What’s up with that (sorta) snarky headline, you ask? After all, isn’t the PennEast v. New Jersey case, heard yesterday by the Supreme Court, a real honest-to-goodness eminent domain case about a pipeline?

Doesn’t the transcript show terms like “in rem,” “takings,” “eminent” and “eminent domain” were used a whole lot? Aren’t a lot of the media reports saying this is a big eminent domain case (see here and here for example)?

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But read the transcript or a listen to the recording (stream above or download the mp3 here) and see what you think, eminent domain mavens.

If you are like us, you understand that the case isn’t going to tell us a lot about eminent domain generally, or about valuation, or the power to take (except in very limited circumstances). After all, the case asks whether the State of New Jersey – not some mere private landowner – can be haled into a federal court as a defendant in a Natural Gas Act private pipeline taking, and the issue isn’t the same as a typical NGA pipeline case in which a private landowner can’t assert Eleventh Amendment immunity.

As a consequence, here we witnessed a much different result in the way the lower courts treated the condemnee. Unlike virtually all other NGA cases in which the private pipeline condemnor pulled the usual “quick-take-by-preliminary-injunction” trick to get immediate possession of the property (even though the NGA doesn’t delegate the federal government’s quick take power), the Third Circuit invalidated the PI.

So we had lowered expectations that yesterday’s arguments would tell us anything truly worthwhile about this issue or any other eminent domain-ey things. It didn’t, but here’s what we thought were the most interesting points:

  • There was a lot of mention of how eminent domain is an “in rem” action. See, e.g., Tr. at 5 (“Second, the proceedings here are in rem and can only augment the state treasury. This Court has recognized that in rem proceedings pose a lesser threat to state sovereignty.”). An action against the property and not against the owner. That seemed to be an assumption that everyone was operating under. But as Justice Gorsuch noted (and only Justice G) noted the “in rem” shorthand really doesn’t help much. Tr. at 83 (“I remember Upper Skagit. I may be the only person who does, but I do having gotten saddled with that one, but it was a delightful assignment. But that — that has to do with property outside the state. What about inside the state?”). The “Upper Skagit” case he refers to is this one, which we thought reflected the notion that the “in rem” vs. “in personam” distinction is not terribly helpful in eminent domain. But we’ll hold off on that one here, because one of PennEast’s key arguments is that it wasn’t really suing New Jersey qua New Jersey, but rather land that just happens to be owned by New Jersey.
  • It was kind schadenfreudey to hear New Jersey complain about how unfair and harsh eminent domain can be. Welcome to the world of typical condemnees, New Jersey!
  • The main point of PennEast’s argument was that PennEast really isn’t a private actor, and it isn’t simply exercising a delegated federal power. Instead, it has effectively been “deputized” as a federal agent, and this is really just like the feds are suing New Jersey. If the Court buys that, we think it is all over for New Jersey.
  • Finally, this: PennEast emphasized what we’ve always thought was a point worth repeating: eminent domain is not a typical civil action: “And of all in rem actions, eminent-domain proceedings pose the least concerns. They allege no wrongdoing, they impose no liability, and they cannot be brought without federal authorization. The whole point of the proceeding is to ensure just compensation for a taking.”). Tr. at 6. If the Court picks this up, the opinion might be more interesting.

A clear consensus was not obvious among the Justices. To be honest, we’re kind of ambivalent about the outcome in this one because the Court didn’t even think about the quick-take-by-PI issue that we believe remains a festering problem, and the Court deciding whether a state can be subject to the unfair and unconstitutional regime that private owners have to suffer under leaves us lukewarm (same as it ever was).

Transcript, Penneast Pipeline Co., LLC v. New Jersey, No. 19-1039 (U.S. April 28, 2021)