The US Supreme Court on Thursday agreed to hear a pair of consolidated cases that could reshape the legal landscape for state-run transportation systems operating across state lines. The court granted limited certiorari to determine whether the New Jersey Transit Corporation (NJ Transit) qualifies as an “arm of the state” entitled to interstate sovereign immunity in negligence lawsuits filed outside New Jersey.

At the heart of the dispute is a clash between rulings from the highest courts of New York and Pennsylvania over whether NJ Transit, which operates one of the largest public transportation networks in the country, can be sued in state courts outside New Jersey for injuries caused by its buses and trains.

The legal question has significant practical implications: NJ Transit buses and trains routinely operate across state lines, serving millions of riders annually in New Jersey, Pennsylvania and New York. But depending on where a lawsuit is filed, the agency’s immunity from litigation may vary.

In Galette v. NJ Transit, the Pennsylvania Supreme Court held in March that NJ Transit is an arm of the State of New Jersey and immune from suit in Pennsylvania under the doctrine of interstate sovereign immunity. That ruling dismissed a lawsuit filed by Cedric Galette, a passenger injured in a 2018 collision with an NJ Transit bus in Philadelphia.

But in NJ Transit v. Colt, the New York Court of Appeals reached the opposite conclusion in November, holding that NJ Transit is not entitled to immunity in a case involving Jeffrey Colt, a pedestrian struck by an NJ Transit bus while crossing a Manhattan street in 2017.

The contradictory rulings created what NJ Transit called an “untenable situation” in its petition to the court—one in which its legal liability for the same type of conduct differs simply based on geography. “Same public service, same day, same train—yet a different answer on the same state entity’s immunity,” NJ Transit argued.

The Supreme Court’s decision will hinge on interstate sovereign immunity, a doctrine revived in the court’s 2019 ruling in Franchise Tax Board v. Hyatt. While sovereign immunity typically protects states from private lawsuits in other states’ courts, the extent to which that immunity covers state-created agencies or corporations like NJ Transit remains unsettled.

Lower courts have struggled with the question, often applying a multi-factor test to determine whether an entity is an “arm of the state.” These factors include whether the state treasury would be liable for a judgment, how much control the state exerts over the entity, and how the state defines the agency’s function.

The US Court of Appeals for the Third Circuit previously ruled in 2018 that NJ Transit is an arm of the state under the Eleventh Amendment and is immune from suit in federal court.

However, in the Colt case, the New York high court held that NJ Transit’s financial independence, its statutory authority to sue and be sued, and its operational autonomy weighed against a finding of sovereign immunity, even while acknowledging that New Jersey law labels the agency a state instrumentality.

The Supreme Court will hear oral arguments during its October 2025 term, with one hour allocated for the consolidated cases. A ruling is expected by June 2026. The outcome could set a national precedent for determining which state-created entities can invoke sovereign immunity and where.