The case of Pennsylvania Coal Company v. Mahon established that regulations limiting private property in favor of police power must consider the degree to which the property's value is diminished. If the regulation goes too far, it may be recognized as a taking, and compensation may have to be paid. In this case, a statute prohibiting mining in a way that caused subsidence of human habitation or public property was found to exceed police power and contravene the rights of the coal-owner under the Contract Clause of the Constitution and the Due Process Clause of the Fourteenth Amendment. The prohibition made it commercially impracticable to remove valuable coal deposits, and the reserved property rights and contracts were valid under state law. However, the Kohler Act prohibits mining of anthracite coal in a way that causes subsidence of human habitation structures, but exceptions exist. The act destroys existing property and contract rights, and there are limits to the police power. In the case of a single private house, the public interest does not warrant extensive interference with existing property and contract rights. The court's opinion is that the act cannot be sustained as an exercise of police power when it affects the mining of coal under streets or cities where the right to mine has been reserved. The right to mine coal is valuable, and making it commercially impracticable to mine has the same effect as appropriating or destroying it. The statute does make it commercially impracticable to mine certain coal. If a lower court errs, it should be noted.

The court ruled that the legislature can require a coal pillar to be left for employee safety, but only for those invited into the mine. Private property can be regulated to a certain extent, but if it goes too far, it will be recognized as a taking. Recent laws dealing with congestion provided reasonable compensation, but the present act goes beyond any previous cases. Justice Brandeis dissented, stating that the state can prohibit mining or excavation that endangers the community without compensation. The restriction on mining cannot be justified as a protection of personal safety, and notice would not provide adequate protection where the legislature and highest court of the state have declared otherwise. Public safety prevails over grant or contract. The prohibition of mining that causes subsidence of public structures and facilities is enacted for a public purpose, and the act provides reciprocal advantage to coal operators.