Justia Opinion Summary and Annotations

Under the Natural Gas Act, to build an interstate pipeline, a natural gas company must obtain from the Federal Energy Regulatory Commission (FERC) a certificate of “public convenience and necessity,” 15 U.S.C. 717f(e). A 1947 amendment, section 717f(h), authorized certificate holders to exercise the federal eminent domain power. FERC granted PennEast a certificate of public convenience and necessity for a 116-mile pipeline from Pennsylvania to New Jersey. Challenges to that authorization remain pending. PennEast sought to exercise the federal eminent domain power to obtain rights-of-way along the pipeline route, including land in which New Jersey asserts a property interest. New Jersey asserted sovereign immunity. The Third Circuit concluded that PennEast was not authorized to condemn New Jersey’s property.

The Supreme Court reversed, first holding that New Jersey’s appeal is not a collateral attack on the FERC order. Section 717f(h) authorizes FERC certificate holders to condemn all necessary rights-of-way, whether owned by private parties or states, and is consistent with established federal government practice for the construction of infrastructure, whether by government or through a private company.

States may be sued only in limited circumstances: where the state expressly consents; where Congress clearly abrogates the state’s immunity under the Fourteenth Amendment; or if it has implicitly agreed to suit in “the structure of the original Constitution.” The states implicitly consented to private condemnation suits when they ratified the Constitution, including the eminent domain power, which is inextricably intertwined with condemnation authority. Separating the two would diminish the federal eminent domain power, which the states may not do.

Annotation

Primary Holding

The holder of a FERC certificate of public convenience and necessity to build a natural gas pipeline may exercise the federal eminent domain power to obtain necessary rights-of-way.