FETAHU v. NEW JERSEY TRANSIT CORPORATION (2021)

Order, Supreme Court, New York County (Adam Silvera, J.), entered on or about April 29, 2020, which denied defendant's motion to dismiss plaintiff's claim as barred by the doctrine of state sovereign immunity, unanimously affirmed, without costs.

Although defendant is an “arm of the state” of New Jersey (see Karns v. Shanahan, 879 F.3d 504, 512–519 [3d Cir. 2018]), it waived its sovereign immunity defense by engaging in litigation conduct that amounted to an “inescapably [ ] clear declaration to have [New York] courts entertain this action” (see Belfand v. Petosa, 196 A.D.3d 60, 73, 148 N.Y.S.3d 457 [1st Dept. 2021]).  Defendant did not assert the defense until six years after commencement of this action, and had by then defended against the case on the merits (see Henry v. New Jersey Tr. Corp., 195 A.D.3d 444, 445, 144 N.Y.S.3d 851 [1st Dept. 2021]).  To the extent defendant contends that it could not have raised the defense before Franchise Tax Bd. of Cal. v. Hyatt, 587 U.S. ––––, 139 S Ct 1485, 203 L.Ed.2d 768 (2019), we have already considered and rejected this contention in Belfand, 196 A.D.3d at 72–73, 148 N.Y.S.3d 457.

We decline to consider defendant's argument that the Full Faith and Credit Clause requires dismissal of the action (see Franchise Tax Bd. of California v. Hyatt, 578 U.S. 171, 136 S Ct 1277, 194 L.Ed.2d 431 [2016]), as it is raised for the first time in the reply brief (see Matter of Lemma v. Nassau County Police Officer Indem. Bd., 147 A.D.3d 760, 763, 47 N.Y.S.3d 54 [2d Dept. 2017], affd 31 N.Y.3d 523, 80 N.Y.S.3d 669, 105 N.E.3d 1250 [2018]).  We also reject defendant's contention that it may raise the argument for the first time on reply because of the “intervening change in law” set forth in Belfand, 196 A.D.3d 60, 148 N.Y.S.3d 457 and Henry, 195 A.D.3d 444, 144 N.Y.S.3d 851.  In fact, neither Belfand nor Henry changed the law regarding immunity under the Full Faith and Credit Clause.