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The PennEast Pipeline project faces a major setback after a Third Circuit court decision

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The PennEast Pipeline project faces a significant roadblock after a federal appeals court decided that the company could not condemn state land to build part of the pipeline.

The Third Circuit Court of Appeals on Sept. 10 reversed a lower court’s decision that allowed PennEast to condemn about 42 parcels of New Jersey state land.

The court stated under the 11th Amendment of the U.S. Constitution, the state is immune from condemnation lawsuits by private parties, including pipeline companies.

“PennEast will review in detail the Third Circuit Court’s opinion and then determine its next steps. PennEast remains committed to moving forward with the PennEast Pipeline Project to provide New Jersey and Pennsylvania residents and businesses increased access to clean, affordable natural gas,” said Patricia Kornick, spokeswoman for PennEast.

PennEast had argued that the federal Natural Gas Act allowed the company to condemn all needed properties along the path of the proposed pipeline. Through the Third Circuit decision on Sept. 10 the court stated the company does not overcome New Jersey’s sovereign immunity under the Constitution.

The Natural Gas Act is a federal law that allows private gas companies to exercise the federal government’s power to take property by eminent domain, under certain requirements.

The $1 billion project proposes the construction of a 116-mile-long natural gas pipeline from Pennsylvania into New Jersey.

“We will not hesitate to stand up to private companies when their actions violate the law—or, in this case, the U.S. Constitution,” NJ Attorney General Gurbir Grewal said. “From the very beginning, we have made clear that the 11th Amendment prohibits private pipeline companies like PennEast from condemning state properties for private use, and we’re pleased that the Third Circuit agreed with our position. This is great news for New Jersey and the environment.”

The pipeline’s construction would occur in the Hopewell area, while the New Jersey leg of the pipeline accounts for one-third of the total project.

“We were thrilled that the Third Circuit saw this issue the same way that essentially we did. It just seemed unthinkable to me that a private company could take publicly preserved land for profit,” Hopewell Township Mayor Kristin McLaughlin said. “It was a good day for Hopewell Township when the decision came down from the Third Circuit.”

She said the township early on has been fighting the construction of New Jersey leg of the pipeline.

Company officials said the pipeline route in New Jersey largely aligns with decades-old power lines and roads to dramatically lower overall impacts. As a result, wetland impacts are reduced by nearly half, with a total project footprint reduced by more than 20%, according to officials.

Timothy Duggan is a partner with Stark & Stark, a Lawrence Township based law firm, who has experience in eminent domain.

“This is a pretty big decision on the Jersey side. The decision put the whole pipeline in jeopardy for several reasons,” Duggan said. “First, PennEast now has to figure out whether or not they are legally permitted to acquire any property rights owned by the state. If they are not able to do that, they either have to re-route the pipeline or cancel it. We believe this decision sets them back one to two years.”

Duggan and the firm are representing four municipalities, including Hopewell Township, two nonprofit organizations and 45 property owners.

Duggan said he believes it will be very difficult for the company to re-route a pipeline in New Jersey without crossing a property in which the state has an interest.

“We will argue that the eminent domain cases should not be allowed to proceed because the whole pipeline project is now in jeopardy and may never be built. We do not believe it is fair that property owners have their property taken when the pipeline may never be built,” he said.

Duggan is referring to the 43 cases involving eminent domain that are awaiting a decision at the appellate level. He said they are still digesting the decision and reviewing various options that they have.

The PennEast pipeline project also faced opposition from organizations such as the Watershed Institute in Pennington. Watershed officials said they also were pleased with the Third Circuit’s decision.

“This ruling is a great victory in the fight against PennEast,” said Jim Waltman, executive director of The Watershed Institute. “We stand poised ready to protect the safety of New Jersey’s waterways and environment.”

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