Galette v. New Jersey Transit Corporation

This episode from Galette v. New Jersey Transit Corporation (2026) clarifies the criteria used to determine if a state-created entity qualifies as an "arm of the state" for sovereign immunity purposes. The Court unanimously ruled that NJ Transit is not entitled to immunity because it was structured as a legally separate corporation with the power to sue, be sued, and manage its own property. Justice Sotomayor’s opinion emphasizes that formal financial liability is a primary factor; since New Jersey is not legally responsible for the agency’s debts, the entity remains distinct from the state's protected treasury. While the state exerts substantial control through board appointments and veto powers, the Court held that such oversight does not override the agency's independent corporate status. This decision resolves a conflict between New York and Pennsylvania courts, affirming that sovereign immunity does not extend to independent instrumentalities that are responsible for their own legal judgments. Conclusively, the ruling establishes that states cannot grant immunity to autonomous entities simply by labeling them as state agencies if they function with corporate independence.