Opposition Brief — Honda Motor Company, Ltd. v. Walter P. Coons

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Office Supreme Court, U.S,

84-5942 FILED

NOV 9 1984

No. 84-385

ALEXANDER i. STEVAS.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

WALTER P. COONS,

Cross-Petitioner,

HONDA MOTOR COMPANY, LTD.,

Cross-Respondent.

On Petition for a Writ of Certiorari to the

Supreme Court of New Jersey

BRIEF FOR CROSS-RESPONDENT

HONDA MOTOR CO., LTD. IN OPPOSITION

JOHN I. LISOWSKI *

PAUL A. LISOVICZ

MORGAN, MELHUISH, MONOGHAN,

ARVIDSON, ABRUTYN & LISOWSKI

651 W. Mount Pleasant Avenue

Livingston, New Jersey 07039

(201) 994-2500

Counsel for Cross-Respondent

Honda Motor Co., Ltd.

* Counsel of Record

November 9, 1984

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON, D.C. 20001

COUNTERSTATEMENT OF QUESTION PRESENTED

Whether the Supreme Court of New Jersey properly

held that the New Jersey tolling statute unconstitutionally

burdens interstate commerce by conditioning a foreign

corporation’s assertion of that State’s statutes of limita-

tion on submitting to New Jersey’s licensing scheme.

PARTIES BELOW

The list of all parties to the proceeding in the court

below is fully set forth at page ii of the petition for a

writ of certiorari filed by Honda Motor Co., Ltd. on

September 11, 1984.

(i)

TABLE OF CONTENTS

Page

COUNTERSTATEMENT OF QUESTION PRE-

EE ETE TT SRS eS OO i

EES SS i

I I cc cccccennevnsvaccncncocsseoocere iv

ef rT 1

SUMMARY OF ARGUMENT ........................................ 2

ARGUMENT

There Is No Substantial Question Presented Be-

cause the Court Below Correctly Applied This

Court’s Well-Settled Commerce Clause Principles

in a Manner That Cross-Petitioner Concedes Cre-

ates No Conflict with Decisions of This Court,

Lower Federal Courts, or Other State Courts _......

A. The Lower Court’s Holding ............................... 3

B. Cross-Petitioner’s Question Presents No Con-

EES EES a

ATLA. LE

D. The Lower Court Properly Applied Settled

SEES EE oe ee er 7

E. The Inapplicability Here of Equal Protection

Ss ST TT g

F. The Irrelevance of the New Legislation ........... 11

SE ae 14

(iii)

TABLE OF AUTHORITIES

Cases: Page

Allenberg Cotton Co. v. Pittmann, 429 U.S. 20

UTI x sciuiisenisc pninsichaitapasindetaiaasiaiihaeintileh oamadaiaiaiaia 4, 6, 7, 10, 18

Avdel Corp. v. Mecure, 58 N.J. 264, 277 A.2d 207

CIID cssccochsnissntcniniatiabisnitnicectiniigdtaiiiat inti tines intattieies 10

Brown Vv. Ohio, 482 U.S. 161 (1967) -...................... 5

Buck Stove & Range Co. v. Vickers, 226 U.S. 205

| —__ I A APRINES RIe PE 6

Coons v. Honda Motor Co., 94 N.J. 307, 463 A.2d

| RCE Sere SOL ate 7,8

Crutcher v. Kentucky, 141 U.S. 47 (1891) ~............. 6

Dahnke-Walker Milling Co. v. Bondurant, 257 U.S.

Ce aaibrnede Raia isa i dicinleniioinee 4, 6, 7

Day Vv. Stokes, 97 N.J. Eq. 378, 127 A. 331 (1925)... 8

Eli Lilly & Co. v. Sav-On Drugs, inc., 366 U.S. 276

CI vain cdi cetitittnbiciica in iicietetalimeedisdbitbmcne 6

G. D. Searle & Co. v. Cohn, 455 U.S. 404 (1982)... 3, 7,9

Garner V. Louisiana, 368 U.S. 157 (1961) _............... 5

Garrity Vv. New Jersey, 386 U.S. 493 (1967) .......... 6,8

Grow Farms Corp. v. National State Bank, 167

N.J. Super. 102, 400 A.2d 585 (Law Div. 1979).. 8

Guaranty Trust Co. v. United States, 304 U.S. 126

RE RSRESE ESS SPD SME aS EAS ee Re OR One 9

Hudanich v. Borough Council of Avalon, 183 N.J.

Super. 244, 433 A.2d 777 (Law Div. 1981) ......... 11

International Text Book Co. v. Pigg, 217 U.S. 91>

| GRR ee 6, 7,13

Kassel v. Consolidated Freightways Corp., 450 U.S.

TAT ET Ge Se Ee aaa 10

Litton Industrial Systems, Inc. v. Kennedy Van

Saun Corp., 117 N.J. Super. 52, 283 A.2d 551

I i iO 13

McLaughlin v. Bassing, 51 N.J. 410, 24% A.2d 450

I alate 11

Neirbo Co. v. Bethlehem Shipbuilding Corp., 308

ER FE ay eee ee 13

Pike v. Bruce Church, Inc., 397 U.S. 187 (1970)... 10, 11

Protective Finance Corp. v. Glass, 101 N.J.L. 85,

2 N.J. Mise. 818, 125 A. 879 (1924) , 8

TABLE OF AUTHORITIES—Continued

Page

Randolph Laboratories, Inc. v. Specialities Dev.

Corp., 62 F. Supp. 897 (D.N.J. 1945) 2000... 13

San Antonio Independent School District v. Rod-

I re te ic iacteteceeteneninpimences 9

Sioux Remedy Co. v. Cope, 235 U.S. 197 (1914)... 4,6

United States v. Kubrick, 444 U.S. 111 (1979) ....... 8,9

United States v. Seckinger, 397 U.S. 203 (1970)... 5

Velmohos v. Maren Engineering Corp., 83 N.J.

GEL ee 10

Wood v. Carpenter, 101 U.S. 135 (1879) —..0000000. 8

Constitution, Statute and Rules:

Ne eset nee passim

N.d. Gent. Aum. § BA 334-28 ......................................---. passim

EERE SE aE a EEE 2,11

EE eat 11

ee ne nee tea 10, 11

REST SENET AES ass a ee ee 11

Other Authorities:

Restatement (Second) of Conflict of Laws, § 44,

EEE ei ae ee 13

R. Stern & E. Gressman, Supreme Court Practice

I 10

L. Tribe, American Constitutional Law § 6-13

a 6,8

Wright, Law of Federal Courts §60 (4th ed.

TRS Se ec re 5

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

No. 84-385

WALTER P. COONS,

Cross-Petitioner,

HONDA MOTOR COMPANY, LTD.,

Cross-Respondent.

On Petition for a Writ of Certiorari to the

Supreme Court of New Jersey

BRIEF FOR CROSS-RESPONDENT

HONDA MOTOR CO., LTD. IN OPPOSITION

Cross-respondent Honda Motor Co., Ltd. (Honda) re-

spectfully requests that the cross-petition for writ of cer-

tiorari be denied.

COUNTERSTATEMENT

The cross-petition and its accompanying appendix in-

clude, and are replete with references to, documents not

identified as being of record in this case. Rather than

deal with each of the many liberties taken by the cross-

petitioner in this regard, we simply note here that the Q

relevant facts of record in this case are stated accurately

and fully in the decisions of the Supreme Court of New

Jersey for which review is sought herein. Pet. App. A

(at la-27a) and B (at 28a-54a). We only wish to em-

phasize here thét the Cross-Petition concedes that the

New Jersey courts below have held that the cross-petitioner

“had sufficient facts available to him to discover the ex-

istence of his cause of action . . . within the two-year

[statute of limitation period],” Cross Pet. at 9; that,

under the New Jersey rules (N.J. Ct. R. 4:2-2), an action

is “commenced,” and the statute of limitations tolled, by

filing a complaint, not by serving the defendant; and that,

in any event, service upon Honda was effectuated by the

cross-petitioner well within two years after his complaint

was filed. Pet. App. at 66a. Accordingly, despite cross-

petitioner’s exaggerated complaints about the difficulty of

serving Honda, the cross-petitioner could have easily

brought his suit in a timely fashion. Finally, as the cross-

petitioner also acknowledges, the grounds upon which the

cross-petition is based were never adopted by the dis-

senting justices below. Cross Pet. at 18. Contrary to

cross-petitioner’s assertion, Cross Pet. at 13, however, the

majority opinion below did address the issue now raised

by the cross-petitioner and it summarily rejected the ar-

gument as being wholly without merit. Pet. App. B at

39a-40a. |

SUMMARY OF ARGUMENT

The cross-petitioner seeks to have this Court carve out

an exception from the age-old principles of its Commerce

Clause jurisprudefte based on a strained factual distinc-

tion which has been wrung from the record of this case.

By the cross-petitioner’s own admission, however, there

is no supporting authority, for the analysis he advances.

See Cross Pet. at 13. Accordingly, the cross-petitioner

is not able «o show that the decision below is in conflict

with any decision of this Court, of the lower “federal

courts, or of any state court. Moreover, the view of the

law advanced by the cross-petitioner here was summarily

rejected by the majority opinion below, and its lack of

merit is evidenced in telling fashion by the fact that the

cross-petitioner’s analysis formed no basis, indeed, was not

even mentioned in, the fifteen-page dissent below. As we

show in detail (see pp. 3-10, infra) the question presented

on its merits is far from worthy of this Court’s further

consideration. We do, however, agree with petitioner that

the New Jersey legislature’s recent amendment of the

statute at issue should in and of itself have no bearing on

this Court’s consideration of either the petition or cross-

petition in this case. See pp. 11-14, infra.

ARGUMENT

There Is No Substantial Question Presented Because

the Court Below Correctly Applied This Court’s Well-

Settled Commerce Clause Principles in a Manner That

Cross-Petitioner Concedes Creates No Conflict with De-

cisions of This Court, Lower Federal Courts, or Other

State Courts.

A. The Lower Court’s Holding. Pursuant to a remand

from this Court, 455 U.S. 996 (1982), the New Jersey

Supreme Court struck down the New Jersey tolling sta-

tute at issue here on Commerce Clause grounds. In so

doing, the lower court first responded to this Court’s re-

quest that an ambiguity in the tolling statute be resolved.

The lower court ruled that the New Jersey tolling stat-

ute requires that non-New Jersey corporations register

to do business in New Jersey in order to gain the benefit

of the state’s statutes of limitation. Pet. App. 29a-30a.'

After so construing the tolling statute, the New Jersey

Supreme Court went on to hold that, under a long line of

1In G.D. Searle & Co. v. Cohn, 455 U.S. 404 (1982), this Court,

over the dissent of Justice Stevens, ruled that the New Jersey

tolling statute did not violate the Equal Protection Clause. Never-

theless, this Court remanded Searle, and ultimately this case, for

resolution of an ambiguity in the tolling statute, which, when

resolved, would clarify the constitutionality of the tolling statute

under the Commerce Clause. Jd. at 412-14; 996. The specific am-

biguity in the statute which caused this Court to remand in Searle

and in this case was the question of what precisely a foreign

corporation—i.e., one not incorporated in the State—must do to be

“represented in [New Jersey] by any person or officer upon whom

summons or other original process may be served” within the

meaning of the tolling statute.

decisions of this Court, the tolling statute constituted a

“forced licensure” provision in violation of the Commerce

Clause. In relevant part, the court’s reasoning was as

follows:

[T]he Supreme Court has invalidated state sta-

tutes, * * * as per se violations of the Commerce

Clause in the area of licensing requirements imposed

on foreign corporations involved in interstate com-

merce. In a series of decisions the Supreme Court

has held that a state cannot discriminate against a

foreign corporation engaged in interstate commerce

merely because it has failed to qualify to do business

in that state. See Ailenberg Cotton Co. v. Pittman,

419 U.S. 20 (1974); Dahnke-Walker Milling Co. Vv.

Bondurant, 257 U.S. 282 (1921) ; Sioux Remedy Co.

v. Cope, 235 U.S. 197 (1914).

* * * The legislature * * * cannot, in effect, force

licensure on foreign corporations dealing exclusively

in interstate commerce by otherwise preventing them

from gaining the benefit of the statute of limitations

defense. The burden thus imposed on interstate

commerce is unconstitutional. Jd. at 38a-40a.

Bb. Crose-Petitioner’s Question Presents No Conflict.

When the atmosphere of the cross-petition are put to one

side, the sole question it presents is whether the long

line of this Court’s authority relied upon by the New

Jersey Supreme Court in the passage quoted above is

apt in this case. The cross-petition distinguishes those

Commerce Clause cases cited by the New Jersey Supreme

Court on the grounds that each involved a denial by a

state of the right to sue to foreign corporations; this case

is different, cross-petitioner contends, because New Jer-

sey’s tolling statute does not interfere with a foreign

corporation’s right to sue, but, instead, precludes foreign

corporations from raising New Jersey statutes of limita-

tions. The cross-petitioner not only concedes that the

dissent below did not rely upon this strained distinction

to argue that the New Jersey statute satisfies the federal

Constitution, Cross Pet. at 13,2 but the cross-petitioner

further acknowledges that he has found no authority

which attaches any significance to its analysis. Jd. at 14.

Accordingly, the cross-petitioner does not—and, indeed,

he cannot—assert that the decision at issue is in conflict

with any decisions of this Court or with any decisions of

other state or federal courts. Manifestly, then, there is

no important question of constitutional law at stake re-

quiring review by this Court. In any event, we show be-

low that when viewed against this Court’s broad Com-

merce Clause rulings, cross-petitioner’s attempt to at-

tach significance to the factual distinction it draws is

wholly without merit.

2 The dissent below premised its Commerce Clause analysis upon

its own construction of the New Jersey tolling statute. Unlike the

majority, it found that a non-New Jersey corporation did not have

to register in New Jersey to gain the benefits of the statutes of limi-

tations; instead, “all that is required . . . to obtain the general

benefits of a statute of limitations [under New Jersey law] is that

[the foreign corporation] appoint an agent for service of process.”

Pet. App. 4la. The dissent then concluded—in our view incorrectly

(see n.6, infra)—that, because its reading of the statute imposed

such a minimal licensing burden on a foreign corporation, there

was no Commerce Clause violation.

Cross-petitioners cannot advance the position of the dissent here,

because, as they recognize (Cross Pet. at 17 n.19), state “courts

‘have final authority to interpret . . . State!] legislation,’” Brown

v. Ohio, 482 U.S. 161, 167 (1977), quoting Garner v. Louisiana, 368

U.S. 157, 169 (1961), and this Court could only adopt the reasoning

of the dissent if it disregarded the majority opinion’s construction

of the New Jersey tolling statute. Cross-petitioner feebly suggests

(Cross Pet. at 17 n.9) that this Court may not be limited by a

state supreme court’s interpretation of its own law when federal

constitutional issues are at stake. The cases cross-petitioner cites

in support of this proposition, however, are wholly inapt. They

involve cases where this Court has refused to follow a state court’s

construction of a contract to which the United States is a party on

grounds that contracts of this nature are governed by federal,

rather than state, common law. See, e.g., United States v. Seckinger,

397 U.S. 203, 209 (1970); Wright, Law of Federal Courts § 60 at

896 & n.12 (4th ed. 1983).

C. The Settled Law. It is an age-old and fundamental

axiom of Commerce Clause jurisprudence “that a state

law is unconstitutional and void which requires a party to

take out a license for carrying on interstate commerce

no matter how [meritorious] the pretext may be for im-

posing it.” Crutcher v. Kentucky, 141 U.S. 47, 58 (1891).

See also, ¢.g., Eli Lilly & Co. v. Sav-On Drugs, Inc., 366

U.S. 276, 278-79 (1961); Dahnke-Walker Milling Co. V.

Bondurant, 257 U.S. 282, 291 (1921) ; Sioux Remedy Co.

v. Cope, 235 U.S. 197 (1914) ; International Textbook Co.

v. Pigg, 217 U.S. 91 (1910); L. Tribe, American Consti-

tutional Law § 6-13 at p. 342 (1978).

Thus, a foreign corporation engaging exclusively in

interstate commerce within a state has a right to be free

of a state’s licensing requirements. This Court, in turn,

has concluded that this kind of right is “of a Constitu-

tional stature whose exercise a State may not condition

by the exaction of a price.” Garrity v. New Jersey, 385

U.S. 498, 500 (1967). It has given effect to this doctrine

by repeatedly invalidating state statutes which required

foreign corporations engaged exclusively in interstate com-

merce to forego their right to sue in state courts as a

condition of avoiding state licensing requirements. See,

e.g., Allenberg Cotton Co. v. Pittman, 419 U.S. 20 (1974)

(invalidating statute making the receipt of a certificate

of authority a condition to the right to sue in state

court); Dahnke-Walker Milling Co. v. Bondurant, supra

(invalidating statute making the receipt of a license and

agreement that process can be served upon the secretary

of state a condition to the right to sue); Buck Stove &

Range Co. v. Vickers, 226 U.S. 205 (1912) (invalidating

statute making the receipt of a license, agreement to

designate the secretary of state for service of process,

payment of a school tax, and the filing of a corporation

charter a condition to the right to sue). In this regard,

state statutes have been struck down even when court ac-

cess has been conditioned on only minimal infringements

upon interstate commerce. See, e.g., International Text-

book Co. v. Pigg, supra (invalidating statute making the

receipt of a $25.00 license and agreement that service

could be effected on secretary of state a condition to the

right to sue).

D. The Lower Court Properly Applied Settled Law.

The cross petitioner’s attempt to suggest some type of

meaningful distinction for the purposes of Commerce

Clause analysis between conditioning the free flow of

interstate commerce on forsaking the right to sue and for-

saking the right to assert what may be a dispositive lim-

itations defense is unavailing. The majority in Coons J,

following the analytical lead suggested to it by Justice

Powell in Searle,’ rejected this distinction because it

could not be accommodated by the breadth of this Court’s

well-settled Commerce Clause rulings. For example, the

Coons I majority noted that in

striking down a Kentucky statute that prevented

such a suit, the Dahnke-Walker Court held that

“{a] corporation of one state may go into an-

other, without obtaining the leave or license of

the latter, for all the legitimate purposes of such

commerce; and any statute of the latter state

which obstructs or lays a burden on the exercise

of this privilege is void under the commerce

clause. [257 U.S. at 291.]” Pet. App. at 39a.

Accordingly, the court reasoned that in the Commerce

Clause cases relevant to the question at hand, this Court

has “spoke[n] in broad terms, declining to limit decision

8 Justice Powell, joined by Chief Justice Burger, dissented to the

remand in Searle on the grounds that the New Jersey tolling

statute was not at all ambiguous and clearly required that foreign

corporations register to do business in New Jersey to obtain state

statutes of limitations. 455 U.S. at 415-19. Justice Powell went

on to note that the Commerce Clause challenge to the tolling stat-

ute had “considerable force,” citing Allenberg Cotton Co. v. Pitt-

man, 419 U.S. 20 (1974. 455 U.S. at 419-20.

to the ‘right to sue’ context.” Id. (emphasis added). The

Coons I court further observed that this Court has “fo-

cused on the importance of leaving interstate commerce

unfettered.” Id.

Again, this Court has made it clear that “rights of a

Constitutional stature,” such as “[e]ngaging in interstate

commerce,” “may not [be] condition[ed] by the exaction

of a price.” Garrity v. New Jersey, supra, 385 U.S. at

500. See also, e.g., L. Tribe, supra, § 6-13, at 342-343

& n.5. Thus, it was not the lower court’s burden to

demonstrate that the price of foregoing the right to as-

sert a limitations defense is as high as the price of fore-

going the right to sue—although we believe it clearly is

as high. The only question is whether foregoing the pro-

tection of the statute of limitations is “the exaction of a

price” at all. This Court, in United States v. Kubrick,

444 U.S. 111, 117 (1979), made quite clear that it is,

when it said:

Statutes of limitation, which “are found and ap-

proved in all systems of enlightened jurisprudence,”

Wood v. Carpenter, 101 U.S. 135, 139 (1879), repre-

sent a pervasive legislative judgment that it is un-

just to fail to put the adversary on notice to defend

within a specified period of time and that “the right

to be free of stale claims in time comes to prevail

4 Indeed, a foreign corporation can immediately overcome the bar

to its right to sue upon existing claims by submitting itself to the

state’s licensing system. See e.g., Grow Farms Corp. v. National

State Bank, 167 N.J. Super. 102, 400 A.2d 535 (1979) (foreign

corporation allowed to obtain certificate during pendency of action,

if necessary, in order to avoid motion to dismiss) ; Day v. Stokes,

97 NJ. Eq. 378, 127 A.2d 331 (1925) (certificated foreign corpora-

tion may sue on contract executed before certification) ; Protective

Finance Corp. Vv. Glass, 100 N.J.L. 85, 2 N.J. Misc. 818, 125 A. 879

(1924) (same). But licensing will not automatically entitle a

foreign corporation to assert a limitations defense as to pending

claims. Instead, as the terms of the tolling make plain, licensing

will only commence the running of the limitations statute—clearly

a “price” which exceeds that found in “the right to sue” context.

over the right to prosecute them.” * * * We should

regard the plea of limitations as a “meritorious de-

fense, in itself serving a public interest.” Guaranty

Trust Co. v. United States, 304 U.S. 126, 136 (1938).

E. The Inapplicability Here of Equal Protection An-

alysis. Cross-petitioner’s reliance on a series of equal pro-

tection and due process cases holding that statutes of

limitations do not constitute a “fundamental right” of a

litigant does not in any way affect the foregoing analysis.

As Searle itself demonstrates, the question of whether

there is a fundamental right to a statute of limitations

is only relevant to Equal Protection analysis, because if

there were a fundamental right to statutes of limitation,

the Court would have had to review the classification un-

der heightened scrutiny. 455 U.S. at 408. See also, e.g.,

San Antonio Independent School District v. Rodriguez,

411 U.S. 1, 17 (1973) (heightened scrutiny required when

state statute “operates to disadvantage of some suspect

class or impinges upon a fundamental right explicitly or

implicitly protected by the Constitution”). In Commerce

Clause analysis, in contrast, the important issue is the

discrimination against or burden on interstate commerce

—not whether any fundamental right is involved. This

distinction between Equal Protection and Commerce

Clause analysis is implicit in this Court’s remand in

Searle, since this Court remanded Searle to determine if

the statute violated the Commerce Clause, even after rul-

ing that the statute did not violate Equal Protection. 455

U.S. at 412-14. Indeed, cross-petitioner acknowledges that

“lthe fact] that a state statute passes constitutional mus-

ter on equal protection and due process grounds does not

prevent it from being declared invalid under Commerce

Clause standards.” Cross Pet. at 17. As we have shown

(see pp. 6-8, supra), under the Commerce Clause an-

alysis relevant here, the question is only whether the free

exercise of interstate commerce is “condition[ed] by the

exaction of a price.” And, as United States v. Kubrick,

supra, 444 U.S. at 117, makes clear, requiring a foreign

corporation to forego statute of limitations defenses as a

condition of engaging in interstate commerce free of state

regulations is an “exaction of a price,” see pp. 8-9, supra,

even if it may not be the abrogation of a fundamental

right.

In sum, “the decision below merely applies principles

previously approved by the Supreme Court, and applies

them correctly,” R. Stern & E. Gressman, Supreme Court

Practice 315 (5th ed., 1978), and in such a circumstances,

certiorari is traditionally denied by this Court. Jd.

5 The Allenberg-line of cases, upon which the majority in Coons

I relied and which Justice Powell, joined by Chief Justice Burger,

cited in Searle, see n.3, supra, apply a virtual per se rule of in-

validity to state statutory schemes which impose licensing require-

ments on foreign corporations engaged only in interstate commerce.

These cases are to be distinguished from other Commerce Clause

decisions of this Court which do not involve classic, discriminatory

“forced licensure” formats, and which therefore apply a balancing

test to determine if there is a Commerce Clause violation, i.e., that

a state law which regulates “even-handedly” but which imposes

“indirect” or “incidental” burdens on interstate commerce is invalid

if “the burden imposed on interstate commerce is clearly excessive

in relation to the putative local benefit.” Pike v. Bruce Church, Inc.,

397 U.S. 137, 142 (1970). Accord, Kassel v. Consolidated Freight-

ways Corp., 450 U.S. 662, 670-71 (1981). But even if the “balanc-

ing” test of Pike were applied here, the New Jersey statute at issue

would still be invalid. As we have shown, the burdens imposed by

the tolling statute on interstate commerce are substantial, while

the local benefit which was initially to be derived from that statute

is now being fulfilled by other means.

The original purpose in enacting the tolling provision at issue

was to prevent statutes of limitation from applying in actions in

which foreign corporations could not be served because of the then-

existing restrictions on the extraterritorial reach of New Jersey’s

service of process rules. See, ¢.g., Velmohos v. Maren Engineering

Corp., 416 A.2d 372, 376-77 (NJ. 1980). Those restrictions have

now been largely, if not completely, removed. NJ. Ct. R. 4:4-4(c)

& (e). See Avdel Corp. v. Mecure, 277 A.2d 207, 209 (1971) (long-

arm rule in New Jersey reaches to limit of due process). To the

extent that New Jersey plaintiffs still have any difficulties in effect-

uating service on foreign corporations, the New Jersey rules

F. The Irrelevance of the New Legislation. Finally,

there is one point on which we agree with the cross-

petitioner, i.e., that the New Jersey legislature’s recent

amendment of the New Jersey tolling statute in and of

itself should have no bearing on this Court’s consideration

of either the petition or the cross-petition. See Cross Pet.

at 6-7. The new tolling statute deletes the requirement

that a foreign corperation must register to do business

in New Jersey to gain the benefit of the New Jersey

statutes of limitation. Instead, a foreign corporation must

now “file[] with the Secretary of State a notice designat-

ing a representative to accept service of process.” Cross

App. at la. A filing of this nature merely terminates

the tolling of the applicable statute of limitations, and

that statute of limitations therefore only begins to run

against the foreign corporation on the date of that filing.

Id.; see also n.6, supra. The new legislation became ef-

fective upon its date of enactment, August 238, 1984, id.

provide a sensible solution for this problem. Under N.J. Ct. R.

4:2-2, a civil action is commenced (and the statute of limitations

tolled) by filing a complaint, not by service on a defendant. A

plaintiff may therefore protect himself against a limitations bar by

filing a complaint, even if he anticipates difficulty in serving the

defendant. And, while N.J. Ct. R. 4:4-1 appears to require that

service be made within ten days of filing a complaint, dismissal of

a suit for failure to comply with this rule is within the “sound

discretion” of the court. McLaughlin v. Bassing, 51 N.J. 410, 241

A.2d 450 (1968) (adopting dissenting opinion in the Appellate

Division, 100 N.J. Super. 67, 241 A.2d 237 (App. Div. 1967));

Hudanich v. Borough Council of Avalon, 183 N.J. Super. 244, 433

A.2d 777 (Law Div. 1981); N.J. Ct. R. 4:37-2(a) (incorporated

into N.J. Ct. R. 4:4-1). Thus, a complaint will not be dismissed

for late service if a plaintiff has had legitimate difficulty serving

a foreign corporation. Even if any problems remain, they could

readily be addressed by amendment to the New Jersey rules which

would ensure that a complaint will not be dismissed in cases where

a New Jersey plaintiff has legitimate difficulties in serving a de-

fendant. In sum, under the Pike analysis, “the nature of the local

interest” to be protected by the statute could easily “be promoted,

[if it is not already being promoted,] with a lesser impact on inter-

state activities.”

Thus, even had a foreign corporation filed the appropriate

notice with the New Jersey Secretary of State on August

23, 1984, it would have available to it a statute of limita-

tions defense only in those New Jersey personal injury

actions filed on or after August 23, 1986, and only in those

New Jersey actions for property damage or breach of

contract filed on or after August 23, 1990.

Because the New Jersey Supreme Court’s ruling de-

claring the prior tolling statute unconstitutional was ap-

plied by that court wholly prospectively so that “the stat-

ute of limitations as to foreign, unrepresented corpora-

tions commences to run as of [August 3, 1983],” Pet.

App. at 19a, there are now hundreds of otherwise un-

timely cases pending in both New Jersey state and fed-

eral district courts which could never have been brought

if the New Jersey Supreme Court was correct in its

constitutional invalidation of the prior tolling statute

and, if, as we argue in our own September 11, 1984

petition, the decision on the constitutionality of the tolling

statute should be applied retroactively. Honda Pet. at

5 & n.4. Indeed, because of the lower court’s prospec-

tivity ruling, there will doubtless be hundreds of addi-

tional otherwise untimely cases filed before the new toll-

ing statute allows foreign corporations to raise a statute

of limitation defense, which, in the case of a breach of

contract action, could not be before August 23, 1990.

Therefore, any substantial federal questions pertaining

to the New Jersey tolling statute at issue here will have

great significance to the administration of justice within

the New Jersey state and federal courts for years to

come. Moreover, the questions raised in Honda’s petition

have general constitutional significance in that they ad-

dress the manner in which state courts should handle the

retroactivity of federal constitutional decisions. Finally,

as cross-petitioner acknowledges, Cross Pet. at 7, the new

tolling statute itself raises substantial Commerce Clause

issues, and, thus, for this reason as well, the statute can-

not be viewed as in any way resolving or diminishing

the importance of any substantial federal questions raised

herein.®

Our only difference with cross-petitioner on this issue

is that, while the new tolling statute should not inter-

fere with this Court’s consideration of substantial fed-

eral questions raised herein, we do not in the first in-

stance view cross-petitioner’s issues as being worthy of

this Court’s further review, whereas we do view the

® The New Jersey legislature, in amending the tolling statute, has

apparently adopted the position of the dissenters in Coons I, i.e.,

that by changing the name of the requirements imposed on foreign

corporations by the tolling statute, the Commerce Clause problem

is avoided. The point, however, is that the Allenberg-Cotton line

of cases discussed above did not turn on whether or not a state

requirement was deemed “registration.” Indeed, in one of those

cases, International Textbook v. Pigg, 217 U.S. 91, 110-11 (1910),

the Court acknowledged that the requirements imposed by Kansas

on foreign corporations (filing a statement giving information

about the corporation with the Kansas Secretary of State, id. at

102-03) did not technically include procuring a “license” to do

business in the State. Still the Court struck down the state law

because the “effect” of the filing requirement “[was] practically

the same as if a formal license was required as a condition prece-

dent to the right to do . . . business [in Kansas].” Rather than

implying anything magical about a“registration” requirement, then,

the Allenberg Cotton-line of cases stands for the principle that a

state may not condition certain privileges on compliance by a

foreign corporation with state requirements such as designation

of an agent. In addition, the burden imposed on foreign corpo-

rations by the new statute may be substantial. Designation of an

agent in the manner required could make New Jersey a forum

in which the foreign corporation might readily be sued by non-

New Jersey plaintiffs-—-perhaps even on causes of action not

arising out of the corporation’s New Jersey contacts. E.g., Ran-

dolph Laboratories, Inc. Vv. Specialities Development Corp., 62

F. Supp. 897, 898-99 (D.N.J. 1945); Litton Industrial Systems,

Inc. v. Kennedy Van Saun Corp., 117 N.J. Super. 52, 60-62, 283

A.2d 551, 555-56 (Law Div. 1971). See generally Neirbo Co. Vv.

Bethlehem Shipbuilding Corp., 308 U.S. 165, 175 (1939); Restate-

ment (Second) of Conflict of Laws § 44 & Comment a (1971).

issues presented in our petition as be’ug ripe for this

Court’s consideration.

CONCLUSION

For the foregoing reasons, the cross-petition for a writ

of certiorari should be denied.