No State Sovereign Immunity for the Port Authority in Federal Court:
Baroni v. Port Authority and the Demise of Caceres

I. Introduction

In Baroni v. Port Authority of New York and New Jersey, No. 23‑916 (2d Cir. Dec. 2, 2025), the U.S. Court of Appeals for the Second Circuit issued a significant opinion clarifying the status of the Port Authority under state sovereign immunity doctrine and reshaping how procedural “conditions precedent” in state law and agency bylaws operate in federal court.

The case arises out of the high-profile “Bridgegate” scandal. William E. Baroni Jr., former Deputy Executive Director of the Port Authority of New York and New Jersey (“Port Authority”), was criminally prosecuted for his role in manipulating traffic lanes on the George Washington Bridge allegedly to retaliate against the mayor of Fort Lee, New Jersey. After years of litigation, his convictions were vacated and the indictment dismissed. Baroni then sought indemnification from the Port Authority for approximately $4 million in criminal-defense legal fees, invoking an indemnification provision in the Port Authority’s bylaws.

The central legal issues on appeal were:

Whether the Port Authority possesses state sovereign immunity that limits the subject matter jurisdiction of federal courts, particularly for state-law claims.
Whether state statutory conditions and Port Authority bylaw “conditions precedent” to indemnification are jurisdictional limitations or instead merits-based contractual defenses.
Whether a prior Second Circuit decision, Caceres v. Port Authority of N.Y. & N.J., 631 F.3d 620 (2d Cir. 2011), correctly treated the Port Authority as having sovereign immunity from state-law claims in federal court.

The Second Circuit, in an opinion by Judge Menashi (joined by Judge Walker), vacated the district court’s dismissal for lack of subject matter jurisdiction and remanded. The court held that:

Under the Supreme Court’s decision in Hess v. Port Authority Trans‑Hudson Corp., 513 U.S. 30 (1994), the Port Authority does not possess the sovereign immunity “that a State enjoys” and is not entitled to immunity from suit in federal court, whether the claims arise under federal or state law.
The Second Circuit’s earlier contrary decision in Caceres, which recognized a form of sovereign immunity shielding the Port Authority from state-law claims in federal court, is overruled through the court’s “mini en banc” procedure.
The Port Authority’s bylaws and related state statutes may impose substantive or procedural conditions on indemnification, but they do not limit federal subject matter jurisdiction. Noncompliance with such conditions is an affirmative defense, not a jurisdictional defect.

Judge Carney concurred in the judgment and in the core holdings (applying Hess to the Port Authority and overruling Caceres), but declined to join the majority’s broader discussion of how Eleventh Amendment immunity and state sovereign immunity interrelate, emphasizing that the larger theoretical questions are unsettled and were unnecessary to resolve the case.

II. Summary of the Opinion

A. Factual Background

Baroni served as the Port Authority’s Deputy Executive Director. In 2013, he approved changes in the placement of traffic cones affecting access lanes from Fort Lee, New Jersey to the George Washington Bridge. The changes caused major traffic disruption and generated a political firestorm (“Bridgegate”), leading to investigations by the New Jersey Legislature and the U.S. Attorney’s Office.

Baroni received a legislative subpoena in December 2013 and quickly notified the Port Authority’s General Counsel. Between December 2013 and March 2014, he repeatedly requested defense and indemnification under Article XI, Paragraph 7 of the Port Authority’s bylaws. That provision states, in relevant part, that:

The Port Authority may provide a defense when punitive damages or criminal charges are asserted against an employee for acts within the scope of employment, if the General Counsel determines it is in the Port Authority’s best interest.
However, the Port Authority “shall provide reimbursement of defense costs incurred by or on behalf of an indemnified party in defense of a criminal proceeding … upon acquittal or dismissal of the criminal charges.”

The General Counsel acknowledged Baroni’s requests and told his counsel that Baroni had done everything necessary to request indemnification and need not repeat the requests, though the Port Authority had “no immediate plan” to act. The Port Authority never advanced defense costs.

In April 2015, a federal grand jury indicted Baroni. The Port Authority publicly stated it was reviewing the indictment, and according to Baroni, the General Counsel received a copy within five days. Baroni was convicted on multiple counts in 2016, partially vindicated in the Third Circuit in 2018, resentenced, and then fully exonerated when the Supreme Court, in Kelly v. United States, 590 U.S. 391 (2020), held that his conduct did not amount to federal-program or wire fraud. The district court ultimately dismissed the indictment in June 2020.

Following his exoneration, Baroni:

September 25, 2020: Sent the Port Authority a formal letter seeking indemnification under the bylaws.
October 23, 2020: Received a denial based on the Port Authority’s assertion that his conduct fell outside the scope of his employment.
March 5, 2021: Served a notice of claim on the Port Authority.

B. Procedural History

Baroni filed suit in New York state court on June 9, 2021. The Port Authority removed the case to the Southern District of New York, where it moved to dismiss on two grounds:

Lack of subject matter jurisdiction based on sovereign immunity: New York and New Jersey statutes, which waive immunity for the Port Authority, limit that waiver to claims that have “accrued” and require compliance with notice-of-claim and one-year limitations provisions. The Port Authority argued that Baroni’s claim had not accrued because he failed to comply with Article XI, Paragraph 8 of the bylaws—particularly the requirement to deliver certain documents to the General Counsel within five days—so the statutory waiver never became effective, leaving the Port Authority “immune” and the federal court without jurisdiction.
Failure to state a claim: The conduct for which Baroni sought indemnification allegedly fell outside the scope of his Port Authority employment.

Paragraph 8 of Article XI conditions indemnification on:

(i) Delivery to the General Counsel, within five days, of any “summons, complaint, process, notice, demand or pleading,” which is “deemed a request” for a defense;
(ii) The employee’s full cooperation in the defense; and
(iii) The employee’s agreement that the Port Authority may withdraw the defense and seek reimbursement of costs.

The district court accepted the Port Authority’s jurisdictional framing. It held that:

The statutes waiving sovereign immunity for the Port Authority applied only to accrued claims.
Accrual depended on strict compliance with the contractual conditions precedent in the bylaws—specifically, timely delivery of the “judgment of acquittal” (rather than the indictment).
Because Baroni failed to plead or prove such compliance, the Port Authority’s sovereign immunity had not been waived, depriving the court of subject matter jurisdiction under Rule 12(b)(1).
The court also denied leave to amend as “futile” because even the proposed amended complaint did not allege timely delivery of the judgment of acquittal.

Baroni appealed both the dismissal and the denial of leave to amend.

C. The Second Circuit’s Disposition

The Second Circuit:

Vacated the district court’s judgment dismissing the complaint for lack of subject matter jurisdiction.
Vacated the denial of leave to amend, holding that futility was wrongly predicated on jurisdictional reasoning.
Remanded for further proceedings on the merits, including any consideration of contractual defenses and the proposed amended complaint.

The court’s core legal holdings are:

The Port Authority is not entitled to state sovereign immunity in federal court. Hess already determined that the Port Authority “is not cloaked” with the sovereign immunity “that a State enjoys” and is “not entitled to Eleventh Amendment immunity from suit in federal court.” That conclusion applies to all claims, federal and state.
State law cannot create an immunity that divests federal courts of subject matter jurisdiction. While state law may define substantive rights and defenses (e.g., accrual, notice-of-claim), it cannot manufacture a form of sovereign immunity that limits Article III jurisdiction.
Conditions precedent in the Port Authority’s bylaws are merits questions, not jurisdictional ones. Failure to comply with such conditions is an affirmative defense under state contract law, not a jurisdictional prerequisite.
The Second Circuit’s prior decision in Caceres is overruled through the court’s “mini en banc” process to the extent it held that the Port Authority enjoys sovereign immunity from state-law claims in federal court.

III. In-Depth Analysis

A. Precedents and Authorities Cited

1. Hess v. Port Authority Trans‑Hudson Corp., 513 U.S. 30 (1994)

Hess is the linchpin of the Second Circuit’s analysis. There, the Supreme Court considered whether the Port Authority Trans‑Hudson Corporation (PATH), a subsidiary of the Port Authority, was an “arm of the state” entitled to Eleventh Amendment immunity.

The Court concluded:

The Port Authority and its subsidiary are bistate entities created by compact between New York and New Jersey with congressional consent.
They occupy “a significantly different position in our federal system than do the States themselves.”
They are creations of “three discrete sovereigns” (New York, New Jersey, and the federal government, via Compact Clause approval).
They are financially self-sufficient: they generate their own revenues and pay their own debts. A judgment against them does not threaten the states’ treasuries or dignity in the way judgments against states do.

Therefore, the Court held that the Port Authority is “not cloaked with the Eleventh Amendment immunity that a State enjoys” and is “not entitled to Eleventh Amendment immunity from suit in federal court.” The Second Circuit in Baroni treats this holding as fully controlling and dispositive of any claim by the Port Authority to state sovereign immunity in federal court.

2. Caceres v. Port Authority of N.Y. & N.J., 631 F.3d 620 (2d Cir. 2011)

In Caceres, the Second Circuit confronted state statutes (New York Unconsol. Law § 7107 and N.J. Stat. § 32:1‑163) that condition suits against the Port Authority on strict compliance with notice-of-claim and limitations provisions. Although Hess had already held that the Port Authority lacked Eleventh Amendment immunity, Caceres treated those statutory conditions as part of a separate, state-law-based “sovereign immunity” that limited federal jurisdiction over state-law claims against the Port Authority.

The Caceres panel:

Described Hess as involving “Eleventh Amendment sovereign immunity” only with respect to federal claims.
Posited a different “sovereign immunity” for state-law claims that “cannot be waived” and that depended on strict compliance with the statutory conditions (such as a one-year limitations period and notice-of-claim).
Raised and decided the jurisdictional issue sua sponte, even though neither party argued it and the district court had not relied on it.

Baroni declares that this dual-immunity framework in Caceres is inconsistent with Supreme Court precedent and thus must be overruled.

3. Regents of the University of California v. Doe, 519 U.S. 425 (1997)

Regents clarified that the key Eleventh Amendment question is whether a judgment would be legally enforceable against the state itself, not who ultimately pays. Even if the state will be indemnified, its status as legally liable is decisive in determining whether an entity is an “arm of the state.”

The Second Circuit uses Regents to reaffirm the logic of Hess: the Port Authority is not legally equivalent to either state, and judgements against it do not implicate state treasuries, confirming it is not an “arm of the state.”

4. Structural Sovereign Immunity Cases: Hans, Alden, Blatchford, and Others

The opinion situates the case within the Supreme Court’s broader sovereign immunity jurisprudence:

Hans v. Louisiana, 134 U.S. 1 (1890): Held that a citizen cannot sue his own state in federal court without its consent, reasoning from the “presupposition” of state sovereignty that underlies the Constitution. It emphasized that suits against non-consenting states were “unknown to the law” when the Constitution was adopted.
Alden v. Maine, 527 U.S. 706 (1999): Reinforced that state sovereign immunity is a “fundamental aspect” of sovereignty preserved by the constitutional structure and not limited to the text of the Eleventh Amendment. It exists “by constitutional design.”
Blatchford v. Native Village of Noatak, 501 U.S. 775 (1991): Described federal judicial power as limited by the sovereign immunity that states retained when entering the Union; states are not subject to suit unless they consent or consented in the “plan of the convention.”

The Second Circuit uses these cases to support the proposition that “Eleventh Amendment immunity” is best understood as a shorthand expression for a single, structural doctrine of state sovereign immunity – not as a separate category of immunity limited to certain types of claims.

5. North Insurance Co. of New York v. Chatham County, 547 U.S. 189 (2006)

Chatham County is crucial for rejecting “residual” immunity theories. The county admitted that Eleventh Amendment immunity did not extend to it but claimed a distinct “common law” or “residual” sovereign immunity on the theory that it exercised state-delegated power.

The Supreme Court rejected this argument, holding:

There is only one relevant sovereign immunity doctrine for federal courts: the “residuary and inviolable sovereignty” of the states preserved by the Constitution.
Political subdivisions such as counties are subject to suit in federal court unless they qualify as arms of the state under the Court’s established tests.

Baroni applies this reasoning directly: if the Port Authority is not an arm of a state (as Hess held), then it shares none of the state’s sovereign immunity in federal court. There is no second, state-law-based immunity for it to invoke.

6. PennEast Pipeline Co. v. New Jersey, 594 U.S. 482 (2021)

The majority cites PennEast and, in particular, a footnote in Justice Gorsuch’s dissent distinguishing:

“Structural immunity” derived from the Constitution’s design, which can be waived.
“Eleventh Amendment immunity,” which, in his view, may operate as an independent, non-waivable textual limit on federal judicial power in certain diversity suits.

The Second Circuit majority notes this two-immunity theory but characterizes it as an “academic argument” inconsistent with how the Supreme Court has, in practice, treated sovereign immunity—as a single structural doctrine for federal courts. At the same time, the court stresses that even if Justice Gorsuch’s approach were correct, it would provide no support for Caceres’s very different dual-immunity model (one immunity for federal claims, another for state-law claims derived from state law).

7. Miscellaneous Precedents: Jurisdiction vs. Merits

To separate jurisdictional from non-jurisdictional rules, the Second Circuit invokes:

Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998): Federal courts must resolve jurisdiction before reaching merits.
Henderson v. Shinseki, 562 U.S. 428 (2011): Cautions against labeling rules as jurisdictional because doing so alters burdens and timing in litigation.
Guaranty Trust Co. v. York, 326 U.S. 99 (1945): Federal courts sitting in diversity apply state statutes of limitations as substantive law, but such rules are not usually treated as jurisdictional bars to federal power.
Second Circuit cases on affirmative defenses and conditions precedent (e.g., Endovasc, Ltd. v. J.P. Turner & Co., 169 F. App’x 655 (2d Cir. 2006); Clark v. Hanley, 89 F.4th 78 (2d Cir. 2023); Abbas v. Dixon, 480 F.3d 636 (2d Cir. 2007)) establishing that failure to satisfy a condition precedent typically constitutes an affirmative defense, which defendants must plead and prove, rather than a jurisdictional prerequisite plaintiffs must affirmatively allege.

B. The Court’s Legal Reasoning

1. The Port Authority Has No State Sovereign Immunity in Federal Court

The majority’s core syllogism is:

Under Hess, the Port Authority “is not cloaked with the Eleventh Amendment immunity that a State enjoys” and is “not entitled to Eleventh Amendment immunity from suit in federal court.”
Supreme Court precedent treats “Eleventh Amendment immunity” and “state sovereign immunity” as different labels for the same underlying structural doctrine, not as two distinct species of immunity.
Chatham County rejects the idea of a distinct, residual or common-law sovereign immunity for entities that are not arms of the state.
Therefore, once Hess determined that the Port Authority is not an arm of any state, there is no form of state sovereign immunity left for it to invoke in federal court—for federal or state-law claims.

The court also emphasizes that Eleventh Amendment immunity has long been applied to state-law, not just federal-law, claims (e.g., Franchise Tax Bd. v. Hyatt, 587 U.S. 230 (2019) (tort claims); Regents (state contract claims); Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139 (1993) (diversity suit)). If the Port Authority lacks that immunity, it cannot resurrect a separate one limited to state-law claims.

2. Overruling Caceres via Mini En Banc

Recognizing that Caceres conflicted with Hess and the Supreme Court’s broader sovereign immunity doctrine, the Second Circuit invokes its “mini en banc” procedure to overrule circuit precedent without convening the full court formally en banc. Following the court’s internal practice (citing United States v. Peguero, 34 F.4th 143, 158 n.9 (2d Cir. 2022) and United States v. Bedi, 15 F.4th 222, 232 (2d Cir. 2021)), the panel:

Circulated the draft opinion to all active judges of the court.
Received no objections.
Overruled Caceres “to the extent” it held that the Port Authority has sovereign immunity from state-law claims in federal court.

The court is careful to note that its overruling is limited to Caceres’s immunity holding; it does not disturb the separate, substantive holdings applying state notice-of-claim statutes and limitations periods as part of state law.

3. State Law Cannot Create Federal Subject Matter Jurisdiction Limits

The Port Authority argued—and the district court accepted—that New York and New Jersey statutes conditioning the waiver of sovereign immunity on timely accrual and notice-of-claim effectively dictated the federal court’s jurisdiction. The Second Circuit decisively rejects this:

States have “sole control of [their] own courts” and may adopt state-law immunity or justiciability doctrines for state tribunals, including special rules for when suits may proceed there.
But when a case is in federal court, only federal-law sovereign immunity—rooted in the Constitution’s structure and the Eleventh Amendment—can limit Article III jurisdiction.
State law can define the elements of a claim, statutes of limitations, and notice-of-claim requirements, but these are merits-based rules, not jurisdictional barriers.

Thus, the Port Authority’s reliance on statutory “waiver” conditions as a jurisdictional bar misunderstands the source and nature of sovereign immunity in federal courts.

4. Contractual Conditions Precedent Are Affirmative Defenses, Not Jurisdictional Prerequisites

The district court held that compliance with the bylaws’ five‑day delivery requirement and other conditions precedent to indemnification had to be pleaded and proved to establish subject matter jurisdiction. The Second Circuit reverses that approach:

Under New York law (and ordinary contract law), “failure of a plaintiff to comply with conditions precedent is an affirmative defense.” It is the defendant’s burden to plead and prove noncompliance.
The Federal Rules of Civil Procedure do not require plaintiffs to anticipate affirmative defenses in their complaints. Plaintiffs need not allege compliance with every condition precedent unless a specific rule so requires.
Labeling these contractual conditions “jurisdictional” improperly shifts burdens, blocks the application of doctrines such as substantial compliance, and allows courts to dispose of claims without reaching straightforward contractual and factual questions.

Accordingly, even if Baroni failed to deliver some particular document (e.g., the judgment of acquittal) within five days, that failure would go to whether the Port Authority is obligated to indemnify him—not whether the federal court has jurisdiction to adjudicate the dispute.

5. The Error in Denying Leave to Amend

Because the district court’s futility analysis was premised on the mistaken conclusion that Baroni’s alleged noncompliance with conditions precedent was jurisdictional, the Second Circuit vacates the denial of leave to amend.

Key points:

Rule 15(a)(2) provides that leave to amend should be “freely give[n] when justice so requires.”
An amendment is “futile” only if it could not survive a motion to dismiss—here, the court had applied Rule 12(b)(1), not 12(b)(6), and did so on incorrect jurisdictional grounds.
Because the original complaint already sufficed to establish subject matter jurisdiction (once sovereign immunity is properly understood), the amendment cannot be deemed futile on that basis.

The panel does not decide whether the amended complaint is sufficient on the merits; it remands so the district court can decide whether to accept the amended complaint and then address contractual defenses and factual issues in the proper, non-jurisdictional posture.

C. The Concurring Opinion: A Note of Caution

Judge Carney’s concurrence agrees with the judgment and with the two pivotal holdings:

Hess forecloses any claim by the Port Authority to state sovereign immunity in federal court.
Caceres was wrong to treat state law as creating a sovereign immunity limitation on federal jurisdiction and must be abandoned.

However, she declines to join the majority’s broader discussion of the precise conceptual relationship between:

State sovereign immunity rooted in the Constitution’s structure, and
The Eleventh Amendment’s text.

Her key concerns:

The Supreme Court’s sovereign immunity jurisprudence is in flux, often decided by narrow 5–4 majorities and subject to scholarly debate and periodic overruling.
The majority’s strong assertion that sovereign immunity is a single, purely structural doctrine may not fully reflect the nuances or competing readings of Supreme Court decisions (e.g., Virginia Office for Protection & Advocacy v. Stewart, Federal Maritime Commission v. South Carolina State Ports Authority).
Our own earlier decision in Beaulieu v. Vermont, 807 F.3d 478 (2d Cir. 2015), spoke of “two types” of sovereign immunity and may not fit neatly within the majority’s current description.
Because the Court’s future direction is uncertain—and because resolving these bigger theoretical questions is unnecessary to decide Baroni’s case—those issues should be left open.

The concurrence thus underscores that the binding aspect of Baroni is narrow: the Port Authority lacks state sovereign immunity in federal court, and Caceres’s contrary jurisdictional rule is overruled. The more expansive conceptual discussion is dicta and should be read accordingly.

D. Likely Impact on Future Cases

1. Litigation Against the Port Authority

Baroni substantially clarifies the status of the Port Authority in federal court:

The Port Authority cannot invoke state sovereign immunity to defeat federal subject matter jurisdiction, regardless of whether claims arise under federal or state law.
Plaintiffs suing the Port Authority in federal court no longer need to plead—or prove—state-law “waivers” of sovereign immunity as jurisdictional prerequisites.
Statutory conditions such as notice-of-claim requirements or one-year limitations periods remain enforceable as substantive state law (under Erie principles), but they are defenses to be raised by the Port Authority, not jurisdictional bars.

Practically, this means:

More suits against the Port Authority can proceed in federal court on their merits.
Threshold motions will focus on Rule 12(b)(6) or summary judgment (e.g., whether the plaintiff complied with notice-of-claim or bylaw conditions), not Rule 12(b)(1).
Standard doctrines like substantial compliance, waiver, and estoppel are now available to plaintiffs in addressing these procedural requirements—doctrines the district court previously refused to apply because it characterized the requirements as jurisdictional.

2. Compact Clause Entities and “Arm of the State” Analysis

Baroni reinforces that bistate compact entities like the Port Authority are not automatically treated as arms of any state. For such entities:

The Hess analysis—focusing on financial independence, political accountability, and the nature of the compact—will control whether they share state sovereign immunity.
Absent a clear structure designed to give them the “special constitutional protection” of the states (and congressional concurrence), they will be subject to suit in federal court.

This has potential implications for other multistate authorities (bridges, tunnels, regional transit agencies) created by compact and approved by Congress. Their immunity claims are likely to be scrutinized under the Hess/Chatham County framework rather than insulated by state legislation alone.

3. Federal–State Interplay Over Procedural Prerequisites

Baroni also contributes to the ongoing clarification of which rules are truly “jurisdictional” in federal court:

State law can and does shape substantive causes of action (including accrual, limitations, and notice-of-claim rules), and federal courts routinely apply these under Erie and Guaranty Trust.
But state law cannot dictate the scope of Article III jurisdiction by re-labeling contractual or procedural conditions as “sovereign immunity” in a way that binds federal courts.
This reinforces the Supreme Court’s broader trend toward tightening the definition of “jurisdictional” rules and insisting on clear statements before treating rules as such.

4. Broader Sovereign Immunity Debates

On a more theoretical level, Baroni illustrates:

The practical consequences of conflating state-law procedural rules with federal sovereign immunity doctrines.
How lower courts navigate the sometimes unsettled and contested relationship between structural sovereign immunity and the Eleventh Amendment’s text.
The tension between striving for doctrinal coherence (the majority’s approach) and acknowledging the Supreme Court’s evolving and sometimes internally inconsistent case law (the concurrence’s caution).

The concurrence’s reference to pending Supreme Court cases involving New Jersey Transit underscores that the field is still in motion and that higher courts may revisit aspects of interstate sovereign immunity and the role of the Eleventh Amendment in the near future.

IV. Complex Concepts Simplified

1. State Sovereign Immunity vs. Eleventh Amendment Immunity

State sovereign immunity is the principle that states, as sovereigns, cannot be sued without their consent. The Supreme Court has treated this as a feature of the Constitution’s structure: when the states joined the Union, they retained this immunity except where the Constitution or subsequent amendments clearly abrogate it.

Eleventh Amendment immunity is often used as a shorthand for this broader principle, even though the text of the Eleventh Amendment only mentions suits “against one of the United States by Citizens of another State” or foreign citizens. The Court has read the Amendment as confirming and illustrating a more general rule: non-consenting states are not ordinarily amenable to suit in federal court.

The majority in Baroni treats these as essentially the same doctrine for federal-court purposes. The concurrence notes that some justices and scholars see additional, independent meaning in the Amendment’s text, but both opinions agree that this theoretical issue does not change the outcome in Baroni’s case.

2. “Arm of the State”

An entity is an “arm of the state” if:

It is created by the state and closely controlled by it;
A judgment against the entity would effectively be paid by the state treasury; and
It serves as a direct instrumentality of the state government.

If an entity is an arm of the state, it shares the state’s sovereign immunity in federal court. If not—as with the Port Authority under Hess—it is treated more like a municipality or other public corporation and can be sued without special immunity.

3. Compact Clause Entity

A Compact Clause entity is created by an agreement (compact) between two or more states, with congressional approval, under Article I, Section 10, Clause 3 of the Constitution. These entities:

Are not simply agencies of a single state;
Owe their existence to coordinated action by multiple sovereigns, including the federal government; and
Do not automatically enjoy any one state’s immunity.

Hess held that Compact Clause entities, including the Port Authority, do not qualify for state sovereign immunity absent clear evidence that the states and Congress intended to clothe them with that special protection.

4. Subject Matter Jurisdiction vs. Affirmative Defenses

Subject matter jurisdiction refers to a court’s legal authority to hear a type of case. If a court lacks it, it cannot decide the case at all, and the defect cannot be waived or ignored.

An affirmative defense accepts, for argument’s sake, that the court has jurisdiction and that the plaintiff has alleged a claim, but asserts some additional reason why the defendant should not be held liable (e.g., statute of limitations, failure to satisfy a condition precedent).

In Baroni:

The district court treated bylaw conditions as jurisdictional, effectively saying: “Unless Baroni complied, the federal court has no power to hear this case.”
The Second Circuit holds that this is incorrect: those conditions may be a defense (potentially defeating Baroni’s claim), but they do not strip the court of jurisdiction.

5. Conditions Precedent and Substantial Compliance

A condition precedent is a contract term that must occur before a party’s duty to perform arises. In indemnification clauses, conditions precedent might include:

Timely notice of a claim;
Forwarding pleadings or summonses;
Cooperating in the defense.

The doctrine of substantial compliance allows a court to excuse minor or technical failures when the essential purpose of the condition is satisfied (e.g., the defendant actually received notice and was not prejudiced).

By labeling conditions precedent “jurisdictional,” the district court barred the application of substantial compliance and related doctrines. Baroni corrects this: such doctrines can and should be used when these are treated as ordinary contractual conditions.

6. The “Mini En Banc” Procedure

Ordinarily, a federal court of appeals overrules its own precedent only through a full en banc proceeding (all active judges rehearing the case). The Second Circuit sometimes uses a “mini en banc”:

A panel proposes to overrule prior circuit precedent;
The proposed opinion is circulated to all active judges;
If no judge objects, the panel may overrule the prior decision without formal en banc argument.

In Baroni, this mechanism was used to overrule Caceres’s immunity holding, ensuring internal consistency with Hess and Supreme Court doctrine.

V. Conclusion

Baroni v. Port Authority of New York and New Jersey is a consequential decision for both sovereign immunity doctrine and the practical litigation of claims against powerful interstate agencies.

Substantively, the case establishes that:

The Port Authority lacks state sovereign immunity in federal court for all claims, including state-law claims, as a direct consequence of Hess.
State statutes and Port Authority bylaws cannot retroactively transform ordinary contractual and procedural conditions into jurisdictional bars in federal court.
Prior Second Circuit precedent (Caceres) that treated such conditions as jurisdictional sovereign immunity limitations is overruled.

Doctrinally, the decision reinforces a sharp distinction between:

Constitutional sovereign immunity (which may limit federal jurisdiction for true arms of the state), and
State-law procedural and contractual requirements (which may affect the merits but not Article III power).

At the same time, the concurrence reminds readers that the foundational questions about the relationship between structural sovereign immunity and the Eleventh Amendment remain contested and evolving at the Supreme Court level. The binding effect of Baroni is thus both significant and carefully bounded: federal courts cannot treat state-law conditions applicable to the Port Authority as sovereign-immunity-based jurisdictional limits, and the Port Authority stands, for federal-court purposes, as a suable public entity rather than an arm of either New York or New Jersey.

On remand, Baroni’s indemnification claim will rise or fall on the traditional merits issues: the scope of his employment, the meaning of the Port Authority’s bylaws, and the application of contract-law doctrines to his notices and the Port Authority’s responses. Those questions will now be addressed where they belong—in a court with undisputed jurisdiction, applying ordinary principles of state contract law rather than the extraordinary doctrine of state sovereign immunity.

No State Sovereign Immunity for the Port Authority in Federal Court: Baroni v. Port Authority and the Demise of Caceres