Brief Fact Summary. A Pennsylvania law deprived a coal company of rights to mining the company had obtained by contract with another private party. The constitutionality of the State’s undermining a private contract was called into question by Plaintiff Mahon, who claimed that the application of the Pennsylvania law
Synopsis of Rule of Law. While property may be regulated to a certain extent, if the regulation goes too far, it will be recognized as a taking.
Issue. Was the Act, as applied to previously existing contracts, a proper use of the State’s Police Powers?
Held. No. Decree Reversed.
The protection of private property in the Fifth Amendment presupposes that there are circumstances where the property is needed for public use, but it also provides that such property shall not be taken without compensation. The fact that this protection of property can be qualified in the name of a state exercising its Police Powers encourages the states to attempt to expand their Police Powers more and more until all private property is gone. But, the United States Constitution will not permit this. A strong public desire to improve public conditions is not enough to justify achieving that desire by a taking an end run around the Constitution by not paying for the improvement.
The State went too far here. Whether a State’s action rises to the level of a taking under the Fifth Amendment such that just compensation is required is a matter of degree and therefore cannot be answered by a general proposition.
Dissent. Justice Brandeis: A regulation enacted to protect the public health, safety or morals from threatened dangers is not a taking. The Act merely proscribed a noxious use. The restricted property remains in the possession of its owner. The State has not appropriated it or made any use of it.
Discussion. This case makes clear that there are no bright lines between government regulation of private property that rises to the level of a taking and that which does not. The Supreme Court of the United States in this case decided that a taking occurred based on the extent of the regulation (as opposed to the nature). The Supreme Court does not seem to take into account the importance of the governmental interest here in deciding whether there has been a taking.