The Supreme Court recently issued a unanimous decision that New Jersey Transit is not an arm of the state, clarifying a key limit on sovereign immunity in a ruling that could reshape how states structure and defend quasi-governmental entities.
The case, Galette v. New Jersey Transit, focused on interstate immunity, but its reasoning may ripple into broader immunity fights, tort claim defenses, and the architecture of public authorities. McCarter & English partner Mark Makhail told Law360 that the ruling would force states and public entities to reassess their structures.
“It will come down to a few different things that I think the court really focused on,” he said, pointing to control, finances and legal independence. The opinion, he said, requires entities to examine “whether or not the way that the particular corporate structure … is one that’s going to continue to enjoy immunity from suit.”