Brief of Professors William Baude and Stephen E. Sachs as Amici Curiae, Galette v. N.J. Transit Corp.

Abstract

The cases of Galette v. N.J. Transit Corp. and N.J. Transit Corp. v. Colt reduce to a simple question: who is the legal person before the Court, against whom the plaintiffs request relief? The common-law immunity States retained at the Founding was a personal immunity, one belonging to specific legal persons, namely the sovereign States. Each State may decide the internal structure of its government; yet each also has power to create separate and distinct legal persons that are not sovereign, appearing before courts as creatures of States rather than States themselves.

That is what New Jersey did. It created a new public corporation—petitioner New Jersey Transit Corporation—whose appearances in court are not appearances of the State, whose judgment debts are not debts of the State, and whose adversely decided issues are not issues decided against the State. And the Corporation in turn created its own subsidiary corporations—including petitioner NJ Transit Bus Operations, Inc.—as legal persons distinct even from itself, still more plainly the sort of “lesser entities” that lack the State’s sovereignty and immunity.

The only reason this case might seem difficult is that this straightforward historical rule has since been swallowed up by judicial confusion. The Court should restore the original test: whether the requested relief acts against a separate legal person (which is amenable to federal process) or against a sovereign State (which is not). Because the State of New Jersey chose to create the Corporation as a distinct legal person from itself, with neither bound by judgments against the other, the Corporation cannot claim the State’s immunity.

Keywords: arm of the State, sovereign immunity, legal persons, public corporations, Eleventh Amendment

JEL Classification: K1, K10, K19, K3, K30, K4, K40, K49