Sovereign Immunity, Though Not Raised Below, Wins the Day for the United States Government

Jacobson v. United States, 422 N.J. Super. 561 (App. Div. 2011).  It is not often that the United States is a party in a state court case.  This matter involved a claim against the Social Security Administration for failure to withhold disability benefits payments pursuant to a proper child support garnishment order.  Plaintiff won in the Law Division, but the United States appealed and prevailed, based on sovereign immunity.  Judge Parrillo wrote the panel’s opinion.

From an appellate law perspective, the key aspect of this decision arises from the fact that the United States did not raise sovereign immunity below, but was permitted to do so on appeal.  Plaintiff, of course, argued that the issue, not having been raised below, could not be considered.  Judge Parrillo disagreed.  “While we generally decline to resolve questions or issues not properly presented in the trial court, an exception is made where ‘the questions so raised on appeal go to the jurisdiction of the trial court or concern matters of great public interest.’  Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973).  Here, the question of the Government’s sovereign immunity clearly and plainly goes to the jurisdiction of the trial court.” 

Accordingly, the panel considered the sovereign immunity issue and found that it barred plaintiff’s claim.  This was because the federal government and its agencies are immune from suit in state court absent consent from Congress, and such consent must be expressly given and strictly construed when it is given, as Judge Parrillo explained.  A federal regulation, 5 C.F.R. §581.305, was amended in 1998 “to specifically preclude damages liability.”  The panel rejected plaintiff’s contention that the regulation was ultra vires and unenforceable. 

Cases in which arguments not raised below are considered on appeal are relatively rare.  Most of the cases that have considered contentions not raised below have involved the “matters of great public interest” aspect of Nieder.   This decision is a useful reminder that issues that “go to the jurisdiction of the trial court” can also be raised for the first time on appeal, though such opportunities do not present themselves often.