On appeal from the Superior Court of New Jersey, Law Division, Camden County.
Before Judges Michels and Keefe.
The opinion of the court was delivered by MICHELS, P.J.A.D.
Plaintiffs Joseph H. Taylor and Louise Taylor appeal from a summary judgment of the Law Division that dismissed their personal injury tort action against defendant Daniel Rorke. Plaintiffs sought to recover non-economic losses sustained by plaintiff Joseph H. Taylor as a result of an automobile accident. The trial court dismissed the action because plaintiffs failed to satisfy the verbal threshold requirements of the New Jersey Automobile Reparation Reform Act codifed under N.J.S.A. 39:6A-1 et seq. (Commonly referred to as our No-Fault Law). At issue is whether N.J.S.A. 17:28-1.4, often referred to as "The Deemer Statute," violates the Privileges and Immunities Clause of the United States Constitution.
Joseph Taylor was injured when the automobile that he was driving was struck by a vehicle driven by defendant. At the time of the accident, Joseph Taylor was a domiciliary of the state of North Carolina and was driving his North Carolina registered and insured automobile. As a result of the accident, Joseph Taylor suffered soft tissue injuries to his cervical spine and back. It was conceded at trial that his injuries were not of sufficient severity to pierce the verbal threshold of N.J.S.A. 39:6A-8a.
Defendant moved for summary judgment on the ground that plaintiffs were subject to the verbal threshold requirements of our No-Fault Law in accordance with N.J.S.A. 17:28-1.4, and, therefore, they were barred from proceeding with their claims. Plaintiffs responded by challenging the constitutionality of N.J.S.A. 17:28-1.4. They argued that they should not be subject to the verbal threshold requirements of the No-Fault Law because the application of the statute to their claims would violate the Privileges and Immunities Clause of the United States Constitution. The trial court disagreed and granted summary judgment in favor of defendant, holding that plaintiffs, as out-of-state residents insured by an insurance company authorized to do business in New Jersey, were deemed to be subject to the verbal threshold requirements of our No-Fault Law pursuant to N.J.S.A. 17:28-1.1. And, since they failed to satisfy the requirements under that statute, they could not maintain this action.
The sole issue raised by plaintiffs is whether N.J.S.A. 17:28-1.4 violates the Privileges and Immunities Clause of the United States Constitution, and is therefore unconstitutional. In order to resolve this issue, it is necessary to understand the New Jersey no-fault insurance statute and the interpretation and application of the Privileges and Immunities Clause.
Under New Jersey's current insurance scheme, with respect to non-economic injuries, New Jersey residents must choose between the more expensive "full coverage" option, or the less expensive "verbal threshold" option. Dyszel v. Marks, 6 F.3d 116 (3d Cir. 1993). Nonresidents are also subject to our No-Fault Law. N.J.S.A. 17:28-1.4, applies where an out-of-state driver or vehicle is involved in an automobile accident in New Jersey, and expressly provides:
Any insurer authorized to transact or transacting automobile or motor vehicle insurance business in this State, or controlling or controlled by, or under common control by, or with, an insurer authorized to transact or transacting insurance business within this State, which sells a policy providing automobile or motor vehicle liability insurance coverage, or any similar coverage, in any other state or in any province of Canada, shall include in each policy coverage to satisfy at least the liability insurance requirements of...39:6B-1 or...39:6A-3, the uninsured motorist insurance requirements of...17:28-1.1, and personal injury protection benefits coverage pursuant to 39:6A-4, whenever the automobile or motor vehicle insured under the policy is used or operated in this State.
Any liability insurance policy subject to this section shall be construed as providing the coverage required herein, and any named insured, and any immediate family member as defined in...39:6A-8.1, under that policy, shall be subject to the tort option specified in...39:6A-8.
N.J.S.A. 17:28-1.4 requires any insurer authorized to transact business in New Jersey to include New Jersey personal injury protection (PIP) coverage in a policy which is sold in another state whenever the automobile insured under the policy is operated in New Jersey. Adams v. Keystone Ins. Co., 264 N.J. Super. 367, 371, 624 A.2d 1008 (App. Div. 1993). At the same time, N.J.S.A. 17:28-1.4:
limits the right of non-residents of New Jersey to sue for non-economic (pain and suffering) loss by automatically assigning the so called verbal threshold tort option under N.J.Stat.Ann. § 39:6A-8(a) to out-of-state residents involved in accidents occurring in the State of New Jersey, solely on the basis of whether their automobile (auto) insurance carrier is authorized to transact business in the State of New Jersey. [Dyszel v. Marks, supra, 6 F.3d at 119].
Plaintiffs contend that this statute is unconstitutional because nonresidents do not have the ability, as New Jersey residents do, to elect whether or not to be subject to the verbal threshold. Therefore, the automatic assignment of the verbal threshold option to nonresidents constitutes discrimination against nonresidents, violating ...