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May 10, 2018Download PDF

Thinking of filing an NJLAD claim against a bi-state agency? Think again.

The Third Circuit Court of Appeals has not yet addressed the question of whether a bi-state agency is subject to suit under the New Jersey Law Against Discrimination. However, despite some befuddlement by hopeful litigants, the lower federal courts and the New Jersey state courts have consistently held that the answer is a resounding “no”.

In Bell v Bell, 83 N.J. 417 (1980), the New Jersey Supreme Court first addressed the applicability of a single state’s law to bi-state agencies in general. The Court determined that the state legislature could not unilaterally affect the waiver of sovereign immunity to bi-state entities like the Delaware River Port Authority (“DRPA”). The Court explained “that to allow one state to regulate the bi-state entity would destroy the purpose of the agency.”

Nearly a decade later, in Eastern Paralyzed Veterans Assn. v. Camden, 111 N.J. 389 (1988), the Court applied the rationale set forth in Bell and refused to extend the NJLAD to the DRPA. The Court declared that a single state's law may only be applied when the compact itself states that the bi-state entity is subject to single-state jurisdiction. Furthermore, the Court explained that when the compact states have similar, but not identical laws, the laws apply to the bi-state agency only upon an explicit showing of agreement by both states that the laws are intended to apply to the agency.

In King v. Port Authority Trans-Hudson Corp., 909 F. Supp. 938 (D.N.J. 1995), the United States District Court for the District of New Jersey became the first court to deal with the precise question of whether the Port Authority of New York and New Jersey (“Port Authority”) could be sued under the NJLAD. The District Court predicted that “the New Jersey Supreme Court would apply the Bell and Eastern rationale to the present Port Authority Compact. Accordingly, [the District Court found] that LAD may only be applied to the Port Authority if New York has concurrently adopted the same legislation or if the states have similar legislation which purport to apply to the Port Authority.” The District Court ultimately predicted that the Court would not apply the NJLAD to the Port Authority.

However, only one year after the District Court’s decision in King, the New Jersey Supreme Court issued an opinion in Bunk v. Port. Authority of New York & New Jersey, 144 N.J. 176 (1996), which indicated that the District Court’s prediction in King was inaccurate. The issue before the Court in Bunk was whether a Port Authority worker was entitled to receive workers' compensation benefits under the same limitations as apply to other public employees in New Jersey. The Court resolved the issue by determining that the provisions for awarding workers’ compensation benefits in New York and New Jersey were parallel and complementary.

Shortly thereafter, the Court in Int'l Union of Operating Engineers, Local 68, AFL-CIO v. Delaware River & Bay Auth., 147 N.J. 433 (1997), created a straightforward approach for deciding whether an employee of a bi-state agency can sue under a single state law. Specifically, the new test provided by the Court set forth that: “a bi-state agency . . . is subject to the law of New Jersey when [1] the agency's compact expressly provides for unilateral action, [2] both states have adopted complementary or parallel legislation, or [3] the agency has impliedly consented to the exercise of single-state jurisdiction.” This test was utilized by the Superior Court of New Jersey, Appellate Division, and was subsequently affirmed by the Supreme Court in Ballinger v. Delaware River Port Auth., 311 N.J. Super. 317, 326 (App. Div. 1998), aff'd, 172 N.J. 586 (2002).

In Burke v. Port Auth. Of New York and New Jersey, No. Civ. A. 11-6853 JLL, 2012 WL 3314761, at *5 (D.N.J. Aug 12, 2013), the District Court initially went against the holding in King and determined that NJLAD does apply to the Port Authority:

Despite the absence of an explicit reference to the Port Authority in the relevant state statute, this Court will infer that the legislature intended the law to apply to the activities of bistate agencies. The very purpose of the NJLAD is to prevent discrimination. Accordingly, absent some specific, clear indication intending to exclude a specific employer such as Defendant herein, it follows that the legislature did not intend to exclude any particular employer.

Furthermore, in a 1951 Amendment to the bi-state compact, the Port Authority broadly consented to “suits, actions, or proceedings of any form or nature at law in equity or otherwise.” N.J.S.A. 32–1–157; N.Y. Unconsol. Laws § 7101. The amendment further provides that “the said two States consent to liability on the part of the Port Authority in such suits actions or proceedings for tortious acts committed by it and its agents to the same extent as through it were a private corporation. Therefore, even if the New Jersey legislature did not originally intend to apply the NJLAD to the Port Authority, the plain language of its own contractual amendment consents to application of same and Defendants' motion to dismiss Plaintiff's NJLAD claim is denied.

However, the court in Burke reconsidered its own decision shortly thereafter and determined that NJLAD was not applicable to the Port Authority.

Recently in Sullivan v. Port Auth. of New York & New Jersey, 449 N.J. Super. 276 (App. Div. 2017), the Appellate Division declined to apply New Jersey’s Conscientious Employee Protection Act (“CEPA”) to the Port Authority. In making its decision, the Appellate Division explained that a bi-state agency may be subject to complementary or parallel state legislation if it is ‘substantially similar’ to an enactment of the other state. “In order to be deemed substantially similar, the two laws at issue must ‘evidence some showing of agreement.’ In other words, the New Jersey and [New York] legislatures must ‘have adopted a substantially similar policy’ that is apparent in their respective statutes.”

Regardless of whether an employee of a bi-state agency can sue her employer under the NJLAD, the Appellate Division in Santiago v. New York & New Jersey Port Auth., 429 N.J. Super. 150, 159 (App. Div. 2012) made it clear: “a party wishing to file an employment discrimination suit against the Port Authority in New Jersey must comply with the notice provisions of N.J.S.A. 32:1–163.which provide: that the suit be commenced within one year of accrual and “upon the further condition that notice be given at least sixty days before the suit is filed.”

In conclusion, a party planning to file suit against a bi-state agency under NJLAD should proceed with grate caution.