Cohn v. GD Searle & Co.
Decision Date | 07 December 1984 |
Docket Number | Civ. A. No. 74-450. |
Citation | 598 F. Supp. 965 |
Parties | Susan COHN and Walter Cohn, her husband, Plaintiffs, v. G.D. SEARLE & CO., Defendant. |
Court | U.S. District Court — District of New Jersey |
Walter R. Cohn, Thomas E. Cohn, South Orange, N.J., for plaintiffs.
Shanley & Fisher by Raymond M. Tierney, Jr., Susan M. Sharko, Morristown, N.J., for defendant; Sidley & Austin, Chicago, Ill., of counsel.
Robinson, Wayne, Levin, Riccio & LaSala by Joseph F. Lagrotteria, Newark, N.J., and Shea & Gardner by I. Michael Greenberger, Washington, D.C., for Brinco Mining Limited as amicus curiae.
Plaintiffs, Susan and Walter Cohn, who are husband and wife, instituted this action in the New Jersey Superior Court against defendant G.D. Searle & Co. The complaint alleges that Susan Cohn suffered a stroke and that the stroke was caused by her use of an oral contraceptive manufactured by Searle.
Susan Cohn's stroke occurred in 1963. In late 1969 or 1970 plaintiffs became aware that there may have been a causal link between use of the contraceptive and the stroke. Suit was instituted in 1974, more than ten years after the stroke and approximately four years after plaintiffs became aware of the possibility of a causal relationship between the stroke and Searle's contraceptive.
After removing the case to this court Searle moved for summary judgment based upon New Jersey's 2-year statute of limitations. N.J.S.A. 2A:14-2. Plaintiffs resisted the motion, relying on N.J.S.A. 2A:14-22 which tolls the statute of limitations for a cause of action against a foreign corporation that "is not represented" in New Jersey "by any person or officer upon whom summons or other original process may be served." Judge Meanor, to whom the case was then assigned, granted Searle's motion, ruling that the tolling provision was invalid under the Equal Protection Clause and that, therefore, the 2-year statute of limitations barred plaintiffs' action. Cohn v. G.D. Searle & Co., 447 F.Supp. 903 (D.N.J.1978).
Plaintiffs appealed. The Court of Appeals reversed, holding that there was a rational basis for the tolling provisions and that consequently the New Jersey statute does not violate the Equal Protection Clause. Hopkins v. Kelsey-Hayes, Inc., 628 F.2d 801 (3d Cir.1980).
The United States Supreme Court granted certiorari. It too concluded that the New Jersey statute does not violate the Equal Protection Clause. G.D. Searle & Co. v. Cohn, 455 U.S. 404, 102 S.Ct. 1137, 71 L.Ed.2d 250 (1982). In a footnote it addressed Searle's due process contentions. As to the argument that the tolling statute violates due process by unfairly and irrationally denying certain foreign corporations the benefit of the statute of limitations without furthering any legitimate societal interest, the Court stated that "this due process argument is nothing more than a restatement of Searle's equal protection claim." 455 U.S. at 412, n. 7, 102 S.Ct. at 1143, n. 7. Because it was not raised in the Court of Appeals the Court declined to address Searle's other due process argument, namely, that it was deprived of due process because it could obtain the benefit of New Jersey's statute of limitations only by appointing an agent to accept service, and that such appointment would subject it to suit in New Jersey when there otherwise would not be the minimum contacts required for suit. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
The Supreme Court discussed but did not decide the question whether the tolling provision violates the Commerce Clause. It did not resolve this issue for two reasons. First, neither the district court nor the Court of Appeals addressed the question directly, although in a footnote the district court suggested that the tolling provision would violate the Commerce Clause. 447 F.Supp. at 911, n. 17. Second, it was unclear under New Jersey law whether the tolling statute required a corporation to register to do business in New Jersey pursuant to N.J.S.A. 14A:13-2 in order to obtain the benefit of the statute of limitations or whether the mere appointment of an agent would suffice.
In view of the unsettled state of New Jersey's law, the Court remanded the case to the Court of Appeals so that it might "determine whether Searle's Commerce Clause argument, if it was properly raised below, has merit." 455 U.S. at 414, 102 S.Ct. at 1144. The Court of Appeals remanded the case to this court for a decision on the validity of the tolling statute under the Commerce Clause. Hopkins v. Kelsey-Hayes, Inc., 677 F.2d 301 (3d Cir.1982).
In 1982, after remand, Searle moved for summary judgment on the ground that the tolling statute is unconstitutional under the Commerce Clause and also on the due process ground which it raised but which was not decided by the Supreme Court. The Attorney General of New Jersey moved to intervene and cross-moved for summary judgment. Judge Meanor granted the intervention motion. Plaintiffs joined in the Attorney General's cross-motion. Judge Meanor stayed proceedings until final disposition of a New Jersey case which required that the State Supreme Court decide what action a foreign corporation must take in order to escape the tolling effect of N.J.S.A. 2A:14-22.
The New Jersey Supreme Court has now eliminated any ambiguity which may have existed in the tolling statute. In Coons v. American Honda Motor Co., 94 N.J. 307, 463 A.2d 921 (1983) it held (i) that foreign corporations may designate an agent for service of process only by obtaining a certificate of authority to do business; (ii) the tolling statute is a forced licensure provision and as such is in violation of the Commerce Clause; and (iii) the decision would be given retrospective effect, making it applicable to all matters that had not reached final judgment at the time of that decision.
Thereafter the plaintiff in Coons, supported by numerous amici curiae (including the plaintiffs in the instant case), filed a petition for rehearing on all issues. The Court granted the petition, limited to the retroactivity issue. After rehearing and further consideration it changed its position on retroactivity and a majority of the Court ruled: "We now hold as a matter of state law that Coons I is to be applied prospectively only, from the date of that decision, August 3, 1983." As further explicated by the Court, "... the statute of limitations as to foreign, unrepresented corporations commences to run as of August 3, 1983." Coons v. American Honda Motor Co., Inc., 96 N.J. 419, 422, 435, 476 A.2d 763 (1984).
Although the New Jersey Supreme Court decided only the state law retroactivity question, it discussed both state and federal cases and proceeded as if state law and federal law on the subject were "inspired by the same considerations." 96 N.J. at 426, 476 A.2d 763.
There is now pending in the United States Supreme Court a petition for a writ of certiorari to review the decision in Coons II. That Court will, of course, finally decide the issues now before us, but in view of the importance of this case to both parties and in view of the long delay to which the case has already been subjected, I believe I should rule on the same issues raised by the pending motions in light of Coons I and II.
There can be no question that the New Jersey Supreme Court has decided definitively the meaning of N.J.S.A. 2A:14-22, which tolls the running of the statute of limitations against foreign corporations which are not "represented" in New Jersey. It held in Coons I "that a foreign corporation must obtain a certificate to do business in this state, under N.J.S.A. 2A:13-4, in order to achieve `representation' in the context of N.J.S.A. 2A:14-22." 94 N.J. at 309, 463 A.2d 921.
Two questions of pertinence to the present case remained after the New Jersey Supreme Court decided the statutory question: (i) Does N.J.S.A. 2A:14-22, as so interpreted, unconstitutionally burden interstate commerce? and (ii) If it is concluded that N.J.S.A. 2A:14-22 does unconstitutionally burden interstate commerce, should such a conclusion be applied retroactively or prospectively? In Coons I the New Jersey Supreme Court held that as a matter of federal law the statute does unconstitutionally burden interstate commerce by requiring a foreign corporation engaged exclusively in interstate commerce to obtain a certificate to do business in order to gain the advantage of the statute of limitations. In Coons II the New Jersey Supreme Court held that as a matter of state law, its holding of unconstitutionality should be applied prospectively.
A. Applicable Law: Both parties agree that federal law governs the question of the constitutionality of N.J.S.A. 2A:14-22. Since this is a federal question the issue must ultimately be decided by the United States Supreme Court. Although the decision of the New Jersey Supreme Court applying federal law to the question is both persuasive and instructive it is not binding, and under the mandate of the United States Supreme Court and the Court of Appeals I am required to make an independent determination of the constitutionality of the tolling statute under the Commerce Clause.
Plaintiffs urge strenuously that I am bound by the decision in Coons II that, assuming the unconstitutionality of the tolling statute, the constitutional determination is to be applied prospectively and not retroactively. However the cases cited by plaintiffs involve interpretation of state statutes and the effect to be given to changes in state law, not, as in the present case, the question of the retroactivity of federal constitutional decisions.
It would be difficult to reconcile rationally a holding that federal law will be applied to determine the constitutionality of a statute but that the states remain free to determine under state law when and how the ruling of unconstitutionality will be applied. Such a rule would...
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