NJ Landowners in Federal Court to Fight Pipeline Company on Eminent Domain

Jon Hurdle | April 6, 2018 | Energy & Environment
Dozens of New Jersey landowners were in court yesterday to challenge PennEast’s efforts to take possession of parts of their properties

Credit: Susan Phillips/StateImpact Pennsylvania
PennEast pipeline
Sixty-three New Jersey landowners took their fight against the proposed PennEast pipeline to federal court in Trenton yesterday, arguing that the company has no right to take parts of their properties using eminent domain.

The hearing before U.S. District Judge Brian Martinotti was the first of three to challenge the company’s recent filing of eminent domain suits against private landowners and government entities that have refused offers of compensation for building the natural gas pipeline on their land.

Attorneys for the landowners — around 40 of whom were in court — argued that the PennEast Pipeline Co. does not yet have final approval from the federal government that would allow it to take private land by eminent domain, even though the company filed the suits after the Federal Energy Regulatory Commission issued a conditional approval of the project on Jan. 19.

“We contend that PennEast doesn’t have the kind of certificate to allow construction to begin,” Jennifer Danis, an attorney representing the New Jersey Conservation Foundation, told the court.

She argued that FERC, which regulates interstate pipelines, can’t do its final analysis on the public need for the pipeline until it has a water-quality certificate from New Jersey’s Department of Environmental Protection, which has not yet issued that document.

Company’s lawyer says it has every right

But James Graziano, a PennEast attorney, argued that the company can take private land if it is unable to agree on compensation with the owners because Congress has delegated the power of eminent domain to pipeline companies through the Natural Gas Act.

“Congress has decided that natural gas companies are going to have the full power of eminent domain, and the state can’t block that,” he said. Since PennEast’s authority to use eminent domain is based on federal law, that pre-empts any state or local effort to block the seizure of private property, Graziano said.

“When federal power and state power intersect, federal power wins,” he said.

PennEast is also fighting the New Jersey attorney general’s office, which has rejected the company’s offers of compensation for several parcels of protected land in Hunterdon County where the state has easements to prevent the development of farms.

Deputy Attorney General Mark Collier argued that the Natural Gas Act does not give the company a right to take public land. “The Natural Gas Act is silent as to those rights,” he told the court. “That silence is simply insufficient to allow a private entity like PennEast to take the state’s property rights.”

Landowners far from optimistic

Outside the courthouse, some landowners welcomed the start of the legal fight, although they were far from optimistic that they would prevail.

“At every possible turn, we’ve been told, ‘You won’t win this,’” said Leslie Sauer, who owns 250 acres in Delaware Township, Hunterdon County, where she has lived since the early 1950s. “They are going to absolutely grant the certificate because they always do. They won’t grant you a rehearing because they never do. They won’t require the conditions be fulfilled because they never do. So it’s a little difficult to see where our space is.”

Sauer said PennEast had offered her compensation for building the pipeline on a small part of her land, but she rejected it because the company gave her only 12 days to decide. She said she would not entertain any offer until the company submits an environmental impact statement to replace one that she said is “grossly inaccurate.”

“We have always been given nothing more than a snowflake’s chance in hell, and we are going with it,” she said. “And we have slowed them down, we have held them up, we have raised real questions. Hopefully, the courts will finally look at this somewhat seriously and recognize how absurd it is.”

Jacqueline Evans, another Delaware Township landowner, said PennEast withdrew its compensation offer to her and declined her proposal to sell the company the 7-acre property where she runs a small organic farm and raises honey bees. She said drilling for the pipeline would threaten her water well with arsenic, and the natural gas in the pipeline would endanger her family if it leaks or explodes.

Last resort?

“If this goes through, I absolutely have to move because I cannot have my children living in what’s called an incineration zone,” Evans said.

PennEast spokeswoman Pat Kornick said after the hearing that, after many landowners declined the company’s compensation offers, it was “forced to exercise a last-resort option” of filing the eminent domain suits so that it could get access to their land to do environmental surveys, as required by FERC.

The FERC certificate determined that the natural gas pipeline project is in the public interest, she said.

That assertion has been rejected by critics including the New Jersey Rate Counsel, an advocate for utility ratepayers, who say the line is not needed.

Kornick, who said the company anticipates starting construction this year, said the pipeline will be operational in 2019.

Martinotti scheduled two more hearings on April 19 and 26 for about 68 other New Jersey landowners who are fighting eminent domain suits, and to hear final arguments from attorneys. On the Pennsylvania portion of the route, about 50 landowners have been sued by PennEast for eminent domain. The approximately 120-mile pipeline would carry natural gas from Luzerne County in Pennsylvania to Mercer County, New Jersey.