# Opposition Brief — Honda Motor Company, Ltd. v. Walter P. Coons > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0390%3A04 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1985 - **Citation:** 469 U.S. 1123 ## Text [ ottice-supome Court, U.S, 84-985 | FiLep OCT 24 1984 ALEXANDER a STEVAS, In The CLERK Supreme Court of the United States October Term, 1984 fa Vv HONDA MOTOR CO., LTD., Petitioner, Vv. WALTER P. COONS, Respondent. fy Vv On Petition for a Writ of Certiorari to the Supreme Court of New Jersey ty. ww BRIEF IN OPPOSITION TO PETITION FOR A WRIT OF CERTIORARI TO THE SUPREME COURT OF NEW JERSEY fy Vw Irwin I. KimMELMAN Attorney General of New Jersey Attorney for Respondent, Attorney General of New Jersey Richard J. Hughes Justice Complex CN 112 Trenton, New Jersey 08625 (609) 292-1527 JAMES J. CIANCIA Assistant Attorney General Of Counsel Harry HAvsHALTER Deputy Attorney General On the Brief COCKLE LAW BRIEF PRINTING CO., (800) 835-7427 Ext. 333 ~ BEST AVAILABLE COPY TABLE OF CONTENTS Pages Counterstatement of the Case ... = A wee” Argument: In Accordance With The Equitable Standards Established By This Court, The Supreme Court Of New Jersey Correctly Determined To Apply The Invalidity of N.J.S.A. 2A :14-22 On A Pro- spective Basis ...... ; Waiiiiitieiihibamaie: I hit as pidhentliadeesiesce ae AUTHORITIES CITED Allen v. State Board of Elections, 393 U.S. 544 (1969) 18 Bacchus Imports, Ltd. v. Dias, 52 U.S.L.W. 4979 (June BIT rn TSE re he ot ca ae Pe a 19 Buckley v. Valeo, 424 U.S.1 (1976) 17 Chevron Ou Co. v. Huson, 404 U.S. 97 (1971) 5, 6,9, 14, 15 Chicot Co. Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 374 (1940) ..... Se nah 06S Rs ae 5 Cipriano v. City of Houma, 395 U.S. 701 (1969) 0... 17 City of Phoenix v. Kolodziejski, 399 U.S. 701 (1970)... 18 Coons v. American Honda Motor Company, 94 N.J. 307, 463 4.2d 921 (1983) passim Coons v. American Honda Motor Co., Inc., 96 NJ. 419, 476 A.2d 763 (1984) | : 4, 20 Edwards v. Arizona, 451 U.S. 477 (1984) 17 G.D. Searle & Company v. Cohn, 455 U.S. 404 (1982) 3,9, 11 Jenkins v. Delaware, 395 U.S. 213 (1969) 18 il AUTHORITIES CITED—Continued Pages Lemke v. Bailey, 41 N.J. 295, 196 A.2d 523 (1963) WW. 9 Lemon v. Kurtzman, 403 U.S. 602 (1971) 8 Lemon v. Kurtzman, 411 U.S. 1921 (1973) 5, 6,8, 9, 15, 16 Los Angeles Dept. of Water and Power v. Manhart, 435 U.S. 702 (1978) 17 New York v. Cathedral Academy, 434 U.S. 124 (1977) 15, 16 Norton v. Shelton Cty., 118 U.S. 425 (1886) 5 Rodrique v. Aetna Casualty & Surety Co., 395 U.S. 352 (1969) 6, 7 Salorio v. Glaser, 93 N.J. 447, 461 A.2d 1100 (1983), cert. denied, 52 U.S.L.W. 3422 (Nov. 28, 1983)...._._-19 San Antonio School District v. etait 411 US. 160 (1973) . 18 Solem v. Stumes, 55 U.S.L.W. 4307 (Feb. 29, 1984) 17 State v. Johnson, 457 U.S. 537 (1982) 16, 17 State v. Vigliano, 50 N.J. 51, 232 A.2d 129 (1967) —.. 18 United States v. U.S. Coin & Currency, 401 U.S. 715 (1971) 15, 16 Velmohos v. Maren Whncihii. Corp., 83 N.J. 282, 416 A.2d 372 (1980) 10 OTHER AUTHORITIES N.J. Ct. R. 2:12-2 3 N.J.S.A, 2A :14-2 2 N.J.S.A, 2A :143 14 N.J.S.A. 2A:14-22 1, 2, 3, 4, 5, 9, 12, 13 Traffic and Motor Vehicle Safety Act, 15 U.S.C. 1399(e) 2 COUNTERSTATEMENT OF THE CASE The petitioner, Honda Motor Co., Ltd., is seeking, by writ of certiorari, to have this Court review a decision by the Supreme Court of New Jersey holding that, based upon the balancing of equitable principles reaffirmed by this Court in numerous decisions, its previous declaration of invalidity of a portion of the New Jersey tolling sta- tute, V.J.S.A. 2A :14-22,* on Commerce Clause grounds is to be prospectively applied as of August 3, 1983, the date of the declaration of invalidity. N.J.S.A. 2A:14-22 pro- vides for a tolling of certain statutes of limitation against foreign corporations which are not represented in New Jersey for service of process. *N.J.S.A. 2A:14-22 states that, lf any person against whom there is any of the causes of action specified in sections 2A:14-1 to 2A:14-5 and 2A: 14-8, or if any surety against whom there is a cause of action specified in any of the sections of article 2 of this chapter, is net a resident of this State when such cause of action accrues, or removes from this State after the accrual thereof and before the expiration of the times limited in said sections, or if any corporation or corporate surety not organized under the laws of this State, against whom there is such a cause of action, is not represented in this State by any person or officer upon whom sum- mons or other original process may be served, when such cause of action accrues or at any time before the expiration of the times so limited, the time or times dur- ing which such person or surety is not residing within this State or such corporation or corporate surety is not so represented within this State shall not be computed as part of the periods of time within which such an action is required to be commenced by the section. The person entitled to any such action may commence the same after the accrual of the cause therefor, within the period of time limited therefor by said section, exclusive of such time or times of nonresidence or nonrepresentation. This matter commenced as a personal injury suit brought by the respondent, Walter P. Coons (‘‘Coons”), in the Superior Court of New Jersey, Law Division. Coons was the owner of a Honda CB 350 motoreyele and was injured as a result of an accident on October 30, 1974 while riding the eyele. Coons instituted legal action on October 30, 1978 naming as the primary defendants Honda Motor Company, Ltd. (‘‘Honda”’), the manufacturer of the motoreyele, and American Honda Motor Co. (‘‘ Ameri- ean Honda”), the distributor of Honda products in the United States. American Honda is a California corpora- tion that maintains /acilities in New Jersey. Honda is a Japanese corporation which is not authorized to do busi- ness in New Jersey. American Honda was served with a summons and complaint by mail at its Moorestown, New Jersey facility. Service of process upon Honda was ef- fected as a result of a court order permitting substituted service upon a Washinton, D.C. law firm, which acted as Honda’s agent under the Trafiic and Motor Vehicle Safe- ty Act, 15 U.S.C. 1399(e) (App. 65a-66a). The trial court dismissed American Honda as a de- fendant because the suit was instituted beyond the two- year statute of limitations under N.J.S.A. 2A :14-2 (App. Tia). Honda thereafter filed a motion for summary judgment seeking dismissal of the suit also on the basis that the complaint was instituted beyond the two-year stat- ute of limitations. The trial court denied the motion and held that the two-year statute had been tolled by N.J.S.A. 2A :14-22 since Honda was a foreign corporation which was not represented in this State by a person upon whom process could be served. The trial court further held that the statute was consistent with the Equal Protection Clause of the Federal Constitution (App. 69a-70a). Upon appeal, the Superior Court of New Jersey, Appellate Di- vision, affirmed the judgment of the trial court. Honda filed a motion for leave to appeal to the Supreme Court of New Jersey which was denied. Following the filing by Honda of a notice of appeal with this Court, an order was entered on March 8, 1982, vacating the judgment of the Appellate Division and remanding the matter to the Ap- pellaie Division for further consideration in light of G.D. Searle & Company v. Cohn, 455 U.S. 404 (1982). The Attorney General intervened on the remand in support of the constitutionality of N.J.S.A. 2A :14-22. In the Searle ease, this Court sustained the validity of N.J.S.A. 2A :14 22 on Due Process and Equal Protection grounds, but re- manded the case for further consideration in light of a Commerce Clause challenge. On September 14, 1982, the Supreme Court of New Jersey directly certified this case pending unheard in the Appellate Division.* (App. 73a). On August 3, 1983, the New Jersey Supreme Court issued the opinion and judgment in Coons v. American Honda Motor Company, 94 N.J. 307, 463 A.2d 921 (1983) (Coons 1), which determined that, 1. The only formal means by which a foreign cor- poration can become represented and thus desig- nate an agent for the purpose of accepting ser- o~ vice of process in New Jersey is by receiving a certificate of authority from the New Jersey Sec- retary of State to do business in New Jersey un- der N.J.S.A. 144A :13-4, *Pursuant to N.J. Ct. R. 2:12-2, the Supreme Court of New Jersey may directly certify an appeal pending unheard in the Superior Court, Appellate Division. 4 2. The only means by which a foreign, unrepresented corporation could avoid the tolling of the appli- eable statute of limitations under N.J.S.A. 2A :14- 22 is by designating an agent upon whom process can be served in the context of securing a certifi- cate of authority to do business in New Jersey from the New Jersey Secretary of State. 3. The tolling provision, N.J.S.A. 2A :14-22, is viola- tive of the Commerce Clause of the United States Constitution because it imposes a ‘‘foreed licen- sure” upon an unrepresented, foreign corporation by requiring a certificate of authority from the New Jersey Secretary of State as the only means for such corporation to he represented in New Jersey and thus avoid the tolling effect of the statute. 4. The decision is to, ... be given retrospective effect, consistent with the general rule applied in civil cases that a new ruling shall apply to all matters that have not reached final judgment. See For v. Snow, 6 N.J. 12, 14 (1950). [App. 78a]. Following the decision in Coons I, Coons filed a peti- tion for rehearing with the Supreme Court of New Jersey regarding all of the issues previously considered. The petition for rehearing was granted solely on the issue of retroactive application of the decision in Coons I. The Supreme Court of New Jersey thereafter issued an opin- ion and judgment, dated June 13, 1984, in Coons v. Ameri- can Honda Motor Co., Inc., 96 N.J. 419, 476 A.2d 763 (1984) (Coons II), which held that the invalidity of N.J.S.A. 2A: 14-22 on Commerce Clause grounds warranted a prospec- tive application of Coons I as of August 3, 1983, the date of that decision. The prospective holding applied to all litigants, including the participating defendant and amici. The Supreme Court of New Jersey, in reaching its deci- sion on the prospectivity issue, applied the equitable bal- ancing test best typiiied in Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), and Lemon v. Kurtzman, 411 U.S. 1921 (1973) (Lemon II). The court noted that since its deci- sion in Coons I was the equivalent of a new rule of law clearly not anticipated and since justifiable reliance was placed on a system that provided for a tolling of statutes of limitation with respect to unrepresented, foreign cor- porations, the holding of prospectivity was proper and consistent with the relevant precedents of this Court. co) ARGUMENT In Accordance With The Equitable Standards Established By This Court, The Supreme Court Of New Jersey Correctly Determined To Apply The Invalidity Of N.J.S.A. 2A:14-22 On A Pros- pective Basis. The applicable common law doctrine initially required the determination of a statute’s unconstitutionality to be retroactive on the basis that the statute was ‘‘. . . inoper- ative as though it had never been passed.’’ Norton v. Shel- ton Cty., 118 U.S. 425 (1886). In Chicot Cos Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 374 (1940), this Court recognized the Norton doctrine as being overly broad and subject to rejection in the context of public policy concerns regarding the justifiable reliance upon existing iaw: The actual existence of a statute, prior to such a de- termination, is an operative fact and may have con- 6 sequences which cannot justly be ignored. The past cannot always be erased by a new judicial declara- tion... . Questions of rights claimed to have hecome vested, of status, of prior determination deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. Subsequent decisions by this Court have clearly eroded the Norton doctrine and have substituted an equitable balancing test to determine whether a statute’s invalidity is to be prospectively or retroactively applied. That balancing test is best illustrated in Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), and Lemon v. Kurtzman, 411 U.S. 192 (1973) (Lemon II). Prior to Chevron, supra, this Court held in Rodrique v. Aetna Casualty & Surety Co., 395 U.S. 352 (1969), that state law rather than ad- miralty law, including state statutes of limitation, applied to personal injury actions relating to fixed structures on the Outer Continental Shelf. Chevron involved a suit for personal injury suffered by the plaintiff while working on the defendant’s drilling rig located on the Outer Con- tinental Shelf. At the time the Chevron suit was insti- tuted, the two-year statute of limitations under admiraity law was deemed applicable. The Chevron suit was filed within two years of the injury but outside the one-year statute of limitations governing under state law. The Chevron Court noted that in the last few decades it had recognized the doctrine of nonretroactivity outside the criminal area many times in both constitutional and non- constitutional cases (404 U.S. at 106) and translated those holdings into a three-part test to determine whether a ret- roactive application was warranted: In our cases dealing with the nonretroactive question, we have generally considered three separate factors. First, the decision to be applied nonretro- actively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, see e.g., Hanover Shoe v. United Shoe Machinery Corp., supra, at 496, 20 L.Fd.2d at 1243, or by deciding an issue of first impres- sion whose resolution was not clearly foreshad- owed, see, e.g., Allen v. State Board of Elections, supra, at 572, 22 L.Ed.2d at 20. Second, it has been stressed that ‘‘we must ... weigh the merits and de- merits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.” Linkletter v. Walker, supra, at 629, 14 L.Ed.2d at 608. Finally, we have weighed the in- equity imposed by retroactive application, for ‘*{wlhere a decision of this Court could produce sub- stantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the ‘in- justice or hardship’ by a holding of nonretroactivity.”’ Cipriano v. City of Houma, supra, at 706, 23 L.Ed.2d at 652. [404 U.S. at 106-107]. In applying these factors, this Court concluded that the state statute of limitations should not be applied retro- actively. It noted that Rodrigue, supra, was not only a ease of first impression but also overruled prior lower court decisions which were binding. It was thus proper for the plaintiff to have relied on the “existing” law at the time suit was instituted. This Court opined that sub- stantial inequitable results would be produced by a retro- active application of Rodrigue since the plaintiff had suf- fered serious injury for which he may be barred from further relief because of a sudden change in the appli- cable statute of limitations. In Lemon II, supra, in which this Court determined that its holding in Lemon I* was to be given prospective effect, Chief Justice Burger, writing for the Court, held that the abandonment of the Norton doctrine was com- pelled by the “recognition that statutory or judg. nade rules of law are hard facts on which people must rely in making decisions and in shaping their conduct.” 411 U.S. at 199. He stated that the process of reconciling consti- tutional concerns reflected in a new rule of law with re- liance interests founded upon the old law presents a dif- ficult issue which must incorporate various considera- tions, including the relations and conduct of parties, of rights that may have vested, of status, of prior determin- ations that have been deemed final and public policy. 411 U.S. at 199. He noted, however, that, “reliance interests must weigh heavily in the shaping” of proper equitable remedies. 411 U.S. at 203. Chief Justice Burger further stated that, Here, we are not considering whether we will apply a new constitutional rule of criminal law in reviewing judgments of convictions obtained under a prior standard; the problem of the instant case is essen- tially one relating to the appropriate scope of federal equitable remedies, a problem arising from enforce- ment of a state statute during the period before it had been declared unconstitutional. . . . But however we state the issue, the fact remains that we are asked to re-examine the District Court’s evaluation of the proper means of implementing an equitable decree. 1411 U.S. at 199}. *Lemon Il is distinguishable from Lemon | (Lemon v. Kurtz- man, 403 U.S. 602 (1971)), in which this Court invalidated a Pennsylvania statutory program to reimburse nonpublic sec- tarian schools for designated secular educational services. 9 Thus, the contention by petitioner that the issue of retro- activity-prospectivity in this matter involves questions of constitutional dimension is simply not accurate. This is- sue relates to essentially equitable considerations which must be closely scrutinized to reach a fair result. The Supreme Court of New Jersey applied the prin- ciples enumerated in Chevron and Lemon I/ in determin- ing that the invalidity of N./J.S.A. 2A:14-22 was to re- ceive prospective application. Initially, in applying the three-part test of Chevron, the court noted that its hold- ing of invalidity in Coons I under the Commerce Clause was not foreshadowed and constituted a new principle of law. The tolling statute, N.J.S.A. 2A:14-22, had been on the books since 1949 and a tolling provision had been a fixture of New Jersey law since 1820. See Lemke v. Bai- ley, 41 N.J. 295, 298, 196 A.2d 523, 525 (1963). The first mention of a potential Commerce Clause problem by an appellate court was this Court’s decision in G.D. Searle & Co. v. Cohn, supra. Thus, as of 1978, the vear in which plaintiff contemplated this law suit, there was no indi- cation of the invalidation of the tolling statute as to for- eign, unrepresented corporations on Commerce Clause grounds. The New Jersey Supreme Court thus aptly con- cluded that, Hence, the declaration of Coons I was hardly foreshadowed; and although the case did not literal- ly alter precedent because there was none on the holding of the case, it amounted to a “statement” in a matter of first impression—and thus “new law.” [App. 16a]. With regard to another facet of the Chevron test, the consideration of reliance, it is appropriate to recog- nize that potential New Jersey plaintiffs were justified in 10 relying on the existence of the tolling statute in believing that causes of action against foreign, unrepresented cor- porations would be preserved in New Jersey. Obviously, the retroactive invalidity of the tolling statute may for- ever bar such plaintiffs from instituting legal action in this State. For example, there may exist potential plain- tiffs, wno had a cause of action against a foreign, unrep- resented corporate defendant which was amenable to long- arm service in New Jersey during the assumed tolling of the statute of limitations.* Such plaintiffs, in strict re- liance on the tolling statute and for reasons of conveni- ence, strategy, expense and the like, opted to refrain from utilizing long-arm service as the only available means for instituting action in this State within the statute of lim- itations. Such potential plaintiffs would be seriously prej- udiced by a retroactive application of Coons I sinee, but for the tolling statute, timely suit would have been com- menced in New Jersey. In addition, there may be poten- tial plaintiffs whe had a substantial cause of action against a foreign, unrepresented corporate defendant which was not amenable to long-arm service in New Jer- sey. Such plaintiffs, but for the tolling statute and the anticipation of filing suit in New Jersey sometime in the future, would have presumably made effort to institute action in a foreign jurisdiction in order to prosecute the eause of action. The expense and inconvenience of in- stituting such an action would have been justified in light of the seriosusness and/or substantiality of the cause of *In Velmohos v. Maren Engineering Corp., 83 N.j. 282, 416 A.2d 372 (1980), the Supreme Court of New Jersey held that the tolling effect was applicable even to foreign, unrepresent- ed corporations that were subject to long-arm service of pro- cess. 11 action. Clearly such plaintiffs would be severely preju- diced by a retroactive application of the tolling statute’s invalidity particularly if the availability of the out-of-state forum were now foreclosed because the applicable stat- utes of limitation had run. It is obviously difficult to gauge the number of plain- tiffs that may be affected by a retroactive holding and it is also difficult to determine the prejudice to be suffered by those actual or potential plaintiffs who may have re- lied on the tolling statute. It is clear, however, that the tolling statute must have served a useful purpose in pre- serving causes of action for New Jersey residents re- garding foreign, unrepresented corporate entities other- wise the New Jersey Legislature would not have enacted such a provision. The salutary purpose served by such legislation was unequivocally recognized in G.D. Searle & Company v. Cohn, supra. As previously noted, the toll- ing provision has represented a fundamental facet of New Jersey’s jurisprudence for many years. The pub- lic had no hasis for anticipating a judicial ruling that the tolling statute was invalid and, therefore, had no oppor- tunity to structure its legal strategy accordingly. Thus, in fairness to potential or actual plaintiffs who justifiably relied on the validity of the tolling provision, the holding of unconstitutionality in Coons I was properly applied prospectively. Such a holding terminated the tolling of the statutes of limitation applicable to causes of action against foreign, unrepresented corporate defendants on August 3, 1983, the date of the decision in Coons I, and triggered the running of the statutes of limitation as of that date. Further compounding the egregious inequity that would result from a retroactive holding of Coons I is the 12 recent amendment to N./J.S.A. 2A:14-22 by the enactment of New Jersey Public Law 1984, Chapter 131. This law was approved and became effective, on August 23, 1984. The amendment added the following italicized para- graph to N.J.S.A, 2A:14-22:* If any person against whom there is any of the causes of action specified in sections 2A :14-1 to 2A: *N.J. Public Law 1984, Chapt. 131, was introduced in the New Jersey Legislature as Senate Bill 953 (1984). The Senate Judici- ary Committee Statement to Bill 953, dated February 23, 1984, clearly identifies that its purpose was to remedy the uncon- stitutional defect found in Coons !: N.J.S. 2A:14-22 tolls the running of the statute of limitations in civil actions against foreign corporations that are not represented in New Jersey and thus cannot be reached with service of process. This bill would pro- vide that a foreign corporation would be deemed repre- sented in New Jersey for the purpose of N.j.S. 2A:14-22 if the corporation filed with the Secretary of State a no- tice designating a representative to accept service of process. The bill was introduced in response to a recent New Jersey Supreme Court decision, Coons v. American Honda Co., Inc., 94 N.J. 327 (1983). In that decision, the court determined that in order to be ‘“‘represented” in the con- text of N.j.S. 2A:14-22, a foreign corporation must ob- tain a certificate to do business in New Jersey. The court ruled that this requirement was in violation of the com- merce clause of the U.S. Constitution in that it unduly burdened interstate commerce by requiring a foreign cor- poration engaged exclusively in interstate commerce to obtain such a certificate. The filing of a notice designating a representative to accept process is a less burdensome requirement than ob- taining a certificate to do business. Therefore, by pro- viding that a foreign corporation would be deemed rep- resented for purposes of N.j.S. 2A:14-22 if such a notice were filed, S-953 is intended to meet the Supreme Court's objections as stated in the Coons decision and thereby assist New Jersey citizens to pursue their claims against foreign corporations. 13 14-5 and 2A :14-8, or if any surety against whom there is a cause of action specified in any of the sections of articie 2 of this chapter, is not a resident of this State when such cause of action accrues, or removes from this State after the accrual thereof and before tne ex- piration of times limited in said sections, or if any corporation or corporate surety not organized under the laws of this State, against whom there is such a cause of action, is not represented in this State by any person or officer upon whom summons or other original process may be served, when such cause of action accrues or at any time before the expiration of the times so limited, the time or times during which such person or surety is not residing within this State shall not be co:mputed as part of the periods of time within which such an action is required to be commenced by the section. The person entitled to any such action may commence the same after the accrual of the cause therefor, within the period of time limited therefor by said section, exclusive of such time or ,times of nonresidence or nonrepresentation. A cor- poration shall be deemed represented for purposes of this section if the corporation has filed with the Sec- retary of State a notice des'gnating a representative to accept service of process. The amendment to N.J.S.A. 24 :14-22 provides that foreign, unrepresented corporations may file a notice with the New Jersey Secretary of State designating a repre- sentative to accept service of process in order to be rep- resented in New Jersey and thereby avoid the tolling ef- fect. Accordingly, as of May 23, 1984, foreign, unrepre- sented corporations no longer need to obtain a certificate to do business in New Jersey as the sole means of avoid- ing the tolling effect of N.J.S.A. 2A:14-22. Therefore, the constitutional defect of the statute determined in Coons I has been cured. 14 In light of the statutory amendment, the equitable scales even more than ever tip in the direction of a pros- pective holding of Coons I.