Penneast Pipeline Co. v. Newjersey

• Decision Date: 29 June 2021
• Docket Number: No. 19-1039,19-1039
• Citation: 141 S.Ct. 2244,210 L.Ed.2d 624
• Parties: PENNEAST PIPELINE COMPANY, LLC, Petitioner v. NEW JERSEY, et al.
• Court: U.S. Supreme Court

141 S.Ct. 2244

210 L.Ed.2d 624

PENNEAST PIPELINE COMPANY, LLC, Petitioner

v.NEW JERSEY, et al.

No. 19-1039

Supreme Court of the United States.

Argued April 28, 2021

Decided June 29, 2021

Paul D. Clement, Counsel of Record, Erin E. Murphy, Kasdin M. Mitchell, Michael D. Lieberman, Mariel A. Brookins, Kirkland & Ellis LLP, Washington, DC, for Petitioner.

Mark Collier, Erin M. Hodge, Kathrine M. Hunt, Kristina L. Miles, Daniel Resler, Jamie M. Zug, Deputy Attorneys General, Gurbir S. Grewal, Attorney General of New Jersey, Jeremy M. Feigenbaum, Counsel for Record, State Solicitor, Angela Cai, Deputy State Solicitor, Michael C. Walters, Assistant Attorney General, The Office of the Attorney, General of New Jersey, Trenton NJ, for Respondents.

Jennifer Danis, Edward Lloyd, Morningside Heights Legal Services, Inc., New York, NY, Matthew Littleton, Counsel of Record, David T. Goldberg, Donahue, Goldberg, Weaver & Littleton, Washington, DC, for Respondent New Jersey Conservation Foundation.

Chief Justice ROBERTS delivered the opinion of the Court.

Eminent domain is the power of the government to take property for public use without the consent of the owner. It can be exercised either by public officials or by private parties to whom the power has been delegated. And it can be exercised either through the initiation of legal proceedings or simply by taking possession up front, with compensation to follow. Since the founding, the United States has used its eminent domain authority to build a variety of infrastructure projects. It has done so on its own and through private delegatees, and it has relied on legal proceedings and upfront takings. It has also used its power against both private property and property owned by the States.

This case involves one of the ways the federal eminent domain power can be exercised: through legal proceedings initiated by private delegatees against state-owned property. Specifically, we are asked to decide whether the Federal Government can constitutionally confer on pipeline companies the authority to condemn necessary rights-of-way in which a State has an interest. We hold that it can. 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.

I

A

Natural gas has been a part of the Nation's energy supply since at least the 1820s, when an "enterprising gunsmith" named William Aaron Hart developed a natural gas well near Fredonia, New York. D. Waples, The Natural Gas Industry in Appalachia 12 (2d ed. 2012). Initially, difficulties in transporting natural gas limited its distribution, as the available pipeline technology did not allow producers to reach the sprawling American markets. See Tarr, Transforming an Energy System, in The Governance of Large Technical Systems 26 (O. Coutard ed. 1999). Over the following century, however, that technology slowly improved. In 1891, one of the first interstate pipelines—albeit a rudimentary and inefficient one—was built to carry natural gas from central Indiana to Chicago. And in the 1920s, development began in earnest on the country's pipeline infrastructure. See id., at 27–28; J. Speight, Natural Gas 20–21, 26 (2007).

In 1938 Congress passed the Natural Gas Act, ch. 556, 52 Stat. 821, to regulate the transportation and sale of natural gas in interstate commerce. Congress vested the Federal Power Commission (now the Federal Energy Regulatory Commission) with the authority to administer the NGA, including by approving the construction and extension of interstate pipelines. The NGA provides that in order to build an interstate pipeline, a natural gas company must obtain from FERC a certificate reflecting that such construction "is or will be required by the present or future public convenience and necessity." 15 U.S.C. § 717f(e). The NGA also provides that, before issuing a certificate of public convenience and necessity, FERC "shall set the matter for hearing and shall give such reasonable notice of the hearing thereon to all interested persons." § 717f(c)(1)(B).

As originally enacted, the NGA did not identify a mechanism for certificate holders to secure property rights necessary to build pipelines. Natural gas companies were instead left to rely on state eminent domain procedures, which were frequently made unavailable to them. In some States, the eminent domain power could be exercised only if the operation of a pipeline would benefit residents. See S. Rep. No. 429, 80th Cong., 1st Sess., 2 (1947) (collecting cases). In others, statutory and constitutional provisions denied state eminent domain power to corporations from other States. See id., at 2–3. The result was that certificate holders often had only an illusory right to build.

Congress acted to remedy this defect. In 1947, it amended the NGA to authorize certificate holders to exercise the federal eminent domain power. See ch. 333, 61 Stat. 459. Under 15 U.S.C. § 717f(h) :

"When any holder of a certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for, the necessary right-of-way to construct, operate, and maintain a pipe line or pipe lines for the transportation of natural gas ..., it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located, or in the State courts."

By enabling FERC to vest natural gas companies with the federal eminent domain power, the 1947 amendment ensured that certificates of public convenience and necessity could be given effect.

B

Petitioner PennEast Pipeline Co. is a joint venture owned by several energy companies. In 2015, PennEast applied to FERC for a certificate of public convenience and necessity authorizing the construction of a 116-mile pipeline from Luzerne County, Pennsylvania, to Mercer County, New Jersey. FERC published notice of PennEast's application in the Federal Register, and subsequently received thousands of comments in writing and at public hearings. FERC then issued a draft environmental impact statement for the project, which yielded thousands of additional comments. PennEast made a number of route modifications in response to the concerns commenters had raised.

In January 2018, FERC granted PennEast a certificate of public convenience and necessity. FERC later denied rehearing of this decision, and several parties, including respondent New Jersey, petitioned for review in the D. C. Circuit. The D. C. Circuit has held those proceedings in abeyance pending resolution of this case.

Weeks after FERC granted its application, PennEast filed various complaints in Federal District Court in New Jersey. PennEast sought to exercise the federal eminent domain power under § 717f(h) to obtain rights-of-way along the pipeline route approved by FERC, and to establish just compensation for affected owners. PennEast also sought preliminary and permanent injunctive relief allowing it take immediate possession of each property in advance of any award of just compensation. As relevant here, PennEast sought to condemn two parcels in which New Jersey asserts a possessory interest, and 40 parcels in which the State claims nonpossessory interests, such as conservation easements. PennEast also sought to condemn parcels in which respondent New Jersey Conservation Foundation holds an interest.

New Jersey moved to dismiss PennEast's complaints on sovereign immunity grounds. The District Court denied the motion, holding that New Jersey was not immune from PennEast's exercise of the Federal Government's eminent domain power. In re PennEast Pipeline Co. , 2018 WL 6584893, *12 (D. N.J., Dec. 14, 2018). Having denied New Jersey's motion to dismiss on immunity grounds, the District Court granted PennEast's requests for a condemnation order and preliminary injunctive relief. Id., at *21, *26.

The Third Circuit vacated the District Court's order insofar as it awarded PennEast relief with respect to New Jersey's property interests, and it remanded for dismissal of any claims against the State. In re PennEast Pipeline Co. , 938 F.3d 96, 113 (2019). Although the court acknowledged that the Federal Government can condemn state-owned property, it reasoned that this power is in fact the product of two separate powers: the Federal Government's eminent domain power, on the one hand, and its ability to sue nonconsenting States, on the other. Id., at 104. While the Federal Government can delegate its eminent domain power to private parties, the court found "reason to doubt" that it can do the same with respect to its exemption from state sovereign immunity. Id., at 100. After expressing skepticism as to whether the Federal Government could ever delegate this exemption, see id., at 105–111, the court determined that it did not need to "definitively resolve that question," because "nothing in the NGA indicates that Congress intended to do so," id., at 111. In reaching this determination, the Third Circuit relied on this Court's precedents holding that Congress cannot abrogate state sovereign immunity in the absence of an " ‘unmistakably clear’ " statement. Ibid. (quoting Blatchford v. Native Village of Noatak , 501 U.S. 775, 786, 111 S.Ct. 2578, 115 L.Ed.2d 686 (1991) ). Concluding that § 717f(h) did not clearly delegate to certificate holders the Federal Government's ability to sue nonconsenting States, the court held that PennEast was not authorized to condemn New Jersey's property. 938 F.3d at 111–113.

We granted certiorari to determine whether the NGA authorizes certificate holders to condemn land in which a State claims an...