Third Circuit Holds New Jersey Transit Corporation Cannot be Sued for Disability Pension Benefits under ERISA Due to Governmental Plan Exemption

In Pue v. New Jersey Transit Corporation, No. 22-2616, 2023 WL 2930298 (3d Cir. Apr. 13, 2023), the pro se Plaintiff-Appellant Anthony Pue filed a lawsuit against New Jersey Transit Corporation seeking disability pension benefits. The district court construed Pue’s pleadings as asserting claims under the LMRA and ERISA but concluded that the defendant could not be sued under either statute. With respect to the ERISA claim, ERISA exempts from its coverage governmental plans established or maintained by “any State or political subdivision thereof, or by any agency or instrumentality of the foregoing.” 29 U.S.C. §§ 1002(32), 1003(b)(1). An entity is considered a “political subdivision” if it was either “(1) created directly by the state, so as to constitute departments or administrative arms of the government, or (2) administered by individuals who are responsible to public officials or to the general electorate.”

In an unpublished decision, the Third Circuit noted that Pue did not raise any arguments in his opening brief to rebut the conclusion that NJ Transit is a political subdivision exempt from ERISA. Regardless, the court agrees with the district court’s conclusion because NJ Transit is “allocated within the Department of Transportation,” and is “constituted as an instrumentality of the State exercising public and essential governmental functions.” N.J. Stat. Ann. § 27:25-4(a). Further, it is governed by a board composed of members including the Commissioner of Transportation, the State Treasurer, a member of the Executive Branch selected by the Governor, and additional public members appointed by the Governor. Id. § 27.25-4(b). The court relied on two decisions, Crilly v. Se. Pennsylvania Transp. Auth., 529 F.2d 1355, 1357 (3d Cir. 1976) and Koval v. Washington Cnty. Redevelopment Auth., 574 F.3d 238, 243 (3d Cir. 2009), wherein the court held that the defendants constituted political subdivisions under similar circumstances.

To the extent that Pue’s pleadings raised claims under the LMRA and ERISA, the Third Circuit agreed that the district court lacked subject-matter jurisdiction over these claims.