SCOTUSblog by Mark Latham 4/27/2021
On Wednesday, the justices will hear argument in PennEast Pipeline Co. v. New Jersey. The case presents the question of what impact, if any, does the Natural Gas Act have on the sovereign immunity provided to the states through the 11th Amendment. This clash between the NGA and the Constitution arose because, under the NGA, companies with permits to build new pipelines can use the power of eminent domain to seize property along the pipeline route. The case has broad ramifications for the industry because it may affect the extent to which states can block pipeline construction within their borders.
Factual and legal background
PennEast’s quest to construct a new pipeline to serve markets in the eastern United States started in 2014 when the Federal Energy Regulatory Commission began its pre-submission environmental review of the proposed pipeline. In 2015, with the environmental review still pending, PennEast submitted a formal application to construct and operate the pipeline, and in 2018, following staff review, the commission issued the requested “certificate of public convenience and necessity” – a permit authorizing the company to proceed with a 116-mile natural-gas pipeline through Pennsylvania and New Jersey.
New Jersey, which opposes the pipeline, challenged the issuance of the certificate before FERC by requesting a rehearing, which was ultimately rejected. Then, as required by the NGA, the state raised its objections before the U.S. Court of Appeals for the District of Columbia Circuit.
However, before FERC had issued a final order in response to New Jersey’s objections to the issuance of the certificate, PennEast initiated multiple eminent domain proceedings in federal district court against properties that New Jersey had either been granted easements for or owned outright. PennEast sought to use the power of eminent domain to condemn and seize land that it needs for the pipeline. The D.C. Circuit decided to put the challenge to the certificate on hold until the proceedings in district court were resolved. Meanwhile, New Jersey responded to the eminent domain suits by asserting that it was not subject to such suits in federal court pursuant to the 11th Amendment, which makes states generally immune from lawsuits in federal court brought by parties other than the federal government.
The district court rejected New Jersey’s assertion of sovereign immunity, finding that “PennEast has been vested with the federal government’s eminent domain powers and stands in the shoes of the sovereign.” Accordingly, the sovereign immunity provided to states by the 11th Amendment did not shield New Jersey from the condemnation proceedings initiated by PennEast in federal district court.
New Jersey appealed to the U.S. Court of Appeals for the 3rd Circuit and asserted once again that PennEast’s condemnation suits were barred by sovereign immunity. PennEast responded by arguing that the ability to initiate eminent domain proceedings in federal court against a state naturally flowed from the delegation by Congress in the NGA of the federal government’s eminent domain power. “To conclude otherwise,” the company argued, “would frustrate the fundamental purpose for the NGA to facilitate interstate pipelines.”
More:
https://www.scotusblog.com/2021/04/eminent-domain-sovereign-immunity-and-a-controversial-pipeline-through-new-jersey/
