Supreme Court Sides with PennEast in Dispute Over Pipeline’s Claim to State Land

Washington, D.C. — Today, the Supreme Court issued its decision in PennEast Pipeline Company v. New Jersey. The Court held, in a 5-4 opinion, that private parties such as PennEast “can initiate condemnation proceedings, including against state-owned property” as part of the authority granted under the Natural Gas Act.

“The Court’s decision today removes a hurdle for PennEast to construct its project,” said Bethany Davis Noll, Executive Director of the State Energy & Environmental Impact Center. “But New Jersey and other parties have separately challenged the public interest determination underlying PennEast’s authorization to construct the pipeline, raising issues about the environmental review of the project and the need for the project -- areas where both the Federal Energy Regulatory Commission and courts have shown a renewed interest.”

“We’re disappointed by today’s SCOTUS ruling on the PennEast pipeline, but our fight is far from over. I’m proud to continue standing up for our residents & championing environmental protection. I urge the feds to take another look at this harmful proposal,” said New Jersey Attorney General Gurbir Grewal in a tweet.

Background — In 2018, PennEast Pipeline Company (PennEast) obtained approval from the Federal Energy Regulatory Commission (FERC) to build a 116-mile interstate natural gas pipeline through Pennsylvania and New Jersey. PennEast sued the State of New Jersey to gain access to state-owned property along the pipeline route, attempting to exercise eminent domain authority under the Natural Gas Act. New Jersey Attorney General Gurbir Grewal sought the dismissal of the lawsuit, arguing that the state was immune from suit under the Eleventh Amendment to the U.S. Constitution. The U.S. Court of Appeals for the Third Circuit agreed with AG Grewal, finding that the Natural Gas Act’s grant of eminent domain authority to PennEast does not abrogate the state’s immunity from suit by private parties.

PennEast sought Supreme Court review of the Third Circuit decision, and the case was argued in April 2021. In New Jersey’s brief and argument, AG Grewal argued that private parties, such as PennEast, may not file an eminent domain action against a nonconsenting state in federal court because the Natural Gas Act does not authorize that type of action.

Oregon Attorney General Ellen Rosenblum led a coalition of nineteen states in filing an amicus brief in support of New Jersey. The multistate coalition highlighted how state sovereign immunity is an integral part of our federalist system. California, Connecticut, Delaware, Hawai’i, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Rhode Island, Vermont, Virginia, and Washington joined AG Rosenblum in filing the amicus brief.

Separately, New Jersey has challenged FERC’s approval of this pipeline in the D.C. Circuit (Docket No. 18-1144) in a case that has been in abeyance pending the Supreme Court’s decision in this case. Read more about the states’ natural gas pipeline advocacy here.

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About the State Energy & Environmental Impact Center:
The State Energy & Environmental Impact Center at NYU School of Law is a nonpartisan academic center at NYU School of Law. The Center is dedicated to working towards a healthy and safe environment, guided by inclusive and equitable principles. The Center studies and supports the work of state attorneys general (AGs) in defending, enforcing, and promoting strong laws and policies in the areas of climate, environmental justice, environmental protection, and clean energy.