Clear Law on New Jersey Choice of Law

By:  Lisa M. Coutu, Esq.

 

The New Jersey Supreme Court recently issued an opinion clarifying New Jersey’s choice of law rules for determining the applicable statute of limitations in tort actions.  In McCarrell v. Hoffman-La Roche, plaintiff, an Alabama resident, filed a products-liability action against defendants Hoffmann-La Roche alleging defendants’ failed to adequately warn of their drug’s potential side effects.  Plaintiff was prescribed and took the medication in Alabama, and was treated for medication’s side effects in Alabama.  Defendants were both New Jersey corporations, who designed, manufactured, labeled, and distributed the medication in New Jersey. 
 
Plaintiff timely filed the products-liability action under New Jersey’s statute of limitations, but not under Alabama’s statute of limitations.  Defendants argued that under the Supreme Court’s prior decision in P.V. ex rel. T.V. v. Camp Jaycee, the Second Restatement’s most-significant-relationship test was the proper analytical tool for deciding choice-of-law issues, and that in this instance, Alabama had the most significant relationship to the litigation, and therefore Alabama’s statute of limitations rule should apply.
 
The Supreme Court disagreed.  While the Camp Jaycee decision remains good law, the Court relied upon the most-significant-relationship test in Sections 145 and 146 of the Restatement, which only applies to resolve conflicts of substantive law in tort actions, not choice-of-law for statutes of limitations issues.  This is because “the essential purpose of substantive tort law is to provide a remedy to a party who has been wronged, whereas the essential purpose of a statute of limitations is to encourage litigants to file timely claims and to bar the litigation of stale claims.” Instead, for statute of limitations issues, Section 142 of the Restatement applies, which dictates that “the statute of limitations of the forum state generally applies whenever the state has a substantial interest in the maintenance of the claim.”  It is only if the forum state has “no substantial interest” in the maintenance of the claim does a court consider whether the claim would be barred under the statute of limitations of a state having a more significant relationship to the litigation.  In this instance, as New Jersey “has a substantial interest in deterring its manufacturers from developing, making and distributing unsafe products, including inadequately labeled prescription drugs,” therefore New Jersey’s statute of limitations applied, and the plaintiff could proceed.