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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1985
- **Citation:** 469 U.S. 1123

## Text

Office Supreme Court, U.S,

84-5942 FILED

NOV 9 1984
No. 84-385
ALEXANDER i. STEVAS.
oY
IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

WALTER P. COONS,
Cross-Petitioner,
v.

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)

iv

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

v

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,
v.

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

2

“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

3

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.

4

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

|

5

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).

6

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

7

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.

8

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.

9

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

10

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

11

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.”

12

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-

13

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).

14

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.

November 9, 1984

Respectfully submitted,

JOHN I. LISOWSKI *
PAUL A. LISOVICZ
MorcAN, 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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0341%3A3. Public record. Not legal advice.