# Gantes v. Kason Corp.

> Supreme Court of New Jersey · July 23, 1996 · 145 N.J. 478

URL: https://www.frixlaw.com/law-library/cases/9707541

## Case

- **Full name:** Samuel Gantes, Administrator Ad Prosequendum of Graciela Gonzalez, on Behalf of the Estate of Graciela Gonzalez and on Behalf of the Heirs-At-Law of Graciela Gonzalez, Plaintiff-Appellant, v. Kason Corporation, Defendant-Respondent, and Otto Cuyler Associates and Xyz Co. I-V (Being Fictitious Business Entities Whose Identities Are Currently Unknown), Defendants
- **Court:** Supreme Court of New Jersey
- **Decided:** July 23, 1996
- **Citations:** 145 N.J. 478; 679 A.2d 106; 1996 N.J. LEXIS 960
- **Precedential status:** Published
- **Opinion:** Dissent by Garibaldi
- **Judges:** Handler, Garibaldi
- **Cited by:** 115 later opinions in the Frix Law Library

## Citator (automated)

- **Red flag:** Abrogated by Andrew McCarrell v. Hoffman-La Roach, Inc.(076524), 227 N.J. 569 (2017).
- Negative treatments: 2
- Distinguished by: 2
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9707541

## How later opinions describe it (automated extraction)

- finding that characterization of Georgia’s statute of repose as substantive did not preclude issue- by-issue analysis and concluding the law of the place of the tortious conduct governed repose
- finding an "obvious and direct conflict" between Georgia's ten-year statute of repose and New Jersey's two-year statute of limitations where plaintiff's action would have been barred under the Georgia statute
- observing that one general “purpose of tort laws is to encourage reasonable conduct and, conversely, to discourage conduct that creates an unreasonable risk of injury to others”
- recognizing importance of deterrence goal of torts in strict products liability

## Opinion text

GARIBALDI, J.,
dissenting.
In this appeal, the only issue is whether, in applying New Jersey’s “governmental interests” conflicts of law test, Georgia or New Jersey has the paramount interest in this personal injury case. This case arose when a Georgia resident, working at a Georgia food processing factory, was killed when struck by a part from a shaker machine that was manufactured by a New Jersey corporation and placed into commerce more than ten years before the accident. The majority’s opinion subjects New Jersey businesses to an increased risk of litigation that would be time-barred in the state where the injured person lives and where the accident *500 occurred, increases forum shopping and further taxes an already overburdened court system, without offering any countervailing benefit to a New Jersey resident or business. For those reasons, I dissent.
I
It is undisputed that if Georgia law applies, decedent’s claim is barred pursuant to Georgia’s ten-year statute of repose. Because the machine that caused the injury was sold in 1977 and the injury occurred on February 27, 1991, more than ten years after the initial sale, Georgia’s statute of repose bars this action. Conversely, should New Jersey law apply, the claim is not barred as there exists no statute of repose and the claim was brought within New Jersey’s two-year statute of limitations.
New Jersey’s “governmental interest” conflicts of law test is not based on where a litigant will have the greatest likelihood of success. Instead, the “governmental interest” test requires the court to apply the law of the state with the greatest interest in resolving the issue in the underlying litigation. Veazey v. Doremus, 103 N.J. 244, 247-49 , 510 A.2d 1187 (1986); see State Farm Mutual Automobile Ins. Co. v. Estate of Simmons, 84 N.J. 28, 36-37 , 417 A.2d 488 (1980); O’Keeffe v. Snyder, 83 N.J. 478, 490 , 416 A.2d 862 (1980).
[T]he governmental interest approach to choice of law questions ... requires a two-step analysis in resolving conflicts questions: the court determines first the governmental policies evidenced by laws of each related jurisdiction and second the factual contacts of the parties with the related jurisdiction.
[Deemer v. Silk City Textile Mach.Co., 193 N.J.Super. 643, 649 , 475 A.2d 648 (App.Div.1984) (citations omitted) ].
Applying the two-prong test I am convinced, as was the trial court, Gantes v. Kason Corp., 278 N.J.Super. 473 , 651 A.2d 503 (1993) and the majority of the Appellate Division, Gantes v. Kason Corp., 276 N.J.Super. 586 , 648 A.2d 517 (1994), that Georgia has the paramount interest in this matter, and its law should apply. Indeed, the majority concedes that Georgia’s substantive tort law will be applicable. Ante at 494, 679 A.2d at 114.
There are two major problems with the majority’s reasoning. First, it substantially underestimates, misinterprets and misap *501 plies Georgia’s strong policy in having its statute of repose apply; and second, it focuses solely on New Jersey’s interest in deterring the marketing of a defective product and ignores New Jersey’s other substantial interests. I turn first to a discussion of Georgia’s interest.
II
As the majority in the Appellate Division stated, “[T]he weight of authority clearly favors following the law of the state with the interest of compensating its residents, where such law conflicts with that of the state having solely a deterrence interest.” Gantes, supra, 276 N.J.Super. at 590 , 648 A.2d 517 . “[F]air compensation of a tortiously injured party is the predominant concern of a personal injury claim for the state of domicile of the injured party, particularly where it is the locus of an industrial accident.” Id. at 589 , 648 A.2d 517 (citations omitted). New Jersey’s interest in the tortious injury action of a non-domiciliary resident is nonexistent. Deemer, supra, 193 N.J.Super. at 649 , 475 A.2d 648 . Here the accident occurred in Georgia, the machine was being used in a Georgia factory, decedent was a resident of Georgia who died in Georgia, and decedent’s heirs also are residents of Georgia. Accordingly Georgia’s contacts to this litigation and its interest in its residents and in accidents that occur in its state are substantially greater than New Jersey’s interest.
The majority wrongly concludes that the Georgia Legislature’s motives in enacting its ten-year statute of repose are limited solely to parochial concerns within the Georgia court system and the Georgia insurance market, and that those policies therefore are not implicated in the current case. “There is nothing to indicate Georgia’s interest is parochial, limited to protecting only manufacturers within its borders.” Gantes, supra, 278 N.J.Super. at 479 , 651 A.2d 503 . Georgia enacted its statute of repose to address the problems generated by the open-ended liability of manufacturers. Love v. Whirlpool Corporation, 264 Ga. 701 , 449 S.E.2d 602, 605 (1994). It was “a deliberate recognition of that state’s government *502 interest in allowing its businesses to operate free of the concern that alleged defects will produce product liability claims after the passage of a set period of time.” Gantes, supra, 278 N.J.Super. at 479 , 651 A.2d 503 . Specifically, that statute’s purpose was to eliminate stale claims and to reduce and stabilize product-liability insurance rates. Those policy concerns extend to cases, such as this one, outside Georgia’s courts.
First, the policy against stale claims is a general concern with respect to all lawsuits. Georgia’s policy is certainly implicated if its residents, both individuals and corporations, have to go to other states to testify in cases that would be barred under its statute of repose. This case presents a perfect example of the inconveniences that will be imposed on Georgia residents when barred claims are allowed to be litigated in foreign states. Here the proofs, the witnesses, and medical records, as well as the scene of the accident, are in Georgia. Undoubtedly, to litigate this case, several Georgia residents will have to be witnesses and will have to come to New Jersey to testify. For example, the decedent’s fellow employees who previously used the machine and who were present when the accident occurred, most likely will have to testify. Defendant also claims that the sheriff officers who investigated the accident and the medical examiner who performed the autopsy will be called to testify. Thus, Georgia residents will now be forced to participate in litigation on a stale claim, that would be barred under Georgia’s statute of repose.
Similarly, allowing lawsuits in New Jersey about accidents that occur in Georgia might well increase insurance costs in that State. In product liability cases, the original manufacturer’s defense often is that the product was substantially changed or misused after it left that manufacturer’s hands. Brown v. United States Stove Co., 98 N.J. 155, 172 , 484 A.2d 1234 (1984). That defense is particularly relevant in cases where the product has been used for several years by many different companies. The shaker machine at issue was sold in 1977 to Salvo Corp. of Massachusetts for shipment to Snyder’s Potato Chips of Berlin, Pennsylvania. It *503 was subsequently sold around 1985 to Otto Cuyler Associates of New York, who, in turn, sold the machine to the decedent’s employer, Dutch Quality House. At this stage of the proceedings, it is impossible to determine whether those were the only companies through whose hands the shaker machine passed and whether any of those companies substantially changed or misused that machine. However, it is reasonable to assume that defendant’s attorney will investigate and question the subsequent owners of the machine, including Dutch Quality House, the decedent’s employer, to determine if any one of them had substantially changed or misused the shaker machine. It is not unreasonable to assume that, when this case is tried, defendant may seek to join in this lawsuit those prior companies, including the Georgia company, Dutch Quality House, which may be held liable to defendant for a portion of its losses. Such a result will undoubtedly increase the product liability insurance rates in Georgia and contribute to instability in that insurance market.
Ill
New Jersey’s contacts to this litigation, on the other hand, are at best de minimus. The only connection New Jersey has to this claim is that the machine may have been manufactured in New Jersey. Although we assume this fact for purposes of the summary judgment motion, there was considerable evidence presented suggesting that the machine was in fact manufactured in New York. 1
Although the policy identified by the majority, deterring the manufacturing of unsafe products by suing the manufacturer is a laudable goal, its results are problematic. As New Jersey courts have previously recognized, liability judgments only have “incidental benefits ... towards the correction of a defective design or the *504 deterrence of -wrongful conduct with respect to the future distribution of a product.” Deemer, supra, 193 N.J.Super. at 651 , 475 A.2d 648 . As the Appellate Division observed the majority ignores the other important New Jersey interests suggested in Heavner v. Uniroyal, Inc., 63 N.J. 130 , 305 A.2d 412 (1973) and clearly enunciated in Deemer, supra, 193 N.J.Super. at 650-51 , 475 A.2d 648 , Mowrey v. Duriron Co., Inc., 260 N.J.Super. 402, 408 , 616 A.2d 1300 (App.Div.1992), and in Seals v. Langston, 206 N.J.Super. 408, 412 , 502 A.2d 1185 (App.Div.), certif. denied 104 N.J. 386 , 517 A.2d 392 (1986). See Gantes, supra, 276 N.J.Super. at 589 , 648 A.2d 517 . Those other “important interests” were listed by the Appellate Division majority as follows:
to prevent “exposing New Jersey manufacturers to greater jeopardy in our courts than they would face where a cause of action against them arose, or in a disinterested forum provided by another state”, and to avoid forum shopping, overuse of our judicial system, or requiring us to treat local manufacturers sued by foreign plaintiffs more rigorously than foreign manufacturers sued in our courts by foreign plaintiffs.
[Gantes, supra, 276 N.J.Super. at 589-90 , 648 A.2d 517 (quoting Seals, supra, 206 N.J.Super. at 412 , 502 A.2d 1185 ).]
This case involves those “other important interests” identified by the Appellate Division majority. By ignoring those other interests, the majority subjects New Jersey manufacturers to an increased risk of litigation that would otherwise be time-barred in the state where the injured person lives and where the accident occurred. Such a result will have a chilling effect on new businesses coming into New Jersey.
Despite the majority’s attempt to distinguish prior New Jersey cases, our prior cases all support my conclusion. In Heavner, supra, 63 N.J. 130 , 305 A.2d 412 , plaintiff, a resident of North Carolina, purchased a truck tire from Pullman, in North Carolina. 63 N.J. at 133 , 305 A.2d 412 . The tire was manufactured by Uniroyal, a New Jersey corporation. Ibid. Plaintiff sought recovery for personal injuries sustained by him and contemporaneous damages to his car, when a defect in the tire induced a blow out, causing plaintiff to crash. Ibid. Plaintiff brought a personal injury action against Pullman and Uniroyal. Id. at 134 , 305 A.2d 412 . *505 No cause of action was ever commenced in North Carolina. Ibid. By the time the action was commenced in New Jersey, the statute of limitations in North Carolina had expired, barring any claims. Ibid.
The Heavner court rejected the mechanical rule that the Statute of Limitations of the forum state must be applied in every action involving a foreign cause of action. Id. at 140-41, 305 A.2d 412 . The court explained:
We need go no further now than to say that when a cause of action arises in another state, the parties are all present in and amenable to the jurisdiction of that state, New Jersey has no substantial interest in the matter, the substantive law of the foreign state is to be applied, and its limitation period has expired at the time the suit is commenced here, New Jersey will hold the suit barred.
[Id at 141, 305 A.2d 412 ].
The court further identified plaintiffs decision to bring the action in New Jersey as “forum shopping,” explaining that the plaintiffs motivation was to seek a forum “more favorable than that of North Carolina.” Id. at 134 n. 3, 305 A.2d 412 . Holding that New Jersey law should not apply, the court observed: “[W]e do not believe that New Jersey has any sufficient interest in this action to call for the application of its substantive law in preference to that of North Carolina under the governmental interests choice-of-law principles.” Id. at 135 n. 3, 305 A.2d 412 . The only possible interest, the court noted, was that Uniroyal was incorporated in New Jersey. However, the court remarked “that is not enough.” Ibid.
As in Heavner, the cause of action in this case arose in the foreign state, all parties were present and amenable to suit in the foreign state and New Jersey had no substantial interest in resolving the issue. Finally, as in Heavner, the plaintiffs in this case forum shopped, seeking a forum state that would yield a more favorable result. In view of Georgia’s interest in the enforcement of its statute of repose and the fact that all contacts with this case are in Georgia, to permit the application of New Jersey law would encourage the very type of forum shopping this Court rejected in Heavner.
*506 Deemer, supra, is a case substantially similar to this case. There, a wrongful death action was instituted in the New Jersey Superior Court by plaintiff, individually, and as administratrix ad prosequendum of her deceased husband’s estate against Silk City Textile Machinery Co. (Silk City). 193 N.J.Super, at 647, 475 A.2d 648 . Plaintiffs husband, Deemer, suffered a crush-type injury to his left ankle while performing maintenance work on a shear-cut batcher manufactured by Silk City. Ibid. Ultimately, Deemer died and the action was instituted, asserting that his death was caused by the injury. Ibid. At the time the machine was sold and when the accident occurred, Silk City was a New Jersey corporation doing business nationwide. Id. at 648 , 475 A.2d 648 . The machine was also manufactured in New Jersey. At the time of the accident, the machine was being used in a factory in North Carolina. The decedent was, at the time of the accident and the time of his demise, a resident of North Carolina. The decedent also filed a worker’s compensation claim in North Carolina. Finally, plaintiff was a resident of North Carolina. Ibid.
Reversing the trial court’s decision to apply New Jersey law, the Deemer court held that “the trial court erred in concluding that the substantive law of New Jersey governed this matter.” Id. at 649 , 475 A.2d 648 . The court explained that “New Jersey has no interest in protecting the compensation rights of a non-domiciliary resident.” Ibid. Citing Heavner, supra, the Deemer court recognized that this Court “appears to evidence a policy of discouraging forum shopping where, as here, the contacts with the state are at best tenuous.” Ibid.
In applying the two-prong governmental interests test, the Deemer court contended that the competing policies at issue are: “(1) those relating to the defect free design and manufacturing of a product and (2) those that regulate the full and fair compensation of the injured party.” Id. at 650-51 , 475 A.2d 648 . The Deemer court concluded:
*507 Whatever incidental benefits a liability judgement may contribute towards the correction of a defective design or the deterrence of wrongful conduct with respect to the future distribution of a product, the principal aim of a product liability or personal injury claim is fairly to compensate the injured party. We therefore determine that the second of the two noted policies must control.
[Id. at 651, 475 A.2d 648 ].
Additionally, the court identified plaintiffs attempt to bring suit in New Jersey as forum shopping. Ibid. The North Carolina Legislature, the court explained, did not adopt strict liability in product liability cases. The Deemer court held: “North Carolina, having chosen not to afford its own residents the protection of strict liability, there is no compelling reason for us to extend to such non-domiciliary plaintiffs the benefit of our decisional law.” Ibid.
Furthermore, the court recognized the adverse effect on New Jersey manufacturers of applying New Jersey law under those circumstances.
[T]he sffect of holding New Jersey law to be applicable in a matter of this kind is to subject any corporation conducting manufacturing activities in this state against whom a product liability claim is asserted to suit in New Jersey under New Jersey law. Such a holding would have the undesirable consequence of deterring the conduct of manufacturing operations in this state and would likely result in an unreasonable increase in litigation and thereby unduly burden our courts.
[Ibid]
Similarly, in Seals, supra, the Appellate Division upheld the application of Louisiana’s more restrictive statute of limitations over that of New Jersey, notwithstanding this State’s interest in deterring the marketing of defective products by local manufacturers. 206 N.J.Super. at 410 , 502 A.2d 1185 . Seals involved a New Jersey action for damages for injuries caused in Louisiana by a defective machine manufactured in New Jersey by a New Jersey corporation. Id. at 409 , 502 A.2d 1185 . Under Louisiana’s statute of limitations, the plaintiffs action was time-barred, but under New Jersey limitations law, it was not. Ibid.
In Seals , the Appellate Division recognized a “noticeable difference” between Heavner and the case before it: in Seals , New *508 Jersey was the place of manufacture of the allegedly defective machine. Id. at 411 , 502 A.2d 1185 . Notwithstanding that difference, the court found Louisiana’s limitations law applicable. Id. at 413 , 502 A.2d 1185 . The court in Seals concluded that New Jersey’s deterrence interest did not warrant the application of New Jersey’s limitations law, reasoning:
We see no significant interest in exposing New Jersey manufacturers to greater jeopardy in our courts than they would face where a cause of action against them arose, or in a disinterested forum provided by another state. Such a course would encourage forum shopping to avoid the statute of limitations of the state where the cause of action arose. It would also encourage overuse of our judicial system, and would require us to treat local manufacturers more rigorously than foreign manufacturers sued in our courts by foreign plaintiffs.
[Id. at 412, 502 A.2d 1185 ],
The court further reasoned that “if we were to apply rules that favor foreign plaintiffs against local manufacturers, when we could not do so against foreign ones, we would pointlessly discriminate against our own residents.” Id. at 413 , 502 A.2d 1185 . The court concluded, “Consistent with Deemer, [supra, 193 N.J.Super. at 651 , 475 A.2d 648 ], we hold that New Jersey has no significant interest under the Heavner test in deterring and correcting the marketing by local manufacturers of defective machines.” Seals, supra, 206 N.J.Super. at 413-14 , 502 A.2d 1185 .
As in Deemer and Seals , the injury-causing product involved in this case was manufactured in New Jersey by a New Jersey corporation. As in Heavner, Deemer and Seals , all other contacts occurred in a foreign state, here Georgia. The plaintiffs and decedents were residents of that foreign state, Georgia, the shaker machine was located in Georgia, the accident occurred in Georgia and plaintiff and decedent’s heirs are Georgia residents.
IV
In this case the respective contacts of the two states dictate the application of Georgia law. Georgia by far has the paramount interest and its law should apply.
Moreover, as the majority of the Appellate Division concluded:
*509 Choice of law in this case requires recognition that deterrence is but one of New Jersey’s interests, and that it is outweighed by our policy against forum shopping which exposes local manufacturers to greater burdens than they would face in the state having the most interest in compensation of the injured party.
[Gantes, supra, 276 N.J.Super. at 590 , 648 A.2d 517 ].
I agree with Heavner, Deemer, Seals, and the majority in the Appellate Division. The effect of the Court’s decision is that every manufacturer located in New Jersey will remain potentially liable regardless of where the accident occurs. The majority’s opinion also will open the door to forum shopping. With an already overburdened court system, our goal should be to lessen the strain on the court’s limited resources, not to further deplete them.
I would affirm the judgment of the Appellate Division.
Justice COLEMAN, joins in this opinion.
For reversal — Justices HANDLER, POLLACK, O’HERN and STEIN — 4.
For affirmance — Justices GARIBALDI and COLEMAN — 2.
For example, evidence was presented indicating that the letter prefix on the product’s serial number was a code designation indicating the Champlain, New York plant as place of manufacture.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9707541. Public record. Not legal advice.