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Energy and Environment Monitor

Fourth Circuit Vacates but does not Reverse District Court Decision Barring Columbia’s Use of Natural Gas Act Eminent Domain Against Commonwealth of Maryland

May 23, 2022

By: Robert G. McLusky

The Natural Gas Act gives FERC-regulated projects the right to condemn private property.  In 2019, the Third Circuit ruled that those rights did not extend to property held by a state because states enjoy sovereign immunity from such suits.  The federal district court in Maryland followed suit, blocking efforts by Columbia Gas to install a short transmission line under a state-owned bike trail located along the Potomac River.  The Maryland case was appealed to the Fourth Circuit.  We have written about those cases before, which represented a significant threat to pipeline construction in September 2019 and November 2019.

In June 2021, however, the United States Supreme Court reversed the Third Circuit, ruling that FERC certificated projects could condemn state-owned land. See PennEast Pipeline Co., LLC v. New Jersey.  Soon after that ruling, Columbia Gas moved the Fourth Circuit for summary reversal of the Maryland district court’s opinion, arguing that the PennEast ruling controlled its dispute with the State. Maryland resisted, arguing that the Supreme Court had not resolved all areas of dispute on the sovereign immunity issue.  It argued that states enjoy two types of sovereign immunity: “structural,” which “derives from the nature of the Constitution” and “Eleventh Amendment immunity, which flows from that later adopted amendment.”  It argued further that the Supreme Court determined only that the states had waived their “structural” immunity, but that Maryland also has 11th Amendment immunity that it has not waived.  The 11th Amendment divests federal courts of jurisdiction of suits against states by a citizen of another state.  Columbia Gas argued that this issue was resolved in favor of PennEast by the Supreme Court, and it was only Justice Gorsuch’s dissenting opinion that recognized the distinction advanced by the State.

By order dated May 19, 2022, the Fourth Circuit denied the motion for summary reversal without further comment, but vacated the district court order and remanded the case to the District of Maryland in light of the Supreme Court’s ruling in PennEast.  As a result, Maryland will be permitted to assert its 11th Amendment argument back before the U.S. District Court for District of Maryland.

 

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