Can the tolling of statutes of limitations based on the defendant's absence from the state ever be consistent with the Commerce Clause?

AuthorHeiser, Walter W.

Most states have legislation that tolls applicable statutes of limitations during the time a defendant is absent from the state. (1) In 1988, the United States Supreme Court held in Bendix Autolite Corp. v. Midwesco Enterprises, Inc. that such tolling provisions violated the Commerce Clause when applied to nonresident corporations. (2) Since then, courts in several jurisdictions have considered the constitutionality of these statutes with respect to other categories of defendants. In some states, courts narrowly defined the statutory term "absence" to exclude individual defendants who, although physically absent from the state, are amenable to service of process under the laws of the forum state. (3) This limiting construction largely eliminates tolling applications that may run afoul of the Commerce Clause. (4)

However, courts in other jurisdictions have construed the tolling provisions in their state statutes to apply whenever the defendant is physically absent from the forum state, regardless of whether that defendant is still amenable to service of process. (5) These courts also conclude that such tolling provisions violate the Commerce Clause when applied to nonresident individuals, (6) as well as to resident individuals whose absence from the forum state was for business reasons. (7) Under the reasoning employed by these courts, the applicable statutes of limitations will not be tolled during the time the defendant temporarily leaves the forum state for a non-business purpose, such as for a vacation in another state or country. (8)

This Article discusses the propriety of these Commerce Clause decisions with respect to individual defendants. More precisely, this Article examines two questions. The first is whether the Supreme Court's holding in Bendix was properly extended to individual resident and nonresident defendants. The other, and more difficult, issue concerns the proper application of the Commerce Clause to state statutes that toll the statute of limitations during the time a resident defendant is temporarily absent from the state. The Article focuses on whether such provisions violate the Commerce Clause regardless of the reason for the absence.

Part I of this Article examines the nature and operation of state statutes that toll statutes of limitations during a defendant's absence, as well as the reasons why many states enacted such legislation. Part II discusses dormant Commerce Clause jurisprudence generally, and its application to tolling provisions based on absence from the state. This Part summarizes both the Supreme Court's decision in Bendix, which invalidated certain absence-based tolling provisions when applied to nonresident corporations, and state and lower federal court decisions that extended Bendix to individual defendants. (9) Part III addresses the two issues identified in the previous paragraph and concludes that the extension of Bendix to individual defendants is clearly appropriate. This Part also explains why absence-based tolling violates the Commerce Clause when applied to a resident defendant who temporarily leaves the state, regardless of the purpose of the out-of-state travel. Finally, this Article concludes that absence-based tolling survives Commerce Clause scrutiny only in very limited circumstances. (10)

  1. TOLLING BASED ON ABSENCE FROM THE STATE

    As mentioned previously, most states have legislation that tolls statutes of limitations during a defendant's absence from the state. (11) For example, the California statute, which is typical of many of these tolling provisions, provides:

    If, when the cause of action accrues against a person, he is out of the state, the action may be commenced within the term herein limited, after his return to the state, and if, after the cause of action accrues, he departs from the state, the time of his absence is not part of the time limited for the commencement of the action. (12) Most of these statutes originally were enacted in the 1800s, at a time when service on an absent defendant was generally unavailable in an in personam action. (13) According to the Supreme Court in Pennoyer v. Neff, the newly adopted Due Process Clause of the Fourteenth Amendment embodied a restriction on personal jurisdiction based on state sovereignty. (14) "[E]very state possesses exclusive jurisdiction and sovereignty over persons and property within its territory," the Pennoyer court reasoned, and, correspondingly, "no State can exercise direct jurisdiction and authority over persons or property without its territory." (15) Therefore, a state court's power to exercise personal jurisdiction was limited to persons or property present within that state, unless the defendant appeared voluntarily. (16)

    Pennoyer also restrained service of process according to the constitutional limitations on personal jurisdiction. (17) In an in personam case, the Court held that the Due Process Clause required personal service on the defendant. (18) However, based on the exclusive sovereignty principle, service of process from the courts of one state could not run into another state: "no tribunal [of one state] can extend its process beyond that territory so as to subject either persons or property to its decisions." (19) As a consequence, a defendant could be personally served only by a court in the state where that defendant resided or was found. (20)

    The Pennoyer rules were less clear with respect to a defendant who was temporarily absent from the forum state, but personal service was constitutionally appropriate only when the defendant returned. Constructive service by publication was constitutionally inadequate unless the defendant had property within the forum state, and even then only if the property was attached at the outset of the litigation. (21) In other words, service by publication was proper in in rem and quasi-in rem actions, but not in in personam actions. (22) The only exception was for cases determining status, such as dissolution of marriage cases, where service by publication on nonresidents was deemed constitutionally permissible. (23)

    In summary, under Pennoyer, a forum state could not exercise personal jurisdiction over a nonresident defendant in an in personam action and could not authorize personal service on that defendant while he was absent from the state. If a defendant was not found within the forum state, he could not be sued there. This meant a plaintiff could sue and serve a defendant only in the state of the defendant's residence, unless the nonresident defendant had an agent to accept service within the forum state. (24) These rules also had choice-of-law ramifications. A court located in the state of the defendant's residence would likely apply its own choice-of-law doctrine, which means the court could apply its own substantive law and statute of limitations. (25)

    In response to Pennoyer's due process restrictions on personal jurisdiction and service of process, many states enacted legislation that tolled statutes of limitations while the defendant was absent from the state. (26) These provisions were intended to alleviate the difficulties confronting resident plaintiffs when commencing an action against nonresident defendants. (27) They served the then-important purpose of "preventing] a claim from being barred simply because the defendant, being outside the state, could not be served with a summons and complaint." (28) Likewise, these statutes alleviated hardships that resulted when Pennoyer's personal jurisdiction and service restrictions compelled a plaintiff to pursue the defendant out of state in order to commence an action within the limitations period. (29) Because the applicable statute of limitations was tolled during a defendant's absence, a plaintiff did not need to file suit until the defendant was present in the state of the plaintiffs residence, when service was available and practical. (30)

    However, in the mid-1900s, the Supreme Court dramatically altered the nature of the due process limitations on personal jurisdiction and service of process. In International Shoe Co. v. Washington, the Court replaced Pennoyer's territorial "presence" restrictions with a new "minimum contacts" requirement. (31) With respect to a nonresident defendant who could not be served within the territory of the forum state, due process requires only that the defendant have sufficient "minimum contacts with [the forum] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" (32) So long as the defendant purposely engaged in activities within the forum, he need not be physically present and served within the forum in order to be subject to personal jurisdiction. (33) International Shoe rejected Pennoyer's mutually exclusive sovereignty of the states as the basis for due process limitations, at least in in personam actions. (34) Subsequently, the Supreme Court extended the "minimum contacts" approach to all assertions of personal jurisdiction, whether denominated in personam, in rem, or quasi in rem. (35)

    Five years after International Shoe, the Supreme Court turned its attention to Pennoyer's formalistic restrictions on service of process. In Mullane v. Central Hanover Bank & Trust Co., the Court set forth the modern standard for determining whether a particular manner of service complies with due process. (36) Rejecting the relevance of historical distinctions between in personam and in rem actions, this time in the context of the power of the state to resort to constructive service by publication, the Court ruled that due process instead requires "notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." (37)

    Most importantly for purposes of this Article, Mullane's new due process standard eliminated the territorial restrictions on service of process...

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