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HENRY v. RICHARDSON-MERRELL

November 14, 1973

Denis HENRY, a minor, by Gaston Henry and Lorraine Henry, his natural parents and guardians, et al., Plaintiffs,
v.
RICHARDSON-MERRELL, INC., a Delaware corporation, and Merrell-National Laboratories, Division of Richardson-Merrell, Inc., a Delaware corporation, Defendants


Coolahan, District Judge.


The opinion of the court was delivered by: COOLAHAN

JURISDICTION AND PROCEDURE

 This is a civil action for personal injuries and damages brought on behalf of one Denis Henry, a minor of 11 years, by his natural parents and guardians, Gaston Henry and Lorraine Henry, and for themselves individually. The plaintiffs are all citizens of Quebec, Canada. Defendant Richardson-Merrell, Inc., is a Delaware corporation having its principal place of business in the State of New York. *fn1" Defendant engages in both a national and international drug business, and does transact some business in the State of New Jersey.

 Plaintiffs commenced this action on or about January 31, 1973 in the Superior Court of New Jersey, Law Division, Bergen County. Defendant was served with a summons and a copy of the complaint through its registered agent for service of process in New Jersey, the Corporation Trust Company. Defendant subsequently petitioned for removal of this suit to the Federal District Court of New Jersey on the grounds of diversity of citizenship between the parties, and a cause of action in excess of $10,000. 28 U.S.C. § 1446; 28 U.S.C. § 1332.

 Plaintiff Lorraine Henry claims that in July of 1961 she ingested a pill called Kevadon while she was in a pregnant condition and a patient in Hospital Maisonneuve, located in the City of Montreal in the Province of Quebec, Canada. In March of 1962 she gave birth to the infant-plaintiff, Denis Henry, in the same hospital. Denis Henry was born with severe birth defects and anomalies, including malformed ears, deafness, left facial paralysis, bilateral cranial nerve palsy, micrognathia, psychic damage, and severe disfiguring cosmetic abnormalities, all of which are apparently permanent.

 The complaint alleges that in 1961 defendant was engaged in testing, manufacturing, and marketing the drug thalidomide in the pill form of Kevadon. The complaint further alleges that Denis Henry's injuries and damages are a proximate result of defendant's "negligent, fraudulent, wilful, wanton and reckless conduct" in testing, manufacturing and marketing the drug Kevadon and its component ingredient thalidomide, a drug "unfit for the purpose intended, not fit for human consumption, not free of defects, and . . . not of merchantable quality."

 ISSUE BEFORE THE COURT

 Defendant, Richardson-Merrell, Inc., now moves for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Defendant contends: (a) this diversity action is initially governed by choice-of-law rules of New Jersey; (b) under all of the circumstances of this suit New Jersey choice-of-law rules require the application or "borrowing" of the statute of limitations of Quebec, Canada; (c) plaintiffs' claims for relief are, under Quebec law, absolutely barred and extinguished by a Quebec Civil Code prescription statute; and (d) by bringing their action to New Jersey plaintiffs are merely "forum-shopping" for a jurisdiction with a favorable statute of limitations in an effort to circumvent the law of Quebec, the jurisdiction most significantly connected with the parties, transactions, and alleged injuries involved in this law suit.

 Plaintiffs argue that defendant's motion for summary judgment should be denied in that: (a) New Jersey's choice-of-law rules require that New Jersey's statute of limitations governs the timeliness of this action since this State has a substantial governmental interest in the matter, while Quebec has no legitimate governmental interest in having its limitations period applied; (b) New Jersey has significant contacts and ties with the subject matter of the litigation since defendant manufactured and clinically tested the drug thalidomide in New Jersey; and (c) even if the Quebec statute of limitations is applied to bar plaintiff's tort action in New Jersey, defendant's motion for summary judgment should still be denied because the facts alleged in the complaint make out a contract action under Quebec law which is not barred by the Quebec prescription statute.

 Defendant's motion for summary judgment focuses on the issue of application of statutes of limitation in a conflict-of-laws context. Therefore, solely for the purposes of deciding this motion, defendant concedes and the Court will take as true most of the factual allegations recited in plaintiffs' complaint. *fn2" Mazzilli v. Accident, etc. Casualty Ins. Co., 26 N.J. 307, 139 A.2d 741 (1958).

 MERITS

 The Court will commence its inquiry by taking judicial notice of several relevant statutory provisions contained in the Civil Code of Quebec, Canada. *fn3" First, Article 2262 of the Civil Code provides that an action for bodily injuries is "absolutely extinguished" after one year has elapsed from the date the cause of action accrues. Second, Article 2267 of the Civil Code provides that this one-year prescription period shall "run against minors." *fn4" Under these provisions the infant-plaintiff's tort action against defendant is clearly time-barred under Quebec law. McCormack v. Sherbrooke Hospital (1935) 39 P.R. 1; Plamondon v. Hill (1937) 43 R.L. 263; Remmelle v. Laporte (1967) P.R. 66.

 The Court also takes judicial notice of the relevant laws of the State of New Jersey. First, New Jersey has a two-year statute of limitations period governing the timeliness of personal injury actions. Second, New Jersey, unlike Quebec, "tolls" this two-year period on behalf of infants until they reach the age of 21 years. *fn5" Therefore, the infant-plaintiff's tort action is not time-barred in New Jersey, provided that New Jersey's choice-of-law rules preclude application of the Quebec time-bar. *fn6"

  Since the infant-plaintiff's suit is a diversity action, and since defendant's motion for summary judgment raises a conflict-of-laws issue, this Court must apply whatever law would be applied by the courts of the forum state, New Jersey. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938); Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941); Mixing Equipment Co., Inc. v. Philadelphia Gear, Inc., 436 F.2d 1308 (3 Cir. 1971); Boase v. Lee Rubber & Tire Co., 437 F.2d 527 (3 Cir. 1970); Kieffer v. Blue Steel Chemical Co., 196 F.2d 614 (3 Cir. 1952). Specifically, this Court is bound to follow New Jersey's choice-of-law rules in determining whether New Jersey's statute of limitations or Quebec's prescription statute governs the timeliness of this action. Ramsay v. Boeing Co., 432 F.2d 592 (5 Cir. 1970).

 An examination of the relevant New Jersey case law reveals that in recent years the courts of this State have clearly departed from the traditional conflicts rule that automatically chooses the "substantive" law of the place of the wrong, or the lex loci delicti. Instead, New Jersey has adopted the more modern and flexible conflicts doctrine applying the substantive law of that jurisdiction having the most substantial governmental interest in, or the most significant relationship to, or the closest contacts with, the subject matter or the parties in an action. Heavner v. Uniroyal, Inc., 63 N.J. 130, 305 A.2d 412 (1973); Rose v. Port of New York Authority, 61 N.J. 129, 139-140, 293 A.2d 371 (1972); Pfau v. Trent Aluminum Co., 55 N.J. 511, 263 A.2d 129 (1970); Mellk v. Sarahson, 49 N.J. 226, 229 A.2d 625 (1964).

 However, when New Jersey is the forum State for a foreign-based cause of action, New Jersey will apply its own "rules of procedure" in the action pending here, not the rules of procedure which the foreign State's courts would have applied if the action had been instituted there. See Marshall v. Geo. M. Brewster & Son, Inc., 37 N.J. 176, 180 A.2d 129 (1962), and the cases cited at 180, 180 A.2d 129.

 Given the fact that statutes of limitation are ordinarily viewed as procedural in nature rather than substantive, New Jersey's courts have traditionally adhered to the settled common-law conflicts rule that "the forum applies only its own procedural statute of limitations and does not give effect to a statute of another state in which the cause of action arose -- unless [emphasis added] that statute has been held by the state which enacted it to be substantive in nature, operating as a condition terminating the existence of the right instead of merely barring the remedy." Gordon v. Loew's, Inc., 247 F.2d 451, 454 (3 Cir. 1957); Goodwin v. Townsend, 197 ...


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