A federal appeals court today ruled that PennEast, a private company, cannot condemn state-owned lands in order to build part of its planned 116-mile natural gas pipeline across New Jersey.

The United States Court of Appeals for the Third Circuit reversed a December district court ruling that had allowed PennEast to condemn approximately 40 parcels of land in Hunterdon and Mercer counties that had previously been preserved with state tax dollars for recreational, conservation or agricultural uses. The court held that under the Eleventh Amendment of the U.S. Constitution, the state is immune from condemnation lawsuits by private parties, including pipeline companies.

New Jersey Attorney General Gurbir Grewal said his office has always taken the position that the Eleventh Amendment prohibits private pipeline companies like PennEast from condemning state properties for private use. “We’re pleased that the Third Circuit agreed with our position,” he said. “This is great news for New Jersey and the environment.”

In issuing its ruling, the Third Circuit held that the federal Natural Gas Act – which PennEast argued allowed it to condemn all needed properties along the path of its proposed pipeline – does not overcome New Jersey’s sovereign immunity under the Constitution.

The ruling today means that PennEast’s plans have been effectively halted in New Jersey until the company figures out a new route or new strategy for the construction of the proposed pipeline. Several other hurdles still remain. The backers of PennEast would have to convince the New Jersey Department of Environmental Protection that the proposed pipeline wouldn’t adversely affect water quality standards under Section 401 of the federal Clean Water Act. The PennEast Pipeline Company would also have to convince the New Jersey Department of Environmental protection that the company is entitled to the required permits for the project.

“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.”