Oral Argument Re-Listen: CSX Galette versus New Jersey Transit | Sovereign Immunity Shell Game

CSX Galette v. NJ Transit Corp. | Argument Date: 1/14/26 | Docket Link: Here Consolidated with CSX NJ Transit Corp. v. Colt | Argument Date: 1/14/26 | Docket Link: Here

Question Presented: Whether the New Jersey Transit Corporation functions as an arm of the State of New Jersey for interstate sovereign immunity purposes

Overview: NJ Transit claims sovereign immunity after bus injured passenger in Philadelphia, raising fundamental federalism questions about state power to extend constitutional immunity to state-created corporations while disclaiming their debts and liabilities.

Posture: Pennsylvania Supreme Court reversed lower courts, holding NJ Transit qualifies as state arm based on statutory mission and structure.

Holding: NJ Transit Corporation is not an arm of New Jersey and thus is not entitled to share in New Jersey’s interstate sovereign immunity.

Voting Breakdown: 9-0. Justice Sotomayor delivered the opinion for a unanimous Court

Majority Reasoning: New Jersey structured NJ Transit as a legally separate corporation responsible for its own debts and judgments. The statutory firewall explicitly blocked state liability, and NJ Transit itself conceded New Jersey owed nothing on its obligations. Two hundred years of precedent confirm that state-created corporations carrying their own debts do not qualify as state arms.

Result: Affirmed (24–1113); Reversed (24–1021)

Link to Opinion: Here.

Oral Advocates:

1. For Petitioner (New Jersey Transit Corp.): Michael Zuckerman, Deputy Solicitor General, Trenton, New Jersey.
2. For Respondents (Galette and Colt): Michael Kimberly, Washington, D.C.

The Fine Print:

• N.J. Stat. § 27:25-17: "All expenses incurred by the corporation in carrying out the provisions of this act shall be payable from funds available to the corporation...No debt or liability of the corporation shall be deemed or construed to create or constitute a debt, liability, or a loan or pledge of the credit of the State"

• Eleventh Amendment: "The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State"

Primary Cases:

• Hess v. Port Authority Trans-Hudson Corp. (1994): Treasury factor constitutes "most salient factor" that "homes in on the impetus for the Eleventh Amendment: the prevention of federal-court judgments that must be paid out of a State's treasury"; when evidence on structure and control factors appears mixed, treasury factor becomes dispositive

• Bank of United States v. Planters' Bank of Georgia (1824): When government becomes partner in trading company, it "devests itself, so far as concerns the transactions of that company, of its sovereign character, and takes that of a private citizen"; corporate form precluded sovereign immunity regardless of state ownership or control