CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT.

Mr. John W. Davis, with whom Messrs. Theodore Kiendl, Ralph M. Carson and Francis W. Phillips were on the brief, for petitioner.

Mr. Meyer Abrams for respondent.

Briefs were filed by Solicitor General Fahy, Messrs. Roger S. Foster, Milton V. Freeman, David K. Kadane and Arnold R. Ginsburg on behalf of the Securities and Exchange Commission, and by Messrs. Carl J. Austrian and Saul J. Lance on behalf of J. Cloyd Kent et al., Trustees, as amici curiae, urging affirmance.

MR. JUSTICE FRANKFURTER delivered the opinion of the Court.

In Russell v. Todd, 309 U.S. 280, 294, we had "no occasion to consider the extent to which federal courts, in the exercise of the authority conferred upon them by Congress to administer equitable remedies, are bound to follow state statutes and decisions affecting those remedies." The [100] question thus carefully left open in Russell v. Todd is now before us. It arises under the following circumstances.

In May, 1930, Van Sweringen Corporation issued notes to the amount of $30,000,000. Under an indenture of the same date, petitioner, Guaranty Trust Co., was named trustee with power and obligations to enforce the rights of the noteholders in the assets of the Corporation and of the Van Sweringen brothers. In October, 1930, petitioner, with other banks, made large advances to companies affiliated with the Corporation and wholly controlled by the Van Sweringens. In October, 1931, when it was apparent that the Corporation could not meet its obligations, Guaranty cooperated in a plan for the purchase of the outstanding notes on the basis of cash for 50% of the face value of the notes and twenty shares of Van Sweringen Corporation's stock for each $1,000 note. This exchange offer remained open until December 15, 1931.

Respondent York received $6,000 of the notes as a gift in 1934, her donor not having accepted the offer of exchange. In April, 1940, three accepting noteholders began suit against petitioner, charging fraud and misrepresentation. Respondent's application to intervene in that suit was denied, 117 F.2d 95, and summary judgment in favor of Guaranty was affirmed. Hackner v. Morgan, 130 F.2d 300. After her dismissal from the Hackner litigation, respondent, on January 22, 1942, began the present proceedings.

The suit, instituted as a class action on behalf of non-accepting noteholders and brought in a federal court solely because of diversity of citizenship, is based on an alleged breach of trust by Guaranty in that it failed to protect the interests of the noteholders in assenting to the exchange offer and failed to disclose its self-interest when sponsoring the offer. Petitioner moved for summary judgment, which was granted, upon the authority of the Hackner case. On appeal, the Circuit Court of Appeals, one Judge dissenting, [101] found that the Hackner decision did not foreclose this suit, and held that in a suit brought on the equity side of a federal district court that court is not required to apply the State statute of limitations that would govern like suits in the courts of a State where the federal court is sitting even though the exclusive basis of federal jurisdiction is diversity of citizenship. 143 F.2d 503. The importance of the question for the disposition of litigation in the federal courts led us to bring the case here. 323 U.S. 693.

In view of the basis of the decision below, it is not for us to consider whether the New York statute would actually bar this suit were it brought in a State court. Our only concern is with the holding that the federal courts in a suit like this are not bound by local law.

We put to one side the considerations relevant in disposing of questions that arise when a federal court is adjudicating a claim based on a federal law. See, for instance, Board of Comm'rs v. United States, 308 U.S. 343; Deitrick v. Greaney, 309 U.S. 190; D'Oench, Duhme & Co. v. F.D.I.C., 315 U.S. 447; Clearfield Trust Co. v. United States, 318 U.S. 363; O'Brien v. Western Union Telegraph Co., 113 F.2d 539. Our problem only touches transactions for which rights and obligations are created by one of the States, and for the assertion of which, in case of diversity of the citizenship of the parties, Congress has made a federal court another available forum.

Our starting point must be the policy of federal jurisdiction which Erie R. Co. v. Tompkins, 304 U.S. 64, embodies. In overruling Swift v. Tyson, 16 Pet. 1, Erie R. Co. v. Tompkins did not merely overrule a venerable case. It overruled a particular way of looking at law which dominated the judicial process long after its inadequacies had been laid bare. See, e. g., Field, J., dissenting in Baltimore & Ohio R. Co. v. Baugh, 149 U.S. 368, 391; Holmes, J., dissenting in Kuhn v. Fairmont Coal Co., 215 U.S. 349, [102] 370, and in Black & White Taxi. Co. v. Brown & Yellow Taxi. Co., 276 U.S. 518, 532; Erie R. Co. v. Tompkins, supra at 73, note 6. Law was conceived as a "brooding omnipresence" of Reason, of which decisions were merely evidence and not themselves the controlling formulations. Accordingly, federal courts deemed themselves free to ascertain what Reason, and therefore Law, required wholly independent of authoritatively declared State law, even in cases where a legal right as the basis for relief was created by State authority and could not be created by federal authority and the case got into a federal court merely because it was "between Citizens of different States" under Art. III, § 2 of the Constitution of the United States.

This impulse to freedom from the rules that controlled State courts regarding State-created rights was so strongly rooted in the prevailing views concerning the nature of law, that the federal courts almost imperceptibly were led to mutilating construction even of the explicit command given to them by Congress to apply State law in cases purporting to enforce the law of a State. See § 34 of the Judiciary Act of 1789, 1 Stat. 73, 92. The matter was fairly summarized by the statement that "During the period when Swift v. Tyson (1842-1938) ruled the decisions of the federal courts, its theory of their freedom in matters of general law from the authority of state courts pervaded opinions of this Court involving even state statutes or local law." Vandenbark v. Owens-Illinois Co., 311 U.S. 538, 540.

In relation to the problem now here, the real significance of Swift v. Tyson lies in the fact that it did not enunciate novel doctrine. Nor was it restricted to its particular situation. It summed up prior attitudes and expressions in cases that had come before this Court and lower federal courts for at least thirty years, at law as well as in equity.^[1] [103] The short of it is that the doctrine was congenial to the jurisprudential climate of the time. Once established, judicial momentum kept it going. Since it was conceived that there was "a transcendental body of law outside of any particular State but obligatory within it unless and until changed by statute," 276 U.S. 518, 532, 533, State court decisions were not "the law" but merely someone's opinion — to be sure an opinion to be respected — concerning the content of this all-pervading law. Not unnaturally, the federal courts assumed power to find for themselves the content of such a body of law. The notion was stimulated by the attractive vision of a uniform body of federal law. To such sentiments for uniformity of decision and freedom from diversity in State law the federal courts gave currency, particularly in cases where equitable remedies were sought, because equitable doctrines are so often cast in terms of universal applicability when close analysis of the source of legal enforceability is not demanded.

In exercising their jurisdiction on the ground of diversity of citizenship, the federal courts, in the long course of their history, have not differentiated in their regard for State law between actions at law and suits in equity. Although § 34 of the Judiciary Act of 1789, 1 Stat. 73, 92, 28 U.S.C. § 725, directed that the "laws of the several states . . . shall be regarded as rules of decision in trials at common law . . .," this was deemed, consistently for over a hundred years, to be merely declaratory of what would in [104] any event have governed the federal courts and therefore was equally applicable to equity suits.^[2] See Hawkins v. Barney's Lessee, 5 Pet. 457, 464; Mason v. United States, 260 U.S. 545, 559; Erie R. Co. v. Tompkins, supra at 72. Indeed, it may fairly be said that the federal courts gave greater respect to State-created "substantive rights," Pusey & Jones Co. v. Hanssen, 261 U.S. 491, 498, in equity than they gave them on the law side, because rights at law were usually declared by State courts and as such increasingly flouted by extension of the doctrine of Swift v. Tyson, while rights in equity were frequently defined by legislative enactment and as such known and respected by the federal courts. See, e.g., Clark v. Smith, 13 Pet. 195; Scott v. Neely, 140 U.S. 106; Louisville & Nashville R. Co. v. Western Union Co., 234 U.S. 369, 374-76; Pusey & Jones Co. v. Hanssen, supra at 498.

Partly because the States in the early days varied greatly in the manner in which equitable relief was afforded and in the extent to which it was available, see, e.g., Fisher, The Administration of Equity Through Common Law Forms (1885) 1 L.Q. Rev. 455; Woodruff, Chancery in Massachusetts (1889) 5 L.Q. Rev. 370; Laussat, Essay on Equity in Pennsylvania (1826), Congress provided that "the forms and modes of proceeding in suits . . . of equity" [105] would conform to the settled uses of courts of equity. § 2, 1 Stat. 275, 276, 28 U.S.C. § 723. But this enactment gave the federal courts no power that they would not have had in any event when courts were given "cognizance," by the first Judiciary Act, of suits "in equity." From the beginning there has been a good deal of talk in the cases that federal equity is a separate legal system. And so it is, properly understood. The suits in equity of which the federal courts have had "cognizance" ever since 1789 constituted the body of law which had been transplanted to this country from the English Court of Chancery. But this system of equity "derived its doctrines, as well as its powers, from its mode of giving relief." Langdell, Summary of Equity Pleading (1877) xxvii. In giving federal courts "cognizance" of equity suits in cases of diversity jurisdiction, Congress never gave, nor did the federal courts ever claim, the power to deny substantive rights created State law or to create substantive rights denied by State law.

This does not mean that whatever equitable remedy is available in a State court must be available in a diversity suit in a federal court, or conversely, that a federal court may not afford an equitable remedy not available in a State court. Equitable relief in a federal court is of course subject to restrictions: the suit must be within the traditional scope of equity as historically evolved in the English Court of Chancery, Payne v. Hook, 7 Wall. 425, 430; Atlas Ins. Co. v. Southern, Inc., 306 U.S. 563, 568; Sprague v. Ticonic Bank, 307 U.S. 161, 164-165; a plain, adequate and complete remedy at law must be wanting, § 16, 1 Stat. 73, 82, 28 U.S.C. § 384; explicit Congressional curtailment of equity powers must be respected, see, e.g., Norris-LaGuardia Act, 47 Stat. 70, 29 U.S.C. § 101 et seq.; the constitutional right to trial by jury cannot be evaded, Whitehead v. Shattuck, 138 U.S. 146. That a State may authorize its courts to give equitable relief unhampered [106] by any or all such restrictions cannot remove these fetters from the federal courts. See Clark v. Smith, supra at 203; Broderick's Will, 21 Wall. 503, 519-20; Louisville & Nashville R. Co. v. Western Union Co., supra at 376; Henrietta Mills v. Rutherford Co., 281 U.S. 121, 127-28; Atlas Ins. Co. v. Southern, Inc., supra at 568-70. State law cannot define the remedies which a federal court must give simply because a federal court in diversity jurisdiction is available as an alternative tribunal to the State's courts.^[3] Contrariwise, a federal court may afford an equitable remedy for a substantive right recognized by a State even though a State court cannot give it. Whatever contradiction or confusion may be produced by a medley of judicial phrases severed from their environment, the body of adjudications concerning equitable relief in diversity cases leaves no doubt that the federal courts enforced State-created substantive rights if the mode of proceeding and remedy were consonant with the traditional body of equitable remedies, practice and procedure, and in so doing [107] they were enforcing rights created by the States and not arising under any inherent or statutory federal law.^[4]

Inevitably, therefore, the principle of Erie R. Co. v. Tompkins, an action at law, was promptly applied to a suit in equity. Ruhlin v. N.Y. Life Ins. Co., 304 U.S. 202.

And so this case reduces itself to the narrow question whether, when no recovery could be had in a State court because the action is barred by the statute of limitations, a federal court in equity can take cognizance of the suit because there is diversity of citizenship between the parties. Is the outlawry, according to State law, of a claim created by the States a matter of "substantive rights" to be respected by a federal court of equity when that court's jurisdiction is dependent on the fact that there is a State-created [108] right, or is such statute of "a mere remedial character," Henrietta Mills v. Rutherford Co., supra at 128, which a federal court may disregard?

Matters of "substance" and matters of "procedure" are much talked about in the books as though they defined a great divide cutting across the whole domain of law. But, of course, "substance" and "procedure" are the same key-words to very different problems. Neither "substance" nor "procedure" represents the same invariants. Each implies different variables depending upon the particular problem for which it is used. See Home Ins. Co. v. Dick, 281 U.S. 397, 409. And the different problems are only distantly related at best, for the terms are in common use in connection with situations turning on such different considerations as those that are relevant to questions pertaining to ex post facto legislation, the impairment of the obligations of contract, the enforcement of federal rights in the State courts and the multitudinous phases of the conflict of laws. See, e.g., American Railway Express Co. v. Levee, 263 U.S. 19, 21; Davis v. Wechsler, 263 U.S. 22, 24-25; Worthen Co. v. Kavanaugh, 295 U.S. 56, 60; Garrett v. Moore-McCormack Co., 317 U.S. 239, 248-49; and see Tunks, Categorization and Federalism: "Substance" and "Procedure" After Erie Railroad v. Tompkins (1939) 34 Ill. L. Rev. 271, 274-276; Cook, Logical and Legal Bases of Conflict of Laws (1942) 163-165.

Here we are dealing with a right to recover derived not from the United States but from one of the States. When, because the plaintiff happens to be a non-resident, such a right is enforceable in a federal as well as in a State court, the forms and mode of enforcing the right may at times, naturally enough, vary because the two judicial systems are not identic. But since a federal court adjudicating a State-created right solely because of the diversity of citizenship of the parties is for that purpose, in effect, only another court of the State, it cannot afford recovery [109] if the right to recover is made unavailable by the State nor can it substantially affect the enforcement of the right as given by the State.

And so the question is not whether a statute of limitations is deemed a matter of "procedure" in some sense. The question is whether such a statute concerns merely the manner and the means by which a right to recover, as recognized by the State, is enforced, or whether such statutory limitation is a matter of substance in the aspect that alone is relevant to our problem, namely, does it significantly affect the result of a litigation for a federal court to disregard a law of a State that would be controlling in an action upon the same claim by the same parties in a State court?

It is therefore immaterial whether statutes of limitation are characterized either as "substantive" or "procedural" in State court opinions in any use of those terms unrelated to the specific issue before us. Erie R. Co. v. Tompkins was not an endeavor to formulate scientific legal terminology. It expressed a policy that touches vitally the proper distribution of judicial power between State and federal courts. In essence, the intent of that decision was to insure that, in all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court. The nub of the policy that underlies Erie R. Co. v. Tompkins is that for the same transaction the accident of a suit by a non-resident litigant in a federal court instead of in a State court a block away should not lead to a substantially different result. And so, putting to one side abstractions regarding "substance" and "procedure," we have held that in diversity cases the federal courts must follow the law of the State as to burden of proof, Cities Service Co. v. Dunlap, 308 U.S. 208, as to conflict of laws, Klaxon Co. v. Stentor Co., [110] 313 U.S. 487, as to contributory negligence, Palmer v. Hoffman, 318 U.S. 109, 117. And see Sampson v. Channell, 110 F.2d 754. Erie R. Co. v. Tompkins has been applied with an eye alert to essentials in avoiding disregard of State law in diversity cases in the federal courts. A policy so important to our federalism must be kept free from entanglements with analytical or terminological niceties.

Plainly enough, a statute that would completely bar recovery in a suit if brought in a State court bears on a State-created right vitally and not merely formally or negligibly. As to consequences that so intimately affect recovery or non-recovery a federal court in a diversity case should follow State law. See Morgan, Choice of Law Governing Proof (1944) 58 Harv. L. Rev. 153, 155-158. The fact that under New York law a statute of limitations might be lengthened or shortened, that a security may be foreclosed though the debt be barred, that a barred debt may be used as a set-off, are all matters of local law properly to be respected by federal courts sitting in New York when their incidence comes into play there.^[5] Such particular rules of local law, however, do not in the slightest change the crucial consideration that if a plea of the statute of limitations would bar recovery in a State court, a federal court ought not to afford recovery.

Prior to Erie R. Co. v. Tompkins it was not necessary, as we have indicated, to make the critical analysis required by the doctrine of that case of the nature of jurisdiction of the federal courts in diversity cases. But even before Erie R. Co. v. Tompkins, federal courts relied on statutes of limitations of the States in which they sat. In suits at [111] law State limitations statutes were held to be "rules of decision" within § 34 of the Judiciary Act of 1789 and as such applied in "trials at common law." M'Cluny v. Sullivan, 3 Pet. 270; Bank of Alabama v. Dalton, 9 How. 522; Leffingwell v. Warren, 2 Black 599; Bauserman v. Blunt, 147 U.S. 647. While there was talk of freedom of equity from such State statutes of limitations, the cases generally refused recovery where suit was barred in a like situation in the State courts, even if only by way of analogy. See, e.g., Godden v. Kimmell, 99 U.S. 201; Alsop v. Riker, 155 U.S. 448; Benedict v. City of New York, 250 U.S. 321, 327-328. However in Kirby v. Lake Shore & M.S.R. Co., 120 U.S. 130, the Court disregarded a State statute of limitations where the Court deemed it inequitable to apply it.

To make an exception to Erie R. Co. v. Tompkins on the equity side of a federal court is to reject the considerations of policy which, after long travail, led to that decision. Judge Augustus N. Hand thus summarized below the fatal objection to such inroad upon Erie R. Co. v. Tompkins: "In my opinion it would be a mischievous practice to disregard state statutes of limitation whenever federal courts think that the result of adopting them may be inequitable. Such procedure would promote the choice of United States rather than of state courts in order to gain the advantage of different laws. The main foundation for the criticism of Swift v. Tyson was that a litigant in cases where federal jurisdiction is based only on diverse citizenship may obtain a more favorable decision by suing in the United States courts." 143 F.2d 503, 529, 531.

Diversity jurisdiction is founded on assurance to non-resident litigants of courts free from susceptibility to potential local bias. The Framers of the Constitution, according to Marshall, entertained "apprehensions" lest distant suitors be subjected to local bias in State courts, or, at least, viewed with "indulgence the possible fears and apprehensions" of such suitors. Bank of the United States [112] v. Deveaux, 5 Cranch 61, 87. And so Congress afforded out-of-State litigants another tribunal, not another body of law. The operation of a double system of conflicting laws in the same State is plainly hostile to the reign of law. Certainly, the fortuitous circumstance of residence out of a State of one of the parties to a litigation ought not to give rise to a discrimination against others equally concerned but locally resident. The source of substantive rights enforced by a federal court under diversity jurisdiction, it cannot be said too often, is the law of the States. Whenever that law is authoritatively declared by a State, whether its voice be the legislature or its highest court, such law ought to govern in litigation founded on that law, whether the forum of application is a State or a federal court and whether the remedies be sought at law or may be had in equity.

Dicta may be cited characterizing equity as an independent body of law. To the extent that we have indicated, it is. But insofar as these general observations go beyond that, they merely reflect notions that have been replaced by a sharper analysis of what federal courts do when they enforce rights that have no federal origin. And so, before the true source of law that is applied by the federal courts under diversity jurisdiction was fully explored, some things were said that would not now be said. But nothing that was decided, unless it be the Kirby case, needs to be rejected.

The judgment is reversed and the case is remanded for proceedings not inconsistent with this opinion.

So ordered.

MR. JUSTICE ROBERTS and MR. JUSTICE DOUGLAS took no part in the consideration or decision of this case.

MR. JUSTICE RUTLEDGE.

I dissent. If the policy of judicial conservatism were to be followed in this case, which forbids deciding constitutional [113] and other important questions hypothetically or prematurely, I would favor remanding the cause to the Court of Appeals for determination of the narrow and comparatively minor question whether, under the applicable local law, the cause of action has been barred by lapse of time. That question has not been decided,^[6] may be determined in respondent's favor, and in that event the important question affecting federal judicial power now resolved, in a manner contrary to all prior decision here, will have been determined without substantial ultimate effect upon the litigation.^[7]

But the Court conceives itself confronted with the necessity for making that determination and in doing so overturns a rule of decision which has prevailed in the federal courts from almost the beginning. I am unable to assent to that decision, for reasons stated by the Court of Appeals^[8] and others to be mentioned only briefly. One may give full adherence to the rule of Erie R. Co. v. Tompkins, 304 U.S. 64, and its extension to cases in equity in so far as they affect clearly substantive rights, without conceding or assuming that the long tradition, both federal and state, which regards statutes of limitations as falling within the category of remedial rather than substantive law, necessarily must be ruled in the same way; and without conceding further that only a different jurisprudential climate or a kind of "brooding omnipresence in the sky" [114] has dictated the hitherto unvaried policy of the federal courts in their general attitude toward the strict application of local statutes of limitations in equity causes.

If any characteristic of equity jurisprudence has descended unbrokenly from and within "the traditional scope of equity as historically evolved in the English Court of Chancery," it is that statutes of limitations, often in terms applying only to actions at law, have never been deemed to be rigidly applicable as absolute barriers to suits in equity as they are to actions at law.^[9] That tradition, it would seem, should be regarded as having been incorporated in the various Acts of Congress which have conferred equity jurisdiction upon the federal courts. So incorporated, it has been reaffirmed repeatedly by the decisions of this and other courts.^[10] It is now excised from those Acts. If there is to be excision, Congress, not this Court, should make it.

Moreover, the decision of today does not in so many words rule that Congress could not authorize the federal courts to administer equitable relief in accordance with the substantive rights of the parties, notwithstanding state courts had been forbidden by local statutes of limitations to do so. Nevertheless the implication to that effect seems strong, in view of the reliance upon Erie R. Co. v. Tompkins.^[11] In any event, the question looms more largely in the issues than the Court's opinion appears to [115] make it. For if legislative acquiescence in long-established judicial construction can make it part of a statute, it has done so in this instance. More is at stake in the implications of the decision, if not in the words of the opinion, than simply bringing federal and local law into accord upon matters clearly and exclusively within the constitutional power of the state to determine. It is one thing to require that kind of an accord in diversity cases when the question is merely whether the federal court must follow the law of the state as to burden of proof, Cities Service Co. v. Dunlap, 308 U.S. 208; contributory negligence, Palmer v. Hoffman, 318 U.S. 109, 117; or perhaps in application of the so-called parol evidence rule. These ordinarily involve matters of substantive law, though nominated in terms of procedure. But in some instances their application may lie along the border between procedure or remedy and substance, where the one may or may not be in fact but another name for the other. It is exactly in this borderland, where procedural or remedial rights may or may not have the effect of determining the substantive ones completely, that caution is required in extending the rule of the Erie case by the very rule itself.

The words "substantive" and "procedural" or "remedial" are not talismanic. Merely calling a legal question by one or the other does not resolve it otherwise than as a purely authoritarian performance. But they have come to designate in a broad way large and distinctive legal domains within the greater one of the law and to mark, though often indistinctly or with overlapping limits, many divides between such regions.

One of these historically has been the divide between the substantive law and the procedural or remedial law to be applied by the federal courts in diversity cases, a division sharpened but not wiped out by Erie R. Co. v. Tompkins and subsequent decisions extending the scope [116] of its ruling. The large division between adjective law and substantive law still remains, to divide the power of Congress from that of the states and consequently to determine the power of the federal courts to apply federal law or state law in diversity matters.

This division, like others drawn by the broad allocation of adjective or remedial and substantive, has areas of admixture of these two aspects of the law. In these areas whether a particular situation or issue presents one aspect or the other depends upon how one looks at the matter. As form cannot always be separated from substance in a work of art, so adjective or remedial aspects cannot be parted entirely from substantive ones in these borderland regions.

Whenever this integration or admixture prevails in a substantial measure, so that a clean break cannot be made, there is danger either of nullifying the power of Congress to control not only how the federal courts may act, but what they may do by way of affording remedies, or of usurping that function, if the Erie doctrine is to be expanded judicially to include such situations to the utmost extent.

It may be true that if the matter were wholly fresh the barring of rights in equity by statutes of limitation would seem to partake more of the substantive than of the remedial phase of law. But the matter is not fresh and it is not without room for debate. A long tradition, in the states and here, as well as in the common law which antedated both state and federal law, has emphasized the remedial character of statutes of limitations, more especially in application to equity causes, on many kinds of issues requiring differentiation of such matters from more clearly and exclusively substantive ones. We have recently reaffirmed the distinction in relation to the power of a state to change its laws with retroactive effect, giving renewed vigor if not new life to Campbell v. Holt, 115 [117] U.S. 620. Chase Securities Corp. v. Donaldson, 325 U.S. 304. Similar, though of course not identical, arguments were advanced in that case to bring about departure from the long-established rule, but without success. The tradition now in question is equally long and unvaried. I cannot say the tradition is clearly wrong in this case more than in that. Nor can I say, as was said in the Erie case, that the matter is beyond the power of Congress to control. If that be conceded, I think Congress should make the change if it is to be made. The Erie decision was rendered in 1938. Seven years have passed without action by Congress to extend the rule to these matters. That is long enough to justify the conclusion that Congress also regards them as not governed by Erie and as wishing to make no change. This should be reason enough for leaving the matter at rest until it decides to act.

Finally, this case arises from what are in fact if not in law interstate transactions.^[12] It involves the rights of security holders in relation to securities which were distributed not in New York or Ohio alone but widely throughout the country. They are the kind of rights which Congress acted to safeguard when it adopted the Securities and Exchange legislation.^[13] Specific provisions of that legislation are not involved in this litigation. The broad policies underlying it may be involved or affected, [118] namely, by the existence of adequate federal remedies, whether judicial or legislative, for the protection of security holders against the misconduct of issuers or against the breach of rights by trustees. Even though the basic rights may be controlled by state law, in such situations the question is often a difficult one whether the law of one state or another applies; and this is true not only of rights clearly substantive but also of those variously characterized as procedural or remedial and substantive which involve the application of statutes of limitations.

Applicable statutes of limitations in state tribunals are not always the ones which would apply if suit were instituted in the courts of the state which creates the substantive rights for which enforcement is sought. The state of the forum is free to apply its own period of limitations, regardless of whether the state originating the right has barred suit upon it.^[14] Whether or not the action will be held to be barred depends therefore not upon the law of the state which creates the substantive right, but upon the law of the state where suit may be brought. This in turn will depend upon where it may be possible to secure service of process, and thus jurisdiction of the person of the defendant. It may be therefore that because of the plaintiff's inability to find the defendant in the jurisdiction which creates his substantive right, he will be foreclosed of remedy by the sheer necessity of going to the haven of refuge within which the defendant confines its "presence" for jurisdictional purposes. The law of the latter may bar the suit even though suit still would be allowed under the law of the state creating the substantive right.

It is not clear whether today's decision puts it into the power of corporate trustees, by confining their jurisdictional "presence" to states which allow their courts to give equitable remedies only within short periods of time, to [119] defeat the purpose and intent of the law of the state creating the substantive right. If so, the "right" remains alive, with full-fledged remedy, by the law of its origin, and because enforcement must be had in another state, which affords refuge against it, the remedy and with it the right are nullified. I doubt that the Constitution of the United States requires this, or that the Judiciary Acts permit it. A good case can be made, indeed has been made, that the diversity jurisdiction was created to afford protection against exactly this sort of nullifying state legislation.^[15]

In my judgment this furnishes added reason for leaving any change, if one is to be made, to the judgment of Congress. The next step may well be to say that in applying the doctrine of laches a federal court must surrender its own judgment and attempt to find out what a state court sitting a block away would do with that notoriously amorphous doctrine.

MR. JUSTICE MURPHY joins in this opinion.

[1] In Russell v. Southard, 12 How. 139, 147, Mr. Justice Curtis, refusing to be bound by Kentucky law barring the reception of oral evidence to show that an absolute bill of sale was in reality a mortgage, declared that "upon the principles of general equity jurisprudence, this court must be governed by its own views of those principles." To support this statement, he cited, among others, Robinson v. Campbell, 3 Wheat. 212, Boyle v. Zacharie and Turner, 6 Pet. 648, and Swift v. Tyson, supra. This commingling of law and equity cases indicates that the same views governed both and that Swift v. Tyson was merely another expression of the ideas put forth in the equity cases.

[2] In Bank of Hamilton v. Dudley's Lessee, 2 Pet. 492, 525, Chief Justice Marshall, in discussing the applicability of Ohio occupant law as "rules of decision" under § 34, said, "The laws of the states, and the occupant law, like others, would be so regarded, independent of that special enactment. . . ." It is interesting to note that this judicial pronouncement corresponds to the views John Marshall expressed in the Virginia Convention called to ratify the Constitution. Responding to George Mason's question as to what law would apply in the federal courts in diversity cases, Marshall declared: "By the laws of which state will it be determined? said he. By the laws of the state where the contract was made. According to those laws, and those only, can it be decided. Is this a novelty? No; it is a principle in the jurisprudence of this commonwealth." 3 Elliott's Debates, 556.

[3] In Pusey & Jones Co. v. Hanssen, supra, the Court had to decide whether a Delaware statute had created a new right appropriate for enforcement in accordance with traditional equity practice or whether the statute had merely given the Delaware Chancery Court a new kind of remedy. The statute authorized the Chancellor to appoint a receiver for an insolvent corporation upon the application of an unsecured simple contract creditor. Suit was brought in a federal equity court under diversity jurisdiction. Although traditional equity notions do not give a simple contract creditor an interest in the funds of an insolvent debtor, the State may, as this Court recognized, create such an interest. When the State has done that, whatever remedies are consonant with the practice of equity courts in effectuating creditor's rights come into play. Pusey & Jones Co. v. Hanssen, supra, did not question that in the case of diversity jurisdiction the States create the obligation for which relief is sought. But the Court construed the Delaware statute merely to extend the power to an equity court to appoint a receiver on the application of an ordinary contract creditor. By conferring new discretionary authority upon its equity court, Delaware could not modify the traditional equity rule in the federal courts that only someone with a defined interest in the estate of an insolvent person, e.g., a judgment creditor, can protect that interest through receivership. But the Court recognized that if the Delaware statute had been one not regulating the powers of the Chancery Court of Delaware but creating a new interest in a contract creditor, the federal court would have had power to grant a receivership at the behest of such a simple contract creditor, as much so as in the case of a secured creditor. See Mackenzie Oil Co. v. Omar Oil & Gas Co., 14 Del. Ch. 36, 45, 120 A. 852, for Delaware's view as to the nature of the Delaware statute.

[4] "It is true that where a state statute creates a new equitable right of a substantive character, which can be enforced by proceedings in conformity with the pleadings and practice appropriate to a court of equity, such enforcement may be had in a Federal court provided a ground exists for invoking the Federal jurisdiction. . . . But the enforcement in the Federal courts of new equitable rights created by States is subject to the qualification that such enforcement must not impair any right conferred, or conflict with any inhibition imposed, by the Constitution or laws of the United States. . . . Whatever uncertainty may have arisen because of expressions which did not fully accord with the rule as thus stated, the distinction, with respect to the effect of state legislation, has come to be clearly established between substantive and remedial rights." Henrietta Mills v. Rutherford Co., supra at 127-128.

[5] See, e.g., Hulbert v. Clark, 128 N.Y. 295, 28 N.E. 638; House v. Carr, 185 N.Y. 453, 78 N.E. 171; Lightfoot v. Davis, 198 N.Y. 261, 91 N.E. 582; Davidson v. Witthaus, 106 App. Div. 182, 94 N.Y.S. 428; Matter of Ewald, 174 Misc. 939, 22 N.Y.S.2d 299. The statute may be waived, Peoples Trust Co. v. O'Neil, 273 N.Y. 312, 316, 237 N.Y.S. 180, and must be pleaded, Dunkum v. Maceck Building Corp., 227 App. Div. 230, 7 N.E.2d 244.

[6] The Court of Appeals only assumed arguendo that the local statute of limitations had terminated the right to sue. 143 F.2d 503.

[7] An inferior court, of course, is free to select one or more of several available grounds upon which to rest its decision; and generally, on review here, our function should be performed by passing upon the grounds chosen. But there are circumstances in which it is proper to vacate the judgment and remand the cause for consideration of other issues presented. Cf. e.g., the recent instance of Herb v. Pitcairn, 324 U.S. 117; 325 U.S. 77.

[8] 143 F.2d 503. The court's opinion reviews at length the unbroken course of decision now overturned.

[9] Michoud v. Girod, 4 How. 503, 561; Meader v. Norton, 11 Wall. 442; Bailey v. Glover, 21 Wall. 342, 348; Kirby v. Lake Shore & M.S.R. Co., 120 U.S. 130.

[10] See the authorities cited and discussed, 143 F.2d 503, 522-524. See also Committee for Holders v. Kent, 143 F.2d 684, 687; Overfield v. Pennroad Corp., 146 F.2d 889, 901, 921-923.

[11] In the Erie case the Court said: "If only a question of statutory construction were involved, we should not be prepared to abandon a doctrine so widely applied throughout nearly a century. But the unconstitutionality of the course pursued has now been made clear and compels us to do so." 304 U.S. 64, 77-78.

[12] Reference is made to the opinion of the Court of Appeals for a detailed statement of the nature and scope of the intricate and elaborate financial transactions, involving the distribution of $30,000,000 worth of securities, apparently in many states, including Ohio and New York, and rights growing out of the distribution. 143 F.2d at 505 et seq. See also Eastman v. Morgan, 43 F. Supp. 637, aff'd sub nom. Hackner v. Morgan, 130 F.2d 300, cert. denied, 317 U.S. 691.

[13] Cf. S. Rep. No. 714, 77th Cong., 1st Sess., Additional Report of Committee on Interstate Commerce pursuant to S. Res. 71, 74th Cong., pts. 1-4. See also Stock Exchange Practices, Hearings before Committee on Banking and Currency on S. Res. 84, 72d Cong. and S. Res. 56 and 97, 73d Cong.

[14] 3 Beale, Conflict of Laws (1935 ed.) 1620, 1621; Goodrich, Conflict of Laws (1938 ed.) 201, 202.

[15] Frankfurter, Distribution of Judicial Power Between United States and State Courts (1928) 13 Corn. L.Q. 499, 520. See Corwin, The Progress of Constitutional Theory (1925) 30 Am. Hist. Rev. 511, 514. See also Friendly, The Historic Basis of Diversity Jurisdiction (1928) 41 Harv. L. Rev. 483, 495-497. That the motivating desire was or may have been to protect creditors who were men of business does not make the policy less applicable when the creditor is a customer of such men.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT.

Albert P. Zabin argued the cause for petitioner, pro hac vice, by special leave of Court. With him on the brief was George Welch.

James J. Fitzpatrick argued the cause for respondent. On the brief were Alfred E. LoPresti and James T. Connolly.

[461] MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.

The question to be decided is whether, in a civil action where the jurisdiction of the United States district court is based upon diversity of citizenship between the parties, service of process shall be made in the manner prescribed by state law or that set forth in Rule 4 (d) (1) of the Federal Rules of Civil Procedure.

On February 6, 1963, petitioner, a citizen of Ohio, filed her complaint in the District Court for the District of Massachusetts, claiming damages in excess of $10,000 for personal injuries resulting from an automobile accident in South Carolina, allegedly caused by the negligence of one Louise Plumer Osgood, a Massachusetts citizen deceased at the time of the filing of the complaint. Respondent, Mrs. Osgood's executor and also a Massachusetts citizen, was named as defendant. On February 8, service was made by leaving copies of the summons and the complaint with respondent's wife at his residence, concededly in compliance with Rule 4 (d) (1), which provides:

"The summons and complaint shall be served together. The plaintiff shall furnish the person making service with such copies as are necessary. Service shall be made as follows:

"(1) Upon an individual other than an infant or an incompetent person, by delivering a copy of the summons and of the complaint to him personally or by leaving copies thereof at his dwelling house or usual place of abode with some person of suitable age and discretion then residing therein . . . ."

Respondent filed his answer on February 26, alleging, inter alia, that the action could not be maintained because it had been brought "contrary to and in violation of the [462] provisions of Massachusetts General Laws (Ter. Ed.) Chapter 197, Section 9." That section provides:

"Except as provided in this chapter, an executor or administrator shall not be held to answer to an action by a creditor of the deceased which is not commenced within one year from the time of his giving bond for the performance of his trust, or to such an action which is commenced within said year unless before the expiration thereof the writ in such action has been served by delivery in hand upon such executor or administrator or service thereof accepted by him or a notice stating the name of the estate, the name and address of the creditor, the amount of the claim and the court in which the action has been brought has been filed in the proper registry of probate. . . ." Mass. Gen. Laws Ann., c. 197, § 9 (1958).

On October 17, 1963, the District Court granted respondent's motion for summary judgment, citing Ragan v. Merchants Transfer Co., 337 U. S. 530, and Guaranty Trust Co. v. York, 326 U. S. 99, in support of its conclusion that the adequacy of the service was to be measured by § 9, with which, the court held, petitioner had not complied. On appeal, petitioner admitted noncompliance with § 9, but argued that Rule 4 (d) (1) defines the method by which service of process is to be effected in diversity actions. The Court of Appeals for the First Circuit, finding that "[r]elatively recent amendments [to § 9] evince a clear legislative purpose to require personal notification within the year,"^[1] concluded that the conflict of state [463] and federal rules was over "a substantive rather than a procedural matter," and unanimously affirmed. 331 F. 2d 157. Because of the threat to the goal of uniformity of federal procedure posed by the decision below,^[2] we granted certiorari, 379 U. S. 813.

We conclude that the adoption of Rule 4 (d) (1), designed to control service of process in diversity actions,^[3] [464] neither exceeded the congressional mandate embodied in the Rules Enabling Act nor transgressed constitutional bounds, and that the Rule is therefore the standard against which the District Court should have measured the adequacy of the service. Accordingly, we reverse the decision of the Court of Appeals.

The Rules Enabling Act, 28 U. S. C. § 2072 (1958 ed.), provides, in pertinent part:

"The Supreme Court shall have the power to prescribe, by general rules, the forms of process, writs, pleadings, and motions, and the practice and procedure of the district courts of the United States in civil actions.

"Such rules shall not abridge, enlarge or modify any substantive right and shall preserve the right of trial by jury . . . ."

Under the cases construing the scope of the Enabling Act, Rule 4 (d) (1) clearly passes muster. Prescribing the manner in which a defendant is to be notified that a suit has been instituted against him, it relates to the "practice and procedure of the district courts." Cf. Insurance Co. v. Bangs, 103 U. S. 435, 439.

"The test must be whether a rule really regulates procedure, —the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for disregard or infraction of them." Sibbach v. Wilson & Co., 312 U. S. 1, 14.^[4]

In Mississippi Pub. Corp. v. Murphree, 326 U. S. 438, this Court upheld Rule 4 (f), which permits service of a summons anywhere within the State (and not merely the district) in which a district court sits:

"We think that Rule 4 (f) is in harmony with the Enabling Act . . . . Undoubtedly most alterations [465] of the rules of practice and procedure may and often do affect the rights of litigants. Congress' prohibition of any alteration of substantive rights of litigants was obviously not addressed to such incidental effects as necessarily attend the adoption of the prescribed new rules of procedure upon the rights of litigants who, agreeably to rules of practice and procedure, have been brought before a court authorized to determine their rights. Sibbach v. Wilson & Co., 312 U. S. 1, 11-14. The fact that the application of Rule 4 (f) will operate to subject petitioner's rights to adjudication by the district court for northern Mississippi will undoubtedly affect those rights. But it does not operate to abridge, enlarge or modify the rules of decision by which that court will adjudicate its rights." Id., at 445-446.

Thus were there no conflicting state procedure, Rule 4 (d) (1) would clearly control. National Rental v. Szukhent, 375 U. S. 311, 316. However, respondent, focusing on the contrary Massachusetts rule, calls to the Court's attention another line of cases, a line which—like the Federal Rules—had its birth in 1938. Erie R. Co. v. Tompkins, 304 U. S. 64, overruling Swift v. Tyson, 16 Pet. 1, held that federal courts sitting in diversity cases, when deciding questions of "substantive" law, are bound by state court decisions as well as state statutes. The broad command of Erie was therefore identical to that of the Enabling Act: federal courts are to apply state substantive law and federal procedural law. However, as subsequent cases sharpened the distinction between substance and procedure, the line of cases following Erie diverged markedly from the line construing the Enabling Act. Guaranty Trust Co. v. York, 326 U. S. 99, made it clear that Erie-type problems were not to be solved by [466] reference to any traditional or common-sense substance-procedure distinction:

"And so the question is not whether a statute of limitations is deemed a matter of `procedure' in some sense. The question is . . . does it significantly affect the result of a litigation for a federal court to disregard a law of a State that would be controlling in an action upon the same claim by the same parties in a State court?" 326 U. S., at 109.^[5]

Respondent, by placing primary reliance on York and Ragan, suggests that the Erie doctrine acts as a check on the Federal Rules of Civil Procedure, that despite the clear command of Rule 4 (d) (1), Erie and its progeny demand the application of the Massachusetts rule. Reduced to essentials, the argument is: (1) Erie, as refined in York, demands that federal courts apply state law whenever application of federal law in its stead will alter the outcome of the case. (2) In this case, a determination that the Massachusetts service requirements obtain will result in immediate victory for respondent. If, on the other hand, it should be held that Rule 4 (d) (1) is applicable, the litigation will continue, with possible victory for petitioner. (3) Therefore, Erie demands application of the Massachusetts rule. The syllogism possesses an appealing simplicity, but is for several reasons invalid.

In the first place, it is doubtful that, even if there were no Federal Rule making it clear that in-hand service is not required in diversity actions, the Erie rule would have obligated the District Court to follow the Massachusetts procedure. "Outcome-determination" analysis was never [467] intended to serve as a talisman. Byrd v. Blue Ridge Cooperative, 356 U. S. 525, 537. Indeed, the message of York itself is that choices between state and federal law are to be made not by application of any automatic, "litmus paper" criterion, but rather by reference to the policies underlying the Erie rule. Guaranty Trust Co. v. York,supra, at 108-112.^[6]

The Erie rule is rooted in part in a realization that it would be unfair for the character or result of a litigation materially to differ because the suit had been brought in a federal court.

"Diversity of citizenship jurisdiction was conferred in order to prevent apprehended discrimination in state courts against those not citizens of the State. Swift v. Tyson introduced grave discrimination by non-citizens against citizens. It made rights enjoyed under the unwritten `general law' vary according to whether enforcement was sought in the state or in the federal court; and the privilege of selecting the court in which the right should be determined was conferred upon the non-citizen. Thus, the doctrine rendered impossible equal protection of the law." Erie R. Co. v. Tompkins, supra, at 74-75.^[7]

The decision was also in part a reaction to the practice of "forum-shopping" which had grown up in response to the rule of Swift v. Tyson. 304 U. S., at 73-74.^[8] That the York test was an attempt to effectuate these policies is demonstrated by the fact that the opinion framed the inquiry in terms of "substantial" variations between state [468] and federal litigation. 326 U. S., at 109. Not only are nonsubstantial, or trivial, variations not likely to raise the sort of equal protection problems which troubled the Court in Erie; they are also unlikely to influence the choice of a forum. The "outcome-determination" test therefore cannot be read without reference to the twin aims of the Erie rule: discouragement of forum-shopping and avoidance of inequitable administration of the laws.^[9]

The difference between the conclusion that the Massachusetts rule is applicable, and the conclusion that it is not, is of course at this point "outcome-determinative" in the sense that if we hold the state rule to apply, respondent prevails, whereas if we hold that Rule 4 (d) (1) governs, the litigation will continue. But in this sense every procedural variation is "outcome-determinative." For example, having brought suit in a federal court, a plaintiff cannot then insist on the right to [469] file subsequent pleadings in accord with the time limits applicable in the state courts, even though enforcement of the federal timetable will, if he continues to insist that he must meet only the state time limit, result in determination of the controversy against him. So it is here. Though choice of the federal or state rule will at this point have a marked effect upon the outcome of the litigation, the difference between the two rules would be of scant, if any, relevance to the choice of a forum. Petitioner, in choosing her forum, was not presented with a situation where application of the state rule would wholly bar recovery;^[10] rather, adherence to the state rule would have resulted only in altering the way in which process was served.^[11] Moreover, it is difficult to argue that permitting service of defendant's wife to take the place of in-hand service of defendant himself alters the mode of enforcement of state-created rights in a fashion sufficiently "substantial" to raise the sort of equal protection problems to which the Erie opinion alluded.

There is, however, a more fundamental flaw in respondent's syllogism: the incorrect assumption that the rule of Erie R. Co. v. Tompkins constitutes the appropriate test [470] of the validity and therefore the applicability of a Federal Rule of Civil Procedure. The Erie rule has never been invoked to void a Federal Rule. It is true that there have been cases where this Court has held applicable a state rule in the face of an argument that the situation was governed by one of the Federal Rules. But the holding of each such case was not that Erie commanded displacement of a Federal Rule by an inconsistent state rule, but rather that the scope of the Federal Rule was not as broad as the losing party urged, and therefore, there being no Federal Rule which covered the point in dispute, Erie commanded the enforcement of state law.

"Respondent contends, in the first place, that the charge was correct because of the fact that Rule 8 (c) of the Rules of Civil Procedure makes contributory negligence an affirmative defense. We do not agree. Rule 8 (c) covers only the manner of pleading. The question of the burden of establishing contributory negligence is a question of local law which federal courts in diversity of citizenship cases (Erie R. Co. v. Tompkins, 304 U. S. 64) must apply." Palmer v. Hoffman, 318 U. S. 109, 117.^[12]

(Here, of course, the clash is unavoidable; Rule 4 (d) (1) says—implicitly, but with unmistakable clarity—that in-hand service is not required in federal courts.) At the same time, in cases adjudicating the validity of Federal Rules, we have not applied the York rule or other refinements of Erie, but have to this day continued to decide questions concerning the scope of the Enabling Act and the constitutionality of specific Federal Rules in light of [471] the distinction set forth in Sibbach. E. g., Schlagenhauf v. Holder, 379 U. S. 104.

Nor has the development of two separate lines of cases been inadvertent. The line between "substance" and "procedure" shifts as the legal context changes. "Each implies different variables depending upon the particular problem for which it is used." Guaranty Trust Co. v. York, supra, at 108; Cook, The Logical and Legal Bases of the Conflict of Laws, pp. 154-183 (1942). It is true that both the Enabling Act and the Erie rule say, roughly, that federal courts are to apply state "substantive" law and federal "procedural" law, but from that it need not follow that the tests are identical. For they were designed to control very different sorts of decisions. When a situation is covered by one of the Federal Rules, the question facing the court is a far cry from the typical, relatively unguided Erie choice: the court has been instructed to apply the Federal Rule, and can refuse to do so only if the Advisory Committee, this Court, and Congress erred in their prima facie judgment that the Rule in question transgresses neither the terms of the Enabling Act nor constitutional restrictions.^[13]

We are reminded by the Erie opinion^[14] that neither Congress nor the federal courts can, under the guise of formulating rules of decision for federal courts, fashion rules which are not supported by a grant of federal authority contained in Article I or some other section of the Constitution; in such areas state law must govern [472] because there can be no other law. But the opinion in Erie, which involved no Federal Rule and dealt with a question which was "substantive" in every traditional sense (whether the railroad owed a duty of care to Tompkins as a trespasser or a licensee), surely neither said nor implied that measures like Rule 4 (d) (1) are unconstitutional. For the constitutional provision for a federal court system (augmented by the Necessary and Proper Clause) carries with it congressional power to make rules governing the practice and pleading in those courts, which in turn includes a power to regulate matters which, though falling within the uncertain area between substance and procedure, are rationally capable of classification as either. Cf. M`Culloch v. Maryland, 4 Wheat. 316, 421. Neither York nor the cases following it ever suggested that the rule there laid down for coping with situations where no Federal Rule applies is coextensive with the limitation on Congress to which Erie had adverted. Although this Court has never before been confronted with a case where the applicable Federal Rule is in direct collision with the law of the relevant State,^[15] courts of appeals faced with such clashes have rightly discerned the implications of our decisions.

"One of the shaping purposes of the Federal Rules is to bring about uniformity in the federal courts by getting away from local rules. This is especially true of matters which relate to the administration of legal proceedings, an area in which federal courts [473] have traditionally exerted strong inherent power, completely aside from the powers Congress expressly conferred in the Rules. The purpose of the Erie doctrine, even as extended in York and Ragan, was never to bottle up federal courts with `outcome-determinative' and `integral-relations' stoppers— when there are `affirmative countervailing [federal] considerations' and when there is a Congressional mandate (the Rules) supported by constitutional authority." Lumbermen's Mutual Casualty Co. v. Wright, 322 F. 2d 759, 764 (C. A. 5th Cir. 1963).^[16]

Erie and its offspring cast no doubt on the long-recognized power of Congress to prescribe housekeeping rules for federal courts even though some of those rules will inevitably differ from comparable state rules. Cf. Herron v. Southern Pacific Co., 283 U. S. 91. "When, because the plaintiff happens to be a non-resident, such a right is enforceable in a federal as well as in a State court, the forms and mode of enforcing the right may at times, naturally enough, vary because the two judicial systems are not identic." Guaranty Trust Co. v. York, supra, at 108; Cohen v. Beneficial Loan Corp., 337 U. S. 541, 555. Thus, though a court, in measuring a Federal Rule against the standards contained in the Enabling Act and the Constitution, 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, Sibbach v. Wilson & Co., supra, at 13-14, it cannot be forgotten that the Erie rule, and the guidelines suggested in York, were created to serve another purpose altogether. To hold that a Federal Rule of Civil Procedure must cease to function whenever it alters the mode of enforcing state-created rights would be to disembowel [474] either the Constitution's grant of power over federal procedure or Congress' attempt to exercise that power in the Enabling Act.^[17] Rule 4 (d) (1) is valid and controls the instant case.

Reversed.

MR. JUSTICE BLACK concurs in the result.

MR. JUSTICE HARLAN, concurring.

It is unquestionably true that up to now Erie and the cases following it have not succeeded in articulating a workable doctrine governing choice of law in diversity actions. I respect the Court's effort to clarify the situation in today's opinion. However, in doing so I think it has misconceived the constitutional premises of Erie and has failed to deal adequately with those past decisions upon which the courts below relied.

Erie was something more than an opinion which worried about "forum-shopping and avoidance of inequitable administration of the laws," ante, p. 468, although to be sure these were important elements of the decision. I have always regarded that decision as one of the modern cornerstones of our federalism, expressing policies that profoundly touch the allocation of judicial power between the state and federal systems. Erie recognized that there should not be two conflicting systems of law controlling the primary activity of citizens, for such alternative governing authority must necessarily give rise to a debilitating uncertainty in the planning of everyday affairs.^[18] And it recognized that the scheme of our Constitution envisions an allocation of law-making functions between state and federal legislative processes which is undercut if the federal judiciary can make substantive law affecting [475] state affairs beyond the bounds of congressional legislative powers in this regard. Thus, in diversity cases Erie commands that it be the state law governing primary private activity which prevails.

The shorthand formulations which have appeared in some past decisions are prone to carry untoward results that frequently arise from oversimplification. The Court is quite right in stating that the "outcome-determinative" test of Guaranty Trust Co. v. York, 326 U. S. 99, if taken literally, proves too much, for any rule, no matter how clearly "procedural," can affect the outcome of litigation if it is not obeyed. In turning from the "outcome" test of York back to the unadorned forum-shopping rationale of Erie, however, the Court falls prey to like over-simplification, for a simple forum-shopping rule also proves too much; litigants often choose a federal forum merely to obtain what they consider the advantages of the Federal Rules of Civil Procedure or to try their cases before a supposedly more favorable judge. To my mind the proper line of approach in determining whether to apply a state or a federal rule, whether "substantive" or "procedural," is to stay close to basic principles by inquiring if the choice of rule would substantially affect those primary decisions respecting human conduct which our constitutional system leaves to state regulation.^[19] If so, Erie and the Constitution require that the state rule prevail, even in the face of a conflicting federal rule.

The Court weakens, if indeed it does not submerge, this basic principle by finding, in effect, a grant of substantive legislative power in the constitutional provision for a federal [476] court system (compare Swift v. Tyson, 16 Pet. 1), and through it, setting up the Federal Rules as a body of law inviolate.

"[T]he constitutional provision for a federal court system . . . carries with it congressional power . . . to regulate matters which, though falling within the uncertain area between substance and procedure, are rationally capable of classification as either." Ante, p. 472. (Emphasis supplied.)

So long as a reasonable man could characterize any duly adopted federal rule as "procedural," the Court, unless I misapprehend what is said, would have it apply no matter how seriously it frustrated a State's substantive regulation of the primary conduct and affairs of its citizens. Since the members of the Advisory Committee, the Judicial Conference, and this Court who formulated the Federal Rules are presumably reasonable men, it follows that the integrity of the Federal Rules is absolute. Whereas the unadulterated outcome and forum-shopping tests may err too far toward honoring state rules, I submit that the Court's "arguably procedural, ergo constitutional" test moves too fast and far in the other direction.

The courts below relied upon this Court's decisions in Ragan v. Merchants Transfer Co., 337 U. S. 530, and Cohen v. Beneficial Loan Corp., 337 U. S. 541. Those cases deserve more attention than this Court has given them, particularly Ragan which, if still good law, would in my opinion call for affirmance of the result reached by the Court of Appeals. Further, a discussion of these two cases will serve to illuminate the "diversity" thesis I am advocating.

In Ragan a Kansas statute of limitations provided that an action was deemed commenced when service was made on the defendant. Despite Federal Rule 3 which provides that an action commences with the filing of the complaint, [477] the Court held that for purposes of the Kansas statute of limitations a diversity tort action commenced only when service was made upon the defendant. The effect of this holding was that although the plaintiff had filed his federal complaint within the state period of limitations, his action was barred because the federal marshal did not serve a summons on the defendant until after the limitations period had run. I think that the decision was wrong. At most, application of the Federal Rule would have meant that potential Kansas tort defendants would have to defer for a few days the satisfaction of knowing that they had not been sued within the limitations period. The choice of the Federal Rule would have had no effect on the primary stages of private activity from which torts arise, and only the most minimal effect on behavior following the commission of the tort. In such circumstances the interest of the federal system in proceeding under its own rules should have prevailed.

Cohen v. Beneficial Loan Corp. held that a federal diversity court must apply a state statute requiring a small stockholder in a stockholder derivative suit to post a bond securing payment of defense costs as a condition to prosecuting an action. Such a statute is not "outcome determinative"; the plaintiff can win with or without it. The Court now rationalizes the case on the ground that the statute might affect the plaintiff's choice of forum (ante, p. 469, n. 10), but as has been pointed out, a simple forum-shopping test proves too much. The proper view of Cohen is, in my opinion, that the statute was meant to inhibit small stockholders from instituting "strike suits," and thus it was designed and could be expected to have a substantial impact on private primary activity. Anyone who was at the trial bar during the period when Cohen arose can appreciate the strong state policy reflected in the statute. I think it wholly legitimate to view Federal Rule 23 as not purporting to deal [478] with the problem. But even had the Federal Rules purported to do so, and in so doing provided a substantially less effective deterrent to strike suits, I think the state rule should still have prevailed. That is where I believe the Court's view differs from mine; for the Court attributes such overriding force to the Federal Rules that it is hard to think of a case where a conflicting state rule would be allowed to operate, even though the state rule reflected policy considerations which, under Erie, would lie within the realm of state legislative authority.

It remains to apply what has been said to the present case. The Massachusetts rule provides that an executor need not answer suits unless in-hand service was made upon him or notice of the action was filed in the proper registry of probate within one year of his giving bond. The evident intent of this statute is to permit an executor to distribute the estate which he is administering without fear that further liabilities may be outstanding for which he could be held personally liable. If the Federal District Court in Massachusetts applies Rule 4 (d) (1) of the Federal Rules of Civil Procedure instead of the Massachusetts service rule, what effect would that have on the speed and assurance with which estates are distributed? As I see it, the effect would not be substantial. It would mean simply that an executor would have to check at his own house or the federal courthouse as well as the registry of probate before he could distribute the estate with impunity. As this does not seem enough to give rise to any real impingement on the vitality of the state policy which the Massachusetts rule is intended to serve, I concur in the judgment of the Court.

[1] Section 9 is in part a statute of limitations, providing that an executor need not "answer to an action . . . which is not commenced within one year from the time of his giving bond . . . ." This part of the statute, the purpose of which is to speed the settlement of estates, Spaulding v. McConnell, 307 Mass. 144, 146, 29 N. E. 2d 713, 715 (1940); Doyle v. Moylan, 141 F. Supp. 95 (D. C. D. Mass. 1956), is not involved in this case, since the action clearly was timely commenced. (Respondent filed bond on March 1, 1962; the complaint was filed February 6, 1963, and the service—the propriety of which is in dispute—was made on February 8, 1963.) 331 F. 2d, at 159. Cf. Guaranty Trust Co. v. York, supra; Ragan v. Merchants Transfer Co., supra.

Section 9 also provides for the manner of service. Generally, service of process must be made by "delivery in hand," although there are two alternatives: acceptance of service by the executor, or filing of a notice of claim, the components of which are set out in the statute, in the appropriate probate court. The purpose of this part of the statute, which is involved here, is, as the court below noted, to insure that executors will receive actual notice of claims. Parker v. Rich, 297 Mass. 111, 113-114, 8 N. E. 2d 345, 347 (1937). Actual notice is of course also the goal of Rule 4 (d) (1); however, the Federal Rule reflects a determination that this goal can be achieved by a method less cumbersome than that prescribed in § 9. In this case the goal seems to have been achieved; although the affidavit filed by respondent in the District Court asserts that he had not been served in hand nor had he accepted service, it does not allege lack of actual notice.

[2] There are a number of state service requirements which would not necessarily be satisfied by compliance with Rule 4 (d) (1). See, e. g., Cal. Civ. Proc. Code § 411 8; Idaho Code Ann. § 5-507 7 (1948); Ill. Rev. Stat., c. 110, § 13.2 (1963); Ky. Rev. Stat., Rules Civ. Proc., Rule 4.04 (1962); Md. Ann. Code, Rules Proc., Rule 104 b (1963); Mich. Rev. Jud. Act § 600.1912 (1961); N. C. Gen. Stat. § 1-94 (1953); S. D. Code § 33.0807 (8) (Supp. 1960); Tenn. Code Ann. § 20-214 (1955).

[3] "These rules govern the procedure in the United States district courts in all suits of a civil nature whether cognizable as cases at law or in equity, with the exceptions stated in Rule 81. . . ." Fed. Rules Civ. Proc. 1.

This case does not come within any of the exceptions noted in Rule 81.

[4] See also Schlagenhauf v. Holder, 379 U. S. 104, 112-114.

[5] See also Ragan v. Merchants Transfer Co., supra; Woods v. Interstate Realty Co., 337 U. S. 535; Bernhardt v. Polygraphic Co., 350 U. S. 198, 203-204, 207-208; cf. Byrd v. Blue Ridge Cooperative, 356 U. S. 525.

[6] See Iovino v. Waterson, 274 F. 2d 41, 46-47 (C. A. 2d Cir. 1959), cert. denied sub nom. Carlin v. Iovino, 362 U. S. 949.

[7] See also Klaxon Co. v. Stentor Co., 313 U. S. 487, 496; Woods v. Interstate Realty Co., supra, note 5, at 538.

[8] Cf. Black & White Taxicab Co. v. Brown & Yellow Taxicab Co., 276 U. S. 518.

[9] The Court of Appeals seemed to frame the inquiry in terms of how "important" § 9 is to the State. In support of its suggestion that § 9 serves some interest the State regards as vital to its citizens, the court noted that something like § 9 has been on the books in Massachusetts a long time, that § 9 has been amended a number of times, and that § 9 is designed to make sure that executors receive actual notice. See note 1, supra. The apparent lack of relation among these three observations is not surprising, because it is not clear to what sort of question the Court of Appeals was addressing itself. One cannot meaningfully ask how important something is without first asking "important for what purpose?" Erie and its progeny make clear that when a federal court sitting in a diversity case is faced with a question of whether or not to apply state law, the importance of a state rule is indeed relevant, but only in the context of asking whether application of the rule would make so important a difference to the character or result of the litigation that failure to enforce it would unfairly discriminate against citizens of the forum State, or whether application of the rule would have so important an effect upon the fortunes of one or both of the litigants that failure to enforce it would be likely to cause a plaintiff to choose the federal court.

[10] See Guaranty Trust Co. v. York, supra, at 108-109; Ragan v. Merchants Transfer Co., supra, at 532; Woods v. Interstate Realty Co., supra,note 5, at 538.

Similarly, a federal court's refusal to enforce the New Jersey rule involved in Cohen v. Beneficial Loan Corp., 337 U. S. 541, requiring the posting of security by plaintiffs in stockholders' derivative actions, might well impel a stockholder to choose to bring suit in the federal, rather than the state, court.

[11] Cf. Monarch Insurance Co. of Ohio v. Spach, 281 F. 2d 401, 412 (C. A. 5th Cir. 1960). We cannot seriously entertain the thought that one suing an estate would be led to choose the federal court because of a belief that adherence to Rule 4 (d) (1) is less likely to give the executor actual notice than § 9, and therefore more likely to produce a default judgment. Rule 4 (d) (1) is well designed to give actual notice, as it did in this case. See note 1, supra.

[12] To the same effect, see Ragan v. Merchants Transfer Co., supra; Cohen v. Beneficial Loan Corp., supra, note 10, at 556; id., at 557 (DOUGLAS, J., dissenting); cf. Bernhardt v. Polygraphic Co., supra, note 5, at 201-202; see generally Iovino v. Waterson, supra, note 6, at 47-48.

[13] Sibbach v. Wilson & Co., supra, at 13-15; see Appointment of Committee to Draft Unified System of Equity and Law Rules, 295 U. S. 774; Orders re Rules of Procedure, 302 U. S. 783; Letter of Submittal, 308 U. S. 649; 1A Moore, Federal Practice ¶ 0.501 [2], at 5027-5028 (2d ed. 1961).

[14] Erie R. Co v. Tompkins, supra, at 77-79; cf. Bernhardt v. Polygraphic Co., supra, note 5, at 202; Sibbach v. Wilson & Co., supra, at 10; Guaranty Trust Co. v. York, supra, at 105.

[15] In Sibbach v. Wilson & Co., supra, the law of the forum State (Illinois) forbade the sort of order authorized by Rule 35. However, Sibbach was decided before Klaxon Co. v. Stentor Co., supra, note 7, and the Sibbach opinion makes clear that the Court was proceeding on the assumption that if the law of any State was relevant, it was the law of the State where the tort occurred (Indiana), which, like Rule 35, made provision for such orders. 312 U. S., at 6-7, 10-11.

[16] To the same effect, see D'Onofrio Construction Co. v. Recon Co., 255 F. 2d 904, 909-910 (C. A. 1st Cir. 1958).

[17] Mississippi Pub. Corp. v. Murphree, supra, at 445-446; Iovino v. Waterson, supra, note 6, at 46.

[18] Since the rules involved in the present case are parallel rather than conflicting, this first rationale does not come into play here.

[19] See Hart and Wechsler, The Federal Courts and the Federal System 678.

Byrd v. Blue Ridge Coop., Inc., 356 U. S. 525, 536-540, indicated that state procedures would apply if the State had manifested a particularly strong interest in their employment. Compare Dice v. Akron, C. & Y. R. Co., 342 U. S. 359. However, this approach may not be of constitutional proportions.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT.

[741] Don Manners argued the cause and filed a brief for petitioner.

Jay M. Galt argued the cause and filed a brief for respondent.

MR. JUSTICE MARSHALL delivered the opinion of the Court.

This case presents the issue whether in a diversity action the federal court should follow state law or, alternatively, Rule 3 of the Federal Rules of Civil Procedure in determining when an action is commenced for the purpose of tolling the state statute of limitations.

I

According to the allegations of the complaint, petitioner, a carpenter, was injured on August 22, 1975, in Oklahoma City, Okla., while pounding a Sheffield nail into a cement wall. Respondent was the manufacturer of the nail. Petitioner claimed that the nail contained a defect which caused its head to shatter and strike him in the right eye, resulting in permanent injuries. The defect was allegedly caused by respondent's negligence in manufacture and design.

Petitioner is a resident of Oklahoma, and respondent is a foreign corporation having its principal place of business in a [742] State other than Oklahoma. Since there was diversity of citizenship, petitioner brought suit in the United States District Court for the Western District of Oklahoma. The complaint was filed on August 19, 1977. Although summons was issued that same day,^[1] service of process was not made on respondent's authorized service agent until December 1, 1977.^[2] On January 5, 1978, respondent filed a motion to dismiss the complaint on the ground that the action was barred by the applicable Oklahoma statute of limitations. Although the complaint had been filed within the 2-year statute of limitations, Okla. Stat., Tit. 12, § 95 (1971),^[3] state law does not deem the action "commenced" for purposes of the statute of limitations until service of the summons on the defendant, [743] Okla. Stat., Tit. 12, § 97 (1971).^[4] If the complaint is filed within the limitations period, however, the action is deemed to have commenced from that date of filing if the plaintiff serves the defendant within 60 days, even though that service may occur outside the limitations period. Ibid. In this case, service was not effectuated until long after this 60-day period had expired. Petitioner in his reply brief to the motion to dismiss admitted that his case would be foreclosed in state court, but he argued that Rule 3 of the Federal Rules of Civil Procedure governs the manner in which an action is commenced in federal court for all purposes, including the tolling of the state statute of limitations.^[5]

The District Court dismissed the complaint as barred by the Oklahoma statute of limitations. 452 F. Supp. 243 (1978). The court concluded that Okla. Stat., Tit. 12, § 97 (1971) was "an integral part of the Oklahoma statute of limitations," 452 F. Supp., at 245, and therefore under Ragan v. Merchants Transfer & Warehouse Co., 337 U. S. 530 (1949), state law applied. The court rejected the argument that Ragan had been implicitly overruled in Hanna v. Plumer, 380 U. S. 460 (1965).

[744] The United States Court of Appeals for the Tenth Circuit affirmed. 592 F. 2d 1133 (1979). That court concluded that Okla. Stat., Tit. 12, § 97 (1971), was in "direct conflict" with Rule 3. 592 F. 2d, at 1135. However, the Oklahoma statute was "indistinguishable" from the statute involved in Ragan, and the court felt itself "constrained" to follow Ragan. 592 F. 2d, at 1136.

We granted certiorari, 444 U. S. 823 (1979), because of a conflict among the Courts of Appeals.^[6] We now affirm.

II

The question whether state or federal law should apply on various issues arising in an action based on state law which has been brought in federal court under diversity of citizenship jurisdiction has troubled this Court for many years. In the landmark decision of Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), we overturned the rule expressed in Swift v. Tyson, 16 Pet. 1 (1842), that federal courts exercising diversity jurisdiction need not, in matters of "general jurisprudence," apply the nonstatutory law of the State. The Court noted [745] that "[d]iversity of citizenship jurisdiction was conferred in order to prevent apprehended discrimination in state courts against those not citizens of the State," Erie R. Co. v. Tompkins, supra, at 74. The doctrine of Swift v. Tyson had led to the undesirable results of discrimination in favor of non-citizens, prevention of uniformity in the administration of state law, and forum shopping. 304 U. S., at 74-75. In response, we established the rule that "[e]xcept in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any [diversity] case is the law of the State," id., at 78.

In Guaranty Trust Co. v. York, 326 U. S. 99 (1945), we addressed ourselves to "the narrow question whether, when no recovery could be had in a State court because the action is barred by the statute of limitations, a federal court in equity can take cognizance of the suit because there is diversity of citizenship between the parties," id., at 107. The Court held that the Erie doctrine applied to suits in equity as well as to actions at law. In construing Erie we noted that "[i]n essence, the intent of that decision was to insure that, in all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court." 326 U. S., at 109. We concluded that the state statute of limitations should be applied. "Plainly enough, a statute that would completely bar recovery in a suit if brought in a State court bears on a State-created right vitally and not merely formally or negligibly. As to consequences that so intimately affect recovery or non-recovery a federal court in a diversity case should follow State law." Id., at 110.

The decision in York led logically to our holding in Ragan v. Merchants Transfer & Warehouse Co., supra. In Ragan, the plaintiff had filed his complaint in federal court on September 4, 1945, pursuant to Rule 3 of the Federal Rules of [746] Civil Procedure. The accident from which the claim arose had occurred on October 1, 1943. Service was made on the defendant on December 28, 1945. The applicable statute of limitations supplied by Kansas law was two years. Kansas had an additional statute which provided: "An action shall be deemed commenced within the meaning of [the statute of limitations], as to each defendant, at the date of the summons which is served on him. . . . An attempt to commence an action shall be deemed equivalent to the commencement thereof within the meaning of this article when the party faithfully, properly and diligently endeavors to procure a service; but such attempt must be followed by the first publication or service of the summons within sixty days." Kan. Gen. Stat. § 60-308 (1935). The defendant moved for summary judgment on the ground that the Kansas statute of limitations barred the action since service had not been made within either the 2-year period or the 60-day period. It was conceded that had the case been brought in Kansas state court it would have been barred. Nonetheless, the District Court held that the statute had been tolled by the filing of the complaint. The Court of Appeals reversed because "the requirement of service of summons within the statutory period was an integral part of that state's statute of limitations." Ragan, 337 U. S., at 532.

We affirmed, relying on Erie and York. "We cannot give [the cause of action] longer life in the federal court than it would have had in the state court without adding something to the cause of action. We may not do that consistently with Erie R. Co. v. Tompkins." 337 U. S., at 533-534. We rejected the argument that Rule 3 of the Federal Rules of Civil Procedure governed the manner in which an action was commenced in federal court for purposes of tolling the state statute of limitations. Instead, we held that the service of summons statute controlled because it was an integral part of the state statute of limitations, and under York that statute of limitations was part of the state-law cause of action.

[747] Ragan was not our last pronouncement in this difficult area, however. In 1965 we decided Hanna v. Plumer, 380 U. S. 460, holding that in a civil action where federal jurisdiction was based upon diversity of citizenship, Rule 4 (d) (1) of the Federal Rules of Civil Procedure, rather than state law, governed the manner in which process was served. Massachusetts law required in-hand service on an executor or administrator of an estate, whereas Rule 4 permits service by leaving copies of the summons and complaint at the defendant's home with some person "of suitable age and discretion." The Court noted that in the absence of a conflicting state procedure, the Federal Rule would plainly control, 380 U. S., at 465. We stated that the "outcome-determination" test of Erie and York had to be read with reference to the "twin aims" of Erie: "discouragement of forum-shopping and avoidance of inequitable administration of the laws." 380 U. S., at 468. We determined that the choice between the state in-hand service rule and the Federal Rule "would be of scant, if any, relevance to the choice of a forum," for the plaintiff "was not presented with a situation where application of the state rule would wholly bar recovery; rather, adherence to the state rule would have resulted only in altering the way in which process was served." Id., at 469 (footnote omitted). This factor served to distinguish that case from York and Ragan. See 380 U. S., at 469, n. 10.

The Court in Hanna, however, pointed out "a more fundamental flaw" in the defendant's argument in that case. Id., at 469. The Court concluded that the Erie doctrine was simply not the appropriate test of the validity and applicability of one of the Federal Rules of Civil Procedure:

"The Erie rule has never been invoked to void a Federal Rule. It is true that there have been cases where this Court had held applicable a state rule in the face of an argument that the situation was governed by one of the [748] Federal Rules. But the holding of each such case was not that Erie commanded displacement of a Federal Rule by an inconsistent state rule, but rather that the scope of the Federal Rule was not as broad as the losing party urged, and therefore, there being no Federal Rule which covered the point in dispute, Erie commanded the enforcement of state law." 380 U. S., at 470.

The Court cited Ragan as one of the examples of this proposition, 380 U. S., at 470, n. 12.^[7] The Court explained that where the Federal Rule was clearly applicable, as in Hanna, the test was whether the Rule was within the scope of the Rules Enabling Act, 28 U. S. § 2072, and if so, within a constitutional grant of power such as the Necessary and Proper Clause of Art. I. 380 U. S., at 470-472.

III

The present case is indistinguishable from Ragan. The statutes in both cases require service of process to toll the statute of limitations, and in fact the predecessor to the Oklahoma statute in this case was derived from the predecessor to the Kansas statute in Ragan. See Dr. Koch Vegetable Tea Co. v. Davis, 48 Okla. 14, 22, 145 P. 337, 340 (1914). Here, as in Ragan, the complaint was filed in federal court under diversity jurisdiction within the 2-year statute of limitations, but service of process did not occur until after the 2-year period and the 60-day service period had run. In both cases the suit would concededly have been barred in the applicable state court, and in both instances the state service statute was held to be an integral part of the statute of limitations by the lower court more familiar than we with state law. Accordingly, as the Court of Appeals held below, [749] the instant action is barred by the statute of limitations unless Ragan is no longer good law.

Petitioner argues that the analysis and holding of Ragan did not survive our decision in Hanna.^[8] Petitioner's position is that Okla. Stat., Tit. 12, § 97 (1971), is in direct conflict with the Federal Rule. Under Hanna, petitioner contends, the appropriate question is whether Rule 3 is within the scope of the Rules Enabling Act and, if so, within the constitutional power of Congress. In petitioner's view, the Federal Rule is to be applied unless it violates one of those two restrictions. This argument ignores both the force of stare decisis and the specific limitations that we carefully placed on the Hanna analysis.

We note at the outset that the doctrine of stare decisis weighs heavily against petitioner in this case. Petitioner seeks to have us overrule our decision in Ragan. Stare decisis does not mandate that earlier decisions be enshrined forever, of course, but it does counsel that we use caution in rejecting established law. In this case, the reasons petitioner asserts for overruling Ragan are the same factors which we concluded in Hanna did not undermine the validity of Ragan. A litigant who in effect asks us to reconsider not one but two prior decisions bears a heavy burden of supporting such a change in our jurisprudence. Petitioner here has not met that burden.

This Court in Hanna distinguished Ragan rather than overruled it, and for good reason. Application of the Hanna analysis is premised on a "direct collision" between the Federal Rule and the state law. 380 U. S., at 472. In Hanna itself the "clash" between Rule 4 (d) (1) and the state in-hand service requirement was "unavoidable." 380 U. S., at 470. The first question must therefore be whether the scope of the Federal Rule in fact is sufficiently broad to control the issue before [750] the Court. It is only if that question is answered affirmatively that the Hanna analysis applies.^[9]

As has already been noted, we recognized in Hanna that the present case is an instance where "the scope of the Federal Rule [is] not as broad as the losing party urge[s], and therefore, there being no Federal Rule which cover[s] the point in dispute, Erie command[s] the enforcement of state law." Ibid. Rule 3 simply states that "[a] civil action is commenced by filing a complaint with the court." There is no indication that the Rule was intended to toll a state statute of limitations,^[10] much less that it purported to displace state [751] tolling rules for purposes of state statutes of limitations. In our view, in diversity actions^[11] Rule 3 governs the date from which various timing requirements of the Federal Rules begin to run, but does not affect state statutes of limitations. Cf. 4 C. Wright & A. Miller, Federal Practice and Procedure § 1057, pp. 190-191 (1969); id., § 1051, at 165-166.

In contrast to Rule 3, the Oklahoma statute is a statement of a substantive decision by that State that actual service on, and accordingly actual notice by, the defendant is an integral part of the several policies served by the statute of limitations. See C & C Tile Co. v. Independent School District No. 7 of Tulsa County, 503 P. 2d 554, 559 (Okla. 1972). The statute of limitations establishes a deadline after which the defendant may legitimately have peace of mind; it also recognizes that after a certain period of time it is unfair to require the defendant to attempt to piece together his defense to an old claim. A requirement of actual service promotes both of those functions of the statute. See generally ibid.; Seitz v. Jones, 370 P. 2d 300, 302 (Okla. 1961). See also Ely, The Irrepressible Myth of Erie, 87 Harv. L. Rev. 693, 730-731 (1974).^[12] It is these policy aspects which make the service [752] requirement an "integral" part of the statute of limitations both in this case and in Ragan. As such, the service rule must be considered part and parcel of the statute of limitations.^[13] Rule 3 does not replace such policy determinations found in state law. Rule 3 and Okla. Stat., Tit. 12, § 97 (1971), can exist side by side, therefore, each controlling its own intended sphere of coverage without conflict.

Since there is no direct conflict between the Federal Rule and the state law, the Hanna analysis does not apply.^[14] Instead, the policies behind Erie and Ragan control the issue whether, in the absence of a federal rule directly on point, state service requirements which are an integral part of the state statute of limitations should control in an action based on state law which is filed in federal court under diversity [753] jurisdiction. The reasons for the application of such a state service requirement in a diversity action in the absence of a conflicting federal rule are well explained in Erie and Ragan, see supra, at 744-746, and need not be repeated here. It is sufficient to note that although in this case failure to apply the state service law might not create any problem of forum shopping,^[15] the result would be an "inequitable administration" of the law. Hanna v. Plumer, 380 U. S., at 468. There is simply no reason why, in the absence of a controlling federal rule, an action based on state law which concededly would be barred in the state courts by the state statute of limitations should proceed through litigation to judgment in federal court solely because of the fortuity that there is diversity of citizenship between the litigants. The policies underlying diversity jurisdiction do not support such a distinction between state and federal plaintiffs, and Erie and its progeny do not permit it.

The judgment of the Court of Appeals is

Affirmed.

[1] The Court of Appeals stated that summons was issued the following day, August 20. See 592 F. 2d 1133, 1134 (CA10 1979). However, the docket sheet in the District Court indicates that summons was issued August 19. See App. insert preceding p. A-1. Nothing turns on this difference.

[2] The record does not indicate why this delay occurred. The face of the process record shows that the United States Marshal acknowledged receipt of the summons on December 1, 1977, and that service was effectuated that same day. Id., at A-5. At oral argument counsel for petitioner stated that the summons was found "in an unmarked folder in the filing cabinet" in counsel's office some 90 days after the complaint had been filed. Tr. of Oral Arg. 3. See also id., at 6. Counsel conceded that the summons was not delivered to the Marshal until December 1. Id., at 3-4. It is unclear why the summons was placed in the filing cabinet. See id., at 17.

[3] Under Oklahoma law, a suit for products liability, whether based on a negligence theory or a breach of implied warranty theory, is governed by the 2-year statute of limitations period of Okla. Stat., Tit. 12, § 95 (1971). See Hester v. Purex Corp., 534 P. 2d 1306, 1308 (Okla. 1975); O'Neal v. Black & Decker Manufacturing Co., 523 P. 2d 614, 615 (Okla. 1974); Kirkland v. General Motors Corp., 521 P. 2d 1353, 1361 (Okla. 1974). The period begins to run from the date of injury. O'Neal v. Black & Decker Manufacturing Co., supra, at 615; Kirkland v. General Motors Corp., supra, at 1361.

[4] Oklahoma Stat., Tit. 12, § 97 (1971), provides in pertinent part: "An action shall be deemed commenced, within the meaning of this article [the statute of limitations], as to each defendant, at the date of the summons which is served on him, or on a codefendant, who is a joint contractor or otherwise united in interest with him. . . . An attempt to commence an action shall be deemed equivalent to the commencement thereof, within the meaning of this article, when the party faithfully, properly and diligently endeavors to procure a service; but such attempt must be followed by the first publication or service of the summons, . . . within sixty (60) days."

[5] Petitioner also argued in his reply brief to the motion to dismiss that respondent should have relied on Federal Rule of Civil Procedure 41—dismissal for failure to prosecute—rather than the state statute of limitations. Respondent in its response to the reply brief argued that a Rule 41 argument was implicit in its motion to dismiss. Neither the District Court nor the Court of Appeals addressed this issue.

[6] Compare case below; Rose v. K. K. Masutoku Toy Factory Co., 597 F. 2d 215 (CA10 1979); Lindsey v. Dayton-Hudson Corp., 592 F. 2d 1118, 1121-1123 (CA10), cert. denied, 444 U. S. 856 (1979); Witherow v. Firestone Tire & Rubber Co., 530 F. 2d 160, 163-166 (CA3 1976); Anderson v. Papillion, 445 F. 2d 841 (CA5 1971) (per curiam); Groninger v. Davison, 364 F. 2d 638 (CA8 1966); Sylvester v. Messler, 351 F. 2d 472 (CA6 1965) (per curiam), cert. denied, 382 U. S. 1011 (1966), all holding that state law controls, with Smith v. Peters, 482 F. 2d 799 (CA6 1973), cert. denied, 415 U. S. 989 (1974), and Sylvestri v. Warner & Swasey Co., 398 F. 2d 598 (CA2 1968), holding that Rule 3 controls. See also Ingram v. Kumar, 585 F. 2d 566, 568 (CA2 1978) (reaffirming Sylvestri), cert. denied, 440 U. S. 940 (1979); Prashar v. Volkswagen of America, Inc., 480 F. 2d 947 (CA8 1973) (distinguishing Ragan), cert. denied sub nom. Volkswagenwerk Aktiengesellschaft v. Prashar, 415 U. S. 994 (1974); Chappell v. Rouch, 448 F. 2d 446 (CA10 1971) (distinguishing Ragan). See generally Walko Corp. v. Burger Chief Systems, Inc., 180 U. S. App. D. C. 306, 308-311, 554 F. 2d 1165, 1167-1170 (1977) (dicta).

[7] The Court in Hanna noted that "this Court has never before been confronted with a case where the applicable Federal Rule is in direct collision with the law of the relevant State." 380 U. S., at 472.

[8] Mr. Justice Harlan in his concurring opinion in Hanna concluded that Ragan was no longer good law. 380 U. S., at 474-478. See also Sylvestri v. Warner & Swasey Co., 398 F. 2d 598 (CA2 1968).

[9] This is not to suggest that the Federal Rules of Civil Procedure are to be narrowly construed in order to avoid a "direct collision" with state law. The Federal Rules should be given their plain meaning. If a direct collision with state law arises from that plain meaning, then the analysis developed in Hanna v. Plumer applies.

[10]"Rule 3 simply provides that an action is commenced by filing the complaint and has as its primary purpose the measuring of time periods that begin running from the date of commencement; the rule does not state that filing tolls the statute of limitations." 4 C. Wright & A. Miller, Federal Practice and Procedure § 1057, p. 191 (1969) (footnote omitted).

The Note of the Advisory Committee on the Rules states:

"When a Federal or State statute of limitations is pleaded as a defense, a question may arise under this rule whether the mere filing of the complaint stops the running of the statute, or whether any further step is required, such as, service of the summons and complaint or their delivery to the marshal for service. The answer to this question may depend on whether it is competent for the Supreme Court, exercising the power to make rules of procedure without affecting substantive rights, to vary the operation of statutes of limitations. The requirement of Rule 4 (a) that the clerk shall forthwith issue the summons and deliver it to the marshal for service will reduce the chances of such a question arising." 28 U. S. C. App., pp. 394-395.

This Note establishes that the Advisory Committee predicted the problem which arose in Ragan and arises again in the instant case. It does not indicate, however, that Rule 3 was intended to serve as a tolling provision for statute of limitations purposes; it only suggests that the Advisory Committee thought the Rule might have that effect.

[11] The Court suggested in Ragan that in suits to enforce rights under a federal statute Rule 3 means that filing of the complaint tolls the applicable statute of limitations. 337 U. S., at 533, distinguishing Bomar v. Keyes, 162 F. 2d 136, 140-141 (CA2), cert. denied, 332 U. S. 825 (1947). See Ely, The Irrepressible Myth of Erie, 87 Harv. L. Rev. 693, 729 (1974). See also Walko Corp. v. Burger Chef Systems, Inc., 180 U. S. App. D. C., at 308, n. 19, 554 F. 2d, at 1167, n. 19; 4 Wright & Miller, supra, § 1056, and authorities collected therein. We do not here address the role of Rule 3 as a tolling provision for a statute of limitations, whether set by federal law or borrowed from state law, if the cause of action is based on federal law.

[12] The importance of actual service, with corresponding actual notice, to the statute of limitations scheme in Oklahoma is further demonstrated by the fact that under Okla. Stat., Tit. 12, § 97 (1971), the statute of limitations must be tolled as to each defendant through individual service, unless a codefendant who is served is "united in interest" with the unserved defendant. That requirement, like the service requirement itself, does nothing to promote the general policy behind all statutes of limitations of keeping stale claims out of court. Instead, the service requirement furthers a different but related policy decision: that each defendant has a legitimate right not to be surprised by notice of a lawsuit after the period of liability has run. If the defendant is "united in interest" with a codefendant who has been served, then presumably the defendant will receive actual notice of the lawsuit through the codefendant and will not have his peace of mind disturbed when he receives official service of process. Similarly, the defendant will know that he must begin gathering his evidence while that task is still deemed by the State to be feasible.

[13] The substantive link of § 97 to the statute of limitations is made clear as well by another provision of Oklahoma law. Under Okla. Stat., Tit. 12, § 151 (1971), "[a] civil action is deemed commenced by filing in the office of the court clerk of the proper court a petition and by the clerk's issuance of summons thereon." This is the state-law corollary to Rule 3. However, § 97, not § 151, controls the commencement of the lawsuit for statute of limitations purposes. See Tyler v. Taylor, 578 P. 2d 1214 (Okla. App. 1977). Just as § 97 and § 151 can both apply in state court for their separate purposes, so too § 97 and Rule 3 may both apply in federal court in a diversity action.

[14] Since we hold that Rule 3 does not apply, it is unnecessary for us to address the second question posed by the Hanna analysis: whether Rule 3, if it applied, would be outside the scope of the Rules Enabling Act or beyond the power of Congress under the Constitution.

[15] There is no indication that when petitioner filed his suit in federal court he had any reason to believe that he would be unable to comply with the service requirements of Oklahoma law or that he chose to sue in federal court in an attempt to avoid those service requirements.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

[23] F. A. Flowers III argued the cause for petitioners. With him on the briefs was Joseph W. Letzer.

Scott M. Phelps argued the cause and filed a brief for respondents.

[24] JUSTICE MARSHALL delivered the opinion of the Court.

This case presents the issue whether a federal court sitting in diversity should apply state or federal law in adjudicating a motion to transfer a case to a venue provided in a contractual forum-selection clause.

I

The dispute underlying this case grew out of a dealership agreement that obligated petitioner company, an Alabama corporation, to market copier products of respondent, a nationwide manufacturer with its principal place of business in New Jersey. The agreement contained a forum-selection clause providing that any dispute arising out of the contract could be brought only in a court located in Manhattan.^[1] Business relations between the parties soured under circumstances that are not relevant here. In September 1984, petitioner brought a complaint in the United States District Court for the Northern District of Alabama. The core of the complaint was an allegation that respondent had breached the dealership agreement, but petitioner also included claims for breach of warranty, fraud, and antitrust violations.

Relying on the contractual forum-selection clause, respondent moved the District Court either to transfer the case to the Southern District of New York under 28 U. S. C. § 1404(a) or to dismiss the case for improper venue under 28 U. S. C. § 1406. The District Court denied the motion. Civ. Action No. 84-AR-2460-S (Jan. 29, 1985). It reasoned that the transfer motion was controlled by Alabama law and that Alabama looks unfavorably upon contractual forum-selection clauses. The court certified its ruling for interlocutory appeal, [25] see 28 U. S. C. § 1292(b) (1982 ed., Supp. IV), and the Court of Appeals for the Eleventh Circuit accepted jurisdiction.

On appeal, a divided panel of the Eleventh Circuit reversed the District Court. The panel concluded that questions of venue in diversity actions are governed by federal law, and that the parties' forum-selection clause was enforceable as a matter of federal law. 779 F. 2d 643 (1986). The panel therefore reversed the order of the District Court and remanded with instructions to transfer the case to a Manhattan court. After petitioner successfully moved for rehearing en banc, 785 F. 2d 896 (1986), the full Court of Appeals proceeded to adopt the result, and much of the reasoning, of the panel opinion. 810 F. 2d 1066 (1987).^[2] The en banc court, citing Congress' enactment or approval of several rules to govern venue determinations in diversity actions, first determined that "[v]enue is a matter of federal procedure." Id., at 1068. The Court of Appeals then applied the standards articulated in the admiralty case of The Bremen v. Zapata Off-Shore Co., 407 U. S. 1 (1972), to conclude that "the choice of forum clause in this contract is in all respects enforceable generally as a matter of federal law . . . ." 810 F. 2d, at 1071. We now affirm under somewhat different reasoning.

II

Both the panel opinion and the opinion of the full Court of Appeals referred to the difficulties that often attend "the sticky question of which law, state or federal, will govern various aspects of the decisions of federal courts sitting in [26] diversity." 779 F. 2d, at 645. A district court's decision whether to apply a federal statute such as § 1404(a) in a diversity action,^[3] however, involves a considerably less intricate analysis than that which governs the "relatively unguided Erie choice." Hanna v. Plumer, 380 U. S. 460, 471 (1965) (referring to Erie R. Co. v. Tompkins, 304 U. S. 64 (1938)). Our cases indicate that when the federal law sought to be applied is a congressional statute, the first and chief question for the district court's determination is whether the statute is "sufficiently broad to control the issue before the Court." Walker v. Armco Steel Corp., 446 U. S. 740, 749-750 (1980); Burlington Northern R. Co. v. Woods, 480 U. S. 1, 4-5 (1987). This question involves a straightforward exercise in statutory interpretation to determine if the statute covers the point in dispute. See Walker v. Armco Steel Corp., supra, at 750, and n. 9.^[4] See also Burlington Northern R. [27] Co. v. Woods, supra, at 7 (identifying inquiry as whether a Federal Rule "occupies [a state rule's] field of operation").

If the district court determines that a federal statute covers the point in dispute, it proceeds to inquire whether the statute represents a valid exercise of Congress' authority under the Constitution. See Hanna v. Plumer, supra, at 471 (citing Erie R. Co. v. Tompkins, supra, at 77-79).^[5] If Congress intended to reach the issue before the district court, and if it enacted its intention into law in a manner that abides with the Constitution, that is the end of the matter; "[f]ederal courts are bound to apply rules enacted by Congress with respect to matters . . . over which it has legislative power." Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395, 406 (1967); cf. Hanna v. Plumer, supra, at 471 ("When a situation is covered by one of the Federal Rules . . . the court has been instructed to apply the Federal Rule, and can refuse to do so only if the Advisory Committee, this Court, and Congress erred in their prima facie judgment that the Rule in question transgresses neither the terms of the Enabling Act nor constitutional restrictions").^[6] Thus, a district court sitting in diversity must apply a federal statute that controls the issue before the court and that represents a valid exercise of Congress' constitutional powers.

[28] III

Applying the above analysis to this case persuades us that federal law, specifically 28 U. S. C. § 1404(a), governs the parties' venue dispute.

A

At the outset we underscore a methodological difference in our approach to the question from that taken by the Court of Appeals. The en banc court determined that federal law controlled the issue based on a survey of different statutes and judicial decisions that together revealed a significant federal interest in questions of venue in general, and in choice-of-forum clauses in particular. The Court of Appeals then proceeded to apply the standards announced in our opinion in The Bremen v. Zapata Off-Shore Co., 407 U. S. 1 (1972),^[7] to determine that the forum-selection clause in this case was enforceable. But the immediate issue before the District Court was whether to grant respondent's motion to transfer the action under § 1404(a),^[8] and as Judge Tjoflat properly noted in his special concurrence below, the immediate issue before the Court of Appeals was whether the District Court's denial of the § 1404(a) motion constituted an abuse of discretion. Although we agree with the Court of Appeals that the Bremen case may prove "instructive" in resolving the parties' dispute, 810 F. 2d, at 1069; but cf. Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U. S. 630, 641-642 (1981) (federal common law developed under admiralty jurisdiction not freely transferable to diversity setting), we disagree with the [29] court's articulation of the relevant inquiry as "whether the forum selection clause in this case is unenforceable under the standards set forth in The Bremen." 810 F. 2d, at 1069. Rather, the first question for consideration should have been whether § 1404(a) itself controls respondent's request to give effect to the parties' contractual choice of venue and transfer this case to a Manhattan court. For the reasons that follow, we hold that it does.

B

Section 1404(a) provides: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." Under the analysis outlined above, we first consider whether this provision is sufficiently broad to control the issue before the court. That issue is whether to transfer the case to a court in Manhattan in accordance with the forum-selection clause. We believe that the statute, fairly construed, does cover the point in dispute.

Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an "individualized, case-by-case consideration of convenience and fairness." Van Dusen v. Barrack, 376 U. S. 612, 622 (1964). A motion to transfer under § 1404(a) thus calls on the district court to weigh in the balance a number of case-specific factors. The presence of a forum-selection clause such as the parties entered into in this case will be a significant factor that figures centrally in the district court's calculus. In its resolution of the § 1404(a) motion in this case, for example, the District Court will be called on to address such issues as the convenience of a Manhattan forum given the parties' expressed preference for that venue, and the fairness of transfer in light of the forum-selection clause and the parties' relative bargaining power. The flexible and individualized analysis Congress prescribed in § 1404(a) thus encompasses [30] consideration of the parties' private expression of their venue preferences.

Section 1404(a) may not be the only potential source of guidance for the District Court to consult in weighing the parties' private designation of a suitable forum. The premise of the dispute between the parties is that Alabama law may refuse to enforce forum-selection clauses providing for out-of-state venues as a matter of state public policy.^[9] If that is so, the District Court will have either to integrate the factor of the forum-selection clause into its weighing of considerations as prescribed by Congress, or else to apply, as it did in this case, Alabama's categorical policy disfavoring forum-selection clauses. Our cases make clear that, as between these two choices in a single "field of operation," Burlington Northern R. Co. v. Woods, 480 U. S., at 7, the instructions of Congress are supreme. Cf. ibid. (where federal law's "discretionary mode of operation" conflicts with the nondiscretionary provision of Alabama law, federal law applies in diversity).

It is true that § 1404(a) and Alabama's putative policy regarding forum-selection clauses are not perfectly coextensive. Section 1404(a) directs a district court to take account of factors other than those that bear solely on the parties' private ordering of their affairs. The district court also must weigh in the balance the convenience of the witnesses and those public-interest factors of systemic integrity and fairness that, in addition to private concerns, come under the heading of "the interest of justice." It is conceivable in [31] a particular case, for example, that because of these factors a district court acting under § 1404(a) would refuse to transfer a case notwithstanding the counterweight of a forum-selection clause, whereas the coordinate state rule might dictate the opposite result.^[10] See 15 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3847, p. 371 (2d ed. 1986). But this potential conflict in fact frames an additional argument for the supremacy of federal law. Congress has directed that multiple considerations govern transfer within the federal court system, and a state policy focusing on a single concern or a subset of the factors identified in § 1404(a) would defeat that command. Its application would impoverish the flexible and multifaceted analysis that Congress intended to govern motions to transfer within the federal system. The forum-selection clause, which represents the parties' agreement as to the most proper forum, should receive neither dispositive consideration (as respondent might have it) nor no consideration (as Alabama law might have it), but rather the consideration for which Congress provided in § 1404(a). Cf. Norwood v. Kirkpatrick, 349 U. S. 29, 32 (1955) (§ 1404(a) accords broad discretion to district court, and plaintiff's choice of forum is only one relevant factor for its consideration). This is thus not a case in which state and federal rules "can exist side by side . . . each controlling its own intended sphere of coverage without conflict." Walker v. Armco Steel Corp., 446 U. S., at 752.

Because § 1404(a) controls the issue before the District Court, it must be applied if it represents a valid exercise of [32] Congress' authority under the Constitution. The constitutional authority of Congress to enact § 1404(a) is not subject to serious question. As the Court made plain in Hanna, "the constitutional provision for a federal court system . . . carries with it congressional power to make rules governing the practice and pleading in those courts, which in turn includes a power to regulate matters which, though falling within the uncertain area between substance and procedure, are rationally capable of classification as either." 380 U. S., at 472. See also id., at 473 ("Erie and its offspring cast no doubt on the long-recognized power of Congress to prescribe housekeeping rules for federal courts"). Section 1404(a) is doubtless capable of classification as a procedural rule, and indeed, we have so classified it in holding that a transfer pursuant to § 1404(a) does not carry with it a change in the applicable law. See Van Dusen v. Barrack, 376 U. S., at 636-637 ("[B]oth the history and purposes of § 1404(a) indicate that it should be regarded as a federal judicial housekeeping measure"). It therefore falls comfortably within Congress' powers under Article III as augmented by the Necessary and Proper Clause. See Burlington Northern R. Co. v. Woods, supra, at 5, n. 3.

We hold that federal law, specifically 28 U. S. C. § 1404(a), governs the District Court's decision whether to give effect to the parties' forum-selection clause and transfer this case to a court in Manhattan.^[11] We therefore affirm the Eleventh Circuit order reversing the District Court's application of Alabama law. The case is remanded so that the District Court may determine in the first instance the appropriate effect under federal law of the parties' forum-selection clause on respondent's § 1404(a) motion.

It is so ordered.

[33] JUSTICE KENNEDY, with whom JUSTICE O'CONNOR joins, concurring.

I concur in full. I write separately only to observe that enforcement of valid forum-selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system. Although our opinion in The Bremen v. Zapata Off-Shore Co., 407 U. S. 1, 10 (1972), involved a Federal District Court sitting in admiralty, its reasoning applies with much force to federal courts sitting in diversity. The justifications we noted in The Bremen to counter the historical disfavor forum-selection clauses had received in American courts, id., at 9, should be understood to guide the District Court's analysis under § 1404(a).

The federal judicial system has a strong interest in the correct resolution of these questions, not only to spare litigants unnecessary costs but also to relieve courts of time-consuming pretrial motions. Courts should announce and encourage rules that support private parties who negotiate such clauses. Though state policies should be weighed in the balance, the authority and prerogative of the federal courts to determine the issue, as Congress has directed by § 1404(a), should be exercised so that a valid forum-selection clause is given controlling weight in all but the most exceptional cases. See The Bremen, supra, at 10.

JUSTICE SCALIA, dissenting.

I agree with the opinion of the Court that the initial question before us is whether the validity between the parties of a contractual forum-selection clause falls within the scope of 28 U. S. C. § 1404(a). See ante, at 26-27, 29. I cannot agree, however, that the answer to that question is yes. Nor do I believe that the federal courts can, consistent with the twin-aims test of Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), fashion a judge-made rule to govern this issue of contract validity.

[34] I

When a litigant asserts that state law conflicts with a federal procedural statute or formal Rule of Procedure, a court's first task is to determine whether the disputed point in question in fact falls within the scope of the federal statute or Rule. In this case, the Court must determine whether the scope of § 1404(a) is sufficiently broad to cause a direct collision with state law or implicitly to control the issue before the Court, i. e., validity between the parties of the forum-selection clause, thereby leaving no room for the operation of state law. See Burlington Northern R. Co. v. Woods, 480 U. S. 1, 4-5 (1987). I conclude that it is not.

Although the language of § 1404(a) provides no clear answer, in my view it does provide direction. The provision vests the district courts with authority to transfer a civil action to another district "[f]or the convenience of parties and witnesses, in the interest of justice." This language looks to the present and the future. As the specific reference to convenience of parties and witnesses suggests, it requires consideration of what is likely to be just in the future, when the case is tried, in light of things as they now stand. Accordingly, the courts in applying § 1404(a) have examined a variety of factors, each of which pertains to facts that currently exist or will exist: e. g., the forum actually chosen by the plaintiff, the current convenience of the parties and witnesses, the current location of pertinent books and records, similar litigation pending elsewhere, current docket conditions, and familiarity of the potential courts with governing state law. See 15 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure §§ 3848-3849, 3851, 3853-3854 (2d ed. 1986). In holding that the validity between the parties of a forum-selection clause falls within the scope of § 1404(a), the Court inevitably imports, in my view without adequate textual foundation, a new retrospective element into the court's deliberations, requiring examination of what the [35] facts were concerning, among other things, the bargaining power of the parties and the presence or absence of overreaching at the time the contract was made. See ante, at 28, and n. 7, 29.

The Court largely attempts to avoid acknowledging the novel scope it gives to § 1404(a) by casting the issue as how much weight a district court should give a forum-selection clause as against other factors when it makes its determination under § 1404(a). I agree that if the weight-among-factors issue were before us, it would be governed by § 1404 (a). That is because, while the parties may decide who between them should bear any inconvenience, only a court can decide how much weight should be given under § 1404(a) to the factor of the parties' convenience as against other relevant factors such as the convenience of witnesses. But the Court's description of the issue begs the question: what law governs whether the forum-selection clause is a valid or invalid allocation of any inconvenience between the parties. If it is invalid, i. e., should be voided, between the parties, it cannot be entitled to any weight in the § 1404(a) determination. Since under Alabama law the forum-selection clause should be voided, see Redwing Carriers, Inc. v. Foster, 382 So. 2d 554, 556 (Ala. 1980), in this case the question of what weight should be given the forum-selection clause can be reached only if as a preliminary matter federal law controls the issue of the validity of the clause between the parties.^[12]

[36] Second, § 1404(a) was enacted against the background that issues of contract, including a contract's validity, are nearly always governed by state law. It is simply contrary to the practice of our system that such an issue should be wrenched from state control in absence of a clear conflict with federal law or explicit statutory provision. It is particularly instructive in this regard to compare § 1404(a) with another provision, enacted by the same Congress a year earlier, that did pre-empt state contract law, and in precisely the same field of agreement regarding forum selection. Section 2 of the Federal Arbitration Act, 9 U. S. C. § 2, provides:

"A written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."

We have said that an arbitration clause is a "kind of forum-selection clause," Scherk v. Alberto-Culver Co., 417 U. S. 506, 519 (1974), and the contrast between this explicit pre-emption [37] of state contract law on the subject and § 1404(a) could not be more stark. Section 1404(a) is simply a venue provision that nowhere mentions contracts or agreements, much less that the validity of certain contracts or agreements will be matters of federal law. It is difficult to believe that state contract law was meant to be pre-empted by this provision that we have said "should be regarded as a federal judicial housekeeping measure," Van Dusen v. Barrack, 376 U. S. 612, 636-637 (1964), that we have said did not change "the relevant factors" which federal courts used to consider under the doctrine of forum non conveniens, Norwood v. Kirkpatrick, 349 U. S. 29, 32 (1955), and that we have held can be applied retroactively because it is procedural, Ex parte Collett, 337 U. S. 55, 71 (1949). It seems to me the generality of its language — "[f]or the convenience of parties and witnesses, in the interest of justice" — is plainly insufficient to work the great change in law asserted here.

Third, it has been common ground in this Court since Erie, 304 U. S., at 74-77, that when a federal procedural statute or Rule of Procedure is not on point, substantial uniformity of predictable outcome between federal and state courts in adjudicating claims should be striven for. See also Klaxon Co. v. Stentor Electric Mfg. Co., 313 U. S. 487, 496 (1941). This rests upon a perception of the constitutional and congressional plan underlying the creation of diversity and pendent jurisdiction in the lower federal courts, which should quite obviously be carried forward into our interpretation of ambiguous statutes relating to the exercise of that jurisdiction. We should assume, in other words, when it is fair to do so, that Congress is just as concerned as we have been to avoid significant differences between state and federal courts in adjudicating claims. Cf. Southland Corp. v. Keating, 465 U. S. 1, 15 (1984) (interpreting Federal Arbitration Act to apply to claims brought in state courts in order to discourage forum shopping). Thus, in deciding whether a federal procedural statute or Rule of Procedure encompasses a particular [38] issue, a broad reading that would create significant disuniformity between state and federal courts should be avoided if the text permits. See, e. g., Walker v. Armco Steel Corp., 446 U. S. 740, 750-751 (1980); Cohen v. Beneficial Industrial Loan Corp., 337 U. S. 541, 556 (1949); Palmer v. Hoffman, 318 U. S. 109, 117 (1943); cf. P. Bator, D. Meltzer, P. Mishkin, & D. Shapiro, Hart and Wechsler's The Federal Courts and the Federal System 828 (3d ed. 1988) ("The Supreme Court has continued since Hanna to interpret the federal rules to avoid conflict with important state regulatory policies"). As I have shown, the interpretation given § 1404(a) by the Court today is neither the plain nor the more natural meaning; at best, § 1404(a) is ambiguous. I would therefore construe it to avoid the significant encouragement to forum shopping that will inevitably be provided by the interpretation the Court adopts today.

II

Since no federal statute or Rule of Procedure governs the validity of a forum-selection clause, the remaining issue is whether federal courts may fashion a judge-made rule to govern the question. If they may not, the Rules of Decision Act, 28 U. S. C. § 1652, mandates use of state law. See Erie, supra, at 72-73; Hanna v. Plumer, 380 U. S. 460, 471-472 (1965) (if federal courts lack authority to fashion a rule, "state law must govern because there can be no other law"); DelCostello v. Teamsters, 462 U. S. 151, 174, n. 1 (1983) (O'CONNOR, J., dissenting) (Rules of Decision Act "simply requires application of state law unless federal law applies"); see also id., at 159, n. 13.

In general, while interpreting and applying substantive law is the essence of the "judicial Power" created under Article III of the Constitution, that power does not encompass the making of substantive law. Cf. Erie, supra, at 78-79. Whatever the scope of the federal courts' authority to create federal common law in other areas, it is plain that the mere [39] fact that petitioner company here brought an antitrust claim, ante, at 24, does not empower the federal courts to make common law on the question of the validity of the forum-selection clause. See Campbell v. Haverhill, 155 U. S. 610, 616 (1895) (Rules of Decision Act "itself neither contains nor suggests . . . a distinction" between federal-question cases and diversity cases); DelCostello, supra, at 173, n. 1 (STEVENS, J., dissenting) (same); cf. Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U. S. 630 (1981). The federal courts do have authority, however, to make procedural rules that govern the practice before them. See 28 U. S. C. § 2071 (federal courts may make rules "for the conduct of their business"); Fed. Rule Civ. Proc. 83 (districts courts have authority to "regulate their practice"); see generally Sibbach v. Wilson & Co., 312 U. S. 1, 9-10 (1941).

In deciding what is substantive and what is procedural for these purposes, we have adhered to a functional test based on the "twin aims of the Erie rule: discouragement of forum-shopping and avoidance of inequitable administration of the laws." Hanna, supra, at 468; see also ante, at 27, n. 6; Walker v. Armco Steel Corp., supra, at 747. Moreover, although in reviewing the validity of a federal procedural statute or Rule of Procedure we inquire only whether Congress or the rulemakers have trespassed beyond the wide latitude given them to determine that a matter is procedural, see Burlington Northern R. Co. v. Woods, 480 U. S., at 5; Hanna, supra, at 471-474, in reviewing the lower courts' application of the twin-aims test we apply our own judgment as a matter of law.

Under the twin-aims test, I believe state law controls the question of the validity of a forum-selection clause between the parties. The Eleventh Circuit's rule clearly encourages forum shopping. Venue is often a vitally important matter, as is shown by the frequency with which parties contractually provide for and litigate the issue. Suit might well not be pursued, or might not be as successful, in a significantly less [40] convenient forum. Transfer to such a less desirable forum is, therefore, of sufficient import that plaintiffs will base their decisions on the likelihood of that eventuality when they are choosing whether to sue in state or federal court. With respect to forum-selection clauses, in a State with law unfavorable to validity, plaintiffs who seek to avoid the effect of a clause will be encouraged to sue in state court, and non-resident defendants will be encouraged to shop for more favorable law by removing to federal court. In the reverse situation — where a State has law favorable to enforcing such clauses — plaintiffs will be encouraged to sue in federal court. This significant encouragement to forum shopping is alone sufficient to warrant application of state law. Cf. Walker v. Armco Steel Corp., supra, at 753 (failure to meet one part of the twin-aims test suffices to warrant application of state law).

I believe creating a judge-made rule fails the second part of the twin-aims test as well, producing inequitable administration of the laws. The best explanation of what constitutes inequitable administration of the laws is that found in Erie itself: allowing an unfair discrimination between noncitizens and citizens of the forum state. 304 U. S., at 74-75; see also Hanna, 380 U. S., at 468, n. 9. Whether discrimination is unfair in this context largely turns on how important is the matter in question. See id., at 467-468, and n. 9. The decision of an important legal issue should not turn on the accident of diversity of citizenship, see, e. g., Walker, supra, at 753, or the presence of a federal question unrelated to that issue. It is difficult to imagine an issue of more importance, other than one that goes to the very merits of the lawsuit, than the validity of a contractual forum-selection provision. Certainly, the Erie doctrine has previously been held to require the application of state law on subjects of similar or obviously lesser importance. See, e. g., Walker, supra (whether filing of complaint or service tolls statute of limitations); Bernhardt v. Polygraphic Co. of America, 350 U. S. [41] 198, 202-204 (1956) (arbitrability); Cohen v. Beneficial Industrial Loan Corp., 337 U. S., at 555-556 (indemnity bond for litigation expenses). Nor can or should courts ignore that issues of contract validity are traditionally matters governed by state law.

For the reasons stated, I respectfully dissent.

[1] Specifically, the forum-selection clause read: "Dealer and Ricoh agree that any appropriate state or federal district court located in the Borough of Manhattan, New York City, New York, shall have exclusive jurisdiction over any case or controversy arising under or in connection with this Agreement and shall be a proper forum in which to adjudicate such case or controversy." App. 38-39.

[2] Judge Tjoflat, in a special concurrence joined by two other judges, argued that the District Court should have taken account of, and ultimately should have enforced, the forum-selection clause in its evaluation of the factors of justice and convenience that govern the transfer of cases under 28 U. S. C. § 1404(a). 810 F. 2d, at 1071-1076. There also was a dissenting opinion by five members of the Eleventh Circuit, who argued that state law should govern the dispute and warned that the application of federal law would encourage forum shopping and improperly undermine Alabama policy. Id., at 1076-1077.

[3] Respondent points out that jurisdiction in this case was alleged to rest both on the existence of an antitrust claim, see 28 U. S. C. § 1337, and diversity of citizenship, see 28 U. S. C. § 1332. Respondent does not suggest how the presence of a federal claim should affect the District Court's analysis of applicable law. The Court of Appeals plurality likewise did not address this issue, and indeed characterized this case simply as a diversity breach-of-contract action. See 810 F. 2d 1066, 1067, 1068 (1987). Our conclusion that federal law governs transfer of this case, see Part III, infra, makes this issue academic for purposes of this case, because the presence of a federal question could cut only in favor of the application of federal law. We therefore are not called on to decide, nor do we decide, whether the existence of federal-question as well as diversity jurisdiction necessarily alters a district court's analysis of applicable law.

[4] Our cases at times have referred to the question at this stage of the analysis as an inquiry into whether there is a "direct collision" between state and federal law. See, e. g., Walker v. Armco Steel Corp., 446 U. S., at 749; Hanna v. Plumer, 380 U. S. 460, 472 (1965). Logic indicates, however, and a careful reading of the relevant passages confirms, that this language is not meant to mandate that federal law and state law be perfectly coextensive and equally applicable to the issue at hand; rather, the "direct collision" language, at least where the applicability of a federal statute is at issue, expresses the requirement that the federal statute be sufficiently broad to cover the point in dispute. See Hanna v. Plumer, supra, at 470. It would make no sense for the supremacy of federal law to wane precisely because there is no state law directly on point.

[5] Hanna v. Plumer, supra, identifies an additional inquiry where the applicability of a Federal Rule of Civil Procedure is in question. Federal Rules must be measured against the statutory requirement of the Rules Enabling Act that they not "abridge, enlarge or modify any substantive right . . . ." 28 U. S. C. § 2072.

[6] If no federal statute or Rule covers the point in dispute, the district court then proceeds to evaluate whether application of federal judge-made law would disserve the so-called "twin aims of the Erie rule: discouragement of forum-shopping and avoidance of inequitable administration of the laws." Hanna v. Plumer, supra, at 468. If application of federal judge-made law would disserve these two policies, the district court should apply state law. See Walker v. Armco Steel Corp., supra, at 752-753.

[7] In The Bremen, this Court held that federal courts sitting in admiralty generally should enforce forum-selection clauses absent a showing that to do so "would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching." 407 U. S., at 15.

[8] The parties do not dispute that the District Court properly denied the motion to dismiss the case for improper venue under 28 U. S. C. § 1406(a) because respondent apparently does business in the Northern District of Alabama. See 28 U. S. C. § 1391(c) (venue proper in judicial district in which corporation is doing business).

[9] In its application of the standards set forth in The Bremen to this case, the Court of Appeals concluded that the Alabama policy against the enforcement of forum-selection clauses is intended to apply only to protect the jurisdiction of the state courts of Alabama and therefore would not come into play in this case, in which case this dispute might be much ado about nothing. See 810 F. 2d, at 1069-1070. Our determination that § 1404(a) governs the parties' dispute notwithstanding any contrary Alabama policy makes it unnecessary to address the contours of state law. See n. 4, supra.

[10] The dissent does not dispute this point, but rather argues that if the forum-selection clause would be unenforceable under state law, then the clause cannot be accorded any weight by a federal court. See post, at 35. Not the least of the problems with the dissent's analysis is that it makes the applicability of a federal statute depend on the content of state law. See n. 4, supra. If a State cannot pre-empt a district court's consideration of a forum-selection clause by holding that the clause is automatically enforceable, it makes no sense for it to be able to do so by holding the clause automatically void.

[11] Because a validly enacted Act of Congress controls the issue in dispute, we have no occasion to evaluate the impact of application of federal judge-made law on the "twin aims" that animate the Erie doctrine.

[12] Contrary to the opinion of the Court, there is nothing unusual about having "the applicability of a federal statute depend on the content of state law." Ante, at 31, n. 10. We have recognized that precisely this is required when the application of the federal statute depends, as here, on resolution of an underlying issue that is fundamentally one of state law. See Commissioner v. Estate of Bosch, 387 U. S. 456, 457, 464-465 (1967); cf. Budinich v. Becton Dickinson & Co., 486 U. S. 196, 199 (1988) (dictum). Nor is the approach I believe is required undermined by the fact that there would still be some situations where the state-law rule on the validity of a forum-selection clause would not be dispositive of the issue of transfer between federal courts. When state law would hold a forum-selection clause invalid the federal court could nonetheless order transfer to another federal court under § 1404(a), but it could do so only if such transfer was warranted without regard to the forum-selection clause. This is not at all remarkable since whether to transfer a case from one federal district court to another for reasons other than the contractual agreement of the parties is plainly made a matter of federal law by § 1404(a). When, on the other hand, state law would hold a forum-selection clause valid, I agree with JUSTICE KENNEDY'S concurrence that under § 1404(a) such a valid forum-selection clause is to be "given controlling weight in all but the most exceptional cases." Ante, at 33. And even in those exceptional cases where a forum-selection clause is valid under state law but transfer is unwarranted because of some factor other than the convenience of the parties, the district court should give effect to state contract law by dismissing the suit.