Juzwin v. Asbestos Corp., Ltd.

Decision Date09 May 1990
Docket NumberNo. 89-5420,89-5420
Citation900 F.2d 686
Parties, Prod.Liab.Rep.(CCH)P 12,679 Stephen JUZWIN and Mary Juzwin, his wife v. ASBESTOS CORPORATION, LTD., individually and as successor to Johnson's Company; Carey Canadian Mines; Amtorg Trading Corporation; and Metropolitan Life Insurance Company; Flintkote Mines, Ltd.; Turner & Newall, P.L.C.; John Doe Corporation (a fictitious name representing one or more corporations or companies, engaged in the business of mining, manufacturing, distributing or supplying finished and unfinished asbestos products and fibers to plaintiffs' employer GAF/Ruberoid); Judy Doe Corporations (a fictitious name representing one or more legal entities who stand in the shoes of the John Doe defendants either as successor in interest, alter ego, or by other equitable doctrine which makes them responsible for the John Doe liability). AMTORG TRADING CORP., Third-Party Plaintiff, v. LEONARD J. BUCK, INC., Flintkote Mines, Ltd., National Gypsum Company and Turner & Newall, P.L.C., Third-Party Defendants. and CAREY CANADA, INC., Defendant and Third-Party Plaintiff, v. LAC D'AMIANTE DU QUEBEC LIMITEE, individually and as successor to Lake Asbestos of Quebec, Ltd. and Bell Asbestos Mines Limited, and Leonard J. Buck, Inc., Third-Party Defendant and Fourth-Party Plaintiff. v. ASSOCIATED ORE & METAL CORP., LTD., Fourth-Party Defendant. Appeal of CAREY CANADA, INC., Appellant.
CourtU.S. Court of Appeals — Third Circuit

Andrew T. Berry (argued), Kevin J. Connell, Stephen Marinko, McCarter & English, Newark, N.J., for appellant.

Jane B. Cantor (argued), Frances A. Tomes, Garruto, Galex & Cantor, P.C., East Brunswick, N.J., Peter N. Perretti, Jr., Atty. Gen. of N.J., Mary C. Jacobson, Harry Haushalter (argued), Trenton, N.J., Arthur D. Bromberg, Budd Larner Gross Picillo Rosenbaum Greenberg & Sade, P.C., Short Hills, N.J., David M. Katzenstein, Goldfein & Joseph, P.C., Princeton, N.J., Richard V. Jones, Bressler, Amery & Ross, Morristown, N.J., H. Frank Carpenter, Carton, Nary, Witt & Arvanitis, Asbury Park, N.J., Leon B. Piechta, O'Donnell, Kennedy, Vespole & Piechta, West Orange, N.J., for appellees.

Alan M. Darnell, Wilentz, Goldman & Spitzer, Woodbridge, N.J., for amicus curiae.

Before BECKER, COWEN and SEITZ, Circuit Judges.

OPINION OF THE COURT

SEITZ, Circuit Judge.

Carey Canada, Inc., (defendant) appeals from an interlocutory order of the district court denying its motion for summary judgment based on the New Jersey statute of limitations. The district court concluded that N.J.Stat.Ann. Sec. 2A:14-22 (West 1987) (the "tolling statute") is constitutional. Therefore, defendant's failure to designate a representative to accept service of process pursuant to that statute tolled the statute of limitations. The district court certified the order under 28 U.S.C. Sec. 1292(b) (1982). Since that order involves a controlling question of law as to the constitutionality of the tolling statute, we granted permission to appeal.

I.

Stephen and Mary Juzwin (plaintiffs) brought suit in the Superior Court of New Jersey, alleging that Stephen's asbestos-related ailments were caused by exposure to asbestos fibers supplied by defendant and others. Upon application of defendant Amtorg Trading Corporation, the action was removed to the United States District Court for the District of New Jersey.

Plaintiffs admit that this cause of action arose in 1982 when Stephen Juzwin was diagnosed as having asbestosis and concede that they did not institute legal proceedings within the New Jersey two-year statute of limitations period. Juzwin v. Amtorg Trading Corp., No. 87-3876, slip op. at 4 (D.N.J. filed February 28, 1989). Thus, plaintiffs' action is barred unless, as the district court concluded, that statute of limitations was tolled pursuant to New Jersey's tolling statute. Id. at 14.

New Jersey's tolling statute provides in pertinent part:

If any person against whom there is any of the causes of action specified in sections 2A:14-1 to 2A:14-5 and 2A:14-8 ... is not a resident of this State when such cause of action accrues ... or if any corporation or corporate surety not organized under the laws of this State, against whom there is such a cause of action, is not represented in this State by any person or officer upon whom summons or other original process may be served, when such cause of action accrues ... the time or times during which such person or surety is not residing within this State or such corporation or corporate surety is not so represented within this State shall not be computed as part of the periods of time within which such action is required to be commenced by the section. The person entitled to any such action may commence the same after the accrual of the cause therefor, within the period of time limited therefor by said section, exclusive of such time or times of nonresidence or nonrepresentation.

A corporation shall be deemed represented for purposes of this section if the corporation has filed with the Secretary of State a notice designating a representative to accept service of process.

N.J.Stat.Ann. Sec. 2A:14-22 (West 1987). 1

Defendant, a corporation formed under the laws of Canada, has no corporate offices in the 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. Thus, it is not "represented" in New Jersey within the meaning of the tolling statute. It appears to concede, however, that it was properly served under New Jersey's long-arm court rule, N.J.Ct.R. 4:4-4(c)(1).

Citing Bendix Autolite Corp. v. Midwesco Enters., Inc., 486 U.S. 888, 108 S.Ct. 2218, 100 L.Ed.2d 896 (1988), defendant moved for summary judgment on the ground that the tolling statute violates the commerce clause. In Bendix, the Supreme Court invalidated an Ohio tolling statute which required a foreign corporation to subject itself to the general jurisdiction of the Ohio courts, "whether or not the transaction in question had any connection with Ohio," in order to gain the protection of its statute of limitations. Bendix, 486 U.S. at 892, 108 S.Ct. at 2221.

The district court concluded that, unlike the Ohio statutory 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 designations 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 corporations, regardless of their connection with New Jersey. However, we will assume without deciding that the New Jersey Supreme Court would interpret the statute to permit designation of an agent for service of process only for causes of action having a nexus with New Jersey. The issue then becomes whether the statute so interpreted still constitutes an impermissible burden on interstate commerce. Our standard of review is plenary.

It may be helpful at the outset if we review the three standards of review that are applied in performing a dormant commerce clause inquiry:

1) state actions that purposefully or arbitrarily discriminate against interstate commerce or undermine uniformity in areas of particular federal importance are given heightened scrutiny; 2) legislation in areas of peculiarly strong state interest is subject to very deferential review; and 3) the remaining cases are governed by a balancing rule, under which state law is invalid only if the incidental burden on interstate commerce is clearly excessive in relation to the putative local benefits.

Ford Motor Co. v. Insurance Comm'r of Pa., 874 F.2d 926, 941 (3d Cir.1989), cert. denied sub nom. United Services Auto. Ass'n v. Foster, --- U.S. ----, 110 S.Ct. 418, 107 L.Ed.2d 382 (1989) (citing Norfolk Southern Corp. v. Oberly, 822 F.2d 388, 398-99 (3d Cir.1987)). 2

While heightened scrutiny is the standard of review for simple economic protectionism, "[this] category of protectionism includes those state measures that discriminate on their face against out-of-state interests or in favor of in-state interests." Norfolk Southern Corp., 822 F.2d at 400 (citations omitted). Because the New Jersey tolling statute applies to out-of-state corporations but not to New Jersey corporations, 3 it comes within the class of statutes that are subject to heightened scrutiny. See Old Coach Dev. Corp. v. Tanzman, 881 F.2d 1227, 1231 (3d Cir.1989) (citations omitted).

To pass the heightened scrutiny test, the state is required to "demonstrate both that the statute 'serves a legitimate local purpose,' and that this purpose could not be served as well by available nondiscriminatory means." Id. (quoting Maine v. Taylor, 477 U.S. 131, 138, 106 S.Ct. 2440, 2447, 91 L.Ed.2d 110 (1986) (quoting Hughes v. Oklahoma, 441 U.S. 322, 336, 99 S.Ct. 1727, 1736, 60 L.Ed.2d 250 (1979)). "In practice, such heightened scrutiny is applied with considerable rigor and turns out to be 'a virtually per se rule of invalidity.' " Norfolk Southern Corp., 822 F.2d at 400 (quoting Philadelphia v. New Jersey, 437 U.S. 617, 624, 98 S.Ct. 2531, 2535, 57 L.Ed.2d 475 (1978)).

As the district court recognized, New Jersey has a legitimate interest in "assist[ing] New Jersey citizens to pursue their claims against foreign corporations." New Jersey Senate Judiciary Committee's Statement to Senate Bill 953 (1984), dated February 23, 1984. The tolling statute is designed to further that interest by suspending "the running of the statute of limitations for foreign corporations that are not represented...

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