The prospects for the property-rights claim in Hoffman v. WBI Energy Transmission appear bleak at first glance.
The U.S. Supreme Court heard oral arguments this week in a dispute over whether landowners whose property was seized for an interstate natural gas pipeline can invoke state-law protections for just compensation, protections that are more expansive in this context than those offered by federal law. The tenor of the proceedings suggested that a majority of the justices may be inclined to side against the property owners.
The case, formally titled Hoffman v. WBI Energy Transmission, centers on whether state law can provide more robust remedies for compensation than federal law when private companies condemn land for interstate transmission lines. Representing the landowners at the podium on Monday was Robert J. McNamara, the Institute for Justice’s deputy litigation director. He argued that while the Natural Gas Act authorizes private entities to petition courts for compelled land sales, it does not dictate which substantive rules should govern how much the land is worth. In his view, the absence of such guidance matters because granting authorization for condemnations alone does not automatically override the state’s rules on compensation.
McNamara conceded that state law would not apply if the United States took property in its own name. However, the land in question was seized by a private company acting under delegated federal authority, and crucially, nothing in the statute extends sovereign immunity to private firms. Consequently, the private company should not be shielded from the state-law protections that would otherwise apply to similar takings.
Yet this line of reasoning met skepticism from the bench. Justice Clarence Thomas, who often aligns with property-rights arguments, pressed the point by asking whether delegating eminent-domain power to a private actor also carries with it the trappings of state-law compensation requirements. If the federal government gives a private party the power to condemn, does that delegation implicitly bring along the same compensation framework that state laws would impose?
Chief Justice John Roberts quickly joined the critique, expressing the view that the case should be straightforward. He asked why, if the federal government can seize land without being bound by the additional compensation rules imposed by state law, a private partner operating under federal authority should not enjoy the same privileges. He suggested that the process could be more efficient if the private developer took the land on the same terms as the federal government, without triggering the attorneys’ fees that state law might require.
Personally, the writer found McNamara’s argument to be comparatively stronger than the reactions from Roberts or Thomas indicated. If a private company acting as a stand-in for the federal government is to be treated as a full proxy for the government, isn’t it reasonable to demand that federal law make this proxy arrangement explicit and unambiguous? The purpose of the Just Compensation Clause, after all, is to constrain the government’s use of eminent domain, not to loosen those limits.
Nevertheless, by the course of the oral arguments, that view appeared to be in the minority at the Supreme Court. Based on the questions and exchanges heard, it seems the property owners may be facing an unfavorable outcome.
