Searle Company v. Cohn

• Decision Date: 24 February 1982
• Docket Number: No. 80-644,80-644
• Citation: 455 U.S. 404,102 S.Ct. 1137,71 L.Ed.2d 250
• Parties: G. D. SEARLE & COMPANY, Petitioner, v. Susan COHN and Walter Cohn
• Court: U.S. Supreme Court

455 U.S. 404

102 S.Ct. 1137

71 L.Ed.2d 250

G. D. SEARLE & COMPANY, Petitioner,

v Susan COHN and Walter Cohn.

No. 80-644.

Argued Dec. 7, 1981.

Decided Feb. 24, 1982.

Syllabus

A New Jersey statute tolls the limitation period for an action against a foreign corporation that "is not represented" in New Jersey by any person or officer upon whom process may be served. In respondents' action against petitioner foreign corporation, originally brought in a New Jersey state court and removed to Federal District Court, petitioner moved for summary judgment based upon the applicable New Jersey statute of limitation, and respondents countered with the tolling provision. Although ruling that petitioner was not represented in New Jersey for purposes of the tolling provision, the District Court nevertheless held that the suit was barred. Reasoning that the tolling provision operated to preserve only causes of action against corporate defendants that were not subject to in personam jurisdiction in New Jersey, and that with the enactment of New Jersey's long-arm rule, the rationale for the pre-existing tolling provision ceased to exist, the District Court found the tolling provision invalid under the Equal Protection Clause of the Fourteenth Amendment. The Court of Appeals reversed. That court's decision was based upon an intervening decision of the New Jersey Supreme Court holding that, as a matter of New Jersey law, the tolling provision continued in force despite the advent of long-arm jurisdiction, and that such provision did not violate the Equal Protection Clause, because the increased difficulty of out-of-state service provided a rational basis for tolling the statute of limitation in a suit against an unrepresented foreign corporation.

Held:

1. The tolling provision does not violate the Equal Protection Clause. Rational reasons support the provision despite the institution of long-arm jurisdiction in New Jersey. The unrepresented foreign corporation remains potentially difficult to locate, and the institution of long-arm jurisdiction has not made service upon such a corporation the equivalent of service upon a corporation with a New Jersey representative but requires additional conditions for effective service. Because of these burdens connected with suing unrepresented foreign corporations, as opposed to suing a domestic corporation or a represented foreign corporation, the tolling provision does not deprive an unrepresented foreign corporation of the equal protection of the laws. Pp. 1141-1144.

2. But since neither lower court addressed directly the question whether the tolling provision violates the Commerce Clause, and since, moreover, the Commerce Clause issue is clouded by an ambiguity in state law, the Court of Appeals' judgment is vacated, and the case is remanded for consideration of such issue. P. 1144.

628 F.2d 801, vacated and remanded.

William P. Richmond, Chicago, Ill., for petitioner.

Walter R. Cohn, South Orange, N.J., for respondents.

Justice BLACKMUN delivered the opinion of the Court.

A New Jersey statute, N.J.Stat.Ann. § 2A:14-22 (West 1952), tolls the limitation period for an action against a foreign corporation that is amenable to jurisdiction in New Jersey courts but that has in New Jersey no person or officer upon whom process may be served. The United States Court of Appeals for the Third Circuit in this case held that the statute does not violate the Equal Protection and Due Process Clauses of the Fourteenth Amendment. We agree, but we vacate the Court of Appeals' judgment and remand the case for consideration of petitioner's Commerce Clause challenge to the statute.

I

Respondents, Susan and Walter Cohn, are husband and wife. In 1963, Susan Cohn suffered a stroke. Eleven years later, in 1974, the Cohns sued petitioner, G. D. Searle & Co., in the Superior Court of New Jersey, Essex County, alleging that Susan Cohn's stroke was caused by her use of an oral contraceptive manufactured by petitioner.¹ Petitioner was served under New Jersey's long-arm rule, N.J.Ct.Rule 4:4-4(c)(1) (1969). Petitioner removed the suit to federal court and thereafter moved for summary judgment based upon New Jersey's 2-year statute of limitation, N.J.Stat.Ann. § 2A:14-2 (West 1952), governing an "action at law for an injury to the person caused by . . . wrongful act." Respondents countered with § 2A:14-22. That section tolls the statute of limitation 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." ²

The District Court ruled that petitioner was not represented in New Jersey for the purposes of the tolling provision.³ 447 F.Supp. 903, 907-909 (N.J.1978). Nevertheless it held that respondents' suit was barred. According to the District Court, the tolling provision had operated to prem102 S.Ct. 1141m serve ONLY causes of action against corporate defendants that were not subject to in personam jurisdiction in New Jersey. With the enactment of New Jersey's long-arm rule, now N.J.Ct.Rule 4:4-4(c),⁴ the rationale for the pre-existing tolling provision ceased to exist. On this reasoning, the court held that the tolling provision served no logical purpose, found it invalid under the Equal Protection Clause, and ruled that the 2-year statute of limitation therefore barred respondents' suit. 447 F.Supp., at 911-913.

Respondents appealed. Before the Court of Appeals reached a decision, however, the Supreme Court of New Jersey decided Velmohos v. Maren Engineering Corp., 83 N.J. 282, 416 A.2d 372 (1980), appeal pending, No. 80-629. That court ruled, as a matter of New Jersey law, that the tolling provision continued in force despite the advent of long-arm jurisdiction. In addition, the court concluded that the tolling provision did not violate the Equal Protection or Due Process Clauses of the Fourteenth Amendment, because the increased difficulty of out-of-state service provided a rational basis for tolling the statute of limitation in a suit against an unrepresented foreign corporation.

The Court of Appeals then followed the New Jersey Supreme Court's lead and reversed the District Court.⁵ Summing up what it felt to be the rational basis for the tolling provision, the Court of Appeals explained "Since service of process under the long-arm statute is more difficult and time-consuming to achieve than service within the state, and since out-of-state, non-represented corporate defendants may be difficult to locate let alone serve, tolling the statute of limitations protects New Jersey plaintiffs and facilitates their lawsuits against such defendants." Hopkins v. Kelsey-Hayes, Inc., 628 F.2d 801, 811 (CA3 1980).

Because of the novel and substantial character of the federal issue involved, we granted certiorari, 451 U.S. 905, 101 S.Ct. 1972, 68 L.Ed.2d 293 (1981).

II

Like the Court of Appeals, we conclude that the New Jersey statute does not violate the Equal Protection Clause. In the absence of a classification that is inherently invidious or that impinges upon fundamental rights, a state statute is to be upheld against equal protection attack if it is rationally related to the achievement of legitimate governmental ends. Schweiker v. Wilson, 450 U.S. 221, 230, 101 S.Ct. 1074, 1080, 67 L.Ed.2d 186 (1981). The New Jersey tolling provision need satisfy only this constitutional minimum. As the Court explained in Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 65 S.Ct. 1137, 1142, 89 L.Ed. 1628 (1945):

"[Statutes of limitation] represent a public policy about the privilege to litigate. Their shelter has never been regarded as what now is called a 'fundamental' right or what used to be called a 'natural' right of the individual. He may, of course, have the protection of the policy while it exists, but the history of pleas of limitation shows them to be good only by legislative grace and to be subject to a relatively large degree of legislative control."

See also Campbell v. Holt, 115 U.S. 620, 6 S.Ct. 209, 29 L.Ed. 483 (1885).⁶

Petitioner insists that the tolling statute no longer is rationally related to a legitimate state objective. Repeating the argument it made below, petitioner claims that the statute's only purpose was to preserve causes of action for those New Jersey plaintiffs unable to obtain in personam jurisdiction over unrepresented foreign corporations. With the presence now of long-arm jurisdiction, petitioner contends, there is no longer a valid reason for tolling the limitation period for a suit against an amenable foreign corporation without a New Jersey representative.

We note at the outset, and in passing, that petitioner's argument fails as a matter of state law. The New Jersey Supreme Court disagreed with petitioner's interpretation of the statute. That court observed that the State's original tolling provision did not mention corporations and thus treated them like all other defendants. In 1949, the state legislature amended the statute and exempted corporations except those foreign corporations "not represented" in New Jersey. The legislature, the New Jersey Supreme Court emphasized, did not limit the tolling provision to corporations "not amenable to service" in New Jersey. Consequently, the court reasoned, the tolling provision was not rendered meaningless by the subsequent acceptance of long-arm jurisdiction. Velmohos v. Maren Engineering Corp., 83 N.J., at 288-293, 416 A.2d, at 376-379. As construed by the highest judicial authority on New Jersey law, the meaning of the tolling statute cannot be confined as narrowly as petitioner would like.

When the statute is examined under the Equal Protection Clause, it survives petitioner's constitutional challenge because rational reasons support tolling the limitation period for unrepresented foreign corporations despite the institution of long-arm jurisdiction in New Jersey. First, the unrepresented foreign...