The underlying cases involve plaintiffs — including Cedric Galette and Jeffrey Colt — who allege they were injured by NJ Transit and sued in their home states rather than in New Jersey. NJ Transit argued that, as an arm of the state, it enjoys sovereign immunity and can only be sued where New Jersey has consented. The plaintiffs countered that because NJ Transit is a legally separate public corporation with its own assets, liabilities, and sue-and-be-sued authority, it is not the state and cannot claim the state's immunity.
Arguing for NJ Transit, New Jersey Deputy Solicitor General Michael Zuckerman urged the Court to apply a substance-based, multifactor analysis. He pointed to NJ Transit's rulemaking authority subject to New Jersey's APA, its statewide law enforcement power, its eminent domain authority, the governor's veto over any proposed board action, gubernatorial appointment and removal power over all board members, and the state's practice of covering NJ Transit's annual deficits — which he said were well over $200 million in most years and over a billion dollars in a recent year. He argued that calling NJ Transit a corporation was an anachronism and that the label should not be dispositive when every substantive feature points to a state agency.
Michael B. Kimberly, arguing for the plaintiffs, pressed a simpler rule: when a state creates a bona fide public corporation — one with a separate legal identity, its own assets and liabilities, and independent sue-and-be-sued power — it does not share in the state's sovereign immunity. He traced that principle to Planters' Bank in 1824 and argued it runs through the Court's more recent cases. He also warned that if NJ Transit wins, plaintiffs injured outside New Jersey may have no forum at all, pointing to New Jersey Court Rule 4:3-2, which limits venue to where the injury occurs.
The justices questioned both sides closely. Justice Sotomayor noted that the Court has called formal liability a critical factor and questioned whether NJ Transit's informal funding commitment could substitute for a formal legal obligation. Justice Jackson repeatedly challenged Zuckerman on the significance of the corporate form, observing that the enabling statute expressly declares NJ Transit independent of the Department of Transportation's supervision or control, authorizes it to contract with the state on the other side of the table, and grants it the power to sue and be sued. Justice Barrett questioned whether any precedent would actually need to be overruled to rule for the plaintiffs. Justice Kagan pressed Kimberly on Biden v. Nebraska, in which the Court examined whether MOHELA was part of Missouri using a multifactor analysis similar to what NJ Transit advocates — though Kimberly argued that standing and sovereign immunity are distinct inquiries. Justice Kavanaugh focused on the practical stakes, asking Kimberly about the blast radius of a ruling for the plaintiffs and whether formal liability of the state is a necessary condition for immunity — which Kimberly ultimately acknowledged it was.
In rebuttal, Zuckerman disputed Kimberly's claim that New Jersey courts are closed to out-of-state plaintiffs, pointing to Footnote 2 of NJ Transit's cert reply in the Colt case as a concession that New Jersey courts are open to such claims. He also argued that Kimberly's rule would expose entities like the Florida Department of Transportation and the Louisiana Department of Corrections to state-law injunctions in federal court, producing results he called untenable under Pennhurst.
The consolidated cases are No. 24-1021 and No. 24-1113.