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Machipongo Land & Coal Co. v. Commonwealth of Pennsylvania,
569 Pa. 3 (2002)
The Department of Environmental Resources granted a petition to list a small coal-bearing watershed as unsuitable for mining pursuant to the Pa. Surface Mining and Reclamation Act. Holders of various surface and mineral estates (property interests) in the watershed challenged the ruling as a regulatory taking, demanding just compensation. Finding that the holders of the coal estates had been deprived of all beneficial economic use of their property interest, the Commonwealth Court concluded, following Lucas, that the DER ruling constituted a regulatory taking. The Commonwealth appealed to the Supreme Court.
In an opinion that comprehensively reviewed and summarized many different aspects of federal and Pennsylvania regulatory takings law, the Pennsylvania Supreme Court held that it is error to "vertically" separate property interests when calculating the takings "denominator." When making a determination of whether a regulatory action deprives a property owner of all "economically feasible" uses, a court must consider the value of the foreclosed property interest (the takings numerator) in proportion to the value of the entire property (the takings denominator), including the air, surface, mineral, and support estates (vertical property estates otherwise recognized under PA law).
The Pennsylvania Supreme Court also provided guidance on calculating the "horizontal" aspect of the takings denominator, or the physical geographic extent of the property. Adopting "a flexible approach designed to account for factual nuances," the Court listed seven non-exhaustive factors to be weighed in the calculation.
In addition to reversing the lower court on the "denominator calculation," the Supreme Court also held that a successor in interest has standing to initiate a takings claim even if the regulatory action occurred prior to the interest passing. The Court also held that the lower court erred for not hearing evidence related to a nuisance claim, noting that the definition of a public nuisance can evolve over time.
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