A pair of bus accidents is prompting the Supreme Court to reckon with the scope of state entities’ immunity from lawsuits.
The court on Thursday agreed to hear two cases involving NJ Transit, which is being sued in Pennsylvania and New York state court after its buses allegedly hit people outside the borders of its home base Garden State. NJ Transit is a statewide system running trains, light rail and buses through New Jersey and in parts of the New York and Philadelphia metro areas.
The high court sees a novel legal issue in the otherwise routine personal injury claims — which is partly of its own making. In 2019, it ruled 5-4 that one state cannot be sued in another state’s courts without the first state’s consent.
The ruling left unclear where to draw the line on what state entities get such immunity, leaving open a question about things like state hospitals, student loan servicers and public transit providers. Attorneys in the personal injury cases argued NJ Transit isn’t actually entitled to a state’s immunity, even though the transit agency was created by the state. NJ Transit said lawsuits should be brought against it in New Jersey state court because that’s where it is based.
NJ Transit, which considers itself an arm of state government, argues that it is protected from lawsuits in other states because of sovereign immunity, the English legal doctrine meant to protect the king that now shields governments from many citizen lawsuits. The doctrine is enshrined in the 11th Amendment of the U.S. Constitution.
Neighboring state court judges now can’t agree on what to do when NJ Transit causes injuries in their states: A man who said he was in a stopped car when it was hit by an NJ Transit bus on Market Street in Philadelphia had his claims blocked by the Pennsylvania Supreme Court because of sovereign immunity. But the New York Court of Appeals, that state’s highest court, said immunity didn’t apply and allowed another man to sue NJ Transit after he said he was hit by a bus crossing an intersection in Manhattan.
Michael Kimberly, a partner at Winston & Strawn who represents the accident victim in the Pennsylvania case, said NJ Transit is not an arm of the state but instead “a massive, multibillion-dollar corporation that operates thousands of buses and trains, competing in a private market with private companies for paying riders”
“The Founders never could have imagined that a company like this would be entitled to sovereign immunity simply because it is established by state law, and longstanding precedents make plain that it is not,” he said.
NJ Transit did not immediately comment, but in legal filings its attorneys argued that there is “extensive state control” over its operations and said it’s in an “untenable” situation given the dueling opinions in neighboring states.
A group of red and blue state attorneys general — including Texas, Virginia, Minnesota, Missouri and, notably, Pennsylvania — filed a joint friend of the court brief in the Pennsylvania case supporting New Jersey’s argument that NJ Transit should be shielded from lawsuits in other states. They argue states should get to decide what counts as a state agency because anything else would be a “recipe for confusion for out-of-state judges.”
Missouri’s interest is likely acute, because of lawsuits facing one of the nation’s largest student loan servicers, the Missouri Higher Education Loan Authority, known to most people as MOHELA.
The state, which helped block the Biden administration’s student loan relief plans, is seeking Supreme Court review in a separate case. In those legal filings, the state said MOHELA is facing “unprecedented retaliation” from lawsuits that seek hundreds of millions of dollars in damages from MOHELA and “threatens to inflict significant financial harm on the state.” The state argued MOHELA should be immune from such lawsuits, but the 10th Circuit Court of Appeals disagreed.
The Supreme Court isn’t hearing that case, but how it rules in the NJ Transit case could help draw the boundaries for whether MOHELA gets immunity or not. The high court is expected to hear oral argument in the NJ Transit case later this year or early next.
NJ Transit is a statewide transit provider that operates trains and buses that cross state lines — the bulk of its riders on trains and buses are heading in and out of New York City to New Jersey, but it also serves parts of Pennsylvania. It argues that it doesn’t make sense for a bus or train that travels from Pennsylvania through New Jersey to New York City to be subject to different legal standards depending on where it is.
“When an NJ Transit train leaves Morrisville, Pennsylvania, bound for New York City, its sovereign immunity from suit toggles on and off at different points along the route,” its attorneys wrote.