Opinion
Civil Action No. 98-725 (NHP).
January 26, 1999
Alan Y. Medvin, Esq., MEDVIN ELBERG, Newark, N.J., Kenneth M. Suggs, Esq., SUGGS KELLY, LAWYERS, PA., Columbia, S.C., Attorneys for Plaintiff.
Angela D. Slater, Esq., Amy E. Robinson, Esq., GIBBONS, DEL DEO, DOLAN, GRIFFINGER VECCHIONE, Newark, N.J., Attorneys for Defendant.
LETTER OPINION ORIGINAL ON FILE WITH CLERK OF THE COURT
Dear Counsel:
This matter comes before the Court on defendant Hoffmann La Roche, Inc.'s motion for summary judgment solely on the issue of whether to invoke California or New Jersey's statute of limitations in this matter. This Court heard oral argument on October 28, 1998. For the reasons stated herein, defendant Hoffmann La Roche, Inc.'s motion for summary judgment is DENIED.
STATEMENT OF FACTS
Plaintiff Eden L. Rue (hereafter "plaintiff") is a resident of the State of California. Defendant Hoffmann La Roche, Inc., ("Roche") is a corporation organized under the laws of the State of New Jersey with its principal place of business in Nutley, New Jersey. Roche distributes Lariam, a drug duly approved by the Food and Drug Administration ("hereafter FDA"), to licensed physicians. Lariam is used for both prophylaxis and for the treatment of malaria.On December 29, 1995, plaintiff was prescribed Lariam in California by a physician at the University of California Student Health Services in Santa Cruz, California as prophylaxis against malaria in anticipation of a trip to India. Plaintiff then filled the prescription for Lariam in California at the University of California, Santa Cruz, Student Health Center Pharmacy. Thereafter, plaintiff ingested the drug.
On January 2, 1996, plaintiff received treatment in California from Dr. Mark Nitzberg, who is affiliated with the University of California Student Health Services in Santa Cruz, California. Dr. Nitzberg described plaintiff's condition as a severe allergic reaction to mefloquine that included symptoms such as a generalized rash, photosensitivity, asthmatic wheezing, a bronchial spasm, angioedema and multiple psychomotor symptoms such as anxiety, insomnia, nightmares, motor restlessness and difficulty concentrating. See Certification of Demetrios C. Batsides at ¶ 7, Exhibit D; see also Certification of Kenneth M. Suggs at ¶ 7, Exhibit D.
On December 24, 1997, plaintiff commenced the within action by filing a Complaint in the Superior Court of New Jersey, Essex County. Thereafter, Roche removed the matter pursuant to 28 U.S.C. § 1332 and 28 U.S.C. § 1441(a) to the United States District Court for the District of New Jersey by filing a Notice of Removal on February 17, 1998. This action was filed within New Jersey's two-year statute of limitations for personal-injury actions, but beyond California's one-year statute of limitations applicable to personal-injury actions. Since there is clearly a conflict between the two statutes, this Court is presented with a choice-of-law issue.
DISCUSSION
The issue before this Court is which statute applies, either New Jersey's two-year statute of limitations or California's one- year statute of limitations and, whether, depending upon this Court's decision, the action will be barred.
I. Standard of Review for Summary Judgment
The standard governing a summary judgment motion is set forth in Fed.R.Civ.P. 56(c), which provides, in pertinent part, that:
[t]he judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). A fact is material if it might affect the outcome of the suit under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
Procedurally, the movant has the initial burden of identifying evidence that it believes shows an absence of genuine issues of material fact.Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). When the movant will bear the burden of proof at trial, the movant's burden can be discharged by showing that there is an absence of evidence to support the non-movant's case. Id. at 325. If the movant establishes the absence of a genuine issue of material fact, the burden shifts to the non-movant to do more than "simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
In this matter, there are no genuine issues of material fact relative to this issue and therefore, summary judgment is appropriate in these circumstances.
II. Choice of Law
As this case arises under the Court's diversity jurisdiction pursuant to 28 U.S.C. § 1332, the Court will address the issue in accordance with the substantive laws, including choice of law principles, that would be applied by a New Jersey state court in this case. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941). A thorough review of New Jersey case law indicates that New Jersey courts apply a "flexible governmental-interest standard" in evaluating choice-of-law cases. Gantes v. Kason Corporation, 145 N.J. 478, 484 (1996); see egs., Boyson, Inc. v. Archer Greiner, P.C., 308 N.J. Super. 287, 296 (N.J.Super.Ct. App. Div. 1998); Greenfeder v. Jarvis, 302 N.J. Super. 153, 159 (N.J.Super.Ct. App. Div. 1997). This standard requires application "of the law of the state with the greatest interest in resolving the particular issue that is raised in the underlying litigation." Gantes, 145 N.J. at 484 (citing Veazey v. Doremus, 103 N.J. 244, 247-49 (1986)).
Notably, New Jersey courts have abandoned the traditional lex loci deliciti approach to resolving choice of law principles which required that the law of the forum state be applied. The Prudential Insurance Company of America v. Nelson, II , 11 F. Supp.2d 572, 578 n. 5 (D.N.J. 1998) (citing D'Agostino v. Johnson Johnson, Inc . , 133 N.J. 516, 523 (1993)).
The first prong of the governmental interest analysis requires that an actual conflict exist between the two pertinent laws. Id. New Jersey law provides:
Every action at law for an injury to the person caused by the wrongful act, neglect or default of any person within this state shall be commenced within 2 years next after the cause of any such action shall have accrued.See N.J. Stat. Ann. § 2A:14-2.
California law, however, provides:
Within one year:
(3) . . . An action [must be brought] for . . . injury to or for the death of one caused by the wrongful act or neglect of another . . .See Cal. Civ. Proc. Code § 340(3).
In this matter, there is clearly a conflict between the two relevant statutes of limitation. The facts indicate that on or about December 29, 1995, plaintiff ingested the prescription drug Lariam. Plaintiff, however, filed the Complaint on December 24, 1997 in a New Jersey state court. Plaintiff's action is barred pursuant to California's one-year statute of limitations, but is timely pursuant to New Jersey's two-year statute of limitations. Thus, since a conflict exists between the two state laws, this Court must proceed with the second prong of the governmental interest analysis in order to resolve the conflict.
The second prong of the governmental interest analysis serves as the vehicle by which the evaluating court attempts to determine the interest that each state has in resolving the disputed issue. The second prong requires the court "to identify the governmental policies underlying the law of each state and [analyze] how those policies are affected by each state's contacts to the litigation and to the parties." Gantes, 145 N.J. at 485 (citing Veazey, 103 N.J. at 248).
The New Jersey Supreme Court recently reviewed the policies underlying New Jersey's two-year statute of limitations. See Gantes, 145 N.J. at 486. Referencing the earlier New Jersey Supreme Court case Rivera v. Prudential Property Casualty Ins. Co., 104 N.J. 32, 39 (1986), theGantes Court noted,
The purposes of statutes of limitations oft-repeated by this Court, are two-fold: (1) to stimulate litigants to pursue a right of action within a reasonable time so that the opposing party may have a fair opportunity to defend, thus preventing the litigation of stale claims, and (2) `to penalize dilatoriness and serve as a measure of repose.' E.g., Ochs v. Federal Ins., Co., 90 N.J. 108, 112, 447 A.2d 163 (1982) (quoting Farrell v. Votator Div. of Chemetron Corp., 62 N.J. 111, 115, 299 A.2d 394 (1973)).Gantes, 145 N.J. at 486. See also Savage v. Old Bridge-Sayreville Medical Group, P.A., 134 N.J. 241 (1993) (opining that the purposes underlying statutes of limitations are "to stimulate activity and punish negligence and "to promote repose by giving security and stability to human affairs.").
California courts have also examined the purposes underlying the California one-year statute of limitations period. More specifically, California courts have stated that:
Limitations statutes are intended to enable defendants to marshal evidence while memories and facts are fresh and to provide defendants with repose for past facts . . . the legislative goal underlying limitations statutes is to require diligent prosecution of known claims so that legal affairs can have their necessary finality and predictability and so that claim can be resolved while evidence remains reasonably available and fresh.Jordache Enterprises, Inc. v. Brobeck, Phleger Harrison, 18 Cal.4th 739, 755-56, 958 P.2d 1062, 1074, 76 Cal.Rptr.2d 749, 761 (1998).
Accord Kaiser Foundation Hospitals v. Workers' Compensation Appeals , 39 Cal.3d 57, 62, 702 P.2d 197, 200, 216 Cal.Rptr. 115, 118 (1985); Cutujian v. Benedict Hills Estates Association , 41 Cal.App.4th 1379, 1386, 49 Cal.Rptr.2d 166, 173 (1996); Debbie Reynolds Professional Rehearsal Studios v. The Superior Court of Los Angeles County , 25 Cal.App.4th 222, 233- 34, 20 Cal.Rptr.2d 514, 521 (1994); Aerojet General Corporation v. The Superior Court of Sacramento County , 177 Cal.App.3d 950, 954, 223 Cal.Rptr. 249, 252 (1986); United States v. Northrop Corporation , 91 F.3d 1211, 1217 (9th Cir. 1996).
Once the policies that underlie the conflicting laws of the states are identified, the evaluating court must then decide whether those policies give rise to a governmental interest requiring application of that state's law. In deciding whether the policies that underlie the law of a particular state give rise to a governmental interest requiring application of that state's law, the evaluating court must look to "the nature of the contacts that the state has to the litigation and to the parties." Gantes, 145 N.J. at 487. If the state's contacts are unrelated to the policies underlying the state's law, then that state does not possess the requisite interest in having its law apply. Greenfeder v. Jarvis, 302 N.J. Super. 153, 160 (N.J.Super.Ct. App. Div. 1997). Notably, it is the qualitative nature of the contacts and not the quantitative nature of the contacts which determines whether the state's law should apply. Id. at 160 (emphasis added).
The Gantes Court noted two cases, Heavner v. Uniroyal, Inc. 63 N.J. 130 (1973) and Marshall v. Geo M. Brewster Son, Inc., 37 N.J. 176 (1962) which, in the opinion of the Gantes Court, exemplify the correct analysis to be applied in choice-of-law matters.
In Marshall, the earlier of the two cases, plaintiff, a resident of Ohio and the administrator of decedent's estate, sued various New Jersey corporations that were part of a joint venture performing construction work on a railroad crossing in Pennsylvania. Marshall, 37 N.J. at 178. All of the defendants were incorporated in New Jersey and also had their "main business interests and activities" in New Jersey. Id. at 188. Based in part upon this factual scenario, the Supreme Court of New Jersey concluded that the New Jersey statute of limitations should apply rather than Pennsylvania's one-year statute of limitations period. Id.
In Heavner, plaintiffs were residents of North Carolina who sued a New Jersey corporation for personal injuries which resulted when a truck tire manufactured by defendant exploded while one of the plaintiffs was driving a truck in North Carolina. Heavner, 63 N.J. at 133-34. The defendant was a national corporation whose only contact with New Jersey was that it was incorporated in New Jersey. Id. at 134. Moreover, plaintiffs made no allegation that defendant actually manufactured the tire in New Jersey. Id. The New Jersey Supreme Court concluded, perhaps surprisingly, that New Jersey had "no substantial interest in the matter" and, therefore, the Court applied North Carolina's statute of limitations. Id. at 141.
Recognizing that the conclusion reached by the Heavner Court was quite unlike the conclusion reached in the Marshall case despite the relative factual similarity, the Heavner Court explained, in footnote fashion, that the Marshall case "presented a different factual picture than here presented." Heavner, 63 N.J. at 141, n. 6. Sensing that the analysis proffered by the Heavner Court was not quite complete, the Gantes Court then clarified the distinction between the two cases. The Gantes Court explained that "the critical factual distinction between Heavner andMarshall was that the defendant in Marshall had a significant presence in New Jersey by virtue of its doing business here, while the defendant inHeavner had a `virtual nonpresence' because its only contact with New Jersey was that it was incorporated in this State." Gantes, 145 N.J. at 488.
In light of both Marshall and Heavner, the Gantes Court likened its factual scenario to those facts presented in Marshall. In Gantes, decedent was a resident of Georgia who was killed when a part from a machine, manufactured in New Jersey, struck her in the head. Gantes, 145 N.J. at 481. Decedent's representatives brought suit against the New Jersey corporation that manufactured the machine. Id. The corporation had its principal place of business in Linden, New Jersey. Id. at 482. The Court then noted that the only contacts that New Jersey had to the litigation were that it was responsible for both the manufacturing of the machine that caused the injury and for placing the machine into the stream of commerce. Id. at 488. The Gantes Court explained that the sole New Jersey interest implicated in the litigation, by virtue of its contacts with the litigation and parties, was that of "deterring the manufacturing of unsafe products." Id. The Court, however, found that that interest was, indeed, a very strong interest. Notably, the Gantes Court held:
We conclude that this State has a strong interest in encouraging the manufacture and distribution of safe products for the public and, conversely, in deterring the manufacture and distribution of unsafe products within the state. That interest is furthered through the recognition of claims and the imposition of liability based on principles of strict liability law.Id. at 490.
The Court did not conclude the analysis at that point but, instead, reasoned that New Jersey's governmental interest in deterring the manufacturing of unsafe products must then be weighed against any governmental interest that Georgia may have in applying its statute of repose. Id. at 493. The New Jersey Supreme Court rejected the trial court's finding that Georgia's statute of repose "expressed a broad policy to encourage manufacturing generally by barring product-liability actions for ten years from the date of sale of an alleged unsafe product." Gantes, 145 N.J. at 493. The Gantes Court found that Georgia's statute of repose was enacted in order to stabilize Georgia's insurance industry and to keep stale claims out of the Georgia courts. Id. The Court then noted that Georgia did not have any contacts with the defendant manufacturer or with the litigation. Thus, although the plaintiffs were residents of the Georgia and the accident occurred in Georgia, the Gantes Court reasoned that these contacts did not implicate Georgia's statute of repose since the underlying policies were "intended only to unburden Georgia courts and to shield Georgia manufacturers from claims based on product defects long after the product has been marketed or sold." Id. at 496. In other words, the Gantes Court concluded that Georgia did not have a governmental interest requiring application of its statute of repose because plaintiffs' status as residents of Georgia was unrelated to the policies underlying Georgia's statute of repose, i.e., Georgia's statute of repose was intended to protect Georgia manufacturers and their insurance companies who were defendants involved in various lawsuits. Id.
But see Gantes , 145 N.J. at 499-500 (Garibaldi, J. dissenting) (opining that "[t]he majority's opinion subjects New Jersey businesses to an increased risk of litigation that would be time-barred in the state where the injured person lives and where the accident occurred, increases forum shopping and further taxes an already overburdened court system, without offering any countervailing benefit to a New Jersey resident or business.")
In this matter, Roche contends that California law should apply because: (1) California has qualitatively better contacts than New Jersey; (2) California has a greater interest than New Jersey in having its law apply to this matter; and (3) plaintiff should not benefit from forum shopping.
In support of their first argument, that, California has qualitatively better contacts than New Jersey, Roche notes that there are a greater number of contacts in California. For example, plaintiff is a resident of California, the drug Lariam was prescribed in California, plaintiff ingested the subject drug in California, plaintiff was treated in California by a California physician, and, finally, California is the place where plaintiff allegedly sustained her injuries. To further buttress their second argument, namely, that California has a greater interest than New Jersey in having its law apply to this matter, defendant argues that California's interest in the deterrence of future tortious conduct against its own citizens outweighs New Jersey's interest in deterring the manufacture of unsafe products.
Plaintiff claims that New Jersey has the greater interest in applying its law because: (1) defendant is a New Jersey manufacturer with an interest in deterring the unsafe manufacture of products which outweighs any interest California may have in applying its statute of limitations; and (2) forum shopping does not apply to cases, such as the present matter, where a case has more than "slender ties" to New Jersey.
Plaintiff first directs the Court's attention to the fact that there are additional contacts with New Jersey other than the fact that Roche is incorporated in state, namely, that Roche manufactures, designs, packages, distributes, tests, markets, and sells Lariam in New Jersey, as well as, communicates with the FDA from New Jersey. In support of plaintiff's argument that New Jersey's law should be applied because defendant is a domestic manufacturer who, by virtue of that status, has an interest in deterring the manufacture of unsafe products, plaintiff argues that California's policies would not be supported if its statute of limitations were applied. Plaintiff pointedly asserts that since "[n]o evidence has been lost, no memories of the events that gave rise to this lawsuit have faded, and no witnesses have disappeared," California's policies are clearly not supported. See Plaintiff's Brief in Opposition to Motion for Summary Judgment, page 7.
As aforementioned, in deciding whether the policies that underlie the law of a particular state give rise to a governmental interest requiring application of that state's law, the evaluating court must look to "the nature of the contacts that the state has to the litigation and to the parties." Gantes, 145 N.J. at 487. If the state's contacts are unrelated to the policies underlying the state's law, then that state does not possess the requisite interest in having its law apply. Greenfeder v. Jarvis, 302 N.J. Super. 153, 160 (N.J.Super.Ct. App. Div. 1997).
See 16 Am. Jur. 2d Conflict of Laws § 129 (1998) (noting that, when applying the "governmental interests" approach, "relevant contacts are not disregarded, but are examined in connection with the analysis of the interests of the involved states in the issues, the character of the cause of action, and the relevant purposes of the rules under consideration").
New Jersey's sole contact with this litigation is that of a domestic manufacturer (and, of course, all duties deriving from that role). As a domestic manufacturer, New Jersey has a very strong interest in deterring the manufacturing of unsafe products. See Gantes, 145 N.J. at 488. New Jersey law has recognized and, indeed, appears to be emphasizing that:
the situs of the accident may not be dispositive in a governmental-interest analysis but, rather, may have to yield to the policy interests of defendant's home state. This is particularly so if the home state's policy is to ensure the accountability in tort of its domiciliaries for the consequences of their negligent conduct.Butkera v. Hudson River Sloop "Clearwater", 300 N.J. Super. 550, 554 (N.J.Super.Ct. App. Div. 1997). See also Gantes v. Kason Corporation, 145 N.J. 478 (1996).
California has a strong interest in ensuring that the citizens of their State are compensated for their injuries, especially those injuries caused by foreign corporations. See Dent v. Cunningham, 786 F.2d 173, 176 (3d Cir. 1986) (citing Greenbaum v. Yuba Power Products, 59 Cal.2d 57, 62, 27 Cal.Rptr. 697, 701, 377 P.2d 897, 901 (1962)); see also Chin v. Chrysler Corporation, 182 F.R.D. 448 (D.N.J. 1998); In re Ford Motor Company Ignition Switch Products Liability Litigation v. Ford Motor Company, 174 F.R.D. 332, 348 (D.N.J. 1997) (opining that the home state's interest arises "by virtue of each state being the place in which plaintiffs reside, or the place in which plaintiffs bought and used their allegedly defective [products] or the place where plaintiffs' alleged damages occurred.").
Based upon a review of Gantes and the post-Gantes case law, this Court finds that New Jersey's statute of limitations must be applied in this matter and, therefore, plaintiff's cause of action will not be barred. InGantes, the New Jersey Supreme Court appears to have paved the way for other courts applying New Jersey choice of law principles to emphasize the important policy interest in deterring future tortious conduct, especially when New Jersey is the state where the product, which allegedly caused the injury, was manufactured. Clearly, both New Jersey and California have an interest in deterring tortious conduct. Based upon the facts in this case, however, New Jersey has the greater interest because the alleged tortious conduct in this matter arose from significant activities which took place in New Jersey. This Court finds that, similar to the factual scenario presented in Marshall, Roche has a significant presence in New Jersey to justify application of its statute of limitations.
Defendant also cites two pre- Gantes cases, namely, Washington v. Systems Maintenance Corp . , 260 N.J. Super. 505 (N.J.Super.Ct. Law Div. 1992) and Allen v. Volkswagen of America, Inc . , 555 F.2d 361 (3d Cir. 1977) which Roche contends stands for the proposition that state and federal courts have consistently applied California's statute of limitations in cases involving "strikingly similar" factual scenarios to those presented in the matter at bar. Both cases, however, were decided before Gantes , wherein it should be clear at this point, that the New Jersey Supreme Court developed the governmental interest test and emphasized that New Jersey has a strong interest in encouraging the manufacture and distribution of safe products for the public and that such interest "is furthered through the recognition of claims and the imposition of liability based on principles of strict products-liability law." Gantes , 145 N.J. at 490 .
See Defendant's Brief in Support of Motion for Summary Judgment, page 8 ("It is conceded solely for purposes of this motion that both California and New Jersey' statute of limitations would be furthered, albeit by varying degrees, by the application of each statute of limitations.")
Moreover, this Court does not adopt Roche's argument that California's statute of limitations must be applied because "when comparing a state's interest of full and fair compensation to the plaintiff with deterrence, compensation to the plaintiff generally outweighs deterring a defendant's future conduct, thereby practically eliminating New Jersey's potential interest in the litigation." Simply stated, plaintiff would not be given the opportunity to bring this cause of action and, therefore, have the potential to be compensated, if California's statute of limitations were applied.
This Court is not convinced that plaintiff "slept on her rights" as there have been no facts alleged to support such an allegation.
Furthermore, the policy reasons underlying California's statute of limitations would not be served in this matter because there is no indication that evidence has been lost, memories of the events that gave rise to this lawsuit have faded, nor any indication that witnesses have disappeared.
It is also not as clear from subsequent case law, as defendant suggests, that a different analysis is employed when the conflict of law between the two states is each state's statute of limitations (as compared to a conflict between one state's statute of limitations and another state's statute of repose). A review of the Gantes case and subsequent cases suggests that the Gantes Court declined to extend the line of reasoning proffered by the Court in Heavner and, instead, adopt the governmental interest analysis in choice of law cases, which obviously emphasizes each state's interest. Thus, there is no indication from a thorough reading of Gantes that the Court would not have decided its case differently if plaintiff's claim was barred by a one-year statute of limitations rather than a ten- year statute of repose. This Court cannot surmise about what the New Jersey Supreme Court "would have said" but, instead, must follow the dictates of what the Court "has said."
Defendant asserts that two post- Gantes cases, namely, Kiel v. National Westminster Bank, Inc . , 311 N.J. Super. 473, 489 (N.J.Super.Ct. App. Div. 1998) and Pittson Co. v. Sedgwick James of New York , 971 F. Supp. 915, 922 (D.N.J. 1997) suggest that the Heavner test is still a viable test in cases involving conflicting statutes of limitation and is, in fact, the test to be used in lieu of the governmental interest analysis. This Court disagrees. First, the Kiel case did not involve two conflicting statutes of limitations periods but, instead, involved a conflict between the substantive law of two states and their respective dates of accrual for the cause of action. Kiel , 311 N.J. Super at 489. Additionally, in Pittson , the District Court noted, without citing to Gantes , that post- Heavner cases have held that "the statutes of limitations choice of law determination articulated by Heavner is essentially a "governmental interest" test." Pittson , 971 F. Supp. at 922. Therefore, Roche's argument essentially proffers a distinction without a difference in the result.
Finally, this Court will not hold that plaintiff is guilty of forum shopping since Roche has more than "slender ties" to New Jersey. See Gantes, 145 N.J. at 493.
CONCLUSION
For the foregoing reasons, defendant Hoffmann La Roche, Inc.'s motion for summary judgment solely on the issue of whether to invoke California or New Jersey's statute of limitations in this matter is DENIED.
__________________________ NICHOLAS H. POLITAN U.S.D.J.