Nuveen Municipal Trust Ex Rel. Nuveen High Yield Municipal Bond Fund v. WithumSmith Brown, P.C.

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 10-4633

_______________

NUVEEN MUNICIPAL TRUST, on behalf of its series

Nuveen High Yield Municipal Bond Fund,

a Massachusetts Business Trust,

Appellant

v.

WITHUMSMITH BROWN, P.C., A New Jersey Professional

Corporation; LINDABURY, MCCORMICK, ESTABROOK

& COOPER P.C.,

a New Jersey Professional Corporation

_______________

On Appeal from the United States District Court

For the District of New Jersey

(D.C. Civil Action No. 3-08-cv-05994)

District Judge: Honorable Garrett E. Brown, Jr.

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Argued June 21, 2012

_______________

Before: AMBRO, VANASKIE

and ALDISERT, Circuit Judges

(Opinion filed: August 16, 2012)

Alexander Bilus, Esquire

Robert C. Heim, Esquire (Argued)

Brielle M. Rey, Esquire

Wayne Pollock, Esquire

Dechert LLP

2929 Arch Street

18th Floor, Circa Centre

Philadelphia, PA 19104

G. Eric Brunstad, Jr., Esquire (Argued)

Matthew J. Delude, Esquire

Collin O. Udell, Esquire

Dechert LLP

90 State House Square

Hartford, CT 06103

David P. Stich, Esquire

Solomon Blum Heymann & Stich

40 Wall Street, 35th Floor

New York, NY 10005

Professor Stephen B. Burbank

3400 Chestnut Street

Philadelphia, PA 19104

Counsel for Appellant

Michael J. Canning, Esquire (Argued)

2

Catherine J. Bick, Esquire

Donald F. Campbell, Jr., Esquire (Argued)

Jaclyn B. Kass, Esquire

Giordano, Halleran & Cielsa

125 Half Mile Road, Suite 300

Red Bank, NJ 07701

Counsel for Appellee

WithumSmith+Brown, P.C.

William A. Cambria, Esquire

Louis A. Modugno, Esquire (Argued)

James J. DiGiulio, Esquire

William F. O’Connor, Jr., Esquire

McElroy, Deutsch, Mulvaney & Carpenter, LLP

1300 Mt. Kemble Avenue

P.O. Box 2075

Morristown, NJ 07962-2075

Counsel for Appellee

Lindabury, McCormick, Estabrook & Cooper, P.C.

Christian D. Wright, Esquire

Benjamin Z. Grossberg, Esquire

Young Conaway Stargatt & Taylor, LLP

1000 North King Street, 17th Floor

Rodney Square

Wilmington, DE 19801

Amicus Counsel for

Professor Geoffrey C. Hazard, Jr.

3

_______________

OPINION OF THE COURT

_______________

AMBRO, Circuit Judge

This case is on appeal to us for the second time. It

arises from a loan transaction between Appellant Nuveen

Municipal Trust (“Nuveen”), on behalf of its “Nuveen High

Yield Municipal Bond Fund,” and Bayonne Medical Center

(“Bayonne”). In connection with the transaction, Bayonne

provided Nuveen with an audit report authored by Bayonne’s

accounting firm, Appellee WithumSmith+Brown, P.C.

(“Withum”), and an opinion letter authored by Bayonne’s

counsel, Appellee Lindabury, McCormick, Estabrook &

Cooper P.C. (“Lindabury”). Soon after the transaction,

Bayonne filed a petition for relief under Chapter 11 of the

Bankruptcy Code, 11 U.S.C. §§ 101 et seq. Nuveen contends

that the audit report and opinion letter concealed problem

aspects of Bayonne’s financial condition, and had it known

about these financial issues, it would not have entered into the

transaction.

Nuveen filed this action against Withum and

Lindabury, asserting fraud (as to Withum only), negligent

misrepresentation, and malpractice (as to Lindabury only),

and representing that the District Court had diversity

jurisdiction under 28 U.S.C. § 1332. The Court dismissed the

action with prejudice based on Nuveen’s noncompliance with

New Jersey’s Affidavit of Merit statute, N.J. Stat. Ann.

§§ 2A:53A-26 et seq. (the “AOM Statute” or “Statute”),

which requires the timely filing of an affidavit of merit

attesting to the viability of claims in certain actions against

professionals.

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On initial appeal to us, Nuveen brought to our

attention Emerald Investors Trust v. Gaunt Parsippany

Partners, 492 F.3d 192 (3d Cir. 2007), which held that, for

purposes of diversity jurisdiction, the citizenship of a trust is

determined by the citizenship of its beneficial shareholders.

Because Nuveen may be considered a trust, Emerald called

into question the District Court’s previously asserted basis for

jurisdiction. We granted Nuveen’s unopposed motion to

remand the case to allow the District Court to reconsider its

jurisdiction.

On remand, Withum and Lindabury raised a new basis

for jurisdiction—that the action was “related to” Bayonne’s

bankruptcy proceeding, and thus that the District Court had

jurisdiction under 28 U.S.C. § 1334(b). The Court accepted

this basis for jurisdiction and re-entered its order dismissing

the action with prejudice. Both the jurisdictional decision and

its dismissal of the action are on appeal to us now. Nuveen

also raises two new choice-of-law arguments on appeal: that

the AOM Statute is a procedural pleading requirement that

conflicts with Federal Rule of Civil Procedure 8 such that the

Statute cannot be applied in federal court, as federal

procedural rules preempt conflicting state ones; or that certain

provisions to protect plaintiffs with respect to the Statute are

substantive state law that must be applied by a federal court

under Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), and its

progeny.

We agree that the District Court had “related to”

jurisdiction under 28 U.S.C. § 1334(b). We further hold that

the AOM Statute can be applied by a federal court without

conflicting with Rule 8, and that the protections Nuveen

identifies are procedural under Erie, thus not requiring a

federal court to follow them. If the AOM Statute applies to

the action, we believe that Nuveen’s noncompliance with it

calls for the action’s dismissal, but question whether this

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action is subject to the Statute. Because the New Jersey

Supreme Court has not addressed key issues regarding the

application of the Statute, we reserve deciding whether the

District Court was correct to dismiss the action with prejudice

and certify two questions of law regarding the Statute to the

New Jersey Supreme Court.

I. Factual and Procedural Background

In the attempt to salvage its action from dismissal

purely based on its counsel not filing timely affidavits of

merits, Nuveen’s arguments fall into four broad categories:

(i) jurisdiction; (ii) the AOM Statute’s application in federal

court under Erie and its progeny; (iii) the Statute’s application

to its action as a legal matter; and (iv) whether its

noncompliance with the Statute can be excused. To decide

these issues, we detail the history of the loan transaction,

Bayonne’s bankruptcy proceeding, this action, the Statute,

and the proceedings in and decisions of the District Court.

A. Loan Transaction and Bayonne’s Bankruptcy

In October 2006, Nuveen, on behalf of one of its bond

funds, purchased a $10 million Bond Anticipation Note

(“BAN”) from Bayonne. In connection with the transaction,

Bayonne provided Nuveen with an audit report prepared by

Withum regarding Bayonne’s company-prepared 2005

financial statements. As Bayonne’s counsel in the

transaction, Lindabury provided Nuveen with an opinion

letter addressing Bayonne’s ability to repay the BAN. It

included the typical opinion that Bayonne had the power and

authority to enter into the BAN transaction and that, other

than one disclosed investigation not relevant here, there were

no investigations or suits that “could reasonably be expected

to . . . materially [and] adversely affect the capability of

[Bayonne] to comply with its obligations under [the BAN], or

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materially [and] adversely affect the transactions

contemplated to be consummated on the part of [Bayonne] as

described in the [BAN].”

Six months later, in April 2007, Bayonne filed its

Chapter 11 petition in the Bankruptcy Court for the District of

New Jersey. In October 2007, the Bank of New York, master

trustee, filed a proof of claim on behalf of Nuveen and other

secured creditors totaling $46,673,886.79. Nuveen’s portion

of the claim was for $10,533,989.84 (including approximately

$10,000,000 principal on the BAN, $436,136.98 in interest,

and $97,852.86 for Nuveen’s fees and expenses).

As a prelude to this action, in May 2008 Nuveen

requested that Bayonne provide it with documents to

determine whether it had a cause of action against Bayonne’s

officers, directors, and “pre-petition professionals” for

misrepresentations or other conduct that induced Nuveen to

purchase the BAN. Bayonne did not respond, and Nuveen

served a subpoena on it and then filed a motion to compel.

Notably, in the materials accompanying its motion to compel,

Nuveen represented that any amounts it recovered from such

actions would reduce its claim against Bayonne’s bankruptcy

estate. It also specifically identified potential suits against

Withum and Lindabury.

No doubt partially in response to Nuveen’s (and

possibly other creditors’) requests for documents, Bayonne

made a global settlement agreement among it, the Official

Committee of Unsecured Creditors, and certain secured

creditors that included Nuveen (the “Settlement Agreement”).

Approved by the Bankruptcy Court in September 2008, the

Settlement Agreement provided that it would be implemented

by a plan of liquidation. In the event the confirmed plan did

not conform to the Settlement Agreement, or Bayonne’s

bankruptcy case was converted or dismissed, the Agreement

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would control and survive. 1 It further provided that the

secured creditors would not pursue claims against any of

Bayonne’s former officers, directors or trustees, but preserved

the secured creditors’ right to bring claims against any third

parties (i.e., Withum and Lindabury) retained by, or who had

rendered services to, Bayonne.

The Settlement Agreement granted the secured

creditors a general unsecured claim in the amount of

$46,673,886.79 (the dollar amount asserted in the master

trustee’s proof of claim), which would be reduced “dollar for

dollar” for sums received by the secured creditors through

certain distributions defined in the Agreement. Thus it

effectively fixed Nuveen’s claim against Bayonne’s estate as

a secured claim in an amount to be determined based on funds

in Bayonne’s estate and an unsecured claim to be paid pro

rata with other unsecured claims.

B. District Court Complaint

In accordance with the Settlement Agreement, Nuveen

filed this action against Withum and Lindabury in December

2008. As to Withum, Nuveen asserted that Bayonne’s 2005

financial statements were false and misleading because they

recorded substantial revenue from a sham charitable pledge

and showed as assets a substantial amount of uncollectible

accounts receivable. Nuveen contended that if Withum had

examined the financial statements consistent with Generally

Accepted Accounting Principles and specific accounting

standards promulgated by the American Institute for Certified

1

The Bankruptcy Court approved Bayonne’s plan of

liquidation (the “Plan”) in April 2009, approximately four

months after Nuveen filed this action. The Plan incorporates

the Settlement Agreement in full.

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Public Accountants, it would not have issued its audit report

because, once the sham revenue and uncollectible receivables

were considered, it would have known that Bayonne either

was insolvent or soon would become insolvent. Based on

these allegations, Nuveen asserted three claims against

Withum: (i) common law fraud; (ii) aiding and abetting

common law fraud; and (iii) negligent misrepresentation.

As to Lindabury, Nuveen asserted that Lindabury’s

opinion letter was misleading because it failed to disclose a

certain repayment obligation Bayonne owed under Medicare.

Based on this allegation, Nuveen asserted against Lindabury

(i) negligent misrepresentation and (ii) malpractice in

preparing the opinion. 2

Nuveen sought compensatory damages, prejudgment

interest, costs, punitive damages, and other relief. It stated

that its compensatory damages were then unknown, but

believed them to be $9.5 million less any amounts recovered

in Bayonne’s bankruptcy proceeding plus attorney’s fees

incurred in the bankruptcy proceeding.

2

The opinion letter stated that Lindabury relied on certificates

of Bayonne’s officers that it assumed were true and correct in

all respects, and that it undertook no independent

investigation to determine the existence or absence of any

factual matters. The certificates, dated the loan closing date,

were from Robert H. Evans, Bayonne’s President and Chief

Executive Officer, and Paul Mohrle, Bayonne’s Acting Chief

Financial Officer. As such, absent fraud (and there are no

allegations to that effect as to Lindabury or to its pre-closing

knowledge contrary to its opinion), there is doubt that Nuveen

has viable causes of action against Lindabury based on the

opinion letter.

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In preparing its complaint, Nuveen communicated with

two experts. First, in April 2008 it discussed Withum’s audit

report with Gordon Yale, a Certified Public Accountant.

Based on his affidavit later filed with the District Court, Yale

concluded that there was a “reasonable probability” that

Withum’s work that is the subject of the complaint fell

outside of applicable professional standards. The affidavit

also verifies that in April 2008 Yale submitted to Nuveen’s

counsel a 16-page report addressing the matters alleged

against Withum in the complaint.

Second, in November 2008 Nuveen called Robert

Doty, a bond and securities lawyer. Nuveen’s counsel

described the allegations against Lindabury in the complaint

to Doty during a phone conversation. Based on that

information, as verified in his affidavit subsequently

submitted to the District Court, Doty stated that he believed

there was a “reasonable probability” Lindabury’s opinion fell

outside applicable professional standards.

C. AOM Statute

The New Jersey legislature enacted the AOM Statute

“as part of a tort reform package ‘designed to strike a fair

balance between preserving a person’s right to sue and

controlling nuisance suits.’” Natale v. Camden Cnty. Corr.

Facility, 318 F.3d 575, 579 (3d Cir. 2003) (quoting Palanque

v. Lambert-Woolley, 774 A.2d 501, 505 (N.J. 2001)). It

requires that a plaintiff filing “any action for damages for

personal injuries, wrongful death or property damage

resulting from an alleged act of malpractice or negligence by

a licensed professional” provide each defendant with “an

affidavit of an appropriate licensed person [stating] that there

exists a reasonable probability that the care, skill or

knowledge exercised or exhibited in the treatment, practice or

work that is the subject of the complaint, fell outside

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acceptable professional or occupational standards or

treatment practices.” N.J. Stat. Ann. § 2A:53A-27. This

affidavit must be provided within 60 days after the defendant

files its answer. Id. For good cause shown, the Statute

provides for one extension period of an additional 60 days

contiguous to the initial 60-day period. Id.

The penalty for not following the AOM Statute is

severe. Absent a showing of one of four limited exceptions, 3

the failure to file the affidavit “shall be deemed a failure to

state a cause of action.” Id. § 2A:53A-29. Thus, unless the

plaintiff can show one of the four exceptions, if an affidavit

of merit is not filed within the 60- or extended 120-day

period, the complaint will be dismissed with prejudice.

Aware of this harsh consequence, the New Jersey

Supreme Court instituted two safeguards to aid plaintiffs in

complying with the AOM Statute. First, it directed that New

Jersey’s Civil Case Information Sheet be amended to contain

the question, “IS THIS A PROFESSIONAL

MALPRACTICE CASE?,” and boxes to check “YES” or

3

They are: (i) a statutory exception regarding lack of

information; (ii) a “common knowledge” exception; (iii)

substantial compliance with the affidavit of merit

requirement; or (iv) “extraordinary circumstances” that

warrant equitable relief. See N.J. Stat. Ann. § 2A:53A-28

(detailing the statutory exception); Ferreira v. Rancocas

Orthopedic Assocs., 836 A.2d 779, 782–83 (N.J. 2003)

(detailing the “extraordinary circumstances” exception);

Hubbard v. Reed, 774 A.2d 495, 501 (N.J. 2001) (establishing

the “common knowledge” exception); Cornblatt v. Barow,

708 A.2d 401, 411–12 (N.J. 1996) (establishing that the

substantial compliance doctrine applies to the affidavit

requirement).

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“NO.” Underneath the question is the following sentence:

“IF YOU HAVE CHECKED ‘YES,’ SEE N.J.S.A. 2A:53A-

27 AND APPLICABLE CASE LAW REGARDING YOUR

OBLIGATION TO FILE AN AFFIDAVIT OF MERIT.” See

Burns v. Belafsky, 766 A.2d 1095, 1101 (N.J. 1999).

Second, the New Jersey Supreme Court required that

an accelerated case management conference be held within 90

days of the service of the answer in all malpractice actions.

See Ferreira v. Rancocas Orthopedic Assocs., 836 A.2d 779,

785 (N.J. 2003). At this conference, if the plaintiff has not

filed an affidavit, the trial court is to remind it of the

requirement. Id.

D. Proceedings in the District Court

Along with its complaint, Nuveen filed the standard

Civil Cover Sheet used in the federal court. Unlike New

Jersey’s Civil Case Information Sheet, the Civil Cover Sheet

here did not contain the question, box, or any notice regarding

the AOM Statute.

In January 2009, Withum and Lindabury filed answers

to the complaint. (Their answers contained third-party

complaints against Bayonne’s officers, which they later

consented to the dismissal of without prejudice.) On June 4,

2009, 142 days after they filed their answers, Withum and

Lindabury filed separate motions to dismiss with prejudice

the actions against them based on Nuveen’s failure to serve a

timely affidavit of merit. 4 Nuveen provided the two expert

4

Specifically, Lindabury’s motion was styled as a motion for

summary judgment, though it acknowledged that the motion

was functionally equivalent to a motion to dismiss. Withum’s

motion was a motion to dismiss. The District Court regarded

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affidavits discussed above the day after the motions to

dismiss were filed.

Between the filings of the answers and the motions to

dismiss, Withum, Lindabury, and Nuveen formally

conferenced twice. In April 2009, they held a telephone

conference under Federal Rule of Civil Procedure 26(f).

Nuveen’s counsel subsequently circulated a draft report on

the Rule 26(f) conference. In May 2009, Magistrate Judge

Douglas E. Arpert held a scheduling conference. At no time

did Withum or Lindabury mention the AOM Statute.

Contrary to the practice of New Jersey state courts, the

District Court did not hold a status conference within 90 days

of the filing of the answers nor remind Nuveen of the

affidavit requirement.

Nuveen also filed a response to the motions to dismiss

in which it raised four arguments that its action should be

allowed to proceed. First, it asserted that the AOM Statute

did not apply to any of its claims because they were for

economic damages, which are not “property damages”

subject to the Statute. Alternatively, it contended that the

Statute did not apply to its non-negligence and non-

malpractice claims—specifically its fraud claims against

Withum. Third, assuming the Statute applied, Nuveen argued

that its noncompliance should be excused because it

substantially complied with the Statute. Alternatively, and

finally, it argued that extraordinary circumstances required

dismissal of the action without prejudice. Nuveen also stated

that it sought to recover the amount it had paid for the BAN,

plus related costs and interest, less any amounts it recovered

prior to the end of the action, including any disbursements

from Bayonne’s bankruptcy estate.

them both as motions to dismiss, and proceeded to analyze

them under Federal Rule of Civil Procedure 12(b)(6).

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E. District Court Decisions

The District Court rejected each of Nuveen’s

arguments regarding the AOM Statute. In holding that the

monetary recovery sought by Nuveen was subject to the

Statute, it cited two New Jersey intermediate state court

decisions—Cornblatt v. Barow, 696 A.2d 65, 68 (N.J. Super.

Ct. App. Div. 1997), rev’d on other grounds, 708 A.2d 401

(N.J. 1998), and Nagim v. New Jersey Transit, 848 A.2d 61,

70 (N.J. Super. Ct. Law Div. 2003)—for their statements that

a claim against an attorney for alleged malpractice is a claim

for “property damages” and that these damages include

claims for monetary damages.

In considering the fraud claims against Withum, the

District Court cited Couri v. Gardner, 801 A.2d 1134, 1141

(N.J. 2002), for its statement that the nature of the legal

inquiry should guide the assessment of whether the Statute

applies to a claim. Because the complaint contained

numerous references to accounting standards, the Court

concluded that the Statute applied to all of the causes of

action against Withum. Finally, it noted that Nuveen’s failure

to file an affidavit of merit was caused solely by attorney

inadvertence, which was not a reasonable explanation to

excuse Nuveen’s noncompliance with the Statute or to find

the existence of extraordinary circumstances.

On remand regarding jurisdiction, the District Court

agreed with Withum’s and Lindabury’s argument that the

action was related to Bayonne’s bankruptcy proceeding

because its outcome conceivably could affect the distribution

of the estate’s assets. It noted that though the Settlement

Agreement fixed Nuveen’s claim in the bankruptcy

proceeding, it did not fix its recovery. Because Nuveen

simultaneously was seeking the same damages—unpaid

principal and interest on the BAN—from Bayonne’s estate as

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well as Withum and Lindabury, if Nuveen recovered from

Withum and Lindabury first, its claim against Bayonne’s

estate would need to be reduced, thereby increasing the

amount of assets available for distribution to other creditors.

(In short, Nuveen could not recover twice for the same loss.)

The District Court thus held that it had jurisdiction under 28

U.S.C. § 1334(b).

II. Jurisdiction and Standard of Review

Whether the District Court had jurisdiction is an issue

on appeal. We have jurisdiction under 28 U.S.C. § 1291 over

its final decisions that it had jurisdiction under 28 U.S.C.

§ 1334(b), and to dismiss this action.

Whether subject matter jurisdiction exists is a question

of law requiring de novo review. W.R. Grace & Co. v.

Chakarian (In re W.R. Grace & Co.), 591 F.3d 164, 170 n.7

(3d Cir. 2009). Our review of a motion to dismiss is plenary.

Natale v. Camden Cnty. Corr. Facility, 318 F.3d 575, 579 (3d

Cir. 2003). We “accept as true all well-pled factual

allegations in the complaint and all reasonable inferences that

can be drawn from them, and we affirm the order of dismissal

only if the pleading does not plausibly suggest an entitlement

to relief.” Fellner v. Tri-Union Seafoods, L.L.C., 539 F.3d

237, 242 (3d Cir. 2008). Similarly, we review de novo the

District Court’s determinations regarding New Jersey state

law. Snyder v. Pascack Valley Hosp., 303 F.3d 271, 273 (3d

Cir. 2002).

III. Subject Matter Jurisdiction

A. Burden of Proof

Nuveen argues that the District Court inappropriately

relieved Withum and Lindabury of their burden of proving

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that the Court had jurisdiction. As such, because Nuveen’s

arguments cast doubt on jurisdiction, the Court should have

construed this doubt in favor of Nuveen and held that it

lacked jurisdiction.

Nuveen is correct that the party asserting a federal

court’s jurisdiction bears the burden of proving that

jurisdiction exists. See, e.g., Hertz Corp. v. Friend, 130 S. Ct.

1181, 1194 (2010) (“The burden of persuasion for

establishing diversity jurisdiction, of course, remains on the

party asserting it.”). Federal courts are presumed not to have

jurisdiction without affirmative evidence of this fact. See

DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3

(2006). However, a district court “is free to weigh the

evidence and satisfy itself as to the existence of its power to

hear the case.” Mortensen v. First Fed. Sav. & Loan Ass’n,

549 F.2d 884, 891 (3d Cir. 1977). Indeed, a district court has

an independent obligation to determine whether subject

matter jurisdiction exists, even if its jurisdiction is not

challenged. See Arbaugh v. Y & H Corp., 546 U.S. 500, 514

(2006).

Though the District Court did not state explicitly that

Withum and Lindabury bore the burden of establishing

jurisdiction, its decision confirms that it required them to

prove jurisdiction and that it considered the evidence

presented regarding jurisdiction. For example, the Court

stated that it was “persuaded” that, at the time Nuveen filed

the complaint in December 2008, it was conceivable that the

outcome of this action would have an effect on Bayonne’s

bankruptcy proceeding. Thus, it proceeded correctly in

considering its jurisdiction.

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B. Subject Matter Jurisdiction under 28 U.S.C. § 1334(b)

1. Principles of “Related To” Jurisdiction

Section 1334(b) provides that “district courts . . . have

original but not exclusive jurisdiction of all civil proceedings

arising under title 11, or arising in or related to cases under

title 11.” 28 U.S.C. § 1334(b) (emphasis added). In Pacor,

Inc. v. Higgins, 743 F.2d 984 (3d Cir. 1984), overruled in

part by Things Remembered, Inc. v. Petrarca, 516 U.S. 124,

134–35 (1995), we established that a proceeding is “related

to” a Chapter 11 proceeding if the “outcome of [the]

proceeding could conceivably have any effect on the estate

being administered in bankruptcy.” Id. at 994 (emphasis

added).

The key inquiry no doubt is conceivability.

“Certainty, or even likelihood [of effect on the estate being

administered in bankruptcy,] is not a requirement.” Copelin

v. Spirco, Inc., 182 F.3d 174, 179 (3d Cir. 1999) (quoting

Halper v. Halper, 164 F.3d 830, 837 (3d Cir. 1999))

(alteration in original). An action thus generally is “related

to” a bankruptcy proceeding “if the outcome could alter the

debtor’s rights, liabilities, options, or freedom of action

(either positively or negatively) and which in any way

impacts upon the handling and administration of the bankrupt

estate.” Pacor, 743 F.2d at 994.

The Supreme Court endorsed Pacor’s conceivability

standard with the caveats that “related to” jurisdiction “cannot

be limitless,” and that the critical component of the Pacor test

is that “bankruptcy courts have no jurisdiction over

proceedings that have no effect on the estate of the debtor.”

Celotex Corp. v. Edwards, 514 U.S. 300, 308 & n.6 (1995).

In addition, “related to” jurisdiction does not exist if another

action would need to be filed before the current action could

17

affect a bankruptcy proceeding. See W.R. Grace, 591 F.3d at

172; In re Fed.-Mogul Global, Inc., 300 F.3d 368, 382 (3d

Cir. 2002).

Conceivability is determined at the time a lawsuit is

filed. See Grupo Dataflux v. Atlas Global Grp., L.P., 541

U.S. 567, 570–71 (2004) (“It has long been the case that ‘the

jurisdiction of the Court depends upon the state of things at

the time of the action brought.’” (quoting Mollan v. Torrance,

22 U.S. (9 Wheat.) 537, 539 (1824))). Although we once

declined to apply the time of filing rule in a federal question

case, New Rock Asset Partners, L.P. v. Preferred Entity

Advancements, Inc., 101 F.3d 1492 (3d Cir. 1996),

subsequent Supreme Court decisions demonstrate the

continuing vitality of the rule. See Grupo Dataflux, 541 U.S.

at 582 (“We decline to endorse a new exception to a time-of-

filing rule that has a pedigree of almost two centuries.

Uncertainty regarding the question of jurisdiction is

particularly undesirable, and collateral litigation on the point

particularly wasteful.”); Dole Food Co. v. Patrickson, 538

U.S. 468, 478 (2003) (“[J]urisdiction of the Court depends

upon the state of things at the time of the action brought.”

(quoting Keene Corp. v. United States, 508 U.S. 200, 207

(1993))). Indeed, the strength and longevity of this rule has

led courts to hold that confirmation of a bankruptcy plan does

not divest a district court of related-to jurisdiction over pre-

confirmation claims. See, e.g., Newby v. Enron Corp. (In re

Enron Corp. Sec.), 535 F.3d 325, 336 (5th Cir. 2008);

ConocoPhillips Co. v. SemGroup, L.P. (In re SemCrude,

L.P.), 428 B.R. 82, 96–98 (Bankr. D. Del. 2010).

There is one twist to the otherwise straightforward

application of Pacor’s conceivability standard. If an action is

brought after the confirmation of a plan in a related

bankruptcy proceeding, the post-confirmation context of the

dispute alters the “related to” inquiry. Because a bankruptcy

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court’s jurisdiction wanes after the confirmation of a case,

“retention of bankruptcy jurisdiction may be problematic. . . .

At the most literal level, it is impossible for the bankrupt

debtor’s estate to be affected by a post-confirmation dispute

because the debtor’s estate ceases to exist once confirmation

has occurred.” Binder v. Price Waterhouse & Co., LLP (In re

Resorts Int’l, Inc.), 372 F.3d 154, 164–65 (3d Cir. 2004).

Nonetheless, “courts do not usually apply Pacor’s ‘effect on

the bankruptcy estate’ test so literally as to entirely bar post-

confirmation bankruptcy jurisdiction.” Id. at 165. Instead,

they apply varying standards that focus on whether the action

could conceivably affect the implementation of the confirmed

plan. See id. at 166; U.S. Tr. v. Gryphon at the Stone

Mansion, Inc., 166 F.3d 552, 556 (3d Cir. 1999) (applying

Pacor to hold that a post-confirmation action for fees was

related to the bankruptcy proceeding “because it directly

relates to the debtor’s liabilities—in fact it creates a

liability—and could impact the handling and administration

of the estate”).

2. Application to Nuveen’s Action

Nuveen’s primary argument is that its recovery from

Bayonne’s estate was fixed by the Settlement Agreement,

which was approved by the Bankruptcy Court prior to its

filing of the action. Under Nuveen’s theory, if it recovers

from Withum and Lindabury in this action, its claim against

Bayonne’s estate can be assigned to them. Bayonne’s estate

thus would not be affected. Likewise, if Nuveen recovers

from the estate first, that recovery would offset its recovery in

this action, decreasing Nuveen’s recovery from Withum and

Lindabury and not affecting Bayonne’s estate.

Nuveen dusts off the rarely cited Ivanhoe Bldg. &

Loan Assn. v. Orr, 295 U.S. 243 (1935), which was decided

under the Bankruptcy Act (the immediate predecessor to the

19

Bankruptcy Code), for the proposition that a creditor may

recover from non-debtor parties without reducing the value of

its claim against a bankruptcy estate. Because Nuveen stakes

its argument on Ivanhoe, some background is required. The

debtor there executed a bond to a creditor; the bond was

secured by a mortgage on real estate. The creditor purchased

the real estate at a foreclosure sale. Though it then had the

collateral in partial payment for its debt, the creditor

nonetheless filed a claim for the full amount (principal and

interest) of the debtor’s obligation under the bond. The

Supreme Court held that the claim was valid even though the

creditor held property that partially satisfied the claim.

However, the Court expressly clarified that the creditor “may

not collect and retain dividends which with the sum realized

from the foreclosure will more than make up that amount.”

Id. at 246. It subsequently explained this ruling as settling

that “in bankruptcy proceedings . . . a creditor secured by the

property of others need not deduct the value of that collateral

or its proceeds in proving his debt.” Reconstruction Fin.

Corp. v. Denver & Rio Grande W. R.R. Co., 328 U.S. 495,

529 (1946).

Ivanhoe thus provides that a creditor may file a proof

of claim for the total amount it is owed by a debtor even if it

has recovered or may recover all or a portion of that amount

from a non-debtor. It does not hold that the actual amount the

creditor collects from the estate evades reduction by recovery

from third parties. Rather, it states the exact opposite: a

creditor cannot collect more, in total, than the amount it is

owed. Indeed, this distinction was present in case law prior to

the Supreme Court’s holding in Ivanhoe. See, e.g., Bd. of

Comm’rs v. Hurley, 169 F. 92, 97 (8th Cir. 1909) (“[T]he

holder of a claim, upon which several parties are personally

liable, may prove his claim against the estates of those who

become bankrupt and may at the same time pursue the others

at law, and, notwithstanding partial payments after the

20

bankruptcy by other [parties] or their estates, he may recover

dividends from each estate in bankruptcy upon the full

amount of his claim at the time the petition in bankruptcy was

filed therein until from all sources he has received full

payment of his claim, but no longer.” (emphasis added)). The

distinction also has been associated with Ivanhoe in

subsequent decisions. See, e.g., Feder v. John Engelhorn &

Sons, 202 F.2d 411, 412 (2d Cir. 1953) (citing Ivanhoe for the

holding that “the creditor . . . may prove his claim in full in

the bankruptcy proceeding, although of course he may not

retain dividends [from the estate] which, when combined with

the amount realized on the security, exceed his claim”); In re

Sacred Heart Hosp., 182 B.R. 413, 417 (Bankr. E.D. Pa.

1995) (citing Ivanhoe and Reconstruction Finance and noting

that “a creditor can seek to prove its entire claim in the

bankrupt’s case notwithstanding the existence of third party

collateral or guarantees of payment so long as the claimant

does not seek to recover more than one full payment of its

claim from whatever source”); see also Nat’l Energy & Gas

Transmission, Inc. v. Liberty Elec. Power, LLC (In re Nat’l

Energy & Gas Transmission, Inc.), 492 F.3d 297, 301 (4th

Cir. 2007) (“In Ivanhoe, the Supreme Court held that a

creditor need not deduct from his claim in bankruptcy an

amount received from a non-debtor third party in partial

satisfaction of an obligation.” (emphasis added)).

Ivanhoe is not codified explicitly in the Bankruptcy

Code. What we have are § 502, 5 which deals with the

5

In pertinent part, § 502 provides that “[a] claim or interest,

proof of which is filed under section 501 of this title, is

deemed allowed, unless a party in interest, including a

creditor of a general partner in a partnership that is a debtor in

a case under chapter 7 of this title, objects.” 11 U.S.C.

§ 502(a).

21

allowance of claims, and § 506(a), 6 which concerns in part

what constitutes a secured claim. Of importance is that

§§ 502 and 506(a) do not change the outcome that a creditor

cannot collect more in total than it is owed. For example,

consistent with Ivanhoe and § 506(a), the Court in In re

F.W.D.C., Inc., 158 B.R. 523, 528 (Bankr. S.D. Fla. 1993),

allowed a creditor to prove the total indebtedness against a

guarantor-debtor without deducting the amount of collateral

received from a third party. But it emphasized that the

creditor may not be able to collect the total indebtedness from

the debtor, providing this instructive example: “[I]f a creditor

received collateral of a third party worth $8 million securing

the third party’s indebtedness of $10 million and the

guarantor of this $10 million indebtedness were in

bankruptcy, such creditor would be allowed to prove a claim

of $10 million but would not be allowed to realize more than

$2 million.” Id.

Nuveen cannot rely on Ivanhoe and the Settlement

Agreement to establish that the amount it will collect from

6

In pertinent part, § 506(a) reads:

An allowed claim of a creditor secured by a lien

on property in which the estate has an interest,

or that is subject to setoff under section 553 of

this title, is a secured claim to the extent of the

value of such creditor’s interest in the estate’s

interest in such property, or to the extent of the

amount subject to setoff, as the case may be,

and is an unsecured claim to the extent that the

value of such creditor’s interest or the amount

so subject to setoff is less than the amount of

such allowed claim.

11 U.S.C. § 506(a)(1).

22

Bayonne’s estate is fixed regardless of its recovery in this

action. 7 Yet its argument raises the issue of the timing of its

recovery in this action and from Bayonne’s estate. If a

creditor’s recovery from a non-debtor definitely will not

affect the amount of its payment from a bankruptcy estate, the

third-party action is not “related to” the bankruptcy

proceeding. As the Fifth Circuit Court explained, this is true,

for example, where a plan has been confirmed and the

bankruptcy estate has been administered.

If, at the time of [the] suit . . ., [the] bankruptcy

estate had already been administered by the

trustee—i.e., if all property of the estate were

collected, liquidated, and the proceeds

distributed to creditors—then presumably [the

plaintiff’s] potential damage recovery against

7

Nuveen also argues that the Settlement Agreement must be

read to fix the amount it will collect from Bayonne’s estate

because the Agreement distinguishes between claims arising

within the bankruptcy proceeding (“internal” claims) and

claims arising from sources collateral to the bankruptcy

proceeding, such as this action (“external” claims). For

internal claims, the Agreement defines the manner in which

any recovery will offset a creditor’s claim. Because the

Agreement does not include similar express provisions

regarding offsetting for external claims, Nuveen argues that to

read it to allow offset of external claims inappropriately adds

a term to the Agreement. However, the Agreement merely

fixes Nuveen’s claim against Bayonne’s estate. Ivanhoe

teaches that granting a creditor a claim against the estate does

not mean that the creditor necessarily is entitled to collect

from the estate that amount if that collection will allow it to

receive more than it is owed. Ivanhoe, 295 U.S. at 246.

23

the [non-debtor] defendants would have been

limited to the amount of the outstanding

judgment (that part of the judgment not paid

through bankruptcy), and no effect on the estate

would have been possible.

Randall & Blake, Inc. v. Evans (In re Canion), 196 F.3d 579,

586 n.27 (5th Cir. 1999).

Similarly, if the amount of a creditor’s recovery from a non-

debtor depends on its recovery from a bankruptcy estate such

that the asserted losses against the non-debtor only can be

calculated when the creditor’s recovery from the bankruptcy

estate is certain, there is no “related to” jurisdiction. See, e.g.,

In re J&J Towne Pharmacy, Inc., No. 09-17560, 2000 WL

568355 (Bankr. E.D. Pa. May 5, 2000) (concluding that there

was no “related to” jurisdiction over a malpractice action that

could be adjudicated only after the bankruptcy estate had

been administered because the amount of the losses sought in

the action depended on the actual recoveries of secured and

unsecured creditors in the bankruptcy proceeding).

In contrast, courts have held that “related to”

jurisdiction does exist where a creditor’s recovery from a

non-debtor conceivably could alter the amount of the

creditor’s recovery from a bankruptcy estate. For example, in

advancing an argument similar to Nuveen’s in Canion, the

creditor argued that were it successful in prosecuting its

action against a non-debtor, its claims against the debtor’s

estate would not be reduced or extinguished because the non-

debtor would stand in its shoes as a judgment creditor of the

debtor based on legal subrogation (thus the debtor’s estate

would owe the same amount regardless). The Fifth Circuit

rejected this argument, noting that there was no guarantee that

the non-debtor would be allowed to step into the creditor’s

shoes.

24

Assuming that [the creditor] should successfully

collect from the defendants the judgment it

holds against [the debtor], and assuming that . .

. legal subrogation [would not be allowed], the

total amounts due on claims against [the]

bankruptcy estate would be decreased. This

decrease would inure to the benefit [of] all other

unsecured creditors, each of whom would then

share in the disbursement that would otherwise

have been paid to [the creditor].

Canion, 196 F.3d at 586. See also Owens-Ill., Inc. v. Rapid

Am. Corp (In re Celotex Corp.), 124 F.3d 619, 626–27 (4th

Cir. 1997) (finding “related to” jurisdiction where a creditor’s

claim against a non-debtor would reduce its claim in

bankruptcy); Kaonohi Ohana, Ltd. v. Sutherland (In re

Sutherland), 873 F.2d 1302, 1306–07 (9th Cir. 1989) (finding

“related to” jurisdiction over a third-party action because the

specific performance remedy sought in the third-party action

would reduce the amount of damages in the related breach-of-

contract claim against a bankruptcy estate); Nat’l Union Fire

Ins. Co. of Pittsburgh, PA v. Titan Energy, Inc. (In re Titan

Energy, Inc.), 837 F.2d 325, 329–30 (8th Cir. 1988) (holding

that a coverage dispute between the debtor’s insurance

company and a creditor was “related to” the bankruptcy

because a finding of coverage would reduce the claims

against the estate); Wood v. Wood (In re Wood), 825 F.2d 90,

94 (5th Cir. 1987) (“Although we acknowledge the possibility

that this suit may ultimately have no effect on the bankruptcy,

we cannot conclude, on the facts before us, that it will have

no conceivable effect.”) (emphasis in original).

At the time Nuveen filed its complaint against Withum

and Lindabury, the same loss it sought to recover in that

action (primarily the unpaid principal and interest on the

BAN) was included in the proof of claim filed by the master

25

trustee against Bayonne’s estate. The loss also was included

in the provisions of the Settlement Agreement whereby

Nuveen’s portion of the proof of claim was resolved as an

unsecured claim against Bayonne’s estate (which would be

reduced dollar for dollar by other recoveries from the estate).

Nonetheless, Nuveen now argues that it is not seeking

to recover for the same grievance in this action as the harm

encompassed by the proof of claim. See Appellant’s Br. 35

(“Nuveen’s bankruptcy claim and its claims against [Withum

and Lindabury] are not ‘for the same grievance’ . . . .”). This

argument contradicts its statements throughout Bayonne’s

bankruptcy proceeding acknowledging that this action and its

claim against Bayonne’s estate relate to the same harm. In

seeking documents related to Bayonne’s pre-petition

professionals, Nuveen stated that any recovery from claims

brought against those professionals would decrease its claim

against Bayonne’s estate. See Application in Support of

Motion for Nuveen High Yield Municipal Bond Fund to

Compel the Production of Documents from the Debtor, In re

Bayonne Medical Center, Case No. 07-15195 (Bankr. D. N.J.

2007), ECF No. 1503 at 2, 8. In this action, it asserts

damages of $9.5 million, less any amounts recovered in

Bayonne’s bankruptcy proceeding. Moreover, before us

Nuveen acknowledges that if it recovers in this action first,

there will have to be an “accounting” in the bankruptcy to

prevent double recovery by it. Appellant’s Br. 36 n.10.

The bottom line is that if Nuveen prevails in this

action, it will not be permitted to recover more in total from

Withum, Lindabury, and Bayonne’s estate than will make it

whole as to its losses on the BAN. Though Nuveen asserts

that its claim against Bayonne’s estate should be assigned to

Withum and Lindabury, there is no guarantee that if they

moved to have the claim assigned to them, the assignment

would be allowed. Indeed, it is most likely that someone

26

would object to the assignment on the basis that it would be

inequitable for a bad acting party to be assigned all or a

portion of the claim, and that the money instead should go to

unpaid creditors who acted in good faith. Thus, at the time

Nuveen filed its action, Bayonne’s liability to it conceivably

could have been reduced, having a direct, indeed substantial,

effect on the pool of assets available for distribution to

Bayonne’s creditors. The Pacor inquiry thus leads to the

conclusion that Nuveen’s action is “related to” Bayonne’s

bankruptcy proceeding. 8

8

Similarly focusing on Withum and Lindabury, Nuveen

argues that if it is successful in this action, Bayonne’s estate

will be affected if Withum and Lindabury file another,

separate suit against Bayonne’s officers and directors based

on their potential indemnification claims under Bayonne’s

directors and officers liability insurance policy (the “D&O

Policy”), which is property of Bayonne’s estate. ACandS,

Inc. v. Travelers Cas. & Sur. Co., 435 F.3d 252, 260 (3d Cir.

2006) (“It has long been the rule in this Circuit that insurance

policies are considered part of the property of a bankruptcy

estate.”). These indemnification claims include common law

indemnification claims, which are inchoate—that is, they can

be asserted only when there is a determination of Withum’s

and Lindabury’s liability to Nuveen in this action. See Bd. of

Educ. of Florham Park v. Utica Mut. Ins. Co., 798 A.2d 605,

610 (N.J. 2002); W.R. Grace, 591 F.3d at 171 (“[A]n inchoate

claim of common law indemnity is not, in and of itself,

enough to establish the bankruptcy court’s subject matter

jurisdiction.”). Because Withum and Lindabury agreed to

dismiss without prejudice their third-party complaints against

certain of Bayonne’s officers, they will need to file another

suit if they want to assert indemnification against them (and,

27

In a final attempt to defeat this conclusion, Nuveen

argues that we should deviate from the hornbook rule that

jurisdiction is assessed at the time of the filing of a complaint

and assess jurisdiction now because significant intervening

events support looking at post-filing events in reviewing

“related to” jurisdiction. Chief among these events is that the

Plan has been confirmed and Bayonne’s bankruptcy

proceeding is winding down. With this argument, Nuveen in

we presume, Bayonne’s directors). Only after the filing of

such a suit will Bayonne’s estate be implicated through the

D&O Policy. Compare Pacor, 743 F.2d at 995 (“The fact

remains that any judgment received by the plaintiff . . . could

not itself result in even a contingent claim against [the

debtor], since [the defendant] would still be obliged to bring

an entirely separate proceeding to receive indemnification.”),

and W.R. Grace, 591 F.3d at 173 (“Here, we are presented

with state court actions that have only the potential to give

rise to a separate lawsuit seeking indemnification from the

debtor.”), with Stoe v. Flaherty, 436 F.3d 209, 217–19 (3d

Cir. 2006) (finding “related to” jurisdiction where there was

an automatic right to indemnification).

However, because Nuveen asserted a claim, as established by

the Settlement Agreement, against Bayonne’s estate, the

estate already is implicated. Even though Withum and

Lindabury may bring a third-party action against Bayonne’s

officers depending on the outcome of this action, and the

officers in turn may seek indemnification from Bayonne

(thereby affecting Bayonne’s bankruptcy proceeding through

another suit), the outcome of this action conceivably will

resolve a portion of Bayonne’s possible liability. This is

sufficient to establish “related to” jurisdiction.

28

effect requests that we apply a post-confirmation gloss on the

Pacor inquiry discussed above.

Nuveen offers no case law to support its contention

that we should adopt a new rule for determining “related to”

jurisdiction in situations in which a plan is confirmed after the

filing of the complaint or in which a bankruptcy estate is

almost fully administered at the time the jurisdictional

analysis is undertaken. Indeed, had Nuveen initially filed the

complaint in a New Jersey state court, as it now asserts it

should have, Withum and Lindabury could have moved to

transfer the action to the District Court based on “related to”

jurisdiction immediately. Under this scenario, when the

Court assessed its jurisdiction, the Plan either would not have

been confirmed or would have been confirmed only recently.

There would be few (if any) intervening events to consider,

and the Court would not question that “related to” jurisdiction

should be assessed as of the date Nuveen filed the complaint.

Only because “related to” jurisdiction was raised after

Nuveen’s reversal of its position regarding diversity

jurisdiction is Nuveen able to create an argument about

intervening events.

Supreme Court precedent is clear that the date of filing

is the date when subject matter jurisdiction is assessed. See,

e.g., Grupo Dataflux, 541 U.S. at 582; Dole Food, 538 U.S. at

478. The unique procedural posture of this action should not

affect that outcome. Moreover, Bayonne’s bankruptcy

proceeding, though nearing closure, remains open. And even

if it is closed, it can be reopened by a motion. See 11 U.S.C.

§ 350(b) (“A case may be reopened in the court in which such

case was closed to administer assets, to accord relief to the

debtor, or for other cause.”); Fed. R. Bank. P. 5010 (“A case

may be reopened on motion of the debtor or other party in

interest pursuant to § 350(b) of the Code.”). As subject

matter jurisdiction should be assessed at the time the

29

complaint was filed, Pacor’s analysis counsels that Nuveen’s

action is “related to” Bayonne’s bankruptcy proceeding. We

thus affirm the District Court’s holding that it has jurisdiction

under 28 U.S.C. § 1334(b). 9

IV. Choice of Law and the AOM Statute

Nuveen raises two choice-of-law arguments regarding

the application of the AOM Statute and certain protections

abating its harsh consequences in federal court. First, it cites

Chamberlain v. Giampapa, 210 F.3d 154, 161 (3d Cir. 2000),

in which we held that the Statute was “substantive state law

that must be applied by federal courts sitting in diversity”

because Federal Rules of Civil Procedure 8 and 9 did not

“collide” with the Statute under Erie R.R. Co. v. Tompkins,

304 U.S. 64 (1938), and its progeny. Nuveen argues (as

significantly developed by the amicus curiae brief filed by

Professor Geoffrey C. Hazard, Jr.) that this holding has been

overruled impliedly by the combination of the Supreme

Court’s decisions in Bell Atlantic Corp. v. Twombly, 550 U.S.

544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), with

Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co.,

130 S. Ct. 1431 (2010) (plurality opinion). The assertion is

that the pleading standard established by Twombly and Iqbal,

when considered against the Statute under the Shady Grove

analysis, makes the Statute procedurally in conflict with Rule

8 such that it no longer can be applied by a federal court.

On the flip side, Nuveen and amicus also argue that the

two protections the New Jersey Supreme Court has

9

Because the District Court held that it had jurisdiction over

this action under 28 U.S.C. § 1334(b), it did not address

whether it also had jurisdiction under 28 U.S.C. § 1332. We

likewise need not address jurisdiction under § 1332.

30

established to dull the severe consequences of the failure to

file a timely affidavit of merit—the addition to New Jersey’s

Civil Case Information Sheet referencing the AOM Statute

and the accelerated case management conference—are

substantive requirements of the Statute that must be applied in

federal court. 10

A. Waiver

Before considering these two issues, we confront

Withum’s and Lindabury’s contention that Nuveen failed to

advance arguments about them before the District Court.

Nuveen counters that it raised the distinction between federal

and state law before the Court, specifically citing Burns v.

Belafsky, 766 A.2d 1095 (N.J. 1999), and Ferreira v.

Rancocas Orthopedic Assocs., 836 A.2d 779 (N.J. 2003), the

cases in which the New Jersey Supreme Court established the

two protections. Though it did not cite Erie or Shady Grove,

Nuveen asserts that the implications of its argument were

10

Amicus further argues that the AOM Statute is an

affirmative defense under Federal Rule of Civil Procedure

8(c), and Withum’s and Lindabury’s failure to assert it as an

affirmative defense in their responses to the complaint

constitutes waiver. An amicus cannot expand the scope of an

appeal with issues not presented by the parties on appeal. See

N.J. Retail Merchs. Ass’n v. Sidamon-Eristoff, 669 F.3d 374,

383 n.2 (3d Cir. 2012) (rejecting an attempt by an amicus to

raise an issue not addressed by the parties); Universal City

Studios, Inc. v. Corley, 273 F.3d 429, 445 (2d Cir. 2001)

(“Although an amicus brief can be helpful in elaborating

issues properly presented by the parties, it is normally not a

method for injecting new issues into an appeal, at least in

cases where the parties are competently represented by

counsel.”). We thus do not address this argument.

31

clear and that its citation of Erie now is a natural extension

and refinement of its argument below. An argument is not

waived if it “is inherent in the parties’ positions throughout

[the] case.” Huber v. Taylor, 469 F.3d 67, 75 (3d Cir. 2006).

However, the argument must do more than “emanat[e] from

the ethers of briefs filed in the district court.” Brennan v.

Norton, 350 F.3d 399, 418 (3d Cir. 2003). The party must

“present[] the argument with sufficient specificity to alert the

district court.” Id. (quoting Keenan v. City of Philadelphia,

983 F.2d 459, 471 (3d Cir. 1993)).

Before the District Court, Nuveen argued (without

reference to Erie) that the absence in federal court of (1) a

New Jersey Civil Case Information Sheet referring to the

AOM Statute and (2) an accelerated case management

conference created “extraordinary circumstances” under New

Jersey law that excused any failure to file a timely AOM, and

thus required its complaint to be dismissed without prejudice.

“Extraordinary circumstance” is one of four limited

exceptions that the Supreme Court of New Jersey has

recognized to the affidavit requirement under the AOM

Statute. See Ferreria, 836 A.2d at 783. This is the argument

that Nuveen advanced to the District Court with its citation of

Burns and Ferreira, and we address it below. See infra Part

V.B. Before doing so, however, we consider two choice-of-

law issues (see infra Part IV. B-C) that were not presented to

the District Court and are distinct from Nuveen’s contentions

regarding the exceptions to the Statute’s requirements.

Merely citing Burns and Ferreira in its argument regarding

extraordinary circumstances was not sufficient to alert the

District Court that it also was raising these choice-of-law

issues.

Nonetheless, we have not adopted a consistent rule

regarding whether choice-of-law issues can be waived.

Huber, 469 F.3d at 75 n.12. In Parkway Baking Co., Inc. v.

32

Freihofer Baking Co., 255 F.2d 641, 646 (3d Cir. 1958), and

United States v. Certain Parcels of Land, 144 F.2d 626, 630

(3d Cir. 1944), we held that choice-of-law questions are not

waivable. We noted in Certain Parcels that “[t]he

appropriate law must be applied in each case and upon a

failure to do so appellate courts should remand the cause to

the trial court to afford it opportunity to apply the appropriate

law, even if the question was not raised in the court below.”

144 F.2d at 630. In Neely v. Club Med Mgmt. Servs., 63 F.3d

166, 180 n.10 (3d Cir. 1995) (en banc), however, we deemed

the choice-of-law question waived. Neely, however, did not

overrule Parkway Baking specifically or even address the

case.

Moreover, we may review waived issues at our

discretion. See Wright v. Owens Corning, 679 F.3d 101, 105

(3d Cir. 2012). We have exercised our discretion in

exceptional circumstances, such as when the “public interest

. . . so warrants,” and particularly when issues are not fact

dependent. Barefoot Architect, Inc. v. Bunge, 632 F.3d 822,

834–35 (3d Cir. 2011) (quoting Rogers v. Larson, 563 F.2d

617, 620 n.4 (3d Cir. 1977)); see also Wright, 679 F.3d at

105.

Nuveen’s choice-of-law arguments involve issues

purely of law, and given that they involve choice of law, the

public interest weighs toward our consideration of them. This

is an appropriate circumstance for us to do so.

B. Shady Grove and the AOM Statute as a Pleading

Requirement

Our last encounter with choice of law and the AOM

Statute was in Chamberlain. As noted, under an Erie analysis

we concluded that the Statute is substantive state law. Erie

provides that a federal court sitting in diversity must apply

33

substantive state law and federal procedural law. 11 304 U.S.

at 78. Under Erie, a court assesses the substantive/procedural

dichotomy with the objective that “the outcome of the

litigation in the federal court [will] be substantially the same,

so far as legal rules determine the outcome of a litigation, as it

would be if tried in a State court.” Guar. Trust Co. of N.Y. v.

York, 326 U.S. 99, 109 (1945). This “outcome determinative

test” focuses on the “twin aims” of discouraging forum

shopping and avoiding “the inequitable administration of the

laws.” Hanna v. Plumer, 380 U.S. 460, 468 (1965).

Consideration of the “twin aims” should produce a decision

favoring application of state law only if one of the aims is

furthered:

[T]he importance of a state rule is indeed

relevant, but only in the context of asking

whether application of the rule would make so

important a difference to the character or result

of the litigation that failure to enforce it would

unfairly discriminate against citizens of the

forum State, or whether application of the rule

would have so important an effect upon the

fortunes of one or both of the litigants that

11

Where a claim that derives from state law is before a

federal court based on “related to” jurisdiction, that court also

must apply state law. See, e.g., Statek Corp. v. Dev.

Specialists, Inc. (In re Coudert Bros. LLP), 673 F.3d 180, 187

(2d Cir. 2012) (“28 U.S.C. § 1334(b) vests the district courts

with original jurisdiction over civil proceedings ‘arising

under,’ ‘arising in,’ or ‘related to’ cases under the Bankruptcy

Code. Such jurisdiction extends not only to questions of

federal law, but also to many state law disputes. Erie made

clear that state law provides the rules of decision for the

merits of state law claims in bankruptcy court.”).

34

failure to enforce it would be likely to cause a

plaintiff to choose the federal court.

Id. at 468 n.9 (emphasis added).

There are two caveats to the Erie analysis. First,

notwithstanding that its application should further the “twin

aims,” if a “strong countervailing federal interest” dictates

application of a federal rule, the federal rule controls.

Chamberlain, 210 F.3d at 159. Second, the Erie rule cannot

void a Federal Rule of Civil Procedure “so long as the federal

rule is authorized by the Rules Enabling Act and consistent

with the Constitution.” 12 Id. Prior to Shady Grove, to

determine whether a state law voided a Rule, we considered

whether the Rule “directly collided” with the state law. Id.

(citing Hanna, 380 U.S. at 470–74). Absent a direct conflict,

we followed the Erie dichotomy. Id.

Proceeding under this analysis in Chamberlain, we

found “no direct conflict” between Federal Rules 8 and 9 and

the AOM Statute:

The affidavit of merit statute has no effect on

what is included in the pleadings of a case or

the specificity thereof. The required affidavit is

not a pleading, is not filed until after the

pleadings are closed, and does not contain a

statement of the factual basis for the claim. Its

purpose is not to give notice of the plaintiff’s

claim, but rather to assure that malpractice

claims for which there is no expert support will

be terminated at an early stage in the

12

Rule 8 is within the scope of the Rules Enabling Act and

consistent with the Constitution. See Chamberlain, 210 F.3d

at 160.

35

proceedings. This state policy can be

effectuated without compromising any of the

policy choices reflected in Federal Rules 8 and

9.

Id. at 160. We also addressed the Statute’s provision that

failure to file an affidavit is “deemed a failure” to state a

cause of action. N.J. Stat. Ann. § 2A:53A-29. “We read the

‘deeming’ language to be no more than the New Jersey

legislature’s way of saying that the consequences of a failure

to file shall be the same as those of a failure to state a claim.”

Chamberlain, 210 F.3d at 160–61. Failure to file the required

affidavit thus does not render pleadings insufficient. Id. at

160.

Nuveen and amicus counsel question the continued

validity of our conclusion that the AOM Statute does not

“collide” with Rule 8 in light of Twombly, Iqbal, and Shady

Grove. Twombly and Iqbal established the pleading standard

under Rule 8 that a party must demonstrate the plausibility, as

opposed to conceivability, of its causes of action in the

complaint. See Phillips v. Cnty. of Allegheny, 515 F.3d 224,

230–35 (3d Cir. 2008) (discussing Twombly and Iqbal).

Shady Grove clarified the second caveat to the Erie

analysis. In determining that certification of a class action

under Rule 23 alleging violations of New York law was

proper even though New York law prohibited the action from

proceeding as a class action, a plurality of the Court stated

that the “collision” inquiry does not depend on “the

substantive or procedural nature or purpose of the affected

state law,” but rather “substantive or procedural nature of the

Federal Rule.” Shady Grove, 130 S. Ct. at 1444; see Knepper

v. Rite Aid Corp., 675 F.3d 249, 264–65 (3d Cir. 2012)

(discussing Shady Grove).

36

However, as we held in Chamberlain, the affidavit of

merit is not a pleading requirement. It is not part of the

complaint, nor does it need to be filed with the complaint.

Rather, the affidavit must be filed within 60, or possibly 120

days, after the defendant files its answer. See N.J. Stat. Ann.

§ 2A:53A-27. The requirement exists to provide expert

verification of the merits of the assertions in the complaint so

that “malpractice claims for which there is no expert support

will be terminated at an early stage in the proceedings.”

Chamberlain, 210 F.3d at 160 (emphasis added). Our

holding in Chamberlain was premised on the temporal

separation of the filing of the complaint and the affidavit.

The AOM Statute “has no effect on what is included in the

pleadings of a case or the specificity thereof.” Id. Rule 8

does not collide with the Statute, as it is not even implicated

by the Statute.

Twombly, Iqbal, and Shady Grove do not alter this

conclusion. 13 See also Liggon-Reading v. Estate of

13

That the affidavit is not a pleading requirement counsels

that a defendant seeking to “dismiss” an action based on the

plaintiff’s failure to file a timely affidavit should file a motion

for summary judgment under Rule 56, and not a motion to

dismiss for failure to state a claim under Rule 12(b)(6).

Though the AOM Statute directs courts to dismiss actions in

which a timely affidavit has not been filed for “failure to state

a claim,” because the affidavit is not a pleading requirement,

this language merely provides that the consequences of not

filing a timely affidavit are the same as failing to state a

claim. Chamberlain, 210 F.3d at 610. Indeed, because the

affidavit is not part of the pleadings, dismissing an action

based on the lack of an affidavit necessarily seems to involve

matters outside the pleadings, which would require a court to

consider a motion to dismiss for failure to state a claim as a

37

Sugarmann, 659 F.3d 258, 262–63 (3d Cir. 2011) (concluding

that Pennsylvania’s similar requirement that a certificate of

merit be filed in malpractice cases is substantive state law that

federal courts must apply under Erie). The AOM Statute can

be applied by a federal court without voiding any Federal

Rules. 14

C. New Jersey Civil Information Cover Sheet and Expedited

Case Management Conference as Substantive State Law

Having concluded that an action subject to the AOM

Statute can be maintained in federal court, we proceed to the

Erie analysis and consider whether the District Court should

have afforded Nuveen the two protections the New Jersey

Supreme Court has established to cut back the severe

consequences of the failure to file a timely affidavit of

merit—the addition to New Jersey’s Civil Case Information

Sheet referencing the Statute and the accelerated case

management conference (often called the “Ferreira

conference,” see Ferreira, 836 A.2d at 785). Nuveen and the

amicus characterize these protections as part of a three-step

process that includes the Statute, the Civil Case Information

Sheet, and the accelerated conference. According to them,

though the protections are procedural, their objective is

substantive and thus they are outcome determinative.

motion for summary judgment, as provided by Rule 12(d).

See Fed. R. Civ. P. 12(d) (“If, on a motion under Rule

12(b)(6) or 12(c), matters outside the pleadings are presented

to and not excluded by the court, the motion must be treated

as one for summary judgment under Rule 56.”).

14

There also is no strong countervailing federal interest that

precludes application of the AOM Statute. See Chamberlain,

210 F.3d at 161.

38

Turning to the information sheet first, the use of a

particular form generally is a procedure of a state court, and

the information provided to parties by a state court via its

forms usually will not result in forum shopping. Here, a

plaintiff either will file in state court and be reminded of the

affidavit requirement via the Civil Case Information Sheet, or

will file in federal court and not be reminded of the

requirement. Moreover, plaintiffs (and their attorneys) are

required to know the law. 15 They should not need to be

reminded of the affidavit requirement on an information

sheet; thus the lack of a reminder does not result in

inequitable administration of the AOM Statute. In addition, a

defendant has no incentive to remove a case from state to

federal court based on the reminder of the affidavit

requirement on the Civil Case Information Sheet because the

burden is on the plaintiff to know the requirements for

initiation of an action. At bottom, the requirement that the

Civil Case Information Sheet reference the Statute in New

Jersey state actions is not a substantive requirement.

The same is true for the Ferreira conference. Though

the New Jersey Supreme Court requires the conference,

Ferreira, 836 A.2d at 785, it has held that its absence will not

prevent an action from being dismissed based on the failure to

file a timely affidavit. See Paragon Contrs., Inc. v. Peachtree

Condo. Ass’n, 997 A.2d 982, 987 (N.J. 2010) (“[O]ur creation

of a tickler system to remind attorneys and their clients about

critical filing dates plainly cannot trump the statute. In other

words, the absence of [the accelerated] conference cannot toll

the legislatively prescribed time frames.”). The timing of a

conference that will not affect the outcome of a proceeding is

15

The problem here is that both firms acting as Nuveen’s

counsel were not from New Jersey. This underscores the

need to engage local counsel to avoid state-specific pitfalls.

39

unlikely to promote forum shopping and will not result in an

inequitable administration of the Statute. Moreover, a

defendant has no incentive to remove a case from state to

federal court solely to prevent the accelerated conference

from being held because the plaintiff already will have been

reminded of the affidavit requirement when it filed the Civil

Case Information Sheet along with its complaint.

Neither protection furthers the “twin aims” of

discouraging forum shopping and preventing the inequitable

administration of state laws. The protections are procedural.

The District Court thus was not required to provide Nuveen

with a reminder of the affidavit requirement on the cover

sheet that Nuveen filed along with its complaint or to hold an

accelerated conference. The Court acted appropriately.

V. The AOM Statute and Dismissal of the Action

Having cleared jurisdictional and choice-of-law

hurdles, we finally arrive at the core of Nuveen’s appeal—

whether, based on New Jersey state law, it can escape the

harsh consequences of its counsel’s failure to file timely

affidavits of merit as required by the AOM Statute. As it did

before the District Court, Nuveen argues that the Statute does

not apply to all or a portion of the complaint and that, if it

does apply, its counsel’s mistake can be excused based on its

substantial compliance with the Statute or extraordinary

circumstances.

To review, the AOM Statute requires a plaintiff in a

malpractice action against a licensed professional seeking

“damages for personal injuries, wrongful death or property

damage” to file an affidavit of merit from an appropriate

licensed professional within 60 days of the defendant filing its

answer. N.J. Stat. Ann. § 2A:53A-27. Upon a showing of

good cause, the court may extend this deadline an additional

40

60 days. Id. Absent the plaintiff’s showing of one of four

limited exceptions, if the affidavit of merit is not filed within

60 (or 120) days, the failure to file requires dismissal of the

action with prejudice. Id. § 2A:53A-29. The four limited

exceptions are: (i) a statutory exception regarding lack of

information; (ii) a “common knowledge” exception; (iii)

substantial compliance with the affidavit-of-merit

requirement; or (iv) “extraordinary circumstances” that

warrant equitable relief. See id. § 2A:53A-28; Ferreira v.

Rancocas Orthopedic Assocs., 836 A.2d 779, 782–83 (N.J.

2003); Hubbard v. Reed, 774 A.2d 495 (N.J. 2001); Cornblatt

v. Barow, 708 A.2d 401, 411–12 (N.J. 1996).

We go out of turn, and consider first the arguments

that, if the AOM Statute applies, Nuveen’s failure to file

timely affidavits should be excused based on either its

substantial compliance with the Statute or extraordinary

circumstances. Our answer in each instance is no. We

conclude with whether the Statute applies to all or but a

portion of this action, as it is there that we reserve ruling

pending the certification of two questions to the New Jersey

Supreme Court.

A. Substantial Compliance

The New Jersey Supreme Court has established a five-

part test to determine whether the equitable doctrine of

substantial compliance excuses noncompliance with the

AOM Statute:

(1) the lack of prejudice to the defending party;

(2) a series of steps taken to comply with the

statute involved; (3) a general compliance with

the purpose of the statute; (4) a reasonable

notice of petitioner’s claim[;] and (5) a

41

reasonable explanation why there was not a

strict compliance with the statute.

Galik v. Clara Maass Med. Ctr., 771 A.2d 1141, 1149 (N.J.

2001) (quoting Bernstein v. Bd. of Trs. of Teachers’ Pension

& Annuity Fund, 376 A.2d 563, 566 (N.J. Super. Ct. App.

Div. 1977)). “Satisfying those elements guarantees that the

underlying purpose of the statute is met and that no prejudice

is visited on the opposing party.” Id. Though the New Jersey

Supreme Court has noted that establishing the elements of

substantial compliance “is a heavy burden,” id. at 1152, it

also has stated that Cornblatt, in which it established that the

doctrine applies to the Statute, is not a “narrow authorization

of substantial compliance in the affidavit of merit setting.”

Id. at 1150. Overall, the analysis is fact sensitive, “involving

the assessment of all of the idiosyncratic details of a case to

determine whether ‘reasonable effectuation of the statute’s

purpose’ has occurred.” Id. at 1151 (quoting Cornblatt, 708

A.2d at 401).

1. Lack of Prejudice to Withum and Lindabury

The District Court held that Withum and Lindabury

suffered prejudice by filing and defending their motions to

dismiss. Nuveen argues that its noncompliance did not cause

them prejudice because the complaint was sufficiently

detailed to provide them with reasonable notice of its claims.

Thus, it contends, Withum and Lindabury were prepared for

the suit after receiving the complaint. In addition, Nuveen

asserts that Withum and Lindabury did not incur undue

additional defense costs in filing and litigating the motions to

dismiss the complaint. See Fink v. Thompson, 772 A.2d 386,

394 (N.J. 2001) (holding that an affidavit that inadvertedly

excluded the name of a defendant-professional involved in

the malpractice action did not prejudice the defendant-

42

professional, and noting that “permitting plaintiff’s case to

proceed would not result in undue additional defense costs”).

We agree that the incurrence of additional costs to

bring a motion to dismiss based on the failure to file the

requisite affidavit is not sufficient to cause prejudice to a

defendant. If the costs of filing and defending the motion to

dismiss were sufficiently prejudicial to preclude a showing of

substantial compliance, few plaintiffs could prove substantial

compliance. Yet courts have found substantial compliance in

a variety of circumstances. See, e.g., Burns v. Belafsky, 766

A.2d 1095, 1101 (N.J. 1999) (holding that failure to timely

file affidavit was not prejudicial because it was “simply too

early in the litigation for that claim to be credible”); Mayfield

v. Cmty. Med. Assocs., P.A., 762 A.2d 237, 243 (N.J. Super.

Ct. App. Div. 2000) (stating that, where the affidavit was

timely filed but served late, “there has been no showing of

prejudice to defendants that would outweigh the strong

preference for adjudication on the merits rather than final

disposition for procedural reasons”).

Nuveen provided Withum and Lindabury with a

complaint that was detailed enough to place them on notice of

the asserted claims without the affidavits. The only apparent

prejudice they suffered was the cost of filing and defending

the motions to dismiss. This is not sufficient prejudice to

preclude a finding of substantial compliance. Nonetheless,

Nuveen still must demonstrate the other four factors.

2. “Series of Steps”

Nuveen argues that, in holding that it did not take a

“series of steps” necessary for substantial compliance, the

District Court overlooked its actions to verify the merit of its

complaint. Nuveen highlights that it conducted an 18-month-

long investigation to support its allegations, which allowed it

43

to submit a detailed complaint. During this extensive

investigation, it consulted two experts who later submitted

affidavits, one of whom provided it with a 16-page report

before it filed the complaint. It also notes that it provided

Withum and Lindabury the affidavits one day after they filed

their motions to dismiss.

Though Nuveen may have researched its complaint

and scrambled to correct its mistake regarding the affidavits,

its failure to take some action to comply with the affidavit

requirement before the AOM Statute’s deadline expired

appears fatal here. A review of New Jersey Supreme Court

cases discussing substantial compliance reveals that the

“series of steps” element requires some effort by the plaintiff

to provide the defendant with a statement of a professional

discussing the merits of the action by the expiration of the

120-day period. See, e.g., Ferreira, 836 A.2d at 784

(declining to find substantial compliance where “[p]laintiff’s

counsel did not, within the statutory time frame, take steps to

forward the affidavit to opposing counsel”); Palanque v.

Lambert-Woolley, 774 A.2d 501, 506 (N.J. 2001) (“In both

Galik and Fink, the plaintiffs took a series of steps that

notified the defendants about the merits of the malpractice

claims filed against them. Here, no such action was taken.

Plaintiff obtained an expert report but did not provide the

report or an affidavit to defendant. The action taken by

plaintiff falls short of meeting the elements of substantial

compliance.”); Fink, 772 A.2d at 386 (finding a “series of

steps” where plaintiff served a timely affidavit that did not

identify one of the defendant-professionals, but identified

“unknown” professionals, and also provided a pre-suit expert

report in which the unidentified defendant-professional was

mentioned by name); Galik, 771 A.2d at 1151 (finding a

“series of steps” where “[p]laintiff retained an expert before

filing suit, forwarded the medical records to the expert,

obtained both an initial and a supplementary expert report,

44

and sent both to defendants’ carriers who attempted to settle

the case on defendants’ behalf”); Burns, 766 A.2d at 1101

(finding substantial compliance where affidavit was served

after 60 days, but before 120 days, after the answer, and only

after defendants filed motions to dismiss); Cornblatt, 708

A.2d at 411–12 (finding substantial compliance where

plaintiff served a certification instead of an affidavit).

These decisions comport with the AOM Statute’s goal

of weeding out frivolous lawsuits by providing defendants

with independent opinions of the actions. See Chamberlain,

210 F.3d at 610. As long as a defendant receives timely (that

is, within the time allowed by the Statute) an opinion in the

form of a document or combination of documents authored by

a non-party discussing the merits of the action as to each

defendant, the plaintiff will have fulfilled the “series of steps”

element of substantial compliance.

Nuveen communicated with two professionals before

it filed the complaint. One professional provided it with a

report; the other merely discussed the potential action on the

telephone. Nuveen did not provide the report to Withum and

Lindabury, and did not file it with the complaint. It also did

not obtain the affidavits until more than 120 days after

Withum and Lindabury filed their answers. The result is that

it did not timely provide Withum and Lindabury with

independent verification that the allegations in the complaint

were sufficient to state causes of action for malpractice.

Nuveen’s failure to engage in a “series of steps” undermines

its argument that it substantially complied with the Statute.

3. Remaining Factors

In arguing that it generally complied with the purposes

of the AOM Statute, Nuveen again references the detailed

complaint and its provision of the affidavits one day after

45

Withum and Lindabury filed their motions to dismiss.

However, the purpose of the Statute is to identify frivolous

malpractice actions by requiring independent verification of

the validity of claims. Regardless how detailed a complaint

is, a pleading is self-serving and cannot be substituted for this

independent verification. In not attempting to provide

independent verification of the merit of the complaint until

more than 140 days after Withum and Lindabury filed their

answers, Nuveen did not comply with the purposes of the

Statute.

As to the fourth factor, we agree with the District

Court that Nuveen’s detailed complaint provided Withum and

Lindabury with reasonable notice of Nuveen’s claims.

Reasonable notice refers to whether the defendant can

understand the basis of the malpractice suit such that it can

begin defending itself. If a complaint is conclusive or does

not specify particular professionals, an affidavit will be

necessary to supplement the complaint for the defendant to be

on reasonable notice of the asserted claims. See, e.g., Kindig

v. Gooberman, 149 F. Supp. 2d 159, 166 (D.N.J. 2001)

(noting that the filing of complaint first notified the

defendants). But if a complaint is detailed, as here, it should

provide the defendant with reasonable notice of the claims.

Finally, Nuveen provides one reason for its lack of

strict compliance: inadvertence by its counsel. However,

New Jersey state courts have rejected attorney inadvertence

alone as a sufficient ground for a party’s failure to comply

with the AOM Statute. See, e.g., Paragon Contrs., Inc. v.

Peachtree Condo. Ass’n, 997 A.2d 982, 986 (N.J. 2010)

(“[A]n attorney’s inadvertence in failing to timely file an

affidavit will generally result in dismissal with prejudice.”).

Nuveen’s counsel’s failure to exercise sufficient diligence in

obtaining and serving affidavits is not a reasonable

explanation for Nuveen’s noncompliance with the Statute.

46

* * * * *

Though Nuveen filed a detailed complaint that put

Withum and Lindabury on notice of its claims such that they

did not incur undue additional expenses in defending the

action, it failed to provide independent verification of the

merits of the claims in its complaint. Absent that independent

verification, under the facts before us we (like the District

Court) cannot hold that Nuveen substantially complied with

the Statute.

B. Extraordinary Circumstances

Where a plaintiff cannot establish substantial

compliance with the AOM Statute, the New Jersey Supreme

Court has held that dismissal of the plaintiff’s complaint

should be with prejudice in all but extraordinary

circumstances. See Ferreira, 836 A.2d at 783. A finding of

extraordinary circumstances results in a dismissal of the

complaint without prejudice. See Paragon, 997 A.2d at 986.

Like substantial compliance, the extraordinary circumstances

analysis is fact-specific. See Hyman Zamft & Manard, L.L.C.

v. Cornell, 707 A.2d 1068, 1071 (N.J. Super. Ct. App. Div.

1998). Nuveen asserts that extraordinary circumstances exist

here because the District Court did not afford it the two

protections available in New Jersey state court (which were

the subject of the Erie analysis above), and because Withum

and Lindabury could have alerted it to its noncompliance with

the Statute.

We have identified no federal court decision finding

extraordinary circumstances based even partially on New

Jersey’s Civil Case Information Sheet. Rather, federal courts

focus on more typical “extraordinary circumstances,” stating

that “[c]arelessness, lack of circumspection, or lack of

diligence on the part of counsel are not extraordinary

47

circumstances which will excuse missing a filing deadline.”

Cobalt Multifamily Investors I, LLC v. Shapiro, No. 06-6468,

2012 U.S. Dist. LEXIS 30954, at *51 (S.D.N.Y. Mar. 8,

2012) (quoting Hyman Zamft & Manard, 707 A.2d at 1071)

(applying the AOM Statute). The notice on the information

sheet may provide plaintiffs with a useful reminder of the

Statute, but plaintiffs and their counsel are responsible for

knowing that an affidavit must accompany a malpractice

claim under New Jersey law.

And, ironically, Nuveen chose to file in federal, rather

than state, court. That choice by Nuveen alone, whereby it

did not receive notice of the Statute on the federal form it was

required to file along with its complaint, is not a basis for a

finding of extraordinary circumstances.

The New Jersey Supreme Court established the

accelerated “Ferreira conference” in 2003. See Ferreira, 836

A.2d at 785. In an opinion issued the same day as Ferreira, it

discussed the conference as if it were mandatory: “Our

decision in Ferreira requires that an accelerated case

management conference be held within ninety days of the

service of an answer in all malpractice actions.” Knorr v.

Smeal, 836 A.2d 794, 801 (N.J. 2003). After Ferreira and

Knorr, New Jersey intermediate state courts issued

conflicting decisions regarding the effect of not holding a

conference on whether an action should be dismissed with

prejudice for failure to file a timely affidavit. See Paragon,

997 A.2d at 987. To clarify, the New Jersey Supreme Court

recently held that the absence of this conference will not

preclude dismissal. Id. at 987–88.

In so clarifying, in Paragon it held that the confusion

among New Jersey state courts “counsels lenience in this

case.” Id. at 987 (emphasis added). The complaint in that

case was captioned as a breach-of-contract claim, and the

48

plaintiff’s counsel filed a certification that a legal assistant in

its office had been told by the state court that an affidavit

would need to be filed prior to an unscheduled case

management conference, and even if the affidavit was not

filed before the conference, it could be filed later with the

consent of the parties. See Paragon Contractors, Inc. v.

Peachtree Condominium Ass’n, 968 A.2d 752, 756–57 (N.J.

Super Ct. App. Div. 2009), rev’d, 997 A.2d at 982. The New

Jersey Supreme Court emphasized that its finding of

extraordinary circumstances arose from the confusion

regarding the Ferreira conference. Paragon, 997 A.2d at

987.

Here, Nuveen filed the complaint in December 2008,

after Ferreira was decided, but before Paragon clarified it.

Nuveen thus plausibly can assert that, at the time it filed the

complaint, it was unclear whether the Ferreira conference

was mandatory such that failure to hold it possibly could

constitute an extraordinary circumstance. However,

“extraordinary circumstances” requires a fact-specific

analysis. The “confusion” in Paragon that led to the finding

of extraordinary circumstances was created in large part by

the state court and the initial captioning of the case as a

breach-of-contract claim. Moreover, in Paragon the

plaintiff’s attorney inquired about the affidavit, demonstrating

that the plaintiff tried to comply with the affidavit

requirement. In contrast, Nuveen (and its counsel) appear not

to have attempted to determine if and when an affidavit was

necessary. Apparently Nuveen’s counsel simply was

unaware of the requirement. And, continuing with the theme

already noted, “attorney inadvertence is not a circumstance

entitling plaintiff to a remedy of dismissal of a complaint

without prejudice.” Ferreira, 836 A.2d at 784; see also

Palanque, 774 A.2d at 505 (“[A]ttorney inadvertence will not

support the extraordinary circumstances set forth in

Cornblatt.”). Lack of the accelerated conference is not a

49

basis for a finding of extraordinary circumstances in this

instance.

Finally, Withum and Lindabury had no duty to notify

Nuveen of the affidavit requirement. Ferreira establishes that

the state court must inquire about the status of the affidavit if

it has not been filed, not that the defendant must notify the

plaintiff of the requirement. See Ferreira, 836 A.2d at 785

(“At the conference, the court will address all discovery

issues, including whether an affidavit of merit has been

served on defendant. If an affidavit has been served,

defendant will be required to advise the court whether he has

any objections to the adequacy of the affidavit.”). In addition,

though defendants cannot sleep on their rights, Withum and

Lindabury acted appropriately in waiting approximately three

weeks after the 120-day period in which Nuveen had to file

the affidavits expired to file their motions to dismiss. See,

e.g., Knorr, 836 A.2d at 801 (holding that equitable estoppel

and laches barred the granting of motion to dismiss for failure

to file a timely affidavit where the defendant waited 14

months to file the motion, during which time the parties

engaged in extensive discovery); Stoecker v. Echevarria, 975

A.2d 975, 985 (N.J. Super. Ct. App. Div. 2009) (finding

reliance on Knorr misplaced when the motion to dismiss for

failure to file a timely affidavit was filed two and a half

months after the affidavit was due). Moreover, Withum and

Lindabury should not be penalized for knowing the law—

including that they should wait until after the expiration of the

extended 120-day period (even if Nuveen had not requested

an extension) to preclude an argument regarding substantial

compliance—and using it to their advantage.

If Nuveen’s counsel had been diligent, it would not

have needed a reminder on an information sheet, at a case

management conference, or from Withum or Lindabury that it

had an obligation to serve affidavits of merit. Under New

50

Jersey law, attorney inadvertence alone cannot support a

claim of extraordinary circumstances. See, e.g., Ferreira, 836

A.2d at 784; Palanque, 774 A.2d at 505. We agree with the

District Court that no extraordinary circumstances exist here.

Thus, unless the action is not subject to the AOM Statute, we

must uphold the District Court’s dismissal of that action with

prejudice.

C. The AOM Statute’s Application to Nuveen’s Action

Nuveen argues that the AOM Statute does not apply to

its entire action because it is not seeking recovery for

“property damage” under the Statute, and alternatively that

the Statute does not apply to the non-negligence and non-

malpractice claims it asserts against Withum. We consider

each argument in turn.

1. What Damages Are Covered by the AOM Statute?

In primary support of the argument that it is not

seeking recovery for “property damage” under the AOM

Statute, Nuveen cites Couri v. Gardner, 801 A.2d 1134 (N.J.

2002). In that case, the plaintiff retained a licensed

psychiatrist as a potential expert witness in connection with

his divorce proceeding. After the psychiatrist disclosed his

preliminary findings without the plaintiff’s permission, the

plaintiff filed a breach-of-contract action alleging that the

psychiatrist was retained to prepare a report only for the

plaintiff. The New Jersey Supreme Court analyzed whether

the action was subject to the AOM Statute based on three

elements:

(1) whether the action is for “damages for

personal injuries, wrongful death or property

damage” (nature of injury); (2) whether the

action is for “malpractice or negligence” (cause

51

of action); and (3) whether the “care, skill or

knowledge exercised or exhibited in the

treatment, practice or work that is the subject of

the complaint [] fell outside acceptable

professional or occupational standards or

treatment practices” (standard of care).

Id. at 1137. It considered these elements in order.

Addressing the “nature of injury” element first, it emphasized

that the Statute “covers actions ‘for damages for personal

injuries, wrongful death or property damage.’” Id. at 1138

(quoting N.J. Stat. Ann. § 2A:53A-27). It noted that though

the plaintiff requested “compensatory and punitive damages”

in his complaint, “at oral argument plaintiff narrowed his

request for damages to the $12,000 that he paid to defendant

for the report and any incidental costs incurred in the

matrimonial action resulting from the necessity of filing

motions based on defendant’s dissemination of the report.”

Id. Because these damages were not “damages for personal

injuries, wrongful death or property damage,” the Court held

that the plaintiff’s claim was not subject to the Statute.

Though it continued on to address the “cause of action”

element, the Court noted that it could “conclude [the] opinion

at this juncture.” Id.

Based on Couri, query whether Nuveen’s action falls

under the AOM Statute? Couri counsels that the “nature of

the injury” element of the Statute is to be considered first.

Nuveen is requesting only money damages arising from

alleged acts of Withum and Lindabury. However, arguably

the alleged acts have not caused “personal injuries, wrongful

death or property damage,” particularly if “property damage”

refers to damage to physical property. We have found no

decision from the New Jersey Supreme Court since Couri

directly addressing the extent of the damages encompassed by

52

“damages for personal injuries, wrongful death or property

damage.” 16

Indeed, the District Court based its holding that the

action is subject to the AOM Statute on two New Jersey

intermediate state court decisions—Cornblatt v. Barow, 696

A.2d 65 (N.J. Super. Ct. App. Div. 1997), and Nagim v. New

Jersey Transit, 848 A.2d 61 (N.J. Super. Ct. Law Div. 2003).

Cornblatt was decided before Couri. In Nagim, in holding

that the asserted claim for defense costs pursuant to an

indemnification contract was a claim for property damages

within the meaning of the Statute, the Court distinguished

Couri on the basis that the damages alleged in that action

were for monies the plaintiff had paid to the expert under a

contract, and not for any damages relating to malpractice. It

emphasized that the claim under the indemnification contract

was limited to defense costs if the defendant was found to be

without fault, and that the underlying action for which the

defendant was seeking indemnification regarded professional

engineering services for the construction of a parking lot. It

thereby determined that the damages related to claims of

alleged professional malpractice causing “property damage,”

16

Though the New Jersey Supreme Court recently stated that

“[t]he [AOM] statute applies to all actions for damages based

on professional malpractice,” Paragon, 997 A.2d at 985, in

making this statement it referenced Charles A. Manganaro

Consulting Eng'rs, Inc. v. Carneys Point Twp. Sewerage

Auth., 781 A.2d 1116 (N.J. Super. Ct. App. Div. 2001), which

was decided before Couri. It also did not analyze whether the

Statute applied to the action, and only addressed the effect of

the failure to hold the accelerated case management

conference. See Paragon, 997 A.2d at 987. Paragon thus

does not tell us what injuries are encompassed by the term

“property damage” as used in the Statute.

53

including damage to tangible property. Nagim, 848 A.2d at

69–71. Nagim thus involved a claim for money damages

arising from alleged malpractice causing damage to physical

property. And its emphasis on the underlying cause of action

may conflate the “nature of the injury” and “cause of action”

elements of the Statute. In Couri, the New Jersey Supreme

Court continued onto the analysis of whether the claims met

the “cause of action” element only after it held that the

damages requested did not meet the “nature of the injury”

covered by the Statute, which it stated could have allowed it

to end its inquiry.

In this context, we are in doubt whether the New

Jersey Supreme Court would hold that the AOM Statute

applies to actions requesting damages for alleged acts of

professional malpractice or negligence that do not cause

personal injuries, wrongful death or property damage. We are

reluctant to speculate about how it would rule if confronted

with a situation similar to the circumstances here.

Accordingly, we shall certify to the New Jersey Supreme

Court a question regarding the scope of the “nature of the

injuries” element of the Statute, and postpone deciding if

Nuveen’s action is subject to the Statute.

2. What Claims Are Covered by the AOM Statute?

Nuveen asserts two intentional tort claims (common

law fraud and aiding and abetting common law fraud) against

Withum that are not the “malpractice or negligence” claims

referenced by the text of the AOM Statute. Couri again is the

only decision from the New Jersey Supreme Court addressing

what types of claims are subject to the Statute. After holding

that the “nature of the injury” asserted was not subject to the

Statute, it addressed the “cause of action” element.

54

It is not the label placed on the action that is

pivotal but the nature of the legal inquiry.

Accordingly, when presented with a tort or

contract claim asserted against a professional

specified in the statute, rather than focusing on

whether the claim is denominated as tort or

contract, attorneys and courts should determine

if the claim’s underlying factual allegations

require proof of a deviation from the

professional standard of care applicable to that

specific profession. If such proof is required, an

affidavit of merit is required for that claim,

unless some exception applies. . . .

[That analysis] will ensure that tort claims

brought against licensed professionals that

allege ordinary negligence, but not malpractice,

will not be subject to the statute. Stated

differently, by asking whether a claim’s

underlying factual allegations require proof of

a deviation from a professional standard of

care, courts can assure that claims against

licensed professionals acting in a professional

capacity that [do not] require proof . . . of a

deviation from professional standards are not

encompassed by the statute.

Couri, 801 A.2d at 1141 (emphases added). Based on these

guidelines, the New Jersey Supreme Court held that the

Statute did not apply because the asserted cause of action

required proof that the expert breached the contract by

distributing his preliminary report without the plaintiff’s

consent, not that the expert deviated from standards of

professional conduct in doing so. Id. at 1142 (“Although

defendant’s unauthorized dissemination of the report also

might implicate a deviation from prevailing professional

55

standards of practice, proof of that deviation is not essential to

the establishment of plaintiff's right to recover based on

breach of contract.”).

Though Nuveen’s fraud claims implicate Withum’s

purported failure to comply with accounting standards,

Nuveen does not necessarily have to prove that Withum

deviated from these standards to establish fraud. See Gennari

v. Weichert Co. Realtors, 691 A.2d 350, 367 (N.J. 1997)

(“The five elements of common-law fraud are: (1) a material

misrepresentation of a presently existing or past fact; (2)

knowledge or belief by the defendant of its falsity; (3) an

intention that the other person rely on it; (4) reasonable

reliance thereon by the other person; and (5) resulting

damages.”). Rather, it has to prove that Withum intended to

deceive it. As in Couri, though Withum’s actions may

suggest that it committed malpractice or acted negligently,

proof of that malpractice or negligence is not necessary to the

fraud claims. Indeed, Nuveen asserts a separate claim for

negligent misrepresentation against Withum. The two fraud

claims are distinct causes of action that may not be subject to

the Statute. See also Balthazar v. Atl. City Med. Ctr., 816

A.2d 1059, 1067–68 (N.J. Super. Ct. App. Div. 2003)

(“[C]auses of action alleging intentional torts that rely for

their success upon proof of a deviation from the professional

standard of care applicable to the profession are subject to the

affidavit of merit requirement, regardless of their label.”

(emphasis added)).

Moreover, the AOM Statute requires submission of an

affidavit of merit as a prerequisite for “any action for

damages for personal injuries, wrongful death or property

damage resulting from an alleged act of malpractice or

negligence by a licensed person in his profession or

occupation . . . .” N.J. Stat. Ann. § 2A:53A-27 (emphasis

added). Courts in states with similarly worded statutes

56

providing for the submission of some form of independent

verification of professional malpractice or negligence actions

have arrived at differing conclusions regarding whether their

statutes apply to actions for fraud. See, e.g., Williams v.

Boyle, 72 P.3d 392, 399–400 (Colo. App. 2003) (holding that

claims for fraudulent concealment and fraud were subject to

Colorado’s “certificate of review” statute, Colo. Rev. Stat.

§ 13-20-602); Labovitz v. Hopkinson, 519 S.E.2d 672, 678

(Ga. 1999) (concluding that, in enacting Georgia’s similar

statute, Ga. Code. Ann. § 9-11-9.1, “the legislative intent was

to enact a statute which sought to reduce the number of

frivolous professional malpractice actions by placing a

procedural hurdle before those plaintiffs who sought damages

for professional negligence. Those claims grounded on a

professional’s intentional acts which allegedly resulted in

injury to one with whom the professional had a professional

relationship are not required to be accompanied by an expert

affidavit” (emphases in original)). These divergent

conclusions also cause us to be uncertain how the New Jersey

Supreme Court would interpret the AOM Statute.

Again we are reluctant to decide how that Court would

rule in these circumstances. Thus we also will certify to it a

question regarding whether intentional torts are subject to the

Statute.

VI. Conclusion

Nuveen’s action is “related to” Bayonne’s bankruptcy

proceeding because the outcome of this action conceivably

may affect a portion of the Bayonne estate’s liabilities. As

such, we affirm the District Court’s holding that it had

jurisdiction under 28 U.S.C. § 1334(b). Assuming that the

action is subject to the AOM Statute, because Nuveen’s

failure to fulfill the affidavit requirement resulted from

inadvertence, we agree with the Court’s holding that

57

Nuveen’s noncompliance cannot be excused under New

Jersey law. However, we question whether the Statute

applies to all or a portion of the claims alleged in the action.

As the New Jersey Supreme Court can more definitively than

we assess the “nature of the injury” and “cause of action”

elements of the Statute, we reserve ruling on whether the

action must be dismissed in whole or in part, and certify two

questions addressing these elements to the New Jersey

Supreme Court. 17

17

We believe that the New Jersey Supreme Court’s answers

to these two strictly legal issues, though framed by the factual

circumstances here, will be amenable to many factual

situations. Their resolution will clarify what constitutes

“property damage” under the AOM Statute and to what extent

the Statute applies to causes of action against professionals

other than for malpractice and negligence, yet related to

alleged acts of malpractice and negligence.

58

ALDISERT, Circuit Judge, dissenting.

I agree with the Majority’s comprehensive treatment of

many of the issues before our Court, and I therefore join in all

parts of its opinion save one: the Majority’s decision in Part

V.C to make no decision about whether the Affidavit of Merit

(“AOM”) Statute applies here. The Majority has balked at

exercising our duty to interpret state law when sitting in

diversity, and has chosen instead to certify two questions to

the New Jersey Supreme Court: (1) whether the money

damages requested by Nuveen in this case are considered

“property damages” under the AOM Statute; and (2) whether

an action alleging an intentional tort, such as common law

fraud or aiding and abetting common law fraud, is subject to

the same statute.

Four federal judges have ruled on these issues; we

seem to be divided on the result, two and two: District Judge

Garret E. Brown Jr. and myself on one side, and my

colleagues in the Majority on the other. It is thus difficult to

say that those who now seek certification reflect the view of

the Third Circuit that the New Jersey Supreme Court has not

been adequately clear on the points in question.

We are charged with the responsibility of deciding

state law issues contained in federal diversity cases, and we

may not shirk that duty merely because those issues may be

difficult, unwieldy, or ponderous. As Judge Jones said on our

Court’s behalf three-quarters of a century ago, when

considering “the responsibility which Erie R. Co. v.

Tompkins, 304 U.S. 64 (1938), cast upon federal courts, of

deciding questions of state law in diversity cases,” we must

“‘not hesitate[] to decide questions of state law when

1

necessary for the disposition of a case brought to [us] for

decision,” even if “the highest court of the state ha[s] not

answered them, the answers [are] difficult, and the character

of the answers which the highest state courts might ultimately

give remain[] uncertain.’” Comm’r of Internal Revenue v.

Lewis, 141 F.2d 221, 225 (3d Cir. 1944) (quoting Meredith v.

City of Winter Haven, 320 U.S. 228, 237 (1943)). This is

especially so “where, as in the present instance, the pertinent

question of local law is directly involved and is duly raised by

the pleadings and the material facts as stipulated by the

parties.” Id.

In my view, certification should be limited to basic

legal issues of great import, amenable to application in a large

panoply of factual situations, rather than the fact-bound issues

presented in this limited certification. See e.g., Arizonans for

Official English v. Arizona, 520 U.S. 43, 79 (1997) (“Novel,

unsettled questions of state law, however, not ‘unique

circumstances,’ are necessary before federal courts may avail

themselves of state certification procedures.”) (quoting

Yniguez v. Arizonans for Official English, 69 F.3d 920, 931

(9th Cir. 1995)). Because I conclude that the New Jersey

Supreme Court’s view has been expressed sufficiently to

facilitate our review, I respectfully dissent from the

certification to the New Jersey Supreme Court.

I.

The first issue the Majority certifies is whether the

money damages sought by Nuveen are considered “property

damages” under N.J. Stat. Ann. § 2A:53A-27, which provides

that an affidavit of merit is required in actions seeking

“damages for personal injuries, wrongful death or property

2

damage resulting from an alleged act of malpractice or

negligence by a licensed person in his profession or

occupation.” Certification of this issue is unnecessary because

the New Jersey Supreme Court has already answered the

question: “The [AOM] statute applies to all actions for

damages based on professional malpractice.” Paragon

Contrs., Inc. v. Peachtree Condo. Ass’n, 997 A.2d 982, 985

(N.J. 2010) (emphasis added) (citation omitted).

A federal court sitting in diversity is “bound to follow

state law as announced by the highest state court.” Sheridan

v. NGK Metals Corp., 609 F.3d 239, 253 (3rd Cir. 2010)

(internal quotation marks and citation omitted). Here, the

New Jersey Supreme Court has clearly expressed its view on

the AOM Statute’s applicability. Even if “the state’s highest

court has not addressed the precise question presented, [we]

must [still] predict how the state’s highest court would

resolve the issue,” rather than merely punt the issue to the

state court because of a perceived lack of clarity. Orson, Inc.

v. Miramax Film Corp., 79 F.3d 1358, 1373 n.15 (3d Cir.

1996) (emphasis added).

The Majority relies on the teachings of Couri v.

Gardner, 801 A.2d 1134 (N.J. 2002), to explain their doubt as

to whether the money damages sought here fall within the

ambit of the AOM Statute. But Couri is factually

distinguishable from this matter and does not sow seeds of

doubt regarding the New Jersey Supreme Court’s view of the

issue currently before us. Unlike the plaintiff in Couri, who

brought a breach-of-contract action seeking a finite sum of

money he had already paid to the defendant, see 801 A.2d at

1141, here, Nuveen seeks the money it paid as part of a

transaction with a non-party. Nuveen has not paid any money

3

to Appellees and has not brought a breach-of-contract claim

against either Appellee. The New Jersey Supreme Court’s

view is unambiguous: because Nuveen’s “action for damages

[is] based on professional malpractice,” the AOM statute

applies. Paragon, 997 A.2d at 985. 1

II.

The second issue the Majority certifies is whether an

action alleging an intentional tort, such as common law fraud

or aiding and abetting common law fraud, is subject to N.J.

Stat. Ann. § 2A:53A-27. But, once again, the New Jersey

Supreme Court has already answered this question: “[W]hen

1

Nuveen’s interpretation of “property damages,” moreover,

would render the AOM Statute’s provisions meaningless with

respect to attorneys and accountants—the professions of

Appellees here. For certain professionals, it is rare that

malpractice would result in personal injuries or death. See

Cornblatt v. Barow, 696 A.2d 65, 68 (N.J. Super. Ct. App.

Div. 1997), rev’d on other grounds 708 A.2d 401 (N.J. 1998).

If Nuveen were correct that “property damages” do not

include money damages, the AOM Statute would hardly ever

apply to attorneys or accountants and would essentially be

confined to actions for medical malpractice. But both

accountants and attorneys are professionals defined by the

Statute as a “licensed person.” N.J. Stat. Ann. § 2A:53A-26.

New Jersey courts have held that it was not the legislature’s

intent to exclude these professions. See e.g., Cornblatt, 696

A.2d at 68 (“[A] claim against an attorney for alleged

malpractice is a claim for property damage within the

legislative intent and plain meaning of the statute.”).

4

asserting a claim against a professional covered by the statute,

whether in contract or in tort, a claimant should determine if

the underlying factual allegations of the claim require proof

of a deviation from the professional standard of care for that

specific profession.” Couri, 801 A.2d at 1141. “If such proof

is required, an affidavit of merit shall be mandatory for that

claim, unless either the statutory, N.J. Stat. Ann. § 2A:53A-

28, or common knowledge exceptions apply.” Id.

The instructions are clear; we must merely apply the

rule to the facts before us—a task that New Jersey state courts

have had no problem accomplishing. See e.g., Risko v.

Ciocca, 812 A.2d 1138, 1142-1143 (N.J. Super. Ct. App. Div.

2003) (applying the teachings of Couri and concluding that

“no exception is applicable in this case, which essentially

deals with a claimed deviation in the standard of care, an

affidavit of merit was required”).

Here, Nuveen contends that intentional

misrepresentations were made as a result of Withum’s failure

to abide by the Generally Accepted Accounting Principles

(“GAAP”) and the Generally Accepted Auditing Standards

(“GAAS”). Thus, Nuveen’s fraud claims plainly require proof

that Withum deviated from professional standards of care.

“[C]auses of action alleging intentional torts that rely for their

success upon proof of deviation from the professional

standard of care applicable to the profession are subject to the

AOM requirement, regardless of their label.” Balthazar v.

Atlantic City Med. Ctr., 816 A.2d 1059, 1067 (N.J. Super. Ct.

App. Div. 2003) (citing Couri, 801 A.2d 1134). Because the

New Jersey Supreme Court has sufficiently expressed its

view on the issue, certification is not warranted.

5

III.

For the foregoing reasons, I respectfully disagree with

the Majority and would not certify any questions to the New

Jersey Supreme Court, but instead, would decide the state law

issues properly before us.

6