In a decision that surprised many viewers, the Supreme Court of the United States has ruled that a private company may condemn state-owned land, and that the doctrine of sovereign immunity does not apply. This decision is considered surprising for a number of reasons, not the least of which is that it flew in the face of what many expected from traditional interpretations of federal law. As a result, the decision could substantially expand the power of certain companies to obtain land, even land owned by a state government.
What Was This Case?
In the case of PennEast Pipeline Co. v. New Jersey, PennEast, a natural gas company, was given approval by the Federal Energy Regulatory Commission (FERC) to begin the process of building a 116-mile pipeline from New Jersey to Pennsylvania. As part of that process, it began to seek land on which to build the pipeline, as permitted under § 717f(h) of the Natural Gas Act. Part of the land it sought belonged to the state of New Jersey, which sued to stop the seizure of its land.
What Were the Legal Issues Being Decided?
The first question was whether PennEast actually had the legal authority to seize state lands under the Natural Gas Act. If it did, there was then the secondary issue as to whether the doctrine of sovereign immunity, which protects state governments from most lawsuits, would also protect the state from having its land condemned.
What Was the Decision of the Court?
In a shocking 5-4 decision, the Supreme Court ruled that PennEast did, in fact, have the authority to seize New Jersey’s land to build the pipeline, and that New Jersey’s defense of sovereign immunity did not apply.
With respect to the first issue, the majority noted that the Supreme Court had long upheld the federal government’s right to seize land under the doctrine of eminent domain. Because PennEast was authorized to condemn land by FERC to build its pipeline, it was effectively acting as an agent of the federal government, and thus could benefit from the government’s power of eminent domain. In addition, the majority noted that the Supreme Court had previously been broadly willing to allow eminent domain cases, regardless of whether:
- It was exercised by the Government directly or by a private corporation to which the power had been delegated;
- It was through the upfront taking of property, or through a condemnation action; and/or
- It was against private property or State-owned land.
With respect to the sovereign immunity issue, the Court noted two major exceptions to the doctrine of sovereign immunity: a state can be sued in any case where either Congress had abrogated the State’s immunity under the Fourteenth Amendment of the US Constitution, or in any case where it implicitly agrees to be sued under the Constitution. The majority agreed both applied in this case, with the Natural Gas Act itself being cited as Congress abrogating New Jersey’s sovereign immunity.
How Will This Affect Other Cases?
For landowners, the risk of land being seized by eminent domain is ever present, and even state governments are not immune from that. It also shows that utilities like natural gas companies may have broad authority to seize land under federal law. Thus, property owners should always keep abreast of potential developments in their area, because they never know when their own property might be seized.
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