The U.S. Court of Appeals for the Third Circuit recently handed down a precedential decision regarding the federal Natural Gas Act (NGA) and the authority of private companies acting pursuant to a certification of public convenience and necessity from the Federal Energy Regulatory Commission (FERC). See In re PennEast Pipeline, 938 F.3d 96 (3d Cir. 2019). The Third Circuit reviewed a decision from the U.S. District Court for the District of New Jersey, which granted a pipeline company immediate access to easements sought over state land, and ultimately vacated the trial court’s opinion, offering interesting insights as to the scope of authority under the NGA.

PennEast Pipeline Co. had initiated an eminent domain action pursuant to the NGA to allow it to acquire property interests necessary for a pipeline being built through Pennsylvania and New Jersey. The general framework of eminent domain authority pursuant to the NGA is well established and allows private gas companies to acquire necessary rights-of-way where the gas company holds a FERC certificate of public convenience and necessity; the gas company was unable to acquire the property by contract or agreement with the property; the property interests are necessary for the FERC-certificated project; and the value of the property condemned exceeds $3,000, see 15 U.S.C. Section 717f(h). PennEast’s pipeline project met these requirements and PennEast filed complaints in the U.S. District Court for the District of New Jersey, seeking condemnation orders for easements across properties along the pipeline route, just compensation determinations for those easements condemned, and injunctive relief to gain immediate access to the easements condemned to begin construction of the pipeline. Of the properties where easements were condemned, 42 were owned by New Jersey or divisions of the state.