[J-23-2020]

IN THE SUPREME COURT OF PENNSYLVANIA

WESTERN DISTRICT

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

PBS COALS, INC. AND PENN 

POCAHONTAS COAL, CO.,

Appellees

v.

COMMONWEALTH OF PENNSYLVANIA, 

DEPARTMENT OF TRANSPORTATION,

Appellant

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No. 41 WAP 2019

Appeal from the Order of the 

Commonwealth Court entered 

March 28, 2019 at No. 140 CD 

2018, reversing the Order of the 

Court of Common Pleas of 

Somerset County entered January 

23, 2018 at No. 98 Civil 2015 and 

remanding

SUBMITTED: April 16, 2020

OPINION

JUSTICE DONOHUE DECIDED: JANUARY 20, 2021

We granted the Commonwealth of Pennsylvania, Department of Transportation 

(“PennDOT”)’s petition seeking review of the Commonwealth Court’s holding that a de 

facto taking of an unmined coal estate, owned by Penn Pocahontas and leased to PBS

Coals, Inc. (collectively “the Coal Companies”), occurred under the Eminent Domain 

Code, 26 Pa.C.S. §§ 101-1106 (“Code”), when PennDOT’s construction of Highway 219

on an adjoining parcel destroyed options for constructing rights-of-ways to the coal 

estate’s surface. In reaching that conclusion, the Commonwealth Court held that the

feasibility of mining the coal, as measured by the probability of obtaining a legally required

permit from the Department of Environmental Protection (“DEP”), was relevant only to 

damages. We reverse the Commonwealth Court’s decision, as we agree with PennDOT 
[J-23-2020] - 2

that the legality of extracting the coal goes directly to the trial court’s duty to determine 

whether a taking occurred. We further find that the Commonwealth Court erred by failing 

to remand the case for consideration of whether consequential damages are available to 

the Coal Companies. We therefore reverse and remand to the Commonwealth Court with 

instructions to remand to the trial court with respect to the Coal Companies’ consequential 

damages claim.

I. Factual and Procedural History

In the 1970s, condemnee Penn Pocahontas Coal Company acquired 

approximately 25,000 acres of land situated in Somerset County spanning roughly 250 

properties. Penn Pocahontas does not mine the coal but instead leases those rights to

companies such as co-condemnee PBS Coals, Inc. and receives royalties from the sales. 

The precise parcel involved in this case is an unmined seventy-three-acre tract of land

referred to as Parcel 55. Its mineral rights were severed from the surface rights in June 

of 1971. N.T., 2/14/2017, at 1.31. Today, Penn Pocahontas owns the coal rights while 

the surface rights are retained by private citizens. Two seams of coal sit beneath Parcel 

55, the rights to which were leased to PBS Coals in 2006.

Prior to construction of Highway 219, Parcel 55 lacked frontage and was only 

accessible via options to construct private rights of way. The surface owners of Parcel 

55 retained the right to construct a fifty-foot-wide private route across Parcel 54, which 

bounded Parcel 55 on the east, continuing through a sixteen-foot-wide right of way across

Parcel 50 onto Garrett Shortcut Road and the highway system. The specifics were to be 

determined by the surface owners.
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The Coal Companies averred that this potential route was destroyed when 

PennDOT acquired a north-south strip of land on Parcel 54 by a deed in lieu of 

condemnation dated June 14, 2010. The construction cut off the possibility of west-toeast access from Parcel 55 and thereby precluded development of the unimproved 

private trails. The Coal Companies thereafter filed a petition under Section 502(c) of the 

Code alleging a de facto taking, which “occurs when the entity clothed with the power of 

eminent domain substantially deprives an owner of the use and enjoyment of his 

property.” Conroy-Prugh Glass Co. v. PennDOT, 321 A.2d 598, 599 (Pa. 1974) (citation 

omitted). Accord McElwee v. SEPTA, 948 A.2d 762, 764 (Pa. 2008) (same).

There is no dispute that PennDOT is clothed with the power of eminent domain. 

The point of contention here is whether the highway construction on Parcel 55 

substantially deprived the Coal Companies of the use and enjoyment of the coal estate. 

“An owner of a property interest who asserts that the owner's property interest has been 

condemned without the filing of a declaration of taking may file a petition for the 

appointment of viewers.” 26 Pa.C.S. § 502(c)(1). The viewers “shall view the premises, 

hold hearings and file a report.” 26 Pa.C.S. § 504(a)(1). The condemnor may file 

preliminary objections to the appointment and if issues of fact are raised the court must 

receive evidence. Once an issue of fact is raised, the viewers cannot take evidence on 

this issue. 26 Pa.C.S. § 504(d). The trial court “shall determine whether a condemnation 

has occurred, and ... the condemnation date and the extent and nature of any property 

interest condemned.” 26 Pa.C.S. § 502(c)(2). The court “shall enter an order specifying 

any property interest which has been condemned and the date of the condemnation.” 26 

Pa.C.S. § 502(c)(3). 
[J-23-2020] - 4

At the evidentiary hearing, the Coal Companies identified three issues: whether 

there was a taking; if so, the extent of the taking; and the date of the taking. The Coal 

Companies alleged that under the prior version of the Code, effective through August 31, 

2006, the latter two issues “were thought to be ... within the province of the board of 

viewers[.]” N.T., 2/14/2017, at 1.11. In contrast, the 2006 amendments “clearly 

established that it’s this [c]ourt’s duty to make those determinations[.]” Id. at 1.12.1 The 

Coal Companies argued that PennDOT’s preliminary objections were relevant only to the 

value of the property and hence an issue of damages to be decided by the board of 

viewers. 

The Coal Companies’ petition pled two counts. At count one, the Coal Companies 

argued that the coal “underlying [Parcel 55] is no longer accessible,” due to highway 

construction on Parcel 54. In this respect the petition treated the Coal Companies’ 

surface estate rights and mineral estate rights identically, i.e. the right to transport the 

coal off Parcel 55 presented the same legal issues as the further inability to access the 

parcel for purposes of extracting and transporting the coal. “As a result of the PennDOT 

Deed in Lieu of Condemnation, the coal under [Parcel 55] is now isolated and not capable 

of being mined.” Petition, 2/19/2015, at 4. 

 

1

 The current Code was enacted in 2006, largely in response to Kelo v. City of New

London, 545 U.S. 469 (2005) (holding that economic development by private enterprises 

can justify taking of property as a “public use” under the Fifth Amendment). See Alpha

Fin. Mortg., Inc. v. Redevelopment Auth. of Fayette Cty., 152 A.3d 375, 380 (Pa. Commw. 

2016) (explaining that the repeal of the former Eminent Domain Code and its replacement 

“sought to counteract Kelo and expand protections for condemnees by limiting the ability 

of governments to take private property for private use, reinforcing that a taking must be 

for a valid public use.”). In McMaster v. Twp. of Bensalem, 161 A.3d 1031, 1036 (Pa. 

Commw. 2017), the Commonwealth Court stated that “there is no difference between the 

former Eminent Domain Code and the current Eminent Domain Code on the issues in this 

appeal of de facto taking and consequential damages.”
[J-23-2020] - 5

At count two, the Coal Companies sought consequential damages pursuant to 26 

Pa.C.S. § 714. “All condemners, including the Commonwealth, shall be liable for 

damages to property abutting the area of an improvement resulting from change of grade 

of a road or highway, permanent interference with access or injury to surface support, 

whether or not any property is taken.” That count incorporated the foregoing complaints 

and argued that the coal “has been permanently isolated by PennDOT . . . [by] taking the 

only access PBS and Penn Pocahontas had to and from [Parcel 55] from a public road.” 

Petition, 2/19/2015, at 7.

PennDOT filed preliminary objections asserting that no de facto taking occurred 

because the Coal Companies “have not been deprived of the beneficial use and

enjoyment of their property,” Preliminary Objections, 4/16/2015, at 1. PennDOT noted 

that the Coal Companies “had not applied for any mining permits for Parcel 55,” and any 

damages “are mere speculation” not compensable under the Code. Id. at 2. PennDOT 

requested dismissal of the petition or, in the alternative, an evidentiary hearing.

The Coal Companies replied and, in relevant part, argued that the loss of access 

is itself a taking, which directly caused the loss of the coal. “Loss of access caused by a 

governmental entity in and of itself is compensable as an inverse or de facto taking. Since 

the tract of coal containing 73 acres is no longer accessible by reason of the action of 

[PennDOT], the same should be deemed [i]solated [c]oal. ... .” Answer, 5/4/2015, at 2. 

The Coal Companies requested an evidentiary hearing. 

The trial court held a three-day hearing, with testimony taken on the history of the 

various deeds and conveyances to determine whether the Coal Companies had rights of 

way to Garrett Shortcut Road or whether those rights were exclusively held by surface 
[J-23-2020] - 6

owners. The parties also presented evidence regarding the likelihood of the Coal 

Companies obtaining a mining permit from DEP. With respect to this latter point, 

PennDOT stated that the “ability to obtain a permit had to have been reasonably certain; 

that it cannot be speculation and conjecture.” N.T., 2/14/2017, at 1.15. Following the 

hearing both parties submitted proposed findings of fact and law. PennDOT urged the 

court to find that no taking occurred because access through Parcel 54 was illusory for 

one of three reasons: (a) the fourteen-foot right of way on Parcel 50 was not wide enough 

to accommodate mining operations; (b) the connecting right of way on Parcel 55 to Parcel 

50 was reserved only to the surface owners; and/or (c) a necessary highway occupancy 

permit would not be issued on Parcel 50. Alternatively, PennDOT argued that another 

route existed through other parcels of land on which the Coal Companies had mining 

rights, i.e. a route to Mud Pike Road.

2

 PennDOT further argued that no taking occurred 

because the Coal Companies could not establish a reasonable likelihood that a DEP 

permit would be issued for various environmental reasons. PennDOT claimed that any 

mining operation was speculative in nature and the Coal Companies therefore failed to 

establish that a de facto taking occurred.

As to access, PennDOT attempted to introduce evidence that a temporary bridge

could be constructed. In its opening argument before the evidentiary hearing, PennDOT’s 

counsel stated, “We have a cost to cure. PennDOT is willing to finance a bridge over the 

new road, a temporary bridge to allow PBS to extract the coal from Parcel 55.” Id. at 1.13. 

Following conclusion of the opening remarks, the trial court asked if the possibility of a 

 

2 PennDOT also alleged that the Coal Companies waived their right to contest the loss 

of the right of way through Parcel 54 because they failed to file preliminary objections at 

the Parcel 54 proceedings. That argument is no longer at issue. 
[J-23-2020] - 7

bridge had been discussed before the hearing. Id. at 1.17. Counsel for PBS replied, “the 

first time we heard of it was last week[.]” Id. The Coal Companies later argued that posttaking remedies are legally irrelevant. N.T., 2/15/2017, at 2.11. In its proposed findings 

of fact and law, PennDOT cited the testimony of its witness John A. Vitez, the chief 

highway engineer and project manager for Highway 219, who testified that a temporary 

bridge capable of handling mining operations could be built at a cost of approximately 

$2.3 million. Id. at 2.70. 

The trial court sustained PennDOT’s preliminary objections and issued a 

memorandum setting forth its findings of fact and conclusions of law. The court disagreed 

with PennDOT’s assertion that Garrett Shortcut Road was inaccessible and found that 

the Coal Companies had rights of way that were severed, causing Parcel 55 to become 

landlocked. Conversely, the court agreed with PennDOT that alternative access to 

highways existed via the Mud Pike Road route because the relevant leases for the other 

properties contemplated a proposed haul road and an “affected area” encompassing 

multiple surface mine pits. As a result, the trial court concluded that no taking had 

occurred. 

The trial court further addressed the issue of whether the Coal Companies had 

demonstrated that they could obtain the necessary permits to mine the coal in the coal 

estate. The Coal Companies called two expert witnesses, Louis T. Pierce, a registered 

professional geologist, and Robert Kudlawiec, a licensed engineer, both of whom opined 

with a reasonable degree of certainty that a surface mining permit could be obtained if an 

application was submitted. Mr. Pierce testified that any on-site streams and the small 

area of present wetlands could be mitigated. N.T., 2/14/2017, at 1.84. Mr. Kudlawiec 
[J-23-2020] - 8

agreed, indicating that replacement wetlands could be established elsewhere on the 

property. Id. at 1.137. As such, both experts testified that the present streams and 

wetlands would not pose an insurmountable hurdle to obtaining a DEP permit. In this 

regard, the experts offered testimony regarding the coal seams. The first seam is known 

as the Clarion Rider seam and the second seam is referred to as Brookville A seam. The 

average depth from the surface of the Brookville A seam was eighty-seven feet, while the 

Clarion Rider was approximately forty to fifty-five feet from the surface. Id. at 1.75-1.76. 

These numbers were relevant to the overburden analysis, which is the material that must 

be removed to mine the coal. Id. at 1.79. Mining has the potential to produce acid 

discharge, and anyone submitting a mining permit application must demonstrate "that 

there is no presumptive evidence of potential pollution to the water of the 

Commonwealth." 25 Pa. Code §86.37(a)(3).3 To counter acid discharge, Mr. Pierce

testified that miners “use special handling plans and alkaline addition,” N.T., 2/14/2017,

at 1.80, opining that the overburden on these sites could be neutralized with 2,220 tons 

per acre of an alkaline solution. Id. at 1.81. Mr. Kudlawiec testified that while Mr. Pierce 

had provided an “initial quantity” of 2,200 tons of alkaline per acre, they would in fact use 

7,000 tons per acre to neutralize the acid on these sites. Id. at 1.153. 

These experts acknowledged that an endangered species of bat was on Parcel 

55, thus requiring compliance with the Federal Endangered Species Act. Both Mr. Pierce 

 

3

 Both experts noted that PennDOT had obtained permits to mitigate the wetlands and 

streams on nearby parcels, including Parcel 54, which were required to construct 

Highway 219. Mr. Kudlawiec admitted, however, that the highway overburden extraction 

only went down to fifty or fifty-five feet, considerably less than the eighty-seven feet that 

the Brookville A mining operation would require. N.T., 2/16/2017, at 3.53. 
[J-23-2020] - 9

and Mr. Kudlawiec, however, expressed confidence that its habitation could be mitigated. 

N.T., 2/16/2017, at 3.48. 

On cross-examination, Mr. Pierce was asked if “modules” six, seven, and eight had 

been prepared. “Modules” are large studies, including those assessing environmental 

impacts, that must be submitted with a DEP surface mining permit application.4 Module 

six involves investigating water sources and conducting sampling. Id. at 1.89. Number

seven is the geology module and “requires the geologist to drill the site and obtain ...

overburden samples and analysis of that overburn to determine the chemistry of the 

rocks.” Id. at 1.61. Module eight is the “write-up portion of the hydrogeology and the 

hydrology, difference between the surface water and ground water.” Id. at 1.60-1.61. Mr. 

Pierce confirmed that none of these studies had been performed for the mining of coal on

the Clarion Rider and Brookville A seams on Parcel 55. Id. at 1.91.5 

 

4 Mr. Pierce stated that he believed the total number of modules required was eighteen. 

N.T., 2/14/2017, at 1.94. Mr. Kudlawiec testified there are “twenty-two or twenty-three 

modules as part of the application, but some are not utilized in every application.” Id. at

1.150. 

5

 There is no dispute that the Coal Companies never applied for a mining permit. Timothy 

Williams, the president of Penn Pocahontas, testified on cross-examination:

Q. Can you tell us why you never mined that coal 

in the 1970s, '80s, '90s, into the early 2000s?

A. There's a lot of coal reserves in the United 

States. They're not all mineable at the same 

time. There's a hierarchy you use when you 

mine coal and when you don't. A function of 

market, function of engineering, function of 

whether you are mining somewhere else.

* * *
[J-23-2020] - 10

PennDOT called Daniel Sammarco as an expert witness. Mr. Sammarco is 

employed by the DEP's Cambria District Mining Office as its District Mining Manager, a 

position he has held for five years. It is his responsibility to ensure that the permitting 

process complies with the Surface Mine Reclamation Act. N.T., 2/15/2017, at 2.94. He 

testified in detail about the extensive pre-application and application processes to be 

followed by an operator seeking a surface mining permit. The permit application itself

consists of twenty-seven modules, some of which are required in every instance and 

others more selectively. Id. at 2.96. 

Mr. Sammarco testified that he could not state to a reasonable degree of 

professional certainty that his office would grant a permit to the Coal Companies to 

surface mine the Clarion Rider or Brookville A seams on Parcel 55. Id. at 2.119. He first 

testified that he is not aware of any evidence that the Coal Companies have conducted 

any stream and wetland impacts studies or performed an over-burden analysis. Indeed,

Mr. Kudlawiec was not aware of the existence of an intermittent stream on the property 

until he appeared in court. N.T., 2/16/2017, at 3.41 - 3.42. Addressing the on-site streams 

and wetlands, those would require separate permits from DEP as well as a federal permit 

under the Federal Clean Water Act (in addition to necessary permits from federal 

 

Q. Have you or any of the operators that you have 

-- including PBS -- that you may have leased 

parcel 55 to, have you ever sought a mining 

permit?

A. Penn Pocahontas has never filed mining permit 

for that parcel.

N.T., 2/14/2017, at 1.23-1.24.
[J-23-2020] - 11

agencies that protect endangered animal species). Once all these hurdles are cleared, 

the Coal Companies would still need to demonstrate to DEP that the acid mine drainage 

will be sufficiently neutralized so that waters will not be polluted. Mr. Sammarco testified 

that 7,000 tons of alkaline per acre “would provide a level of concern in reviewing the 

application,” whereas the 2,200 tons per acre number was a more standard number for 

permits. N.T., 2/15/2017, at 2.129.

Mr. Sammarco also identified two prior experiences with PBS Coals that would 

constitute serious impediments to the issuance of a surface mining permit. The first was 

“Job 21.” A permit was issued in the mid-1970s for the Brookville A seam of coal at a 

location near Parcel 55. Post-mine discharges developed and negatively affected the 

water supply of the Borough of Garrett. Id. at 2.112. At the hearing before the trial court, 

Mr. Sammarco testified that PBS Coals failed to bring forth documents or substantive 

testimony on their continuing activity at the Job 21 site to demonstrate that the problems 

there are unlikely to be exacerbated by more surface mining on Parcel No. 55. Mr. 

Sammarco testified that the Project 21 debacle would be a relevant consideration if an 

application to surface mine Parcel 55 at the location in question were filed. Id. at 2.115.

Second, PBS Coals failed to address adequately the potential impact of surface 

mining Parcel 55 on the Black Mountain Mine site. Mr. Kudlawiec disclosed that the Black 

Mountain Mine was on a nearby property and that, among other problems, adverse 

geologic and water conditions were encountered. PBS Coals’ Exhibit 15, at 4. According 

to Mr. Sammarco, this omission raised further questions regarding a finding of 

permitability.
[J-23-2020] - 12

Finally, Mr. Sammarco testified to the existence of a note authored by another DEP 

employee regarding a 2005 meeting with PBS Coals’ representatives concerning the 

possibility of mining one of the two seams underneath Parcel 55. The note reflected a 

belief that “the potential for successfully permitting the targeted reserves is low, because, 

given currently known facts, the potential for generating additional pollution is high.” N.T., 

2/15/2017, at 2.121.

After review and consideration of the evidence, the trial court concluded that the 

“ability to obtain a surface mining permit from the Cambria District Mining Office for Parcel 

55 is speculative and uncertain and, accordingly, incapable of supporting a claim of a 

taking of a property right....”. Order and Memorandum, 1/29/2018, at 18.

6

 The trial court 

analogized the present facts to cases where “the condemnee’s burden was to prove that 

the property was ripe for development, that they had taken meaningful steps toward 

development, and there was ‘virtually no conjecture as to the reasonable certainty’ of the 

 

6 The trial court’s initial findings of fact stated that “[t]here was no testimony that the 

Petitioner's experts have, to this point, studied stream and wetland impacts or performed 

an over-burden analysis, which matters are essential elements of the permit process.” 

Order and Memorandum, 1/29/2018, at 14. In its trial court opinion, the court 

acknowledged that this was partially incorrect:

The court acknowledges its statement as overly broad, and 

therefore erroneous. The approval of the surface component 

for the A Seam Deep Mine is, however, far less exhaustive in 

its review and approval process than the context of a complete 

surface mine for the entire parcel. The former focuses on 

displacing overburden at one fixed point to obtain access for 

a deep mine portal. The latter requires a review of the 

complete displacement of the overburden on the entire tract 

and the ability to assure that acid mine drainage can be 

avoided during and after mining operations.

Trial Court Opinion, 4/26/2018, at 3.
[J-23-2020] - 13

development.” Id. at 17. While acknowledging that the legal principles applied in those 

cases pertained to valuations, the court referenced its factual findings and reaffirmed its 

conclusion that the “ability to obtain a surface mining permit ... is speculative and 

uncertain and, accordingly, incapable of supporting a claim of a taking of a property 

right[.]” Id. at 18.

The Coal Companies appealed to the Commonwealth Court, which reversed and 

remanded for further proceedings in a published opinion. PBS Coals, Inc. v. PennDOT,

206 A.3d 1201, 1223 (Pa. Commw. 2019), appeal granted in part, 218 A.3d 373 (Pa. 

2019). The companies raised three arguments. The first challenged the conclusion that 

alternative access to Parcel 55 was available via Mud Pike Road. Second, the Coal 

Companies argued that the trial court erroneously considered as a matter of law whether 

the coal was not mineable due to the unlikelihood of obtaining a DEP permit, as that was 

strictly an issue of damages for the de facto taking. Third, the Coal Companies argued 

that the record lacked substantial evidence supporting the trial court’s conclusion that a 

permit was unlikely to issue. The Commonwealth Court ruled in favor of the Coal 

Companies with respect to the first two allegations, and, as a result, declined to consider 

whether substantial evidence supported the permit finding. Id. at 1224 n.10 (“Because 

we determine that the trial court erred to the extent it examined whether Parcel 55 was 

mineable and/or permittable at the preliminary objections stage, it is unnecessary for us 

to address the Coal Companies' third issue raised on appeal....”). 

Regarding the conclusion that PennDOT did not effectuate a de facto taking 

because the Coal Companies maintained alternative access via Mud Pike Road, the 

Commonwealth Court disagreed after examining the language of the relevant leases. It 
[J-23-2020] - 14

is well-settled that the right to mine coal creates an implied right “to use as much of the 

surface property as necessary for mining operations,” id. at 1212, but that right goes only 

so far as is necessary to give effect to the grant of reservation. The coal rights owner 

may move coal from adjoining lands through the passages opened for removal until the 

coal estate is terminated but it cannot use the surface estate to transport foreign minerals. 

In other words, the implied rights to the surface do not extend to removing minerals mined 

from other lands absent express contractual language to that effect. The Commonwealth 

Court reviewed the leases and found nothing to indicate an express grant of that surface 

right. “Here, the plain language ... does not manifest an intention to permit the Coal 

Companies to access Parcel 55 by way of the surface of Parcel 59.” Id. at 1215. The 

court further rejected arguments that other provisions, when read together, created such 

a right. See id. at 1215-17. Accordingly, the court concluded that Parcel 55 was 

landlocked as a matter of law.

Turning to the permit issue, the Commonwealth Court agreed that any questions 

concerning the likelihood of securing a mining permit is a matter of damages and therefore 

irrelevant to whether a taking occurred. The Commonwealth Court distinguished a trio of

cases relied on by the trial court, discussed in more detail infra, that applied the 

Commonwealth Court’s “speculative and conjectural” line of analysis to de facto takings. 

In all three cases, “it was speculative and conjectural that the deprivation of use suffered 

by the property owners was the immediate and necessary consequence of the 

condemnation power.” Id. at 1222. Here, in contrast, the Commonwealth Court indicated 

that “because the construction of Route 219 resulted in the Coal Companies' complete 

loss of access to Parcel 55, it is beyond question that the Coal Companies were deprived 
[J-23-2020] - 15

of the use of their property as a direct and immediate consequence of PennDOT's 

actions.” Id. at 1223. 

The Commonwealth Court believed that application of the “speculative and

conjectural” principle in this case would result in treating mineral estate owners worse 

than surface right owners: 

Under the trial court and PennDOT's logic, the owners of a 

coal estate would never be able to demonstrate a de facto

taking, at the preliminary objections stage, unless they were 

able to prove that they were likely to obtain a mining permit. 

However, such a result would place a higher burden of proof 

on owners of coal estates than owners of surface properties 

and would effectively relegate owners of coal estates to 

second class property owner status. This is because, for de

facto taking cases, coal estate owners would not be able to 

prove that they suffered a substantial deprivation in the use 

and enjoyment of their property, at the preliminary objections 

stage, unless they could establish that DEP would issue a 

mining permit; unlike surface property owners who do not face 

any similar requirement to demonstrate a de facto taking at 

the preliminary objections stage, even if their property is 

relatively valueless or useless.

Id.

The Commonwealth Court held that any questions of whether the coal was

mineable were irrelevant at the preliminary objections stage and “should have been left 

to the board of viewers to determine at the damages/valuation stage.” Id. at 1223-24. 

The Commonwealth Court did not discuss consequential damages.

We granted PennDOT’s petition for allowance of appeal on the following questions:

1. Did the Commonwealth Court err in determining that the 

Coal companies had substantially deprived [sic] of the 

beneficial use and enjoyment of their mineral rights as a direct 

and immediate consequence of PennDOT's actions?

2. Does the Commonwealth Court's decision conflict with the 

plain language of Sections 502(c)(2) of the Eminent Domain 
[J-23-2020] - 16

Code, because it precludes the trial court from determining 

the extent and nature of a taking?

3. Did the Commonwealth Court err in remanding the matter 

to the trial court for determination of the extent and the date 

of the taking pursuant to Section 502(c)(2) of the Code, only?

PBS Coals, Inc. v. PennDOT, 218 A.3d 373 (Pa. 2019).

7 Our standard of review in de 

facto takings cases is as follows:

“A landowner alleging a de facto taking is under a heavy 

burden to establish that such a taking has occurred.” Miller &

Son Paving v. Plumstead Township, 552 Pa. 652, 656, 717 

A.2d 483, 485 (1998). Appellate review in a case where the 

trial court has sustained preliminary objections to a petition for 

an appointment of viewers is directed to considering whether 

the common pleas court's findings are supported by 

substantial evidence of record, and whether the court abused 

its discretion or committed an error of law. See Sienkiewicz I,

584 Pa. at 279, 883 A.2d at 500 (citing Denes, 547 Pa. at 156, 

689 A.2d at 222 (1997)); In re Condemnation by Municipality

of Penn Hills, 870 A.2d 400, 404 (Pa.Cmwlth.2005).

McElwee v. SEPTA, 948 A.2d 762, 771 (Pa. 2008).

II. Eminent Domain Law

The critical issue in this case is whether, and if so to what extent, PennDOT’s 

activities on Parcel 54 constituted a taking of Parcel 55’s coal estate. The alleged taking 

in this case centers on the concept of a de facto taking or an inverse condemnation. 

De facto takings

“Inverse condemnation stands in contrast to direct condemnation, in which the 

government initiates proceedings to acquire title under its eminent domain authority. 

Pennsylvania, like every other State besides Ohio, provides a state inverse condemnation

 

7 We did not grant PennDOT’s request to review the Commonwealth Court’s conclusion 

that Parcel 55 is landlocked and inaccessible via Mud Pike Road. 
[J-23-2020] - 17

action.” Knick v. Twp. of Scott, ___ U.S. ____, 139 S. Ct. 2162, 2168 (2019) (citing Code). 

“The Pennsylvania Constitution provides that private property cannot be taken for public 

use without just compensation.” In re De Facto Condemnation & Taking of Lands of WBF

Assocs., L.P., 903 A.2d 1192, 1199 (Pa. 2006) (citing Pa. Const. Art. I, § 10). The Code’s 

procedure for requesting a board of viewers represents the General Assembly’s 

implementation of a mechanism to receive compensation for de facto takings. See 

Conroy-Prugh Glass Co., 321 A.2d at 599 (“The Pennsylvania Legislature recognized the 

concept of ‘de facto’ taking when it enacted s[ection] 502(e) of the Eminent Domain Code

... .“). 

The de facto taking concept allows parties to recover where governmental action, 

while falling short of a physical invasion or appropriation, interferes with property rights to 

the extent that compensation is required under the United States Constitution. See 

Palazzolo v. Rhode Island, 533 U.S. 606, 617 (2001) (noting that Takings Clause was 

made applicable to the States through the Fourteenth Amendment). “Prior to Justice 

Holmes's exposition in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), it was 

generally thought that the Takings Clause reached only a ‘direct appropriation’ of property 

or the functional equivalent of a ‘practical ouster of [the owner's] possession,’” Lucas v.

South Carolina Coastal Council, 505 U.S. 1003, 1014 (1992) (some citations omitted, 

bracketing in original). The Mahon Court recognized that “the text of the Clause can be 

read to encompass regulatory as well as physical deprivations.” Id. at 1028 n.15. 

Regulatory measures are perhaps the most common instance of governmental 

activity that results in a de facto taking. But the concept extends to any governmental 

action that interferes with property rights. “We have recognized, however, that no magic 
[J-23-2020] - 18

formula enables a court to judge, in every case, whether a given government interference 

with property is a taking.” Arkansas Game & Fish Comm'n v. United States, 568 U.S. 23, 

31 (2012). In determining whether a taking has occurred we have looked to United States 

Supreme Court interpretations of the Fifth Amendment’s Takings Clause.8 “An 

examination of our case law reveals that this Court has continually turned to federal

precedent for guidance in its ‘taking’ jurisprudence, and indeed has adopted the analysis 

used by the federal courts.” United Artists' Theater Circuit, Inc. v. City of Philadelphia,

635 A.2d 612, 616 (Pa. 1993). Thus, in the absence of an argument that the Pennsylvania 

Constitution offers greater protections than its federal counterpart, see id., we draw upon 

the high Court’s law to determine whether a taking has occurred. Accord Machipongo

Land & Coal Co. v. DEP, 799 A.2d 751, 763 n.7 (Pa. 2002) (same). 

Determining whether a taking has occurred almost always turns on the facts, and 

as a result takings jurisprudence generally rejects per se rules. “In view of the nearly 

infinite variety of ways in which government actions or regulations can affect property 

interests, the Court has recognized few invariable rules in this area.” Id. 

True, we have drawn some bright lines, notably, the rule that 

a permanent physical occupation of property authorized by 

government is a taking. Loretto v. Teleprompter Manhattan

CATV Corp., 458 U.S. 419, 426, 102 S.Ct. 3164, 73 L.Ed.2d 

868 (1982). So, too, is a regulation that permanently requires 

a property owner to sacrifice all economically beneficial uses 

of his or her land. Lucas v. South Carolina Coastal Council,

505 U.S. 1003, 1019, 112 S.Ct. 2886, 120 L.Ed.2d 798 

(1992). But aside from the cases attended by rules of this 

order, most takings claims turn on situation-specific factual 

inquiries. See Penn Central, 438 U.S., at 124, 98 S.Ct. 2646..

 

8

“No person ... shall be ... deprived of life, liberty, or property, without due process of 

law; nor shall private property be taken for public use, without just compensation.” U.S. 

Const. amend. V.
[J-23-2020] - 19

Arkansas Game & Fish, 568 U.S. at 31–32.

9

 

Those few situations aside, consideration of the relevant factual circumstances 

includes the economic impact of the action. Penn Central, 438 U.S. at 124. The

economic value of the property encompasses both its present and future use. “Property 

is not to be deemed worthless because the owner allows it to go to waste, or to be 

regarded as valueless because he is unable to put it to any use.” Mississippi & Rum

River Boom Co. v. Patterson, 98 U.S. 403, 408 (1878). This is reflected in the concept of 

the “highest and best use.” See Olson v. United States, 292 U.S. 246, 255 (1934) (“The 

highest and most profitable use for which the property is adaptable and needed or likely 

to be needed in the reasonably near future is to be considered ... .”) (citing Rum River 

Boom). Determining the highest and best use is often a question of damages as it relates 

to the owner’s compensation, and when the condemnee asserts a use different than the 

current use, the burden is on the owner. “There are two requirements, and only two, for 

proving highest and best use. First, the condemnee must show the physical adaptability 

of the land to such a use, and second it must be demonstrated that this use is needed in 

the area.” Pennsylvania Gas & Water Co. v. Pennsylvania Tpk. Comm'n, 236 A.2d 112, 

116 (Pa. 1967). As a result, the “highest and best use” inquiry includes consideration of 

whether the proffered use is reasonably possible. “In determining its value the trial court 

is required to consider all reasonably possible uses for which the property is adaptable 

 

9

 The Coal Companies seem to suggest that this case triggers a per se rule because 

PennDOT’s activities required them to sacrifice the economic value of their coal estate. 

“Obviously, cutting off all access to a property is the direct and immediate cause of the 

loss of not only the present use but any potential use.” Coal Companies’ Brief at 24. Cf. 

Lucas, 505 U.S. at 1017 (“[F]or what is the land but the profits thereof[?]”) (quoting 1 E. 

Coke, Institutes, ch. 1, § 1 (1st Am. ed. 1812)).
[J-23-2020] - 20

and might if reason be applied.” Bolus v. Cnty. of Monroe, 650 A.2d 1188, 1191 (Pa. 

Commw. 1994). But the “highest and best use” inquiry may be considered at the takings 

stage as well. See WBF Assocs., 903 A.2d at 1210–11 (“The actual issue, the highest 

and best use of the property, was the same in both instances, and the highest and best 

use of property for purposes of ascertaining a taking is the same as the highest and best 

use for purposes of setting the fair market value.”). 

Consequential damages

The Commonwealth Court did not address the Coal Companies’ consequential 

damages claim because of its resolution of the de facto taking claim. The consequential 

damages statute states:

All condemnors, including the Commonwealth, shall be liable 

for damages to property abutting the area of an improvement 

resulting from change of grade of a road or highway, 

permanent interference with access or injury to surface 

support, whether or not any property is taken.

26 Pa.C.S. § 714 (emphases added).

Cases from both this Court and the Commonwealth Court have stated that the 

availability of consequential damages is a separate and distinct issue from whether a 

taking has occurred. In Colombari v. Port Auth. of Allegheny Cnty., 951 A.2d 409 (Pa. 

Commw. 2008), the Commonwealth Court held that the phrase “whether or not any 

property is taken” means that liability for consequential damages exists regardless of 

whether a taking has occurred. 

“Speculative and conjectural” takings

The assertion that the Coal Companies were required to establish a reasonable 

likelihood of obtaining a mining permit as a condition of establishing a de facto taking was 
[J-23-2020] - 21

derived from three Commonwealth Court cases examining whether a taking occurred

when the governmental interference precludes a use of the land that is alleged to be 

“speculative or conjectural.” We thus examine those cases in more detail to lend context 

to the parties’ arguments.

In In re Borough of Blakely, 25 A.3d 458 (Pa. Commw. 2011), landowner John 

Williams had purchased property in 1966 abutted by a tract of land containing a 

functioning railroad bed bordering Virginia Avenue. In 1986, he purchased that abutting 

property, which became the subject of the taking claim. Starting in the late 1960s, the 

railroad tracks were removed and the land was mined for coal to a depth of ten feet. Over 

time the property flattened into a ravine, leading to substantial flooding problems that 

formed a ditch. In 1989, the borough placed a plastic drainage pipe in the ditch and 

covered it with dirt. A few years later, the borough installed a replacement pipe that 

extended over the length of the subject property. The borough covered the pipe with 

twelve feet of fill, which could not support vehicular traffic. 

This pipe cut off access to Virginia Avenue. In the early 2000s, William developed 

an intention to build homes and townhomes on Virginia Avenue. Sometime in 2005 or 

2006, Williams asked the borough council to build up the land so that it could support 

traffic. The borough council did not respond favorably, at which time Williams filed a 

petition asserting that the borough had effectuated a de facto taking in 1989 when the 

pipe cut off his access to Virginia Avenue. Williams alleged that the pipe “resulted in a 

diminution in the value and use of the property.” Id. at 462. The trial court dismissed the 

petition on ripeness grounds. Williams appealed. On appeal, the borough argued that 
[J-23-2020] - 22

the trial court had ruled correctly because Williams could still develop the property if he 

accounted for storm water runoff. 

The Commonwealth Court affirmed, indicating that “the trial court properly rejected 

his de facto taking claim as premature and insufficient” because his “claims of injury and 

substantial deprivation of the use of his property” were speculative and conjectural. Id. 

at 467. Williams “never presented any formal plans to the Borough Planning 

Commission,” did not file any formal requests before that commission, and never spoke

to anyone about the zoning permits he would need for developing the lots. Id. at 466. 

The court cited Williams’ own testimony from the evidentiary hearing, where he confirmed 

that his project “hadn’t gotten far enough along” to reach the Planning Commission or 

Zoning Hearing Board stages. Id. The appellate court noted that “[t]he Borough never 

told Owner he cannot build homes on these lots” and the owner “did not explain why 

access is not possible from another road abutting his property.” Id. Williams had not 

taken any concrete steps to develop the properties, including submitting plans to the 

borough or investigating necessary storm water improvements. Id. 

Blakely favorably cited Petition of 1301 Filbert Ltd. P'ship, 441 A.2d 1345, 1346 

(Pa. Commw. 1982), in support. Therein, the 1301 Filbert Limited Partnership purchased 

the Essex Hotel in June of 1974. The hotel “had been closed for several years and was 

in a state of serious disrepair.” Id. at 1348. The partnership intended to renovate the 

building and open a hotel and began renovations in early 1975. The hotel never opened, 

leading to a de facto taking claim. 

Around the time of purchase, the City of Philadelphia had been exploring a largescale tunnel project. In July of 1975, the federal government began granting funding for 
[J-23-2020] - 23

projects such as land acquisition, and the city’s Department of Public Property authorized, 

but did not require, the acquisition of the Essex Hotel. The partnership had been told the 

Essex was not in the right of way and would not be condemned. The partnership 

attempted to obtain a short-term construction loan for renovations, but the bank declined 

the loan, citing the tunnel’s construction and predicted interference with the hotel’s 

operation as the reason. 

The partnership alleged a de facto taking of the hotel occurred as a result of the 

construction, because the Essex abutted the route officially designated for the tunnel and 

an estimated four years of construction was expected to turn the area in front of the hotel 

into a giant pit, precluding access. The partnership claimed that the tunnel project caused 

it to lose the needed financing, leading to mortgage foreclosure and the loss of the 

property. The partnership also offered an expert witness, who opined that the hotel could 

not have stayed in business anyway due to the construction noise and dust. 

The trial court dismissed the petition and the Commonwealth Court affirmed. The 

court stated that “an important element in the lower court's decision was the determination 

that the Partnership had not met its proof burden of showing that the alleged detriment, 

underlying the claim of de facto taking, was the direct and necessary consequence of the 

Tunnel project and its concomitants.” Id. at 1359. The Filbert panel found that the 

partnership failed to establish that the construction would have made the hotel financially 

unviable. While the partnership presented expert testimony on that point, the trial court 

rejected it. “However, the weight and credibility of the Partnership's testimonial evidence, 

concerning the impact of the Tunnel work on the prospective or hoped-for patrons of the 

hotel, was for the determination of the lower court sitting as the finder of fact.” Id. at 1360. 
[J-23-2020] - 24

The court agreed that the construction project would affect the quality of access, but it 

would not preclude access. “The case at bar is one in which the claim of de facto taking 

is linked to an alleged injury that is not only prospective but is also speculative and 

conjectural.” Id. at 1360.

The final case is Parker Ave., L.P. v. City of Philadelphia, 122 A.3d 483, 491 (Pa. 

Commw. 2015) (en banc), which rejected an allegation that discretionary inaction 

constituted a taking. There, developer Parker Avenue acquired in 2005 a parcel of land 

zoned as residential permitting construction of homes by right. This parcel was situated 

in a park where the local community was known to have strong opposition to 

development. Parker Avenue nonetheless began planning the construction of forty-eight 

single family homes along Cinnaminson Street, which bisected the subject property. 

Cinnaminson Street extended beyond the parcel onto Philadelphia-owned land and had 

already been improved with sewer lines, fire hydrants, manhole covers, and water basins 

but was unpaved. Cinnaminson was merely a paper street and was “essentially an 

unimproved trail.” Id. at 485. Parker Avenue began acquiring the necessary clearances 

from the water department and various environmental agencies. The tract to the rest of 

Philadelphia required paving, and Parker Avenue submitted to the City Council two

ordinances to have the street paved.

When these proposed ordinances were not approved, Parker Avenue filed a 

petition for an appointment of viewers, alleging a de facto taking through deprivation of 

the property’s beneficial use and enjoyment as a residential development. The trial court 

overruled the city’s preliminary objections, concluding that the city’s actions “have 
[J-23-2020] - 25

rendered [Parker Avenue’s] property virtually useless, and has completely precluded the 

highest and best use of the property.” Id. at 487 (citing trial court order). 

The Commonwealth Court reversed, ruling that the inherently discretionary act of 

failing to pave roads could not qualify as a taking. The Parker Avenue Court recognized 

that a failure to issue a document required for construction could qualify as a de facto 

taking if the petitioning party were otherwise entitled to its issuance. However, “Parker 

Avenue is not entitled to the ordinances it proposed. ... The City’s decision whether to 

enact said ordinances requires weighing competing interests of multiple stakeholders and 

the best interests of Philadelphia-at-large.” Id. at 489.

The court next addressed the claim that Parker Avenue had relied on the 

residential zoning regulations in place at the time it purchased the property, which had

permitted the construction of residential buildings as of right. The Commonwealth Court 

rejected this argument by emphasizing that the parcel was already landlocked at 

purchase because no legally-open street connected the property to the rest of 

Philadelphia, and thus the developer knew that it needed governmental support to 

develop the property. The clear import of the court’s analysis was that Parker Avenue’s 

expectations at the time of purchase undercut the finding of a taking. See Penn Central, 

438 U.S. at 124 (“The economic impact of the regulation on the claimant and, particularly, 

the extent to which the regulation has interfered with distinct investment-backed 

expectations are, of course, relevant considerations.”). 

III. Parties’ Arguments

As a background matter, we note that both parties devote substantial argument to 

whether the trial court’s finding that the Coal Companies failed to establish a reasonable 
[J-23-2020] - 26

probability of obtaining a DEP permit is supported by the record. The Commonwealth 

Court held that the trial court’s factual findings in that regard were irrelevant to the legal 

question, and we likewise accepted review to determine that point of law. As addressed 

in the text infra, we find that the permit question was properly addressed as a component 

of the taking analysis. 

PennDOT

PennDOT argues that sufficient evidence exists to sustain the trial court’s finding 

that the ability to obtain a permit was speculative and conjectural. To establish a taking, 

the Coal Companies were required to show that the ability to use their estate, i.e. to exploit 

their mineral rights through surface mining, was something more than mere speculation. 

As explained above, no evidence was introduced by the Coal Companies that they had 

participated in any pre-application process, that they ever filed a surface mining permit 

application for Parcel 55, or that they had performed any studies to complete any of the 

modules for a permit to be issued. PennDOT’s Brief at 16. 

PennDOT analogizes these defects to the line of Commonwealth Court cases

involving the “speculative and conjectural” test discussed supra. It describes Parker 

Avenue and Blakely as “on all fours with the instant case.” PennDOT’s Brief at 21. 

PennDOT views the Blakey homeowner’s intentions to build housing as directly 

comparable to the Coal Companies’ desire to one day open a mining operation on Parcel 

55. The Blakely court held that “substantial deprivation of the use of the property was 

speculative and conjectural, and therefore, did not amount to a de facto taking ... .” In 

PennDOT’s view, the same logic applies here because the Coal Companies have not 

begun the permit process, rendering mining operations a too remote possibility to justify 
[J-23-2020] - 27

a de facto taking finding. In Parker Avenue the Commonwealth Court held that the 

planned developments were speculative and conjectural because the necessary permits 

were not guaranteed to issue. Similarly, the Coal Companies have no guarantee that the 

required permits for mining will ever issue, establishing that “the Coal Companies’ inability 

to surface mine Parcel 55 was not the direct and immediate consequence of PennDOT’s 

acquisition of Parcel 54 for the highway project.” Id. at 22. Addressing the Filbert hotel 

case, PennDOT emphasizes the aspect of the Commonwealth Court’s granting deference

to the trial court’s rejection of the partnership’s expert witness testimony. See PennDOT’s 

Brief at 25 (“This deference of the Commonwealth Court to the trial court as the finder of 

fact is entirely missing in the decision in the instant case.”).

PennDOT submits that the Commonwealth Court’s primary reason for 

distinguishing those three cases, i.e. the fact that the property owners therein all retained 

access to the surface estate and could continue to use the property for some purpose, is 

flawed. PennDOT deems it irrelevant whether the Coal Companies have physical access 

to transport coal from Parcel 55. “[I]f the Coal Companies cannot legally extract the coal, 

PennDOT did not substantially deprive the Coal Companies of the use of their mineral

rights and the Court never has to address the access issue.” Id. at 24. The

Commonwealth Court’s further distinction of identifying the highest and best use of the 

land as a coal mine is similarly flawed. Finding “that the highest and best use of the coal 

estate is for mining coal ... puts the cart before the horse,” id., because the condemnees 

are not mining coal. Therefore, the Coal Companies are attempting to do the same thing 

as the three landowners in Blakely, Parker Avenue, and Filbert; namely, establish a use 

of the property different from its current use. PennDOT argues that the “highest and best 
[J-23-2020] - 28

use” analysis is assessed in the damages phase when access to a surface interest is

completely cut off. Here, where the property interest is subsurface rights, the Coal 

Companies must establish that the coal is legally mineable. Otherwise, the Coal 

Companies would receive a windfall. 

Turning to the second issue regarding the structure of the Code, PennDOT claims

that the Commonwealth Court’s categorical holding that issues surrounding the permit 

process are irrelevant to the takings analysis is contrary to the Code’s scheme. The trial 

court is exclusively authorized to determine the extent and nature of a taking. Applying 

the Commonwealth Court’s holding here, the trial court cannot determine whether a taking 

occurred because the legal inquiry, which calls for consideration of whether the Coal 

Companies were deprived of the use of their coal estate, necessarily required an analysis 

of whether the coal could be “enjoyed,” i.e., legally mined. Thus, precluding trial courts 

from considering evidence about permitability is contrary to the statutory language. 

Furthermore, PennDOT observes that the Commonwealth Court’s holding means that the 

trial court should have immediately appointed a board of viewers. In that scenario, the 

board would have heard the extensive testimony presented to the judge herein, which 

would then be reproduced upon any appeal from their report in de novo proceedings. 

With respect to the third issue, PennDOT does not contest that the Coal 

Companies are entitled to litigate their claim for consequential damages on remand. 

The Coal Companies

The Coal Companies urge affirming the holding that any questions regarding the 

likelihood of obtaining a DEP permit are relevant only to damages and do not factor into 

the taking analysis. The Coal Companies emphasize that the taking of access is itself a 
[J-23-2020] - 29

de facto taking and a fully compensable right. Coal Companies’ Brief at 21 (citing 

McElwee, 948 A.2d at 775-76). Because the right of access to a mineral estate is 

protected to the same degree as access to the surface rights, Belden & Blake Corp. v. 

DCNR, 969 A.2d 528,532 (Pa. 2009), the right-of-way taking that caused Parcel 55 to 

become landlocked constituted a taking of the coal estate. The appellees posit that 

PennDOT’s position creates an absurdity because by their logic “until a permit is secured 

there is no estate and no value in a coal estate.” Id. at 25. The Coal Companies rely, 

with little elaboration, on cases that deal with loss of access to surface uses. “Simply put, 

and as caselaw cited above (McElwee supra) indicates, when access to property is 

permanently eliminated by government action, a taking has occurred and the value of 

what has been taken is properly determined by the Board of Viewers.” Id. at 27.

Turning to the three Commonwealth Court cases discussed supra, the Coal 

Companies agree with the Commonwealth Court’s distinctions. The companies describe 

Filbert as a case in which “the damages were speculative and conjectural because there 

was no proof of damages in any form; the owners retained access and had no evidence

of economic damages.” Id. at 29. Blakely likewise involved a case where the owner “was 

never deprived of access, never prohibited from building, and failed to prove any other 

basis for his claim.” Id. at 30 (emphasis omitted). Finally, Parker Avenue is inapposite 

because the owner, when he purchased the land, knew the parcel was landlocked. That 

is not the case here because Parcel 55 became landlocked after the relevant property 

interest was obtained. In contrast to those cases, the loss of access here has precluded 

any use of the property whatsoever. 
[J-23-2020] - 30

Turning to the second issue, the Coal Companies argue that resolution of the first 

issue resolves this point of error as well. The Commonwealth Court held that the “highest 

and best use” was a coal estate. Therefore, the extent of the de facto taking was the 

entire coal estate and the only issue left is damages. As a result, the remand order is not 

inconsistent with the Code. The board of viewers can award just compensation by 

considering, among other factors, whether a permit is likely to issue now or in the future

and adjust the amount of damages based upon that determination. 

Regarding the last issue, the Coal Companies concede that no consequential 

damages are available following the Commonwealth Court’s holding. “Consequential

damages only apply when there has been a negative [e]ffect upon the property but that

does not result in a taking of the property. Id. at 46. The consequential damages claim 

“was made moot by the determination that a de facto taking of the property has occurred.” 

Id. at 47.

Finally, the Coal Companies maintain that while the Commonwealth Court 

correctly determined that the permit issue was irrelevant to the takings analysis, the trial 

court’s findings were not sufficiently supported by evidence of record.

IV. Analysis

For the following reasons, we conclude that the Commonwealth Court erred by 

finding a de facto taking of the coal estate occurred by operation of law. The Coal 

Companies are not presently using their coal estate, and their inability to establish a 

likelihood of securing a permit implicated the legal question of whether a taking occurred,

not damages for a de facto taking. We are therefore aligned with PennDOT’s view that 
[J-23-2020] - 31

the trial court correctly considered the issue of permitability under the Code’s provisions 

requiring the trial court to determine whether a taking occurred. 

We begin by considering the three “speculative and conjectural” cases that serve 

as a backdrop to our analysis. We agree with the Commonwealth Court that Filbert and 

Parker Avenue, two of the three “speculative and conjectural” cases, are readily 

distinguishable and shed little light on whether a taking has occurred in this case. The 

Filbert court placed great emphasis on the fact that the trial court rejected the expert’s 

testimony that the hotel, had it been an ongoing business, would have been hurt by the 

ongoing construction. Furthermore, the construction project, while certainly diminishing 

the quality of access, did not completely foreclose access. Thus, that the property 

retained some economic value notwithstanding the fact that construction would impact its 

operation was a critical component of the takings analysis.

10

 Parker Avenue is similar. 

There, the developer’s parcel retained economic value, 122 A.3d at 489 (“Parker Avenue 

can still build a single dwelling now, as it was permitted to do on the date of purchase”), 

and the purported taking in that case involved discretionary inaction stemming from 

failures to issue permits. Furthermore, Parker Avenue involved an assertion that the 

 

10 In Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), the high Court 

observed that takings law is “full of these ‘all-or-nothing’ situations”:

It is true that in at least some cases the landowner with 95% 

loss will get nothing, while the landowner with total loss will 

recover in full. But that occasional result is no more strange 

than the gross disparity between the landowner whose 

premises are taken for a highway (who recovers in full) and 

the landowner whose property is reduced to 5% of its former 

value by the highway (who recovers nothing). Takings law is 

full of these “all-or-nothing” situations.

Id. at 1019 n.8.
[J-23-2020] - 32

discretionary failure to issue ordinances constituted the relevant act for a de facto taking. 

The Coal Companies do not contend that DEP’s failure to issue a permit is a de facto 

taking (as no permit application has even been filed), but rather that PennDOT’s 

construction of Highway 219 was the relevant act. 

The two cases are further distinguishable because there is no suggestion that the 

Coal Companies’ investment expectations should have contemplated the construction of 

a highway on those lands at the time of purchase. In Parker Avenue, the parcel was 

already landlocked, and the fact that a portion of the parcel which had existing access to 

the city was severed and sold for a much higher per acre sum was an important factor. 

And in Filbert, the investors’ awareness that the tunnel project was a possibility formed a 

part of the analysis. The hotel also retained some economic value because the 

construction merely diminished but did not foreclose access to the hotel. 

We agree with PennDOT that Blakely is on point. The owner in Blakely asserted 

that he presented sufficient facts to establish a de facto taking based on his claim that the 

local government’s placement of a PVC pipe blocked vehicular access to lots on which 

he wished to build homes. As previously described, the owner never took concrete steps 

to establish that actual development would occur. Hence, the PVC pipe blocked nothing.

The same logic employed in Blakely applies here. Highway 219 does not block 

the Coal Companies from enjoying their coal estate, and the Coal Companies have failed 

to meet their heavy burden to establish that a de facto taking has occurred. The 

Commonwealth Court identified the de facto taking test as having three elements. PBS 

Coals, 206 A.3d at 1219. The first is that the condemnor has the power to condemn, 

which is not at issue here. The second element is whether the act substantially deprived 
[J-23-2020] - 33

the owner of the beneficial use and enjoyment of the property. The third requires a finding 

of causation, namely that the deprivation is the immediate, necessary and unavoidable

consequence of the governmental action. The Commonwealth Court’s analysis 

essentially skipped the second element by concluding “it is beyond question that the Coal 

Companies were deprived of the use of their property as a direct and immediate

consequence of PennDOT's actions.” PBS Coals, 206 A.3d at 1223.

We disagree, as the Coal Companies failed to establish the second element of the 

takings test. They presented insufficient evidence to demonstrate that they possessed 

any “beneficial use and enjoyment of the property” (the coal estate). The Coal Companies 

cannot use and enjoy their coal estate because there is no mining operation on the Parcel 

55 property, and they did not meet their heavy evidentiary burden to establish any 

likelihood that they will be able to obtain a surface mining permit to begin a mining 

operation to extract the coal. The Commonwealth Court identified Blakely, Filbert, and 

Parker Avenue as “hing[ing], to a certain degree, on the causation prong of the de facto

taking test, i.e., whether the substantial deprivation of use was the ‘immediate, necessary 

and unavoidable consequence of the exercise of the power to condemn.’” Id. at 1222. 

There is little doubt that Highway 219 would be the immediate and necessary 

consequence of the Coal Companies’ inability to use and enjoy their coal estate if a 

mining operation existed, or could be commenced with a permit, on the property.

11

 

However, just as the PVC pipe in Blakely was only theoretically precluding the landowner 

from developing the property as he wished, the highway is only theoretically preventing 

 

11 Of course, under those circumstances PennDOT may well have opted to provide 

alternative access as part of its highway construction plans. 
[J-23-2020] - 34

the Coal Companies from using their coal estate. As things stand, the coal estate sits 

idle and may not be mined; therefore Highway 219 has not resulted in any deprivation 

to the Coal Companies whatsoever. Under the facts presented here, we never reach 

the third element of the takings test (causation), as the Coal Companies have not satisfied 

the second element (a deprivation).

The Commonwealth Court held that the likelihood of obtaining a permit was entirely 

irrelevant at the preliminary objections stage on the issue of whether a taking took place, 

and therefore the trial court erred by not directing the board of viewers to consider that 

issue at the damages stage. We disagree.

12

 The trial court’s determination that a permit 

was not likely to issue goes directly to whether the Coal Companies established that 

PennDOT’s construction substantially deprived the condemnees of the beneficial use and 

enjoyment of their coal estate.

The lodestar of the Commonwealth Court’s analysis was its conflation of the 

surface estate rights with the coal estate rights, reasoning that the inability to access the 

parcel necessarily caused the Coal Companies to lose the enjoyment of their coal 

estate.

13 In Blakely, continuing access was important because the surface rights owner 

 

12 PennDOT has litigated this case under the assumption that if the Coal Companies 

were able to establish to the trial court’s satisfaction a reasonable probability of obtaining 

a DEP permit then a de facto taking occurred. We accept that premise for purposes of 

our disposition.

13 With no further development, the Coal Companies cite and quote Belden & Blake Corp.

v. DCNR, 969 A.2d 528 (Pa. 2009), as definitively settling this issue. The case is 

distinguishable. Therein, Belden owned or leased mineral rights on lands owned by the 

Commonwealth. When Belden informed the Department of Conservation and Natural 

Resources (DCNR) that it was in preliminary stages of developing gas wells, the DCNR 

sought to impose conditions on Belden’s access, including fees for removing timber that 

were double the fair market value of the material. Belden alleged that the DCNR’s 
[J-23-2020] - 35

was using the land for some purpose. That merely reflects the fact that surface owners 

enjoy a broad array of uses, whereas here the Coal Companies can enjoy their coal estate 

in only one way: mining coal. The Coal Companies rely on McElwee, 948 A.2d 762, to 

support its argument that a de facto taking occurred here. There, the Southeastern 

Pennsylvania Transport Authority (SEPTA), in the course of three years of construction 

work, interfered with access to a printing shop to a degree that the day-to-day operations 

of the business were made impossible. The shop lost business and closed its doors, all 

of which was attributable as a matter of law to SEPTA’s activities. “[W]e find that the trial 

court failed to adequately support its conclusion that Appellees did not establish any 

causal link between SEPTA's actions and the closure of their business.” Id. at 772–73. 

We thus held that SEPTA’s preliminary objections should have been overruled. McElwee 

is not comparable to the present circumstances. That case involved the substantial 

deprivation of an actual use of a surface estate caused by SEPTA’s acts. Again, there is 

no present use of the coal estate whatsoever. This is not a case where PennDOT’s 

construction activities interfered with an ongoing coal mining operation. 

The Commonwealth Court equated the fact of ownership of subsurface rights, i.e., 

a coal estate, with the highest and best use of that ownership interest. According to that 

 

conditions were tantamount to a de facto taking. We found that partial summary judgment 

was warranted in Belden’s favor. Belden had a right to access and its exercise of its 

subsurface rights was reasonable. “A ‘regular’ surface owner cannot unilaterally impose 

extra conditions on the subsurface owner beyond those that are reasonable.” Id. at 532-

33. We determined that the government was held to the same standard notwithstanding 

potential constitutionally based fiduciary duties connected to the DCNR’s role in 

preserving state lands under the Pennsylvania Constitution. 

Belden does not support the Coal Companies’ position. The government is not imposing 

any conditions on access but rather a condition on opening the mine. Nor does the 

government own Parcel 55’s surface rights. 
[J-23-2020] - 36

court, the Coal Companies did not have any burden to establish that the coal was legally 

mineable. Because it was uncontroverted that coal existed in their subsurface parcel, to 

require subsurface rights owners to establish that a permit to mine the coal was likely to 

issue would treat subsurface rights owners differently and worse than surface rights 

owners.

The defect in the Commonwealth Court’s logic is that mere ownership of a property 

right is not a use, and the Commonwealth Court’s ruling gives preferential treatment to 

these coal estate owners by eliminating an essential evidentiary burden. Like any other 

owner of property rights claiming a de facto taking, the Coal Companies must prove, inter 

alia, that the government’s action substantially deprived the owner of the beneficial use 

and enjoyment of the property. In the matter before us, there is no dispute that the only 

use of the Coal Companies’ subsurface rights is a coal extraction operation. It is the only 

use and thus the highest and best use. This use is implicit in the Coal Companies’ 

argument. Their claim is that they lost the ability to extract the coal because of their loss 

of access to the subsurface area. The ability to extract the coal is central to the takings 

claim. The coal estate owners have the burden to establish the existence of a use as a 

coal extraction site. Because the Coal Companies did not establish the feasibility of such 

use, the Coal Companies cannot establish that they have been deprived of the use by 

PennDOT’s construction activity.

The use of property by surface rights owners and subsurface rights owners are 

distinct. The takings analysis, and its fact-intensive nature, properly permits courts to

account for those distinctions. The de facto takings jurisprudence “is characterized by 

essentially ad hoc, factual inquiries, designed to allow careful examination and weighing 
[J-23-2020] - 37

of all the relevant circumstances.” Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l

Planning Agency, 535 U.S. 302, 322 (2002). The Coal Companies’ assertion that a de 

facto taking occurred by operation of law by virtue of ownership of subsurface rights 

requires a court to ignore all circumstances other than the loss of access. 

Finally, the Commonwealth Court did not acknowledge any distinction between 

permitability, which was relevant to the legality of extracting the coal (and properly a focus 

of a de facto takings analysis) versus the economic value of the coal (a matter of 

damages). The Coal Companies, picking up on the Commonwealth Court’s analysis, 

argue that the trial court and PennDOT suggest that “until a permit is secured there is no 

estate and no value in a coal estate.” Coal Companies’ Brief at 25. That charge is 

inaccurate. The value as determined by an economic analysis of what the coal is worth 

has no bearing on whether a taking occurred.

14

 If the coal cannot be mined, the 

government took nothing. This is precisely the type of “speculative and conjectural” use 

that the caselaw holds cannot qualify as a de facto taking. We therefore agree with the 

trial court’s legal conclusion that the Coal Companies failed to establish that a permit was 

reasonably likely to issue, and accordingly any taking was purely speculative and 

conjectural. 

The Sufficiency of the Evidence Regarding Permitability

Before the Commonwealth Court, the Coal Companies raised as a question for 

review whether the record lacked substantial evidence to support the trial court's 

 

14 For instance, whether the coal is worth $100 million, $50 million, or $100,000, DEP’s 

decision to issue a permit has nothing to do with what the investor expects to make. What 

the coal is worth goes to why a mineral rights owner would seek a permit, but the DEP 

permit itself goes to whether a mine is opened. The latter is the focus for takings, the 

former is the focus for damages. 
[J-23-2020] - 38

conclusion that the Coal Companies' ability to obtain approval from DEP for a surface 

mining permit for Parcel 55 was too speculative and uncertain. The Commonwealth 

Court, based upon its determination that the trial court erred in examining permitability at 

the preliminary objections stage of the proceedings, found it unnecessary to address the 

issue. PBS Coals, 206 A.3d at 1224 n.10. As we have concluded that the Commonwealth 

Court’s ruling was in error, we will address whether sufficient evidence exists to support 

the trial court’s conclusion that a DEP permit was not reasonably probable. As developed, 

the trial court’s analysis implicates the condemnee’s heavy burden to establish that a de 

facto taking occurred. 

The trial court had the duty of weighing the evidence. See Thomas A. McElwee & 

Son, Inc. v. SEPTA, 896 A.2d 13, 21 (Pa. Commw. 2006) (“The trial court, as fact-finder, 

had the discretion to weigh the evidence and determine which was most credible[.]”). aff'd 

sub nom. McElwee v. SEPTA, 948 A.2d 762 (Pa. 2008). Appellate review then consists 

of deciding whether substantial evidence exists in the record to support the trial court’s 

findings. McElwee, 948 A.2d at 771. As reviewed herein, the Coal Companies insist that 

their experts testified that the facts presented to the trial court established that a permit 

was reasonably probable, even without the completion of the different modules and 

questions surrounding the environmental issues. PennDOT’s witness, Mr. Sammarco,

without categorically ruling out the possibility of the issuance of a mining permit to the 

Coal Companies, provided the trial court with a number of reasons to seriously doubt the 

likelihood of any such eventuality. 

Based upon our review of the record, we conclude that said record contains 

substantial evidence to support the trial court’s finding that the issuance of a mining permit 
[J-23-2020] - 39

to the Coal Companies was “speculative and uncertain.” As reviewed in detail herein, 

see supra at 10-11, Mr. Sammarco testified that the Coal Companies had to date not 

conducted any stream or wetlands impacts studies or an overburdening analysis. One of 

PBS Coals’ testifying experts, Mr. Kudlawiec, was not even aware of the existence of an

intermittent stream running through the area until the time of his testimony before the trial 

court. This failure to study stream and wetlands impacts was particularly concerning to 

Mr. Sammarco, as two previous mining operations by PBS Coals in the same area (“Job 

21” and the Black Mountain site) resulted in serious pollution to water supplies. At the 

evidentiary hearing, PBS Coals offered testimony to allay fears that an additional mining 

operation would not exacerbate the damage already done by PBS Coals to the water 

supply in the area. Mr. Kudlawiec’s suggestion that PBS Coals would use up to four times 

the usual amount of an alkaline solution to mitigate acid discharges would, according to 

Mr. Sammarco, provide an additional level of concern in reviewing the permit application. 

The existence of an endangered species was another impediment. Finally, a note in 

DEP’s files generated after a 2005 meeting with PBS Coals’ representatives stated that 

permitting additional coal reserves at the location at issue was low given the significant 

potential “for generating additional pollution.” 

Based upon this evidence admitted by the DEP, the trial court was well within its 

province as the finder of fact to conclude that the issuance of a mining permit to the Coal 

Companies to commence a new mining operation was unlikely to occur. 

Consequential damages for loss of access

By holding a de facto taking occurred, the Commonwealth Court did not address 

the claim for consequential damages. As previously discussed, consequential damages 
[J-23-2020] - 40

are available even if a taking has not occurred. The Coal Companies’ second count 

incorporated the foregoing complaints and argued that the coal “has been permanently 

isolated by PennDOT ... [by] taking the only access PBS and Penn Pocahontas had to 

and from [Parcel 55] from a public road.” Petition, 2/19/2015, at 7.

The Coal Companies conceded that consequential damages are unavailable by 

virtue of the Commonwealth Court’s holding that a de facto taking occurred, which we 

have reversed. PennDOT, on the other hand, argues that it intends to defend the 

remaining consequential damages claim. We express no opinion on this matter, as the 

parties have had no opportunity to litigate this aspect of the case.

Conclusion

We reverse the decision of the Commonwealth Court and, for the reasons 

discussed in this opinion, reinstate the trial court’s determination that no taking occurred. 

We remand the case to the Commonwealth Court with directions to remand to the trial 

court for consideration of the Coal Companies’ claim for consequential damages.

Chief Justice Saylor and Justices Baer, Todd, Dougherty and Wecht join the 

opinion.

Justice Mundy files a dissenting opinion.