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The PennEast Pipeline: What Happens Next?

A few weeks ago, the Federal Energy Regulatory Commission (FERC) granted conditional approval of the PennEast Pipeline. FERC is a federal agency which regulates gas pipelines and issued an order to allow PennEast to proceed forwardwith its project on January 19, 2018. This approval will allow PennEast to file complaints in the United States Federal Courts in New Jersey and Pennsylvania seeking to exercise the power of eminent domain to take property rights to install the pipeline.

Since this announcement, the most common question has been: what happens next?

After FERC announced their approval, PennEast sent out letters, informing the property owners whose land they intended to obtain for the pipeline that the deadline to accept their last offer was February 5, 2018. Homeowners were given contact information for PennEast’s land agent and instructed to call a specific phone number if they want to accept the offer. The letter also enclosed the agreement they were to sign if they accepted the offer.

For property owners who rejected the last offer, the next step is to be named as a defendant in an eminent domain lawsuit. Each property owner is being named in separate lawsuits.

As of February 10, 2018, 103 lawsuits were filed in New Jersey and more are expected. The lawsuits ask the Court for the following relief:

  1. Let PennEast have access to the defendant’s (homeowner’s) property for surveying/testing;
  2. Enter an Order allowing PennEast to take easements rights to construct the pipeline; and
  3. Determine what PennEast must pay property owners for just compensation.

Since the PennEast pipeline was first announced, there have been several groups that have stepped forward and organized with the goal of fighting the pipeline. One of these organizations, HALT (Homeowners Against Land Taking), is a group I have assisted and encourage people against the pipeline to join.

Many people probably know that eminent domain is the right of the federal government to take private property in return for an equivalent sum, but when a private company or companies get involved, it can be confusing.

You might wonder, how can a private company access and use a near omnipotent power like eminent domain to take private property from homeowners for the purpose of their own monetary gain?

Under the Natural Gas Act, Congress delegated the power of eminent domain to private companies who obtain certain certificates from FERC. The private pipeline companies “step in the government’s shoes” and exercise the right of eminent domain on the federal government’s behalf. This decision is made with the assumption of “public use” or “benefit” to the public once the FERC certificate is issued. Several property owners have recently challenge the right of Congress to delegate this authority, with some cases still pending.

The groups that oppose the PennEast Pipeline are planning to challenge the issuance of the FERC certificate and ask for a rehearing in the hopes that FERC will overturn their decision.

While this goes on, I expect PennEast will continue to go forward with eminent domain complaints against property owners.

Of course, this fight is far from over. PennEast still needs to obtain approval for a host of additional permits, including one from the New Jersey Department of Environmental Protection (NJDEP).

Last year, the NJDEP rejected the pipeline’s water permit application in April and again June, citing a lack of “substantive information” needed to obtain the permit. Just this week, the NJDEP announced for a third time that they would be rejecting the pipeline’s application for the same reason.

If you are a homeowner whose property falls along the intended Penn East Pipeline path, you still have the ability to tell pipeline companies to stay off your property as of now. They have no right to go on your property and do any types of tests or surveys until they obtain a court order.

COPYRIGHT © 2020, STARK & STARKNational Law Review, Volume VIII, Number 43


About this Author

Timothy P. Duggan, Stark Law, Creditor's Rights Lawyer, Bankruptcy Attorney

Timothy P. Duggan is Chair of Stark & Stark’s Bankruptcy & Creditors' Rights Group.  Mr. Duggan represents national and community banks, agricultural lenders, franchisors, equipment leasing companies, shopping centers and trade creditors in commercial litigation and bankruptcy cases.  Mr. Duggan has substantial experience in creditor-rights litigation, including foreclosures, replevin matters and negotiating corporate loan restructuring. Mr. Duggan’s litigation experience covers most aspects of bankruptcy litigation, with a focus on defending preference and fraudulent transfer...