Penneast Pipeline Company, LLC v. New Jersey

141 S. Ct. 2244 (2021)

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Nature of the Case

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Facts

In 1891, one of the first interstate pipelines was built to carry natural gas from central Indiana to Chicago. And in the 1920s, development began in earnest on the country’s pipeline infrastructure. In 1938 Congress passed the Natural Gas Act to regulate the transportation and sale of natural gas in interstate commerce. The Federal Energy Regulatory Commission is vested with the authority to administer the NGA, including by approving the construction and extension of interstate pipelines. A natural gas company must obtain from FERC a certificate reflecting that such construction “is or will be required by the present or future public convenience and necessity.” Before issuing a certificate of public convenience and necessity, FERC “shall set the matter for hearing and shall give such reasonable notice of the hearing thereon to all interested persons.” Originally, natural gas companies were left to rely on state eminent domain procedures, which were frequently made unavailable to them. In 1947, Congress amended the NGA to authorize certificate holders to exercise the federal eminent domain power. P is a joint venture owned by several energy companies. P applied to FERC for a certificate of public convenience and necessity authorizing the construction of a 116-mile pipeline from Luzerne County, Pennsylvania, to Mercer County, New Jersey. FERC published a notice and received thousands of comments in writing and at public hearings. FERC issued a draft environmental impact statement for the project, which yielded thousands of additional comments. P made a number of route modifications in response to the concerns commenters had raised. In January 2018, FERC granted P a certificate of public convenience and necessity. New Jersey (D) petitioned for review in the D. C. Circuit. After FERC granted its application, P filed various complaints in Federal District Court in New Jersey. P sought to exercise the federal eminent domain power under §717f(h) to obtain rights-of-way along the pipeline route approved by FERC and to establish just compensation for affected owners. P sought preliminary and permanent injunctive relief allowing it to take immediate possession of each property in advance of any award of just compensation. P sought to condemn two parcels in which D asserts a possessory interest and 40 parcels in which D claims nonpossessory interests, such as conservation easements. P also sought to condemn parcels in which the New Jersey Conservation Foundation (D) holds an interest. D moved to dismiss on sovereign immunity grounds. The District Court held that D was not immune from P’s exercise of the Federal Government’s eminent domain power. The Third Circuit reversed. The court acknowledged that the Federal Government can condemn state-owned property, it reasoned that this power is the product of two separate powers: the Federal Government’s eminent domain power, on the one hand, and its ability to sue nonconsenting States, on the other. While the Federal Government can delegate its eminent domain power to private parties, the court found “reason to doubt” that it can do the same with respect to its exemption from state sovereign immunity. It held that “nothing in the NGA indicates that Congress intended to do so.” P appealed.