The U.S. Supreme Court unanimously held that New Jersey Transit is not an “arm of the state” and doesn’t share New Jersey’s sovereign immunity from lawsuits that are filed in other state courts because it is legally separate from the state government.
The case involved two separate incidents where a person was injured by an NJ Transit bus, one in New York City in 2017 and another in Philadelphia in 2018. After they filed lawsuits in their home states, New Jersey argued that it was protected by sovereign immunity and asked that the cases be dismissed.
The Pennsylvania Supreme Court determined that New Jersey Transit is an arm of the state, while the New York Court of Appeals found that it was not. The U.S. Supreme Court took the case in order to resolve the conflict.
The nation’s top court cited New Jersey Transit’s own corporate powers: it can sue and be sued, enter into its own contracts, own property, and create its own bylaws, noting that New Jersey state law explicitly states that the state is not responsible for debts and liabilities incurred by NJ Transit.
“NJ Transit is not an arm of New Jersey and thus is not entitled to share in New Jersey’s interstate sovereign immunity,” the decision stated.
The justices suggested in the opinion that New Jersey can fix this issue going forward.
“Of course, all states maintain the power to ‘structure themselves as they wish,’” the decision noted. “To the extent New Jersey, and other states, created such corporate entities intending that they would remain part of the state and that the state would formally assume their liabilities, the states are always free to amend their laws.”
The 23-page opinion was authored by Justice Sonia Sotomayor.
