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PHILADELPHIA – Another Pennsylvania lawsuit against a New Jersey public transportation system is moving forward, thanks to a recent ruling from the U.S. Supreme Court.
The state Superior Court on May 6 looked to a March ruling from the nation’s highest court that said the New Jersey Transit Corporation is not an “arm” of that state’s government. If it were, cases brought against it in Pennsylvania would have to be filed elsewhere.
The Pennsylvania Supreme Court had ordered Philadelphian Cedric Galette to go across state lines to sue over a traffic accident before the U.S. Supreme Court reversed. Kim had sued in Philadelphia state court over allegations an NJTC train’s door closed on her in 2022 while she was exiting the train at Philadelphia’s 30th Street Station.
After confusion over conflicting rulings, SCOTUS put a stop to the controversy. Justice Sonia Sotomayor wrote NJ Transit couldn’t show it is “financially integrated with the State and financially dependent on it.”
“NJ Transit, however, is a corporation that has all the hallmarks of separate legal personhood, such as the power to sue and be sued, make contracts, and hold property in its own name, which all indicate that it is not an arm of the State and does not share in its immunity from suit,” Sotomayor wrote.
“This Court has not previously found a similarly structured corporation to be an arm of the State.”
Superior Court judge Kate Ford Elliott and others refused to say the Supreme Court ruling didn’t apply retroactively. Determinations made by SCOTUS are retroactive on points of federal law when its ruling is a controlling interpretation of it.
“Accordingly, NJTC’s Eleventh Amendment assertion of sovereign immunity has been conclusively determined at this juncture: NJTC is not immune from suit under the Eleventh Amendment to the Constitution of the United States,” Elliott wrote.
When the Pennsylvania Supreme Court analyzed the issue, it examined the U.S. Supreme Court's 2019 ruling in Hyatt III, which involved the Franchise Tax Board of California facing suit in Nevada. The decision addressed interstate sovereign immunity and overturned precedent in place for the previous 40 years.
Its 5-4 ruling held states have immunity from lawsuits filed in other states.
NJ Transit was established in 1979 by the New Jersey Public Transportation Act. The legislation said it was created to provide "efficient, coordinated, safe and responsive public transportation," and that "as a matter of public policy, it is the responsibility of the State to establish and provide for the operation and improvement of a coherent public transportation system in the most efficient and effective manner."
The New Jersey legislature called it "an instrumentality of the State" and said its operation is "an essential government function."
Calling it an “instrumentality” wasn’t strong enough language to afford NJ Transit sovereign immunity, the U.S. Supreme Court held, rejecting arguments put forth by 23 states in an amicus brief.
“There is no good reason to believe that the State intended for NJ Transit to be part of the State itself by using the word ‘instrumentality,’ when it simultaneously used the word ‘body corporate, a term traditionally understood to create a ‘separate legal personality,’” Sotomayor wrote.
“The States’ preferred test that any label a State chooses is dispositive therefore does not promote predictability in the treatment of state-created entities because it still requires courts to decide which state-law pronouncement is dispositive.
“Instead, what promotes consistency is adhering to a long line of cases in which this Court has found state-created corporations that are formally liable for their own judgments not to be arms of the States that created them.”
