The potential unintended consequences of Galette v. NJ Transit Corp
How is this acceptable?
I started pulling on this thread almost as soon as the decision came out, and the further I dive, the more complicated and consequential this decision seems to become.
TL:DR -- Galette seems to upend a whole swath of state-created organizations that have been built up over time, capturing the benefits of Private Entities while still operating under the presumed protection of State Agencies. I want to be clear that I don't disagree at all with the decision, far from it. I think the decision is completely logical: States cannot have their cake and eat it too.
But the scope here is likely staggering. A lot of the initial analysis has (rightfully) focused on liability of State-created organizations for things like Tort law, and contractors with state-created entities. But there's other dimensions that don't seem to be recognized yet.
Let's start with: Charter Schools
Some states have set up state-created independent charter authorization bodies. Depending on their corporate structure, these are now private entities. This opens up a private non-delegation doctrine can of worms, and also opens the door to State-level Constitutional challenges due to the fact that many states impose public education obligations via their Constitutions. There's also the question of whether or not they qualify as "educational agencies or institutions" for FERPA purposes.
Another fun one: Public Banking Corporations.
Depending on their setup, these now face the full force of GLB, FACTA/FCRA, which previously, these entities may have been able to argue that they were either instrumentalities of the state or state arms period. Now, the exemptions under GLB for government entities no longer apply. That's the full force of GLB's privacy framework now applying to a state-owned private banking corporation. Privacy notices, opt-out rights (affects sharing of customer data for affordable housing, small business lending, etc), now a review of alignment with the Safeguards rule is required.
If that wasn't enough, what about REAL ID?
REAL ID compliance requires states to implement several data systems that many states built through or connected to private corporate entities, e.g. AAMVA.
The American Association of Motor Vehicle Administrators is the central nervous system of REAL ID implementation. AAMVA is incorporated as a nonprofit corporation in the District of Columbia. It operates:
The State-to-State (S2S) verification system that allows states to check whether an applicant already has a license in another state
The Problem Driver Pointer System
The Commercial Driver's License Information System
The AAMVA National Driver Register interface
AAMVA is the entity through which states share driver identity information with each other for REAL ID compliance purposes. It is the data hub that makes the nationwide verification architecture function.
Applying Galette directly: AAMVA is a private nonprofit corporation. It has full corporate powers. No state is formally liable for its obligations. It was created by motor vehicle administrators — governmental officials — but as a private membership organization rather than a governmental entity. Under Galette's framework, AAMVA is a …
How is this acceptable?
I started pulling on this thread almost as soon as the decision came out, and the further I dive, the more complicated and consequential this decision seems to become.
TL:DR -- Galette seems to upend a whole swath of state-created organizations that have been built up over time, capturing the benefits of Private Entities while still operating under the presumed protection of State Agencies. I want to be clear that I don't disagree at all with the decision, far from it. I think the decision is completely logical: States cannot have their cake and eat it too.
But the scope here is likely staggering. A lot of the initial analysis has (rightfully) focused on liability of State-created organizations for things like Tort law, and contractors with state-created entities. But there's other dimensions that don't seem to be recognized yet.
Let's start with: Charter Schools
Some states have set up state-created independent charter authorization bodies. Depending on their corporate structure, these are now private entities. This opens up a private non-delegation doctrine can of worms, and also opens the door to State-level Constitutional challenges due to the fact that many states impose public education obligations via their Constitutions. There's also the question of whether or not they qualify as "educational agencies or institutions" for FERPA purposes.
Another fun one: Public Banking Corporations.
Depending on their setup, these now face the full force of GLB, FACTA/FCRA, which previously, these entities may have been able to argue that they were either instrumentalities of the state or state arms period. Now, the exemptions under GLB for government entities no longer apply. That's the full force of GLB's privacy framework now applying to a state-owned private banking corporation. Privacy notices, opt-out rights (affects sharing of customer data for affordable housing, small business lending, etc), now a review of alignment with the Safeguards rule is required.
If that wasn't enough, what about REAL ID?
REAL ID compliance requires states to implement several data systems that many states built through or connected to private corporate entities, e.g. AAMVA.
The American Association of Motor Vehicle Administrators is the central nervous system of REAL ID implementation. AAMVA is incorporated as a nonprofit corporation in the District of Columbia. It operates:
The State-to-State (S2S) verification system that allows states to check whether an applicant already has a license in another state
The Problem Driver Pointer System
The Commercial Driver's License Information System
The AAMVA National Driver Register interface
AAMVA is the entity through which states share driver identity information with each other for REAL ID compliance purposes. It is the data hub that makes the nationwide verification architecture function.
Applying Galette directly: AAMVA is a private nonprofit corporation. It has full corporate powers. No state is formally liable for its obligations. It was created by motor vehicle administrators — governmental officials — but as a private membership organization rather than a governmental entity. Under Galette's framework, AAMVA is a …
The potential unintended consequences of Galette v. NJ Transit Corp
How is this acceptable?
I started pulling on this thread almost as soon as the decision came out, and the further I dive, the more complicated and consequential this decision seems to become.
TL:DR -- Galette seems to upend a whole swath of state-created organizations that have been built up over time, capturing the benefits of Private Entities while still operating under the presumed protection of State Agencies. I want to be clear that I don't disagree at all with the decision, far from it. I think the decision is completely logical: States cannot have their cake and eat it too.
But the scope here is likely staggering. A lot of the initial analysis has (rightfully) focused on liability of State-created organizations for things like Tort law, and contractors with state-created entities. But there's other dimensions that don't seem to be recognized yet.
Let's start with: Charter Schools
Some states have set up state-created independent charter authorization bodies. Depending on their corporate structure, these are now private entities. This opens up a private non-delegation doctrine can of worms, and also opens the door to State-level Constitutional challenges due to the fact that many states impose public education obligations via their Constitutions. There's also the question of whether or not they qualify as "educational agencies or institutions" for FERPA purposes.
Another fun one: Public Banking Corporations.
Depending on their setup, these now face the full force of GLB, FACTA/FCRA, which previously, these entities may have been able to argue that they were either instrumentalities of the state or state arms period. Now, the exemptions under GLB for government entities no longer apply. That's the full force of GLB's privacy framework now applying to a state-owned private banking corporation. Privacy notices, opt-out rights (affects sharing of customer data for affordable housing, small business lending, etc), now a review of alignment with the Safeguards rule is required.
If that wasn't enough, what about REAL ID?
REAL ID compliance requires states to implement several data systems that many states built through or connected to private corporate entities, e.g. AAMVA.
The American Association of Motor Vehicle Administrators is the central nervous system of REAL ID implementation. AAMVA is incorporated as a nonprofit corporation in the District of Columbia. It operates:
The State-to-State (S2S) verification system that allows states to check whether an applicant already has a license in another state
The Problem Driver Pointer System
The Commercial Driver's License Information System
The AAMVA National Driver Register interface
AAMVA is the entity through which states share driver identity information with each other for REAL ID compliance purposes. It is the data hub that makes the nationwide verification architecture function.
Applying Galette directly: AAMVA is a private nonprofit corporation. It has full corporate powers. No state is formally liable for its obligations. It was created by motor vehicle administrators — governmental officials — but as a private membership organization rather than a governmental entity. Under Galette's framework, AAMVA is a …
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