Supreme Court Approves Eminent Domain Use

TUESDAY, JULY 13, 2021

In a ruling last month, the U.S. Supreme Court announced in a 5-4 decision that the state of New Jersey could not block construction of the PennEast natural gas pipeline on state lands.

The controversial pipeline, which plans to run 116 miles long from Pennsylvania to New Jersey, is expected to cost $1 billion.

Debate History & Outcome

According to reports, the recent ruling has been opposed by New Jersey in court battles dating back to 2017, arguing that Federal Energy Regulatory Commission construction approval does not also confer federal eminent domain power to PennEast Pipeline Co.

FERC reportedly first approved the project in 2015. Since then, PennEast has been required to change the project’s route at least 33 different times.

However, due to the authority that had previously been granted to PennEast by the federal government, members of the Supreme Court ruled to uphold the authority, granting the company approval to seize necessary land through eminent domain.

Not without a fight, New Jersey argued the 11th Amendment—which grants states immunity from private lawsuits—means to prevent PennEast from condemning 42 parcels owned or held by the state of New Jersey as conservative easements needed for the project.

On the side of the state’s favor, Justice Amy Coney Barrett insisted that the 11th Amendment guarantees a state’s sovereign immunity and should have prevented PennEast from suing to seize the land.

“If private parties cannot sue nonconsenting States, the Court says, delegatees would have no practical means of taking state property,” Barrett wrote. “And that is inconsistent with the Constitution, the Court tells us, because ‘[a]n eminent domain power that is incapable of being exercised amounts to no eminent domain power at all.’ … The flaw in this logic is glaring: The eminent domain power belongs to the United States, not to PennEast, and the United States is free to take New Jersey’s property through a condemnation suit or some other mechanism.”

Chief Justice John Roberts (writing for the majority) found that through the Natural Gas Act, Congress allows such condemnation when the interest of building a nationwide system of pipelines, or other infrastructure, is involved.

The Act was passed in the 1930s and authorizes the federal government, through FERC, to deputize private companies building gas pipelines so they have eminent domain authority to seize land from unwilling property owners. It was disputed over whether Congress meant to allow private entities to sue states for eminent domain takings.

“When the Framers met in Philadelphia in the summer of 1787, they sought to create a cohesive national sovereign in response to the failings of the Articles of Confederation,” Roberts wrote. “Over the course of the Nation’s history, the Federal Government and its delegates have exercised the eminent domain power to give effect to that vision, connecting our country through turnpikes, bridges, and railroads—and more recently pipelines, telecommunications infrastructure, and electric transmission facilities. And we have repeatedly upheld these exercises of the federal eminent domain power—whether by the Government or a private corporation, whether through an upfront taking or a direct condemnation proceeding, and whether against private property or state-owned land.”

Roberts was joined by Justices Stephen Breyer, Samuel Alito, Sonia Sotomayor and Brett Kavanaugh, which represented both conservative and liberal justices.

The ruling was noted to have reversed a 2019 decision by the Third Circuit of Appeals that approved New Jersey the ability to block construction on state-controlled conservation land. The Department of Justice under both former President Trump and current President Biden sided with PennEast.

On the ruling, PennEast Pipeline board chair Anthony Cox stated that several decades of legal precedent were upheld.

“This decision is about more than just the PennEast Pipeline Project,” said Cox in a statement. “It protects consumers who rely on infrastructure projects—found to be in the public benefit after thorough scientific and environmental reviews—from being denied access to much-needed energy by narrow State political interests. PennEast understood that New Jersey brought this case for political purposes, but energy crises in recent years in California, Texas, and New England, have clearly demonstrated why interstate natural gas infrastructure is so vital for our way of life, public safety and enabling clean energy goals.”

The decision was also praised by Amy Andryszak, President and Chief Executive Officer of the The Interstate Natural Gas Association of America. “Our nation’s interstate natural gas pipelines make up a vast and critical transportation network, moving approximately one-third of the energy consumed in the United States,” she said. “In order to continue to harness the benefits of natural gas to achieve our energy and climate goals, we need a predictable regulatory framework that allows improvements and additions to our country’s interstate natural gas transmission infrastructure.”

Moving forward, the pipeline still faces other ongoing legal challenges, however. According to New Jersey Attorney General Gurbir Grewal, the latest ruling runs in opposition of the nation’s climate goals and would be both unnecessary and destructive to Pennsylvania and New Jersey.

“States like New Jersey should be able to retain their right to do what they wish with the lands they own, and no private actor – including pipeline companies – should be able to usurp that right,” added Energy and Commerce Committee Chairman Rep. Frank Pallone, Jr. (D-New Jersey). “I am determined to work with my colleagues to do everything in our power to preserve this important State right.”

The pipeline is currently awaiting Clean Water Act permits from Pennsylvania and New Jersey, as well as approvals from the Delaware River Basin Commission and the U.S Army Corps of Engineers. While Pennsylvania has begun taking steps to grant said permits, New Jersey has already denied them.

“This project cannot move forward without a New Jersey authorization finding that it could be built consistent with Clean Water Act laws – which are designed to protect waters and wetlands against destructive projects like PennEast,” said Jennifer Danis, senior fellow at the Columbia University Sabin Center for Climate Change Law and of counsel to Morningside Heights Legal Services. “While it's outrageous that the court sidestepped decades of sovereign immunity jurisprudence, the Murphy administration went to the mat trying to guard its public and stewarded conservation lands.”

If completed, the pipeline would ship Marcellus Shale gas from Luzerne County in Northeast Pennsylvania across the Delaware River to Mercer County, New Jersey. The pipeline is expected to cross dozens of waterways, wetlands and the main stem of the Delaware River.

FERC Review News

Earlier this year, in March, FERC was reported to have completed its first-ever climate change review. The infrastructure project in question involves the replacement of 87 miles of Northern Natural Gas Co.-owned natural gas pipeline that was built in the 1940s and 1950s, stretching through South Dakota and Nebraska.

The replacement project was approved to proceed on March 22 in a 3-2 decision. Neil Chatterjee joined current FERC Chairman Richard Glick and Allison Clements, both Democrats, while Republican commissioners James Danly and Mark Christie, dissented.

According to reports, the Northern Natural Gas Co. made the request to replace the pipeline after inspections revealed that the infrastructure had mechanical joints and acetylene welds that were more susceptible to leaks and hydrostatic pressure test failures.

Once replaced, the old pipeline is slated to be sold to a salvage company and removed.

The climate change review arrives after the inauguration of President Joe Biden, where Glick was appointed to Chairman of FERC, and have since made significant changes in policy. On Feb. 18, FERC issued a Notice of Inquiry seeking new information and additional stakeholder perspectives to help it decide whether to revise its approach for assessing the significance of GHG emissions.

Moving forward, Glick reports that the Commission will continue to consider all appropriate evidence regarding the significance of a project’s reasonably foreseeable greenhouse gas emissions and their contribution to climate change. The Commission is also committed to treating GHG emissions' contribution to climate change the same as all other environmental impacts.

However, despite the NOI, FERC claims that future changes would not affect its decision regarding the Northern Natural Gas pipeline.

To reach a decision, the FERC compared the $173.8 million project’s foreseeable GHG emissions to total GHG emissions of the US, revealing that the project could potentially increase CO2 emissions based on 2018 levels by 0.0003%, in subsequent years, the operations only would be 0.000006%.

Although the project was approved, Danly dissented in part, saying the commission violated the law “by reversing its longstanding determination that it is unable to assess the significance of a project’s GHG emissions or those emissions’ contribution to climate change without sufficient reasoning.”

Adding that, “regulatory malfeasance at its most arbitrary and capricious,” and the change in policy direction announced is in “an obscure docket that is likely not to be appealed.” Danly also went on to say in his dissent that the new order would be likely to have profound consequences.


Tagged categories: Environmental Controls; Environmental Protection; Government; Government contracts; Infrastructure; NA; North America; Oil and Gas; Ongoing projects; Pipelines; Program/Project Management; Project Management

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