PennEast Pipeline Company, LLC v. State of New Jersey, et al.

DOES THE NGA AUTHORIZE THE LAWSUIT?

PennEast Pipeline Co. (PennEast) argues that 15 U.S.C. § 717f(h) ( “NGA”) expressly authorizes a FERC certificate holder to construct an interstate pipeline by acquiring the property it cannot contract or negotiate for “by the exercise of the right of eminent domain in the district court of the United States,” regardless of who owns the property. Brief for Petitioner, PennEast Pipeline Co. at 25. PennEast contrasts this expansive grant of authority with the more narrow eminent-domain power delegated in other statutes, and congressional amendments to other statutes that exempt state-owned land from the delegation. Id. at 26–27. Further, quoting the Senate Report, PennEast contends that the entire purpose behind enacting § 717f(h) was to prevent states from blocking preferred routes for interstate pipelines by preventing the use of eminent domain by pipeline developers. Id. at 28. PennEast emphasizes that NGA provides many opportunities for states to participate in FERC’s certificate-granting process, and to challenge the certificate after it is granted. Id. at 29.

State of New Jersey et al. (“New Jersey”) responds that the NGA is silent about “filing actions against States over sovereign property,” which is “insufficient to justify nonconsensual private lawsuits against a sovereign in federal court.” Brief for Respondents, New Jersey et al. at 31. New Jersey cites to language from former Court cases that require Congress to use “unequivocal statutory language” before allowing a federal court to “entertain a suit against a nonconsenting state.” Id. at 32. The NGA, New Jersey argues, allows parties like PennEast to file condemnation actions for “necessary” real property, but does not mention suits brought against states for state lands. Id. New Jersey addresses PennEast’s contention that other statutes have been limited to prevent the exercise of eminent domain against states and their land by contending that Congress would be equally clear before authorizing the exercise of eminent domain over state-owned land. Id. at 36. Next, New Jersey argues that Congress’s purpose in enacting the NGA is too imprecise to resolve the issue before the Court. Id. at 39.

DOES THE EXERCISE OF EMINENT DOMAIN VIOLATE STATE SOVEREIGN IMMUNITY?

PennEast argues that it is unnecessary for Congress to explicitly abrogate sovereign immunity here because the states surrendered immunity for the federal government’s exercise of eminent domain when the Constitution was drafted. Brief for Petitioner at 31–32. Otherwise, PennEast contends that state interference with the federal government’s attempts to condemn land using its eminent-domain power would subordinate Congressional authority and violate the Supremacy Clause. Id. at 32. PennEast cites to the immovable-property exception as further evidence of this, under which the states have “no immunity from jurisdiction with respect to actions relating to immovable [i.e., real] property.” Id. Therefore, PennEast attests, New Jersey has no immunity from a suit over real property, where, as here, the supreme sovereign authorized the suit. Id. at 33. PennEast also insists that at the Founding, it was understood that the eminent-domain power could be delegated to private parties, especially when overseeing public improvements. Id. at 33–34. PennEast points to the Fifth Amendment as evidence that people were more concerned about ensuring adequate compensation for the owners of condemned property than totally precluding the seizure of property. Id. at 34. Regardless, PennEast argues that there is no threat to sovereign dignity or the state’s treasury here because only FERC certificate holders can bring suit, and the states will be adequately compensated for their land. Id. at 37–39.

Moreover, PennEast maintains the federal government is not delegating broad condemnation power to private parties. Id. at 38. PennEast states that when Congress, through an agency like FERC, permits specific land takings and thereafter delegates “the essentially ministerial duties” to a private party, which then obtains the land and compensates the prior landowner fairly, there is neither a delegation issue nor an Eleventh Amendment violation should the land belong the states. Id. at 40. Further, PennEast asserts that in rem suits do not drag nonconsenting states into court in contravention of the Eleventh Amendment because they are directed at the property, not the state. Id. at 41. Therefore, PennEast contends that in rem suits do not threaten state sovereignty as other kinds of exercises of jurisdiction do. Id. Despite the State’s clear interest in its own property, PennEast attests that any intrusion on the New Jersey’s sovereign interest took place in the proceedings regarding the grant of a certificate before FERC, rather than in the present suit. Id. at 42–43. PennEast avers that New Jersey is not being forced into court because the State could refuse to appear and still be entitled to fair market value for its property, and that this money is sufficient to make New Jersey whole for its loss. Id. at 42–43.

New Jersey argues that the Eleventh Amendment, which prevents federal courts from hearing suits against states brought by citizens of other states, bars the suit because PennEast is a private citizen of Delaware that is suing New Jersey in federal court. Brief for Respondents at 12. New Jersey contends it has immunity over land within its borders, and thus doctrines like the immovable-property doctrine do not apply here because the State’s land is not within the territory of a different sovereign. Id. at 31. New Jersey states that the Framers of the Eleventh Amendment understood that a central aspect of state sovereignty and dignity was the states’ immunity from being “dragged before a court.” Id. at 13. New Jersey claims that there is no basis for an exception to this immunity for condemnation actions by private parties in the legislative history of the amendment’s ratification. Id. at 14. New Jersey insists that private condemnation actions were unheard of for many years after the amendment’s ratification, so there is no evidence of the States’ consent to private suit at the Founding. Id. at 14–16. Further, New Jersey contends that at the time of the Founding, the condemnation of state land was controversial and it was believed that the federal government could not condemn state land; by contrast, it was understood that the federal government “could condemn land within territories and the District of Columbia.” Id. at 17.

While New Jersey acknowledges that states are not immune from suit by the federal government because they are dual sovereigns, New Jersey argues that this logic cannot be extended to suits by private parties like PennEast. Id. at 20. New Jersey explains that the federal government is unable to “select” private parties to bring claims against the States; therefore, PennEast cannot be “selected” to bring suit against New Jersey. Id. at 20–21. New Jersey further dismisses the idea that an in rem suit over the State’s property would not offend the State’s sovereignty, because “an adverse judgment in rem directly affects the property owner by divesting him of his rights in the property before the court.” Id. at 27. New Jersey argues that this proceeding is different than in rem admiralty or bankruptcy proceedings, where the courts have long recognized where states are not immune from such suits, because of the “[f]ounding-era material indicating state consent” that do not exist in the present case. Id. at 29–30. New Jersey also rejects the idea that the suit is “ministerial,” because, even though it is a condemnation suit, it is an adversarial proceeding that implicates New Jersey’s interests. Id. at 22–23.

WHETHER THE THIRD CIRCUIT PROPERLY EXERCISED JURISDICTION OVER THE SUIT

PennEast asserts that the Third Circuit Court of Appeals rightly exercised its jurisdiction over the case because of the bases on which New Jersey challenges PennEast’s claim. Brief for Petitioner at 44. PennEast acknowledges that the NGA vests exclusive jurisdiction in specific to “affirm, modify, or set aside” the certificates that FERC issues, and that if New Jersey was contesting the validity of the certificate, the lower court’s jurisdiction would be improper. Id. at 44–45. Instead, PennEast emphasizes that New Jersey only challenges PennEast’s assertion of the federal government’s eminent-domain power. Id. at 46. PennEast suggests that the district court had jurisdiction because the proceeding was in rem, and the court of appeals had jurisdiction because of the collateral-order doctrine and the interlocutory appeals provision of 28 U.S.C. § 1292(a). Id. at 47.

Likewise, New Jersey argues that the circuit court had jurisdiction over the present suit. Brief for Respondents at 40. New Jersey contends that the Constitution asks courts to decide whether Eleventh Amendment sovereign immunity applies to the suit when it is raised by the defendant, in this case, New Jersey, “to ensure its actions remain[] consistent with the ‘judicial authority in Article III.’” Id. Otherwise, New Jersey cautions that the claim would have to be asserted against an Article I tribunal under the relevant Act provision, which requires rehearing before FERC—no less an affront to the State’s dignity. Id. New Jersey agrees with PennEast that it is not challenging the FERC-issued certificate order, which would require rehearing before the agency, therefore, the lower court properly exercised its jurisdiction. Id. at 41–42.