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AMERICAN EXPORT LINES v. J & J DISTRIB. CO.

May 9, 1978

AMERICAN EXPORT LINES, INC., et al., Plaintiffs,
v.
J & J DISTRIBUTING CO., Defendant. AMERICAN EXPORT LINES, INC., et al., Plaintiffs, v. REITMAN INDUSTRIES, INC., Defendant



The opinion of the court was delivered by: BIUNNO

 In each of these two cases, the same group of plaintiffs sue a defendant who was a consignee of goods shipped in ocean transport. The plaintiffs have moved for summary judgment in each case. Each defendant moves for dismissal. The underlying facts and the legal issues raised are exactly the same in both cases, thus making it possible to dispose of all four pending motions in this ruling.

 The facts.

 Defendants do not say, in their responding papers, that the charges were paid. Rather, the defenses are that over a long period of time, which includes all dates alleged in the complaint, it was a custom of the trade, or it was understood, or it was expressly agreed, that these charges, although billed by invoice, were to be disregarded and need not be paid; and that there has been a waiver or estoppel.

 Defendants also assert that none of the plaintiffs has complied with the New Jersey "Corporation Business Activities Reporting Act," c. 171, N.J.P.L. 1973 (N.J.S.A. 14A:13-14 et seq., pocket part), a fact not denied, as a consequence of which it is claimed that plaintiffs may not sue in any state or federal court. The collateral history indicates that the present plaintiffs, along with two other overseas carriers, had asserted the same claims in identical suits in the Superior Court of New Jersey, in which there were voluntary dismissals as to the present plaintiffs who have filed these suits. It is probable that the other two overseas carriers not plaintiffs here had complied with N.J.S.A. 14A:13-20 a (pocket part), or were not within its terms.

 Jurisdiction.

 Since the claims arise by reason of Acts of Congress regulating commerce, i. e., The Shipping Act of 1916, 46 U.S.C. § 801 et seq., jurisdiction in this court exists under the terms of 28 U.S.C. § 1337.

 The Motions to Dismiss based on N.J.S.A. 14A:13-20 a.

 By its terms, this state law appears to close the doors of the state and federal courts to a corporate plaintiff not incorporated in New Jersey or authorized to do business there, which has not complied with the reporting requirement, see N.J.S.A. 14A:13-20 a (pocket part).

 Plaintiffs respond that the statute contravenes the federal constitution and so is unenforceable here. If this claim were colorable, the court would be required to first certify the fact to the Attorney General of New Jersey, under the 1976 amendment to 28 U.S.C. § 2403 (and, see N.J. Court Rules, R. 4:28-4). *fn2"

 However, since it is fundamental doctrine that the judiciary is not to deal with constitutional issues wherever the dispute can be decided on other grounds, that step is not required here.

 It has been established law, at least since David Lupton's Sons v. Automobile Club, 225 U.S. 489, 32 S. Ct. 711, 56 L. Ed. 1177 (1912), that the states have no authority to declare who may have access to the federal courts. These are courts of limited jurisdiction regulated by Acts of Congress, which in turn are part of the "law of the land" under U.S. Const. Art. VI.

 As the result of Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1937) the rule of Lupton's Sons was modified. The modification was articulated in Angel v. Bullington, 330 U.S. 183, 67 S. Ct. 657, 91 L. Ed. 832 (1947), and clarified in J. S. Woods v. Interstate Realty Co., 337 U.S. 535, 69 S. Ct. 1235, 93 L. Ed. 1524 (1948). The modification allows the states to close the courthouse doors in both the state and federal courts, but only in cases where federal jurisdiction is based on diversity of ...


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