The US Supreme Court held the Natural Gas Act (NGA) allows private pipeline companies to condemn state property to secure routes for their pipelines. In PennEast Pipleline v. New Jersey, the Court said the 3rd Circuit Court of Appeals was wrong in concluding the NGA did not give private pipelines the power to use eminent domain to acquire state property for approved pipelines. The Court also rejected New Jersey’s argument that the US Constitution precluded giving this power to a private entity.
FERC Approved Pipeline Route
PennEast, after securing permission from the Federal Energy Regulatory Commission (FERC), proceeded to condemn various properties along the approved pipeline route in New Jersey. In approving the route, FERC knew some of the properties were owned by or subject to ownership interests (such as easements) of the State of New Jersey. As part of the condemnation process, PennEast sued in federal court to obtain immediate possession and for a determination of the compensation for the property owners.
States Permitted Eminent Domain by Joining the Union
New Jersey argued the US Constitution precluded Congress from subjecting state property to eminent domain, because eminent domain proceedings would require states to be parties to suits in federal court. The Court rejected that argument, holding that when the states agreed to join the United States, they accepted the federal government’s eminent domain power as to state property, a power the United States could delegate to private pipeline companies.
Interpreting the NGA
New Jersey also argued the NGA did not delegate to private companies the power to force a state into federal court. The Court rejected that argument, stating the NGA’s language was sufficiently clear to give private pipeline companies full eminent domain power even as to state property.
Dissent Says States Did Not Consent to Private Party Condemnation
Four justices dissented, saying the majority’s conclusion that states accepted private party condemnation in joining the United States “has no textual, structural, or historical support.” Two of the dissenting justices also argued the 11th Amendment unequivocally precludes a private entity from exercising eminent domain as to state property.
To see the Court’s majority opinion and the two dissenting opinions https://www.supremecourt.gov/opinions/20pdf/19-1039_8n5a.pdf
Complimentary Webinar on July 20
Keith Bradley, Director, Ecological Services, GES, and I will present a complimentary webinar Clean Water Act Section 404: Today and Tomorrow on Tuesday July 20, 2021, noon-1 PM Central Time. To register, https://register.gotowebinar.com/register/6968921716297226511