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New Jersey Dep't of Envtl. Protection v. Gloucester Envtl. Management Servs.

ELR Citation: 26 ELR 21346
Nos. 84-152(JBS), 923 F. Supp. 651/42 ERC 2159/(D.N.J., 03/22/1995) Third-party defendant state agencies' motion for summary judgment denied

The court holds that when the state of New Jersey acts in its sovereign capacity to invoke the jurisdiction of a federal court to assert state-law claims against a waste hauler and its customers, it waives its Eleventh Amendment immunity with respect to contribution claims by third-party plaintiffs against state agencies that were also allegedly the waste hauler's customers. The court first holds that third-party defendant state colleges are not alter egos of the state. The court finds that the most important factor, the source of the colleges' funding, supports the conclusion that the colleges are not entitled to invoke the protection afforded to states by the Eleventh Amendment. The colleges failed to present the court with sufficient evidence to show that an adverse judgment would be paid out of the state treasury. The second factor, the colleges' status under state law, tilts slightly in favor of finding immunity, because the colleges do not possess the statutory authority to sue or be sued, and state law restricts their authority to enter into contracts. The court finds that the third factor of overall autonomy points neither toward comprehensive state control nor general permissiveness toward the colleges' operations. The court concludes that the question of whether the colleges are alter egos of the state is close, and notes that New Jersey courts have shown reluctance to accord immunity to agencies whose status under New Jersey statutes is ambiguous. The court holds, however, that third-party defendant state hospitals are alter egos of the state under the Eleventh Amendment. The hospitals were created by state statute, their funding comes almost entirely from appropriations by the legislature out of the general state treasury, and they are not statutorily authorized to sue or be sued in their own right.

The court next holds that the state hospitals and colleges may not assert sovereign immunity as a bar to the claims for contribution against them, because the state has waived its Eleventh Amendment immunity. The court disagrees with the state's argument that the colleges and hospitals can be treated as involuntary parties who can claim immunity notwithstanding the state's active and otherwise voluntary role in the litigation. The New Jersey Department of Environmental Protection is itself an alter ego of the state, and therefore, the state is the real party in interest in the litigation. Thus, the correct inquiry is not whether one state agency can waive the immunity of another state agency, but instead whether the state's submission of its rights to a federal court's determination gives rise to a waiver of the state's immunity for claims directly arising from the state's own causes of action. The court finds that the state has extensively participated in the federal court proceedings by voluntarily enlarging the litigation through its filing of an amended complaint more than five years after the case was removed to federal court, and by subsequently asserting claims under the Comprehensive Environmental Response, Compensation, and Recovery Act. Moreover, the third-party plaintiffs' claims against the state arise from the same event underlying the state's action and have not enlarged the relief sought against the allegedly responsible state entities.

Counsel for Plaintiff
Deborah T. Poritz, Attorney General
Attorney General's Office
R.J. Hughes Justice Complex, Trenton NJ 08625
(609) 292-4919

Counsel for Defendants
John F. Lynch Jr.
Carpenter, Bennett & Morrissey
Three Gateway Ctr.
100 Mulberry St., 17th Fl., Newark NJ 07102
(201) 622-7711