OPINION OF THE COURT
GARTH, Circuit Judge.This is an appeal from an order granting the defendant’s motion for summary judgment in a diversity action brought in United States District Court for the District of New Jersey. The district court concluded that plaintiff’s claim was time-barred under the New York statute of limitations for medical malpractice claims. The plaintiff, Diana M. Schum, is a New Jersey resident. In her complaint she alleges that the defendant, Charles P Bailey, M. D., a resident of New York, subjected her to unnecessary surgery in St. Barnabas Hospital in the *494Bronx, New York, on October 25, 1967, and to resulting treatment in New York until October 21, 1970. We conclude that the district court should have applied the New Jersey statute of limitations. Since under that statute plaintiff’s complaint may not be time-barred, we reverse the judgment below.
I
In March of 1974, Schum filed her diversity complaint in the District of New Jersey.1 On September 23, 1974, defendant Bailey responded with a motion to dismiss the complaint for lack of personal jurisdiction, asserting by affidavit that although licensed in New Jersey as well as in New York, he had not practiced in New Jersey since 1938 and had no affiliation with any New Jersey hospital during the relevant times to which Schum’s complaint referred.
While that motion was under consideration, Schum filed a second complaint in the United States District Court for the Southern District of New York. That complaint was identical to the complaint filed in the New Jersey action. On November 7, 1974, the New Jersey district court dismissed the complaint as to Bailey, holding that Dr. Bailey’s contacts with New Jersey provided an insufficient basis for personal jurisdiction over him. Schum did not appeal from that judgment.
In the then pending New York action Bailey moved for summary judgment alleging that Schum’s cause of action was time-barred by New York’s three-year statute of limitations. The district court in New York agreed with Bailey and on June 23, 1975, dismissed Schum’s complaint as barred by the statute of limitations. The district court’s opinion discussed only the New York statute of limitations as it applied to Schum’s action. That opinion makes no reference to any possible conflict between New York law and New Jersey law. Schum v. Bailey, 398 F.Supp. 164 (S.D.N.Y. 1975) . Schum appealed to the United States Court of Appeals for the Second Circuit, which affirmed without opinion the district court’s order. 538 F.2d 313 (2d Cir. 1976) .
Subsequent to the Southern District’s disposition, Schum’s attorney acquired information that Bailey, at the times in question, was in fact a staff member of, and performed professional services at, at least two New Jersey medical facilities. Accordingly, in October 1975, Schum filed a motion in the district court for the District of New Jersey seeking to set aside “the order of dismissal of the complaint as to Charles P Bailey, M.D., entered in this Court on November 7, 1974, based on new evidence under Rule 60(b).” The motion was accompanied by affidavits which contradicted the earlier Bailey affidavit upon which the district court had relied when it dismissed the complaint against Bailey in November, 1974. On June 22, 1976, Schum’s motion was granted and the court restored Schum’s complaint to the trial calendar.
Once again Bailey moved for summary judgment claiming that “under New Jersey choice of law principles the New York statute of limitations applies and all causes of action . . . are barred by the New York limitations.” (A-19).2 The New Jersey district court granted Bailey’s motion for summary judgment on January 6, 1977. Had it accepted Schum’s argument that the New Jersey statute of limitations applied, the court would have been faced with the applicability of the rule of Lopez v. Swyer, 62 N.J. 267, 300 A.2d 563 (1973). In Lopez, the New Jersey Supreme Court held that the New Jersey two-year statute of limitations does not begin to run until the injured party knows, or reasonably should know, *495not only of the injury but also of the basis for the actionable claim. Schum contends that she did not learn until 1973 that her 1967 surgery had been unnecessary. Thus, if the New Jersey statute of limitations applies, there would be a material fact issue as to when the statute began to run, and summary judgment would be precluded. See Goodman v. Mead Johnson & Co., 534 F.2d 566 (3d Cir. 1976). This appeal followed from the district court’s order of January 6, 1977.
II
Under Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1940), a federal court sitting in diversity applies the choice of law principles of the forum state. Thus, the conflict at issue here between the New York and New Jersey statutes of limitations is properly resolved by the application of the choice of law principles of New Jersey.
Prior to 1973, the New Jersey courts generally viewed statutes of limitations as purely matters of procedure, and had followed the common law lex fori rule that the forum state would always apply its own statute of limitations regardless of which state’s law governed the substantive issues in the case. In 1973, the New Jersey Supreme Court in Heavner v. Uniroyal, Inc., 63 N.J. 130, 305 A.2d 412 (1973), abandoned this rule. The court recognized that the rule of lex fori did not comport with an interest-based approach to resolving choice of law problems — an approach which had been adopted by New Jersey in a series of cases beginning with Mellk v. Sarahson, 49 N.J. 226, 229 A.2d 625 (1967).
In Heavner, a husband and wife, residents of North Carolina, sued on claims arising out of the purchase in North Carolina of an allegedly defective tire manufactured by Uniroyal, a New Jersey corporation. The accident occurred in North Carolina and the motor vehicle involved in the accident was registered there. Since Uniroyal was a New Jersey corporation it was amenable to suit in the New Jersey court. This contact alone, however, was deemed insufficient to give New Jersey an interest in applying its more favorable products liability law to the case.
Noting the unsoundness of the lex fori rule, and recognizing the existence in other jurisdictions of “borrowing” statutes which provide for the application of a foreign statute of limitations under certain circumstances, the New Jersey Supreme Court in Heavner fashioned a judicial “borrowing” rule of its own. The court stated:
We need go no further now than to say that when the cause of action arises in another state, the parties are all present in and amenable to the jurisdiction of that state, New Jersey has no substantial interest in the matter, the substantive law of the foreign state is to be applied, and its limitation period has expired at the time suit is commenced here, New Jersey will hold the suit barred. In essence, we will "borrow” the limitations law of the foreign state.
63 N.J. at 140-41, 305 A.2d at 418. This result was predicated on the conclusion that under a governmental interest analysis New Jersey would apply North Carolina’s substantive law to the cause of action, 63 N.J. at 135 n.4, 305 A.2d at 414 n.4. Since the claim would be time-barred in North Carolina, the court held it would also be time-barred in New Jersey.
Ill
A
We glean from Heavner that the critical determination underlying the “borrowing” of a foreign statute of limitations is a determination as to whether a foreign substantive law is to be applied. The threshold question here, therefore, is whether New York’s or New Jersey’s substantive law governs Schum’s action against Bailey. If, as in Heavner, New Jersey has no substantial interest in Schum’s action, then New York’s substantive law would govern. In such a case the district court, applying the principle of Heavner, might not have erred in borrowing New York’s statute of limita*496tions and granting summary judgment for Bailey. If, on the other hand, it is determined that New Jersey, the forum state, does have a substantial interest such as to invoke the application of its own substantive law, then the district court, following Heavner, would be constrained to apply the relevant limitations law of New Jersey, and on this record could not have granted Bailey’s motion for summary judgment.
B
This court’s initial consideration of Heavner is to be found in Henry v. Richardson-Merrell, Inc., 508 F.2d 28 (3d Cir. 1975). The plaintiffs in Henry were all mothers, domiciliaries of Quebec, for whom thalidomide had been prescribed during pregnancy. The complaint alleged certain defects respecting the drug. Baker, a subsidiary of the defendant Richardson-Merrell (a Delaware corporation) had manufactured an active ingredient of the drug in its New Jersey plant. The central issue presented to this court by Henry was whether the Quebec or the longer New Jersey statute of limitations should be applied. The district court in Henry had found that New Jersey was “sufficiently interested” and thus applied New Jersey law. On appeal this court reversed, holding that the plaintiffs' suit was time-barred under the applicable Quebec statute of limitations. In so holding, Henry characterized New Jersey’s governmental-interest approach to choice of law questions as one requiring a two-step analysis. We stated in Henry that:
The court determines first the governmental policies evidenced by the laws of each related jurisdiction and second the factual contacts between the parties and each related jurisdiction. A state is deemed interested only where application of its law to the facts in issue will foster that state’s policy. This approach does not count up contacts and make quantitative determinations of interest based on which state has the greatest number of contacts. Instead, the qualitative nature of contacts is considered so that only contacts which are likely to promote valid state policies are considered relevant.
Id. at 32. (footnotes omitted.)
In Henry, and thereafter in Allen v. Volkswagen of America, Inc., 555 F.2d 361 (3d Cir. 1977) (per curiam), we identified New Jersey’s policies in a tort context as consisting primarily of compensation and deterrence. We said in Henry that “[t]he primary purpose of a torts recovery is to compensate plaintiffs for their injury.” We also noted that “[a]n alternate purpose of torts suits is to exact compensation from the tortfeasor in order to deter future misconduct.” 508 F.2d at 33 (footnote omitted).
Having identified the relevant policies, and, having examined them in light of this factual context, it becomes evident that both policies would be served by the application in this case of New Jersey’s own law. Moreover, assuming that the policies of New York in this self-same context are similar to those of New Jersey, it is apparent that the application of New Jersey law in no way conflicts with any New York interest.
Turning to the second step of the Henry formula (factual contacts), it is clear that New Jersey’s strong interest in protecting compensation rights of its domiciliaries is implicated here. Schum, unlike the plaintiff in Heavner, is a domiciliary of New Jersey. Thus New Jersey — which had no interest in protecting any compensation rights of the plaintiff in Heavner — has a strong interest in compensating Schum as a domiciliary plaintiff. The New Jersey cases have almost uniformly applied New Jersey law in instances in which the state had a significant compensation interest, viz., where the plaintiff was a New Jersey domiciliary. See, e. g., Rose v. Port of New York Authority, 61 N.J. 129, 293 A.2d 371 (1972); Mellk v. Sarahson, 49 N.J. 226, 229 A.2d 625 (1967); Wuerffel v. Westinghouse Corp., 148 N.J.Super. 327, 372 A.2d 659 (Law Div.1977); Raskulinecz v. Raskulinecz, 141 N.J.Super. 148, 357 A.2d 330 (Law Div.1976). New York, on the other hand, while presumably having a strong interest *497in the compensation of its own domiciliar-ies — a policy similar to that of New Jersey — would have no interest in compensating a non-domiciliary such as Schum. Therefore the interests of the two states in this respect are not in conflict.
With respect to the deterrence interest, the record discloses that Dr. Bailey had significant contacts with New Jersey — contacts that readily distinguish his status as a physician licensed and practicing in New Jersey from the “mere incorporation” or other minimal presence held insufficient to give New Jersey a deterrence interest in Heavner, Henry, and Allen.3 Bailey is not a nationally dispersed corporate “presence”, but is rather an individual physician who has been licensed to practice medicine in New Jersey. More importantly, Bailey was an active member of the staff of St. Michael’s Medical Center in Newark from 1950-1953, served there variously as a consultant in Cardio-Surgery and an attending surgeon from 1954-1973, and was placed on “active” staff both at St. Michael’s and at the Jersey City Medical Center in 1973. The continuing probability of doctor-patient relationships between a physician such as Bailey and New Jersey residents is very real. Clearly then New Jersey has an interest in deterring any tortious conduct on the part of medical practitioners such as Bailey.4
Since New York is both Bailey’s domicile and a state where he is licensed and maintains an office for the practice of medicine, and since New York is as well the locus of the alleged tort, New York too would have a deterrence interest with respect to physicians such as Bailey. It does not appear that New York’s substantive law of liability differs from that of New Jersey. Thus, assuming New York’s interest in deterring Bailey’s ■ tortious conduct is the same as New Jersey’s, that interest is adequately served by application of New Jersey law in this case.
Since this record reveals no conflict between New York and New Jersey insofar as the application of their substantive laws is concerned, and since the record also reveals that New Jersey has a substantial interest in the application of its own law, we conclude that New Jersey, as an interested forum, would apply its own law of liability. See Pfau v. Trent Aluminum, 55 N.J. 511, 263 A.2d 129 (1970); Rose v. Port of New York Authority, supra; B. Currie, Selected Essays on the Conflict of Laws 270-71 (1963); See generally Sedler, The Governmental Interest Approach to Choice of Law, 25 U.C.L.A.L.Rev. 181 (1977).
Having concluded that New Jersey, the forum state, has substantial interests in Schum’s action such as to warrant application of its own substantive law, it is clear that, under any choice of law test5 the *498appropriate statute of limitations to be applied is that of New Jersey.
IV
We cannot conclude our discussion without mention of a separate ground for decision apparently urged by the defendant Bailey. In his motion for summary judgment made before the district court, Bailey adverted to the principles of collateral es-toppel and res judicata in just three sentences:
Once “borrowed,” it is clear that the New York Statute of Limitations bars the plaintiff’s cause of action herein. This issue has been raised and decided by the United States District Court for the Southern District of New York applying the principles of New York Law. It would seem that the principles of collateral estoppel and res judicata proscribe the plaintiff from relitigating these issues in another form.
Appendix at 24.
Before us Bailey did not argue res judica-ta or any related doctrine as a ground of appeal. However, on the last page of his brief, the following appears:
This issue [whether the suit was time-barred by the New York statute of limitations] was raised and decided by the United States District Court for the Southern District of New York applying the principles of New York law, and its determination has been affirmed by the Court of Appeals for the Second Circuit. Moreover, the principle of res judicata prevents the plaintiff from relitigating this issue in another forum.
Appellee’s Brief at 18.
Those few sentences comprise the whole of the discussion of res judicata and the effect, if any, of the New York determination on the present litigation. Our examination of the opinion rendered by the court in the Southern District of New York, which held that the New York statute of limitations barred Schum’s complaint, reveals no discussion whatsoever as to any-conflict of laws issue. In particular no question was raised as to whether New York law or New Jersey law was to apply. Recognizing that, at the time of the New York action and the New York decision, Sehum had no knowledge of Bailey’s New Jersey relationships — a knowledge which she subsequently obtained through investigation and which revealed Bailey’s New Jersey hospital associations — she obviously could not and did not urge the conflict issue in the New York forum.
Other than the two sentences which appear in Bailey’s brief, neither party here has briefed this issue. Moreover, of greater significance, the district court did not address itself in any respect to that concern. Accordingly it would be inappropriate for us to decide the res judicata issue on this record. See New Jersey Education Association v. Burke, 579 F.2d 764 at 776 (3d Cir. May 1,1978). If on remand such an issue is raised by the defendant Bailey, it will be for the district court to resolve it in the first instance.'
V
The order of the district court granting summary judgment in favor of the defendant Bailey will be reversed. The case will be remanded for further proceedings consistent with this opinion.6
. Schum’s complaint named a number of defendants other than Dr. Bailey. As appears from the record, Schum has either abandoned her claim against these defendants or has not appealed from or moved to reopen dispositions made as to the others. Hence, Dr. Bailey is the only defendant against whom Schum is presently claiming in this proceeding, and jurisdiction obtains in this court under 28 U.S.C. § 1291.
. It is undisputed that New York’s three-year statute of limitations ran prior to the March, 1974 filing date of Schum’s New Jersey action.
. In Allen, California plaintiffs sought damages against Volkswagen of America, a New Jersey corporation, for defects in design and manufacture, and breach of sales warranty, of the car in which they were riding when injured in an accident in California. The court found that “[vjery little business . . was done in New Jersey.” Rather, Volkswagen’s regional office in California had ordered, received, and distributed the automobile in question.
. The district court in its analysis completely ignored the associations which Bailey had with New Jersey hospitals. It also erred in focusing on an analysis of the respective limitations statutes of New Jersey and New York, an analysis which we rejected in Henry, 508 F.2d at 32 n.10.
. Other than the fact that the cause of action arose in New York, the balance of the Heavner calculus (as that is interpreted in Allen) requires the application of the New Jersey statute of limitations. Indeed, it is not clear to us that the Heavner-Allen balancing concept is required in the present context where the forum state has a substantial interest, rather than where the forum state is completely disinterested. See Allen, 555 F.2d at 364 (Seitz, C. J., concurring):
Plaintiffs’ sole contention is that New Jersey has a substantial interest in the application of its statute of limitations in the present case. I agree with plaintiffs that, under Heav-ner, if it is determined that New Jersey has a substantial interest in applying its law, the New Jersey courts would, without more, apply New Jersey’s own limitation period. They would not, in this situation at least, balance among all five of the Heavner factors.
It should not be overlooked that in Heavner, Henry and Allen New Jersey was held to have *498had no substantial interest. As such, in each instance, foreign law rather than New Jersey law was applied.
. In light of Judge Gibbons’ concurrence in this case, it may be useful to note the points upon which the majority and the concurrence diverge.
First, it seems that until the Supreme Court chooses to reconsider the rule in Klaxon, we
are bound by the principles of Klaxon and therefore we should not hesitate (as the concurrence suggests) in applying the settled law of that case. Moreover, we do not fully share the concurrence’s “misgivings” regarding the Klaxon rule. Cf. Concurring Op. at 502-503.
Second, under our view, this Court’s decision in Allen v. Volkswagen of America, Inc., 555 F.2d 361 (3d Cir. 1977), reaffirming Henry v. *499Richardson-Merrell, 508 F.2d 28, 32 (3d Cir. 1973) (which interpreted Heavner), frames the statute of limitations issue so far as New Jersey is concerned. Therefore it appears to us that discussion of Allen and Henry is relevant to the resolution of this case.
Third, the res judicata defense was neither squarely raised before nor passed upon by the district judge; it also was not meaningfully briefed before us. Since a claim of res judicata is best resolved initially by a trial court, we believe that we need not explore the procedural questions dealt with by the concurrence. Concurring Op. at 504-506.