By Mark Latham
on May 2, 2021
at 12:59 p.m.
New Jersey District Attorney Jeremy Feigenbaum argues on behalf of New Jersey. (Art lien)
The Supreme Court heard arguments in PennEast Pipeline Co. v. New Jersey on Wednesday. The case raises two questions: (1) whether sovereign immunity prevents PennEast from commencing significant domain proceedings in federal court to convict properties New Jersey is interested in, and (2) whether the U.S. appeals court for 3rd Electric circuit was responsible for this procedure.
The dispute arose when PennEast received a certificate from the Federal Energy Regulatory Commission under the Natural Gas Act of the convenience and need for the public to build a 116-mile pipeline from northeast Pennsylvania to western New Jersey. To facilitate pipeline projects, the NGA has delegated significant federal domain powers to private parties who have been issued certificates of public convenience and necessity by FERC.
Shortly after receiving certification, PennEast opened a federal district court convicting the properties in which New Jersey was involved. New Jersey, which opposes the pipeline, claimed it was immune to the 11th Amendment lawsuits. The federal district court disagreed, and New Jersey appealed to the 3rd Circuit, which backed up. It noted that while Congress could delegate federal power of a significant domain to a private party, the lifting of the sovereign immunity granted to states by the 11th Amendment was a distinctly different matter. In order to lift the sovereign immunity of the state, the 3rd Circle decided that Congress had to expressly do so in the text of the law which the court in the NGA found defective.
The question of jurisdiction arose because the NGA establishes exclusive jurisdiction for judicial challenges to the issuance of certificates of appropriateness and necessity by FERC either in the U.S. Court of Appeals for the District of Columbia Circuit or in the circle in which the certificate holder is located.
At the beginning of his argument on behalf of PennEast, Paul Clement quickly pointed out that there is no doubt that the pre-eminent domain power of the federal government could be delegated, or that private parties, as he put it, could be “deputed”, to use the significant domain performance. Clement stated that after the states had delegated a significant domain authority, as in the NGA, they had to give up their immunity, since “only a sovereign can have ultimate authority over land if the federal government and the states assert conflicting claims” . Clement also argued that once the delegation had taken place, the private party was exercising a significant domain as a “federal limited-purpose actor” with regard to both the revenue clause of the fifth amendment and the eleventh amendment. In other words, after PennEast received the certificate from FERC, it stepped into the role of the federal government to fulfill both a significant domain and an obligation to pay fair compensation.
Clement also distinguished between legal proceedings against a state and those brought against property or controlled by the state. Here he argued that lawsuits against a state’s property interests were few of the risks to state sovereignty that led to the adoption of the 11th Amendment: “They claim no wrongdoing, they are not liable, and they cannot go without authorization of the federal government. The whole point of [an eminent domain] Procedure is only compensation for an intake. “
While the judges seemed largely convinced that Congress could delegate a significant federal domain authority, several judges expressed concern about the lack of federal involvement when convicting a state was launched in federal court. For example, Judge Elena Kagan asked, “Was there any government oversight? Was there any government involvement? Did United States lawyers approve the timing of the sentencing suit? In response, Clement noted that the process that led to the issuance of the certificate, including the route of the pipeline, “was conducted under the auspices of the federal government. You approved the route … up to which the packages were affected. “
On behalf of the United States, Assistant Attorney General Edwin Kneedler followed suit and dealt immediately with the question of jurisdiction. He agreed with PennEast and New Jersey that the 3rd Circuit would have jurisdiction to review New Jersey’s sovereign immunity defense in the conviction process. However, he denied New Jersey’s claim to sovereign immunity, claiming that “there is no such 11th change bar”. This was because, according to Kneedler, “the power of the federal government over an important domain is complete in itself” and “no state can dictate the manner in which it may be exercised”. Kneedler also claimed that “the right of the sovereign to an important domain includes the power to authorize private entities to exercise that right”.
Kneedler then responded to lurking questions about the lack of an explicit and clear statement in the NGA that Congress lifted state sovereign immunity when it delegated significant federal power to private parties. He told the judges that because “there is initially no immunity that can be waived,” the only “clear statement” is whether the law empowers a private party to initiate the major domain process, and think here we that it is clear that it does. “
As he had investigated with Clement, Judge Neil Gorsuch noted that this case involved a land seizure and compensation procedure, and therefore it “appears to be a lawsuit relating to law and justice”. As such, he asked, “Why is this not included in the plain text of the 11th Amendment to the Constitution?” Kneedler admitted that it was a lawsuit against a state, but then offered that the 11th amendment was still not an obstacle because it was “supposed to restore immunity taken away by the court and that immunity before the ban did not rule out this type from someone to whom Congress had given significant domain authority. “
Jeremy Feigenbaum, New Jersey’s attorney, began his reasoning by reiterating that the 11th Amendment excluded PennEast’s lawsuit. He noted that the United States could bring such a lawsuit, but that non-consensual lawsuits by private parties “are never appropriate” against the States. And he went on to claim that “the state’s consent to be sued by the United States is not the consent of those who the US might choose,” and that “there are important differences between claims by responsible and politically accountable sovereigns and claims by private parties gives”.
Several judges expressed concern about the impact of the New Jersey position on the construction of new natural gas pipelines. After Feigenbaum confirmed that New Jersey was indeed against the pipeline before the DC Circuit, Chief Justice John Roberts replied, “Well, that appears to be a major practical problem.” He expressed concern about a de facto state veto on new pipelines. “Your customer is against this pipeline. So if they say no to that, there is no moving forward, ”said Roberts. He then characterized New Jersey’s position as the federal government’s unacceptable position as “junior college sovereign”.
Judge Stephen Breyer was perhaps the most skeptical of New Jersey’s position. It went back to the development of the current system of natural gas pipelines that now run across the country. He noted that there were some states that “protested the pipelines in very different ways. And so Congress passed the Natural Gas Act. “He went on to remark that without the significant domain power conferred by the NGA,” How could they have done it? I do not see it. “And he later remarked,” I don’t see how a sane person could have delegated significant domain power to the Natural Gas Act, which was intended for interstate pipelines, without incorporating the power to crack down on the state. “
Feigenbaum responded by claiming that the premise of Breyer’s question “is based on the misunderstanding at the heart of PennEast’s mandate, and that these are speculations about the behavior of states.” Breyer replied quickly and sharply: “I know that natural gas is a big political argument in many countries. Some think it’s good for the environment, others think it doesn’t go far enough, it carries risks. Those are the two things I know No speculation. “
While the court was able to determine that the 3rd circuit was not competent, the judges seemed more interested in the interaction of the NGA and the 11th amendment than in the question of jurisdiction. Therefore, it is likely that the court will make a decision on the matter.
The practical concerns raised by several judges in response to New Jersey’s claim to sovereign immunity could bode well for PennEast, as it has also argued in its brief and before the court that states if the 3rd Circuit decision is valid, interstate natural gas pipelines that would have been approved by the federal government will have a right of veto. However, Gorsuch and Justice Amy Coney Barrett seemed most concerned about a private party bringing a state to federal court, and it remains to be seen who will ultimately prevail.