Belfand v. Petosa, 196 A.D.3d 60

Background

Plaintiff Seman Belfand sued after a March 8, 2012 NYC collision in which a New Jersey Transit (NJT) bus driven by employee Raymond Petosa rear-ended his vehicle, alleging negligence.
Case filed in August 2012; summary judgment on liability was denied; NJT later conceded Petosa’s negligence and vicarious liability, leaving damages for trial.
At the first damages trial plaintiff prevailed, but a mistrial was granted because plaintiff introduced injuries not pleaded; pretrial disputes (discovery, motions to preclude/strike) had occurred over the years.
During jury selection for a second damages trial (2019), NJT for the first time asserted sovereign immunity under the U.S. Supreme Court’s decision in Franchise Tax Bd. v. Hyatt. NJT argued it is an arm of New Jersey and had not consented to suit in New York.
Trial court denied NJT’s motion to dismiss; on appeal the First Department affirmed, holding (1) New Jersey’s Tort Claims Act does not constitute express consent to be sued in a sister state and (2) NJT waived interstate sovereign immunity by its litigation conduct under Lapides principles.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Hyatt bars suit against a nonconsenting state/entity in a sister state's courts	Hyatt doesn't vitiate NJT's amenability because NJT has consented via its Tort Claims Act and prior NY cases allowed suits against NJT	Hyatt holds a state cannot be sued in another State without that state's consent; NJT did not consent to suit in NY	Hyatt governs; a state needs express consent to be sued in a sister state, but here the court did not rest dismissal on Hyatt alone because of waiver analysis
Whether New Jersey's Tort Claims Act constitutes express consent to be sued in a sister state's courts	The Act's waiver of immunity in NJ implies consent to suits in other states; NY courts have heard similar claims against NJT	The Act waives immunity only for suits in New Jersey; it is not an unequivocal consent to suit in sister-state courts	The Tort Claims Act does not amount to express consent to be sued in New York; it waives immunity only for NJ forums
Whether NJT waived interstate sovereign immunity by its litigation conduct	Plaintiff argued NJT’s prolonged defense, discovery conduct, concession of liability, motions and reliance by plaintiff/court amount to waiver	NJT argued it never voluntarily submitted to NY jurisdiction and only raised immunity post-Hyatt when the defense became legally viable	Court held NJT waived immunity by voluntary litigation conduct (conceding liability, lengthy defense, tactical litigation) applying Lapides-equitable factors
Whether sovereign-immunity defenses can be forfeited by delay or litigation conduct	Plaintiff: defense was forfeited by NJT’s actions and unfair tactical advantage	NJT: sovereign immunity is jurisdictional and may be raised anytime; Hyatt was a new ground for asserting immunity	Although jurisdictional, immunity may be waived; equitable waiver applies and NJT’s conduct produced substantial reliance, so dismissal was denied

Key Cases Cited

Franchise Tax Bd. of California v. Hyatt, 139 S. Ct. 1485 (2019) (overruled Nevada v. Hall and held that a State cannot be sued in another State’s courts absent the State’s consent)
Nevada v. Hall, 440 U.S. 410 (1979) (held forum states could, as a matter of comity, permit suits against sister States; later overruled)
Lapides v. Board of Regents of the Univ. System of Ga., 535 U.S. 613 (2002) (State’s removal of case to federal court constituted waiver of Eleventh Amendment immunity by voluntary invocation of federal jurisdiction)
College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999) (waiver of sovereign immunity must be clear and unambiguous; waivers not to be implied)
Edelman v. Jordan, 415 U.S. 651 (1974) (state consent to suit in federal court must be unequivocal; courts indulge every reasonable presumption against waiver of sovereign rights)
Ex parte State of New York, 256 U.S. 490 (1921) (discussed sovereign immunity as a limitation on judicial power and principles underlying Eleventh Amendment)
Chisholm v. Georgia, 2 U.S. 419 (1793) (early case prompting the Eleventh Amendment by allowing suit by citizen against State)
F.D.I.C. v. Meyer, 510 U.S. 471 (1994) (sovereign immunity is jurisdictional in nature and may be waived by the State)