United States Supreme Court Opinion in PennEast Pipeline Co. v. New Jersey

[Page 1] (Slip Opinion) OCTOBER TERM, 2020 1 Syllabus being done in connection with this case, at the time the opinion is issued. NOTE: Where it is feasible, a syllabus (headnote) will be released, as is The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. SUPREME COURT OF THE UNITED STATES Syllabus PENNEAST PIPELINE CO., LLC v. NEW JERSEY ET AL. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 19–1039. Argued April 28, 2021—Decided June 29, 2021 Congress passed the Natural Gas Act in 1938 to regulate the transportation and sale of natural gas in interstate commerce. To build an interstate pipeline, a natural gas company must obtain from the Federal Energy Regulatory Commission a certificate reflecting that such construction “is or will be required by the present or future public convenience and necessity.” 15 U. S. C. § 717f(e). As originally enacted, the NGA did not provide a mechanism for certificate holders to secure property rights necessary to build pipelines, often leaving certificate holders with only an illusory right to build. Congress remedied this defect in 1947 by amending the NGA to authorize certificate holders to exercise the federal eminent domain power, thereby ensuring that certificates of public convenience and necessity could be given effect. See §717f(h). FERC granted petitioner PennEast Pipeline Co. a certificate of public convenience and necessity authorizing construction of a 116-mile pipeline from Pennsylvania to New Jersey. Several parties, including respondent New Jersey, petitioned for review of F ERC’s order in the D. C. Circuit. The D. C. Circuit has held those proceedings in abeyance pending resolution of this case. PennEast filed various complaints in Federal District Court in New Jersey seeking to exercise the federal eminent domain power under §717f(h) to obtain rights-of-way along the pipeline route approved by FERC. As relevant here, PennEast sought to condemn parcels of land in which either New Jersey or the New Jersey Conservation Foundation asserts a property interest. New Jersey moved to dismiss PennEast’s complaints on sovereign immunity grounds. The District Court denied the motion, and it granted PennEast’s requests for a condemnation order and preliminary injunctive relief. The Third Circuit vacated the District Court’s order insofar [Page 2] 2 PENNEAST PIPELINE CO. v. NEW JERSEY Syllabus as it awarded PennEast relief with respect to New Jersey’s property interests. The Third Circuit concluded that because §717f(h) did not clearly delegate to certificate holders the Federal Government’s ability to sue nonconsenting States, PennEast was not authorized to condemn New Jersey’s property. Held: Section 717f(h) authorizes FERC certificate holders to condemn all necessary rights-of-way, whether owned by private parties or States. Pp. 6–23. (a) The United States raises a threshold challenge to the Third Cir- cuit’s jurisdiction below on the grounds that §717r(b) grants the court of appeals reviewing FERC’s certificate order (here, the D. C. Circuit) “exclusive” jurisdiction to “affirm, modify, or set aside such order.” The Court rejects this challenge. New Jersey does not seek to modify FERC’s order; it asserts a defense against the condemnation proceedings initiated by PennEast. The Third Circuit’s decision that §717f(h) does not grant natural gas companies the right to bring condemnation suits against States did not “modify” or “set aside” FERC’s order, which neither purports to grant PennEast the right to file a condemnation suit against States nor addresses whether §717f(h) grants that right. Contrary to the argument of the United States, New Jersey’s appeal is not a collateral attack on the FERC order. Pp. 6–7. (b) The Federal Government has exercised its eminent domain authority since the founding, connecting our country through turnpikes, bridges, and railroads—and more re cently through pipelines, telecom- munications infrastructure, and electric transmission facilities. The Court has upheld these exercises of the federal eminent domain power—whether by the Government or a private corporation, whether through the upfront taking of property or a condemnation action, and whether against private property or state-owned land. Section 717f(h) falls within this established practice. Pp. 7–12. (1) Governments have long taken property for public use without the owner’s consent. The United States is no different. While the Con- stitution and Bill of Rights did not use the term “eminent domain,” the Takings Clause of the Fifth Amendment (“nor shall private property be taken for public use, without just compensation”) presupposed the existence of such a power. Initially, the Federal Government exercised its eminent domain authority in areas subject to exclusive federal jurisdiction. The Court later confirmed that federal eminent domain ex- tended to property within a State. Kohl v. United States, 91 U. S. 367. The Court’s decision in Kohl—which upheld the power of the United States to condemn land in Ohio to construct a federal building—ob- served that eminent domain was a “means well known when the Con- stitution was adopted” and that “[t]he powers vested by the Constitu- tion in the general government demand for their exercise the [Page 3] Cite as: 594 U. S. ____ (2021) 3 Syllabus acquisition of lands in all the States.” Id., at 371–372. Kohl involved the condemnation of private land, but the Court subsequently made clear that “[t]he fact that land is owned by a state is no barrier to its condemnation by the United States.” Oklahoma ex rel. Phillips v. Guy F. Atkinson Co. , 313 U. S. 508, 534. Pp. 7–9. (2) For as long as the eminent domain power has been exercised by the United States, it has also been delegated to private parties. The Colonies, the States, and the Federal Government have commonly authorized the private condemnation of land for public works. And in the years following Kohl, the Court confirmed that private delegatees, like the United States, can exercise the federal eminent domain power within the States. In Luxton v. North River Bridge Co ., 153 U. S. 525, for example, the Court rejected a landowner’s claim that Congress could not delegate its authority to condemn property necessary to construct a bridge between New York and New Jersey. Congress had the sovereign power to construct bridges for interstate commerce, and the Court confirmed Congress could choose to do so through a corporation. Id., at 530. These powers, the Court noted, could be exercised “with or without a concurrent act of the State in which the lands lie.” Ibid. Early cases also reflected the understanding that state property was not immune from the exercise of delegated federal eminent domain power. See Stockton v. Baltimore & N. Y. R. Co., 32 F. 9 (Bradley, Cir. J.). The contrary position—that a federal delegatee could not condemn a State’s land without the State’s consent—would give rise to the “di- lemma of requiring the consent of the state” in virtually every infrastructure project authorized by the Federal Government. Id., at 17. The Court in Cherokee Nation v. Southern Kansas R. Co., 135 U. S. 641, echoed Stockton’s explanation of the superior eminent domain power of the Federal Government when it rejected a challenge to a private railroad company’s exercise of the federal eminent domain power against land owned by the Cherokees. In reaching that result, the Court acknowledged that “the national government, in the execution of its rightful authority, could exercise the power of eminent domain in the several States,” and the Court labeled as “strange” the notion that the Federal Government “could not exercise the same power in a Ter- ritory occupied by an Indian nation or tribe.” 135 U. S., at 656–657. Pp. 9–11. (3) Section 717f(h) delegates to certificate holders the power to condemn any necessary rights-of-way, including land in which a State holds an interest. This delegation of the federal eminent domain authority is consistent with the Nation’s history and this Court’s precedents. FERC’s issuance to a company of a certificate of public convenience and necessity to build a pipeline carries with it the power—if the company cannot acquire the necessary rights-of-way by contract at an [Page 4] 4 PENNEAST PIPELINE CO. v. NEW JERSEY Syllabus agreed compensation—to “acquire the same by the exercise of the right of eminent domain.” §717f(h). This delegation is categorical; by its terms, §717f(h) delegates to certificate holders the power to condemn any necessary rights-of-way, including land in which a State holds an interest. Pp. 11–12. (c) Respondents contend that sovereign immunity bars condemnation actions against a nonconsenting State. Alternatively, respondents contend that §717f(h) does not speak with sufficient clarity to authorize such actions. The Court rejects each argument, for reasons stated below. Pp. 13–22. (1) “States’ immunity from suit is a fundamental aspect of the sovereignty which the States enjoyed before the ratification of the Consti- tution.” Alden v. Maine, 527 U. S. 706, 713. A State may be sued only in limited circumstances, including where the State expressly consents or where Congress clearly abrogates the State’s immunity under the Fourteenth Amendment. A State may also be sued if it has implicitly agreed to suit in the “plan of the Convention,” which is shorthand for “the structure of the original Constitution itself.” Id., at 728. The Court has looked to the plan of the Convention to permit actions against nonconsenting States in the context of bankruptcy proceedings, suits by other States, and suits by the Federal Government. Pp. 13–14. (2) Respondents do not dispute that the NGA empowers certificate holders to condemn private property, but they contend that the same certificate holders have no power to condemn state-owned property under §717f(h). It is argued that the NGA cannot authorize such condemnation actions under the Court’s decision in Seminole Tribe of Fla. v. Florida, 517 U. S. 44, which generally prohibits Congress from using its Article I powers to abrogate state sovereign immunity. But con- gressional abrogation is not the only means of subjecting States to suit. The States implicitly consented to private condemnation suits when they ratified the Constitution, and respondents’ arguments to the contrary cannot be squared with the Court’s precedents. Respondents do not dispute that the Federal Government enjoys a power of eminent domain superior to that of the States, or that the Federal Government can delegate that power to private parties. Re- spondents instead point to the absence of founding-era evidence of private condemnation suits against nonconsenting States to maintain that States did not consent to such suits when they entered the federal system. Respondents would divorce the federal eminent domain power from the power to bring condemnation actions—and th en argue that the latter cannot be delegated to private parties with respect to state- owned lands. But the eminent domain power is inextricably inter- [Page 5] Cite as: 594 U. S. ____ (2021) 5 Syllabus twined with condemnation authority. Separating the two would di- minish the eminent domain power of the federal sovereign, which the State may not do. See Kohl, 91 U. S., at 374. Absent the power to condemn States’ property interests, the only constitutionally permis- sible way of exercising the federal eminent domain power would be to take property up front and require States to sue for compensation later. State sovereign immunity would not be served by favoring private or Government-supported invasions of state-owned lands over ju- dicial proceedings. The Court held in United States v. Texas, 143 U. S. 621, that it “does no violence to the inherent nature of sovereignty” for a State to be sued by “the government established for the common and equal benefit of the people of all the States.” Id., at 646. In so holding, the Court did not insist upon examples from the founding era of federal suits against States. Similar structural considerations support the conclusion that States consented to the federal eminent domain power, whether that power is exercised by the Government or its delegatees. The absence of a perfect historical analogue to the proceedings PennEast initiated below does not suggest otherwise. Pp. 14–21. (3) Finally, respondents argue that even if States agreed in the plan of the Convention to condemnation suits by Federal Government delegatees, the NGA does not authorize such suits with the clarity required by the Court’s precedents. There is no requirement, however, that the Federal Government speak with “unmistakable clarity” when authorizing a private party to exercise its eminent domain power. Pp. 21–22. 938 F. 3d 96, reversed and remanded. ROBERTS, C. J., delivered the opinion of the Court, in which BREYER, ALITO, SOTOMAYOR, and KAVANAUGH, JJ., joined. GORSUCH, J., filed a dissenting opinion, in which THOMAS, J., joined. BARRETT, J., filed a dissenting opinion, in which THOMAS, KAGAN, and GORSUCH, JJ., joined. [Page 6] Cite as: 594 U. S. ____ (2021) 1 Opinion of the Court NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Wash - ington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press. SUPREME COURT OF THE UNITED STATES _________________ No. 19–1039 _________________ PENNEAST PIPELINE COMPANY, LLC, PETITIONER v. NEW JERSEY, ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT [June 29, 2021] CHIEF JUSTICE ROBERTS delivered the opinion of the Court. Eminent domain is the power of the government to take property for public use without the consent of the owner. It can be exercised either by public officials or by private parties to whom the power has been delegated. And it can be exercised either through the initiation of legal proceedings or simply by taking possession up front, with compensation to follow. Since the founding, the United States has used its eminent domain authority to build a variety of infrastructure projects. It has done so on its own and through private delegatees, and it has relied on legal proceedings and upfront takings. It has also used its power against both private property and property owned by the States. This case involves one of the ways the federal eminent domain power can be exercised: through legal proceedings initiated by private delegatees against state-owned property. Specifically, we are asked to decide whether the Fed - eral Government can constitutionally confer on pipeline companies the authority to condemn necessary rights-of - way in which a State has an interest. We hold that it can. [Page 7] 2 PENNEAST PIPELINE CO. v. NEW JERSEY Opinion of the Court Although nonconsenting States are generally immune from suit, they surrendered their immunity from the exercise of the federal eminent domain power when they ratified the Constitution. That power carries with it the ability to condemn property in court. Because the Natural Gas Act del - egates the federal eminent domain power to private parties, those parties can initiate condemnation proceedings, including against state-owned property. I A Natural gas has been a part of the Nation’s energy supply since at least the 1820s, when an “enterprising gunsmith” named William Aaron Hart developed a natural gas well near Fredonia, New York. D. Waples, The Natural Gas In- dustry in Appalachia 12 (2d ed. 2012). Initially, difficulties in transporting natural gas limited its distribution, as the available pipeline technology did not allow producers to reach the sprawling American markets. See Tarr, Trans - forming an Energy System, in The Governance of Large Technical Systems 26 (O. Coutard ed. 1999). Over the following century, however, that technology slowly improved. In 1891, one of the first interstate pipelines—albeit a rudi - mentary and inefficient one—was built to carry natural gas from central Indiana to Chicago. And in the 1920s, devel- opment began in earnest on the country’s pipeline infrastructure. See id., at 27–28; J. Speight, Natural Gas 20– 21, 26 (2007). In 1938 Congress passed the Natural Gas Act, ch. 556, 52 Stat. 821, to regulate the transportation and sale of natural gas in interstate commerce. Congress vested the Federal Power Commission (now the Federal Energy Regulatory Commission) with the authority to administer the NGA, including by approving the construction and extension of interstate pipelines. The NGA provides that in order to build an interstate pipeline, a natural gas company must obtain [Page 8] Cite as: 594 U. S. ____ (2021) 3 Opinion of the Court from FERC a certificate reflecting that such construction “is or will be required by the present or future public convenience and necessity.” 15 U. S. C. §717f(e). The NGA also provides that, before issu ing a certificate of public convenience and necessity, FERC “shall set the matter for hearing and shall give such reasonable notice of the hearing thereon to all interested persons.” §717f(c)(1)(B). As originally enacted, the NGA did not identify a mechanism for certificate holders to secure property rights necessary to build pipelines. Natural gas companies were instead left to rely on state eminent domain procedures, which were frequently made unavailable to them. In some States, the eminent domain power could be exercised only if the operation of a pipeline would benefit residents. See S. Rep. No. 429, 80th Cong., 1st Sess., 2 (1947) (collecting cases). In others, statutory and constitutional provisions denied state eminent domain power to corporations from other States. See id., at 2–3. The result was that certificate holders often had only an illusory right to build. Congress acted to remedy this defect. In 1947, it amended the NGA to authorize certificate holders to exercise the federal eminent domain power. See ch. 333, 61 Stat. 459. Under 15 U. S. C. §717f(h): “When any holder of a certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for, the necessary right-of-way to construct, operate, and maintain a pipe line or pipe lines for the transportation of natural gas . . . , it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located, or in the State courts.” By enabling FERC to vest natural gas companies with the [Page 9] 4 PENNEAST PIPELINE CO. v. NEW JERSEY Opinion of the Court federal eminent domain power, the 1947 amendment en- sured that certificates of public convenience and necessity could be given effect. B Petitioner PennEast Pipeline Co. is a joint venture owned by several energy companies. In 2015, PennEast applied to FERC for a certificate of public convenience and necessity authorizing the construction of a 116-mile pipeline from Lu- zerne County, Pennsylvania, to Mercer County, New Jer- sey. FERC published notice of PennEast’s application in the Federal Register, and subsequently received thousands of comments in writing and at public hearings. FERC then issued a draft environmental impact statement for the project, which yielded thousands of additional comments. PennEast made a number of route modifications in re- sponse to the concerns commenters had raised. In January 2018, FERC granted PennEast a certificate of public convenience and necessity. FERC later denied re- hearing of this decision, and several parties, including respondent New Jersey, petitioned for review in the D. C. Cir- cuit. The D. C. Circuit has held those proceedings in abeyance pending resolution of this case. Weeks after FERC granted its application, PennEast filed various complaints in Federal District Court in New Jersey. PennEast sought to exercise the federal eminent domain power under §717f(h) to obtain rights-of-way along the pipeline route approved by FERC, and to establish just compensation for affected owners. PennEast also sought preliminary and permanent injunctive relief allowing it take immediate possession of each property in advance of any award of just compensation. As relevant here, PennEast sought to condemn two parcels in which New Jer- sey asserts a possessory interest, and 40 parcels in which the State claims nonpossessory interests, such as conserva - tion easements. PennEast also sought to condemn parcels [Page 10] Cite as: 594 U. S. ____ (2021) 5 Opinion of the Court in which respondent New Jersey Conservation Foundation holds an interest. New Jersey moved to dismiss PennEast’s complaints on sovereign immunity grounds. The District Court denied the motion, holding that New Jersey was not immune from PennEast’s exercise of the Federal Government’s eminent domain power. In re PennEast Pipeline Co., 2018 WL 6584893, *12 (D NJ, Dec. 14, 2018). Having denied New Jersey’s motion to dismiss on immunity grounds, the Dis- trict Court granted PennEast’s requests for a condemnation order and preliminary injunctive relief. Id., at *21, *26. The Third Circuit vacated the District Court’s order insofar as it awarded PennEast relief with respect to New Jer- sey’s property interests, and it remanded for dismissal of any claims against the State. In re PennEast Pipeline Co., 938 F. 3d 96, 113 (2019). Although the court acknowledged that the Federal Government can condemn state-owned property, it reasoned that this power is in fact the product of two separate powers: the Federal Government’s eminent domain power, on the one hand, and its ability to sue nonconsenting States, on the other. Id., at 104. While the Fed- eral Government can delegate its eminent domain power to private parties, the court found “reason to doubt” that it can do the same with respect to its exemption from state sovereign immunity. Id., at 100. After expressing skepticism as to whether the Federal Government could ever delegate this exemption, see id., at 105–111, the court determined that it did not need to “definitively resolve that question,” because “nothing in the NGA indicates that Congress in- tended to do so,” id., at 111. In reaching this determination, the Third Circuit relied on this Court’s precedents holding that Congress cannot abrogate state sovereign immunity in the absence of an “‘unmistakably clear’” statement. Ibid. (quoting Blatchford v. Native Village of Noatak, 501 U. S. 775, 786 (1991)). Concluding that §717f(h) did not clearly delegate to certificate holders the Federal Government’s [Page 11] 6 PENNEAST PIPELINE CO. v. NEW JERSEY Opinion of the Court ability to sue nonconsenting States, the court held that PennEast was not authorized to condemn New Jersey’s property. 938 F. 3d, at 111–113. We granted certiorari to determine whether the NGA authorizes certificate holders to condemn land in which a State claims an interest. 592 U. S. ___ (2021). II We begin by addressing a jurisdictional issue raised by the United States. As just noted, the Third Circuit ruled in New Jersey’s favor based on the State’s statutory argument that the NGA did not delegate to certificate holders the right to file condemnation actions against nonconsenting States. The United States now argues that the Third Cir- cuit lacked jurisdiction to decide that question under 15 U. S. C. §717r(b), which gives the court of appeals reviewing FERC’s certificate order (here, the D. C. Circuit) “exclusive” jurisdiction to “affirm, modify, or set aside such order.” According to the United States, New Jersey’s statutory argument, if accepted, would modify FERC’s order because FERC “expressly stated” in the order that PennEast “would have authority to acquire the necessary land or property to construct the approved facilities by exercising the right of eminent domain.” Brief for United States as Amicus Curiae 15 (internal quotation marks omitted). PennEast and the respondents both argue that the United States is wrong. We agree. New Jersey does not seek to modify FERC’s order; it asserts a defense against the condemnation proceedings initiated by PennEast. To determine whether the District Court correctly rejected New Jersey’s defense, the Third Circuit needed to decide whether §717f(h) grants natural gas companies the right to bring condemnation suits against States. Its conclusion that §717f(h) does not authorize such suits did not “modify” or “set aside” FERC’s order, which neither purports to grant PennEast the right to file a condemnation suit against [Page 12] Cite as: 594 U. S. ____ (2021) 7 Opinion of the Court States nor addresses whether §717f(h) grants that right. This case is thus unlike Tacoma v. Taxpayers of Tacoma, 357 U. S. 320 (1958), in which we held that the Federal Power Act’s similarly worded exclusive-review provision barred a State from arguing that a licensee could not exercise the rights granted to it by the license itself. Contrary to the United States’ argument, New Jersey’s appeal is not a collateral attack on the FERC order. III Turning to New Jersey’s sovereign immunity defense, we begin by discussing the federal eminent domain power. Since the founding, the Federal Government has exercised its eminent domain authority through both its own officers and private delegatees. And it has used that power to take