SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-5209-94T2
AMERICAN HOME PRODUCTS
CORPORATION; AMERICAN
HOME FOODS, INC.; AYERST
LABORATORIES, INC.;
AYERST-WYETH PHARMACEUTICALS,
INC.; SHERWOOD MEDICAL COMPANY;
AND WYETH LABORATORIES, INC.,
Plaintiffs/Respondents
v.
ADRIATIC INSURANCE COMPANY
(also known as Riunione Adriatica
di Sicurta); THE AETNA CASUALTY
& SURETY COMPANY; AFFILIATED FM
INSURANCE COMPANY; AIU INSURANCE
COMPANY; ALLIANZ UNDERWRITERS
INSURANCE COMPANY; ALLSTATE INSURANCE
COMPANY (as successor to Northbrook
Excess and Surplus Insurance Company
and Northbrook Insurance Company);
AMERICAN HOME ASSURANCE COMPANY;
AMERICAN REINSURANCE COMPANY;
BIRMINGHAM FIRE INSURANCE COMPANY
OF PENNSYLVANIA; CALIFORNIA UNION
INSURANCE COMPANY; CENTRAL NATIONAL
INSURANCE COMPANY OF OMAHA; CITY
INSURANCE COMPANY; CONTINENTAL
CASUALTY COMPANY; THE CONTINENTAL
INSURANCE COMPANY; FIRST STATE
INSURANCE COMPANY; FORUM INSURANCE
COMPANY;GENERAL REINSURANCE CORPORATION
GOVERNMENT EMPLOYEES INSURANCE COMPANY
GRANITE STATE INSURANCE COMPANY;
HARTFORD ACCIDENT AND INDEMNITY COMPANY;
THE HOME INSURANCE COMPANY; INSURANCE
COMPANY OF NORTH AMERICA; INSURANCE
COMPANY OF THE STATE OF PENNSYLVANIA;
INTERNATIONAL INSURANCE COMPANY;
INTERNATIONAL SURPLUS LINES INSURANCE
COMPANY; LEXINGTON INSURANCE COMPANY;
LIBERTY MUTUAL INSURANCE COMPANY;
LONDON GUARANTEE AND ACCIDENT
COMPANY OF NEW YORK; NATIONAL UNION
FIRE INSURANCE COMPANY OF PITTSBURGH, PA.;
NEW ENGLAND INSURANCE COMPANY; NORTH
STAR REINSURANCE CORPORATION; PACIFIC
INSURANCE COMPANY; PROTECTIVE NATIONAL
INSURANCE COMPANY OF OMAHA; ROYAL
INDEMNITY COMPANY; SAFETY MUTUAL
CASUALTY CORPORATION; UNIGARD SECURITY
INSURANCE COMPANY; UNIONE ITALIANA
REINSURANCE COMPANY OF AMERICA; UNITED
STATES FIRE INSURANCE COMPANY; CERTAIN
UNDERWRITERS AT LLOYD'S, LONDON AND
LONDON MARKET INSURANCE COMPANIES;
ALTE LEIPZIGER VERSICHERUNG A.G.;
COLONIA INSURANCE COMPANY (also known
as Colonia Versicherung A.G.);
GOTHAER VERSICHERUNGSBANK VVAG; AND
HAFTPFLICHTVERBANK DER DEUTSCHEN
INDUSTRIES V.A.G.
Defendants/Appellants
AMERICAN CENTENNIAL INSURANCE COMPANY;
ATLANTA INTERNATIONAL INSURANCE COMPANY
(as successor to Drake Insurance
Company of New York); COMMERCIAL
UNION INSURANCE COMPANY (formerly
known as Employers' Commercial Union
Insurance Company of America); EMPLOYERS'
LIABILITY ASSURANCE CORPORATION,
LIMITED (doing business as Commercial
Union Insurance Company); FEDERAL
INSURANCE COMPANY FIREMAN'S FUND
INSURANCE COMPANY; GIBRALTAR CASUALTY
COMPANY; LUMBERMEN MUTUAL CASUALTY COMPANY;
NATIONAL CASUALTY COMPANY; NEW ENGLAND
REINSURANCE CORPORATION; PRUDENTIAL
REINSURANCE COMPANY; PURITAN INSURANCE
COMPANY (formerly known as Manhattan
Fire and Marine Insurance Company);
REPUBLIC INSURANCE COMPANY; TRANSAMERICA
INSURANCE COMPANY; THE TRAVELERS INDEMNITY
COMPANY; LE ASSICURAZIONI D'ITALIA;
ASSURANCES GENERALES DE FRANCE I.A.R.T.;
BERMUDA FIRE AND MARINE INSURANCE COMPANY, LTD.;
LE CENTRE MUTUEL; CHEMICAL INSURANCE COMPANY;
COMPAGNIE NOUVELLE D'ASSURANCES; EISEN UND STAHL;
EXCESS INSURANCE COMPANY, LTD.; LA FONCIERE
COMPAGNIE D'ASSURANCES ET DE REASSURANCES;
GERLING-KONZERN ALLEGEMEINE VERSICHERUNGS-AG;
GROUPE D'ASSURANCES MUTUELLES; INSCO, LIMITED;
MENTOR INSURANCE LIMITED, UK; NISSHIN FIRE
& MARINE; NORTHUMBERLAND GENERAL INSURANCE
COMPANY; LA PRESERVATRICE; ROYALE BELGE
I.R.S.A. D'ASSURANCE; LE SECOURS; SOCIETE
LILLOISE D'ASSURANCE; SWISS REINSURANCE COMPANY;
L'UNION DES ASSURANCES DE PARIS I.S.R.D;
ZURICH INTERNATIONAL LTD.,
Defendants.
______________________________________________________
Argued: October 18, 1995 - Decided: December
11, 1995
Before Judges King, Landau and Kleiner.
On appeal from the Superior Court of New
Jersey, Law Division, Hudson County.
Gary Hoppe argued the cause for appellants
(Manta & Welge, attorneys for Liberty Mutual
Ins. Co.; Stephen F. Brock and Michael E.
Twomey of the firm Aron, Twomey, Hoppe &
Galanty, of counsel).
William B. McGuire argued the cause for
appellants (Tompkins, McGuire & Wachenfeld,
attorneys for appellants London Market
Insurers, Royale Belge Societe Anonym, Excess
Ins. Co., and the Britamco Insurers; Mr.
McGuire and William H. Trousdale, on the
brief).
David Thomasch argued the cause for
respondents (Pitney, Hardin, Kipp & Szuch,
attorneys; Donovan, Leisure, Newton & Irvine,
and William J. Ruane, of counsel; Donald W.
Kiel, on the brief).
Mound, Cotton & Wollan, attorneys for
appellants AIU Insurance Co., American Home
Assurance Co., Birmingham Fire Ins. Co. of
Pa., Granite State Ins. Co., The Ins. Co. of
the State of Pa., Lexington Ins. Co., and
National Union Fire Ins. Co. of Pittsburgh
(Robert N. Kelly of the firm Jackson &
Campbell, and Jeffrey Weinstein, of counsel).
Thurm & Heller, attorneys for appellant Forum
Ins. Co. (Steven A. Stadtmauer and Margaret A.
Arnold of the firm Vedder, Price, Kaufmann &
Kammholz, of counsel).
Bumgardner, Hardin & Ellis, attorneys for
appellants Pacific Ins. Co., Continental Ins.
Co., London Guarantee and Accident Co. of N.Y.
(Janet L. Poletto and Michelle L. Melin of the
firm Carr, Goodson & Lee, of counsel).
Siff Rosen, attorneys for appellants Hartford
Accident & Indemnity Co., New England Ins.
Co., Royal Indemnity Co. and First State Ins.
Co. (Susan M. Chesler, of counsel).
Ford, Marrin, Espositio, Witmeyer & Gleser,
attorneys for appellant Continental Casualty
Co. (Charles Booth and Justin N. Kinney, of
counsel).
Rivkin, Radler & Kramer, attorneys for
appellant Allstate Ins. Co. (Joni Mason, of
counsel).
Connell, Foley & Geiser, attorneys for
appellant Aetna Casualty & Surety Co. (Frank
A. Lattal, Richard Doran of the firm Gibson,
Dunn & Crutcher, and Jodi Newhouse of the firm
Gibson, Dunn & Crutcher, of counsel).
Dwyer, Connell & Lisbona, attorneys for
appellant Uniguard Security Ins. Co. (Kenneth
F. Mullaney, Jr., Aidan M. McCormack of the
firm Newman & Harrington and James J. Duane,
III, of the firm Taylor, Anderson & Travers,
of counsel).
Skadden, Arps, Slate, Meagher & Flom,
attorneys for appellants General Reinsurance
Corp. and North Star Reinsurance Corp. (Mark
Hoerrner, of counsel).
Golden, Rothschild, Spagnola & DiFazio,
attorneys for appellants The Home Ins. Co. and
City Ins. Co. (William E. McGrath and Ann
Bickford of the firm Skadden, Arps, Slate,
Meagher & Florm, of counsel).
Sheft & Sheft, attorneys for appellants
Adriatic Ins. Co., Allianza Underwriters Ins.
Co., American Reinsurance Co., Protective
National Ins. Co. of Omaha, and Unione
Italiana Reinsurance Co. of America (Gerald A.
Greenberger, of counsel).
LeBoeuf, Lamb, Lieby & MacRae, attorneys for
appellants Government Employee Ins. Co. (Lynn
Menschenfreund, Elizabeth A. Sandza, and Rocco
N. Covina, of counsel).
O'Malvany & Myers, attorneys for appellants
Insurance Co. of North American; CIGNA,
Central National Ins. Co. of Omaha (Karen
Mendalka Hoernner and Mark D. Pelvin of the
firm Cromwell & Moring, of counsel).
McElroy, Deutsch & Mulvaney, attorneys for
International Ins. Co., International Surplus
Lines Ins. Co., and United States Fire Ins.
Co. (Kevin M. Haas, of counsel).
Herten, Burstein, Sheridan, Cevasco,
Bottinelli & Litt, attorneys for Alte
Leipziger Versicherung, A.G. Colonia Ins. Co.,
Gothaer Bersicherungsbank, Maftpflichtverband
der Deutschen Industrie V.A.G., Colonia
Versicherungag and Eisen & Stahl (Kevin P.
Kelly, of counsel).
The opinion of the court was delivered by
KING, P.J.A.D.
We granted leave to appeal, R. 2:2-3(b); R. 2:5-6(a), on June
5, 1995 to review the order of the Law Division which declined to
dismiss or stay this insurance coverage action on comity grounds,
in deference to an earlier action pending in New York's state
court. We conclude that the plaintiffs have shown sufficient
"special equities" to justify retention of jurisdiction over this
New Jersey action. We affirm the March 20, 1995 decision of the
Law Division judge declining to dismiss or stay this action.
American Home Products Corporation (AHP), incorporated in Delaware, is a manufacturer and distributor of agricultural, food and healthcare products throughout the United States and abroad.
When the insurance contracts involved in this case were negotiated
and issued, AHP's corporate headquarters and insurance department
were located in New York. AHP had usually litigated coverage
disputes with its carriers in New York.
In April 1991, AHP and its subsidiaries filed actions in the
Delaware state court against seventy-seven or more insurers, the
defendants here, seeking a declaration that these insurers were
required to defend and indemnify AHP for liability incurred in
connection with environmental claims at thirty-plus cleanup sites
in eleven states. AHP also sought money damages for remediation
costs already incurred.
Two months later, in June 1991, Employers Insurance of Wausau
(Wausau), an excess-liability carrier and a defendant in the
Delaware actions, filed a declaratory judgment action in New York
state court against AHP, several of its subsidiaries, and the
seventy-six other insurers named as defendants in Delaware. The
New York action was essentially identical to the Delaware action in
legal import, including the same parties, waste sites, and
insurance policies.
In July 1991, Wausau and other insurers moved to dismiss AHP's
Delaware actions on forum non conveniens grounds. Their motion was
granted in November 1991. Upon termination of the case in
Delaware, the New York trial-level court dismissed as moot AHP's
then-pending motion to dismiss the New York action.
On June 1, 1992 AHP and its subsidiaries filed the present
action in New Jersey, seeking declaratory relief against eighty
insurance companies. The appellants in the present appeal (the
insurers) are forty-three of these defendant insurance companies.
This action is substantially similar to the case pending in New
York; it involves the same issues and virtually the same parties.See footnote 1
AHP concedes that any claims it may have against any of the parties
here are pending in or could be joined in the action in New York.
One month after this New Jersey action was filed, AHP moved to
dismiss the New York action on forum non conveniens grounds. Wausau
and other insurance companies opposed AHP's motion and cross-moved
for an order enjoining AHP from proceeding in any jurisdiction
other than New York. In December 1992, the New York trial-level
judge dismissed the action, except as to the single New York site,
on forum non conveniens grounds.
Several insurance companies appealed. On December 15, 1994
New York's Appellate Division reversed the forum non conveniens
dismissal of the claims arising from the non-New York sites and
reinstated the New York action in its entirety. AHP's attempt to
have the New York action dismissed on forum non grounds was
effectively ended when AHP's motion for reargument and its motion
for leave to appeal to the Court of Appeals were denied. The New
York court, however, refused to enjoin AHP from proceeding in New
Jersey, considering that issue "academic" once the New York action
was reinstated. Possibly the New York court assumed that this New
Jersey action would be stayed by our courts.
AHP had moved its world-wide corporate headquarters, including
its insurance and law departments, from New York City to Madison,
New Jersey in October 1993. On January 23, 1995, after the New
York action had been reinstated in its entirety, a number of the
defendant insurers moved to dismiss or stay this New Jersey action,
arguing that principles of comity and the entire-controversy
doctrine so required. On March 20, 1995 Judge McLaughlin of Hudson
County concluded that there were "special equities" which justified
the denial of the insurers' motion to dismiss, and he permitted
this New Jersey action to proceed. We granted the insurers' motion
for leave to appeal on June 5, 1995.
We now have the same complex litigation pending in two law suits in sister states in courthouses five miles apart. The insurers want to litigate in New York, the insured in New Jersey. Insofar as we can determine from this record and the parties' representations, staged discovery has been proceeding in New Jersey at an efficient pace, at least since an April 24, 1994 "Case Management Order I" was entered by Judge McLaughlin. Discovery has been concentrated on eight sites, three in New Jersey and none in New York, all selected by the parties. The discovery undertaken has been deemed efficacious in both jurisdictions.
The fact that an action pending in another state involves the same parties and the same or substantially similar claims does not
bar prosecution of a subsequent action here in New Jersey.
However, the New Jersey action may, as a matter of sound
discretion, be stayed by our courts until the prior action has been
adjudicated. Cogen Technologies v. Boyce Eng'g,
241 N.J. Super. 268, 272 (App. Div.), certif. denied,
122 N.J. 358 (1990);
Lumbermens Mutual Casualty Co. v. Carriere,
163 N.J. Super. 7, 14
(App. Div. 1978); Wallace, Muller & Co. v. Leber,
67 N.J.L. 26-27
(Sup. Ct. 1901). The issue is one of comity, not lack of
jurisdiction.
Our Supreme Court, in Yancoskie v. Delaware River Port Auth.,
78 N.J. 321 (1978), held that when an action, essentially identical
to one brought in New Jersey, is pending in another state, "our
proper course under comity principles is not to exercise
jurisdiction but to adhere to the general rule that the court which
first acquires jurisdiction has precedence in the absence of
special equities." Id. at 324.
In 1990 we further explained the reasoning behind the
Yancoskie rule:
A court having jurisdiction has the authority
to refuse to proceed in a vexatious law suit
focusing on a matter already proceeding in the
courts of another state. We do not distrust
the proceedings of the courts of our sister
states as we once did. It has become
necessary and commonplace in a national
economy for courts to interpret and enforce
the laws of other jurisdictions. In these
circumstances, there is ordinarily no reason
to entertain subsequent local litigation
paralleling an already instituted action in
another state. And this is so whether the
later New Jersey action is brought by
plaintiff or defendant in the earlier case....
[Cogen, supra, at 272-273 (citation omitted).]
The insurers argue here that the judge made a "clear error of
law" when he failed to dismiss or stay the case in preference to
the earlier-filed New York action. According to the insurers, the
judge applied a "wholly irrelevant forum non conveniens analysis,"
thus relieving AHP of its "burden of proving. . . `special
equities'" in order to avoid a stay based on comity.
On a forum non conveniens application, the moving defendant
must demonstrate serious inconvenience if the case were to proceed
in plaintiff's chosen forum. Wangler v. Harvey,
41 N.J. 277, 286
(1963). Defendant must also show that transferring or deferring
the case to another forum will not result in significant hardship
to the plaintiff. Ibid. The judge must do more than merely
balance the conveniences in deciding a forum non conveniens motion.
D'Agostino v. Johnson & Johnson, Inc.,
225 N.J. Super. 250, 262
(App. Div. 1988), aff'd o.b.,
115 N.J. 491 (1989), appeal after
remand,
242 N.J. Super. 267 (App. Div. 1990). The defendant must
show that the plaintiff's chosen forum is "demonstrably
inappropriate." Mowrey v. Duriron Co, Inc.,
260 N.J. Super. 402,
409 (App. Div. 1992). Generally, plaintiffs are entitled to choose
the forum; the burden is placed on the objecting defendant to
demonstrate that the plaintiff's forum is inappropriate. Civic
Southern Factors Corp. v. Bonat,
65 N.J. 329, 333 (1974).
"Determination of the appropriateness of the forum [for forum non
purposes] requires weighing . . . public and private interest
factors" including the accessibility of proof, availability of
witnesses, administrative difficulties, local interest in the
trial, and the availability of a much more appropriate forum.
Mowrey, supra, 260 N.J. Super. at 409-10.
The insurers correctly contend that a "comity-stay" analysis
is qualitatively different from a forum non conveniens analysis.
Forum non conveniens and comity are separate concepts and the
reasoning animating each, though somewhat overlapping, is distinct.
A forum non conveniens analysis examines whether the New Jersey
forum is totally inappropriate, regardless of who filed the action
or when it was filed. Principles of comity, on the other hand,
might require granting a stay even when New Jersey, had it been the
first forum selected, would have been entirely appropriate. The
general rule favors stays or dismissals in comity-stay situations,
in the absence of special equities. The general rule in a forum
non conveniens analysis favors retention of jurisdiction, unless
the forum is manifestly inappropriate.
No New Jersey case has directly addressed the issue before us.
The Supreme Court of Delaware, in McWane Cast Iron Pipe Corp. v.
McDowell-Wellman Eng'g Co.,
263 A.2d 281 (Del. 1970), did
explicitly distinguish the forum non conveniens analysis from a
comity-stay analysis. In McWane, the trial-level court refused to
stay or dismiss a second-filed Delaware action on the basis that
the movant had not proven "the various elements prerequisite to an
invocation of the doctrine of forum non conveniens under our
cases." Id. at 282. The Delaware Supreme Court held that, when a
prior action had been pending in another state, a forum non
conveniens analysis was inappropriate. Id. at 283. The Delaware
Supreme Court recognized that granting a stay for comity reasons
was discretionary but stated:
such discretion should be exercised freely in
favor of the stay when there is a prior action
pending elsewhere, in a court capable of doing
prompt and complete justice, involving the
same parties and the same issues; [and], as a
general rule, litigation should be confined to
the forum in which it is first commenced, and
a defendant should not be permitted to defeat
the plaintiff's choice of forum in a pending
suit by commencing litigation involving the
same cause of action in another jurisdiction
of its own choosing;....
[Ibid.]
The Delaware Supreme Court observed that a forum non conveniens
analysis remained appropriate when no prior-filed action was
pending in another state. Id. at 284. McWane clearly declared that
in Delaware there will be times when a comity analysis will compel
the stay of an action even though a forum non conveniens analysis
would not compel deference to another forum. The Delaware approach
is sensible.
There is no New Jersey precedent which discusses the appropriate burden placed on the respective parties on a motion to stay or dismiss a later-filed New Jersey case under comity principles. The moving insurers argue that, unlike a forum non conveniens analysis, a comity analysis places the burden on plaintiffs to show the existence of "special equities." AHP
stresses that, generally, a stay is a remedy which will not be
granted unless the moving party demonstrates a "clear entitlement"
to relief. See Chalom v. Benesh,
234 N.J. Super. 248, 254 (Law
Div. 1989). Though the parties appear to be in disagreement about
their respective burdens, their reasoning may be harmonized with
the reasoning in the comity analysis cases.
One can infer from the Yancoskie and Cogen standard that the
burden remains on the moving party to show that the cases and
parties are substantially the same in both states and that the
plaintiff will not be adversely affected by the stay of the second-filed case. Once this is established the burden logically shifts
to the non-moving party to show that "special equities" exist and
are sufficiently strong to justify the retention of jurisdiction.
We could not sensibly require the moving party to prove an "absence
of special equities."
No New Jersey case has specifically articulated how a judge
should analyze a motion for a comity stay. We conclude that the
following approach is consistent with both existing precedent and
common sense: when requesting that the court dismiss or stay a New
Jersey case for comity reasons, the defendant should be required to
establish (1) the existence of a first-filed action in another
state,See footnote 2 (2) that both cases involve substantially the same parties,
the same claims, and the same legal issues, and (3) that plaintiff
will have the opportunity for adequate relief in the prior
jurisdiction. When a defendant establishes these requisites, it
has shown a clear entitlement to comity-stay relief and the judge
should grant the stay unless plaintiff demonstrates "special
equities."
This analysis actually was applied by the judge in this case.
The New York action was filed first. Without dispute, both the New
York and New Jersey cases involve virtually the same parties,
insurance contracts, waste sites, and legal issues. AHP
acknowledges that any distinct claims in the New Jersey action
could be brought as counter-claims in New York. The question,
according to the judge, came down to whether or not there was any
"special equity" justifying a New Jersey court to proceed. The
judge determined that New Jersey's links to the case constituted
"special equities." The close question for us is whether the judge
was within his sound discretion in his interpretation of the
meaning and scope of "special equities."
The insurers contend that the factors the judge considered in
determining whether special equities existed, because also
appropriate to a forum non conveniens analysis, are inappropriate
to a comity-stay analysis. AHP in contrast argues that the forum
non conveniens factors are completely apposite. The reported cases
do not clarify exactly which specific equities are relevant to a
comity-stay analysis or indeed how "special" they must be.
Some cases lend support to the notion that special equities can be
found in the extent of New Jersey's connection to the controversy
or parties. Specifically, there are cases which decline to find
special equities and point to the absence of New Jersey contacts
for justification. See, e.g., Yancoskie, supra, 78 N.J. at 323
(dismissed second-in-time New Jersey action; noted that
Pennsylvania connections to the controversy predominated); Devlin
v. National Broadcasting Co.,
47 N.J. 126, 128 (1966) (dismissed
defamation action whose only connection with New Jersey arose when
a program was telecast into this state). When considering a
related but distinct legal issue, we relied heavily on the New
Jersey nexus to an environmental action and decided to enjoin the
insured from proceeding in a subsequently-filed Texas action.
American Employers' Insurance Co. v. Elf Atochem North America,
Inc.,
280 N.J. Super. 601 (App. Div. 1995). In McWane, even after
the Delaware Supreme Court had expressly distinguished a forum non
conveniens analysis from a comity-stay analysis, that court looked
to the nexus of the competing jurisdictions with the actions when
deciding whether to grant the comity stay. McWane, supra, 263 A.
2d
at 283.
We also may appropriately consider whether or not granting a
comity stay would in any way thwart the public policy of New
Jersey. See Philadelphia v. Austin,
86 N.J. 55, 64 (1981) (a New
Jersey court need not enforce a foreign penal claim or judgment for
comity reasons if it "would contravene the public or judicial
policy of the forum.") Another factor which courts consider is how
well-advanced to the trial stage the New Jersey action may be in
comparison with the first-filed case. See Moses H. Cone Hosp. v.
Mercury Constr.,
460 U.S. 1, 22;
103 S.Ct. 927, 940;
74 L.Ed.2d 767, 783-84 (1983). Other factors and interests, not yet
specifically articulated by our courts, also could present special
equities.
The insurers are correct in reasoning that "special equities"
should not simply be interchangeable with the forum non conveniens
factors; doing this effectively transforms a comity-stay analysis
into a forum non conveniens analysis, equating the two. However,
the insurers' contention that forum non conveniens factors are
"wholly irrelevant" is not correct. Considerations such as
convenience and fairness to the parties, as well as connections
with the respective forums, could, in a particular case, give rise
to special equities. The difference in a comity analysis is that
these factors should be examined, not to determine if litigation in
the forum is generally appropriate, but to determine whether a
particular case presents specific facts making a stay in New Jersey
unjust to the interests of the parties or an unfair and inefficient
use of the courts of this State.
In this case, the judge found, with ample justification in
this record, that (1) though its headquarters were in New York City
when the New Jersey suit was filed in 1992, AHP has had its
worldwide headquarters in Madison, New Jersey since 1993, (2) ten
of the thirty-seven waste sites allegedly covered by the policies
involved are located in New Jersey (only one in New York), (3) six
of the defendant insurers have headquarters in New Jersey, (4)
about one-third of the estimated $89 million in site-remediation
damages may well be attributable to New Jersey sites (only $3
million to New York), (5) New Jersey law will probably be applied
to coverage issues involving the ten New Jersey sites, and (6) this
New Jersey case was "well along" and discovery had been proceeding
expeditiously for the past two years. The judge balanced these New
Jersey ties against the two factors favoring deference to New York;
(a) the policies were negotiated and sold in New York when AHP
headquarters were in that State, and (b) the case was also then
proceeding apace in New York.
Moreover, we note the record discloses that AHP has a
legitimate presence in this State. It employs about 6,000 people
in New Jersey in Hammonton, Mays Landing, Cherry Hill, Princeton,
Wayne, Bound Brook and Teterboro and will pay about $6.6 million in
State and local taxes this year.
Of the thirty-seven environmental cleanup sites involved in
this controversy, these ten are located in New Jersey: (1) the
Boyle-Midway Cranford Site; (2) the Harmon Haledon Site; (3) the
Renora, Inc. Site; (4) the PJP Landfill Site; (5) the GEMS Landfill
Site; (6) the Chemical Control Site; (7) the Price Landfill Site;
(8) the Marvin Jonas Transfer Station Site; (9) the Chemsol, Inc.
Site; and (10) the SCP-Carlstadt Site. The balance of the sites
are in Indiana (9), Pennsylvania (4), California (3), Maryland (3),
Ohio (2), and Nebraska, Florida, Connecticut, Puerto Rico, and
Illinois (1 each). The New Jersey Department of Environmental
Protection (NJDEP) has intervened at eight of these sites by
issuing notice letters, directives and requests for information to
AHPC and other potentially responsible parties. NJDEP and the
United States Environmental Protection Agency have commenced
actions in New Jersey courts with respect to at least four of the
New Jersey sites. Private actions relating to five of the New
Jersey sites have been commenced in the New Jersey District Court
and various vicinages of the Superior Court. This State obviously
has a significant interest in remediation of its polluted sites.
See Morton Int'l, Inc. v. General Accident Ins. Co. of America,
134 N.J. 1 (1993), cert. denied, ___ U.S. ___,
114 S.Ct. 2764,
129 L.Ed.2d 878 (1994); Gilbert Spruance Co. v. PMA,
254 N.J. Super 43, 47 (App. Div. 1992), aff'd,
134 N.J. 96, 98 (1993). We think
the judge fairly and within his sound discretion concluded that New
Jersey's interests in this case constituted sufficient special
equities to justify denying the comity-stay application. Cf. Waste
Management Inc. v. Admiral Ins. Co.,
138 N.J. 106, 124-25 (1994),
cert. denied, __ U.S. ___,
115 S.Ct 1175,
130 L.Ed.2d 1128 (1995)
(discussing burden on the defendant seeking dismissal for lack of
in personam jurisdiction to make a "compelling case" that certain
equities make the exercise of jurisdiction unreasonable in the
circumstance.)
These factors would be relevant to a forum non analysis and
would have justified a denial of a motion to dismiss in New Jersey
based on that doctrine. However, we find no abuse of discretion in
also considering these factors as "special equities" for comity-stay purposes. As suggested earlier, this is a difficult case.
This lawsuit has not only enough legitimate quantitative contacts
with New Jersey to support AHP's choice of forum over that of the
insurers, but those contacts appear to us as qualitatively and
economically predominant. Also, the discovery proceedings have
been conducted with a cooperative spirit, are nonduplicative, and
will be available in either forum.
On November 30, 1995, when this opinion was ready for release,
the New York trial-level judge, Justice Shainswit, ruled on pending
motions, filed in March 1995, and denied both the insurers' motion
to enjoin AHP's prosecution of the New Jersey action and AHP's
cross-motion to stay the New York action pending the resolution of
this appeal. The Justice stated that "where, as here, a sister
state has declared that it has `significant and dominant interests'
in the adjudication of the controversy in that State, it would be
manifestly improper for this court to grant the injunction
requested by movants [the insurers]," while recognizing that
"nonetheless, the doctrine of comity does not negate New York's
interest in this litigation." Unfortunately, there is no available
mechanism for consultation with the courts of our sister states
concerning application of the comity doctrine and the resolution of
jurisdictional conflicts in comity-stay situations. Compare
N.J.S.A. 2A:34-34(c) of the Uniform Child Custody Jurisdiction Act
providing for communication with the courts of sister states "to
the end that the issue may be litigated in the more appropriate
forum." See E.E.B. v. D.A.,
89 N.J. 595, 612 (1982), cert. denied,
459 U.S. 1210,
103 S.Ct. 1203,
75 L.Ed.2d 445 (1983); Benda v.
Benda,
236 N.J. Super. 365, 370 (App. Div. 1989). Nor is there any
effective transfer mechanism, as in the federal court system. See
28 U.S.C.A.
§1404(a); Hart & Wechsler's, The Federal Courts and
the Federal System, 1733-46 (3d ed. 1988).
We have endeavored in the past to defer to the dominant
interests of a sister state on comity grounds based upon the
relative importance of the issues to each state. See, e.g.,
Baldwin Enterprises v. Town of Warwick, N.Y.,
226 N.J. Super. 549
(App. Div. 1988). As both the number and local impact of New
Jersey interests are unquestionably strong, perhaps upon review of
our decision, the New York court may wish to reconsider its comity
stay ruling and similarly defer to this New Jersey action.
We reject the insurers' alternative theory for dismissal, the
bar of the entire-controversy doctrine, see R. 4:30A, as clearly
without merit. R. 2:11-3(e)(1)(A) and (E). This case involves
concurrent and duplicative, not fragmented, litigation.
Affirmed.
Footnote: 1Wausau does not appear named as a party in the New Jersey case, although it is listed among the defendants on the appellant's reply brief; AHP comments it is "interesting" that Wausau does not join the present appeal. Footnote: 2AHP argues that the New York action is not "entitled" to first-filed status because AHP was actually the first party to file when it brought suit in Delaware. This misses the point that New Jersey grants comity stays out of deference to the courts of sister states and out of concern for judicial efficiency, not because out-of-state plaintiffs become "entitled" to protection in New Jersey.
The fact that an out-of-state defendant coming to New Jersey
might be acting in bad faith, simply trying to defeat the out-of-state plaintiff's choice of forum, might properly be a factor when
evaluating equities; in this case, however, both sides appear to
have done a fair amount of forum-shopping.