PennEast Pipeline Co. v New Jersey was a United States Supreme Court case dealing with the sovereign immunity of states to delegated powers of eminent domain granted to private companies from federal agencies, in the specific case, acquiring property for the right-of-way to build a natural gas pipeline. The Court, in a 5–4 decision issued in June 2021, ruled that states, by nature of ratifying the Constitution, gave up their ability to exercise sovereign immunity from the federal government or from those parties whom they have delegated that authority.
Background.
The PennEast Pipeline was proposed by the PennEast Pipeline Co., a consortium of five regional energy companies, to move up 1 million cubic feet (28,000 m3) of natural gas from the Marcellus Shale formation in Pennsylvania to New Jersey over a distance of about 115 miles. As part of the approvals and permitting process, the consortium got approval from the Federal Energy Regulatory Commission (FERC) for their proposed pipeline route in 2018. FERC's approval included the ability for PennEast to use eminent domain to obtain parcels of property along the route under terms of the Natural Gas Act of 1938 and its 1947 amendment to 15 U.S.C. §717f(e). This approval was met with numerous criticisms by New Jersey and other respondents, and a separate suit challenging the FERC's order was raised at the United States Court of Appeals for the District of Columbia Circuit.
As the case challenging the FERC order proceeded, PennEast began legal action to use eminent domain power to acquire the land for the pipeline. About forty parcels of land were owned by the state of New Jersey and the New Jersey Conservation Foundation, and PennEast turned to court action to assert eminent domain. New Jersey requested these suits be dismissed on the basis of sovereign immunity, that the state should be immune from such a lawsuit by a private company. The United States District Court for the District of New Jersey denied the motion and allowed PennEast's suits to proceed. New Jersey appealed to the Third Circuit Court of Appeals, which reversed the District Court's ruling. The Third Circuit ruled that on the basis of the Eleventh Amendment to the United States Constitution, states did enjoy sovereign immunity from private lawsuits, blocking the process of PennEast's suits.
