(Slip Opinion) OCTOBER TERM, 2009 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A. v.
ALLSTATE INSURANCE CO.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SECOND CIRCUIT
No. 08–1008. Argued November 2, 2009—Decided March 31, 2010
After respondent Allstate refused to remit the interest due under New
York law on petitioner Shady Grove’s insurance claim, Shady Grove
filed this class action in diversity to recover interest Allstate owed it
and others. Despite the class action provisions set forth in Federal
Rule of Civil Procedure 23, the District Court held itself deprived of
jurisdiction by N. Y. Civ. Prac. Law Ann. §901(b), which precludes a
class action to recover a “penalty” such as statutory interest. Affirm
ing, the Second Circuit acknowledged that a Federal Rule adopted in
compliance with the Rules Enabling Act, 28 U. S. C. §2072, would
control if it conflicted with §901(b), but held there was no conflict be
cause §901(b) and Rule 23 address different issues—eligibility of the
particular type of claim for class treatment and certifiability of a
given class, respectively. Finding no Federal Rule on point, the Court
of Appeals held that §901(b) must be applied by federal courts sitting
in diversity because it is “substantive” within the meaning of Erie R.
Co. v. Tompkins, 304 U. S. 64 (1938).
Held: The judgment is reversed, and the case is remanded.
549 F. 3d 137, reversed and remanded.
JUSTICE SCALIA delivered the opinion of the Court with respect to
PARTS I and II–A, concluding that §901(b) does not preclude a federal
district court sitting in diversity from entertaining a class action un
der Rule 23. Pp. 3–12.
(a) If Rule 23 answers the question in dispute, it governs here
unless it exceeds its statutory authorization or Congress’s rulemak
ing power. Burlington Northern R. Co. v. Woods, 480 U. S. 1, 4–5.
Pp. 3–4.
2 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
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(b) Rule 23(b) answers the question in dispute—whether Shady
Grove’s suit may proceed as a class action—when it states that “[a]
class action may be maintained” if certain conditions are met. Since
§901(b) attempts to answer the same question, stating that Shady
Grove’s suit “may not be maintained as a class action” because of the
relief it seeks, that provision cannot apply in diversity suits unless
Rule 23 is ultra vires. The Second Circuit’s view that §901(b) and
Rule 23 address different issues is rejected. The line between eligibil
ity and certifiability is entirely artificial and, in any event, Rule 23
explicitly empowers a federal court to certify a class in every case
meeting its criteria. Allstate’s arguments based on the exclusion of
some federal claims from Rule 23’s reach pursuant to federal statutes
and on §901’s structure are unpersuasive. Pp. 4–6.
(c) The dissent’s claim that §901(b) can coexist with Rule 23 be
cause it addresses only the remedy available to class plaintiffs is
foreclosed by §901(b)’s text, notwithstanding its perceived purpose.
The principle that courts should read ambiguous Federal Rules to
avoid overstepping the authorizing statute, 28 U. S. C. §2072(b), does
not apply because Rule 23 is clear. The dissent’s approach does not
avoid a conflict between §901(b) and Rule 23 but instead would ren
der Rule 23 partially invalid. Pp. 6–12.
JUSTICE SCALIA, joined by THE CHIEF JUSTICE, JUSTICE THOMAS, and
JUSTICE SOTOMAYOR, concluded in Parts II–B and II–D:
(a) The Rules Enabling Act, 28 U. S. C. §2072, not Erie, controls
the validity of a Federal Rule of Procedure. Section 2072(b)’s re
quirement that federal procedural rules “not abridge, enlarge or mod
ify any substantive right” means that a Rule must “really regulat[e]
procedure,—the judicial process for enforcing rights and duties rec
ognized by substantive law and for justly administering remedy and
redress for disregard or infraction of them,” Sibbach v. Wilson & Co.,
312 U. S. 1, 14. Though a Rule may incidentally affect a party’s
rights, it is valid so long as it regulates only the process for enforcing
those rights, and not the rights themselves, the available remedies,
or the rules of decision for adjudicating either. Rule 23 satisfies that
criterion, at least insofar as it allows willing plaintiffs to join their
separate claims against the same defendants. Allstate’s arguments
asserting §901(b)’s substantive impact are unavailing: It is not the
substantive or procedural nature of the affected state law that mat
ters, but that of the Federal Rule. See, e.g., id., at 14. Pp. 12–16.
(b) Opening federal courts to class actions that cannot proceed in
state court will produce forum shopping, but that is the inevitable re
sult of the uniform system of federal procedure that Congress cre
ated. P. 22.
JUSTICE SCALIA, joined by THE CHIEF JUSTICE and JUSTICE THOMAS,
Cite as: 559 U. S. ____ (2010) 3
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concluded in Part II–C that the concurrence’s analysis—under which
a Federal Rule may displace a state procedural rule that is not
“bound up” or “sufficiently intertwined” with substantive rights and
remedies under state law—squarely conflicts with Sibbach’s single
criterion that the Federal Rule “really regulat[e] procedure,” 312
U. S., at 13–14. Pp. 16–22.
JUSTICE STEVENS agreed that Federal Rule of Civil Procedure 23
must apply because it governs whether a class must be certified, and
it does not violate the Rules Enabling Act in this case. Pp. 1–22.
(a) When the application of a federal rule would “abridge,
enlarge or modify any substantive right,” 28 U. S. C. §2072(b), the
federal rule cannot govern. In rare cases, a federal rule that dictates
an answer to a traditionally procedural question could, if applied,
displace an unusual state law that is procedural in the ordinary use
of the term but is so intertwined with a state right or remedy that it
functions to define the scope of the state-created right. Examples
may include state laws that make it significantly more difficult to
bring or to prove a claim or that function as limits on the amount of
recovery. An application of a federal rule that directly collides with
such a state law violates the Rules Enabling Act. Pp. 1–13.
(b) N. Y. Civ. Prac. Law Ann. §901(b), however, is not such a
state law. It is a procedural rule that is not part of New York’s sub
stantive law. Pp. 17–22.
SCALIA, J., announced the judgment of the Court and delivered the
opinion of the Court with respect to Parts I and II–A, in which ROB-
ERTS, C. J., and STEVENS, THOMAS, and SOTOMAYOR, JJ., joined, an opin
ion with respect to Parts II–B and II–D, in which ROBERTS, C. J., and
THOMAS, and SOTOMAYOR, JJ., joined, and an opinion with respect to
Part II–C, in which ROBERTS, C. J., and, THOMAS, J., joined. STEVENS,
J., filed an opinion concurring in part and concurring in the judgment.
GINSBURG, J., filed a dissenting opinion, in which KENNEDY, BREYER,
and ALITO, JJ., joined.
Cite as: 559 U. S. ____ (2010) 1
Opinion of SCALIA, J.
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 08–1008
_________________
SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.,
PETITIONER v. ALLSTATE INSURANCE
COMPANY
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SECOND CIRCUIT
[March 31, 2010]
JUSTICE SCALIA announced the judgment of the Court
and delivered the opinion of the Court with respect to
Parts I and II–A, an opinion with respect to Parts II–B
and II–D, in which THE CHIEF JUSTICE, JUSTICE THOMAS,
and JUSTICE SOTOMAYOR join, and an opinion with respect
to Part II–C, in which THE CHIEF JUSTICE and JUSTICE
THOMAS join.
New York law prohibits class actions in suits seeking
penalties or statutory minimum damages.1 We consider
——————
1 N. Y. Civ. Prac. Law Ann. §901 (West 2006) provides:
“(a) One or more members of a class may sue or be sued as represen
tative parties on behalf of all if:
“1. the class is so numerous that joinder of all members, whether
otherwise required or permitted, is impracticable;
“2. there are questions of law or fact common to the class which
predominate over any questions affecting only individual members;
“3. the claims or defenses of the representative parties are typical of
the claims or defenses of the class;
“4. the representative parties will fairly and adequately protect the
interests of the class; and
“5. a class action is superior to other available methods for the fair
2 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
Opinion of SCALIA, J.
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whether this precludes a federal district court sitting in
diversity from entertaining a class action under Federal
Rule of Civil Procedure 23.2
I
The petitioner’s complaint alleged the following: Shady
Grove Orthopedic Associates, P. A., provided medical care
to Sonia E. Galvez for injuries she suffered in an automo
bile accident. As partial payment for that care, Galvez
assigned to Shady Grove her rights to insurance benefits
under a policy issued in New York by Allstate Insurance
Co. Shady Grove tendered a claim for the assigned bene
fits to Allstate, which under New York law had 30 days to
pay the claim or deny it. See N. Y. Ins. Law Ann. §5106(a)
(West 2009). Allstate apparently paid, but not on time,
and it refused to pay the statutory interest that accrued on
the overdue benefits (at two percent per month), see ibid.
Shady Grove filed this diversity suit in the Eastern
District of New York to recover the unpaid statutory in
terest. Alleging that Allstate routinely refuses to pay
——————
and efficient adjudication of the controversy.
“(b) Unless a statute creating or imposing a penalty, or a minimum
measure of recovery specifically authorizes the recovery thereof in a
class action, an action to recover a penalty, or minimum measure of
recovery created or imposed by statute may not be maintained as a
class action.”
2 Rule 23(a) provides:
“(a) Prerequisites. One or more members of a class may sue or be
sued as representative parties on behalf of all members only if:
“(1) the class is so numerous that joinder of all members is imprac
ticable;
“(2) there are questions of law or fact common to the class;
“(3) the claims or defenses of the representative parties are typical
of the claims or defenses of the class; and
“(4) the representative parties will fairly and adequately protect
the interests of the class.”
Subsection (b) says that “[a] class action may be maintained if Rule 23
(a) is satisfied and if” the suit falls into one of three described catego
ries (irrelevant for present purposes).
Cite as: 559 U. S. ____ (2010) 3
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interest on overdue benefits, Shady Grove sought relief on
behalf of itself and a class of all others to whom Allstate
owes interest. The District Court dismissed the suit for
lack of jurisdiction. 466 F. Supp. 2d 467 (2006). It rea
soned that N. Y. Civ. Prac. Law Ann. §901(b), which pre
cludes a suit to recover a “penalty” from proceeding as a
class action, applies in diversity suits in federal court,
despite Federal Rule of Civil Procedure 23. Concluding
that statutory interest is a “penalty” under New York law,
it held that §901(b) prohibited the proposed class action.
And, since Shady Grove conceded that its individual claim
(worth roughly $500) fell far short of the amount-in
controversy requirement for individual suits under 28
U. S. C. §1332(a), the suit did not belong in federal court.3
The Second Circuit affirmed. 549 F. 3d 137 (2008). The
court did not dispute that a federal rule adopted in com
pliance with the Rules Enabling Act, 28 U. S. C. §2072,
would control if it conflicted with §901(b). But there was
no conflict because (as we will describe in more detail
below) the Second Circuit concluded that Rule 23 and
§901(b) address different issues. Finding no federal rule
on point, the Court of Appeals held that §901(b) is “sub
stantive” within the meaning of Erie R. Co. v. Tompkins,
304 U. S. 64 (1938), and thus must be applied by federal
courts sitting in diversity.
We granted certiorari, 556 U. S. ___ (2009).
II
The framework for our decision is familiar. We must
first determine whether Rule 23 answers the question in
dispute. Burlington Northern R. Co. v. Woods, 480 U. S. 1,
——————
3 Shady Grove had asserted jurisdiction under 28 U. S. C. §1332(d)(2),
which relaxes, for class actions seeking at least $5 million, the rule
against aggregating separate claims for calculation of the amount in
controversy. See Exxon Mobil Corp. v. Allapattah Services, Inc., 545
U. S. 546, 571 (2005).
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4–5 (1987). If it does, it governs—New York’s law not
withstanding—unless it exceeds statutory authorization or
Congress’s rulemaking power. Id., at 5; see Hanna v.
Plumer, 380 U. S. 460, 463–464 (1965). We do not wade
into Erie’s murky waters unless the federal rule is inappli
cable or invalid. See 380 U. S., at 469–471.
A
The question in dispute is whether Shady Grove’s suit
may proceed as a class action. Rule 23 provides an an
swer. It states that “[a] class action may be maintained” if
two conditions are met: The suit must satisfy the criteria
set forth in subdivision (a) (i.e., numerosity, commonality,
typicality, and adequacy of representation), and it also
must fit into one of the three categories described in sub
division (b). Fed. Rule Civ. Proc. 23(b). By its terms this
creates a categorical rule entitling a plaintiff whose suit
meets the specified criteria to pursue his claim as a class
action. (The Federal Rules regularly use “may” to confer
categorical permission, see, e.g., Fed. Rules Civ. Proc.
8(d)(2)–(3), 14(a)(1), 18(a)–(b), 20(a)(1)–(2), 27(a)(1),
30(a)(1), as do federal statutes that establish procedural
entitlements, see, e.g., 29 U. S. C. §626(c)(1); 42 U. S. C.
§2000e–5(f)(1).) Thus, Rule 23 provides a one-size-fits-all
formula for deciding the class-action question. Because
§901(b) attempts to answer the same question—i.e., it
states that Shady Grove’s suit “may not be maintained as
a class action” (emphasis added) because of the relief it
seeks—it cannot apply in diversity suits unless Rule 23 is
ultra vires.
The Second Circuit believed that §901(b) and Rule 23 do
not conflict because they address different issues. Rule 23,
it said, concerns only the criteria for determining whether
a given class can and should be certified; section 901(b), on
the other hand, addresses an antecedent question:
whether the particular type of claim is eligible for class
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treatment in the first place—a question on which Rule 23
is silent. See 549 F. 3d, at 143–144. Allstate embraces
this analysis. Brief for Respondent 12–13.
We disagree. To begin with, the line between eligibility
and certifiability is entirely artificial. Both are precondi
tions for maintaining a class action. Allstate suggests that
eligibility must depend on the “particular cause of action”
asserted, instead of some other attribute of the suit, id., at
12. But that is not so. Congress could, for example, pro
vide that only claims involving more than a certain num
ber of plaintiffs are “eligible” for class treatment in federal
court. In other words, relabeling Rule 23(a)’s prerequi
sites “eligibility criteria” would obviate Allstate’s objec
tion—a sure sign that its eligibility-certifiability distinc
tion is made-to-order.
There is no reason, in any event, to read Rule 23 as
addressing only whether claims made eligible for class
treatment by some other law should be certified as class
actions. Allstate asserts that Rule 23 neither explicitly
nor implicitly empowers a federal court “to certify a class
in each and every case” where the Rule’s criteria are met.
Id., at 13–14. But that is exactly what Rule 23 does: It
says that if the prescribed preconditions are satisfied “[a]
class action may be maintained” (emphasis added)—not “a
class action may be permitted.” Courts do not maintain
actions; litigants do. The discretion suggested by Rule 23’s
“may” is discretion residing in the plaintiff: He may bring
his claim in a class action if he wishes. And like the rest
of the Federal Rules of Civil Procedure, Rule 23 automati
cally applies “in all civil actions and proceedings in the
United States district courts,” Fed. Rule Civ. Proc. 1. See
Califano v. Yamasaki, 442 U. S. 682, 699–700 (1979).
Allstate points out that Congress has carved out some
federal claims from Rule 23’s reach, see, e.g., 8 U. S. C.
§1252(e)(1)(B)—which shows, Allstate contends, that Rule
23 does not authorize class actions for all claims, but
6 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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rather leaves room for laws like §901(b). But Congress,
unlike New York, has ultimate authority over the Federal
Rules of Civil Procedure; it can create exceptions to an
individual rule as it sees fit—either by directly amending
the rule or by enacting a separate statute overriding it in
certain instances. Cf. Henderson v. United States, 517
U. S. 654, 668 (1996). The fact that Congress has created
specific exceptions to Rule 23 hardly proves that the Rule
does not apply generally. In fact, it proves the opposite. If
Rule 23 did not authorize class actions across the board,
the statutory exceptions would be unnecessary.
Allstate next suggests that the structure of §901 shows
that Rule 23 addresses only certifiability. Section 901(a),
it notes, establishes class-certification criteria roughly
analogous to those in Rule 23 (wherefore it agrees that
subsection is pre-empted). But §901(b)’s rule barring class
actions for certain claims is set off as its own subsection,
and where it applies §901(a) does not. This shows, accord
ing to Allstate, that §901(b) concerns a separate subject.
Perhaps it does concern a subject separate from the sub
ject of §901(a). But the question before us is whether it
concerns a subject separate from the subject of Rule 23—
and for purposes of answering that question the way New
York has structured its statute is immaterial. Rule 23
permits all class actions that meet its requirements, and a
State cannot limit that permission by structuring one part
of its statute to track Rule 23 and enacting another part
that imposes additional requirements. Both of §901’s
subsections undeniably answer the same question as Rule
23: whether a class action may proceed for a given suit.
Cf. Burlington, 480 U. S., at 7–8.
The dissent argues that §901(b) has nothing to do with
whether Shady Grove may maintain its suit as a class
action, but affects only the remedy it may obtain if it wins.
See post, at 8–17 (opinion of GINSBURG, J.). Whereas
“Rule 23 governs procedural aspects of class litigation” by
Cite as: 559 U. S. ____ (2010) 7
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“prescrib[ing] the considerations relevant to class certifica
tion and postcertification proceedings,” §901(b) addresses
only “the size of a monetary award a class plaintiff may
pursue.” Post, at 11–12. Accordingly, the dissent says,
Rule 23 and New York’s law may coexist in peace.
We need not decide whether a state law that limits the
remedies available in an existing class action would con
flict with Rule 23; that is not what §901(b) does. By its
terms, the provision precludes a plaintiff from “main
tain[ing]” a class action seeking statutory penalties.
Unlike a law that sets a ceiling on damages (or puts other
remedies out of reach) in properly filed class actions,
§901(b) says nothing about what remedies a court may
award; it prevents the class actions it covers from coming
into existence at all.4 Consequently, a court bound by
§901(b) could not certify a class action seeking both statu
tory penalties and other remedies even if it announces in
advance that it will refuse to award the penalties in the
event the plaintiffs prevail; to do so would violate the
statute’s clear prohibition on “maintain[ing]” such suits as
class actions.
The dissent asserts that a plaintiff can avoid §901(b)’s
barrier by omitting from his complaint (or removing) a
request for statutory penalties. See post, at 14–15. Even
assuming all statutory penalties are waivable,5 the fact
——————
4 Contrary to the dissent’s implication, post, at 13, we express no view
as to whether state laws that set a ceiling on damages recoverable in a
single suit, see App. A to Brief for Respondent, are pre-empted.
Whether or not those laws conflict with Rule 23, §901(b) does conflict
because it addresses not the remedy, but the procedural right to main
tain a class action. As Allstate and the dissent note, several federal
statutes also limit the recovery available in class actions. See, e.g., 12
U. S. C. §2605(f)(2)(B); 15 U. S. C. §1640(a)(2)(B); 29 U. S. C.
§1854(c)(1). But Congress has plenary power to override the Federal
Rules, so its enactments, unlike those of the States, prevail even in case
of a conflict.
5 But see, e.g., Asher v. Abbott Labs., 290 App. Div. 2d 208, 737
8 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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that a complaint omitting them could be brought as a class
action would not at all prove that §901(b) is addressed
only to remedies. If the state law instead banned class
actions for fraud claims, a would-be class-action plaintiff
could drop the fraud counts from his complaint and pro
ceed with the remainder in a class action. Yet that would
not mean the law provides no remedy for fraud; the ban
would affect only the procedural means by which the
remedy may be pursued. In short, although the dissent
correctly abandons Allstate’s eligibility-certifiability dis
tinction, the alternative it offers fares no better.
The dissent all but admits that the literal terms of
§901(b) address the same subject as Rule 23—i.e., whether
a class action may be maintained—but insists the provi
sion’s purpose is to restrict only remedies. See post, at 12–
15; post, at 15 (“[W]hile phrased as responsive to the
question whether certain class actions may begin, §901(b)
is unmistakably aimed at controlling how those actions
must end”). Unlike Rule 23, designed to further proce
dural fairness and efficiency, §901(b) (we are told) “re
sponds to an entirely different concern”: the fear that
allowing statutory damages to be awarded on a class-wide
basis would “produce overkill.” Post, at 12, 9 (internal
quotation marks omitted). The dissent reaches this con
clusion on the basis of (1) constituent concern recorded in
the law’s bill jacket; (2) a commentary suggesting that the
Legislature “apparently fear[ed]” that combining class
actions and statutory penalties “could result in annihilat
ing punishment of the defendant,” V. Alexander, Practice
Commentaries, C901:11, reprinted in 7B McKinney’s
Consolidated Laws of New York Ann., p. 104 (2006) (in
ternal quotation marks omitted); (3) a remark by the
Governor in his signing statement that §901(b) “ ‘ provides
——————
N. Y. S. 2d 4 (2002) (treble damages under N. Y. Gen. Bus. Law §340(5)
are nonwaivable, wherefore class actions under that law are barred).
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a controlled remedy,’ ” post, at 9 (quoting Memorandum on
Approving L. 1975, Ch. 207, reprinted in 1975 N. Y. Laws,
at 1748; emphasis deleted), and (4) a state court’s state
ment that the final text of §901(b) “ ‘was the result of a
compromise among competing interests,’ ” post, at 9 (quot
ing Sperry v. Crompton Corp., 8 N. Y. 3d 204, 211, 863
N. E. 2d 1012, 1015 (2007)).
This evidence of the New York Legislature’s purpose is
pretty sparse. But even accepting the dissent’s account of
the Legislature’s objective at face value, it cannot override
the statute’s clear text. Even if its aim is to restrict the
remedy a plaintiff can obtain, §901(b) achieves that end by
limiting a plaintiff’s power to maintain a class action. The
manner in which the law “could have been written,” post,
at 23, has no bearing; what matters is the law the Legisla
ture did enact. We cannot rewrite that to reflect our
perception of legislative purpose, see Oncale v. Sundowner
Offshore Services, Inc., 523 U. S. 75, 79–80 (1998).6 The
dissent’s concern for state prerogatives is frustrated
rather than furthered by revising state laws when a po
——————
6 Our decision in Walker v. Armco Steel Corp., 446 U. S. 740 (1980),
discussed by the dissent, post, at 5–6, 13–14, n. 8, is not to the contrary.
There we held that Rule 3 (which provides that a federal civil action is
“ ‘commenced’ ” by filing a complaint in federal court) did not displace a
state law providing that “ ‘[a]n action shall be deemed commenced,
within the meaning of this article [the statute of limitations], as to each
defendant, at the date of the summons which is served on him . . . .’ ”
446 U. S., at 743, n. 4 (quoting Okla. Stat., Tit. 12, §97 (1971); altera
tion in original, emphasis added). Rule 3, we explained, “governs the
date from which various timing requirements of the Federal Rules
begin to run, but does not affect state statutes of limitations” or tolling
rules, which it did not “purpor[t] to displace.” 446 U. S., at 751, 750.
The texts were therefore not in conflict. While our opinion observed
that the State’s actual-service rule was (in the State’s judgment) an
“integral part of the several policies served by the statute of limita
tions,” id., at 751, nothing in our decision suggested that a federal court
may resolve an obvious conflict between the texts of state and federal
rules by resorting to the state law’s ostensible objectives.
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tential conflict with a Federal Rule arises; the state
friendly approach would be to accept the law as written
and test the validity of the Federal Rule.
The dissent’s approach of determining whether state
and federal rules conflict based on the subjective inten
tions of the state legislature is an enterprise destined to
produce “confusion worse confounded,” Sibbach v. Wilson
& Co., 312 U. S. 1, 14 (1941). It would mean, to begin
with, that one State’s statute could survive pre-emption
(and accordingly affect the procedures in federal court)
while another State’s identical law would not, merely
because its authors had different aspirations. It would
also mean that district courts would have to discern, in
every diversity case, the purpose behind any putatively
pre-empted state procedural rule, even if its text squarely
conflicts with federal law. That task will often prove
arduous. Many laws further more than one aim, and the
aim of others may be impossible to discern. Moreover, to
the extent the dissent’s purpose-driven approach depends
on its characterization of §901(b)’s aims as substantive, it
would apply to many state rules ostensibly addressed to
procedure. Pleading standards, for example, often embody
policy preferences about the types of claims that should
succeed—as do rules governing summary judgment, pre
trial discovery, and the admissibility of certain evidence.
Hard cases will abound. It is not even clear that a state
supreme court’s pronouncement of the law’s purpose
would settle the issue, since existence of the factual predi
cate for avoiding federal pre-emption is ultimately a fed
eral question. Predictably, federal judges would be con
demned to poring through state legislative history—which
may be less easily obtained, less thorough, and less famil
iar than its federal counterpart, see R. Mersky & D. Dunn,
Fundamentals of Legal Research 233 (8th ed. 2002); Tor
res & Windsor, State Legislative Histories: A Select, An
notated Bibliography, 85 L. Lib. J. 545, 547 (1993).
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But while the dissent does indeed artificially narrow the
scope of §901(b) by finding that it pursues only substan
tive policies, that is not the central difficulty of the dis
sent’s position. The central difficulty is that even artificial
narrowing cannot render §901(b) compatible with Rule 23.
Whatever the policies they pursue, they flatly contradict
each other. Allstate asserts (and the dissent implies, see
post, at 3, 11) that we can (and must) interpret Rule 23 in
a manner that avoids overstepping its authorizing stat
ute.7 If the Rule were susceptible of two meanings—one
that would violate §2072(b) and another that would not—
we would agree. See Ortiz v. Fibreboard Corp., 527 U. S.
815, 842, 845 (1999); cf. Semtek Int’l Inc. v. Lockheed
Martin Corp., 531 U. S. 497, 503–504 (2001). But it is not.
Rule 23 unambiguously authorizes any plaintiff, in any
federal civil proceeding, to maintain a class action if the
Rule’s prerequisites are met. We cannot contort its text,
even to avert a collision with state law that might render
——————
7 The dissent also suggests that we should read the Federal Rules
“ ‘with sensitivity to important state interests’ ” and “ ‘to avoid conflict
with important state regulatory policies.’ ” Post, at 7 (quoting Gasperini
v. Center for Humanities, Inc., 518 U. S. 415, 427, n. 7, 438, n. 22
(1996)). The search for state interests and policies that are “important”
is just as standardless as the “important or substantial” criterion we
rejected in Sibbach v. Wilson & Co., 312 U. S. 1, 13–14 (1941), to define
the state-created rights a Federal Rule may not abridge.
If all the dissent means is that we should read an ambiguous Federal
Rule to avoid “substantial variations [in outcomes] between state and
federal litigation,” Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U. S.
497, 504 (2001) (internal quotation marks omitted), we entirely agree.
We should do so not to avoid doubt as to the Rule’s validity—since a
Federal Rule that fails Erie’s forum-shopping test is not ipso facto
invalid, see Hanna v. Plumer, 380 U. S. 460, 469–472 (1965)—but
because it is reasonable to assume that “Congress is just as concerned
as we have been to avoid significant differences between state and
federal courts in adjudicating claims,” Stewart Organization, Inc. v.
Ricoh Corp., 487 U. S. 22, 37–38 (1988) (SCALIA, J., dissenting). The
assumption is irrelevant here, however, because there is only one
reasonable reading of Rule 23.
12 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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Opinion of SCALIA, J.
it invalid. See Walker v. Armco Steel Corp., 446 U. S. 740,
750, n. 9 (1980).8 What the dissent’s approach achieves is
not the avoiding of a “conflict between Rule 23 and
§901(b),” post, at 17, but rather the invalidation of Rule 23
(pursuant to §2072(b) of the Rules Enabling Act) to the
extent that it conflicts with the substantive policies of
§901. There is no other way to reach the dissent’s destina
tion. We must therefore confront head-on whether Rule
23 falls within the statutory authorization.
B
Erie involved the constitutional power of federal courts
to supplant state law with judge-made rules. In that
context, it made no difference whether the rule was tech
nically one of substance or procedure; the touchstone was
whether it “significantly affect[s] the result of a litigation.”
Guaranty Trust Co. v. York, 326 U. S. 99, 109 (1945). That
is not the test for either the constitutionality or the statu
tory validity of a Federal Rule of Procedure. Congress has
undoubted power to supplant state law, and undoubted
power to prescribe rules for the courts it has created, so
long as those rules regulate matters “rationally capable of
classification” as procedure. Hanna, 380 U. S., at 472. In
the Rules Enabling Act, Congress authorized this Court to
promulgate rules of procedure subject to its review, 28
U. S. C. §2072(a), but with the limitation that those rules
“shall not abridge, enlarge or modify any substantive
right,” §2072(b).
We have long held that this limitation means that the
Rule must “really regulat[e] procedure,—the judicial
——————
8 The cases chronicled by the dissent, see post, at 3–8, each involved a
Federal Rule that we concluded could fairly be read not to “control the
issue” addressed by the pertinent state law, thus avoiding a “direct
collision” between federal and state law, Walker, 446 U. S., at 749
(internal quotation marks omitted). But here, as in Hanna, supra, at
470, a collision is “unavoidable.”
Cite as: 559 U. S. ____ (2010) 13
Opinion of SCALIA, J.
process for enforcing rights and duties recognized by
substantive law and for justly administering remedy and
redress for disregard or infraction of them,” Sibbach, 312
U. S., at 14; see Hanna, supra, at 464; Burlington, 480
U. S., at 8. The test is not whether the rule affects a
litigant’s substantive rights; most procedural rules do.
Mississippi Publishing Corp. v. Murphree, 326 U. S. 438,
445 (1946). What matters is what the rule itself regulates:
If it governs only “the manner and the means” by which
the litigants’ rights are “enforced,” it is valid; if it alters
“the rules of decision by which [the] court will adjudicate
[those] rights,” it is not. Id., at 446 (internal quotation
marks omitted).
Applying that test, we have rejected every statutory
challenge to a Federal Rule that has come before us. We
have found to be in compliance with §2072(b) rules pre
scribing methods for serving process, see id., at 445–446
(Fed. Rule Civ. Proc. 4(f)); Hanna, supra, at 463–465 (Fed.
Rule Civ. Proc. 4(d)(1)), and requiring litigants whose
mental or physical condition is in dispute to submit to
examinations, see Sibbach, supra, at 14–16 (Fed. Rule
Civ. Proc. 35); Schlagenhauf v. Holder, 379 U. S. 104, 113–
114 (1964) (same). Likewise, we have upheld rules au
thorizing imposition of sanctions upon those who file
frivolous appeals, see Burlington, supra, at 8 (Fed. Rule
App. Proc. 38), or who sign court papers without a reason
able inquiry into the facts asserted, see Business Guides,
Inc. v. Chromatic Communications Enterprises, Inc., 498
U. S. 533, 551–554 (1991) (Fed. Rule Civ. Proc. 11). Each
of these rules had some practical effect on the parties’
rights, but each undeniably regulated only the process for
enforcing those rights; none altered the rights themselves,
the available remedies, or the rules of decision by which
the court adjudicated either.
Applying that criterion, we think it obvious that rules
allowing multiple claims (and claims by or against multi
14 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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Opinion of SCALIA, J.
ple parties) to be litigated together are also valid. See,
e.g., Fed. Rules Civ. Proc. 18 (joinder of claims), 20 (joinder
of parties), 42(a) (consolidation of actions). Such rules
neither change plaintiffs’ separate entitlements to relief
nor abridge defendants’ rights; they alter only how the
claims are processed. For the same reason, Rule 23—at
least insofar as it allows willing plaintiffs to join their
separate claims against the same defendants in a class
action—falls within §2072(b)’s authorization. A class
action, no less than traditional joinder (of which it is a
species), merely enables a federal court to adjudicate
claims of multiple parties at once, instead of in separate
suits. And like traditional joinder, it leaves the parties’
legal rights and duties intact and the rules of decision
unchanged.
Allstate contends that the authorization of class actions
is not substantively neutral: Allowing Shady Grove to sue
on behalf of a class “transform[s] [the] dispute over a five
hundred dollar penalty into a dispute over a five million
dollar penalty.” Brief for Respondent 1. Allstate’s aggre
gate liability, however, does not depend on whether the
suit proceeds as a class action. Each of the 1,000-plus
members of the putative class could (as Allstate acknowl
edges) bring a freestanding suit asserting his individual
claim. It is undoubtedly true that some plaintiffs who
would not bring individual suits for the relatively small
sums involved will choose to join a class action. That has
no bearing, however, on Allstate’s or the plaintiffs’ legal
rights. The likelihood that some (even many) plaintiffs
will be induced to sue by the availability of a class action
is just the sort of “incidental effec[t]” we have long held
does not violate §2072(b), Mississippi Publishing, supra,
at 445.
Allstate argues that Rule 23 violates §2072(b) because
the state law it displaces, §901(b), creates a right that
the Federal Rule abridges—namely, a “substantive
Cite as: 559 U. S. ____ (2010) 15
Opinion of SCALIA, J.
right . . . not to be subjected to aggregated class-action
liability” in a single suit. Brief for Respondent 31. To
begin with, we doubt that that is so. Nothing in the text of
§901(b) (which is to be found in New York’s procedural
code) confines it to claims under New York law; and of
course New York has no power to alter substantive rights
and duties created by other sovereigns. As we have said,
the consequence of excluding certain class actions may be
to cap the damages a defendant can face in a single suit,
but the law itself alters only procedure. In that respect,
§901(b) is no different from a state law forbidding simple
joinder. As a fallback argument, Allstate argues that even
if §901(b) is a procedural provision, it was enacted “for
substantive reasons,” id., at 24 (emphasis added). Its end
was not to improve “the conduct of the litigation process
itself” but to alter “the outcome of that process.” Id., at 26.
The fundamental difficulty with both these arguments is
that the substantive nature of New York’s law, or its
substantive purpose, makes no difference. A Federal Rule
of Procedure is not valid in some jurisdictions and invalid
in others—or valid in some cases and invalid in others—
depending upon whether its effect is to frustrate a state
substantive law (or a state procedural law enacted for
substantive purposes). That could not be clearer in
Sibbach:
“The petitioner says the phrase [‘substantive rights’ in
the Rules Enabling Act] connotes more; that by its use
Congress intended that in regulating procedure this
Court should not deal with important and substantial
rights theretofore recognized. Recognized where and
by whom? The state courts are divided as to the
power in the absence of statute to order a physical ex
amination. In a number such an order is authorized
by statute or rule. . . .
“The asserted right, moreover, is no more important
16 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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Opinion of SCALIA, J.
than many others enjoyed by litigants in District
Courts sitting in the several states before the Federal
Rules of Civil Procedure altered and abolished old
rights or privileges and created new ones in connec
tion with the conduct of litigation. . . . If we were to
adopt the suggested criterion of the importance of the
alleged right we should invite endless litigation and
confusion worse confounded. The test must be
whether a rule really regulates procedure . . . .” 312
U. S., at 13–14 (footnotes omitted).
Hanna unmistakably expressed the same understanding
that compliance of a Federal Rule with the Enabling Act is
to be assessed by consulting the Rule itself, and not its
effects in individual applications:
“[T]he court has been instructed to apply the Federal
Rule, and can refuse to do so only if the Advisory
Committee, this Court, and Congress erred in their
prima facie judgment that the Rule in question trans
gresses neither the terms of the Enabling Act nor con
stitutional restrictions.” 380 U. S., at 471.
In sum, it is not the substantive or procedural nature or
purpose of the affected state law that matters, but the
substantive or procedural nature of the Federal Rule. We
have held since Sibbach, and reaffirmed repeatedly, that
the validity of a Federal Rule depends entirely upon
whether it regulates procedure. See Sibbach, supra, at 14;
Hanna, supra, at 464; Burlington, 480 U. S., at 8. If it
does, it is authorized by §2072 and is valid in all jurisdic
tions, with respect to all claims, regardless of its incidental
effect upon state-created rights.
C
A few words in response to the concurrence. We under
stand it to accept the framework we apply—which re
quires first, determining whether the federal and state
Cite as: 559 U. S. ____ (2010) 17
Opinion of SCALIA, J.
rules can be reconciled (because they answer different
questions), and second, if they cannot, determining
whether the Federal Rule runs afoul of §2072(b). Post, at
5–7 (STEVENS, J., concurring in part and concurring in
judgment). The concurrence agrees with us that Rule 23
and §901(b) conflict, post, at 15–16, and departs from us
only with respect to the second part of the test, i.e.,
whether application of the Federal Rule violates §2072(b),
post, at 7–13. Like us, it answers no, but for a reason
different from ours. Post, at 17–22.
The concurrence would decide this case on the basis, not
that Rule 23 is procedural, but that the state law it dis
places is procedural, in the sense that it does not “function
as a part of the State’s definition of substantive rights and
remedies.” Post, at 1. A state procedural rule is not pre
empted, according to the concurrence, so long
as it is “so bound up with,” or “sufficiently intertwined
with,” a substantive state-law right or remedy “that it
defines the scope of that substantive right or remedy,”
post, at 4, 13.
This analysis squarely conflicts with Sibbach, which
established the rule we apply. The concurrence contends
that Sibbach did not rule out its approach, but that is not
so. Recognizing the impracticability of a test that turns on
the idiosyncrasies of state law, Sibbach adopted and ap
plied a rule with a single criterion: whether the Federal
Rule “really regulates procedure.” 312 U. S., at 14.9 That
——————
9 The concurrence claims that in Sibbach “[t]he Court . . . had no oc
casion to consider whether the particular application of the Federal
Rules in question would offend the Enabling Act.” Post, at 12. Had
Sibbach been applying the concurrence’s theory, that is quite true—
which demonstrates how inconsistent that theory is with Sibbach. For
conformity with the Rules Enabling Act was the very issue Sibbach
decided: The petitioner’s position was that Rules 35 and 37 exceeded
the Enabling Act’s authorization, 312 U. S., at 9, 13; the Court faced
and rejected that argument, id., at 13–16, and proceeded to reverse
the lower court for failing to apply Rule 37 correctly, id., at 16. There
18 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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Opinion of SCALIA, J.
the concurrence’s approach would have yielded the same
result in Sibbach proves nothing; what matters is the rule
we did apply, and that rule leaves no room for special
exemptions based on the function or purpose of a particu
lar state rule.10 We have rejected an attempt to read into
Sibbach an exception with no basis in the opinion, see
Schlagenhauf, 379 U. S., at 113–114, and we see no reason
to find such an implied limitation today.
In reality, the concurrence seeks not to apply Sibbach,
but to overrule it (or, what is the same, to rewrite it). Its
approach, the concurrence insists, gives short shrift to the
statutory text forbidding the Federal Rules from
“abridg[ing], enlarg[ing], or modify[ing] any substantive
right,” §2072(b). See post, at 9–10. There is something to
that. It is possible to understand how it can be deter
mined whether a Federal Rule “enlarges” substantive
——————
could not be a clearer rejection of the theory that the concurrence now
advocates.
The concurrence responds that the “the specific question of ‘the
obligation of federal courts to apply the substantive law of a state’ ” was
not before the Court, post, at 12 (quoting Sibbach, supra, at 9). It is
clear from the context, however, that this passage referred to the Erie
prohibition of court-created rules that displace state law. The opinion
unquestionably dealt with the Federal Rules’ compliance with §2072(b),
and it adopted the standard we apply here to resolve the question,
which does not depend on whether individual applications of the Rule
abridge or modify state-law rights. See 312 U. S., at 13–14. To the
extent Sibbach did not address the Federal Rules’ validity vis-à-vis
contrary state law, Hanna surely did, see 380 U. S., at 472, and it made
clear that Sibbach’s test still controls, see 380 U. S., at 464–465,
470–471.
10 The concurrence insists that we have misread Sibbach, since surely
a Federal Rule that “in most cases” regulates procedure does not do so
when it displaces one of those “rare” state substantive laws that are
disguised as rules of procedure. Post, at 13, n. 13. This mistakes what
the Federal Rule regulates for its incidental effects. As we have ex
plained, supra, at 12–13, most Rules have some effect on litigants’
substantive rights or their ability to obtain a remedy, but that does not
mean the Rule itself regulates those rights or remedies.
Cite as: 559 U. S. ____ (2010) 19
Opinion of SCALIA, J.
rights without consulting State law: If the Rule creates a
substantive right, even one that duplicates some state
created rights, it establishes a new federal right. But it is
hard to understand how it can be determined whether a
Federal Rule “abridges” or “modifies” substantive rights
without knowing what state-created rights would obtain if
the Federal Rule did not exist. Sibbach’s exclusive focus
on the challenged Federal Rule—driven by the very real
concern that Federal Rules which vary from State to State
would be chaos, see 312 U. S., at 13–14—is hard to square
with §2072(b)’s terms.11
Sibbach has been settled law, however, for nearly seven
decades.12 Setting aside any precedent requires a “special
——————
11 The concurrence’s approach, however, is itself unfaithful to the
statute’s terms. Section 2072(b) bans abridgement or modification only
of “substantive rights,” but the concurrence would prohibit pre-emption
of “procedural rules that are intimately bound up in the scope of a
substantive right or remedy,” post, at 19. This would allow States to
force a wide array of parochial procedures on federal courts so long as
they are “sufficiently intertwined with a state right or remedy.” Post,
at 13.
12 The concurrence implies that Sibbach has slipped into desuetude,
apparently for lack of sufficient citations. See post, at 13–14, n. 14. We
are unaware of any rule to the effect that a holding of ours expires if
the case setting it forth is not periodically revalidated. In any event,
the concurrence’s account of our shunning of Sibbach is greatly exag
gerated. Hanna did not merely cite the case, but recognized it as
establishing the governing rule. 380 U. S., at 464–465, 470–471.
Mississippi Publishing Corp. v. Murphree, 326 U. S. 438, 445–446
(1946), likewise cited Sibbach and applied the same test, examining the
Federal Rule, not the state law it displaced. True, Burlington Northern
R. Co. v. Woods, 480 U. S. 1 (1987), and for that matter Business
Guides, Inc. v. Chromatic Communications Enterprises, Inc., 498 U. S.
533 (1991), did not cite Sibbach. But both cited and followed Hanna—
which as noted held out Sibbach as setting forth the governing rule.
See Burlington Northern, supra, at 5–6, 8; Business Guides, supra, at
552–554. Thus, while Sibbach itself may appear infrequently in the
U. S. Reports, its rule—and in particular its focus on the Federal Rule
as the proper unit of analysis—is alive and well.
In contrast, Hanna’s obscure obiter dictum that a court “need not
20 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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Opinion of SCALIA, J.
justification” beyond a bare belief that it was wrong.
Patterson v. McLean Credit Union, 491 U. S. 164, 172
(1989) (internal quotation marks omitted). And a party
seeking to overturn a statutory precedent bears an even
greater burden, since Congress remains free to correct us,
ibid., and adhering to our precedent enables it do so, see,
e.g., Finley v. United States, 490 U. S. 545, 556 (1989); 28
U. S. C. §1367; Exxon Mobil Corp. v. Allapattah Services,
Inc., 545 U. S. 546, 558 (2005). We do Congress no service
by presenting it a moving target. In all events, Allstate
has not even asked us to overrule Sibbach, let alone car
ried its burden of persuading us to do so. Cf. IBP, Inc. v.
Alvarez, 546 U. S. 21, 32 (2005). Why we should cast
aside our decades-old decision escapes us, especially since
(as the concurrence explains) that would not affect the
result.13
——————
wholly blind itself” to a Federal Rule’s effect on a case’s outcome, 380
U. S., at 473—which the concurrence invokes twice, post, at 8, 13–14,
n. 14—has never resurfaced in our opinions in the 45 years since its
first unfortunate utterance. Nor does it cast doubt on Sibbach’s
straightforward test: As the concurrence notes, Hanna cited Sibbach for
that statement, 380 U. S., at 473, showing it saw no inconsistency
between the two.
13 The concurrence is correct, post, at 10, n. 9, that under our disposi
tion any rule that “really regulates procedure,” Sibbach, supra, at 14,
will pre-empt a conflicting state rule, however “bound up” the latter is
with substantive law. The concurrence is wrong, however, that that
result proves our interpretation of §2072(b) implausible, post, at 10,
n. 9. The result is troubling only if one stretches the term “substantive
rights” in §2072(b) to mean not only state-law rights themselves, but
also any state-law procedures closely connected to them. Neither the
text nor our precedent supports that expansive interpretation. The
examples the concurrence offers—statutes of limitations, burdens of
proof, and standards for appellate review of damages awards—do not
make its broad definition of substantive rights more persuasive. They
merely illustrate that in rare cases it may be difficult to determine
whether a rule “really regulates” procedure or substance. If one con
cludes the latter, there is no pre-emption of the state rule; the Federal
Rule itself is invalid.
Cite as: 559 U. S. ____ (2010) 21
Opinion of SCALIA, J.
The concurrence also contends that applying Sibbach
and assessing whether a Federal Rule regulates substance
or procedure is not always easy. See post, at 11, n. 10.
Undoubtedly some hard cases will arise (though we have
managed to muddle through well enough in the 69 years
since Sibbach was decided). But as the concurrence ac
knowledges, post, at 11, the basic difficulty is unavoidable:
The statute itself refers to “substantive right[s],” §2072(b),
so there is no escaping the substance-procedure distinc
tion. What is more, the concurrence’s approach does
nothing to diminish the difficulty, but rather magnifies it
many times over. Instead of a single hard question of
whether a Federal Rule regulates substance or procedure,
that approach will present hundreds of hard questions,
forcing federal courts to assess the substantive or proce
dural character of countless state rules that may conflict
with a single Federal Rule.14 And it still does not sidestep
the problem it seeks to avoid. At the end of the day, one
must come face to face with the decision whether or not
the state policy (with which a putatively procedural state
rule may be “bound up”) pertains to a “substantive right or
remedy,” post, at 19—that is, whether it is substance or
procedure.15 The more one explores the alternatives to
——————
The concurrence’s concern would make more sense if many Federal
Rules that effectively alter state-law rights “bound up with procedures”
would survive under Sibbach. But as the concurrence concedes, post, at
11, n. 10, very few would do so. The possible existence of a few outlier
instances does not prove Sibbach’s interpretation is absurd. Congress
may well have accepted such anomalies as the price of a uniform
system of federal procedure.
14 The concurrence argues that its approach is no more “taxing” than
ours because few if any Federal Rules that are “facially valid” under the
Enabling Act will fail the concurrence’s test. Post, at 11, and n. 10. But
that conclusion will be reached only after federal courts have consid
ered hundreds of state rules applying the concurrence’s inscrutable
standard.
15 The concurrence insists that the task will be easier if courts can
22 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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Sibbach’s rule, the more its wisdom becomes apparent.
D
We must acknowledge the reality that keeping the fed
eral-court door open to class actions that cannot proceed in
state court will produce forum shopping. That is unaccept
able when it comes as the consequence of judge-made rules
created to fill supposed “gaps” in positive federal law. See
Hanna, 380 U. S., at 471–472. For where neither the Con
stitution, a treaty, nor a statute provides the rule of deci
sion or authorizes a federal court to supply one, “state law
must govern because there can be no other law.” Ibid.; see
Clark, Erie’s Constitutional Source, 95 Cal. L. Rev. 1289,
1302, 1311 (2007). But divergence from state law, with the
attendant consequence of forum shopping, is the inevitable
(indeed, one might say the intended) result of a uniform
system of federal procedure. Congress itself has created the
possibility that the same case may follow a different course
if filed in federal instead of state court. Cf. Hanna, 380
U. S., at 472–473. The short of the matter is that a Federal
Rule governing procedure is valid whether or not it alters
the outcome of the case in a way that induces forum shop
ping. To hold otherwise would be to “disembowel either the
Constitution’s grant of power over federal procedure” or
Congress’s exercise of it. Id., at 473–474.
* * *
The judgment of the Court of Appeals is reversed, and
the case is remanded for further proceedings.
It is so ordered.
——————
“conside[r] the nature and functions of the state law,” post, at 11, n. 10,
regardless of the law’s “form,” post, at 4 (emphasis deleted), i.e., what
the law actually says. We think that amorphous inquiry into the
“nature and functions” of a state law will tend to increase, rather than
decrease, the difficulty of classifying Federal Rules as substantive or
procedural. Walking through the concurrence’s application of its test to
§901(b), post, at 17–22, gives little reason to hope that its approach will
lighten the burden for lower courts.
Cite as: 559 U. S. ____ (2010) 1
Opinion of STEVENS, J.
SUPREME COURT OF THE UNITED STATES
_________________
No. 08–1008
_________________
SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.,
PETITIONER v. ALLSTATE INSURANCE
COMPANY
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SECOND CIRCUIT
[March 31, 2010]
JUSTICE STEVENS, concurring in part and concurring in
the judgment.
The New York law at issue, N. Y. Civ. Prac. Law Ann.
(CPLR) §901(b) (West 2006), is a procedural rule that is
not part of New York’s substantive law. Accordingly, I
agree with JUSTICE SCALIA that Federal Rule of Civil
Procedure 23 must apply in this case and join Parts I and
II–A of the Court’s opinion. But I also agree with JUSTICE
GINSBURG that there are some state procedural rules that
federal courts must apply in diversity cases because they
function as a part of the State’s definition of substantive
rights and remedies.
I
It is a long-recognized principle that federal courts
sitting in diversity “apply state substantive law and fed
eral procedural law.” Hanna v. Plumer, 380 U. S. 460, 465
(1965).1 This principle is governed by a statutory frame
work, and the way that it is administered varies depend
ing upon whether there is a federal rule addressed to the
——————
1 See also Gasperini v. Center for Humanities, Inc., 518 U. S. 415, 427
(1996); E. Chemerinsky, Federal Jurisdiction §5.3, p. 327 (5th ed. 2007)
(hereinafter Chemerinsky); 17A J. Moore et al., Moore’s Federal Prac
tice §124.01[1] (3d ed. 2009) (hereinafter Moore).
2 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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Opinion of STEVENS, J.
matter. See id., at 469–472. If no federal rule applies, a
federal court must follow the Rules of Decision Act, 28
U. S. C. §1652, and make the “relatively unguided Erie
choice,”2 Hanna, 380 U. S., at 471, to determine whether
the state law is the “rule of decision.” But when a situa
tion is covered by a federal rule, the Rules of Decision Act
inquiry by its own terms does not apply. See §1652;
Hanna, 380 U. S., at 471. Instead, the Rules Enabling Act
(Enabling Act) controls. See 28 U. S. C. §2072.
That does not mean, however, that the federal rule
always governs. Congress has provided for a system of
uniform federal rules, see ibid., under which federal courts
sitting in diversity operate as “an independent system for
administering justice to litigants who properly invoke its
jurisdiction,” Byrd v. Blue Ridge Rural Elec. Cooperative,
Inc., 356 U. S. 525, 537 (1958), and not as state-court
clones that assume all aspects of state tribunals but are
managed by Article III judges. See Hanna, 380 U. S., at
473–474. But while Congress may have the constitutional
power to prescribe procedural rules that interfere with
state substantive law in any number of respects, that is
not what Congress has done. Instead, it has provided in
the Enabling Act that although “[t]he Supreme Court”
may “prescribe general rules of practice and procedure,”
§2072(a), those rules “shall not abridge, enlarge or modify
any substantive right,” §2072(b). Therefore, “[w]hen a
situation is covered by one of the Federal Rules, . . . the
court has been instructed to apply the Federal Rule”
unless doing so would violate the Act or the Constitution.
Hanna, 380 U. S., at 471.
Although the Enabling Act and the Rules of Decision
——————
2 The Erie choice requires that the court consider “the twin aims of
the Erie rule: discouragement of forum-shopping and avoidance of
inequitable administration of the laws.” Hanna v. Plumer, 380 U. S.
460, 468 (1965); see also Gasperini, 518 U. S., at 427–428 (describing
Erie inquiry).
Cite as: 559 U. S. ____ (2010) 3
Opinion of STEVENS, J.
Act “say, roughly, that federal courts are to apply state
‘substantive’ law and federal ‘procedural’ law,” the inquir
ies are not the same. Ibid.; see also id., at 469–470. The
Enabling Act does not invite federal courts to engage in
the “relatively unguided Erie choice,” id., at 471, but
instead instructs only that federal rules cannot “abridge,
enlarge or modify any substantive right,” §2072(b). The
Enabling Act’s limitation does not mean that federal rules
cannot displace state policy judgments; it means only that
federal rules cannot displace a State’s definition of its own
rights or remedies. See Sibbach v. Wilson & Co., 312 U. S.
1, 13–14 (1941) (reasoning that “the phrase ‘substantive
rights’ ” embraces only those state rights that are sought
to be enforced in the judicial proceedings).
Congress has thus struck a balance: “[H]ousekeeping
rules for federal courts” will generally apply in diversity
cases, notwithstanding that some federal rules “will inevi
tably differ” from state rules. Hanna, 380 U. S., at 473.
But not every federal “rul[e] of practice or procedure,”
§2072(a), will displace state law. To the contrary, federal
rules must be interpreted with some degree of “sensitivity
to important state interests and regulatory policies,”
Gasperini v. Center for Humanities, Inc., 518 U. S. 415,
427, n. 7 (1996), and applied to diversity cases against the
background of Congress’ command that such rules not
alter substantive rights and with consideration of “the
degree to which the Rule makes the character and result
of the federal litigation stray from the course it would
follow in state courts,” Hanna, 380 U. S., at 473. This can
be a tricky balance to implement.3
It is important to observe that the balance Congress
——————
3 SeeChemerinsky §5.3, at 321 (observing that courts “have struggled
to develop an approach that permits uniform procedural rules to be
applied in federal court while still allowing state substantive law to
govern”).
4 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
Opinion of STEVENS, J.
has struck turns, in part, on the nature of the state law
that is being displaced by a federal rule. And in my view,
the application of that balance does not necessarily turn
on whether the state law at issue takes the form of what is
traditionally described as substantive or procedural.
Rather, it turns on whether the state law actually is part
of a State’s framework of substantive rights or remedies.
See §2072(b); cf. Hanna, 380 U. S., at 471 (“The line be
tween ‘substance’ and ‘procedure’ shifts as the legal con
text changes”); Guaranty Trust Co. v. York, 326 U. S. 99,
108 (1945) (noting that the words “ ‘substance’ ” and “ ‘pro
cedure’ ” “[e]ach impl[y] different variables depending
upon the particular problem for which [they] are used”).
Applying this balance, therefore, requires careful inter
pretation of the state and federal provisions at issue. “The
line between procedural and substantive law is hazy,”
Erie R. Co. v. Tompkins, 304 U. S. 64, 92 (1938) (Reed, J.,
concurring), and matters of procedure and matters of
substance are not “mutually exclusive categories with
easily ascertainable contents,” Sibbach, 312 U. S., at 17
(Frankfurter, J., dissenting). Rather, “[r]ules which law
yers call procedural do not always exhaust their effect by
regulating procedure,” Cohen v. Beneficial Industrial Loan
Corp., 337 U. S. 541, 555 (1949), and in some situations,
“procedure and substance are so interwoven that rational
separation becomes well-nigh impossible,” id., at 559
(Rutledge, J., dissenting). A “state procedural rule,
though undeniably ‘procedural’ in the ordinary sense of
the term,” may exist “to influence substantive outcomes,”
S. A. Healy Co. v. Milwaukee Metropolitan Sewerage Dist.,
60 F. 3d 305, 310 (CA7 1995) (Posner, J.), and may in
some instances become so bound up with the state-created
right or remedy that it defines the scope of that substan
tive right or remedy. Such laws, for example, may be
seemingly procedural rules that make it significantly more
difficult to bring or to prove a claim, thus serving to limit
Cite as: 559 U. S. ____ (2010) 5
Opinion of STEVENS, J.
the scope of that claim. See, e.g, Cohen, 337 U. S., at 555
(state “procedure” that required plaintiffs to post bond
before suing); Guaranty Trust Co., 326 U. S. 99 (state
statute of limitations).4 Such “procedural rules” may also
define the amount of recovery. See, e.g., Gasperini, 518
U. S., at 427 (state procedure for examining jury verdicts
as means of capping the available remedy); Moore
§124.07[3][a] (listing examples of federal courts’ applying
state laws that affect the amount of a judgment).
In our federalist system, Congress has not mandated
that federal courts dictate to state legislatures the form
that their substantive law must take. And were federal
courts to ignore those portions of substantive state law
that operate as procedural devices, it could in many in
stances limit the ways that sovereign States may define
their rights and remedies. When a State chooses to use a
traditionally procedural vehicle as a means of defining the
scope of substantive rights or remedies, federal courts
must recognize and respect that choice. Cf. Ragan v.
Merchants Transfer & Warehouse Co., 337 U. S. 530, 533
(1949) (“Since th[e] cause of action is created by local law,
the measure of it is to be found only in local law. . . .
Where local law qualifies or abridges it, the federal court
must follow suit”).
II
When both a federal rule and a state law appear to
govern a question before a federal court sitting in diver
——————
4 Cf. Milam v. State Farm Mut. Auto. Ins. Co., 972 F. 2d 166, 170
(CA7 1992) (Posner, J.) (holding that “where a state in furtherance of
its substantive policy makes it more difficult to prove a particular type
of state-law claim, the rule by which it does this, even if denominated a
rule of evidence or cast in evidentiary terms, will be given effect in a
diversity suit as an expression of state substantive policy”); Moore
§124.09[2] (listing examples of federal courts that apply state eviden
tiary rules to diversity suits). Other examples include state-imposed
burdens of proof.
6 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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Opinion of STEVENS, J.
sity, our precedents have set out a two-step framework for
federal courts to negotiate this thorny area. At both steps
of the inquiry, there is a critical question about what the
state law and the federal rule mean.
The court must first determine whether the scope of the
federal rule is “ ‘sufficiently broad’ ” to “ ‘control the issue’ ”
before the court, “thereby leaving no room for the opera
tion” of seemingly conflicting state law. See Burlington
Northern R. Co. v. Woods, 480 U. S. 1, 4–5 (1987); Walker
v. Armco Steel Corp., 446 U. S. 740, 749–750, and n. 9
(1980). If the federal rule does not apply or can operate
alongside the state rule, then there is no “Ac[t] of Con
gress” governing that particular question, 28 U. S. C.
§1652, and the court must engage in the traditional Rules
of Decision Act inquiry under Erie and its progeny. In
some instances, the “plain meaning” of a federal rule will
not come into “ ‘direct collision’ ” with the state law, and
both can operate. Walker, 446 U. S., at 750, n. 9, 749. In
other instances, the rule “when fairly construed,” Burling
ton Northern R. Co., 480 U. S., at 4, with “sensitivity to
important state interests and regulatory policies,”
Gasperini, 518 U. S., at 427, n. 7, will not collide with the
state law.5
——————
5I thus agree with JUSTICE GINSBURG, post, at 3–7, that a federal
rule, like any federal law, must be interpreted in light of many different
considerations, including “sensitivity to important state interests,” post,
at 7, and “regulatory policies,” post, at 2. See Stewart Organization,
Inc. v. Ricoh Corp., 487 U. S. 22, 37–38 (1988) (SCALIA, J., dissenting)
(“We should assume . . . when it is fair to do so, that Congress is just as
concerned as we have been to avoid significant differences between
state and federal courts in adjudicating claims. . . . Thus, in deciding
whether a federal . . . Rule of Procedure encompasses a particular issue,
a broad reading that would create significant disuniformity between
state and federal courts should be avoided if the text permits”). I
disagree with JUSTICE GINSBURG, however, about the degree to which
the meaning of federal rules may be contorted, absent congressional
authorization to do so, to accommodate state policy goals.
Cite as: 559 U. S. ____ (2010) 7
Opinion of STEVENS, J.
If, on the other hand, the federal rule is “sufficiently
broad to control the issue before the Court,” such that
there is a “direct collision,” Walker, 446 U. S., at 749–750,
the court must decide whether application of the federal
rule “represents a valid exercise” of the “rulemaking au
thority . . . bestowed on this Court by the Rules Enabling
Act.” Burlington Northern R. Co., 480 U. S., at 5; see also
Gasperini, 518 U. S., at 427, n. 7; Hanna, 380 U. S., at
471–474. That Act requires, inter alia, that federal rules
“not abridge, enlarge or modify any substantive right.” 28
U. S. C. §2072(b) (emphasis added). Unlike JUSTICE
SCALIA, I believe that an application of a federal rule that
effectively abridges, enlarges, or modifies a state-created
right or remedy violates this command. Congress may
have the constitutional power “to supplant state law” with
rules that are “rationally capable of classification as pro
cedure,” ante, at 12 (internal quotation marks omitted),
but we should generally presume that it has not done so.
Cf. Wyeth v. Levine, 555 U. S. ___, ___ (2009) (slip op., at 8)
(observing that “we start with the assumption” that a
federal statute does not displace a State’s law “unless that
was the clear and manifest purpose of Congress” (internal
quotation marks omitted)). Indeed, the mandate that
federal rules “shall not abridge, enlarge or modify any
substantive right” evinces the opposite intent, as does
Congress’ decision to delegate the creation of rules to this
Court rather than to a political branch, see 19 C. Wright,
A. Miller, & E. Cooper, Federal Practice and Procedure
§4509, p. 265 (2d ed. 1996) (hereinafter Wright).
Thus, the second step of the inquiry may well bleed back
into the first. When a federal rule appears to abridge,
enlarge, or modify a substantive right, federal courts must
consider whether the rule can reasonably be interpreted to
avoid that impermissible result. See, e.g., Semtek Int’l Inc.
v. Lockheed Martin Corp., 531 U. S. 497, 503 (2001)
(avoiding an interpretation of Federal Rule of Civil Proce
8 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
Opinion of STEVENS, J.
dure 41(b) that “would arguably violate the jurisdictional
limitation of the Rules Enabling Act” contained in
§2072(b)).6 And when such a “saving” construction is not
possible and the rule would violate the Enabling Act,
federal courts cannot apply the rule. See 28 U. S. C.
§2072(b) (mandating that federal rules “shall not” alter
“any substantive right” (emphasis added)); Hanna, 380
U. S., at 473 (“[A] court, in measuring a Federal Rule
against the standards contained in the Enabling Act . . .
need not wholly blind itself to the degree to which the Rule
makes the character and result of the federal litigation
stray from the course it would follow in state courts”); see
also Semtek Int’l Inc., 531 U. S., at 503–504 (noting that if
state law granted a particular right, “the federal court’s
extinguishment of that right. . . would seem to violate
[§2072(b)]”); cf. Statement of Justices Black and Douglas,
374 U. S. 865, 870 (1963) (observing that federal rules “as
applied in given situations might have to be declared
invalid”). A federal rule, therefore, cannot govern a par
ticular case in which the rule would displace a state law
that is procedural in the ordinary use of the term but is so
intertwined with a state right or remedy that it functions
to define the scope of the state-created right. And absent
a governing federal rule, a federal court must engage in
the traditional Rules of Decision Act inquiry, under the
Erie line of cases. This application of the Enabling Act
shows “sensitivity to important state interests,” post, at 7,
and “regulatory policies,” post, at 2, but it does so as Con
gress authorized, by ensuring that federal rules that
——————
6 See also Ortiz v. Fibreboard Corp., 527 U. S. 815, 842, 845 (1999)
(adopting “limiting construction” of Federal Rule of Civil Procedure 23
that, inter alia, “minimizes potential conflict with the Rules Enabling
Act”); Amchem Products, Inc. v. Windsor, 521 U. S. 591, 612–613 (1997)
(observing that federal rules “must be interpreted in keeping with the
Rules Enabling Act, which instructs that rules of procedure ‘shall not
abridge, enlarge or modify any substantive right’ ”).
Cite as: 559 U. S. ____ (2010) 9
Opinion of STEVENS, J.
ordinarily “prescribe general rules of practice and proce
dure,” §2072(a), do “not abridge, enlarge or modify any
substantive right,” §2072(b).
JUSTICE SCALIA believes that the sole Enabling Act
question is whether the federal rule “really regulates
procedure,” ante, at 12, 16, 17, 20, n. 13 (plurality opinion)
(internal quotation marks omitted), which means, appar
ently, whether it regulates “the manner and the means by
which the litigants’ rights are enforced,” ante, at 13 (inter
nal quotation marks omitted). I respectfully disagree.7
This interpretation of the Enabling Act is consonant with
the Act’s first limitation to “general rules of practice and
procedure,” §2072(a). But it ignores the second limitation
that such rules also “not abridge, enlarge or modify any
substantive right,” §2072(b) (emphasis added),8 and in so
——————
7 This understanding of the Enabling Act has been the subject of sub
stantial academic criticism, and rightfully so. See, e.g., Wright §4509,
at 264, 269–270, 272; Ely, The Irrepressible Myth of Erie, 87 Harv.
L. Rev. 693, 719 (1974) (hereinafter Ely); see also R. Fallon, J. Man
ning, D. Meltzer, & D. Shapiro, Hart and Wechsler’s, The Federal
Courts and the Federal System 593, n. 6 (6th ed. 2009) (discussing Ely).
8 JUSTICE SCALIA concedes as much, see ante, at 18–19, but argues
that insofar as I allow for the possibility that a federal rule might
violate the Enabling Act when it displaces a seemingly procedural state
rule, my approach is itself “unfaithful to the statute’s terms,” which
cover “substantive rights” but not “procedural rules,” ante, at 19, n. 11
(internal quotation marks omitted). This is not an objection to my
interpretation of the Enabling Act—that courts must look to whether a
federal rule alters substantive rights in a given case—but simply to the
way I would apply it, allowing for the possibility that a state rule that
regulates something traditionally considered to be procedural might
actually define a substantive right. JUSTICE SCALIA’s objection, more
over, misses the key point: In some instances, a state rule that appears
procedural really is not. A rule about how damages are reviewed on
appeal may really be a damages cap. See Gasperini, 518 U. S., at 427.
A rule that a plaintiff can bring a claim for only three years may really
be a limit on the existence of the right to seek redress. A rule that a
claim must be proved beyond a reasonable doubt may really be a
definition of the scope of the claim. These are the sorts of rules that
10 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
Opinion of STEVENS, J.
doing ignores the balance that Congress struck between
uniform rules of federal procedure and respect for a State’s
construction of its own rights and remedies. It also ig
nores the separation-of-powers presumption, see Wright
§4509, at 265, and federalism presumption, see Wyeth, 555
U. S., at ___ (slip op., at 8), that counsel against judicially
created rules displacing state substantive law.9
——————
one might describe as “procedural,” but they nonetheless define sub
stantive rights. Thus, if a federal rule displaced such a state rule, the
federal rule would have altered the State’s “substantive rights.”
9 The plurality’s interpretation of the Enabling Act appears to mean
that no matter how bound up a state provision is with the State’s own
rights or remedies, any contrary federal rule that happens to regulate
“the manner and the means by which the litigants’ rights are enforced,”
ante, at 13 (internal quotation marks omitted), must govern. There are
many ways in which seemingly procedural rules may displace a State’s
formulation of its substantive law. For example, statutes of limitations,
although in some sense procedural rules, can also be understood as a
temporal limitation on legally created rights; if this Court were to
promulgate a federal limitations period, federal courts would still, in
some instances, be required to apply state limitations periods. Simi
larly, if the federal rules altered the burden of proof in a case, this could
eviscerate a critical aspect—albeit one that deals with how a right is
enforced—of a State’s framework of rights and remedies. Or if a federal
rule about appellate review displaced a state rule about how damages
are reviewed on appeal, the federal rule might be pre-empting a state
damages cap. Cf. Gasperini, 518 U. S., at 427.
JUSTICE SCALIA responds that some of these federal rules might be
invalid under his view of the Enabling Act because they may not “really
regulat[e] procedure.” Ante, at 20, n. 13 (internal quotation marks
omitted). This response, of course, highlights how empty the plurality’s
test really is. See n. 10, infra. The response is also limited to those
rules that can be described as “regulat[ing]” substance, ante, at 13; it
does not address those federal rules that alter the right at issue in the
litigation, see Sibbach v. Wilson & Co., 312 U. S. 1, 13–14 (1941), only
when they displace particular state laws. JUSTICE SCALIA speculates
that “Congress may well have accepted” the occasional alteration of
substantive rights “as the price of a uniform system of federal proce
dure.” Ante, at 20–21, n. 13. Were we forced to speculate about the
balance that Congress struck, I might very well agree. But no specula
tion is necessary because Congress explicitly told us that federal rules
Cite as: 559 U. S. ____ (2010) 11
Opinion of STEVENS, J.
Although the plurality appears to agree with much of
my interpretation of §2072, see ante, at 18–19, it nonethe
less rejects that approach for two reasons, both of which
are mistaken. First, JUSTICE SCALIA worries that if fed
eral courts inquire into the effect of federal rules on state
law, it will enmesh federal courts in difficult determina
tions about whether application of a given rule would
displace a state determination about substantive rights.
See ante, at 15, 21–22, and nn. 14, 15. I do not see why an
Enabling Act inquiry that looks to state law necessarily is
more taxing than JUSTICE SCALIA’s.10 But in any event,
that inquiry is what the Enabling Act requires: While it
may not be easy to decide what is actually a “substantive
right,” “the designations substantive and procedural be
come important, for the Enabling Act has made them so.”
Ely 723; see also Wright §4509, at 266. The question,
therefore, is not what rule we think would be easiest on
federal courts. The question is what rule Congress estab
lished. Although, JUSTICE SCALIA may generally prefer
easily administrable, bright-line rules, his preference does
not give us license to adopt a second-best interpretation of
the Rules Enabling Act. Courts cannot ignore text and
——————
“shall not” alter “any” substantive right. §2072(b).
10 It will be rare that a federal rule that is facially valid under 28
U. S. C. §2072 will displace a State’s definition of its own substantive
rights. See Wright §4509, at 272 (observing that “unusual cases
occasionally might arise in which . . . because of an unorthodox state
rule of law, application of a Civil Rule . . . would intrude upon state
substantive rights”). JUSTICE SCALIA’s interpretation, moreover, is not
much more determinative than mine. Although it avoids courts’ having
to evaluate state law, it tasks them with figuring out whether a federal
rule is really “procedural.” It is hard to know the answer to that
question and especially hard to resolve it without considering the
nature and functions of the state law that the federal rule will displace.
The plurality’s “ ‘test’ is no test at all—in a sense, it is little more than
the statement that a matter is procedural if, by revelation, it is proce
dural.” Id., §4509, at 264.
12 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
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Opinion of STEVENS, J.
context in the service of simplicity.
Second, the plurality argues that its interpretation of
the Enabling Act is dictated by this Court’s decision in
Sibbach, which applied a Federal Rule about when parties
must submit to medical examinations. But the plurality
misreads that opinion. As Justice Harlan observed in
Hanna, “shorthand formulations which have appeared in
earlier opinions are prone to carry untoward results that
frequently arise from oversimplification.” 380 U. S., at
475 (concurring opinion). To understand Sibbach, it is
first necessary to understand the issue that was before the
Court. The petitioner raised only the facial question
whether “Rules 35 and 37 [of the Federal Rules of Civil
Procedure] are . . . within the mandate of Congress to this
court” and not the specific question of “the obligation of
federal courts to apply the substantive law of a state.”11
312 U. S., at 9. The Court, therefore, had no occasion to
consider whether the particular application of the Federal
Rules in question would offend the Enabling Act.12
——————
11 The petitioner in Sibbach argued only that federal rules could not
validly address subjects involving “important questions of policy,” Supp.
Brief of Petitioner, O. T. 1940, No. 28, p. 7; see also Reply to Brief of
Respondent, O. T. 1940, No. 28, p. 2 (summarizing that the petitioner
argued only that “[t]he right not to be compelled to submit to a physical
examination” is “a ‘substantive’ right forbidden by Congress” to be
addressed by the Federal Rules of Civil Procedure, “even though in
theory the right is not of the character determinative of litigation”). In
the petitioner’s own words, “[t]his contention. . . [did] not in itself
involve the [applicable] law of Illinois,” ibid., and the petitioner in her
briefing referenced the otherwise applicable state law only “to show
that [she] was in a position to make the contention,” ibid., that is, to
show that the federal court was applying a federal rule and not, under
the Rules of Decision Act, applying state law, see id., at 3.
12 The plurality defends its view by including a long quote from two
paragraphs of Sibbach. Ante, at 15–16. But the quoted passage of
Sibbach describes only a facial inquiry into whether federal rules may
“deal with” particular subject matter. 312 U. S., at 13. The plurality’s
block quote, moreover, omits half of one of the quoted paragraphs, in
Cite as: 559 U. S. ____ (2010) 13
Opinion of STEVENS, J.
Nor, in Sibbach, was any further analysis necessary to
the resolution of the case because the matter at issue,
requiring medical exams for litigants, did not pertain to
“substantive rights” under the Enabling Act. Although
most state rules bearing on the litigation process are
adopted for some policy reason, few seemingly “proce
dural” rules define the scope of a substantive right or
remedy. The matter at issue in Sibbach reflected compet
ing federal and state judgments about privacy interests.
Those privacy concerns may have been weighty and in
some sense substantive; but they did not pertain to the
scope of any state right or remedy at issue in the litiga
tion. Thus, in response to the petitioner’s argument in
Sibbach that “substantive rights” include not only “rights
sought to be adjudicated by the litigants” but also “general
principle[s]” or “question[s] of public policy that the legis
lature is able to pass upon,” id., at 2–3, we held that “the
phrase ‘substantive rights’ ” embraces only state rights,
such as the tort law in that case, that are sought to be
enforced in the judicial proceedings. Id., at 13–14. If the
Federal Rule had in fact displaced a state rule that was
sufficiently intertwined with a state right or remedy, then
perhaps the Enabling Act analysis would have been differ
ent.13 Our subsequent cases are not to the contrary.14
——————
which the Court explained that the term “substantive rights” in the
Enabling Act “certainly embraces such rights” as “rights conferred by
law to be protected and enforced,” such as “the right not to be injured in
one’s person by another’s negligence” and “to redress [such] infraction.”
Ibid. But whether a federal rule, for example, enlarges the right “to
redress [an] infraction,” will depend on the state law that it displaces.
13 Put another way, even if a federal rule in most cases “really regu
lates procedure,” Sibbach, 312 U. S., at 14, it does not “really regulat[e]
procedure” when it displaces those rare state rules that, although
“procedural” in the ordinary sense of the term, operate to define the
rights and remedies available in a case. This is so because what is
procedural in one context may be substantive in another. See Hanna,
380 U. S., at 471; Guaranty Trust Co. v. York, 326 U. S. 99, 108 (1945).
14 Although this Court’s decision in Hanna cited Sibbach, that is of
14 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
Opinion of STEVENS, J.
III
JUSTICE GINSBURG views the basic issue in this case as
whether and how to apply a federal rule that dictates an
answer to a traditionally procedural question (whether to
join plaintiffs together as a class), when a state law that
“defines the dimensions” of a state-created claim dictates
the opposite answer. Post, at 12. As explained above, I
readily acknowledge that if a federal rule displaces a state
rule that is “ ‘procedural’ in the ordinary sense of the
term,” S. A. Healy Co., 60 F. 3d, at 310, but sufficiently
interwoven with the scope of a substantive right or rem
edy, there would be an Enabling Act problem, and the
federal rule would have to give way. In my view, however,
——————
little significance. Hanna did not hold that any seemingly procedural
federal rule will always govern, even when it alters a substantive state
right; nor, as in Sibbach, was the argument that I now make before the
Court. Indeed, in Hanna we cited Sibbach’s statement that the Ena
bling Act prohibits federal rules that alter the rights to be adjudicated
by the litigants, 312 U. S., at 13–14, for the proposition that “a court, in
measuring a Federal Rule against the standards contained in the
Enabling Act . . . need not wholly blind itself to the degree to which the
Rule makes the character and result of the federal litigation stray from
the course it would follow in state courts,” 380 U. S., at 473. And most
of our subsequent decisions that have squarely addressed the frame
work for applying federal rules in diversity cases have not mentioned
Sibbach at all but cited only Hanna. See, e.g., Burlington Northern R.
Co. v. Woods, 480 U. S. 1, 5 (1987).
JUSTICE SCALIA notes that in Mississippi Publishing Corp. v.
Murphree, 326 U. S. 438 (1946), we used language that supported his
view. See ante, at 13. But in that case, we contemplated only that the
Federal Rule in question might have “incidental effects . . . upon the
rights of litigants,” explaining that “[t]he fact that the application of
Rule 4(f) will operate to subject petitioner’s rights to adjudication by
the district court for northern Mississippi” rather than southern Mis
sissippi “will undoubtedly affect those rights.” 326 U. S., at 445–446.
There was no suggestion that by affecting the method of enforcing the
rights in that case, the federal rules could plausibly abridge, enlarge, or
modify the rights themselves.
Cite as: 559 U. S. ____ (2010) 15
Opinion of STEVENS, J.
this is not such a case.
Rule 23 Controls Class Certification
When the District Court in the case before us was asked
to certify a class action, Federal Rule of Civil Procedure 23
squarely governed the determination whether the court
should do so. That is the explicit function of Rule 23. Rule
23, therefore, must apply unless its application would
abridge, enlarge, or modify New York rights or remedies.
Notwithstanding the plain language of Rule 23, I under
stand the dissent to find that Rule 23 does not govern the
question of class certification in this matter because New
York has made a substantive judgment that such a class
should not be certified, as a means of proscribing damages.
Although, as discussed infra, at 17–20, I do not accept the
dissent’s view of §901(b), I also do not see how the dis
sent’s interpretation of Rule 23 follows from that view.15 I
——————
15 Nor do I see how it follows from the dissent’s premises that a class
cannot be certified. The dissent contends that §901(b) is a damages
“limitation,” post, at 7, n. 2, 8, 9, 12, 25, or “proscription,” post, at 12,
n. 6, 21, whereas Rule 23 “does not command that a particular remedy
be available when a party sues in a representative capacity,” post, at
11, and that consequently both provisions can apply. Yet even if the
dissent’s premises were correct, Rule 23 would still control the question
whether petitioner may certify a class, and §901(b) would be relevant
only to determine whether petitioner, at the conclusion of a class-action
lawsuit, may collect statutory damages.
It may be that if the dissent’s interpretation of §901(b) were correct,
this class could not (or has not) alleged sufficient damages for the
federal court to have jurisdiction, see 28 U. S. C. §1332(d)(6). But that
issue was not raised in respondent’s motion to dismiss (from which the
case comes to this Court), and it was not squarely presented to the
Court. In any event, although the lead plaintiff has “acknowledged
that its individual claim” is for less than the required amount in
controversy, see 549 F. 3d 137, 140 (CA2 2008), we do not know what
actual damages the entire class can allege. Thus, even if the Court
were to adopt all of the dissent’s premises, I believe the correct disposi
tion would be to vacate and remand for further consideration of
whether the required amount in controversy has or can be met.
16 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
Opinion of STEVENS, J.
agree with JUSTICE GINSBURG that courts should “avoi[d]
immoderate interpretations of the Federal Rules that
would trench on state prerogatives,” post, at 3–4, and
should in some instances “interpre[t] the federal rules to
avoid conflict with important state regulatory policies,”
post, at 5 (internal quotation marks omitted). But that is
not what the dissent has done. Simply because a rule
should be read in light of federalism concerns, it does not
follow that courts may rewrite the rule.
At bottom, the dissent’s interpretation of Rule 23 seems
to be that Rule 23 covers only those cases in which its
application would create no Erie problem. The dissent
would apply the Rules of Decision Act inquiry under Erie
even to cases in which there is a governing federal rule,
and thus the Act, by its own terms, does not apply. But
“[w]hen a situation is covered by one of the Federal Rules,
the question facing the court is a far cry from the typical,
relatively unguided Erie choice.” Hanna, 380 U. S., at
471. The question is only whether the Enabling Act is
satisfied. Although it reflects a laudable concern to pro
tect “state regulatory policies,” post, at 5 (internal quota
tion marks omitted), JUSTICE GINSBURG’s approach would,
in my view, work an end run around Congress’ system of
uniform federal rules, see 28 U. S. C. §2072, and our deci
sion in Hanna. Federal courts can and should interpret
federal rules with sensitivity to “state prerogatives,” post,
at 4; but even when “state interests . . . warrant our re
spectful consideration,” post, at 8, federal courts cannot
rewrite the rules. If my dissenting colleagues feel strongly
that §901(b) is substantive and that class certification
should be denied, then they should argue within the Ena
bling Act’s framework. Otherwise, “the Federal Rule
applies regardless of contrary state law.” Gasperini, 518
U. S., at 427, n. 7; accord, Hanna, 380 U. S., at 471.
Cite as: 559 U. S. ____ (2010) 17
Opinion of STEVENS, J.
Applying Rule 23 Does Not Violate the Enabling Act
As I have explained, in considering whether to certify a
class action such as this one, a federal court must inquire
whether doing so would abridge, enlarge, or modify New
York’s rights or remedies, and thereby violate the Ena
bling Act. This inquiry is not always a simple one because
“[i]t is difficult to conceive of any rule of procedure that
cannot have a significant effect on the outcome of a case,”
Wright §4508, at 232–233, and almost “any rule can be
said to have . . . ‘substantive effects,’ affecting society’s
distribution of risks and rewards,” Ely 724, n. 170. Faced
with a federal rule that dictates an answer to a tradition
ally procedural question and that displaces a state rule,
one can often argue that the state rule was really some
part of the State’s definition of its rights or remedies.
In my view, however, the bar for finding an Enabling
Act problem is a high one. The mere fact that a state law
is designed as a procedural rule suggests it reflects a
judgment about how state courts ought to operate and not
a judgment about the scope of state-created rights and
remedies. And for the purposes of operating a federal
court system, there are costs involved in attempting to
discover the true nature of a state procedural rule and
allowing such a rule to operate alongside a federal rule
that appears to govern the same question. The mere
possibility that a federal rule would alter a state-created
right is not sufficient. There must be little doubt.
The text of CPLR §901(b) expressly and unambiguously
applies not only to claims based on New York law but also
to claims based on federal law or the law of any other
State. And there is no interpretation from New York
courts to the contrary. It is therefore hard to see how
§901(b) could be understood as a rule that, though proce
dural in form, serves the function of defining New York’s
rights or remedies. This is all the more apparent because
lawsuits under New York law could be joined in federal
class actions well before New York passed §901(b) in 1975,
18 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
Opinion of STEVENS, J.
and New York had done nothing to prevent that. It is
true, as the dissent points out, that there is a limited
amount of legislative history that can be read to suggest
that the New York officials who supported §901(b) wished
to create a “limitation” on New York’s “statutory dam
ages.” Post, at 8. But, as JUSTICE SCALIA notes, that is
not the law that New York adopted.16 See ante, at 7–8
(opinion of the Court).
The legislative history, moreover, does not clearly de
scribe a judgment that §901(b) would operate as a limita
tion on New York’s statutory damages. In evaluating that
——————
16 In its Erie analysis, the dissent observes that when sovereigns
create laws, the enacting legislatures sometimes assume those laws
will apply only within their territory. See post, at 18–20. That is a true
fact, but it does not do very much work for the dissent’s position. For
one thing, as the dissent observes, this Erie analysis is relevant only if
there is no conflict between Rule 23 and §901(b), and the court can thus
apply both. Post, at 17. But because, in my view, Rule 23 applies, the
only question is whether it would violate the Enabling Act. See Hanna,
380 U. S., at 471. And that inquiry is different from the Rules of
Decision Act, or Erie, inquiry. See id., at 469–471.
The dissent’s citations, moreover, highlight simply that when inter
preting statutes, context matters. Thus, we sometimes presume that
laws cover only domestic conduct and sometimes do not, depending
upon, inter alia, whether it makes sense in a given situation to assume
that “the character of an act as lawful or unlawful must be determined
wholly by the law of the [place] where the act is done,” American
Banana Co. v. United Fruit Co., 213 U. S. 347, 356 (1909). But in the
context of §901(b), a presumption against extraterritoriality makes
little sense. That presumption applies almost only to laws governing
what people can or cannot do. Section 901(b), however, is not directed
to the conduct of persons but is instead directed to New York courts.
Thus, §901(b) is, by its own terms, not extraterritorial insofar as it
states that it governs New York courts. It is possible that the New
York Legislature simply did not realize that New York courts hear
claims under other sources of law and that other courts hear claims
under New York law, and therefore mistakenly believed that they had
written a limit on New York remedies. But because New York set up
§901(b) as a general rule about how its courts operate, my strong
presumption is to the contrary.
Cite as: 559 U. S. ____ (2010) 19
Opinion of STEVENS, J.
legislative history, it is necessary to distinguish between
procedural rules adopted for some policy reason and seem
ingly procedural rules that are intimately bound up in the
scope of a substantive right or remedy. Although almost
every rule is adopted for some reason and has some effect
on the outcome of litigation, not every state rule “defines
the dimensions of [a] claim itself,” post, at 12. New York
clearly crafted §901(b) with the intent that only certain
lawsuits—those for which there were not statutory penal
ties—could be joined in class actions in New York courts.
That decision reflects a policy judgment about which
lawsuits should proceed in New York courts in a class
form and which should not. As JUSTICE GINSBURG care
fully outlines, see post, at 8–10, §901(b) was “apparently”
adopted in response to fears that the class-action proce
dure, applied to statutory penalties, would lead to “ annihi
lating punishment of the defendant.” V. Alexander, Prac
tice Commentaries, C901:11, reprinted in 7B McKinney’s
Consolidated Laws of New York Ann., p. 104 (2006) (in
ternal quotation marks omitted); see also Sperry v.
Crompton Corp., 8 N. Y. 3d 204, 211, 863 N. E. 2d 1012,
1015 (2007). But statements such as these are not par
ticularly strong evidence that §901(b) serves to define who
can obtain a statutory penalty or that certifying such a
class would enlarge New York’s remedy. Any device that
makes litigation easier makes it easier for plaintiffs to
recover damages.
In addition to the fear of excessive recoveries, some
opponents of a broad class-action device “argued that there
was no need to permit class actions in order to encourage
litigation . . . when statutory penalties . . . provided an
aggrieved party with a sufficient economic incentive to
pursue a claim.” Id., at 211, 863 N. E. 2d, at 1015 (em
phasis added). But those opponents may have felt merely
that, for any number of reasons, New York courts should
not conduct trials in the class format when that format is
20 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
Opinion of STEVENS, J.
unnecessary to motivate litigation.17 JUSTICE GINSBURG
asserts that this could not be true because “suits seeking
statutory damages are arguably best suited to the class
device because individual proof of actual damages is un
necessary.” Post, at 9–10. But some people believe that
class actions are inefficient or at least unfair, insofar as
they join together slightly disparate claims or force courts
to adjudicate unwieldy lawsuits. It is not for us to dismiss
the possibility that New York legislators shared in those
beliefs and thus wanted to exclude the class vehicle when
it appeared to be unnecessary.
The legislative history of §901 thus reveals a classically
procedural calibration of making it easier to litigate claims
in New York courts (under any source of law) only when it
is necessary to do so, and not making it too easy when the
class tool is not required. This is the same sort of calcula
tion that might go into setting filing fees or deadlines for
briefs. There is of course a difference of degree between
those examples and class certification, but not a difference
of kind; the class vehicle may have a greater practical
effect on who brings lawsuits than do low filing fees, but
that does not transform it into a damages “proscription,”
post, at 12, n. 6, 21, or “limitation,” post, at 7, n. 2, 8, 9, 12,
25.18
——————
17 To be sure, one could imagine the converse story, that a legislature
would create statutory penalties but dictate that such penalties apply
only when necessary to overcome the costs and inconvenience of filing a
lawsuit, and thus are not necessary in a class action. But it is hard to
see how that narrative applies to New York, given that New York’s
penalty provisions, on their face, apply to all plaintiffs, be they class or
individual, and that §901(b) addresses penalties that are created under
any source of state or federal law.
18 JUSTICE GINSBURG asserts that class certification in this matter
would “transform a $500 case into a $5,000,000 award.” Post, at 1. But
in fact, class certification would transform 10,000 $500 cases into one
$5,000,000 case. It may be that without class certification, not all of
the potential plaintiffs would bring their cases. But that is true of any
Cite as: 559 U. S. ____ (2010) 21
Opinion of STEVENS, J.
The difference of degree is relevant to the forum shop
ping considerations that are part of the Rules of Decision
Act or Erie inquiry. If the applicable federal rule did not
govern the particular question at issue (or could be fairly
read not to do so), then those considerations would matter,
for precisely the reasons given by the dissent. See post, at
17–24. But that is not this case. As the Court explained
in Hanna, it is an “incorrect assumption that the rule of
Erie R. Co. v. Thompkins constitutes the appropriate test
of . . . the applicability of a Federal Rule of Civil Proce
dure.” 380 U. S., at 469–470. “It is true that both the
Enabling Act and the Erie rule say, roughly, that federal
courts are to apply state ‘substantive’ law and federal
‘procedural’ law,” but the tests are different and reflect the
fact that “they were designed to control very different
sorts of decisions.” Id., at 471.
Because Rule 23 governs class certification, the only
decision is whether certifying a class in this diversity case
would “abridge, enlarge or modify” New York’s substantive
rights or remedies. §2072(b). Although one can argue
that class certification would enlarge New York’s “limited”
damages remedy, see post, at 7, n. 2, 8, 9, 12, 25, such
arguments rest on extensive speculation about what the
New York Legislature had in mind when it created
§901(b). But given that there are two plausible competing
narratives, it seems obvious to me that we should respect
the plain textual reading of §901(b), a rule in New York’s
procedural code about when to certify class actions
brought under any source of law, and respect Congress’
decision that Rule 23 governs class certification in federal
courts. In order to displace a federal rule, there must be
more than just a possibility that the state rule is different
——————
procedural vehicle; without a lower filing fee, a conveniently located
courthouse, easy-to-use federal procedural rules, or many other fea
tures of the federal courts, many plaintiffs would not sue.
22 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
Opinion of STEVENS, J.
than it appears.
Accordingly, I concur in part and concur in the judg
ment.
Cite as: 559 U. S. ____ (2010) 1
GINSBURG, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 08–1008
_________________
SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.,
PETITIONER v. ALLSTATE INSURANCE
COMPANY
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SECOND CIRCUIT
[March 31, 2010]
JUSTICE GINSBURG, with whom JUSTICE KENNEDY,
JUSTICE BREYER, and JUSTICE ALITO join, dissenting.
The Court today approves Shady Grove’s attempt to
transform a $500 case into a $5,000,000 award, although
the State creating the right to recover has proscribed this
alchemy. If Shady Grove had filed suit in New York state
court, the 2% interest payment authorized by New York
Ins. Law Ann. §5106(a) (West 2009) as a penalty for over
due benefits would, by Shady Grove’s own measure,
amount to no more than $500. By instead filing in federal
court based on the parties’ diverse citizenship and request
ing class certification, Shady Grove hopes to recover, for
the class, statutory damages of more than $5,000,000.
The New York Legislature has barred this remedy, in
structing that, unless specifically permitted, “an action to
recover a penalty, or minimum measure of recovery cre
ated or imposed by statute may not be maintained as a
class action.” N. Y. Civ. Prac. Law Ann. (CPLR) §901(b)
(West 2006). The Court nevertheless holds that Federal
Rule of Civil Procedure 23, which prescribes procedures
for the conduct of class actions in federal courts, preempts
the application of §901(b) in diversity suits.
The Court reads Rule 23 relentlessly to override New
York’s restriction on the availability of statutory damages.
2 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
Our decisions, however, caution us to ask, before under
mining state legislation: Is this conflict really necessary?
Cf. Traynor, Is This Conflict Really Necessary? 37 Tex.
L. Rev. 657 (1959). Had the Court engaged in that in
quiry, it would not have read Rule 23 to collide with New
York’s legitimate interest in keeping certain monetary
awards reasonably bounded. I would continue to interpret
Federal Rules with awareness of, and sensitivity to, im
portant state regulatory policies. Because today’s judg
ment radically departs from that course, I dissent.
I
A
“Under the Erie doctrine,” it is long settled, “federal
courts sitting in diversity apply state substantive law and
federal procedural law.” Gasperini v. Center for Humani
ties, Inc., 518 U. S. 415, 427 (1996); see Erie R. Co. v.
Tompkins, 304 U. S. 64 (1938). Justice Harlan aptly
conveyed the importance of the doctrine; he described Erie
as “one of the modern cornerstones of our federalism,
expressing policies that profoundly touch the allocation of
judicial power between the state and federal systems.”
Hanna v. Plumer, 380 U. S. 460, 474 (1965) (concurring
opinion). Although we have found Erie’s application
“sometimes [to be] a challenging endeavor,” Gasperini, 518
U. S., at 427, two federal statutes mark our way.
The first, the Rules of Decision Act,1 prohibits federal
courts from generating substantive law in diversity ac
tions. See Erie, 304 U. S., at 78. Originally enacted as
part of the Judiciary Act of 1789, this restraint serves a
policy of prime importance to our federal system. We have
——————
1 The Rules of Decision Act directs that, “[t]he laws of the several
states, except where the Constitution or treaties of the United States or
Acts of Congress otherwise require or provide, shall be regarded as
rules of decision in civil actions in the courts of the United States, in
cases where they apply.” 28 U. S. C. §1652.
Cite as: 559 U. S. ____ (2010) 3
GINSBURG, J., dissenting
therefore applied the Act “with an eye alert to . . . avoiding
disregard of State law.” Guaranty Trust Co. v. York, 326
U. S. 99, 110 (1945).
The second, the Rules Enabling Act, enacted in 1934,
authorizes us to “prescribe general rules of practice and
procedure” for the federal courts, but with a crucial re
striction: “Such rules shall not abridge, enlarge or modify
any substantive right.” 28 U. S. C. §2072. Pursuant to
this statute, we have adopted the Federal Rules of Civil
Procedure. In interpreting the scope of the Rules, includ
ing, in particular, Rule 23, we have been mindful of the
limits on our authority. See, e.g., Ortiz v. Fibreboard
Corp., 527 U. S. 815, 845 (1999) (The Rules Enabling Act
counsels against “adventurous application” of Rule 23; any
tension with the Act “is best kept within tolerable limits.”);
Amchem Products, Inc. v. Windsor, 521 U. S. 591, 612–613
(1997). See also Semtek Int’l Inc. v. Lockheed Martin
Corp., 531 U. S. 497, 503–504 (2001).
If a Federal Rule controls an issue and directly conflicts
with state law, the Rule, so long as it is consonant with
the Rules Enabling Act, applies in diversity suits. See
Hanna, 380 U. S., at 469–474. If, however, no Federal
Rule or statute governs the issue, the Rules of Decision
Act, as interpreted in Erie, controls. That Act directs
federal courts, in diversity cases, to apply state law when
failure to do so would invite forum-shopping and yield
markedly disparate litigation outcomes. See Gasperini,
518 U. S., at 428; Hanna, 380 U. S., at 468. Recognizing
that the Rules of Decision Act and the Rules Enabling Act
simultaneously frame and inform the Erie analysis, we
have endeavored in diversity suits to remain safely within
the bounds of both congressional directives.
B
In our prior decisions in point, many of them not men
tioned in the Court’s opinion, we have avoided immoderate
4 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
interpretations of the Federal Rules that would trench on
state prerogatives without serving any countervailing
federal interest. “Application of the Hanna analysis,” we
have said, “is premised on a ‘direct collision’ between the
Federal Rule and the state law.” Walker v. Armco Steel
Corp., 446 U. S. 740, 749–750 (1980) (quoting Hanna, 380
U. S., at 472). To displace state law, a Federal Rule,
“when fairly construed,” must be “ ‘sufficiently broad’ ” so
as “to ‘control the issue’ before the court, thereby leaving
no room for the operation of that law.” Burlington North
ern R. Co. v. Woods, 480 U. S. 1, 4–5 (1987) (quoting
Walker, 446 U. S., at 749–750, and n. 9; emphasis added);
cf. Stewart Organization, Inc. v. Ricoh Corp., 487 U. S. 22,
37–38 (1988) (SCALIA, J., dissenting) (“[I]n deciding
whether a federal . . . Rule of Procedure encompasses a
particular issue, a broad reading that would create signifi
cant disuniformity between state and federal courts
should be avoided if the text permits.”).
In pre-Hanna decisions, the Court vigilantly read the
Federal Rules to avoid conflict with state laws. In Palmer
v. Hoffman, 318 U. S. 109, 117 (1943), for example, the
Court read Federal Rule 8(c), which lists affirmative de
fenses, to control only the manner of pleading the listed
defenses in diversity cases; as to the burden of proof in
such cases, Palmer held, state law controls.
Six years later, in Ragan v. Merchants Transfer &
Warehouse Co., 337 U. S. 530 (1949), the Court ruled that
state law determines when a diversity suit commences for
purposes of tolling the state limitations period. Although
Federal Rule 3 specified that “[a] civil action is commenced
by filing a complaint with the court,” we held that the
Rule did not displace a state law that tied an action’s
commencement to service of the summons. Id., at 531–
533. The “cause of action [wa]s created by local law,” the
Court explained, therefore “the measure of it [wa]s to be
found only in local law.” Id., at 533.
Cite as: 559 U. S. ____ (2010) 5
GINSBURG, J., dissenting
Similarly in Cohen v. Beneficial Industrial Loan Corp.,
337 U. S. 541 (1949), the Court held applicable in a diver
sity action a state statute requiring plaintiffs, as a prereq
uisite to pursuit of a stockholder’s derivative action, to
post a bond as security for costs. At the time of the litiga
tion, Rule 23, now Rule 23.1, addressed a plaintiff’s insti
tution of a derivative action in federal court. Although the
Federal Rule specified prerequisites to a stockholder’s
maintenance of a derivative action, the Court found no
conflict between the Rule and the state statute in ques
tion; the requirements of both could be enforced, the Court
observed. See id., at 556. Burdensome as the security-for
costs requirement may be, Cohen made plain, suitors
could not escape the upfront outlay by resorting to the
federal court’s diversity jurisdiction.
In all of these cases, the Court stated in Hanna, “the
scope of the Federal Rule was not as broad as the losing
party urged, and therefore, there being no Federal Rule
which covered the point in dispute, Erie commanded the
enforcement of state law.” 380 U. S., at 470. In Hanna
itself, the Court found the clash “unavoidable,” ibid.; the
petitioner had effected service of process as prescribed by
Federal Rule 4(d)(1), but that “how-to” method did not
satisfy the special Massachusetts law applicable to service
on an executor or administrator. Even as it rejected the
Massachusetts prescription in favor of the federal proce
dure, however, “[t]he majority in Hanna recognized . . .
that federal rules . . . must be interpreted by the courts
applying them, and that the process of interpretation can
and should reflect an awareness of legitimate state inter
ests.” R. Fallon, J. Manning, D. Meltzer, & D. Shapiro,
Hart and Wechsler’s The Federal Courts and the Federal
System 593 (6th ed. 2009) (hereinafter Hart & Wechsler).
Following Hanna, we continued to “interpre[t] the fed
eral rules to avoid conflict with important state regulatory
policies.” Hart & Wechsler 593. In Walker, the Court took
6 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
up the question whether Ragan should be overruled; we
held, once again, that Federal Rule 3 does not directly
conflict with state rules governing the time when an ac
tion commences for purposes of tolling a limitations pe
riod. 446 U. S., at 749–752. Rule 3, we said, addresses
only “the date from which various timing requirements of
the Federal Rules begin to run,” id., at 751, and does not
“purpor[t] to displace state tolling rules,” id., at 750–751.
Significant state policy interests would be frustrated, we
observed, were we to read Rule 3 as superseding the state
rule, which required actual service on the defendant to
stop the clock on the statute of limitations. Id., at 750–
752.
We were similarly attentive to a State’s regulatory
policy in Gasperini. That diversity case concerned the
standard for determining when the large size of a jury
verdict warrants a new trial. Federal and state courts
alike had generally employed a “shock the conscience” test
in reviewing jury awards for excessiveness. See 518 U. S.,
at 422. Federal courts did so pursuant to Federal Rule
59(a) which, as worded at the time of Gasperini, instructed
that a trial court could grant a new trial “for any of the
reasons for which new trials have heretofore been granted
in actions at law in the courts of the United States.” Fed.
Rule Civ. Proc. 59(a) (West 1995). In an effort to provide
greater control, New York prescribed procedures under
which jury verdicts would be examined to determine
whether they “deviate[d] materially from what would be
reasonable compensation.” See Gasperini, 518 U. S., at
423–425 (quoting CPLR §5501(c)). This Court held that
Rule 59(a) did not inhibit federal-court accommodation of
New York’s invigorated test.
Most recently, in Semtek, we addressed the claim
preclusive effect of a federal-court judgment dismissing a
diversity action on the basis of a California statute of
limitations. The case came to us after the same plaintiff
Cite as: 559 U. S. ____ (2010) 7
GINSBURG, J., dissenting
renewed the same fray against the same defendant in a
Maryland state court. (Plaintiff chose Maryland because
that State’s limitations period had not yet run.) We held
that Federal Rule 41(b), which provided that an involun
tary dismissal “operate[d] as an adjudication on the mer
its,” did not bar maintenance of the renewed action in
Maryland. To hold that Rule 41(b) precluded the Mary
land courts from entertaining the case, we said, “would
arguably violate the jurisdictional limitation of the Rules
Enabling Act,” 531 U. S., at 503, and “would in many cases
violate [Erie’s] federalism principle,” id., at 504.
In sum, both before and after Hanna, the above
described decisions show, federal courts have been cau
tioned by this Court to “interpre[t] the Federal Rules . . .
with sensitivity to important state interests,” Gasperini,
518 U. S., at 427, n. 7, and a will “to avoid conflict with
important state regulatory policies,” id., at 438, n. 22
(internal quotation marks omitted).2 The Court veers
——————
2JUSTICE STEVENS stakes out common ground on this point: “[F]ederal
rules,” he observes, “must be interpreted with some degree of ‘sensitiv
ity to important state interests and regulatory policies,’ . . . and applied
to diversity cases against the background of Congress’ command that
such rules not alter substantive rights and with consideration of ‘the
degree to which the Rule makes the character and result of the federal
litigation stray from the course it would follow in state courts,’ Hanna
[v. Plumer], 380 U. S. [460, 473 (1965)].” Ante, at 3. (opinion concurring
in part and concurring in judgment). See also ante, at 4 (“A ‘state
procedural rule, though undeniably procedural in the ordinary sense of
the term’ may exist ‘to influence substantive outcomes,’ . . . and may in
some instances become so bound up with the state-created right or
remedy that it defines the scope of that substantive right or remedy.”
(some internal quotation marks omitted)); ante, at 5 (“When a State
chooses to use a traditionally procedural vehicle as a means of defining
the scope of substantive rights or remedies, federal courts must recog
nize and respect that choice.”). Nevertheless, JUSTICE STEVENS sees no
reason to read Rule 23 with restraint in this particular case; the Fed
eral Rule preempts New York’s damages limitation, in his view, be
cause §901(b) is “a procedural rule that is not part of New York’s
substantive law.” Ante, at 1. This characterization of §901(b) does not
8 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
away from that approach—and conspicuously, its most
recent reiteration in Gasperini, ante, at 11, n. 7—in favor
of a mechanical reading of Federal Rules, insensitive to
state interests and productive of discord.
C
Our decisions instruct over and over again that, in the
adjudication of diversity cases, state interests—whether
advanced in a statute, e.g., Cohen, or a procedural rule,
e.g., Gasperini—warrant our respectful consideration. Yet
today, the Court gives no quarter to New York’s limitation
on statutory damages and requires the lower courts to
thwart the regulatory policy at stake: To prevent excessive
damages, New York’s law controls the penalty to which a
defendant may be exposed in a single suit. The story
behind §901(b)’s enactment deserves telling.
In 1975, the Judicial Conference of the State of New
York proposed a new class-action statute designed “to set
up a flexible, functional scheme” that would provide “an
effective, but controlled group remedy.” Judicial Confer
ence Report on CPLR, reprinted in 1975 N. Y. Laws
pp. 1477, 1493 (McKinney). As originally drafted, the
legislation addressed only the procedural aspects of class
actions; it specified, for example, five prerequisites for
certification, eventually codified at §901(a), that closely
tracked those listed in Rule 23. See CPLR §901(a) (requir
ing, for class certification, numerosity, predominance,
typicality, adequacy of representation, and superiority).
While the Judicial Conference proposal was in the New
York Legislature’s hopper, “various groups advocated for
the addition of a provision that would prohibit class action
plaintiffs from being awarded a statutorily-created penalty
——————
mirror reality, as I later explain. See infra, at 17–24. But a majority of
this Court, it bears emphasis, agrees that Federal Rules should be read
with moderation in diversity suits to accommodate important state
concerns.
Cite as: 559 U. S. ____ (2010) 9
GINSBURG, J., dissenting
. . . except when expressly authorized in the pertinent
statute.” Sperry v. Crompton Corp., 8 N. Y. 3d 204, 211,
863 N. E. 2d 1012, 1015 (2007). These constituents
“feared that recoveries beyond actual damages could lead
to excessively harsh results.” Ibid. “They also argued that
there was no need to permit class actions . . . [because]
statutory penalties . . . provided an aggrieved party with a
sufficient economic incentive to pursue a claim.” Ibid.
Such penalties, constituents observed, often far exceed a
plaintiff’s actual damages. “When lumped together,” they
argued, “penalties and class actions produce overkill.”
Attachment to Letter from G. Perkinson, New York State
Council of Retail Merchants, Inc., to J. Gribetz, Executive
Chamber (June 4, 1975) (Legislative Report), Bill Jacket,
L. 1975, Ch. 207.
Aiming to avoid “ annihilating punishment of the defen
dant,” the New York Legislature amended the proposed
statute to bar the recovery of statutory damages in class
actions. V. Alexander, Practice Commentaries, C901:11,
reprinted in 7B McKinney’s Consolidated Laws of New
York Ann., p. 104 (2006) (internal quotation marks omit
ted). In his signing statement, Governor Hugh Carey
stated that the new statute “empowers the court to pre
vent abuse of the class action device and provides a con
trolled remedy.” Memorandum on Approving L. 1975, Ch.
207, reprinted in 1975 N. Y. Laws, at 1748 (emphasis
added).
“[T]he final bill . . . was the result of a compromise
among competing interests.” Sperry, 8 N. Y. 3d, at 211,
863 N. E. 2d, at 1015. Section 901(a) allows courts leeway
in deciding whether to certify a class, but §901(b) rejects
the use of the class mechanism to pursue the particular
remedy of statutory damages. The limitation was not
designed with the fair conduct or efficiency of litigation in
mind. Indeed, suits seeking statutory damages are argua
bly best suited to the class device because individual proof
10 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
of actual damages is unnecessary. New York’s decision
instead to block class-action proceedings for statutory
damages therefore makes scant sense, except as a means
to a manifestly substantive end: Limiting a defendant’s
liability in a single lawsuit in order to prevent the exorbi
tant inflation of penalties—remedies the New York Legis
lature created with individual suits in mind.3
D
Shady Grove contends—and the Court today agrees—
that Rule 23 unavoidably preempts New York’s prohibi
tion on the recovery of statutory damages in class actions.
The Federal Rule, the Court emphasizes, states that
Shady Grove’s suit “may be” maintained as a class action,
which conflicts with §901(b)’s instruction that it “may not”
so proceed. Ante, at 4 (internal quotation marks omitted
and emphasis deleted). Accordingly, the Court insists,
§901(b) “cannot apply in diversity suits unless Rule 23 is
ultra vires.” Ibid. Concluding that Rule 23 does not vio
late the Rules Enabling Act, the Court holds that the
federal provision controls Shady Grove’s ability to seek, on
behalf of a class, a statutory penalty of over $5,000,000.
Ante, at 12–16 (plurality opinion); ante, at 17–22 (STEVENS,
J., concurring in part and concurring in judgment).
The Court, I am convinced, finds conflict where none is
——————
3 Even in the mine-run case, a class action can result in “potentially
ruinous liability.” Advisory Committee’s Notes on Fed. Rule Civ.
Proc. 23, 28 U. S. C. App., p. 143. A court’s decision to certify a class
accordingly places pressure on the defendant to settle even unmeritori
ous claims. See, e.g., Coopers & Lybrand v. Livesay, 437 U. S. 463, 476
(1978). When representative plaintiffs seek statutory damages, pres
sure to settle may be heightened because a class action poses the risk of
massive liability unmoored to actual injury. See, e.g., Ratner v. Chemi
cal Bank New York Trust Co., 54 F. R. D. 412, 416 (SDNY 1972) (exer
cising “considerable discretion of a pragmatic nature” to refuse to
certify a class because the plaintiffs suffered negligible actual damages
but sought statutory damages of $13,000,000).
Cite as: 559 U. S. ____ (2010) 11
GINSBURG, J., dissenting
necessary. Mindful of the history behind §901(b)’s enact
ment, the thrust of our precedent, and the substantive
rights limitation in the Rules Enabling Act, I conclude, as
did the Second Circuit and every District Court to have
considered the question in any detail,4 that Rule 23 does
not collide with §901(b). As the Second Circuit well un
derstood, Rule 23 prescribes the considerations relevant to
class certification and postcertification proceedings—but it
does not command that a particular remedy be available
when a party sues in a representative capacity. See 549
F. 3d 137, 143 (2008).5 Section 901(b), in contrast, trains
on that latter issue. Sensibly read, Rule 23 governs proce
dural aspects of class litigation, but allows state law to
control the size of a monetary award a class plaintiff may
pursue.
——————
4 See, e.g., In re Automotive Refinishing Paint Antitrust Litigation,
515 F. Supp. 2d 544, 549–551 (ED Pa. 2007); Leider v. Ralfe, 387 F.
Supp. 2d 283, 289–292 (SDNY 2005); Dornberger v. Metropolitan Life
Insurance Co., 182 F. R. D. 72, 84 (SDNY 1999). See also Weber v. U. S.
Sterling Securities, Inc., 282 Conn. 722, 738–739, 914 A. 2d 816, 827–
828 (2007) (section 901(b) applied in Connecticut state court to action
governed by New York substantive law).
5 Shady Grove projects that a dispensation in favor of Allstate would
require “courts in all diversity class actions . . . [to] look to state rules
and decisional law rather than to Rule 23 . . . in making their class
certification decisions.” Brief for Petitioner 55. This slippery-slope
projection is both familiar and false. Cf. R. Bork, The Tempting of
America 169 (1990) (“Judges and lawyers live on the slippery slope of
analogies; they are not supposed to ski it to the bottom.”). In this case,
CPLR §901(a) lists the state-law prerequisites for class certification,
but Allstate does not contend that §901(a) overrides Rule 23. Brief for
Respondent 18 (“There is no dispute that the criteria for class certifica
tion under state law do not apply in federal court; that is the ground
squarely occupied by Rule 23.”). Federal courts sitting in diversity have
routinely applied Rule 23’s certification standards, rather than compa
rable state provisions. See, e.g., In re New Motor Vehicles Canadian
Export Antitrust Litigation, 522 F. 3d 6, 18–24 (CA1 2008); Order and
Reasons in In re Katrina Canal Breaches Consolidated Litigation, Civ.
Action No. 05–4182 (ED La., Aug. 6, 2009).
12 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
In other words, Rule 23 describes a method of enforcing
a claim for relief, while §901(b) defines the dimensions of
the claim itself. In this regard, it is immaterial that
§901(b) bars statutory penalties in wholesale, rather than
retail, fashion. The New York Legislature could have
embedded the limitation in every provision creating a
cause of action for which a penalty is authorized; §901(b)
operates as shorthand to the same effect. It is as much a
part of the delineation of the claim for relief as it would be
were it included claim by claim in the New York Code.
The Court single-mindedly focuses on whether a suit
“may” or “may not” be maintained as a class action. See
ante, at 4–6. Putting the question that way, the Court
does not home in on the reason why. Rule 23 authorizes
class treatment for suits satisfying its prerequisites be
cause the class mechanism generally affords a fair and
efficient way to aggregate claims for adjudication. Section
901(b) responds to an entirely different concern; it does
not allow class members to recover statutory damages
because the New York Legislature considered the result of
adjudicating such claims en masse to be exorbitant.6 The
fair and efficient conduct of class litigation is the legiti
mate concern of Rule 23; the remedy for an infraction of
state law, however, is the legitimate concern of the State’s
lawmakers and not of the federal rulemakers. Cf. Ely, The
Irrepressible Myth of Erie, 87 Harv. L. Rev. 693, 722
(1974) (It is relevant “whether the state provision embod
ies a substantive policy or represents only a procedural
disagreement with the federal rulemakers respecting the
——————
6 The Court disputes the strength of the evidence of legislative intent,
see ante, at 9, but offers no alternative account of §901(b)’s purpose.
Perhaps this silence indicates how very hard it would be to ascribe to
§901(b) any purpose bound up with the fairness and efficiency of
processing cases. On its face, the proscription is concerned with reme
dies, i.e., the availability of statutory damages in a lawsuit. Legislative
history confirms this objective, but is not essential to revealing it.
Cite as: 559 U. S. ____ (2010) 13
GINSBURG, J., dissenting
fairest and most efficient way of conducting litigation.”).
Suppose, for example, that a State, wishing to cap dam
ages in class actions at $1,000,000, enacted a statute
providing that “a suit to recover more than $1,000,000
may not be maintained as a class action.” Under the
Court’s reasoning—which attributes dispositive signifi
cance to the words “may not be maintained”—Rule 23
would preempt this provision, nevermind that Congress,
by authorizing the promulgation of rules of procedure for
federal courts, surely did not intend to displace state
created ceilings on damages.7 The Court suggests that the
analysis might differ if the statute “limit[ed] the remedies
available in an existing class action,” ante, at 7, such that
Rule 23 might not conflict with a state statute prescribing
that “no more than $1,000,000 may be recovered in a class
action.” There is no real difference in the purpose and
intended effect of these two hypothetical statutes. The
notion that one directly impinges on Rule 23’s domain,
while the other does not, fundamentally misperceives the
office of Rule 23.8
——————
7 There is, of course, a difference between “justly administering [a]
remedy,” Sibbach v. Wilson & Co., 312 U. S. 1, 14 (1941), and prescrib
ing the content of that remedy; if Rule 23 can be read to increase a
plaintiff’s recovery from $1,000,000 to some greater amount, the Rule
has arguably “enlarge[d] . . . [a] substantive right” in violation of the
Rules Enabling Act. 28 U. S. C. §2072(b). The plurality appears to
acknowledge this point, stating that the Federal Rules we have found
to be in compliance with the Act have not “altered . . . available reme
dies.” Ante, at 13. But the Court’s relentless reading of Rule 23 today
does exactly that: The Federal Rule, it says, authorizes the recovery of
class-size statutory damages even though the New York provision
instructs that such penalties shall not be available.
8 The Court states that “[w]e cannot rewrite [a state law] to reflect
our perception of legislative purpose.” Ante, at 9. But we can, of
course, interpret the Federal Rules in light of a State’s regulatory policy
to decide whether and to what extent a Rule preempts state law. See
supra, at 3–7. Just as we read Federal Rule 3 in Walker v. Armco Steel
Corp., 446 U. S. 740, 751 (1980), not to govern when a suit commences
14 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
The absence of an inevitable collision between Rule 23
and §901(b) becomes evident once it is comprehended that
a federal court sitting in diversity can accord due respect
to both state and federal prescriptions. Plaintiffs seeking
to vindicate claims for which the State has provided a
statutory penalty may pursue relief through a class action
if they forgo statutory damages and instead seek actual
damages or injunctive or declaratory relief; any putative
class member who objects can opt out and pursue actual
damages, if available, and the statutory penalty in an
individual action. See, e.g., Mendez v. The Radec Corp.,
260 F. R. D. 38, 55 (WDNY 2009); Brzychnalski v. Unesco,
Inc., 35 F. Supp. 2d 351, 353 (SDNY 1999).9 See also
Alexander, Practice Commentaries, at 105 (“Even if a
statutory penalty or minimum recovery is involved, most
courts hold that it can be waived, thus confining the class
recovery to actual damages and eliminating the bar of
CPLR 901(b).”). In this manner, the Second Circuit ex
——————
for purposes of tolling a state statute of limitations (although the Rule
indisputably controls when an action commences for federal procedural
purposes), so too we could read Rule 23 not to direct when a class action
may be maintained for purposes of recovering statutory damages
prescribed by state law. On this reading of Rule 23, no rewriting of
§901(b) is necessary to avoid a conflict.
9 The New York Legislature appears to have anticipated this result.
In discussing the remedial bar effected by §901(b), the bill’s sponsor
explained that a “statutory class action for actual damages would still
be permissible.” S. Fink, [Sponsor’s] Memorandum, Bill Jacket, L.
1975, Ch. 207. See also State Consumer Protection Board Memoran
dum (May 29, 1975), Bill Jacket, L. 1975, Ch. 207. On this understand
ing, New York courts routinely authorize class actions when the class
waives its right to receive statutory penalties. See, e.g., Cox v. Micro
soft Corp., 8 App. Div. 3d 39, 778 N. Y. S. 2d 147 (2004); Pesantez v.
Boyle Env. Servs., Inc., 251 App. Div. 2d 11, 673 N. Y. S. 2d 659 (1998);
Ridge Meadows Homeowners’ Assn., Inc. v. Tara Development Co., 242
App. Div. 2d 947, 665 N. Y. S. 2d 361 (1997); Super Glue Corp. v. Avis
Rent A Car System, Inc., 132 App. Div. 2d 604, 517 N. Y. S. 2d 764
(1987); Weinberg v. Hertz Corp., 116 App. Div. 2d 1, 499 N. Y. S. 2d 693
(1986).
Cite as: 559 U. S. ____ (2010) 15
GINSBURG, J., dissenting
plained, “Rule 23’s procedural requirements for class
actions can be applied along with the substantive re
quirement of CPLR 901(b).” 549 F. 3d, at 144. In sum,
while phrased as responsive to the question whether
certain class actions may begin, §901(b) is unmistakably
aimed at controlling how those actions must end. On that
remedial issue, Rule 23 is silent.
Any doubt whether Rule 23 leaves §901(b) in control of
the remedial issue at the core of this case should be dis
pelled by our Erie jurisprudence, including Hanna, which
counsels us to read Federal Rules moderately and cautions
against stretching a rule to cover every situation it could
conceivably reach.10 The Court states that “[t]here is no
reason . . . to read Rule 23 as addressing only whether
claims made eligible for class treatment by some other law
should be certified as class actions.” Ante, at 5. To the
contrary, Palmer, Ragan, Cohen, Walker, Gasperini, and
Semtek provide good reason to look to the law that creates
the right to recover. See supra, at 4–7. That is plainly so
on a more accurate statement of what is at stake: Is there
any reason to read Rule 23 as authorizing a claim for relief
when the State that created the remedy disallows its
pursuit on behalf of a class? None at all is the answer our
federal system should give.
Notably, New York is not alone in its effort to contain
penalties and minimum recoveries by disallowing class
relief; Congress, too, has precluded class treatment for
certain claims seeking a statutorily designated minimum
recovery. See, e.g., 15 U. S. C. §1640(a)(2)(B) (Truth in
Lending Act) (“[I]n the case of a class action . . . no mini
——————
10 The plurality notes that “we have rejected every statutory chal
lenge to a Federal Rule that has come before us.” Ante, at 13. But it
omits that we have interpreted Rules with due restraint, including Rule
23, thus diminishing prospects for the success of such challenges. See
Ortiz v. Fibreboard Corp., 527 U. S. 815, 842 (1999); Amchem Products,
Inc. v. Windsor, 521 U. S. 591, 612–613 (1997); supra, at 4–8.
16 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
mum recovery shall be applicable.”); §1693m(a)(2)(B)
(Electronic Fund Transfer Act) (same); 12 U. S. C.
§4010(a)(2)(B)(i) (Expedited Fund Availability Act) (same).
Today’s judgment denies to the States the full power
Congress has to keep certain monetary awards within
reasonable bounds. Cf. Beard v. Kindler, 558 U. S. ___,
___ (2009) (slip op., at 8) (“In light of . . . federalism and
comity concerns . . . it would seem particularly strange to
disregard state . . . rules that are substantially similar to
those to which we give full force in our own courts.”).
States may hesitate to create determinate statutory penal
ties in the future if they are impotent to prevent federal
court distortion of the remedy they have shaped.11
By finding a conflict without considering whether Rule
23 rationally should be read to avoid any collision, the
Court unwisely and unnecessarily retreats from the feder
alism principles undergirding Erie. Had the Court re
flected on the respect for state regulatory interests en
dorsed in our decisions, it would have found no cause to
interpret Rule 23 so woodenly—and every reason not to do
so. Cf. Traynor, 37 Tex. L. Rev., at 669 (“It is bad enough
for courts to prattle unintelligibly about choice of law, but
——————
11 States have adopted a variety of formulations to limit the use of
class actions to gain certain remedies or to pursue certain claims, as
illustrated by the 96 examples listed in Allstate’s brief. Apps. to Brief
for Respondent. The Court’s “one-size-fits-all” reading of Rule 23, ante,
at 4, likely prevents the enforcement of all of these statutes in diversity
actions—including the numerous state statutory provisions that, like
§901(b), attempt to curb the recovery of statutory damages. See, e.g.,
Cal. Civ. Code Ann. §2988.5(a)(2) (West 1993); Colo. Rev. Stat. Ann.
§12–14.5–235(d) (2009); Conn. Gen. Stat. §36a–683(a) (2009); Haw.
Rev. Stat. §489–7.5(b)(1) (2008); Ind. Code §24–4.5–5–203(a)(2) (2004);
Ky. Rev. Stat. Ann. §367.983(1)(c) (West 2006); Mass. Gen. Laws, ch.
167B, §20(a)(2)(B) (2008); Mich. Comp. Laws Ann. §493.112(3)(c) (West
2005); N. M. Stat. Ann. §58–16–15(B) (Lexis 2004); Ohio Rev. Code
Ann. §1351.08(A) (West 2004); Okla. Stat., Tit. 14A, §5–203(1) (2007
Supp.); Wyo. Stat. Ann. §40–19–119(a)(iii) (2009).
Cite as: 559 U. S. ____ (2010) 17
GINSBURG, J., dissenting
unforgiveable when inquiry might have revealed that
there was no real conflict.”).
II
Because I perceive no unavoidable conflict between Rule
23 and §901(b), I would decide this case by inquiring
“whether application of the [state] rule would have so
important an effect upon the fortunes of one or both of the
litigants that failure to [apply] it would be likely to cause a
plaintiff to choose the federal court.” Hanna, 380 U. S., at
468, n. 9. See Gasperini, 518 U. S., at 428.
Seeking to pretermit that inquiry, Shady Grove urges
that the class-action bar in §901(b) must be regarded as
“procedural” because it is contained in the CPLR, which
“govern[s] the procedure in civil judicial proceedings in all
courts of the state.” Brief for Petitioner 34 (quoting CPLR
§101; emphasis in original). Placement in the CPLR is
hardly dispositive. The provision held “substantive” for
Erie purposes in Gasperini is also contained in the CPLR
(§5501(c)), as are limitations periods, §201 et seq., pre
scriptions plainly “substantive” for Erie purposes however
they may be characterized for other purposes, see York,
326 U. S., at 109–112. See also, e.g., 1 Restatement (Sec
ond) of Conflict of Laws §133, Reporter’s Note, p. 369
(1969) (hereinafter Restatement) (“Under the rule of Erie
. . . the federal courts have classified the burden of persua
sion as to contributory negligence as a matter of substan
tive law that is governed by the rule of the State in which
they sit even though the courts of that State have charac
terized their rule as procedural for choice-of-law pur
poses.”); Cook, “Substance” and “Procedure” in the Conflict
of Laws, 42 Yale L. J. 333 (1933).
Shady Grove also ranks §901(b) as “procedural” because
“nothing in [the statute] suggests that it is limited to
rights of action based on New York state law, as opposed
to federal law or the law of other states”; instead it “ap
18 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
plies to actions seeking penalties under any statute.” Brief
for Petitioner 35–36. See also ante, at 17–18 (STEVENS, J.,
concurring in part and concurring in judgment) (Section
901(b) cannot “be understood as a rule that . . . serves the
function of defining New York’s rights or remedies” because
its “text . . . expressly and unambiguously applies not only
to claims based on New York law but also to claims based on
federal law or the law of any other State.”).
It is true that §901(b) is not specifically limited to claims
arising under New York law. But neither is it expressly
extended to claims arising under foreign law. The rule
prescribes, without elaboration either way, that “an action
to recover a penalty . . . may not be maintained as a class
action.” We have often recognized that “general words”
appearing in a statute may, in fact, have limited applica
tion; “[t]he words ‘any person or persons,’ ” for example,
“are broad enough to comprehend every human being.
But general words must not only be limited to cases within
the jurisdiction of the state, but also to those objects to
which the legislature intended to apply them.” United
States v. Palmer, 3 Wheat. 610, 631 (1818) (opinion for the
Court by Marshall, C. J.). See also Small v. United States,
544 U. S. 385, 388 (2005) (“In law, a legislature that uses
the statutory phrase ‘any person’ may or may not mean to
include ‘persons’ outside the jurisdiction of the state.”
(some internal quotation marks omitted)); Flora v. United
States, 362 U. S. 145, 149 (1960) (The term “ ‘any sum’ is a
catchall [phrase,] . . . but to say this is not to define what
it catches.”).
Moreover, Shady Grove overlooks the most likely expla
nation for the absence of limiting language: New York
legislators make law with New York plaintiffs and defen
dants in mind, i.e., as if New York were the universe. See
Baxter, Choice of Law and the Federal System, 16 Stan.
L. Rev. 1, 11 (1963) (“[L]awmakers often speak in univer
sal terms but must be understood to speak with reference
Cite as: 559 U. S. ____ (2010) 19
GINSBURG, J., dissenting
to their constituents.”); cf. Smith v. United States, 507
U. S. 197, 204, n. 5 (1993) (presumption against extrater
ritoriality rooted in part in “the commonsense notion that
Congress generally legislates with domestic concerns in
mind”).
The point was well put by Brainerd Currie in his semi
nal article on governmental interest analysis in conflict-of-
laws cases. The article centers on a now-archaic Massa
chusetts law that prevented married women from binding
themselves by contract as sureties for their husbands.
Discussing whether the Massachusetts prescription ap
plied to transactions involving foreign factors (a foreign
forum, foreign place of contracting, or foreign parties),
Currie observed:
“When the Massachusetts legislature addresses itself
to the problem of married women as sureties, the un
developed image in its mind is that of Massachusetts
married women, husbands, creditors, transactions,
courts, and judgments. In the history of Anglo-
American law the domestic case has been normal, the
conflict-of-laws case marginal.” Married Women’s
Contracts: A Study in Conflict-of-Laws Method, 25 U.
Chi. L. Rev. 227, 231 (1958) (emphasis added).
Shady Grove’s suggestion that States must specifically
limit their laws to domestic rights of action if they wish
their enactments to apply in federal diversity litigation
misses the obvious point: State legislators generally do not
focus on an interstate setting when drafting statutes.12
——————
12 Shady Grove’s argument that §901(b) is procedural based on its
possible application to foreign claims is also out of sync with our Erie
decisions, many of them involving state statutes of similarly unquali
fied scope. The New Jersey law at issue in Cohen v. Beneficial Indus
trial Loan Corp., 337 U. S. 541, 544, n. 1 (1949), for example, required
plaintiffs to post a bond as security for costs in “any [stockholder’s
derivative] action.” (quoting 1945 N. J. Laws ch. 131 (emphasis
20 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
Shady Grove also observes that a New York court has
applied §901(b) to a federal claim for relief under the
Telephone Consumer Protection Act of 1991 (TCPA), 47
U. S. C. §227, see Rudgayzer & Gratt v. Cape Canaveral
Tour & Travel, Inc., 22 App. Div. 3d 148, 799 N. Y. S. 2d
795 (2005), thus revealing §901(b)’s “procedural” cast.
Brief for Petitioner 36. We note first that the TCPA itself
calls for the application of state law. See Rudgayzer, 22
App. Div. 3d, at 149–150, 799 N. Y. S. 2d, at 796–797
(federal action authorized in state court “if otherwise
permitted by the laws or rules of the court of [the] State”
(quoting 47 U. S. C. §227(b)(3))). See also Gottlieb v.
Carnival Corp., 436 F. 3d 335, 342 (CA2 2006) (Sotomayor,
J.) (“Congress sought, via the TCPA, to enact the func
tional equivalent of a state law.”). The TCPA, the Su
preme Court of Connecticut has recognized, thus “carves
out an exception to th[e] general rule” that “when Erie . . .
is reversed . . . , a state court hearing a federal case is
normally required to apply federal substantive law”: “Un
der §227(b)(3) . . . it is state substantive law that deter
mines, as a preliminary matter, whether a federal action
under the act may be brought in state court.” Weber v.
U. S. Sterling Securities, Inc., 282 Conn. 722, 736, 924
A. 2d 816, 826 (2007) (in TCPA action governed by New
York substantive law, §901(b) applied even though the
claim was pursued in Connecticut state court).
——————
added)). See also, e.g., Walker, 446 U. S., at 742–743, and n. 4 (Okla
homa statute deemed “[a]n action” commenced for purposes of the
statute of limitations upon service of the summons (quoting Okla. Stat.,
Tit. 12, §97 (1971)). Our characterization of a state statute as substan
tive for Erie purposes has never hinged on whether the law applied only
to domestic causes of action. To the contrary, we have ranked as
substantive a variety of state laws that the state courts apply to federal
and out-of-state claims, including statutes of limitations and burden-of
proof prescriptions. See infra, at 21.
Cite as: 559 U. S. ____ (2010) 21
GINSBURG, J., dissenting
Moreover, statutes qualify as “substantive” for Erie
purposes even when they have “procedural” thrusts as
well. See, e.g., Cohen, 337 U. S., at 555; cf. Woods v. Inter
state Realty Co., 337 U. S. 535, 536–538, and n. 1 (1949)
(holding diversity case must be dismissed based on state
statute that, by its terms, governed only proceedings in
state court). Statutes of limitations are, again, exemplary.
They supply “substantive” law in diversity suits, see York,
326 U. S., at 109–112, even though, as Shady Grove ac
knowledges, state courts often apply the forum’s limita
tions period as a “procedural” bar to claims arising under
the law of another State, see Reply Brief 24, n. 16; Tr. of
Oral Arg. 16–17. See also Restatement §§142–143 (when
adjudicating a foreign cause of action, State may use
either its own or the foreign jurisdiction’s statute of limi
tations, whichever is shorter). Similarly, federal courts
sitting in diversity give effect to state laws governing the
burden of proving contributory negligence, see Palmer v.
Hoffman, 318 U. S. 109, 177 (1943), yet state courts adju
dicating foreign causes of action often apply their own
local law to this issue. See Restatement §133 and Re
porter’s Note.
In short, Shady Grove’s effort to characterize §901(b) as
simply “procedural” cannot successfully elide this funda
mental norm: When no federal law or rule is dispositive of
an issue, and a state statute is outcome affective in the
sense our cases on Erie (pre- and post-Hanna) develop, the
Rules of Decision Act commands application of the State’s
law in diversity suits. Gasperini, 518 U. S., at 428;
Hanna, 380 U. S., at 468, n. 9; York, 326 U. S., at 109. As
this case starkly demonstrates, if federal courts exercising
diversity jurisdiction are compelled by Rule 23 to award
statutory penalties in class actions while New York courts
are bound by §901(b)’s proscription, “substantial varia
tions between state and federal [money judgments] may be
expected.” Gasperini, 518 U. S., at 430 (quoting Hanna,
22 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
380 U. S., at 467–468 (internal quotation marks omitted)).
The “variation” here is indeed “substantial.” Shady Grove
seeks class relief that is ten thousand times greater than
the individual remedy available to it in state court. As the
plurality acknowledges, ante, at 22, forum shopping will
undoubtedly result if a plaintiff need only file in federal
instead of state court to seek a massive monetary award
explicitly barred by state law. See Gasperini, 518 U. S., at
431 (“Erie precludes a recovery in federal court signifi
cantly larger than the recovery that would have been
tolerated in state court.”).13 The “accident of diversity of
citizenship,” Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U. S.
487, 496 (1941), should not subject a defendant to such
augmented liability. See Hanna, 380 U. S., at 467 (“The
Erie rule is rooted in part in a realization that it would be
unfair for the character or result of a litigation materially
to differ because the suit had been brought in a federal
court.”).
It is beyond debate that “a statutory cap on damages
would supply substantive law for Erie purposes.”
Gasperini, 518 U. S., at 428. See also id., at 439–440
(STEVENS, J., dissenting) (“A state-law ceiling on allowable
damages . . . is a substantive rule of decision that federal
courts must apply in diversity cases governed by New
York law.”); id., at 464 (SCALIA, J., dissenting) (“State
substantive law controls what injuries are compensable
and in what amount.”). In Gasperini, we determined that
New York’s standard for measuring the alleged excessive
——————
13 In contrast, many “state rules ostensibly addressed to procedure,”
ante, at 10 (majority opinion)—including pleading standards and rules
governing summary judgment, pretrial discovery, and the admissibility
of certain evidence—would not so hugely impact forum choices. It is
difficult to imagine a scenario that would promote more forum shopping
than one in which the difference between filing in state and federal
court is the difference between a potential award of $500 and one of
$5,000,000.
Cite as: 559 U. S. ____ (2010) 23
GINSBURG, J., dissenting
ness of a jury verdict was designed to provide a control
analogous to a damages cap. Id., at 429. The statute was
framed as “a procedural instruction,” we noted, “but the
State’s objective [wa]s manifestly substantive.” Ibid.
Gasperini’s observations apply with full force in this
case. By barring the recovery of statutory damages in a
class action, §901(b) controls a defendant’s maximum
liability in a suit seeking such a remedy. The remedial
provision could have been written as an explicit cap: “In
any class action seeking statutory damages, relief is lim
ited to the amount the named plaintiff would have recov
ered in an individual suit.” That New York’s Legislature
used other words to express the very same meaning
should be inconsequential.
We have long recognized the impropriety of displacing,
in a diversity action, state-law limitations on state-created
remedies. See Woods, 337 U. S., at 538 (in a diversity
case, a plaintiff “barred from recovery in the state court
. . . should likewise be barred in the federal court”); York,
326 U. S., at 108–109 (federal court sitting in diversity
“cannot afford recovery if the right to recover is made
unavailable by the State nor can it substantively affect the
enforcement of the right as given by the State”). Just as
Erie precludes a federal court from entering a deficiency
judgment when a State has “authoritatively announced
that [such] judgments cannot be secured within its bor
ders,” Angel v. Bullington, 330 U. S. 183, 191 (1947), so too
Erie should prevent a federal court from awarding statu
tory penalties aggregated through a class action when
New York prohibits this recovery. See also Ragan, 337
U. S., at 533 (“Where local law qualifies or abridges [a
claim], the federal court must follow suit. Otherwise there
is a different measure of the cause of action in one court
than in the other, and the principle of Erie . . . is trans
gressed.”). In sum, because “New York substantive law
governs [this] claim for relief, New York law . . . guide[s]
24 SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.
v. ALLSTATE INS. CO.
GINSBURG, J., dissenting
the allowable damages.” Gasperini, 518 U. S., at 437.14
III
The Court’s erosion of Erie’s federalism grounding im
pels me to point out the large irony in today’s judgment.
Shady Grove is able to pursue its claim in federal court
only by virtue of the recent enactment of the Class Action
Fairness Act of 2005 (CAFA), 28 U. S. C. §1332(d). In
CAFA, Congress opened federal-court doors to state-law
based class actions so long as there is minimal diversity,
at least 100 class members, and at least $5,000,000 in
controversy. Ibid. By providing a federal forum, Congress
sought to check what it considered to be the overreadiness
of some state courts to certify class actions. See, e.g.,
S. Rep. No. 109–14, p. 4 (2005) (CAFA prevents lawyers
from “gam[ing] the procedural rules [to] keep nationwide
or multi-state class actions in state courts whose judges
have reputations for readily certifying classes.” (internal
quotation marks omitted)); id., at 22 (disapproving “the ‘I
never met a class action I didn’t like’ approach to class
certification” that “is prevalent in state courts in some
localities”). In other words, Congress envisioned fewer—
not more—class actions overall. Congress surely never
anticipated that CAFA would make federal courts a mecca
for suits of the kind Shady Grove has launched: class
actions seeking state-created penalties for claims arising
under state law—claims that would be barred from class
treatment in the State’s own courts. Cf. Woods, 337 U. S.,
at 537 (“[T]he policy of Erie . . . preclude[s] maintenance in
——————
14 There is no question that federal courts can “give effect to the sub
stantive thrust of [§901(b)] without untoward alteration of the federal
scheme for the trial and decision of civil cases.” Gasperini, 518 U. S., at
426. There is no risk that individual plaintiffs seeking statutory
penalties will flood federal courts with state-law claims that could be
managed more efficiently on a class basis; the diversity statute’s
amount-in-controversy requirement ensures that small state-law
disputes remain in state court.
Cite as: 559 U. S. ____ (2010) 25
GINSBURG, J., dissenting
. . . federal court . . . of suits to which the State ha[s] closed
its courts.”).15
* * *
I would continue to approach Erie questions in a man
ner mindful of the purposes underlying the Rules of Deci
sion Act and the Rules Enabling Act, faithful to precedent,
and respectful of important state interests. I would there
fore hold that the New York Legislature’s limitation on the
recovery of statutory damages applies in this case, and
would affirm the Second Circuit’s judgment.
——————
15 Itremains open to Congress, of course, to exclude from federal
court jurisdiction under the Class Action Fairness Act of 2005, 28
U. S. C. §1332(d), claims that could not be maintained as a class action
in state court.