Bunk Dicta is Bunk Dicta: New Jersey Appellate Division Rejects Residency as a Sufficient Condition for Jurisdiction

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When can an employee who was injured in another state pursue a workers’ compensation claim in New Jersey? On July 22, 2019, the New Jersey Appellate Division approved for publication a decision dealing with exactly that question. In Marconi v. United Airlines, A-0110-18T4 (App. Div. July 22, 2019), the petitioner alleged he sustained work injuries in Pennsylvania. Testimony showed that United initially hired the petitioner in San Francisco. At the time of the accidents, the petitioner lived in New Jersey but worked at the Philadelphia airport. Other than his residency, his only employment ties to New Jersey included that he would call United staff at Newark Liberty Airport “once every couple of months” for technical advice. The petitioner would also fly out of Newark when he was assigned to do field work at other sites. Additionally, the court noted that his supervisor reported to a United employee in Newark.

As is tradition, the judge of workers’ compensation began the jurisdictional analysis by quoting Larson’s six grounds for asserting jurisdiction:

  1. Place where the injury occurred
  2. Place of making the contract
  3. Place where the employment relation exists or is carried out
  4. Place where the industry is localized
  5. Place where the employee resides
  6. Place whose statute the parties expressly adopted by contract.

The petitioner’s claims were dismissed for lack of jurisdiction in New Jersey. The decision was appealed by the petitioner. The Appellate Division provided a detailed analysis of the fourth and fifth Larson factors and their relation to jurisdiction in New Jersey.

On appeal, the petitioner argued that residency alone was sufficient for jurisdiction in the state of New Jersey, citing  Bunk v. Port Authority of New York & New Jersey, 144 N.J. 176, 180-81 (1996). However, in its analysis, the Marconi court found that the crux of the Bunk decision was not a jurisdictional issue. Therefore, Bunk’s conclusion that residency was sufficient for jurisdiction was dicta and held no precedential effect in this circumstance. Instead, after reviewing a number of cases finding jurisdiction based on residency, along with another Larson factor, the court concluded that residency alone was insufficient to establish jurisdiction over workplace injuries occurring outside of New Jersey.

The court continued, finding that Larson’s fourth factor, the place where the industry is localized, is also insufficient in itself to confer jurisdiction. The court conducted a survey of cases from other states to understand what “localization” means. The court deferred on finding a specific definition of the term, instead concluding that in weighing the fourth factor, courts must evaluate “the nature and frequency of the employee’s relationship with the localized presence of the employer.” In this case, the court concluded that United’s localized presence in New Jersey was the facility at Newark Liberty Airport. It found that the petitioner’s contacts with the Newark facility were “in large part” to advance his work in Philadelphia or the field locations. Therefore, the fourth Larson category was not satisfied here.

The case highlights some important considerations for employers and insurers when evaluating whether New Jersey will assert jurisdiction over an injury occurring outside of New Jersey. The most basic lesson is that residency alone is not enough. An employee who lives in New Jersey must have some additional connection to the state to bring a claim. Likewise, the decision suggests an employee who has a significant relationship with the localized presence of an employer in New Jersey could not bring a claim if he was not also a resident. It bears repeating that the court’s conclusions here only apply to cases where the injury occurred outside of New Jersey.

The decision is also instructive as to what facts respondents should highlight in the localization inquiry. Employers who can demonstrate that a large part of the petitioner’s work in New Jersey was, in fact, in furtherance of the employer’s purpose in another state will have a good argument that New Jersey cannot assert jurisdiction over an extra-territorial injury, even if the petitioner is a resident.