Shady Grove Orthopedic Associates Pa v. Allstate Insurance Co

Syllabus

certiorari to the united states court of appeal s for the second circuit

No. 08 –1008. Argued November 2, 2009 —Decided March 31, 2010 Af ter 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. Affirming, 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 because § 901( b) and Rule 23 address different issues— elig ibility of the particular type of claim for class treatment and certifiability of a g iven 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 Er i e R. Co. v. To mpkins, 304

He l d : The judg ment 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 under Rule 23. Pp. 398 – 406. (a) If Rule 23 answers the question in dispute, it governs here unless it exceeds its statutory authorization or Congress’s r ulemaking power.

Burl ing to n Nor ther n R. Co. v. Wo o d s, 480 U. S. 1, 4 – 5. P. 398. ( 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 dif­ ferent issues is re jected. The line between elig ibility and certifiability

Syllabus

is entirely artificial and, in any event, Rule 23 explicitly empowers a federal court to certify a class in every case meeting its criteria. All­ state’s arguments based on the exclusion of some federal claims from Rule 23’s reach pursuant to federal statutes and on § 901’s str ucture are unpersuasive. Pp. 398 – 401. (c) The dissent’s claim that § 901( b) can coexist with Rule 23 because 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 be­ tween § 901( b) and Rule 23 but instead would render Rule 23 partially invalid. Pp. 401– 406.

Justice Scalia, joined by The Chief Justice, Justice Thomas,

(a) The Rules Enabling Act, 28 U. S. C. § 2072, not Er i e, controls the validity of a Federal Rule of Procedure. Section 2072( b)’s requirement that federal procedural r ules “not abridge, enlarge or modify any sub­ stantive right” means that a Rule must “really regulat[e] procedure,— the judicial process for enforcing rights and duties recog nized by substantive law and for justly administering remedy and redress for disregard or infraction of them, ” Sibbach v. Wi lso n & 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 r ules of deci­ sion 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 substan­ tive impact are unavailing: It is not the substantive or procedural nature of the affected state law that matters, but that of the Federal Rule.

See, e. g., id., at 14. Pp. 406 – 410. ( b) Opening federal courts to class actions that cannot proceed in state court will produce for um shopping, but that is the inevitable result of the uniform system of federal procedure that Congress created.

Pp. 415 – 416.

Justice Scalia, joined by The Chief Justice and Justice Thomas, concluded in Part II– C that the concurrence’s analysis—under which a Federal Rule may displace a state procedural r ule 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. 410 – 415.

Cite as: 559 U. S. 393 (2010) 395 Opinion of the Court

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. 416 – 436. (a) When the application of a federal r ule would “abridge, enlarge or modify any substantive right, ” 28 U. S. C. § 2072( b), the federal r ule can­ not govern. In rare cases, a federal r ule 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 sig nificantly more difficult to bring or to prove a claim or that function as limits on the amount of recovery. An application of a fed­ eral r ule that directly collides with such a state law violates the Rules Enabling Act. Pp. 416 – 428.

( b) New York Civ. Prac. Law Ann. § 901( b), however, is not such a state law. It is a procedural r ule that is not part of New York ’s sub­ stantive law. Pp. 432 – 436.

Scalia, J., announced the judg ment of the Court and delivered the opin­ ion of the Court with respect to Parts I and II–A, in which Roberts,

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 con­ curring in part and concurring in the judg ment, post, p. 416. Ginsburg, J., filed a dissenting opinion, in which Kennedy, Breyer, and Alito, JJ., joined, post, p. 436.

Sco t t L. Nelso n arg ued the cause for petiti oner. With h im on the br iefs were Br i an Wo l fman and John S. Spadaro.

Chr ist o phe r L andau arg ued the cause for respondent.

With h im on the br ief was Andrew T. Hahn, Sr.*

Justice Scalia announced the judg ment of the Cour t and delivered the opini on of the Cour t w ith respect to Par ts I and II–A, an opini on w ith respect to Par ts II–B and II–D, in

*Amanda Frost, Lesl i e A. Br ueckner, and Ar thur H. Br yan t filed a brief for Public Justice, P. C., as amicus cur i ae urg ing reversal.

Douglas W. D unham, Ellen P. Q u ackenbos, Allan J. Ste in, Rob in S.

Co nrad, and Amar D. Sar wal filed a brief for the Partnership for New York City, Inc., et al. as amici cur i ae urg ing affirmance.

Opinion of the Court

wh ich The Chief Justice, Justice Thomas, and Justice Sotomayor join, and an opini on w ith respect to Par t II– C, in wh ich The Chief Justice and Justice Thomas join.

New York law proh ibits class acti ons in suits seek ing pen­ alties or statutory minimum damages. 1 We consider whether th is precludes a federa l distr ict cour t sitting in di­ versity from enter taining a class acti on under Federa l Ru le of Civil Procedure 23.2

“(a) One or more members of a class may sue or be sued as representa­

“1. the class is so numerous that joinder of all members, whether other­ wise required or permitted, is impracticable; “ 2. there are questions of law or fact common to the class which pre­ dominate 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 in­ terests of the class; and “5. a class action is superior to other available methods for the fair 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. ”

“(a) Prerequisites. One or more members of a class may sue or be sued

“(1) the class is so numerous that joinder of all members is impracticable; “(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 categories ( irrelevant for present purposes).

Cite as: 559 U. S. 393 (2010) 397 Opinion of the Court

The petiti oner ’s complaint a lleged the follow ing: Shady Grove Or thopedic Associates, P. A., provided medica l care to Sonia E. Ga lvez for in jur ies she suffered in an automobile accident. As par tia l payment for that care, Ga lvez assig ned to Shady Grove her r ights to insurance benefits under a pol­ icy issued in New York by Allstate Insurance Co. Shady Grove tendered a claim for the assig ned benefits to Allstate, wh ich 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 accr ued on the overdue bene­ fits (at two percent per month), see ib i d.

Shady Grove filed th is diversity suit in the Easter n Dis­ tr ict of New York to recover the unpaid statutory interest.

Alleg ing that Allstate routinely refuses to pay interest on overdue benefits, Shady Grove sought relief on beha lf of it­ self and a class of a ll others to whom Allstate owes interest.

The Distr ict Cour t dismissed the suit for lack of jur isdicti on.

466 F. Supp. 2d 467 (2006). It reasoned that N. Y. Civ. Prac.

Law Ann. § 901( b), wh ich precludes a suit to recover a “pen­ a lty” from proceeding as a class acti on, applies in diversity suits in federa l cour t, despite Federa l Ru le of Civil Proce­ dure 23. Concluding that statutory interest is a “pena lty” under New York law, it held that § 901( b) proh ibited the pro­ posed class acti on. And, since Shady Grove conceded that its individua l claim (wor th rough ly $500) fell far shor t of the amount-in-controversy requirement for individua l suits under 28 U. S. C. § 1332(a), the suit did not belong in federa l cour t.3

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 r ule against aggregating separate claims for calculation of the amount in controversy.

See Exxo n M ob i l Cor p. v. Allapa ttah Ser v ices, Inc., 545 U. S. 546, 571 (2005).

Opinion of the Court

The Second Circuit affir med. 549 F. 3d 137 (2008). The cour t did not dispute that a Federa l Ru le adopted in compli­ ance w ith the Ru les Enabling Act, 28 U. S. C. § 2072, wou ld control if it conflicted w ith § 901( b). But there was no con­ flict because (as we w ill descr ibe in more detail below) the Second Circuit concluded that Ru le 23 and § 901( b) address different issues. Finding no Federa l Ru le on point, the Cour t of Appea ls held that § 901( b) is “substantive” w ith in the meaning of Er i e R. Co. v. To mpkin s, 304 U. S. 64 (1938), and thus must be applied by federa l cour ts sitting in diversity.

We granted cer ti orar i. 556 U. S. 1220 (2009).

The framework for our decisi on is familiar. We must first deter mine whether Ru le 23 answers the questi on in dispute.

Burl ing t o n No r the r n R. Co. v. Wo o d s, 480 U. S. 1, 4 – 5 (1987).

If it does, it gover ns—New York ’s law notw ithstanding—un­ less it exceeds statutory author izati on or Congress’s r u le- mak ing power. Id., at 5; see Hann a v. Plume r, 380 U. S. 460, 463 – 464 (1965). We do not wade into Er i e’s murky wa­ ters unless the Federa l Ru le is inapplicable or inva lid. See 380 U. S., at 469 – 471.

The questi on in dispute is whether Shady Grove’s suit may proceed as a class acti on. Ru le 23 provides an answer. It states that “ [a] class acti on may be maintained” if two condi­ ti ons are met: The suit must satisfy the cr iter ia set for th in subdivisi on (a) (i. e., numerosity, commona lity, typica lity, and adequacy of representati on), and it a lso must fit into one of the three categor ies descr ibed in subdivisi on ( b). Fed. Ru le Civ. Proc. 23( b). By its ter ms th is creates a categor ica l r u le entitling a plaintiff whose suit meets the specified cr iter ia to pursue h is claim as a class acti on. (The Federa l Ru les reg u lar ly use “may” to confer categor ica l per missi on, see,

e. g., Fed. Ru les Civ. Proc. 8(d)(2)–(3), 14(a)(1), 18(a)–( b),

20(a)(1)–(2), 27(a)(1), 30(a)(1), as do federa l statutes that es­ Cite as: 559 U. S. 393 (2010) 399

Opinion of the Court

tablish procedural entitlements, see, e. g., 29 U. S. C. § 626(c)(1); 42 U. S. C. § 2000e– 5(f )(1).) Thus, Ru le 23 pro­ vides a one-size-fits-a ll for mu la for deciding the class-acti on questi on. Because § 901( b) attempts to answer the same questi on— i. e., it states that Shady Grove’s suit “may no t be maintained as a class acti on” (emphasis added) because of the relief it seeks—it cannot apply in diversity suits unless Ru le 23 is u ltra vires.

The Second Circuit believed that § 901( b) and Ru le 23 do not conflict because they address different issues. Ru le 23, it said, concer ns only the cr iter ia for deter mining whether a g iven class can and shou ld be cer tified; § 901( b), on the other hand, addresses an antecedent questi on: whether the par tic­ u lar type of claim is elig ible for class treatment in the first place—a questi on on wh ich Ru le 23 is silent. See 549 F. 3d, at 143 –144. Allstate embraces th is ana lysis. Br ief for Re­ spondent 12 –13.

We disagree. To beg in w ith, the line between elig ibility and cer tifiability is entirely ar tificia l. Both are precondi­ ti ons for maintaining a class acti on. Allstate suggests that elig ibility must depend on the “par ticu lar cause of acti on” asser ted, instead of some other attr ibute of the suit, i d., at 12. But that is not so. Congress cou ld, for example, pro­ vide that only claims involving more than a cer tain number of plaintiffs are “elig ible” for class treatment in federa l cour t. In other words, relabeling Ru le 23(a)’s prerequisites “elig ibility cr iter ia” wou ld obviate Allstate’s objecti on— a sure sig n that its elig ibility-cer tifiability distincti on is made-to-order.

There is no reason, in any event, to read Ru le 23 as ad­ dressing only whether claims made elig ible for class treat­ ment by some other law shou ld be cer tified as class acti ons.

Allstate asser ts that Ru le 23 neither explicitly nor implicitly empowers a federa l cour t “ to cer tify a class in each and every case” where the Ru le’s cr iter ia are met. Id., at 13 –14.

But that is exactly what Ru le 23 does: It says that if the

Opinion of the Court

prescr ibed preconditi ons are satisfied “ [a] class acti on may be main tained” (emphasis added)—not “ a cl ass act io n may be pe r mi t ted.” Cour ts do not maintain acti ons; litigants do.

The discreti on suggested by Ru le 23’s “may” is discreti on residing in the plaintiff : He may br ing h is claim in a class acti on if he w ishes. And like the rest of the Federa l Ru les of Civil Procedure, Ru le 23 au t o ma t ically applies “ in a ll civil acti ons and proceedings in the United States distr ict cour ts, ” Fed. Ru le Civ. Proc. 1. See Cal i fano v. Yamasaki, 442 U. S. 682, 699 –700 (1979).

Allstate points out that Congress has carved out some fed­ era l claims from Ru le 23’s reach, see, e. g., 8 U.S.C. § 1252(e)(1)(B)—wh ich shows, Allstate contends, that Ru le 23 does not author ize class acti ons for a ll claims, but rather leaves room for laws like § 901( b). But Congress, unlike New York, has u ltimate author ity over the Federa l Ru les of Civil Procedure; it can create excepti ons to an individua l r u le as it sees fit — either by directly amending the r u le or by enacting a separate statute overr iding it in cer tain instances.

Cf. Hende rso n v. Un i ted Sta tes, 517 U. S. 654, 668 (1996).

The fact that Congress has created specific excepti ons to Ru le 23 hardly proves that the Ru le does not apply genera lly.

In fact, it proves the opposite. If Ru le 23 did no t author­ ize class acti ons across the board, the statutory excepti ons wou ld be unnecessary.

Allstate next suggests that the str ucture of § 901 shows that Ru le 23 addresses only cer tifiability. Secti on 901( a), it notes, establishes class-cer tificati on cr iter ia rough ly ana lo­ gous to those in Ru le 23 (wherefore it agrees tha t subsecti on is pre-empted). But § 901( b)’s r u le barr ing class acti ons for cer tain claims is set off as its own subsecti on, and where it applies, § 901(a) does not. Th is shows, according to Allstate, that § 901( b) concer ns a separate subject. Perhaps it does concer n a subject separate from the subject of § 901(a). But the questi on before us is whether it concer ns a subject sepa­ rate from the subject of Rule 23 —and for purposes of an­

Cite as: 559 U. S. 393 (2010) 401 Opinion of the Court

swer ing tha t questi on the way New York has str uctured its statute is immater ia l. Ru le 23 per mits a ll class acti ons that meet its requirements, and a State cannot limit that per mis­ si on by str uctur ing one par t of its statute to track Ru le 23 and enacting another par t that imposes additi ona l require­ ments. Both of § 901’s subsecti ons undeniably answer the same questi on as Ru le 23: whether a class acti on may pro­ ceed for a g iven suit. Cf. Burl ing t o n, 480 U. S., at 7– 8.

The dissent arg ues that § 901( b) has noth ing to do w ith whether Shady Grove may maintain its suit as a class acti on, but affects only the remedy it may obtain if it w ins. See post, at 443 – 451 (opini on of Ginsburg, J.). Whereas “Ru le 23 gover ns procedura l aspects of class litigati on” by “pre­ scr ib[ing] the considerati ons relevant to class cer tificati on and postcer tificati on proceedings, ” § 901( b) addresses only “ the size of a monetary award a class plaintiff may pursue. ” Post, at 446 – 447. According ly, the dissent says, Ru le 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 acti on wou ld conflict w ith Ru le 23; that is not what § 901( b) does. By its ter ms, the provisi on precludes a plaintiff from “maintain[ing] ” a class acti on seek ing statutory pena lties. Unlike a law that sets a ceiling on damages (or puts other remedies out of reach) in proper ly filed class acti ons, § 901( b) says noth ing about what remedies a cour t may award; it prevents the class acti ons it covers from coming into existence at a ll.4 Conse­

4 Contrary to the dissent’s implication, post, at 448, 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 maintain 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 Con­ gress has plenary power to override the Federal Rules, so its enactments, unlike those of the States, prevail even in case of a conflict.

Opinion of the Court

quently, a cour t bound by § 901( b) cou ld not cer tify a class acti on seek ing both statutory pena lties and other remedies even if it announces in advance that it w ill refuse to award the pena lties in the event the plaintiffs prevail; to do so wou ld vi olate the statute’s clear proh ibiti on on “maintain­ [ing] ” such suits as class acti ons.

The dissent asser ts that a plaintiff can avoid § 901( b)’s bar­ r ier by omitting from h is complaint (or removing) a request for statutory pena lties. See post, at 449 – 450. Even assum­ ing a ll statutory pena lties are waivable,5 the fact that a com­ plaint omitting them cou ld be brought as a class acti on wou ld not at a ll prove that § 901( b) is addressed only to remedies.

If the state law instead banned class acti ons for fraud claims, a wou ld-be class-acti on plaintiff cou ld drop the fraud counts from h is complaint and proceed w ith the remainder in a class acti on. Yet that wou ld not mean the law provides no rem­ edy for fraud; the ban wou ld affect only the procedura l means by wh ich the remedy may be pursued. In shor t, a l­ though the dissent correctly abandons Allstate’s elig ibility­ cer tifiability distincti on, the a lter native it offers fares no better.

The dissent a ll but admits that the litera l ter ms of § 901( b) address the same subject as Ru le 23 — i. e., whether a class acti on may be maintained—but insists the provisi on’s pur­ pose is to restr ict only remedies. See post, at 447– 448; post, at 450 (“ [W]h ile phrased as responsive to the questi on whether cer tain class acti ons may beg in, § 901( b) is unmis­ takably aimed at controlling how those acti ons must end”).

Unlike Ru le 23, desig ned to fur ther procedura l fair ness and efficiency, § 901( b) (we are told) “responds to an entirely dif­ ferent concer n”: the fear that a llow ing statutory damages to be awarded on a classw ide basis wou ld “produce overk ill. ” Post, at 447, 444 ( inter na l quotati on marks omitted). The

5 But see, e. g., Asher v. Abbo tt L abs., 290 App. Div. 2d 208, 737 N. Y. S.

2d 4 (2002) (treble damages under N. Y. Gen. Bus. Law Ann. § 340(5) are nonwaivable, wherefore class actions under that law are barred).

Cite as: 559 U. S. 393 (2010) 403 Opinion of the Court

dissent reaches th is conclusi on on the basis of (1) constituent concer n recorded in the law’s bill jacket; (2) a commentary suggesting that the leg islature “apparently fear[ed] ” that combining class acti ons and statutory pena lties “cou ld resu lt in annih ilating punishment of the defendant, ” V. Alexander, Practice Commentar ies, C901:11, repr inted in 7B McKinney’s Consolidated Laws of New York Ann., p. 104 (2006) ( inter na l quotati on marks omitted); (3) a remark by the Gover nor in h is sig ning statement that § 901( b) “ ‘provides a controlled remedy, ’ ” post, at 444 (quoting Memorandum on Approving

L. 1975, Ch. 207, repr inted in 1975 N. Y. Laws, p. 1748; em­

phasis deleted); and (4) a state cour t’s statement that the fina l text of § 901( b) “ ‘was the resu lt of a compromise among competing interests, ’ ” post, at 444 (quoting Spe r r y v. Cro mp­ ton Corp., 8 N. Y. 3d 204, 211, 863 N. E. 2d 1012, 1015 (2007)).

Th is evidence of the New York Leg islature’s purpose is pretty sparse. But even accepting the dissent’s account of the leg islature’s objective at face va lue, it cannot overr ide the statute’s clear text. Even if its aim is to restr ict the remedy a plaintiff can obtain, § 901( b) ach ieves that end by limiting a plaintiff ’s power to maintain a class acti on. The manner in wh ich the law “cou ld have been wr itten, ” post, at 457, has no bear ing; what matters is the law the leg islature did enact. We cannot rewr ite that to reflect our percepti on of leg islative purpose, see Oncale v. Sundo w ne r O ffsho re Se r v ices, Inc., 523 U. S. 75, 79 – 80 (1998).6 The dissent’s con­

6 Our decision in Walker v. Ar mco Steel Cor p., 446 U. S. 740 (1980), dis­ cussed by the dissent, post, at 441, 448, n. 8, is not to the contrary. There we held that Rule 3 (which provides that a federal civil action is “ ‘com­ menced’ ” by filing a complaint in federal court) did not displace a state law providing that “ ‘ [a]n action shall be deemed commenced, w i th in the mean ing o f th is ar t icle [the sta tu te o f l imi ta t io ns], 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); alteration in orig inal; emphasis added). Rule 3, we explained, “governs the date from which various timing requirements of the Federal Rules beg in to r un, but does not affect state statutes of limitations” or tolling r ules, which it did not

Opinion of the Court

cer n for state prerogatives is fr ustrated rather than fur­ thered by revising state laws when a potentia l conflict w ith a Federa l Ru le ar ises; the state-fr iendly approach wou ld be to accept the law as wr itten and test the va lidity of the Fed­ era l Ru le.

The dissent’s approach of deter mining whether state and federa l r u les conflict based on the subjective intenti ons of the state leg islature is an enterpr ise destined to produce “confusi on worse confounded, ” Sibbach v. Wilson&Co., 312

U. S. 1, 14 (1941). It wou ld mean, to beg in w ith, that one

State’s statute cou ld survive pre-empti on (and according ly affect the procedures in federa l cour t) wh ile another State’s identica l law wou ld not, merely because its authors had dif­ ferent aspirati ons. It wou ld a lso mean that distr ict cour ts wou ld have to discer n, in every diversity case, the purpose beh ind any putatively pre-empted state procedura l r u le, even if its text squarely conflicts w ith federa l law. That task w ill of ten prove arduous. Many laws fur ther more than one aim, and the aim of others may be impossible to discer n. Moreover, to the extent the dissent’s purpose- dr iven approach depends on its character izati on of § 901( b)’s aims as substantive, it wou ld apply to many state r u les os­ tensibly addressed to procedure. Pleading standards, for example, of ten embody policy preferences about the types of claims that shou ld succeed—as do r u les gover ning summary judg ment, pretr ia l discovery, and the admissibility of cer tain evidence. Hard cases w ill abound. It is not even clear that a state supreme cour t’s pronouncement of the law’s purpose wou ld settle the issue, since existence of the factua l predi­

“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 r ule was ( in the State’s judg ment) an “ integral part of the several policies served by the statute of limitations, ” id., at 751, nothing in our decision suggested that a federal court may resolve an obvious conflict between the texts of state and federal r ules by resorting to the state law’s ostensi­ ble objectives.

Cite as: 559 U. S. 393 (2010) 405 Opinion of the Court

cate for avoiding federa l pre-empti on is u ltimately a federa l questi on. Predictably, federa l judges wou ld be condemned to por ing through state leg islative h istory—wh ich may be less easily obtained, less thorough, and less familiar than its federa l counterpar t, see R. Mersky & D. Dunn, Fundamen­ ta ls of Lega l Research 233 (8th ed. 2002); Torres & Windsor, State Leg islative Histor ies: A Select, Annotated Bibli ogra­ phy, 85 L. Lib. J. 545, 547 (1993).

But wh ile the dissent does indeed ar tificia lly narrow the scope of § 901( b) by finding that it pursues only substantive policies, that is not the centra l difficu lty of the dissent’s posi­ ti on. The centra l difficu lty is that even ar tificia l narrow ing cannot render § 901( b) compatible w ith Ru le 23. W ha tev e r the policies they pursue, they flatly contradict each other.

Allstate asser ts (and the dissent implies, see post, at 438,

446) that we can (and must) in te r pre t Ru le 23 in a manner

that avoids overstepping its author izing statute.7 If the Ru le were susceptible of two meanings—one that wou ld vi o­

7 The dissent also suggests that we should read the Federal Rules “ ‘with sensitivity to important state interests’ ” and “ ‘ to avoid conflict with im­ portant state regulatory policies. ’ ” Post, at 442 (quoting Gasper in i v.

Cen ter for Human i t i es, 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 re jected in Sibbach v. Wi lso n & 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 fed­ eral litigation, ” Sem tek In t’l Inc. v. Lockheed Mar t in Cor p., 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 Er i e’s for um-shopping test is not ipso facto invalid, see Hanna v. Plumer, 380 U. S. 460, 469 – 472 (1965)—but because it is reason­ able to assume that “Congress is just as concerned as we have been to avoid sig nificant differences between state and federal courts in adjudicat­ ing claims, ” Stewar t Organ i za t io n, Inc. v. Ricoh Cor p., 487 U. S. 22, 37– 38 (1988) (Scalia, J., dissenting). The assumption is irrelevant here, how­ ever, because there is only one reasonable reading of Rule 23.

Opinion of Scalia, J.

late § 2072( b) and another that wou ld not —we wou ld agree.

See Ortiz v. Fibrebo ard Co r p., 527 U. S. 815, 842, 845 (1999); cf. Sem tek In t’l Inc. v. Lockheed Mar t in Co r p., 531 U. S. 497, 503 – 504 (2001). But it is not. Ru le 23 unambig uously au­ thor izes any plaintiff, in any federa l civil proceeding, to maintain a class acti on if the Ru le’s prerequisites are met.

We cannot contor t its text, even to aver t a collisi on w ith state law that might render it inva lid. See Walker v. Ar mco Steel Co r p., 446 U. S. 740, 750, n. 9 (1980).8 What the dis­ sent’s approach ach ieves is not the avoiding of a “conflict be­ tween Ru le 23 and § 901( b), ” post, at 452, but rather the in­ va lidati on of Ru le 23 (pursuant to § 2072( b) of the Ru les Enabling Act) to the extent that it conflicts w ith the substan­ tive policies of § 901. There is no other way to reach the dissent’s destinati on. We must therefore confront head-on whether Ru le 23 fa lls w ith in the statutory author izati on.

Er i e involved the constituti ona l power of federa l cour ts to supplant state law w ith judge-made r u les. In that context, it made no difference whether the r u le was technica lly one of substance or procedure; the touchstone was whether it “sig nificantly affect[s] the resu lt of a litigati on. ” G u aran ty Tr ust Co. v. Yo rk, 326 U. S. 99, 109 (1945). That is not the test for either the constituti ona lity or the statutory va lidity of a Federa l Ru le of Procedure. Congress has undoubted power to supplant state law, and undoubted power to pre­ scr ibe r u les for the cour ts it has created, so long as those r u les reg u late matters “rati ona lly capable of classificati on” as procedure. Hann a, 380 U. S., at 472. In the Ru les En­

8 The cases chronicled by the dissent, see post, at 439 – 443, 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 colli­ sion” between federal and state law, Walker, supra, at 749 ( internal quota­ tion marks omitted). But here, as in Hanna, supra, at 470, a collision is “unavoidable. ”

Cite as: 559 U. S. 393 (2010) 407 Opinion of Scalia, J.

abling Act, Congress author ized th is Cour t to promu lgate r u les of procedure subject to its review, 28 U. S. C. § 2072(a), but w ith the limitati on that those r u les “sha ll not abr idge, enlarge or modify any substantive r ight, ” § 2072( b).

We have long held that th is limitati on means that the Ru le must “rea lly reg u lat[e] procedure,—the judicia l process for enforcing r ights and duties recog nized by substantive law and for justly administer ing remedy and redress for disre­ gard or infracti on of them, ” Sibbach, 312 U. S., at 14; see Hann a, supra, at 464; Burl ing t o n, 480 U. S., at 8. The test is not whether the Ru le affects a litigant’s substantive r ights; most procedura l r u les do. M ississipp i Publ ish ing Co r p. v.

Mur phree, 326 U. S. 438, 445 (1946). What matters is what the Ru le itself regul a tes: If it gover ns only “ the manner and the means” by wh ich the litigants’ r ights are “enforced, ” it is va lid; if it a lters “ the r u les of decisi on by wh ich [the] cour t w ill adjudicate [those] r ights, ” it is not. Id., at 446 ( inter na l quotati on marks omitted).

Apply ing that test, we have re jected every statutory cha l­ lenge to a Federa l Ru le that has come before us. We have found to be in compliance w ith § 2072( b) Ru les prescr ibing methods for serving process, see i d., at 445 – 446 (Fed. Ru le Civ. Proc. 4(f )); Hann a, supra, at 463 – 465 (Fed. Ru le Civ.

Proc. 4(d)(1)), and requir ing litigants whose menta l or physi­ ca l conditi on is in dispute to submit to examinati ons, see Sib­ bach, supra, at 14 –16 (Fed. Ru le Civ. Proc. 35); Sch l agenhauf

v. Ho l d e r, 379 U. S. 104, 113 –114 (1964) (same). Likew ise,

we have upheld Ru les author izing impositi on of sancti ons upon those who file fr ivolous appea ls, see Burl ing t o n, supra, at 8 (Fed. Ru le App. Proc. 38), or who sig n cour t papers w ithout a reasonable inquiry into the facts asser ted, see Business G u i des, Inc. v. Chro ma t ic Co mmun ica t io n s En te r­ pr ises, Inc., 498 U. S. 533, 551– 554 (1991) (Fed. Ru le Civ.

Proc. 11). Each of these Ru les had some practica l effect on the par ties’ r ights, but each undeniably reg u lated only the process for enforcing those r ights; none a ltered the r ights

Opinion of Scalia, J.

themselves, the available remedies, or the r u les of decisi on by wh ich the cour t adjudicated either.

Apply ing that cr iter i on, we th ink it obvi ous that Ru les a llow ing mu ltiple claims (and claims by or against mu ltiple par ties) to be litigated together are a lso va lid. See, e. g., Fed. Ru les Civ. Proc. 18 ( joinder of claims), 20 ( joinder of par ties), 42(a) (consolidati on of acti ons). Such Ru les neither change plaintiffs’ separate entitlements to relief nor abr idge defendants’ r ights; they a lter only how the claims are pro­ cessed. For the same reason, Ru le 23 —at least insofar as it a llows w illing plaintiffs to join their separate claims against the same defendants in a class acti on—fa lls w ith in § 2072( b)’s author izati on. A class acti on, no less than traditi ona l join­ der (of wh ich it is a species), merely enables a federa l cour t to adjudicate claims of mu ltiple par ties at once, instead of in separate suits. And like traditi ona l joinder, it leaves the par ties’ lega l r ights and duties intact and the r u les of deci­ si on unchanged.

Allstate contends that the author izati on of class acti ons is not substantively neutra l: Allow ing Shady Grove to sue on beha lf of a class “ transfor m[s] [the] dispute over a five hun­ dred dollar pena lty into a dispute over a five mi ll io n dollar pena lty. ” Br ief for Respondent 1. Allstate’s aggregate lia­ bility, however, does not depend on whether the suit pro­ ceeds as a class acti on. Each of the 1,000-plus members of the putative class cou ld (as Allstate acknowledges) br ing a freestanding suit asser ting h is individua l claim. It is un­ doubtedly tr ue that some plaintiffs who wou ld not br ing indi­ vidua l suits for the relatively sma ll sums involved w ill choose to join a class acti on. That has no bear ing, however, on All­ state’s or the plaintiffs’ lega l r ights. The likelihood that some (even many) plaintiffs w ill be induced to sue by the availability of a class acti on is just the sor t of “ incidenta l effec[t] ” we have long held does not vi olate § 2072( b), M issis­ sipp i Publ ish ing, supra, at 445.

Allstate arg ues that Ru le 23 vi olates § 2072( b) because the state law it displaces, § 901( b), creates a r ight that the Fed­

Cite as: 559 U. S. 393 (2010) 409 Opinion of Scalia, J.

era l Ru le abr idges—namely, a “substantive r ight . . . not to be subjected to aggregated class-acti on liability” in a sing le suit. Br ief for Respondent 31. To beg in w ith, we doubt that that is so. Noth ing in the text of § 901( b) (wh ich is to be found in New York ’s procedura l code) confines it to claims under New York law; and of course New York has no power to a lter substantive r ights and duties created by other sover­ eig ns. As we have said, the co n sequence of excluding cer­ tain class acti ons may be to cap the damages a defendant can face in a sing le suit, but the law itself a lters only procedure.

In that respect, § 901( b) is no different from a state law for­ bidding simple joinder. As a fa llback arg ument, Allstate ar­ g ues that even if § 901( b) is a procedura l provisi on, it was enacted “for substantive reaso n s, ” i d., at 24 (emphasis added). Its end was not to improve “ the conduct of the liti­ gati on process itself ” but to a lter “ the outcome of that proc­ ess. ” Id., at 26.

The fundamenta l difficu lty w ith both these arg uments is that the substantive nature of New York ’s law, or its sub­ stantive purpose, makes no d i ffe rence. A Federa l Ru le of Procedure is not va lid in some jur isdicti ons and inva lid in others—or va lid in some cases and inva lid in others— de­ pending upon whether its effect is to fr ustrate a state sub­ stantive law (or a state procedura l law enacted for substan­

“ The petiti oner says the phrase [‘substantive r ights’ in the Ru les Enabling Act] connotes more; that by its use Congress intended that in reg u lating procedure th is Cour t shou ld not dea l w ith impor tant and substantia l r ights theretofore recog nized. Recog nized where and by whom? The state cour ts are divided as to the power in the absence of statute to order a physica l examina­ ti on. In a number such an order is author ized by stat­ uteorrule.... “ The asser ted r ight, moreover, is no more impor tant than many others en joyed by litigants in Distr ict Cour ts sitting in the severa l states, before the Federa l Ru les

Opinion of Scalia, J.

of Civil Procedure a ltered and abolished old r ights or pr ivileges and created new ones in connecti on w ith the conduct of litigati on. . . . If we were to adopt the sug­ gested cr iter i on of the impor tance of the a lleged r ight we shou ld invite endless litigati on and confusi on worse confounded. The test must be whether a r u le rea lly reg u lates procedure . . . . ” 312 U. S., at 13 –14 (foot­ note omitted).

Hann a unmistakably expressed the same understanding that compliance of a Federa l Ru le w ith the Enabling Act is to be assessed by consu lting the Ru le itself, and not its effects in

“ [T]he cour t has been instr ucted to apply the Federa l Ru le, and can refuse to do so only if the Advisory Com­ mittee, th is Cour t, and Congress erred in their pr ima facie judg ment that the Ru le in questi on transgresses neither the ter ms of the Enabling Act nor constituti ona l restr icti ons. ” 380 U. S., at 471.

In sum, it is not the substantive or procedura l nature or purpose of the affected state law that matters, but the sub­ stantive or procedura l nature of the Federa l Ru le. We have held since Sibbach, and reaffir med repeatedly, that the va lid­ ity of a Federa l Ru le depends entirely upon whether it reg u­ lates procedure. See Sibbach, supra, at 14; Hann a, supra, at 464; Burl ing t o n, 480 U. S., at 8. If it does, it is author ized by § 2072 and is va lid in a ll jur isdicti ons, w ith respect to a ll claims, regardless of its incidenta l effect upon state-created r ights.

A few words in response to the concurrence. We under­ stand it to accept the framework we apply—wh ich requires first, deter mining whether the federa l and state r u les can be reconciled ( because they answer different questi ons), and second, if they cannot, deter mining whether the Federa l Ru le r uns afou l of § 2072( b). Post, at 421– 422 (Stevens, J. ,

Cite as: 559 U. S. 393 (2010) 411 Opinion of Scalia, J.

concurr ing in par t and concurr ing in judg ment). The concur­ rence agrees w ith us that Ru le 23 and § 901( b) conflict, post, at 429 – 431, and depar ts from us only w ith respect to the second par t of the test, i. e., whether applicati on of the Federa l Ru le vi olates § 2072( b), post, at 422 – 428. Like us, it answers no, but for a reason different from ours. Post, at 431– 436.

The concurrence wou ld decide th is case on the basis, not that Ru le 23 is procedura l, but that the state law it displaces is procedura l, in the sense that it does not “functi on as a par t of the State’s definiti on of substantive r ights and remedies. ” Post, at 416 – 417. A state procedura l r u le is not pre-empted, according to the concurrence, so long as it is “so bound up w ith, ” or “sufficiently inter tw ined w ith, ” a substantive state-law r ight or remedy “ that it defines the scope of that substantive r ight or remedy, ” post, at 420, 428.

This analysis squarely conflicts with Sibbach, which established the r u le we apply. The concurrence contends that Sibbach did not r u le out its approach, but that is not so.

Recog nizing the impracticability of a test that tur ns on the idi osyncrasies of state law, Sibbach adopted and applied a r u le w ith a sing le cr iter i on: whether the Federa l Ru le “rea lly reg u lates procedure. ” 312 U. S., at 14.9 That the

9 The concurrence claims that in Sibbach “ [t]he Court . . . had no occasion to consider whether the particular application of the Federal Rules in question would offend the Enabling Act. ” Post, at 427. Had Sibbach been applying the concurrence’s theory, that is quite tr ue—which demonstrates how inconsistent that theory is with Sibbach. For conformity with the Rules Enabling Act was the v er y issue Sibbach decided: The petitioner ’s position was that Rules 35 and 37 exceeded the Enabling Act’s authoriza­ tion, 312 U. S., at 9, 13; the Court faced and re jected that argument, id., at 13 –16, and proceeded to reverse the lower court for failing to apply Rule 37 correctly, id., at 16. There could not be a clearer re jection of the theory that the concurrence now advocates.

The concurrence responds that “ the specific question of ‘ the obligation of federal courts to apply the substantive law of a state’ ” was not before the Court, post, at 427 (quoting Sibbach, supra, at 9). It is clear from the context, however, that this passage referred to the Er i e prohibition of court-created r ules that displace state law. See Er i e R. Co. v. To mpkins,

Opinion of Scalia, J.

concurrence’s approach wou ld have y ielded the same resu lt in Sibbach proves noth ing; what matters is the r u le we did apply, and that r u le leaves no room for specia l exempti ons based on the functi on or purpose of a par ticu lar state r u le.10 We have re jected an attempt to read into Sibbach an excep­ ti on w ith no basis in the opini on, see Sch l agenhauf, 379 U. S., at 113 –114, and we see no reason to find such an implied limitati on today.

In rea lity, the concurrence seeks not to apply Sibbach, but to overr u le it (or, what is the same, to rewr ite it). Its ap­ proach, the concurrence insists, g ives shor t shr if t to the stat­ utory text proh ibiting the Federa l Ru les from “abr idg[ing], enlarg[ing], or modify[ing] any substantive r ight, ” § 2072( b).

See post, at 424 – 425. There is someth ing to that. It is pos­ sible to understand how it can be deter mined whether a Fed­ era l Ru le “enlarges” substantive r ights w ithout consu lting state law: If the Ru le creates a substantive r ight, even one that duplicates some state-created r ights, it establishes a new fede ral r ight. But it is hard to understand how it can be deter mined whether a Federa l Ru le “abr idges” or “mod­ ifies” substantive r ights w ithout know ing what state-created r ights wou ld obtain if the Federa l Ru le did not exist. Sib­

304 U. S. 64 (1938). 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’ valid­ ity vis-a` -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 dis­ guised as r ules of procedure. Post, at 428, n. 13. This mistakes what the Federal Rule regula tes for its incidental e ffects. As we have explained, supra, at 406 – 408, 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. 393 (2010) 413 Opinion of Scalia, J.

bach’s exclusive focus on the cha llenged Federa l Ru le— dr iven by the very rea l concer n that Federa l Ru les wh ich vary from State to State wou ld be chaos, see 312 U. S., at 13 –14 —is hard to square w ith § 2072( b)’s ter ms. 11 Sibbach has been settled law, however, for near ly seven decades.12 Setting aside any precedent requires a “specia l justificati on” beyond a bare belief that it was wrong. Pa t ­ te rso n v. M cLean Cred i t Un io n, 491 U. S. 164, 172 (1989) ( inter na l quotati on marks omitted). And a par ty seek ing to

11 The concurrence’s approach, however, is itself unfaithful to the stat­ ute’s terms. Section 2072( b) bans abridg ment or modification only of “substantive rights, ” but the concurrence would prohibit pre-emption of “procedural r ules that are intimately bound up in the scope of a substan­ tive right or remedy, ” post, at 433. 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 428.

12 The concurrence implies that Sibbach has slipped into desuetude, ap­ parently for lack of sufficient citations. See post, at 428 – 429, n. 14. We are unaware of any r ule 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 exaggerated.

Hanna did not merely cite the case, but recog nized it as establishing the governing r ule. 380 U. S., at 464 – 465, 470 – 471. Mississippi Publ ish ing Co r p. v. Mur phree, 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. Tr ue, Burl ing to n Nor ther n R. Co. v. Wo o d s, 480 U. S. 1 (1987), and for that matter Business G u ides, Inc. v. Chro ma t ic Co mmun i­ ca t io ns En ter pr ises, Inc., 498 U. S. 533 (1991), did not cite Sibbach. But both cited and followed Hanna—which as noted held out Sibbach as set­ ting forth the governing r ule. See Burl ing to n Nor ther n, supra, at 5 – 6, 8; Business G u ides, supra, at 552 – 554. Thus, while Sibbach itself may appear infrequently in the U. S. Reports, its r ule—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 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 423, 428 – 429,

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 straightfor­ ward test: As the concurrence notes, Hanna cited Sibbach for that state­ ment, 380 U. S., at 473, showing it saw no inconsistency between the two.

Opinion of Scalia, J.

over tur n a statutory precedent bears an even greater bur­ den, since Congress remains free to correct us, ib i d., and adher ing to our precedent enables it do so, see, e. g., Fin ley

v. Un i ted Sta tes, 490 U. S. 545, 556 (1989); 28 U. S. C. § 1367;

Exxo n M ob i l Co r p. v. All apa t tah Se r v ices, Inc., 545 U. S.

546, 558 (2005). We do Congress no service by presenting it a moving target. In a ll events, Allstate has not even asked us to overr u le Sibbach, let a lone carr ied its burden of persuading us to do so. Cf. IBP, Inc. v. Alv arez, 546 U. S.

21, 32 (2005). Why we shou ld cast aside our decades-old de­ cisi on escapes us, especia lly since (as the concurrence ex­ plains) that wou ld not affect the resu lt.13 The concurrence a lso contends that apply ing Sibbach and assessing whether a Federa l Ru le reg u lates substance or procedure is not a lways easy. See post, at 426, n. 10. Un­ doubtedly some hard cases w ill ar ise (though we have man­ aged to muddle through well enough in the 69 years since

13 The concurrence is correct, post, at 425, n. 9, that under our disposition any r ule that “really regulates procedure, ” Sibbach, 312 U. S., at 14, will pre-empt a conflicting state r ule, 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 425 – 426, 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 con­ currence 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 r ule “really regu­ lates” procedure or substance. If one concludes the latter, there is no pre-emption of the state r ule; the Federal Rule itself is invalid.

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 426, 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.

Cite as: 559 U. S. 393 (2010) 415 Opinion of Scalia, J.

Sibbach was decided). But as the concurrence acknowl­ edges, post, at 426, the basic difficu lty is unavoidable: The statute itself refers to “substantive r ight[s], ” § 2072( b), so there is no escaping the substance-procedure distincti on.

What is more, the concurrence’s approach does noth ing to diminish the difficu lty, but rather mag nifies it many times over. Instead of a sing le hard questi on whether a Federa l Ru le reg u lates substance or procedure, that approach w ill present hundreds of hard questi ons, forcing federa l cour ts to assess the substantive or procedura l character of countless state r u les that may conflict w ith a sing le Federa l Ru le. 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 w ith the decisi on whether or not the state policy (w ith wh ich a pu­ tatively procedura l state r u le may be “ bound up”) per tains to a “substantive r ight or remedy, ” post, at 433 —that is, whether it is substance or procedure.15 The more one ex­ plores the a lter natives to Sibbach’s r u le, the more its w isdom becomes apparent.

We must acknowledge the reality that keeping the federa l-cour t door open to class acti ons that cannot proceed in state cour t w ill produce for um shopping. That is unac­

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 426, and n. 10. But that conclusion will be reached only af ter federal courts have considered hundreds of state r ules applying the concurrence’s inscr utable standard.

15 The concurrence insists that the task will be easier if courts can “con­ side[r] the nature and functions of the state law, ” post, at 426, n. 10, regard­ less of the law’s “form, ” post, at 419 (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 431– 436, g ives little reason to hope that its approach will l ighten the burden for lower courts.

Opinion of Stevens, J.

ceptable when it comes as the consequence of judge-made r u les created to fill supposed “gaps” in positive federa l law.

See Hann a, 380 U. S., at 471– 472. For where neither the Constituti on, a treaty, nor a statute provides the r u le of deci­ si on or author izes a federa l cour t to supply one, “state law must gover n because there can be no other law. ” Ib i d. ; see Clark, Er i e’s Constituti ona l Source, 95 Ca l. L. Rev. 1289, 1302, 1311 (2007). But divergence from state law, w ith the attendant consequence of for um shopping, is the inevitable ( indeed, one might say the intended) resu lt of a unifor m sys­ tem of federa l procedure. Congress itself has created the possibility that the same case may follow a different course if filed in federa l instead of state cour t. Cf. Hann a, 380

U. S., at 472 – 473. The shor t of the matter is that a Federa l

Ru le gover ning procedure is va lid whether or not it a lters the outcome of the case in a way that induces for um shop­ ping. To hold other w ise wou ld be to “disembowel either the Constituti on’s grant of power over federa l procedure” or Congress’s exercise of it. Id., at 473 – 474.

* * * The judg ment of the Cour t of Appea ls is reversed, and the case is remanded for fur ther proceedings.

It is so o rde red.

Justice Stevens, concurr ing in par t and concurr ing in the judg ment.

The New York law at issue, N. Y. Civ. Prac. Law Ann.

(CPLR) § 901( b) (West 2006), is a procedura l r u le that is not par t of New York ’s substantive law. According ly, I agree w ith Justice Scalia that Federa l Ru le of Civil Procedure 23 must apply in th is case and join Par ts I and II–A of the Cour t’s opini on. But I a lso agree w ith Justice Ginsburg that there are some state procedura l r u les that federa l cour ts must apply in diversity cases because they functi on

Cite as: 559 U. S. 393 (2010) 417 Opinion of Stevens, J.

as a par t of the State’s definiti on of substantive r ights and remedies.

It is a long-recog nized pr inciple that federa l cour ts sitting in diversity “apply state substantive law and federa l proce­ dura l law. ” Hann a v. Plume r, 380 U. S. 460, 465 (1965).1 Th is pr inciple is gover ned by a statutory framework, and the way that it is administered var ies depending upon whether there is a federa l r u le addressed to the matter. See i d., at 469 – 472. If no federa l r u le applies, a federa l cour t must fol­ low the Ru les of Decisi on Act, 28 U. S. C. § 1652, and make the “relatively ung uided Er i e choice, ” 2 Hann a, 380 U. S., at 471, to deter mine whether the state law is the “r u le of decisi on. ” But when a situati on is covered by a federa l r u le, the Ru les of Decisi on Act inquiry by its own ter ms does not apply. See § 1652; Hann a, 380 U. S., at 471. Instead, the Ru les Enabling Act (Enabling Act) controls. See 28

That does not mean, however, that the federa l r u le a lways gover ns. Congress has provided for a system of unifor m federa l r u les, see ib i d., under wh ich federa l cour ts sitting in diversity operate as “an independent system for administer­ ing justice to litigants who proper ly invoke its jur isdicti on, ” Byrd v. Blue Ri d ge Rural Elec. Coo pe ra t i v e, Inc., 356 U. S.

525, 537 (1958), and not as state-cour t clones that assume a ll aspects of state tr ibuna ls but are managed by Ar ticle III judges. See Hann a, 380 U. S., at 473 – 474. But wh ile Con­

1 See also Gasper in i v. Cen ter for Human i t i es, Inc., 518 U. S. 415, 427 (1996); E. Chemerinsky, Federal Jurisdiction § 5.3, p. 327 (5th ed. 2007) (hereinaf ter Chemerinsky); 17A J. Moore et al., Moore’s Federal Practice § 124.01[1] (3d ed. 2009) (hereinaf ter Moore).

2 The choice in Er i e R. Co. v. To mpkins, 304 U. S. 64 (1938), requires that the court consider “ the twin aims of the Er i e r ule: discouragement of for um-shopping and avoidance of inequitable administration of the laws. ” Hanna v. Plumer, 380 U. S. 460, 468 (1965); see also Gasper in i, 518 U. S., at 427– 428 (describing Er i e inquiry).

Opinion of Stevens, J.

gress may have the constituti ona l power to prescr ibe proce­ dura l r u les that interfere w ith state substantive law in any number of respects, that is not what Congress has done. In­ stead, it has provided in the Enabling Act that a lthough “ [t]he Supreme Cour t” may “prescr ibe genera l r u les of prac­ tice and procedure, ” § 2072(a), those r u les “sha ll not abr idge, enlarge or modify any substantive r ight, ” § 2072( b). There­ fore, “ [w]hen a situati on is covered by one of the Federa l Ru les, . . . the cour t has been instr ucted to apply the Federa l Ru le” unless doing so wou ld vi olate the Act or the Constitu­ ti on. Id., at 471.

Although the Enabling Act and the Ru les of Decisi on Act “say, rough ly, that federa l cour ts are to apply state ‘substan­ tive’ law and federa l ‘procedura l’ law, ” the inquir ies are not the same. Ib i d. ; see a lso i d., at 469 – 470. The Enabling Act does not invite federa l cour ts to engage in the “relatively ung uided Er i e choice, ” i d., at 471, but instead instr ucts only that federa l r u les cannot “abr idge, enlarge or modify any substantive r ight, ” § 2072( b). The Enabling Act’s limitati on does not mean that federa l r u les cannot displace state policy judg ments; it means only that federa l r u les cannot displace a State’s definiti on of its own r ights or remedies. See Sib­ bach v. Wilson&Co., 312 U. S. 1, 13 –14 (1941) (reasoning that “ the phrase ‘substantive r ights’ ” embraces only those state r ights that are sought to be enforced in the judicia l proceedings).

Congress has thus str uck a ba lance: “ [H]ousekeeping r u les for federa l cour ts” w ill genera lly apply in diversity cases, notw ithstanding that some federa l r u les “w ill inevitably dif­ fer ” from state r u les. Hann a, 380 U. S., at 473. But not every federa l “r u l[e] of practice or procedure, ” § 2072(a), w ill displace state law. To the contrary, federa l r u les must be interpreted w ith some degree of “sensitivity to impor tant state interests and reg u latory policies, ” Gaspe r in i v. Ce n t e r fo r Human i t i es, Inc., 518 U. S. 415, 427, n. 7 (1996), and ap­ plied to diversity cases against the background of Congress’

Cite as: 559 U. S. 393 (2010) 419 Opinion of Stevens, J.

command that such r u les not a lter substantive r ights and w ith considerati on of “ the degree to wh ich the Ru le makes the character and resu lt of the federa l litigati on stray from the course it wou ld follow in state cour ts, ” Hann a, 380 U. S., at 473. Th is can be a tr icky ba lance to implement.3 It is impor tant to observe that the ba lance Congress has str uck tur ns, in par t, on the nature of the state law that is being displaced by a federa l r u le. And in my view, the applicati on of that ba lance does not necessar ily tur n on whether the state law at issue takes the fo r m of what is traditi ona lly descr ibed as substantive or procedura l.

Rather, it tur ns on whether the state law actua lly is par t of a State’s framework of substantive r ights or remedies. See § 2072( b); cf. Hann a, 380 U. S., at 471 (“ The line between ‘substance’ and ‘procedure’ sh if ts as the lega l context changes”); G u aran ty Tr ust Co. v. Yo rk, 326 U. S. 99, 108 (1945) (noting that the words “ ‘substance’ ” and “ ‘proce­ dure’ ” “ [e]ach impl[ y] different var iables depending upon the par ticu lar problem for wh ich [they] are used”).

Apply ing th is ba lance, therefore, requires carefu l interpre­ tati on of the state and federa l provisi ons at issue. “ The line between procedura l and substantive law is hazy, ” Er i e R.

Co. v. To mpkin s, 304 U. S. 64, 92 (1938) (Reed, J., concurr ing in resu lt), and matters of procedure and matters of substance are not “mutua lly exclusive categor ies w ith easily ascer tain­ able contents, ” Sibbach, 312 U. S., at 17 (Frankfur ter, J., dis­ senting). Rather, “ [r]u les wh ich lawyers ca ll procedura l do not a lways exhaust their effect by reg u lating procedure, ” Co h e n v. Bene fici al Industr i al Lo an Co r p., 337 U. S. 541, 555 (1949), and in some situati ons, “procedure and substance are so inter woven that rati ona l separati on becomes well-nigh im­ possible, ” i d., at 559 (Rutledge, J., dissenting). A “state pro­ cedura l r u le, though undeniably ‘procedura l’ in the ordinary

3 See Chemerinsky § 5.3.5, at 321 (observing that courts “ have str uggled to develop an approach that permits uniform procedural r ules to be ap­ plied in federal court while still allowing state substantive law to govern”).

Opinion of Stevens, J.

sense of the ter m, ” may exist “ to influence substantive out­ comes, ” S. A. Healy Co. v. M i lw aukee Me tro po l i tan Sew e r­ age D ist., 60 F. 3d 305, 310 (CA7 1995) (Posner, J.), and may in some instances become so bound up w ith the state-created r ight or remedy that it defines the scope of that substantive r ight or remedy. Such laws, for example, may be seeming ly procedura l r u les that make it sig nificantly more difficu lt to br ing or to prove a claim, thus serving to limit the scope of that claim. See, e. g., Cohen, 337 U. S., at 555 (state “proce­ dure” that required plaintiffs to post bond before suing); G u aran ty Tr ust Co., 326 U. S. 99 (state statute of limita­ ti ons).4 Such “procedura l r u les” may a lso define the amount of recovery. See, e. g., Gaspe r in i, 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 federa l cour ts’ apply ing state laws that affect the amount of a judg ment).

In our federa list system, Congress has not mandated that federa l cour ts dictate to state leg islatures the for m that their substantive law must take. And were federa l cour ts to ig­ nore those por ti ons of substantive state law that operate as procedura l devices, it cou ld in many instances limit the ways that sovereig n States may define their r ights and remedies.

When a State chooses to use a traditi ona lly procedura l veh i­ cle as a means of defining the scope of substantive r ights or remedies, federa l cour ts must recog nize and respect that choice. Cf. Ragan v. Me rchan ts Tran sfe r & Wareho use Co., 337 U. S. 530, 533 (1949) (“Since th[e] cause of acti on is cre­

4 Cf. Milam v. Sta te Far m Mu t. Au to. Ins. Co., 972 F. 2d 166, 170 (CA7 1992) (Posner, J.) (holding that “where a state in furtherance of its sub­ stantive policy makes it more difficult to prove a particular type of state- law claim, the r ule by which it does this, even if denominated a r ule of evidence or cast in evidentiary terms, will be g iven effect in a diversity suit as an expression of state substantive policy”); Moore § 124.09[2] ( list­ ing examples of federal courts that apply state evidentiary r ules to diver­ sity suits). Other examples include state-imposed burdens of proof.

Cite as: 559 U. S. 393 (2010) 421 Opinion of Stevens, J.

ated by loca l law, the measure of it is to be found only in loca l law. . . . Where loca l law qua lifies or abr idges it, the federa l cour t must follow suit”).

When both a federa l r u le and a state law appear to gover n a questi on before a federa l cour t sitting in diversity, our precedents have set out a two-step framework for federa l cour ts to negotiate th is thor ny area. At both steps of the inquiry, there is a cr itica l questi on about what the state law and the federa l r u le mean.

The cour t must first deter mine whether the scope of the federa l r u le is “ ‘sufficiently broad’ ” to “ ‘control the issue’ ” before the cour t, “ thereby leaving no room for the operati on” of seeming ly conflicting state law. See Burl ing t o n No r th- ernR.Co. v. Wo o d s, 480 U. S. 1, 4 – 5 (1987); Walker v. Ar mco Steel Co r p., 446 U. S. 740, 749 –750, and n. 9 (1980). If the federa l r u le does not apply or can operate a longside the state r u le, then there is no “Ac[t] of Congress” gover ning that par­ ticu lar questi on, 28 U. S. C. § 1652, and the cour t must engage in the traditi ona l Ru les of Decisi on Act inquiry under Er i e and its progeny. In some instances, the “plain meaning ” of a federa l r u le w ill not come into “ ‘direct collisi on’ ” w ith the state law, and both can operate. Walker, 446 U. S., at 750,

n. 9, 749. In other instances, the r u le “when fair ly con­

str ued, ” Burl ing t o n No r the r n R. Co., 480 U. S., at 4, w ith “sensitivity to impor tant state interests and reg u latory poli­ cies, ” Gaspe r in i, 518 U. S., at 427, n. 7, w ill not collide w ith the state law.5

5 I thus agree with Justice Ginsburg, post, at 438 – 442 (dissenting opin­ ion), that a federal r ule, like any federal law, must be interpreted in light of many different considerations, including “sensitivity to important state interests, ” post, at 442 ( internal quotation marks omitted), and “regulatory policies, ” post, at 437. See Stewar t Organ i za t io n, Inc. v. Ricoh Cor p., 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 sig nificant differences between state and federal courts in adjudicat­

Opinion of Stevens, J.

If, on the other hand, the federa l r u le is “sufficiently broad to control the issue before the Cour t, ” such that there is a “direct collisi on, ” Walker, 446 U. S., at 749 –750, the cour t must decide whether applicati on of the federa l r u le “repre­ sents a va lid exercise” of the “r u lemak ing author ity...be­ stowed on th is Cour t by the Ru les Enabling Act, ” Burl ing­ ton Northern R. Co., 480 U. S., at 5; see a lso Gaspe r in i, 518 U. S., at 427, n. 7; Hann a, 380 U. S., at 471– 474. The Enabling Act requires, in te r al i a, that federa l r u les “not abr idge, enlarge or modify any substantive r ight. ” 28

U. S. C. § 2072( b) (emphasis added). Unlike Justice Scalia,

I believe that an applicati on of a federa l r u le that effectively abr idges, enlarges, or modifies a state-created r ight or rem­ edy vi olates th is command. Congress may have the consti­ tuti ona l power “ to supplant state law” w ith r u les that are “rati ona lly capable of classificati on as procedure, ” an te, at 406 ( inter na l quotati on marks omitted), but we shou ld gener­ a lly presume that it has not done so. Cf. Wy e t h v. Lev ine, 555 U. S. 555, 565 (2009) (observing that “we star t w ith the assumpti on” that a federa l statute does not displace a State’s law “unless that was the clear and manifest purpose of Con­ gress” ( inter na l quotati on marks omitted)). Indeed, the mandate that federa l r u les “sha ll not abr idge, enlarge or modify any substantive r ight” evinces the opposite intent, as does Congress’ decisi on to delegate the creati on of r u les to th is Cour t rather than to a politica l branch, see 19 C. Wr ight,

A. Miller, & E. Cooper, Federa l Practice and Procedure

§ 4509, p. 265 (2d ed. 1996) ( hereinaf ter Wr ight).

Thus, the second step of the inquiry may well bleed back into the first. When a federa l r u le appears to abr idge, en­

ing claims. . . . Thus, in deciding whether a federal...Rule of Procedure encompasses a particular issue, a broad reading that would create sig nifi­ cant 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 r ules may be contorted, absent congressional authorization to do so, to accommodate state policy goals.

Cite as: 559 U. S. 393 (2010) 423 Opinion of Stevens, J.

large, or modify a substantive r ight, federa l cour ts must con­ sider whether the r u le can reasonably be interpreted to avoid that imper missible resu lt. See, e. g., Sem tek In t’l Inc.

v. Lockheed Mar t in Co r p., 531 U. S. 497, 503 (2001) (avoiding

an interpretati on of Federa l Ru le of Civil Procedure 41( b) that “wou ld arg uably vi olate the jur isdicti ona l limitati on of the Ru les Enabling Act” contained in § 2072( b)).6 And when such a “saving ” constr ucti on is not possible and the r u le wou ld vi olate the Enabling Act, federa l cour ts cannot apply the r u le. See 28 U. S. C. § 2072( b) (mandating that federa l r u les “sha ll not” a lter “any substantive r ight” (emphasis added)); Hann a, 380 U. S., at 473 (“ [A] cour t, in measur ing a Federa l Ru le against the standards contained in the En­ abling Act . . . , need not wholly blind itself to the degree to wh ich the Ru le makes the character and resu lt of the federa l litigati on stray from the course it wou ld follow in state cour ts”); see a lso Sem tek In t’l Inc., 531 U. S., at 503 – 504 (not­ ing that if state law granted a par ticu lar r ight, “ the federa l cour t’s exting uishment of that r ight . . . wou ld seem to vi o­ late [§ 2072( b)] ”); cf. Statement of Justices Black and Doug­ las, 374 U. S. 865, 870 (1963) (observing that federa l r u les “as applied in g iven situati ons might have to be declared in­ va lid”). A federa l r u le, therefore, cannot gover n a par ticu­ lar case in wh ich the r u le wou ld displace a state law that is procedura l in the ordinary use of the ter m but is so inter­ tw ined w ith a state r ight or remedy that it functi ons to de­ fine the scope of the state-created r ight. And absent a gov­ er ning federa l r u le, a federa l cour t must engage in the traditi ona l Ru les of Decisi on Act inquiry, under the Er i e line

6 See also Ortiz v. Fibreboard Cor p., 527 U. S. 815, 842, 845 (1999) (adopt­ ing “ limiting constr uction” of Federal Rule of Civil Procedure 23 that, in ter al i a, “minimizes potential conflict with the Rules Enabling Act”); Amchem Products, Inc. v. Windsor, 521 U. S. 591, 612 – 613 (1997) (observ­ ing that federal r ules “must be interpreted in keeping with the Rules Enabling Act, which instr ucts that r ules of procedure ‘shall not abridge, enlarge or modify any substantive right’ ”).

Opinion of Stevens, J.

of cases. Th is applicati on of the Enabling Act shows “sensi­ tivity to impor tant state interests, ” post, at 442 ( inter na l quotati on marks omitted), and “reg u latory policies, ” post, at 437, but it does so as Congress author ized, by ensur ing that federa l r u les that ordinar ily “prescr ibe genera l r u les of prac­ tice and procedure, ” § 2072(a), do “not abr idge, enlarge or modify any substantive r ight, ” § 2072( b).

Justice Scalia believes that the sole Enabling Act ques­ ti on is whether the federa l r u le “rea lly reg u lates procedure, ” an te, at 407, 410, 411, 414, n. 13 (plura lity opini on) ( inter na l quotati on marks omitted), wh ich means, apparently, whether it reg u lates “ the manner and the means by wh ich the litigants’ r ights are enforced, ” an te, at 407 ( inter na l quotati on marks omitted). I respectfu lly disagree.7 Th is interpretati on of the Enabling Act is consonant w ith the Act’s first limitati on to “genera l r u les of practice and procedure, ” § 2072(a). But it ig nores the second limitati on that such r u les a lso “not abr idge, enlarge or modify any substantive r ight, ” § 2072( b) (emphasis added),8 and in so doing ig nores the ba lance that

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) (hereinaf ter Ely); see also R. Fallon, J. Manning,

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 an te, at 412 – 413, but argues that insofar as I allow for the possibility that a federal r ule might violate the Enabling Act when it displaces a seemingly procedural state r ule, my approach is itself “unfaithful to the statute’s terms, ” which cover “substan­ tive rights” but not “procedural r ules, ” an te, at 413, n. 11 ( internal quota­ tion marks omitted). This is not an objection to my interpretation of the Enabling Act —that courts must look to whether a federal r ule alters sub­ stantive rights in a g iven case—but simply to the way I would apply it, allowing for the possibility that a state r ule that regulates something tra­ ditionally considered to be procedural might actually define a substantive right. Justice Scalia’s objection, moreover, misses the key point: In some instances, a state r ule that appears procedural really is not. A r ule about how damages are reviewed on appeal may really be a damages cap.

See Gasper in i, 518 U. S., at 427. A r ule that a plaintiff can bring a claim

Cite as: 559 U. S. 393 (2010) 425 Opinion of Stevens, J.

Congress str uck between unifor m r u les of federa l procedure and respect for a State’s constr ucti on of its own r ights and remedies. It a lso ig nores the separati on-of-powers pre­ sumpti on, see Wr ight § 4509, at 265, and federa lism presump­ ti on, see Wye th, 555 U. S., at 565, that counsel against judi­ cia lly created r u les displacing state substantive law.9

for only three years may really be a limit on the existence of the right to seek redress. A r ule 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 r ules that one might describe as “procedural, ” but they nonethe­ less define substantive rights. Thus, if a federal r ule displaced such a state r ule, the federal r ule 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 r ule that happens to regulate “ the man­ ner and the means by which the litigants’ rights are enforced, ” an te, at 407 ( internal quotation marks omitted), must govern. There are many ways in which seemingly procedural r ules may displace a State’s formula­ tion of its substantive law. For example, statutes of limitations, although in some sense procedural r ules, can also be understood as a temporal limi­ tation on legally created rights; if this Court were to promulgate a federal limitations period, federal courts would still, in some instances, be re­ quired to apply state limitations periods. Similarly, if the federal r ules altered the burden of proof in a case, this could eviscerate a critical as­ pect —albeit one that deals with how a right is enforced—of a State’s framework of rights and remedies. Or if a federal r ule about appel­ late review displaced a state r ule about how damages are reviewed on appeal, the federal r ule might be pre-empting a state damages cap.

Cf. Gasper in i, 518 U. S., at 427.

Justice Scalia responds that some of these federal r ules might be invalid under his view of the Enabling Act because they may not “really regulat[e] procedure. ” An te, at 414, n. 13 ( internal quotation marks omit­ ted). This response, of course, high lights how empty the plurality’s test really is. See n. 10, in f ra. The response is also limited to those r ules that can be described as “regulat[ing] ” substance, an te, at 407; it does not address those federal r ules that alter the right at issue in the litigation, see Sibbach v. Wi lso n & Co., 312 U. S. 1, 13 –14 (1941), only when they displace particular state laws. Justice Scalia speculates that “Con­ gress may well have accepted” the occasional alteration of substantive rights “as the price of a uniform system of federal procedure. ” An te, at 414, n. 13. Were we forced to speculate about the balance that Con­

Opinion of Stevens, J.

Although the plura lity appears to agree w ith much of my interpretati on of § 2072, see an te, at 412 – 413, it nonetheless re jects that approach for two reasons, both of wh ich are mis­ taken. First, Justice Scalia worr ies that if federa l cour ts inquire into the effect of federa l r u les on state law, it w ill enmesh federa l cour ts in difficu lt deter minati ons about whether applicati on of a g iven r u le wou ld displace a state deter minati on about substantive r ights. See an te, at 409, 414 – 415, and nn. 14, 15. I do not see why an Enabling Act in­ quiry that looks to state law necessar ily is more taxing than Justice Scalia’s .10 But in any event, that inquiry is what the Enabling Act requires: Wh ile it may not be easy to decide what is actua lly a “substantive r ight, ” “ the desig nati ons sub­ stantive and procedura l become impor tant, for the Enabling Act has made them so. ” Ely 723; see a lso Wr ight § 4509, at

266. The questi on, therefore, is not what r u le we th ink

wou ld be easiest on federa l cour ts. The questi on is what r u le Congress established. Although Justice Scalia may genera lly prefer easily administrable, br ight-line r u les, h is preference does not g ive us license to adopt a second-best interpretati on of the Enabling Act. Cour ts cannot ig nore text and context in the service of simplicity.

gress str uck, I might very well agree. But no speculation is necessary because Congress explicitly told us that federal r ules “shall not” alter “any” substantive right. § 2072( b).

10 It will be rare that a federal r ule 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 r ule of law, application of a Civil Rule . . . would intr ude upon state substantive rights”). Justice Scalia’s interpretation, moreover, is not much more determinate than mine. Although it avoids courts’ having to evaluate state law, it tasks them with figuring out whether a federal r ule 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 r ule 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 procedural. ” Id., at 264.

Cite as: 559 U. S. 393 (2010) 427 Opinion of Stevens, J.

Second, the plura lity arg ues that its interpretati on of the Enabling Act is dictated by th is Cour t’s decisi on in Sibbach, wh ich applied a Federa l Ru le about when par ties must sub­ mit to medica l examinati ons. But the plura lity misreads that opini on. As Justice Har lan observed in Hann a, “shor t­ hand for mu lati ons wh ich have appeared in ear lier opini ons are prone to carry untoward resu lts that frequently ar ise from oversimplificati on. ” 380 U. S., at 475 (concurr ing opin­ i on). To understand Sibbach, it is first necessary to under­ stand the issue that was before the Cour t. The petiti oner raised only the facia l questi on whether “Ru les 35 and 37 [of the Federa l Ru les of Civil Procedure] are . . . w ith in the mandate of Congress to th is cour t” and not the specific ques­ ti on of “ the obligati on of federa l cour ts to apply the substan­ tive law of a state. ” 11 312 U. S., at 9. The Cour t, therefore, had no occasi on to consider whether the par ticu lar applica­ ti on of the Federa l Ru les in questi on wou ld offend the En­ abling Act. 12

11 The petitioner in Sibbach argued only that federal r ules could not validly address subjects involving “ important questions of policy, ” Supp.

Brief for Petitioner, O. T. 1940, No. 28, p. 7; see also Reply to Brief for Respondent, O. T. 1940, No. 28, p. 2 (summarizing that the petitioner ar­ gued only that “ [t]he right not to be compelled to submit to a physical examination” is “a ‘substantive’ right forbidden by Congress” to be ad­ dressed by the Federal Rules of Civil Procedure, “even though in theory the right is not of the character determinative of litigation”). In the peti­ tioner ’s own words, “ [t]his contention ...[ did] not in itself involve the [applicable] law of Illinois, ” ib id., and the petitioner in her briefing refer­ enced the otherwise applicable state law only “ to show that [she] was in a position to make the contention, ” ib id., that is, to show that the federal court was applying a federal r ule 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. An te, at 409 – 410. But the quoted passage of Sibbach describes only a facial inquiry into whether federal r ules 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 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 per­

Opinion of Stevens, J.

No r, i n Sibbach, was any fur ther ana lysis necessary to the resoluti on of the case because the matter at issue, requir ing medica l exams for litigants, did not per tain to “substantive r ights” under the Enabling Act. Although most state r u les bear ing on the litigati on process are adopted for some policy reason, few seeming ly “procedura l” r u les define the scope of a substantive r ight or remedy. The matter at issue in Sib­ bach reflected competing federa l and state judg ments about pr ivacy interests. Those pr ivacy concer ns may have been weighty and in some sense substantive; but they did not per­ tain to the scope of any state r ight or remedy at issue in the litigati on. Thus, in response to the petiti oner ’s arg ument in Sibbach that “substantive r ights” include not only “r ights sought to be adjudicated by the litigants” but a lso “genera l pr inciple[s] ” or “questi on[s] of public policy that the leg isla­ ture is able to pass upon, ” i d., at 2 – 3, we held that “ the phrase ‘substantive r ights’ ” embraces only state r ights, such as the tor t law in that case, that are sought to be enforced in the judicia l proceedings, i d., at 13 –14. If the Federa l Ru le had in fact displaced a state r u le that was sufficiently inter tw ined w ith a state r ight or remedy, then perhaps the Enabling Act ana lysis wou ld have been different.13 Our subsequent cases are not to the contrary.14

son by another ’s negligence” and “ to redress [such] infraction. ” Ib id.

But whether a federal r ule, 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 r ule in most cases “really regulates procedure, ” Sibbach, 312 U. S., at 14, it does not “really regulat[e] proce­ dure” when it displaces those rare state r ules that, although “procedural” in the ordinary sense of the term, operate to define the rights and reme­ dies 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; G u aran ty Tr ust Co. v. York, 326 U. S. 99, 108 (1945).

14 Although this Court’s decision in Hanna cited Sibbach, that is of little sig nificance. Hanna did not hold that any seemingly procedural federal rule will a lways govern, even when it alters a substantive state right; nor, as in Sibbach, was the argument that I now make before the Court. In­ deed, in Hanna we cited Sibbach’s statement that the Enabling Act pro­

Cite as: 559 U. S. 393 (2010) 429 Opinion of Stevens, J.

Justice Ginsburg views the basic issue in th is case as whether and how to apply a federa l r u le that dictates an answer to a traditi ona lly procedura l questi on (whether to join plaintiffs together as a class), when a state law that “de­ fines the dimensi ons” of a state-created claim dictates the opposite answer. Post, at 447. As explained above, I readily acknowledge that if a federa l r u le displaces a state r u le that is “ ‘procedura l’ in the ordinary sense of the ter m, ”

S. A. Healy Co., 60 F. 3d, at 310, but sufficiently inter woven

w ith the scope of a substantive r ight or remedy, there wou ld be an Enabling Act problem, and the federa l r u le wou ld have to g ive way. In my view, however, th is is not such a case.

Rule 23 Controls Class Certi fication When the Distr ict Cour t in the case before us was asked to cer tify a class acti on, Federa l Ru le of Civil Procedure 23 squarely gover ned the deter minati on whether the cour t

hibits federal r ules 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 Fed­ eral 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 framework for applying federal r ules in diversity cases have not mentioned Sibbach at all but cited only Hanna.

See, e. g., Burl ing to n Nor ther n R. Co. v. Wo o d s, 480 U. S. 1, 5 (1987).

Justice Scalia notes that in Mississippi Publ ish ing Cor p. v. Mur­ phree, 326 U. S. 438 (1946), we used language that supported his view.

See an te, at 407. 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 Mississippi “will undoubt­ edly affect those rights. ” 326 U. S., at 445 – 446. There was no sugges­ tion that by affecting the method of enforcing the rights in that case, the federal r ules could plausibly abridge, enlarge, or modify the rights themselves.

Opinion of Stevens, J.

shou ld do so. That is the explicit functi on of Ru le 23. Ru le 23, therefore, must apply unless its applicati on wou ld abr idge, enlarge, or modify New York r ights or remedies.

Notw ithstanding the plain lang uage of Ru le 23, I under­ stand the dissent to find that Ru le 23 does no t gover n the questi on of class cer tificati on in th is matter because New York has made a substantive judg ment that such a class shou ld not be cer tified, as a means of proscr ibing damages.

Although, as discussed in f ra, at 432 – 435, I do not accept the dissent’s view of § 901( b), I a lso do not see how the dissent’s interpretati on of Ru le 23 follows from that view.15 I agree w ith Justice Ginsburg that cour ts shou ld “avoi[d] immod­ erate interpretati ons of the Federa l Ru les that wou ld trench on state prerogatives, ” post, at 439, and shou ld in some in­ stances “ interpre[t] the federa l r u les to avoid conflict w ith impor tant state reg u latory policies, ” post, at 441 ( inter na l quotati on marks omitted). But that is not what the dissent

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 “ limi­ tation, ” post, at 443, and n. 2, 444, 447, 459, or “proscription, ” post, at 447,

n. 6, 456, whereas Rule 23 “does not command that a particular remedy

be available when a party sues in a representative capacity, ” post, at 446, 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 deter­ mine 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 (CA 2 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 disposition would be to vacate and remand for further consideration of whether the required amount in controversy has or can be met.

Cite as: 559 U. S. 393 (2010) 431 Opinion of Stevens, J.

has done. Simply because a r u le shou ld be read in light of federa lism concer ns, it does not follow that cour ts may re­ wr ite the r u le.

At bottom, the dissent’s interpretati on of Ru le 23 seems to be that Ru le 23 covers only those cases in wh ich its appli­ cati on wou ld create no Er i e problem. The dissent wou ld apply the Ru les of Decisi on Act inquiry under Er i e even to cases in wh ich there is a gover ning federa l r u le, and thus the Act, by its own ter ms, does not apply. But “ [w]hen a situa­ ti on is covered by one of the Federa l Ru les, the questi on facing the cour t is a far cry from the typica l, relatively un­ g uided Er i e choice. ” Hann a, 380 U. S., at 471. The ques­ ti on is only whether the Enabling Act is satisfied. Although it reflects a laudable concer n to protect “state reg u latory pol­ icies, ” post, at 441 ( inter na l quotati on marks omitted), Jus­ tice Ginsburg ’s approach wou ld, in my view, work an end r un around Congress’ system of unifor m federa l r u les, see 28 U. S. C. § 2072, and our decisi on in Hann a. Federa l cour ts can and shou ld interpret federa l r u les w ith sensitivity to “state prerogatives, ” post, at 439; but even when “state interests... warrant our respectfu l considerati on, ” post, at 443, federa l cour ts cannot rewr ite the r u les. If my dissent­ ing colleag ues feel strong ly that § 901( b) is substantive and that class cer tificati on shou ld be denied, then they shou ld arg ue w ith in the Enabling Act’s framework. Other w ise, “ the Federa l Ru le applies regardless of contrary state law. ” Gaspe r in i, 518 U. S., at 427, n. 7; accord, Hann a, 380 U. S., at 471.

Apply ing Rule 23 Does No t Vio l a te the En abl ing Act As I have explained, in consider ing whether to cer tify a class acti on such as th is one, a federa l cour t must inquire whether doing so wou ld abr idge, enlarge, or modify New York ’s r ights or remedies, and thereby vi olate the Enabling Act. Th is inquiry is not a lways a simple one because “ [i]t is difficu lt to conceive of any r u le of procedure that cannot have

Opinion of Stevens, J.

a sig nificant effect on the outcome of a case, ” Wr ight § 4508, at 232 – 233, and a lmost “any r u le can be said to have... ‘substantive effects, ’ affecting society’s distr ibuti on of r isks and rewards, ” Ely 724, n. 170. Faced w ith a federa l r u le that dictates an answer to a traditi ona lly procedura l questi on and that displaces a state r u le, one can of ten arg ue that the state r u le was really some par t of the State’s definiti on of its r ights or remedies.

In my view, however, the bar for finding an Enabling Act problem is a h igh one. The mere fact that a state law is desig ned as a procedura l r u le suggests it reflects a judg ment about how state cour ts ought to operate and not a judg ment about the scope of state-created r ights and remedies. And for the purposes of operating a federa l cour t system, there are costs involved in attempting to discover the tr ue nature of a state procedura l r u le and a llow ing such a r u le to operate a longside a federa l r u le that appears to gover n the same questi on. The mere possibility that a federa l r u le wou ld a lter a state-created r ight is not sufficient. There must be little doubt.

The text of CPLR § 901( b) expressly and unambig uously applies not only to claims based on New York law but a lso to claims based on federa l law or the law of any other State.

And there is no interpretati on from New York cour ts to the contrary. It is therefore hard to see how § 901( b) cou ld be understood as a r u le that, though procedura l in for m, serves the functi on of defining New York ’s r ights or remedies.

Th is is a ll the more apparent because lawsuits under New York law cou ld be joined in federa l class acti ons well before New York passed § 901( b) in 1975, and New York had done noth ing to prevent that. It is tr ue, as the dissent points out, that there is a limited amount of leg islative h istory that can be read to suggest that the New York officia ls who suppor ted § 901( b) w ished to create a “ limitati on” on New York ’s “stat­ utory damages. ” Post, at 443. But, as Justice Scalia

Cite as: 559 U. S. 393 (2010) 433 Opinion of Stevens, J.

notes, that is not the law that New York adopted.16 See an te, at 402 – 403 (opini on of the Cour t).

The leg islative h istory, moreover, does not clear ly descr ibe a judg ment that § 901( b) wou ld operate as a limitati on on New York ’s statutory damages. In eva luating that leg isla­ tive h istory, it is necessary to disting uish between proce­ dura l r u les adopted for so me policy reason and seeming ly procedura l r u les that are intimately bound up in the scope of a substantive r ight or remedy. Although a lmost every r u le is adopted for some reason and has some effect on the outcome of litigati on, not every state r u le “defines the di­

16 In its Er i e analysis, the dissent observes that when sovereig ns create laws, the enacting leg islatures sometimes assume those laws will apply only within their territory. See post, at 453 – 454. That is a tr ue fact, but it does not do very much work for the dissent’s position. For one thing, as the dissent observes, this Er i e analysis is relevant only if there is no conflict between Rule 23 and § 901( b), and the court can thus apply both.

Post, at 451. 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 Er i e,

inquiry. See 380 U. S., at 469 – 471.

The dissent’s citations, moreover, high light simply that when interpret­ ing statutes, context matters. Thus, we sometimes presume that laws cover only domestic conduct and sometimes do not, depending upon, in ter alia, whether it makes sense in a g iven 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, ” Amer ican Banana Co. v.

Un i ted Fr u i t Co., 213 U. S. 347, 356 (1909). But in the context of § 901( b), a presumption against extraterritoriality makes little sense. That pre­ sumption 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 Ne w Yo r k courts. It is possible that the New York Leg islature simply did not real­ ize 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 be­ cause New York set up § 901( b) as a general r ule about how its courts operate, my strong presumption is to the contrary.

Opinion of Stevens, J.

mensi ons of [a] claim itself, ” post, at 447. New York clear ly craf ted § 901( b) w ith the intent that only cer tain lawsuits— those for wh ich there were not statutory pena lties—cou ld be joined in class acti ons in New York cour ts. That decisi on reflects a policy judg ment about wh ich lawsuits shou ld pro­ ceed in New York cour ts in a class for m and wh ich shou ld not. As Justice Ginsburg carefu lly outlines, see post, at 443 – 445, § 901( b) was “apparently” adopted in response to fears that the class-acti on procedure, applied to statutory pena lties, wou ld lead to “annih ilating punishment of the de­ fendant. ” V. Alexander, Practice Commentar ies, C901:11, repr inted in 7B McKinney’s Consolidated Laws of New York Ann., p. 104 (2006) ( inter na l quotati on marks omitted); see a lso Spe r r y v. Crompton Corp., 8 N. Y. 3d 204, 211, 863 N. E.

2d 1012, 1015 (2007). But statements such as these are not par ticu lar ly strong evidence that § 901( b) serves to define who can obtain a statutory pena lty or that cer tify ing such a class wou ld enlarge New York ’s remedy. Any device that makes litigati on easier makes it easier for plaintiffs to re­ cover damages.

In additi on to the fear of excessive recover ies, some oppo­ nents of a broad class-acti on device “arg ued that there was no need to per mit class acti ons in order to encourage litigati on . . . when statutory pena lties . . . provided an ag­ gr ieved par ty w ith a sufficient economic incentive to pursue a claim. ” Id., at 211, 863 N. E. 2d, at 1015 (emphasis added).

But those opponents may have felt merely that, for any num­ ber of reasons, New York cour ts shou ld not conduct tr ia ls in the class for mat when that for mat is unnecessary to motivate litigati on.17 Justice Ginsburg asser ts that th is cou ld not

17 To be sure, one could imag ine the converse story, that a leg islature 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, g iven that New York ’s penalty provi­ sions, on their face, apply to all plaintiffs, be they class or individual, and

Cite as: 559 U. S. 393 (2010) 435 Opinion of Stevens, J.

be tr ue because “suits seek ing statutory damages are arg ua­ bly best suited to the class device because individua l proof of actua l damages is unnecessary. ” Post, at 445. But some people believe that class acti ons are inefficient or at least unfair, insofar as they join together slightly disparate claims or force cour ts to adjudicate unw ieldy lawsuits. It is not for us to dismiss the possibility that New York leg islators shared in those beliefs and thus wanted to exclude the class veh icle when it appeared to be unnecessary.

The leg islative h istory of § 901 thus revea ls a classica lly procedura l ca librati on of mak ing it easier to litigate claims in New York cour ts (under any source of law) only when it is necessary to do so, and not mak ing it too easy when the class tool is not required. Th is is the same sor t of ca lcu la­ ti on that might go into setting filing fees or deadlines for br iefs. There is of course a difference of degree between those examples and class cer tificati on, but not a difference of k ind; the class veh icle may have a greater practica l effect on who br ings lawsuits than do low filing fees, but that does not transfor m it into a damages “proscr ipti on, ” post, at 447, n. 6, 456, or “ limitati on, ” post, at 443, and n. 2, 444, 447, 459.18 The difference of degree is relevant to the for um shopping considerati ons that are par t of the Ru les of Decisi on Act or Er i e inquiry. If the applicable federa l r u le did not gover n the par ticu lar questi on at issue (or cou ld be fair ly read not to do so), then those considerati ons wou ld matter, for pre­ cisely the reasons g iven by the dissent. See post, at 452 – 458.

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 million award. ” Post, at 436. But in fact, class certification would transform 10,000 $500 cases into one $5 mil­ lion case. It may be that without class certification, not all of the poten­ tial plaintiffs would bring their cases. But that is tr ue of any procedural vehicle; without a lower filing fee, a conveniently located courthouse, easy-to-use federal procedural r ules, or many other features of the federal courts, many plaintiffs would not sue.

Ginsburg, J., dissenting

But that is not th is case. As the Cour t explained in Hann a, it is an “ incorrect assumpti on that the r u le of Er i e R. Co. v.

To mpkin s constitutes the appropr iate test of...the applica­ bility of a Federa l Ru le of Civil Procedure. ” 380 U. S., at 469 – 470. “It is tr ue that both the Enabling Act and the Er i e r u le say, rough ly, that federa l cour ts are to apply state ‘substantive’ law and federa l ‘procedura l’ law, ” but the tests are different and reflect the fact that “ they were desig ned to control very different sor ts of decisi ons. ” Id., at 471.

Because Ru le 23 gover ns class cer tificati on, the only deci­ si on is whether cer tify ing a class in th is diversity case wou ld “abr idge, enlarge or modify” New York ’s substantive r ights or remedies. § 2072( b). Although one can arg ue that class cer tificati on wou ld enlarge New York ’s “ limited” damages remedy, see post, at 443, and n. 2, 444, 447, 459, such arg u­ ments rest on extensive specu lati on about what the New York Leg islature had in mind when it created § 901( b). But g iven that there are two plausible competing narratives, it seems obvi ous to me that we shou ld respect the plain textua l reading of § 901( b), a r u le in New York ’s procedura l code about when to cer tify class acti ons brought under any source of law, and respect Congress’ decisi on that Ru le 23 gover ns class cer tificati on in federa l cour ts. In order to displace a federa l r u le, there must be more than just a possibility that the state r u le is different than it appears.

According ly, I concur in par t and concur in the judg ment.

Justice Ginsburg, w ith whom Justice Kennedy, Jus­ tice Breyer, and Justice Alito join, dissenting.

The Cour t today approves Shady Grove’s attempt to trans­ for m a $500 case into a $5 million award, a lthough the State creating the r ight to recover has proscr ibed th is a lchemy.

If Shady Grove had filed suit in New York state cour t, the 2% interest payment author ized by New York Ins. Law Ann. § 5106(a) (West 2009) as a pena lty for overdue benefits wou ld, by Shady Grove’s own measure, amount to no more than

Cite as: 559 U. S. 393 (2010) 437 Ginsburg, J., dissenting

$500. By instead filing in federa l cour t based on the par ties’ diverse citizensh ip and requesting class cer tificati on, Shady Grove hopes to recover, for the class, statutory damages of more than $5 million. The New York Leg islature has barred th is remedy, instr ucting that, unless specifica lly per­ mitted, “an acti on to recover a pena lty, or minimum measure of recovery created or imposed by statute may not be main­ tained as a class acti on. ” N. Y. Civ. Prac. Law Ann. (CPLR) § 901( b) (West 2006). The Cour t never theless holds that Federa l Ru le of Civil Procedure 23, wh ich prescr ibes proce­ dures for the conduct of class acti ons in federa l cour ts, pre­ empts the applicati on of § 901( b) in diversity suits.

The Cour t reads Ru le 23 relentlessly to overr ide New York ’s restr icti on on the availability of statutory damages.

Our decisi ons, however, cauti on us to ask, before under­ mining state leg islati on: Is th is conflict rea lly necessary?

Cf. Traynor, Is Th is Conflict Rea lly Necessary? 37 Texas

it wou ld not have read Ru le 23 to collide w ith New York ’s leg itimate interest in keeping cer tain monetary awards rea­ sonably bounded. I wou ld continue to interpret Federa l Ru les w ith awareness of, and sensitivity to, impor tant state reg u latory policies. Because today’s judg ment radica lly de­ par ts from that course, I dissent.

“Under the Er i e doctr ine, ” it is long settled, “federa l cour ts sitting in diversity apply state substantive law and federa l procedura l law. ” Gaspe r in i v. Cen te r fo r Human i­ t i es, Inc., 518 U. S. 415, 427 (1996); see Er i e R. Co. v. To mp­ kins, 304 U. S. 64 (1938). Justice Har lan aptly conveyed the impor tance of the doctr ine; he descr ibed Er i e as “one of the moder n cor nerstones of our federa lism, expressing policies that profoundly touch the a llocati on of judicia l power be­ tween the state and federa l systems. ” Hann a v. Plume r,

Ginsburg, J., dissenting

380 U. S. 460, 474 (1965) (concurr ing opini on). Although we have found Er i e’s applicati on “sometimes [to be] a cha lleng­ ing endeavor, ” Gaspe r in i, 518 U. S., at 427, two federa l stat­ utes mark our way.

The first, the Ru les of Decisi on Act, 1 proh ibits federa l cour ts from generating substantive law in diversity acti ons.

See Er i e, 304 U. S., at 78. Or ig ina lly enacted as par t of the Judiciary Act of 1789, th is restraint serves a policy of pr ime impor tance to our federa l system. We have therefore ap­ pliedtheAct “withaneyealert to... avoiding disregard of State law. ” G u aran ty Tr ust Co. v. Yo rk, 326 U. S. 99, 110 (1945).

The second, the Ru les Enabling Act, enacted in 1934, au­ thor izes us to “prescr ibe genera l r u les of practice and proce­

“Such r u les sha ll not abr idge, enlarge or modify any substan­ tive r ight. ” 28 U. S. C. § 2072. Pursuant to th is statute, we have adopted the Federa l Ru les of Civil Procedure. In in­ terpreting the scope of the Ru les, including, in par ticu lar, Ru le 23, we have been mindfu l of the limits on our author ity.

See, e. g., Ortiz v. Fibrebo ard Co r p., 527 U. S. 815, 845 (1999) (The Ru les Enabling Act counsels against “adventurous ap­ plicati on” of Ru le 23; any tensi on w ith the Act “ is best kept w ith in tolerable limits. ”); Amchem Products, Inc. v. Wind­ so r, 521 U. S. 591, 612 – 613 (1997). See a lso Sem tek In t’l Inc.

v. Lockheed Mar t in Co r p., 531 U. S. 497, 503 – 504 (2001).

If a Federa l Ru le controls an issue and directly conflicts w ith state law, the Ru le, so long as it is consonant w ith the Ru les Enabling Act, applies in diversity suits. See Hann a, 380 U. S., at 469 – 474. If, however, no Federa l Ru le or stat­ ute gover ns the issue, the Ru les of Decisi on Act, as inter­

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 r ules of deci­ sion 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. 393 (2010) 439 Ginsburg, J., dissenting

preted in Er i e, controls. That Act directs federa l cour ts, in diversity cases, to apply state law when failure to do so wou ld invite for um shopping and y ield markedly dispar­ ate litigati on outcomes. See Gaspe r in i, 518 U. S., at 428; Hann a, 380 U. S., at 468. Recog nizing that the Ru les of De­ cisi on Act and the Ru les Enabling Act simu ltaneously frame and infor m the Er i e ana lysis, we have endeavored in diver­ sity suits to remain safely w ith in the bounds of both congres­ si ona l directives.

In our pr i or decisi ons in point, many of them not men­ ti oned in the Cour t’s opini on, we have avoided immoderate interpretati ons of the Federa l Ru les that wou ld trench on state prerogatives w ithout serving any countervailing fed­ era l interest. “Applicati on of the Hann a ana lysis, ” we have said, “ is premised on a ‘direct collisi on’ between the Federa l Ru le and the state law. ” Walker v. Ar mco Steel Co r p., 446

U. S. 740, 749 –750 (1980) (quoting Hann a, 380 U. S., at 472).

To displace state law, a Federa l Ru le, “when fair ly con­ str ued, ” must be “ ‘sufficiently broad’ ” so as “ to ‘control the issue’ before the cour t, thereby leaving no roo m for the oper­ ati on of that law. ” Burl ing t o n No r the r n R. Co. v. Wo o d s, 480 U. S. 1, 4 – 5 (1987) (quoting Walker, 446 U. S., at 749 –750, and n. 9; emphasis added); cf. Stew ar t O rgan i za t io n, Inc. v.

Ricoh Co r p., 487 U. S. 22, 37– 38 (1988) (Scalia, J., dissent­ ing) (“ [I]n deciding whether a federal... Ruleof Procedure encompasses a par ticu lar issue, a broad reading that wou ld create sig nificant disunifor mity between state and federa l cour ts shou ld be avoided if the text per mits. ”).

In pre-Hann a decisi ons, the Cour t vig ilantly read the Fed­ era l Ru les to avoid conflict w ith state laws. In Palme r v.

Ho ffman, 318 U. S. 109, 117 (1943), for example, the Cour t read Federa l Ru le 8(c), wh ich lists affir mative defenses, to control only the manner of pleading the listed defenses in diversity cases; as to the burden of proof in such cases, Palme r held, state law controls.

Ginsburg, J., dissenting

Six years later, in Ragan v. Me rchan ts Tran sfe r & Ware­ ho use Co., 337 U. S. 530 (1949), the Cour t r u led that state law deter mines when a diversity suit commences for purposes of tolling the state limitations period. Although Federa l Ru le 3 specified that “ [a] civil acti on is commenced by filing a com­ plaint w ith the cour t, ” we held that the Ru le did not displace a state law that tied an acti on’s commencement to service of the summons. Id., at 531– 533. The “cause of acti on [wa]s created by loca l law, ” the Cour t explained, therefore “ the measure of it [wa]s to be found only in loca l law. ” Id., at 533.

Similar ly in Co h e n v. Bene fici al Industr i al Lo an Co r p., 337 U. S. 541 (1949), the Cour t held applicable in a diversity acti on a state statute requir ing plaintiffs, as a prerequisite to pursuit of a stockholder ’s der ivative acti on, to post a bond as secur ity for costs. At the time of the litigati on, Ru le 23, now Ru le 23.1, addressed a plaintiff ’s instituti on of a der iva­ tive acti on in federa l cour t. Although the Federa l Ru le specified prerequisites to a stockholder ’s maintenance of a der ivative acti on, the Cour t found no conflict between the Ru le and the state statute in questi on; the requirements of both cou ld be enforced, the Cour t observed. See i d., at 556.

Burdensome as the secur ity-for-costs requirement may be, Co h e n made plain, suitors cou ld not escape the upfront out­ lay by resor ting to the federa l cour t’s diversity jur isdicti on.

In a ll of these cases, the Cour t stated in Hann a, “ the scope of the Federa l Ru le was not as broad as the losing par ty urged, and therefore, there being no Federa l Ru le wh ich cov­ ered the point in dispute, Er i e commanded the enforcement of state law. ” 380 U. S., at 470. In Hann a itself, the Cour t found the clash “unavoidable, ” ib i d.; the petiti oner had ef­ fected service of process as prescr ibed by Federa l Ru le 4(d)(1), but that “ how-to” method did not satisfy the specia l Massachusetts law applicable to service on an executor or administrator. Even as it re jected the Massachusetts pre­ scr ipti on in favor of the federa l procedure, however, “ [t]he major ity in Hanna recog nized . . . that federa l r u les . . . must

Cite as: 559 U. S. 393 (2010) 441 Ginsburg, J., dissenting

be interpreted by the cour ts apply ing them, and that the process of interpretati on can and shou ld reflect an aware­ ness of leg itimate state interests. ” R. Fa llon, J. Manning,

D. Meltzer, & D. Shapiro, Har t and Wechsler ’s The Federa l

Cour ts and the Federa l System 593 (6th ed. 2009) ( herein­ af ter Har t & Wechsler).

Follow ing Hann a, we continued to “ interpre[t] the federa l r u les to avoid conflict w ith impor tant state reg u latory poli­ cies. ” Har t & Wechsler 593. In Walker, the Cour t took up the questi on whether Ragan shou ld be overr u led; we held, once again, that Federa l Ru le 3 does not directly conflict w ith state r u les gover ning the time when an acti on com­ mences for purposes of tolling a limitations period. 446

U. S., at 749 –752. Ru le 3, we said, addresses only “ the date

from wh ich var i ous timing requirements of the Federa l Ru les beg in to r un, ” i d., at 751, and does not “purpor[t] to displace state tolling ru les, ” i d., at 750 –751. Sig nificant state policy interests wou ld be fr ustrated, we observed, were we to read Ru le 3 as superseding the state r u le, wh ich re­ quired actua l service on the defendant to stop the clock on the statute of limitati ons. Id., at 750 –752.

We were similar ly attentive to a State’s reg u latory policy in Gaspe r in i. That diversity case concer ned the standard for deter mining when the large size of a jury verdict war­ rants a new tr ia l. Federa l and state cour ts a like had gener­ a lly employed a “shock the conscience” test in review ing jury awards for excessiveness. See 518 U. S., at 422. Federa l cour ts did so pursuant to Federa l Ru le 59(a) wh ich, as worded at the time of Gaspe r in i, instr ucted that a tr ia l cour t cou ld grant a new tr ia l “for any of the reasons for wh ich new tr ia ls have heretofore been granted in acti ons at law in the cour ts of the United States. ” Fed. Ru le Civ. Proc. 59(a) (West 1995). In an effor t to provide greater control, New York prescr ibed procedures under wh ich jury verdicts wou ld be examined to deter mine whether they “deviate[d] mater i­ a lly from what wou ld be reasonable compensati on. ” See

Ginsburg, J., dissenting Gaspe r in i, 518 U. S., at 423 – 425 (quoting CPLR § 5501(c)).

Th is Cour t held that Ru le 59(a) did not inh ibit federa l-cour t accommodati on of New York ’s invigorated test.

Most recently, in Semtek, we addressed the claim­ preclusive effect of a federa l-cour t judg ment dismissing a di­ versity acti on on the basis of a Ca lifor nia statute of limita­ ti ons. The case came to us af ter the same plaintiff renewed the same fray against the same defendant in a Maryland state cour t. (Plaintiff chose Maryland because that State’s limitati ons per i od had not yet r un.) We held that Federa l Ru le 41( b), wh ich provided that an involuntary dismissa l “op­ erate[d] as an adjudicati on on the mer its, ” did not bar main­ tenance of the renewed acti on in Maryland. To hold that Ru le 41( b) precluded the Maryland cour ts from enter taining the case, we said, “wou ld arg uably vi olate the jur isdicti ona l limitati on of the Ru les Enabling Act, ” 531 U. S., at 503, and “wou ld in many cases vi olate [Er i e’s] federa lism pr inciple, ” i d., at 504.

In sum, both before and af ter Hann a, the above-descr ibed decisi ons show, federa l cour ts have been cauti oned by th is Cour t to “ interpre[t] the Federa l Ru les . . . w ith sensitivity to impor tant state interests, ” Gaspe r in i, 518 U. S., at 427,

n. 7, and a w ill “ to avoid conflict w ith impor tant state reg u la­

tory policies, ” i d., at 438, n. 22 ( inter na l quotati on marks omitted).2 The Cour t veers away from that approach—and

2 Justice Stevens stakes out common ground on this point: “ [F]ederal r ules, ” he observes, “must be interpreted with some degree of ‘sensitivity to important state interests and regulatory policies, ’ . . . and applied to diversity cases against the background of Congress’ command that such r ules 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)]. ” An te, at 418 – 419 (opinion concurring in part and concurring in judg ment). See also an te, at 419 – 420 (“A ‘state proce­ dural r ule, 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

Cite as: 559 U. S. 393 (2010) 443 Ginsburg, J., dissenting

conspicuously, its most recent reiterati on in Gaspe r in i, an te, at 405, n. 7—in favor of a mechanica l reading of Federa l Ru les, insensitive to state interests and productive of discord.

Our decisi ons instr uct over and over again that, in the ad­ judicati on of diversity cases, state interests—whether ad­ vanced in a statute, e. g., Cohen, or a procedura l r u le, e. g., Gasper ini —warrant our respectfu l considerati on. Yet today, the Cour t g ives no quar ter to New York ’s limitati on on statutory damages and requires the lower cour ts to thwar t the reg u latory policy at stake: To prevent excessive damages, New York ’s law controls the pena lty to wh ich a defendant may be exposed in a sing le suit. The story be­ h ind § 901( b)’s enactment deserves telling.

In 1975, the Judicia l Conference of the State of New York proposed a new class-acti on statute desig ned “ to set up a flexible, functi ona l scheme” that wou ld provide “an effective, but controlled group remedy. ” Judicia l Conference Repor t on CPLR, repr inted in 1975 N. Y. Laws pp. 1477, 1493 (Mc­ Kinney). As or ig ina lly draf ted, the leg islati on addressed only the procedura l aspects of class acti ons; it specified, for example, five prerequisites for cer tificati on, eventua lly codi­ fied at § 901(a), that closely tracked those listed in Ru le 23.

See CPLR § 901(a) (requir ing, for class cer tificati on, numer­

it defines the scope of that substantive right or remedy. ” (some internal quotation marks omitted)); an te, at 420 (“When a State chooses to use a traditionally procedural vehicle as a means of defining the scope of sub­ stantive 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 Federal Rule preempts New York ’s damages limitation, in his view, because § 901( b) is “a proce­ dural r ule that is not part of New York ’s substantive law. ” An te, at 416.

This characterization of § 901( b) does not mirror reality, as I later explain.

See in f ra, at 452 – 458. 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.

Ginsburg, J., dissenting

osity, predominance, typica lity, adequacy of representati on, and super i or ity).

Wh ile the Judicia l Conference proposa l was in the New York Leg islature’s hopper, “var i ous groups advocated for the additi on of a provisi on that wou ld proh ibit class acti on plain­ tiffs from being awarded a statutor ily-created pena lty... except when expressly author ized in the per tinent statute. ” Spe r r y v. Crompton Corp., 8 N. Y. 3d 204, 211, 863 N. E. 2d 1012, 1015 (2007). These constituents “feared that recover­ ies beyond actua l damages cou ld lead to excessively harsh resu lts. ” Ib i d. “ They a lso arg ued that there was no need to per mit class acti ons . . . [ because] statutory pena lties . . . provided an aggr ieved par ty w ith a sufficient economic in­ centive to pursue a claim. ” Ib i d. Such pena lties, constit­ uents observed, of ten far exceed a plaintiff ’s actua l damages.

“When lumped together, ” they arg ued, “pena lties and class acti ons produce overk ill. ” Attachment to Letter from G.

Perk inson, New York State Council of Retail Merchants, Inc., to J. Gr ibetz, Executive Chamber (June 4, 1975) (Leg is­ lative Repor t), Bill Jacket, L. 1975, Ch. 207.

Aiming to avoid “annih ilating punishment of the defend­ ant, ” the New York Leg islature amended the proposed stat­ ute to bar the recovery of statutory damages in class acti ons.

7B McKinney’s Consolidated Laws of New York Ann., p. 104 (2006) ( inter na l quotati on marks omitted). In h is sig ning statement, Gover nor Hugh Carey stated that the new stat­ ute “empowers the cour t to prevent abuse of the class acti on device and provides a co n tro lled remedy. ” Memorandum on Approving L. 1975, Ch. 207, repr inted in 1975 N. Y. Laws, at 1748 (emphasis added). “ [T]he fina l bill . . . was the resu lt of a compromise among competing interests. ” Spe r r y, 8 N. Y. 3d, at 211, 863 N. E.

2d, at 1015. Secti on 901(a) a llows cour ts leeway in deciding whether to cer tify a class, but § 901( b) re jects the use of the class mechanism to pursue the par ticu lar remedy of statu­

Cite as: 559 U. S. 393 (2010) 445 Ginsburg, J., dissenting

tory damages. The limitati on was not desig ned w ith the fair conduct or efficiency of litigati on in mind. Indeed, suits seek ing statutory damages are arg uably best suited to the class device because individua l proof of actua l damages is unnecessary. New York ’s decisi on instead to block class- acti on proceedings for statutory damages therefore makes scant sense, except as a means to a manifestly substantive end: limiting a defendant’s liability in a sing le lawsuit in order to prevent the exorbitant inflati on of pena lties—reme­ dies the New York Leg islature created w ith individua l suits in mind.3

Shady Grove contends—and the Cour t today agrees—that Ru le 23 unavoidably preempts New York ’s proh ibiti on on the recovery of statutory damages in class acti ons. The Federa l Ru le, the Cour t emphasizes, states that Shady Grove’s suit “may be” maintained as a class acti on, wh ich conflicts w ith § 901( b)’s instr ucti on that it “may not” so proceed. An te, at 399 ( inter na l quotati on marks omitted; emphasis deleted).

According ly, the Cour t insists, § 901( b) “cannot apply in di­ versity suits unless Ru le 23 is u ltra vires. ” Ib i d. Conclud­ ing that Ru le 23 does not vi olate the Ru les Enabling Act, the Cour t holds that the federa l provisi on controls Shady Grove’s ability to seek, on beha lf of a class, a statutory pen­ a lty of over $5 million. An te, at 406 – 410 (plura lity opini on);

3 Even in the mine-r un 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 unmeritorious claims. See, e. g., Coopers & L ybrand v. Li v esay, 437 U. S. 463, 476 (1978).

When representative plaintiffs seek statutory damages, pressure to settle may be heightened because a class action poses the risk of massive liability unmoored to actual injury. See, e. g., Ra tner v. Chemical Bank New York Tr ust Co., 54 F. R. D. 412, 416 (SDNY 1972) (exercising “considerable dis­ cretion of a prag matic nature” to refuse to certify a class because the plaintiffs suffered neglig ible actual damages but sought statutory damages of $13 million).

Ginsburg, J., dissenting

an te, at 431– 436 (Stevens, J., concurr ing in par t and concur­ r ing in judg ment).

The Cour t, I am convinced, finds conflict where none is necessary. Mindfu l of the h istory beh ind § 901( b)’s enact­ ment, the thr ust of our precedent, and the substantive-r ights limitati on in the Ru les Enabling Act, I conclude, as did the Second Circuit and every Distr ict Cour t to have considered the questi on in any detail,4 that Ru le 23 does not collide w ith § 901( b). As the Second Circuit well understood, Ru le 23 prescr ibes the considerati ons relevant to class cer tificati on and postcer tificati on proceedings—but it does not command that a par ticu lar remedy be available when a par ty sues in a representative capacity. See 549 F. 3d 137, 143 (2008).5 Secti on 901( b), in contrast, trains on that latter issue. Sensi­ bly read, Ru le 23 gover ns procedura l aspects of class litiga­

4 See, e. g., In re Automotive Refinishing Paint Antitrust Litigation, 515 F. Supp. 2d 544, 549 – 551 (ED Pa. 2007); Leider v. Ral fe, 387 F. Supp.

2d 283, 289 – 292 (SDNY 2005); Dor nberger v. Metropo l i tan Li fe Ins. Co.,

182 F. R. D. 72, 84 (SDNY 1999). See also Weber v. U. S. Sterl ing Secur i­

t i es, Inc., 282 Conn. 722, 738 –739, 924 A. 2d 816, 827– 828 (2007) (§ 901( b) applied in Connecticut state court to action governed by New York sub­ stantive law).

5 Shady Grove projects that a dispensation in favor of Allstate would

require “courts in all diversity class actions . . . [to] look to state r ules 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 analog ies; 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 con­ tend that § 901(a) overrides Rule 23. Brief for Respondent 18 (“ There is no dispute that the criteria for class certification 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 certifi­ cation standards, rather than comparable state provisions. See, e. g., In re New M o tor Veh icles Canadi an Expor t An t i tr ust Li t i ga t io n, 522

F. 3d 6, 18 – 24 (CA1 2008); Order and Reasons in In re Ka tr ina Canal

Breaches Co nso l. Li t i ga t io n, Civ. Action No. 05 – 4182 (ED La., Aug. 6, 2009).

Cite as: 559 U. S. 393 (2010) 447 Ginsburg, J., dissenting

ti on, but a llows state law to control the size of a monetary award a class plaintiff may pursue.

In other words, Ru le 23 descr ibes a method of enforcing a claim for relief, wh ile § 901( b) defines the dimensi ons of the claim itself. In th is regard, it is immater ia l that § 901( b) bars statutory pena lties in wholesa le, rather than retail, fash i on. The New York Leg islature cou ld have embedded the limitati on in every provisi on creating a cause of acti on for wh ich a pena lty is author ized; § 901( b) operates as shor t­ hand to the same effect. It is as much a par t of the delinea­ ti on of the claim for relief as it wou ld be were it included claim by claim in the New York Code.

The Cour t sing le-mindedly focuses on whether a suit “may” or “may not” be maintained as a class acti on. See an te, at 398 – 401. Putting the questi on that way, the Cour t does not home in on the reason why. Ru le 23 author izes class treatment for suits satisfy ing its prerequisites because the class mechanism genera lly affords a fair and efficient way to aggregate claims for adjudicati on. Secti on 901( b) re­ sponds to an entirely different concer n; it does not a llow class members to recover statutory damages because the New York Leg islature considered the resu lt of adjudicating such claims en masse to be exorbitant.6 The fair and effi­ cient co nduct of class litigati on is the leg itimate concer n of Ru le 23; the remedy for an infracti on of state law, however, is the leg itimate concer n of the State’s lawmakers and not of the federa l r u lemakers. Cf. Ely, The Irrepressible Myth of Er i e, 87 Harv. L. Rev. 693, 722 (1974) (It is relevant “whether the state provisi on embodies a substantive policy or repre­

6 The Court disputes the strength of the evidence of leg islative intent,

see an te, at 403, 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 process­ ing cases. On its face, the proscription is concerned with remedies, i. e., the availability of statutory damages in a lawsuit. Leg islative history confirms this objective, but is not essential to revealing it.

Ginsburg, J., dissenting

sents only a procedura l disagreement w ith the federa l r u le- makers respecting the fairest and most efficient way of con­ ducting litigati on. ”).

Suppose, for example, that a State, w ish ing to cap damages in class acti ons at $1 million, enacted a statute providing that “a suit to recover more than $1 million may not be main­ tained as a class acti on. ” Under the Cour t’s reasoning— wh ich attr ibutes dispositive sig nificance to the words “may not be maintained”—Ru le 23 wou ld preempt th is provisi on, never mind that Congress, by author izing the promu lgati on of r u les of procedure for federa l cour ts, surely did not intend to displace state-created ceilings on damages.7 The Cour t suggests that the ana lysis might differ if the statute “ lim­ it[ed] the remedies available in an existing class acti on, ” an te, at 401, such that Ru le 23 might not conflict w ith a state statute prescr ibing that “no more than $1 million may be recovered in a class acti on. ” There is no rea l difference in the purpose and intended effect of these two hypothetica l statutes. The noti on that one directly impinges on Ru le 23’s domain, wh ile the other does not, fundamenta lly misper­ ceives the office of Ru le 23. 8

7 There is, of course, a difference between “ justly administering [a] rem­ edy, ” Sibbach v. Wilson&Co., 312 U. S. 1, 14 (1941), and prescribing the content of that remedy; if Rule 23 can be read to increase a plaintiff ’s recovery from $1 million 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 remedies. ” An te, at 407– 408.

The Federal Rule, it says, authorizes the recovery of class-size statutory damages even though the New York provision instr ucts that such penal­ ties shall not be available.

8 The Court states that “ [w]e cannot rewrite [a state law] to reflect our perception of leg islative purpose. ” An te, at 403. But we can, of course, in ter pret 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 439 – 442. Just as we read Federal Rule 3 in Walker v. Ar mco Steel Cor p.,

Cite as: 559 U. S. 393 (2010) 449 Ginsburg, J., dissenting

The absence of an inevitable collisi on between Ru le 23 and § 901( b) becomes evident once it is comprehended that a fed­ era l cour t sitting in diversity can accord due respect to both state and federa l prescr ipti ons. Plaintiffs seek ing to vindi­ cate claims for wh ich the State has provided a statutory pen­ a lty may pursue relief through a class acti on if they forgo statutory damages and instead seek actua l damages or in­ junctive or declaratory relief ; any putative class member who objects can opt out and pursue actua l damages, if avail­ able, and the statutory pena lty in an individua l acti on. See,

e. g., Mendez v. The Radec Co r p., 260 F. R. D. 38, 55 (WDNY

2009); Brzychn alski v. Unesco, Inc., 35 F. Supp. 2d 351, 353 (SDNY 1999).9 See a lso Alexander, Practice Commentar ies, at 105 (“Even if a statutory pena lty or minimum recovery is involved, most cour ts hold that it can be waived, thus confin­ ing the class recovery to actua l damages and eliminating the bar of CPLR 901( b). ”). In th is manner, the Second Circuit

446 U. S. 740, 751 (1980), not to govern when a suit commences for pur­ poses of tolling a state statute of limitations (although the Rule indisput­ ably 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 Leg islature appears to have anticipated this result. In discussing the remedial bar effected by § 901( b), the bill’s sponsor ex­ plained that a “statutory class action for actual damages would still be permissible. ” S. Fink, [Sponsor ’s] Memorandum, p. 2, Bill Jacket, L. 1975, Ch. 207. See also State Consumer Protection Board Memorandum (May 29, 1975), Bill Jacket, L. 1975, Ch. 207. On this understanding, New York courts routinely authorize class actions when the class waives its right to receive statutory penalties. See, e. g., Cox v. Microso f t Cor p., 8 App. Div.

3d 39, 778 N. Y. S. 2d 147 (2004); Pesan tez v. Boy le Env. Ser vs., Inc., 251 App. Div. 2d 11, 673 N. Y. S. 2d 659 (1998); Rid ge Meadows Ho meowners’ Assn., Inc. v. Tara Dev elopmen t Co., 242 App. Div. 2d 947, 665 N. Y. S. 2d 361 (1997); Super Glue Cor p. v. Av is Ren t A Car System, Inc., 132 App.

Div. 2d 604, 517 N. Y. S. 2d 764 (1987); We inberg v. He r t z Co r p. , 116 App. Div. 2d 1, 499 N. Y. S. 2d 693 (1986).

Ginsburg, J., dissenting

explained, “Ru le 23’s procedura l requirements for class ac­ ti ons can be applied a long w ith the substantive requirement of CPLR 901( b). ” 549 F. 3d, at 144. In sum, wh ile phrased as responsive to the questi on whether cer tain class acti ons may beg in, § 901( b) is unmistakably aimed at controlling how those acti ons must end. On that remedia l issue, Ru le 23 is silent.

Any doubt whether Ru le 23 leaves § 901( b) in control of the remedia l issue at the core of th is case shou ld be dispelled by our Er i e jur ispr udence, including Hann a, wh ich counsels us to read Federa l Ru les moderately and cauti ons against stretch ing a Ru le to cover every situati on it cou ld conceivably reach.10 The Cour t states that “ [t]here is no reason...to read Ru le 23 as addressing only whether claims made elig i­ ble for class treatment by some other law shou ld be cer tified as class acti ons. ” An te, at 399. To the contrary, Pa l m e r, Ragan, Cohen, Wal ke r, Gaspe r in i, and Sem tek provide good reason to look to the law that creates the r ight to recover.

See supra, at 439 – 442. That is plainly so on a more accurate statement of what is at stake: Is there any reason to read Ru le 23 as author izing a claim for relief when the State that created the remedy disa llows its pursuit on beha lf of a class?

None at a ll is the answer our federa l system shou ld g ive.

Notably, New York is not a lone in its effor t to contain pen­ a lties and minimum recover ies by disa llow ing class relief ; Congress, too, has precluded class treatment for cer tain claims seek ing a statutor ily desig nated minimum recovery.

See, e. g., 15 U. S. C. § 1640(a)(2)(B) (Tr uth in Lending Act) (“ [I]n the case of a class acti on ...no minimum recov­ ery sha ll be applicable. ”); § 1693m(a)(2)(B) (Electronic Fund

10 The plurality notes that “we have re jected every statutory challenge to a Federal Rule that has come before us. ” An te, at 407. 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 Cor p., 527 U. S. 815, 842 (1999); Amchem Products, Inc. v.

Windsor, 521 U. S. 591, 612 – 613 (1997); supra, at 439 – 443.

Cite as: 559 U. S. 393 (2010) 451 Ginsburg, J., dissenting

Transfer Act) (same); 12 U. S. C. § 4010(a)(2)(B)( i) (Expedited Funds Availability Act) (same). Today’s judg ment denies to the States the fu ll power Congress has to keep cer tain mone­ tary awards w ith in reasonable bounds. Cf. Beard v. Kin­ dler, 558 U. S. 53, 62 (2009) (“In light of . . . federa lism and comity concer ns . . . it wou ld seem par ticu lar ly strange to disregard state . . . r u les that are substantia lly similar to those to wh ich we g ive fu ll force in our own cour ts. ”).

States may hesitate to create deter minate statutory pena l­ ties in the future if they are impotent to prevent federa l- cour t distor ti on of the remedy they have shaped.11 By finding a conflict w ithout consider ing whether Ru le 23 rati ona lly shou ld be read to avoid any collisi on, the Cour t unw isely and unnecessar ily retreats from the federa lism pr inciples underg irding Er i e. Had the Cour t reflected on the respect for state reg u latory interests endorsed in our decisi ons, it wou ld have found no cause to interpret Ru le 23 so woodenly—and every reason not to do so. Cf. Traynor, 37 Texas L. Rev., at 669 (“It is bad enough for cour ts to prattle unintellig ibly about choice of law, but unforg iveable when inquiry might have revea led that there was no rea l conflict. ”).

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 Respond­ ent. The Court’s “one-size-fits-all” reading of Rule 23, an te, at 399, likely prevents the enforcement of all of these statutes in diversity actions— including the numerous state statutory provisions that, like § 901( b), at­ tempt 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) (West 2004); Ky. Rev. Stat. Ann. § 367.983(1)(c) (West 2006); Mass. Gen. Laws, ch. 167B, § 20(a)(2)(B) (West 2008); Mich. Comp. Laws Ann. § 493.112(3)(c) (West 2005); N. M. Stat. Ann. § 58 –16 –15(B) (2007); Ohio Rev. Code Ann. § 1351.08(A) (Lexis 2006); Okla.

Stat., Tit. 14A, § 5 – 203(1) (West 2007 Supp.); Wyo. Stat. Ann. § 40 –19 – 119(a)( iii) (2009).

Ginsburg, J., dissenting

Because I perceive no unavoidable conflict between Ru le

23 and § 901( b), I wou ld decide th is case by inquir ing

“whether applicati on of the [state] r u le wou ld have so impor­ tant an effect upon the for tunes of one or both of the litigants that failure to [apply] it wou ld be likely to cause a plaintiff to choose the federa l cour t. ” Hann a, 380 U. S., at 468, n. 9.

See Gaspe r in i, 518 U. S., at 428.

Seek ing to preter mit that inquiry, Shady Grove urges that the class-acti on bar in § 901( b) must be regarded as “proce­ dura l” because it is contained in the CPLR, wh ich “gover n[s] the procedure in civil judicia l proceedings in all courts of the sta te. ” Br ief for Petiti oner 34 (quoting CPLR § 101; empha­ sis in or ig ina l). Placement in the CPLR is hardly disposi­ tive. The provisi on held “substantive” for Er i e purposes in Gaspe r in i is a lso contained in the CPLR (§ 5501(c)), as are limitati ons per i ods, § 201 e t seq., prescr ipti ons plainly “sub­ stantive” for Er i e purposes however they may be character­ ized for other purposes, see Yo rk, 326 U. S., at 109 –112. See a lso, e. g., 1 Restatement (Second) of Conflict of Laws § 133, Repor ter ’s Note, p. 369 (1969) ( hereinaf ter Restatement) (“Under the r u le of Er ie . . . the federa l cour ts have classified the burden of persuasi on as to contr ibutory neg ligence as a matter of substantive law that is gover ned by the r u le of the State in wh ich they sit even though the cour ts of that State have character ized their r u le as procedura l for choice-of-law purposes. ”); Cook, “Substance” and “Procedure” in the Con­ flict of Laws, 42 Ya le L. J. 333 (1933).

Shady Grove a lso ranks § 901( b) as “procedura l” because “noth ing in [the statute] suggests that it is limited to r ights of acti on based on New York state law, as opposed to federa l law or the law of other states”; instead it “applies to acti ons seek ing pena lties under any statute. ” Br ief for Petiti oner

35 – 36. See a lso an te, at 432 (Stevens, J., concurr ing in

par t and concurr ing in judg ment) (Secti on 901( b) cannot “ be Cite as: 559 U. S. 393 (2010) 453

Ginsburg, J., dissenting

understood as a r u le that . . . serves the functi on of defining New York ’s r ights or remedies” because its “ text . . . ex­ pressly and unambig uously applies not only to claims based on New York law but a lso to claims based on federa l law or the law of any other State. ”).

It is tr ue that § 901( b) is not specifica lly l imi ted to claims ar ising under New York law. But neither is it expressly ex­ tended to claims ar ising under foreig n law. The r u le pre­ scr ibes, w ithout elaborati on either way, that “an acti on to recover a pena lty... maynotbe maintainedasa class ac­ ti on. ” We have of ten recog nized that “genera l words” ap­ pear ing in a statute may, in fact, have limited applicati on; “ [t]he words ‘any person or persons, ’ ” for example, “are broad enough to comprehend every human being. But gen­ era l words must not only be limited to cases w ith in the ju­ r isdicti on of the state, but a lso to those objects to wh ich the leg islature intended to apply them. ” Un i ted Sta tes v.

Pa l m e r, 3 Wheat. 610, 631 (1818) (opini on for the Cour t by Marsha ll, C. J.). See a lso Small v. Un i ted Sta tes, 544 U. S.

385, 388 (2005) (“In law, a leg islature that uses the statutory phrase ‘any person’ may or may not mean to include ‘persons’ outside the jur isdicti on of the state. ” (some inter na l quota­ ti on marks omitted)); Flora v. Un i ted Sta tes, 362 U. S. 145,

149 (1960) (The ter m “ ‘any sum’ is a catcha ll [phrase,]...

but to say th is is not to define what it catches. ”).

Moreover, Shady Grove over looks the most likely explana­ ti on for the absence of limiting lang uage: New York leg isla­ tors make law w ith New York plaintiffs and defendants in mind, i. e., as if New York were the universe. See Baxter, Choice of Law and the Federa l System, 16 Stan. L. Rev. 1,

11 (1963) (“ [L]awmakers of ten speak in universa l ter ms but

must be understood to speak w ith reference to their constit­ uents. ”); cf. Smi th v. Un i ted Sta tes, 507 U. S. 197, 204, n. 5 (1993) (presumpti on against extraterr itor ia lity rooted in par t in “ the commonsense noti on that Congress genera lly leg is­ lates w ith domestic concer ns in mind”).

Ginsburg, J., dissenting

The point was well put by Brainerd Curr ie in h is semina l ar ticle on gover nmenta l interest ana lysis in conflict-of-laws cases. The ar ticle centers on a now-archaic Massachusetts law that prevented marr ied women from binding themselves by contract as sureties for their husbands. Discussing whether the Massachusetts prescr ipti on applied to transac­ ti ons involving foreig n factors (a foreig n for um, foreig n place

“When the Massachusetts leg islature addresses itself to the problem of marr ied women as sureties, the undevel­ oped image in its mind is that of Massachuse t ts marr ied women, husbands, creditors, transacti ons, cour ts, and judg ments. In the h istory of Ang lo-Amer ican law the domestic case has been nor ma l, the conflict-of-laws case marg ina l. ” Marr ied Women’s Contracts: A Study in Conflict-of-Laws Method, 25 U. Ch i. L. Rev. 227, 231 (1958) (emphasis added).

Shady Grove’s suggesti on that States must specifica lly limit their laws to domestic r ights of acti on if they w ish their en­ actments to apply in federa l diversity litigati on misses the obvi ous point: State leg islators genera lly do not focus on an interstate setting when draf ting statutes.12

12 Shady Grove’s argument that § 901( b) is procedural based on its possi­

ble application to foreig n claims is also out of sync with our Er i e decisions, many of them involving state statutes of similarly unqualified scope. The New Jersey law at issue in Co h e n v. Bene fici al Industr i al Loan Cor p., 337 U. S. 541 (1949), for example, required plaintiffs to post a bond as security for costs in “any [stockholder ’s derivative] action. ” Id., at 544,

n. 1 (quoting 1945 N. J. Laws ch. 131 (emphasis added)). See also, e. g.,

Walker, 446 U. S., at 742 –743, and n. 4 (Oklahoma 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 character­ ization of a state statute as substantive for Er i e 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 in f ra, at 455 – 456.

Cite as: 559 U. S. 393 (2010) 455 Ginsburg, J., dissenting

Shady Grove a lso observes that a New York cour t has ap­ plied § 901( b) to a federa l claim for relief under the Telephone Consumer Protecti on Act of 1991 (TCPA), 47 U. S. C. § 227, see Rud gayze r & G ra t t v. Cape Can av e ral To ur & Trav el, Inc., 22 App. Div. 3d 148, 799 N. Y. S. 2d 795 (2005), thus revea ling § 901( b)’s “procedura l” cast. Br ief for Petiti oner

36. We note first that the TCPA itself ca lls for the applica­

ti on of state law. See Rud gayze r, 22 App. Div. 3d, at 149 – 150, 799 N. Y. S. 2d, at 796 –797 (federa l acti on author ized in state cour t “ if other w ise per mitted by the laws or r u les of the cour t of [the] State” (quoting 47 U. S. C. § 227( b)(3))).

See a lso Go t tl i eb v. Ca r n i v a l Co r p. , 436 F. 3d 335, 342 (CA 2 2006) (Sotomayor, J.) (“Congress sought, via the TCPA, to enact the functi ona l equiva lent of a state law. ”). The TCPA, the Supreme Cour t of Connecticut has recog nized, thus “carves out an excepti on to th[e] genera l r u le” that “when Er i e . . . is reversed . . . , a state cour t hear ing a federa l case is nor ma lly required to apply federa l substantive law”: “Under § 227( b)(3) . . . it is state substantive law that deter­ mines, as a preliminary matter, whether a federa l acti on under the act may be brought in state cour t. ” Webe r v. U. S .

Ste rl ing Secur i t i es, Inc., 282 Conn. 722, 736, 924 A. 2d 816, 826 (2007) ( in TCPA acti on gover ned by New York substan­ tive law, § 901( b) applied even though the claim was pursued in Connecticut state cour t).

Moreover, statutes qua lify as “substantive” for Er i e pur­ poses even when they have “procedura l” thr usts as well.

See, e. g., Cohen, 337 U. S., at 555; cf. Woods v. In te rsta te Real ty Co., 337 U. S. 535, 536 – 538, and n. 1 (1949) ( holding diversity case must be dismissed based on state statute that, by its ter ms, gover ned only proceedings in state cour t).

Statutes of limitati ons are, again, exemplary. They supply “substantive” law in diversity suits, see Yo rk, 326 U. S., at

109 –112, even though, as Shady Grove acknowledges, state

cour ts of ten apply the for um’s limitati ons per i od as a “proce­ dura l” bar to claims ar ising under the law of another State, see Reply Br ief 24, n. 16; Tr. of Ora l Arg. 16 –17. See a lso

Ginsburg, J., dissenting

Restatement §§ 142 –143 (when adjudicating a foreig n cause of acti on, State may use either its own or the foreig n jur is­ dicti on’s statute of limitati ons, wh ichever is shor ter). Simi­ lar ly, federa l cour ts sitting in diversity g ive effect to state laws gover ning the burden of proving contr ibutory neg li­ gence, see Palme r v. Ho ffman, 318 U. S. 109, 117 (1943), yet state cour ts adjudicating foreig n causes of acti on of ten apply their own loca l law to th is issue. See Restatement § 133 and Repor ter ’s Note.

In shor t, Shady Grove’s effor t to character ize § 901( b) as simply “procedura l” cannot successfu lly elide th is fundamen­ ta l nor m: When no federa l law or r u le is dispositive of an issue, and a state statute is outcome affective in the sense our cases on Er i e (pre- and post-Hann a) develop, the Ru les of Decisi on Act commands applicati on of the State’s law in diversity suits. Gaspe r in i, 518 U. S., at 428; Hann a, 380

U. S., at 468, n. 9; Yo rk, 326 U. S., at 109. As th is case

starkly demonstrates, if federa l cour ts exercising diversity jur isdicti on are compelled by Ru le 23 to award statutory pena lties in class acti ons wh ile New York cour ts are bound by § 901( b)’s proscr ipti on, “substantia l var iati ons between state and federa l [money judg ments] may be expected. ” Gaspe r in i, 518 U. S., at 430 (quoting Hann a, 380 U. S., at 467– 468 ( inter na l quotati on marks omitted)). The “var ia­ ti on” here is indeed “substantia l. ” Shady Grove seeks class relief that is ten tho usand t imes greater than the individua l remedy available to it in state cour t. As the plura lity ac­ knowledges, an te, at 415, for um shopping w ill undoubtedly resu lt if a plaintiff need only file in federa l instead of state cour t to seek a massive monetary award explicitly barred by state law. See Gaspe r in i, 518 U. S., at 431 (“Er i e precludes a recovery in federa l cour t sig nificantly larger than the re­ covery that wou ld have been tolerated in state cour t. ”).13

13 In contrast, many “state r ules ostensibly addressed to procedure, ” an te, at 404 (majority opinion)—including pleading standards and r ules governing summary judg ment, pretrial discovery, and the admissibility of

Cite as: 559 U. S. 393 (2010) 457 Ginsburg, J., dissenting

The “accident of diversity of citizensh ip, ” Kl axo n Co. v. Sten­ t o r Elec. Mfg. Co., 313 U. S. 487, 496 (1941), shou ld not sub­ ject a defendant to such aug mented liability. See Hann a, 380 U. S., at 467 (“ The Er i e r u le is rooted in par t in a rea li­ zati on that it wou ld be unfair for the character or resu lt of a litigati on mater ia lly to differ because the suit had been brought in a federa l cour t. ”).

It is beyond debate that “a statutory cap on damages wou ld supply substantive law for Er i e purposes. ” Gaspe r­ in i, 518 U. S., at 428. See a lso i d., at 439 – 440 (Stevens, J. , dissenting) (“A state-law ceiling on al lowable damages...is a substantive r u le of decisi on that federa l cour ts must apply in diversity cases gover ned by New York law. ”); i d., at 464 (Scalia, J., dissenting) (“State substantive law controls what in jur ies are compensable and in what amount. ”). In Gaspe r­ in i, we deter mined that New York ’s standard for measur ing the a lleged excessiveness of a jury verdict was desig ned to provide a control ana logous to a damages cap. Id., at 429.

The statute was framed as “a procedura l instr ucti on, ” we noted, “ but the State’s objective [wa]s manifestly substan­ tive. ” Ib i d.

Gaspe r in i’s observati ons apply w ith fu ll force in th is case.

By barr ing the recovery of statutory damages in a class ac­ ti on, § 901( b) controls a defendant’s maximum liability in a suit seek ing such a remedy. The remedia l provisi on cou ld have been wr itten as an explicit cap: “In any class acti on seek ing statutory damages, relief is limited to the amount the named plaintiff wou ld have recovered in an individua l suit. ” That New York ’s Leg islature used other words to ex­ press the very same meaning shou ld be inconsequentia l.

We have long recog nized the impropr iety of displacing, in a diversity acti on, state-law limitati ons on state-created rem-

certain evidence—would not so hugely impact for um choices. It is diffi­ cult to imag ine a scenario that would promote more for um 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 million.

Ginsburg, J., dissenting

edies. See Wo o d s, 337 U. S., at 538 ( in a diversity case, a plaintiff “ barred from recovery in the state cour t . . . shou ld likew ise be barred in the federa l cour t”); Yo rk, 326 U. S., at 108 –109 (federa l cour t sitting in diversity “cannot afford recovery if the r ight to recover is made unavailable by the State nor can it substantively affect the enforcement of the r ight as g iven by the State”). Just as Er i e precludes a fed­ era l cour t from enter ing a deficiency judg ment when a State has “author itatively announced that [such] judg ments cannot be secured w ith in its borders, ” Angel v. Bull ing t o n, 330 U. S.

183, 191 (1947), so too Er i e shou ld prevent a federa l cour t from awarding statutory pena lties aggregated through a class acti on when New York proh ibits th is recovery. See a lso Ragan, 337 U. S., at 533 (“Where loca l law qua lifies or abr idges [a claim], the federa l cour t must follow suit. Other­ w ise there is a different measure of the cause of acti on in one cour t than in the other, and the pr inciple of Er i e .. .is transgressed. ”). In sum, because “New York substantive law gover ns [th is] claim for relief, New York law . . . g uide[s] the a llowable damages. ” Gaspe r in i, 518 U. S., at 437.14

The Cour t’s erosi on of Er i e’s federa lism grounding impels me to point out the large irony in today’s judg ment. Shady Grove is able to pursue its claim in federa l cour t only by vir tue of the recent enactment of the Class Acti on Fair ness Act of 2005 (CAFA), 28 U. S. C. § 1332(d). In CAFA, Con­ gress opened federa l-cour t doors to state-law-based class ac­ ti ons so long as there is minima l diversity, at least 100 class

14 There is no question that federal courts can “g ive effect to the sub­ stantive thr ust of [§ 901( b)] without untoward alteration of the federal scheme for the trial and decision of civil cases. ” Gasper in i, 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. 393 (2010) 459 Ginsburg, J., dissenting

members, and at least $5 million in controversy. Ib i d. By providing a federa l for um, Congress sought to check what it considered to be the overreadiness of some state cour ts to cer tify class acti ons. See, e. g., S. Rep. No. 109 –14, p. 4 (2005) (CAFA prevents lawyers from “gam[ing] the proce­ dura l r u les [to] keep nati onw ide or mu lti-state class acti ons in state cour ts whose judges have reputati ons for readily cer tify ing classes. ” ( inter na l quotati on marks omitted)); i d., at 22 (disapproving “ the ‘I never met a class acti on I didn’t like’ approach to class cer tificati on” that “ is preva lent in state cour ts in some loca lities”). In other words, Congress envisi oned fewer—not more—class acti ons overa ll. Con­ gress surely never anticipated that CAFA wou ld make fed­ era l cour ts a mecca for suits of the k ind Shady Grove has launched: class acti ons seek ing state-created pena lties for claims ar ising under state law—claims that wou ld be barred from class treatment in the State’s own cour ts. Cf. Wo o d s, 337 U. S., at 537 (“ [T]he policy of Er i e . . . preclude[s] mainte­ nance in . . . federa l cour t ...of suits to wh ich the State ha[s] closed its cour ts. ”).15

* * * I wou ld continue to approach Er i e questi ons in a manner mindfu l of the purposes under ly ing the Ru les of Decisi on Act and the Ru les Enabling Act, faithfu l to precedent, and respectfu l of impor tant state interests. I wou ld therefore hold that the New York Leg islature’s limitati on on the recov­ ery of statutory damages applies in th is case, and wou ld af­ fir m the Second Circuit’s judg ment.

15 It remains open to Congress, of course, to exclude from federal-court jurisdiction under CAFA, 28 U. S. C. § 1332(d), claims that could not be maintained as a class action in state court.