                                                                                                                           Opinions of the United
2007 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-18-2007

Jaworowski v. Ciasulli
Precedential or Non-Precedential: Precedential

Docket No. 05-1423




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                                            PRECEDENTIAL

          UNITED STATES COURT OF APPEALS
               FOR THE THIRD CIRCUIT


                         No. 05-1423


                 ANDRZEJ JAWOROWSKI,
                               Appellant

                               v.

       ROBERT CIASULLI; BOB CIASULLI HONDA;
    RP RICHARDS & SON; JOHN DOE 1-10 name being
  fictitious, (representing one or more fictitious defendants)
 ABC CORP 1-10 a name being fictitious, (representing one or
  more fictitious corporations); XYZ PARTNERSHIP 1-10
        (representing one or more fictitious partnerships)


APPEAL FROM THE UNITED STATES DISTRICT COURT
          FOR THE DISTRICT OF NEW JERSEY
                 D.C. Civil No. 04-cv-01267
    District Judge: The Honorable Harold A. Ackerman


          Submitted Under Third Circuit LAR 34.1(a)
                       May 21, 2007


Before: BARRY, CHAGARES, and TASHIMA,* Circuit Judges

                (Opinion Filed: June 18, 2007)



      *
        The Honorable A. Wallace Tashima, Senior Circuit Judge,
United States Court of Appeals for the Ninth Circuit, sitting by
designation.

                               1
Dennis S. Brotman, Esq.
Fox Rothschild
997 Lenox Drive
Princeton Pike Corporate Center
Building 3
Lawrenceville, NJ 08648

Counsel for Appellant


Mark P. Ciarrocca, Esq.
Ciarrocca & Ciarrocca
1155 West Chestnut Street
P.O. Box 303
Union, NJ 07083-0303

Counsel for Appellees




                  OPINION OF THE COURT


BARRY, Circuit Judge

        Appellant, Andrezej Jaworowski, challenges the order of
the District Court which dismissed his action pursuant to Rules
12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.
The District Court believed itself bound by our unwillingness to
predict, in Young v. Clantech, Inc., 863 F.2d 300 (3d Cir. 1988),
that the Supreme Court of New Jersey would toll the New Jersey
statute of limitations for personal injury actions during the
pendency of a suit brought in a court which did not have
personal jurisdiction over the defendant. Because we find that
what we said in Young is no longer accurate, we will reverse and




                               2
remand for further proceedings.1

                                 I.

       In July 2001, Jaworowski, a New York resident, suffered
a variety of injuries when the scaffold on which he was working
collapsed. The accident occurred at Bob Ciasulli Honda, a car
dealership owned and operated by Robert Ciasulli (collectively,
“Ciasulli”), which is located in Jersey City, New Jersey and
alleged to be a citizen of New Jersey for purposes of diversity
jurisdiction.

        Less than two years later, in January 2003, Jaworowski
filed a complaint against Ciasulli and another defendant in the
Supreme Court of New York, Kings County. As that case
progressed, Jaworowski, in September 2003, filed a virtually
identical complaint in the U. S. District Court for the Eastern
District of New York. The federal action, in circumstances
which are not entirely clear from the record, was transferred to
the U. S. District Court for the District of New Jersey in January
2004. The action in the Supreme Court was discontinued by the
parties in May 2004.



       1
         We acknowledge, as we must, that Third Circuit Internal
Operating Procedure 9.1 prohibits panels of this Court from
overruling the holdings of precedential opinions of previous panels.
“However, when we are applying state law we are, of course, free
to reexamine the validity of our state law interpretation based on
subsequent decisions of the state supreme court.” Nationwide Ins.
Co. v. Patterson, 953 F.2d 44, 46 (3d Cir. 1991). Although the
Supreme Court of New Jersey has not addressed the issue before
us since Young, there has been a change in the legal landscape
such that we can now predict what we believed “at that juncture”
we could not predict in Young. Young, 863 F.2d at 301. To wait
for the Supreme Court to reach an issue that it may never need to
reach would be to abdicate our responsibility, while sitting in
diversity, “to seek to eliminate inconsistency between federal and
state courts in the application of state substantive law.” Id. at 47.
Nationwide Ins. Co., 953 F.2d at 47.

                                 3
        In the District Court, Ciasulli moved to dismiss, arguing
that the two-year New Jersey statute of limitations for personal
injury actions, N.J. Stat. Ann. § 2A:14-2, operated to bar this suit
because it was not filed in federal court within two years of
Jaworowski’s injury. The Court agreed.

        First, the District Court decided that the critical question
was whether personal jurisdiction existed over Ciasulli in New
York, because if jurisdiction was lacking in New York then the
statute of limitations of New Jersey, as the transferee forum,
would apply. See Levy v. Pyramid Co., 871 F.2d 9 (2d Cir.
1989).2 Applying New York C.P.L.R. sections 301 and 302, the
Court concluded that there was no personal jurisdiction over
Ciasulli in New York. Given that the federal action in the
Eastern District of New York was not filed until more than two
years after Jaworowski’s cause of action accrued, the Court
applied New Jersey law to determine if its two-year statute of
limitations could be tolled in such a situation. The Court
discussed the Supreme Court of New Jersey’s decision in
Galligan v. Westfield Centre Service, Inc., 412 A.2d 122 (N.J.
1980), at length, but believing itself “bound to follow Third
Circuit precedent,” applied our conclusion in Young that “the
timely filing of a case in a court which lacks personal
jurisdiction over the defendant does not toll the New Jersey
statute of limitations.” Young, 863 F.2d at 301. The Court
dismissed Jaworowski’s action as untimely.

        Jaworowski timely appealed. He argues that the District
Court erred in its understanding of New Jersey law regarding the
equitable tolling of the statute of limitations.3 We have
jurisdiction pursuant to 28 U.S.C. § 1291.



       2
           Neither party contests this ruling.
       3
         Jaworowski also challenges the finding of the District
Court that there was no personal jurisdiction over Ciasulli in New
York and its refusal to allow jurisdictional discovery. Because we
find that equitable tolling is available under New Jersey law, we
need not consider these alternative arguments.

                                   4
                                II.

        As a federal court sitting in diversity, we must, pursuant
to Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), apply the
relevant state’s substantive law, which includes its statute of
limitations, Dixon Ticonderoga Co. v. Estate of O’Connor, 248
F.3d 151, 160–61 (3d Cir. 2001), as that law has been set forth
by its legislature or highest court, Packard v. Provident Nat’l
Bank, 994 F.2d 1039, 1046 (3d Cir. 1993). When a state’s
highest court has yet to speak on a particular issue, it becomes
the role of the federal court to “predict how [the state’s highest
court] would decide the issue were it confronted with the
problem.” Packard, 994 F.2d at 1046. To that end, we should
give careful consideration to decisions of the state’s intermediate
appellate courts, see McKenna v. Pac. Rail Serv., 32 F.3d 820,
825 (3d Cir. 1994), and should aim to “eliminate inconsistency
between the federal and state courts in the application of state
substantive law,” see Nationwide Ins. Co. v. Patterson, 953 F.2d
44, 47 (3d Cir. 1991).

        The Supreme Court of New Jersey addressed the
equitable tolling of the New Jersey personal injury statute of
limitations in its 1980 decision in Galligan v. Westfield Centre
Service, Inc., 412 A.2d 122 (N.J. 1980). In Galligan, the
plaintiff brought an action in federal district court within the
two-year limitations period. Recognizing that subject matter
jurisdiction was lacking, the plaintiff, during the pendency of the
district court action but after the two-year limitations period had
run, brought an identical action in the Superior Court of New
Jersey. The district court action was later dismissed and the
question presented to the Supreme Court was whether the statute
of limitations “may be tolled by the filing of a complaint in
federal court which lacked subject matter jurisdiction.” Id. at
123. The Court answered in the affirmative.

       In reaching this conclusion, the Supreme Court
considered the goals of the limitations period in the context of
the “obvious and unnecessary harm” that could be worked by its
“[u]nswerving, ‘mechanistic’ application.” Id. at 124.
According to the Court, the statute was designed to promote the

                                5
diligent and prompt assertion of rights by plaintiffs, to ensure the
defendants’ “ability to answer the allegations against them,” to
“create[] desirable security and stability in human affairs” by
fostering “eventual repose,” and to spare the courts from the
burden of stale claims. Id. Applying the facts of the case to the
goals of the statute, the Court concluded that allowing the statute
to be tolled during the pendency of the federal action did “no
violence to the purposes underlying” the statute because the
plaintiff timely asserted his rights, “albeit by the unconventional
vehicle of a jurisdictionally deficient complaint,” such that the
defendant could not reasonably claim a sense of repose, and the
claim had not become stale. Id. at 125.

        Eight years after Galligan, in Young v. Clantech, Inc.,
863 F.2d 300 (3d Cir. 1988), we were asked to determine
whether the principle announced in Galligan operated to toll the
limitations period “when a plaintiff files a lawsuit against a
defendant in a court which does not have in personam
jurisdiction over the defendant.” Id. at 300. Noting that
“[s]ignificant policy arguments would support a distinction
between” the defect present in Galligan and that present in
Young, we concluded, in a per curiam opinion, that the “New
Jersey Supreme Court has not extended the remedy of tolling to
encompass such a defect, and we are unwilling, at this juncture,
to predict that it would.” Id. at 301.

        The Superior Court of New Jersey, Appellate Division,
disagreed. In Mitzner v. West Ridgelawn Cemetery, Inc., 709
A.2d 825 (N.J. Super. Ct. App. Div. 1998), the Appellate
Division sharply criticized Young and concluded that Galligan
did apply in situations in which the initial action was filed within
the two-year limitations period but in a court that did not have
personal jurisdiction over the defendant. Contrary to what we
had said, the Court could “not perceive any” “significant policy
arguments” to support the distinction we had made in Young
between filing suit in a court that lacks subject matter
jurisdiction and one that lacks personal jurisdiction, and, indeed,
stated that “the filing in a court without subject matter
jurisdiction would seem to be the greater defect” because, unlike
personal jurisdiction, “subject matter jurisdiction may never be

                                 6
waived.” Id. at 828.

       We have previously noted the conflict between Young
and Mitzner. In Island Insteel Systems, Inc. v. Waters, 296 F.3d
200 (3d Cir. 2002), we examined both cases in the course of
selecting “the more appropriate rule as a matter of policy” for
purposes of Virgin Islands law. Id. at 215. In that context, we
found Young to be unpersuasive given its “cursory treatment” of
the policy questions implicated by its holding. Id. at 216.
Although we acknowledged that Young was a “prediction of
how the New Jersey Supreme Court would decide the question,”
we noted that Mitzner “disapproved Young’s distinction” and
provided the sounder rationale. Id. at 216–17.

        As noted above, when sitting in diversity our role is to
predict how a state’s highest court would rule if a particular
issue came before it. We have no difficulty concluding that the
Supreme Court of New Jersey, if confronted with this issue,
would agree with Mitzner and find that the personal injury
statute of limitations could be equitably tolled during the
pendency of an action brought in a court which lacked personal
jurisdiction over the defendant in those situations in which, as in
Galligan, the goals of that statute would not thereby be offended.

        We reach this conclusion for a number of reasons. First,
Mitzner has been cited on several occasions as an example of
tolling that is consistent with the goals of the New Jersey statute
of limitations. For example, in Dixon Ticonderoga, a case in
which we applied the New Jersey statute of limitations, we noted
that “[t]he principal reason for statutes of limitations is to
provide notice to defendants.” Dixon Ticonderoga Co., 248 F.3d
at 168. Mitzner, we explained, was an example of a case in
which tolling “does not undermine this policy” because “the
defendant has . . . received notice.” Id. The Appellate Division
has similarly explained Mitzner and has described it as part of
“[a] long line of New Jersey cases [which] have held that the
filing of an action in one forum will toll the statute of limitations
during the pendency of that proceeding.” Staub v. Eastman
Kodak Co., 726 A.2d 955, 965–66 (N.J. Super. Ct. App. Div.
1999); see also Berke v. Buckley Broad. Corp., 821 A.2d 118,

                                 7
124–27 (N.J. Super. Ct. App. Div. 2003). Most importantly, the
Supreme Court of New Jersey, while not explicitly approving
Mitzner, cited it together with Galligan in its discussion of
equitable tolling as a “doctrine[] [that] in appropriate
circumstances, such as those presented by this case, can be
relevant in determining whether the statute of limitations should
be tolled.” Negron v. Llarena, 716 A.2d 1158, 1164 (N.J. 1998).

        Second, we are persuaded by the numerous cases in
which New Jersey courts have flexibly applied the New Jersey
statute of limitations in order to avoid barring litigants on
procedural grounds. “New Jersey law has been hospitable to
equitably purposed procedural devices” including a generous
discovery rule, a fictitious-names procedure, a principle of
equitable tolling, and a doctrine of substantial compliance.
Staub, 726 A.2d at 964–67 (allowing tolling during pendency of
class action in which plaintiff considered himself a member but
which provided no notice to defendant that plaintiff was
asserting a claim); see LaFage v. Jani, 766 A.2d 1066, 1070–80
(N.J. 2001) (finding that wrongful death statute contemplates
tolling for minors despite statute’s silence); Negron, 716 A.2d at
1162–64 (finding substantial compliance with substantive statute
of limitations governing wrongful death actions where plaintiff
incorrectly brought suit in federal court during limitations
period); Zaccardi v. Becker, 440 A.2d 1329, 1334–36 (N.J.
1982) (“It is now well settled in New Jersey that statutes of
limitation will not be applied when they would unnecessarily
sacrifice individual justice under the circumstances.”); Galligan,
412 A.2d at 123–25; Kaczmarek v. N.J. Tpk. Auth., 390 A.2d
597, 601–05 (N.J. 1978); Berke, 821 A.2d at 124–27; Zacharias
v. Whatman PLC, 784 A.2d 741, 745 (N.J. Super. Ct. App. Div.
2001).

        Finally, given the rationale of Galligan and its progeny,
we can envision no reason why the Supreme Court would
distinguish between an action where subject matter jurisdiction
is lacking and one where personal jurisdiction is lacking. See
Galligan, 412 A.2d at 124 (“Whenever dismissal would not
further the Legislature’s objectives in prescribing the limitation,
the plaintiff should be given an opportunity to assert his claim.”).

                                 8
In both instances, the defendant has been apprised of the
plaintiff’s claims, showing diligence on the part of the plaintiff,
and the matter has been kept alive for adjudication. If there is
any distinction it is, as the Court in Mitzner correctly noted, that
bringing an action in a court that lacks subject matter jurisdiction
is arguably a “greater defect,” Mitzner, 709 A.2d at 828,
especially in light of the judicial resources that might be wasted
before the defect is discovered and the very real possibility that,
once re-filed in New Jersey courts, the claims will be older and
less amenable to efficient adjudication. See, e.g., Louisville &
Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152–54 (1908)
(ordering court to dismiss case where Supreme Court, sua
sponte, raised lack of jurisdiction). That risk is diminished
where the defect is a lack of personal jurisdiction, as that defect
can be waived by the defendant and the court is capable of
hearing the case and issuing a valid judgment on the merits.

        Therefore, we predict that if given the opportunity to rule
on this issue, the Supreme Court of New Jersey would allow the
equitable tolling of the New Jersey personal injury statute of
limitations during the pendency of an action brought in a court
which lacked personal jurisdiction over the defendant in those
instances in which to do so would not offend the goals of the
limitations statute. See Galligan, 412 A.2d at 124–25.4 Because
this calculus is necessarily fact-sensitive, whether it is



       4
          We note that in Berke, the Appellate Division discussed
Galligan and Mitzner as “substantial compliance” cases and set
forth a five-part test adopted by the Supreme Court in Negron.
See Berke, 821 A.2d at 125–26. In Negron, however, the Supreme
Court clearly distinguished between substantial compliance cases
and equitable tolling cases such as Galligan and Mitzner.
See Negron, 716 A.2d at 1164 (“The application of the doctrine of
substantial compliance obviates additional consideration of
whether equitable tolling or the discovery rule should be invoked
to toll the statute of limitations.”). As such, we predict that the
Supreme Court would apply the equitable tolling test announced in
Galligan in determining whether equitable tolling would be
appropriate in cases such as this.

                                 9
appropriate to equitably toll the statute of limitations in this
action should be determined by the District Court in the first
instance. See Island Insteel Sys., Inc., 296 F.3d at 218.

                                III.

       For the foregoing reasons, we will reverse the order of the
District Court and remand for further proceedings consistent
with this Opinion.




                                 10
