On appeal from Superior Court of New Jersey, Law Division, Morris County.
Antell, Baime and Thomas.*fn1The opinion of the court was delivered by Baime, J.A.D.
This pharmaceutical products liability case presents a difficult choice of law problem. While a resident of Connecticut, Ellen Mueller ingested Dilantin pursuant to a prescription issued by her physician. It is undisputed that she was pregnant at the time she ingested the drug. Michelle, Ellen's daughter, was born in Stamford, Connecticut, on February 17, 1971, with a plastic fibular syndrome, a congenital malformation of the lower leg. This condition resulted in an amputation below the knee when Michelle was nine months old. In 1978, the Muellers
moved to Virginia, where they continue to reside. Dilantin is an anticonvulsant prescription drug manufactured by Parke, Davis & Company (Parke Davis). In 1977 Parke Davis moved its principal place of business from Michigan to New Jersey.
On January 10, 1989, plaintiffs instituted this action in the Law Division, alleging that Michelle's condition was caused by her mother's ingestion of Dilantin. Although both the New Jersey and Virginia statutes of limitation are tolled during the period of infancy, see N.J.S.A. 2A:14-21 and Virginia Code Sec. 8.01-229, Connecticut has no statutory counterpart. In Connecticut, a cause of action accrues on the date of the injury or its discovery, but suit must be commenced no more than ten years from the defendant's loss of control or possession of the product. See Conn.Gen.Stat.Ann. § 52-577a. Applying the law of the place where the wrong occurred, sometimes described as lex loci delicti, the Law Division granted defendant's motion for summary judgment and dismissed plaintiffs' complaint with prejudice. We now reverse.
In tort cases, New Jersey has rejected the traditional rule for determining choice of law based on the place where the wrong occurred. See Veazey v. Doremus, 103 N.J. 244, 247, 510 A.2d 1187 (1986); Pfau v. Trent Aluminum Co., 55 N.J. 511, 514-15, 263 A.2d 129 (1970); Mellk v. Sarahson, 49 N.J. 226, 228-29, 229 A.2d 625 (1967). Despite the advantages of uniformity, certainty and predictability often attributed to the lex loci delicti approach, mechanistic application of that rule often led to unjust results. Mellk v. Sarahson, 49 N.J. at 234, 229 A.2d 625. Consequently, we have adopted the more flexible "governmental-interest" analysis in choice-of-law decisions. Veazey v. Doremus, 103 N.J. at 247, 510 A.2d 1187; see also Heavner v. Uniroyal, Inc., 63 N.J. 130, 140-41, 305 A.2d 412 (1973).
Under that analysis, the determinative law is that of the state with the greatest interest in governing the particular issue. See, e.g., State Farm Mut. Auto Ins. Co. v. Estate of
Simmons, 84 N.J. 28, 34, 417 A.2d 488 (1980); Pfau v. Trent Aluminum Co., 55 N.J. at 514-15, 263 A.2d 129; Mellk v. Sarahson, 49 N.J. at 229-31, 229 A.2d 625. This approach requires a two-step analysis in resolving conflicts questions. Seckular v. Celotex, 209 N.J. Super. 242, 248, 507 A.2d 290 (App.Div.1986). The first step is to determine whether a conflict exists between the laws of the interested states. Veazey v. Doremus, 103 N.J. at 248, 510 A.2d 1187. This is to be decided "on an issue-by-issue basis." Ibid.; see also R. Leflar, American Conflicts Law § 92 at 185 (3d ed. 1977); R. Weintraub, Commentary on the Conflict of Laws § 6.9 at 285 (2d ed. 1980). If an actual conflict exists, the governmental policies evidenced by the laws of each jurisdiction must be identified and the factual contacts of the parties determined. Deemer v. Silk City Textile Mach. Co., 193 N.J. Super. 643, 649, 475 A.2d 648 (App.Div.1984). If a state's contacts are not related to the policies underlying its law, it has no real governmental interest in having its statute apply. Veazey v. Doremus, 103 N.J. at 248, 510 A.2d 1187.
Against this backdrop, we hold that the Law Division erred by mechanistically applying the law of the place where the wrong allegedly occurred. Instead, once having found that a conflict actually existed, the court should have determined the nexus between the parties and the policies embodied in each state's laws. Because the essential facts are not in dispute, we have decided to resolve the question rather than remanding the matter to the Law Division.
Initially, we find that the interests of both Virginia and New Jersey are paramount to those of Connecticut. Clearly, Virginia has an important governmental interest in compensating its domiciliaries. See, e.g., Schum v. Bailey, 578 F.2d 493, 503 (3d Cir.1978); Allen v. Volkswagen of America, Inc., 555 F.2d 361, 363 (3d Cir.1977); Henry v. Richardson-Merrell, Inc., 508 F.2d 28, 33 (3d Cir.1975). If, as we believe, compensation of Virginia residents is the overriding state governmental
interest, it makes little sense to focus upon the expiration date of Connecticut's limitations statute. See Pine v. Eli Lilly & Co., 201 N.J. Super. 186, 193, 492 A.2d 1079 (App.Div.1985). The fact that plaintiffs were residents of Connecticut when the wrong allegedly occurred is purely fortuitous and not bearing on Virginia's interest in compensating all its domiciliaries uniformly and without exception. Moreover, choosing the respective statute based on the timing of the domicile, as defendant urges, is arbitrary and unfair. While the "bright-line" approach advanced by defendant might ease the burden of judicial administration and reduce the danger of forum shopping, it unreasonably deprives a plaintiff of a valued right where his change of domiciles is totally unrelated to his injury and potential cause of action. Id. at 194, 492 A.2d 1079; see also Comment, Post Transaction or Occurrence Events in Conflict of Laws, 69 Colum.L.Rev. 843, 863 (1969). Within this analytical framework, Connecticut has no compelling interest in having its statute of limitations applied to defeat recovery by plaintiffs. Connecticut's rejection of tolling the expiration period during infancy is not the product of insensitivity to the need of those wrongfully injured. Instead, it is based on the countervailing considerations of social tranquility and repose. See Gurliacci v. Mayer, 218 Conn. 531, 547, 590 A.2d 914, 924 (1991); Keleman v. Rimrock Corp., 207 Conn. 599, 610, 542 A.2d 720, 725 (1988); Zapata v. Burns, 207 Conn. 496, 509, 54 ...