Tolling Statute Violates Dormant Commerce

Arrow Highway Steel, Inc. v. Dubin, No. B303289 (D2d2 Oct. 29, 2020)

Plaintiffs here have a super-old judgment that they never bothered to renew under Code of Civil Procedure § 683.110, 683.120. But they argue that the ten-year limit on time to bring a collections action in § 337.5, should be tolled under § 351, which tolls limitations while the defendant is not present in California. Defendants, however, argue that § 351 is unconstitutional under the dormant commerce clause. The trial court agreed, and so does the Court of Appeal.

Generally, there are three tests that determine whether a state law violates the commerce clause: (1) laws that purposefully discriminate against out of state persons; (2) laws that do so in “practical effect”; and (3) laws that, while not necessarily discriminatory, burden interstate commerce to an extent that can’t be justified by their utility. Nobody here is arguing that § 351 is a (1) or a (2). That is, § 351 applies equally to toll the statute when a Californian leaves as it does when a Nevadan comes here to commit a tort and then leaves the state. So the issue is the balancing test.

Which is not the clearest of tests in the con law casebook. Applying both U.S. Supreme Court and California state precedent, the Court of Appeal holds that § 351 subjects defendants to an unreasonable burden of having to choose between remaining present in California to permit the statute to run and being out of state to conduct their affairs, including interstate commerce. That is particular so given the minimal need for tolling in an era where out of state defendants are readily subject to long arm jurisdiction and out of state service of process.

Affirmed.