Supreme Court allows NJ Transit out-of-state lawsuits

NJ Transit out-of-state lawsuits can now proceed after the U.S. Supreme Court ruled Wednesday that the agency is not entitled to “sovereign immunity,” the doctrine that generally shields one state from being sued in another state’s courts.

U.S. Supreme Court ruling on sovereign immunity

In a unanimous opinion, Justice Sonia Sotomayor wrote that “sovereign immunity is personal to the state and thus extends only to arms of the state itself, not to legally independent agencies that the state creates.” She also said such entities have a “separate legal personhood,” meaning they can both sue and be sued.

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At the center of the case was whether NJ Transit, as one of those legally independent agencies, could avoid lawsuits filed outside New Jersey. Meanwhile, the ruling makes clear that sovereign immunity does not apply in the same way to agencies set up separately from the state itself.

NJ Transit bus accidents behind the case

The case grew out of two NJ Transit bus accidents, according to Courthouse News Service. One involved a passenger in a car struck by an NJ Transit bus in Philadelphia. The other involved a pedestrian hit by one of the agency’s buses in Manhattan.

At the same time, courts in New York and Pennsylvania reached different results. New York’s state Supreme Court allowed the lawsuit tied to the Manhattan incident to go forward, while the Pennsylvania Supreme Court reached the opposite conclusion in the Philadelphia-related case.

Separate legal personhood and agency structure

As New Jersey Monitor noted, there are constitutional reasons for setting up an agency as a separate corporation. Also, under the state constitution, New Jersey is limited to 20 state departments, and independently organized agencies such as NJ Transit do not count toward that total.

In that setting, the court’s focus on separate legal personhood is central to the NJ Transit out-of-state lawsuits issue, because the agency’s structure helps determine whether it can claim the same protection as the state itself.

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