Source: http://openjurist.org/628/f2d/801
Timestamp: 2015-09-04 19:13:04
Document Index: 364847020

Matched Legal Cases: ['§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 1292']

628 F2d 801 Hopkins v. Kelsey-Hayes Inc Cohn 79-2406 79-2605 | OpenJurist
628 F. 2d 801 - Hopkins v. Kelsey-Hayes Inc Cohn 79-2406 79-2605 Home
628 F2d 801 Hopkins v. Kelsey-Hayes Inc Cohn 79-2406 79-2605 628 F.2d 801
Roy HOPKINS, Appellee,v.KELSEY-HAYES, INC., Appellant.Susan COHN and Walter Cohn, her husband, Appellants in No.79-2406, Cross-Appellee in No. 79-2605,v.G. D. SEARLE & COMPANY, Appellee in No. 79-2406,Cross-Appellant in No. 79-2605.
Nos. 79-1881, 79-2406 and 79-2605.
Argued Feb. 11, 1980.Decided July 23, 1980.
Apell, Howard & Mathews, J. Llewellyn Mathews (Argued), Browns Mills, N. J., for appellee in No. 79-1881.
Shanley & Fisher, Raymond M. Tierney, Jr. (Argued), Abbott S. Brown, Newark, N. J., for appellee, cross-appellant in No. 79-2406 and 2605.
Rawle & Henderson, Lowell A. Reed, Jr. (Argued), Philadelphia, Pa., for appellant in No. 79-1881.
Walter R. Cohn (Argued), Elaine Harris, South Orange, N. J., for appellants in Nos. 79-2406 and 2605.
These appeals1 present us with constitutional challenges to a New Jersey statute, N.J.S.A. § 2A:14-22, which tolls the statute of limitations in actions against foreign corporations which are not represented in New Jersey, but which may nonetheless be amenable to New Jersey's long-arm jurisdiction. By contrast, foreign corporations which are represented in New Jersey receive the full benefit of all limitations statutes. Thus, the defendants here, both non-represented foreign corporations, claim that N.J.S.A. § 2A:14-22, by refusing them the protection of the limitation statute, has denied them due process and equal protection of the laws under the United States constitution.
In the first of these appeals, Cohn v. G. D. Searle & Co., the plaintiffs, who are husband and wife, sued G. D. Searle & Co. (hereinafter "Searle") in tort for damages caused by a birth control pill, Enovid, which had been manufactured by Searle and which allegedly contributed to a stroke suffered by Mrs. Cohn. Searle is a Delaware corporation with its principal place of business in Illinois. Although it was at all times subject to New Jersey's long-arm jurisdiction, see N.J.Ct.R. 4:4-4(c)(1),2 Searle was not registered to do business in New Jersey, and it maintained no agent for service of process in New Jersey. In fact, the only personnel affiliated with Searle who were located in New Jersey, during the time period relevant to this litigation, were 40 so-called "detail-persons" who worked out of their own homes and whose sole function was to generate good-will for Searle among New Jersey doctors.
Before trial, Searle claimed the benefit of New Jersey's two year statute of limitations as a defense. N.J.S.A. § 2A:14-2.3 In response, the plaintiffs claimed that the statute of limitations was no bar to their complaint because N.J.S.A. § 2A:14-22 (hereinafter the "tolling provision") tolls the limitations statute in any action against a foreign corporation which "is not represented in this state by any person or officer upon whom summons or other original process may be served . . . ."4
The district court rejected Searle's argument that the presence of detail-persons in New Jersey afforded Searle the benefit of the statute of limitations. On the other hand, the district court accepted Searle's contention that the tolling provision was unconstitutional. 447 F.Supp. 903 (D.N.J.1978). Reasoning that the tolling provision must be interpreted in light of the legislative intent at the time of its enactment, the court held that Searle's detail-persons were not adequate corporate "representatives" within the meaning of the tolling provision inasmuch as, at the time that provision was most recently amended, in 1949,5 jurisdiction could be obtained over a foreign corporation only by serving, within New Jersey, an "officer, director, trustee or a managing or general agent of the corporation."6 In personam jurisdiction over Searle, therefore, could not have been obtained by service on mere detail-persons. 447 F.Supp. at 909-10.
Having disposed of this statutory issue, the district court then turned to Searle's constitutional claims. The court observed that the purpose of the tolling provision, when it was originally enacted and as it was subsequently amended, see note 5 supra, was to protect New Jersey plaintiffs asserting causes of action against corporate defendants which were not subject to in personam jurisdiction in the New Jersey courts. In light of this purpose, the court concluded that the tolling provision was no longer relevant in cases where the out-of-state defendant was now subject to the long-arm jurisdiction of the New Jersey courts a jurisdictional expansion which, in New Jersey,7 post-dated the 1949 amendment to the tolling provision. Therefore, the district court held that the continued application of the tolling provision in cases such as this one served no rational purpose and consequently violated the United States Constitution. See 447 F.Supp. at 910-12.
Both parties appealed from the judgment of the district court. In No. 79-2605, Searle contends that the district court erred by concluding that the presence of its detail-persons in New Jersey did not entitle it to the benefit of the statute of limitations. In No. 79-2406, the Cohns argue, contrary to the district court's holding, that the tolling provision is a rational exercise of the legislature's prerogative and is thus constitutional.
In the second appeal before us, Hopkins v. Kelsey-Hayes, Inc., the plaintiff, Hopkins, was injured on May 18, 1975 when a tire mounted on a rim which had been manufactured by Kelsey-Hayes exploded. This lawsuit was filed on April 27, 1978, nearly three years after plaintiff's cause of action had accrued. Kelsey-Hayes is a Delaware corporation, which has never been represented in New Jersey. However, at all times it has been subject to New Jersey's long-arm jurisdiction.
Before a different district court judge than the judge who presided in Cohn v. G. D. Searle, Inc., Kelsey-Hayes claimed the benefit of New Jersey's two year statute of limitations and moved for summary judgment. Plaintiff responded that the running of the limitations statute was tolled by N.J.S.A. § 2A:14-22, see note 4 supra, and that therefore its complaint was not barred. Alternatively, the plaintiff argued that the statute was tolled under New Jersey's "discovery rule," see Lopez v. Swyer, 62 N.J. 267, 300 A.2d 563 (1973), Fernandi v. Strully, 35 N.J. 434, 173 A.2d 277 (1961), under which the statute does not begin to run until the plaintiff has had a reasonable opportunity to "discover" the identity of the person who caused his injury. At the pre-trial state, Kelsey-Hayes responded only to the plaintiff's first argument. It claimed that the tolling provision, when applied to defendants subject to New Jersey's long-arm jurisdiction, violated the due process and equal protection clauses of the United States Constitution.
In ruling on Kelsey-Hayes' summary judgment motion, the district court similarly confined its analysis to the constitutionality of the tolling provision. The district court judge in Hopkins expressly disagreed with the constitutional holding reached by the district court judge in Cohn v. G. D. Searle, Inc., supra. The Hopkins court concluded that since under New Jersey law, obtaining jurisdiction over non-represented foreign corporations process under the long-arm rule was more difficult than obtaining jurisdiction over foreign corporations which were represented in New Jersey, a rational basis existed for distinguishing between these two categories of defendants. Having found that this "rational basis" supported the tolling provision, the district court rejected both defendant's due process and equal protection arguments. Hopkins v. Kelsey-Hayes, Inc., 463 F.Supp. 539, 542 (D.N.J.1978).
Pursuant to 28 U.S.C. § 1292(b), the district court and this court certified Kelsey-Hayes' interlocutory appeal from the order denying summary judgment.
Shortly before we heard argument in these cases, counsel called our attention to Velmohos v. Maren Engineering Corp., 83 N.J. 282, 416 A.2d 372, No. A-72/143 (N.J.Sup.Ct. June 18, 1980), a case which was at that time pending before the New Jersey Supreme Court. Velmohos involves the identical issues raised in these appeals.
In Velmohos, as in these cases, New Jersey plaintiffs had sued non-represented foreign corporations in tort, and had relied upon the tolling provision in response to a statute of limitations defense. The state defendants in Velmohos raised two arguments against application of the tolling provision. First, they claimed that their amenability to New Jersey's long-arm jurisdiction constituted sufficient "representation" within the state to entitle them to a limitations defense in that case, two years. Secondly, they argued that, as applied to them, the tolling provision violated the federal constitution. In an unreported opinion, the state trial court in Velmohos struck down the tolling provision on federal constitutional grounds, adopting the reasoning of the district court in Cohn v. G. D. Searle & Co., supra. This decision was reversed by the Appellate Divisi