Skip to main content



Bonnier Corporation v. Jersey Cape Yacht Sales Inc.

2010 WL 4025062 (N.J. Super. App. Div. 2010)

CORPORATIONS; STANDING — If a corporation’s business in New Jersey is confined to interstate commerce, then it cannot be compelled to register as a foreign corporation in New Jersey and has standing to sue in New Jersey without registering.

A publisher of national special-interest magazines sold advertising space in one of its magazines to a New Jersey corporation. When the customer failed to pay for its advertising, the publisher filed a collection action in New Jersey. The customer moved to dismiss the complaint for lack of standing because the publisher was a not a New Jersey corporation and had not filed a certificate of authority to do business in New Jersey pursuant to N.J.S.A. 14A:13-11.

The publisher argued that its business contacts in New Jersey were non-local in character and therefore, under the Commerce Clause of the United States Constitution, it was unconstitutional for New Jersey to require the publisher to obtain a certificate of authority in New Jersey. In support of its position, the publisher noted that it published national special-interest magazines and not magazines targeted specifically to New Jersey residents. The publisher also argued that it did not have a New Jersey presence because it did not own any property in New Jersey, did not maintain a New Jersey office, and did not have a New Jersey telephone listing. In addition, the publisher did not have any employees working in New Jersey although it occasionally sent sales representatives into New Jersey to meet with its customers.

The lower court held that the publisher was required to obtain a certificate of authority and it dismissed the complaint without prejudice, subject to reinstatement if the publisher filed a certificate of authority. The publisher appealed, and the Appellate Division reversed, finding that under the Commerce Clause, a state’s power to compel a foreign corporation to register within that state is limited. Based on a United States Supreme Court case, the critical analysis is whether the foreign corporation’s presence in New Jersey was confined to “interstate” business or “intrastate” business. If a corporation’s business in New Jersey is confined to interstate commerce, then it cannot be compelled to register as a foreign corporation in New Jersey. However, if it has engaged in intrastate commerce, it can be compelled to register as a foreign corporation. In this case, if the publisher maintained a presence in New Jersey either by working out of New Jersey offices or by retaining employees in New Jersey to sell directly to New Jersey retailers (as opposed to wholesalers), then would be engaging in intrastate commerce. Or, if the publisher published a local, New Jersey edition of its national magazine that was specifically targeted towards New Jersey residents, the publisher would be engaging in intrastate commerce. However, the Court found that, based on the record in this case, there was no evidence that the publisher had engaged in intrastate commerce that would have required it to obtain a certificate of authority.


MEISLIK & MEISLIK
66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 • info@meislik.com