In a 5–4 decision, the United States Supreme Court ruled that a private company can use the federal government’s delegated power of eminent domain to sue the State of New Jersey in a federal condemnation action—PennEast Pipeline Co. v. New Jersey594 U.S. (2021). In doing so, and allowing the suit to move forward, the court reversed the decision of the Third Circuit Court of Appeals, which had sided with the State of New Jersey and barred the action as against the State of New Jersey.

Background Overview

In 2018, the Federal Energy Regulatory Commission (FERC) issued a certificate of public convenience and necessity (FERC Certificate) to the PennEast Pipeline Co., approving and authorizing the construction of a 116-mile pipeline from Luzerne County, Pennsylvania, to Mercer County, New Jersey. Under section 717f(h) of the Natural Gas Act, the holder of a FERC Certificate is authorized to use the federal government’s power of eminent domain to obtain a right-of-way along a pipeline route approved by FERC and to establish just compensation for affected owners. 15 U.S.C. §717f(h).

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