WASHINGTON (CN) — The U.S. Supreme Court agreed Wednesday to decide whether conflicting state interests would block a private gas companies from exercising eminent domain to build an interstate pipeline.
PennEast Pipeline Co. petitioned the justices to step in here after losing their dispute with New Jersey at the Third Circuit — a decision that it called a case of the court “get[ting] an exceptionally important question exceptionally wrong.”
PennEast applied for a certificate to build a 116-mile natural gas pipeline from Pennsylvania to New Jersey in 2015.
As noted by Kirkland Ellis attorney Paul Clement in PennEast’s petition, the gas line has the capacity to send 1 billion cubic feet per day between the states. Ellis also noted that the Federal Energy Regulatory Commission shared its Environmental Impact Statement on the project’s land use and solicited public comments on the construction.
Once it got certificate to build from the commission, PennEast then negotiated with most property owners within the construction path to obtain necessary rights of way.
The lone holdout was New Jersey. “Eventually, PennEast was force to bring a series of condemnation actions as to those properties in federal court,” Clement wrote. “This case involves 42 of the 49 properties in federal court.”
New Jersey argued that PennEast is barred under the 11th Amendment from condemning property through eminent domain for construction if a state holds any type of interest in that property.
Though that argument failed in District Court, the Third Circuit reversed — a decision that court conceded “may disrupt how the natural gas industry” has operated for the past 80 years.
Per its custom, the Supreme Court did not issue any statement in granting the writ of certiorari Wednesday.
Clement wrote that, “simply put, state veto power and interstate pipelines are incompatible, as Congress recognized more than 70 years ago in arming pipeline certificate holders with the federal eminent domain power.”
“As FERC explained, the decision below is both profoundly wrong and profoundly consequential — a combination that cries out for this court’s review,” Clement added.
New Jersey Assistant Solicitor General Jeremy Feigenbaum notes in the state’s opposition brief there’s no circuit split for the high court to settle, and that PennEast has not pointed to any error in the Third Circuit’s ruling.
“Its first argument is that plaintiffs should not have to show both that the U.S. government delegated eminent domain power and that it delegated its exemption from Eleventh Amendment immunity,” Feigenbaum wrote. “But anytime a private party wishes to sue the state, it must show there is an underlying cause of action and a way to overcome sovereign immunity.” (Emphasis in original.)
The attorneys have not returned a request for comment.