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PennEast and Sovereign Immunity
Andrew Hyman

In June of this year, a closely divided U.S. Supreme Court decided the case of PennEast v. New Jersey, holding that Congress has power to delegate the ability to take land for an interstate pipeline to private pipeline companies who are headquartered in another state, and who can then launch lawsuits for eminent domain in federal court against not just private landowners but also against a state that owns land needed for the pipeline.  My co-blogger Michael Ramsey recently commented about that case, which raises important issues about whether the State of New Jersey had sovereign immunity from these lawsuits.  The U.S. Supreme Court said no, but did not go very deeply into this issue, because the parties relied entirely on SCOTUS precedents without asking that those precedents be reconsidered.  Justice Gorsuch, joined by Justice Thomas, wrote in dissent that:

The Eleventh Amendment’s text, no less than the Constitution’s structure, may bar [this suit]. This Court, understandably, does not address that issue today because the parties have not addressed it….The lower courts, however, have an obligation to consider this issue on remand before proceeding to the merits.

I hope the lower courts will do so.  The 11th Amendment says: 

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

This language, read literally, would have resolved this case against PennEast and in favor of the state of New Jersey, but literal text is not necessarily the end of the story.  I agree with Professor Eric Segall that, “The text of the 11th Amendment unequivocally blocks that suit,” but I would also allow exceptions that were understood when the 11th Amendment was ratified.  Unwritten exceptions to otherwise clear text may not be pleasant for textualists, but they are sometimes unavoidable.  For example, the text of the 6th Amendment indicates that a defendant can never represent himself without counsel: “In all criminal prosecutions, the accused shall…have the Assistance of Counsel for his defence.”  But every clause in the Constitution ought to be read reasonably rather than literally, taking into account both historical and textual context.

The question in PennEast is whether there were any applicable exceptions to the 11th Amendment, when it was ratified, that might shift the case in favor of the plaintiff pipeline company. Probably the best candidates for such an exception were described by Alexander Hamilton in Federalist 32, where he explained that if the federal government is given exclusive (not merely concurrent) power over a matter then that would amount to a valid waiver of the states’ sovereign immunity.  Hamilton wrote (emphasis in original):

[A]lienation, of  state sovereignty, would only exist in three cases: [1] where the Constitution in express terms granted an exclusive authority to the Union; [2] where it granted in one instance an authority to the Union, and in another prohibited the States from exercising the like authority; and [3] where it granted an authority to the Union, to which a similar authority in the States would be absolutely and totally CONTRADICTORY and REPUGNANT. I use these terms to distinguish this last case from another which might appear to resemble it, but which would, in fact, be essentially different; I mean where the exercise of a concurrent jurisdiction might be productive of occasional interferences in the POLICY of any branch of administration, but would not imply any direct contradiction or repugnancy in point of constitutional authority. These three cases of exclusive jurisdiction in the federal government may be exemplified by the following instances….

So, if PennEast had involved bankruptcy instead of interstate commerce, then the plaintiff would have had an extremely strong case for overcoming the sovereign immunity explicitly guaranteed by the 11th Amendment, because the bankruptcy power (unlike the interstate commerce power) is an entirely exclusive federal power.  As Hamilton explained in Federalist 32, such a power must “necessarily be exclusive; because if each State had power to prescribe a DISTINCT RULE, there could not be a UNIFORM RULE” (emphasis as in original).  But PennEast was not about bankruptcy, it was about interstate commerce which is not an exclusive federal power like the bankruptcy power.  If indeed the interstate commerce power exercised in PennEast does not fit into the “three cases” that Hamilton described, then there cannot be alienation of state sovereignty, and so the 11th Amendment is not subject to such an exception.  Obviously, Federalist 32 was not commenting in 1788 about an Eleventh Amendment that would not be drafted until 1794, but still I would want to see some solid evidence that public sympathy shifted away from Hamilton’s argument between 1788 and 1794 before shifting away myself.

It may well be, as Professors William Baude and Stephen Sachs say, that the Eleventh Amendment does not allow states to waive any immunity protected by that amendment, “any more than two citizens of Pennsylvania can agree to bring their fender-bender into federal court.”  Assuming so, that still does not say anything about whether states could (or did) accomplish such a thing by ratifying other constitutional text, granting exclusive power to the federal government over certain discrete subjects.

So, the result in PennEast was probably wrong.  But the Court was constrained by the limited arguments made by the parties, and it will be interesting to see what happens on remand.