PennEast Pipeline Co., LLC v. New Jersey

Supreme Court of the United States · 2021 · Property

PropertyEminent DomainSovereign ImmunityNatural Gas Acteminent domainfederal eminent domainstate-owned propertysovereign immunity

Facts

The Natural Gas Act requires a natural gas company seeking to build an interstate pipeline to obtain from FERC a certificate of public convenience and necessity. After receiving such a certificate for a pipeline running from Pennsylvania to New Jersey, PennEast filed condemnation actions under 15 U.S.C. §717f(h) to obtain rights-of-way, including over parcels in which New Jersey asserted possessory and nonpossessory interests such as conservation easements. New Jersey moved to dismiss on sovereign immunity grounds. The dispute centered on whether the Federal Government may constitutionally authorize a private certificate holder to condemn property in which a State has an interest.

Issue

Whether the Natural Gas Act authorizes FERC certificate holders to condemn necessary rights-of-way in which a State claims an interest, and whether such condemnation suits are barred by state sovereign immunity. Also, whether the Third Circuit had jurisdiction to decide that statutory question notwithstanding the Natural Gas Act's exclusive-review provision for FERC orders.

Rule

The Federal Government may delegate its eminent domain power to private parties, and the States consented in the plan of the Convention to the exercise of the federal eminent domain power, including condemnation proceedings against state-owned property brought by authorized private delegatees. Accordingly, 15 U.S.C. §717f(h) authorizes FERC certificate holders to condemn all necessary rights-of-way, including property in which a State holds an interest, without any special unmistakably clear statement directed to sovereign immunity.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Prairie Line Gas, a fictional pipeline company, obtained a federal certificate of public convenience and necessity to construct an interstate natural gas pipeline from Tulsa, Oklahoma, to Wichita, Kansas. After failing to buy a needed corridor by agreement, Prairie Line filed a condemnation action under 15 U.S.C. §717f(h) against a parcel in Topeka in which Kansas holds fee title.

Kansas moves to dismiss on sovereign immunity grounds, arguing that only the United States itself may condemn state-owned land. How should the court rule?

Explanation. The majority held that the Federal Government may delegate its eminent domain power to private parties and that States consented in the plan of the Convention to the exercise of that federal eminent domain power, including condemnation proceedings against state-owned property brought by authorized private delegatees. So a §717f(h) action by a certificate holder is not barred merely because the defendant State owns the property. (Derived from PennEast Pipeline Co., LLC v. New Jersey (2021).)