The NCSL Blog

03

By Lisa Soronen

In PennEast Pipeline Co. v. New Jersey, the U.S. Supreme Court will decide whether a private natural gas company may use the federal government’s eminent-domain power to condemn state land.

A sign June 29, 2016, on Hewitt Road in Hunterdon County show opposition to the proposed PennEast Pipeline.TT TT Michael MancusoThe Natural Gas Act (NGA) authorizes private companies like PennEast to obtain necessary rights of way through eminent domain to build pipelines. PennEast asked a federal district court to condemn 42 properties which belong to New Jersey to build a pipeline.

New Jersey claims that 11th Amendment's sovereign immunity prevents a private company from hauling it into court. The 11th Amendment prohibits states from being sued in federal court unless they have consented to suit.

An exemption applies to the federal government. New Jersey argues that “the federal government cannot delegate its exemption from state sovereign immunity to private parties like PennEast.” The 3rd Circuit agreed.

The 3rd Circuit offered three reasons why it “doubt[ed]” the federal government can delegate its exemption.

  • First, the court reasoned case law doesn’t support the “delegation” theory of sovereign immunity.
  • Second, “fundamental differences” between lawsuits brought by “accountable federal agents” versus private parties weigh against allowing the federal government to delegate to private parties its ability to sue states.
  •  “Finally, endorsing the delegation theory would undermine the careful limits established by the Supreme Court on the abrogation of State sovereign immunity.”

In its petition asking the Supreme Court to hear this case, PennEast repeatedly cites to the 3rd Circuit “recogniz[ing] that our holding may disrupt how the natural gas industry, which has used the NGA to construct interstate pipelines over state-owned land for the past 80 years, operates.”  

According to the 3rd Circuit, there is a “workaround.” “Accountable federal official[s]” may “file the necessary condemnation actions and then transfer the property to the natural gas company.” PennEast pushed back at this suggestion claiming the NGA doesn’t allow the federal government to condemn property.

To this 3rd Circuit responded: “But one has to have a power to be able to delegate it, so it seems odd to say that the federal government lacks the power to condemn state property for the construction and operation of interstate gas pipelines under the NGA.”

At the request of the court, the United States government filed an amicus brief at the petition stage. It encouraged the court to hear the case and reverse the 3rd Circuit.

The U.S. brief argues that the “text, structure, and history of the NGA make clear” natural gas companies may “acquire state-owned property necessary for constructing” approved interstate pipelines.”

Lisa Soronen is executive director of the State and Local Legal Center and a regular contributor to the NCSL Blog on judicial issues.

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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.