Coons v. American Honda Motor Co., Inc.

GARIBALDI, J.,

dissenting.

On August 3, 1983 in Coons v. American Honda Motor Co., 94 N.J. 307 (1983) (Coons I), we held that N.J.S.A. 2A:14-22 imposes an unconstitutional burden on interstate commerce in violation of the commerce clause, U.S. Const. art. 1, § 8, cl. 3. We further stated that this decision “should be given retrospective effect, consistent with the general rule applied in civil cases that a new ruling shall apply to all matters that have not reached final judgment.” Id. at 319. Today, less than 8 months later, the majority reverses our decision in Coons I with respect to retroactivity and holds that the decision in Coons I should be applied prospectively to all parties from the date of that decision August 3, 1983. We disagree.

Justices Schreiber and Pollock would apply our decision in Coons I retroactively to all parties presently before the Court including amici: G.D. Searle & Co., Kelsey-Hayes Co. and Brinco Mining Limited, but would apply the decision prospectively as to everyone else. I agree with my dissenting breth*436ren, but would go further and accord our Coons I decision retroactive effect “across the board.”

I

Irrespective of the general retroactivity of the Coons I decision, there should be no question that those responsible for effecting the change in law should benefit by their efforts. It has long been the position of this Court that “fundamental fairness” compels that “champions of the cause” should be rewarded for their effort and expense in challenging existing law. We need private attorneys to push forward the frontiers of the law, but we will not have them if they stand to gain nothing through their efforts.

As we have held in Goldberg v. Traver, 52 N.J. 344, 347 (1968), “[u]nless the immediate litigant can hope to gain, there would be no incentive to challenge existing practices or prior holdings which, in the public interest ought to be reviewed.” And as Chief Justice Weintraub observed in Willis v. Department of Cons. & Econ. Dev., 55 N.J. 534, 541 (1970):

As to the plaintiffs in this case, the decision should be applied, and this for the practical reason that case law is not likely to keep up with the needs of society if the litigant who successfully champions a cause is left with only that distinction.

This Court set forth similar policy reasons when we held that our decisions would be prospectively applied, except as to the litigants before the Court, in the following cases: Cogliati v. Ecco High Frequency Corp., 92 N.J. 402, 417 (1983) (decisions extending responsibility of predecessor in title for maintenance of public sidewalks, applied prospectively except as to parties); Spiewak v. Rutherford Bd. of Educ., 90 N.J. 63, 82-83 (1982) (overruling of prior decision in Point Pleasant Beach Teachers’ Ass’n v. Callam, 173 N.J.Super. 11, certif. den., 84 N.J. 469 (1980), applied prospectively except as to parties before court); Pascucci v. Vagott, 71 N.J. 40, 50-51 (1976) (setting aside of classification standards under welfare statute applied prospectively except as to litigants); and Darrow v. Hanover Town*437ship, 58 N.J. 410, 420 (1971) (abrogation of doctrine of inter-spousal immunity in automobile negligence cases applied prospectively except as to litigants).

Recently, we held that as a matter of fundamental fairness a new rule of strict liability in a products liability case should be extended to all plaintiffs similarly situated. Ramirez v. Amsted Industries, 86 N.J. 332 (1981). In Ramirez we said:

Therefore, we apply the new rule to the present case and its companion, Nieves v. Bruno-Sherman Corp. & Harris Corp., 86 N.J. 361. Moreover, we conclude that on balance and as a matter of fundamental fairness, the benefit of today’s rule should be extended to other similarly situated plaintiffs with products liability suits against successor manufacturers affected by this rule, which suits were in progress as of November 15, 1979, the date of the Appellate Division decision. There is a basic justice in recognizing that persons who have exercised the initiative to challenge the existing law should be accorded relief if their claims — not yet resolved when the new rule of law is announced—are ultimately vindicated, (emphasis added) [Id., [86 N.J.] at 357.]

The fundamental principles of basic fairness contemplated by this Court in Ramirez are particularly appropriate in the instant case. For years the parties here have waged protracted legal battles over the constitutionality of the tolling statute. Defendant Honda has been fighting this suit for over 5 years. It has been an extraordinarily hard fought battle in both the state and federal courts, as a brief history of the litigation demonstrates. The majority opinion, ante at 422-423, sets forth the procedural history of this case. That history reveals: arguments in this state’s trial court and Appellate Division; denial of cross-motions for leave to appeal to this Court; vacation of the judgment and remand by the United States Supreme Court; certification by this Court on our own motion; our Coons I decision, declaring that the tolling statute unconstitutionally burdens interstate commerce and that our decision should be given retroactive effect; and finally, this case, Coons II, a rehearing of the retroactivity issue only. Even the most superficial glance at this procedural history indicates that the road to today’s decision has been a tortuous one.

The amici likewise have engaged in an extraordinarily protracted and tenacious pursuit of this issue through the Federal *438District Court to the United States Court of Appeals and finally to the United States Supreme Court. As the majority recognizes, Searle and Kelsey-Hayes are the originators of the prevailing commerce clause theory and Brinco has persistently espoused the cause. Ante at 434-435.

Certainly Searle and Kelsey-Hayes have “championed the cause.” They have challenged the constitutionality of this statute longer than any other party. But for the Supreme Court decision in G.D. Searle & Co. v. Cohn, 455 U.S. 404, 102 S.Ct. 1137, 71 L.Ed.2d 250 (1982) and the subsequent remand of the Coons case, the commerce clause issue would not have been decided by this Court at this time.

Brinco likewise long has challenged the tolling statute’s constitutionality. It joined the Searle case as an amicus in the Supreme Court and filed an amicus brief devoted exclusively to the commerce clause. After the Supreme Court remanded Coons to the Appellate Division in light of its decision in Searle, Brinco obtained leave to file an amicus brief and to argue before us.

Given the especially long and arduous history of this appeal, there is no valid reason to depart from established judicial principles. Basic justice and principles of fundamental fairness demand that the defendant and amici in this case have the Coons I decision applied retroactively to them. When a statute’s unfair and discriminatory features render it offensive to the supreme law of our land, it is just to resolve the matter so that the challenging litigants be spared further constitutional deprivation. Only in this fashion may the unconstitutional burden which has heretofore been placed upon them be eradicated.

The majority’s excuse for not applying these well-recognized standards to the defendant and amici is that they are institutional litigants and hence will suffer no injustice. Whatever merit attends that argument is insufficient to carry the day. All litigants should be treated equally before the courts. More*439over, defendant and amici certainly will suffer an injustice if Coons I is not applied to them retrospectively. Under today’s decision not only the present plaintiffs in this action and in cases in which amici are involved will have an unconstitutional cause of action, but until August 3, 1985 (two years from our decision in Coons I) plaintiffs who have sat on their rights will be able to institute actions against these parties and impose additional unconstitutional burdens upon them.

II

While my fellow dissenters would limit the retroactive application of Coons I to the parties before the Court today, I would go further; I would hold that Coons I should be given complete retroactive effect. This Court has generally adhered to the principle that “the presumption is in favor of retrospectivity, and that presumption can be overcome only by a clear demonstration in a particular ease that there are sound policy reasons for according a judicial decision prospective application only.” Cogliati v. Ecco High Frequency Corp., supra, 181 N.J.Super. at 583. In my opinion, plaintiffs have failed to meet their burden of demonstrating good reasons for prospective application in this case. See Mirza v. Filmore Corp., 92 N.J. 390, 396-97 (1983); Busik v. Levine, 63 N.J. 351, 360-61, app. dism. 414 U.S. 1106, 94 S.Ct. 831, 38 L.Ed.2d 733 (1973); Darrow v. Hanover Township, 58 N.J. 410, 413 (1971); Fox v. Snow, 6 N.J. 12, 14 (1950); Ross v. Board of Chosen Freeholders of Hudson Cty., 90 N.J.L. 522 (E. & A. 1917); Goncalvez v. Patuto, 188 N.J.Super. 620, 626 (App.Div.1983); Cogliati v. Ecco High Frequency Corp., supra, 181 N.J.Super. at 582.

Our law of retroactivity is based on the same considerations that underlie retroactivity theory of the Supreme Court. In civil actions, we have recognized standards similar to the tests set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed. 2d 296 (1971). In that case the Supreme Court looked to three factors to determine the retroactivity question: *440(1) whether the decision establishes a “new principle of law;” (2) whether retroactive operation of the decision would further or retard the purpose of the new rule; and (3) whether retroactive application would work an injustice upon those who had reasonably relied upon the old rule. 394 U.S. at 106-107, 92 S.Ct. at 355, 30 L.Ed.2d at 306; see Mirza v. Filmore Corp., 92 N.J. 390, 397 (1983) (applying similar test when overruling prior judicial precedent in civil action); see also State v. Burstein, 85 N.J. 394, 406 (1981) (applying similar test in the context of changing interpretation of criminal statute).

The threshold issue in any retroactivity decision is whether or not a new rule of law or judicial principle has been announced. In defining the threshold question in the court context, we have consistently followed the liberal “new rule of law” standard set forth in Chevron. See Salorio v. Glaser, 93 N.J. 447, 465 (1983).

Although the tolling statute had been criticized and court decisions challenged its constitutionality, my review of the statute’s history and the relevant cases leads me, as it did the majority, to conclude that our decision in Coons I amounted to a statement of first impression. Therefore, applying the first Chevron test, I agree with the majority that the decision in Coons I established a new rule of law.

My disagreement with the majority stems from my belief that it is improperly applying the second and third tests of Chevron. Turning to an examination of the second Chevron test, the prospective application of Coons I clearly frustrates the purpose of that decision. In applying Coons I prospectively, the majority ignores that its purpose was to strike down an unconstitutional statute. Today the majority countenances the very unconstitutionality that we sought to abrogate in Coons I. When the very law that prejudices the litigant cannot withstand a constitutional challenge, only extraordinarily strong policy reasons (as present in Salorio) justify limiting the new rule to prospective application.

*441The majority primarily bases its holding upon its analysis of the third Chevron factor and erroneously holds that retroactive application would be unjust to the plaintiff in this case because of his reliance upon the unconstitutional statute. An examination of the record discloses, however, that the parties in this case did not place any reliance whatsoever upon the tolling statute. Plaintiff Coons brought suit against Honda as soon as he realized that he had a cause of action; Amicus Cohn did not file suit immediately because he believed that the theory of causation was too tenuous. Finally, Roy Hopkins asserted that he was unaware that he might have a cause of action against Kelsey-Hayes, Inc., until after the statute of limitations had run.

Today the majority holds that actual reliance need not be shown, but that the potential for reliance is sufficient to trigger a prospective application of the rule. Ante at 434. I disgree. In the past we have required a showing of actual reliance before limiting a new decision to purely prospective effect. Wangler v. Harvey, 41 N.J. 277, 286 (1963) (no evidence of actual reliance by defendant); Arrow Builders Supply Corp. v. Hudson Terrace Apts., 16 N.J. 47, 50 (1954) (record contained nothing to suggest party actually relied upon old rule). I would require actual reliance or at least a reasonable likelihood of reliance before I would allow this factor to determine whether a decision should be applied retroactively or prospectively.

Ill

In conclusion, I still hold to our presumption of retroactivity. The reason for the presumption is that in most instances the advancement of the purpose of the new ruling is best served and the equities are not substantially disserved by applying the ruling to all actions. This general rule is clearly applicable to the present case.

Here the purpose of our ruling was to correct an unconstitutionally discriminatory statute. The Court’s decision, to apply that ruling prospectively only, does nothing to advance the *442equities of this case since, as we have seen, the parties did not rely on the old rule. The decision, however, does delay the effect of the new rule, and thereby retards its purpose.

I would not give these or other plaintiffs who slept on their rights a windfall action allowing them to sue foreign corporations for another year without any showing that they either knew or relied on our statute. The proper remedy for these plaintiffs is the discovery exception to the statute of limitations. If they cannot succeed under that provision, they should not be allowed to succeed under this one. New Jersey cannot afford to create inconsistent decisions based on this Court’s desire to give a certain class of plaintiffs a remedy to which they are not entitled.

Justice SCHREIBER and Justice POLLOCK join in Part I of this opinion.

For modification—Chief Justice WILENTZ, and Justices CLIFFORD, HANDLER and O’HERN—4.

Dissenting—Justices SCHREIBER, POLLOCK and GARIBALDI—3.