CEDRIC GALETTE v. NJ TRANSIT AND JULIE E. MCCREY
No. 2210 EDA 2021
IN THE SUPERIOR COURT OF PENNSYLVANIA
MARCH 21, 2023
2023 PA SUPER 46
OPINION BY BOWES, J.
J-S37005-22; APPEAL OF: NJ TRANSIT; Appeal from the
BEFORE: BOWES, J., LAZARUS, J., and OLSON, J.
New Jersey Transit Corporation (“NJ Transit“) appeals the September 27, 2021 denial of its motion to dismiss the negligence claims of Cedric Galette pursuant to the doctrine of sovereign immunity. We affirm.
This controversy stems from an August 9, 2018 incident wherein a collision occurred between a bus owned and operated by NJ Transit and the personal vehicle of Julie McCrey in Philadelphia, Pennsylvania. Mr. Galette was a passenger in Ms. McCrey‘s vehicle and suffered various physical injuries as a result of the collision. He timely commenced this civil action by filing a praecipe for a writ of summons on August 7, 2020, and, ultimately, served both Ms. McCrey and NJ Transit. Thereafter, Mr. Galette filed a complaint containing claims sounding in negligence against both Ms. McCrey and NJ Transit.1 NJ Transit filed an answer with a new matter alleging, inter alia, that it was an “arm” of the State of New Jersey and that Mr. Galette‘s claims against it were barred by the doctrine of sovereign immunity. See Answer and New Matter, 6/15/21, at ¶ 28 (“NJ Transit and its subsidiary, NJ Transit Bus Operations, Inc., are arms of the State of New Jersey and are protected by the [s]tate[-]afforded governmental and sovereign immunities and, as such, [Mr. Galette‘s c]omplaint is barred and must be dismissed.“). Thereafter, NJ Transit filed a motion to dismiss reiterating this particular claim.2 Mr. Galette filed a response opposing NJ Transit‘s arguments.
NJ Transit has raised the following claims for our consideration:
- Is the order denying NJ Transit‘s motion to dismiss on its defense of state sovereign immunity an appealable collateral order?
- Did the trial court err, as a matter of law, in denying NJ Transit‘s motion to dismiss for lack of jurisdiction where NJ Transit, a foreign state entity, did not provide consent to be sued in another state and rightfully asserted its state sovereign immunity protections under the United States Constitution?
NJ Transit‘s brief at 4 (cleaned up; issues reordered for ease of disposition).
We begin our analysis by assessing whether the trial court‘s September 27, 2021 order is an appealable, collateral order pursuant to
Rule 313 provides that “[a]n appeal may be taken as of right from a collateral order of a trial court or other government unit.”
In Brooks, our Supreme Court addressed whether a decision denying a governmental party‘s assertion of the sovereign immunity defense meets the collateral order doctrine. Therein, the High Court concluded that a claim of sovereign immunity is: (1) “separable” from civil claims of negligence since it presents a “purely legal question” that can be resolved without “an examination of the merits of [the plaintiff‘s] negligence claims;” (2) “is too important to evade review before final judgment;” and (3) “irreparably lost if appellate review of an
Pursuant to Brooks, we find that the September 27, 2021 order denying NJ Transit‘s motion to dismiss is a collateral order that was immediately appealable as of right. Accordingly, our jurisdiction over this appeal is proper pursuant to Rule 313. Thus, we proceed to the merits.
In its substantive claim for relief, NJ Transit asserts the trial court erred in declining to dismiss based upon sovereign immunity. See Appellant‘s brief at 9 (“[NJ Transit] is an arm of the State of New Jersey who was hauled into a foreign [s]tate court without its consent.“). Our standard of review is de novo, and our scope of review is plenary. See Goldman v. Southeastern Pennsylvania Transp. Authority, 57 A.3d 1154, 1170 (Pa. 2012).
Sovereign immunity is a venerable legal doctrine that has its origins in the old adage of the English common law that “the Crown could not be sued without consent in its own courts.” Alden v. Maine, 527 U.S. 706, 715 (1999). After examining the relevant history and case law, the United States Supreme Court has concluded that this general legal principle was “universal” in terms of its recognition at the time that the United States Constitution was “drafted and ratified.” Id. at 716. Specifically, the Court has recognized that the historical circumstances of the passage of the Eleventh Amendment clearly evince an intent “to preserve the States’ traditional immunity from private suits.” See id. at 724; see also
Sovereign immunity often arises in the context of interstate lawsuits. In the landmark ruling of Nevada v. Hall, 440 U.S. 410 (1979), the High Court held that the question of “any one State‘s immunity from suit in the courts of another State” was “a matter of comity.” Thus, it was not automatically incumbent upon one State to recognize the sovereign immunity of another State. See also Flamer v. New Jersey Transit Bus Operations, Inc., 607 A.2d 260, 262 (Pa.Super. 1992) (citing Hall, supra at 425) (“[W]hether one [S]tate is required to accord sovereign immunity in its courts to another [S]tate is purely a question of comity and is not a constitutional mandate.“).
In Hyatt, the Court revisited and explicitly overruled Hall:
Interstate sovereign immunity is . . . integral to the structure of the Constitution.
Like a dispute over borders or water rights, a State‘s assertion of compulsory judicial process over another State involves a direct conflict between sovereigns. The Constitution implicitly strips States of any power they once had to refuse each other sovereign immunity, just as it denies them the power to resolve border disputes by political means. Interstate immunity, in other words, is implied as an essential component of federalism. . . . .
[Hall] is irreconcilable with our constitutional structure and with the historical evidence showing a widespread preratification understanding that States retained immunity from private suits, both in their courts and in other courts. We therefore overrule that decision.
Hyatt, supra at 1497-99. Thus, Hall no longer animates the contours of sovereign immunity and “States retain their sovereign immunity from private suits brought in the courts of other States.”3 Id. at 1492.
Although the State of New Jersey is not directly named as a defendant in this matter, it is well-established that sovereign immunity extends to “entities which are agents or instrumentalities of the [S]tate such that a suit brought against them would be, for all practical purposes, a suit against the [S]tate itself.” Goldman, supra at 1171. NJ Transit maintains it is an instrumentality of the State of New Jersey. See Appellant‘s brief at 10-14.
At a basic level, the determination of whether a particular entity qualifies as an alter ego of a State for the purposes of sovereign immunity is a question of federal law that concomitantly relies upon a searching examination of state law provisions. See Goldman, supra at 1173. Interpreting the relevant precedents of the United States Supreme Court, the Pennsylvania Supreme Court has distilled this inquiry into six factors of “equal importance,” namely: (1) the legal classification and description of the entity within the governmental structure of the State, both statutorily and under its caselaw; (2) the degree of control the State exercises over the entity; (3) the extent to which the entity may independently raise revenue; (4) the extent to which the State provides funding to the entity; (5) whether the monetary obligations of the entity are binding upon the State; and (6) whether the core function of the entity is normally performed by the State. See id. at 1179.
Rather than discuss Pennsylvania law, however, NJ Transit has relied entirely upon the jurisprudence of the U.S. Court of Appeals for the Third Circuit, which has previously concluded that NJ Transit qualifies as an instrumentality of the State of New Jersey for the purposes of sovereign immunity under its own three-part test.4 See Karns v. Shanahan, 879 F.3d 504, 513 (3d Cir. 2018). It is well-established that the holdings of the Third Circuit are not binding upon this Court, even in the context of a question of federal
The first element in Pennsylvania‘s six-part test entails an examination of NJ Transit‘s status under New Jersey law, which clearly evinces support for the conclusion that it should be considered an instrumentality of the State of New Jersey. See
By contrast, however, the remaining three factors augur in favor of the opposite conclusion. Specifically, NJ Transit is independently empowered to raise revenue through several different avenues. See
Where, as here, the six-factor test is not dispositive, we must reach a conclusion by inquiring as to whether allowing NJ Transit to be sued in this particular manner would “thwart the two principal purposes of the Eleventh Amendment,” namely, “the protection of [New Jersey‘s] dignity as a sovereign [S]tate and the protection of [New Jersey‘s treasury] against involuntary depletion from suits brought
Goldman is highly instructive on the merits of these related points of inquiry. Therein, the Pennsylvania Supreme Court considered whether it would offend the dignity or the finances of the Commonwealth to permit the Southeastern Pennsylvania Transportation Authority (“SEPTA“) to be sued in a Pennsylvania state court pursuant to the Federal Employees Liability Act (“FELA“).6 Ultimately, the Court found a lawsuit naming SEPTA as a defendant would not offend Pennsylvania‘s sovereign dignity, reasoning as follows:
In such a suit, the Commonwealth is not a named defendant, as SEPTA has been designated by the legislature of the Commonwealth as a distinct legal entity with the power to sue and be sued in its own capacity. Thus, it is not any purported negligent act of the Commonwealth at issue in a suit, but, rather, the alleged negligent act of SEPTA itself. Neither can the Commonwealth be joined as a defendant in any action against SEPTA since the Commonwealth has specifically repudiated any legal responsibility for obligations incurred by SEPTA; hence, having explicitly disclaimed all responsibility for any financial liability incurred by SEPTA, it may not be joined in a suit against SEPTA under our rules of civil procedure. See
Pa.R.C.P. 1076.1 ,2252(a)(1) , (4) (allowing joinder by plaintiff or defendant in a civil action of only those parties which are solely liable to the plaintiff, liable to the joining party, or jointly or severally liable with the joining party on the plaintiff‘s cause of action). Further, the Commonwealth does not enter its appearance to defend a suit on SEPTA‘s behalf, and it does not otherwise participate in the litigation, as the legislature has explicitly placed the responsibility on SEPTA to manage all of its own legal affairs, which responsibility includes the defense of
any suits against it. In sum, then, SEPTA bears the sole and exclusive burden of any litigation against it in our state courts.
Because a suit against SEPTA in the courts of common pleas of this Commonwealth proceeds against SEPTA, alone, as a wholly independent entity without the involvement of the Commonwealth, the Commonwealth cannot, therefore, be subject to any decree or order of court as the result of such a suit. Thus, no right or interest of the Commonwealth will be affected by the outcome of a suit against SEPTA in our Commonwealth‘s courts, and so a suit poses no danger that the Commonwealth will be involuntarily subject to and controlled by the mandates of judicial tribunals, without its consent, at the instance of private parties.
Goldman, supra at 1183-84 (cleaned up).
We find the particulars of NJ Transit‘s status with respect to the State of New Jersey to be in complete parity with this analysis. NJ Transit is a distinct legal entity that is empowered to sue, and be sued, in a capacity that is independent from the State. See
We discern no risk to the sovereign dignity of New Jersey in permitting a suit against NJ Transit to proceed. For the purposes of such legal disputes, it seems beyond cavil that NJ Transit operates as a “wholly independent entity” that cannot bind the State of New Jersey or otherwise place it in a position where it will be “subject to and controlled by the mandates of judicial tribunals,” without its consent, “at the instance of private parties.” Goldman, supra at 1183. Thus, the paramount consideration of the Eleventh Amendment does not support a finding that NJ Transit is a state instrumentality for the purposes of sovereign immunity. See id. at 1183-84.
Likewise, we also find that any potential judgment against NJ Transit would have no discernible impact upon the New Jersey treasury. While such an inquiry cannot be reduced to a formalistic assessment of “ultimate financial responsibility,” the “controlling question is whether [the State] would be legally liable to pay” if a bevy of legal claims overwhelmed NJ Transit‘s ability to pay. Goldman, supra at 1184 (emphasis in original) (citing Regents of the Univ. of California v. Doe, 519 U.S. 425, 431-32 (1997)). Comparatively, “the mere prospect that a [S]tate might render financial assistance to cover an unforeseen budgetary shortfall of an entity it created does not create a legal obligation of the [S]tate to pay.” Id. at 1184 (emphasis in original) (citing Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30, 43-44 (1994)). Overall, New Jersey bears no culpability with respect to the financial liabilities of NJ Transit. See
Based on the foregoing analysis, we discern that Mr. Galette‘s lawsuit poses no threat to either the sovereign dignity or the state treasury of New Jersey. Accordingly, we conclude that NJ Transit is not an arm of the State of New Jersey and, thus, it is not entitled to the protections of sovereign immunity which it has asserted. See Goldman, supra at 1185.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/21/2023