The United States Supreme Court has rendered an usual number of decisions dealing with eminent domain. On June 29, 2021, the Court decided PennEast Pipeline Co. v New Jersey, 594 U.S. __ (2021). The Court held that the Federal Government had properly delegated to private companies’ federal authority to condemn necessary rights-of-way in state owned property.
The Natural Gas Act regulates the transportation and sale of natural gas in interstate commerce. The Act requires natural gas companies to obtain from the Federal Energy Regulatory Commission (“FERC”) a certificate recognizing that an interstate pipeline “is or will be required by the present or future public convenience and necessity.” 15 U. S .C. Sec. 717f(e). The Natural Gas Act has authorized certificate holders to exercise federal eminent domain power to obtain property rights necessary to construct a pipeline. 15 U. S. C. Sec. 717f(h).
FERC granted PennEast a certificate of public convenience and necessity to construct a 116-mile pipeline from Pennsylvania to New Jersey. After receiving the certificate, PennEast filed eminent domain suits in the Federal District Court in New Jersey to secure rights-of-way in property owned by New Jersey. The District Court denied New Jersey’s motions to dismiss based on sovereign immunity and granted PennEast a condemnation order. The Third Circuit Court of Appeals reversed concluding that the law did not clearly delegate to certificate holders the Federal Government’s authority to sue nonconsenting States, and therefore did not abrogate sovereign immunity.
The Supreme Court reversed the Judgment and remanded for further proceeding by a 5 to 4 vote. On the merits, the Court concluded that established precedent authorized federal eminent domain over State-owned property and the exercise of that power through delegated private parties, as authorized by the law. The majority held that sovereign immunity does not bar condemnation actions by private party delegatees against nonconsenting states. Chief Justice John Roberts wrote, “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. That power carries with it the ability to condemn property in court. Because the Natural Gas Act delegates the federal eminent domain power to private parties, those parties can initiate condemnation proceedings, including against state-owned property.”