On Appeal from the United States District Court for the District of New Jersey, D.C. Civil No. 85-2173.
Before: GIBBONS, Chief Judge, WEIS, Circuit Judge, and POLLAK, District Judge*fn*
The question before this court -- a question of law, on which our review is plenary -- is whether the district court was correct in determining, on the motion of defendant Auberge Gray Rocks Inn for summary judgment, that plaintiff Earl Warner's claim is time-barred. The question emerges from facts alleged in the complaint and taken as agreed for purposes of the motion -- facts which may be quickly summarized:
In the late fall of 1983, Earl Warner, a New Jersey domiciliary, was vacationing at Auberge Gray Rocks Inn, a ski resort located and incorporated in the Province of Quebec. Mr. Warner, a long-time member of the South Jersey Ski Club, had come to the Inn with other club members for a skiing holiday, just as he had done the year before.*fn1 On the morning of December 1, Mr. Warner rode on a chair lift to the top of one of the ski slopes. On leaving the lift, Mr. Warner fell and hurt himself: this happened because his right ski boot caught in the boot of a fellow passenger who occupied the lift's adjacent seat, while his left ski got tangled in one of four bales of hay placed next to the lift as guides to disembarking skiers.
On May 7, 1985, Mr. Warner commenced this tort suit against the inn in the United States District Court for the District of New Jersey. Because the controversy is one between a citizen of a state and an entity incorporated in a foreign country, Mr. Warner was able to invoke the court's diversity jurisdiction. The gravamen of Mr. Warner's claim is that the Inn's placement of the hay bales was negligent, resulting in injury to Mr. Warner.
Relying on Quebec's one-year statute of limitations, the defendant Inn moved for summary judgment. Plaintiff Warner resisted the motion, contending that New Jersey's two-year statute of limitations was controlling and that the suit was therefore timely. The district court concluded that the Quebec statute was applicable and hence that the suit was time-barred; accordingly, the court granted summary judgment.
This is a case in which federal jurisdictions rests on the citizenship of the parties and the claims and defenses derive from local -- i.e., Quebec and New Jersey -- law, not federal law. Accordingly, pursuant to the teaching of Erie R. Co. v. Tompkins, 304 U.S. 64, 82 L. Ed. 1188, 58 S. Ct. 817 (1938), issues of a potentially dispositive nature must be determined as they would have been determined had this law suit been brought in a New Jersey state court. The requirement that a federal court sitting in diversity conform itself to the dispositive law administered by state courts in the same state embraces not only questions of a state's internal law but also questions of choice-of-law. Klaxon Co. v. Stentor Co., 313 U.S. 487, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941); Griffin v. McCoach, 313 U.S. 498, 85 L. Ed. 1481, 61 S. Ct. 1023 (1941); Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 46 L. Ed. 2d 3, 96 S. Ct. 167 (1975). Therefore, as the district court recognized, the question in this case is whether a New Jersey state court, confronted with this law suit, would have applied Quebec's one-year statute of limitations, which had run six months before this suit was commenced, or its own longer statute. In concluding that the applicable statute was Quebec's, the district court observed: "Being subjected to suit in a foreign jurisdiction after the expiration of Quebec's one-year statute of limitations is a financial risk not created or contemplated under Quebec law. It would be fundamentally unfair to subject a Quebec corporation acting entirely in that province to New Jersey's laws."
Determining how a New Jersey court would have ruled on the defendant's motion for summary judgment would present no apparent difficulty if, with respect to statutes of limitations, New Jersey were still operating within the framework of the American Law Institute's original Restatement of the Conflict of Laws (1934), or even the A.L.I.'s Second Restatement of the Conflict of Laws (1969). Both Restatements call for application of the forum's statute of limitations rather than that of some other jurisdiction.*fn2 But in 1973 the New Jersey Supreme Court struck out on a new path. The case was Heavner v. Uniroyal, Inc., 63 N.J. 130, 305 A.2d 412 (1973). The case was a products liability suit arising out of a truck accident caused by the blow-out of an allegedly defective tire manufactured by defendant Uniroyal and mounted on a trailer retailed by defendant Pullman. Mr. and Mrs. Heavner, the plaintiffs, were domiciled in North Carolina, the state in which Mr. Heavner bought the trailer and suffered the accident. Plaintiffs sued Uniroyal, a New Jersey corporation, and Pullman, a Delaware corporation, in a New Jersey state court. When the suit was filed, the applicable North Carolina statute of limitations had already expired. The New Jersey Supreme Court declined to salvage the case by applying the more generous New Jersey statute of limitations on which plaintiffs relied. In its opinion the court canvassed the views of several scholars who had inveighed against the forum-oriented rule that achieved dominance under the Restatements. The earliest of the writings from which the court quoted was an article written by Ernest Lorenzen of Yale in 1919, fifteen years before the A.L.I.'s promulgation of the first Restatement. Professor Lorenzen's thoughtful assessment -- one which seems to anticipate the rationale of the district court in the instant case -- was this:
After the enforcement of the right of action is gone under the law governing the rights of the parties, it would seem clear upon principle that the same consequences should attach to the operative facts elsewhere. Nor is there any policy pointing to a different conclusion. It follows that no court should enforce a foreign cause of ...