Pipeline Opponents Bring Constitutional Challenge Against FERC’s Use of Eminent Domain

Posted November 27, 2017

TRENTON, NJ (November 27, 2017) – The Federal Energy Regulatory Commission (FERC), the federal agency charged with reviewing applications to permit natural gas pipelines, is acting unconstitutionally by not ensuring that the lands it authorizes pipeline companies to seize are being put to a public use, contends a complaint filed by the Eastern Environmental Law Center (EELC) and Columbia Environmental Law Clinic on behalf of New Jersey Conservation Foundation (NJ Conservation).

The first-of-its-kind legal challenge, filed with the U.S. District Court in Trenton against FERC, asks the court to declare that:

  • Under its current evaluation process, FERC’s approval process for pipelines violates the Fifth Amendment of the U.S. Constitution for improperly taking land from private parties without a public use.
  • FERC must consider environmental impacts before granting a pipeline company a Certificate of Public Convenience and Necessity, which allows the companies to exercise eminent domain.
  • FERC cannot accept private ‘shipping’ contracts as proof of market demand or as proof that the consumers will not suffer economic harm.

“The Fifth Amendment says that private property can only be taken for public use, and FERC’s pipeline review process doesn’t pass that test,” said Tom Gilbert, campaign director, NJ Conservation.

“For example, hundreds of homeowners, organizations and local governments could have their land seized through eminent domain for the unneeded, proposed PennEast pipeline, and would be victims of unconstitutional action by the federal government,” Gilbert added.

Jennifer Danis, senior staff attorney, EELC, said: “The law is clear, and it is not being followed. FERC’s practice flies in the face of constitutional protections against the illegal seizing of private property.”

“Our aim is to motivate FERC to amend its policies so the agency ceases its unconstitutional practice of granting Certificates for pipelines that are not in the public interest. This will end the unjust seizing of public and private land,” said Susan J. Kraham, senior staff attorney, Columbia Environmental Law Clinic.

The complaint notes that “pipeline parent companies can profit from deals with their…subsidiaries, and transfer shipments from old pipelines to new pipelines without overall cost savings to consumers. Those parent companies are motivated by the availability of a 14 percent rate of return on investment that has been consistently awarded by FERC and described by the New Jersey Rate Counsel as ‘tantamount to winning the lottery.’”

Among the FERC practices challenged in the complaint are allowing eminent domain authority to grant seizure of land that will not be for public use before a pipeline project has received its other required state and federal approvals that might never be issued.

“The pipeline may never get built, yet the landowners have had their lands taken and held by private corporations for a project that fails to come to fruition,” the complaint says.

Download the complaint here.

Click to tweet: First-of-its-kind legal filing challenges @FERC “unconstitutional” practices in approving pipelines http://ow.ly/ZW5y30gPNzH @ConserveNJ @rethinkenergynj @eelc_org

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