Demystifying Borrowing Statutes
May 6, 2025
A borrowing statute is a law directing the courts in one jurisdiction to “borrow” the shorter statute of limitations of another jurisdiction. Borrowing statutes are common in the United States—thirty-six states have enacted them—but they are largely unknown in the rest of the world. In this post, I seek to demystify borrowing statutes for the uninitiated. I first discuss their purpose and explain how they work. I then review the many different varieties of borrowing statutes currently on the books and consider whether they are still necessary. I conclude by discussing several proposals for reform.
Purpose
The purpose of a borrowing statute is to discourage plaintiffs from forum shopping for long limitations periods. In the United States, many states classify statutes of limitations as procedural for choice-of-law purposes, which means that the courts in these states will apply the limitations period of the forum even when the underlying claim is governed by the laws of another jurisdiction. This state of affairs presents obvious opportunities for forum shopping. If a plaintiff can somehow obtain personal jurisdiction over a defendant in a jurisdiction with a long statute of limitations, the claim will be deemed timely even if it is barred under the laws of the jurisdiction in which it first arose.
The issue of forum shopping for limitations periods rarely arises in other nations because most countries classify statutes of limitations as substantive. When limitations periods are substantive, then there is no reason to seek out a forum with a long statute of limitations because there is no guarantee that that statute will be applied. The borrowing statute is a uniquely American invention designed to address a uniquely American doctrine—classifying statutes of limitations as procedural rather than substantive.
How They Work
To understand how a borrowing statute works, consider the facts of Miller v. Stauffer Chemical Company. The plaintiff was a resident of Oregon who was injured in California by employees of the defendant. The plaintiff sued the defendant in Idaho state court eighteen months after the accident. The statute of limitations in California and Oregon was one year. The statute of limitations in Idaho was two years.
The Idaho courts classify statutes of limitations as procedural. As a matter of common law, therefore, those courts would ordinarily apply the two-year statute of limitations of the forum and deem the claim timely. The Idaho legislature had, however, enacted a borrowing statute which stated that:
When a cause of action has arisen in another state or territory, or in a foreign country, and by the laws thereof an action thereon cannot there be maintained against a person by reason of the lapse of time, an action thereon shall not be maintained against him in this state.
The borrowing statute rendered the plaintiff’s claim untimely. The cause of action “arose” in California because the plaintiff was injured there. Under the laws of California, the plaintiff’s action could not be maintained because it was brought more than one year after the accident. Since the claim was untimely under the laws of California, it was similarly untimely in Idaho. The plaintiff’s attempt to take advantage of the longer limitations period in Idaho was thus defeated by the borrowing statute.
Varieties
There are three different varieties of borrowing statutes. The first is the basic borrowing statute. This statute borrows the shorter limitations period of the place where the cause of action arose without qualification. The Idaho statute quoted above is an example of this type of borrowing statute. Eight states—including Colorado, Florida, and Wisconsin—have enacted this type of borrowing statute.
The second is the basic borrowing statute with a resident-plaintiff exception. This statute borrows the shorter limitations period of the place where the cause of action arose unless the plaintiff is a resident of the forum. When the plaintiff is a resident of the forum, then the court will only look to the statute of limitations of the forum to determine whether the claim is timely. Eleven states—including California, Delaware, and New York—have enacted this type of borrowing statute.
The third is the exotic borrowing statute. There are five different types: (1) those that only apply when all of the litigants reside outside the forum, (2) those that only apply when the plaintiff is not a resident of the forum, (3) those that only apply when defendant is not a resident of the forum, (4) those that only apply to specific causes of action, and (5) those that are sui generis. Seventeen states have enacted an exotic borrowing statute.
A chart listing which states have enacted which varieties of borrowing statutes can be found here.
Do We Still Need Them?
The purpose of the borrowing statute is to discourage plaintiffs from forum shopping for statutes of limitation. The ability to shop for a favorable limitations period has, however, been dramatically curtailed in recent years, first, by changes in the law of personal jurisdiction and, second, by the increased use of forum selection clauses.
Personal Jurisdiction
In the years between 1945 and 2014, plaintiffs were frequently able to obtain personal jurisdiction over corporate defendants in multiple states. The existence of “doing-business” jurisdiction meant that plaintiffs holding claims that were stale in one jurisdiction could easily sue a corporate defendant in another state with a longer statute of limitations. In 2014, however, the U.S. Supreme Court did away with doing-business jurisdiction when it decided Daimler AG v. Bauman.
The decision significantly curtailed a plaintiff’s ability to forum shop. If the plaintiff in Miller v. Stauffer Chemical Company were to file his personal injury suit in Idaho today, for example, there would be no general jurisdiction over the defendant because it was neither headquartered nor incorporated in Idaho. There would be no specific jurisdiction over the defendant because the plaintiff was injured in California. The case would almost certainly have been dismissed for lack of personal jurisdiction before the defendant raised the issue of timeliness. The borrowing statute would never have been brought into play.
In light of these and other recent changes to the law of personal jurisdiction, it is reasonable to ask whether the old concerns about forum shopping for statutes of limitation—concerns premised on the now-obsolete assumption that corporations are subject to personal jurisdiction in many different states—are still valid.
Forum Selection Clauses
Over the past several decades, forum selection clauses have become ubiquitous in U.S. contracts. The forum selection clauses in contracts drafted by Apple, for example, state that all suits must be brought in Santa Clara, California. The contracts drafted by Amazon mandate that all claims be filed in King County, Washington. The standard terms and conditions for Carnival Cruise require cruise passengers to sue the company in Miami, Florida.
If a plaintiff sues in a court that is different than the one named in the clause, then the court will typically dismiss or transfer the case to the chosen forum. The effect of such provisions is to limit the ability of plaintiffs to choose where a lawsuit will be filed. This shift in legal practice similarly calls into question the continued need for borrowing statutes to discourage forum shopping by plaintiffs.
Proposals for Reform
In light of these changes in the law, one may fairly inquire whether the borrowing statutes currently on the books are serving their intended purpose. If a state legislature was potentially interested in updating its borrowing statutes for the twenty-first century, there are three different reform proposals that it might consider.
Repeal
In a world where doing-business jurisdiction is defunct and forum selection clauses are omnipresent, one may fairly question whether borrowing statutes are still required to discourage forum shopping. If they are no longer necessary to achieve this goal, then they should be repealed, not least because many of the borrowing statutes currently on the books bar claims brought by plaintiffs who are not engaged in forum shopping. When a plaintiff sues in a court named in a mandatory forum selection clause, for example, and when that suit is timely under the limitations period of the forum, it seems unfair to invoke a borrowing statute to declare the suit barred by the statute of limitations of the jurisdiction where the cause of action arose.
Reclassification
A borrowing statute is only needed when statutes of limitations are classified as procedural for choice-of-law purposes. If these laws are classified as substantive, then the forum is no longer obliged to apply its own limitations period and the incentives for forum shopping are greatly reduced. As an alternative to simply repealing its borrowing statute, therefore, a state legislature might choose to replace it with a statute that directs courts to apply the limitations period associated with the law that governs the underlying claim.
The Uniform Conflict of Laws – Limitations Act does precisely this. Instead of directing the courts to “borrow” the shorter statute of limitations from the jurisdiction where the cause of action arose, the Act calls for statutes of limitations to be classified as substantive. Specifically, it directs courts to perform a choice-of-law analysis for the underlying claim and then to apply the limitations period associated with that claim. This approach would simultaneously discourage forum shopping (by making clear that limitations periods are not procedural) and simplify the judicial task (by making clear that there is no need to perform a separate choice-of-law analysis for limitations periods).
Revision
Still another (more modest) reform proposal would be for states to revise their existing borrowing statutes to better target plaintiffs engaged in forum shopping for limitations periods. These states could amend these statutes to state that they shall not apply when (a) the plaintiff brings the lawsuit in the plaintiff’s home jurisdiction, (b) the plaintiff brings the lawsuit in the defendant’s home jurisdiction, or (c) the plaintiff brings the lawsuit in the jurisdiction named in an exclusive forum selection clause. In none of these scenarios is the plaintiff engaged in unseemly forum shopping. And yet the courts routinely invoke borrowing statutes to hold that the plaintiff’s claims are time-barred.
At a minimum, state legislatures should take steps to amend their existing borrowing statutes to carve out each of the three scenarios outlined above. Such a statute might look like this:
When the cause of action has arisen in another state, territory, or country between nonresidents of this state, and by the laws of the state, territory, or country where the action arose, an action cannot be maintained thereon by reason of the lapse of time, no action shall be maintained thereon in this state. This [section] shall not apply when the parties have agreed in writing that a cause of action shall be brought only in this state.
Enacting such a statute would go a long way towards ensuring that borrowing statutes achieve their intended purpose of discouraging forum shopping without creating mischief for plaintiffs not engaged in unseemly forum shopping.
Additional Reading
The arguments set forth above are further developed in a forthcoming article in the Florida Law Review. That article may be downloaded here.