A number of people have asked me what I think of PennEast Pipeline Co. versus New Jersey, a major major domain case that was examined by the Supreme Court earlier this week. Usually when a problem with a significant domain reaches the Supreme Court, I finish doing analysis and often hand in an amicus letter. Since current case law greatly undervalues constitutional property rights in many ways, in the vast majority of cases I support the owner against the government.
PennEast is different because it only superficially deals with property rights. The real focus is on the extent of the state’s sovereign immunity from lawsuits by private parties in federal courts. The positions of both sides are based on highly problematic foundations. So much so that my reaction to Henry Kissinger’s case on the Iran-Iraq war is similar: “It’s a shame you can’t both lose.”
The case arose because the federal government used its powers under the Natural Gas Act to give PennEast Pipeline Company the authority to use a significant domain to condemn property it needs to build a pipeline through Pennsylvania and New Jersey. Part of the land PennEast wants to condemn is owned by the state of New Jersey (which opposes the construction of the pipeline).
When PennEast went to court to initiate conviction against the state, New Jersey relied on its sovereign immunity from lawsuits by private parties in federal courts. PennEast responded by arguing that sovereign immunity under the Eleventh Amendment does not apply to actions brought by the federal government and that PennEast should have the same powers as the government in this case, since it is exercising a power delegated by Congress (the power of a significant domain) ).
While I am not categorically opposed to all uses of major domains to build private pipelines, I think that power must be subject to much more severe restrictions than it is today. Too often state and federal courts allow such convictions in situations where they are not intended for real “public purposes” (as required by the Fifth Amendment Takings Clause and state constitutional equivalents) or are not really necessary to building the project in question . In some cases, convictions are carried out even when it is not clear whether the pipeline in question is actually being built. In addition, federal and state governments routinely undercompensate landowners in major domain cases, often even denying them the “fair market value” compensation required by the Supreme Court precedent (which in itself is often inadequate because it does not take into account the “subjective” Value (“many landlords value their land above and beyond the market price). These problems can be especially severe when conviction is at the discretion of a private party like PennEast. This can make it even more difficult to ensure and ensure real public use the land is really necessary to build it, and many of these subjects I will elaborate on in various earlier writings on important areas such as my book, The Grasping Hand.
But if the PennEast side of the case is problematic, the same can be said for New Jersey’s side. The state’s position does not focus on constitutional deficiencies in the use of outstanding areas, but on sovereign immunity under the Eleventh Amendment. In a series of dubious rulings, the Supreme Court ruled that the eleventh amendment grants state governments immunity from lawsuits from private parties, with a few key exceptions, such as lawsuits made after the fourteenth amendment, which were approved by Congress.
In reality, the text of the eleventh amendment does not give states such blanket immunity from lawsuits. It just says that “the judicial power of the United States shall not be construed as extending to any claim relating to law or justice brought against any of the United by citizens of any other state or by citizens or subjects of a foreign state States initiated or prosecuted “(emphasis added). This should in no way exclude actions against a state by its own citizens. In this case, at least two of the five companies that make up the PennEast consortium are based in New Jersey. So the eleventh amendment shouldn’t prevent them from suing New Jersey. But the Supreme Court precedent holds otherwise in its clear lack of wisdom.
The principle on which New Jersey bases its position here also blocks a wide variety of other lawsuits against states, including many alleging grave violations of constitutional and legal rights. As one of my law professors once said, sovereign immunity is a form of “legalized barbarism” because it rests on the idea that legal authority ultimately comes from the king (or some other ruler) who can therefore “do no” wrongly “by law. This position is in radical contradiction to the more enlightened political theory underlying the US Constitution that ultimate authority comes from the people and their natural rights. The government is therefore subordinate to them and able to both “doing wrong” and being held accountable in court – a principle established by the Supreme Court in its earliest major decision: Chisholm v Georgia (1793).
The eleventh amendment was made in response to Chisholm. Significantly, however, the text only restricts complaints from citizens of other states and other countries. In addition, the basic assumptions of the constitution are not repealed. While space constraints make it impossible to go into detail, I am not convinced by arguments that suggest that sovereign immunity was already embedded in the Constitution before the eleventh amendment, although there is conspicuously no reference to it. As Justice James Wilson (who was also a senior constitution writer) put it in his opinion in Chisholm:
In a sense, the term “sovereign” has to refer to its correlative “subject”. In this sense, the term cannot be applied as it has no subject in the United States Constitution. According to this constitution, there are citizens but no subjects. “Citizens of the United States.” “Citizen of another state.” “Citizens of Different States.” “A state or a citizen of it.” The term subject actually occurs once in the instrument; but in order to highlight the contrast strongly, the epithet “foreign” is placed in front. With that in mind, I’m assuming that the state of Georgia is not entitled to any of its own citizens. In this sense it can certainly not lay claim to the citizens of another state. “
As Wilson explains, monarchs and other similar rulers might have a right to sovereign immunity from their “subjects”. But not such a republican government against its citizens.
Overall, PennEast has broad federal authority to delegate the authority of a significant domain to private companies against state sovereign immunity under the Eleventh Amendment. The lower court’s judgment in this case was on the latter’s side. But the truth is, both are terrible, both are against the Constitution, understood correctly, and both deserve to be lost.
Unfortunately that is unlikely. In theory, I can envision a ruling where the Supreme Court of New Jersey denies sovereign immunity defense, but also states that the National Gas Act goes beyond the constitutional scope of federal federal power. However, this is highly unlikely, especially since the latter question is not really before the Court of Justice.
There is a small exception to the general principle that the positions of both sides in this case are dire. As the Institute of Justice outlines in its Amicus Brief, the Supreme Court should reject the federal government’s argument (beyond that of PennEast) that the federal courts are not empowered to view “applied” challenges to the exploitation of significant domains Natural Gas Act. To their credit, both PennEast and New Jersey actually agree that the courts have jurisdiction over such cases, as does the Third Circuit. Hopefully the Supreme Court will do the same. Aside from this point, in this case I wish a smallpox on the houses of both sides.
UPDATE: It’s worth noting that the Conservative, Libertarian, and Progressive editorial teams in the recent National Constitutional Center-sponsored draft constitutional project all agreed that sovereign immunity (and the eleventh amendment) should be completely abolished.