Court Opinion

ID: 9762639
Source: CourtListenerOpinion
Date Created: 2023-08-29 02:27:52.035779+00
Date Added: 2024-06-11T07:29:36.129102
License: Public Domain

STEIN, J.,
dissenting.
I agree with the majority’s preliminary observation that under the contemporary choice-of-law doctrine, “the determinative law is that of the state with the greatest interest in governing the particular issue.” Ante at 140. In my view, however, South Carolina’s interest in insulating a general contractor like Du Pont from tort liability is minimal. In comparison, New Jersey has a clear and compelling interest in providing redress, beyond the limited compensation made available through a workers’ compensation award, to the survivors of a worker whose exposure to radioactivity in South Carolina caused him to contract leukemia, resulting in his death. I would modify Wilson v. Faull, 27 N.J. 105 (1958), reverse the judgment of the Appellate Division, and remand this matter for trial.
*147My difference with the majority’s conclusion in this case is narrow but fundamental. The majority opinion observes that South Carolina has manifested its interest in providing a comprehensive system of workers’ compensation by requiring that a general contractor, as well as an employee’s direct employer, furnish workers’ compensation coverage. In effect, this gives an employee the choice of proceeding against his own employer or against a general contractor that has engaged his employer. However, the general contractor is accorded by South Carolina law a claim-over against the primary employer for any benefits that the general contractor is required to pay. In return for this “backstop” function, South Carolina has elected to grant such general contractors an immunity from tort claims. Ante at 137-38.
In New Jersey, our Legislature has elected to mandate virtually the same “backstop” workers’ compensation protection, but without immunizing a general contractor from third-party claims. Thus, general contractors are made liable for compensation benefits to employees of a subcontractor in the event the subcontractor has not secured workers’ compensation insurance, and, as in South Carolina, are granted a right of reimbursement from the subcontractor. N.J.S.A. 34:15-79. Nevertheless, a general contractor, exposed to liability for workers’ compensation benefits pursuant to the statute, has never been accorded immunity from tort liability. See Boehm v. Witte, 95 N.J.Super. 359 (Law Div.1967).
One might speculate about the wisdom of South Carolina’s statutory scheme, which grants immunity to general contractors in return for what is in reality a “secondary” liability for compensation benefits. Under South Carolina law a general contractor would bear the actual cost of compensation benefits only if it were unable to secure reimbursement from the subcontractor. Such a legislative grant of immunity appears to confer a significant benefit to South Carolina general contractors in return for a relatively modest burden. The record in this case is barren of any evidence concerning the frequency *148with which South Carolina general contractors are required to pay workers’ compensation benefits and are subsequently unable to recover from the primary employer.
I would also note that in this case the statutory exposure of Du Pont, a Delaware corporation doing business in South Carolina, is highly theoretical. The injured worker lived in New Jersey, was employed by a New Jersey company, and thus understandably elected to prosecute his workers’ compensation claim against his employer in New Jersey. No workers’ compensation claim was filed in South Carolina. The record before us does not indicate the frequency with which the injured worker visited Du Pont’s South Carolina plant, and there may be some question whether he could have maintained a workers’ compensation action under South Carolina law. Even if such a claim against Du Pont had been asserted successfully in South Carolina, Du Pont would have a statutory right of reimbursement from Allstates, the worker’s employer. Under these circumstances, Du Pont’s contingent exposure to liability for workers’ compensation benefits in South Carolina seems to fall considerably short of establishing a substantial state interest on the part of South Carolina in preserving Du Pont's immunity.
The contingent nature of defendant’s statutory workers' compensation liability differentiates this case from Wilson v. Faull and that Court’s balancing of interests. In Wilson, the defendant general contractor was, by Pennsylvania law, made the primary statutory employer, equivalent in all respects to New Jersey’s treatment of immediate employers. See 27 N.J. 112—13, 121-23. Unlike South Carolina, Pennsylvania did not accord to a general contractor a statutory right of reimbursement from the direct employer.1 As a matter of fundamental com*149pensation policy, then, the Wilson Court considered the conflict of interests issue to be no different from that posed by third-party actions against out-of-state employers in states with workers’ compensation statutes identical to the New Jersey statute:
Since there is almost universal recognition of a sister state’s grant of immunity to an immediate employer, who is required to provide compensation, that policy, from a choice of law viewpoint, should be equally applicable where the general contractor is effectively substituted for the immediate employer for compensation purposes, unless to do so would be contrary to the public policy of New Jersey. [Id. at 123.]
Here, South Carolina has not, in the same sense as has Pennsylvania, chosen to substitute its general contractors for the immediate employer, but, as explained, has instead imposed a secondary or contingent compensation liability on general contractors such as Du Pont. For purposes of interest analysis, Du Pont’s immunity is more like a “gratuitous” immunity, bestowed by some states on co-employees or unrelated subcontractors, deserving far less respect in the conflicts of law context. Cf 4 A. Larson, Workmen’s Compensation Law § 88.21 at 16-149 (1987) (rationale of Wilson v. Faull, turning on potential threat to “central policy of compensation law,” not relevant in cases involving non-employer third parties).
Hence, it is not at all apparent how the application of New Jersey law to allow this suit to be maintained against Du Pont would “undermine the foundation of that state’s workers’ compensation statute.” Ante at 140. Such a decision would simply reflect New Jersey’s determination that the immunity accorded to a general contractor under South Carolina’s workers’ compensation law is far less significant to the operation of that statute than is the immunity accorded to the primary employer. The fact that South Carolina has provided in its workers’ compensation statutes for an expansive immunity that *150includes parties other than the primary employer hardly compels the conclusion that that expansive immunity is fundamental to that state’s workers’ compensation system. The compensation systems of New Jersey and many other states apparently function adequately without according immunity to general contractors. For example, under Delaware law, the state of Du Pont’s incorporation, no such immunity is accorded to a general contractor who may be contingently liable for an injured employee’s workers’ compensation benefits. See Dickinson v. Eastern Railroad Builders, Inc., 403 A.2d 717 (Del.1979).
On the other side of the equation is New Jersey’s clear interest in providing adequate compensation to an injured domiciliary. Although the majority expresses the view that that interest has been addressed through the workers’ compensation system, it is well recognized that the workers’ compensation system does not always provide adequate redress for injuries sustained by a worker. As this Court observed in Lyon v. Barrett, 89 N.J. 294 (1982):
Good reason exists for preserving the right of an injured worker to sue a third person to the maximum extent that such actions are consistent with workers’ compensation laws. The fixed dollar ceiling on benefits under the workers’ compensation laws are the result of a trade-off of certain liability of the employer for reduced awards for the employee. Injured workers are entitled not only to recovery against employers under workers’ compensation laws, but also against third parties under tort law. [Id. at 305 (citations omitted).]
In other choice-of-law contexts, courts have accorded substantial weight to New Jersey’s governmental interest in securing adequate compensation for its residents from negligently inflicted injuries. See Mellk v. Sarahson, 49 N.J. 226, 231 (1967) (New Jersey’s “strong * * * policy” of allowing recovery by injured guest for injuries caused by host-driver’s negligence “is not diminished merely because accident occurred in another state”); Schum v. Baily, 578 F.2d 493, 496 (3rd Cir.1978) (applying New Jersey statute of limitations in malpractice claim arising in New York since “it is clear that New Jersey’s strong interest in protecting compensation rights of its domiciliaries is implicated”).
*151This case does not present the question whether New Jersey should ignore the immunity granted by a sister state’s workers’ compensation statute to the primary employer who bears the ultimate liability for compensation benefits. A refusal to recognize that immunity might severely impair the fabric of a sister state’s compensation scheme. But South Carolina’s interest in according immunity to a general contractor whose workers’ compensation liability is secondary under South Carolina law should not be accorded any such significance. Whatever weight that immunity may have under South Carolina’s statutory scheme should yield to New Jersey’s compelling interest in providing its workers an opportunity to recover adequate compensation for negligently inflicted injuries.
Accordingly, I would reverse the judgment of the Appellate Division and remand the matter for a trial on the merits.
For affirmance—Chief Justice WILENTZ, and Justices HANDLER, POLLOCK, O’HERN and GARIBALDI—5.
For reversal and remandment—Justices CLIFFORD and STEIN—2.

The majority suggests that this distinction between the Pennsylvania and South Carolina workers' compensation schemes is not significant because at the time of Wilson general contractors were able, by contract, to shift to subcontractors the burden of obtaining compensation insurance. Ante at 138 *149n. 2. In my view, the ability to redistribute statutory rights and duties by private arrangement is not determinative of the importance to be accorded the state interest that underlies such statutory provisions.