real and personal property, N.J.S.A. § 27:25-5(j), and lease or sell its property, N.J.S.A. § 27:25-5(k); however, for tax purposes at least, all property owned by the corporation is deemed to be state property. N.J.S.A. § 27:25-16. The corporation has been given the power of eminent domain, N.J.S.A. § 27:25-13(a)-(c)(1).
New Jersey Transit may collect fares from its operations, N.J.S.A. § 27:25-5(n), and may collect fees and rental charges from its properties, N.J.S.A. § 27:25-5(o). The corporation may also seek money from any federal, state or local agency or from any private source. N.J.S.A. § 27:25-5(g). The corporation is prohibited from incurring a deficit, N.J.S.A. § 27:25-17, or from issuing bonds. The State has explicitly disclaimed liability for any debts or liabilities of the corporation, id.; however, New Jersey Transit receives an annual appropriation from the New Jersey Legislature through the Department of Transportation. In Fiscal Year 1982, New Jersey Transit received an appropriation of $104 million from the legislature. L.1981, c. 190.
New Jersey Transit may deposit its revenues in interest-bearing accounts or in the State of New Jersey Cash Management Fund. N.J.S.A. § 27:25-5(p). The Cash Management Fund is a common trust fund, established and maintained by the Director of the Division of Investment of the Department of the Treasury under the custodianship of the State Treasurer which serves as a legal depository for public monies. N.J.S.A. § 52:18A-90.4. Investment of the fund is subject to the limitations which govern investment of funds in the state treasury, id., and the fund may contain money that inures to the benefit of the General State Fund. N.J.S.A. § 52:18A-90.1. New Jersey Transit is exempt from state taxation. N.J.S.A. § 27:25-16.
Labor relations between New Jersey Transit and its employees are governed by the New Jersey Employer-Employee Relations Act, N.J.S.A. § 34:13A-1 et seq., and are within the jurisdiction of the Public Employees Relations Commission. N.J.S.A. § 27:25-14(c). Labor disputes are to be resolved by arbitration; however, the "cost to the state of the first year portion of any arbitration award shall not exceed the appropriations permitted within the provisions of the 'State Expenditures Limitation Act.'" Id. The corporation must consult with state authorities in developing an employee compensation schedule, and must file the schedule with these authorities when it is completed. N.J.S.A. § 27:25-15. The corporation is subject to the provisions of the New Jersey Open Public Meetings Act, N.J.S.A. § 27:25-4(g), its records and papers are public records open to public inspection, N.J.S.A. § 27:25-20, and its rules and regulations must be filed in accordance with the New Jersey Administrative Procedure Act. N.J.S.A. § 27:25-5.
The Court's analysis of the characteristics of New Jersey Transit in light of the factors outlined in Urbano and Blake dictates the conclusion that New Jersey Transit is the alter ego of the State for diversity purposes. First, New Jersey Transit is by statute a state instrumentality performing an essential governmental function. As such, it has been granted complete immunity from state taxation. Second, the corporation does not have substantial autonomy from the state government in carrying out its functions. While the legislature has declared that the corporation is independent of any supervision or control by the Department of Transportation, it has also made the Commissioner of Transportation chairman of New Jersey Transit's governing board and has given him the responsibility of reviewing the corporation's budget. Moreover, whatever the relationship of New Jersey Transit to the Department of Transportation, it is clear that the corporation is not autonomous from the Executive Branch as a whole given the Governor's power to appoint all of the members of the governing board, to remove them for cause and to veto any decision made by the board.
Third, we find that any judgment against New Jersey Transit will have a financial impact on the state. While the state has disclaimed any responsibility for the debts and liabilities of the corporation, it has in fact appropriated over $100 million to New Jersey Transit for the current fiscal year. As New Jersey Transit points out, without contradiction by plaintiff, the fiscal realities of operating a public transportation system, coupled with the inability of the corporation to incur debt or to raise money through sale of its own bonds, dictates the continuation of appropriations of state funds to New Jersey Transit. This substantial and continuing contribution of state money to New Jersey Transit's budget is a sufficiently direct effect on the state treasury to support a finding that New Jersey Transit is the alter ego of New Jersey. Fitzpatrick v. Bitzer, 519 F.2d 559, 564-65 (2d Cir.1975), rev'd on other grounds, 427 U.S. 445, 96 S. Ct. 2666, 49 L. Ed. 2d 614 (1976). This conclusion is further supported by the fact that all property of New Jersey Transit is deemed by statute to be state property and by the fact that all funds of New Jersey Transit are, by definition, public monies, since they may be placed in the New Jersey Cash Management Fund.
Finally, we note that there are numerous indicia not explicitly set forth in Urbano and Blake that New Jersey Transit is an arm of the state. Thus, it has been given the power of eminent domain, suits against it are governed by the New Jersey Contractual Liability Act and the New Jersey Tort Claims Act, it is within the jurisdiction of the Public Employees Relations Commission, it is subject to the New Jersey Administrative Procedure Act and Open Public Meetings Act, and it has been represented in this litigation, as it must be by statute, by the Attorney General's Office.
There are several factors -- New Jersey Transit's power to sue and be sued, its power to enter into contracts and own property and its creation as a body corporate and politic -- which could indicate that New Jersey Transit should not be considered the alter ego of the State for diversity purposes.
These factors, however, are far outweighed by those supporting the conclusion that New Jersey Transit is an arm of the state. Accordingly, the Court finds that New Jersey Transit is the alter ego of the State of New Jersey, and that this action must be dismissed for want of diversity jurisdiction.