In this motion for summary judgment, plaintiffs Rybeck seek an order declaring the New Jersey Automobile Reparations Reform Act (hereinafter No Fault Act) to be unconstitutional as a whole and in several specific parts.
There are two consolidated actions. The first arose out of an auto accident involving the Rybeck car and a car
driven by Evans. In that suit plaintiff Mrs. Rybeck, a passenger in the family car, sought recovery for her injuries against the two drivers, her husband and Evans. Mrs. Rybeck found herself in an unhappy position vis-a-vis her auto insurance carrier, Amica Mutual Insurance Company. She and her husband were both named insureds on their policy, and consequently she had to look to Amica both for first-party no-fault benefits and also for third-party recovery, alleging negligence on her husband's part.
The second suit is by both Rybecks against Amica, seeking a judgment declaring the No Fault Act underlying their auto policy invalid. The two suits were consolidated. A motion was subsequently made by Amica to disqualify Mrs. Rybeck's attorney in the negligence action from representing both Mr. and Mrs. Rybeck in the consolidated declaratory judgment action. Mr. and Mrs. Rybeck submitted affidavits disclaiming and waiving any conflict of interest, an issue they said they had explored thoroughly with the attorney. Amica then withdrew its motion. It is not known whether Amica did so on the strength of the Rybecks' statement or in the light of the obvious parallel between the attorney's dual representation and Amica's own role as both first-party insuror and liability insuror for the Rybecks, a dual role with which no one seems to be very comfortable. However, there is nothing before me on that question and I choose not to raise it myself. Mr. Rybeck seems to be a totally unnecessary plaintiff in the declaratory judgment action. He represents no interest independent of that of his wife.
Plaintiffs make a number of attacks on the constitutional validity of the No Fault Act. Defendants question their standing to mount many of the attacks and support the validity of the law. Wondering whether the interests of the State were fully represented, I invited the Attorney General to participate. He declined to do so.
In broad outline, plaintiffs' position is that the law is unconstitutional in that it denies to Mrs. Rybeck
(a) access to the courts and trial by jury on all issues formerly so triable in negligence cases;
(b) the right to prove all of her damages by unlawfully enacting a rule of evidence in violation of both the Supreme Court's rule-making power and the doctrine of separation of powers;
(c) the equal protection of the laws by forcing her to deal with Amica both as her no-fault personal injury protection carrier and as the carrier interested in defending against her negligence action;
(d) the equal protection of the laws as a married woman because she is deprived of the option either to obtain her own insurance or to remain uncovered directly by any insurance for no-fault benefits;
(e) the equal protection of the laws by establishing constitutionally impermissible classifications of various sorts, and
(f) due process of the law.
The law with which we deal is officially called the New Jersey Automobile Reparations Reform Act. As the title signifies, it was enacted in response to the widely felt need for reform of our system of awarding damages for injuries arising out of auto accidents. The act establishes a comprehensive scheme for reform of the system for compensating persons injured in auto accidents. It outlaws civil suits for such injuries below a statutory standard of minimal significance. It requires most New Jersey vehicles to be insured by policies providing personal injury protection (PIP) benefits. The purpose of PIP benefits is to compensate injured persons for their out-of-pocket losses, with certain limitations, without regard to fault. The act bars recovery in civil negligence suits of losses covered by PIP benefits.
The act is codified in chapter 6A of Title 39. Section 3 (N.J.S.A. 39:6A-3) requires automobiles, as defined in § 2(a), which are registered or principally garaged in New Jersey, to carry liability insurance with specified minimum
limits. Section 4 requires every liability insurance policy required by § 3 to include personal injury protection (PIP) coverage for payment, regardless of fault, to injured insureds and resident family members who are hurt in any auto accident, and, additionally, to injured occupants of the covered auto and passengers injured by it. There are five classes of required PIP benefits: (1) medical expense benefits without limitation, (2) income continuation benefits of up to $100 a week with a maximum of $5,200 a person; (3) substitute essential services benefits of up to $12 a day, with a maximum of $4,380 a person; (4) survivor's benefits of rather limited scope, and finally, (5) funeral benefits with a maximum of $1,000.
Section 10 permits but does not require an insured to purchase PIP coverage in higher amounts than mandated by § 4. Section 5 requires prompt payments of PIP benefits and § 6 provides for deduction from those payments of benefits collectible as workmen's compensation, temporary disability payments and Medicare. Section 12 provides that evidence of amounts paid or collectible under PIP "is inadmissible in a civil action for recovery of damages for bodily injury".
Section 8 bars suit for bodily injury against owners and operators of vehicles with PIP benefits coverage unless the injury either is permanent as opposed to "soft-tissue," or requires treatment with a cost or equivalent value of $200.
Administrative sections of the act authorize early and rather complete medical investigation by PIP carriers when claims are made, require uninsured motorist coverage, and establish penalties for failing to maintain insurance coverage and making fraudulent claims. Section 18 requires a reduction of "bodily injury insurance rates" of "at least 15%" on the effective date of the act.
The act arose out of the nationwide recognition that developed in the 1960s that the traditional court-oriented "fault" system was not working very well to provide prompt compensation for accident victims and fairly allocate the
cost. As early as 1932 a workmen's compensation-type of reparations system was seriously entertained as an alternative to the fault system. Columbia University Council for Research in the Social Sciences, Report by the Committee to Study Compensation for Automobile Accidents (1932). The problem and suggestions for reform received frequent attention over the years. See, e.g., Ehrensweig, "Full Aid" Insurance for the Traffic Victim (1954); Rosenberg and Sovern, "Delay and the Dynamics of Personal Injury Litigation", 59 Columbia L. Rev. 1115 (1959); Keeton and O'Connell, Basic Protection for the Traffic Victim (1965). No-fault reparations eventually became the focus of academic and then governmental reform efforts.
In a 1970 joint resolution the New Jersey Legislature created the Automobile Insurance Study Commission and charged it to inquire into the whole area of insurance costs, legal fees, property damage costs, no-fault (as it was already popularly known), arbitration and comparative negligence. The resolution recited the need to reform existing systems and their resulting hardships, high costs and inequities. The Commission submitted its December 1971 report, "Reparation Reform for New Jersey Motorists."
Among the problems to which the Commission invited legislative attention were (1) the inability of persons whose negligence contributed to their injuries to obtain compensation; (2) the high and still rising costs of auto insurance; (3) the uncertain availability of insurance coverage and (4) the inefficiency of the judicial process to handle the volume of automobile cases with reasonable economy and promptness. The whole range of problems is thoroughly explored in the New York Court of Appeals opinion in Montgomery v. Daniels , 38 N.Y. 2d 41, 378 N.Y.S. 2d 1, 340 N.E. 2d 444 (Ct. App. 1975).
The Commission recognized that solving all these problems required inconsistent and competing measures. If no-fault was to compensate those previously barred by their own negligence, then insurance costs would have to rise to
meet the newly cognizable claims. On the other hand, if costs and therefore premiums were to be lowered, the average claim cost would have to be drastically reduced. "Reparation Reform for New Jersey Motorists," at 121-22. Many more people sharing less money would require each of them to receive a substantially smaller amount. This simple truth somehow escaped those who later argued, Januslike, that no-fault would deliver greater dollar benefits to the community while exacting smaller premiums.
A number of bills containing different reform proposals were introduced for legislative consideration in early 1972. Assembly Bill 666 required arbitration of all auto claims of less than $5,000. Senate Bill 517 was much like the present law in general outline except that it limited no-fault medical benefits and mandated arbitration of claims up to $3,000. Senate Bill 956 would have created a no-fault scheme, mandated arbitration, and created a state-financed auto insurance agency. Assembly Bill 675 would altogether have barred civil suits for bodily injury from auto accidents. Assembly Bill 954 would have put a ceiling on PIP benefits and would have created a rather high threshold for civil suits. Assembly Bill 1190 was in the same vein. Assembly Bill 1230 was much like the enacted law.
After picking its way through the thicket of possibilities, the Legislature enacted chapter 6A. Signing the bill into law on June 20, 1972, the Governor predicted that court cases "will be greatly reduced and that accident victims will be assured of prompt compensation for all economic losses". The Trentonian's May 17, 1972 editorial predicted that 69% of the auto accident claims "clogging the courts" would be eliminated. On the same day the Newark Star Ledger reported that insurance premiums could fall 24%. There had been massive efforts both for and against no-fault. Each side had its studies and statistics, demonstrating that the act would be either a total success or a total failure. The legislative judgment was for no-fault and its anticipated advantages.
Other states went through much the same process. Many of them enacted various forms of no-fault. Because their acts differ, and because their local constitutions differ, their judicial treatment will not be discussed in this opinion. On the major constitutional issues involved in all no-fault schemes, of course, the opinions are of interest. Those states whose courts have upheld no-fault legislation against constitutional attack are Massachusetts, Pinnick v. Cleary , 271 N.E. 2d 592 (Sup. Jud. Ct. 1971); New Hampshire, Opinion of the Justices , 113 N.H. 205, 384 A.2d 881 (Sup. Ct. 1973); Kansas, Manzanares v. Bell , 214 Kan. 589, 522 P. 2d 1291 (Sup. Ct. 1974); Pennsylvania, Singer v. Sheppard , Pa. , 346 A.2d 897 (Sup. Ct. 1975); Kentucky, Fann v. McGuffey , 534 S.W. 2d 770 (Ct. App. 1975); Connecticut, Gentile v. Altermatt, Conn. (Sup. Ct. Err. 1975); and New York, Montgomery v. Daniels , 39 N.Y. 2d 41, 378 N.Y.S. 2d 1, 348 N.E. 2d 444 (Ct. App. 1975). Courts have held no-fault legislation to be unconstitutional in significant respects in Illinois, Grace v. Howlett , 51 Ill. 2d 478, 283 N.E. 2d 474 (Sup. Ct. 1972); Florida, Lasky v. State Farm Ins. Co. , 296 So. 2d 9 (Sup. Ct. 1974) and Michigan, Gaines v. Mohawk Motor, Inc. , No. 74-005-575 NI (Cir. Ct. 1974). There are a good number of enacted but yet untested similar laws in other states.
I find the No Fault Act to be constitutional. I do so with a constant eye on the strong presumptions of lawfulness accorded to legislation, and also on the undesirability of a trial court declaration of invalidity.
THE ACT DOES NOT DEPRIVE THE PLAINTIFFS OF DUE PROCESS OF LAW
The legislature may not deprive a person of life, liberty or property without due process of law. Judicial enforcement of that standard does not permit a court, however, to substitute its own policy judgment for that of the legislature. Ferguson v. Skrupa , 372 U.S. 726, 83 S. Ct. 1028,
10 L. Ed. 2d 93 (1963). See Tribe, "The Supreme Court, 1972 term," 87 Harv. L. Rev. 1 (1973). The constitutional test is "reasonableness." Thus, if any state of facts reasonably may be conceived to justify the legislation, a court's duty is to sustain it. McGowan v. Maryland , 366 U.S. 420, 81 S. Ct. 1101, 6 L. Ed. 2d 393 (1961).
There were four policy bases for the No Fault Act: (1) increased reparation benefits (for those previously barred by fault tests); (2) reduction in the cost of auto insurance; (3) increased availability of necessary coverage, and (4) increased judicial economy. Without doubt, the objectives were worthy ones. The Legislature faced a mass of conflicting information and alternative suggestions for reaching the objectives. The ...