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COHN v. G.D. SEARLE & CO.

December 7, 1984

SUSAN COHN and WALTER COHN, her husband, Plaintiffs,
v.
G.D. SEARLE & CO., Defendant



The opinion of the court was delivered by: DEBEVOISE

 DEBEVOISE, District Judge.

 Procedural History

 Plaintiffs, Susan and Walter Cohn, who are husband and wife, instituted this action in the New Jersey Superior Court against defendant G.D. Searle & Co. The complaint alleges that Susan Cohn suffered a stroke and that the stroke was caused by her use of an oral contraceptive manufactured by Searle.

 Susan Cohn's stroke occurred in 1963. In late 1969 or 1970 plaintiffs became aware that there may have been a causal link between use of the contraceptive and the stroke. Suit was instituted in 1974, more than ten years after the stroke and approximately four years after plaintiffs became aware of the possibility of a causal relationship between the stroke and Searle's contraceptive.

 After removing the case to this court Searle moved for summary judgment based upon New Jersey's 2-year statute of limitations. N.J.S.A. 2A:14-2. Plaintiffs resisted the motion, relying on N.J.S.A. 2A:14-22 which tolls the statute of limitations for a cause of action against a foreign corporation that "is not represented" in New Jersey "by any person or officer upon whom summons or other original process may be served." Judge Meanor, to whom the case was then assigned, granted Searle's motion, ruling that the tolling provision was invalid under the Equal Protection Clause and that, therefore, the 2-year statute of limitations barred plaintiffs' action. Cohn v. G.D. Searle & Co., 447 F. Supp. 903 (D.N.J. 1978).

 Plaintiffs appealed. The Court of Appeals reversed, holding that there was a rational basis for the tolling provisions and that consequently the New Jersey statute does not violate the Equal Protection Clause. Hopkins v. Kelsey-Hayes, Inc., 628 F.2d 801 (3d Cir. 1980).

 The United States Supreme Court granted certiorari. It too concluded that the New Jersey statute does not violate the Equal Protection Clause. G.D. Searle & Co. v. Cohn, 455 U.S. 404, 71 L. Ed. 2d 250, 102 S. Ct. 1137 (1982). In a footnote it addressed Searle's due process contentions. As to the argument that the tolling statute violates due process by unfairly and irrationally denying certain foreign corporations the benefit of the statute of limitations without furthering any legitimate societal interest, the Court stated that "this due process argument is nothing more than a restatement of [Searle's] equal protection claim." 455 U.S. at 412, n. 7. Because it was not raised in the Court of Appeals the Court declined to address Searle's other due process argument, namely, that it was deprived of due process because it could obtain the benefit of New Jersey's statute of limitations only by appointing an agent to accept service, and that such appointment would subject it to suit in New Jersey when there otherwise would not be the minimum contacts required for suit. International Shoe Co. v. Washington, 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154 (1945).

 The Supreme Court discussed but did not decide the question whether the tolling provision violates the Commerce Clause. It did not resolve this issue for two reasons. First, neither the district court nor the Court of Appeals addressed the question directly, although in a footnote the district court suggested that the tolling provision would violate the Commerce Clause. 447 F. Supp. at 911, n. 17. Second, it was unclear under New Jersey law whether the tolling statute required a corporation to register to do business in New Jersey pursuant to N.J.S.A. 14A-13-2 in order to obtain the benefit of the statute of limitations or whether the mere appointment of an agent would suffice.

 In view of the unsettled state of New Jersey's law, the Court remanded the case to the Court of Appeals so that it might "determine whether [Searle's] Commerce Clause argument, if it was properly raised below, has merit." 455 U.S. at 414. The Court of Appeals remanded the case to this court for a decision on the validity of the tolling statute under the Commerce Clause. Hopkins v. Kelsey-Hayes, Inc., 677 F.2d 301 (3d Cir. 1982).

 The New Jersey Supreme Court has now eliminated any ambiguity which may have existed in the tolling statute. In Coons v. American Honda Motor Co., 94 N.J. 307, 463 A.2d 921 (1983) it held (i) that foreign corporations may designate an agent for service of process only by obtaining a certificate of authority to do business; (ii) the tolling statute is a forced licensure provision and as such is in violation of the Commerce Clause; and (iii) the decision would be given retrospective effect, making it applicable to all matters that had not reached final judgment at the time of that decision.

 Thereafter the plaintiff in Coons, supported by numerous amici curiae (including the plaintiffs in the instant case), filed a petition for rehearing on all issues. The Court granted the petition, limited to the retroactivity issue. After rehearing and further consideration it changed its position on retroactivity and a majority of the Court ruled: "We now hold as a matter of state law that Coons I is to be applied prospectively only, from the date of that decision, August 3, 1983." As further explicated by the Court, ". . . the statute of limitations as to foreign, unrepresented corporations commences to run as of [August 3, 1983]." Coons v. American Honda Motor Co., Inc., 96 N.J. 419, 422, 435, 476 A.2d 763 (1984).

 Although the New Jersey Supreme Court decided only the state law retroactivity question, it discussed both state and federal cases and proceeded as if state law and federal law on the subject were ...


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