Amicus Curiae Brief — PennEast Pipeline Company, LLC, Petitioner v. New Jersey, et al.
Supreme Court briefMar 8, 2021
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No. 19-1039
IIN
N THE
THE
Supreme Court
the United
States
fpupreme
Court of
of tie
Einiteb iptatez
_________
P
ENNEAST P
IPELINE C
OMPANY, LLC,
PENNEAST
PIPELINE
COMPANY,
Petitioner,
v.
STATE
STATE OF N
EW JERSEY,
JERSEY, et al.,
NEW
Respondents.
_________
On Writ of Certiorari to the
United States Court of Appeals
for the Third Circuit
_________
BRIEF AMICUS CURIAE OF COLUMBIA GAS
TRANSMISSION, LLC IN SUPPORT OF
PETITIONER
_________
CATHERINE
C
ATHERINE E. S
TETSON
STETSON
Counsel of Record
SEAN
SEAN M
MAROTTA
AROTTA
PATRICK
P
ATRICK C. VALENCIA
VALENCIA
LOVELLS
HOGAN L
OVELLS US LLP
HOGAN
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-5600
cate.stetson@hoganlovells.com
Amicus Curiae
Counsel for Amicus
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES....................................... ii
STATEMENT OF INTEREST ....................................1
SUMMARY OF ARGUMENT ..................................... 3
ARGUMENT ............................................................... 5
I.
CONGRESS INTENDED STATES
TO VET THEIR CONCERNS
ABOUT INTERSTATE NATURALGAS PROJECTS THROUGH THE
FERC PROCESS, NOT VETOING
COMPANIES’
PIPELINE COMPANIES'
EXERCISE OF EMINENT
DOMAIN ........................................................ 5
II.
STATE-LED NIMBYISM
HISTORICALLY HAS BEEN A
MAJOR IMPEDIMENT TO
NATURAL-GAS PIPELINE
EXPANSION ................................................ 12
III. THE DECISION BELOW
CREATES A SIGNIFICANT
HOLD-UP PROBLEM FOR
PIPELINE COMPANIES WITH
FERC-APPROVED ROUTES, AS
COLUMBIA'S
COLUMBIA’S EXPERIENCE
SHOWS ........................................................ 20
CONCLUSION .......................................................... 27
(i)
11
ii
TABLE OF AUTHORITIES
Page
CASES:
CASES:
Algonquin LNG v. Loqa,
Algonquin
79 F. Supp. 2d 49 (D.R.I. 2000) ........................... 16
California v. FERC,
495 U.S. 490 (1990) ................................................ 8
Columbia Gas Transmission, LLC v. 0.12
Acres of Land, More or Less, in WashingAcres
ton Cty., Md.,
No. 1:19-cv-01444-GLR (D. Md. Aug. 22,
2019) ....................................................................... 2
Dominion Transmission, Inc. v. Town of
Myersville Town Council,
982 F. Supp. 2d 570 (D. Md. 2013) ...................... 16
Estate of Gibbs v. United States,
161 F.3d 242 (3d Cir. 1998) ................................. 23
Georgia Indus. Grp. v. FERC,
137 F.3d 1358 (D.C. Cir. 1998) ............................ 24
Islander E. Pipeline Co. v. Connecticut
Dep’t of Envtl. Prot.,
Dep't
482 F.3d 79 (2d Cir. 2006) ................................... 19
Kern River Gas Transmission Co. v. Clark
County,
757 F. Supp. 1110 (D. Nev. 1990) ........................ 16
Kohl v. United States,
91 U.S. 367 (1875) ................................................ 21
Millennium Pipeline Co. v. Seggos,
288 F. Supp. 3d 530 (N.D.N.Y. 2017) ............ 15, 16
111
iii
TABLE OF AUTHORITIES—Continued
Page
for Env't
Env’t Pres. v.
Minisink Residents for
FERC,
762 F.3d 97 (D.C. Cir. 2014) ................................ 20
Missouri ex rel. Barrett v. Kansas Nat.
Gas Co.,
265 U.S. 298 (1924) .............................................. 13
National Fuel Gas Supply Corp. v. Public
Comm’n of New York,
Serv. Comm'n
894 F.2d 571 (2d Cir. 1990) ........................... 15, 17
Ass’n, Inc.
New England Power Generators Ass'n,
v. FERC,
881 F.3d 202 (D.C. Cir. 2018) ................................ 8
New York v. FERC,
535 U.S. 1 (2002) .................................................... 8
North Carolina v. FERC,
112 F.3d 1175 (D.C. Cir. 1997) .............................. 8
AtkinOklahoma ex rel. Phillips v. Guy F. Atkinson Co.,
313 U.S. 508 (1941) .............................................. 19
Pennsylvania v. West Virginia,
262 U.S. 553 (1923) .............................................. 13
Public Utils. Comm’n
Comm'n of Rhode Island v.
Attleboro Steam & Elec. Co.,
Attleboro
273 U.S. 83 (1927) ................................................ 13
ANR Pipeline Co.,
Schneidewind v. ANR
485 U.S. 293 (1988) .......................................... 6, 15
United States v. Reynolds,
397 U.S. 14 (1970) ................................................ 21
iv
TABLE OF AUTHORITIES—Continued
Page
University of Texas Sw. Med. Ctr. v. Nassar,
570 U.S. 338 (2013 ......................................... 11, 12
Whitman v. American
American Trucking Ass'ns,
Ass’ns,
531 U.S. 457 (2001) .............................................. 12
ADMINISTRATIVE P
ROCEEDINGS:
ADMINISTRATIVE
PROCEEDINGS:
Columbia Gas Transmission,
164 FERC ¶
If 61,036 (July 19, 2018)..................... 24
PennEast Pipeline Co.,
162 FERC ¶
If 61,053 (Jan. 19, 2018)................. 9, 10
PennEast Pipeline Co.,
164 FERC ¶
9I 61,098 (Aug. 10, 2018) .............. 10, 19
PennEast Pipeline Co.,
170 FERC ¶
If 61,064 (Jan. 30, 2020)..................... 26
S
TATUTES:
STATUTES:
15 U.S.C. § 717b(d) ................................................. 17
15 U.S.C. § 717f(c)(1)(A) ........................................... 6
15 U.S.C. § 717f(c)(1)(B) ........................................... 6
15 U.S.C. § 717f(e) ................................................ 2, 6
15 U.S.C. § 717f(h) .............................................. 2, 21
15 U.S.C. § 717r(a).................................................... 8
15 U.S.C. § 717r(b).................................................... 8
15 U.S.C. § 717r(d)(1) ............................................. 18
15 U.S.C. § 717r(d)(2) ............................................. 18
REGULATIONS:
REGULATIONS:
18 C.F.R. § 157.10(a) ................................................ 8
18 C.F.R. § 157.21..................................................... 7
v
V
TABLE OF AUTHORITIES—Continued
Page
18 C.F.R. § 157.6 ....................................................... 7
18 C.F.R. § 157.6(d)(1) .............................................. 7
18 C.F.R. § 380.10 ..................................................... 8
18 C.F.R. § 385.102 ................................................... 8
18 C.F.R. § 385.211(a)(1) .......................................... 8
LEGISLATIVE MATERIALS:
MATERIALS:
LEGISLATIVE
Amendments to the Natural Gas Act:
Act:
Amendments
Hearings on H.R. 2185, H.R. 2235, H.R.
2292, H.R. 2569, and H.R. 2956 Before
the H. Comm. on Interstate and Foreign
Com., 80th Cong. (1947) ...................................... 14
Natural Gas Symposium: Symposium Before the S. Comm. on Energy & Nat. Res.,
109th Cong. (Jan. 24, 2005) ................................. 19
S. Rep. No. 80-429 (1947) ....................................... 14
OTHER
OTHER AUTHORITIES:
AUTHORITIES:
1 Office of Energy Projects, Federal EnComm’n, Guidance Manual
ergy Regul. Comm'n,
for Environmental Report Preparation:
For Applications Filed Under the Natural Gas Act (2017), https://tinyurl.com/2b2a8nx8 ....................................... 20, 21
Chad Arnold, Cuomo on Constitution Pipe‘Any Way That We Can Challenge
line: `Any
It, We Will’,
Will', Press & Sun-Bulletin (Sept.
6, 2019, 1:55 PM ET), https://tinyurl.com/5by82nje ........................................ 17, 18
vi
TABLE OF AUTHORITIES—Continued
Page
Activists Have a New Strategy
Jeff Brady, Activists
to Block Gas Pipelines: State's
State’s Rights,
NPR (Aug. 20, 2018, 3:51 PM ET),
https://tinyurl.com/vlybdgy............................ 17, 18
https://tinyurl.com/vlybdgy
Robert Bryce, Manhattan Inst., Out of
Gas: New York’s
York's Blocked Pipelines Will
Hurt Northeast Consumers (June 25,
2019), https://tinyurl.com/2mcvdm4z .................. 22
Christopher J. Castaneda, Invisible Fuel:
Manufactured and Natural Gas in
America, 1800-2000 (1999) .................................. 14
America,
Joan M. Darby, et al., The Role of FERC
Approving and Siting
and the States in Approving
Interstate Natural Gas Facilities and
After the Energy Policy
LNG Terminals After
Act
of
2005
—
Consultation,
Preemption,
Act
and Cooperative Federalism, 6 Tex. J.
Oil Gas & Energy L. 335 (2011) .............. 12, 13, 15
Niina H. Farah, Pipeline Eminent Domain
Battle Lands at Supreme Court, E&E
News (Jan. 22, 2021), https://tinyurl.com/2bz37s67 ............................................. 23
An InterFederal Energy Regul. Comm’n,
Comm'n, An
state Natural Gas Facility on my Land?
What Do II Need to Know? (Aug. 2015),
https://tinyurl.com/y73qr6p3 ............................... 21
“Public Use”
Daniel B. Kelly, The "Public
Use" RequireA Rament in Eminent Domain Law: A
tionale Based on Secret Purchases and
Private Influence, 92 Cornell L. Rev. 1
(2006) .................................................................... 21
vii
TABLE OF AUTHORITIES—Continued
Page
Alexandra B. Klass & Danielle Meinhardt,
Transporting Oil and Gas: U.S. Infrastructure Challenges,
100 Iowa L. Rev. 947 (2015) .......................... 13, 14
Alexandra B. Klass & Elizabeth J. Wilson,
for
Interstate Transmission Challenges for
A Federalism MisRenewable Energy: A
match, 65 Vand. L. Rev. 1801 (2012) .................. 17
Baker’s
Lane Lambert & Neal Simpson, Baker's
Review of Weymouth Compressor Station
Applauded, Patriot Ledger (July 18,
Applauded,
2017, 1:21 AM), https://tinyurl.com/y5y2wtyx ............................................. 18
Assessments: Glossary, Fed. EnMarket Assessments:
Comm’n (Aug. 31, 2020),
ergy Regul. Comm'n
https://tinyurl.com/yvs3sp4v ............................... 24
Paul W. Parfomak, Cong. Rsch. Serv.,
Interstate Natural Gas Pipelines: Process
Application
and Timing of FERC Permit Application
Review (Jan. 16, 2015),
https://fas.org/sgp/crs/misc/R43138.pdf............. 7, 8
Richard J. Pierce, Jr., Reconstituting the
Natural Gas Industry from Wellhead to
Burnertip, 25 Energy L.J. 57 (2004) ................... 13
Acerage by Classification, New
State Land Acerage
Dep’t of Env’t
York State Dep't
Env't Conservation
(Sept. 2018), https://tinyurl.com/rgmvpv6 .............................................. 22
viii
TABLE OF AUTHORITIES—Continued
Page
U.S. Gov’t
Gov't Accountability Office, GAO-13221, Pipeline Permitting: Interstate and
Intrastate Natural Gas Permitting Processes Include Multiple Steps, and Time
Frames Vary (2013),
https://www.gao.gov/assets/660/652225.pdf ........................................... 6, 7
Miriam Wasser, The Controversial Natural Gas Compressor in Weymouth, Explained, WBUR (Oct. 13, 2020),
plained,
https://tinyurl.com/mrxm3es ............................... 18
IIN
N THE
THE
Supreme Court
the United
States
fpupreme
Court of
of tie
Einiteb iptatez
_________
No. 19-1039
_________
P
PENNEAST
ENNEAST P
PIPELINE
IPELINE C
COMPANY,
OMPANY, LLC,
Petitioner,
v.
V.
S
STATE
TATE OF N
EW JERSEY,
JERSEY, et al.,
NEW
Respondents.
_________
On Writ of Certiorari to the
United States Court of Appeals
for the Third Circuit
_________
BRIEF AMICUS CURIAE OF COLUMBIA GAS
TRANSMISSION, LLC IN SUPPORT OF
PETITIONER
_________
STATEMENT OF INTEREST
Columbia Gas Transmission, LLC, submits this
Petitioner.1
brief as amicus curiae in support of Petitioner.1
The Columbia pipeline system serves millions of customers from New York State to the Gulf of Mexico.
Columbia transports an average of three billion cubic
feet of natural gas a day and covers hundreds of communities. Columbia’s
Columbia's network of nearly 12,000 miles
of pipeline ensures the heat stays on and businesses
function, even when demand increases.
11 No party or counsel for a party authored this brief in whole or
in part. No party, counsel for a party, or person other than amicus curiae or its counsel made any monetary contribution intended to fund the preparation or submission of this brief. Petitioner filed a notice of blanket consent with the Clerk. Respondents have consented to the filing of this brief.
(1)
2
The Nation’s
Nation's demand for natural gas continues to
grow. But it is harder than ever for natural-gas infra“not in my backyard"
backyard” mentalstructure to be built. A "not
ity from certain States and state officials has created
new obstacles for natural-gas projects that the Federal Energy Regulatory Commission has determined
“or will be required by the present or future public
are "or
convenience and necessity.”
necessity." 15 U.S.C. § 717f(e). The
eminent-domain power Congress conferred on pipeline companies in the Natural Gas Act, id. § 717f(h),
was intended to overcome these obstacles by allowing
pipeline companies to obtain rights-of-way in return
for just compensation to affected landowners. But the
decision below drastically undermines that purpose
by allowing one kind of landowner—a State—to unilaterally veto a project, regardless of the public need
or the compensation offered.
Columbia understands this reality better than most.
Like PennEast here, Columbia has found its ability to
complete a necessary, and FERC-certificated, naturalgas project stymied by a judicial decision holding that
Act’s delegated eminent-domain
the Natural Gas Act's
power does not allow a pipeline to condemn stateState’s consent. See Columowned land without the State's
bia Gas Transmission, LLC v. 0.12 Acres
Acres of Land,
More or Less, in Washington Cty., Md., No. 1:19-cv01444-GLR (D. Md. Aug. 22, 2019), appeal docketed,
No. 19-2040 (4th Cir. Sept. 25, 2019). Columbia therefore writes to emphasize that Congress intended
States’ pipeline concerns to be accommodated through
States'
the FERC certificate process—not through a largely
ministerial eminent-domain action—and to highlight
the hold-up problems that the decision below exacerbates, allowing States to delay or even defeat critical,
3
federally approved infrastructure improvements on
pretextual bases.
SUMMARY OF ARGUMENT
appeals’ decision disrupts the NatuI. The court of appeals'
Act’s detailed system that funnels review of
ral Gas Act's
natural-gas infrastructure through the Commission.
Under the Act and Commission regulations, States
can voice their concerns about proposed natural-gas
infrastructure by participating in inter-agency processes, intervening in Commission proceedings, and—
if dissatisfied with the Commission’s
Commission's decisions—seeking judicial review in the circuit courts of appeals. The
decision below allows a State to elect to not participate
in the Commission process, yet still block a federally
approved natural-gas project, not by persuading a
neutral federal agency or court, but by simply refusing
to voluntarily convey its property interests—including any land it might strategically acquire—at any
price. The loophole that the court of appeals'
appeals’ decision
Act’s careful review
creates in the Natural Gas Act's
Act’s structure and design.
scheme is contrary to the Act's
II. Government officials historically have been a
major impediment to natural-gas expansion. Before
the Natural Gas Act, States imposed regulations that
this Court held to be unconstitutional. After the Act,
States refused to grant federally approved pipeline
companies rights-of-way or the right of eminent domain, thus preventing pipeline expansion into their
land. After Congress delegated the federal right of
eminent domain to pipeline companies, state and local
officials then looked to their own laws and ordinances,
claiming pipeline companies must meet their own environmental or safety regulations. Those efforts were
Act’s broad
held to violate the Natural Gas Act's
4
preemptive scope. The state-led effort here is just another in the long line of government officials impeding
natural-gas pipeline infrastructure projects at all
costs. Just as it has in the past, this Court should recognize the state action here for what it is: an extra“Not in my backyard."
backyard.”
legal attempt to say, "Not
appeals’ decision also creates the
III. The court of appeals'
hold-up problem that eminent domain was supposed
to solve. Because only rights-of-way on the FERC approved route can be acquired, certificate holders—for
regulatory and engineering reasons—must adhere to
published routes that have limited flexibility. That
makes it nearly impossible for FERC-regulated certificate holders to assemble rights-of-way in secret or to
simply route around an obstinate landowner, which in
turn allows a sufficiently opposed landowner to delay
or block a project by refusing to sell. Eminent domain
breaks the logjam by compelling a sale for constitutionally guaranteed just compensation.
appeals’ decision allows States to hold
The court of appeals'
up projects on NIMBY, ideological, or pretextual
grounds by refusing to sell their interests in land over
which a pipeline must cross, even after their full participation in FERC proceedings or no participation at
appeals’ decision—by allowall. Indeed, the court of appeals'
ing any state-owned interest in a property to not be
State’s consent—potentially
condemned without the State's
allows private landowners to coordinate with States
by conveying an easement to the State for the express
purpose of blocking a natural-gas project.
appeals’ decision is not limThe logic of the court of appeals'
ited to the Third Circuit. Columbia, too, has found its
efforts to build additional pipeline stymied by a
State—this time, Maryland—refusing to sell an
5
easement over a small tract of state-owned land and
refusing to consent to condemnation. A Maryland disMaryland’s sovereign-immuntrict judge agreed with Maryland's
ity argument, leaving Columbia currently unable to
complete a project that FERC—nearly three years
ago—found to be in the public convenience and necessity. The Court should put a stop to state obstructionism by making clear that the Natural Gas Act deleStates’ eminent-domain powers
gates all of the United States'
to pipeline companies, including the United States'
States’
power to condemn state-owned land.
The Third Circuit’s
Circuit's judgment should be reversed.
ARGUMENT
I. CONGRESS INTENDED STATES TO VET
THEIR CONCERNS ABOUT INTERSTATE
NATURAL-GAS PROJECTS THROUGH THE
FERC PROCESS, NOT VETOING PIPELINE
COMPANIES'
COMPANIES’ EXERCISE OF EMINENT
DOMAIN.
The decision below, by interpreting pipeline companies’
nies' Natural Gas Act-conferred eminent-domain
power to not extend to state-owned land and interests
in land, effectively allows States to veto FERCapproved projects that must cross land in which the
State claims an interest. See Pet. App. 30a (court of
“may disrupt how
appeals conceding that its decision "may
the natural gas industry, which has used the [Natural
Gas Act] to construct interstate pipelines over Stateoperates”). That
owned land for the past eighty years, operates").
result is contrary to Congress’s
Congress's design in the Natural
Gas Act, which intended to channel States'
States’ objections
to interstate natural-gas projects through FERC.
6
“Congress occupied the
1. In the Natural Gas Act, "Congress
field of matters relating to wholesale sales and transportation of natural gas in interstate commerce."
commerce.”
Schneidewind v. ANR
ANR Pipeline Co., 485 U.S. 293, 305
(1988). One way in which Congress occupied the field
Act’s Section 7, which prois through the Natural Gas Act's
vides that no natural-gas company may engage in the
transportation or sale of interstate natural gas—or
build or expand interstate natural-gas infrastruc“certificate of public
ture—without first obtaining a "certificate
convenience and necessity issued by the Commission
operations.” 15 U.S.C.
authorizing such acts or operations."
§ 717f(c)(1)(A). The Commission, in turn, will issue a
certificate of public convenience and necessity only if
“the applicant is able and willing
it concludes that "the
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"
thereunder” and that "the
“the proposed service * * * to the extent authorized by the certificate, is
or will be required by the present or future public convenience and necessity.”
necessity." Id. § 717f(e). Otherwise, the
“application shall be denied."
denied.” Id.
"application
The Commission's
Commission’s review process is extensive. The
Natural Gas Act requires that FERC set an application for a certificate of public convenience and neces“for hearing and * * * give such reasonable notice
sity "for
of the hearing thereon to all interested persons as in
its judgment may be necessary under”
under" the Commission’s rules and regulations. Id. § 717f(c)(1)(B). And
sion's
the Commission takes its certificate-review process
seriously. One study found that it took over a yearand-a-half for a major project to go from submission to
certification. U.S. Gov’t
Gov't Accountability Office, GAO13-221, Pipeline Permitting: Interstate and Intrastate
7
Natural Gas Permitting Processes Include Multiple
Steps, and Time Frames Vary 26 (Feb. 2013),
https://tinyurl.com/rjh6fzo. And even minor projects
took about seven-and-a-half months for FERC to complete its regulatory review. Id.
The FERC process for a major project begins with
“pre-filing” process. See 18 C.F.R. § 157.21. Durthe "pre-filing"
ing the pre-filing process, the developer "notifies
“notifies all
stakeholders—including state, local, and other federal
agencies, and potentially affected property owners—
about a proposed project so that the developer and
commission staff can provide a forum to hear stakeconcerns.” Paul W. Parfomak, Cong. Rsch.
holder concerns."
Serv., Interstate Natural Gas Pipelines: Process and
Timing of FERC Permit Application
Application Review 2 (Jan.
16, 2015) (Process and Timing) (emphasis added),
https://fas.org/sgp/crs/misc/R43138.pdf. During the
pre-filing period, the applicant also typically studies
potential project sites and conducts pipeline-route and
field studies to inform its formal application to FERC.
“consults with interested stakeAnd Commission staff "consults
government agencies, and also
holders, including government
holds public scoping meetings and site visits in the
proposed project area."
area.” Id. (emphasis added). The
pre-filing process allows the developer to "tak[e]
“tak[e] into
input”—including state input—
account stakeholder input"—including
before ever formally filing an application with FERC.
Id.
The developer then submits a formal certificate application to the Commission. 18 C.F.R. § 157.6. A certificate application is comprehensive and includes notification to "all
“all affected landowners and towns, communities, and local, state and federal governments
and agencies involved in the project.”
project." Id. § 157.6(d)(1)
8
(emphasis added). An affected State, like any other
affected entity, can intervene and protest the application by submitting comments on any matter relevant
to the intervenor, including a pipeline’s
pipeline's necessity, its
environmental impact, or its route. Id. § 157.10(a)
(permitting "any
“any person”
intervene”); id.
person" to intervene");
§ 385.211(a)(1) (permitting "any
“any person”
“file a properson" to "file
test”); id. § 385.102 (defining a "person"
“person” as including
test");
“a State”);
"a
State"); see also id. § 380.10 (Commission regulations permitting public participation on environmental issues in certificate proceedings).
The Commission fully considers comments from
States and other stakeholders, and issues an order
granting or denying the certificate. Process and Timing, supra at 4-5. The Commission also takes a second
look at any issues presented in a party’s
party's rehearing petition, a statutorily mandated step before judicial review. See 15 U.S.C. § 717r(a). The Administrative
Procedure Act requires that FERC’s
“respond
FERC's orders "respond
meaningfully to the arguments raised before it."
it.” New
England Power Generators Ass'n
Ass’n v. FERC, 881 F.3d
202, 210 (D.C. Cir. 2018) (internal quotation marks
omitted). And a State aggrieved by FERC’s
FERC's decision
Commission's orders in
can petition for review of the Commission’s
the D.C. Circuit or in the regional circuit court of appeals where the developer is incorporated or headquartered. 15 U.S.C. § 717r(b). Many do. See, e.g.,
New York v. FERC, 535 U.S. 1 (2002); California v.
FERC, 495 U.S. 490 (1990); North Carolina v. FERC,
112 F.3d 1175 (D.C. Cir. 1997).
2. The Commission proceedings in this case show
FERC’s
FERC's solicitude towards States and their agencies
in the certificate process. The Commission addressed
comments from the New Jersey Department of
9
Environmental Protection (NJDEP), adding environmental conditions to PennEast’s
PennEast's certificate to protect
New Jersey natural resources. See, e.g., PennEast
Pipeline Co., 162 FERC ¶
If 61,053, at P 114 (Jan. 19,
“suffi2018) (adding an environmental condition that "suffiNJDEP’s concerns"
concerns” and that "appro“approciently addresses NJDEP's
priately mitigate[s]”
“adverse impacts on signifimitigate[s]' any "adverse
resources”); id. P 135 (adding an
cant paleontological resources");
“that PennEast file a final
environmental condition "that
project-specific Wetland Restoration Plan developed
in consultation with the * * * applicable state agencies
Jersey”). The Commission
in Pennsylvania and New Jersey").
also stressed that PennEast would adhere to certain
NJDEP requirements to mitigate the pipeline’s
pipeline's environmental impact—a success of the state consultative
process. See, e.g., id. P 129 (noting that PennEast
would complete and submit outstanding field surveys
to NJDEP before beginning construction); id. P 138
“PennEast will adhere to the recommen(noting that "PennEast
dations and requirements of NJDEP-Division of Fish
on”
and Wildlife in order to avoid or minimize impacts on"
“including completing all necessary
certain species, "including
species”); P 141 (noting, in response
surveys for state species");
to NJDEP comments, that PennEast will set aside
“permanent conservation of forest lands in key water"permanent
sheds and reforest areas within the same municipality
in which the impact occurs; or develop mitigation
measures for restoring areas of temporary project impacts in New Jersey").
Jersey”).
To be sure, the Commission did not agree with all of
New Jersey's
Jersey’s objections. But the Commission considState’s arguments and explained why it disered the State's
agreed with them. The New Jersey Division of Rate
Counsel, for instance, objected that the PennEast
Pipeline was unnecessary because there was "little
“little or
10
no forecasted load growth in New Jersey."
Jersey.” Id. P 20.
The Commission, in response, explained that under
its Certificate Policy Statement and D.C. Circuit precedent, it did not have to look beyond the contractual
commitment PennEast received for nearly all of the
new pipeline’s
pipeline's capacity. Id. P 27. The Commission
Counsel’s argument
also rejected the Division of Rate Counsel's
that PennEast was receiving too great a rate of return
on its equity investments, explaining that PennEast’s
PennEast's
14-percent rate of return reflected the fact that pipe“undertaken by a new entrant in the market face
lines "undertaken
higher business risks than existing pipelines,”
pipelines," includ“higher risks in securing financing."
financing.” Id. P 59. But
ing "higher
even then, the Commission accepted the Division of
Rate Counsel’s
Counsel's objection in part, requiring PennEast
to modify its capital structure—again reflecting the
importance of State participation in the certificate
process. Id. P 58.
Despite the Commission’s
Commission's serious consideration of
State’s objections, the New Jersey Department of
the State's
Environmental Protection and Division of Rate CounCommission’s certifisel both sought rehearing of the Commission's
cate order, as the Natural Gas Act allows. See PennEast Pipeline Co., 164 FERC ¶
9I 61,098 (Aug. 10,
2018). The Commission again rejected the State's
State’s arguments, including the NJDEP's
NJDEP’s argument that PennEast should not be granted eminent-domain authority before it has completed all conditions precedent to
construction. Id. PP 28-33 (NJDEP eminent-domain
argument); see also, e.g., id. PP 34-39 (Division of Rate
Counsel rate arguments); id. PP 41-51 (NJDEP environmental-impact arguments).
Still dissatisfied, NJDEP and the Division of Rate
Counsel petitioned the D.C. Circuit to review the
11
Commission’s
Commission's certificate and rehearing orders. See
Dep’t of Env't
Env’t Prot. v. FERC, No. 18-1144
New Jersey Dep't
(D.C. Cir.); New Jersey Div. of Rate Counsel v. FERC,
No. 18-1233 (D.C. Cir.). And in their brief, NJDEP
and the Division of Rate Counsel renewed their arguments that the PennEast Pipeline was unneeded and
that the Commission’s
Commission's environmental analysis and
rate-of-return analyses were deficient. See Joint Brief
of Petitioners New Jersey Department of Environmental Protection, Delaware and Raritan Canal Commission, and New Jersey Division of the Rate Counsel,
at 15-39, Delaware Riverkeeper Network v. FERC, No.
18-1128 (D.C. Cir. Dec. 21, 2018). New Jersey, in
short, has been diligently channeling its objections to
the PennEast Pipeline through the Natural Gas Act's
Act’s
prescribed pathways that allow for consideration by
impartial, federal adjudicators.
3. Under the decision below, New Jersey would not
even have to go through the trouble of pursuing its
Natural Gas Act remedies—indeed, of participating at
all in the FERC process—because it need only object
to a sliver of its land being appropriated for just compensation in order to block an entire natural-gas project. The decision below allows any State to circumAct’s reticulated process for convent the Natural Gas Act's
sidering opposition to natural-gas infrastructure. Rather than participating in the pre-filing process, intervening in the formal certificate proceeding, filing comments, seeking rehearing, and ultimately litigating if
necessary, States can simply veto a project by refusing
to sell or allow its property interests necessary to construct a pipeline to be condemned. That cannot be
what Congress intended. This Court rejects interpre“inconsistent with the stattations of statutes that are "inconsistent
ute’s
design
and
structure,”
ute's
structure," University of Texas Sw.
12
Med. Ctr. v. Nassar, 570 U.S. 338, 339 (2013), and it
beggars belief that Congress intended to let States
frustrate the detailed federal system for resolving objections to natural-gas infrastructure through a loopAct’s broad delegation of emhole in the Natural Gas Act's
American Trucking
inent domain. See Whitman v. American
Ass’ns, 531 U.S. 457, 468 (2001).
Ass'ns,
appeals’ holding is
The inconsistency of the court of appeals'
driven home in this case by how it has preempted the
FERC-led review of the PennEast Pipeline. Following
the court of appeals’
appeals' decision, the D.C. Circuit placed
PennEast’s FERC certificate order in
its review of PennEast's
abeyance—canceling oral argument—presumably beappeals’ decision as potencause it saw the court of appeals'
tially obviating the need to review the Commission’s
Commission's
certificate order. Order Postponing Oral Argument,
Delaware Riverkeeper Network, No. 18-1128 (Oct. 1,
2019). Condemnation should not be the tail that wags
the Natural Gas Act dog, and the Court should reverse
the judgment below to confirm that it is not.
II. STATE-LED NIMBYISM HISTORICALLY
HAS BEEN A MAJOR IMPEDIMENT TO
NATURAL-GAS PIPELINE EXPANSION.
1. State government officials—either in response to
constituent pressure or as a result of their own policy
preferences—have long opposed interstate natural“the primary impediment
gas infrastructure. Indeed, "the
to timely development of natural gas infrastructure
projects, historically, has been delay at the state
level.” Joan M. Darby et al., The Role of FERC and
level."
the States in Approving
Approving and Siting Interstate Natural
Gas Facilities and LNG Terminals After
After the Energy
Act of 2005 — Consultation, Preemption, and
Policy Act
13
Cooperative Federalism, 6 Tex. J. Oil Gas & Energy L.
335, 384 (2011).
In the early twentieth century, States—both producing and consuming—regulated interstate pipelines di“attempted to regulate sales
rectly: producing States "attempted
by producers to pipelines and to limit the quantity of
gas pipelines could transport out of the state,"
state,” while
“attempted to regulate the price at
consuming States "attempted
made.” See Richard J. Pierce,
which those sales were made."
from
Jr., Reconstituting the Natural Gas Industry from
Wellhead to Burnertip, 25 Energy L.J. 57, 60 (2004);
see also Alexandra B. Klass & Danielle Meinhardt,
Transporting Oil and Gas: U.S. Infrastructure Challenges, 100 Iowa L. Rev. 947, 993 (2015). These regulations imposed inconsistent obligations on the pipeline companies—a State might require all suppliers in
its State to meet the needs for all citizens and businesses in that State regardless of a supplier's
supplier’s obligations in other States—and began to jeopardize interstate transactions and drive up rates. See Pierce, supra at 60-61; Pennsylvania v. West Virginia, 262 U.S.
pra
553, 593 (1923).
This Court thwarted some of these attempts, holding that some of the most-restrictive state laws violated the dormant Commerce Clause by benefitting
citizens of the regulating State to the detriment of citComm’n of
izens of other States. See Public Utils. Comm'n
Attleboro Steam & Elec. Co., 273 U.S.
Rhode Island v. Attleboro
83 (1927); Missouri ex rel. Barrett v. Kansas Nat. Gas
Co., 265 U.S. 298 (1924); Pennsylvania v. West Virginia, 262 U.S. 553 (1923). But during the Depresginia,
sion, even as Texas, Kansas, Oklahoma, and Louisiana held natural-gas surpluses unconnected to the interstate grid, the eastern United States was suffering
14
“shortages and high gas prices, monopoly, and a reli"shortages
gas.” Klass & Meinhardt, suance on manufactured gas."
pra at 994. States like Pennsylvania contributed to
pra
these shortages and monopolies by refusing to grant
rights-of-way that would allow new pipelines access to
the eastern United States. See id.
Even after the Natural Gas Act's
Act’s enactment in 1938,
States still obstructed the development of interstate
pipelines. Some state laws expressly denied the right
of eminent domain to out-of-state corporations or
other federally approved interstate pipelines. See
S. Rep. No. 80-429, at 2-3 (1947). Other States would
not grant eminent-domain rights to pipelines that
crossed but did not distribute natural gas in that
Amendments to the NatuState. See id. at 2; see also Amendments
Act: Hearings on H.R. 2185, H.R. 2235, H.R.
ral Gas Act:
2292, H.R. 2569, and H.R. 2956 Before the H. Comm.
on Interstate and Foreign Com., 80th Cong. (1947).
And even after the Natural Gas Act, state governments, along with the coal industry and railroad interests, blocked at least one pipeline company's
company’s expansion efforts to bring natural gas to markets in the
East. See Christopher J. Castaneda, Invisible Fuel:
America, 1800Manufactured and Natural Gas in America,
2000, at 138-139 (1999).
In response, Congress amended the Natural Gas Act
in 1947 to permit pipeline companies to exercise the
government’s eminent-domain power. The
federal government's
Senate report for the amendment took particular note
of the States that denied eminent-domain power to
out-of-state pipeline companies. See S. Rep. No. 80429, at 2-3 (1947). The report also explained that
pipeline companies needed a federal eminent-domain
power, because "[i]f
“[i]f a State may require such
15
interstate natural-gas pipe lines to serve markets
within that State as a condition to exercising the right
of eminent domain, then it is obvious that the orders
of the Federal Power Commission may be nullified”
nullified" by
state law. Id. at 4.
2. Beyond eminent domain, Congress understood
States’
States' roles in blocking interstate natural-gas projects. Darby, supra at 384. The Natural Gas Act itself
therefore broadly preempts state and local regulations
that stand in the way of necessary natural-gas infra“agencies with only local constituencies
structure, lest "agencies
* * * delay or prevent construction that has won approval after federal consideration of environmental
factors and interstate need.”
need." National Fuel Gas Supply Corp. v. Public Serv. Comm’n
ply
Comm'n of New York, 894
F.2d 571, 579 (2d Cir. 1990).
But preemption has not stopped States from trying.
Act’s passage, state and local governments
Since the Act's
continuously have attempted to impose their own regulations on interstate pipeline projects. In 1988, this
Court held that the Natural Gas Act preempted a
Michigan statute requiring natural-gas companies to
obtain approval from the Michigan Public Service
Commission before issuing long-term securities. See
Schneidewind, 485 U.S. at 307. In New York, meanState’s Public Service Commission used a
while, the State's
state regulatory scheme to conduct site-specific environmental review over interstate pipeline construction, despite never having done so for many years after enactment of the law. National Fuel Gas Supply,
894 F.2d at 575. The Second Circuit held that federal
law preempted the state regulation because FERC
also had authority to consider environmental issues.
See id. at 579; see also Millennium Pipeline Co. v.
16
Seggos, 288 F. Supp. 3d 530, 545 (N.D.N.Y. 2017)
(state environmental-permit requirement preempted
by FERC certificate).
Local governments also obstruct natural-gas development. In 1990, officials in Clark County, Nevada
attempted to force a natural-gas company to acquire
local construction permits containing conditions that
conflicted with federal requirements. See Kern River
Gas Transmission Co. v. Clark County, 757 F. Supp.
1110, 1114 (D. Nev. 1990). A district court enjoined
that attempt, explaining that the Natural Gas Act
preempted the local requirements because "state
“state and
local governments * * * cannot require [interstate
pipeline companies] to meet additional safety standards” beyond those required by the federal licensing
ards"
scheme. Id. at 1115. In Rhode Island, an operator of
a natural-gas facility applied to FERC for a certificate
authorizing modifications to the existing facility. See
Algonquin LNG v. Loqa, 79 F. Supp. 2d 49, 50 (D.R.I.
Algonquin
2000). After FERC approved the modifications, the
City of Providence—despite not participating in the
FERC proceedings—tried to hold up the modifications
under the guise of enforcing its zoning and building
code requirements. See id. A district court enjoined
this attempt, too, explaining that the Natural Gas Act
preempted the city's
city’s ordinances "insofar
“insofar as they purport to apply to the FERC-approved modifications.”
modifications."
Id. at 53; see also Dominion Transmission, Inc. v.
Town of Myersville Town Council, 982 F. Supp. 2d
570, 578-579 (D. Md. 2013) (town zoning and land-use
provisions preempted by FERC site-suitability determination).
These experiences and others like them show that
“place[ ] authority
despite Congress’s
Congress's decision to "place[
17
regarding the location of interstate pipelines * * * in
the FERC, a federal body that can make choices in the
interests of energy consumers nationally,”
nationally," National
Fuel Gas Supply, 894 F.2d at 579, States and localities
still use their regulatory powers to hold up projects.
And even when pipeline projects ultimately move forward, they often can do so only after significant cost
and delay.
3. In an attempt to address that concern, Congress
again amended the Natural Gas Act through the EnStates’ roles in
ergy Policy Act of 2005. In a nod to States'
cooperative federal environmental schemes, the Act
preserves States'
States’ delegated federal roles under the
Clean Water Act, the Clean Air Act, and the Coastal
Zone Management Act. See Alexandra B. Klass &
Elizabeth J. Wilson, Interstate Transmission Chalfor Renewable Energy: A
A Federalism Mismatch,
lenges for
65 Vand. L. Rev. 1801, 1861 n.334 (2012); see also 15
U.S.C. § 717b(d).
Despite Congress’s
Congress's amendments, state resistance to
federal natural-gas infrastructure remains strong.
Act’s modest carveouts as a roadmap,
Using the 2005 Act's
and undoubtedly as an unintended consequence of the
amendments, States have used their delegated authority under these three statutes to continue to hold
up federally authorized natural-gas infrastructure
projects. For instance, New York regulators recently
used the Clean Water Act to block a pipeline project
in the State. See Chad Arnold, Cuomo on Constitution
‘Any Way That We Can Challenge It, We
Pipeline: `Any
Will’,
Will', Press & Sun-Bulletin (Sept. 6, 2019, 1:55 PM
ET), https://tinyurl.com/5by82nje; see also Jeff Brady,
Activists Have a New Strategy to Block Gas Pipelines:
Activists
State’s Rights, NPR (Aug. 20, 2018, 3:51 PM ET),
State's
18
https://tinyurl.com/vlybdgy. Though claiming to proState’s Governor made his true
tect water quality, the State's
“Any way that we can challenge [the pipeintent clear: "Any
line], we will."
will.” Arnold, supra.
In Massachusetts, meanwhile, a natural-gas company unveiled plans in 2015 for a new compressor station (a relatively small upgrade) to aid expansion of
its pipelines from New Jersey to Canada. State officials used all three carve-out statutes to hold up the
project for years. See Lane Lambert & Neal Simpson,
Baker’s Review of Weymouth Compressor Station ApApBaker's
plauded, Patriot Ledger (July 18, 2017, 1:21 AM),
plauded,
https://tinyurl.com/y5y2wtyx. State officials first held
up the compressor station for two years before finally
issuing a water permit. See id. But the station then
hit another snag, with the governor ordering further
state environmental review before the project received
its necessary air-quality and coastal zone management permits. See id. The station finally made it
through the permitting process and was put into service, but it took five years. See Miriam Wasser, The
Controversial Natural Gas Compressor in Weymouth,
Explained, WBUR (Oct. 13, 2020), https://tinyurl.com/mrxm3es.
nyurl.com/mrxm3es.
Against these new delay tactics, pipeline companies
have some remedy. The Energy Policy Act of 2005
granted pipeline companies expedited judicial review
in the circuit court of appeals of state-agency denials
of federal-law permits needed to build a FERCregulated project, see 15 U.S.C. § 717r(d)(1), and allows the D.C. Circuit to order state agencies to act by
a date certain when they unreasonably refuse to act
on a federal-law permit, id. § 717r(d)(2). This unusual
federal judicial review statute keeps States from
19
“kill[ing]
cuts.”
"kill
[ing] a project with a death by a thousand cuts."
Dep’t of Env't
Env’t
Islander E. Pipeline Co. v. Connecticut Dep't
Prot., 482 F.3d 79, 85 (2d Cir. 2006) (quoting Natural
Gas Symposium: Symposium Before the S. Comm. on
Energy & Nat. Res., 109th Cong. 41 (Jan. 24, 2005)
(statement of Mark Robinson, Director, Office of Energy Projects, FERC)).
States have therefore moved onto a new strategy
that they believe cannot be countered by the courts:
companies’ condemnarefusing to accede to pipeline companies'
tion actions. See infra pp. 22-26. And that is just what
New Jersey's
Jersey’s Eleventh Amendment objection is: A
strategy to block infrastructure development, not a
State’s sovereign prerogatives.
solemn assertion of the State's
After all, everyone agrees that the United States and
Jersey’s property interits agencies can condemn New Jersey's
ests directly. See Oklahoma ex rel. Phillips v. Guy F.
Atkinson Co., 313 U.S. 508, 534 (1941) ("The
(“The fact that
Atkinson
land is owned by a state is no barrier to its condemnaStates.”). And the United States,
tion by the United States.").
through FERC, and with New Jersey's
Jersey’s participation
in the process, has determined that PennEast’s
PennEast's acquisition of a right of way over the land in which New
Jersey claims an interest is required by the public convenience and necessity. See PennEast Pipeline Co.,
164 FERC ¶
91 61,098, at PP 6-10. The Court should reject this latest method to obstruct needed interstate
natural-gas infrastructure, just as it has in the past.
20
III. THE DECISION BELOW CREATES A
SIGNIFICANT HOLD-UP PROBLEM FOR
PIPELINE COMPANIES WITH FERCAPPROVED ROUTES, AS COLUMBIA'S
COLUMBIA’S
EXPERIENCE SHOWS.
appeals’ decision undermines the entire
The court of appeals'
purpose of eminent domain. As Columbia's
Columbia’s experiappeals’ below
ence shows, decisions like the court of appeals'
can delay or defeat essential projects. Indeed, the decision below could give holdout landowners new weapons in their rear-guard actions against Commissionapproved projects, taking the risk beyond just States.
1. "Given
“Given the choice, almost no one would want natural gas infrastructure built on their block."
block.” Minisink
Env’t Pres. v. FERC, 762 F.3d 97, 100
Residents for Env't
(D.C. Cir. 2014). Interstate natural-gas projects serve
interstate markets, not necessarily local ones. Local
communities thus may not experience the scope of the
national-network benefits that come from locating
natural-gas pipelines in their backyard. Localities
may therefore "understandabl[y]"
“understandabl[y]” want developers to
“But given our nabuild projects "“ ‘elsewhere.’
`elsewhere.' "” Id. "But
tion’s increasing demand for natural gas * * * , it is an
tion's
inescapable fact that such facilities must be built
somewhere.” Id.
somewhere."
Natural-gas-pipeline developers face a particular
problem in assembling the rights-of-way necessary for
their projects. A developer must publicly file a detailed route map, and must notify landowners when
the proposed route runs through or next to their properties. See 1 Office of Energy Projects, Fed. Energy
Regul. Comm'n,
Comm’n, Guidance Manual for
for Environmental
Report Preparation: For Applications
Applications Filed Under the
Act, at 2-1 to 2-3 (Feb. 2017),
Natural Gas Act,
21
https://tinyurl.com/2b2a8nx8 (landowner-notification
requirement); id. at 4-17 to 4-22 (route-map requirement). Once identified, a pipeline company’s
company's ability
to modify routes in response to landowner resistance
is limited by local topography and project engineering
Comm'n,
specifications. See Federal Energy Regul. Comm’n,
An Interstate Natural Gas Facility on My Land? What
An
Do II Need to Know? 8 (Aug. 2015), https://tinyurl.com/y73qr6p3.
This confluence of factors makes natural-gas projects ripe for hold-up by holdouts. A landowner that
is sufficiently opposed to a project can refuse to sell an
easement to the developer at any price, delaying or
even potentially defeating the project. See Daniel B.
“Public Use”
Kelly, The "Public
Use" Requirement in Eminent DoA Rationale Based on Secret Purchases
main Law: A
and Private Influence, 92 Cornell L. Rev. 1, 18-19
(2006) (describing the "holdout
“holdout problem”
problem" in land development). To keep the right to construct necessary
natural-gas infrastructure from being "made
“made a barren
sell,”
right by the unwillingness of property-holders to sell,"
Kohl v. United States, 91 U.S. 367, 371 (1875), Congress, through the Natural Gas Act, delegated to
FERC certificate holders who were unable to "acquire
“acquire
contract” needed easements the power to "acquire
“acquire
by contract"
the same by the exercise of the right of eminent domain.”
main." 15 U.S.C. § 717f(h).
Act’s delegation of eminent-doThe Natural Gas Act's
main powers ensures a fair trade-off: Pipeline companies can obtain their necessary rights-of-way, and
landowners are constitutionally guaranteed just compensation for their taken property. See United States
v. Reynolds, 397 U.S. 14, 15-16 (1970) (explaining that
“the full
the Fifth Amendment promises a landowner "the
22
monetary equivalent of the property taken"
taken” and that
“be put in the same position monetarily
the landowner "be
as he would have occupied if his property had not been
taken”). Eminent domain solves the holdout problem
taken").
while protecting all parties’
parties' rights.
2. The decision below, however, gives States a veto
that no eminent-domain delegation, existing federal
preemption, or fast-track judicial review can overcome. Under it, a State can defeat a pipeline project
that must cross land in which the State claims a property interest simply by refusing to sell the interest to
the certificated pipeline company at any price. See
Pet. App. 30a. In the face of a State veto, a developer
must either hope that its FERC-approved route can be
modified to avoid state-owned land—potentially with
additional impacts on the environment and other land
owners—or give up on the project entirely. And avoiding state-owned land can be hard, if not impossible.
For instance, New York—one of the most-vociferous
objectors to new natural-gas infrastructure—claims
an interest in nearly 4.9 million acres of land, includAcreage by
ing conservation easements. State Land Acreage
Classification, New York State Dep't
Dep’t of Env't
Env’t Conservation (Sept. 2018), https://tinyurl.com/rgmvpv6. And
a State can exercise its veto in its role as property
owner no matter how many customers its decision
may harm in its own or in other States. See Robert
York’s
Bryce, Manhattan Inst., Out of Gas: New York's
Blocked Pipelines Will Hurt Northeast Consumers
(June 25, 2019), https://tinyurl.com/2mcvdm4z (explaining how New York's
York’s opposition to new naturalgas infrastructure will harm not just New Yorkers,
but customers in adjoining Massachusetts).
23
The threat from the decision below is amplified because it allows a State to exercise a veto over FERCapproved pipelines not just when the State has a possessory interest in the property, but when the State
owns any interest in the property. Attempting to avoid
state-implicated land may simply be impossible as a
result. In the decision below, for instance, New Jersey’s interest in most of the properties was nothing
sey's
more than a "conservation
“conservation * * * easement,"
easement,” where the
property owner conveys a promise to maintain the
property for "recreational,
“recreational, conservation, or agricultural use.”
use." Pet. App. at 4a n.4 & 5a; Estate of Gibbs v.
United States, 161 F.3d 242, 243 n.1 (3d Cir. 1998) (explaining New Jersey's
Jersey’s use of conservation easements).
In the hands of a sufficiently motivated private landowner and a like-minded State or state agency, such
conveyances can allow private landowners to exercise
a veto over FERC-approved pipelines. All the landowner needs to do is convey a conservation easement
over the pipeline’s
pipeline's proposed right-of-way to the State,
and the easement will become an impenetrable barrier to the pipeline’s
pipeline's development. As PennEast’s
PennEast's
chairman has explained, under the decision below,
“[i]t’s very, very easy to put up a conservation easelilt's
ment on a private property that would essentially creeffect” and that “[n]o
ate a blocking effect"
Inlo matter where you
wall.” Niina H.
turn, you would run into another wall."
Farah, Pipeline Eminent Domain Battle Lands at Supreme Court, E&E News (Jan. 22, 2021), https://tipreme
nyurl.com/2bz37s67. And landowners do not even
need to be tied to long-term conservation easements
to create such barriers. Suppose, for instance, a State
and a landowner were to agree that the State had a
conditional easement over a pipeline’s
pipeline's planned rightof-way only so long as the pipeline continues to pursue
24
development. That could allow a State and landowner
to stop an unwanted pipeline without the landowner
actually giving up anything of value. The State thus
can create a property interest for the sole purpose of
holder’s exercise of the federal
frustrating a certificate holder's
eminent-domain power. That is precisely the kind of
private-party hold-up that the Natural Gas Act and
its delegation of eminent domain were enacted to prevent.
3. The rationale of the decision below is spreading,
threatening more projects than just PennEast. Columbia is the sponsor of the Eastern Panhandle Expansion Project, which will provide up to 47,500 dekatherms per day of incremental firm transportation2
transportation 2
service to markets in West Virginia. Columbia Gas
Transmission, 164 FERC ¶
If 61,036, at P 4 (July 19,
2018). The Eastern Panhandle Expansion Project will
consist of a little more than three miles of pipeline
stretching from Fulton County, Pennsylvania,
through Washington County, Maryland, and end in
Morgan County, West Virginia, and will cost $24.97
million. Id. PP 4, 6. The Project is fully subscribed by
a local distribution system, Mountaineer Gas Company, for a 20-year term. Id. P 5.
The Commission’s
Commission's environmental-assessment process included consultation with the Maryland State
Historic Preservation Office, which concluded that the
Project will not have an effect on historic properties.
2
2
A dekatherm is about equal to 1,000 cubic feet of natural gas.
Comm’n (Aug.
Market Assessments: Glossary, Fed. Energy Regul. Comm'n
“MMBtu”).
31, 2020), https://tinyurl.com/yvs3sp4v (definition of "MMBtu").
In FERC parlance, "firm"
“firm” service is guaranteed, as opposed to
“interruptible” service, which is not. Georgia Indus. Grp. v.
"interruptible"
FERC, 137 F.3d 1358, 1360 n.6 (D.C. Cir. 1998).
25
“to
Id. P 71. The Commission also directed Columbia "to
permits," including
adhere to state conditions for permits,”
those conditions imposed by Maryland law, except to
the extent they would frustrate Columbia’s
Columbia's project.
Id. P 74. After considering all the comments submit“[b]ased on the
ted, the Commission concluded that "[biased
benefits the project will provide and the lack of effects
on,” among others, "landowners
“landowners and surrounding comon,"
munities,”
“public convenience and necessity remunities," the "public
of” the Project. Id. P 16.
quires approval of"
Columbia was able to negotiate the voluntary acquisition of easements for all of the privately owned property impacted by the Project. Declaration of Jacob
Haney, P.E., ¶
9I 19, Columbia Gas, No. 1:19-cv-01444GLR (May 16, 2019), Dkt. No. 2-1. Columbia was not,
however, able to negotiate an easement over 0.12
acres of land owned by the Maryland Department of
Natural Resources, a Maryland state agency. Id. ¶
9I 13.
After extensive negotiations, Columbia offered Maryland $5,000 for its required easement, well in excess
of the easement’s
easement's appraised value. Id. ¶
9I 15. But Maryland’s Board of Public Works refused to approve the
yland's
Department of Natural Resources’
Resources' conveyance of the
91 17.
easement to Columbia. Id. ¶
Columbia therefore began a condemnation action
against the parcel in the District of Maryland. Complaint in Condemnation, Columbia Gas, No. 1:19-cv01444-GLR (May 16, 2019), Dkt. No. 1. But Maryland, like New Jersey here, moved to dismiss the complaint on the ground that the State's
State’s Eleventh Amendment immunity forbids Columbia from condemning
Maryland’s consent. Mostate-owned land without Maryland's
tion to Dismiss, Columbia Gas, No. 1:19-cv-01444GLR (June 17, 2019), Dkt. No. 29.
26
Columbia’s
The district court agreed and dismissed Columbia's
complaint in condemnation. See 8/21/19 Hearing
Transcript at 12-18, Columbia Gas, No. 1:19-cv01444-GLR (Sept. 17, 2019), Dkt. 47. The district
“Congress did not delegate the
court concluded that "Congress
government’s exemption to state sovereign imfederal government's
munity”
munity" to natural-gas companies in the Natural Gas
Act—the same reasoning offered by the court of appeals below. Id. at 12. And like the court of appeals
below, the district court believed that the sovereignimmunity problem could be obviated if a federal
agency were to file the condemnation action in Columbia’s place. Id. at 19. But see PennEast Pipeline Co.,
bia's
170 FERC ¶
If 61,064, at PP 26, 49-53 (Jan. 30, 2020)
(explaining that FERC cannot, under its current authority, bring a condemnation action on a pipeline’s
pipeline's
behalf). Yet the district court confessed that the ques“is not particularly clear in this circumtion presented "is
stance.” 8/21/19 Hearing Transcript, supra at 18.
stance."
Columbia’s
Columbia's case demonstrates that the court of appeals’
peals' reasoning is not limited to the Third Circuit. If
it stands, it can significantly impair the development
of needed infrastructure. This Court should now clarify that the Natural Gas Act delegates to certificated
pipeline companies all of the United States'
States’ eminentdomain powers, including the power to condemn
state-owned land in federal court. Decisions like this
one and the one below limit the development of federally approved, necessary projects critical to fulfilling
the Nation’s
Nation's economic growth and its demand for natural gas.
27
CONCLUSION
For the foregoing reasons and those in PennEast’s
PennEast's
brief, the judgment of the Third Circuit should be reversed.
Respectfully submitted,
C
ATHERINE E. S
TETSON
CATHERINE
STETSON
Counsel of Record
S
EAN M
AROTTA
MAROTTA
SEAN
PATRICK
P
ATRICK C. VALENCIA
VALENCIA
H
OGAN L
LOVELLS
OVELLS US LLP
HOGAN
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-5600
cate.stetson@hoganlovells.com
Counsel for
for Amicus
Amicus Curiae
MARCH
M
ARCH 2021
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.