PennEast Pipeline Co. v. New Jersey

Background

A pipeline company owned by private energy firms received a FERC certificate to build a 116-mile pipeline from Pennsylvania into New Jersey. The company sued in federal court under the Natural Gas Act to acquire rights‑of‑way when it could not reach private deals. New Jersey and a conservation group claimed the State could not be sued; the District Court allowed condemnation orders and preliminary possession, but the Third Circuit limited relief and said PennEast could not condemn state-owned interests.

Reasoning

The Court first rejected a jurisdictional argument that only the D.C. Circuit could resolve New Jersey’s defense. It then examined whether the Natural Gas Act’s section 717f(h) permits certificate holders to bring condemnation suits against States. Relying on long-standing practice and earlier decisions showing the federal government can take land within States and delegate that power, the Court concluded section 717f(h) delegates the federal eminent domain power to pipeline companies to acquire necessary rights‑of‑way, including land in which a State holds an interest. The Third Circuit’s contrary reading was reversed and the case remanded for further proceedings.

Real world impact

The ruling allows pipeline companies with FERC certificates to sue to secure state-owned and private rights‑of‑way when voluntary deals fail. The decision does not itself complete construction: later court proceedings will determine compensation and other defenses. The opinion clarifies that federal condemnation authority, as delegated under the Natural Gas Act, can reach state property and affects future interstate infrastructure projects.

Dissents or concurrances

Separate dissents argued differently: some Justices said state sovereign immunity or the Eleventh Amendment bars private suits by commercial entities against nonconsenting States and would have upheld the Third Circuit’s limit on condemnation of state land.