NJ Transit is estopped from relying on Hyatt

The intersection of federal constitutional law and New York no-fault insurance litigation creates complex jurisdictional questions, particularly when out-of-state government entities become involved in personal injury cases. The Eleventh Amendment to the U.S. Constitution generally protects states from being sued in federal court by private parties, but this immunity can be waived under certain circumstances.

In Belfand v Petosa, the First Department Appellate Division addressed whether New Jersey Transit could invoke Eleventh Amendment immunity to avoid litigation in New York courts. This case highlights the ongoing tension between state sovereign immunity protections and the practical realities of interstate commerce and transportation. The decision demonstrates how procedural missteps can result in the waiver of significant constitutional protections, particularly when government entities fail to properly preserve their defenses in litigation involving insurance fraud or related no-fault matters.

Jason Tenenbaum’s Analysis:

Belfand v Petosa, 2021 NY Slip Op 03522 (1st Dept. 2021)

I follow certain US Supreme Court cases, because I always like to see how far the Court veers from constitutional precedent that I learned quite awhile ago in law school. This Eleventh Amendment jurisprudence does not seem to be correct. If NJ Transit comes to NY and acts inappropriately, why should they not be called to task in a New York Court? that was the lesson we learned in law school.

Of course, strare decsis is something the Roberts Court honors in the breach. When it is convenient, it is cited. When it is inconvenient, they throw it out. Oh and try bringing a lawsuit in New Jersey under the TCA. The threshold on those cases is worse than the standard New Jersey permanency threshold.

But in the end, the Court held NJ Transit waived its 11th Amendment defense. That is great but I am sure since 2019, they have moved for dismissal or preserved the defense.

Key Takeaway

The First Department ruled that NJ Transit waived its Eleventh Amendment immunity defense by failing to properly preserve it during litigation. This decision allows injured parties to pursue claims against the transit authority in New York courts, though future cases may see more careful preservation of constitutional defenses by government entities.