# Opposition Brief — Juzwin v. Asbestos Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_1819%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1990 - **Citation:** 498 U.S. 896 ## Text IN THE Supreme Court of the United States OCTOBER TERM, 1990 > STEPHEN JUZWIN, ef ux., Petitioners, _V— ASBESTOS CORPORATION, LTD., efc., et al., Respondents. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT SEE nRIEE — LL a aca BRIEF IN OPPOSITION FOR RESPONDENT CAREY CANADA, INC. ANDREW T. BERRY Counsel of Record KEVIN J. CONNELL MCCARTER & ENGLISH Four Gateway Center 100 Mulberry Street Newark, New Jersey 07102 (201) 622-4444 Attorneys for Respondent Carey Canada, Inc. i PARTIES TO THE PROCEEDING AND RULE 29.1 STATEMENT The parties to the proceeding below included: 1) Carey Canada, Inc. (defendant-appellant below) [incorrectly listed in the petition as ‘‘Carey Cana- dian Mines]; 2) Stephen Juzwin and Mary Juzwin, his wife (plaintiffs-appellees below); 3) The State of New Jersey (intervenor below); 4) Amtorg Trading Corp. (defendant-appellee below); 5) Asbestos Corp., Ltd. (defendant-appellee below); 6) Bell Asbestos Mines, Ltd. (defendant-appellee below); 7) Flintkote Mines, Ltd. (defendant-appellee below); 8) Metropolitan Life Insurance Co. (defendant-appellee below); 9) Leonard J. Buck, Inc. (third-party defendant- appellee below). 10) Wilentz, Goldman & Spitzer, P.C. (counsel for ami- cus curiae below). Four corporations lis*2d in the petition were parties to the proceedings in the district court, but were not parties to the proceedings in the court of appeals: a) Turner & Newall, P.L.C. (third-party defendant), b) National Gypsum Co. (third-party defendant), c) Lac D’Amiante du Quebec Limitee (defendant), d) Associated Ore & Metal Corp., Ltd. (fourth- party defendant). Pursuant to Rule 29.1 respondent Carey Canada, Inc. states that its parent company is The Celotex Corporation. (The Celotex Corporation’s parent is Jim Walter Corpora- tion). Respondent has no affiliates or other than wholly owned subsidiaries. TABLE OF CONTENTS PAGE PARTIES TO THE PROCEEDING AND RULE 29.1 A in occ cae ncdundceue eee i TADLE OP AATTURIITIOE «<< ccs éccedccscnaeess iii I od ci vaceae ee 1 COUNTERSTATEMENT OF THE CASE........... 2 A. POURRERETY DROUIN oo nnn cc cesaseicccscecs 2 De ee oo 6a ko 66o kos ee hee ee 3 REASONS FOR DENYING THE WRIT I. THE DECISION OF THE THIRD CIRCUIT DOES NOT CONFLICT WITH THE LAW OF NEW JERSEY AND THE NEW JERSEY APPELLATE COURTS ARE CURRENTLY CONSIDERING WHETHER TO FOLLOW TERRE DB ccs cncnaceceecinessseas 6 A. New Jersey Law Does Not Provide for the ‘Saving Construction’’ of the Tolling Stat- ute Urged by Petitioners .........cccee0. 6 B. The New Jersey Superior Court, Appellate Division is Currently Reviewing the Com- merce Clause Issue Decided by the Third eo ee ia bed on beeke eke 10 C. The Third Circuit Utilized Petitioners’ ‘‘Saving Construction’ in Striking the Tolling Statute on Commerce Clause COORG 6.045 nsteeudakdanneeeeaseeeee 12 — II. Ill. IV. THE THIRD CIRCUIT’S DECISION STRIK- ING THE NEW JERSEY TOLLING STAT- UTE UNDER THE INTERSTATE COM- MERCE CLAUSE IS ENTIRELY CONSIS- TENT WITH THIS COURT’S PRECE- A. Heightened Interstate Commerce Clause Scrutiny is the Appropriate Standard of Review for the Tolling Provision at Bar.. B. The Tolling Provision at Bar Cannot Sur- vive Scrutiny Under the Interstate Com- merce Clause Balancing Test ............ C. The Existence of a Commerce Clause Vio- lation is Not Dependent Upon a Finding That a State’s Enactment Confers Com- petitive Advantages Upon its Residents... EVEN IF THE THIRD CIRCUIT USED AN INAPPROPRIATE STANDARD OF INTER- STATE COMMERCE CLAUSE REVIEW, THE DECISION BELOW STRIKING THE NEW JERSEY TOLLING STATUTE IS WARRANTED UNDER THE STANDARD OF SCRUTINY APPLICABLE TO REGU- LATIONS BURDENING INTERNATIONAL DE CEGAG5 Gs 0866066000reencccces RETROACTIVE APPLICATION OF THE THIRD CIRCUIT’S DECISION STRIKING THE NEW JERSEY TOLLING STATUTE ON COMMERCE CLAUSE GROUNDS CONSTITUTES A PROPER APPI ICATION OF THIS COURT’S PRECEDENTS. ........ ETT TEE Ee PAGE 14 14 18 21 22 24 30 iv TABLE OF AUTHORITIES Cases: PAGE Allied Signal, Inc. v. Purex Industries, Inc., 242 N.J. Super. 362, 576 A.2d 942 (N.J. Super. Ct. App. Div. Anderson v. Owens-Corning Fiberglas Corp., No. W-012500-89 (N.J. Super. Ct. Law Div. Middlesex PPT PTTeT CTT TT TTT TOTTI TT TTT TT eT Tee 12 Armenti v. Carey Canada, Inc., No. L-045449-87 (N.J. Super Ct. Law Div. Middlesex County), aff’d with- out opinion, No. 177-88T3F (N.J. Super. Ct. App. Div. order filed November 7, 1988) ............. 6, 7, 10 Badaracco v. Commissioner, 464 U.S. 386 (1984) .... 8 Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U.S. 888, 108 S. Ct. 2218 (1988) ....7, 8, 13, passim Board of Trustees of the Univ. of Illinois v. United NE, See Meats ee CD 6 ha Nek ad ean wcescddesaces 22 Burnham v. Superior Court of California, County of ee, Re es ks nS oan daca dcascedwses 9 Chevron Oil Co. v. Huson, 404 U.S. 97 (1971)..... 24, 25, Cohn v. G.D. Searle & Co., 784 F.2d 460 (3d Cir.), cert. denied, 479 U.S. 883 (1986) ...........ceeoe 27, 28 Cohn v. G.D. Searle & Co., 447 F. Supp. 903 (D.N.J. 1978), rev’d sub nom., Hopkins v. Kelsey-Hayes, Inc., 628 F.2d 801 (3d Cir. 1980), vacated and remanded, 455 U.S. 404 (1982), remanded sub nom., Hopkins v. Kelsey-Hayes, Inc., 677 F.2d 301 (3d Cir 1982), on remand, 598 F. Supp. 965 (D.N.J. 1984), reversed in part and remanded, 784 F.2d 460 (3d Cir.), cert. denied, 479 U.S. 883 (1986)........ 7, 17, 18, 19, passim — PAGE Coons v. American Honda Motor Co., 94 N.J. 307, 463 A.2d 921 (1983) (‘‘Coons I’’), modified, 96 N.J. 419, 476 A.2d 763 (1984) (‘‘Coons II’’), cert. denied, et Gs Ee EE 66 669.6 6:000-0000c0006e0K805 3, 27, 28 Coons v. American Honda Motor Co., 96 N.J. 419, 476 A.2d 763 (1984) (‘‘Coons II’’), cert. denied, 469 ft FF rr eer re 3 Coons v. Honda Motor Co., 176 N.J. Super. 575,- 424 A.2d 446 (App. Div. 1980), vacated, 455 U.S. 996 ee Pee ee re ee ee ee 26, 27 Crespo v. Stapf, 242 N.J. Super. 254, 576 A.2d 346 CR.t. SR: SA, I Te Te nok ccna ceneesas 15, 16 Cutler v. Raymark Industries, Inc., 707 F. Supp. 168 (D.N.J. 1989), overruled, Juzwin v. Asbestos Corp., E5G., GED Fue Ge Cee Gls, BHD bc kee wccnenciens 6 DiFalco v. Subaru of America, Inc., No. W-019907-88 (N.J. Super. Ct. Law Div. Passaic County), motion for leave to appeal granted, Motion No. M-6197-89, Docket No. A-6247-89T3F (N.J. Super Ct. App. ee Se ee 5. 6 b'o 6e 000 0508 506008 11 Duke Power v. Carolina Environmental Study Group, i Se Se TD 6 6 6 656605 06 Keehn ce cawean 20 Eli Lilly & Co. v. Sav-On-Drugs, Inc., 366 U.S. 276 SEP soc ku os cunssteeaccauansdackscauayecssevess 17 Ford Motor Co. v. Insurance Comm’r of Pa., 874 F.2d 926 (3d Cir.), cert. denied sub nom., United Service Auto. Ass’n v. Foster, 110 S. Ct. 4i8 (1989) ...... 18 Great Western United Corp. v. Kidwell, 577 F.2d 256 (Sth Cir. 1978), rev’d 443 U.S. 182 (1979)......... 20 Harmon yv. Phillips Petroleum Co., 555 F. Supp. 447 ek Sn MOE na sec eece kas esau nekedunueeaedens 8 ii eee vi PAGE Honda Motor Co. v. Coons, 455 U.S. 996 (1982).... 27 Hopkins v. Kelsey-Hayes, Inc., 628 F.2d 801 (3d Cir. 1980), vacated and remanded, 455 U.S. 984 (1982), remanded, 677 F.2d 301 (3d Cir. 1982)........ 19, 20, 26 Hughes v. Oklahoma, 441 U.S. 322 (1979) .......... 15 Japan Line, Ltd. v. County of Los Angeles, 441 U.S. a ee ee ne a ere 23 Juzwin v. Asbestos Curp., Ltd., 900 F.2d 686 (3d Cir. errr rer rr TTT PT TET TET TT eee 1, 3, passim Juzwin v. Amtorg Trading Corp., No. 87-3876, slip op. (D.N.J. opinion filed February 28, 1989), rev'd, og = — fF: Ce Ae RAITT IT TTT Tree l Juzwin v. Amtorg Trading Corp., 705 F. Supp. 1053 (D.N.J. 1989), vacated on reconsideration, 718 F. BS BAD CN Rs NOEs ccc ccccstevescscenteces 2 Lemke v. Bailey, 41 N.J. 295, 196 A.2d 523 (1963) .. 26 Lemon v. Kurtzman, 411 U.S. 192 (1973) (‘‘Lemon PL en, SARE ig a a ey ear 24, 25 Leogrande v. Keene Corp., No. W-026197-87 (N.J. Super. Ct. Law Div. Middlesex County)........... 12 Maine v. Taylor, 477 U.S. 131 (1986)............... 15 Materials Research Corp. v. Metron, Inc., 64 N.J. 74, i is phe ee beck eeeeeeeknensess 4 17 Mayflower Securities Co. v. Bureau of Securities, 64 ee Oe ee OD CUED 24.0 cc endttcnceeenes ss 10 McGlone v. Corbi, 59 N.J. 86, 279 A.2d 812 (1971) . 29 Michelin Tire Corp v. Wages, 423 U.S. 276 (1976)... 22 Norfolk Southern Corp. v. Oberly, 822 F.2d 388 (3d Eade nt ht sb0ees hessees beecebussacdeas 24 — Vii PAGE Old Coach Development Corp. v. Tanzman, 881 F.2d oe ee eT re 15 Pike v. Bruce Church, Inc., 397 U.S. 137 (1970)..... 18 Robinson v. Visual Packaging, Inc., 705 F. Supp. 216 es MING 4S es ONS ES ck cu Wieewetsanenescubeses 9, 10 Service Armament Co. v. Hyland, 70 N.J. 551, 362 EE eT er 10 South Central Timber Development Inc. v. Wunnicke, Se ee Se hb 8 0 hw She ce he Keke races teedese 23 United States v. Curtiss-Wright Export Corp., 299 U.S. Se Eo -wob + 6 64-00 u 0 064 Kb 44006000 008senebuens 22 Weinberger v. Salfi, 422 U.S. 749 (1975) ............ 20 Wickard v. Filburn, 317 U.S. 111 (1942) ............ 24 Constitutional Provisions: is fo Se PTE rere 2, 3, passim Came GME, GUO, Fwy Bbc ncccecanccccs 14, 19, 20, 21 Statutes: Se eee, BRD CEOUED bec on ccncccccvecnonnceses 5 ee ce. IE UE Sh 4 6000s cccnennancuecstcann 4 ee ees: he SOE is 6.66 ce ancanuesccceneuces 4 ee se I CE 8 8.6 av oes ewan wan ankseccenn 12 N.J. Stat. Ann. § 2A:14-22 (West 1987) ....... 2, 3, passim N.J. Stat. Ann. § 2A:53A-1-47 (West 1987).......... 29 N.J. Stat. Ann. § 14A:4-1(1) (West Supp. 1990)...... 16 N.J. Stat. Ann. § 14A:4-2(1) (West Supp. 1990)...... 4, 16 Vili PAGE N.J. Stat. Ann. § 14A:13-3(2) (West 1969)........... 17 N.Jj. Stat. Ann. § 14A:13-11(2) (West 1969).......... 17 Rules: POF. COOUE TR. BSD ccc ccccncncccccccccsessccceces 7 PEF. SARE TR. GE cc ccc ccccccenccsccccccsccecans 12 Miscellaneous Authorities: H. Black, Black’s Law Dictionary (Sth ed. 1979)..... 29 G. Gunther, Cases and Materials on Constitutional SAD GE GE, BEND 0 6c chcccccccesvacscecsosceenes 20 RED PRB. SED Gk ccc cccccccnsecccsesesseses 27 J. Nowak, R. Rotunda & J. Young, Constitutional Law (3d ed. L. Tribe, American Constitutional Law (2d ed. 1988) 17, 22 cc onc de Ce ein ee ee eel ae ausched kee ees 0 ot oe > | eee SLR ec eek cee heed oe aee 5 LA | IN THE Supreme Court of the United States OCTOBER TERM, 1990 No. 90-76 >_> STEPHEN JUZWIN, ef ux., _ Petitioners, —Y ASBESTOS CORPORATION, LTD., efc., ef al., Respondents. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT >_> BRIEF IN OPPOSITION FOR RESPONDENT CAREY CANADA, INC. Respondent Carey Canada, Inc. [hereinafter ‘‘Carey Can- ada’’] respectfully requests that this Court deny the petition for a writ of certiorari seeking review of the Third Circuit’s decision in this matter. OPINIONS BELOW Although the petition correctly notes the citation for the court of appeals’ reported decision below, this respondent wishes to add that the district court opinion it reversed is not published and bears a different caption: Juzwin v. Amtorg Trading Corp., Civil No. 87-3876, slip op. (D.N.J. opinion filed February 28, 1989) (reprinted in the appendix to the Dnata 2 petition’ at 27a). Two other district court opinions in the case were published, but they concern issues unrelated to those raised in the petition.’ COUNTERSTATEMENT OF THE CASE A. Preliminary Statement This case involves the constitutionality of the New Jersey “tolling statute,’’ N.J. Stat. Ann. § 2A:14-22 (West 1987),’ which provides, inter alia, that the statute of limitations applicable to a plaintiff’s claim will toll—that is, cease to run—as to a defendant foreign corporation (not organized under the laws of New Jersey) during the time it is not ‘‘rep- resented’’ within the state. For purposes of the tolling stat- ute, a foreign corporation not ‘‘represented’’ within the jurisdiction ‘‘by any person or officer upon whom summons or other original process may be served,’’ will be ‘‘deemed represented for purposes of this section if the corporation has filed with the Secretary of State a notice designating a repre- sentative to accept service of process.’’ N.J. Stat. Ann § 2A:14-22. Since respondent Carey Canada was ‘‘formed under the laws of Canada, has no corporate offices in the 1 Hereinafter citations to the appendix to the petition will be stated as: **Pet. App. a’’; citations to the petition itself will be stated as: ‘‘Pet. 2 The petition addresses the validity of the New Jersey ‘‘tolling stat- ute’’ under the Commerce Clause of the United States Constitution; the two published district court opinions concern the constitutionality of punitive damages: Juzwin v. Amtorg Trading Corp., 705 F. Supp. 1053 (D.N.J. 1989), vacated on reconsideration, 718 F. Supp. 1233 (D.N.J. 1989). Unfor- tunately, in preparing the reported version of the Third Circuit opinion below striking the New Jersey tolling statute on commerce clause grounds, West Publishing Co. erroneously replaced citations to the district court’s unpublished tolling statute opinion with citations to one of the district court’s reported punitive damages opinions. See Juzwin v. Asbestos Corp., Lid., 900 F.2d 686, 688 (3d Cir. 1990) (citing 705 F. Supp. 1053, 1055). 3. ~=Pet. App. 6a. Hereinafter cited without parenthetical reference to publisher and date. state of New Jersey, has never been registered to do business there, and has not appointed an agent for service of process with the Secretary of State. . . it is not ‘represented’ in New Jersey within the meaning of the tolling statute.’’ Juzwin v. Asbestos Corp., Ltd., 900 F.2d 686, 688 (3d Cir. 1990). Pet. App. 7a. It is this provision regarding designation of an agent to accept service of process’ which presented the issue litigated below. The relevant provision of the tolling statute was added to the ‘‘current’’ tolling statute’ in 1984 in an attempt to cure a constitutional defect responsible for the predecessor statute’s invalidation by both state® and federal courts.’ B. The Facts On or about July 24, 1987, petitioners Stephen Juzwin and Mary Juzwin, his wife, filed an action in the Law Division of the Superior Court of New Jersey alleging that Stephen 4 ‘‘Acorporation shall be deemed represented for purposes of this sec- tion if the corporation has filed with the Secretary of State a notice designat- ing a representative to accept service of process.’’ Pet. App. 6a. 5 Except for the addition of the relevant provision set forth in the pre- ceding note supra, the ‘‘current’’ tolling statute stricken by the decision below is identical to the ‘‘predecessor’’ tolling statute. 6 ~- In Coons v. American Honda Motor Co., 94 N.J. 307, 463 A.2d 921 (1983) [hereinafter ‘‘Coons I’’], modified, 96 N.J. 419, 476 A.2d 763 (1984) {hereinafter ‘‘Coons IT’’], cert. denied, 469 U.S. 1123 (1985), the New Jersey Supreme Court held that by requiring a foreign corporation to obtain a ‘‘cer- tificate of authority’’ to do business in New Jersey in order to achieve ‘‘rep- resentation’ and realize the benefits of the statute of limitations, the predecessor tolling statute amounted to a ‘‘forced licensure provision’’ which unconstitutionally burdened interstate commerce. Jd. at 318, 463 A.2d at 927. In Coons II the court held that its Coons J ruling should be applied pro- spectively. [Hereinafter, where appropriate, the Coons opinions will be cited without subsequent history]. 7 Cohn v. G.D. Searle & Co., 598 F. Supp. 965 (D.N.J. 1984) (striking statute on commerce clause grounds and applying decision retroactively), reversed in part and remanded, 784 F.2d 460 (3d Cir.) (requiring prospective application), cert. denied, 479 U.S. 883 (1986). [Hereinafter, where appropri- ate, opinions in the Cohn line of decisions from 1978 to 1986 will be cited without subsequent history]. 4 Juzwin [hereinafter ‘‘Juzwin’’] developed a pulmonary condi- tion as a result of his exposure to various asbestos-containing products manufactured or supplied by the defendants. Among the defendants named in the complaint was respon- dent Carey Canada, a corporation organized under the laws of Canada. Upon application of defendant Amtorg Trading Corpora- tion, the action was removed to the United States District Court for the District of New Jersey, where jurisdiction was based upon diversity of citizenship.® During the course of discovery, plaintiffs supplied answers to interrogatories admitting that Juzwin knew that he had been diagnosed as having an asbestos-related condition on or about August 16, 1982.” Moreover, on June 7, 1982—several months before he learned of that diagnosis—Juzwin, repre- sented by counsel, filed a Workers Compensation action for the same type of condition at issue in the instant case and subsequently collected benefits.'® Since plaintiffs’ action was not filed within twc years of his diagnosis as required by the applicable statute of limitations governing personal injury claims, N.J. Stat. Ann. § 2A:14-2 (West 1987), defendant Carey Canada moved for dismissal of plaintiffs’ complaint on that ground, arguing that the New Jersey tolling statute was invalid under the Commerce Clause of the United States Constitution and therefore could not operate to toll the run- 8 To assist the Court and petitioner with respect to Rule 14.1(i), Carey Canada notes that jurisdiction in the district court was predicated upon diversity of citizenship pursuant to 28 U.S.C. § 1441(a) and 28 U.S.C. § 1332(c). The amount in controversy was alleged to exceed $10,000. 9 See Joint Appendix in Juzwin v. Asbestos Corp., Ltd., 900 F.2d. 686 (3d Cir. 1990) at pages i1 and 16c. [Hereinafter citations to the Joint Appendix before the Third Circuit will be stated as ‘‘Jt. App. ”"). See also tne opinion of the district court below at Pet. App. 29a-30a. 10 See Plaintiffs’ Answers to Part I Interrogatories, response to I[.27 attaching ‘‘Employee’s Claim Petition,’’ No. 82-16872 (filed June 2, 1982 with the Division of Workers Compensation, Department of Labor and Industry, State of New Jersey), as well as two ‘‘Order(s] Approving Settle- ment With Dismissal.’’ (Discussed in Carey Canada’s opening brief to the Third Circuit at page 6). 5 ning of the limitations period. Carey Canada also requested that the decision striking the tolling statute be applied retro- actively. Pet. App. 28a; Jt. App. at 16. Although Carey Canada, a Canadian corporation, has been joined as a defendant in numerous federal and state actions in New Jersey over the past eight or more years, it is not ‘*represented’’ in the jurisdiction for tolling statute purposes. See Preliminary Statement supra. Furthermore, since Carey Canada sold its asbestos fiber ‘‘F.O.B. Quebec, Canada,’’” it did not conduct its business operations in the United States. The district court upheld the constitutionality of the tolling statute, denied Carey Canada’s motion, and certified the toll- ing statute issue for interlocutory appeal under 28 U.S.C. § 1292(b). The Third Circuit granted Carey Canada permis- sion to appeal and reversed, holding that the tolling statute impermissibly burdened interstate commerce. Furthermore, the Third Circuit, speaking through the Honorable Collins J. Seitz, C.J., held that its decision striking the tolling statute should be retroactively applied. Juzwin, 900 F.2d 686, 696 (3d Cir. 1990). Pet. App. la, 26a. 11 Carey Canada’s Answers to Interrogatories at A.4. (Discussed in Carey Canada’s opening brief to the Third Circuit at 7). A ‘‘Free on Board”’ point of origin contract requires the seller to put his goods in the possession of the carrier at that location. See U.C.C. §§ 2-319 and 2-504. al 6 REASONS FOR DENYING THE WRIT I. THE DECISION OF THE THIRD CIRCUIT DOES NOT CONFLICT WITH THE LAW OF NEW JERSEY AND THE NEW JERSEY APPELLATE COURTS ARE CURRENTLY CONSIDERING WHETHER TO FOLLOW THAT DECISION A. New Jersey Law Does Not Provide for the ‘‘Saving Con- struction’’ of the Tolling Statute Urged by Petitioners One of the principal arguments advanced by petitioners for grant of certiorari in the case at bar is that the Third Circuit disregarded a ‘‘saving construction’’ of the tolling statute adopted by New Jersey state courts. See, e.g., Pet. at 4, 6, 7, 12, 13, 14 and 24. In support of this argument, petitioners cite the unpublished summary affirmance of the New Jersey Superior Court, Appellate Division in Armenti v. Carey Can- ada, Inc.,'* and a district court opinion, Cutler v. Raymark Industries, Inc., 707 F. Supp. 168 (D.N.J. 1989), which was overruled’? by the Third Circuit decision at bar. Contrary to petitioners’ assertions, neither the bench opin- ions rendered by Law Division Judges Keefe and Mannion,“ nor the order of the Appellate Division (Pet. App. 47a) con- stitutes precedent ‘‘binding upon any court”’ since those deci- 12. Armenti v. Carey Canada, Inc., No. L-045449-87 (N.J. Super. Ct. Law Div. Middlesex County), aff’d without opinion, No. 177-88T3F (N.J. Super. Ct. App. Div. order filed Nov. 7, 1988). 13. In Cutler, the district court upheld the same tolling provision at bar in Juzwin against a commerce clause challenge. 14 Thetwo bench opinions are reprinted in the appendix to this brief at la and 23a, respectively. [Hereinafter citations to the appendix to this brief will be stated as: ‘‘Brief App.’’]. ieee 7 sions were not approved for publication pursuant to N.J. Court R. 1:36-3."° Furthermore, this respondent respectfully maintains the decisions in Armenti cannot serve even as persuasive author- ity regarding the statutory construction and commerce clause issues raised by petitioner. Both the initial trial court bench opinion, rendered before this Court’s decision in Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U.S. 888 (1988), and the second trial court bench opinion rendered thereafter pursuant to defendants’ motion for rehearing, are marred by erroneous interpretations of significant issues.'® The Appellate Division’s order in Armenti cannot serve as a greater source of persuasive authority since it ‘‘summarily affirm[s] the Law Division’s ruling ‘‘for the reasons expressed in the September 16, 1988 oral opinion of Judge Mannion which effectively supplemented the May 27, 1988 oral opinion of Judge Keefe.’’ Pet. App. 47a. A review of petitioners’ other arguments in support of the ‘saving construction’’ reveals the weakness of their position. As in the proceedings below, petitioners maintain that the New Jersey tolling statute is valid since, unlike the Ohio toll- ing provision invalidated by this Court’s decision in Bendix, 486 U.S. 888 (1988), the New Jersey enactment permits out- of-state corporations not registered to do business in New Jersey to obtain the protection of the statute of limitations by 15 That rule provides: ‘‘No unpublished opinion shall constitute prece- dent or be binding upon any court. Except to the extent required by res judi- cata, collateral estoppel, the single controversy doctrine or any other similar principle of law, no unpublished opinion shall be cited by any court. No unpublished opinion shall be cited to any court by counsel unless all other parties are served with a copy of the opinion and of all other relevant unpub- lished opinions known to counsel including those adverse to the position of his client.’’ Jd. 16 For example, Judge Keefe stated that the enactment did not unduly burden interstate commerce on the theory that since it pertains to both indi- viduals and corporations it is ‘‘not aimed simply at commerce conduct.”’ Brief App. 19a. Regarding Judge Mannion’s bench opinion, this respondent respectfully maintains that undue weight was given to the New Jersey legisla- ture’s perceived desire to create a constitutional statute. See Brief App. at 39a. 8 designating a representative for service of process whose authority is limited to causes of action as to which the corpo- ration has a ‘‘nexus’’ with New Jersey, i.e., the minimum contacts necessary for in personam jurisdiction under the Due Process Clause of the Fourteenth Amendment. See, e.g., Pet. at 5. Although nothing in the wording of the New Jersey tolling statute suggests that it permits the appointment of an agent for service of process whose authority is limited to minimum contact causes of action,'’ proponents of the statute in the proceedings below argued that the absence of language pro- hibiting such appointments permitted the federal courts to perform ‘‘judicial surgery’’ and read in such a provision. The argument that a judicial interpretation of the New Jersey toll- ing statute may ignore the plain meaning of the enactment to avoid an unconstitutional result conflicts with the sound legal principle that a court cannot substitute its judgment for that of the legislature by rewriting a statute." Petitioners’ limited designation argument is also undercut by New Jersey decisional law that designation of an agent to accept service of process subjects a corporation to the general jurisdiction of the forum.” 17 _—‘ The statute flatly states that: ‘‘A corporation shall be deemed repre- sented for purposes of this section if the corporation has filed with the Secre- tary of State a notice designating a representative to accept service of process.’’ N.J. Stat. Ann. § 2A:14-22. 18 See, e.g., Badaracco v. Commissioner, 464 U.S. 386 (1984) (courts are not authorized to rewrite a statute because they might deem its effects susceptible of improvement); Harmon v. Phillips Petroleum Co., 555 F. Supp. 447 (D. Mont. 1982) (court cannot substitute its judgment for that of the legislature or insert what it deems has been omitted). Unlike the excision of a severable unconstitutional provision, the task urged by proponents of the “‘limited designation’’ argument would require a court to traverse the boundaries between the judicial and legislative branches of government and engage in the quintessentially legislative function of for- mulating a new statute. 19 See, e.g., Allied-Signal, Inc. v. Purex Industries, Inc., 242 N.J. Super. 362, 576 A.2d 942 (N.J. Super. Ct. App. Div. 1990). In Allied, plain- — | 9 In support of their argument that the New Jersey tolling statute permits the filing of limited designations, petitioners also refer to the affidavit of Paul E. Wermuth, an attorney for the New Jersey Secretary of State. Pet. at 12-13 & n.6. In that affidavit, Mr. Wermuth, relying upon unpublished ‘tadvice of the New Jersey Attorney General’’ rather than a formal opinion from that official, maintains that the Secre- tary of State permits the ‘‘filing of designations by unregis- tered, foreign corporations of representatives for service of process only with respect to causes of action which have the minimum contacts for due process purposes in this State. Such designations are recorded by this office and insulate foreign corporations filing such designations from causes of action which have no nexus with New Jersey.’’” tiff served its complaint on Purex’s registered agent for service of process appointed pursuant to N.J. Stat. Ann. § 14A:4-1 and -2 (West. Supp. 1990). [Reprinted at Pet. App. 56a-58a]. The ‘‘only question’’ on appeal was whether plaintiff obtained personal jurisdiction over Purex by virtue of that service. 576 A.2d at 943. ‘‘Purex contended that, while it owned real prop- erty here, registering its agent for process was only related to New Jersey ~ environmental litigation stemming from its predecessor’s activities,’’ and that ‘‘it had effectively left the State for purposes of Allied’s action.’’ /d. Rejecting Purex’s limited designation argument, the court stated: ‘‘We know of no New Jersey or Supreme Court authority for the proposition that a cor- poration may limit a state’s jurisdiction in the manner Purex suggests and none has been cited to us. Moreover, Purex asserts no limiting action on its part in the appointment process under N.J.S.A. 14A:4-2.’’ Jd. Drawing on Burnham v. Superior Court of California, County of Marin, 110 S. Ct. 2105 (1990), the court held that service on Purex’s registered agent conferred per- sonal jurisdiction over that firm ‘‘regardless of the nature of the litigation.”’ 576 A.2d at 945. 20 ‘‘Affidavit of Paul E. Wermuth’’ dated September 8, 1988 at para- graph 5. [The affidavit is reprinted in the appendix hereto at Brf. App. 4Sa.] The affidavit bears the caption of, and is discussed in, Robinson v. Visual Packaging, Inc., 705 F. Supp. 216, 220 (D.N.J. 1989) (rejecting limited des- ignation argument and striking iolling statute under commerce clause). Although the proponents of the tolling statute referred to the affidavit in making their ‘‘limited designation’’ argument, the document was not filed with the clerk of the district court in the proceedings below. Nevertheless, the i 10 Since the Wermuth affidavit is by no means a controlling interpretation of the tolling statute,’ in the absence of a binding state court precedent the Third Circuit was free to construe the statute in a manner consistent with its plain meaning and reject petitioners’ limited designation argument. Indeed, a district court which struck the tolling statute on commerce clause grounds prior to the Third Circuit’s ruling below did exactly that.” B. The New Jersey Superior Court, Appellate Division Is Currently Reviewing the Commerce Clause Issue Decided by the Third Circuit One of the most obvious and compelling reason for deny- ing the writ is the fact that the Appellate Division of the Superior Court of New Jersey is currently considering whether to follow the Third Circuit’s opinion in Juzwin v. Asbestos Corp., Ltd., 900 F.2d 686 (3d Cir. 1990). In DiFalco v. Subaru of America, Inc., the Appellate Divi- sion of the New Jersey Superior Court recently granted a defendant’s motion for leave to appeal to consider whether the New Jersey tolling provision stricken in Juzwin violat the Commerce Clause of the United States Constitution.” Third Circuit considered the affidavit and permitted its filing in the supple- mental appendix of the intervenor, the State of New Jersey. The Wermuth affidavit does not indicate when the Secretary of State initi- ated the informal administrative practice of accepting limited desi:nations. Brf. App. 45a. 21 Service Armament Co. v. Hyland, 70 N.J. §51, 561, 362 A.2d 13, 19 (1976) (‘‘ ‘An appellate tribunal is . . . in no way bound by [an] agency’s interpretation of a statute... .’’’) (quoting Mayflower Securities Co. v. Bureau of Securities, 64 N.J. 85, $3, 312 A.2d 497, 501 (1973)). 22 Robinson v. Visual Packaging, Inc., 707 F. Supp. 216, 220 (D.N.J. 1989). 23. +~=In DiFalco, defendant Takata Corporation, a Japanese enterprise not ‘‘represented’’ within New Jersey for purposes of the tolling statute, moved for summary judgment on the ground that plaintiff’s action was not filed within the two-year limitations period provided by N.J. Stat. Ann. i iineniaiaeai il 11 Even if New Jersey’s Appellate Division does not reach the commerce clause issue in DiFalco,“ grant of certiorari still would not be appropriate in the case at bar since there are a number of ‘‘tolling statute’? motions pending in the New Jer- sey state trial courts which provide an opportunity for review of that issue by New Jersey’s appellate courts.” § 2A:14-2 (West 1987). Relying on the Third Circuit’s decision in Juzwin, Takata argued that the tolling statute could not be invoked to extend plain- tiff’s time since the statute is invalid under the Commerce Clause. Both plaintiff and the State of New Jersey as intervenor opposed the motion on the ground that the Law Division should uphold the constitutionality of the tolling statute despite the Third Circuit’s decision in Juzwin. The trial court trial heard argument on June 15, 1990 and denied Takata’s motion ‘‘for the reasons stated by the Deputy Attorney General.’’ Transcript of Proceedings at page 30, lines 23-24. That ruling was memorialized by order dated June 21, 1990. Brief App. 49a. Defendant Takata then filed a motion for leave to appeal with the Appellate Division of Superior Court which by order dated August 6, 1990, agreed to review the trial court’s order. Brief App. 41a. See also Brief App. at 43a (scheduling order). 24 ~~ Based upon this respondent’s review of available briefs in that case, it appears that the plaintiff resisted Takata’s trial court motion on two grounds: 1) the validity of the tolling statute and 2) a state procedural law argument that her amended complaint against Takata should ‘‘relate back’’ to the filing of her original complaint (naming other defendants) so as to be deemed timely. 25 Counsel for respondent Carey Canada represents defendants in a considerable number of pending state court actions in which the tolling stat- ute issue is potentially outcome determinative and virtually certain to be appealed no matter which side prevails. If a particular state trial court judge upholds the tolling statute and denies our defendant’s statute of limitations motion, that defendant will appeal to the Appellate Division. If that state trial court finds the tolling statute invalid under the commerce clause, either plaintiff or the State of New Jersey—which intervenes in such actions to defend the tolling statute—is quite likely to appeal. (Pursuant to N.J. Court. R. 4:28-4(a)-(d), a litigant ‘‘question[ing]’’ the ‘‘validity of a statute, execu- tive order, franchise, or constitutional provision of [the State of New Jer- sey]’’ in an action to which the state is not a party, must notify the Attorney General who may intervene to defend the statute. In the district court pro- ceedings in the case at bar, the State of New Jersey intervened pursuant to the analogous federal statute, 28 U.S.C. § 2403(b)). 12 Thus it would be an unnecessary departure from this Court’s established practice to devote resources to the resolu- tion of an illusory conflict between that intermediate state appellate court” and the court of appeals when the former may, within the next few weeks or months, choose to follow the Third Circuit’s decision below. See Rule 10(b). C. The Third Circuit Utilized Petitioners’ ‘‘Saving Construc- tion’’ in Striking the Tolling Statute on Commerce Clause Grounds This respondent is obligated by Rule 15.1 to point out that the Third Circuit did not ignore the ‘‘saving construction’’ urged by petitioners below. Petitioners argue that the Third Circuit ‘‘abandoned the principle that unnecessary constitutional adjudication should be avoided if a statute can fairly be given a constitutional interpretation”’ by refusing to employ the ‘“‘limited designa- tion’’ construction described above under Point IA. See Pet. at 4; 6-7; 12 & n.6; 14. Contrary to petitioners’ assertions, the Third Circuit expressly stated that it evaluated the consti- tutionality of the tolling statute in accordance with the lim- ited designation argument urged by petitioners and adopted by the district court below. The district court concluded that, unlike the Ohio statu- tory scheme, the New Jersey tolling statute does not compel the conclusion that designation of an agent for service of process subjects a foreign corporation to the general jurisdiction of the New Jersey courts. The court noted the Secretary of State’s practice of accepting des- Two state court cases in which counsel for respondent Carey Canada soon expects decisions on the constitutionality of the tolling statute are: Leogrande vy. Keene Corp., No. W-026197-87 (N.J. Super. Ct. Law Div. Middlesex County) (motion of defendant Pittsburgh Corning returnable September 14, 1990}; Anderson v. Owens-Corning Fiberglas Corp., No. W—012500-89 (N.J. Super. Ct. Law Div. Middlesex County). 26 See discussion of the New Jersey Superior Court, Appellate Divi- sion’s unpublished summary affirmance in Armenti under Point IA supra. 13 ignations of a representative for service of process only for causes of action having a nexus with New Jersey. Such a limited designation, the court held, imposed no unconstitutional burden on interstate commerce. II. As we read Bendix, the New Jersey tolling statute would be invalid if it were applied to all foreign corpo- rations, regardless of their connection with New Jersey. However, we will assume without deciding that the New Jersey Supreme Court would interpret the statute to per- mit designation of an agent for service of process only for causes of action having a nexus with New Jersey. The issue then become whether the statute so interpreted still constitutes an impermissible burden on interstate commerce. Juzwin v. Asbestos Corp., Ltd., 900 F.2d 686, 689 (3d Cir. 1990). Pet App. 7a-8a. The concluding paragraph of Judge Seitz’s commerce clause discussion also notes that the ‘‘lim- ited designation’’ construction of the tolling statute was uti- lized: ‘‘Thus, even with a limiting construction, N.J. Stat. Ann. § 2A:14-22 violates the commerce clause under either [the heightened scrutiny or balancing] test since a nondiscrim- inatory procedure, less burdensome to interstate commerce, could be adopted by New Jersey.’’ Jd. at 692. Pet. App. 14a- 1Sa. Even if one were inclined to accept petitioners’ suggestion that the Third Circuit merely ‘‘purported’’ to utilize the saving construction while actually evaluating the statute on the premise that it did not permit foreign corporations to file limited designations,” one must note that the court of appeals would have been within its rights in doing so since petitioners’ construction is at variance with the plain meaning of the statute and not supported by any binding state prece- dents. See Point IA supra. 27 ~=—s See, e.g., Pet. at 4. 14 Il. THE THIRD CIRCUIT’S DECISION STRIKING THE NEW JERSEY TOLLING STATUTE UNDER THE INTERSTATE COMMERCE CLAUSE IS ENTIRELY CONSISTENT WITH THIS COURT’S PRECEDENTS A. Heightened Interstate Commerce Clause Scrutiny Is The Appropriate Standard of Review for the Tolling Provision at Bar Petitioners raise a number of objections to the Third Cir- cuit’s resolution of the commerce clause issue. Initially, peti- tioners complain that the New Jersey tolling provision should not have been reviewed under the ‘‘heightened scrutiny’’ interstate commerce clause standard. See Pet. at 15-17. Peti- tioners begin their argument with the unusual assertion that ‘*[jJudicial review of state statutes challenged under the Com- merce Clause are governed by a two-track standard, similar to the two-tiered scrutiny of the Equal Protection Clause.’’” Petitioners claim that the ‘‘sole basis for the [Third Cir- cuit’s] application of the heightened scrutiny standard was its erroneous conclusion that the statute on its face, ‘applies to out-of-state corporations but not to New Jersey corpora- tions.’ 900 F.2d at 689 and n.3 (9a).”” Contrary to petitioners’ assertion, the tolling statute provi- sion at issue in the case at bar—the one which permits ‘‘cor- 28 See Pet. at 15. Respondent Carey Canada understands there are three basic levels of review under the equal protection clause (strict scrutiny, intermediate tier review typically employed in gender discrimination cases, and rational basis review) and three basic standards of review under the com- merce clause. See generally J. Nowak, R. Rotunda & J. Young, Constitu- tional Law § 14.3 at 528-33 (3d ed. 1986) (regarding equal protection). A brief discussion of the three standards of commerce clause review appears in the Third Circuit’s opinion below. Juzwin v. Asbestos Corp., Ltd., 900 F.2d 686, 689 (3d Cir. 1990). Pet. App. 8a. 29 ~=—s— Pett. at. 16. Petitioners buttress this argument with the assertion that since the tolling statute has provisions applicable to individual ‘‘citiz¢ns’’ of New Jersey who temporarily leave the state, it is a facially neutrai, nondis- criminatory enactment. See Pet. at 16-17. is A a i aommmpacoanape aaa 15 porations’’ to achieve representation by designating an agent for service of process*°—applies exclusively ‘‘to out of state corporations but not to New Jersey corporations. .. .”’ Juzwin, 900 F.2d 686, 689 [footnote omitted]. As the Third Circuit noted: ‘‘The critical words are ‘any corporation or corporate surety not organized under the laws of this State.’ ’’ Juzwin, 900 F.2d at 689, n.3 (quoting N.J. Stat. Ann. § 2A:14-22). Since the New Jersey tolling provision is facially discriminatory, the heightened scrutiny test is appro- priate: Statutes which discriminate on their face or in their plain effect against interstate commerce are subject to heightened scrutiny. This heightened scrutiny places the burden on the state to ‘‘demonstrate both that the stat- ute ‘serves a legitimate local purpose,’ and that this pur- pose could not be served as well by available nondiscriminatory means.”’ Old Coach Development Corp. v. Tanzman, 881 F.2d 1227, 1231 (3d Cir. 1989} (citations omitted) (quoting Maine v. Taylor, 477 U.S. 131, 138 (1986)) (quoting Hughes v. Okla- homa, 441 U.S. 322, 336 (1979)). Also unpersuasive is petitioners’ argument that the tolling statute should be deemed ‘‘a facially neutral, non- discriminatory enactment”’ in the case at bar since it also tolls the statute of limitations with respect to individuals who leave the state. Even if one could accept the premise that the existence of a distinct provision depriving individuals of a limitations defense justified the discrimination between for- eign and domestic corporations, a binding New Jersey state trial court precedent has stricken the tolling statute on com- merce clause grounds with respect to a nonresident individ- ual. Crespo v. Stapf, 242 N.J. Super. 254, 576 A.2d 346 (N.J. Super. Ct. Law Div. 1990). In Crespo, plaintiff brought a product liability action alleg- ing personal injuries attributable to a machine supplied by defendant Stapf, a resident of Germany who operates his 30 ~=The only provision relevant to the case at bar is contained in the final paragraph of the statute: See Pet. App. 6a, or see n. 4 supra. 16 unincorporated business in that nation. The court, reviewing the relevant provision’! under a balancing test,’” held the stat- ute unduly burdensome of interstate commerce since ‘‘the only method by which a nonresident individual may receive the protection of our statute of limitations is to become a res- ident of this state.’’ Jd. at 260, 576 A.2d at 348. ‘‘A state ‘may not condition this exercise of the defense (of the statute of limitations) on the relinquishment of rights that the for- eign . . . (defendant) would otherwise retain.” Among the rights a foreign defendant would retain is the right to choose his residence, and in particular, to choose not to be a resident of this State.’’ Jd. at 260, 576 A.2d at 349 (citation omitted) (quoting Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U.S. 888, 893 (1988)). Petitioners’ next argument against application of strict interstate commerce clause scrutiny is based on the premise that since corporations organized under the laws of New Jer- sey (as well as those foreign corporations licensed to transact business within the state) are required to continuously main- tain ‘‘a registered office in [the] State’’ and a ‘“‘registered agent [for service of process] having a business office identi- cal with such registered office,”””? the New Jersey tolling stat- ute is nondiscriminatory in that it ‘‘does not impose any burden on nonresident corporations that is not imposed equally on domestic corporations’’ which must ‘‘appoint an agent for service of process as a precondition to obtaining corporate status.’’ Pet. at 7. See also, Pet. at 17 (‘‘No out- 31 See n.4 supra. 32 The court declined to review the provisions regarding nonresident individual defendants under the per se test on the theory that: ‘‘The purpose of this statute, however, is to preserve causes of action which New Jersey res- idents may have against nonresidents, not to erect barriers against foreign businesses competing with New Jersey ones.’’ Crespo v. Stapf, 242 N.J. Super. 254, 258, $76 A.2d 346, 347-48 (N.J. Super. Ct. Law Div. 1990). This respondent respectfully maintains that the tolling provision in Crespo war- ranted review under the per se test. 33. sON..J. Stat. Ann. § 14A:4-1(1) (West 1990). Pet. App. 56a-57a. See also, N.J. Stat. Ann. § 14A:4-2(1) (West 1990) (requiring said agent to accept service of process on behalf of corporation). Pet. App. 57a. te padi ty inate viva 17 of-state-corporation is subjected to a registration burden that is not applied equally to New Jersey corporations’’). This previously unasserted™ argument fails to appreciate the basic difference between intrastate and interstate commerce, and fails to understand the elementary proposition of constitu- tional law that the scope of permissible state regulation is considerably greater with respect to the former.** Moreover, petitioners’ argument regarding the scope of permissible state regulations with respect to corporations with substantial intrastate activities is completely irrelevant to foreign corpo- 34 Since this statutory argument was not raised below, petitioners can- not properly assert it in their petition to this Court. See G.D. Searle & Co. v. Cohn, 455 U.S. 404, 412, n.7. Petitioner did make arguments below based upon different New Jersey statutes affecting corporations, but they were sig- nificantly different. N.J. Stat. Ann § 14A:13-11 (West 1969) pertains to for- eign corporations engaged in intrastate business activities, and provides, infer alia, that any such corporation which fails to obtain a certificate of authority to transact business in the state is prohibited from maintaining ‘‘any action or proceeding in any court of this State.’’ § 14A:13-11(1). Petitioners, citing subparagraph (2) of the statute, argued that since foreign corporations trans- acting business in the state who fail to obtain a certificate of authority are not precluded from ‘‘defending any action or proceeding’’ the New Jersey tolling statute was not unduly burdensome: Furthermore, the denial of a limitations remedy does not even impair the ability to defend a suit on the merits or to raise the equitable defense of laches. The New Jersey statutory scheme explicitly states: {citation to N.J. S.A. § 14A:13-11(2). Third Circuit ‘‘Brief for Plaintiffs-Appellees Stephen and Mary Juzwin’’ at 9. See Materials Research Corp. v. Metron, Inc., 64 N.J. 74, 312 A.2d 147 (1973) (“‘transacting business term of § 14A:13-11 does not apply to corpora- tions engaged only in interstate commerce). In support of their argument petitioners also cited N.J.S.A. § 14:13-3(2) (West 1969) which provides, inter alia, that ‘‘a foreign corporation shall not be considered to be transacting business within this State’’ by virtue of its participation in a legal proceeding. § 14:13-3(2)a). See above-referenced brief at 16 (also citing N.J.S.A. § 14A:13-11(2)). 35 See, e.g., Eli Lilly & Co. v. Sav-On-Drugs, Inc., 366 U.S. 276, 284 (1961) (non-New Jersey corporation which engaged in ‘‘local intrastate busi- ness’’ through New Jersey office with 18 salaried employees could be barred from maintaining action in state court for noncompliance with state statu- tory scheme requiring such corporations to obtain certificate of authority. See generally L. Tribe, American Constitutional Law § 6-5 (2d ed. 1988). 18 rations engaged in purely interstate or (like respondent Carey Canada) international commerce. Given the facially discriminatory character of the tolling provision at bar, the Third Circuit’s use of the heightened scrutiny standard of commerce clause review is clearly proper and in accordance with this Court’s decision in Bendix Auto- lite v. Midwesco Enterprises, Inc., 486 U.S. 888, 891 (1990). B. The Tolling Provision at Bar Cannot Survive Scrutiny Under the Interstate Commerce Clause Balancing Test Petitioners maintain that the Third Circuit also erred in finding the tolling statute violative of the commerce clause under the balancing test enunciated in Pike v. Bruce Church, Inc., 397 U.S. 137 (1970). See Pet. at 18-21. Petitioners do not contend that the statute at bar should have been reviewed under the deferential standard of commerce clause review;” rather they maintain that the Third Circuit improperly applied the balancing test in a manner “‘tantamount to very strict scrutiny.’’ Pet. at 18. Petitioners’ argument that the balancing test was misap- plied is based primarily upon their assertion that the Third Circuit’s decision below ‘‘was in flagrant disregard of this Court’s decision in G.D. Searle & Co. v. Cohn, 455 U.S. 404, 410-11 (1982).’’?”’ The decision below does not conflict 36 Asthe Third Circuit noted: ‘‘None of the parties argue that the cor- rect standard to be applied to the New Jersey tolling statute is that of defer- ential review. New Jersey has, of course, a legitimate interest in facilitating the claims of its citizens, but we are not here concerned with a ‘peculiarly strong’ state interest, such as health or safety. These are the areas that most commonly invoke the deferential standard. Juzwih v. Asbestos Corp., Lid., 900 F.2d 686, 689, n.2 (3d Cir. 1990) (quoting Ford Motor Co. v. Insurance Comm’r of Pa., 874 F.2d 926, 941 (3d Cir.), cert. denied sub nom., United Services Auto. Ass’n v. Foster, 110 S. Ct. 418 (1989)). Petitioners’ statements to the effect that the Third Circuit should have been ‘‘relatively deferential’ or shown ‘‘substantial deference’’ to the New Jersey tolling statute appear only in connection with their request for review under the Pike balancing test. See, ¢.g., Pet. at 7 and 18. 37 ~—s Pet. at 19. See also Pet. at 6 (‘‘[The Third Circuit's] holding was in direct conflict with this Court’s decision in G.D. Searle & Co. v. Cohn, 455 ala ee 19 with this Court’s decision in Cohn. In Cohn, this Court affirmed the Third Circuit's ruling upholding New Jersey’s previous—not current—tolling statute against an equal pro- tection challenge, but nevertheless vacated the judgment below and remanded the case to the court of appeals for con- sideration of petitioner G.D. Searle’s argument that the stat- ute violated the Commerce Clause.* As in the proceedings below, petitioners rely on decisions upholding the previous New Jersey tolling statute against due process”? and equal protection challenges in support of their argument that the courts’ ‘‘balancing’’ of the predecessor tolling statute’s burdens and benefits under those constitu- tional tests impels the conclusion that the current tolling stat- ute should be upheld if reviewed under the ‘‘balancing test’’ employed in commerce clause cases.“ This argument ignores U.S. 404 (1982), a decision which rejected the identical overinclusivity attack on the New Jersey tolling statute asserted in the guise of an equal protection challenge.’’) (emphasis in original); Pet. at 7 (‘‘flagrant disregard’); Pet. at 6 and 19 (Third Circuit ‘‘did not even attempt to distinguish’’ Cohn). 38 455 U.S. 404, 412 (1982), remanded sub nom., Hopkins v. Kelsey- Hayes, Inc. , 677 F.2d 301 (3d Cir. 1982). The Third Circuit in turn remanded the case to the district court to develop a record regarding the commerce clause issues. 677 F.2d at 302, on remand, 598 F. Supp. 965 (D.N.J. 1984). The district court held the predecessor tolling statute violative of the com- merce clause and determined that its decision should be retroactively applied. 598 F. Supp. at 969. The Third Circuit reversed the district court’s decision only with respect to the retroactivity issue and remanded for further proceed- ings consistent with that ruling. Cohn v. G.D. Searie & Co., 784 F.2d 460, 467 (3d Cir.), cert. denied, 479 U.S. 883 (1986). 39 ~~ In the consolidated Cohn v. G.D. Searle & Co./Hopkins v. Kelsey- Hayes cases, Third Circuit rejected both due process and eqmal protection challenges to the previous New Jersey tolling statute. Hopkins v. Kelsey- Hayes, Inc., 628 F.2d 801, 811 (3d Cir. 1980). Since G.D. Searle & Co. tried to assert different due process arguments in the proceedings before this Court, only the equal protection challenge was reviewed. G. D. Searle & Co. v. Cohn, 455 U.S. 404, 412, n.7 (1982) 40 = See, e.g., Pet. at 6 (stating that the Third Circuit’s decision below ‘‘was in direct conflict with this Court’s decision in G.D. Searle & Co. v. Cohn, 455 U.S. 404 (1982), a decision that rejected the identical over- inclusivity attack on the [predecessor] New Jersey tolling statute asserted in the guise of an equal protectiun challenge’’) (emphasis in original). 20 the reality that the ‘‘balancing tests’? employed in due process and equal protection cases vindicate different interests*’ and are substantially more deferential to state regulations than the “‘balancing test’? employed in commerce clause cases.” Indeed, to illustrate this principle one need only recall that although the predecessor New Jersey tolling statute was upheld by the Third Circuit and this Court against equal pro- tection and due process challenges in Cohn v. G.D. Searle, 41 For purposes of due process and equal protection analysis, so-called ‘feconomic and social regulations’’ (such as tolling statutes) are reviewed under the highly deferential ‘‘rational basis’’ test which virtually presumes an enactment valid unless the litigant challenging it shows it to be ‘‘demonstra- bly arbitrary or irrational.’’ Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59 (1978) (due process). Equal protection and due process review require only that the court ask whether the challenged enactment is rationally related to any constitutionally permissible state inter- est. See Hopkins v. Kelsey-Hayes, Inc., 628 F.2d 801, 809 (3d Cir. 1980). Furthermore, there is authority that review under that standard permits the court to hypothesize as to the motivations of the state legislature to find a legitimate objective promoted by the legislation under attack. See Wein- berger v. Salfi, 422 U.S. 749 (1975). Since the Commerce Clause vindicates the exclusively federal power over international and interstate commerce, a less deferential standard of review is appropriate than that employed in rational basis due process and equal protection cases reviewing economic and social regulations predicated upon the states’ traditional police powers. 42 See, e.g., Bendix Autolite v. Midwesco Enterprises, Inc., 486 U.S. 888, 893-94, text preceding n.3 (1988) (‘‘It is true that serving foreign corpo- rate defendants may be more arduous than serving domestic corporations or foreign corporations with a designated agent for service, and we have held for Equal Protection purposes that a State rationally may make adjustments for this difference by curtailing limitations protection for absent foreign cor- porations. G.D. Searle & Co. v. Cohn, 455 U.S. 404 (1982). Nevertheless, State interests that are legitimate for equal protection or due process pur- poses may be insufficient to withstand Commerce Clause scrutiny’’); Great Western United Corp. v. Kidwell, 577 F.2d 1256, 1285 (Sth Cir. 1978) (Wis- dom, J., opinion of the court) (striking an Idaho ‘‘takeover statute’ under commerce clause balancing test characterized as providing ‘‘a stricter stan- dard [of review] than the ‘rational relationship’ test of due process analy- sis’’), rev’d on other grounds, 443 U.S. 182 (1979). See also G. Gunther, Cases and Materials on Constitutional Law at 311 (%h ed 1975) (cited in Great Western, $77 F.2d at 1285); Juzwin, 900 F.2d 686, 695. Pet. App. 23a. wh Sow iat 21 that same statute was shortly thereafter stricken as viclative of the Commerce Clause.” Contrary to petitioners’ assertions that the court below ‘*failed to recognize New Jersey’s legitimate interest in its tolling statute,’ the Third Circuit expressly acknowledged that interest, but found the burdens of the statute ‘‘grossly disproportionate to the state’s interest in assisting resident plaintiffs in the pursuit of claims against foreign corpora- tions.’’ Juzwin, 900 F.2d 686, 691, 692. Pet. App. 14a. C. The Existence of a Commerce Clause Violation is Not Dependent Upon a Finding that a State’s Enactment Con- fers Competitive Advantages Upon its Residents Petitioners seem to argue that the tolling statute does not impermissibly burden interstate commerce since it does not create any competitive advantages for New Jersey businesses. See Pet. at 7, 10, 15-16. While not conceding the factual premise of that argument, this respondent maintains that petitioners’ legal theory is far too simplistic a view of the commerce clause and one not adequately supported even by the cases they cite.” 43 See note 38 and accompanying text supra. 44 Pet. at 18. See also Pet. at 6 (The [Third Circuit] held that New Jer- sey lacked a legitimate interest in ameliorating the impact of the statute of limitations. . . .’’) 45 For example, petitioners’ theory fails to account for the heightened scrutiny standard of review applicable to facially discriminatory enactments. See Point IIA supra. Furthermore, this respondent does not find support in the cases cited for the broad proposition that creation of competitive advan- tages for domestic corporations is the definitive test of a commerce clause violation. 22 Ill. EVEN IF THE THIRD CIRCUIT USED AN INAPPRO- PRIATE STANDARD OF INTERSTATE COMMERCE CLAUSE REVIEW, THE DECISION BELOW STRIKING THE NEW JERSEY TOLLING STATUTE IS WAR- RANTED UNDER THE STANDARD OF SCRUTINY APPLICABLE TO REGULATIONS BURDENING INTERNATIONAL COMMERCE Even if this Court determines that the Third Circuit erred in striking the New Jersey tolling statute under the heightened scrutiny or balancing tests applicable to regulations burdening interstate commerce, issuance of the writ would nevertheless be inappropriate since the enactment could not survive review under the most stringent standard of review applicable to enactments burdening ‘‘foreign’’—i.e. international— commerce. Although defendant Carey Canada argued below that the tolling statute could be stricken under the foreign commerce clause, the Third Circuit found it unnecessary to reach that issue in light of its holding that the enactment impermissibly burdened interstate commerce. See Juzwin v. Asbestos Corp., Ltd., 900 F.2d 686, 690, n.6. Pet. App. 12a. Article I, § 8 of the United States Constitution grants Con- gress the power ‘‘to regulate Commerce with f- -eign Nations.’’ ‘‘This clause has been construed as all but exclu- sive: ‘It is an essential attribute of the power that it is... plenary . . . [and that] its exercise may not be limited, quali- fied or impeded to any extent by state action.’ ’’ L. Tribe, American Constitutional Law, § 6-21 at 468 (2d ed. 1988) (quoting Board of Trustees of the Univ. of Illinois v. United States, 289 U.S. 48, 56 (1933)). [Hereinafter cited as ‘*Tribe’’]. See also Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976) (regulation of foreign commerce is exclusively a federal power); J. Nowak, R. Rotunda & J. Young, Consti- tutional Law 125, 131 (3d ed. 1986). Since the powers of the federal government concerning for- eign or external affairs are different in origin and nature from those involving domestic or internal affairs,“ it is 46 United States v. Curtiss-Wright Export Corp., 299 U.S. 304 (1936). Power over domestic affairs is shared by the federal government and the | ee Tee ee ee TE ere we ee uw “ 2 East 23 hardly surprising that state enactments burdening inter- national commerce are subject to stricter scrutiny than those which burden only interstate commerce. ‘‘It is a well-accepted rule that state restrictions burdening foreign commerce are subjected to a more rigorous and searching scrutiny.’’ South Central Timber Development Inc. v. Wunnicke, 476 U.S. 82, 100 (1984). In Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434 (1979), a decision striking a California ad valorem property tax statute as applied to Japanese shippers, the Court expressly rejected arguments that regulations bur- dening international commerce are entitled to no more strin- gent review under the Commerce Clause than that applied to regulations affecting interstate commerce. Jd. at 446, 448 and nn. 12 and 13. As mentioned above, Carey Canada is incorporated under Canadian law, has no corporate offices in the state of New Jersey, has never been registered to do business in the state of New Jersey, and has not appointed an agent for service of process with the New Jersey Secretary of State. Since Carey Canada sold its asbestos fiber ‘‘F.O.B. Quebec, Canada’’®’ it did not conduct its business operations in the United States and is entitled to have the New Jersey tolling statute reviewed under the exacting standard applicable to state regulations burdening foreign commerce. Given the broad definition of ‘foreign commerce,’’“ and the obvious impact or such com- states since the former’s powers were carved from the general legislative powers originally held by the states. In the domestic sphere the federal gov- ernment possesses only those powers specifically granted to it by the Consti- tution and those ‘‘necessary and proper’’ to the exercise of those enumerated powers. Power over foreign affairs, however, was never possessed by the States since it passed directly from the sovereign nation of Great Britain to the federal government. Jd. at 316-18. 47 See n.il and accompanying test supra. 48 Tribe at 468-469. In the proceedings below, Carey Canada called the Third Circuit's attention to a case in which that court declined to employ the brozdest permissible interpretation of the term ‘‘burden on commerce’’ for purposes of foreign commerce clause review. As Carey Canada explained below, however, that decision is distinguishable from the case at bar since it involved a nondiscriminatory regulation which presented only a hypothetical ee 24 merce in the case at bar, review under the foreign commerce clause would surely strike the tolling statute in the case at bar. Indeed, in Bendix this Court struck a similar Ohio toll- ing statute under a less rigorous interstate commerce clause standard due to the ‘‘significant’? burdens that enactment imposed. 108 S. Ct. 2218, 2221 (1988). Furthermore, the greater cumulative burden the tolling statute poses to interna- tional commerce also argues for invalidation of the statute under the foreign commerce clause.” IV. RETROACTIVE APPLICATION OF THE THIRD CIR- CUIT’S DECISION STRIKING THE NEW JERSEY TOLL- ING STATUTE ON COMMERCE CLAUSE GROUNDS CONSTITUTES A PROPER APPLICATION OF THIS COURT’S PRECEDENTS Petitioners maintain that the Third Circuit’s ruling accord- ing its decision striking the tolling statute retroactive effect represents ‘‘an inappropriate application of the standards laid out in Chevron Oil Co. v. Huson, 404 U.S. 97 (1971) and Lemon v. Kurtzman, 411 U.S. 192 (1973).’’ Pet. at 22. Peti- tioners do not assert that the Third Circuit employed a prin- ciple of retroactivity which conflicts with a decision of this Court, or a decision of another court of appeals, nor do they ask this Court to enunciate a new rule of law. See Pet. at 22-25. burden to foreign commerce: its only potential effect on that commerce was an increase in price to ultimate consumers of the litigant’s product. Norfolk Southern Corp. v. Oberly, 822 F.2d 388, 404-407 (3d Cir. 1987). In addition to distinguishing that case, Carey Canada also argued that a broad interpre- tation of the term ‘‘burden on commerce’’ for purposes of international and interstate commerce clause review is supported by the decisions of this Court. See, e.g., Wickard v. Filburn, 317 U.S. 111 (1942) (farmer growing wheat for home consumption subject to regulation under federal power over interstate commerce). 49 The cumulative nature of burdens imposed by the tolling statute was discussed in Carey Canada’s opening brief to the Third Circuit at 22. 25 Respondent Carey Canada respectfully maintains that peti- tioners’ mere claim of misapplication of the correct retroac- (ivity standards does not constitute a sufficiently ‘‘special’’ or ‘*important’’ matter to warrant issuance of the writ. Rule 10. Indeed, review of the retroactivity issue in accordance with petitioners’ request would amount to no more than a repeti- tion of the Third Circuit’s meticulous application of the proper balancing test to a case involving a state statute with a long, intricate history. In making its retroactivity ruling, the Third Circuit, draw- ing on Lemon v. Kurtzman, 411 U.S. 192 (1973) (Lemon I1), applied the three-factor test enunciated by this Court in Chevron Oil Co. v. Huson, 404 U.S. 97 (1971): First the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolu- tion was not clearly foreshadowed. Second, it has been stressed that ‘‘we must ... weigh the merits and demerits 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 opera- tion.’’ Finally, we have weighed the inequity imposed by retroactive application, for ‘‘{w]here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the ‘injustice or hardship’ by a holding of nonretroactivity.”’ 404 U.S. at 106-07 (citations omitted). Although Chevron calls for consideration of arguments pertaining to each of the three factors, the ultimate decision regarding retroactivity must be based on an overall evaluation of the merits. A litigant seeking to avoid retroactive applica- tion bears the burden of establishing that ‘‘on balance the weight of the three Chevron factors favors prospective appli- cation.’’ Juzwin, 900 F.2d at 693. Pet. App. 17a-18a. In the case at bar the Third Circuit ordered retroactive application based upon a finding that all three Chevron factors favored 26 retroactive application. Juzwin, 900 F.2d at 693-97. Pet. App. 15a to 26a. Petitioners apparently maintain that the Third Circuit erred in applying the first Chevron factor” in finding that petition- ers ‘‘could not have reasonably relied upon the statute in fail- ing to bring suit earlier.’’ Pet. at 23. Petitioners suggest that their reliance on the tolling statute was reasonable since the previous version of the enactment had been subject only ‘‘to several constitutional challenges from 1983 to 1986.’’ Contrary to petitioners’ suggestion, the predecessor tolling statute had been challenged on various constitutional grounds since 1963,°' and was under almost continuous attack from 1978 to 1986 in both federal and state courts. Moreover, the predecessor statute had been 50 Petitioners do not expressly state which Chevron factors they are addressing. See Pet. at 23-25. $1 See Lemke v. Bailey, 41 N.J. 295, 196 A.2d 523 (1963) (upholding statute against equal protection challenge). $2 A chronological account of the Coons and Cohn litigations high- lig’tts petitioners’ imprudence in delaying the filing of their action. In 1978, the district court held that by denying the statute of limitations defense to nonresident corporations subject to long-arm jurisdiction, the predecessor tolling statute violated the Equal Protection Clause of the Four- teenth Amendment. Cohn, 447 F. Supp. 903, 912 (D.N.J. 1978). In 1980, the Third Circuit reversed. Sub nom. Hopkins v. Kelsey-Hayes, Inc., 628 F.2d 801 (3d Cir. 1980). (Although Searle raised the commerce clause issue in its brief as a subsidiary argument, the Third Circuit declined to address it. See Hopkins, 677 F.2d 301, 302 (3d Cir. 1982)). In 1980 American Honda unsuccessfully argued in both the law and appel- late divisions of New Jersey Superior Court that the predecessor tolling stat- ute unduly burdened interstate commerce. See Coons v. American Honda Motor Co., 176 N.J. Super, 575, 424 A.2d 446 (App. Div. 1980). American Honda then sought leave to appeal the issue to the New Jersey Supreme Court. See Coons I, 94 N.J. 307, 463 A.2d 921 (1983). When that court refused to hear the case, American Honda appealed it to this Court. /d. In February of 1982, this Court affirmed the Third Circwit’s 1980 equal protection ruling in Hopkins, 628 F.2d 801, but remanded the case to the court of appeals for consideration of Searle’s commerce clause argument. Cohn, 455 U.S. 404, 414 (1982). (footnute continued) Ss wa ee dedanaesae ee 27 under attack on commerce clause grounds beginning in 1980.°° As the opinion below so carefully explains, petition- ers’ delay in filing suit in reliance on the tolling statute can- not be justified. See Juzwin, 900 F.2d at 692-95. Pet. App. 18a-23a. Petitioners also maintain that since the New Jersey legisla- ture drafted the current tolling statute in 1984 specifically to In March of 1982, this Court vacated the state court judgment in Coons, 176 N.J. Super. 575, 424 A.2d 446 (App. Div. 1980) (rejecting American Honda’s commerce clause challenge to the tolling statute), and remanded the case for reconsideration in light of the recent decision in Cohn, 455 U.S. 404. Honda Motor Co. v. Coons, 455 U.S. 996 (1982). In response to this remand, the New Jersey Supreme Court certified the cause on its own motion. See Coons, 94 N.J. 307, 463 A.2d 921 (1983). In April of 1982, the Third Circuit remanded Cohn (sub nom. Hopkins vy. Kelsey Hayes, Inc., 677 F.2d 301 (3d Cir 1982)) to district court to develop a record regarding commerce clause issues. In August of 1982, plaintiff Stephen Juzwin learned of his alleged injury when he was diagnosed as having an asbestos-related condition. In August 1983 the New Jersey Supreme Court held the predecessor tolling statute unduly burdensome of interstate commerce and applied that ruling retroac- tively. Coons I, 94 N.J. 307, 463 A.2d 921 (1983). In January of 1984 the New Jersey Supreme Court heard argument as to whether it should recon- sider its retroactivity ruling and in June of that year it issued a decision pro- viding for prospective application. Coons II, 96 N.J. 419, 476 A.2d 763 (1984). In response to Coons I, the New Jersey legislature hastily drafted, debated and enacted into law—in August of 1984—a successor [the current] tolling statute. In December 1984, the district court held that the predecessor tolling stat- ute violated the commerce clause and retroactively applied its decision. Cohn, 598 F. Supp 965 (D.N.J. 1984). Like many, if not all significant devel- opments regarding the tolling statute, the ruling was reported at length in the legal trade press. See 115 N.J.L.J. 135 (1985). In 1986, the Third Circuit reversed the district court’s decision only with respect to the retroactivity rul- ing. Cohn, 784 F.2d 460, 467. 53 The opinion below states that the ‘‘first hint of a commerce clause problem with the New Jersey tolling statute came early in 1982 with the Supreme Court’s decision in G.D. Searle & Co. v. Cohn, 455 U.S. 404 (1982).’” Juzwin, 900 F.2d at 693. This respondent notes that the previous tolling statute was challenged in state courts on commerce clause grounds as early as 1980. See preceding footnote supra. 28 cure the constitutional defects of the predecessor tolling stat- ute stricken by Coons I and Cohn v. G.D. Searle & Co.,” plaintiff Juzwir.’s reliance on the current enactment was rea- sonable. This argument is also unpersuasive. As previously stated, following the New Jersey Supreme Court’s decision in Coons J striking the tolling statute, the New Jersey legislature rushed to enact a replacement. The replacement (i.e., the current tolling statute), enacted in effect under emergency conditions, was identical to the old statute except for the final ‘‘designation of agent’’ provision added to avoid the ‘‘forced licensure’’ defect identified in Coons I. See Preliminary Statement supra. Since lawyers practicing in common law jurisdictions inevitably reassert legal theories which have prevailed in past cases, a commerce clause challenge to the replacement tolling statute was to be expected. The fact that the legislature merely repaired the one defect identified in Coons IJ without considering whether the revised statute could withstand commerce clause scrutiny made that challenge all but inevitabie. The fact that the Coons I court struck the ‘‘forced licensure’’ aspect of the predecessor tolling statute does not give grounds for reliance on a replacement statute hastily repaired by addition of an untested ‘‘designation of agent’’ provision. In drafting the current tolling statute, the 1984 New Jersey legislature simply did not correct the long-standing ‘‘amenability to service’’ problem which required the holding below. Juzwin, 900 F.2d at 695. Pet. App. 23a. In support of their argument regarding the second Chevron factor, petitioners suggest that Judge Seitz did not give due consideration to the Third Circuit’s 1986 ruling requiring pro- spective application of the district court decision striking the tolling statute on commerce clause grounds. See Pet. at 24- 25. While it is true that Judge Seitz did not quote from his opinion in Cohn v. G.D. Searle & Co. v. Cohn, 784 F.2d 460 (3d Cir. 1986) (Seitz, J., opinion of the court) in discussing 54 96N.J. 307, 463 A.2d 921 (1983). 55 598 F. Supp. 965 (D.N.J. 1984), reversed in part and remanded, 784 F.2d 460 (3d Cir.), cert. denied, 479 U.S. 883 ($986). — PE eed le Ite. cathe VERGO Se cle enema RE ON lai ley 8d: a Nt ns PO ee Pemiet. De a. AAP OS Reeth aly Rate. wath 29 the second Chevron factor, Carey Canada maintains that Judge Seitz’ opinion below more than adequately explains why the marked differences between Cohn and the case at bar required retrospective application of the latter decision.* Regarding the third Chevron factor, petitioners claim that equitable considerations favor prospective application of the decision below. Pet. at 25. This assertion ignores the reality that prospective application of the decision striking the toll- ing statute would cause great hardship to domestic, i.e., New Jersey, corporations as weli as foreign corporations which complied with the tolling statute. As the opinion below briefly mentions, under New Jersey law’’ the right of a defen- dant to seek contribution is not affected by the running of the limitations period. Juzwin, 900 F.2d at 696. Pet. App. 25a. ‘‘Thus, even New Jersey corporations and foreign cor- porations who have complied with the provisions of the toll- ing statute would continue to be deprived of the protection of the statute of limitations when they were joint tortfeasors with a nonrepresented foreign corporation’’™® which will implead them as third party defendants. Jd. Also unpersuasive are petitioners’ arguments that equity favors plaintiffs who delayed filing their actions in reliance or the tolling statute,’ and that the Third Circuit improperly 56 See Juzwin, 900 F.2d 686, 692-697 (3d Cir. 1990) (Seitz, J., opinion of the court) (retroactivity discussion). Pet. App. 15a-26a. Since application of the Chevron retroactivity test requires a case-specific analysis, it would have been improper for the Third Circuit to uncritically repeat its 1986 ruling in Cohn. $7 N.J. Stat. Ann. § 2A:53A-1, ef seg. (West 1987); McGlone v. Corbi, 59 N.J. 86, 279 A.2d 812 (1971) (defendant has right to implead unjoined, joint tortfeasor for purposes of proving their common liability even after limitations period on plaintiffs claim has run). 58 This is often the situation in asbestos and other toxic tort actions ia which plaintiffs join a large number of defendants. 59 Equity certainly does not favor a plaintiff like Juzwin who, after recovering Workers Compensation settlements, delays for years before filing his action. See n.10 and accompanying text supra. The doctrine of laches ‘‘is based upon the maxim that equity aids the vigilant and not those who slum- ber on their rights.’ H. Black, Black's Law Dictionary at 787 (Sth ed. 1979). 30 ordered retrospective application without the benefits of fac- tual determinations by the district court.” CONCLUSION For the foregoing reasons, the petition should be denied. Respectfully submitted, ANDREW T. BERRY Counsel of Record KEVIN J. CONNELL McCCARTER & ENGLISH Four Gateway Center 100 Mulberry Street Newark, New Jersey 07102 (201) 622-4444 Attorneys for Respondent Carey Canada, Inc. Andrew T. Berry Of Counsel Kevin J. Connell On the Brief September 10, 1990 60 See Pet. at 5S. Petitioners should have submitted all their proofs when the retroactivity issue was litigated in district court. See Jt. App. at !6 (regarding Carey Canada’s argument to the district court in favor of retroac- tive application). TABLE OF CONTENTS Transcript of Proceedings, Armenti v. Carey Canada, Inc., No. L-45449-87 (N.J. Super. Ct. Law Div. Middlesex County May 27, 1988) (Hon. John E. PS MC ce bc ce wbadk aeeancstee0es en weed ces Transcript of Proceedings, Armenti v. Carey Canada, Inc., No. L-045449-87 (N.J. Super. Ct. Law Div. Middlesex County September 16, 1988) (Hon. SE Es I, Beta 6 6 606 6s 6 000 6504406 Order, DiFalco v. Subaru of America, Inc., Docket No. AM-1642-89T3, (sic), Motion No. M-6197-89 (N.J. Super. Ct. App. Div. Aug. 6, 1990) (Hon. James M. Havey, J.A.D.) (order granting motion for Se I Socks bcc eee SuhAseuad bhab ues ceess. Scheduling Order, DiFaico v. Subaru of America, Inc., No. A-6247-89T3F (N.J. Super. Ct. App. Div. Aug. SS POPE eT TEES ETT CET TT TET TET TT CTTe Affidavit of Paul E. Wermuth dated Nov. 8, 1988, (with attached ‘‘Exhibit A’’), Robinson v. Visual Packaging, Inc., No. 86-5059 (D.N.J. marked ‘‘orig- inal filed Nov. 2, 1988’’) [Also filed in supplemental appendix of intervenor, the State of New Jersey in Juzwin v. Asbestos Corp., Litd., No. 89-5420 (3d RUN. oR KCLEAKE CK SANE EAS OER EAR MADRE aL ERS KAS Order, DiFalco v. Subaru of America, Inc., No. W- 019907-88 (N.J. Super. Ct. Law Div. Passaic County PE es EE CECE ECLC Neb aha ceeadesentcnenaenes PAGE la 23a Ala 43a 4Sa OLE TOL LLORES FFE ARR BD la SUPERIOR COURT OF NEW JERSEY LAW DIVISION MIDDLESEX COUNTY DOCKET No. L-45449-87 — ARMENTI, ef ai., Plaintiffs, —Vvs.— CAREY CANADA, ef al., Defendants. > MOTIONS Middlesex County Courthouse New Brunswick, New Jersey May 27, 1988 Before: Honorable John E. Keefe, J.S.C. APPEARANCES: Wilentz, Goldman & Spitzer By: Philip A. Tortoreti, Esq., Attorneys for the Plaintiffs McCarier & English By: Gita F. Rothschild, Esq., Attorneys for Carey Canada & Turner & Newell Goldfein & Joseph By: Roseann Lynn Brenner, Esq., Attorneys for ACL & Bell Harry Z. Haushalter, Esq., Deputy Attorney General Attorney for the Intervenor Stanley Grabon, C.S.R. Official Court Reporter 2a [2] (May 27, 1988.) THE COURT: Armenti versus Carey Canada. MR. ROTHSCHILD: Gita Rothschild; McCarter & English, for Carey Canada and Turner & Newall. Ms. BRENNER: Roseann Brenner for A. C. L. and Bell. MR. HAUSHALTER: Harry Haushalter for the intervenor, Attorney General of New Jersey. Mr. TORTORETI: Philip Tortoreti for Wilentz, Goldman & Spitzer, for the plaintiff. THE CourRT: I assume no one has any opposition to the Attorney General’s motion to intervene on this moticn; is that correct? Ms. ROTHSCHILD: That’s correct. THE CourRT: Okay. That motion is granted. MR. HAUSHALTER: Thank you, your Honor. THE CouRT: Mr. Tortoreti, this is your motion. MR. TORTORETI: Good moming, your Honor. As you know, this is a motion addressing the—affecting the constitu- tionality of the statute, the new tolling statute. I think that we can say that it is not in dispute that the defendants here do not have an agent designated for service of [3] process. We can say that it is not disputed that if the tolling statute is constitutional, that the statute of limitations has not run. They do not dispute that the new tolling statute was made effective law in 1984 and, therefore, there was no break between the Coons-II decision and the tolling statute, the new tolling statute. What we have is a constitutional challenge. THE CourT: Well, the relief that you seek specifically is to strike the defense of statute of limitations. MR. TORTORETI: That’s correct. The statute of limitations has not even commenced running as of this date as against these defendants because they do not have agents appointed for service of process. As regards the due process and equal protection challenges, I don’t know that there’s anything that I have to say. I mean that has been addressed thoroughly in prior decisions. 1 have nothing to add that. 3a As to the, as to the challenge which was effective in over- turning the prior tolling statute, we start out that there has to be a presumption in favor of constitutionality by the [4] court. The case law is clear, that your Honor must presume constitutionality, and further that your Honor, if you are leaning toward an interpretation that might find the statute unconstitutional, you must interpret it in a constitutional manner, if you can reasonably. Given that background, given the fact that there’s also a presumption that the legislature acted with knowledge of the constitution and in consideration of the constitution, and given the fact that this legislative act, the amendment to the tolling statute specifically states that the legislature was addressing the constitutionality of the statute, I think it’s clear that even if we say no more and don’t even address the merits, that this statute is constitutional at least as regards this court’s review of it. Going to the merits of the argument, Coons-1 found the prior tolling statute unconstitutional because it was silent on designation of an agent for service of process by a foreign corporation. That being the case, it looked to the other ave- nues by which a foreign corporation could designate an agent, and the majority, the four member majority as com- pared to [5] the three member dissent found the only way that could be done is by actually registering to do business. They then characterized that as a forced licensure and it was therefore a violation of the commerce clause. We do not have that now. What we have now is a designation, a simple designation for service of process. There is absolutely no other baggage that goes along with it. Simply designated for service of process. They can do this by a simple filing with the Secretary of State’s office. They have argued that subjects them to the jurisdiction of this court and the courts of New Jersey and, therefore, they are giving up jurisdictional defenses. Those jurisdictional defenses have been unsuccessful as to these defendants in the past. But even disregarding that, they offer absolutely no indication whatsoever of one instance where designating an agent for service of process pursuant to the new tolling stat- 4a ute has resulted in a waiver of any jurisdictional defenses, in personam jurisdictional defenses. I would submit, your Honor, first of all, [6] that even if they did, if it was a waiver, that does not render the statute unconstitutional and that does not constitute a forced licen- sure and you would be forced into a balancing test under the applicable law, not a per se violation. THE CouRT: Let me stop you for a second. You're saying that there’s nothing in the statute that implicates or suggests that someone who files and designates an agent for the ser- vice of process is consenting to the jurisdiction of the court in personam. MR. TORTORETI: That’s correct. THE Court: All right. MR.- TORTORETI: Absolutely true. THE CourT: So that they can come in and defend. MR. TORTORETI: Absolutely. THE CourRT: On due process. MR. TORTORETI: That’s correct. THE Court: All right. MR. TORTORETI: They can say that this court or any court in the State of New Jersey has no in personam jurisdiction. Even if they did lose the in personam jurisdiction defense as a result, I would submit [7] that the balancing test proce- dure as compared to the per se violation procedure would be in place. But I think, by the way, your Honor has to look at the statute as constitutional. What the tolling statute does by auowing appointment of an agent for service of process is places the foreign corpora- tion as regards service of process in exactly the same position as the domestic corporation with respect to service of pro- cess, that is, that a New Jersey plaintiff can serve process on a putative or a potential defendant by serving somebody in New Jersey. Now these defendants argue that we have been able to serve them in Canada, so that that’s ridiculous. First of all, these are not the only foreign corporations that exist in the world. There are lots of them. Number two, if we—it so hap- pens that we are able to serve them with process, these defen- Sa dants, because they have been involved in asbestos litigation in New Jersey for ten, “welve, fifteen years. The court has to view this in the context of the general law, the general situation. This is a constitutional challenge. That’s pointed out in my papers, that at least Asbestos Cor- poration [8] Limited at one point in time acknowledged that the new tolling statute is constitutional and they were trying to undermine the retroactive effect of the statute. THE CourT: Mr. Tortoreti, now that you have got me into the balancing test, let’s get to the critical issue. Tell me what the difference between our statute and the Ohio statute is. Distinguish, in other words, the Bendix case from— MR. TORTORETI: The Ohio statute, your Honor, did not carry with it an appointment for service of process clause. The Ohio statute was the same as our old tolling statute. If you read the opinion, the opinion is completly clear. THE Court: I’ve read it. MR. TORTORETI: All right. I’m not implying that you didn’t, your Honor. You might have drawn that inference. THE Court: Yes, I might have. MR. TORTORETI: We are suggesting that maybe counsel for A. C. L. and Bell didn’t read the opinion. Ms. BRENNER: I object to that. Ms. ROTHSCHILD: Thanks, Phil. [9] MR. TORTORETI: You did get me off track. I’m sorry. When the court in the federal court in Ohio indicated that they were dealing with conjecture and speculation, it was because there was conjecture and speculation as to whether or not there could be a simple designation. We do not have that here. We have an absolute designation provision. I have the opinion—! do not have the opinion here, your Honor, but I quoted it in my brief. THE COURT: What are you looking for? MR. TORTORETI: At page 189 of the opinion they charac- terize it, the argument made by the party trying to toll the Statute, as highly speculative and void of any statutory sup- port. The statutory support that they are referring to, if you read that clause in pari materia with the rest of the decision, is that there is no provision in that statute for appointment 6a of service of process, of an agent for service of process. We have that here. I think that it’s a distinguishable statute. It’s really more akin to the tolling statute that was found unconstitutional. {10} THE CouRT: Okay. Thank you. Mr. Haushalter? Mr. HAUSHALTER: Thank you, your Honor. Let me con- cur with Mr. Tortoreti’s argument, and he is correct with regard to the Bendix decision. I think that page 189 the court said with regard to Bendix’s suggestion that the corporation may merely notify the Secretary of State of it’s designated representative, we note simply here that this argument is highly speculative and devoid of any statutory support. That’s the Coons-1. And the Ohio court simply indicated there was no statutory support for a foreign corporation to merely designate an agent. It must actually register to do business. The forced licensure. We have here an argument of forced representation. That seems to be the argument that in order for a foreign corpora- tion to avoid the tolling it must designate an agent, and by doing so it exposes itself to suit from any plaintiff, from any- where. We disagree. That is not, in fact, the case. We pointed out first of all that the designation that can be filed with the Secretary [11] of State clearly can be limited so that the in personam defense is not destroyed, that the for- eign corporation can still defend on the basis of no in per- sonam jurisdiction. THE CourRT: Of course that’s not provided for in the stat- ute, though, is it? Ms. HAUSHALTER: This is part of the jurisdictional right of the Secretary of State to accept these types of designations and he, in fact, is doing that or she is doing that. That in fact is the way that many of these foreign corporations are designating agents. THE CouRT: That’s exactly what the Sixth Circuit found wrong with the Ohio statute in that it did not provide for that exception. MR. HAUSHALTER: Well, we feel our statute does provide for it. 7a THE CouRT: Why would you have to? I guess the point that I am getting to is why does the Secretary of State really have to do that? Why would the Secretary of State have to affirm in some way that a person who files and names an agent in this state would have the right to contest in per- sonam jurisdiction? It’s a constitutional right anyway. [12] MR. HAUSHALTER: The Secretary of State is just accepting filings. I don’t think that it’s up to the Secretary of State to gauge whether the filings are proper or not. She is accepting these filings. Whether those filings are valid, whether in fact the limited designation has validity, would have to be argued in individual cases. We maintain that it’s a proper method for dealing with this situation. THE Court: I think that you think that I am fighting with you, but actually I think that I am agreeing with you. Justice Stevens in his dissent in the Coons case points out the fact that one can—no state legislation can ever void a party's right to come into a jurisdiction and contest on the due pro- cess clause jurisdiction over the person. | think that I am agreeing with you. MR. HAUSHALTER: We subscribe to your Honor’s posi- tion. I think that Mr. Tortoreti appropriately noted that we had three justices in Coons-1, and they dissented, but they dissented with regard to the very issue that was decided in that Bendix case, namely that you do have, or they felt that the Secretary of State could accept the [13] designations with- out having these foreign corporations actually file to do busi- ness. The point being once having reached that result, those three justices said that that kind of a designation is constitu- tional unaer a balancing test. And the critical quote is on page 328 of 94 N.J., where the court is saying, ‘“‘the message they send to the’’—this is the foreign corporations—‘‘message they send to the New Jersey consumer is clear and forceful. The legislature has asked manufacturers to send one little brief message about where they can be found if anything goes wrong with the motorcy- cle. Again, this is Honda, the defendant here.’’ If this kind of an argument, the forced representation is sustained, then we have no tolling statute. There is just no 8a tolling statute. This destroys the very heart of the toliing stat- ute, which means that a foreign corporation which cannot be reached can wait two years, or whatever the appropriate stat- ute of limitations is, and then come into the state and not be concerned about ever being sued. Forget about the long arm, of course. [14] This is really the critical aspect of this case, judge, because if this kind of an argument is sustained, there’s no tolling statute, and the New Jersey plaintiffs are not going to be protected and this is the critical issue that was decided in Coons-II decision, and in the Searle case where we had very clear statements by the U.S. Supreme Court about the impor- tance of this policy of sustaining causes of action for New Jersey plaintiffs. And if you don’t have a tolling statute you can’t protect those plaintiffs, and I think that’s ultimately what has to be decided in this case and that is what the balancing test is all about. Thank you, judge. THE Court: Isn’t that basically the issue here? If I knock out this statute, there’s no tolling statute that can ever be passed and not violate the interstate commerce clause. How less minimal can the intrusion be than the New Jersey legisla- ture has made it in this amended statute? MS. BRENNER: Well, your Honor, I have a different inter- pretation of the Bendix case than counsel. THE CourRT: That’s not my question. That’s [15] not my question. My question is what I’ve just asked you. How less intrusive could a statute be, a tolling statute be than the New Jersey statute already is? MS. BRENNER: The statute that would contain a provision that would protect a foreign corporation’s right to object to in personam jurisdiction. THE CourRT: I just made that point before. Do you dis- agree with the point that you have that right regardless of what a statute says or doesn’t say? How can a statute ever preserve for you a right that you have? It’s pari of the organic law. 9a Ms. BRENNER: It’s our position, your Honor, that it’s quite possible that by designating an agent we could possibly be waiving that right. THE CoOuRT: Under what theory? Ms. BRENNER: Under the theory that then there is a resi- dent agent of the state who is accessible to be served with suit by any New Jersey claimant on any cause of action filed in any state or federal court in New Jersey, and it’s a position of A. C. L. and Bell that they always [16] object to in per- sonam jurisdiction. THE COURT: Let me give you a hypothetical, okay? Let’s assume that Bell Asbestos Mines delivered its fiber into the United States but not to the State of New Jersey. Your driver went from Canada, around the State of New Jersey, to Dela- ware, left off his fiber, and instead of going back the same route to Canada, came up the New Jersey Turnpike, and someone—and Mr. Tortoreti happened to see him going up the Turnpike and hit him with process. There’s no question that he was served, right? Ms. BRENNER: Yes, your Honor. THE Court: Are you telling me that you can’t come in to court and raise the question of jurisdiction over the person of Bell Asbestos based upon that service? Ms. BRENNER: No, your Honor. THE Court: All right. Service is a separate issue from jurisdiction, isn’t it? MS. BRENNER: Yes, your Honor. THE CouRT: Okay. Ms. BRENNER: Your Honor, if I may address the Bendix case, I think what’s important that everybody is overlooking is the fact that the [17] Sixth Circuit found that the imper- missible burden, irrespective of what is required of the defen- dant, was the fact that they had to, which your Honor just nullified my argument about waiving jurisdiction, whether they have to choose to be exposed to suit ad infinitim or sub- ject themselves possibly to service of process of claims that may not otherwise meet minimal contacts. THE CourT: I’m not making any holding now. I’m asking you questions and I think that’s an interesting question that 10a we have to address, and I guess what I’m suggesting is the Sixth Circuit didn’t have to say that much. That’s all that I am saying. I’m not bound by the Sixth Circuit. Ms. BRENNER: That’s correct. THE CourRT: But in terms of analyzing the law, I’m just wondering whether they had to say that much. Is the Ohio statute different from our prior statute, or is it basically iden- tical? MS. BRENNER: It’s similar statute, your Honor. THE CourRT: Okay. Getting back to my original question then. If you are in a jurisdiction that’s governed by the Sixth Circuit opinion and you are a legislator, what kind of a [18] tolling statute can you pass that would meet the constitu- tional muster of Bendix? The answer is none, right? Ms. BRENNER: Well, one that provides for preserving that _ right, your Honor THE Court: All right. Ms. BRENNER: Which your Honor has stated to me you believe that is an organic right under the due process clause. THE COURT: Well, do you disagree with me? MS. BRENNER: I would debate it, your Honor. THE COURT: Well, you’re a good advocate. I would expect you to debate it, but now I want you to tell me why you dis- agree with me legally. What’s wrong with that analysis? Ms. BRENNER: I’m at a loss, your Honor. THE CouRT: Okay. You have raised the defense of laches. Ms. BRENNER: Yes, I have, your Honor. THE Court: In the event that I should find that the stat- ute is constitutional, you say that, nonetheless, the plaintiff’s claim is barred by the doctrine of laches. Ms. BRENNER: That’s correct, your Honor. [19] I believe that if you take the intent of the tolling statute, which has been stated by counsel and your Honor to protect claims of New Jersey plaintiffs, and you look to the doctrine of laches which states that a plaintiff who has inexcusably delayed bringing a claim, the only excusable delay for a plaintiff to bring a claim under—I believe Searle and Velmohos implicitly state if a plaintiff was unable to serve a foreign, unrepre- sented foreign corporation due to the fact that they do not lla have a designated agent or haven’t registered to do business in the State of New Jersey, Velmohos stated flatly in clear language in the footnote that if an unrepresented foreign cor- poration does not have the defense of the statute of limita- tions and the plaintiff has waited until it expired to bring suit, that defendant is permitted to raise the defense of laches. Searle—and the United States Supreme Court quoted that language and stated flatly a defendant has that right to raise that defense. Implicit in that statement along with the state- ment of the court as to the interests sought to be protected by the tolling statute, the interests to be [20] protected is a plaintiff who can’t find the defendant who has run out of time because of that difficulty. Well, if a plaintiff waits eight, nine, ten years and a defen- dant is as easily served as A. C. L. and Bell within twenty- two days after they file suit, we don’t see—I can’t find the inexcusable, I mean the excusable delay. It’s our position that it’s inexcusable. Plaintiff has averred nothing to explain why he waited eight years to bring this suit after he was diagnosed in 1980. The suit was filed in ’87. 7HE COURT: Let me ask you a question. What is laches? Ms. BRENNER: That’s an equitable doctrine, your Honor. THE Court: It’s a defense, right? Ms. BRENNER: That’s correct. THE COURT: Who has the burden of proof on the defense? MS. BRENNER: I do, your Honor. THE CourRT: Okay. And it’s clear, isn’t it, that laches is something that—as applied where the claim is not barred by the statute of limitations, correct? [21] MS. BRENNER: Excuse me. I’m sorry. THE COURT: Laches is a defense that can be used only where the claim is not barred by the statute of limitations. You don’t need it otherwise. MS. BRENNER: Right. THE CourRT: Okay: So the question of delay in filing suit has to be linked up with another element which you forgot to discuss, right? There’s two elements to it. 12a Ms. BRENNER: Prejudice, your Honor. THE CouRT: Right. Ms. BRENNER: It’s obvious that a defendant sued eight years later in that witnesses, evidences, each year passes, it’s either lost, misplaced, destroyed. THE CourT: That’s the problem with asbestos litigation in general, isn’t it? MS. BRENNER: That’s correct, your Honor, and that’s why you can’t let stale claims be coming into court for no other reason than the plaintiff just didn’t want to be coming into court until eight years later, and they are well aware of the situation, and this is well publicized litigation. A. C. L. and Bell have been involved [22] in this for years. THE Court: Tell me specifically how your client is preju- diced in this case. Ms. BRENNER: The man worked and was diagnosed in 1980. I have no information, I don’t have any information in the papers as to his, how long he was employed and where he was employed. THE COURT: You know where he was employed. You know from the complaint where he was employed, don’t you? MS. BRENNER: I’m not sure, your Honor. THE Court: I know from reading the briefs where he was employed. MR. TORTORETI: Only because of your Honer’s order which requires that we plead it. THE CcuRT: All right. I also know that your client has been involved in litigation out of this plant for at least the last nine years that I have been sitting on asbestos litigation. Now I want to know how specifically in this case your client was prejudiced by the fact that he didn’t file suit earlier. What witnesses have been lost because of his delay? Not because of the latency of the disease, which is a problem in and of itself, but because of his delay. What witnesses [23] have been lost? 13a Ms. BRENNER: As a practical matter, your Honor, there’s another area that has to be looked at. The only people that are, because of the tolling statute, the only defendants, viable defendants in this case, if the tolling statute is declared con- stitutional, is the unrepresented foreign corporation. THE CoOuRT: Not true. MS. BRENNER: Unless the unrepresented foreign corpora- tion now turns around and brings in the domestic or resident defendants. THE COURT: What’s wrong with that? Ms. BRENNER: That’s a whiplash effect. The represented defendants in the state, they lose the benefit of the statute of limitations as well. THE CourRT: That’s the way it goes. The statute of limita- tions on a claim for contribution doesn’t arise until the judg- ment is entered against you. Ms. BRENNER: That’s correct, your Honor. THE COURT: Thei’s to protect you, right? That protects you. Ms. BRENNER: Minimally, your Honor. If it never comes to judgment, if you never get a [24] judgment, then obviously you are not going to be hit for contribution or indemnity. THE Court: Exactly. Ms. BRENNER: Defendants originally have the benefit of that statute of limitations. The statute effectively eliminates the statute of limitations in asbestos or any litigation, actu- ally, for resident as well as non resident defendants. THE Court: I’m still looking for prejudice. Show me prejudice and maybe they don’t get the benefit of the statute. I’m still looking for it. Tell me where it is. Ms. BRENNER: Well, your Honor, I still think it’s because the only viable defendants now are the unrepresented foreign corporations. Whether or not there’s indemnification or con- tribution, they are still going through the cost of litigation; that’s prejudice. Cost of litigation is awfully high. A lot of these cases obviously never come to trial. A lot do, but a lot don’t come to trial. I think that there’s extreme prejudice in situations such as this where the statutes run on the resident defendants, I’ll call l4a them, as [25] opposed to the unrepresented foreign corpora- tions. THE CourRT: Okay. Thank you. Ms. Rothschild? Ms. ROTHSCHILD: Your Honor, you directed a question which asked if this telling statute is declared unconstitutional, what less intrusive statute could be drawn? And | think that there is an answer to that, your Honor, because I think that I disagree with Mr. Tortoreti that this statute must be viewed only in the context of all of those foreign corporations who are not defendants in this case. I think quite the contrary. The statute ought to be viewed in this case in the context of these defendants, in the context of defendants who have been accepting service, appearing in this court, and defending cases, paying settlements and judgments for the last eight years. And I think a statute could be drawn which excepts from its provisions defendants like these, defendants who do accept service and who do come in and defend and who behave in New Jersey just like domestic corporations in the context of responding to lawsuits. THE Court: But the Supreme Court of the [26] United States in the Searle case said that is not a legitimate argument when you’re talking about the constitutionality of a statute, at least from the point of view of equal protection. Ms. ROTHSCHILD: I don’t think that Searle made a dis- tinction between defendants who have an agent for service of process and defendants who, although they don’t have an agent for service of process, are amenable to service, accept service and come in and defend. THE Court: I think that they do. Ms. ROTHSCHILD: I think that they do not view in the context of a, of this situation, I don’t think that they declare such a statute as the type that I have hypothesized to be unconstitutional. THE CourRT: Justice Blackmun’s opinion says as follows. “It is true, of course, that respondents had little or no trou- ble locating this particular, well known defendant-petitioner, but the tolling provision is premised on a reasonable assump- 1Sa tion that unrepresented foreign corporations, as a general rule, may not be so easy to find and serve.”’ MS. ROTHSCHILD: Well, I don’t think that [27] statement means that if you drew a statute which provided for the unrepresented foreign corporation who is not easy to find and serve, such as the statute as it exists now, but excepted and gave the benefit of the statute of limitations to those who not only are easy to serve but who voluntarily come in and defend, then that would not be unconstitutional under any decision of the Supreme Court. THE CouRT: How does a plaintiff do that? How do you draft a statute like that in the first place and, secondly, how do you put a plaintiff in a position where they have to know whether they are dealing with someone that’s easy to serve or someone that’s difficult to serve? Ms. ROTHSCHILD: Doesn’t the plaintiff have an obligation to, with reasonable speed and diligence, after discovering that he has a cause of action, to file a complaint? Isn’t that the basis of the statute of limitations, to protect against the prej- udice that may occur generally, as a general matter, by the disappearance of witnesses and staleness of evidence? THE Court: All the legislature is trying to do here is to put the plaintiff and the [28] defendants on the same playing field, and it has to be level. It can’t be uneven. And what they’re trying to do is saying let’s make it a level playing field and let the plaintiff have the same chance of suing a foreign tort-feasor as they do a resident tort-feasor. Ms. ROTHSCHILD: That’s right, but this statute doesn’t do that. What this statute does is give the plaintiff, balances it in favor of the plaintiff because the plaintiff here can sit on his cause of action, vis-a-vis a foreign corporation that is well known to him, that has been in this state defending cases, the same kinds of cases, and playing settlements and judgments for the last eight or ten years, can sit on that cause of action simply because that foreign corporation has not designated an agent, has not done a ministerial act of designating a agent for service of process. l6a THE CourRT: That’s an argument that has been raised and found wanting in two cases, Velmohos, and in the Searle case. Ms. ROTHSCHILD: But no, because those two cases were challenged under equal protection and due process grounds. But the Supreme Court found [29] under commerce clause constraints that the argument which wasn’t advanced in those two cases and which would have succeeded was sufficient. Your Honor has argued that there is a difference between— THE CourRT: I’m not arguing anything. I’m asking ques- tions. MS. ROTHSCHILD: Your Honor last posited that there may be a difference between service of process and acceptance of jurisdiction. THE Court: Sure. Ms. ROTHSCHILD: And that there is nothing in the statute which specifically waives a defendant by appointing an agent to—waives the claim that there’s no personal jurisdiction. It seems to me that that argument is as highly speculative and devoid of statutory support as the argument that was addressed by the Sixth Circuit, and while we have the repre- sentation of the Attorney General’s office that that is in fact what he or she does, there certainly is no statutory support one way or the other to say that. And although your Honor has suggested that perhaps by designation of an agent you don’t waive [30] your right to assert lack of in personam jurisdiction, the very nature of the agency concept is that the Secretary of State or whomever it is that you appoint is your alter ego for accepting service of process, and by accepting service of process it is at least evi- dence of, if not a waiver, and I don’t necessarily concede that it’s not a waiver, that you accept. That’s not like being slapped with a summons as you drive up the New Jersey Turnpike. That is your agent and alter ego to accept service of process. Even if it’s not a waiver, it’s cer- tainly evidence of a submission to the jurisdiction of this state whether or not you would be subject to the jurisdiction 17a of this state under the minimum contacts theory had you been served under the long arm statute somewhere else. So I think that there is an intrusion, if there’s a choice that the defendant must make, and that really in most cases the way that you come in and contest personal jurisdiction is that you are served under the long arm statute and make a special appearance for the purpose of contesting jurisdiction, and so it permits you to come into court and not waive, by coming into this state, [31] any defenses that you have, but for the ability to make a special appearance you would have to come in, and once you come in, I think historically it has been been the rule that you have submitted to the jurisdiction of the court. By appointing an agent, your agent to accept service of process, I think that there is a reasonable argument that can be made that you have done that there too. I don’t suggest that the defendants I represent necessarily have a good argu- ment regarding minimum contacts. But if we are to view the statute as it applies generally, I am virtually certain that there are defendants out there who do. But in the context of these defendants, I think that there is a statute that can be drawn that would not infringe on commerce clause considerations and would be sustainable under the protection and due pro- cess clauses. ‘ As some of us have recently learned, it doesn’t take much to sustain a statute or a court made rule under the equal pro- tection and due process clauses, and I don’t think that there would be anything in the less intrusive statute that I described that would change that. The last point that I would like to address [32] is that I think that the phrase highly speculative and devoid of statu- tory support in the Sixth Circuit case is equally susceptible to the interpretation that what is highly speculative and devoid of statutory support is the assertion that the defendants may do this, that is, appoint an agent for service of process and thereby avoid that Catch 22 THE CourT: Can I just read to you a footnote from Jus- tice Steven’s dissent in the Searle case?.Mind you, he’s dis- senting. 18a **] do not understand the court to be holding that New Jer- sey has a legitimate interest in attempting to require all cor- porations to submit in all cases to the jurisdiction of its courts, and that discrimination against unregistered foreign corporations is justified by the state’s desire to accomplish this purpose. Since a state may not enact a law that prohibits a foreign corporation from asserting a due process defense to an exercise of personal jurisdiction by a state court, I do not believe that the state may justify a classification that disfav- ors unregistered foreign corporations on the ground that they refused to take action that would [33] accomplish the same purpose.’’ Ms. ROTHSCHILD: As your Honor correctly pointed out, we now have dicta in a dissent, and I am not sure how per- suasive that would be in the face of a challenge to a statute which— THE CouRT: Weil, that’s what he’s saying the majority is saying. He is saying that the majority is saying that they are not construing the tolling statute by denying a foreign corpo- ration the right to contest in personam jurisdiction. That’s the whole court. He’s merely making an observation as to what the entire court seems to agree on. Ms. ROTHSCHILD: But that’s not in the context of a stat- ute which requires you to appoint an agent for service of pro- cess in order to take advantage of the statute of limitations. | don’t know that he would say that when we’re dealing with that type of a statute. THE CourRT: Thank you. I’m going to decide the motion today, although I reserve the right to file a formal opinion in the event of an appeal. It is my view that the Bendix case is not binding on the courts of this state. I find that the facts of that case are dis- tinguishable from [34] the facts of the current case. The Ohio statute seems to be very similar to the first statute promul- gated in the state which the Coons-1 opinion found to be wanting under the interstate commerce clause, that is, the Ohio statute in effect required licensure as well as the regis- tration of an agent to effect service of process in order to toll 19a the Ohio statute of limitations. That, in effect, was the prob- lem with our first statute in New Jersey. The first analysis I suppose is whether this statute inter- feres with interstate commerce to the point that it is unconsti- tutional. And we are recommended by case law to apply either the per se test or the balancing test to that question. It is suggested, I think, even in the Bendix case, that the per se rule should not be applied where it is clear on the face of the statute that the legislature has not intended to prefer its state economically over that of another state, or where the unde- clared intent of a statute is not to prefer the home state eco- nomically over a foreign state. And I think the tolling statute, although it clearly has impact on out of state [35] corporations, is not designed to favor either defendants or plaintiffs within the state over out of state defendants. First of all, it affects out of state per- sons, that is individuals, and out of state corporations. So it’s not aimed simply at commerce conduct. Secondly, it doesn’t favor either defendants or plaintiffs in the forum state. As I indicated before, it’s my view that this statute simply places all the parties on the same level playing field and gives the plaintiff the opportunity to serve a tort- feasor who is a resident of New Jersey the same way that he would serve a non-resident defendant, that is, it simplifies the service of process only and makes everyone equal in that respect. The question then is, and I think that the legitimate state interest involved in this statute has been so well addressed and decided by Velmohos and by the Cohn versus Searle case that I’m just going to jump right over it and go to the ques- tion of whether under the balancing test, since we have legiti- mate state interests that are being advanced by the statute, whether there is a less intrusive way of impacting on inter- state commerce but [36] accomplishing the same state goals and results. It would appear to me that this amendment to the statute was obviously taken from the legislative point of view of meeting the constitutional infirmities of the prior statute, and 20a the legislature was attempting to find the least intrusive way of doing it. And all a foreign corporation need do in order to gain the benefit of our statute of limitations is to designate an agent for the service of process by filing a paper. I believe that if this court were to adopt the Bendix opinion to this current statute there would be no way a legislature in the United States could pass a tolling statute that would comply with the interstate commerce clause. In my view, it is incorrect to make the observation that by requiring someone to file a piece of paper designating an agent for the purposes of service you are consenting to the in personam jurisdiction of the forum state. That I think is a fatal analysis of the Sixth Circuit. Service of process and in personam jurisdiction are distinct questions, and I think clearly the organic law permits a defendant to come before the [37] forum court and say you don’t have jurisdiction over me on the typical due process grounds that are always advanced in questions of jurisdiction. And I think that’s clearly suggested by the Supreme Court of the United States in the Cohn versus Searle case, not only by the majority, but also by the dissent. And I think that it’s unnecessary to require a state legisla- ture to say to get the benefit of our statute of limitations you have to file a piece of paper designating an agent tor service of process and, by the way, just to remind you, you do have a constitutional right to contest in personam jurisdiction under the due process clause of the United States Constitu- tion. I just think that’s unnecessary, and that is, as I perceive this argument, to be the only criticism of the New Jersey stat- ute, save the fact that no tolling statute whatsoever will meet constitutional muster in the United States, and I find it diffi- cult to believe in view of the fact that the United States Supreme Court in the Cohn versus Searle case has enumier- ated several reasons why they think the states have a legiti- mate interest in protecting their citizens by passing a [38] tolling statute. So it seems to me by reading the Cohn deci- sion that the United States Supreme Court was not saying 2la there is no tolling statute that can ever be passed that would not meet constitutional muster. For those reasons I find the New Jersey tolling statute not be a burden on interstate commerce and not to be a violation of the United States Constitution. On the collateral issue of laches, I agree that the Cohn case seems to suggest that in order to pass the equal protection clause muster, laches would have to be an affordable defense in order for foreign defendants to be treated fairly in terms of the possibly prolonged time between accrual of the cause of action and institution of suit. But laches is an affirmative defense. The defendant has the burden of proving not only an undue delay in terms of filing the complaint, but also the presence of real prejudice by reason of the delay, and you have to differentiate in toxic tort cases the real problems that result because of the latency of asbestos related diseases from the prejudice that results by reason of the plaintiff waiting seven years from the time of [39] diagnosis until the filing of suit. There has to be some affirmative showing by the defen- dant that there is real factual prejudice. I see none in this rec- ord and, therefore, I cannot grant the defendant's motion which is a partial summary judgment motion. I deny the motion on laches without prejudice to explore it further fac- tually at the time of trial or before, but night now I have no record to base any finding of prejudice. Any questions? MR. TORTORETI: Your Honor, I’m assuming that our motion for summary judgment on the statute of limitations grounds is granted. THE CouRT: The motion is granted. MR. TORTORETI: And the cross motion in all regards is denied because you think the cross motion also addressed the statute of limitations. THE Court: Yes. MR. TORTORETI: Thank you. Ms. ROTHSCHILD: Thank you, your Honor. THE COURT: The Order, however, should re [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_1819%3A3. Public record. Not legal advice.