Does the New Jersey Transit Corporation qualify as an "arm of the State" of New Jersey? If so, is it entitled to share in New Jersey's interstate sovereign immunity to avoid suits in the courts of other states? What legal standards determine whether a state-created entity is a legally independent person or an arm of the state?

• NJ Transit is a separate legal entity created as a "body corporate and politic" with the power to sue and be sued.
• New Jersey law expressly states that the state is not formally liable for NJ Transit's debts or liabilities under N. J. Stat. § 27:25–17.
• The "instrumentality" label provided in N. J. Stat. § 27:25–4(a) is insufficient to override the corporate structure and separate legal personhood of the entity.

• Formal corporate status and "sue and be sued" clauses are not dispositive in determining whether an entity is an arm of the state.
• Its performance of "public and essential governmental functions" and exercise of "substantial plenary public powers" under N. J. Stat. § 27:25–4(a) demonstrate an intent to be an arm of the state.
• The Court should consider the practical financial relationship between the entity and the state, including the degree of state funding and the likelihood the state would voluntarily pay judgments.

• NJ Transit Corporation is not an arm of New Jersey and thus is not entitled to share in New Jersey's interstate sovereign immunity.
• Sovereign immunity is "personal" to the State and extends only to arms of the State, not to legally independent entities (*College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd.*).
• The Court determines "arm-of-the-State" status by considering the provisions of state law that define the agency's character (*Regents of Univ. of Cal. v. Doe*).
• The corporate form is a key marker of separate legal personhood, as a corporation is an artificial person that can sue, be sued, and contract as a stranger to the State (*Trustees of Dartmouth College v. Woodward*, *Bank of United States v. Planters' Bank of Ga.*).
• NJ Transit was created as a "body corporate and politic with corporate succession" possessing typical corporate powers under N. J. Stat. §§ 27:25–4(a), 27:25–5.
• The Court prioritizes formal legal liability over practical financial relationships; because N. J. Stat. § 27:25–17 provides that no liability of the corporation constitutes a liability of the State, NJ Transit is not an arm of the state (*Hess v. Port Authority Trans-Hudson Corporation*).
• The performance of "public and essential governmental functions" is not dispositive, as cities and counties also perform such functions without being arms of the state (*Lincoln County v. Luning*, *Garcia v. San Antonio Metropolitan Transit Authority*).
• State control—including the Governor's appointment and veto powers—is not a dispositive factor because ultimate control of every state-created entity resides with the State (*Hess*).
• The label "instrumentality of the State" in N. J. Stat. § 27:25–4(a) is outweighed by the corporate form and the fact that the New Jersey Tort Claims Act and Contractual Liability Act exclude entities with sue-and-be-sued authority from the definition of "State."