PennEast Pipeline Co. v. New Jersey

In a 5-4 decision on June 29, 2021, the U.S. Supreme Court ruled in favor of PennEast Pipeline Co., allowing it to proceed with the condemnation of state-owned lands in New Jersey for a natural gas pipeline. New Jersey had refused to negotiate and asserted state sovereign immunity under the Eleventh Amendment to block the takings. The Court, led by Chief Justice John Roberts, held that the Natural Gas Act of 1938 clearly authorizes private companies holding FERC certificates to exercise the federal government’s eminent domain power, including against states, and that the Eleventh Amendment did not bar such suits. The ruling overturned the Third Circuit’s decision and removed a significant legal hurdle for the pipeline project.

The Supreme Court reversed the Third Circuit in a 5-4 ruling, holding that the Eleventh Amendment does not bar condemnation actions brought by private parties against a state when exercising delegated federal eminent domain authority under the Natural Gas Act.

The central dispute focused on whether the Natural Gas Act authorized FERC certificate holders to condemn state-owned land to construct pipelines, and whether the Eleventh Amendment's grant of state sovereign immunity prohibited private companies from suing a state to exercise that delegated federal eminent domain power.

The decision significantly bolstered the ability of energy companies to advance interstate pipeline projects over state objections, reinforcing federal supremacy in energy infrastructure development. It was celebrated by the natural gas industry for streamlining project approvals but drew sharp criticism from environmental groups and state’s rights advocates, who viewed it as an erosion of state sovereignty and a setback for environmental conservation efforts.