state law, its holding of unconstitutionality should be applied prospectively.
A. Applicable Law : Both parties agree that federal law governs the question of the constitutionality of N.J.S.A. 2A:14-22. Since this is a federal question the issue must ultimately be decided by the United States Supreme Court. Although the decision of the New Jersey Supreme Court applying federal law to the question is both persuasive and instructive it is not binding, and under the mandate of the United States Supreme Court and the Court of Appeals I am required to make an independent determination of the constitutionality of the tolling statute under the Commerce Clause.
Plaintiffs urge strenuously that I am bound by the decision in Coons II that, assuming the unconstitutionality of the tolling statute, the constitutional determination is to be applied prospectively and not retroactively. However the cases cited by plaintiffs involve interpretation of state statutes and the effect to be given to changes in state law, not, as in the present case, the question of the retroactivity of federal constitutional decisions.
It would be difficult to reconcile rationally a holding that federal law will be applied to determine the constitutionality of a statute but that the states remain free to determine under state law when and how the ruling of unconstitutionality will be applied. Such a rule would provide a tool for nullification of constitutional decisions and does not constitute current law. For example, the United States Supreme Court reviews state court decisions on the retroactivity of new federal constitutional protections for criminal defendants, thus holding by clear implication that federal law controls. Brown v. Louisiana, 447 U.S. 323, 65 L. Ed. 2d 159, 100 S. Ct. 2214 (1980). Federal law governs the retroactivity question in this case.
The New Jersey Supreme Court did not even purport to apply federal law when deciding the retroactivity question. Therefore, while Coons II may be instructive by way of analogy, it does not address the federal question implicated in the present motions.
B. Burden on Interstate Commerce : I conclude that the New Jersey Supreme Court correctly decided that interstate commerce is unconstitutionally burdened by the requirement that in order to avoid the effect of N.J.S.A. 2A:14-22 a foreign corporation must qualify to do business in New Jersey. The United States Supreme Court has held repeatedly that a state cannot discriminate against a foreign corporation engaged in interstate commerce merely because it has failed to qualify to do business in that state. E.g., Allenberg Cotton Co. v. Pittman, 419 U.S. 20, 42 L. Ed. 2d 195, 95 S. Ct. 260 (1974). This is just what New Jersey's tolling statute does. Coons I discusses in some detail application of the pertinent constitutional principles to N.J.S.A. 2A:14-22, 94 N.J. at 316-318, arriving at a conclusion with which I agree.
C. Retroactivity of Ruling of Unconstitutionality : As stated above, the question whether a ruling that New Jersey's tolling statute is unconstitutional should be applied retroactively is a federal, not a state law question. The New Jersey Supreme Court did not address the federal question. In my opinion, applying federal law, the determination that the statute is unconstitutional must be given retroactive effect and should be applied, at the very least, to the instant case. The New Jersey Supreme Court concluded, as have I, that N.J.S.A. 2A:14-22 imposes an impermissible burden on interstate commerce. That being the case, the burden should be lifted. A rule giving prospective effect to the decision of unconstitutionality permits this burden on commerce to perpetuate itself into the future. Thus if Coons II is accepted, foreign corporations engaged solely in interstate commerce will not be able to raise a limitations defense in future actions filed in New Jersey for two or six years from August 3, 1983 (depending on whether the action sounds in tort or asserts a property claim). This defeats the constitutional ruling striking down an impermissible burden on commerce. Cf., New York v. Cathedral Academy, 434 U.S. 125, 54 L. Ed. 2d 346, 98 S. Ct. 340 (1977); Lemon v. Kurtzman, 411 U.S. 192, 36 L. Ed. 2d 151, 93 S. Ct. 1463 (1973); United States v. U.S. Coin & Currency, 401 U.S. 715, 28 L. Ed. 2d 434, 91 S. Ct. 1041 (1971).
Plaintiffs urge that application of the balancing test articulated in Chevron Oil Co. v. Huson, 404 U.S. 97, 30 L. Ed. 2d 296, 92 S. Ct. 349 (1971) would require prospective application of the constitutional ruling. I do not agree. I am not at all sure that a balancing test is called for in a situation such as this where there is an immediate burden on commerce of an extensive and pervasive nature. However, even if the balancing test is applicable, it would not call for prospective application of the ruling of unconstitutionality in this case.
In Chevron the Court noted that it had recognized the doctrine of non-retroactivity outside the criminal area in both constitutional and non-constitutional cases. It stated:
In our cases dealing with the nonretroactivity question, we have generally considered three separate factors. First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, see, e.g., Hanover Shoe v. United Shoe Machinery Corp., supra, at 496, or by deciding an issue of first impression whose resolution was not clearly foreshadowed, see, e.g., Allen v. State Board of Elections, supra, at 572. Second, it has been stressed that "we must . . . weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation." Linkletter v. Walker, supra, at 629. Finally, we have weighed the inequity imposed by retroactive application, for "where a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the 'injustice or hardship ' by a holding of nonretroactivity." Cipriano v. City of Houma, supra, at 706.