Supreme Court to Decide Liability of Transit Agencies After Accidents
WASHINGTON — The Supreme Court agreed Thursday to determine whether New Jersey Transit is immune from liability as a state agency.
The public transit agency was sued by two men who were hit and injured by commuter buses in separate accidents.
In one case of a collision between a bus and a car in Philadelphia, a Pennsylvania court ruled the agency benefits from the same immunity as any other state agency.
In a separate case of a man hit by a bus in Manhattan, a New York court disagreed. It said New Jersey Transit could be sued like any other common carrier.
The Supreme Court is being asked to resolve the differences of opinion.
A Supreme Court ruling against the transit agency would significantly increase liability risks and insurance costs for public transit nationwide. The most likely result could be higher fares for passengers.
Transit agencies often generate some of the highest lawsuit payouts among states that operate them.
In 2021, New Jersey set a record for itself by compelling the state to pay $196 million for lawsuit settlements. The 22 most expensive cases, each with settlements of at least $1 million, resulted from public transit accidents.
A key issue before the Supreme Court is whether New Jersey Transit should be considered the “alter ego” of the state.
New Jersey Transit is a regional public transportation system based in Newark. Although it operates primarily in New Jersey, it also has rail and bus operations that extend to Philadelphia, Pennsylvania, and New York’s Penn Station as well as the surrounding areas.
Each of the three states shares regulatory oversight of the transit agency.
The alter ego doctrine is a legal concept that determines which of two affiliated organizations should be liable in lawsuits.
In general, when one entity exercises significant control over the other’s operations, policies and decision-making, they are considered alter egos of each other and share legal liabilities. The control can be determined by the degree they share money and management.
If they are not alter egos, each entity is separately liable in lawsuits.
In the Pennsylvania case, the state Supreme Court said New Jersey Transit operated like the alter ego of the state, thereby giving the transit agency the same sovereign immunity as the state. The court dismissed the lawsuit of Cedric Galette, who was injured while he was a passenger in a car that collided with a New Jersey Transit bus in August 2018.
In the New York case, the courts said the transit agency was independent from the state based on its separate budget and the high degree of autonomy of its management.
As a result, the lawsuit by Jeffrey Colt against New Jersey Transit was allowed to continue. He was injured by a bus in 2017.
New Jersey Attorney General Matt Platkin encouraged the Supreme Court to resolve the confusion over what he described as “different readings” of relevant laws in a brief he filed in April.
“The split is entrenched, reflecting different views of this court’s decisions and the principles underlying state immunity alike,” Platkin wrote. The differing opinions create an “untenable split in which New Jersey finds itself.”
He said that rather than have potential lawsuit liability spread out among three states, they should be concentrated “in the forum where New Jersey has consented: its own state courts.”
The Supreme Court is scheduled to hear the case during its next term, which begins in October.
The case is Cedric Galette v. New Jersey Transit Corporation.
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