The U.S. Supreme Court on Jan. 14 considered whether New Jersey’s public transit system may be sued for accidents that take place outside of its home state.

The court’s eventual decision in the case could have ramifications for public agencies across the country.

New Jersey Transit is being sued in state courts in New York and Pennsylvania after its buses allegedly struck people while operating outside the Garden State.

Although the transit agency operates buses, trains, and light rail primarily in its home state, service also extends to the Philadelphia and New York metropolitan areas.

The Supreme Court is reviewing state court decisions on whether the New Jersey entity counts as an arm of that state that enjoys sovereign immunity from lawsuits in other states’ courts.

Sovereign immunity is a legal doctrine that prevents governments from being sued unless they consent to being sued. The sovereign immunity of U.S. states is enshrined in the 11th Amendment to the U.S. Constitution. The related doctrine known as interstate sovereign immunity holds that a state can’t be sued in another state’s courts without its consent.

Top courts in Pennsylvania and New York disagree on whether the transit agency was entitled to interstate sovereign immunity. A Pennsylvania court ruled that the agency was immune in that state’s courts because it was an arm of the state of New Jersey, but a New York court found the opposite, ruling the agency could be sued in that state’s courts. The Supreme Court is expected to resolve the split between the two state courts.

The two appeals, New Jersey Transit Corporation v. Colt and Galette v. New Jersey Transit Corporation, were heard together.

Respondent Jeffrey Colt sued New Jersey Transit in 2017 in New York state court, after claiming that a transit agency bus struck him. Petitioner Cedric Galette sued New Jersey Transit in state court in Pennsylvania after he was involved in a 2018 accident.

In oral arguments on Jan. 14, New Jersey Transit attorney Michael Zuckerman said the transit agency looks “nothing like a city or town and little like a private company.”

“It looks a lot like a New Jersey state agency. That means plaintiffs must sue it where the state has consented, in New Jersey,” he said.

Zuckerman said the state designed the agency to operate within its executive branch, giving the governor veto power over its operations.

The Supreme Court “has never suggested that states experiment with efficiency at peril to their sovereignty,” the attorney added.

Justice Ketanji Brown Jackson asked Zuckerman why the state chose “the corporate form,” referring to the fact that the state incorporated New Jersey Transit.

“It was doing something,” she said.

“It was trying to distance itself from having liability for what this entity is doing.

“Your argument sounds like you’re saying: ‘Don’t worry about the fact that the state has chosen the corporate form for this entity, just look at what it does. And to the extent that you see what it does is kind of like an agency, that should be enough.’”

Zuckerman replied, saying the state used the corporate form as “a way to achieve some shorthand kind of efficiency that we could have done other ways.”

Justice Sonia Sotomayor told Zuckerman that the fact that the Supreme Court has ruled that “the corporate form itself is evidence that an entity is not the state” is a “factor [that] goes against you.”

The court has said in several rulings that “formal liability, not informal liability, not indemnity, but formal liability, continues to remain centrally important,” she said.

Justice Elena Kagan told Zuckerman that the Supreme Court’s 2023 ruling in Biden v. Nebraska, which struck down President Joe Biden’s student loan forgiveness program, might help his case.

In that decision, the high court found that the Missouri Higher Education Loan Authority, known as MOHELA, was an arm of the state as a public corporation that Missouri created.

“It’s pretty clearly on point there, right?” Kagan said. “It’s a sue-and-be-sued agency which had exactly the same kind of insulation from liability … as this does.”

Zuckerman replied, saying, “I think you’re absolutely right, Justice Kagan. I think Biden versus Nebraska … is very good for us.”

Michael Kimberly, attorney for Colt and Galette, said that when New Jersey constituted the transit agency as “a separate legal entity,” it accepted that the agency “does not share in the state’s sovereign immunity.”

“That has been the consistent holding of this court for the last 200 years,” he added.

Justice Clarence Thomas asked Kimberly to weigh in on MOHELA and Biden v. Nebraska.

Kimberly said the MOHELA issue was only about standing, the legal right to sue.

“This court’s cases recognize that the constitutional status of entities as state actors varies depending on the constitutional context,” he said.

Kagan said Biden v. Nebraska “says MOHELA is a part of Missouri. That’s what allowed the standing to proceed.”

“MOHELA is a part of Missouri,” she repeated.

The Supreme Court is expected to rule on the cases by the end of June.

This article by Matthew Vadum appeared Jan. 15, 2026, in The Epoch Times.

Photo: Official Photograph of Associate Justice Ketanji Brown Jackson taken by Supreme Court Photographer Fred Schilling, 2022.