Supreme Court Will Decide Whether Pipeline Developers Can Seize Public Land

The Supreme Court is preparing to weigh in on the power of natural gas pipeline companies to seize state land, in an opinion that legal scholars say will set precedent for state-level opposition to fossil fuel infrastructure built by private developers.

The decision will come in the wake of the Keystone XL’s official cancellation, amid rising resistance to Line 3 and Line 5 oil pipelines and the formation of a new national anti-pipeline coalition.

In one of 12 outstanding cases this term, PennEast Pipeline, LLC v. New Jersey et al., the Supreme Court justices will decide whether a 1938 law known as the Natural Gas Act grants private companies the federal government’s power of eminent domain for building a pipeline transporting natural gas. Eminent domain is an implied power vested in the U.S. Constitution, which allows the government to take property in exchange for just compensation to make way for development deemed to benefit the public. While it was originally used for projects like the expansion of railroads, since the 1950s the power has increasingly been granted to private companies to develop features like golf courses, condominiums and — over the last decade since fracking was commercialized — fossil fuel infrastructure.

As Washburn University law professor Janet Thompson Jackson has written, social justice provisions are largely absent from eminent domain law. The seizure of property tends to have an “undue burden on poor people and communities of color in a way that resembles Discovery-era takings of land from [Indigenous peoples],” Jackson wrote. According to research published in May 2021 in the journal GeoHealth, natural gas pipelines, which carry the risk of explosion and are detrimental to property values in the communities that surround them, are overwhelmingly concentrated in U.S. counties with higher levels of social vulnerability.

The project in question in the Supreme Court case, the PennEast Pipeline, is a proposed 116-mile line that would send Marcellus shale fracked gas from the Appalachian Mountains in northeast Pennsylvania across the Delaware River to the edge of Mercer County, New Jersey. Environmentalists opposing the PennEast Pipeline have pointed out that the project would cut through the last contiguous forested areas in central New Jersey, and cross 88 waterways, 44 wetlands and 30 parks, while developers estimate the project would create over 12,000 direct and indirect jobs and lower utility costs millions of dollars annually. The Biden administration has maintained Trump-era support for PennEast in the conflict, which Maya van Rossum, the Delaware Riverkeeper, characterizes as both politically and environmentally “dangerous.”

“It’s going to transform landscapes,” van Rossum told Truthout, explaining how PennEast’s plans to carve out artificial waterways in order to lay pipe through natural ones would degrade the now-vegetated floodplain and open it to erosion and invasive species.

PennEast developers have been working to obtain authorization from the Federal Energy Regulatory Commission (FERC) since 2014. The venture received a key water-crossing permit from Pennsylvania in 2017. But a significant number of landowners did not want to settle for the easement payment the company proposed, leading PennEast to file an estimated 50 eminent domain cases in Pennsylvania, plus another 147 in New Jersey, including suits against the state of New Jersey, which rejected offers by PennEast to purchase easements through public and protected land in Hunterdon County.

New Jersey and other parties, including the Delaware Riverkeeper, objected to the project. The case has since been bouncing between district and appeals courts. The Supreme Court agreed to take the case in February, and oral argument was held in April.

The key legal question centers around whether to uphold an earlier Third Circuit decision that PennEast can’t sue New Jersey to take its land, because doing so would violate the Eleventh Amendment, which protects states from lawsuits brought by private parties. “The case is really about state rights versus the fossil fuel industry and the ability of states to protect their public land, and the [work] of previous generations that have been investing for decades to preserve open space for the benefit of future generations,” von Rossum explained.

James Coleman, a law professor at Southern Methodist University told Truthout that a decision in favor of New Jersey could also deliver consequences for individual landowners living along future proposed pipelines. A ruling in favor of New Jersey could signal that landowners along a proposed natural gas pipeline might issue a conservation easement to the state, which would give state authorities the grounds to decline easement and avoid eminent domain. “When you do that, all of a sudden, that’s a veto,” Coleman said.

Lawyers representing PennEast have deemed the case of “immense national importance” given the potential disruption of the natural gas industry’s reliance on eminent domain powers granted by FERC and the industry’s tendency to build through portions of state-controlled land with minimal state opposition, including riverbeds that form natural borders. “If those state boundaries are converted into barriers to pipeline development, the federal interest in ensuring the interstate transport of natural gas could be critically frustrated,” PennEast’s attorneys wrote in a brief.

But as Texas eminent domain lawyer Clint Schumacher told E&E News, the legal concepts behind eminent domain are antiquated. “It’s an area of the law that’s undeveloped and probably has not kept up with the times,” he said.

The Supreme Court ruling is the highest-profile pending matter, but other litigation, legislation and reform efforts taking aim at ending the use of eminent domain for corporate gain are also in the works.

A coalition of groups including the National Resources Defense Council, the Riverkeeper Alliance and the Southern Environmental Law Center are urging FERC to change what they’ve characterized as its lax approach to approving certificates for pipelines like PennEast. In 107 pages of written comment filed earlier this spring, the groups blamed FERC for facilitating “disorderly development” of natural gas pipelines that “were never required to meet market demand or serve the public interest.”

Among other measures, such as urging FERC to consider climate targets, the groups have proposed that FERC withhold the granting of eminent domain until all state permits for a project are issued, rather than ahead of time, a practice which allows companies to seize land from landowners before ample environmental review is complete.

On account of this practice, Catherine Holleran watched crews accompanied by armed federal marshals clear parts of her family farm of maple trees to make way for the Constitution Pipeline, which was later cancelled when New York state declined to issue the necessary permits, as StateImpact Pennsylvania reported.

Jane Kleeb is founder of the Bold Alliance, a network including fisherfolk, farmers, ranchers and Tribal nations opposing fossil fuel development through grassroots campaigns that mounted major opposition to the Keystone XL. As Kleeb told the Omaha World-Herald, she intends to push for changes to state law that would automatically return property to landowners in the event that a project is cancelled, rather than allowing pipeline developers to sell off the easements to other companies. “I’m not going to rest until we have stronger eminent domain laws and stronger pipeline laws in our state, because I don’t want other families to go through what everybody just went through with Keystone XL,” Kleeb said.

Other changes on the books include reforms to eminent domain in Texas, where the state legislature approved a bill in May that protects landowners from damage done by companies seeking to build pipelines, power lines or railways and allows landowners to file formal complaints against right-of-way agents who approach them to negotiate. The bill would also require the state to offer landowners more information about the eminent domain process, which is nebulous and can require expensive legal help.

Scott Crosby, a Memphis-based lawyer who has been representing landowners along the path of the proposed Byhalia Connection, an oil pipeline slated to run through Tennessee and Mississippi, told Truthout that on July 9, a circuit court judge will for the first time decide whether Tennessee state law specifically grants eminent domain authority to private oil pipeline developers.

Earlier this spring, Byhalia developers dropped their eminent domain lawsuits against Crosby’s clients in exchange for an agreement that the City Council would delay an ordinance designed to block the pipeline. But the agreement was made without prejudice, meaning that the company can bring the lawsuit again at any time, unless the judge finds that oil pipeline developers do not have eminent domain under state law. “A cloud hangs over [my clients’] title and their plans for their property because at any time they can be sued again, and if [the company is] successful, then their land is taken from them,” Crosby said.

As for the Supreme Court decision, the outcome and the degree to which states will be empowered to veto for-profit gas pipelines is of particular importance given that states are at the forefront of climate action, said van Rossum, the Delaware Riverkeeper.

Regardless, van Rossum is also calling for an amendment to the Natural Gas Act, as well as for eminent domain reform more broadly.

“We are in a different time and place in our country,” she said, regarding the original gas pipeline building boom using eminent domain in the 1940s. “What we have been seeing in recent years is an increasing misuse of eminent domain in order to service private industry to the detriment of the people. I think there really needs to be serious consideration of how it’s used, when it’s used; in many places I think it’s no longer appropriate.”