Petition for Writ of Certiorari — PennEast Pipeline Company, LLC, Petitioner v. New Jersey, et al.
Supreme Court briefFeb 18, 2020
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APPENDIX
TABLE OF APPENDICES
Appendix A
Opinion, United States Court of Appeals
for the Third Circuit, In re: PennEast
Pipeline Company, LLC, Nos. 19-119119-1232 (Sept. 10, 2019) .............................. App-1
Appendix B
Order, United States Court of Appeals for
the Third Circuit, In re: PennEast
Pipeline Company, LLC, Nos. 19-119119-1232 (Nov. 5, 2019) ............................... App-32
Appendix C
Opinion, United States District Court for
the District of New Jersey, In re:
PennEast Pipeline Company, LLC,
No. 18-1585 (Dec. 14, 2018)....................... App-34
Appendix D
Relevant Statutory Provisions ................ App-103
15 U.S.C. § 717 .................................. App-103
15 U.S.C. § 717a ................................ App-105
15 U.S.C. § 717b ................................ App-106
15 U.S.C. § 717b-1 ............................. App-111
15 U.S.C. § 717c ................................ App-114
15 U.S.C. § 717c-1 ............................. App-118
15 U.S.C. § 717d ................................ App-118
15 U.S.C. § 717e ................................ App-119
15 U.S.C. § 717f ................................. App-120
15 U.S.C. § 717g ................................ App-125
15 U.S.C. § 717h ................................ App-127
ii
15 U.S.C. § 717i ................................. App-128
15 U.S.C. § 717j ................................. App-129
15 U.S.C. § 717k ................................ App-130
15 U.S.C. § 717l ................................. App-131
15 U.S.C. § 717m ............................... App-131
15 U.S.C. § 717n ................................ App-135
15 U.S.C. § 717o ................................ App-138
15 U.S.C. § 717p ................................ App-138
15 U.S.C. § 717q ................................ App-140
15 U.S.C. § 717r ................................ App-141
15 U.S.C. § 717s ................................ App-145
15 U.S.C. § 717t................................. App-147
15 U.S.C. § 717t-1 ............................. App-147
15 U.S.C. § 717t-2 ............................. App-148
15 U.S.C. § 717u ................................ App-151
15 U.S.C. § 717v ................................ App-151
15 U.S.C. § 717w ............................... App-152
15 U.S.C. § 717x ................................ App-152
15 U.S.C. § 717y ................................ App-153
15 U.S.C. § 717z ................................ App-162
App-1
Appendix A
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 19-1191 thru 19-1232
________________
IN RE: PENNEAST PIPELINE COMPANY, LLC
STATE OF NEW JERSEY; NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION; NEW JERSEY STATE
AGRICULTURE DEVELOPMENT COMMITTEE; DELAWARE
& RARITAN CANAL COMMISSION; NEW JERSEY WATER
SUPPLY AUTHORITY; NEW JERSEY DEPARTMENT OF
TRANSPORTATION; NEW JERSEY DEPARTMENT OF THE
TREASURY; NEW JERSEY MOTOR VEHICLE COMMISSION,
Appellants.
________________
Argued: June 10, 2019
Filed: September 10, 2019
________________
Before: JORDAN, BIBAS, and NYGAARD,
Circuit Judges.
________________
OPINION
________________
JORDAN, Circuit Judge.
The Natural Gas Act (“NGA”), 15 U.S.C. §§ 717717z, allows private gas companies to exercise the
federal government’s power to take property by
eminent domain, provided certain jurisdictional
App-2
requirements are met. This appeal calls on us to
decide whether that delegation of power allows gas
companies to hale unconsenting States into federal
court to condemn State property interests.
PennEast Pipeline Company (“PennEast”) is
scheduled to build a pipeline through Pennsylvania
and New Jersey. The company obtained federal
approval for the project and promptly sued pursuant
to the NGA to condemn and gain immediate access to
properties along the pipeline route. Forty-two of those
properties are owned, at least in part, by the State of
New Jersey or various arms of the State. New Jersey
sought dismissal of PennEast’s condemnation suits for
lack of jurisdiction, citing the Eleventh Amendment to
the United States Constitution, and, separately,
arguing that PennEast failed to satisfy the
jurisdictional requirements of the NGA. Broadly
speaking, the Eleventh Amendment recognizes that
States enjoy sovereign immunity from suits by private
parties in federal court. New Jersey has not consented
to PennEast’s condemnation suits, so those legal
proceedings can go forward only if they are not barred
by the State’s immunity. The District Court held that
they are not barred and granted PennEast orders of
condemnation and preliminary injunctive relief for
immediate access to the properties. New Jersey has
appealed.
We will vacate because New Jersey’s sovereign
immunity has not been abrogated by the NGA, nor has
there been—as PennEast argues—a delegation of the
federal government’s exemption from the State’s
sovereign immunity. The federal government’s power
of eminent domain and its power to hale sovereign
App-3
States into federal court are separate and distinct. In
the NGA, Congress has delegated the former. Whether
the federal government can delegate its power to
override a State’s Eleventh Amendment immunity is,
however, another matter entirely. While there is
reason to doubt that, we need not answer that
question definitively since, even if a delegation of that
sort could properly be made, nothing in the text of the
NGA suggests that Congress intended the statute to
have such a result. PennEast’s condemnation suits are
thus barred by the State’s Eleventh Amendment
immunity. We will therefore vacate the District
Court’s order with respect to New Jersey’s property
interests and remand the matter for the dismissal of
any claims against New Jersey.
I.
BACKGROUND
The NGA authorizes private gas companies to
acquire “necessary right[s]-of-way” for their pipelines
“by the exercise of the right of eminent domain[,]” if
three conditions are met. 15 U.S.C. § 717f(h). First,
the gas company seeking to condemn property must
have obtained a Certificate of Public Convenience and
Necessity (a “Certificate”) from the Federal Energy
Regulatory Commission (“FERC”). Id. Second, it must
show that it was unable to “acquire [the property] by
contract” or “agree with the owner of property” about
the amount to be paid. Id. Third and finally, the value
of the property condemned must exceed $3,000. Id.
In the fall of 2015, PennEast applied for a
Certificate for its proposed 116-mile pipeline running
from Luzerne County, Pennsylvania to Mercer
County, New Jersey (the “project”). After a multi-year
App-4
review, 1 FERC granted PennEast’s application and
issued a Certificate for the project, concluding that, so
long as PennEast met certain conditions, “the public
convenience and necessity require[d] approval of
PennEast’s proposal[.]” 2 (App. at 226.)
Certificate in hand, PennEast filed verified
complaints in the United States District Court for the
District of New Jersey, asking for orders of
condemnation for 131 properties along the pipeline
route, determinations of just compensation for those
1 That review unfolded as follows: In
February 2015, FERC
published notice in the Federal Register and mailed it to some
4,300 interested parties. FERC received over 6,000 written
comments in response and heard from 250 speakers at three
public meetings. The following summer, FERC issued a draft
Environmental Impact Statement (“EIS”) for the project. It also
published notice in the Federal Register and mailed the draft EIS
to over 4,280 interested parties. In response, FERC received more
than 4,100 letters and heard from 420 (out of 670) attendees at
six public meetings.
To address environmental and engineering concerns raised by
the public, PennEast filed 33 route modifications. FERC then
provided notice to newly affected landowners. The following
spring, FERC published a final EIS in the Federal Register. That
final EIS sought to address all substantive comments on the draft
EIS. FERC concluded that nearly all New Jersey parcels “subject
to types of conservation or open space protective easements will
generally retain their conservation and open space
characteristics[.]” (App. at 268.)
2 Multiple parties, including New Jersey, challenged FERC’s
decision in the United States Court of Appeals for the District of
Columbia. Petition for Review, Delaware Riverkeeper Network v.
FERC, No. 18-1128 (D.C. Cir. filed May 9, 2018). That petition
remains pending. Several property owners also petitioned FERC
for rehearing. Those petitions were all “rejected, dismissed, or
denied[.]” (App. at 31.)
App-5
properties, and preliminary and permanent injunctive
relief to gain immediate access to and possession of the
properties to begin construction of its pipeline. Fortytwo of the 131 property interests PennEast sought to
condemn belong to New Jersey or arms of the State
(collectively, the “State” or “New Jersey”). 3 The State
holds possessory interests in two of the properties and
non-possessory interests—most often, easements
requiring that the land be preserved for recreational,
conservation, or agricultural use—in the rest. 4
3 This appeal was filed on behalf of the State of New Jersey, the
New Jersey Department of Environmental Protection
(“NJDEP”), the State Agriculture Development Committee
(“SADC”), the Delaware & Raritan Canal Commission (“DRCC”),
the New Jersey Department of the Treasury, the New Jersey
Department of Transportation, the New Jersey Water Supply
Authority, and the New Jersey Motor Vehicle Commission. It is
undisputed that those various entities are arms of the State, and
PennEast does not suggest that any of those entities should have
anything less than Eleventh Amendment immunity to the same
extent as the State of New Jersey.
4 New Jersey owns those property interests as part its attempt
to preserve farmland and open space in the State. Cf. N.J. Const.
art. VIII, § 2 ¶¶ 6-7 (setting aside tax dollars for open space and
farmland preservation). For decades now, the State has operated
preservation programs aimed at preserving such land. For
example, NJDEP’s “Green Acres” program authorizes the State
to purchase, and help local governments purchase, land for
recreation and conservation. N.J. Stat. Ann. §§ 13:8A-1 to -56.
New Jersey’s Agriculture Retention and Development Act also
empowers the SADC to preserve farmland by buying such land
in fee simple or by buying development easements to preserve the
land for agricultural uses. Id. §§ 4:1C-11 to -48. The State also
owns and maintains easements along the Delaware Canal
through DRCC to protect the State’s water quality and
vegetation. Id. §§ 13:13A-1 to -15; N.J. Admin. Code § 7:45-9.3.
App-6
After PennEast filed its complaints, the District
Court ordered the affected property owners to show
cause why the Court should not grant the relief
sought. 5 New Jersey filed a brief invoking its Eleventh
Amendment immunity and arguing for dismissal of
the complaints against it. It also argued that
PennEast had failed to satisfy the jurisdictional
requirements of the NGA by not attempting to
contract with the State for its property interests.
After hearings on the show-cause order, 6 the
District Court granted PennEast’s application for
orders of condemnation and for preliminary injunctive
relief. At the outset, the Court rejected New Jersey’s
assertion of Eleventh Amendment immunity. It found
that “PennEast ha[d] been vested with the federal
government’s eminent domain powers and stands in
the shoes of the sovereign[,]” making Eleventh
Amendment immunity inapplicable. (App. at 33.) The
The State has spent over a billion dollars on its preservation
efforts. As of 2017, New Jersey had “helped to preserve over
650,000 acres of land[,]” and the “SADC and its partners had
preserved over 2,500 farms and over 200,000 acres of farmland.”
(Opening Br. at 6 (citing App. at 94, 108).)
The defendants include the State, as well as various
townships, property trusts, utility companies, and individual
property owners.
5
The Court held three hearings to accommodate the large
number of defendants involved. Each hearing “generally
proceeded the same way: First, PennEast was permitted to
address the Court, followed by [property owners] represented by
counsel. Next, any property owner in attendance was permitted
to address the Court, giving first priority to any party who had
filed an opposition. PennEast was permitted to respond.” (App.
at 29.)
6
App-7
Court reasoned that, because “the NGA expressly
allows ‘any holder of a certificate of public convenience
and necessity’” to condemn property, PennEast could
do so here—even for property owned by the State.
(App. at 33 (quoting 15 U.S.C. § 717f(h)).)
Next, the Court held that PennEast met the three
requirements of the NGA, entitling it to exercise the
federal government’s eminent domain power. First, it
found that PennEast holds a valid Certificate for the
project. Next, it concluded that PennEast had been
unable to “acquire by contract, or [was] unable to
agree with the owner of property to the compensation
to be paid for” the affected properties. (App. at 48
(alteration in original) (quoting 15 U.S.C. § 717f(h)).)
On that point, the Court rejected the State’s
contention that PennEast had to negotiate with the
holders of all property interests, including easement
holders. In the District Court’s view, § 717f(h) refers
only to the “owner of [the] property[,]” meaning the
owner of the possessory interest. (App. at 48 n.49.)
Finally, the Court found that the statute’s property
value requirement was satisfied because PennEast
had extended offers exceeding $3,000 for each
property. The Court thus granted PennEast’s request
for orders of commendation.
The District Court went on to hold that PennEast
had satisfied the familiar four-factor test for
preliminary injunctive relief. To obtain a preliminary
injunction, the movant must show “1) that there is
reasonable probability of success on the merits, 2) that
there will be irreparable harm to the movant in the
absence of relief, 3) that granting the injunction will
not result in greater harm to the nonmoving party,
App-8
and 4) that the public interest favors granting the
injunction.” Transcon. Gas Pipe Line Co. v. Conestoga
Twp., 907 F.3d 725, 732 (3d Cir. 2018). As to the first
factor, the Court said that PennEast had already
effectively succeeded on the merits, given that “the
Court ha[d] found PennEast satisfied the elements of
§ 717f(h) and is therefore entitled to condemnation
orders.” (App. at 50.) As to the second factor, the Court
found that, without an injunction, PennEast would
suffer irreparable harm in the form of non-recoupable
financial losses and construction delays. For the third
factor, the Court noted that, while it had “carefully
considered a wide range of arguments from
Defendants regarding the harm PennEast’s
possession will cause,” the property owners would not
be harmed “by the Court granting immediate
possession” because they would receive just
compensation. (App. at 53, 55.) Lastly, the Court was
persuaded, especially in light of FERC’s conclusion
about public necessity, that the project is in the public
interest. Having found all four factors weighed in
favor of granting a preliminary injunction, the Court
ordered that relief. 7 It then appointed five individuals
to serve as special masters and condemnation
commissioners to determine just compensation
awards.
New Jersey moved for reconsideration of the
District Court’s denial of sovereign immunity and
sought a stay of the District Court’s order to prevent
7 In addition to allowing PennEast to take immediate
possession of the properties, the Court ordered that the U.S.
Marshals could investigate, arrest, imprison, or bring to Court
any property owner who violated the Court’s order.
App-9
PennEast from taking immediate possession of the
State’s properties. As described more fully herein, see
infra Part III-B.1., it argued that, based on the
Supreme Court’s decision in Blatchford v. Native
Village of Noatak, 501 U.S. 775 (1991), the United
States lacks the constitutional authority to delegate to
private entities like PennEast the capacity to sue a
State. The District Court denied that motion,
concluding that Blatchford does not apply to
condemnation actions brought pursuant to the NGA.
The State timely appealed. It also moved to stay
the District Court’s order pending resolution of this
appeal and to expedite our consideration of the
dispute. We granted that motion in part, preventing
construction of the pipeline and expediting the appeal.
II. JURISDICTION
REVIEW
AND
STANDARD
OF
New Jersey contests jurisdiction in these
condemnation actions, asserting here, as it did in the
District Court, its sovereign immunity. For the
reasons that follow, we agree with it that the District
Court lacked subject matter jurisdiction over the suits
insofar as they implicated the State’s property
interests. We, however, have jurisdiction under 28
U.S.C. § 1291 to review the denial of New Jersey’s
claim of Eleventh Amendment immunity. Puerto Rico
Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506
U.S. 139, 147 (1993); see Cooper v. Se. Pa. Transp.
Auth., 548 F.3d 296, 298 (3d Cir. 2008) (“An order
denying Eleventh Amendment immunity is
immediately appealable as a final order under the
collateral order doctrine.”). And, pursuant to 28 U.S.C.
App-10
§ 1292(a)(1), we have jurisdiction to review the grant
of an injunction.
We exercise plenary review over a claim of
sovereign immunity. Karns v. Shanahan, 879 F.3d
504, 512 (3d Cir. 2018). We review the grant of a
preliminary injunction for abuse of discretion but
review de novo the legal conclusions underlying the
grant. McNeil Nutritionals, LLC v. Heartland
Sweeteners, LLC, 511 F.3d 350, 357 (3d Cir. 2007).
III. DISCUSSION
The Eleventh Amendment declares that:
The Judicial power of the United States shall
not be construed to extend to any suit in law
or equity, commenced or prosecuted against
one of the United States by Citizens of
another State, or by Citizens or Subjects of
any Foreign State.
U.S. Const. amend. XI. The States’ immunity from suit
in federal court, however, “neither derives from, nor is
limited by, the terms of the Eleventh Amendment.”
Alden v. Maine, 527 U.S. 706, 713 (1999). Rather, that
immunity is “a fundamental aspect of the sovereignty
which the States enjoyed before the ratification of the
Constitution, and which they retain today[.]” 8 Id. The
Eleventh Amendment thus embodies a “recognition
that the States, although a union, maintain certain
8 State sovereign immunity “includes both immunity from suit
in federal court and immunity from liability[.]” Lombardo v. Pa.,
Dep’t of Pub. Welfare, 540 F.3d 190, 193 (3d Cir. 2008). Immunity
from suit in federal court is known by the shorthand “Eleventh
Amendment immunity.” Id. That is the only type of State
sovereign immunity at issue here.
App-11
attributes of sovereignty, including sovereign
immunity.” Puerto Rico Aqueduct, 506 U.S. at 146.
Because of that immunity, States are not “subject
to suit in federal court unless” they have consented to
suit, “either expressly or in the ‘plan of the
convention.’” 9 Blatchford, 501 U.S. at 779 (quoting
Port Auth. Trans-Hudson Corp. v. Feeney, 495 U.S.
299, 310 (1990)). As part of “the ‘plan of the
[Constitutional] convention[,]’” the States consented
to suit by the federal government in federal court.
Blatchford, 501 U.S. at 779-82; see United States v.
Texas, 143 U.S. 621, 641-46 (1892); City of Newark v.
United States, 254 F.2d 93, 96 (3d Cir. 1958) (“The
consent of states to suits by the United States is
implied as inherent in the federal plan.”). The federal
government thus enjoys an exemption from the power
of the States to fend off suit by virtue of their sovereign
immunity, an exemption that private parties do not
generally have. 10 Alden, 527 U.S. at 755.
New Jersey asserts that it is entitled to sovereign
immunity from these condemnation suits. It argues
that the federal government cannot delegate its
exemption from state sovereign immunity to private
parties like PennEast and that, even if it could, the
9 That immunity extends to agents and instrumentalities of the
State. Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429 (1997);
Maliandi v. Montclair State Univ., 845 F.3d 77, 83 (3d Cir. 2016).
Citizens can, however, file suit against a State’s officers
where the litigation seeks only prospective injunctive relief based
on an ongoing constitutional violation. Will v. Mich. Dep’t of State
Police, 491 U.S. 58, 70-71 (1989); Ex parte Young, 209 U.S. 123
(1908). No one suggests that that doctrine of Ex parte Young is
applicable here.
10
App-12
NGA is not a clear and unequivocal delegation of that
exemption. PennEast disagrees. The company argues
that a delegation of the federal government’s eminent
domain power under the NGA necessarily includes the
ability to sue the States and that concluding otherwise
would frustrate the fundamental purpose of the NGA
to facilitate interstate pipelines.
A.
In view of PennEast’s argument, it is essential at
the outset to distinguish between the two powers at
issue here: the federal government’s eminent domain
power and its exemption from Eleventh Amendment
immunity. Eminent domain is the power of a
sovereign to condemn property for its own use. Kohl v.
United States, 91 U.S. 367, 371, 373-74 (1875). The
federal government can exercise that power to
condemn State land in federal court. United States v.
Carmack, 329 U.S. 230, 240 (1946). But its ability to
do so is not due simply to “the supreme sovereign’s
right to condemn state land. Rather, it is because the
federal government enjoys a special exemption from
the Eleventh Amendment.” Sabine Pipe Line, LLC v.
Orange Cty., Tex., 327 F.R.D. 131, 140 (E.D. Tex.
2017). Thus, the federal government’s ability to
condemn State land—what PennEast contends it is
entitled to do by being vested with the federal
government’s eminent domain power—is, in fact, the
function of two separate powers: the government’s
eminent domain power and its exemption from
Eleventh Amendment immunity. A delegation of the
former must not be confused for, or conflated with, a
delegation of the latter. A private party is not endowed
with all the rights of the United States by virtue of a
App-13
delegation of the government’s power of eminent
domain.
PennEast tries to ignore that distinction, arguing
that Congress intended for private gas companies to
which the federal government’s eminent domain
power has been delegated under the NGA to be able to
condemn State property. Focusing on Congress’s
intent to enable gas companies to build interstate gas
pipelines, PennEast fails to adequately grapple with
the constitutional impediment to allowing a private
business to condemn State land: namely, Eleventh
Amendment immunity.
That failure is a consequence of the easier road
PennEast chooses, namely citing the NGA and
asserting, in effect, that Congress must have meant
for pipeline construction to go forward, regardless of
the Eleventh Amendment. That approach has the
advantage of avoiding the difficulty of facing up to
what the law requires to overcome Eleventh
Amendment immunity. As discussed below, see infra
Part III-B.3., Congress cannot abrogate state
sovereign immunity under the Commerce Clause,
Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 59, 7273 (1996), and because Congress enacted the NGA
pursuant to that Clause, the statute cannot be a valid
congressional abrogation of sovereign immunity. To
maintain these suits, then, PennEast had to offer a
different answer for why its suits do not offend New
Jersey’s sovereign immunity. But, as just noted, the
only reason it gives—an argument of implied
delegation of the federal government’s Eleventh
Amendment exemption under the NGA—ignores
rather than confronts the distinction between the
App-14
federal government’s eminent domain power and its
exemption from Eleventh Amendment immunity.
Unfortunately for PennEast, that distinction is
essential, and there are powerful reasons to doubt the
delegability of the federal government’s exemption
from Eleventh Amendment immunity.
B.
Three reasons prompt our doubt that the United
States can delegate that exemption to private parties.
First, there is simply no support in the caselaw for
PennEast’s “delegation” theory of sovereign
immunity. Second, fundamental differences between
suits brought by accountable federal agents and those
brought by private parties militate against concluding
that the federal government can delegate to private
parties its ability to sue the States. Finally, endorsing
the delegation theory would undermine the careful
limits established by the Supreme Court on the
abrogation of State sovereign immunity.
1.
Looking in more detail at the caselaw, it lends no
credence to the notion that the United States can
delegate the federal government’s exemption from
state sovereign immunity. In Blatchford, the Supreme
Court dealt with this issue. In that case, Native
American tribes sued an Alaskan official for money
allegedly owed to them under a state revenue-sharing
statute. Blatchford, 501 U.S. at 777-78. Relevant here,
the tribes argued that their suit did not offend state
sovereign immunity because Congress had delegated
to the tribes the federal government’s ability to sue the
States. See id. at 783 (explaining the tribes’ assertion
that, in passing 28 U.S.C. § 1362, which grants district
App-15
courts jurisdiction over suits brought by Indian tribes
arising under federal law, Congress had “delegate[d]”
the federal government’s authority to sue on behalf of
Indian tribes “back to [the] tribes themselves”).
The Court rejected that argument, expressing its
“doubt … that
sovereign
exemption
can
be
delegated—even if one limits the permissibility of
delegation … to persons on whose behalf the United
States itself might sue.” Id. at 785. The Court
explained why: “[t]he consent, ‘inherent in the
convention,’ to suit by the United States—at the
instance and under the control of responsible federal
officers—is not consent to suit by anyone whom the
United States might select[.]” Id. The delegation
theory, the Court explained, was nothing more than “a
creature of [the tribes’] own invention.” Id. at 786.
PennEast would have us dismiss Blatchford as “so
distinguishable” as to be “useless by analogy.”
(Answering Br. at 41.) As PennEast sees it, the statute
at issue in Blatchford was a jurisdictional statute that
did not confer any substantive rights on the tribes,
while the NGA confers the substantive power of
eminent domain on private parties. But the Supreme
Court’s statements in Blatchford had nothing to do
with the jurisdictional nature of the statute at issue
and everything to do with the Court’s deep doubt
about the “delegation” theory itself.
Courts of Appeals have been similarly skeptical
that the federal government can delegate to private
parties its exemption from state sovereign
immunity—even when the private party seeks to
assert the interests of the United States, rather than
the party’s own. The D.C. Circuit’s decision in U.S. ex
App-16
rel. Long v. SCS Business & Technical Institute, Inc.,
173 F.3d 870 (D.C. Cir. 1999), is a case in point. There,
the court stated that “permitting a qui tam relator to
sue a state in federal court based on the government’s
exemption from the Eleventh Amendment bar
involves just the kind of delegation that Blatchford so
plainly questioned.” Id. at 882. That conclusion
accords with others from our sister circuits. See United
States ex rel. Foulds v. Tex. Tech Univ., 171 F.3d 279,
294 (5th Cir. 1999) (holding, in the qui tam context,
that “the United States cannot delegate to nondesignated, private individuals its sovereign ability to
evade the prohibitions of the Eleventh Amendment”);
see also Jachetta v. United States, 653 F.3d 898, 912
(9th Cir. 2011) (rejecting argument that the federal
government could authorize a private plaintiff to sue
on its behalf as “unpersuasive” based on Blatchford).
But cf. United States ex rel. Milam v. Univ. of Tex.
M.D. Anderson Cancer Ctr., 961 F.2d 46, 50 (4th Cir.
1992) (concluding that “the United States is the real
party in interest” in qui tam suits and therefore such
suits are not barred by the States’ Eleventh
Amendment immunity).
While the Supreme Court and federal Courts of
Appeals have not addressed the precise issue that we
have here—whether condemnation actions under the
NGA are barred by Eleventh Amendment immunity—
the one reported district court decision to do so held
that Eleventh Amendment immunity is indeed a bar.
In Sabine Pipe Line, LLC v. Orange, County, Texas,
the pipeline company plaintiff argued that, because
the federal government could exercise its eminent
domain power to condemn State property, there was
“no reason to treat a delegation of the same authority
App-17
any differently.” 327 F.R.D. at 139. The court
disagreed. It explained that, like PennEast’s
arguments, the plaintiff’s “theory of the case
erroneously assumes that by delegating one power
[, that of eminent domain], the government
necessarily also delegated the other [, the ability to sue
the States].” Id. at 140. The court was careful not to
conflate the two powers and, based on Blatchford,
concluded that “a private party does not become the
sovereign such that it enjoys all the rights held by the
United States by virtue of Congress’s delegation of
eminent domain powers.” Id. at 141.” 11 Id.
We are in full agreement. Quite simply, there is
no authority for PennEast’s delegation theory of
sovereign immunity. Indeed, the caselaw strongly
suggests that New Jersey is correct that the federal
government cannot delegate to private parties its
exemption from state sovereign immunity.
2.
Non-delegability makes sense, since there are
meaningful differences between suits brought by the
United States, an accountable sovereign, and suits by
private citizens. Blatchford, 501 U.S. at 785. Suits
PennEast is, of course, at pains to distinguish Sabine. It
notes that the property at issue in Sabine had been privately
owned at the time of the project’s approval and only later
transferred to the State of Texas. Thus, it argues, FERC’s
predecessor was not aware that it was approving a project that
implicated State-owned land and that the State opposed.
Moreover, it asserts, the Sabine court did not consider the
arguments pressed here. But those arguments are unresponsive
to the fundamental concern: whether the federal government can
delegate its immunity exemption at all.
11
App-18
brought by the United States are “commenced and
prosecuted … by those who are entrusted with the
constitutional duty to ‘take Care that the Laws be
faithfully executed[.]’” Alden, 527 U.S. at 755 (quoting
U.S. Const., art. II, § 3). Private parties face no similar
obligation. Nor are they accountable in the way federal
officials are. See id. at 756 (“Suits brought by the
United States itself require the exercise of political
responsibility for each suit prosecuted against a State,
a control which is absent from a broad delegation to
private persons to sue nonconsenting States.”).
Those considerations are clearly in play in the
eminent domain context. There, the condemning party
controls the timing of the condemnation actions,
decides whether to seek immediate access to the land,
and maintains control over the action through the just
compensation phase, determining whether to settle
and at what price. The incentives for the United
States, a sovereign that acts under a duty to take care
that the laws be faithfully executed and is accountable
to the populace, may be very different than those faced
by a private, for-profit entity like PennEast, especially
in dealing with a sovereign State. In other words, the
identity of the party filing the condemnation action is
not insignificant.
3.
There is, however, a way that Congress can
subject the States to suits by private parties. It can
abrogate the sovereign immunity of the States. The
Supreme Court “ha[s] stressed, however, that
abrogation of sovereign immunity upsets the
fundamental constitutional balance between the
Federal Government and the States, placing a
App-19
considerable strain on the principles of federalism
that inform Eleventh Amendment doctrine[.]”
Dellmuth v. Muth, 491 U.S. 223, 227 (1989)
(alterations, internal quotation marks, and citations
omitted). Accordingly, the Court has held that
Congress can abrogate the sovereign immunity of the
States “only by making its intention [to do so]
unmistakably clear in the language of the statute” in
question. 12 Id. at 228 (quoting Atascadero State Hosp.
v. Scanlon, 473 U.S. 234, 242 (1985)). “Unmistakable”
clarity is a high bar, and one that must be cleared
without resort to nontextual arguments. See
Atascadero, 473 U.S. at 246 (“A general authorization
for suit in federal court is not the kind of unequivocal
statutory language sufficient to abrogate the Eleventh
Amendment. When Congress chooses to subject the
States to federal jurisdiction, it must do so
specifically.”); see also Dellmuth, 491 U.S. at 230 (“If
Congress’ intention is ‘unmistakably clear in the
language of the statute,’ recourse to legislative history
will be unnecessary; if Congress’ intention is not
unmistakably clear, recourse to legislative history will
be futile, because by definition the rule of Atascadero
will not be met.”).
12 The same kind of clarity is demanded for waivers of sovereign
immunity. See Atascadero State Hosp. v. Scanlon, 473 U.S. 234,
238 n.1 (1985) (“[W]e require an unequivocal indication that the
State intends to consent to federal jurisdiction that otherwise
would be barred by the Eleventh Amendment. As we said in
Edelman v. Jordan, ‘[c]onstructive consent is not a doctrine
commonly associated with the surrender of constitutional rights,
and we see no place for it here.’” (second alteration in original)
(citation omitted)), superseded in other respects by Rehabilitation
Act Amendments, 42 U.S.C. § 2000d-7.
App-20
Moreover, Congress may abrogate state sovereign
immunity only pursuant to a valid exercise of federal
power. Seminole Tribe, 517 U.S. at 59. Particularly
relevant here, Congress cannot abrogate sovereign
immunity under its Commerce Clause powers. Id. at
59, 72-73. Instead, the Supreme Court has recognized
that Congress can abrogate sovereign immunity only
when it acts pursuant to § 5 of the Fourteenth
Amendment. 13 See Fitzpatrick v. Bitzer, 427 U.S. 445,
456 (1976) (holding that Congress can abrogate state
sovereign immunity pursuant to § 5); cf. Cent. Va.
Cmty. Coll. v. Katz, 546 U.S. 356, 362 (2006) (declining
to decide whether Congress can abrogate state
sovereign immunity pursuant to the Bankruptcy
Clause of the Constitution).
What we take from those rules is that state
sovereign immunity goes to the core of our national
government’s constitutional design and therefore
must be carefully guarded. Yet accepting PennEast’s
delegation theory would dramatically undermine the
careful limits the Supreme Court has placed on
abrogation. Indeed, “[t]o assume that the United
States possesses plenary power to do what it will with
its Eleventh Amendment exemption [by delegation] is
to acknowledge that Congress can make an end-run
around the limits that that Amendment imposes on its
legislative choices.” SCS Bus., 173 F.3d at 883. We are
13 For a relatively short period of time, the Supreme Court held
that Congress could abrogate state sovereign immunity pursuant
to the Commerce Clause. Pennsylvania v. Union Gas Co. 491 U.S.
1, 13-15 (1989). But that decision was overruled. Seminole Tribe,
517 U.S. at 66; see also infra note 20.
App-21
loath to endorse a never-before-recognized doctrine
that would produce such a result.
4.
None of PennEast’s arguments for the
delegability of the Eleventh Amendment exception are
persuasive. PennEast contends that “[t]here simply is
no interference with state sovereignty when the
United States itself has found that an interstate
infrastructure project is both necessary and in the
public’s interest” 14 and that New Jersey “faces no real
‘harm’ … given FERC’s plenary oversight over
pipeline projects and their respective routes.”
(Answering Br. at 18-19.) And, the company says, if
the State is aggrieved, it “has recourse against the
14 In support of that proposition, PennEast relies on Oklahoma
ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508 (1941). There,
according to PennEast, the Supreme Court held there was no
Eleventh Amendment bar to a private party condemning State
land because the dam project at issue had been authorized by
Congress and so “there was ‘no interference with the sovereignty
of the state.’” The same reasoning applies here, it asserts,
because the NGA authorizes PennEast to condemn property that
FERC has found necessary to complete a project that is in the
public interest.
That misreads Guy. In Guy, the State of Oklahoma sued to
enjoin the construction of a congressionally authorized dam, as
well as related condemnations. Id. at 511. While the respondents
were private entities, federal government attorneys had
instituted the condemnation actions. Id. at 511 n.2. And the
United States, not the dam company, was going to “acquire title
to the inundated land.” Id. at 511. So while it is true that
Oklahoma argued the dam would be a “‘direct invasion and
destruction’ of the sovereign and proprietary rights of
Oklahoma[,]” id. at 512, that was not because the State was being
sued by private parties.
App-22
federal government” by way of challenging FERC’s
decision to grant the Certificate. (Answering Br. at
22.) Those arguments miss the point. This case is not
about whether the States have a chance to register
their dissent or concerns about pipeline plans. It is
about whether the federal government can delegate its
ability to hale fellow sovereigns into federal court and
force the States to respond. It is the “indignity of
subjecting a State to the coercive process of judicial
tribunals at the instance of private parties” that New
Jersey seeks to avoid. Puerto Rico Aqueduct, 506 U.S.
at 146 (citation omitted). FERC’s blessing of the
project does not speak to that problem in any way. 15
In the same vein, PennEast cites qui tam suits
under the False Claims Act (“FCA”), 31 U.S.C.
§§ 3729-3733, 16 as proof “that the federal government
Again, adopting PennEast’s position that federal agency
involvement is enough to conclude that the United States has
delegated its ability to sue the States to a private entity would
fundamentally erode the Eleventh Amendment and the rules
regarding abrogation. If PennEast were correct, Congress could
simply amend a statute pursuant to its Commerce Clause
powers, give an agency some review responsibility, and thereby
skirt any limit on Congress’s ability to abrogate state sovereign
immunity.
15
16 The FCA authorizes private plaintiffs to sue “for the person
and for the United States Government” against the alleged false
claimant, “in the name of the Government.” 31 U.S.C.
§ 3730(b)(1). The FCA places several conditions on those suits.
Before suing, the private plaintiff must first notify the federal
government and allow it to intervene. Id. §§ 3730(b)(2), (4). The
government can then decide whether to pursue the claim itself or
leave it to the individual to pursue on behalf of and in the name
of the government. Id. § 3730(b)(4). At that point, the government
can intervene in the suit only for “good cause.” Id. § 3730(c)(3).
App-23
can delegate its authority to sue” the States, provided
the parties act on the government’s behalf and under
its control, as PennEast says is the case here.
(Answering Br. at 36.) We disagree. To begin with,
there is a split of authority on whether qui tam suits
against States are barred by the Eleventh
Amendment. Compare, e.g., United States ex rel.
Milam, 961 F.2d at 50 (allowing qui tam suits to
proceed based on that court’s view that the United
States was the “real party in interest”), with United
States ex rel. Foulds, 171 F.3d at 289, 292-94
(concluding that qui tam suits are barred by the
Eleventh Amendment, based on Blatchford). While we
take no position on that question now, even the cases
upholding qui tam suits are of little help to PennEast.
As New Jersey highlights, courts upheld suits under
the FCA because the suits are brought “in the name of
the Government” based on “false claims submitted to
the government”; the federal government receives
most of any amount recovered; it can intervene in the
suit after it has begun; and the case cannot be settled
or voluntarily dismissed without the government’s
consent. United States ex rel. Milam, 961 F.2d at 4849 (citations omitted). None of that is true here:
PennEast filed suit in its own name; PennEast will
gain title to the land; there is no special statutory
mechanism for the federal government to intervene in
NGA condemnation actions; and PennEast maintains
sole control over the suits. Most importantly, while the
Supreme Court has “express[ed] no view on the
question whether an action in federal court by a qui
But the private plaintiff also cannot dismiss the suit without the
consent of the government. Id. § 3730(b)(1).
App-24
tam relator against a State would run afoul of the
Eleventh Amendment,” it has noted “there is ‘a serious
doubt’ on that score.” Vt. Agency of Nat. Res. v. United
States ex rel. Stevens, 529 U.S. 765, 787 (2000)
(quoting Ashwander v. TVA, 297 U.S. 288, 348 (1936)
(Brandeis, J., concurring)). Accordingly, the attempted
analogy to qui tam suits falls far short of supporting
PennEast’s broad delegation theory.
PennEast is also incorrect that New Jersey’s
sovereign immunity simply “does not apply” in
condemnation actions because they are in rem
proceedings. (Answering Br. at 48.) The cases
PennEast cites are confined—by their terms—to the
specialized areas of bankruptcy and admiralty law.
See Tenn. Student Assistance Corp. v. Hood, 541 U.S.
440, 445, 450 (2004) (concluding “a bankruptcy court’s
discharge of a student loan debt does not implicate a
State’s Eleventh Amendment immunity” because “the
bankruptcy court’s jurisdiction is premised on the res,
not on the persona”); California v. Deep Sea Res., 523
U.S. 491, 506 (1998) (“Although the Eleventh
Amendment bars federal jurisdiction over general title
disputes relating to state property interests, it does
not necessarily follow that it applies to in rem
admiralty actions, or that in such actions, federal
courts may not exercise jurisdiction over property that
the State does not actually possess.” (emphases
added)). 17 In contrast, the Supreme Court has made
17 Moreover, States can assert their sovereign immunity in in
rem admiralty proceedings, when the State possesses the res. See
Aqua Log, Inc. v. Georgia, 594 F.3d 1330, 1334 (11th Cir. 2010)
(“In Deep Sea Research, the Supreme Court reaffirmed the
vitality of a series of cases dating back to the nineteenth century
that hold a government can assert sovereign immunity in an in
App-25
clear that the general rule is “[a] federal court cannot
summon a State before it in a private action seeking
to divest the State of a property interest.” 18 Idaho v.
Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 289 (1997)
(O’Connor, J., concurring). And the Supreme Court
has consistently recognized that sovereigns can assert
their immunity in in rem proceedings in which they
own property. Cf. Minnesota v. United States, 305 U.S.
382, 386-87 (1939); see also Fla. Dep’t of State v.
Treasure Salvors, Inc., 458 U.S. 670, 699 (1982)
rem admiralty proceeding only when it is in possession of the
res.”). Here, of course, New Jersey possesses the property
interests PennEast is seeking to condemn, so PennEast’s
argument is wholly unsupported.
18 PennEast argues that Coeur d’Alene, in which the Supreme
Court held that a tribe’s suit was barred by Eleventh Amendment
immunity, does not show New Jersey is entitled to sovereign
immunity because, in Coeur d’Alene, a state forum was available,
the tribe was effectively seeking a “determination that the lands
in question are not even within the regulatory jurisdiction of the
State[,]” and submerged lands were at issue, a “unique” type of
property under the law. (Answering Br. at 39 (quoting Coeur
d’Alene, 521 U.S. at 282-83).) But those facts were only important
for determining whether the tribe could bring suit pursuant to Ex
parte Young, 209 U.S. at 155-56, which allows suits against state
officials for injunctive relief. Coeur d’Alene, 521 U.S. at 281-83.
The facts PennEast relies on had nothing to do with the general
rule that the Eleventh Amendment applies when a State’s
property is at issue. See Coeur d’Alene, 521 U.S. at 281-82 (“It is
common ground between the parties … that the Tribe could not
maintain a quiet title suit against Idaho in federal court, absent
the State’s consent. The Eleventh Amendment would bar it.); id.
at 289 (“The Tribe could not maintain a quiet title action in
federal court without the State’s consent, and for good reason: A
federal court cannot summon a State before it in a private action
seeking to divest the State of a property interest.” (O’Connor, J.,
concurring)).
App-26
(plurality). New Jersey’s sovereign immunity remains
very much a concern in these in rem proceedings. 19
C.
Like the Supreme Court, our sister circuits, and
the district court in Sabine, we are thus left in deep
doubt that the United States can delegate its
exemption from state sovereign immunity to private
19 The only support for PennEast’s position is Islander East
Pipeline Co. v. Algonquin Gas Transmission Co., 102 FERC
¶ 61054 (Jan. 17, 2003). In that final order, FERC concluded that
the Eleventh Amendment “has no significance” for condemnation
actions under the NGA because those suits are not “suit[s] in law
or equity” against a State. Id. ¶ 61132. FERC’s conclusion is an
outlier and one that was reached with little, if any, analysis. More
importantly, it is flatly wrong. FERC did not deign to explain
what type of suit a condemnation action under the NGA is, if not
a suit at law or equity. And the drafters of the Eleventh
Amendment evidentially meant that term to be allencompassing. See Alden, 527 U.S. at 721 (“Each House spent but
a single day discussing the [Eleventh] Amendment, and the vote
in each House was close to unanimous. All attempts to weaken
the Amendment were defeated.” (citations omitted)); see also id.
at 722 (“The text and history of the Eleventh Amendment also
suggest that Congress acted not to change but to restore the
original constitutional design. Although earlier drafts of the
Amendment had been phrased as express limits on the judicial
power granted in Article III, the adopted text addressed the
proper interpretation of that provision of the original
Constitution[.]” (citations omitted)). In any event, condemnation
suits have historically been understood as suits in law. See City
of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687,
710 (1999) (“Just compensation [for a taking] … differs from
equitable restitution…. As its name suggests, … just
compensation is, like ordinary money damages, a compensatory
remedy.”); Kohl, 91 U.S. at 376 (“The right of eminent domain
always was a right at common law.”). We are therefore
unpersuaded by FERC’s decision and owe it no deference.
App-27
parties. But we need not definitively resolve that
question today because, even accepting the “strange
notion” that the federal government can delegate its
exemption from Eleventh Amendment immunity,
Blatchford, 501 U.S. at 786, nothing in the NGA
indicates that Congress intended to do so. “As a first
inquiry, we must avoid deciding a constitutional
question if the case may be disposed of on some other
basis.” Doe v. Pa. Bd. of Prob. & Parole, 513 F.3d 95,
102 (3d Cir. 2008).
Recall that congressional intent to abrogate state
sovereign immunity must be “unmistakably clear in
the language of the statute.” Blatchford, 501 U.S. at
786 (citation omitted); see also United States v.
Carmack, 329 U.S. 230, 243 n.13 (1946) (explaining
that statutes granting eminent domain power to nongovernmental actors “do not include sovereign powers
greater than those expressed or necessarily implied,
especially against others exercising equal or greater
public powers” and that “[i]n such cases the absence of
an express grant of superiority over conflicting public
uses reflects an absence of such superiority”). If
delegation were a possibility, one would think some
similar clarity would be in order. But the NGA does
not even mention the Eleventh Amendment or state
sovereign immunity. Nor does it reference
“delegating” the federal government’s ability to sue
the States. It does not refer to the States at all. If
Congress had intended to delegate the federal
government’s exemption from sovereign immunity, it
would certainly have spoken much more clearly. Cf.
Dellmuth, 491 U.S. at 232 (rejecting the argument
that a statute’s frequent references to the States were
clear enough to abrogate sovereign immunity);
App-28
Guerrero-Sanchez v. Warden York Cty. Prison, 905
F.3d 208, 223 (3d Cir. 2018) (explaining courts must
“assume that Congress does not intend to pass
unconstitutional laws” given the “cardinal principle of
statutory interpretation that when an Act of Congress
raises a serious doubt as to its constitutionality, courts
will first ascertain whether a construction of the
statute is fairly possible by which the question may be
avoided” (citation and alterations omitted)). And while
the NGA confers jurisdiction where the amount in
controversy exceeds $3,000, “it would be quite a leap”
to infer from that “grant of jurisdiction the delegation
of the federal government’s exemption from the
Eleventh Amendment.” Sabine, 327 F.R.D. at 141. In
short, nothing in the text of the statute even “remotely
impl[ies] delegation[.]” Blatchford, 501 U.S. at 786.
Despite that, PennEast contends that, because
the NGA does not differentiate between privately held
and State-owned property, Congress intended to make
all property subject to a Certificate-holder’s right of
eminent domain. The company also argues that the
NGA is best understood in light of its legislative
history and purpose, as well as by comparing the NGA
to two other condemnation statues, both of which
include explicit carve-outs for property owned by
States. Whatever the force of those arguments—and it
is slight, at best 20—it does not change the text of the
20 As for the legislative history, it demonstrates that Congress
intended to give gas companies the federal eminent domain
power. See S. Rep. No. 80-429, at 2-3 (1947) (discussing need to
grant natural gas companies the right of eminent domain to
ensure the construction of interstate pipelines). But it says
nothing about Congress’s intent to allow suits against the States.
App-29
statute. In the absence of any indication in the text of
the statute that Congress intended to delegate the
federal government’s exemption from state sovereign
immunity to private gas companies, we will not
assume or infer such an intent. That is to say, we will
not assume that Congress intended—by its silence—
to upend a fundamental aspect of our constitutional
And, as one of the amici, the Niskanen Center, argues, the
history of Eleventh Amendment jurisprudence explains the
difference in language between the NGA and the two statutes
PennEast cites, the Federal Power Act (“FPA”), 16 U.S.C. § 791a
et seq., and the statute authorizing Amtrak to exercise eminent
domain over property necessary to build rail lines, 49 U.S.C.
§ 24311(a) (the “Amtrak Act”). When Congress passed the NGA
and 15 U.S.C. § 717f(h), in 1938 and 1947, respectively, Congress
“was legislating under the consensus that it could not abrogate
states’ Eleventh Amendment immunity pursuant to the
Commerce Clause[.]” (Niskanen Br. at 14.) Because of that, there
was no reason to include a carve-out for State-owned property.
See Union Gas, 491 U.S. at 35 (Scalia, J., concurring in part and
dissenting in part) (“It is impossible to say how many extant
statutes would have included an explicit preclusion of suits
against States if it had not been thought that such suits were
automatically barred.”).
Then came Union Gas, which permitted Congress to abrogate
state sovereign immunity pursuant to its Commerce powers. Id.
at 23 (plurality opinion). Seven years later, however, in Seminole
Tribe, the Supreme Court overruled Union Gas and affirmed that
Congress can only abrogate state sovereign immunity pursuant
to the Fourteenth Amendment. Seminole Tribe, 517 U.S. at 6566.
The FPA and Amtrak Act, however, “were enacted or amended
during [the] eight-year period” between Union Gas and Seminole
Tribe, a time during which Congress was careful to address state
sovereign immunity when drafting legislation. (Reply Br. at 12.)
Given that context, the lack of similar language in the NGA is
not as persuasive of PennEast’s point as the company would like.
App-30
design. Cf. King v. Burwell, 135 S. Ct. 2480, 2494
(2018) (rejecting a proposed interpretation of a
statutory scheme because “[i]t is implausible that
Congress meant the Act to operate in this manner”);
Guerrero-Sanchez, 905 F.3d at 223 (explaining
doctrine of constitutional avoidance). Accordingly, we
hold that the NGA does not constitute a delegation to
private parties of the federal government’s exemption
from Eleventh Amendment immunity. 21
D.
PennEast warns that our holding today will give
States unconstrained veto power over interstate
pipelines, causing the industry and interstate gas
pipelines to grind to a halt—the precise outcome
Congress sought to avoid in enacting the NGA. We are
not insensitive to those concerns and recognize that
our holding may disrupt how the natural gas industry,
which has used the NGA to construct interstate
pipelines over State-owned land for the past eighty
years, operates.
But our holding should not be misunderstood.
Interstate gas pipelines can still proceed. New Jersey
is in effect asking for an accountable federal official to
file the necessary condemnation actions and then
transfer the property to the natural gas company. Cf.
Kelo v. City of New London, 545 U.S. 469, 480 (2005)
(discussing how broadly the Supreme Court has
defined “public purpose” under the Takings Clause).
Whether, from a policy standpoint, that is or is not the
21 Because we hold that New Jersey is entitled to Eleventh
Amendment immunity from these suits, we need not address the
State’s alternative arguments.
App-31
best solution to the practical problem PennEast points
to is not our call to make. We simply note that there is
a work-around.
PennEast protests that, because the NGA does
not provide for FERC or the federal government to
condemn the necessary properties, the federal
government cannot do so. But one has to have a power
to be able to delegate it, so it seems odd to say that the
federal government lacks the power to condemn state
property for the construction and operation of
interstate gas pipelines under the NGA. In any event,
even if the federal government needs a different
statutory authorization to condemn property for
pipelines, that is an issue for Congress, not a reason
to disregard sovereign immunity. To be sure, such a
change would alter how the natural gas industry has
operated for some time. But that is what the Eleventh
Amendment demands.
IV. CONCLUSION
Accordingly, we will vacate the District Court’s
order insofar as it condemns New Jersey’s property
interests and grants preliminary injunctive relief with
respect to those interests, and we will remand for
dismissal of claims against the State.
App-32
Appendix B
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 19-1191 thru 19-1232
________________
IN RE: PENNEAST PIPELINE COMPANY, LLC
STATE OF NEW JERSEY; NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION; NEW JERSEY STATE
AGRICULTURE DEVELOPMENT COMMITTEE; DELAWARE
& RARITAN CANAL COMMISSION; NEW JERSEY WATER
SUPPLY AUTHORITY; NEW JERSEY DEPARTMENT OF
TRANSPORTATION; NEW JERSEY DEPARTMENT OF THE
TREASURY; NEW JERSEY MOTOR VEHICLE COMMISSION,
Appellants.
________________
Filed: November 5, 2019
________________
Present: SMITH, Chief Judge, CHAGARES,
JORDAN, KRAUSE, RESTREPO, BIBAS, PORTER,
MATEY, PHIPPS, and NYGAARD, * Circuit Judges.
________________
SUR PETITION FOR REHEARING
________________
The petition for rehearing filed by appellee
PennEast Pipeline Co LLC in the above-entitled case
having been submitted to the judges who participated
* Judge Nygaard’s vote is limited to panel rehearing only.
App-33
in the decision of this Court and to all the other
available circuit judges of the circuit in regular active
service, and no judge who concurred in the decision
having asked for rehearing, and a majority of the
judges of the circuit in regular service not having
voted for rehearing, the petition for rehearing by the
panel and the Court en banc, is DENIED.
BY THE COURT
s/ Kent A. Jordan
Circuit Judge
DATE: November 5, 2019
Lmr/cc: Counsel of Record
App-34
Appendix C
UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW JERSEY
________________
No. 18-1585
(See Exhibit A for all Case Numbers)
________________
IN RE: PENNEAST PIPELINE COMPANY, LLC
________________
Filed: Dec. 14, 2018
________________
OPINION
________________
MARTINOTTI, DISTRICT JUDGE
Before the Court is Plaintiff PennEast Pipeline
Company, LLC’s (“PennEast”) application for orders of
condemnation and orders granting preliminary
injunctive relief under the federal power of eminent
domain pursuant to the Natural Gas Act (“NGA”), 15
U.S.C. § 717f(h), authorizing immediate access to and
possession of the rights of way (“Rights of Way”) as
defined in the respective Verified Complaints in
Condemnation of Property Pursuant to Federal Rule
of Civil Procedure 71.1 1 (the “Condemnation
Application”), for the purpose of “constructing,
operating, and maintaining a natural gas
1 PennEast filed verified complaints in over 130 cases related
to the properties referenced therein. The Court refers to the
filings in this litigation generally and identifies case-specific
documents where necessary.
App-35
transmission pipeline and appurtenant facilities (part
of an interstate natural gas transmission system) and
conducting all other activities required by the Order of
the Federal Energy Regulatory Commission [(‘FERC’
or the ‘Commission’) issuing certificates (‘FERC
Certificates’)] dated January 19, 2018, [FERC] Docket
No. CP15-558-000 (‘FERC Order’)” (Am. Not. of
Condemn. 2; Compl. ¶ 8). PennEast’s request is made
in advance of any award of just compensation.
In response thereto, upon the request of
PennEast, and for good cause appearing, the Court
entered an Order to Show Cause 2 ordering
Defendants, as defined herein, to show cause why an
order for condemnation should not be granted. Due to
the number of cases and Defendants, the Court held
three show cause hearings—April 5, 2018; April 19,
2018; and April 26, 2018—at which Defendants, both
represented and pro se, appeared in opposition to
PennEast’s Condemnation Application. Having heard
the arguments of the parties pursuant to Federal Rule
of Civil Procedure 78(a), and having carefully
reviewed the numerous submissions filed in support of
and in opposition to PennEast’s application and in
response to the Order to Show Cause, for the reasons
set forth below and for good cause shown, PennEast’s
application for orders of condemnation and for
preliminary injunctive relief allowing immediate
possession of the Rights of Way in advance of any
award of just compensation is GRANTED. The State
2 A subsequent Amended Order to Show Cause was entered
allowing PennEast additional time to serve all Defendants.
App-36
Defendants’, as defined herein, request for dismissal
is DENIED.
I.
BACKGROUND 3
A. The Parties
PennEast is a Delaware limited liability company,
duly registered to do business in New Jersey, with its
principal place of business in Pennsylvania. (Compl.
¶ 2.) According to FERC, “[u]pon commencement of
[its] operations … , PennEast will become a natural
gas company within the meaning of section 2(6) of the
NGA, and will be subject to [FERC]’s jurisdiction.” 4
FERC Order ¶ 3.
Defendants are a collection of individual fee
simple owners and interest holders of property
(collectively, “Defendants”) on which PennEast is
seeking to acquire the Rights of Way as described in
the respective complaints. 5
B. PennEast’s Application to FERC and the
FERC Order 6
On September 24, 2015, PennEast filed an
application (the “FERC Application”) with FERC
3 The majority of the facts herein are a matter of public record.
When necessary and appropriate, the Court relies further on the
well-pled allegations in the complaints.
Section 2(6) defines “[n]atural-gas company” as “a person
engaged in the transportation of natural gas in interstate
commerce, or the sale in interstate commerce of such gas for
resale.” 15 U.S.C. § 717a(6).
4
5 Unless otherwise noted, the Court consolidates Defendants’
arguments and addresses them jointly.
6 As discussed below, this Court does not serve as an appeals
court for FERC and therefore does not review the FERC Order in
App-37
pursuant to section 7(c) of the NGA and Parts 157 and
284 of FERC’s regulations for the construction and
operation of a new 116-mile, 36-inch-diameter
greenfield pipeline system from Luzerne County,
Pennsylvania to Mercer County, New Jersey
(sometimes referred to by FERC as the “PennEast
Project”). (Compl. ¶ 12); FERC Order ¶ 1. As described
in the FERC Order based on the FERC Application:
PennEast proposes to construct a new
greenfield pipeline system to provide up to
1,107,000 [dekatherms per day (Dth/d)] of
firm natural gas transportation service to
markets in New Jersey, New York,
Pennsylvania, and surrounding states. The
project extends from various receipt point
interconnections with the interstate natural
gas pipeline system of Transcontinental Gas
Pipe Line Company, LLC (Transco) and with
gathering systems in the eastern Marcellus
Shale region operated by UGI Energy
Services, LLC, Williams Partners, L.P., and
Energy Transfer Partners, L.P., to multiple
delivery point interconnections in natural
gas-consuming markets in New Jersey and
Pennsylvania, terminating at a delivery point
with Transco in Mercer County, New Jersey.
PennEast states that the project is designed
to bring lower cost natural gas to markets in
New Jersey, Pennsylvania, and New York
that capacity. See infra note 42 and text accompanying note 42.
It is summarized here for the benefit of the reader, only.
App-38
and to provide shippers with additional
supply flexibility, diversity, and reliability.
FERC Order ¶ 4. As part of the FERC Application,
PennEast: (1) requested to construct several facilities
costing approximately $1.13 billion; (2) stated it
executed long-term agreements with several shippers
for firm transportation service; (3) requested approval
of its pro forma tariff; (4) requested “a blanket
certificate of public convenience and necessity
pursuant to Part 284, Subpart 284 of the [FERC]’s
regulations authorizing it to provide transportation
service to customers requesting and qualifying for
transportation”; and (5) requested “a blanket
certificate of public convenience and necessity
pursuant to Part 157, Subpart F of the [FERC]’s
regulations authorizing certain future facility
construction, operation, and abandonment.” FERC
Order ¶¶ 5-9 (citing 18 C.F.R. §§ 157.204, 284.221).
On October 15, 2015, the FERC Application was
published in the Federal Register. Id. ¶ 10 (citing 80
Fed. Reg. 62,068 (2015)). In response, FERC granted
various motions to intervene, and “[n]umerous
entities, landowners, individuals, and New Jersey
State representatives filed protests and adverse
comments raising the following issues: (1) the need for
an evidentiary hearing[ 7]; (2) the need for the project;
7 FERC denied the request for a trial-type evidentiary hearing,
finding it was “necessary only where there are material issues of
fact in dispute that cannot be resolved on the basis of the written
record” and “the existing written record provides a sufficient
basis to resolve the issues relevant to this proceeding.” Therefore,
FERC held, “The Commission has satisfied the hearing
requirement by giving all interested parties a full and complete
App-39
and (3) whether the use of eminent domain is
appropriate for this project,” as well as “numerous
comments … raising concerns over the environmental
impacts of the project.” Id. ¶¶ 10-12. According to
FERC, these issues were either “addressed in the
Final Environmental Impact Statement” (“EIS”) or in
the FERC Order. Id. ¶¶ 11, 12; see also id. ¶ 97 n.121
(“All comments received prior to the end of the
comment period and in response to the November 4,
2016 letter that included additional substantive
concerns are included in the comment responses
contained in Appendix M of the final EIS (Volume II).
Any new issues raised after December 31, 2016, which
were not previously identified, are addressed in this
[FERC O]rder.”).
On January 19, 2018, after undergoing an
extensive review process as discussed herein, the
FERC Order was issued authorizing the project and
granting PennEast a Certificate of Public Convenience
and Necessity, subject to certain conditions. FERC
Order ¶ 2. In granting the authorization, FERC found
“the benefits that the PennEast Project will provide to
the market outweigh any adverse effects on existing
shippers, other pipelines and their captive customers,
and on landowners and surrounding communities.” Id.
And while FERC agreed “the project will result in
some adverse environmental impacts,” as concluded
by FERC staff in the EIS, it found that, through the
conditions imposed, “these impacts will be reduced to
acceptable levels.” Id.
opportunity to participate through evidentiary submission in
written form.” FERC Order ¶ 14.
App-40
In its 99-page Order 8, FERC detailed the
thorough evaluation and review process it used in
reaching its decision on the FERC Application.
Specifically,
FERC
evaluated
whether
“the
construction and operation of the facilities” satisfy
“the requirements of subsections (c) and (e) of section
7 of the NGA.” Id. ¶ 15. First, FERC considered the
Application of the Certificate Policy Statement and
“whether there [was] a need for a proposed project and
whether the proposed project will serve the public
interest.” Id. ¶ 16. The Certificate Policy Statement
establishes certain criteria for making this
determination,
and
FERC
found
PennEast
“sufficiently demonstrated that there is market
demand for the project” and that it “will provide
reliable natural gas service to end use customers and
the market.” Id. ¶¶ 16, 28, 36. Therefore, FERC
concluded:
Based on the benefits the project will provide
to the shippers, the lack of adverse effects on
existing customers, other pipelines and their
captive customers, and effects on landowners
and surrounding communities, we find,
consistent with the Certificate Policy
Statement and section 7 of the NGA, that the
public convenience and necessity requires
approval of PennEast’s proposal, subject to
the conditions discussed below.
FERC Order ¶ 40.
8 Inclusive of Appendix A—“Environmental Conditions for the
PennEast Pipeline Project.”
App-41
Next, FERC addressed PennEast’s eminent
domain authority. Despite arguments that “PennEast
is a for-profit company[] and has not shown that there
is a genuine need for the project, or that the public it
is intended to serve will benefit from it,” FERC
recognized that, “[i]n constructing [section 7(h) of the
NGA], Congress made no distinction between forprofit and non-profit companies.” FERC Order ¶¶ 41,
42. Specifically, FERC stated:
Under section 7 of the NGA, the Commission
has jurisdiction to determine if the
construction and operation of proposed
interstate pipeline facilities are in the public
convenience and necessity. Once the
Commission makes that determination, it is
section 7(h) of the NGA that authorizes a
certificate holder to acquire the necessary
land or property to construct the approved
facilities by exercising the right of eminent
domain if it cannot acquire the easement by
an agreement with the landowner.... Further,
as discussed above, need for the project has
been demonstrated by the existence of longterm
precedent
agreements
for
approximately 90 percent of the project’s
capacity. Just as the precedent agreements
provide evidence of market demand/need,
they are also evidence of the public benefits of
the project.
Id. ¶ 42.
With respect to the requested blanket certificates,
FERC observed the objectors took “general issue with
the [FERC]’s blanket certificate program” rather than
App-42
presenting “arguments why PennEast’s specific
request … should be denied.” Id. ¶ 46. Consequently,
FERC granted PennEast a blanket certificate under
Part 157, Subpart F of FERC’s regulations, as well as
a Part 284, Subpart G blanket certificate, “subject to
the [environmental] conditions imposed [in Appendix
A of the FERC Order].” Id. ¶¶ 43-48.
Additionally, FERC outlined its environmental
review process and analysis at length as follows: Prior
to entering the FERC Order, on January 13, 2015,
FERC staff issued a Notice of Intent to Prepare an EIS
for the Planned PennEast Pipeline Project, Request
for Comments on Environmental Issues, and Notice of
Public Scoping Meetings (“NOI”), which “briefly
described the project and the [EIS] process, provided
a preliminary list of issues identified by staff, invited
written comments on the environmental issues that
should be addressed in the EIS, and listed the date
and location of five public scoping meetings.” Id. ¶ 93.
On February 3, 2015, the NOI was published in the
Federal Register and was
sent to more than 4,300 interested entities,
including representatives of federal, state,
and local agencies; elected officials;
environmental and public interest groups;
Native American tribes; potentially affected
landowners as defined in the Commission’s
regulations (i.e., landowners crossed or
adjacent to pipeline facilities or within 0.5
mile of a compressor station); concerned
citizens; and local libraries and newspapers.
Id. In response, “more than 6,000 letters were filed,”
and “250 speakers provided verbal comments” at the
App-43
public scoping meetings, which were held between
February 10 and 12, 2015 and February 25 and 26,
2015 in Bethlehem, Jim Thorpe, and Wilkes-Barre,
Pennsylvania; and Trenton and Hampton, New
Jersey. Id. ¶ 93 & n.115.
Pursuant to requirements of the National
Environmental Policy Act (“NEPA”), and with the
cooperation and participation of the U.S. Army Corps
of Engineers, U.S. Environmental Protection Agency,
and the U.S. Department of Agriculture’s Natural
Resources Conservation Service, FERC staff issued
the draft EIS for the project on July 22, 2016. Id. ¶ 94.
Notice was again published in the Federal Register
allowing public comment, and “[t]he draft EIS was
mailed to over 4,280 stakeholders, which included the
entities that were mailed the NOI and additional
interested entities.” Id. ¶ 95. Six public comment
sessions were held between August 15 and 17, 2016,
where approximately 670 individuals were in
attendance, 420 of which provided verbal comments.
Id. Additionally, “[a] total of 4,169 comment letters
were filed in response to the draft EIS before the
comment period closed on September 12, 2016.” Id.
In response, PennEast filed route modifications
“to address environmental and engineering concerns.”
Id. ¶ 96. Newly affected landowners received notice of
the change and were invited to comment. Id.
On April 7, 2017, FERC issued the final EIS
“address[ing] all substantive comments received on
the draft EIS, the November 4, 2016 letter, and
comments received prior to December 31, 2016,” and,
on April 14, 2017, a public notice was published in the
Federal Register. Id. ¶ 97 & n.121. Significantly, the
App-44
FERC Order summarized and affirmed the final EIS
as follows:
98. The final EIS concludes that while the
project will result in some adverse
environmental impacts, these impacts will be
reduced to less than significant levels with
the implementation of PennEast’s proposed
impact
avoidance,
minimization,
and
mitigation measures, together with staff’s
recommended environmental conditions, now
adopted, as modified, as conditions in the
attached Appendix A of this order. While, the
Commission recognizes that there are
incomplete surveys due to lack of access to
landowner property, the conclusions in the
final EIS, and affirmed by the Commission
here, were based on the information
contained in the record, including PennEast’s
application and supplements, as well as
information developed through Commission
staff’s data requests, field investigations, the
scoping
process,
literature
research,
alternatives analysis, and contacts with
federal, state, and local agencies, as well as
with individual members of the public. As
part of its environmental review, staff
developed specific mitigation measures that
we find will adequately and reasonably
reduce the environmental impacts resulting
from the construction and operation of the
PennEast Project. We believe that the
substantial environmental record and
mitigation measures sufficiently support
reaching a decision on this project.
App-45
99. Once a certificate is issued, the
Commission’s environmental staff is charged
with ensuring that the project will be
constructed in compliance with the
Commission’s
order,
including
the
conclusions regarding the project’s expected
impacts upon the environment. Recognizing
that there are necessary field surveys that
are outstanding on sections of the proposed
route where survey access was denied, we are
imposing several environmental conditions
that
require
filing
of
additional
environmental information for review and
approval once survey access is obtained. This
includes items such as site-specific plans,
survey
results,
documentation
of
consultations with agencies, and additional
mitigation
measures.
The
additional
information ensures the EIS’s analyses and
conclusions are verified based on the best
available data, enabling us to improve and
finalize certain mitigation plans and ensure
stakeholder concerns are addressed. The
information will also provide Commission
staff with the site-specific details necessary to
appropriately evaluate compliance during the
construction
process.
In
addition,
Environmental Condition 10 requires that
before construction can commence, PennEast
must file documentation that it has received
all applicable authorizations required under
federal law (or evidence of waiver thereof).
100. Further, the final EIS has adequately
identified, as required by section 1502.22 of
App-46
the Council on Environmental Quality (CEQ)
regulations, where information is lacking.
CEQ regulations recognize that some
information simply may not be available.
Moreover, the final EIS contains mitigation
plans that provide for using the correct
mitigation measures, sediment control
measures, and restoration requirements
based on the actual site conditions
experienced
during
construction.
The
conditions in the order will ensure that all
environmental resources will be adequately
protected.
101. The Commission needs to consider and
study environmental issues before approving
a project, but it does not require all
environmental concerns to be definitively
resolved before a project’s approval is issued.
NEPA does not require every study or aspect
of an analysis to be completed before an
agency can issue a final EIS, and the courts
have held that agencies do not need perfect
information before it takes any action. In U.S.
Department of the Interior v. FERC, [952 F.2d
538, 546 (D.C. Cir. 1992),] the court held that
“[v]irtually every decision must be made
under some uncertainty; the question is
whether the Commission’s response, given
uncertainty, is supported by substantial
evidence and is not arbitrary and capricious.”
Similarly, in State of Alaska v. Andrus, [580
F.2d 465, 473 (D.C. Cir. 1978),] the court
stated that “[i]f we were to impose a
requirement that an impact statement can
App-47
never be prepared until all relevant
environmental effects were known, it is
doubtful that any project could ever be
initiated.” There must, however, be sufficient
information in the record to enable the
Commission to take the requisite “hard look”
required by NEPA. As indicated above, we
believe the record in this proceeding meets
that requirement.
Id. ¶¶ 98-101 (footnotes omitted).
The FERC Order went on—for over 40 pages—to
address the major environmental issues raised with
respect to the EIS, namely: (1) geology; (2) soils;
(3) water resources; (4) wetlands; (5) vegetation,
forested
land,
and
wildlife;
(6) threatened,
endangered, and other special status species; (7) land
use,
recreation,
and
visual
resources;
(8) socioeconomics; (9) cultural resources; (10) air
quality impacts; (11) noise; (12) safety; (13) upstream
and downstream impacts; and (14) alternatives. Id.
¶¶ 104-215. Ultimately, FERC modified and adopted
the recommendations in the final EIS and included
them as environmental conditions to the FERC Order,
“find[ing] that the project is in the public convenience
and necessity” but noting “[c]ompliance with the
environmental conditions appended to our orders is
integral to ensuring that the environmental impacts
of approved projects are consistent with those
anticipated by our environmental analyses.” Id.
¶¶ 216-17. Additionally, FERC stated that “state or
local permits issued with respect to the jurisdictional
facilities authorized herein must be consistent with
the conditions of this certificate” and that “this does
App-48
not mean that state and local agencies, through
application of state or local laws, may prohibit or
unreasonably delay the construction or operation of
facilities approved by this Commission.” Id. ¶ 218. In
the end, FERC ordered:
(A) A certificate of public convenience and
necessity is issued to PennEast, authorizing
it to construct and operate the proposed
PennEast Project, as described and
conditioned herein, and as more fully
described in the application.
(B) The certificate authority issued in
Ordering Paragraph (A) is conditioned on:
(1) PennEast’s proposed project being
constructed and made available for service
within two years of the date of this order
pursuant to section 157.20(b) of the
Commission’s regulations;
(2) PennEast’s compliance with all
applicable
Commission
regulations,
particularly the general terms and conditions
set forth in Parts 154, 157, and 284, and
paragraphs (a), (c), (e), and (f) of section
157.20 of the Commission’s regulations; and
(3) PennEast’s compliance with the
environmental conditions listed in Appendix
A to this order.
(C) A blanket construction certificate is
issued to PennEast under Subpart F of Part
157 of the Commission’s regulations;
App-49
(D) A blanket transportation certificate is
issued to PennEast under Subpart G of Part
284 of the Commission’s regulations;
(E) PennEast shall file a written statement
affirming that it has executed firm contracts
for the capacity levels and terms of service
represented in signed precedent agreements,
prior to commencing construction.
(F) PennEast’s initial rates and tariff are
approved, as conditioned and modified above.
(G) PennEast is required to file actual tariff
records reflecting the initial rates and tariff
language that comply with the requirements
contained in the body of this order not less
than 30 days and not more than 60 days prior
to the commencement of interstate service
consistent with Part 154 of the Commission’s
regulations.
(H) As described in the body of this order,
PennEast must file any negotiated rate
agreement or tariff record setting forth the
essential terms of the agreement associated
with the project at least 30 days, but not more
than 60 days before the proposed effective
date of such rates.
(I) No later than three months after the end
of its first three years of actual operation, as
discussed herein, PennEast must make a
filing to justify its existing cost-based firm
and interruptible recourse rates. PennEast’s
cost and revenue study should be filed
through the eTariff portal using a Type of
Filing Code 580. In addition, PennEast is
App-50
advised to include as part of the eFiling
description, a reference to Docket No. CP15558-000 and the cost and revenue study.
(J) The requests for an evidentiary hearing
are denied.
(K) PennEast shall notify the Commission’s
environmental staff by telephone or e-mail of
any environmental noncompliance identified
by other federal, state, or local agencies on
the same day that such agency notifies
PennEast. PennEast shall file written
confirmation of such notification with the
Secretary of the Commission within 24 hours.
Id. at 82-83.
C. Verified Complaints
On February 6, 2018, PennEast filed complaints
against Defendants, verified by Jeffrey England of
UGI Energy Services, LLC as Project Manager,
Project Management and Construction, on behalf of
PennEast, asserting claims related to the respective
properties for: (1) award of possession by eminent
domain pursuant to the NGA, 15 U.S.C. § 717f(h);
(2) determination of just compensation; and
(3) preliminary and permanent injunctive relief
allowing
immediate possession and entry onto the
Property, in advance of any award of just
compensation, in order to construct, operate,
and maintain an interstate natural gas
transmission pipeline and appurtenances as
approved by FERC, and enjoining Defendants
and
his/her
agents,
servants,
and
App-51
representatives from interfering in any way
with the construction of the pipeline,
including, without limitation, land surveys,
tree-clearing, excavation, trenching, pipe
laying, and post-construction restoration.
(Compl. ¶¶ 1, 35-41.) In support, PennEast contends
(1) the FERC Order authorizes it to install the
pipeline, (2) the Rights of Way for the respective
property were “reviewed and approved by [the] FERC
prior to the issuance of the FERC Order,” and (3) the
Rights of Way “are necessary to construct, install,
operate, and maintain the pipeline facilities approved
in the FERC Order.” (Id. ¶¶ 18-21.) Further,
PennEast alleges it offered to pay the landowners at
least $3000 for the Rights of Way and attempted
several times, through its land agent Western Land,
to negotiate in good faith for the acquisition of the
Rights of Way for the properties but was unable to
acquire same. (Id. ¶¶ 29-30, 32.) Consequently, it
argues it has satisfied the conditions required to
exercise eminent domain under Section 7(h) of the
NGA and is therefore entitled to immediate
possession. (Id. ¶ 34.)
D. Order to Show Cause
On February 14, 2018, having reviewed the
complaints and exhibits attached thereto, the Court
entered an Order to Show Cause why an order should
not be entered:
1. Determining that PennEast has satisfied
all of the statutory requirements of the
Natural Gas Act, 15 U.S.C. § 717f(h) and is
duly vested with the authority to condemn
App-52
the Rights of Way as defined in the Verified
Complaint;
2. Granting PennEast’s application for an
Order of Condemnation of the Rights of Way;
3. Finding that PennEast is entitled under
the equitable powers of the Court to a
preliminary injunction in the form of an order
for immediate access to and possession of the
property rights being condemned.
4. Requiring PennEast to post appropriate
security in the form of a surety bond or other
undertaking as the Court may direct into the
Court’s Registry pursuant to Local Civil Rule
67.1(a).
5. Finding that upon this deposit with the
Court,
PennEast
is
authorized
to
immediately enter and take possession of the
Rights of Way for all purposes allowed under
the Federal Energy Regulatory Commission’s
Order granting PennEast a Certificate of
Public Convenience and Necessity, including,
without limitation, the performance of survey
activities required by the FERC to be
completed before construction of the pipeline
may commence.
(Order to Show Cause 2-3; Am. Order to Show Cause
2-3; see supra note 2.) Public hearings on the Order to
Show Cause were held on three dates: April 5, 2018;
April 19, 2018; and April 26, 2018. 9 The Order to Show
9 Due to the volume of complaints, the Court assigned a hearing
date of April 5, 2018, or April 19, 2018, to Defendants based on
their property’s docket number (see Am. Order 2), with the final
App-53
Cause also set forth a deadline, 10 prior to the hearings,
for any interested party to file any papers responsive
to the Order to Show Cause. (Id. at 3.) PennEast was
permitted, by way of the Order to Show Cause, to
respond to any opposition it received. (Id.)
E. Responses to the Order to Show Cause 11
i.
Opposition by the State Defendants
and Mercer County12
Appearing as Defendants in over twenty cases,
the State, the Department of Environmental
Protection (the “DEP”), the Delaware and Raritan
Canal Commission, and the State Agriculture
Development Committee (collectively, the “State
April 26, 2018 hearing date being used as a catch-all. While the
Defendant’s specific hearing date was set forth in his or her Order
to Show Cause, all interested property owners were permitted to
comment at any hearing at which they appeared. In preparation
for the hearings, PennEast was ordered to provide the Court with
a master case list. (See Text Order dated March 23, 2018.)
This deadline initially included the time by which
Defendants had to file their answers. If and when requested,
Defendants were granted an extension for time to answer or
respond to the complaints, but the date by which to file papers in
response to the Court’s Amended Order to Show Cause was not
extended by way of that extension. In light of the State’s
jurisdictional challenges, their deadline to answer was tolled
pending the Court’s decision regarding jurisdiction.
10
Many parties’ arguments overlap or are common among
briefs. For the sake of brevity in what is already a complex
matter, the Court highlights novel portions of each brief and
discusses the arguments infra as necessary.
11
12 Mercer County joined the State Defendants’ arguments to
the extent applicable, e.g., they did not (and could not) argue they
were entitled to Eleventh Amendment immunity.
App-54
Defendants”) filed briefs in opposition to PennEast’s
requested relief and seeking dismissal of the
complaints. (See generally State Defs.’ Br.) The State
Defendants argue the State is entitled to Eleventh
Amendment immunity and therefore, this Court does
not have jurisdiction. The State contends it is a
necessary party for determining just compensation,
and therefore, they ask the Court to “refrain from
proceeding with any condemnation related to these
properties.” (State Defs.’ Br. 1.) Alternatively, the
State Defendants assert the actions should be
dismissed because PennEast has failed to meet its
burdens both under the NGA and for injunctive relief.
Specifically, they argue New Jersey has a public policy
of protecting its open space and farmland and, under
the New Jersey Constitution, tax dollars are set aside
to preserve same. The State Defendants point to
several programs they contend evidence how highly
they value this “long-held polic[y],” including
programs supported by the DEP and the State
Agriculture Development Committee (“SADC”). (Id. at
5-7.) The State Defendants claim a preliminary
injunction is premature given the ongoing FERC
proceedings and the likelihood that the pipeline route
could change, causing unnecessary condemnation. (Id.
at 37-45.)
ii. Opposition
Defendants 13
by
the
Stark
Stark & Stark filed notices of appearance and
oppositions in over eighty cases on behalf of
13 The Columbia Environmental Law Clinic serves as cocounsel for the Hunterdon Land Trust and the New Jersey
Conservation Foundation.
App-55
Hunterdon County, West Amwell Township, Hopewell
Township, Delaware Township, Alexandria Township,
the New Jersey Conservation Foundation (“NJCF”),
the Hunterdon Land Trust Alliance (“Hunterdon Land
Trust”), and dozens of private property owners
(collectively, the “Stark Defendants”). The Stark
Defendants’ briefs are largely consistent. They join the
arguments of the State Defendants but additionally
argue, inter alia, “PennEast does not hold a final
FERC Certificate of Public Convenience and Necessity
upon which it could ask this Court to determine that
it possesses a right to condemn,” constituting an
improper taking under the Fifth Amendment. (Stark
Defs.’ Br. 1.) Further, the Stark Defendants contend
PennEast is improperly attempting a “quick-take or
immediate possession” in contravention to the NGA,
where, instead, “PennEast should have moved by
Summary Judgment to obtain an order of
condemnation declaring that it has the substantive
right to condemn prior to receiving preliminary
injunctive relief to gain access to the property.” (Id. at
8.)
iii. Opposition by the McKirdy Riskin
Defendants 14
McKirdy Riskin, Olson & Della Pelle (“McKirdy
Riskin”) filed opposition briefs in approximately eight
cases on behalf of property owners (the “McKirdy
Riskin Defendants”). 15 They argue PennEast failed to
14 McKirdy Riskin also filed non-contesting answers in several
cases on behalf of individual property owners.
15 See, e.g., Dkt. Nos. 18-1722, opposition filed o/b/o Joseph and
Adela Gugiotta; 18-1771 (having since been resolved), filed o/b/o
Philip and Linda Snyder; 18-1779, filed o/b/o Richard and
App-56
comply with state substantive law, PennEast failed to
negotiate, and that the McKirdy Riskin Defendants
were denied substantive due process rights because
the parcel map and description is unclear as to the
parcel to be acquired. 16 (See generally McKirdy Riskin
Defs.’ Br.)
iv. Cole of Hopewell
Cole of Hopewell Township, NJ, LLC (“Cole of
Hopewell”) (Dkt. Nos. 18-1951 and 18-1976),
represented by Giordano, Halleran & Ciesla, filed a
brief in opposition, joining the arguments of Hopewell
Township, the State Defendants, and Mercer County,
arguing PennEast is not entitled to injunctive relief.
v.
Opposition
Kingwood
by
the
Township
of
The Township of Kingwood, represented by
Lavery, Selvaggi, Abromitis & Cohen, filed opposition
to PennEast’s request for an injunction and joined the
arguments of Hunterdon Land Trust. (See Dkt. Nos.
18-1638, 18-1855, 18-1995.) 17
Elizabeth Kohler; 18-1798, filed o/b/o Carl and Valarie
Vanderborght; 18-1853, filed o/b/o Jacqueline Evans; 18-2014,
filed o/b/o Dan and Carla Mackey; 18-2028, filed o/b/o Frank and
Bernice Wahl; and 18-2508, filed o/b/o Foglio and Assocs. LP (in
this matter, Decotiis, Fitzpatrick, Cole & Giblin, LLP serves as
conflict counsel for PennEast).
16 The Court notes the Kohlers, for example, are not opposed to
“allow[ing] PennEast access to the Property on reasonable notice
and conditions to conduct all necessary environmental, cultural,
and species surveys required under the FERC Certificate.” (See,
e.g., Kohler Br. 2 n.1.)
17 The Township of Kingwood was named and later dismissed
in several other cases.
App-57
vi. Answer and Statement of Objections
filed by Holland Township
In approximately six cases, Gebhardt & Kiefer, on
behalf of Holland Township, filed Answers with
counterclaims, asserting PennEast is in violation of
the Takings Clause and the Due Process Clause of the
Fifth Amendment. Holland Township contends “[t]his
Court is not bound by the FERC’s findings based upon
an incomplete record and/or unconstitutional practice
of conferring eminent domain authority without
looking beyond precedent agreements.” (Holland Stat.
of Obj. ¶¶ 3-4.)
vii. Answer and Affirmative Defenses
by Mark G. Korman 2007 Residence
Trust
The Mark G. Korman 2007 Residence Trust (the
“Korman Trust”) (Dkt. No. 18-1814), by and through
its attorneys Piro, Zinna, Cifelli, Paris & Genitempo,
filed an answer with affirmative defenses, contending
PennEast “failed to negotiate in good faith for access
to survey the Korman Property in that [PennEast]
refused to use a licensed surveyor for activities.”
Further, but without explanation, the Korman Trust
asserts a defense of lack of subject matter jurisdiction
and that the claims are barred by the doctrines of
waiver, estoppel, and unclean hands. (Korman Ans.
10.)
viii. Consent by Jersey Central Power &
Light
Jersey Central Power & Light Company
(“JCP&L”) is named as a Defendant in over 110 cases
as either an “‘[i]nterest [h]older’ by reason of JCP&L’s
interest in an easement of right of way in the [named
App-58
p]roperty … or [] a [l]andowner by reason of JCP&L’s
fee simple interest in the [named p]roperty.” (Consent
Order 1.) By way of Consent Order, which was
submitted by JCP&L and entered by the Court,
JCP&L agreed to allow access to PennEast “for the
purposes of performing non-invasive surveys and
studies in furtherance of PennEast obtaining requisite
governmental permits and approvals for its
construction of the [p]roject.” (Id. ¶ 1.) Further, the
parties agreed to “exercise good faith, diligent efforts
to (i) determine whether the proposed location of the
PennEast pipeline in the [p]roject through [the named
property] shall involve any overlapping co-location
with [JCP&L’s interest in the named property] and
(ii) enter an appropriate encroachment consent
agreement with respect to [JCP&L’s property
interest].” (Id. ¶ 2.) PennEast also agreed that,
pending execution of an encroachment consent
agreement, it would not “file or record a declaration of
taking … and shall not commence any construction.”
(Id. ¶ 4.) To date, the parties have not reached an
agreement and continue to extend the time period by
which they shall enter into an encroachment consent
agreement. (See Consent Order dated November 16,
2018 (extending agreement to December 17, 2018).)
ix. Consent by Verizon
Verizon New Jersey Inc. and Cellco Partnership
d/b/a Verizon Wireless (“Verizon”) was named as a
Defendant in approximately twenty complaints, in
which JCP&L is also listed as Defendants. Following
suit, Verizon requested, and PennEast agreed to,
similar protections as JCP&L, allowing PennEast
access to the properties to perform non-invasive
App-59
surveys and studies. (Verizon Ltr. dated March 22,
2018; PennEast Ltr. dated March 28, 2018.) Verizon
has since been voluntarily dismissed from all matters
in which it was a named Defendant. 18
x.
Additional
Owners
Represented
Property
The Court received opposition from several
represented property owners:
•
By Gaetano De Sapio, Esq. o/b/o himself
(Dkt. No. 18-1809) and the Estate of
Anthony De Sapio, Anthony De Sapio,
Jr., Martin De Sapio, and James De
Sapio (Dkt. No. 18-1806) (collectively, the
“De Sapio Defendants”). The De Sapio
Defendants allege they were not properly
served, if at all, with the summons and
complaint, nor were they furnished with
an appraisal from which they could
attempt to negotiate. Beyond that, their
opposition largely mirrors the Stark
Defendants’.
•
By Hill Wallack o/b/o Philip and Suzanne
Muller (“Mullers”) 19 (Dkt. No. 18-1915).
The Mullers argue the NGA “does not
authorize private gas companies to
utilize so-called ‘quick-take’ procedures”
and that PennEast is not entitled to an
order allowing the properties to be
patrolled by armed federal marshals.
18 PennEast has also been able to resolve AT&T’s interest in
several properties.
19 The Mullers are now represented by McKirdy Riskin.
App-60
(Muller Br. 13, 17.) The Mullers further
contend bond, if required, should be at
least equal to the fair market value of the
specified property. (Id. at 19.)
xi. Pro Se Property Owners
The Court received and reviewed oppositions from
the following pro se Defendants:
•
Janet Mowder (Dkt. No. 18-1656)
•
Raymond Aron Jr., in the form of an
answer and request for dismissal (Dkt.
No. 18-1801)
•
Leonard and Sharon Goins (Dkt. No. 181996)
•
Michael and Maureen Santoro, and
Thomas and Barbara Callahan (Dkt. No.
18-2016)
•
Lydia Gombosi, Lana Salsano, and Lydia
Dunne (Dkt. No. 18-1621)
F. Public Hearings on the Orders to Show
Cause
Each of the hearings on the Orders to Show Cause
generally proceeded the same way: First, PennEast
was permitted to address the Court, followed by
Defendants represented by counsel. Next, any
property owner in attendance was permitted to
address the Court, giving first priority to any party
who had filed an opposition. PennEast was permitted
to respond. At each subsequent hearing, the Court
App-61
advised counsel they need only supplement their prior
arguments. 20
Based on this procedure, at the April 5, 2018
hearing, following arguments by PennEast and
counsel for Defendants 21, the Court opened the floor to
individual Defendants wishing to address the Court.
No individuals came forward with objections.
Nevertheless, following PennEast’s rebuttal, the
Court provided individual Defendants with another
opportunity to address the Court. At that point,
Frances Silkotch and Gary Salata 22 spoke, expressing
dissatisfaction with PennEast’s attempts to negotiate.
The April 19, 2018 hearing proceeded in the same
manner, with the Court limiting the parties to new
arguments and supplements to the record. 23 The
following individuals addressed the Court: Michael
Voorhees, Cynthia Niciecki, Leonard Goins, Michael
and Maureen Santoro, Barbara Callahan, Janet
Mowder, Gary Salata, Vincent DiBianca, Kevin
Kuchinski, Jacqueline Evans, and Dan Mackey. 24
The parties’ specific arguments raised at the hearing are
incorporated and discussed infra.
20
Specifically, counsel spoke on behalf of the following
Defendants: the State, NJCF, Hunterdon Land Trust, the Stark
Defendants, the McKirdy Riskin Defendants, Mercer County,
JCP&L, Kingwood Township, and Holland Township.
21
22 Both Silkotch (Dkt No. 18-1765) and Salata (Dkt. No. 18-
1918) are represented by counsel but, by invitation of the Court
and with permission of counsel, spoke on behalf of themselves.
23 Counsel spoke on behalf of the following Defendants: the
Mullers, the Stark Defendants, the McKirdy Riskin Defendants,
the De Sapio Defendants, NJCF, and the Hunterdon Land Trust.
24 Individual Defendants’ arguments included but was not
limited to dissatisfaction with PennEast’s negotiation attempts,
App-62
Prior to the third and final hearing on April 26,
2018, the Court ordered PennEast to reserve certain
Defendants 25 it had not been able to personally serve
and who had not otherwise appeared or filed a
response to the Order to Show Cause.
Counsel had little to add to the oral record at the
April 26, 2018 hearing. The following individuals
addressed the Court: Michael Voorhees, Jackie
Freedman on behalf of Woodside View Estates
Homeowner’s Association, and Joseph Caparoso. 26
G. Summation Briefs
Following the hearings, the Court ordered the
parties to submit written summation briefs in lieu of
closing oral arguments. 27 The Court received and
disagreement with PennEast’s offer and valuation, objections to
use of the United States Marshal Service, and objections to the
route of the pipeline.
Defendants are listed in Exhibit A to the April 20, 2018
Order. (See Dkt Nos. 18-1585; 18-1590; 18-1658; 18-1669; 181695; 18-1776; 18-1811; 18-1905; 18-1909; 18-1924 (having since
been resolved); 18-1942; 18-1989; 18-2001; 18-2003; 18-2004; and
18-2025.)
25
26 Voorhees and Freedman objected to their late service and
notice of the hearings. Therefore, the Court permitted them three
weeks to retain counsel or answer or otherwise respond to the
complaint and Order to Show Cause.
Following the submission of summation briefs, the D.C.
Circuit, the Third Circuit, the District Court for the District of
New Jersey, and the District Court for the Middle District of
Pennsylvania issued pipeline-related decisions, including but not
limited to Delaware Riverkeeper Network v. Federal Energy
Regulatory Commission, 895 F.3d 102 (D.C. Cir. 2018); Township
of Bordentown v. Federal Energy Regulatory Commission, 903
F.3d 234 (3d Cir. 2018); New Jersey Conservation Foundation v.
Federal Energy Regulatory Commission, No. 17-11991, 2018 WL
27
App-63
carefully reviewed summation briefs from the
following parties: PennEast, the State, NJCF,
Hunterdon Land Trust, Mercer County, Cole of
Hopewell, the De Sapio Defendants, the Stark
Defendants, and the McKirdy Riskin Defendants.
H. FERC Rehearing Requests and Denial
While PennEast was filing complaints in this
Court based on the FERC Order, several Defendants
petitioned for a rehearing of FERC’s decision. After
issuing tolling orders giving FERC additional time to
review the rehearing requests 28, on August 10, 2018,
“the requests for rehearing [were] rejected, dismissed,
5342833 (D.N.J. Oct. 29, 2018); Transcontinental Gas Pipe Line
Co., LLC v. 2.14 Acres, 907 F.3d 728 (3d Cir. 2018); Penneast
Pipeline Company v. A Permanent Easement of 0.60 Acre ± And
A Temporary Easement Of 0.60 Acre ± In Towamensing
Township, Carbon County, Pennsylvania, No. 18-281, 2018 WL
6304191 (M.D. Pa. Dec. 3, 2018) (granting motion for preliminary
injunction); and Penneast Pipeline Company v. A Permanent
Easement of 0.60 Acre ± And A Temporary Easement Of 0.60 Acre
± In Towamensing Township, Carbon County, Pennsylvania, No.
18-281, 2018 WL 6304192 (M.D. Pa. Dec. 3, 2018) (granting
partial summary judgment). At the request of counsel or at the
request of the Court, the parties supplemented their briefs when
these decisions were issued, as well as when FERC issued its
Order on Rehearing. Supplemental briefs were received almost
monthly and as recently as December 10, 2018. This opinion has
been revised to reflect these recent decisions, as well as the
parties’ responses thereto, as necessary.
28 Pursuant to the NGA, rehearing requests are to be heard
within thirty days. Despite this, courts have upheld the use of
tolling order to grant FERC additional time to review the
requests. Rehearing requests do not constitute stays of the FERC
Order. Delaware Riverkeeper Network, 895 F.3d at 111; Atl. Coast
Pipeline, LLC Dominion Energy Transmission, Inc., 163 FERC
¶ 61098 (May 4, 2018).
App-64
or denied and the requests for stay [were] dismissed
as moot.” FERC Order on Rehearing, Aug. 10, 2018
¶ 4.
II. JURISDICTION
A. Under The NGA
This action is properly before this Court pursuant
to 15 U.S.C. § 717f(h), which allows the holder of a
certificate of public convenience and necessity to
acquire the necessary right of way for a pipeline “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.” Whether
PennEast has established that it is entitled to this
right—and Defendants argue it is not—is addressed
below.
B. Eleventh Amendment Immunity
The State Defendants seek dismissal based on
Eleventh Amendment immunity. An assertion of
Eleventh Amendment immunity is a challenge to a
district court’s subject matter jurisdiction. See
Blanciak v. Allegheny Ludlum Corp., 77 F.3d 690, 693
n.2 (3d Cir. 1996) (“[T]he Eleventh Amendment is a
jurisdictional bar which deprives federal courts of
subject matter jurisdiction.”) (citing Pennhurst State
Sch. & Hosp. v. Halderman, 465 U.S. 89, 98-100
(1984)). Typically, when jurisdiction is challenged, the
party asserting this Court’s jurisdiction bears the
burden of persuading the Court that subject matter
jurisdiction exists. Kehr Packages, Inc. v. Fidelcor,
Inc., 926 F.2d 1406, 1409 (3d Cir. 1991). However,
because “Eleventh Amendment immunity can be
expressly waived by a party, or forfeited through nonassertion, it does not implicate federal subject matter
App-65
jurisdiction in the ordinary sense,” and therefore, a
party asserting Eleventh Amendment immunity bears
the burden of proving its applicability. Christy v. Pa.
Turnpike Comm., 54 F.3d 1140, 1144 (3d Cir. 1994);
see also Carter v. City of Phila., 181 F.3d 339, 347 (3d
Cir. 1999). Accordingly, the State Defendants must
prove the Eleventh Amendment immunity’s
applicability in this case. For the reasons set forth
below, the Court finds the State Defendants are not
entitled to Eleventh Amendment immunity.
The Eleventh Amendment provides: “The Judicial
power of the United States shall not be construed to
extend to any suit in law or equity, commenced or
prosecuted against one of the United States by
Citizens of another State, or by Citizens or Subjects of
any Foreign State.” U.S. Const. amend. XI. Courts
have interpreted this to mean that State agencies and
State officials acting in their official capacities cannot
be sued under the principles of sovereign immunity
and the Eleventh Amendment, subject to exceptions.
Will v. Michigan Dep’t of State Police, 491 U.S. 58, 7071 (1989).
Fatally, the State Defendants concede their
Eleventh Amendment immunity applies only to suits
by private citizens (State Opp’n to Order to Show
Cause 17) and that their arguments would be different
if the United States government were pursuing
eminent domain rights (Apr. 5, 2018 Hearing Tr. 34:917). Indeed, PennEast has been vested with the
federal government’s eminent domain powers and
stands in the shoes of the sovereign. City of Newark v.
Cent. R.R. of N.J., 297 F. 77, 82 (3d Cir. 1924); Georgia
Power Co. v. 54.20 Acres of Land, 563 F.2d 1178, 1181
App-66
(5th Cir. 1977); City of Davenport v. Three Fifths of an
Acre of Land, 252 F.2d 354, 356 (7th Cir. 1958). The
Court is not persuaded by the State Defendants’
argument that the NGA is silent as to the rights of a
private gas company; the NGA expressly allows “any
holder of a certificate of public convenience and
necessity” to acquire rights of way “by the exercise of
the right of eminent domain” in this District Court. 29
15 U.S.C. § 717f(h). As more thoroughly discussed
below, PennEast holds a valid certificate as issued by
the FERC Order. Therefore, the Eleventh Amendment
is inapplicable, and the State Defendants are not
entitled to immunity. 30 The State Defendants’ request
for dismissal for lack of jurisdiction based on Eleventh
Amendment immunity is DENIED.
29 Recently, and more to the point, the Third Circuit specifically
stated, “Congress may grant eminent domain power to private
companies acting in the public interest .... The NGA gives natural
gas companies the power to acquire property by eminent
domain ....” Transcon. Gas Pipe Line Co., 907 F.3d at 728-29. See
also FERC Order ¶ 41, 42 (“Congress made no distinction
between for-profit and non-profit companies .... Once the
Commission makes [a] determination [that the construction and
operation of proposed interstate pipeline facilities are in the
public convenience and necessity], it is section 7(h) of the NGA
that authorizes a certificate holder to acquire the necessary land
or property to construct the approved facilities by exercising the
right of eminent domain if it cannot acquire the easement by an
agreement with the landowner.”)
30 The Court is further persuaded by the State’s apparent
failure to raise this Eleventh Amendment argument in prior
pipeline cases in this district.
App-67
III. APPLICABLE
PENNEAST’S
APPLICATION
PROCEDURE
FOR
CONDEMNATION
PennEast asks this Court: (1) to find it has
satisfied the statutory requirements of the NGA under
15 U.S.C. § 717f(h) and is therefore vested with the
authority to condemn the Rights of Way; (2) for an
Order of Condemnation of the Rights of Way; and
(3) to enter a preliminary injunction allowing
immediate access to and possession of the Rights of
Way because PennEast “has succeeded on the merits
of its claim.” (PennEast’s Proposed Order 2-3.)
Defendants argue PennEast’s application is improper
because, inter alia, PennEast is required to seek relief
by way of summary judgment motion and that
PennEast’s request equates to a “quick-take” or
immediate possession. Defendants further contend
PennEast’s application is improper because it does not
comply with New Jersey state law. In response,
PennEast claims the Court may—and indeed, must—
summarily find the § 717f(h) factors are satisfied prior
to and as part of the injunctive relief inquiry and that
such a finding is not improper or premature.
Additionally, PennEast argues the NGA preempts
New Jersey state law.
A. Absence of Summary Judgment and
Alleged Quick-Take
There is no doubt the NGA, “like most statutes
giving condemnation authority to government officials
or private concerns, contains no provision for quicktake or immediate possession.” E. Tenn. Nat. Gas Co.
v. Sage, 361 F.3d 808, 822 (4th Cir. 2004); accord
Transcon. Gas Pipe Line Co., 907 F.3d at 728-29.
App-68
However, it is also undeniable 31 that “a certificate of
public convenience and necessity gives its holder the
ability to obtain automatically the necessary right of
way through eminent domain, with the only open
issue being the compensation the landowner
defendant will receive in return for the easement.”
Columbia Gas Transmission, LLC v. 1.01 Acres, 768
F.3d 300, 304 (3d Cir. 2014). Courts are generally in
agreement that, within this framework, immediate
possession is permitted through a preliminary
injunction without being considered a quick-take.
Transcon. Gas Pipe Line Co., 907 F.3d at 738-39; 32
Sage, 361 F.3d at 818, 824.
Therefore, the arguably novel question before this
Court is whether PennEast was required to file a
Defendants challenge the effect of PennEast’s FERC
Certificate. This Court discusses and rejects these arguments
infra. See Columbia Gas Transmission, LLC, 2015 WL 389402,
at *3 & n.7-8; infra note 42 and text accompanying note 42.
31
The Third Circuit rejected landowners’ argument that
“because the NGA does not grant ‘quick take’ power, the statute
does not permit immediate possession,” stating:
32
Nothing in the NGA suggests either explicitly or
implicitly that the rules governing preliminary
injunctions should be suspended in condemnation
proceedings....
[W]e see no reason to read a repeal of Rule 65,
governing preliminary injunctions, into the NGA. In
fact, subsection (a) of Rule 71.1 incorporates the other
Federal Rules of Civil Procedure—including the
preliminary
injunction
rule,
Rule
65—in
condemnation proceedings to the extent Rule 71.1 does
not govern. We do not so easily exterminate equitable
remedies.
Transcon. Gas Pipe Line Co., 907 F.3d at 738-39.
App-69
motion for summary judgment (or partial summary
judgment) with respect to § 717f(h) before or in
conjunction with its motion for a preliminary
injunction. 33 For the reasons set forth herein, the
Court finds such a motion is not required in order for
this Court to make a finding as to PennEast’s
substantive right to eminent domain under § 717f(h).
District courts in the Third Circuit have
repeatedly granted immediate possession and
preliminary injunctions without the benefit of
summary judgment motions or briefings. See, e.g.,
Columbia Gas Transmission, LLC v. 2.510 Acres of
Land in the Borough of Swedesboro, Gloucester Cty.,
86 F. Supp. 3d 291 (D.N.J. 2015); Columbia Gas
33 The Third Circuit did not directly address this discreet issue
in its recent Transcontinental opinion. Transcon. Gas Pipe Line
Co., LLC, 907 F.3d at 734-35. There, plaintiff filed motions for a
partial summary judgment and for a preliminary injunction. The
district court in Pennsylvania granted partial summary
judgment and, because it made a favorable decision on the merits
in doing so, granted the preliminary injunction. On appeal, the
Third Circuit found this did not constitute an impermissible
quick-take. However, it did not specifically discuss whether
anything less that summary judgment on plaintiff’s substantive
right to take would suffice. (See id. at 739 (agreeing with the
Fourth Circuit’s decision in Sage that immediate possession
through a preliminary injunction was permissible in a
condemnation proceeding, stating, “And this Court, too, albeit
with less discussion, has ruled that where summary judgment is
properly granted on a condemnation complaint, a preliminary
injunction is appropriate as well. We effectively granted
immediate access on the basis that the gas company had
demonstrated success on the merits and strong arguments on the
other prongs of the preliminary injunction test.”). For the reasons
set forth herein, the Court finds the Third Circuit’s decision
instructive here.
App-70
Transmission, LLC v. 1.092 Acres of Land, No. 15-208,
2015 WL 389402 (D.N.J. Jan. 28, 2015); Tennessee Gas
Pipeline, LLC v. 1.693 Acres of Land in the Twp. of
Mahwah, No. 2:12-cv-07921, 2013 WL 244821 (D.N.J.
Jan. 22, 2013); Tennessee Gas Pipeline Co. v. 0.018
Acres of Land in Twp. of Vernon, Sussex Cty., N.J., No.
10-4465, 2010 WL 3883260 (D.N.J. Sept. 28, 2010);
Steckman Ridge GP, LLC v. An Exclusive Nat. Gas
Storage Easement Beneath 11.078 Acres, No. 08-168,
2008 WL 4346405 (W.D. Pa. Sept. 19, 2008). In each
of these cases, the court first found “[p]laintiff had
demonstrated an established right to condemn the
landowner defendants’ properties under the [NGA], 15
U.S.C. § 717f(h),” followed by a finding that
“preliminary relief in the form of immediate
possession was appropriate.” See Columbia Gas
Transmission, LLC, 86 F. Supp. 3d at 292-93 (citing
Columbia Gas Transmission, 2015 WL 389402, at *35). This is precisely the procedure PennEast asks the
Court to follow. 34
Still, Defendants argue this seemingly standard
procedure operates as an impermissible quick-take.
The Court disagrees. The Third Circuit in
Transcontinental Gas Pipe Line Co. recently
confirmed there are two types of eminent domain:
One is “quick take,” permitted by the
[Declaration of Taking Act (“DTA”)], 40
U.S.C. § 3114, in which the government files
a “declaration of taking” that states the
34 The pervasiveness of this practice is enough to convince the
Court that this procedure is proper. However, the Court will
address Defendants’ arguments, particularly in light of
Transcontinental Gas Pipe Line Co., 907 F.3d 725.
App-71
authority for the taking, the public use, and
an estimate of compensation. Upon
depositing the estimated compensation, title
vests automatically with the United States.
The other is standard condemnation,
permitted by 40 U.S.C. § 3113, in which title
passes and the right to possession vests after
a final judgment and determination of just
compensation. The procedures for standard
condemnations are set forth in Fed. R. Civ. P.
71.1. The NGA is an example of a grant of
eminent domain power from Congress to a
private actor to condemn land for public use,
but it only embodies the second type—
standard condemnation power, not “quick
take.”
In the case before us, Transcontinental
followed standard condemnation procedure.
The company filed condemnation complaints
under Rule 71.1, not a declaration of taking.
Rule 71.1 has requirements that go beyond
the DTA. Transcontinental followed these
procedures
by
filing
condemnation
complaints under Rule 71.1; it then
established its substantive right to the
property by filing for summary judgment.
Only after the District Court granted
summary judgment in Transcontinental’s
favor did it grant injunctive relief.
Transcontinental also posted bond at three
times the appraised value of the rights of way,
as required by the orders of condemnation. If
Transcontinental had in fact exercised “quick
take,” it would have simply filed a declaration
App-72
of taking with an estimate of compensation;
title would have vested automatically. Here,
unlike
in
a
“quick
take”
action,
Transcontinental does not yet have title but
will receive it once final compensation is
determined and paid. Unlike in a “quick take”
action, the Landowners had the opportunity
to brief the summary judgment motions and
participate in the preliminary injunction
hearing. The different procedures and
opportunities for participation distinguish
the grant of the injunction here from an
exercise of “quick take” power.
Transcon. Gas Pipe Line Co., 907 F.3d at 734-35
(footnotes omitted).
Against this background, it is undeniable
PennEast is permissibly seeking condemnation under
the NGA by way of a preliminary injunction and not
by way of a quick-take under the DTA. The Third
Circuit made clear that a quick-take under the DTA
would have required “a declaration of taking with an
estimate of compensation,” and “title would have
vested
automatically.”
Id.
at
735.
Like
Transcontinental, PennEast “filed condemnation
complaints under Rule 71.1, not a declaration of
taking.... [I]t then[ 35] established its substantive right
to the property....” Id. at 734. And while the Third
Circuit did not specifically address whether something
less than summary judgment would suffice for
determining whether a plaintiff’s substantive rights
35 See infra Section IV (finding PennEast has established its
substantive right to eminent domain under § 717f(h)).
App-73
under § 717f(h) of the NGA were satisfied, it indicated
that its previous decisions to grant immediate access
were based on “the gas company … demonstrat[ing]
success on the merits and strong arguments on the
other prongs of the preliminary injunction test.” Id. at
739 (citing Columbia Gas, 768 F.3d at 315-16); see
supra note 33. Therefore, the Court finds a summary
judgment motion is not required to determine
substantive rights for condemnation under NGA. All
that is required is a finding, first, that the certificate
holder has satisfied § 717f(h), demonstrating a success
on the merits. Then, based on this finding “and strong
arguments on the other prongs of the preliminary
injunction test,” a court may grant preliminary
injunctive relief in the form of immediate possession.
Transcon. Gas Pipe Line Co., 907 F.3d at 739.
Nevertheless, Defendants argue PennEast’s
failure to file a summary judgment motion acts as a
quick-take. The Court disagrees. Logically, if
PennEast did not file a quick-take under the DTA and
if there are only two types of eminent domain, it
stands to reason PennEast filed its Condemnation
Application under Rule 71.1 and the NGA. Failure to
file a summary judgment motion does not convert
PennEast’s NGA condemnation action into a DTA
quick-take, nor does it create a third type of eminent
domain in contravention of Third Circuit directive.
Transcon. Gas Pipe Line Co., 907 F.3d at 736 (“To the
contrary, we conclude that the equitable means by
which Transcontinental’s possession vested through
the preliminary injunction differed in significant ways
from ‘quick take’ under the DTA. We decline the
invitation to conflate the two processes. These are not
trivial differences of procedure or paperwork.”).
App-74
Therefore,
having
found
PennEast’s
Condemnation Application does not constitute an
impermissible quick-take, and having found a
summary judgment motion was not required to be
filed as part of PennEast’s request for orders of
condemnation, the Court will, as other courts in this
district have, evaluate and make a determination as
to PennEast’s substantive right to the property under
§ 717f(h) prior to reviewing the preliminary injunction
motion.
B. Applicability of State Law
Next, Defendants argue the substantive law of
New Jersey does not conflict with federal law and
therefore is not preempted. In particular, Defendants
argue New Jersey state law requires good-faith
negotiations before condemnations. And while the
Court finds, infra, such an obligation does not exist
under the NGA, the Court will address, generally, the
issue of preemption.
Defendants argue that New Jersey law is
controlling in this matter because § 717f(h) requires
“[t]he practice and procedure in any action or
proceeding for [the] purpose [of exercise of the right of
eminent domain] in the district court of the United
States shall conform as nearly as may be with the
practice and procedure in similar action or proceeding
in the courts of the State where the property is
situated.” However, Defendants fail to cite any New
Jersey or Third Circuit law or case for this
proposition. 36 Conversely, since the adoption of
36 To the extent Defendants disagree with the Third Circuit and
the cases on which the Court relies (see e.g., McKirdy Riskin Defs.
Supp. Auth Ltr. dated Nov. 2, 2018), the argument is not
App-75
Federal Rule of Civil Procedure 71.1, the Third Circuit
has ended its reliance on the state conformity
language in the NGA upon which Defendants rely,
expressly stating:
Reliance on state eminent domain procedures
ended with the adoption of Rule 71.1
(previously numbered 71A), which created a
nationally uniform approach to eminent
domain proceedings, and which, because it
conflicted with § 717f(h), superseded the
state-conformity language in the NGA.
Courts
now
generally
agree
that
condemnation proceedings under the NGA
should follow Rule 71.1.
Transcon. Gas Pipe Line Co., 907 F.3d at 738
(footnotes omitted); see also Columbia Gas
Transmission, 2015 WL 389402, at *3 n.8 (“Federal
Rule of Civil Procedure 71.1, however, supersedes the
language in [§] 717f(h) to the extent it requires
conformity with the state court “‘practice and
procedure’” concerning condemnation.” (citation
omitted)); Steckman Ridge GP, LLC, 2008 WL
4346405, at *3, *18 (“[T]he Third Circuit has
determined that ‘Congress intended to preempt state
regulation of rates and facilities of natural gas
companies and it [is] clear that the Natural Gas Act
was intended by Congress to occupy the field.’”
(quoting Pa. Med. Soc. v. Marconis, 942 F.2d 842, 847
(3d Cir. 1991)) (citing Schneidewind v. ANR Pipeline
persuasive. This Court “does not have the discretion to disregard
controlling precedent simply because it [or a party] disagrees
with the reasoning behind such precedent.” Vujosevic v. Rafferty,
844 F.2d 1023, 1030 n.4 (3d Cir. 1988).
App-76
Co., 485 U.S. 293, 300-01 (1988))) (emphasis omitted);
FERC Order ¶ 218 (“Any state or local permits issued
with respect to the jurisdictional facilities authorized
herein must be consistent with the conditions of this
certificate. The Commission encourages cooperation
between interstate pipelines and local authorities.
However, this does not mean that state and local
agencies, through application of state or local laws,
may prohibit or unreasonably delay the construction
or operation of facilities approved by this
Commission.”). 37
Accordingly, the Court will proceed with its
analysis under Rule 71.1, which allows for
preliminary injunction proceedings under Rule 65,
and § 717f(h) of the NGA. 38
IV. SUBSTANTIVE RIGHT OF
DOMAIN UNDER THE NGA
EMINENT
Pursuant to 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, and the
Similarly, for these reasons, the Court finds the State’s
Farmland Preservation Programs and the law governing it,
including but not limited to the Agriculture Retention and
Development Act, N.J. Stat. Ann. 4:1C, et seq., are preempted to
the extent they conflict with the condemnation procedures set
forth in NGA and Rule 71.1.
37
38 See supra note 32.
App-77
necessary land or other property, in addition
to right-of-way, for the location of compressor
stations, pressure apparatus, or other
stations or equipment necessary to the proper
operation of such pipe line or pipe lines, 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. The practice and procedure in any
action or proceeding for that purpose in the
district court of the United States shall
conform as nearly as may be with the practice
and procedure in similar action or proceeding
in the courts of the State where the property
is situated: Provided, That the United States
district courts shall only have jurisdiction of
cases when the amount claimed by the owner
of the property to be condemned exceeds
$3,000.
Therefore, in order to condemn property, the
petitioner must show: (1) that it is the holder of a
FERC certificate of public convenience and necessity;
(2) that it has been unable to acquire the necessary
property interests by contract or agreement; and
(3) that the alleged value of the property interest
exceeds $3000. Transcontinental Gas Pipe Line Co.,
LLC v. Permanent Easement for 2.59 Acres, 709 F.
App’x 109, 111 (3d Cir. 2017); accord Columbia Gas
Transmission, LLC, 768 F.3d at 304. The Court
addresses each element in turn.
App-78
A. FERC Certificate of Public Convenience
and Necessity
PennEast maintains it is the holder of a valid
FERC certificate—the FERC Order issuing blanket
certificates—and that the scope of the FERC Order
includes the properties against which it filed
complaints.
Several Defendants argue, for a variety reasons,
the FERC Order is not a final determination, while
other Defendants concede it is. (See, e.g., State Opp’n
9 (“The Order is a final order, making it eligible for a
rehearing request....”).) The Court finds, for the
reasons set forth below, PennEast holds a final, valid
FERC certificate upon which it can, and has standing
to, pursue its right of eminent domain. Columbia Gas
Transmission, LLC, 768 F.3d at 304 (“Accordingly, a
certificate of public convenience and necessity gives its
holder the ability to obtain automatically the
necessary right of way through eminent domain, with
the only open issue being the compensation the
landowner defendant will receive in return for the
easement.”).
Pursuant to subsection (e) of 15 U.S.C. § 717f:
[A] certificate shall be issued to any qualified
applicant therefor, authorizing the whole or
any part of the operation, sale, service,
construction, extension, or acquisition
covered by the application, if it is found that
the applicant is able and willing properly to
do the acts and to perform the service
proposed and to conform to the provisions of
this chapter and the requirements, rules, and
regulations of the Commission thereunder,
App-79
and that the proposed service, sale, operation,
construction, extension, or acquisition, to the
extent authorized by the certificate, is or will
be required by the present or future public
convenience and necessity; otherwise such
application shall be denied. The Commission
shall have the power to attach to the issuance
of the certificate and to the exercise of the
rights granted thereunder such reasonable
terms and conditions as the public
convenience and necessity may require.
(emphasis added).
Here, on January 19, 2018, after issuing a final
EIS, FERC granted PennEast a Certificate of Public
Convenience and Necessity, exercising its right to
attach conditions to the Certificate. FERC Order ¶ 2.
See 15 U.S.C. § 717f(e). These conditions do not
undermine the finality of the Certificate under
§ 717f(h) and were permitted under subsection (e). See
Penneast Pipeline Co., 2018 WL 6304192, at *3 (“‘It is
true that there are conditions in the FERC certificate
that [PennEast] will need to meet prior to commencing
actual construction of the pipeline, but the fulfillment
of these conditions is not a prerequisite to
[PennEast’s] exercise of eminent domain’; if it were,
some requirements—like surveying the property to
comply with certificate conditions—would never be
met and as a result, the pipeline would never be built.”
(quoting Transcon. Gas Pipe Line Co., 2017 WL
3624250, at *6, aff’d, 907 F.3d 725 (3d Cir. 2018)
(alterations in original)); Constitution Pipeline Co. v.
A Permanent Easement for 0.67 Acres & Temp.
Easement for 0.68 Acres in Summit, Schoharie Cty.,
App-80
N.Y., No. 14-2023, 2015 WL 1638477, at *2 (N.D.N.Y.
Feb. 21, 2015) (holding that “the FERC Order cannot
reasonably be read to prohibit [the gas company] from
exercising eminent domain authority until it has
complied with all conditions set forth in the Appendix”
and rejecting “the argument that [the gas company]
must wait until it has obtained a [Clean Water Act]
401 Certificate before it can initiate eminent domain
proceedings”).
Moreover, since the filing of this matter, FERC
has reviewed and rejected, denied, or dismissed
requests for a rehearing on the Order and, in another
lengthy order with findings, affirmed its findings as
set forth in the final EIS and the FERC Order. See
generally, FERC Order on Rehearing. Notably absent
from the many reasons the requests were rejected,
denied, or dismissed was PennEast’s alleged lack of a
final certificate. Indeed, FERC treated the Certificate
as final without question. See, e.g., id. ¶ 5 (rejecting
requests for a rehearing because “only a party to a
proceeding has standing to request rehearing of a final
Commission decision” (emphasis added)); see also N.J.
Conservation Found., 2018 WL 5342833, at *11 n.12
(describing the PennEast FERC process as final and
complete). This Court will do the same here and finds
the Certificate to be final and valid.
Several Defendants argue the Certificate is “nonfinal” and is only an “incipient authorization without
current force or effect.” (See, e.g., Stark Defs.’ Opp’n
12-13.) That argument is misplaced, and the FERC
orders cited in support thereof are inapposite. For
example, in Crown Landing LLC, 117 FERC ¶ 61,209,
App-81
at 62,106 (2006), on which Defendants rely, FERC
denied rehearing and stated:
The approval we issued in the June 20 Order
is expressly conditioned upon completion of
Crown
Landing’s
remaining
and
unchallenged duties under [the Coastal Zone
Management Act and the Clean Air Act]. Our
order is an incipient authorization without
current force and effect, since it does not yet
allow Crown Landing to begin the activity it
proposes[—i.e., construction and operation of
a pipeline].
Id. ¶ 21. The Crown Landing order 39 does not suggest
the holder of the certificate cannot exercise its
eminent domain rights consistent with the NGA, nor
do Defendants provide FERC order or case that does.
The remaining arguments generally relate to the
effect of the then-pending requests for rehearing. In
light of FERC’s Order on Rehearing, those arguments
are moot. 40 To the extent Defendants argue the FERC
Order and/or Certificate did not make a finding of
public necessity, and is incomplete on those grounds,
39 The Crown Landing order goes on to say that “[c]onditional
Commission orders have been described in the context of
constitutional standing analysis as ‘without binding effect,’”
further distancing that FERC order from relevance to PennEast’s
case. Id. ¶ 21 n.27 (emphasis added) (citing New Mexico Attorney
Gen. v. FERC, No. 04-1398, slip op. at 3 (D.C. Cir. October 13,
2006) (also discussing standing)).
40 For example, the McKirdy Riskin Defendants argue FERC’s
approval was not final, and therefore not ripe for adjudication,
because of the pending rehearing requests. That argument is
moot in light of FERC Order on Rehearing.
App-82
a clear reading of the FERC Order and final EIS
adopted thereby, followed by the Rehearing Order,
demonstrates FERC did, in fact, make such a
finding. 41 This Court is not empowered to criticize that
decision. See 15 U.S.C. § 717r(a), (b); N.J.
Conservation Found., 2018 WL 5342833, at *3;
Columbia Gas Transmission, LLC, 2015 WL 389402,
at *3 & n.7 (“Disputes over the reasons and procedures
for issuing certificates of public convenience and
necessity must … be brought before FERC.”). 42
Therefore, for the reasons set forth above, the
Court finds PennEast is the holder of a Certificate of
Public Convenience and Necessity and has satisfied
that portion of the NGA.
For this reason, the Court finds no merit in Defendants’
argument that their Fifth Amendment rights are being violated
by PennEast’s failure to show the taking is for a public use.
Specifically, FERC found the public convenience and necessity
requires approval of the project, concluding:
41
Based on the benefits the project will provide to the
shippers, the lack of adverse effects on existing
customers, other pipelines and their captive
customers, and effects on landowners and surrounding
communities, we find, consistent with the Certificate
Policy Statement and section 7 of the NGA, that the
public convenience and necessity requires approval of
PennEast’s proposal, subject to the conditions
discussed [in Appendix A].
FERC Order ¶ 40.
42 Similarly, any arguments challenging FERC’s procedures,
including that FERC’s use of tolling orders denied Defendants of
due process in this proceeding, are beyond this Court’s review.
See N.J. Conservation Found., 2018 WL 5342833, at *6 (finding
no jurisdiction over a collateral attack on the FERC order or
FERC’s procedures).
App-83
B. Acquisition by Contract or Agreement
The next requirement under 15 U.S.C. § 717f(h) is
that the holder of the certificate was not able to
“acquire by contract, or [was] unable to agree with the
owner of property to the compensation to be paid for,
the necessary right-of-way.” It is undisputed that
PennEast has been unable to come to an agreement
with the remaining Defendants. 43 Defendants argue,
however, PennEast did not negotiate in good faith. 44
Since the filing of this case, PennEast has come to
agreements with several property owners to allow the pipeline
rights of way as requested in the Complaint. These matters have
been dismissed in their entirety. In other cases, PennEast was
able to reach agreements with one or more interest holder other
than the property owner and, in those cases, those parties have
been dismissed but the case remains active. For example, the
interest holder may have discharged a mortgage, disclaimed an
interest in the property, resolved its interest with PennEast or
otherwise does not wish to participate.
43
Some Defendants argue that the language used in
PennEast’s offers improperly sought permission for rights of way
beyond what is permitted by § 717f(h). That argument is
unsupported by facts or law and, based on the findings herein, is
not dispositive. PennEast’s “proposed orders simply cannot have
the effect of granting any right of ingress or egress not approved
by FERC.” Mountain Valley Pipeline, LLC v. Easements to
Construct, Operate, & Maintain a Nat. Gas Pipeline Over Tracts
of Land in Giles Cty., Craig Cty., Montgomery Cty., Roanoke Cty.,
Franklin Cty., & Pittsylvania Cty., Virginia, No. 17-0492, 2018
WL 1193021, at *2 (W.D. Va. Mar. 7, 2018) (quoting Mountain
Valley Pipeline, LLC v. Simmons, No. 17-211, Dkt. No. 157
(N.D.W. Va. Feb. 20, 2018)). Defendants alternatively argue
PennEast’s parcel map and description of the Rights of Way was
unclear as to the parcel to be acquired or that PennEast did not
properly serve Defendants. The Court has reviewed the
complaints, certifications, and maps and descriptions attached
thereto, and finds notice and service to be satisfactory. See Fed.
44
App-84
PennEast contends the NGA does not impose a good
faith negotiation requirement and, even so, relies on
the certification of Daniel Murphy, a Project Manager
for PennEast to demonstrate its efforts.
The Third Circuit has not taken a position on
whether good faith negotiations are required, 45 and
courts around the country are split. Millennium
Pipeline Co., L.L.C. v. Certain Permanent and
Temporary Easements, 777 F. Supp. 2d 475, 482-3
(W.D.N.Y. 2011) (citing Maritimes & Ne. Pipeline,
L.L.C. v. Decoulos, 146 F. App’x 495, 498 (1st Cir.
2005))
(declining
to
require
good
faith);
Transcontinental Gas Pipe Line Co. v. 118 Acres of
R. Civ. P. 71.1 (requiring “a description sufficient to identify the
property” and “the interests to be acquired”); Columbia Gas
Transmission, LLC v. 370.393 Acres, No. 14-0469, 2014 WL
5092880, at *12-13 (D. Md. Oct. 9, 2014). To the extent
Defendants allege the descriptions are incorrect, vague, or
ambiguous, PennEast will be able to amend the condemnation
orders once it has accessed the property.
While the Third Circuit has not made a specific finding
regarding this requirement, it can be inferred there is no good
faith requirement. In its October 30, 2018 Transcontinental Gas
Pipe Line Co. Opinion, the court stated:
45
The second and third requirements for using the
eminent domain powers under § 717f(h) of the NGA
are that the gas company negotiate with the landowner
for the necessary right of way and that value of the
right of way exceeds $3000. Transcontinental extended
written offers of compensation exceeding $3000 to each
of the Landowners, but these offers were not
accepted.[] Transcontinental thus satisfied the second
and third requirements.
Transcon. Gas Pipe Line Co., 907 F.3d at 731 (footnote omitted)
(citing declaration from senior land representative).
App-85
Land, 745 F. Supp. 366, 369 (E.D. La. 1990) (requiring
good faith). Absent direction from the Third Circuit, 46
district courts in this circuit have declined to find such
a requirement, noting “the plain language of the NGA
does not impose an obligation on a holder of a FERC
certificate to negotiate in good faith before acquiring
land by exercise of eminent domain.” Transcontinental
Gas Pipe Line Co. v. Permanent Easement for 0.78
Acres, No. 17-0571, 2017 WL 3485755, at *3 (M.D. Pa.
Aug. 15, 2017) (quoting UGI Sunbury LLC v. A
Permanent Easement for 0.4944 Acres, No. 16-0783,
2016 WL 3254986, at *6 (M.D. Pa. June 14, 2016))
(citing Steckman Ridge GP, LLC, 2008 WL 4346405 at
*13 n.3; see also Kansas Pipeline Company v. A 200
Foot By 250 Foot Piece of Land, 210 F. Supp. 2d 1253,
1257 (D. Kan. 2002)).
This Court is persuaded by the other district
courts in this Circuit and finds no good faith
requirement exists in the NGA. 47 See Transcon. Gas
Pipe Line Co., 2017 WL 3485755, at *3. Accordingly,
PennEast need only show, quite simply, that it has
been unable to acquire the property by contract or has
been unable to agree with the owner of the property as
to the compensation to be paid. See 15 U.S.C.
§ 717f(h); Columbia Gas Transmission, LLC v. 76
Acres More or Less, No. 14-110, 2014 WL 2919349, at
46 But see supra note 45.
47 Even if the NGA did require a showing of good faith, the
Court finds such a requirement has been met. The Court is
mindful of the impact this decision may have on property owners
who have resided in their homes for years and have taken issue
with the offers and forms of offers. Nonetheless, the Court finds
PennEast has satisfied this portion of § 717f(h).
App-86
*3 (D. Md. June 25, 2014) (rejecting the good faith
requirement and finding plaintiff “need only show that
it made an offer to the [d]efendants in order to
demonstrate compliance with the second condition of
[§] 717f(h). The burden to satisfy this condition is not
onerous.” (citing E. Tenn. Natural Gas, LLC v. 1.28
Acres, No. 06-0022, 2006 WL 1133874, at *29 (W.D.
Va. Apr. 26, 2006))).
PennEast filed a declaration of Daniel Murphy in
each case. Murphy is employed by Western Land
Services (“WLS”) as a Project Manager for the
PennEast Pipeline Project and, in that capacity,
oversees all communications with owners of property
on the pipeline route. (Murphy Decl. ¶¶ 6-7.) These
communications include negotiations for access to
properties for surveys and to acquire the necessary
rights of way. (Id. ¶ 7.) Specifically, Murphy
supervises various land agents “who, over a period of
more than three years, have made numerous contacts
with [p]roperty [o]wners related to WLS’s attempts on
behalf of PennEast to obtain (1) property rights for the
[p]roject and (2) access to conduct surveys and
investigations.” (Id. ¶ 8.) Based on the record before
the Court describing the efforts of WLS 48, the Court
finds PennEast has met its burden to “show that it
made an offer to the [d]efendants,” Columbia Gas
Transmission, LLC, 2014 WL 2919349, at *3, and was
not able to “acquire by contract, or [was] unable to
agree with the owner of property to the compensation
48 Including but not limited to numerous attempts to contact
the property owners either through visits or by mail; failure to
obtain permission for either survey access or to acquire an
easement; and rejection of offers in excess of $3000.
App-87
to be paid for, the necessary right-of-way,” 15 U.S.C.
§ 717f(h). 49 Therefore, this factor is satisfied.
C. Property Value Exceeds $3000
The parties do not dispute the property value
exceeds $3000. PennEast has made offers exceeding
that amount (Murphy Decl. ¶ 19) and, as expected,
Defendants do not argue their property is worth less.
Therefore, this factor is satisfied for purposes of 15
U.S.C. § 717f(h). 50
V. CONDEMNATION ORDER
Because PennEast has established it has a
substantive right to eminent domain under § 717f(h),
PennEast is “entitled to exercise eminent domain over
the those [sic] specified portions of the landowner
[d]efendants’ properties, under the authority of the
[NGA] and the FERC [C]ertificate,” and the Court
“may, under its equitable powers, enter an order of
condemnation concerning the subject properties.”
Columbia Gas Transmission, 2015 WL 389402, at *4
(citing Sage, 361 F.3d at 823); accord Columbia Gas
Transmission, LLC, 768 F.3d at 304; Columbia Gas
Transmission, LLC v. 2.510 Acres of Land in the
Borough of Swedesboro, Gloucester Cty., 86 F. Supp.
3d 291 (D.N.J. 2015); Tennessee Gas Pipeline, LLC v.
1.693 Acres of Land in the Twp. of Mahwah, No. 1249 Several Defendants argue this burden is not met because
PennEast did not attempt to negotiate with all interest holders.
The Court disagrees. To satisfy its burden under § 717f(h),
PennEast need only show it “cannot acquire by contract, or is
unable to agree with the owner of property.” (emphasis added).
PennEast has met this burden. There is no obligation to make a
showing as to all interest holders.
50 See also supra note 45.
App-88
07921, 2013 WL 244821 (D.N.J. Jan. 22, 2013).
Therefore, PennEast’s request for orders of
condemnation is GRANTED.
The next question is “whether such right entitles
[PennEast] to intermediate, equitable relief in the
form of immediate possession.” Columbia Gas
Transmission, 2015 WL 389402, at *4. Having found
injunctive relief is an appropriate remedy in
condemnation actions, see supra Section III.A, the
only remaining question is whether PennEast meets
its burden in “demonstrat[ing] success on the merits
and strong arguments on the other prongs of the
preliminary injunction test.” Transcon. Gas Pipe Line
Co., 907 F.3d at 738-39. For the reasons set forth
below, the Court finds injunctive relief in the form of
immediate possession is warranted.
VI. INJUNCTIVE RELIEF
To obtain a temporary restraining order or
preliminary injunction, the moving party must show:
(1) a reasonable probability of eventual
success in the litigation, and (2) that it will be
irreparably injured … if relief is not
granted.... [In addition,] the district court, in
considering whether to grant a preliminary
injunction, should take into account, when
they are relevant, (3) the possibility of harm
to other interested persons from the grant or
denial of the injunction, and (4) the public
interest.
Reilly v. City of Harrisburg, 858 F.3d 173, 176 (3d Cir.
2017) (quoting Del. River Port Auth. v. Transamerican
Trailer Transport, Inc., 501 F.2d 917, 919-20 (3d Cir.
1974)). The movant bears the burden of establishing
App-89
“the threshold for the first two ‘most critical’
factors .... If these gateway factors are met, a court
then considers the remaining two factors and
determines in its sound discretion if all four factors,
taken together, balance in favor of granting the
requested preliminary relief.” Id. at 179. Significantly,
a motion for injunctive relief following a
determination of plaintiff’s substantive right to
eminent domain
is not a “normal” preliminary injunction,
where the merits await another day. In those
situations, the probability of success is not a
certainty such that weighing the other factors
is paramount. Here, there is no remaining
merits issue; we have ruled that [plaintiff]
has the right to the easements by eminent
domain. The only issue is the amount of
compensation—… the result of which can
have no affect on [plaintiff]’s rights to the
easements. That [plaintiff]’s entitlement to
relief comes in the form of injunctive relief
should not dictate that we impose similar
constraints on our grant of that relief in this
context.
Columbia Gas Transmission, LLC, 768 F.3d at 315.
Against this landscape, the Court weighs the
injunctive relief factors.
A. Reasonable Probability
Success in the Litigation
of
Eventual
PennEast has more than established reasonable
probability of success on the merits; indeed, the Court
has found PennEast satisfied the elements of § 717f(h)
and is therefore entitled to condemnation orders.
App-90
Accordingly, the Court finds this factor is satisfied and
weighs in favor of granting the preliminary injunction.
See Columbia Gas Transmission, 2015 WL 389402, at
*4 (citing Columbia Gas Transmission, 768 F.3d at
314-15; Steckman Ridge, 2008 WL 4346405, at *15).
B. Irreparable Harm
PennEast argues it requires immediate access to
and possession of the Rights of Way in order to meet
the FERC-mandated in-service date of January 1,
2020. In support thereof, PennEast provided the
certification of Jeffrey D. England, Manager, Project
Management and Construction of UGI Energy
Services, LLC on behalf of PennEast. (England Cert.)
England states, “PennEast has entered into precedent
agreements with seven foundation shippers and
eleven shippers in total, which combined have
committed to purchase 975,000 dekatherms per day of
the natural gas to be supplied by the [p]roject. These
precedent agreements are based on the [p]roject being
in service by certain dates.” (Id. ¶ 9.) While the Court
understands Defendants’ objections, 51 courts have
held that a financial loss may be sufficient to establish
irreparable harm “if the expenditures cannot be
51 Defendants argue the in-service date is not a hard deadline
by which the project must be built; rather it is “simply FERC’s
inclusion of PennEast’s anticipated length of project completion,
to ensure that its nascent authorization does not languish
indefinitely while an applicant sits on its rights,” and, to the
extent PennEast is bound by the timeline, “FERC can and
routinely does grant extensions upon simple request.” (See Stark
Defs.’ Br. 28-29.) While this may be true, the Court is persuaded
by its sister courts’ findings which respect to the matter, cited
herein, and, nevertheless, finds additional irreparable injuries on
which it bases its decision.
App-91
recouped,” such as where the delay would prevent the
pipeline company from completing necessary preconstruction survey and conditions or could cause the
company to breach contracts with subcontractors and
vendors. See Transcon. Gas Pipe Line Co., 709 F. App’x
at 112-13; Columbia Gas Transmission, LLC, 768 F.3d
at 315-16; Penneast Pipeline Co., 2018 WL 6304191, at
*2; Columbia Gas Transmission, LLC, 2015 WL
389402, at *4; Tennessee Gas Pipeline Co., 2010 WL
3883260, at *2-3. (See also England Decl. ¶ 29 (“If
PennEast is unable to complete these activities in an
expeditious manner, the project will be delayed
causing PennEast irreparable harm in terms of lost
contracts....”).)
Moreover, FERC has tasked PennEast with a
number of environmental conditions which must be
satisfied before PennEast can begin construction.
Many of these conditions require immediate access to
the properties, including but not limited to Conditions
3, 4, 6, 10, 15-17, 21, 23, 30-32, 35, 39, 41, 47, and 51.
(England Cert. ¶ 18 (citing FERC Order, App’x A).)
Immediate access will additionally allow PennEast to
survey and collect information needed to complete its
Application to the DEP for a Freshwater Wetlands
Individual Permit and Water Quality Certificate. (Id.
¶ 17.)
Defendants argue PennEast’s lack of DEP
approval is grounds for this Court to deny injunctive
relief. The Court is not persuaded by this chicken-andegg argument. The DEP is requiring that PennEast
have 100% of the surveys “completed before the
agency will undertake to complete its review and
render decisions on the Permit and Certificate
App-92
Application.” (Id. ¶ 22.) Therefore, the Court finds
PennEast will be irreparably harmed if it is not
granted immediate access to the properties to begin
surveys, complete its DEP Application, and satisfy
FERC’s Environmental Conditions. 52 See Constitution
Pipeline Co., 2015 WL 1638477, at *2 (holding that
“the FERC Order cannot reasonably be read to
prohibit [the gas company] from exercising eminent
domain authority until it has complied with all
conditions set forth in the Appendix” and rejecting
“the argument that [the gas company] must wait until
it has obtained a CWA 401 Certificate before it can
initiate eminent domain proceedings”). 53
52 To the extent the State Defendants argue this preliminary
relief will cause irreparable harm and is against the stated
policies of the State, the Court has already found that the
condemnation procedures under the NGA and Rule 71.1 preempt
any proscriptions regarding eminent domain conveyance set
forth in the State law.
On December 3, 2018, the District Court for the Eastern
District of Pennsylvania issued opinions pertaining to
PennEast’s motions for summary judgment and injunctive relief.
Penneast Pipeline Co., 2018 WL 6304191 (granting motion for
preliminary injunction); Penneast Pipeline Co., 2018 WL 6304192
(granting partial summary judgment). In granting summary
judgment, the court denied any argument that the FERC Order
was not final because, inter alia,
53
If the FERC certificate was to be interpreted as
requested by [defendant], no entry onto private
property could take place before all pre-conditions
were met, and yet, many of the pre-conditions cannot
be met without access to the property. This contorted
reasoning would make the FERC certificate nothing
more than a meaningless piece of paper. Said another
way, such action would effectively preclude PennEast
from ever being able to submit a completed application
App-93
Accordingly, this factor weighs in favor of
granting the preliminary injunction.
C. Balancing Against Harm to Defendants
This Court has heard, reviewed, and carefully
considered a wide range of arguments from
Defendants regarding the harm PennEast’s
possession will cause, many of which have already
been addressed. 54 Other arguments, however, relate to
to the PADEP. Since the approval of the PADEP is a
condition of the FERC certification that must be met
prior to receiving authorization to begin construction
of the pipeline, without access to the [defendant’s]
property, PennEast will never be able to fulfill the
necessary preconditions and receive those approvals.
Such a result would make a mockery of the process.
Penneast Pipeline Co., 2018 WL 6304192, at *4. In its opinion
granting PennEast’s motion for a preliminary injunction, with
respect to irreparable harm, the court noted that “[m]any of
[defendant’s] arguments are identical to those raised in
opposition to partial summary judgment and have already been
addressed in a separate memorandum issued today.” The
aforementioned portion of the summary judgment decision is
particularly applicable to the irreparable harm analysis for
injunctive relief. To that end, this Court agrees with the
conclusions of the Eastern District of Pennsylvania.
54 For example, Defendants argue PennEast is in violation of
the Fifth Amendment because it cannot show the taking is for a
public use and because the FERC Order is non-final. The Court
has already dismissed both arguments. See supra Section IV.A
and note 41. And while the Court is aware of Defendants’
concerns related to Constitution Pipeline’s inability to obtain a
permit under section 401 of the CWA after it took possession, see
Constitution Pipeline Co. v. New York State Dep’t of Envt’l
Conservation, 868 F.3d 87 (2d Cir. 2017), the Court again finds it
is not persuaded by this chicken-and-egg argument. See
Constitution Pipeline Co., 2015 WL 1638477, at *2 (rejecting
defendants’ argument regarding the CWA permit). Here,
App-94
the value of the property and just compensation for
same. Because this is not a quick-take under the DTA,
PennEast is not required to deposit an estimated
compensation, 55 which would cause title to pass
automatically. This action is proceeding under Rule
71.1 and the NGA, and title will not pass until this
Court has entered a final judgment and determination
of just compensation. That determination is not before
this Court at this time. See Transcon. Gas Pipe Line
Co., 907 F.3d at 735 (“Here, unlike in a ‘quick take’
action, Transcontinental does not yet have title but
will receive it once final compensation is determined
PennEast cannot attempt to obtain its permits without access,
nor can it provide more adequate descriptions of the work to be
completed on the individual parcels, until it is granted access. See
id. and supra note 53. Having satisfied its substantive rights
under § 717f(h), PennEast is entitled to a condemnation order
and possession; granting preliminary relief only permits access
sooner. Therefore, Defendants’ request to grant some form of
interim possession pending satisfaction of the permits is
inherently granted to the extent that title and permanent
possession will not transfer until this Court has entered a final
judgment and determination of just compensation. See Transcon.
Gas Pipe Line Co., 907 F.3d at 734.
55 While PennEast will not be required to deposit an estimated
compensation, they will be required to post a bond in order to
obtain a preliminary injunction. The Third Circuit recently
rejected the argument that depositing a bond and entering a
preliminary injunction equates to a quick-take, because
PennEast “does not yet have title but will receive it once final
compensation is determined and paid.” Transcon. Gas Pipe Line
Co., 907 F.3d at 735-36 (“[W]e conclude that the equitable means
by which Transcontinental’s possession vested through the
preliminary injunction differed in significant ways from ‘quick
take’ under the DTA. We decline the invitation to conflate the two
processes. These are not trivial differences of procedure or
paperwork.”).
App-95
and paid.”); Columbia Gas Transmission, LLC, 768
F.3d at 304 (“[A] certificate of public convenience and
necessity gives its holder the ability to obtain
automatically the necessary right of way through
eminent domain, with the only open issue being the
compensation the landowner defendant will receive in
return for the easement.”).
With respect to Defendants’ argument that they
will be harmed by the presence of the United States
Marshal Service (“USMS”), the Court reminds
Defendants, as it did at the public hearings, that the
Court will not be granting PennEast or the USMS
permission to stand guard on individuals’ property.
The order allows for PennEast to call upon the USMS
in the event this Court’s order is violated and
PennEast is actively prohibited from entering the
property. 56 The Court finds Defendants will not be
harmed by PennEast’s mere ability to call upon the
USMS to enforce the order.
Ultimately, Defendants will not be harmed by the
Court granting immediate possession. 57 While the
56 At the hearing, counsel for PennEast stated:
[W]hat we’re asking for is if somebody is put in danger,
if somebody violates the Court order, that PennEast
can make an application to the federal marshals to
have the marshals investigate that. They’re not going
to stand on the property with automatic weapons.
They’re going to investigate whether someone is
violating the court order and then execute, if they need
to, as they would to enforce any other order of this
Court.
(Apr. 19, 2018 Hearing Tr., 16:3-11.)
57 Even if the Court were to find the harm to Defendants
weighed against possession, the balance of the remaining
App-96
Court is sympathetic to each property owners’
individual interests, the taking of property can be
monetarily compensated. Transcon. Gas Pipe Line Co.,
709 F. App’x at 112. (“[T]he impact of the taking … is
an issue for the determination of just compensation.”);
see Columbia Gas Transmission, LLC, 2015 WL
389402, at *4 (citing Columbia Gas Transmission,
LLC, 768 F.3d at 316; Steckman Ridge GP, LLC, 2008
WL 4346405, at *16). Therefore, this factor weighs in
favor of granting the preliminary injunction.
D. Public Interest
By granting the certificate, FERC made a
determination that the pipeline is necessary and in
the public interest. 58 This conclusion was reached
after an extensive administrative process that
weighed the harm to the public against the need for
the pipeline. 59 The FERC Order issued the Certificate
contingent upon PennEast complying with certain
conditions in order to address these concerns, and
FERC reviewed and rejected, denied, or dismissed
requests for a rehearing on the Order, affirming its
findings as set forth in the final EIS and the FERC
Order. See generally, FERC Order on Rehearing. The
Court is persuaded by FERC’s finding that “the public
convenience and necessity requires approval of
PennEast’s proposal, subject to the conditions
discussed [in Appendix A].” FERC Order ¶ 40. As
equitable factors still weighs in favor of awarding PennEast a
preliminary injunction for immediate possession of the Right of
Way.
58 See supra note 41 and text accompanying note 41.
59 See supra Section I.B.
App-97
already discussed, any challenges to FERC’s findings
are not properly before this Court. Columbia Gas
Transmission, LLC, 2015 WL 389402, at *3 & n.7- 8.
Therefore, this factor weighs in favor or granting
the preliminary injunction.
VII. BOND
Pursuant to Federal Rule of Civil Procedure 65(c),
“The court may issue a preliminary injunction … only
if the movant gives security in an amount that the
court considers proper to pay the costs and damages
sustained by any party found to have been wrongfully
enjoined or restrained.” In the context of eminent
domain proceedings under the NGA, this amount
serves as a safeguard to protect the landowner. Sage,
361 F.3d at 826. For example,
if the gas company’s deposit (or bond) is less
than the final compensation awarded, and
the company fails to pay the difference within
a reasonable time, “it will become a
trespasser, and liable to be proceeded against
as such.” Cherokee Nation[ v. S. Kan. Ry. Co.],
135 U.S. [641,] 660, 10 S. Ct. 965 [(1890)].
Likewise, if a FERC-regulated gas company
was somehow permitted to abandon a
pipeline project (and possession) in the midst
of a condemnation proceeding, the company
would be liable to the landowner for the time
it occupied the land and for any damages
resulting to the [land] and to fixtures and
improvements, or for the cost of restoration.”
4 J. Sackman, Nichols on Eminent Domain
§ 12E.01 [07] (rev.3d ed).
Id. at 825-26.
App-98
PennEast asks the Court to set the bond in the
amount of the appraised value for the Rights of Way
as determined by the independent appraiser retained
by PennEast. Defendants ask for a larger bond
amount based on the market value of the entire
property and contemplating the loss of use of the
property and well as construction and rebuilding
costs.
The amount of the bond must be reasonably
related to the property interest at issue. Often, this
amount is two or three times the appraisal value
provided by plaintiff’s appraiser. See, e.g., Transcon.
Gas Pipe Line Co., 907 F.3d at 735 (posting a bond at
three times the appraised value of the rights of way);
Transcon. Gas Pipe Line Co. v. Permanent Easement
for 0.16 Acres, No. 17-0545, 2017 WL 3412375 at *10
(M.D. Pa. August 9, 2017) (requiring plainti
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