The US Supreme Court ruled in favor of a private delegatee, PennEast Pipeline Company, LLC, and against New Jersey for the State’s property when the Court delivered its opinion on June 29, 2021 in PennEast Pipeline Co., LLC v. New Jersey (2021). A private delegatee is a private party that has been granted the power to act with the authority of the government to perform certain services and functions; in this case, it is having the power to seize privately owned land through the power of eminent domain in order to construct a pipeline. The State of New Jersey challenged PennEast’s authority, arguing that only the United States Federal Government had authority to take its land based upon its ‘sovereign immunity.’ The US Supreme Court found that the federal authority to condemn state-owned land for a pipeline can be transferred to the privately-owned pipeline company itself and is authorized to condemn private or state-owned land.

Individual states, once they each ratified the United States Constitution, became subject to the Federal Government’s supreme sovereignty and its power of eminent domain, which New Jersey did not challenge. What New Jersey challenged was that this authority could or was transferred, or conferred upon, to the pipeline company. Some background information may be helpful to understand how this authority is transferred.

Congress passed the Natural Gas Act of 1938 (NGA) in order to regulate the sale and distribution of gas between states and outside of the country as it was in the public’s interest and required that a natural gas company must obtain a certificate of “public convenience and necessity.” 15 U.S.C. §717(a), §717f(e). This certificate actually comes from the Federal Energy Regulatory Commission (FERC) (formerly named the Federal Power Commission). However, neither the NGA nor did the FERC certificates gave the companies the ability to acquire land, another expression for the taking or condemnation of land. Congress rectified this in 1947 by explicitly granting the power to “exercise … the right of eminent domain in the district court of the United States” by private gas companies when constructing, operating and maintaining a natural gas pipeline. 15 U.S.C. §717f(h).

In this case, PennEast acquired the necessary FERC certificate for constructing a 116-mile natural gas pipeline from Pennsylvania to New Jersey. PennEast filed complaints in a Federal District Court in order to assert its ability to take the land and determine the amount of compensation, as it is the normal protocol for condemnors to initiate condemnation proceedings. New Jersey attempted to have it dismissed, but the court granted PennEast’s condemnation order and preliminary injunction, allowing it to take possession of the land. New Jersey appealed and the Third Circuit vacated the order “insofar as it condemns New Jersey’s property interests and grants preliminary injunctive relief with respect to those interests, and we …. remand for dismissal of claims against the State.” In re PennEast Pipeline Co. 938 F.3d 96 (2019). That court made the distinction between the power of eminent domain and the ability to bring suit against a state and relied upon the fact that the NGA does not specify individually owned private land and state-owned private land and that this absence means that Congress did not intend for the Federal Government to transfer its immunity to state sovereignty, which would deny PennEast the ability to bring suit against New Jersey. In its oral argument, New Jersey maintains that the Federal Government should be the one to bring suit in order to hold it accountable in the legal proceedings. It also relies on, as the Third Circuit pointed to, Dellmuth v. Muth, 491 U.S. 22 (1989) when it stresses that “Congress intended to abrogate sovereign immunity only if its intention is ‘unmistakably clear in the language of the statute.’ Lest [that] be thought to contain any ambiguity, we reaffirm today that in this area of the law, evidence of congressional intent must be both unequivocal and textual.” Id. at 230.

The Court pointed to many instances when the Federal Government gave private delegatees the power to acquire land for infrastructure, such as bridges and roads, and denied that the power of eminent domain, that is, the power to take private land for a public purpose, is separate from the ability to bring suit. Rather, the power to bring a condemnation lawsuit is inextricably tied to the power of eminent domain. The court said PennEast, a private delegatee, did not go against New Jersey’s sovereignty gleaned from the Eleventh Amendment of the U.S. Constitution, which states, “[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.”

Chief Justice Roberts delivered the opinion, with Breyer, Alito, Sotomayor, and Kavanaugh, JJ., joining. Gorsuch, J. dissented, joined by Thomas, J. Barrett, J., also dissented, joined by Thomas, Kagan, and Gorsuch, JJ.

Sources:

Transcript of Oral Argument, Apr. 28, 2021. PennEast Pipeline Co., LLC v. New Jersey (2021). Oyez. Accessed 6 Jul 2021.

United States Code. Legal Information Institute, Cornell Law School. Accessed 6 Jul 2021.

United States Constitution. Legal Information Institute, Cornell Law School. Accessed 6 Jul 2021.

United States, Supreme Court. PennEast Pipeline Co., LLC v. New Jersey, 594 U.S. ____ (2021). 29 Jun 2021. Supreme Court. Accessed 6 Jul 2021.

United States, Supreme Court. Dellmuth v. Muth, 491 U.S. 22 (1989). 15 Jun 1989. Justia Law, US Supreme Court. Accessed 6 Jul 2021.