Andrew McCarrell v. Hoffman-La Roach, Inc.(076524) , 227 N.J. 569 ( 2017 )

SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)
Andrew McCarrell v. Hoffmann-La Roche, Inc. (A-28-15) (076524)
Argued October 13, 2016 -- Decided January 24, 2017
Albin, J., writing for a unanimous Court.
This appeal raises the question: What are New Jersey’s choice-of law rules in determining the applicable
statute of limitations in a tort action? Plaintiff Andrew McCarrell timely filed this products-liability action within
New Jersey’s statute of limitations, but Alabama’s limitations period had expired by the time of the filing. The issue
is which state’s statute of limitations applies under New Jersey’s choice-of-law jurisprudence.
At age 24, McCarrell, an Alabama resident, was prescribed a four-month Accutane regimen to treat his
acne in 1995. In 1996, ten months after he stopped taking Accutane, McCarrell began experiencing intense stomach
pain and diarrhea and was diagnosed as suffering from inflammatory bowel disease; he underwent multiple, serious
surgeries to address complications from this condition. McCarrell was prescribed and took Accutane in Alabama
and received medical treatment in that state. Accutane is produced by defendants Hoffman-La Roche, Inc., and
Roche Laboratories, Inc. (collectively Roche). Roche was incorporated and maintained its corporate offices in New
Jersey. Roche designed, manufactured, and labeled Accutane in New Jersey and distributed it from this State.
In July 2003, plaintiff filed a products-liability action in the Law Division, alleging that Roche had failed to
provide adequate warnings about the risks and side effects associated with taking Accutane. Roche moved for
summary judgment, citing Alabama’s two-year statute of limitations. The trial court denied the motion, finding that
the governmental-interest test set forth in Gantes v. Kason Corp., 145 N.J. 478, 484 (1996), directed that New
Jersey’s statute of limitations governs the case. The jury found in favor of McCarrell on the failure-to-warn claim,
but the Appellate Division reversed based on evidentiary issues. The Appellate Division approved the trial court’s
application of New Jersey’s statute of limitations to the case, however, and the Court denied Roche’s petition for
certification. McCarrell v. Hoffman-La Roche, Inc., 199 N.J. 518 (2009).
After a new trial, a jury found Roche liable for failure to warn, awarding McCarrell $25,159,530. Roche
challenged the verdict on the ground that the governmental-interest test had been supplanted by the most-significant-
relationship test of sections 146, 145, and 6 of the Second Restatement of Conflicts of Law and argued that, under
this test, Alabama’s statute of limitations applied. The trial court denied the challenge as untimely.
An appellate panel accepted Roche’s argument that P.V. ex rel. T.V. v. Camp Jaycee, 197 N.J. 132
(2008)—which adopted sections 146, 145, and 6 of the Second Restatement for resolving conflicts of substantive
tort law—altered the landscape of choice-of-law jurisprudence and compelled the application of Alabama’s statute
of limitations in this case. The panel expressly declined to apply section 142 of the Second Restatement. It vacated
the jury’s verdict and award, dismissed McCarrell’s complaint as untimely, and did not reach the remaining issues
raised by Roche on appeal. The Court granted McCarrell’s petition for certification. 223 N.J. 555 (2015).
HELD: Section 142 of the Second Restatement is now the operative choice-of-law rule in New Jersey for resolving
statute-of-limitations conflicts because it will channel judicial discretion and lead to more predictable and uniform
results that are consistent with the just expectations of the parties. Based on a choice-of-law analysis under section 142,
New Jersey’s limitations period governs, and therefore McCarrell’s action was timely filed. The Court therefore
reinstates McCarrell’s verdict and damages award and remands to the Appellate Division for consideration of the
unaddressed issues remaining on appeal.
1. The first inquiry in any choice-of-law analysis is whether the laws of the states with interests in the litigation are
in conflict. When a complaint is timely filed within one state’s statute of limitations but is filed outside another’s, a
true conflict is present. In this case, New Jersey’s and Alabama’s statutes of limitations are in conflict. (pp. 16-18)
2. Under the common law, the forum state—the state in which a lawsuit was filed—applied its own statute of
limitations when a choice-of-law issue arose. In Heavner v. Uniroyal, Inc., the Court rejected that inflexible rule.
63 N.J. 130, 140-41 (1973). Instead, the Court adopted a new rule that weighed the contacts that each state had to
the matter in determining the applicable statute of limitations. (pp. 19-21)
3. In Gantes, supra, the Court adopted “a flexible ‘governmental-interest’ standard, which requires application of
the law of the state with the greatest interest in resolving the particular issue that is raised in the underlying
litigation.” 145 N.J. at 484. The Gantes Court evaluated New Jersey’s governmental interests, recognized the
State’s “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,” and observed that
meritorious products-liability actions that are timely filed and hold manufacturers accountable for dangerous
products further that interest. Id. at 490. The Gantes Court thus applied New Jersey’s limitations period and
permitted the lawsuit, which would have been barred under Georgia law, to proceed. Id. at 487, 499. (pp. 21-24)
4. The Court had adopted the governmental-interest test to resolve choice-of-law issues concerning substantive tort
law before Heavner and Gantes adopted that test for statutes of limitations. That test remained the analytical tool for
deciding choice-of-law issues related to substantive tort law and statutes of limitations until, in Camp Jaycee, supra,
this Court formally adopted the Second Restatement’s most significant-relationship test in sections 146, 145, and 6
for deciding the choice of substantive law in tort cases involving more than one state. 197 N.J. at 142-43. In Camp
Jaycee, choosing between this State’s and another state’s statute of limitations was not an issue. The Court now
establishes a bright-line rule: a conflict of law is present whenever the selection of one statute of limitations over
another is outcome dispositive. (pp. 24-28)
5. Camp Jaycee’s adoption of sections 146, 145, and 6 of the Second Restatement to resolve conflicts of substantive
law in tort actions was not a signal that the Court would apply the same choice-of-law test for statutes of limitations.
Indeed, the drafters of the Second Restatement did not intend that sections 146 and 145 would be used for statute-of-
limitations choice-of-law determinations, but rather crafted section 142 to address statutes of limitations as an
independent issue. Incorporating section 142 into New Jersey’s choice-of-law jurisprudence completes the
conversion from the governmental-interest standard to the Second Restatement begun in Camp Jaycee. (pp. 28-29)
6. Under section 142, the statute of limitations of the forum state generally applies whenever that state has a
substantial interest in the maintenance of the claim. In that circumstance, the inquiry ends unless exceptional
circumstances would render that result unreasonable. Only when the forum state has “no substantial interest” in the
maintenance of the claim does a court consider whether “the claim would be barred under the statute of limitations
of a state having a more significant relationship to the parties and the occurrence” through consideration of the
factors in section 6. Restatement (Second), supra, § 142(2)(a)-(b). (pp. 29-31)
7. The Court believes that section 142 benefits from an ease of application; places both New Jersey’s and out-of-
state’s citizens on an equal playing field, thus promoting principles of comity; advances predictability and
uniformity in decision-making; and allows for greater certainty in the expectations of the parties. The Court finds
section 142’s presumption favoring a forum state with a substantial interest in the matter consistent with the holding
in Gantes and beneficial to New Jersey companies by offering protection against another state’s longer limitations
period. Section 142 is a less malleable standard than the governmental-interest test and will channel judicial
discretion to ensure a higher degree of uniformity and predictability in resolving choice-of-law issues. (pp. 31-36)
8. Applying section 142 to the facts of this case, New Jersey’s statute of limitations governs because the Court
cannot conclude that “maintenance of the claim would serve no substantial interest” of New Jersey and because
there are no “exceptional circumstances” that call for the application of Alabama’s limitations period. Restatement
(Second), supra, § 142(2)(a). (pp. 36-40)
The judgment of the Appellate Division is REVERSED and the jury’s verdict and damages award are
REINSTATED. The matter is REMANDED to the Appellate Division for consideration of the unaddressed issues.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, FERNANDEZ-VINA, SOLOMON, and
TIMPONE join in JUSTICE ALBIN’s opinion. JUSTICE PATTERSON did not participate.
2
SUPREME COURT OF NEW JERSEY
A-28 September Term 2015
076524
ANDREW McCARRELL,
Plaintiff-Appellant,
v.
HOFFMANN-LA ROCHE, INC., and
ROCHE LABORATORIES, INC.,
Defendants-Respondents.
Argued October 13, 2016 – Decided January 24, 2017
On certification to the Superior Court,
Appellate Division.
David R. Buchanan argued the cause for
appellant (Seeger Weiss, attorneys; Mr.
Buchanan, Michael D. Hook and Mary Jane
Bass, members of the Florida bar, on the
briefs).
Paul W. Schmidt, a member of the District of
Columbia bar, argued the cause for
respondents (Gibbons and Dughi Hewit &
Domalewski, attorneys; Mr. Schmidt, Michelle
M. Bufano, Natalie H. Mantell, Russell L.
Hewit, and Michael X. Imbroscio, a member of
the District of Columbia bar, of counsel and
on the briefs).
Christopher M. Placitella argued the cause
for amicus curiae New Jersey Association for
Justice (Cohen, Placitella & Roth,
attorneys; Mr. Placitella and Jared M.
Placitella, of counsel and on the brief).
David R. Kott argued the cause for amicus
curiae The New Jersey Civil Justice
Institute (Mr. Kott and Edward J. Fanning,
Jr., of counsel; Mr. Kott, Mr. Fanning, and
1
Gary R. Tulp, on the brief).
JUSTICE ALBIN delivered the opinion of the Court.
Over the years, our choice-of-law jurisprudence has striven
to structure rules that will lead to predictable and uniform
results that are fair and just and that will meet the reasonable
expectations of the parties. In this appeal, we attempt to
advance that goal.
Accutane is a prescription medication for the treatment of
severe cases of acne. In this products-liability action filed
in New Jersey, plaintiff Andrew McCarrell, an Alabama resident,
claims that he developed a virulent form of inflammatory bowel
disease as a result of taking Accutane. He also claims that had
Accutane’s warning labels adequately informed him of the risks
and dangers associated with Accutane, he would not have taken
the medication.
Plaintiff was prescribed and took Accutane in Alabama, and
he developed and was treated for inflammatory bowel disease in
that state. Defendants Hoffmann-La Roche, Inc., and Roche
Laboratories, Inc., both New Jersey corporations, (collectively
Roche), designed, manufactured, and labeled Accutane in New
Jersey and distributed the medication from this State.
Plaintiff timely filed the products-liability action under
New Jersey’s statute of limitations, but Alabama’s limitations
period had expired by the time of the filing. The issue is
2
which state’s statute of limitations applies under New Jersey’s
choice-of-law jurisprudence.
The trial court concluded that under the governmental-
interest test articulated in Gantes v. Kason Corp., 145 N.J.
478, 484 (1996), New Jersey’s statute of limitations applied.
In the most recent trial of this case, a jury found Roche liable
on plaintiff’s failure-to-warn claim and awarded damages.
The Appellate Division reversed and dismissed the action,
finding that Alabama’s statute of limitations governed under the
substantial-relationship test in sections 146, 145, and 6 of the
Restatement (Second) of Conflicts of Law (1971) (Am. Law Inst.,
amended 1988) (Restatement (Second)). The American Law
Institute crafted that test to determine whether the forum
state’s or another state’s substantive law applies in a tort
action. That test begins with a presumption favoring the law of
the state where the injury occurred.
The American Law Institute, however, fashioned a different
test to resolve choice-of-law determinations involving statutes
of limitations. Under section 142 of the Second Restatement,
the statute of limitations of the forum state -- here, New
Jersey -- applies if that state has a substantial interest in
the maintenance of the claim and there are no “exceptional
circumstances” that “make such a result unreasonable.”
We hold that section 142 of the Second Restatement is now
3
the operative choice-of-law rule for resolving statute-of-
limitations conflicts because it will channel judicial
discretion and lead to more predictable and uniform results that
are consistent with the just expectations of the parties. The
adoption of section 142 is also a natural progression in our
conversion from the governmental-interest test to the Second
Restatement begun in P.V. ex rel. T.V. v. Camp Jaycee, 197 N.J.
132 (2008), which adopted sections 146, 145, and 6 for resolving
conflicts of substantive tort law. The Appellate Division
mistakenly read Camp Jaycee as suggesting that we would adopt
the same choice-of-law rule for purposes of both substantive law
and statutes of limitations.
An analysis under section 142 of the Second Restatement
leads to the conclusion that New Jersey’s statute of limitations
was properly applied to this products-liability action. Our
jurisprudence has long recognized that this State has a
substantial interest in deterring its manufacturers from placing
dangerous products in the stream of commerce. Inadequate
warning labels can render prescription medications dangerous.
No exceptional circumstances are present that would render the
application of New Jersey’s limitations period unreasonable.
Importantly, even were we to apply our previous governmental-
interest test, the outcome would be no different.
We therefore reverse and reinstate the jury’s verdict and
4
award. We remand to the Appellate Division for consideration of
the unaddressed issues remaining on appeal.
I.
A.
In July 2003, plaintiff filed a products-liability action
in the Superior Court, Law Division, alleging that defendant
Roche -- the New Jersey manufacturer, marketer, and distributor
of Accutane -- failed to provide adequate warnings about the
risks and side effects associated with taking Accutane.
Plaintiff asserts that had he received proper warnings about the
potentially devastating side effects of Accutane, he would not
have taken the medication, which he claims was the proximate
cause of his inflammatory bowel disease. Plaintiff also alleges
that Roche’s mislabeling of Accutane violated the New Jersey
Consumer Fraud Act, N.J.S.A. 56:8-1 to -20.
The sole issue before us is whether the statute of
limitations of New Jersey (the forum state) or Alabama (the
injury-site state) governs this case. From the voluminous trial
and pre-trial record, we recite the facts relevant to address
that issue.
B.
Plaintiff, a resident of Alabama, had suffered from acne
since high school, and antibiotics proved to be an ineffective
treatment. In June 1995, when plaintiff was twenty-four years
5
old, his dermatologist prescribed Accutane. Plaintiff took
daily doses of the medicine for the next four months. Four
weeks into the treatment program, plaintiff experienced dry
eyes, achy joints, and chapped lips but complained of no other
adverse side effects. After completing his regimen of Accutane,
plaintiff noticed that his skin was clearer. At a four-month
post-Accutane review with his dermatologist in February 1996,
plaintiff reported that the prior side effects had subsided and
that he had experienced no new health problems.
In August 1996, ten months after he stopped taking
Accutane, plaintiff began experiencing intense stomach pain and
diarrhea. Over the next several months, plaintiff’s condition
worsened, and his primary care physician referred him to a
gastroenterologist. In November 1996, plaintiff was diagnosed
as suffering from inflammatory bowel disease. By the next
month, as a result of constant bleeding from the rectum,
plaintiff became anemic. Plaintiff’s weight had dropped from
162 pounds, his pre-Accutane weight, to just 114 pounds at this
point.
Over the next several years, plaintiff underwent multiple
surgeries. Plaintiff’s colon and rectum were removed and
replaced with a j-pouch -- an artificially constructed reservoir
at the end of the small intestines -- that is intended to allow
for ordinary bowel movements. The j-pouch became inflamed,
6
causing plaintiff to suffer persistent and severe
gastrointestinal pain and flu-like symptoms. To permit the j-
pouch to heal, a colostomy bag was attached to plaintiff’s small
intestine through a surgical procedure. Plaintiff subsisted
with the colostomy bag for four-and-one-half years until another
surgery reconnected the j-pouch to the small intestine.
Plaintiff continues to suffer from severe abdominal cramping,
multiple bowel movements every day, and episodes of
incontinence.
Plaintiff was prescribed and took Accutane in Alabama and
was treated for the medical complications related to
inflammatory bowel disease in that state.
C.
Defendants Hoffmann-La Roche, Inc., and Roche Laboratories,
Inc., were incorporated in New Jersey and maintained their
corporate offices here. They designed, manufactured, and
labeled Accutane in New Jersey and distributed the product from
this State.
In 1982, the United States Food and Drug Administration
approved Accutane, known generically as isotretinoin, for the
treatment of recalcitrant nodular acne. At the time that
plaintiff’s physician prescribed, and plaintiff took, Accutane,
Roche had provided various warnings about Accutane’s possible
adverse side effects -- including potential gastrointestinal
7
disorders -- by means of product labeling, a patient brochure,
and a Dear Doctor letter.1
Plaintiff claims that the Accutane label and other warnings
conveyed the impression that the listed adverse reactions to
Accutane would arise while the patient was taking the medication
and that discontinuing its use would resolve such problems.
Plaintiff also contends that the warnings did not suggest that
he could develop an irreversible case of inflammatory bowel
disease after completion of the Accutane regimen. He asserts
that, during the period he took Accutane, Roche knew or should
have known that Accutane not only could trigger inflammatory
bowel disease after its use, but that it also could cause
irreversible damage to his organs, and that Roche failed to
provide adequate warnings to him and his physician about those
risks.
Roche counters that the warnings sufficiently apprised
defendant of the associated risks of taking Accutane and that
plaintiff’s use of the medication was not the proximate cause of
his inflammatory bowel disease.
D.
1 A “Dear Doctor letter” is a letter sent to physicians and other
health-care professionals by a drug manufacturer or the Food and
Drug Administration advising of substantial new warning
information. PLIVA, Inc. v. Mensing, 564 U.S. 604, 615, 131 S.
Ct. 2567, 2576, 180 L. Ed. 2d 580, 590 (2011).
8
Roche moved for summary judgment to dismiss plaintiff’s
claims on the basis that they were barred by Alabama’s two-year
statute of limitations governing personal injury claims. See
Ala. Code § 6-2-38(l). Roche reasoned that because plaintiff’s
injury occurred in 1996 and his claim was filed in 2003, the
claim was not filed within the appropriate limitations period.
In contrast, plaintiff argued that the equitable “discovery
rule” incorporated into New Jersey’s two-year statute of
limitations, N.J.S.A. 2A:14-2, was the applicable law. Under
the “discovery rule,” the statute of limitations does not begin
to run “until the injured party discovers, or by an exercise of
reasonable diligence and intelligence should have discovered
that he may have a basis for an actionable claim.” Lopez v.
Swyer, 62 N.J. 267, 272 (1973). Alabama’s statute of
limitations does not have an equitable tolling provision. Cline
v. Ashland, Inc., 970 So. 2d 755, 760-61 (Ala.) (See, J.,
concurring), cert. denied, 551 U.S. 1103, 127 S. Ct. 2916, 168
L. Ed. 2d 244 (2007).
The Honorable Carol Higbee, J.S.C., who presided over the
case, denied Roche’s motion. Judge Higbee stated that the
governmental-interest test, as expounded in Gantes, supra, 145
N.J. at 484, directed that New Jersey’s statute of limitations
governs the case. She found that Alabama had no discernible
interest in barring one of its residents from pursuing a claim
9
against a New Jersey pharmaceutical company in a New Jersey
court and that this State had a singularly distinct interest “in
deterring the manufacture and distribution of unsafe products
within the state,” quoting id. at 490.
Judge Higbee determined that plaintiff did not become aware
that his use of Accutane could have caused his inflammatory
bowel disease until June 2003. Because plaintiff filed his
complaint six weeks after that discovery, Judge Higbee concluded
that, under New Jersey’s equitable tolling rule, the complaint
was timely filed.
E.
At the conclusion of a four-week jury trial in 2007, the
court instructed the jury on Alabama’s substantive law,
including its products-liability law.2 The jury found in favor
of plaintiff on the failure-to-warn claim and awarded damages in
the amount of $2,619,000. The jury rejected plaintiff’s
consumer-fraud claim.
The Appellate Division reversed the jury’s failure-to-warn
verdict based on erroneous evidentiary rulings by the trial
court and remanded for a new trial. The Appellate Division,
however, approved of the trial court’s “sound” reasoning in
finding that “the competing policy interests at stake” called
2 Neither party contests in the present appeal that Alabama’s
products-liability law governs this case.
10
for the application of New Jersey’s statute of limitations on
the failure-to-warn claim. The Appellate Division also
concluded that the trial court “had ample factual grounds to
find that [New Jersey’s] two-year limitation period should be
equitably tolled to accommodate plaintiff’s lawsuit.”
We denied Roche’s petition for certification. McCarrell v.
Hoffmann-La Roche, Inc., 199 N.J. 518 (2009).
F.
Plaintiff’s second trial in 2010 lasted about four weeks.
The jury found Roche liable on plaintiff’s failure-to-warn claim
and awarded plaintiff $25,159,530. Roche moved for a judgment
notwithstanding the verdict, arguing again that the trial court
erroneously applied New Jersey’s limitations period. Relying on
Camp Jaycee, supra, 197 N.J. 132, and Cornett v. Johnson &
Johnson, 414 N.J. Super. 365 (App. Div. 2010), aff’d as
modified, 211 N.J. 362 (2012), Roche maintained that the
governmental-interest test had been supplanted by the most-
significant-relationship test of sections 146 and 145 of the
Second Restatement, which starts with a presumption in favor of
the substantive law of the state where the injury occurred.
That test, Roche asserted, compelled the application of
Alabama’s limitations period.
Judge Higbee denied the motion, holding that Roche’s
change-of-law argument was not timely because Roche did not
11
argue for adoption of those sections of the Second Restatement
when it appeared before the Appellate Division, despite the
availability of the Camp Jaycee decision.3 Judge Higbee,
moreover, concluded that the decision to apply the New Jersey
limitations period would be no different if she were to engage
in an analysis under Second Restatement sections 146, 145, and
6.
G.
In an unpublished opinion, an appellate panel accepted
Roche’s change-of-law argument -- the argument that Camp Jaycee
altered the landscape -- and held that Alabama’s two-year
statute of limitations governed under sections 146, 145, and 6
of the Second Restatement. It noted that plaintiff received his
inflammatory bowel disease diagnosis on November 26, 1996, but
did not file his claims until July 23, 2003. Because Alabama’s
statute had no equitable tolling provision, the panel vacated
the jury’s verdict and award and dismissed plaintiff’s complaint
as having been filed out of time.
The panel held that under section 146 of the Second
Restatement, “the law of the state where the injury occurred” --
here, Alabama -- applies “unless another state has a more
3 Camp Jaycee was decided six days before oral argument in the
Appellate Division and three-and-one-half months before the
Appellate Division rendered its decision.
12
significant relationship to the issue” based on an analysis of
the factors enumerated in Second Restatement sections 145 and 6.
After analyzing those factors, the panel concluded that the
injury-site presumption had not been overcome. It focused on
the fact that Alabama is where plaintiff resided, where he was
prescribed and took Accutane, and where he developed and was
treated for inflammatory bowel disease. The panel took the view
that “New Jersey has little interest in protecting the
compensation right of [an out-of-state] resident,” quoting
Cornett, supra, 414 N.J. Super. at 381.
The panel expressly declined to apply section 142 of the
Second Restatement -- a section specifically crafted to resolve
the choice-of-law issue that arises when the forum state’s and
another state’s statutes of limitations are in conflict. Under
section 142, the limitations period of the forum state applies
unless it has “no substantial interest” in maintaining the claim
in its courts.
The panel did not reach the remaining issues raised by
Roche on appeal.4
We granted plaintiff’s petition for certification.
4 Roche also claimed that the trial court erred in limiting
defendant from calling certain expert witnesses; in allowing the
case to be submitted to the jury in the absence of sufficient
evidence establishing proximate causation; and in not granting a
new trial or, alternatively, a remittitur because of the
excessiveness of the damages award.
13
McCarrell v. Hoffmann-La Roche, Inc., 223 N.J. 555 (2015). We
also granted the motions of the New Jersey Association for
Justice and the New Jersey Civil Justice Institute to
participate as amici curiae.
II.
A.
Plaintiff argues that the Appellate Division erred by not
applying section 142 of the Second Restatement, entitled
“Statute of Limitations of Forum.” That section, he notes, is
specifically designed to decide choice-of-law questions
governing the timeliness of a tort action when two or more
interested states have conflicting statutes of limitations.
Plaintiff asserts that had the appellate panel in this case
applied section 142 and its presumption favoring the forum
state’s statute of limitations, it would have upheld the trial
court’s finding that this State’s limitations period applies.
Plaintiff further maintains that, even if Restatement sections
146, 145, and 6 govern, along with the presumption favoring the
injury-site state, a proper weighing of the factors would
indicate that New Jersey, not Alabama, has the “most significant
relationship” to this products-liability action. Under either
analysis, plaintiff submits, New Jersey’s statute of limitations
applies.
14
Amicus New Jersey Association for Justice urges this Court
to adopt section 142 of the Second Restatement, reasoning that
142’s presumption favoring the forum state’s statute of
limitations will allow for more uniform and predictable choice-
of-law decision-making and advance New Jersey’s strong interest
in regulating its manufacturers.
B.
Roche argues that the proper choice-of-law analysis for
determining the applicable statute of limitations is set forth
in sections 146, 145, and 6 of the Second Restatement. Roche
submits that viewing New Jersey’s and Alabama’s respective
interests through the lens of those Restatement sections leads
to the conclusion that plaintiff did not overcome the
presumption favoring use of the injury-site state’s statute of
limitations. Roche therefore asserts that the Appellate
Division correctly dismissed plaintiff’s action under Alabama’s
limitations period.
Roche asserts that plaintiff -- by advancing section 142 as
the governing choice-of-law modality -- is attempting to revive
the now-defunct common-law rule that the forum state’s statute
of limitations prevails as a matter of procedure. That
approach, Roche insists, was rejected by this Court in Heavner
v. Uniroyal, Inc., 63 N.J. 130 (1973).
15
Roche further asserts that, even if this Court were to
apply section 142 to the choice-of-law issue in this case, the
outcome would be no different; Alabama’s statute of limitations
would govern because nearly all of the significant events
related to this litigation occurred in Alabama.
Amicus New Jersey Civil Justice Institute also asks this
Court to reject plaintiff’s invitation to adopt section 142 of the
Second Restatement. The Civil Justice Institute expresses concern
that ratifying section 142’s framework will encourage forum
shopping by out-of-state residents seeking to sue New Jersey
pharmaceutical companies in our courts.
III.
When a civil action is brought in New Jersey, our courts
apply New Jersey’s choice-of-law rules in deciding whether this
State’s or another state’s statute of limitations governs the
matter. Gantes, supra, 145 N.J. at 484. This appeal raises the
question: What are our choice-of-law rules in determining the
applicable statute of limitations in a tort action? The trial
court used the governmental-interest test expounded in Gantes,
and the Appellate Division used the significant-relationship
test found in sections 146, 145, and 6 of the Second Restatement
-- a test intended to determine which state’s substantive law
will apply. Now, plaintiff argues that we should use the
analytical framework set forth in section 142 of the Second
16
Restatement, which was specifically designed to determine
whether the forum state’s or another state’s statute of
limitations will govern.
The analytical framework for deciding how to resolve a
choice-of-law issue is a matter of law. See Mastondrea v.
Occidental Hotels Mgmt. S.A., 391 N.J. Super. 261, 283 (App.
Div. 2007). Because the trial court and Appellate Division have
no better insight than this Court in determining such matters,
we are not bound by their legal conclusions and therefore our
review is de novo. See Zaman v. Felton, 219 N.J. 199, 216
(2014).
We begin with a brief discussion of some general choice-of-
law principles governing statutes of limitations.
A.
The first inquiry in any choice-of-law analysis is whether
the laws of the states with interests in the litigation are in
conflict. Gantes, supra, 145 N.J. at 484. When application of
the forum state’s or another state’s statute of limitations
results in the same outcome, no conflict exists, and the law of
the forum state governs. Rowe v. Hoffmann-La Roche, Inc., 189
N.J. 615, 621 (2007). In contrast, when a complaint is timely
filed within one state’s statute of limitations but is filed
outside another state’s, then a true conflict is present. See
Schmelzle v. ALZA Corp., 561 F. Supp. 2d 1046, 1048 (D. Minn.
17
2008). In other words, a true conflict of law arises when
choosing between one or another state’s statute of limitations
is outcome determinative. See ibid. In that circumstance, a
court must decide, under the appropriate choice-of-law rule,
which jurisdiction’s statute governs. In this case, New
Jersey’s and Alabama’s statutes of limitations are in conflict.
Plaintiff’s lawsuit is only timely if New Jersey’s limitations
period applies.
The history of our evolving choice-of-law jurisprudence
will provide context to the issue before us.
B.
Under the common law, the forum state -- the state in which
a lawsuit was filed -- applied its own statute of limitations
when a choice-of-law issue arose. See, e.g., Smith v. Smith, 90
N.J.L. 282, 286-87 (E. & A. 1917) (“A foreign judgment is
subject to the statute of limitations of the lex fori[,] . . .
the law of the place where the action is instituted.” (citation
omitted)). That approach was based on the common-law notion
that statutes of limitations are “procedural in nature and
therefore subject to the law of the forum.” Marshall v. Geo. M.
Brewster & Son, Inc., 37 N.J. 176, 180 (1962); accord
Restatement (Second) of Conflicts of Law § 142 (Am. Law Inst.
18
1971).5
In Heavner v. Uniroyal, Inc., we rejected the inflexible
common-law rule of always applying our own statute of
limitations in choice-of-law matters merely because limitations
periods were denominated as procedural. 63 N.J. 130, 140-41
(1973). We held that we were not bound to follow a rule based
solely on historical tradition when no sound rationale remained
for keeping the rule. See id. at 135-40. Instead, we adopted a
new rule that weighed the contacts that each state had to the
matter in determining the applicable statute of limitations.6
Id. at 141.
Heavner involved a products-liability action brought in New
5Indeed, the 1971 version of Second Restatement section 142
adhered to this common-law approach. The original version of
section 142 instructed that “[a]n action will not be maintained
if it is barred by the statute of limitations of the forum” and
that “[a]n action will be maintained if it is not barred by the
statute of limitations of the forum, even though it would be
barred by the statute of limitations of another state.”
Restatement (Second) of Conflicts of Law § 142 (Am. Law Inst.
1971) (emphasis added). In light of evolving choice-of-law
jurisprudence and scholarship, the American Law Institute
revised section 142 in 1988, reframing it to include a
rebuttable presumption favoring the forum state. Restatement
(Second) of Conflicts of Law § 142 (1971) (Am. Law Inst.,
amended 1988).
6 By this time, this Court had also abandoned the lex loci
delicti approach to resolve conflicts of substantive law,
instead favoring the governmental-interest analysis. See Mellk
v. Sarahson, 49 N.J. 226, 234-35 (1967) (criticizing First
Restatement choice-of-law analysis as “unvarying and mechanical”
approach that frustrated state public policy).
19
Jersey. The plaintiff, a North Carolina resident, was driving a
truck purchased in North Carolina when the truck’s tire blew
out, causing an accident in North Carolina. Id. at 133-34. The
allegedly defective tire was mounted in North Carolina by the
defendant Pullman, a Delaware corporation, which also sold the
truck to the plaintiff. Id. at 134. The defendant Uniroyal, a
New Jersey corporation, was the manufacturer and distributor of
Uniroyal tires but was not alleged to have manufactured the
defective tire in New Jersey. Ibid.; see also Gantes, supra,
145 N.J. at 487. Both of the defendant corporations did
business throughout the United States. Heavner, supra, 63 N.J.
at 134.
We found that the only connection between New Jersey and
the products-liability action was Uniroyal’s incorporation in
this State. Id. at 134 n.3. In short, “New Jersey ha[d] no
substantial interest in the matter.” Id. at 141. We concluded
that, despite the fact New Jersey was the forum state, North
Carolina’s statute of limitations should apply because that was
where all the parties were located, where the cause of action
arose, and where all relevant incidents occurred. Id. at 134
n.3, 141. The plaintiff’s complaint was time barred under North
Carolina law and therefore dismissed. Id. at 141-42.
Importantly, we stressed that our ruling was limited to the
“factual pattern” in Heavner and that “there may well be
20
situations involving significant interests of this state where
it would be inequitable or unjust to apply the concept we here
espouse.”7 Id. at 141.
In Gantes v. Kason Corp., 145 N.J. 478 (1996), we further
refined our choice-of-law rules guiding the selection of the
appropriate statute of limitations among states with interests
in the litigation. Relying on the animating principles of
Heavner, we declared that “New Jersey’s rule applies a flexible
‘governmental-interest’ standard, which requires application of
the law of the state with the greatest interest in resolving the
particular issue that is raised in the underlying litigation.”
Id. at 484. To determine the state with the greatest interest,
we instructed courts to “identify the governmental policies
underlying the law of each state and how those policies are
affected by each state’s contacts to the litigation and to the
parties.” Id. at 485 (quoting Veazey v. Doremus, 103 N.J. 244,
7 The Heavner Court specifically cited Marshall v. Geo. M.
Brewster & Son, Inc. as one example in which New Jersey’s
“significant interests” would warrant application of New
Jersey’s statute of limitations, though noting that that case
was affirmed using New Jersey’s old common-law procedural
approach. Heavner, supra, 63 N.J. at 141 n.6. In Marshall, the
decedent was fatally injured at a Pennsylvania railroad
improvement project involving New Jersey contractors, who had
their principal places of business in this State. Ibid. New
Jersey’s statute of limitations applied to that wrongful death
action brought in this State, despite the fact that decedent and
his representative were nonresidents and the injury occurred in
another state. Ibid.
21
248 (1986)).
Gantes involved a Georgia resident who died as a result of
an allegedly defective moving part in a Georgia processing
plant. Id. at 481-82. Her estate and heirs filed a wrongful
death and survivorship products-liability action in this State
against the New Jersey company that manufactured, distributed,
and sold the part. Ibid. The complaint was filed after
Georgia’s statute of repose had expired but within New Jersey’s
two-year statute of limitations, which had been equitably tolled
by the discovery rule. Id. at 485-87.
The obvious conflict between New Jersey’s and Georgia’s
limitations periods required an analysis of the two states’
interests in resolving the dispute. Ibid. In assessing
Georgia’s interests, the Court observed that Georgia’s
legislature enacted its ten-year statute of repose “to eliminate
stale claims and stabilize products liability underwriting.”
Id. at 486 (quoting Chrysler Corp. v. Batten, 450 S.E.2d 208,
212 (Ga. 1994)). Georgia’s statute of repose, however, was not
implicated because it “is 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. The Court emphasized that a New Jersey
lawsuit against a New Jersey manufacturer did not raise concerns
of “‘open-ended liability’ on [Georgia’s] insurance industry and
22
stale claims on its courts.” Id. at 494. Georgia’s public
policy, moreover, would not be frustrated by allowing, under New
Jersey’s statute of limitations, a Georgia resident’s wrongful
death action to proceed against a New Jersey manufacturer in a
New Jersey court. Id. at 498.
In evaluating New Jersey’s governmental interests, the
Court recognized this State’s “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.” Id. at 490. Meritorious
products-liability actions that are timely filed and hold
manufacturers accountable for dangerous products further that
interest. Ibid. In Gantes, the plaintiffs invoked the New
Jersey court system to litigate a claim that had a material link
to this State. Id. at 492. Unlike Georgia’s statute of repose,
New Jersey’s statute of limitations not only discourages the
filing of stale claims, but also, through its discovery rule,
advances “flexible, equitable considerations based on notions of
fairness to the parties and the justice in allowing claims to be
resolved on their merits.” Id. at 487. Our Court noted that
New Jersey’s substantial interest in deterrence outweighed any
countervailing concerns about “burdens on domestic manufacturers
or [about] fears of forum shopping and increased litigation in
the courts of this State.” Id. at 493.
23
Accordingly, our Court applied New Jersey’s limitations
period and permitted the wrongful death lawsuit to proceed. Id.
at 499.
C.
This Court had adopted the governmental-interest test to
resolve choice-of-law issues concerning substantive tort law
before Heavner and Gantes adopted that test for statutes of
limitations. See Mellk, supra, 49 N.J. at 234-35 (finding that
advantages of uniformly applying law of state where injury
occurred “must yield when an unvarying and mechanical
application of this rule would cause a result which frustrates a
strong policy of this state while not serving the policy of the
state where the accident occurred”); see also Camp Jaycee,
supra, 197 N.J. at 139 (noting that “[i]n 1967, we joined with
other jurisdictions in abandoning the First Restatement approach
to tort cases, embracing the modern governmental interest
analysis”). Significantly, our jurisprudence recognized that
the application of the governmental-interest test might lead to
different choice-of-law results concerning substantive law and
statutes of limitations. For example, in Gantes, supra, this
Court recognized that Georgia’s substantive products-liability
law governed and, yet, found that New Jersey had the greater
governmental interest in applying its statute of limitations.
145 N.J. at 492-93, 495.
24
The governmental-interest test remained the analytical tool
for deciding choice-of-law issues related to substantive tort
law and statutes of limitations until P.V. ex rel. T.V. v. Camp
Jaycee, 197 N.J. 132 (2008). In Camp Jaycee, this Court
formally adopted the Second Restatement’s most-significant-
relationship test in sections 146, 145, and 6 for deciding the
choice of substantive law in tort cases involving more than one
state. Id. at 142-43. We considered the most-significant-
relationship test to be a more nuanced approach than the
governmental-interest test. Id. at 142 n.4 (noting that Second
Restatement’s “most significant relationship test embodies all
of the elements of the governmental interest test plus a series
of other factors deemed worthy of consideration”).
We noted, generally, in Camp Jaycee that one of the
benefits of the Second Restatement is the use of “presumptions
and detailed considerations that bear on conflicts analyses” in
deciding choice of law. Id. at 140 (emphasis added). Indeed,
“a set of presumptions” is the starting point for judges under
the Second Restatement. Ibid. (quoting William L. Reynolds,
Legal Process and Choice of Law, 56 Md. L. Rev. 1371, 1388
(1997)); see, e.g., Restatement (Second), supra, § 142 (setting
presumption for choice of statutes of limitations in tort
cases); Restatement (Second), supra, § 146 (setting presumption
for choice of substantive tort law); Restatement (Second),
25
supra, § 188 (setting presumption for choice of contract law).
In Camp Jaycee, supra, we held that in a personal-injury
action, the substantive law of the place of injury is presumed
to be the governing law under section 146. 197 N.J. at 141.
That presumption is not overcome unless some other state has a
more significant relationship with the parties and the
occurrence based on an assessment of each state’s contacts under
section 145 and the guiding principles enunciated in section 6.8
Id. at 144-45. Absent another state having a more significant
relationship, the substantive law of the injury-site state
applies. Id. at 145.
The Camp Jaycee Court was well aware that the Second
Restatement had crafted different presumptions to apply in
various other scenarios. See id. at 140-41. In Camp Jaycee,
choosing between this State’s and another state’s statute of
limitations was not an issue. If it were an issue, we surely
would have acknowledged section 142, which is entitled, “Statute
of Limitations of Forum.” The Court, therefore, had no reason
to appraise the Second Restatement’s presumption that favors
8 The section 145 factors are: “(a) the place where the injury
occurred, (b) the place where the conduct causing the injury
occurred, (c) the domicil, residence, nationality, place of
incorporation and place of business of the parties, and (d) the
place where the relationship, if any, between the parties is
centered.” Restatement (Second), supra, § 145. The section 6
factors are listed infra at 31.
26
applying the forum’s statute of limitations in tort cases. See
Restatement (Second), supra, § 142.
In Cornett v. Johnson & Johnson, 211 N.J. 362 (2012), the
Court did not adopt the Appellate Division’s use of the injury-
site presumption of Restatement section 146 in determining
whether New Jersey’s or Kentucky’s statute of limitations
applied in that products-liability case. See also Cornett v.
Johnson & Johnson, 414 N.J. Super. 365, 378-83 (App. Div. 2010),
aff’d as modified, 211 N.J. 362 (2012). Instead, by finding
that there was no conflict between the statutes of limitations
of the two states, the Court elided the issue of whether the
governmental-interest test or the Second Restatement would
govern.9 Cornett, supra, 211 N.J. at 377-78.
9 In Cornett, the plaintiffs’ lawsuit expired under Kentucky’s
one-year statute of limitations, despite its equitable tolling
provision, whereas the lawsuit was viable under New Jersey’s
two-year statute and its equitable discovery rule. Cornett,
supra, 211 N.J. at 374, 377-78. The appellate panel in Cornett
assumed for purposes of its choice-of-law analysis that there
was a conflict. Cornett, supra, 414 N.J. Super. at 378.
Compare Ky. Rev. Stat. Ann. § 413.140(1)(a), and Perkins v. Ne.
Log Homes, 808 S.W.2d 809, 818-19 (Ky. 1991), with N.J.S.A.
2A:14-2, and Baird v. Am. Med. Optics, 155 N.J. 54, 65-66
(1998). Our Court concluded that, because the two states had
equitable tolling provisions, the differences in their
limitations periods did not “create a true conflict of laws”
because the differences were not “offensive or repugnant to the
public policy of this state.” 211 N.J. at 377. Going forward,
to avoid any confusion, we are establishing a bright-line rule:
a conflict of law is present whenever the selection of one
statute of limitations over another is outcome dispositive. See
Schmelzle, supra, 561 F. Supp. 2d at 1048 (“An actual conflict
exists if choosing the [statute of limitations] of one state or
27
D.
Camp Jaycee’s adoption of sections 146, 145, and 6 of the
Second Restatement to resolve conflicts of substantive law in
tort actions with an injury-site presumption was not a signal
that we would apply the same choice-of-law test for statutes of
limitations. Indeed, the drafters of the Second Restatement did
not intend that sections 146 and 145 would be used for statute-
of-limitations choice-of-law determinations. That is so because
the American Law Institute crafted section 142 of the Second
Restatement precisely to address statutes of limitations as an
independent issue for choice-of-law purposes. The rationales
for whether the forum state’s substantive law or statute of
limitations should govern are different. That was evident in
Gantes, supra, where Georgia’s products-liability law governed,
but New Jersey’s statute of limitations applied. 145 N.J. at
492-93, 495-96.
The essential purpose of substantive tort law is to provide
a remedy to a party who has been wronged, see Fu v. Fu, 160 N.J.
108, 123 (1999), whereas the essential purpose of a statute of
the other is outcome determinative.” (citation omitted)); see
also Spence-Parker v. Del. River & Bay Auth., 656 F. Supp. 2d
488, 497 (D.N.J. 2009) (reinforcing that only if “there is no
divergence between the potentially applicable laws” is court not
presented with conflict). To be clear, when a lawsuit is filed
timely under one state’s statute of limitations but not under
another’s, a conflict of law exists, and a choice-of-law
analysis is required.
28
limitations is to encourage litigants to file timely claims and
to bar the litigation of stale claims, see Gantes, supra, 145
N.J. at 486. Those differences were recognized in the common
law and are recognized by the presumptions in Second Restatement
sections 146 and 142.
There are strong policy reasons for this Court to adopt
section 142 as the choice-of-law rule for statutes of
limitations. Incorporating section 142 into our choice-of-law
analysis for tort purposes completes the conversion from the
governmental-interest standard to the Second Restatement begun
in Camp Jaycee.
We therefore turn to a discussion of section 142 of the
Second Restatement.
E.
The Second Restatement recognizes that when the forum state
has a substantial interest in litigation brought in its courts,
the forum state’s statute of limitations, ordinarily, will
apply. Section 142 provides:
Whether a claim will be maintained against the
defense of the statute of limitations is
determined under the principles stated in § 6.
In general, unless the exceptional
circumstances of the case make such a result
unreasonable:
(1) The forum will apply its own statute of
limitations barring the claim.
(2) The forum will apply its own statute of
29
limitations permitting the claim unless:
(a) maintenance of the claim would serve
no substantial interest of the
forum; and
(b) the claim would be barred under the
statute of limitations of a state
having a more significant
relationship to the parties and the
occurrence.
[Restatement (Second), supra, § 142.]
Section 142’s presumption, like other presumptions in the
Second Restatement, channels judicial discretion and advances
notions of uniformity and predictability. Under section
142(2)(a), the statute of limitations of the forum state
generally applies whenever that state has a substantial interest
in the maintenance of the claim. See Restatement (Second),
supra, § 142(2). In that circumstance, the inquiry ends for
statute-of-limitations purposes, unless exceptional
circumstances would render that result unreasonable.
Restatement (Second), supra, § 142. Only when the forum state
has “no substantial interest” in the maintenance of the claim
does a court consider section 142(2)(b) -- whether “the claim
would be barred under the statute of limitations of a state
having a more significant relationship to the parties and the
occurrence.” Restatement (Second), supra, § 142(2)(a)-(b). In
determining whether another state has a more significant
relationship to the parties and the occurrence, a court must
30
then consider overarching choice-of-law principles embodied in
the factors in section 6:
(a) the needs of the interstate and
international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested
states and the relative interests of
those states in the determination of the
particular issue,
(d) the protection of justified
expectations,
(e) the basic policies underlying the
particular field of law,
(f) certainty, predictability and uniformity
of result, and
(g) ease in the determination and application
of the law to be applied.
[Restatement (Second), supra, § 6(2).]
Section 142 benefits from an ease of application; places
both this State’s and out-of-state’s citizens on an equal
playing field, thus promoting principles of comity; advances
predictability and uniformity in decision-making; and allows for
greater certainty in the expectations of the parties.
Second Restatement section 142 makes clear that when New
Jersey has a substantial interest in the litigation and is the
forum state, it will generally apply its statute of limitations.
See Restatement (Second), supra, § 142(2). That rule is
consistent with our holding in Gantes, supra, in which we
31
allowed an out-of-state citizen to pursue a products-liability
action against a New Jersey manufacturer in our state courts
because of New Jersey’s substantial interest in ensuring the
manufacture and distribution of safe products. 145 N.J. at 490.
When claims are timely filed by a New Jersey or another state’s
resident, and New Jersey has a substantial interest in the
litigation, providing parity between an in-state and out-of-
state citizen makes perfect sense in a system sensitive to
interstate comity.
This rule also benefits New Jersey companies. Under the
Appellate Division’s application of Second Restatement sections
146 and 145, the statute of limitations of the state where the
injury occurred would presumptively apply even when the New
Jersey limitations period had expired. In that circumstance,
the out-of-state citizen could proceed with a claim when a New
Jersey resident could not if the injury had occurred in this
State. That deprives New Jersey companies of the protections of
this State’s statute of limitations against another state’s
longer limitations period.
A New Jersey company, generally, should not have to defend
against a claim that is stale under this State’s statute of
limitations in our courts, whether that claim is brought by a
New Jersey resident or a citizen of another state. When a
plaintiff from another state with a longer limitations period
32
seeks to press a claim against a New Jersey manufacturer in our
state courts after New Jersey’s statute of limitations has
expired, section 142 ordinarily will not permit the claim to
proceed. See Restatement (Second), supra, § 142(1) (stating
that absent “exceptional circumstances” that would make result
“unreasonable,” “[t]he forum will apply its own statute of
limitations barring the claim”). Moreover, when New Jersey has
no substantial interest in the litigation, under section 142,
our courts will not apply our State’s statute of limitations to
save a claim when another state has a more significant
relationship to the case. See Restatement (Second), supra,
§ 142(2).
Pitcock v. Kasowitz, Benson, Torres & Friedman, LLP, 426
N.J. Super. 582 (App. Div. 2012), illustrates this point. In
that case, the plaintiff -- a former partner in a New York City
law firm -- filed a malicious-abuse-of-process lawsuit against
the law firm. Id. at 585. By the time the lawsuit was filed,
New York’s one-year statute of limitations had expired, but New
Jersey’s two-year limitations period had not. Ibid.
In light of Camp Jaycee’s adoption of the Second
Restatement to resolve substantive tort law conflicts, the
appellate panel predicted that this Court would “apply the ‘most
significant relationship’ test of section 142 in determining the
applicable statute of limitations” in tort cases. Id. at 589.
33
Although the plaintiff was a New Jersey resident, the firm’s
primary office was in New York, where the plaintiff worked. Id.
at 584. Previously, the firm had filed an action in New York
Supreme Court claiming that the plaintiff breached contractual
and fiduciary duties based on his allegedly improper conduct in
New York. Ibid. The firm’s New York claim ultimately was
dismissed, which led to the malicious-abuse-of-process lawsuit
filed by the plaintiff in New Jersey. Id. at 584-85.
In an opinion authored by Judge Skillman, the panel
concluded that New Jersey did not have a substantial interest in
“protecting its residents from financial harm arising from their
professional activities in another state” and that New York
“clearly ha[d] ‘a more significant relationship to the parties
and the occurrence’ than New Jersey.” Id. at 589-90 (quoting
Restatement (Second), supra, § 142(2)(b)). Accordingly, the
panel affirmed the dismissal of the action, applying New York’s
one-year statute of limitations. Id. at 591. Also of interest
is Judge Skillman’s observation that application of section 142
in that case did “not generally differ substantially from the
‘governmental interest’ test the Court used in Heavner and
Gantes.” Id. at 589.
We agree that the results in Heavner and Gantes would be no
different under a Second Restatement section 142 analysis than
the actual results reached by the Court in those cases using the
34
governmental-interest test. But there are meaningful
distinctions between section 142 and the governmental-interest
test. Section 142’s presumption in favor of a forum state with
a substantial interest in the litigation can be overcome only by
exceptional circumstances that would render that result
unreasonable. Under the governmental-interest test, a forum
state’s substantial interest in the litigation is a significant
factor -- but not a conclusive one -- to be weighed against the
interests of another state connected with the parties or the
occurrence. Section 142 is a less malleable standard than the
governmental-interest test. For all practical purposes, under
section 142, once a court finds that the forum state has a
substantial interest in the litigation, the inquiry is at an
end.
It bears mentioning, however, that, under both tests, when
the forum state has no interest in the litigation and the claim
is barred by another state’s statute of limitations, the forum
state generally should not entertain the claim. Restatement
(Second), supra, § 142 cmt. g; see also Heavner, supra, 63 N.J.
at 134 n.3, 141. “[E]gregious examples of forum shopping” will
be discouraged when a forum state that has no interest in the
litigation declines to apply its favorable statute of
limitations. Restatement (Second), supra, § 142 cmt. g.
We are persuaded that section 142, with its presumption
35
favoring a forum state with a substantial interest in the
matter, will channel judicial discretion to ensure a higher
degree of uniformity and predictability in resolving choice-of-
law issues.
We now apply the principles of section 142 to the facts of
this case.
IV.
In this failure-to-warn products-liability action filed in
New Jersey, plaintiff presented evidence that (1) defendants
Hoffmann-La Roche, Inc., and Roche Laboratories, Inc., were New
Jersey corporations, which maintained their corporate offices in
this State; (2) defendants designed, manufactured, distributed,
and labeled the prescription drug Accutane in New Jersey; (3)
defendants’ labeling inadequately warned plaintiff of the
potential risks associated with the taking of Accutane; (4)
plaintiff, an Alabama resident, relied on the inadequate
warnings when his physician prescribed, and he took, Accutane to
treat his acne in Alabama; and (5) the taking of Accutane
proximately caused his inflammatory bowel disease, which led to
multiple surgeries and other treatment modalities in Alabama.
Under section 142 of the Second Restatement, New Jersey, as
the forum state, presumptively applies its own statute of
limitations unless (1) New Jersey has no significant interest in
the maintenance of the claim and Alabama, whose statute has
36
expired, has “a more significant relationship to the parties and
the occurrence,” Restatement (Second), supra, § 142(2)(a)-(b);
or (2) given “the exceptional circumstances of the case,”
following the Second Restatement rule would lead to an
unreasonable result, Restatement (Second), supra, § 142. In
light of section 142, if New Jersey has a substantial interest
in the litigation, the inquiry ends, and New Jersey applies its
statute of limitations, provided there are no “exceptional
circumstances” making that “result unreasonable.” Restatement
(Second), supra, § 142. Therefore, we first turn to whether New
Jersey has a significant interest in the products-liability
claim filed by plaintiff against Roche.
New Jersey has a substantial interest in deterring its
manufacturers from developing, making, and distributing unsafe
products, including inadequately labeled prescription drugs.
See Gantes, supra, 145 N.J. at 490. Our State’s interest
extends to protecting not just the citizens of this State, but
also the citizens of other states, from unreasonably dangerous
products originating from New Jersey. Cf. id. at 497-98. We
have never taken the parochial attitude that the health and
safety of our State’s citizens are of greater concern or worth
than the health and safety of citizens of another state. Our
national compact and our interstate system suggest that we
should treat the citizens of other states as we treat our own.
37
It would make little sense, if we were to find that New Jersey
had a substantial interest in the maintenance of a lawsuit, to
discriminate against an out-of-state plaintiff whose lawsuit was
filed within our limitations period. We cannot conclude that
“maintenance of the claim would serve no substantial interest”
of this State. Restatement (Second), supra, § 142(2)(a).
Only if we found that New Jersey had “no substantial
interest” would we address the second issue, which is whether
“the claim would be barred under the statute of limitations of a
state having a more significant relationship to the parties and
the occurrence.” Restatement (Second), supra, § 142(2)(a)-(b).
Were we to address that issue, we would recognize that Alabama
has a significant relationship to the parties and the
occurrence. But, even in light of the section 6 factors, it
would not be self-evident that Alabama has a more significant
relationship than that of New Jersey. See Restatement (Second),
supra, § 6(2)(a)-(g).
Clearly, Alabama has a substantial interest in ensuring
that pharmaceutical products entering its borders are safe for
use by its citizens. See Casrell v. Altec Indus., Inc., 335 So.
2d 128, 131 (Ala. 1976) (“[D]efendants must pay the consequences
of placing an unreasonably dangerous or defective product on the
market.”). But Alabama’s statute of limitations is intended
primarily to protect its manufacturers, and others, from stale
38
claims brought in its courts. See Travis v. Ziter, 681 So. 2d
1348, 1355 (Ala. 1996) (noting that statutes of limitations
“promote[] stability by protecting defendants from stale
claims”); see also Restatement (Second), supra, § 142 cmt. f (“A
state has a substantial interest in preventing the prosecution
in its courts of claims which it deems to be ‘stale.’” (emphasis
added)). Alabama does not have an interest in depriving one of
its citizens of securing redress from a pharmaceutical company
in another state where the statute of limitations has an
equitable tolling feature. Cf. Gantes, supra, 145 N.J. at 493-
98. Stated differently, Alabama has no interest in denying one
of its injured citizens the same relief an injured New Jersey
citizen could obtain for the same wrong in a New Jersey court.
Last, the Second Restatement provides that, even when the
forum state’s statute of limitations would apply under a section
142(a) and (b) analysis, the Court retains a small window of
discretion to override that outcome. Restatement (Second),
supra, § 142. A court is not required to apply the forum
state’s limitations period if there are “exceptional
circumstances” that will “make such a result unreasonable.”
Ibid. In this case, no such “exceptional circumstances” are
present.
In summary, New Jersey’s statute of limitations governs
because we cannot conclude that “maintenance of the claim would
39
serve no substantial interest” of this State and because there
are no “exceptional circumstances” that call for the application
of Alabama’s limitations period. Restatement (Second), supra,
§ 142(2)(a).
Although we are adopting a different choice-of-law
framework for determining whether the forum state’s or another
state’s statute of limitations will apply, had we conducted a
governmental-interest test, the result here would be no
different -- New Jersey’s statute of limitations would govern.
We nevertheless believe that our adoption of section 142 is a
further refinement of our choice-of-law jurisprudence that will
guide judicial discretion toward more predictable and just
outcomes.
V.
For the reasons expressed, we reverse the judgment of the
Appellate Division, which dismissed plaintiff’s verdict and
damages award and extinguished his cause of action because the
Alabama statute of limitations had expired. We hold that, based
on a choice-of-law analysis under section 142 of the Second
Restatement, New Jersey’s limitations period governs, and
therefore plaintiff’s action was timely filed. We also note
that the trial court arrived at the same outcome using the then-
prevailing governmental-interest test. We therefore reinstate
plaintiff’s verdict and damages award and remand to the
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Appellate Division for consideration of the unaddressed issues
remaining on appeal.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, FERNANDEZ-
VINA, SOLOMON, and TIMPONE join in JUSTICE ALBIN’s opinion.
JUSTICE PATTERSON did not participate.
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