The Supreme Court on Tuesday ruled that private pipeline companies, with the help of the federal government and the Natural Gas Act, can overtake land for projects through eminent domain, even if states want pipelines to be blocked.
The 5-4 decision in PennEast Pipeline Company v. New Jersey was a welcomed victory for pipeline companies worried that individual states, which might not want pipelines snaking through their property, could nix pipeline projects.
“It is the right decision,” said Mark Burghardt, a partner at Dorsey & Whitney in its oil and gas industry group. “Allowing states to block the use of eminent domain for national infrastructure projects would give individual states veto power over any project they don’t agree with. What a slippery slope.”
The closeness of the vote highlighted an undercurrent of disagreement about federal and state power among the justices. Aaron Streett, chair of Baker Botts’ Supreme Court and appellate practice, said the case raised “novel questions of state sovereign immunity and whether the federal government may delegate its power of eminent domain to private entities.”
In the case before the court, New Jersey sought to defeat construction of a 116-mile natural gas pipeline across Pennsylvania and New Jersey. The U.S. Court of Appeals for the Third Circuit sided with New Jersey, ruling that delegating federal power to pipeline companies does not apply when a state has a claim against the project.
Chief Justice John Roberts Jr., writing for the majority, cited the long history of eminent domain being delegated to private entities, adding, “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.”
Anthony Cox, chair of the PennEast Board of Managers said in a statement Tuesday, “We are pleased that the Supreme Court kept intact more than seven decades of legal precedent for the families and businesses who benefit from more affordable, reliable energy.” He continued, “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.”
Chief Justice Roberts was joined in the majority by Justices Stephen Breyer, Samuel Alito Jr., Sonia Sotomayor and Brett Kavanaugh. Justices Neil Gorsuch, Clarence Thomas, Amy Coney Barrett and Elena Kagan dissented.
That mélange of conservative and liberal justices can be chalked up to the views several justices have about state power and the rarely-cited Eleventh Amendment.
In a stern dissent, Barrett said, “We have repeatedly held that the Commerce Clause does not permit Congress to strip the States of their sovereign immunity.” The majority asserted that eminent domain is a “special case,” she added, countering “This argument has no textual, structural, or historical support. Because there is no reason to treat private condemnation suits differently from any other cause of action created pursuant to the Commerce Clause, I respectfully dissent.”