Supreme Court determines pipeline company is entitled to seize state-owned property

After receiving federal approval for a pipeline from Pennsylvania to New Jersey, one natural gas company subsequently faced a roadblock when New Jersey refused to relinquish state-owned property in the pipeline’s proposed path.

The company has since filed a lawsuit that advanced all the way to the Supreme Court, which ruled in an ideologically mixed 5-4 decision that it was entitled by the federal government’s right of eminent domain to seize property, including that owned by the state.

Details of the case

Chief Justice John Roberts wrote the majority opinion and was joined by Justices Samuel Alito, Stephen Breyer, Brett Kavanaugh, and Sonia Sotomayor. Justice Amy Coney Barrett authored the primary dissent on behalf of the other four justices.

PennEast planned to create a pipeline running from northeast Pennsylvania to western New Jersey and received approval from the Federal Energy Regulatory Commission in 2015 with a certificate allowing construction to begin.

New Jersey, however, refused to cede certain parcels of state-owned land that the company needed to complete the project.

The ensuing court battle included PennEast’s argument that its federal certificate granted the power of eminent domain while the state maintained that the 11th Amendment of the U.S. Constitution provided it with immunity from claims made by a private company based in another state.

Although the 3rd Circuit Court of Appeals sided with New Jersey, the Supreme Court has now reversed that ruling.

“They surrendered their immunity”

According to the majority opinion, the FERC certificate confers the federal government’s eminent domain rights onto a delegatee — in this case, PennEast — and gives it the right to use the courts to take the necessary right-of-way parcels for the approved project.

Roberts cited multiple precedent opinions from the court showing that the federal government had the right to take property, including state-owned land, and that the right could be delegated to a private party acting on behalf of “present or future public convenience and necessity.”

His ruling acknowledged that states generally enjoy broad immunity from lawsuits, determining that such immunity is subservient to the federal government and the U.S. Constitution’s Fifth Amendment.

“Although nonconsenting States are generally immune from suit, they surrendered their immunity from the exercise of the federal eminent domain power when they ratified the Constitution,” Roberts wrote.

According to the Washington Examiner, this case had been deemed an important precedent by the oil and gas industry, with a potential ruling in favor of New Jersey essentially representing veto power by all the states in response to future pipeline or other interstate infrastructure projects.

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