supra, 272

U.S. 365; cf. Metromedia, Inc. v. City of San Diego, 453 U.S. 490,

§70 (1981) (Rehnquist, J., dissenting). Yet since the nineteenth

century courts have granted special deference to police power

measures which are designed to eliminate or prevent tangible

threats to the public’s health, safety and welfare.”

al.. The White River Junction Manifesto, 9 Vermont L.R. 193, 208-214

(1984). These sources note that the plaintiff in Pennsy/vania Coal had

brought suit against a private party rather than the state and, accord-

ingly, that no action in inverse condemnation was or could have been

stated. [bid. Various state courts have taken the same view. Fred F.

French Invest. Co. v. City of New York, 39 N.Y.2d 587, 594, 350 N.E.2d

381, 385 N.Y.Supp.2d 5, 8-9. appeal dismissed 429 U.S. 990 (1976);

Agins v. City of Tiburon, 24 Cal.3d 266, 274, 157 Cal.Rptr. 372, 598

P.2d 25, 29, 276, aff'd. on other grounds, 447 U.S. 255 (1980). Indeed,

this Court has recently indicated its ambivalence over whether to

characterize an excessive regulation as a violation of the Taking Clause

or, alternatively, of substantive due process guarantees. Williamson

County Regional Planning Commission v. Hamilton Bank of Johnson

City, 473 U.S. ——, 105 S.Ct. 3108, 3116-3124 (1985).

> Ironically, modern zoning and open space ordinances—perhaps the

most common form of aesthetic-based regulation—find their historical

roots in land use measures designed to forestall far more tangible threats

such as “fire, panic and other dangers . . . .” Sax, Some Thoughts on the

Decline of Private Property, 58 Wash. L.R. 481, 490-491 (1983). These

ordinances still often serve their original purpose by, for example,

separating inconsistent uses such as residential subdivisions and indus-

trial plants using hazardous chemicals.

5

The distinction between police power measures which prevent

harm, on the one hand, and those which secure a public good is a

venerable one. It finds support in some of the most respected

analyses of the Constitution and government. See, e.g., Freund,

The Police Power, 546-547 (1904). Indeed, since law was made

in Latin, a common principle has been that one must use one’s

property so as not to do injury to that of another: Sic utere tuo ut

alienum non loedas. The U.S. Constitution and the Bill of Rights

did not repeal this principle. They do not limit the government's

power to prevent conduct by one individual which is injurious to

the public interest. See e.g., Atlantic Coast v. Goldsboro, 232 U.S.

548, 558-59 (1914):

“Under such circumstances the State, in the exercise of

the police power, may legitimately extend the application of

the principle that underlies the maxim sic utere tuo ut

alienum non loedas, so far as may be requisite for the

protection of the public.

“For it is settled that neither the ‘contract’ clause nor the

‘due process’ clause has the effect of overriding the power of

the State to establish all regulations that are reasonably

necessary to secure the health, safety, good order, comfort, or

general welfare of the community; that this power can

neither be abdicated nor bargained away, and is inalienable

even by express grant; and that all contract and property

rights are held subject to its fair exercise. .... And the

enforcement of uncompensated obedience to a regulation

established under this power for the public health or safety is

not an unconstitutional taking of property without compensa-

tion or without due process of law... .”

This Court has adhered to this principle consistently for a

century. In Mugier v. Kansas, supra, 123 U.S. 623, the Court

upheld against constitutional challenge the state’s power to close

a profitable brewery. The governmental action had been predi-

cated on the view that production of alcoholic beverages consti-

tuted a quasi-nuisance threatening the local citizenry. Welch v.

Swasey, 214 U.S. 91 (1909) upheld a municipal height limitation

against claims that it effected a taking of private property. While

such measures are now generally predicated primarily on aes-

6

thetic grounds, the law in Welch was upheld on the ground that

excessively tall buildings in an urban setting constituted a special

fire hazard. 214 U.S. at 107-08.

Similarly, Hadacheck v. Sebastian, 239 U.S. 394 (1915) dis-

missed the notion that a taking resulted when a city ordered a

profitable brickyard closed. The city acted because the operation

posed a threat to the health of those residing nearby. The Court

observed that the power to abate a noxious use overcame the

substantial economic impact upon the plaintiff, i.e., a 92.5 percent

diminution in the value of his property. The Court observed that

“we are dealing with one of the most essential powers of govern-

ment—one that is the least limitable.” /d. at 410. Nor does such

an exercise of the police power pass muster under the Taking

Clause only in cases of declared nuisances: “[G }ranting that the

business was not a nuisance per se, it was clearly within the police

power of the state to regulate it, ‘and to that end to declare that in

particular circumstances and in particular localities [the enter-

prise] shall be deemed a nuisance in fact and in law.’ ” id. at 411,

citing Reinman v. Little Rock, 237 U.S. 171 (1915).

A particularly apposite decision is Plymouth Coal Co. v.

Pennsylvania, 232 U.S. 531 (1914). There the plaintiff coal

company mounted a wide-ranging constitutional attack on a

Pennsylvania statute requiring operators of anthracite coal mines

to leave sufficient coal in the ground to protect working miners.

The Court’s rejection of plaintiff's takings argument was based

upon a proposition that is equally compelling today: “That the

business of mining coal is attended with dangers that render it the

proper subject of regulation by the State in the exercise of the

police power is entirely settled.” Jd. at 540.

Pennsylvania Coal Co. v. Mahon did not signal a departure

from this rule. Respondents analyze the Pennsylvania Coal deci-

sion at length in their brief, and no useful purpose would be

served by repeating that discussion here. Suffice it to say that

plaintiffs in that case brought suit against the private owner of a

single surface estate. No public agency was involved; nor was the

public health, safety and welfare invoked by the parties. As

Justice Holmes noted:

;

“This is the case of a single private house . . . [U]sually in

ordinary private affairs the public interest does not warrant

much of this kind of interference. A source of damage to

such a house is not a public nuisance . .. The damage is not

common or public....” (260 U.S. at 413.)

The critical distinction is driven home by two decisions con-

temporaneous with Pennsylvania Coal. in Gorieb v. Fox, 274

U.S. 603 (1927), Justice Holmes joined in a unanimous ruling

that upheld municipal set-back regulations requiring landowners

not to build within a given distance of the edge of their property.

The plaintiff in Gorieb made an argument identical to that of

petitioners herein: government’s refusal to allow development of a

portion of his property (there, as here, based in principal part on

safety reasons) resulted in an unconstitutional taking. This Court

rejected that notion, concluding that such measures “have arisen

in recent times as a result of the great increase and concentration

of population in urban communities and the vast changes in the

extent and complexity of the problems of modern city life.” 274

U.S. at 608.

An even more pronounced example of government’s power to

abate health and safety problems notwithstanding the Taking

Clause is Miller v. Schoene, 276 U.S. 272 (1928). There the

Court unanimously held that the State of Virginia had acted

properly in requiring plaintiffs to cut down a large number of red

cedar trees, on the ground that the trees could otherwise commu-

nicate a serious plant disease to neighboring apple orchards. The

state’s action was predicated upon the severe threat that would

otherwise be imposed upon a major facet of the state’s agricul-

tural economy. Justice Holmes again joined the Court’s opinion,

which held that government’s obvious power to prevent public

harm* overcame any constitutional challenge:

“(T]he state does not exceed its constitutional powers by

deciding upon the destruction of one class of property in

order to save another which, in the judgment of the legisla-

ture, is of greater value to the public. It will not do to say that

* As in Hadacheck, the court in Miller found it irrelevant whether or

not the infected cedars rose to the level of a nuisance. 276 U.S. at 280.

8

the case is merely one of a conflict of two private interests

and that the misfortune of apple growers may not be shifted

to cedar owners by ordering the destruction of their property;

for it is obvious that there may be, and that here there is, a

preponderant public concern in the preservation of the one

interest over the other.... And where the public interest is

involved preferment of that interest over the property interest

of the individual, to the extent even of its destruction, is one

of the distinguishing characteristics of every exercise of the

police power which affects property.” 274 US. at 279-280.

Lest it be believed (as petitioners and others have sometimes

argued) that this line of authority belongs exclusively to a bygone

era, consider the modern takings cases. In Goldblatt v. Town of

Hempstead, 369 U.S. 590 (1962), for example, the Court sus-

tained the municipality’s prohibition of gravel pit mining below

the municipal water table. The ordinance was found valid on

health and safety grounds despite the fact that its effect was to

prevent the owner from continuing a business that had been in

operation since the first part of the century.

Penn Central Transportation Co. v. City of New York, 438 U.S.

104 (1978) is without question the centerpiece of modern takings

law. In its wide-ranging discussion in Penn Central, the Court

analyzed each of the decisions set forth above and summarized

the applicabie rule as follows:

“ “(T]aking’ challenges have also been held to be without

merit in a wide variety of situations when the challenged

governmental actions prohibited a beneficial use to which

individual parcels had previously been devoted and thus

caused substantial individual harm.” 438 U.S. at 125.

Notably, Justice Rehnquist dissented from the ruling in Penn

Central, which upheld the application of New York’s Landmark

Preservation Law to preclude modern development of Grand

Central Station. Finding that law to have unfairly conferred a

considerable public benefit at the expense of the private land-

owner, Justice Rehnquist was nonetheless careful to distinguish

between this situation and those in which government regulates to

prevent a public harm:

9

“As early as 1887, the Court recognized that the govern-

ment Can prevent a property owner from using his property to

injure others without having to compensate the owner for the

value of the forbidden use. (Citing Mugler, Hadacheck and

Goldblatt, supra.)

“Nor is it relevant, where the government is merely

prohibiting a noxious use of property, that the government

would seem to be singling out a particular property owner.

Hadacheck, supra, at 413...The question is whether the

forbidden use is dangerous to the safety, health, or welfare of

others.” 438 U.S. at 144-145 (footnote omitted).

Mugler is also cited with apparent approval by the majority in

Penn Central, 438 U.S. at 126.

The distinction between the prevention of harm and provision

for the public good was critical to the decision in Kaiser-Aetna v.

United States, 444 U.S. 164 (1979). There the Court struck down

a federal requirement that the landowner allow public access as a

condition of the government’s approval of a dredging. Yet Justice

Rehnquist, now speaking for the majority, was again careful to

observe: “We have not the slightest doubt that the Government

could have refused to allow such dredging on the ground that it

would have impaired navigation in the bay ....” 444 U.S. at 179

(emphasis added).

Perhaps the modern decision most directly on point is Hodel v.

Virginia Surface Mining and Reclamation Assn., 452 U.S. 264

(1981). Plaintiff coal operators in that case challenged the federal

Surface Mining Control and Reclamation Act as, inter alia, a

taking of their property without compensation. The district court,

relying on Pennsylvania Coal, supra, had struck down portions of

the Act, which greatly diminished the value of plaintiffs’ proper-

ties by preventing mining in some locations and requiring restora-

tion of the land’s approximate original contours. Using language

which is equally applicable to the present case, this Court

reversed:

“(T]he Act does not categorically prohibit surface coal

mining; it merely regulates the conditions under which such

10

operations may be conducted.” 452 U.S. at 296 (footnote

omitted).°

Hodel is dispositive of petitioners’ taking che'lenge. Just as the

federal mining statute scrutinized in Hodel was enacted to pre-

clude adverse environmental impacts commonly associated with

coal mining, so the Pennsylvania law at bar simply attempts to

avoid public health and safety hazards attributable to bituminous

coal operations in that state. Indeed, this would appear to be an

easier case, given the immediacy and severity of the public threat

posed relative to that identified in Hodel.

Innumerable state court precedents similarly reject the notion

that a taking claim is viable in the face of a police power measure

necessary to protect against public harm. See, e.g., Consolidated

Rock Products v. City of Los Angeles, 57 Ca!.2d 515, 20 Cal.Rptr.

638, 370 P.2d 342, appeal dismissed 371 U.S. 36 (1962) (rock

and gravel quarry within city limits properly banned on public

health and pollution hazard grounds, notwithstanding absence of

alternative economic use); State v. Dexter, 32 Wash.2d 551, 202

P.2d 906, affd per curiam 338 U.S. 863 (1949) (regulation

barring clear-cutting of timber and requiring reforestation consti-

tutionally valid); Graham v. Estuary Properties, Inc., 399 So.2d

1374, 1381-1382 (Fla. 1981) (no taking where development

would have precipitated dredging and filling of bays and wet-

lands); Turner v. County of Del Norte, 24 Cal.App.3d 311, 101

Cal.Rptr. 93 (1972) (floodplain zoning measure prohibiting con-

struction of permanent buildings not a taking in light of safety

concerns upon which measure was based).

The water pollution cases are particularly instructive. In Mi-

lardo v. Coastal Resources Management Council of Rhode Island,

434 A.2d 266;(R.I. 1981), for example, the Rhode Island

Supreme Court spurned a developer’s challenge to a decision

denying a sewage system permit, where evidence demonstrated

the effect would be to damage a marsh:

5 Plaintiffs’ taking challeage in Hodel was also deemed defective due

to its facial nature—a flaw equally fatal in this case. 452 U.S. at 294-98;

see discussion in part I (B) (3), infra.

1]

“In essence, plaintiff is asserting a right not only to use his

property but also to discharge waste into the surrounding

area. This is a ‘property right’ that this court [has] refused to

recognize ... We believe that this denial was an exercise of

the police power for protection of the public heaith and

safety.” 434 A.2d at 269-70; see also Smoke Rise, Inc. v.

Washington Suburban Sanitary Commission, 400 F.Supp.

1369 (D.Md. 1975) (same); Deltona Corp. v. United States,

657 F.2d 1184, 1194 (Ct.Cl. 1981), cert. denied, 455 U.S.

1017 (1982) (same).

The present case provides the Court with an opportunity to

articulate explicitly what has been implicit throughout this long

line of decisions: regulations enacted to prevent harm to the

public cannot—as a matter of law—constitute a taking.

Such a per se rule is entirely consistent with current takings

law. The Court only recently adopted such an absolute standard

with respect to permanent physical occupations of private prop-

erty by government. In Loretto v. Teleprompter Manhattan

CATV Corp., 458 U.S. 419 (1982), the Court held that “a

permanent physical occupation authorized by government is a

taking ed anne to the public interests that it may serve.”

458 U.S. at 426. Such a permanent physical occupation repre-

sents one end of the taking spectrum. At the other is a police

» power measure that is enacted merely to prevent demonstrable

harm to the public which would otherwise occur as a result of

private action. Just as the Court has not shrunk from adopting a

per se rule in the case of permanent physical invasions (see 458

U.S. at 435, fn. 12), so should it reaffirm 100 years of takings

jurisprudence by explicitly doing so in the regulatory context.

Indeed, if government is to make rational choices to protect

against noxious or dangerous uses of property, it must be able to

make these choices unfettered by their effect on a particular

person’s investment. To say that a property owner has a right to

impose a serious harm on his neighbors simply because he has

invested a great deal of money in the expectation of being able to

impose this harm makes no more sense than a rule saying that

purchasers of Porsches are entitled to drive faster than purchasers

oe

12

of Chevrolets because they have an investment in the nght to

drive fast.°

While the “ad hoc, factual inquiry” identified in Penn Centrai,

supra, 438 U.S. at 123-24 may be required to analyze takings

claims which fall closer to the middle of the spectrum between

preventing harm and providing benefits,’ a per se rule is fully

warranted in the present context. .

Nor would application of a per se ruie in the present’ context

leave government regulation of this kind wholly unconstrained.

Such measures are always subject to the requirement that they

must be reasonably related to a legitimate governmental purpose.

Schad v. Borough of Mount Ephraim, 452 U.S. 61, 68 (1981);

Hadacheck v. Sebastian, supra, 239 U.S. at 412. Nor may

government regulate with an improper discriminatory purpose in

mind. Village of Arlington Heights v. Metropolitan Housing

Development Corp., 429 U.S. 252 (1977) (racial discrimination).

Nor may the government impose unfair procedures in making its

® Indeed, such clarification of the law in this area would be most

welcome. The continued uncertainty of takings law has been a subject of

frustration to many informed observers. See, e.g., Williams, et ai., The

White River Junction Manifesto, 9 Vermont L.R. 193, 219-223 (1984);

Sax, Takings, Private Property and Public Rights, 81 Yale L.J. 149

(1971); Michelman, Property, Utility and Fairness: Comments on the

Ethical Foundations of “Just Compensation” Law, 80 Harvard L.R.

1165, 1170 (1967).

7 In Loretto, the court was careful to exclude from its per se rule

temporary and nonexclusive physical occupations of property. E.g.

Pruneyard Shopping Center v. Robins, 447 U.S. 74 (1980), noted in

Loretto at 458 U.S. at 435, fn. 12; see also United States v. Central

Eureka Mining Co., 357 U.S. 155 (1958). Certain “regulatory takings”

cases similarly warrant application of the multifaceted, ad hoc approach.

The facts of Penn Central are a classic example inasmuch as one goal of

the Landmark Law was to confer a public benefit with respect to

property that was being used in a safe, socially productive way. In this

case, however, Pennsylvania clearly acted to prevent harm rather than to

provide a public benefit. It is difficult to conceive of another case in

which application of the per se rule is more compelling.

13

decisions. See Williamson County, supra, ___. U.S. ___, 105

S.Ct. at 3127 (Stevens, J., concurring).

Respondent Pennsylvania’s subsidence statute and implement-

ing regulations are designed to prevent a clear and present danger

to the citizens, economy and natural environment of that state.

The statutory objectives of the law are undisputed, as are the

imminence and magnitude of the threat posed by petitioners’

unfettered mining operations. Under these circumstances, both a

century of precedent and common logic compel the conclusion

that no taking has transpired.®

B. A Careful Review of the Character of the Regulation at

Issue, Petitioners’ Resonable Investment-Backed Expecta-

tions and the Economic Impact of the Subsidence Act

Mandate the Conclusion That No Unconstitutional Taking

of Property Exists in the Present Case.

Even ignoring the special nature of the regulations at issue in

this case, no constitutional violation of petitioners’ rights has been

presented. Under the “ad hoc” analysis previously identified by

the Court (see, e.g., Penn Central, supra, 438 U.S. 104; Agins v.

City of Tiburon, supra, 447 U.S. 255; Ruckelshaus v. Monsanto

Co., 467 U.S. 986 (1984) ), no taking exists.

Although the cases vary somewhat in describing the factors to

be considered, one common formulation is: “the character of the

governmental action, its economic impact, and its interference

with reasonable investment-backed expectations.” Monsanto,

® While the current takings controversy focuses almost entirely on the

regulation of real property, both states and the federal government are

constantly faced with numerous other problems which could, should

petitioners prevail, conceivably be seen as “takings.” The State of

Washington, for example, barred the sale of over-the-counter capsules

after two of its citizens died of cyanide poisoning from such capsules.

N.Y. Times, § 1, at 6, col. 6 (June 28, 1986). California this past year

had to order the destruction of many thousands of watermelons and a

great deal of cheese after poisoning incidents.

Governments might well be forced to let their citizens bear a little

more risk from such incidents if they knew that any property that was

destroyed might be the subject of a successful takings case.

14

supra, 467 U.S. at 1005.) Reviewing each of these factors

demonstrates that petitioners have not suffered a taking.

1. The Character of the Police Power Measures at Issue,

Which Limit Petitioners’ Ability to Exploit a Natural

Resource Rather Than Authorize Public Use of Private

Property, Simply Does Not Support a Taking Claim.

Even if it is assumed that the character of the subsidence

statute and implementing regulations, standing alone, somehow is

insufficient to preclude a taking challenge, its nature dictates the

same result under the ad hoc, factual inquiry of Penn Central and

Monso to.

In discussing this factor, the Court has noted that:

“la] ‘taking’ may be more readily found when the inter-

ference with property can be characterized as a physical

invasion by government [citation omitted], than when inter-

ference arises from some public program adjusting the bene-

fits and burdens of economic life to promote the common

good. ...

“In instances in which a state tribunal reasonably con-

cluded that ‘the health, safety, morals, or general welfare’

would be promoted by prohibiting particular contemplated

uses of land, this Court has upheld land-use regulations that

destroyed or adversely affected recognized real property

interests....” Penn Central, supra, 438 U.S. at 124-25

(citations omitted).

In this case, of course, there has been no physical occupation of

the subject property. Instead, the alleged “taking” is merely

Pennsylvania’s refusal to permit withdrawal of such bituminous

coal deposits as would trigger surface subsidence and attendant

ihreats to the public health, safety and economic welfare.

This, however, is only the beginning of the character-of-the-

regulation inquiry. (Petitioners apparently dispute this. See part

1(C)(2), infra.) Does the regulation, for example, require that

private property + z made available for public use as a condition of

government's approval of development? Cf. Kaiser Aetna v.

United States, 444 U.S. 164 (1979). Does it authorize physical

occupation of one person’s property by another private entity? Cf.

15

Loretto v. Teleprompter Manhattan CATV Corp., supra, 458 U.S.

419. Measures of this type present far more compelling claims

than, and must be juxtaposed against, ordinances which simply

limit a landowner’s ability to exploit fully his or her property

interest. See, e.g., Andrus v. Allard, 444 U.S. 51 (1979), and

Euclid v. Ambler Realty Co. supra, 272 U.S. 365.

It is inconceivable that a taking could be found given the nature

of the statute and regulations at issue here. The Pennsylvania

Legislature found the subsidence from coal mining was damaging

and endangering the health, safety and welfare of the state’s

citizens as well as causing harm to the ability to develop the land

in the future and to the fiscal health of affected municipalities.

See 52 P.S.A. § 1406.3. As in Hodel and Goldblatt, supra, the

reasons underlying the statute and regulation under review here

fully justify any deleterious impact on petitioners’ ability to

exploit their property for private gain.

In conclusion, even if the special nature of the police power

exercise involved here does not independently warrant rejection of

petitioner’s taking challenge, it still forms a critical element of the

Penn Central/Monsanto test.’ Given the undisputed fact that the

purpose and effect of the subsidence law is to prevent petitioners

from causing serious and widespread public damage, petitioners’

taking challenge must be rejected.

2. There Can Be No Reasonable Expectation of a Right

to Extract Underground Coal Deposits When Such

Extraction Will Cause Subsidence.

Returning to the Penn Central/Monsanto criteria, the next

inquiry is whether the regulatory program at issue interferes with

petitioners’ reasonable, investment-backed expectations.

* Alternatively, the identification of a police power measure designed

and implemented to prevent public injury arising out of private acts

could be viewed as a fourth, separate element of the Penn Cen-

tral/Monsanto analysis. This Court has stated repeatedly that the

specific factors identified in those decisions are not meant to be exc’

sive. E.g., Penn Central, supra, 438 U.S. at p. 124, characterizing the

above-identified elements as “factors that have particular significance”

(emphasis added).

16

It is undisputed that petitioners 7-e entitled to mine a substan-

tial proportion of their bituminous va! resources, notwithstanding

the effect of the law under review. Stripped to its essentials,

petitioners’ argument is that they are constitutionally entitled to

exploit a// of the underground coal deposits irrespective of the

ramifications of that action upon third parties, and that any

attempt to limit their course is constitutionally defective.

Whether or not petitioners actually had any such “expecta-

tion,” it certainly could not have been reasonable. On point,

again, is the Court’s decision in Penn Central:

“[ T]he submission that appellants may establish a ‘taking’

simply by showing that they have been denied the ability to

exploit a property interest that they heretofore had believed

was available for development is quite simply untenable.”

438 U.S. at 130.

While petitioners purchased support estates from the predeces-

sors-in-interest of the current surface owners, the reasonable

expectation value which attaches to those transactions is limited.

{t may be reasonable for a coal company to expect it can exploit

the mineral resource at the expense of the party with whom it has

contracted to purchase a support estate. But petitioners were (and

are) entitled to no reasonable expectation that they would be able

to profit at the expense of the sovereign and the public at large,

who played no part in and secured no fiscal advantage as a result

of these private real estate transactions.

It is by now axiomatic that “vested interest cannot be asserted

against [the exercise of the police power] because of conditions

once obtaining.” Hadacheck v. Sebastian, supra, 239 U.S. at 410.

The reason is obvious: Government must be able to meet evolving

problems with effective solutions. As Justice Black observed in

the context of a taking challenge:

“(T]he solution of the problems precipitated by these

technological advances and new ways of living cannot come

about through the application of rigid constitutional re-

straints formulated and enforced by the courts.” United

States v. Causby, 328 U.S. 256, 274 (1946) (Black, J..

dissenting).

17

Moreover, “[g]overnment hardly could go on if to some extent

values incident to property could not be diminished without

paying for every such change in the general law.” Pennsylvania

Coal, supra, 260 U.S. at 413.

Coupled with the necessarily elastic nature of the police power

are petitioners’ reasonable expectations concerning the exercise of

that power. At least since 1913, petitioners cannot have enter-

tained any serious belief that their ability to extract coal was

unfettered by government’s legitimate health and safety-related

concerns. See Plymouth Coal Co. v. Pennsylvania, supra, 232

U.S. 531. To argue that Pennsylvania was barred from expanding

the ambit of safety concerns to encompass residents and passersby

as well as coal miners bespeaks a fundamental misperception of

the necessary flexibility of the police power.

This case can be contrasted with the decision in Ruckelshaus v.

Monsanto Co., supra, 467 U.S. 986, which contains the most

comprehensive explication of the “reasonable expectations” crite-

rion. The court there held that Monsanto was entitled to rely on

an explicit federal promise not to disclose the firm’s trade secrets,

and that public disclosure of those materials without Monsanto’s

consent would constitute a taking for which compensation was

required. Prior to enactment of the statute, however, quite the

Opposite was true: Monsanto had no reasonable expectation that

in the absence of an explicit guarantee by the sovereign, a

member of a heavily-regulated industry would receive confiden-

tial treatment:

“Monsanto argues that the statute’s requirement that a

submitter give up its property interest in the data constitutes

placing an unconstitutional condition on the right to a

valuable Government benefit.... But Monsanto has not

challenged the ability of the Federal Government to regulate

the marketing and use of pesticides. Nor could Monsanto

successfully make such a challenge, for such restrictions are

the burdens we all must bear in exchange for ‘the advantage

of living and doing business in a civilized community.’.. ..”

467 U.S. at 1007; citations omitted.

18

The same can be said of petitioners’ coal mining activities.

Petitioners simply had no reasonable expectation that they would

be free forever of the state’s considerable power to impose

reasonable restraints on their ability to extract underground coal

deposits. These regulatory measures represent a measured re-

sponse to a problem of alarming regional proportions. Petitioners

had no reason to expect that Pennsylvania would refrain from

carrying out its sovereign responsibilities.

3. Petitioners Have Failed to Demonstrate That They

Have Suffered an Economic Impact Sufficient to Trig-

ger the Taking Clause.

It is with respect to the third prong of the Penn Central

analysis—the economic impact of Pennsylvania’s regulatory pro-

gram—that petitoners are perhaps most vulnerable. Even a cur-

sory review of the applicable precedents reveal that petitioners’

claim is without merit.

At the outset, petitioners are confronted with the fact that their

taking challenge is not ripe for review. They concede that they

have mounted only a facial attack on the validity of the Penn-

sylvania subsidence control program. Yet if one thing is certain

from this Court’s recert taking cases, it is that a facial challenge

is a singularly inappropriate way in which to test a regulation

under the Taking Clause:

“Our reluctance to examine taking claims until such a

final decision has been made is compelled by the very nature

of the inquiry required by the Just Compensation Clause...

[T]his Court consistently has indicated that among the

factors of particular significance in the inquiry are the eco-

nomic impact of the challenged action and the extent to

which it interferes with reasonable investment-backed ex-

pectations. Those factors cannot be evaluated until the ad-

ministrative agency has arrived at a final, definitive position

regarding how it will apply the regulations at issue to the

particular land in question.” Williamson County Regional

Planning Commission v. Hamilton Bank of Johnson City,

supra, 473 US. at 3119 (citation omitted; emphasis

supplied. ).

Sel Lttiean tee

19

See also MacDonald, Sommers and Frates v. County of Yolo,

supra, No. 84-2015, Slip Op. at 10-12: Hodel v. Virginia Surface

Mining and Reclamation Association, supra, 452 U.S. at 298-97:

Agins v. City of Tiburon, supra, 447 U.S. at 260.

Without knowing how the Pennsylvania statute and regulations

will affect an individual firm’s economic viability in a given case,

it is impossible to gauge the program’s economic impact. Petition-

ers’ taking claim fails for this reason alone. [bid.'°

Even beyond the ripeness problem, petitioners’ claims relating

to the economic impact of the challenged measures do not

withstand constitutional scrutiny. Of course, the fact that one is

deprived of the highest and best economic use of his or her

property hardly constitutes a taking. Penn Central supra, 438

U.S. at 124; Andrus v. Allard supra, 444 U.S. at 66. Like the

analogous restrictions on surface coal mining analyzed in Hodel,

supra, the regulations at bar do not prohibit the extraction of coal.

Rather, they impose certain limits on the property owner’s ability

to exploit the resource consistent with the requirements of public

health, safety and welfare. See Hodel supra, 452 US. at 296.

Indeed, it is established that under certain circumstances a

total or virtually total elimination of value does not transmute an

'° Petitioners’ attempt without success to mask this deficiency in their

brief. They make several general allegations, such as: (1) “the effect of

the regulation is at least 50% of the support coal must remain unmined

...” (Brief for Petitioners at 8): (2) the regulations “will make it

infeasible for petitioners in certain situations to use the longwall method

of coal extraction which has become for many coal mine operators the

underground mining method of choice because it is more efficient and

economical” (ibid., citations omitted; emphasis added); (3) “the inabil-

ity of petitioners to use this method of extraction will necessarily

increase [pJetitioners’ costs ...-(ibid.); and (4) “in some circum-

stances, the inability to use the longwall method will make it economi-

cally impracticable to mine the coal petitioners own.” /d. at 8, fn. 14:

empliasis added.

Such vague and generalized allegations are not the stuff of which

taking challenges are made. This case again demonstrates the wisdom of

the Court’s repeated insistence that constitutional claims of this nature

be ripe for judicial determination.

20

otherwise valid exercise of the police power into a taking. See

Hadacheck v. Sebastian, supra, 239 U.S. 394; Goldblatt v. Town

of Hempstead, supra, 369 U.S. 590."'

Petitioners further argue that Pennsylvania’s subsidence pro-

gram renders valueless the support estate they purchased from

surface owners in years past. This argument is defective on two

counts. First, it is by now settled that taking jurisprudence does

not divide property interest into discrete segments; instead, the

court must look to the totality of an owner’s property interest to

assess a regulation’s impact under the Taking Clause. Andrus v.

Allard, supra, 444 U.S. at 65, 66; Penn Central, supra, 438 U.S.

at 130-131. Accordingly, the support estate must not be viewed in

isolation but, rather, in conjunction with petitioners’ mineral

estate in the same parcel(s).'?

'' See also, Sadowsky v. City of New York, 732 F.2d 312, 317, 318

(2nd Cir. 1984); Deltona Corp. v. United States, 657 F.2d 1184, 1190

(Ct.Cl. 1981) cert. denied, 455 U.S. 1017 (1982); and Furey v. City of

Sacramento,592 F.Supp. 463, 471 (E.D. Cal. 1984), afd 780 F.2d 1448

(9th Cir. 1986):

“To the extent that the private interest is in the maximum

exploitation of a piece of property, it is entitled to no weight

whatsoever. [Citations omitted.] Rather the private interest pro-

tected by the law is the interest in retaining some economically

viable use of the land. (Penn Central Transportation Co. v. City of

New York, 438 U.S. at 130, 98 S.Ct. at 2662.) As noted above, the

regulation challenged herein did not have the effect of depriving the

plaintiff of all economically viable use of his land.” (Emphasis that

of the court.)

'2 Ironically, this principle finds its origins in Justice Brandeis’ dissent-

ing opinion in Pennsylvania Coal v. Mahon, supra, 260 U.S. at 419:

“If we are to consider the value of the coal kept in place by the

restriction, we should compare it with the value of all other parts of

the land. That is, with the value not of the coal alone, but with the

value of the whole property. The rights of an owner as against the

public are not increased by dividing the interests in his property into

surface and subsoil. The sum of the rights in the parts can not be

greater than the rights in the whole.”

ed neato

21

Second, petitioners continue to ignore the finding of the district

court below that the support estate retains considerable value

notwithstanding the Pennsylvania subsidence program. See 581

F.Supp. 511, 519, discuss:sg petitioners’ continuing right of

access to mine coal, dig and ventilate mining shafts, etc. Even

viewed in isolation, the support estate has thus not been deprived

of all viable economic use.

It is instructive to compare this case with the Court’s recent

decision in Andrus v. Allard, supra, 444 U.S. 51. There, as here,

government imposed a restriction on private property acquired

before the regulatory measure was promulagated. Yet the pro-

gram scrutinized in Andrus was far more restrictive than the

present case, totally barring the purchase or sale of certain bird

artifacts. The Court there unanimously upheld the federal statute

against the claim that it effected an uncompensated taking of the

plaintiff's property. “To require compensation in all such circum-

stances would effectively compel the government to regulate by

purchase.” 444 U.S. at 65 (emphasis that of the Court).

The significantly more modest restrictions invoked in Penn-

sylvania’s subsidence statute and regulations similarly withstand

constitutional scrutiny. As the Court said i Andrus:

“It is, to be sure, undeniable that the regulations here

prevent the most profitable use of appellees’ property. Again,

however, that is not dispositive. When we review regulation,

a reduction in the value of property is not necessarily equated

with a taking. .. . But, within limits, that is a burden borne to

secure ‘the advantage of living and doing business in a

civilized community.” 444 U.S. at 66-67, quoting Penn-

sylvania Coal Company v. Mahon, supra 260 U.S. at 422

(Brandeis, J. dissenting).

The economic impact of respondent’s program upon petition-

ers, to the extent it can be measured at all, is limited. Like the

other elements of the standard articulated by the court in Penn

Central, petitioners have failed to make the requisite constitu-

tional showing.

22

C. Petitioners Propose a Multifaceted and Radical Change in

Modern Takings Jurisprudence. Besides Contravening Es-

tablished Precedent, the Suggested Changes Would Effec-

tively Hamstring Government’s Ability to Perform a

Multitude of Vital Public Duties.

In addition to seeking misapplication of several settled princi-

ples to the facts in this case, petitioners propose a major change to

existing takings law as developed by this Court. The modification

they propose can be summarized as foliows: (1) the sole constitu-

tional inquiry should be the economic impact of a particular

regulation upon an individual’s property rights (see, e.g., Brief for

Petitioners’ at 22, 28-29 and esp. 29) and (2) the character of the

governmental action involved should be irrelevant, except to

distinguish between a physical invasion of property and an exer-

cise of the regulatory power. /d. at 28.

Both of these propositions do violence to established constitu-

tional precedent. To embrace them would cripple the ability of

federal, state and local governments to perform a wide variety of

vital sovereign functions, expose government to fiscal chaos, or

both.'? Both of the novel theories posited vy petitioners are

analyzed briefly below.

'3 Amici take strong exception to the proposition, advanced by peti-

tioners, that the governmental entities before the Court in this and past,

related cases accede to the broad philosophies advanced by petitioners.

See Brief for Petitioners at 24, fn. 29. To the contrary, a broad coalition

of state and local governments have joined in resisting the novel efforts

of petitioners and their confederates to expand dramatically the scope of

liability under the Taking Clause. See, e.g., amici curiae briefs filed by

the States of California, et al., and the National Association of Counties,

et al. in MacDonald, Sommer & Frates v. County of Yolo, supra, Docket

No. 84-2015, decision reported at US. 54 U.S.L.W. 4782

(1986). These entities similarly argued against the similarly novel

proposition that damages are an appropriate remedy to cure a regulatory

measure found to be constitutionally excessive. /bid. A fair reading of

these briefs utterly rebut any notion that these amici find petitioners’

views at all persuasive.

23

1. Takings Jurisprudence Does Not Permit Analysis of a

Regulation’s Economic Impact to the Exclusion of the

Other Factors Identified by This Court.

Petitioners imply that the Court should turn its back on the

multifaceted test it has carefully crafted over the years in Penn

Central and related cases. In its stead, they argue, the inquiry

should be limited to a straightforward review‘of a particular

regulation’s economic impact upon a given property. As indicated

above, amici believe—and this Court’s decisions hold—that in

cases such as the present litigation, involving a police power

measure expressly designed to prevent a noxious or harmful

private activity, the “ad hoc” Penn Central analysis is inappropri-

ate. In an ordered society, government must have the ability to

prevent one person from injuring others even if the instrument

causing the injury is classified by the law as real property.

Petitioners’ position, on the other hand, would make society at

large a hostage to one individual’s profit and loss statement.

This Court has previously observed that its “decisions sus-

taining other land-use regulations... uniformly reject the pro-

position that diminution in property value, standing alone can

establish a ‘taking’. . . .” Penn Central, supra, 438 U.S. at 131; see

also, Andrus v. Allard, supra, 444 U.S. at 66. The proper inquiry

in most taking cases is instead a multifaceted, albeit sometimes

subjective one. Pruneyard Shopping Center v. Robins, supra, 447

U.S. at 82-83.

The defects of petitioners’ proposed standard are especially

glaring in the case of new, as opposed to longstanding, uses of

property. In Andrus v. Allard, supra, 444 U.S. at 66, the court

noted that “loss of future profits—unaccompanied by any physical

property restriction—provides a slender reed upon which to rest a

taking claim.” See also MacLeod v. Santa Clara County, 749

F.2d 541 (9th Cir. 1984), cert. denied, 105 S.Ct. 2705 (1985);

Mosca v. United States, 417 F.2d 1382 (Ct.Cl. 1969), cert.

denied, 399 U.S. 911 (1970).

An application of petitioner’s narrow “economic impact” test in

the land use context illustrates some of the difficulties and

potentially absurd results: The owner of hillside property in an

24

area with a recent history of serious landslides would be constitu-

tionally entitled to subdivide regardless of the danger if he could

prove no other économically viable uses exist. Moreover, develop-

ment of, e.g., arid land, unsuitable for agriculture and far from

existing cities, requiring massive investment to provide basic

urban services, could not be subjected to even the most traditional

restrictions on density, height, etc., because compliance with

them would preclude profitable development given the tremen-

dous infrastructure costs. The “economic viability test” would

thus prevent regulation on the land most ill-suited for develop-

ment. Surely nothing in the Constitution requires such a result.

Petitioners’ curious position is bottomed on the belief that

government is required to allow uses that will make the ownership

of real property profitable. This is not the law, any more than is

government compelled by the Constitution to insure the profit-

ability of any other type of investment.

2. Judicial Inquiry Into the Character of a Particular

Regulation Is Far More Extensive Than Petitioners

Would Have This Court Believe.

The second and equally troublesome modification proposed by

petitioners is that the character of the governmental action under

attack is essentially irrelevant in a takings inquiry. This view is

manifestly incorrect.

Petitioners cite no authority for their novel proposition that this

component of the Penn Central/Monsanto test is but a shorthand

way of distinguishing between physical invasions of property, on

the one hand, and “regulatory takings” on the other. Nor could

they. In focusing on the nature of the governmental activity, the

Court has traditionally undertaken a far more expansive analysis.

in Penn Central, for example, the Court delved extensively into

the features of New York’s Landmarks Preservation Law. The

provision in that ordinance allowing transfer of development

rights, for example, was specifically cited as a factor ameliorating

the otherwise harsh features of that measure. 438 U.S. at 131-

137. Justice Rehnquist in dissent similarly opined that the requi-

site scrutiny of the challenged regulation was far more sophisti-

cated than petitioners suggest here. 438 U.S. at 149-150; see also,

25

National Board of Young Men's Christian Association v. United

States, 395 U.S. 85, 89-92 (1969).

Petitioners’ argument is further undercut by Loretto v. Tele-

prompter Manhattan CATV Corp., supra, 458 U.S. 419. Accord-

ing to petitioners, once the Court reached the simple conclusion

that Loretto involved a physical occupation of private property

rather than a regulatory measure, the nature of that occupation

became irrelevant. Yet the Court in that case took great pains to

distinguish a permanent and exclusive occupation from less pro-

nounced types of “invasions.” 458 U.S. at 435, fn. 12; see also

440. This discussion would have been irrelevant under the theory

advanced by petitioners. Lower courts have similarly rejected

petitioners’ simplistic characterization of this facet of the Penn

Central/Monsanto analysis. See, e.g. Sadowsky v. City of New

York, supra, 732 F.2d at 318-319.

The pernicious nature of petitioners’ argument can be under-

stood by reference to their brief. They argue at one point that the

Takings Clause ascribes no greater weight to any one public

purpose than to another. Brief of Petitioners at 28. This view

would lead to truly bizarre results. How can it be seriously argued,

for example, that Pennsylvania’s interest in preserving the lives of

coal miners or surface homeowners (e.g., P/ymouth Coal Co. v.

Pennsylvania, supra, 232 U.S. 531) is equivalent, for purposes of

analysis under the Takings Clause, to its desire for attractive

mining sites? Such a stilted view ignores the need of governments

to match the impact of a given regulatory measure to the severity

of the problem encountered. Stated from petitioners’ proprietary

point of view, under their scenario the most compelling police

power measures would be just as vulnerable to an inverse con-

demnation challenge as a borderline attempt by the state to confer

a public benefit at private expense.

The Constitution does not admit to such arbitrary and wholly

illogical strictures. This Court has traditionally been sensitive to

the need of government for flexibility in responding to the day-to-

day demands of modern society. The misleading and ultimately

self-defeating importunings of petitioners should therefore be

firmly rejected.

26

II

THE CONTRACT CLAUSE DOES NOT PREVENT THE

STATE FROM EXERCISING THE POLICE POWER TO

PROTECT HEALTH, SAFETY AND THE GENERAL

WELFARE.

A. The Presumption That State Legislation Regulating Private

Conduct So as to Prevent Damage to the Public Interest

Does Not Disappear Upon the Signing of a Contract

Between Two Private Parties.

While purporting to rely on a venerable line of precedent,

petitioners’ Contract Clause argument proposes a drastic altera-

tion of the relationship between the courts and legislatures—one

giving the courts much greater authority to strike down legislation

which they deem unwise—and between the government and the

people—one giving private parties the ability to shield themselves

from the ordinary exercise of the police power.

Petitioners flatly assert that the existence of a contract shields

one from much regulation: “In short, when contract nghts have

been severely impaired or destroyed, the presumption accorded

state legislation does not apply. ...” Brief for Petitioners at 40.

Thus, simply by signing a piece of paper one could substantially

diminish the government’s ability to act to protect the public

interest. As soon as the ink was dry, any governmental action

seriously affecting this contract—regardless of what the contract

concerned—would have to clear the very much higher hurdles

which petitioners would erect in the name of the Contract Clause.

Were this the law, the countryside would be littered with con-

tracts as businesses and individuals sought to place themselves

beyond the reach of possible new laws. There would be a surge in

the demand for lawyers skilled in both constitutional law and

contracts. Contracts would be carefully drawn so that any mean-

ingful regulation could be said to cause a “destruction” or “severe

impairment.” The ability to avoid the normal scope of the police

power—that is, the police power applicable to those not clever

enough or rich enough to have entered into insulating con-

tracts—would be limitless. Drug manufacturers would sign con-

tracts with wholesalers to provide continuing supply, just in case

the Food and Drug Administration (FDA) should ever think it in

27

the public interest to ban distribution of a drug. The owner of a

hazardous waste dump would be well advised to make long-term

contracts to accept very toxic waste, just in case the future

revealed problems leading to demands to close the site. In each

case, the potential defendant could not be sure that a contract

would be a sufficient shield—perhaps the government would

actually be able to meet the test proposed by petitioners

herein—but it would be foolish not to have a contract or two just

to provide that little edge against the government.'*

Fortunately, the proposition advanced by petitioners has never

been the law in this country and is no more supported by

precedent than by logic. As Justice Holmes said almost 80 years

ago: “One whose rights, such as they are, are subject to state

restriction, cannot remove them from the power of the State by

making a contract about them.” Hudson Water Co. v. McCarter.

209 U.S. 349, 357 (1908), overruled on other grounds, Sporhase

v. Nebraska, 458 U.S. 941 (1982).

‘* One example of the many types of cases which would be affected by

petitioners’ reading of the Contract Clause is Arcara v. Cloud Books,

US , 54 U.S.L.W. 5060 (July 7, 1986). In that case, this

Court sustained the closing of an “adult” bookstore in which illicit

sexual activities were occurring. The New York statute at issue prohib-

ited for one year the use “for any purpose” of a place found to be a

public nuisance. The bookstore operators in Arcara raised oniy a First

Amendment claim. If, however, petitioners’ theory of the Contract

Clause were to be adopted, Arcara might become a Contract Clause

case, provided only that the bookstore had been leased. “Destruction” of

the lease by the application of the statute would lead inexorably to the

requirement that the courts use the “reasonable and necessary” test as

proposed by petitioners, and the courts would need to decide, inter alia,

whether the prohibition of all use for one year was “necessary” or

whether some alternative, lesser destructive of contract rights, perhaps a

six-month closing or an injunction against continued illicit sexual

activity, would suffice. See Brief of Petitioners at 46-47. This is the type

of judgment which this Court has long left to other branches of

government.

B. Petitione:; ‘tempt to Confuse the Tests Employed by This

Court in Enforcing the Contract Clause.

In cases involving state statutes affecting contracts, this Court

has developed a “reasonable and necessary” test to decide

whether the statute is valid. See, e.g., United States Trust Co. v.

New Jersey, 431 U.S. 1, 25-26 (1973).

Petitioners rest virtually their entire argument on the firm

assertion, supported by one citation, that this test should be

employed in an identical fashion in cases involving private con-

tracts, in the event those contracts have been destroyed rather

than merely impaired, as it is in cases involving impairment or

destruction of contracts between the state and a private party.

“When, as here, there is not just severe impairment but

complete destruction of substantive contract rights, then the

full ‘reasonable and necessary’ test developed by this court in

[Home Building & Loan Assn. v. Blaisdell, 290 U.S. 398

(1934) ], and reaffirmed and augmented in [United States

Trust Co. v. New Jersey, 431 U.S. 1 (1977)] and [Allied

Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978)],

should be applied to determine whether an impairing state

law survives Contract Clause scrutiny. See U.S. Trust, 431

U.S. at 25 (applicability of full test to impairment of private

contracts).” Brief of Petitioners at 37 (emphasis added).

The key word in this sentence is “should,” for no decision of this

Court has ever so heid.

Petitioners rely very heavily on language taken from Home

Bldg. & L. Assn. v. Blaisdell, 290 U.S. 398 (1934). That case,

however, sustained a state statute impairing only the duty to pay

money,'° and made it very clear that the Contract Clause does not

impede the state from acting within the scope of its traditional

police powers to protect the public from acts threatening injury to

the health of the state and its citizens:

'S Since the contracts involved were purely financial, the traditional

core of the police power, the power of the state to prevent one person

from using his property to harm another, was not implicated. The same

is true of Allied Structural Steel v. Spannaur, 438 U.S. 234 (1978) and

United States Trust Co. v. New Jersey, supra, both of which are also

relied upon heavily by petitioners.

29

“The States retain adequate power to protect the public

health against the maintenance of nuisances despite insis-

tence upon existing contracts ... Legislation to protect the

public safety comes within the same category of reserved

power....

“[ W_]here the protective power of the State is exercised in

a manner otherwise appropriate in the regulation of a busi-

ness it is no objection that the performance of existing

contracts may be frustrated by the prohibition of injurious

practices... .” 290 U.S. at pp. 436-438 (emphasis added).

In explaining the relationship between these principles and the

challenge before it to a statute which temporarily abrogated

certain contractual provisions in order to provide financial relief

for a class of private parties, the Court said:

“The reservation of state power appropriate to such ex-

traordinary conditions may be deemed to be as much a part

of all contracts, as is the reservation of state power to protect

the public interest in the other situations to which we have

referred... .". 290 U.S. at 439 (emphasis added).

Those “other situations” are precisely what are involved here.

Thus, the Blaisdell court clearly distinguished between the exer-

cise of the state’s traditional police powers to prevent “injurious

practices” and the exercise of emergency powers to suspend the

operation of otherwise harmless contracts. With respect to the

former, the court clearly believed them entirely unimpeded by

challenges under the Contract Clause alleging impairment of

private contracts.

Even the cited page of U.S. Trust, a case involving state

impairment of contracts to which the government was a party,

actually shows the Court’s commitment to deference in cases not

involving state contracts:

“The Contract Clause is not an absolute bar to subsequent

modification of a State's own financial obligations. As with

laws impairing the obligations of private contracts, an im-

pairment may be constitutional if it is reasonable and neces-

sary to serve an important public purpose. /n applying this

standard, however, complete deference to a legislative assess-

ment of reasonableness and necessity is not appropriate

———————~oveaoaae Seo.

30

because the State's self-interest is at stake.” United States

Trust Co. v. New Jersey, supra, 431 U.S. at 25-26 (emphasis

added; footnotes omitted).

The obvious corollary is that in cases not involving the state’s

purse, “complete deference to a legislative assessment of reasona-

bleness and necessity” is appropriate.'® Petitioners’ refusal to

recognize this distinction between contracts with the state and

wholly private contracts is the source of petitioners’ castigation of

the courts below for failing to review the state actions at issue

pursuant to a very strict standard of “reasonableness” and “neces-

sity.” It is petitioners, not the lower courts, who misunderstand

the law.

CONCLUSION

For the foregoing reasons, amici curiae respectfully submit that

the decision of the Court of Appeals for the Third Circuit should

be affirmed.

JOHN K. VAN DE KAmpP

Attorney General

RICHARD C. JACOBS

Special Counsel

N. GrReGorY TAYLOR

THEODORA BERGER

Assistant Attorneys General

RiCHARD M. FRANK

Craic C. THOMPSON

Counsel of Record

Attorneys for Amicus

State of California ex rel.

John K. Van de Kamp,

Attorney General, and the

California Coastal Commission

[See inside front cover for listing of the other counsel |

'® See also, Energy Reserves Group v. Kansas Power & Light, 459 U.S.

400, 412-13 (1983) explaining the distinction between contracts with

the government and between only private parties and also explaining

that in Allied Structural Steel v. Spannaur, supra, 438 U.S. 234, the

statute in question had not been aimed at an “important general social

problem.”