Sovereign Immunity of Natural Gas Pipeline being Investigated

The nation’s judiciary is still trying to find out what “Sovereign Immunity” entails, more than 230 years after the Founding Fathers ratified the Constitution. At least as it relates to a pipeline that transports fracked Pennsylvania natural gas to New Jersey. The PennEast Pipeline Co. LLC, which claims that New Jersey unlawfully barred it from securing key easements on property in which the state has a stake. It has thwarted the federally approved $1.2 billion pipeline, presented oral arguments to the United States Supreme Court on Wednesday.

New Jersey claims that the Sovereign Immunity clause of the United States Constitution protects it from being sued by a private individual like PennEast.

However, PennEast, which is run by a Valley Forge-based subsidiary of UGI Corp., claims it is operating as a spokesman for the federal government, which granted the pipeline company eminent domain authority over states when the Federal Energy Regulatory Commission approved the project. It claims that a federal appeals court ruling in New Jersey’s favour in 2019 was “deeply flawed.”

The justices pressed PennEast’s lawyer, Paul D. Clement, to defend his arguments that PennEast was acting as an agent of the government. Justice Sonia Sotomayor said the delegation of federal eminent domain authority to a private entity “is troublesome to me.”

The case has drawn the attention of anti-pipeline protestors, as well as the gas industry and business supporters, since it poses critical jurisdictional questions of states’ rights against federal law. Acting U.S. Solicitor General Edwin Kneedler argued that the U.S. Congress may transfer its eminent domain power to private individuals under the Constitution.