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Pennsylvania Coal Co. entered an agreement with H.J. Mahon in 1878 to gain full rights to mine the coal located beneath his surface-level property. However in 1921 the state of Pennsylvania passed the Kohler Act, which prohibited miners from extracting below-surface coal that supported surface- level buildings. When Pennsylvania Coal notified Mahon that it would mine coal beneath his property, Mahon filed suit in the Court of Common Pleas to prohibit mining in accordance with the Kohler Act. The court denied his suit but the Supreme Court of Pennsylvania reversed and allowed the ban on mining. Pennsylvania Coal contended that the Takings Clause of the Fifth Amendment protected its contractual rights to the coal.

Did the Kohler Act restrict coal mining to an extent that violated the Takings Clause of the Fifth Amendment by depriving mine owners of coal without compensation?

Yes. Justice Oliver Wendell Holmes delivered the opinion for an 8-1 court. The Court ruled that the Kohler Act violated the Takings Clause of the Fifth Amendment. The state exceeded its police powers by significantly diminishing the value of the land estates without having a strong public interest reason to do so. The Court reasoned that "if regulation goes too far it will be recognized as a taking." In this case, the Court held that "so far as private persons or communities have seen fit to take the risk of acquiring only surface rights, we cannot see that the fact that their risk has become a danger warrants the giving to them greater rights than they bought."